Trade Union Reform and Employment Rights Bill

HL Deb 06 May 1993 vol 545 cc868-966

Consideration of amendments on Report resumed on Clause 32.

Baroness Turner of Camden moved Amendment No. 75A

Page 50, line 20, leave out from ("shall") to end of line 26 and insert ("cease to have effect").

The noble Baroness said: My Lords, we tabled the above amendment in Committee but did not move it because of the lateness of the hour. However, its objective is to ensure that, in mergers or takeovers, occupational pension rights are preserved. As I understand the regulations at present, those rights are not preserved. Indeed, when a similar amendment was moved in Committee in another place, the Government's response was that it would be unreasonable to expect the company or person acquiring a business to accept full responsibility for pension provision as well. However, since that time, it is possible that the Government have had second thoughts on the matter. That is why I have tabled the amendment. I seek clarification from the Minister.

I have in my possession a copy of a letter from the office of the Attorney-General to the Department of Employment which reads: You will recall that I advised the Standing Committee on the Property Services Agency and Crown Suppliers Bill in January 1990 that there was a legal requirement under our own domestic legislation, the Employment Protection (Consolidation) Act 1978, that in the case of a person transferred under TUPE, the transferor and the transferee must so arrange things that the pension rights enjoyed by staff after the transfer were broadly comparable with those enjoyed before. This reflected advice given by the Law Officers in 1983. In my view, therefore, the guidance being given to contractors by Departments that contractors should provide comparable pension rights should stand. The Lord Advocate has seen this letter in draft and has indicated that he agrees with it".

It seems that conflicting advice has been given. I hope that the Minister will say this evening that the advice contained in the letter from the Attorney-General is of general application and that those acquiring businesses through takeovers and mergers would have similar obligations in relation to pension provision as that suggested in his letter. I beg to move.

8.15 p.m.

Viscount Ullswater

My Lords, the amendment is concerned with Regulation 7 of the transfer of undertakings regulations. The EC Acquired Rights directive, which the regulations implement in the UK, specifically excludes from that basic principle, employees' rights to old-age, invalidity or survivors' benefits under supplementary company or inter-company pension schemes outside the statutory social security schemes in member states". The transfer regulations follow the directive by excluding pension entitlements from the employment rights which transfer. That is the purpose of Regulation 7.

Amendment No. 75A tabled in the name of the noble Baroness, Lady Turner, seeks to remove Regulation 7 altogether. That would make the regulations go further than the directive requires. The result would be that, when a transfer of an undertaking took place, the new employer would be required by law to take over and continue whatever occupational pension arrangements the old employer had put in place.

I cannot think that noble Lords opposite really believe that that is a reasonable obligation to place on the new employer when a transfer takes place. Indeed, it is not hard to imagine situations in which it would not he possible for the new employer to do so, because the pension scheme was operated exclusively by the old employer. Employers involved in a transfer will no doubt wish to ensure that satisfactory arrangements are made, and negotiated with the employees. But that is not the same as what the amendment would require—a binding legal requirement to continue the same pension scheme. That is not a realistic requirement, as was recognised when the directive was agreed in 1977.

I listened carefully to what the noble Baroness said about the letter from the Attorney-General. However, I do not believe that letter indicates the position as put forward in her amendment. In the light of that explanation, I hope the noble Baroness will agree to withdraw the amendment. If not, I can only recommend that your Lordships' House rejects it.

Baroness Turner of Camden

My Lords, before the noble Viscount sits down, can he clarify the situation in regard to the advice that I just quoted from the Attorney-General's office? As I read it, it involves providing comparable pension rights in the event of a takeover or a merger. What the Minister said indicates to me that perhaps the same pension scheme would not be taken over. However, does that rule out comparable pension rights as set out in the Attorney-General's letter? That is the reason behind my tabling the amendment. I am seeking clarification on the matter.

Viscount Ullswater

My Lords, I would not dissent from the advice offered by the Attorney-General. However, we are dealing with an amendment to the Bill which would have the effect of imposing a binding legal requirement to continue the same pension scheme. By the word "same", I have in mind an identical pension scheme. I do not think that we are far away from each other on the issue. Nevertheless, I hope that the noble Baroness will not press the amendment.

Baroness Turner of Camden

My Lords, I am grateful to the Minister. As I understand it, he said that he did not dissent from the advice in the Attorney-General's letter. That makes it clear that comparable pension provision should be provided. I am most grateful to have that fact on record. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wedderburn of Charlton moved Amendment No. 76:

Page 50, line 36, at end insert ("and at the end there shall be added "save that in a case where the tribunal considers that the employee should be awarded a further sum having regard to

1. (i) the extent of the loss which he has suffered, and
2. (ii) the need for an effective and deterrent remedy for default characterised by that failure of the employer to comply,
3. (iii) it may award a special sum not exceeding a further four weeks' pay." ").

The noble Lord said: My Lords, the purpose of the amendment is to return to a matter which was discussed in Committee but which, with respect, we thought was not fully dealt with. It arises on the question of the ultimate remedy for a breach in the TUPE regulations which has long been thought to be unsatisfactory. The compensation which can be awarded would, under the terms of the amendment, be extended not by a further sum of compensation but by what is called "a further sum" which could be awarded in the circumstances described.

My hesitancy in my opening remarks arises from the fact that I notice from the Marshalled List that the last two lines of the amendment should be indented as a separate paragraph.

However, as regards the extent of the loss to the claimant and the need for an effective and deterrent remedy for default of the obligations (which of course stem from the Community directive) a special sum may be awarded which does not exceed, a further four weeks' pay".

I should like to take this opportunity to read to the House the basis for that argument—namely, the need to have an effective and deterrent remedy—which is found in a passage from the case of Von Colson in the European Court of Justice in 1984 where the court said: It should be pointed out to the national court that although [the] Directive … for the purpose of imposing a sanction for the breach of the prohibition of discrimination, leaves Member States free to choose between the different solutions suitable for achieving its objective, it nevertheless requires that if a Member State chooses to penalise breaches of that prohibition by the award of compensation, then in order to ensure that it is effective and that it has a deterrent effect, that compensation must … be adequate in relation to the damage sustained and must therefore amount to more than purely nominal compensation such as, for example, the reimbursement … of the expenses".

I have quoted the full passage because in Committee there was some misunderstanding between the noble Lord, Lord Mottistone, and myself about just what the court said. I have therefore taken advantage of this occasion to set it out in full. There is a requirement of an effective and deterrent remedy which, in our submission, the Bill as it stands in dealing with the regulations does not fulfil. I beg to move.

Baroness Turner of Camden

My Lords, I do not wish to add much to what my noble friend said except to say that we on the Front Bench support what he said. We believe in the award of compensation with a deterrent effect. Clearly that is very much to the advantage and protection of the employee in circumstances where the employee may feel the need for such protection. I therefore hope that the amendment will commend itself to your Lordships.

Viscount Ullswater

My Lords, I should like to thank the noble Lord, Lord Wedderburn, for drawing attention to the alteration to be made to the amendment. That was helpful.

Subsection (6) (b) of the clause increases from two weeks' pay to four weeks' pay the maximum amount of compensation which a tribunal can award to an employee where an employer has failed to inform or consult a trade union about a proposed transfer of an undertaking. The noble Lord, Lord Wedderburn, tabled an amendment in Committee to increase the maximum amount of compensation to 10 weeks' pay. Amendment No. 76 also seeks to increase the maximum amount of compensation by a more indirect route.

As I understand it, the amendment would give tribunals the power to award up to an additional four weeks' pay on top of the normal maximum, which the clause increases to four weeks' pay. Tribunals would have discretion to make such "special" awards in cases where an employee was judged to have suffered particular loss, or where it was apparent that the normal maximum was not "an effective and deterrent remedy".

The noble Lord, Lord Wedderburn, clearly believes that industrial tribunals should be able to decide on the level of compensation which is appropriate in particular cases. The Government share that belief, as is apparent from the wording of the Transfer of Undertakings Regulations. Paragraph 4 of Regulation 11 already allows tribunals to require employers to pay "appropriate compensation", and that phrase is defined in paragraph 11 as meaning: such sum not exceeding two weeks' pay for the employee in question as the tribunal considers just and equitable having regard to the seriousness of the failure of the employer to comply with his duty". As I have already explained, the clause increases the maximum from two to four weeks' pay.

As those words of paragraph 11 of Regulation 11 clearly indicate, tribunals already have absolute discretion in deciding how much compensation is appropriate in particular cases, subject to the maximum. The extra flexibility which the noble Lord, Lord Wedderburn, is seeking to add to the regulations by means of Amendment No. 76 is therefore wholly unnecessary.

I believe that it will be apparent to your Lordships that the noble Lord is seeking to increase the maximum level of compensation above that recommended by the Government in the clause. The Government have accepted that the current maximum of two weeks might be too restrictive. We have taken note of the Commission's arguments and increased the size of the maximum possible compensation from two to four weeks' pay. The Government believe that that is a reasonable limit which at the same time provides an effective deterrent.

The Government cannot therefore accept that the noble Lord's amendment is either necessary or appropriate, and I hope that he will not press it.

Lord Wedderburn of Charlton

My Lords, I thank the noble Viscount for what he said, if not for the result. The Government must realise that they are at some risk in this area of penalties and compensation. There is a demand in the court in Luxembourg that there must be an adequate deterrent remedy. Four weeks' pay is not likely to seem to the individual to be enough.

In case the noble Viscount should ever think of the matter before Third Reading, perhaps he might consider that the employer would say to a skilled worker: "We are very sorry but we forgot to consult with your representatives when we sold off part of the business, being assured by the Attorney-General that it was not a transfer of undertaking although we now find that it is. We sold the firm to Associated British Ports"—or Associated Newspapers, or one of those companies to whose aid the Government come when they break the law. "It is all very unfortunate. We see that you do not want to work for them because they will deal with you in a 19th century manner and you will not like that at all. We are terribly sorry. Here is four weeks' pay"—or perhaps a little less—"to save you the cost of going to the tribunal since you cannot get legal aid and you are not within the province of either the Commission's CROTUM or COPUIA".

That is not adequate compensation. It is certainly not a deterrent to the employer in certain situations. If there are hundreds of such workers it might be a deterrent, but it cannot be said to be a deterrent. The court in Luxembourg will not judge the matter on the basis of hundreds of workers, but one or a small group. It is not a deterrent.

I shall not press the amendment; but I ask the Government to consider in their own interests their system of remedy in comparison with that which is obligatory by way of Community directive. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 77:

After Clause 32, insert the following new clause: ("Transfers

.In Schedule 13 to the 1978 Act (computation of period of employment), after paragraph 12 there shall be inserted—

"13.—(l) Where—

1. (a) a trade, business or undertaking is transferred from one person to another;
2. (b) at the time of the transfer, a payment calculated in respect of the period of service with the transferor is paid to the employee on the basis that he is redundant (this payment not being a payment referred to under sub-paragraphs (2) (a) (i) and (2) (b) (i) of paragraph 12 but being at least equivalent to such a payment); and
3. (c) the contract of employment under which the employee was employed is transferred from the transferor to the transferee in accordance with Regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (the 1981 Regulations),

then in determining, for the purposes of Section 81(1) or Schedule 4, the period for which he has been continuously employed, the continuity of the period of employment shall be treated as having been broken as at the date on which the transfer took effect.

(2) In this paragraph, references to "transferor" and "transferee" shall be construed in accordance with the 1981 Regulations." ").

The noble Lord said: My Lords, the amendment was discussed in Committee. I have tabled it again partly because some of the discussion at that stage was not conclusive and I should like to try again, and also because the Minister undertook to give further consideration as to whether a similar amendment might be introduced to clarify the legislation in this area. He did not claim that it did, but the Government amendment, Amendment No. 74A, did not clarify the position.

As I said in Committee, the problem centres on the uncertainty surrounding whether a particular transaction amounts to a transfer of an undertaking. It hinges on the fact that in some situations it may be entirely unclear to the transferor employer and the transferee whether the Transfer of Undertaking Regulations apply. In consequence, a transferor employer may mistakenly conclude that they do not and may make what he believes are redundancy payments to the employees when in law there is no obligation for him to do so. That may have serious implications for the transferee employer who, having engaged those employees, subsequently discovers some years later on making them redundant that the transaction amounted to a relevant transfer and he is liable for a redundancy payment based on the employees' entire period of service with both employers.

When I raised the point in Committee, my noble friend the Minister indicated that where an employee is dismissed on grounds of redundancy, he is entitled to a redundancy payment and that any subsequent transfer of the undertaking would not affect that position. That may well be so; but the situation I envisage is not one where there has been any dismissal by the employer. Your Lordships will recall that the example I gave in Committee involved a situation in which the transferor employer has not dismissed the employees as such but, while negotiations for the transfer are taking place, has merely advised the employees that the potential transferee employer may wish to offer them jobs. Should that happen and the transferor, perhaps in response to a request by the employees themselves who are now in the transferee's employ, then subsequently make what he believes are redundancy payments, those will have arisen without there having been any dismissal. In that situation, the law is unclear as to whether in any subsequent redundancy by the transferee employer the payment made by the transferor would be taken into account.

My noble friend also made a statement in Committee that the situation I envisaged would not happen in practice and that a statutory redundancy payment, as defined in the 1978 Act, does not cease to be such because it subsequently emerges that the regulations applied and, since a statutory redundancy payment breaks continuity, no double payment would be made even if the regulations apply. I have no dispute with the accuracy of the latter statement but with respect to my noble friend it misses the point. Although it is clear from paragraph 12 of Schedule 13 of the 1978 Act and case law that a statutory redundancy payment will break continuity, my point is that in the example I gave it is not clear that the payments made by the employer will be treated by tribunals as statutory payments.

On the point that the situation would not happen in practice, I also have to disagree. Given the uncertainty over whether the contracting-out of services—and that includes the Government's own market testing programme and compulsory competitive tendering—will amount to a transfer of an undertaking in any given situation, that may well become a significant issue if the existing legislation is found wanting. My amendment merely seeks to clarify the position to ensure that the employee is not doubly compensated for the same period of service.

Before I conclude, I should like to acknowledge the comments made in Committee by the noble Lord, Lord Wedderburn, to which he referred in moving Amendment No. 76, concerning the effect that the Katsikas v. Konstantinidies case may have on my amendment. As I understand it, that case has decided that in some circumstances employees may be able to object to their automatic transfer to a new employer. It may well be that some modification may be needed. I make no comment about that. However, I am advised that the Katsikas ruling has no bearing on the substance of Amendment No. 77. Where employees' contracts are in fact transferred, previous redundancy payments made by the transferor employee should be taken into account in calculating future entitlement. I beg to move.

8.30 p.m.

Viscount Ullswater

My Lords, as my noble friend indicated, this amendment is the same as his Amendment No. 214 in Committee. Noble Lords who were present during those proceedings will recall that I made it clear that the Government do not share his view of the legal position. Legal advice received by the Government was that the situation which he envisages would not occur in practice. It would not do so because a statutory payment made to an employee who has been dismissed as redundant (as defined in the 1978 Act) does not cease to be such just because it emerges subsequently that the Transfer of Undertakings Regulations applied, and because a statutory redundancy payment breaks continuity, so that no double payment would be made even if the regulations applied. The dismissal would still have taken place and the payment would still count.

Perhaps I might also make the point that a prudent employer will make clear when he makes a payment whether or not it is a redundancy payment. He may choose to reward or encourage the employees by making payments which are not redundancy payments, but if he intends that they should be treated as redundancy payments he must ensure that the employees concerned are told that they are being dismissed as redundant.

Nevertheless, I promised my noble friend in Committee that I would give further consideration to whether it would be advantageous to put the legal position beyond doubt. Since then, the department's legal advisers have considered the question in depth and have discussed it with Parliamentary Counsel. The result of those careful considerations is that the Government are convinced that an amendment along the lines proposed by my noble friend would not be advantageous. On the contrary, the advice given to the Government remains that clarification is not necessary, because the position is already established, and that there could be a risk that an attempt at clarification might have the effect of altering the law in ways not intended.

The Government have therefore reached the conclusion that there is no need to make an amendment of the sort which my noble friend seeks. The Government cannot, therefore, accept the amendment and I hope my noble friend will not press it.

Lord Mottistone

My Lords, I am indeed grateful to my noble friend for taking the trouble, as he said he would, to have the matter considered carefully by his legal advisers. I have an awful feeling that my legal advisers do not necessarily agree with his legal advisers. However, as matters stand at present, the issue can rest. The argument is not only to ensure that employees and employers are protected from unforeseen events, it is to try to get the law right so that it makes sense to the public at large. It is in the Government's interest that that should be so. All the clever legal chaps have had a look at the provision from the Government's point of view. Sometimes they are wrong; they might be wrong this time. However, I shall come back at Third Reading if I wish to ensure that the Government have got it right. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 [Redundancy consultation procedures]:

Lord Wedderburn of Charlton moved Amendment No. 78:

Page 50, line 41, at end insert:

("( ) at the end of subsection (1) there shall be inserted—

"and where no such trade union is recognised by him—

1. (i) he shall so consult with independent representatives of the employees, including representatives elected or otherwise designated by them for this purpose, and
2. (ii) any difference or dispute concerning the independence of such representatives shall be determined by application to the Certification Officer who shall determine the issue on the principles in sections 5 to 8 of this Act, from which an appeal shall lie as if section 9 applied to his decision" ").

The noble Lord said: My Lords, I hope to receive the support of the noble Lord, Lord Mottistone, on the amendment because I can offer him a piece of legal advice on the difficult matter that he and the Minister have discussed. It is clear that the noble Lord should mount an interlocutory motion in the High Court tomorrow in a case which involves his point, take it to the Court of Appeal within the week, and the Government will act like the wind.

Amendment No. 78 is a genuine attempt—some noble Lords may think that rare in my case but I often do it unnoticed —to find a compromise to a difficult problem. On reading it now I have doubts as to whether the amendment is right and proper. That indicates that it is a compromise.

The amendment concerns the issue of the consultation which an employer is obliged to make when he proposes redundancies. We say, and the Commission says, that the directive requires that consultation. We know that the Government disagree with that. It is not an attempt to re-open that ground; the matter will go to the court in Luxembourg. The Government state that it is a matter of choice.

However, it is not an attempt to attack the Government on our own law and the spirit of the directive. But last October there was surely some proof that there is latent in our law and our practice the desire to have consultation with representatives of the workforce on important matters. It was shown that public law too can come to the aid of that desire with the remedy of declaration.

The amendment does not seek to cover old ground, on which our law states that if there is a recognised trade union there must be consultation. It seeks to cover the ground where no independent trade union is recognised and to provide at least a residual obligation to consult independent representatives of the employees who would be elected or otherwise designated. I have used the word "independent" for the simple reason that I do not believe that anyone would consider it worthwhile, or indeed would wish, to have consultation with mere creatures of the management. Management itself would gain nothing except perhaps hostility from the workforce. Therefore one needs independent representatives.

The traditional demand is for a single channel to be organised in recognised trade unions, and so on. I have gone outside the traditional demand for a single channel because I believe, and my noble friends agree, that an important principle is at stake with regard to consultation. There should be a residual obligation to consult. After all, if redundancies are to be made it is not asking a lot that there should be consultation as to the manner, the number, the selection and so on. That happens all over Western Europe.

I have added a first stab at the way in which independence might be judged. I appreciate that if the noble Viscount were ever to accept the principle of the amendment he would wish to word it rather differently. However, I sought to put the provision within a small compass by saying that the same test that is applied to trade unions with regard to independence should apply to representatives elected in that way. They should not be under the financial or other domination or control of the employer.

However, the first part of the amendment is the important part. I should have thought that it established a middle position of opinion on the matter. It does not demand a recognised trade union, but some consultation with representatives who could put points to the employer which otherwise might go unnoticed and without remedy. I beg to move.

Lord Rochester

My Lords, in Committee I moved an amendment aimed at ensuring that Clause 33, as it now is, should not be brought into force until Sections 188 to 192 of the 1992 Act had been altered in such a way as to extend the application of those sections to employee representatives generally. I am sure that the noble Viscount will recall that. On that occasion, I argued that consultation with representatives of independent trade unions recognised by the employer, as provided for in Section 188, made it possible for the consultation procedure to be completely inapplicable, as the European Commission had observed, where no trade union was recognised by the employer. -1 said that, if the Government acknowledged the need—as they did in bringing forward Clause 33—for recognised trade unions to be consulted about collective redundancies, they could not very well fail to treat in the same way employees who did not choose to be represented by a trade union.

As I understand it, the amendment takes up the same theme. Indeed, in one respect it is an improvement on my earlier amendment, in that it states explicitly, as the noble Lord, Lord Wedderburn, has just said, that, for the purpose of consulting about collective redundancies, employee representatives should be independent, like the works councils which I had in mind earlier. and not so-called house unions or bodies of that kind, lacking in independence from the employer.

I am rather glad that the noble Lord, Lord Wedderburn, entered reservations about paragraph (ii). I myself am a little uncertain as to its validity. So I was glad that he talked of the principle involved in the amendment rather than placing any great emphasis on the detail of paragraph (ii). With those considerations in mind, I am glad to support the amendment.

Lord McCarthy

My Lords, most of the arguments for the amendment have been made. Obviously, we support it. The central point I wish to pose to the Government is: what is the rationale of their position? Their position seems to be that consultation over redundancies—and over many things—under the Bill is the monopoly of the organised worker. What is the rationale of that? Of course, it is a view which the trade union movement used to hold. It is by no means certain that it holds it now: not all the movement holds it; it is divided. But that was a trade union view, hardly a government view. The idea that such rights are the monopoly of trade unions was rooted partly in the belief that only trade unions can represent workers or represent them efficiently and effectively, and partly in the idea that, if one makes that the centre of one's policy, one is inducing workers to join trade unions. What is being said is, "We are not going to provide you with an alternative channel. You've got a trade union channel; that is the proper channel".

However, all that is a strange argument to come from the Government. Throughout most of the Bill, the Government are legislating to reduce trade union influence and power. Only just before the dinner break, the Government said that in that particular area people must be individualised: there must be nothing to do with collective bargaining; they were leaning as far away from collective bargaining as they could. That is part of the Government's philosophy. Yet in this single area, the Government say that the benefits of consultation are to be the monopoly of recognised unions and workers who happen to have recognition. What is the rationale of that? I am at a loss to understand it.

It could be that they say, "We will put so many disadvantages in the path of employers that, if we give those rights to trade unions only, it will accelerate the process of de-recognition." That may be the way that they see it, because the employers will say, "All the rights belong to trade unionists so we'd better not have any trade unionists". If that is the case, then let the Government say so. Otherwise it is a mystery why consultation cannot be provided for people who are not trade unionists in the way that is laid out in the amendment.

Of course, the Government may make all kinds of practical objections to aspects of the amendment. I am sure my noble friend does not mind at all. Let the Government take away the principle and, if they will not do that, then let them tell us why they want this to be the monopoly of organised workers.

8.45 p.m.

Lord Stoddart of Swindon

My Lords, my noble friend is absolutely right. I used to work in the electricity supply industry, where we had a consultative machinery. It was set up as a result of a clause inserted into the Act by the then Labour Government. The clause ensured that there was consultative machinery within the industry, but it was not controlled by the trade unions because people could stand for the advisory machinery, whether or not they were trade union members. Everyone, irrespective of membership of a trade union, was able to vote.

Here we have the odd and strange situation of a Labour Government saying, "We must set up machinery which will be available to all and not just to the trade unions", and a Tory Government coming along and saying, "Such machinery must be restricted to trade unionists". The world has gone stark staring bonkers when we have a situation like that. It behoves the government spokesman to tell the House why they have turned turtle and stood on their heads at the same time.

Viscount Ullswater

My Lords, I shall keep my gymnastics rather more quiet! Amendment No. 78 is concerned with the question of employee representation for the purposes of the statutory consultation requirements in relation to collective redundancies contained in the 1992 consolidation Act. This is an issue which also arises in relation to the acquired rights directive and is one which received considerable attention in Committee. I note that the noble Lord, Lord Wedderburn, has moved away from the approach he advocated then—mechanisms whereby trade unions should be deemed to have been recognised by employers for consultation purposes—and that he now favours an approach which is in some respects more like that advocated by the noble Lord, Lord Rochester, and the noble Baroness, Lady Seear, which the noble Lord, Lord Rochester, told us about in Committee. I must say that that is a great indication of his professed reasonableness.

The noble Lord, Lord Wedderburn, has, however, returned to his theme from Committee—that the UK is in breach of the EC collective redundancies directive because there is no statutory right to employee representation for the purposes of the law on redundancy consultation. As I explained in Committee, the directive defines the employee representatives who must be consulted as those, provided for by the laws or practices of the member states". The noble Lord, Lord Wedderburn, argued that the Government rely on the practice of there not being any practice. In Committee (at col. 734 of Hansard for 30th March 1993) he stated that: What the Government have set out to do … is to convince the court that if it is said that there is no practice and no law it means that they do not have to do anything and can simply dispose of the directive. That is very far from being a fair description of the Government's position. It must surely be evident to your Lordships' House that the normal practice in this country is for employee representatives to be representatives of trade unions which employers have recognised for collective bargaining.

I would say to the noble Lord, Lord McCarthy, that there is nothing in this measure which prevents good employers from consulting their workforces about redundancies, but what we are dealing with here is the implementation of the collective redundancy directive which, as I have said, recognises the different national practices. That is what we have put into law.

The Government believe, therefore, that the amendment is unacceptable in principle. But even if that were not the case, it is very hard to see how it could work in practice. The amendment would require that, where there was no recognised trade union, an employer who was proposing to make a single employee redundant would have to consult with, independent representatives of the employees". Such representatives might, the amendment suggests, have been elected or otherwise designated as such by the workforce—but the amendment provides no clue as to how an employer would be able to judge who should, or should not, be considered to be an employee representative in the absence of such an election or designation.

The amendment contains detailed — and, in the Government's view, wholly inappropriate—machinery for settling disputes as to whether employee representatives are "independent" or not. It seems to suggest that if an employer who has not recognised a trade union needs to make redundancies, he must consult some other people, but it may not be clear who they are until well after the redundancy situation arises. I believe, this would be quite unworkable.

The effect of the amendment could only be to create delays and confusion which would make it more difficult for employers to satisfy all the statutory consultation procedures when making employees redundant. The amendment is unacceptable in principle and unworkable in practice. I ask the noble Lord to withdraw it.

Lord Wedderburn of Charlton

My Lords, I thank the Minister for that reply. I shall read it with interest in Hansard to see whether my impression is correct that most of the Minister's brief constituted an answer to my arguments expounded in Committee to a very different amendment from the one I moved today. Indeed the Minister himself said I had moved my position, which indeed I have. I made it quite clear that I was trying to find some area of consensus. The Minister referred to the arguments which I understand the Government are rehearsing in the Luxembourg court; that is, that the section in the directive which allows representatives to be selected according to national law and practice allows one to carry out no selection at all. That is the nub of the Government's position. I said in moving the amendment that I did not agree with the Government' stance but I was not rehearsing that area.

It occurred to me as I heard the Minister forcefully making his case again at the Dispatch Box that it is as if the directive states, "you can all have an emperor and clothe him how you like". The Government refuse to notice that their emperor has no clothes at all and does not match the directive. If the intention were not to have representatives, that would be clearly stated in the directive. However, the Minister has tempted me to enter that discussion and I have yielded to his temptation.

What I have said today is that there is another position which would not be my first choice but which is better than no consultation at all. What I do not understand is that the Government understand there is merit in conducting consultation before undertaking steps such as redundancies—they say this should be done voluntarily—but then they allow any employer who does not wish to consult not to be put under any pressure whatever. We shall have to read Hansard. The Minister knows I never criticise him personally. Indeed I was reflecting that this is not his argument. Rather it is a collective argument as the Government have a collective position on this matter. It is the only collective matter they approve of; that is, their own position. We may find, having read Hansard, that the argument is largely directed to a previous amendment. The Minister shakes his head to indicate I am wrong. If I am wrong, I shall accept that. We are entitled at any rate to investigate the position before Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 79:

Page 51, line 21, leave out subsection (3).

The noble Lord said: My Lords, at present the law allows for payments made by an employer under a contract of employment, or for breach of that contract, to be credited to the employer in his discharge of obligations to pay a protective award due to his failure to consult over redundancies. The Bill seeks to alter this position by no longer allowing that "set-off or, as the law more aptly puts it the "avoidance of double payments". My amendment seeks to preserve the current law. I say without shame that this is the same amendment as I moved in Committee, because, having studied carefully what was said then, I am still unable to see why the Government feel a change to the law is necessary.

First, let me address the current law and practice and then turn to the points raised in Committee. There are circumstances in which it may not be possible to go through the consultation process with all the exactitude one would wish. That is no secret, and that is why the law offers protection. In such a case a tribunal may order the employer concerned to pay a protective award to employees who were dismissed before the consultation process was complete. The question is, what is the nature of that award?

When this provision which my amendment addresses—now Section 190 of the 1992 Act—was first brought into our law in the 1975 Employment Protection Act, there was much interesting debate in Parliament. There was certainly a feeling on the Conservative Benches in the other place, for example, that, The object of the exercise is not to rap employers on the knuckles. It is not meant to be a punitive provision."—[Official Report, Commons, 15/7/75; col. 1454.]

That statement was made by my honourable friend, Mr. Leon Brittan, as he then was. The then Labour Government also commented, Payments under the contract of employment should fairly go to discharging [any amount for which the employer is liable under a protective award] since they are related to a payment in a period when the person or persons covered by the award are covered by their contract of employment I regret to say I do not know where that appeared in Hansard.

These statements made the position clear in 1975 and indeed that is largely how the position is still viewed now: payments under a protective award primarily compensate employees for actual loss, rather than punish the employers; and credit should be given for other payments already made by the employer. It is difficult therefore to see why the Government are now seeking to remove an established piece of law which works well in practice. Certainly it does not appear necessary because of European Community obligations; and that brings me to address what noble Lords said of this Bill in Committee.

My noble friend Lord Ullswater explained that the European Commission had informed the Government of its view that our current law was incompatible with the collective redundancies directive. He also said, The Government agree that the purpose of the penalty is not just to provide compensation for actual damage suffered by employees, but to create a sanction against employers who fail to consult.

That is a punitive measure. He continued: As the law stands it may well be that there is no penalty for failing to consult if the employer has paid the wages due to the employees".—[Official Report, 30/3/93; col. 738.]

That is an interesting change in opinions on the part of the Government on this side of the House from 1975. The Government now believe that the law should be punitive. The Government had their opinion swayed drastically by the European Commission. That led me to consider how that could be. I know we had an interesting dip in Committee into the ruling of the European Court of Justice in the case of Von Colson v. Land Nordrhein-Westfalen [1986] 2CMLR430. Perhaps my noble friend will confirm whether that case has a bearing on the Government's decision that they must now accede to the European Commission's wishes.

If my noble friend believes that to be the case, I must tell him that I am advised he is mistaken in law in that view. I beg to move.

Lord McCarthy

My Lords, I must congratulate the noble Lord, Lord Mottistone, on his persistence. He was given an answer in chapter and verse the last time and in fact he quoted that chapter and verse. We are not dealing with what happened in 1975. We are dealing with a European directive—the amendment seeks to set it aside—and with punitive sanctions. I hope that the Minister will say the same to him tonight as he said previously.

9 p.m.

Viscount Ullswater

My Lords, I am not sure that I shall disappoint. This amendment is identical in effect to one which my noble friend Lord Mottistone tabled at Committee stage. It is concerned, as my noble friend has explained, with the situation where an employer fails to consult with an appropriate recognised trade union about proposed redundancies. It seeks to prevent the Government removing the provision which allows compensation for an employer's failure to consult to be offset against other compensation in lieu of notice of dismissal or under a protective award.

I cannot agree with the interpretation of the Von Colson case by my noble friend Lord Mottistone. In paragraph 28 of its judgment, the European Court of Justice stated that, if a Member State chooses to penalise breaches of that prohibition by the award of compensation, then in order to ensure that it is effective and that it has a deterrent effect, that compensation must in any event be adequate in relation to the damage sustained". The Government do not consider that if this amendment were accepted there would be the necessary deterrent effect on employers who failed to satisfy the legal duty to consult.

My noble friend has also suggested that, without the offset provisions, an employer would be better off delaying payment in lieu of notice until a tribunal had assessed compensation for failure to consult, because a civil court would then, in any subsequent proceedings to recover pay in lieu of notice, offset the amount awarded against damages awarded. I believe that what my noble friend has in mind is an action for wrongful dismissal. Again, however, I am afraid I have to say that I do not share his conclusions.

I am advised that it is very unlikely that any payments to the employee for failure to comply with the statutory consultation provisions would be taken into account by the court in assessing damages for wrongful dismissal. This is because case law already establishes that protective awards are in a special category. They are not intended to compensate for financial loss, but, rather, for loss of consultation which the employees have experienced. The intended deterrent effect of the awards is further emphasised by the removal of the offset provision by the Bill.

The Government's position is therefore as I explained it to your Lordships' House in Committee. I have to agree with the noble Lord, Lord McCarthy, and say that my position has not changed. The purpose of the penalty is not just to provide compensation for actual damage suffered, but to ensure a deterrent effect on employers who fail to consult. As the law stands at present, it may well be that there is no penalty for failing to consult if the employer has paid the wages due to the employees. The Government are, however, obliged to ensure that such a sanction is provided under Community law.

I hope that, in the light of that further explanation, my noble friend Lord Mottistone will agree that it would not be appropriate for him to press his amendment.

Lord Mottistone

My Lords, I thank my noble friend for his explanation. It is interesting that nearly 20 years ago there was a greater understanding by the then government of the employer's need not to be punished. We have now come full circle and the Government from this side of the House take the view that employers ought to be punished if they do not do what they are told to do. That is an interesting reflection on how life has moved on. Perhaps we can get it to go back again if we try hard enough. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 [Repeal of Part II of Wages Act 1986]:

Earl Russell moved Amendment No. 79A:

Leave out Clause 34 and insert the following new clause: ("Order to abolish wage councils

.—The Secretary of State may not lay an order to abolish a wages council or vary its scope by laying an order until an associated estimate of the earnings effects and employment effects and with a description of the sex balance in the industry and with the results of the survey of employer and employee opinion and an estimate of the costs of social security benefits and the effects on the Public Sector Borrowing Requirement and an alternative means of collective consideration of pay determination is established.").

The noble Earl said: My Lords, this is a commencement amendment. I should like to make clear before anyone suggests otherwise that it does not affect the abolition of wages councils on which the House voted in Committee and the clause was carried. This amendment is concerned simply with the date at which that agreed decision comes into effect. The motto of the amendment is "Look before you leap", which is a motto that used to commend itself to large parts of the Conservative Party. The amendment proposes that before the clause comes into effect we should have before us a considerable amount of information which at present we do not have. In fact it calls for a report, asking for a good deal of information which should have been available before the Bill had its Second Reading in another place.

The amendment first asks for a report on the earnings and employment effects of abolition. In Committee, the noble Viscount said that it is now clear beyond doubt that wages councils are a barrier to employment. But he did not say beyond whose doubt. It is certainly not beyond my doubt and that of the Citizens Advice Bureaux, the Equal Opportunities Commission or the Low Pay Unit. Those are not negligible bodies. I do not think it likely that all of them would be wrong together, all in the same way and all at the same time. I am not aware of any equivalent list of bodies which are on the Government's side.

Be that as it may, this amendment simply asks for certain information. We have not been given very much yet. I become increasingly suspicious of those who tell me that they know but cannot tell me how they know. I listened with great interest in Committee to the noble Lord, Lord Eatwell, who spoke of the small amount of evidence which has been made available on this subject. I hope that he will develop those points further tonight. I should like to know before we go any further.

Secondly, the amendment asks for a report on the sex balance in the affected industries. My information is that four out of five employees in trades covered by wages councils are women. A very high proportion of them work part-time, for reasons outlined by the noble Baroness, Lady Lockwood, when she spoke on Amendment No. 72. I agree with everything she said. I do not feel the need to repeat it.

The Equal Opportunities Commission has examined the gender gap between men and women in different industries. It has come to the conclusion that the gender gap is narrower in the trades covered by wages councils than it is in others. That looks to me like prima facie evidence—I put it no higher because I am asking for information—that wages councils tend toward achieving equality between the sexes in fact.

I will listen with great care to what the noble Baroness, Lady Lockwood, says when moving Amendment No. 80A regarding the effect of European law on the problem. The noble Baroness, in her amendment, mentioned Article 119. It is important that one of the reasons why European law is so strong on issues of sexual discrimination is that it arises directly from an article of the Treaty of Rome. But I hope that the noble Baroness will also mention Articles 117 and 118 of the Treaty of Rome. Taken together with Article 119 they are capable of creating a pincer movement on the case. I hope also that she will mention the doctrine of direct effect of European law as stated in the Defrenne case and others that bear directly on the subject.

In the light of the possibility of European proceedings, I will ask the noble Viscount and other government Ministers to be extremely cautious in stating the argument we have heard from them before that we need not worry too much about low wages because we are dealing with second earnings. That is an argument which may have potentially discriminatory effects and could be powerfully quoted in evidence against them in proceedings under another jurisdiction. They should take care.

The amendment also asks for a report on the effects on social security benefits, for clearly low wages are going to lead to increased expenditure on benefits—notably on family credit and on housing benefit. I do not need to labour that point because the Minister, in Committee, in effect admitted it and justified it. He argued that it was cheaper for the Government to have people in employment than to support them entirely on benefit. We on these Benches would concede that there may be cases where that argument is valid; we do not rule it out in principle altogether. But I do not see how the Government can combine it with their stated devotion to the principles of a free and undistorted market. How can one say that one believes in a free and undistorted market and at the same time allow wages to fall because the state is, in effect, subsidising them? I do not follow the logic of that.

I should say also that though we on these Benches would not rule out that argument in principle—that it is sometimes in the national interest to allow wages to be subsidised by state expenditure—we would wish to be extremely cautious both in the objectives for which we undertake it and in the amount of financial commitment we undertake under it. It could become extremely expensive. In fact, what the noble Viscount is proposing—subsidising low wages out of poor relief—has been done before; it is known as the "Speenhamland" system. The noble Viscount might remember the 18th century verse: The little inn at Speenhamland That lies beneath the hill, Is rightly called the Pelican From its enormous bill".

The noble Viscount may also wish to develop the argument of business costs. Earlier today I told the noble Lord, Lord Boyd-Carpenter, that I would take that argument from him because he has been consistent in his concern for it in his costs. I will be more ready to take it from the Government when they have abolished the uniform business rate and repealed the statutory sick pay Act; when they no longer argue that businesses should pay for the infrastructure in the form of roads, or for research which has previously been paid for out of university budgets, or for entertainment, or for other things which are not normally regarded as part of business purposes. When the Government have done those things I will think that they are serious about business costs, which I agree urgently need reducing. But there is one thing which I believe to be a proper business cost; that is, the true cost of employing labour, for that is actually part of the cost of their operations.

The amendment also calls for a report on the public sector borrowing requirement effects of abolition, and that is perhaps the most serious part of the amendment. It has not been taken on board how much the worsening public sector borrowing requirement is not due to an increase in expenditure but to a loss of revenue. The Government were not ready for that. As they said in an Answer to a Question on 4th June last, they keep no figures on loss of revenue because of either rising unemployment or falling wages. They were not expecting it; they were caught short. If they do not accept the amendment they are going to be caught short again by the public sector borrowing requirement effect of abolishing wages councils.

It is a regular problem of Right-wing governments that, in trying to force wages down by competition, they do not allow for the extent to which they diminish their own revenues and therefore the extent to which they have to run up large public sector borrowing requirements and have to raise interest rates in order to borrow the amount of money they need. They let themselves in for a lot of unnecessary trouble.

Finally, the amendment asks for a new collective method of pay determination. After what we have been told about the amendment we are to expect at Third Reading, we have something of a question in our minds—how far are the Government committed to collective methods of pay determination? We on these Benches believe in a free market but we do not think one has a free market while one party has all the power and the other has none at all. I am reminded of the classic Victorian description of classical economics: "Freedom forever, said the elephant, as he trampled among the chickens". When we speak of a free market, that is not what we mean. I beg to move.

9.15 p.m.

Baroness Turner of Camden

My Lords, I rise to support this amendment. Your Lordships will be aware that another amendment, Amendment No. 80, which stands in my name and that of my noble friends, covers pretty much the same ground. Both amendments seek to have a review before the decision to abolish wages councils is put into effect.

I make no apology for returning on Report to the whole issue of wages councils. We said in Committee that we would be doing so and I think it is important enough for us to have another debate about it. The Government's case for the abolition of wages councils appears to rest on the following: first, that they were all right in 1909 but not in 1990s Britain, where, we are told, the sweatshops they were introduced to combat no longer exist. It is claimed by the Government that low pay is not a cause of poverty. Frankly, that strikes me as ridiculous.

Some while ago, Channel 4 screened a powerful programme, based on the experiences of a young woman reporter who spent some time looking for and living on low wages in wages council industries. She had an appalling tale to tell of existence on the low wages available to her in some of these places. In one place she worked for £1.50 an hour when the wages council rate was £3.06. When she confronted her boss and asked for the proper rate, it was made clear to her that if she did not like what was paid she could go. She worked at a variety of jobs throughout Lancashire and frequently had difficulty in securing the wages council rate. She had to work very hard for these sweatshop rates. So it is clear that sweatshops do still exist and there are plenty of employers who take advantage of the fact that, even now, there are insufficient inspectors, or staff too intimidated to insist on their rights. This, therefore, is not an argument for abolition but for strengthening protection and ensuring better enforcement provisions.

Then the Government claim that the abolition of wages councils will create new jobs. It has to be said that no evidence for that has been produced. Indeed, when there were more wages councils than there are now, and with greater powers and wider coverage, including young people, there was distinctly less unemployment. All the evidence suggests that wages would fall substantially if wages councils were abolished. An analysis undertaken by the National Institute for Economic and Social Research suggests that even if wage rates fell by only 30p an hour, up to 10,000 jobs could be lost through the loss of purchasing power in the economy, a point made very strongly by the noble Earl, Lord Russell.

The justification for removing young people from wages council cover was that youth unemployment would fall and job opportunities would increase. However, the opposite has turned out to be the case. Nearly one in five young workers aged 18 to 19 is unemployed; at 19.4 per cent., the rate is nearly double that for the rest of the population.

Then it has been argued by the Minister that wages council workers are not poor because they are mainly part-time workers—second earners in their households. As we said in Committee, that is a quite extraordinary argument, as is the argument that there are targeted social security benefits which prop up low pay. I should have thought that we had departed from such concepts a long time ago. The argument used against equal pay for women was that they were not main wage earners within the family. I am glad to say that such arguments were discredited with the introduction of equal pay legislation, when there was an acceptance of the fact that people should be paid for the work they do. Moreover, as to the social security argument—we have often advanced this—since when has it been the view that taxpayers should subsidise exploiting sweatshop employers?

Then there is the argument that wages councils are bureaucratic. The system is a simple one: it involves the setting of a legal minimum rate of pay annually. All the employer has to do is to comply. The wages councils' inspectorate deals with 260,000 employers in over 400,000 establishments employing around 2.5 million people. In 1991 wages council inspectors checked over 33,000 establishments and found illegal wage rates at almost 6,000 of them. There were arrears totalling £1.5 million. These sums were owed to people who are among the poorest and most vulnerable. As I said earlier, these are not arguments for abolition; they are arguments for strengthening the protection that still exists.

The young woman who appeared in the Channel 4 programme knew her rights and knew how to set about getting them. But there are many others who do not. She says in an article which she has written for the Low Pay Unit: I don't expect the situation to improve". I hope that she is wrong about that. She said: But at least for the majority it [the wages council system] works and offers employees some form of protection. The government argues that abolition will create jobs. At what cost? Two employees—or maybe three—for the price of one? It is clear that there is a great deal of opposition to what the Government propose to do. At least let there be an adequate review involving both Houses of Parliament. That is what our amendment seeks to do and also the amendment moved by the noble Earl. Lord Russell. I also support the amendment in the name of my noble friend Lady Lockwood. She is dealing with the European aspect, which is important.

The Government may deny it, but if wages councils are abolished we shall be isolated within the EC where minimum standards to safeguard the vulnerable are the rule rather than the exception. Before we take this step let us at least have a full and thoroughgoing review as suggested in these amendments. I support the amendment moved by the noble Earl, Lord Russell.

Baroness Lockwood

My Lords, I support both the amendment moved by the noble Earl, Lord Russell, and that of my noble friend Lady Turner. My Amendment No. 80A is in effect an addition to the list of conditions which my noble friend has set down in her amendment. My conditions seek to require compatibility of United Kingdom with European law.

I raised this matter on clause stand part in Committee. The Minister has been kind enough to write to me subsequently. In both his response in Committee and in his letter he refers to an opinion that the Equal Opportunities Commission had sought from senior leading counsel on whether or not abolition of the wages councils would conflict with European law. The very fact that the Equal Opportunities Commission sought an opinion is a serious indication of their doubt about the matter.

I asked the Minister if it would be possible for him to make the opinion available because I thought that it would have been helpful to us in the debate this evening. He responded by saying that the opinion was not in the department's possession in the sense that it belonged to the commission. The commission did not want its contents made known at the present time.

I understand the reasons for the commission's attitude. The commission itself has not yet met since the opinion was received and therefore it has not been able to determine what subsequent action it would like to take. It is a pity because it would have informed our debate this evening. However, I remind your Lordships that the commission said in a press release on 16th November last year: If wages councils are abolished without alternative measures such as strengthening the Equal Pay Act, the pay gap, already wider than in most other EC countries will increase, making it even more difficult for women to achieve economic independence and to provide for their future in old age That statement has to be taken in the context of the legal framework of European law, which is Articles 119 and 5 of the Treaty of Rome and the equal pay directive. I recognise the two amendments which the noble Earl mentioned, but unfortunately I do not have them with me this evening so I shall not comment on them.

Article 119 of the treaty requires member states to ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work. Article 5 of the treaty requires member states to take all appropriate measures to ensure fulfilment of the treaty obligations and provides that member states shall abstain—I repeat the words "shall abstain"—from any measure which could jeopardise the attainment of the objectives of the treaty. Clearly, the Equal Opportunities Commission feels that this is a measure that could jeopardise the attainment of the objective of equal pay. The equal pay directive leaves member states free to choose which measures are used to ensure the implementation of the principle of equal pay, but those measures must be effective.

The 1970 Equal Pay Act in the United Kingdom envisaged two routes to equal pay: the collective route or the collective approach, and the individual approach whereby individual members could take up their own case if they felt that they were not achieving equal pay. In his letter to me the Minister seems to have misunderstood what I was saying in Committee. I was not advocating that the individual route to equal pay should be abandoned. Of course not. That is a fundamental part of the route to equal pay. I was suggesting that the individual route is not sensible in all cases, the coal board case, which I mentioned in Committee, was one of them.

In bringing forward the equal pay legislation in 1970, the government of the day, with all-party support, made clear that one of the measures to eliminate discriminatory rates was the new requirements that were being placed on the wages councils. Wages councils have their imperfections—we all accept that—but, nevertheless, the system appears to have had some effect. In 1992 the female:male earnings ratio for wages council industries was higher than the ratio for all industries. That was particularly marked in the lower decile of weekly earnings.

Judging by the evidence from other sectors which have no wages council protection, the abolition of the wages councils is likely to have a disproportionate impact on women and so is likely to be indirectly discriminatory in its effects. European Community law looks to proportionality to justify such action—that is, that the gains must outweigh the discriminatory effect. I do not think that in this case anyone would claim that the gains outweighed the discriminatory effect. The dearth of evidence which the Government have put forward to support the effects of the abolition of the wages councils has been consistently criticised throughout the passage of the Bill, but no real response has been received from the Government.

If one of the important measures which ensures the application of the principle of equal pay is removed without anything being put in its place, it is likely to contravene Articles 119 and 5 of the treaty and Article 6 of the equal pay directive. I understand that the TUC has instituted a formal complaint against the Government and has asked the European Commission to take proceedings if the wages councils are abolished. So too has the European Parliament. I would remind the Government that they have been wrong in the past about their interpretation of whether the Equal Pay Act complies with European legislation. It was because the Commission was taking action against the Government that we had the amendment in 1983–84 to introduce the concept of equal pay for work of equal value. The idea of considering the compatibility of our legislation, or our intended legislation, with European legislation is therefore important. On this matter I urge the Government, to use the noble Earl's expression, to look before they leap.

9.30 p.m.

The Earl of Strafford

My Lords, I should like to add my support to this amendment and in particular emphasise the importance of the concept that no wages council should be abolished until an acceptable alternative has been found. I speak from personal experience as both my principal jobs, nurseryman and river-keeper, have been covered by the agricultural wages committee. I rang both my past and present employers this morning to sound them out. They stated that they found the agricultural wages committee guidelines extremely helpful and emphasised that they were especially valuable because they came from an independent body outside the industry.

I believe that the Government are treating the 2.5 million people involved very shabbily indeed. The least that they can do is to consult quickly and, having done so, publish the findings. It may well be that some wages councils are redundant, but, where a need is proved, they should be kept.

Lord Eatwell

My Lords, this amendment is intended to bring some rational thought and analysis into the Government's decision-making process as applied to wages councils. In our discussions on this clause so far—on 1st and 30th March—one vital ingredient of decision-making has been missing from the Government's case; namely, evidence. Many noble Lords have questioned the Government repeatedly as to the estimated employment effects of this measure, the expected impact on wages, the consequent impact on a range of social security benefits, the expected impact on tax revenues, and so on. Not a single question has been answered. I have not received any correspondence from the Department of Employment answering the questions that I put on 1st March, more than two months ago. Perhaps I may ask the noble Viscount: is his letter in the post?

There can be but three interpretations of the Government's persistent failure to provide any evidence for the beneficial effects that they believe will stem from the abolition of wages councils. The first reason for the lack of evidence may be that they do not have any. That this could be the case was revealed, perhaps inadvertently, by the noble Viscount when on 30th March he confessed to your Lordships that one of his key arguments—the assertion that two-thirds of workers in wages councils' industries were paid above the minimum—was based on studies that were anything up to 10 years out of date.

Secondly, it might of course be that the Government do have the evidence, but that they do not want to discuss it because it contradicts their case. If that were so, it would be disgraceful. I do not wish to suggest that it is so. The final explanation for the Government's unwillingness to consider any evidence may be that they simply do not care what the evidence says: they will go ahead anyway. That is perhaps suggested by the well-known case of Bottomley's list. As your Lordships will be aware, that is the list of studies which Mr. Peter Bottomley persuaded the Department of Employment to deposit in the Library of the other place. Most, as your Lordships will recall, contradicted the Government's argument that the abolition of wages councils would increase employment. For all that, the Government did not seem to care in the least. They seem to regard all evidence as irrelevant.

That is a disreputable way to proceed, not just because the working lives and livelihoods of 10 per cent. of the British labour force and their families are at stake; not just because that 10 per cent. contains some of the most vulnerable people in our society; but because the combination of the abolition of wages councils and the consequent social security provision will have a major impact upon the public purse.

I estimate that impact to be in the region of £400 million in a full year. The Government have not contradicted my figure. I must therefore assume that they accept it. If not, will the Minister tell us what is the Government's estimate? I am willing to give way now if he would like to tell us. Well, perhaps I can help him and remind him that on 30th March on that point he referred me to his argument in Hansard. He said: If the price of labour is raised by statute, the number of jobs goes down. But that does not mean that it is possible to make reliable numerical estimates. A great many factors influence the level of employment and wages in the labour market. It is idle to pretend that there is a magic formula which will isolate one single factor".—[Official Report, 30/3/93; col. 779.] With all due respect, that is absolute nonsense. Officials in the Department of Employment who may be economists will have advised the Minister that that is nonsense. Any decent economist could make a stab at solving that problem and provide an estimate which would stand up to consideration.

I now remain at a total loss as to why, at a time when public expenditure is under severe pressure, the Government should be prepared to throw away £400 million, subsidising some of the most backward employers using some of the most outdated production processes in this country.

The amendment merely requires that the Government treat that important issue with the seriousness that it deserves. That is all we are asking for. Given that the cost of obtaining the information will be minuscule compared to the Exchequer costs of abolition, is it not reasonable to ask the Government to think again; to conduct the research; and to find the information which the Minister admitted that he did not have, and so to deal with the lives of millions of our fellow citizens in a coherent, serious and decent manner?

Lord Gilmour of Craigmillar

My Lords, I shall not detain your Lordships long. After the admirably cogent speeches we have heard, there is little to say. I very much hope that the Government will accept the amendment, because it offers a favourable compromise, or modification, of what they propose in Clause 24, for which, after all, they have an extremely weak case.

For one thing, the Government have no mandate for this proposal. When I pointed out in the previous debate that the abolition of wages councils was not mentioned during the last election, my noble friend the Minister said that it had been mentioned often, both before the election campaign and after the election campaign. That was the point that I was seeking to make; the issue was not mentioned during the campaign at all. I should like to know why that was so. It could have been mere forgetfulness but I doubt that.

Secondly, as was pointed out by the noble Earl, Lord Russell, and the noble Lord, Lord Eatwell, there is no evidence to support the idea that wages councils destroy employment. The Government have singularly failed to produce any such evidence. All they have relied upon is 19th century dogma, if one is being charitable, and 19th century cant, if one is being uncharitable. I am prepared to be charitable and say 19th century dogma. But that is not enough when the Government are doing something so drastic and so serious as to take away protection from 2.5 million people, many of whom are extremely badly off.

If the dogma were remotely right one would expect virtually every employer concerned to be in favour of abolition but we know that that is not the case. In 1909 when Winston Churchill introduced wages councils a number of good employers strongly objected to being dragged down and damaged by bad and unscrupulous employers who did not pay sufficient wages. Not only is that bad socially but it increases inefficiency in industry. It often appears that the Government are anxious to make this country the Mexico of Europe, relying on cheap labour to do unskilled jobs. That is no good for our future economic prosperity.

Finally, the main reason is that it is unacceptable socially to damage the economic prospects of those who are least well off. It is particularly offensive when in many industries those in management are paying themselves vast amounts of money. It is offensive that such action should be combined with hitting the least well off. The Government should bear in mind that there is such as thing as fairness and they should also bear in mind what that means. I hope that they will support the amendment.

Lord Blease

My Lords, Clause 34 is one of the elements in the highly concentrated multipurpose Clause 51, which refers to Northern Ireland issues. During the Committee stage on 30th March I mentioned the lack of adequate consultation by the Government in respect of wages councils legislation and provisions in Northern Ireland. The noble Viscount, Lord Ullswater, disputed the remarks I made about consultation. I have since had an opportunity to check with some of the members of the existing nine wages councils in Northern Ireland. Those to whom I spoke agreed that there were consultations in 1988. However since then there has been nothing which could be called consultation. Those people drew attention to the fact that when the consultations were taken there was almost unanimous opposition by employers, workers and independent representatives on the wages councils to the proposed abolition of the nine wages councils in Northern Ireland.

Mention has been made of the evidence which may be required in a review but nothing has given rise to any change in the situation since 1988. There is no evidence that wages councils in Northern Ireland have led to a loss of employment or jobs or that they have prevented employment development in Northern Ireland. There is every reason for effective consultation with each of the respective wages councils before a decision is taken to abolish them. Indeed, I believe that it is a negation of the principle enshrined in the wages councils legislation for almost 80 years; that is the element of consultation. Therefore, I support the proposal that consultation should take place in a review of the wages councils machinery.

9.45 p.m.

Lord Henderson of Brompton

My Lords, why is speed necessary? What is the urgency as regards the clause in which the Government incorporate the abolition of the wages councils? As the noble Earl who moved the amendment said quite rightly, the amendment does not overturn the clause, which was accepted in Committee, but it suggests that time should be allowed for the Government to undertake the inquiries which the amendment embodies so that the nation as a whole can see, if that is the result of the inquiries, that the abolition of the wages councils is justified. No evidence has been produced so far to justify the clause. As the noble Earl quite rightly said, we want to know what is the true cost of employing labour. We shall not know that until those inquiries have taken place.

If there is no hurry—and we have heard no justification for the hurry—surely there is every reasonable justification for taking on board the inquiries which this amendment proposes. When a law has existed as the law of the land since 1909, surely a government should not come to parliament with a shotgun and overturn that law without evidence of the need to overturn it. I find that shocking and distasteful in the 18th century sense of being unpleasant to the taste. It is not in conformity with good parliamentary practice. If the Government were prepared to accept an amendment of this nature—and I do not suggest that this amendment is ideal but it embodies all the procedures which should be undergone before such a radical change is made—I should applaud them. If a change is made after a due period of a year or so after the investigations have taken place, at least the Government could defend themselves. At present they have no cover; they are naked. I find that distasteful also.

I endorse most strongly the speech of the noble Baroness, Lady Lockwood. Unfortunately, we have a very poor reputation for transgressing European law. I should have thought that the Government would take every conceivable opportunity to avoid transgressing European law. And yet, counsel's opinion before the Equal Opportunities Commission is that the Government's actions may well transgress European law. Once again we shall be red faced in shame before our European neighbours. That is highly undesirable.

The noble Lord, Lord Eatwell, costed the operation. I wish to demonstrate with one small example how the abolition of the wages councils can affect those 2.5 million people who are at the bottom of the heap in employment terms. I give hard evidence. Wages councils were abolished for those under the age of 21. I have an example from one person who is under the age of 21. It comes from a citizens' advice bureau in Berkshire. It has a client who is a hairdresser and who is paid £30 a week for a 50-hour week with no mealbreaks. The bureau comments that her pay is less than income support. There we have it in a nutshell.

Lord Finsberg

My Lords, this series of discussions started when the noble Earl, Lord Russell, said that the policy had been decided and that he was not trying to go back on the whole issue but was merely trying to obtain reports. But of course it very soon widened. Indeed, the noble Baroness, Lady Turner, made it very clear that she wanted not merely to see wages councils retained but their powers greatly extended. Having served on a wages council many years ago and then served on an employers' organisation that had to bear the results of those councils, I must say that I believe that they are not in the interests of general employment in the country.

The noble Lord, Lord Henderson, asked why there was such speed in the matter. Frankly, I ask: why has it taken so long to reach this stage? Many of us in another place in the last Parliament deeply regretted that the Government did not then proceed with the abolition of wages councils. I have never believed that those councils are a protection. One of the things that so often happened with them was that they had tripartite representation—that is, employers, unions and independents. The independents were mainly from universities and were not engaged in the business of commerce. They did not realise that, by giving their support to the proposals on the employees' side, it made it virtually impossible for many employers to remain in business. I cannot see that there is any advantage in calling for a report which will produce some sort of figures which may or may not justify the abolition or the retention of wages councils.

Certainly when anyone adduces in favour of retaining wages councils—for example, the Low Pay Unit—that at once sends me running for cover. Organisations like the Low Pay Unit or the London Food Commission are basically self-appointed bodies. Frankly, they do not fall in the same category as the important ones mentioned by the noble Baroness, Lady Turner. For example, the citizens advice bureaux. I listen much more to them. However, in the end, they do not represent the general views as regards what is happening in the country. I hope that my noble friend will not accept this series of amendments. I do not believe that they are helpful in any way.

Lord Blease

My Lords, before the noble Lord sits down, perhaps he will clarify a point. He expressed views and opinions and was not prepared to accept evidence presented by the noble Lord, Lord Eatwell. However, can he present any evidence to the House for the retention of wages councils? He did not speak of anything of an evidential nature; he merely gave opinions and views of his own.

Lord Finsberg

My Lords, 95 per cent. of me had sat down, but the other 5 per cent. of me had not. I was saying that I did not go along with organisations like the Low Pay Unit. With the greatest respect, it is not a matter for individual Members of your Lordships' House who do not have the facilities to obtain the detailed evidence. It is a job for government, I am satisfied that it is our responsibility—

Noble Lords

Hear, hear!

Lord Finsberg

Dear me, my Lords; I did not think that "hear hears" were normal behaviour in your Lordships' House. I thought that I had got rid of all that when I came here. I believe that it is correct for individual Members of this House to assess a general situation and make an informed judgment. That is what I have tried to do.

Lord Stoddart of Swindon

My Lords, before the noble Viscount responds, I should like him to reply to what his noble friend just said and produce the evidence that the abolition of wages councils will do all that is claimed.

Viscount Ullswater

My Lords, a range of issues has been raised. I shall endeavour to deal with as many as possible. I am afraid that I did not hear any new arguments. First I shall say a few words about the amendments themselves. They would not improve Clause 34 but negate its purpose entirely.

The amendments are damaging and unnecessary. They would require that before any individual council could be abolished there would be an extensive review. That series of reviews of individual councils would delay abolition. Amendment No. 80 says nothing about the action to be taken in the light of those reviews, other than publication of reports and that they may be laid before both Houses of Parliament. But under Section 13 of the Wages Act 1986 the Secretary of State already has power to abolish or vary the scope of operation of any wages council at any time. The amendments modify those powers so that abolition under the 1986 Act would become more difficult and long drawn out.

It would have been quite possible for my right honourable friend the Secretary of State to have abolished the wages councils using the powers invested in her by Section 13 of the Wages Act. The Government did not adopt that course. My right honourable friend thought it right to bring the abolition of the councils clearly and openly to Parliament in this Bill. She thought it right that the issue should be fully debated and Parliament's will made clear. Clause 34 has perhaps received more attention than any other in this Bill. It has been accepted decisively in your Lordships' Committee and secured a clear majority in another place. A series of amendments aimed at delaying or frustrating abolition has been rejected firmly.

It is time to recognise that the councils have ceased to serve any useful purpose. The wages councils can only impose pointless bureaucracy or destroy jobs. The details referred to in the amendments are entirely lacking in substance. They rely on bogus statistical comparisons. They obscure the real basis for the Labour Party's policy. Labour opposes abolition to damp down the clamour from trade union leaders, who see the councils as perpetuating union power and influence.

There can be no doubt that statutory wage fixing damages employment. I am surprised that some noble Lords opposite still appear to believe otherwise, but the point is inescapable. If the price of labour is increased the demand for it will fall. This basic relationship between price and demand is central to economics. They may not be teaching that at Cambridge any more. Noble Lords opposite have had every opportunity to say that they would reintroduce wages councils should they form a government. By their silence on this matter we now know where they stand.

Of course, the Labour Party tries to maintain that its replacement policy of a national minimum wage would not destroy jobs. The reality is that study after study has shown quite clearly that jobs would go on a massive scale. Indeed, if wage differentials were half restored over one million jobs could be destroyed by Labour's policy.

Wages councils are subject to the same economic laws. That does not mean that there is any reliable method of calculating the specific number of jobs which might be generated as a result of abolishing the councils. Your Lordships may recall that there were discussions on exactly that point in Committee. It is quite pointless to require a report on an employment effect which cannot be estimated.

Lord Eatwell

My Lords, I thank the noble Viscount for giving way. Can he explain that last point because I do not understand it. Why is it not possible to estimate the employment effect? How can he sustain that argument when study after study and article after article in the professional journals of the economics profession do exactly that for a wide variety of problems? It is certainly possible to do that. How can the Minister possibly contend that it is not possible?

Viscount Ullswater

My Lords, I contend particularly that Labour's national minimum wage would destroy jobs. That is easily done. There are many studies to which I could draw the noble Lord's attention. As I said, there is no reliable method of calculating the specific number of jobs which might be generated.

There are many factors affecting the economy and no reliable estimate can be made. A number of noble Lords opposite assume that abolition of the councils will be accompanied by a widespread fall in wages. We have been over this ground before but it is important to put it clearly on record. Past experience gives no support to that contention. The last Labour Government abolished 11 councils covering some 600,000 workers. There is no evidence of any reduction in average wages as a result. The Wages Act 1986 removed young people aged 21 and under from wages council regulation.

10 p.m.

Lord McCarthy

My Lords, since the noble Viscount cannot calculate the number of jobs that will be lost or gained by his own policy, why is he so precise in telling us how many jobs would be lost by our policy? He stated that our policy would lose a million jobs; we are not even in government yet. But he cannot calculate his own policy.

Viscount Ullswater

My Lords, the noble Lord, Lord Eatwell, asked how many jobs would be gained. I stated that there was no reliable method of calculating such an employment gain. I can cite the noble Lord plenty of studies for Labour's national minimum wage policy and indicate how many jobs would be lost on that basis, if the noble Lord wishes. The National Institute for Economic and Social Research indicates that even the first stages would cost 166,000 jobs.

Lord McCarthy

The noble Viscount must—

Viscount Ullswater

This is Report stage. Stephen Bazen indicates up to 880,000 job losses. Patrick Minford, from the University of Liverpool, refers to up to 1,400,000 job losses.

Noble Lords

Oh!

Viscount Ullswater

Noble Lords say, "Ah", and so on. What they mean is that they do not like economists who tell them facts that they do not appreciate. There is no evidence of any reduction in average wages as a result of the abolition of the wages councils abolished by the last Labour Government. As I said, the Wages Act 1986 removed young people aged 21 and under from wages council regulation. Their wages continued to rise.

I totally reject the assertion that abolition of the councils will have an adverse effect on women's pay. On the contrary, abolition will help women. It will free up the labour market. It will improve the climate for jobs. About 70 per cent. of the workers covered by the councils are women, many of them working part-time. There is no good evidence that abolition will cause their wages to fall. Pay differentials between men and women in full-time work in wages council industries are similar to those for full-time workers in all industries. Women's right to equal pay is dealt with under the Equal Pay Act, which was amended by the Equal Pay (Amendment) Regulations in 1983 to allow for equal pay for work of equal value, and the Sex Discrimination Act. I have to say to the noble Baroness, Lady Lockwood, that it is that legislation which protects women at work, not the wages councils.

Wages councils have never been seen as playing a role in equal pay. Up to 1975 the councils fixed lower rates for women. The Equal Pay Act put an end to that. Historically, wages councils did not encourage equal pay. They gave statutory backing to discrimination against women. We are confident that abolition will not infringe the Treaty of Rome or the equal pay directive.

Noble Lords opposite wish wages councils to be retained because they say there are no other organisations to represent the interests of workers in the industries covered. That is manifestly not the case. The trade unions USDAW and GMB represent workers on the main wages councils. Of course, only a minority of wages council workers have joined one of those or any other trade union. That is the choice which individual workers are fully entitled to make. But the result of that choice is what trade unions and the Labour Party will not accept.

That is the real reason why the Opposition are shackled to the wages councils system. It enables the GMB and USDAW to purport to represent large groups of workers whom they cannot attract as members. It gives them power to negotiate for those who have decided not to join. The real wages council issue is not about women or any of the other contentious points raised by noble Lords on the Benches opposite. It is about trade union power.

I thank my noble friend Lord Finsberg for declaring his interest and his experience from it. There is no evidence that average wages will fall, but every reason to believe that the jobs market will improve. I entirely reject the assertion made by the noble Lord, Lord Eatwell, that abolition of the councils will result in a net cost to the Exchequer. The favourable effects on profits and jobs will increase receipts and reduce expenditure on benefits linked to unemployment. Public finances will benefit from those additional sources. It is entirely unrealistic to attempt to calculate a figure.

We have carried out two full consultation exercises on the future of the wages councils and one in Northern Ireland. We have made it absolutely clear for a number of years that the councils could have no permanent place in our system. I take issue with my noble friend who seems to say that just because we did not make it a major plank in our election campaign we did not mean it, either before the election or after it. Some 85 per cent. of representations from employers and employer bodies support abolition.

There can no longer be any doubt that the wages councils have outlived their usefulness. Clause 34 abolishes them once and for all. Amendments Nos. 79A, 80 and 80A are not designed to modify or improve the abolition. They are an attempt to perpetuate the whole system. I ask the House to reject them.

Earl Russell

My Lords, I am deeply grateful for the support I have received from every quarter of the House. If I may mention one speech above others, I was particularly grateful to listen to the noble Earl, Lord Strafford, and I am grateful to have a breach between our families healed after about 340 years.

I cannot say I was quite so grateful for the Minister's reply, though I thank him for the trouble he put into it. He, above all, invoked delay. I thought he would. I wonder why the Government are in such a desperate hurry. It sounds as though they were not sure that they would be in office for long. I must ask the Minister whether he knows something that I do not.

I am also taken aback by the Minister choosing an amendment like this for an onslaught on Labour policy. The amendment was supported from every quarter of the House. If I may borrow that wonderful phrase of Donne's, the round earth's [four] imagined corners", it might well mean the supporters of the amendment. If the Minister wishes to debate Labour policy, let him put down a motion on a Conservative day, on a Wednesday, and we shall debate it with pleasure. It has nothing to do with this amendment.

The Minister again repeated, even after the arguments of the noble Baroness, Lady Turner, his argument that it is simple that if the price of labour goes up, demand must go down. That would be true if there were no other variant. But that is not the case, for if the amount of money that is paid to labour goes up, its spending will go up and that will in turn generate other employment. That is the factor which the Minister left out of his equation.

I was astonished too that the Minister was quite unable to estimate the effect of his policy. If I were to come before the House and move an amendment on that basis I dread to think what the Minister would say to me about it. I recommend to him the good old traditional maxim: "When in doubt, do now't".

On the effect of this abolition on European law the Minister says, "We are confident". They are always in trouble when they say that. However, I shall remind the Minister that the Government are not the final judge of whether the measure is contrary to European law. That will be judged in another place and I shall be very interested to see the result.

The noble Lord, Lord Finsberg, was one solitary dissident and I listened to him with pleasure and interest. He asked what was the use of having a report. As he spoke, I remembered the noble Lord, Lord Graham of Edmonton, on Part I of the Football Spectators Bill, calling for a report before that measure was brought into effect. The Minister said to him very much the same: what is the use of having a report? As a result, I regret to say, of tragic circumstances, we got one from Lord Justice Taylor. That Bill is still on the statute book but it has not been brought into effect. There is some use in calling for a report. I commend the amendment to the House.

10.10 p.m.

On Question, Whether the said amendment (No. 79A) shall be agreed to?

Their Lordships divided: Contents, 27; Not-Contents, 49.

Division No. 3
CONTENTS
Attlee, E.	Macaulay of Bragar, L.
Blease, L.	McCarthy, L.
Cocks of Hartcliffe, L.	Meston, L.
Darcy (de Knayth), B.	Nicol. B.
Dormand of Easington, L.	Pitt of Hampstead, L.
Eatwell, L.	Robson of Kiddington, B.
Falkland, V.	Rochester, L.
Galpern, L.	Russell, E. [Teller.]
Gilmour of Craigmillar, L.	Stoddart of Swindon, L.
Graham of Edmonton, L. [Teller.]	Strabolgi, L.
	Stafford, E.
Henderson office Brompton, L.	Turner of Camden, B.
Lawrence, L.	Wedderburn of Charlton, L
Lockwood, B.	White, B.

NOT-CONTENTS
Astor, V.	Goschen, V.
Barber, L.	Hacking, L.
Belstead, L.	Hemphill, L.
Blatch, B.	Henley, L.
Boardman, L.	Hesketh, L. [Teller.]
Brabazon of Tara, L.	Howe, E.
Caithness, E.	Lawson of Blaby, L.
Chalker of Wallasey, B.	Lindsey and Abingdon, E.
Chelmsford, V.	Long, V.
Cranborne, V.	Mancroft, L.
Cumberlege, B.	Marlesford, L.
Denton of Wakefield, B.	Mottistone, L.
Downshire, M.	Mountevans, L.
Ferrers, E.	Moyne, L.
Finsberg, L.	Pearson of Rannoch, L.
Fraser of Carmyllie, L.	Reay, L.
Gardner of Parkes, B.	Rippon of Hexham, L.
Gisborough, L.	Rodger of Earlsferry, L.

St. Davids, V.	Tebbit, L.
Shannon, E.	Teviot, L.
Skelmersdale, L.	Ullswater, V.
Stewartby, L.	Wade of Chorlton, L
Strathclyde, L.	Wakeham, L. [Lord Privy Seal]
Strathmore and Kinghorne, E. [Teller]
	Wynford, L.
Swinfen, L.

Resolved in the negative, and amendment disagreed to accordingly.

10.17 p.m.

[Amendments Nos. 80 and 80A not moved.]

Clause 37 [Extension of power to confer on industrial tribunals jurisdiction in respect of contracts of employment etc.]:

Lord Henderson of Brompton moved Amendment No. 81:

Page 54, leave out lines 19 to 26.

The noble Lord said: The Bill introduces a maximum level for claims made for pay in lieu of notice. This amendment would delete that maximum level. How the maximum level is introduced for claims made for pay in lieu of notice is that the Government intends to place jurisdiction for such cases before industrial tribunals. That is where there are maximum levels for such claims. I am quite sure that that is a welcome move.

However, it means that such claims, instead of being awarded their actual loss to the employee, which happens at the moment before the county courts, will have substituted a maximum level. That does not seem to be entirely reasonable. The citizens advice bureaux have quite rightly welcomed the move to industrial tribunals but are clearly jibbing at the idea of having those maximum levels instead of the actual loss to the employee awarded.

That was one of the items on which I and the citizens advice bureaux representatives had talks with officials at the Department of Employment, who were extremely helpful. They said, in shorthand, not to worry because there is an option for the employee to go to the county court instead of to the industrial tribunal and obtain the actual loss instead of the maximum loss per claim.

I was clearly reassured by what we heard from the officials. However, I move the amendment merely because I would like to have on the record the Government's view of the change and what the machinery is for the employee to make sure that he obtains the actual loss awarded instead of a maximum loss per claim. For that reason, I beg to move.

Baroness Denton of Wakefield

My Lords, we have considered carefully the points made by the noble Lord, Lord Henderson of Brompton, both today and in Committee as well as in representation with my officials, but we remain unconvinced of the merits of the amendment. The making of an order under Section 131, as amended by the Bill, will not deprive the civil courts of jurisdiction to hear cases involving breaches of employment contracts. They will have concurrent jurisdiction with the industrial tribunals as subsection (6) of Section 131, which is unchanged by Clause 37, makes plain. That means that any individual who wishes to claim damages in excess of whatever limit may be established in relation to tribunal awards will continue to be able to do so through the civil courts. An order made under Section 131 will make available a new forum for such complaints without barring people from using the existing one.

Industrial tribunals are intended to be relatively informal fora for the resolution of employment disputes. There is no need for either party to be legally represented and the Government would certainly not wish to encourage the regrettable trend towards such representation. In our view it is wholly reasonable that employers against whom tribunal cases are taken and who may have no legal representation should not stand to lose unlimited amounts of money in awards made against them. That is why there are already upper limits on the awards which tribunals can make in almost all other cases falling within their jurisdiction.

Legal aid is not, of course, available for representation at tribunals, nor will it be made so. It is, however, available to those who qualify where perhaps larger sums are at stake in the civil courts. The Government have always intended that an upper limit should apply, at least initially, in awards made under Section 131. The wording in the Bill, which this amendment seeks to delete, merely clarifies that such a limit can be set out under the order-making power. The resolution of contractual disputes as such will be essentially new territory for the industrial tribunals and we consider it prudent to have the power to set an upper limit until we have had the chance to assess how this new, somewhat experimental, jurisdiction is working out in practice.

In the light of my comments I hope that the noble Lord will not press his amendment.

Lord Henderson of Brompton

My Lords, I certainly will not press the amendment. I am grateful to the Minister for what she said. The concurrent jurisdiction clearly gives rise to questions. I would therefore ask the noble Baroness whether, if an employee is dissatisfied by a maximum level which is awarded at at tribunal, he or she can appeal to the county court.

Baroness Denton of Wakefield

My Lords, with leave, these are separate issues. The great thing is that the person going to the industrial tribunal will know before he goes what the maximum limit is.

Lord Henderson of Brompton

My Lords, is the noble Baroness in a position to be able to tell me whether or not an employee can appeal from a maximum award to the county court for the actual loss? If she cannot answer now, will she perhaps write to me?

Baroness Denton of Wakefield

My Lords, with the leave of the House, I hope that would be helpful to the noble Lord. These are two separate forms of jurisdiction. I was saying in my answer that they are concurrent and one does not exclude the other.

Lord Henderson of Brompton

My Lords, so I gather that there is no opportunity to appeal from the industrial tribunal. With that information, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendment No. 82:

After Clause 37, insert the following new clause: Agreements not to take proceedings before industrial tribunal

(".—(1) In section 140 of the 1978 Act (restrictions on contracting out)—

(a) in subsection (2) (exceptions), after the paragraph (fa) inserted by paragraph 21 of Schedule 7 to this Act, there shall be inserted— (fb) to any agreement to refrain from instituting or continuing any proceedings specified in section 133(1) (except (c)) or 134(1) before an industrial tribunal if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement.";

(b) after subsection (2), there shall be inserted—

"(3) The conditions regulating compromise agreements under this Act are that—

1. (a) the agreement must be in writing;
2. (b) the agreement must relate to the particular complaint;
3. (c) the employee must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed agreement and in particular its effect on his ability to pursue his rights before an industrial tribunal;
4. (d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the employee in respect of loss arising in consequence of the advice;
5. (e) the agreement must identify the adviser; and
6. (f) the agreement must state that the conditions regulating compromise agreements under this Act are satisfied.

(4) In subsection (3)—

"independent", in relation to legal advice to the employee, means that it is given by a lawyer who is not acting in the matter for the employer or an associated employer; and

"qualified lawyer" means—

1. (a) as respects proceedings in England and Wales—
   1. (i) a barrister, whether in practice as such or employed to give legal advice, or
   2. (ii) a solicitor of the Supreme Court who holds a practising certificate;
2. (b) as respects proceedings in Scotland—
   1. (i) an advocate, whether in practice as such or employed to give legal advice, or
   2. (ii) a solicitor who holds a practising certificate."

(2) Schedule (Compromise contracts) to this Act shall have effect for making corresponding amendments in the Sex Discrimination Act 1975, the Race Relations Act 1976, the Wages Act 1986 and the Trade Union and Labour Relations (Consolidation) Act 1992.").

The noble Viscount said: My Lords, it gives me great pleasure to bring forward Amendment No. 82, together with which it may be helpful to deal with Amendments Nos. 95 and 96. I hope that noble Lords on both sides of the House will welcome these new provisions.

The amendments will offer a speedy means of assisting termination settlements between parties to a dispute which safeguard the interests of the individual. They relate to agreements reached privately between the parties which settle a particular dispute that has arisen between them. Where the agreement includes a term precluding the individual's right to bring (or to continue with) proceedings before an industrial tribunal in respect of that dispute, that term will be enforceable provided the conditions set out in the amendments are satisfied.

I can reassure any noble Lord who might have anxieties on this point that it would not be possible for an individual to contract out of his right to bring a tribunal claim in advance of any dispute, by promising not to bring a tribunal case in relation to any possible future breach—by the employer, for example. We are proposing that the procedures should only be available in the context of an agreement which settles a particular complaint that has already arisen between the parties to that complaint. They will not allow an individual to compromise his right to present, or to continue with, a claim to a tribunal in respect of any matter other than the particular complaint which is the subject of the agreement.

At present, under the 1978 Act, any term in an agreement which precludes an employee's right to bring proceedings before an industrial tribunal is generally void and cannot prevent the employee from bringing a subsequent tribunal case. The most significant exception is where an ACAS conciliation officer has taken action under Sections 133 or 134 of the 1978 Act to assist the settlement. Similar provisions are contained in the Sex Discrimination Act, the Race Relations Act, the Wages Act and the 1992 Consolidation Acts, which Amendment No. 95 amends in a similar way.

ACAS takes the view, supported by legal advice, that it has no statutory role to become involved where the parties to a dispute have already reached an agreement between themselves, since there is no dispute outstanding. Conciliation officers therefore have no role to play in validating agreements reached privately between the parties. Following representations from a number of employer associations, we have consulted interested parties on the proposal set out in these amendments, and the response has revealed that there would indeed be widespread support for such a change.

Clearly, any amendment which allows individuals to compromise their right to bring a claim to an industrial tribunal must be very carefully drawn. First, we propose to restrict the ability to compromise in this way to cases where the individual has received independent advice from a solicitor who holds a practising certificate, or a barrister —or, in Scotland, an advocate—who is in practice as such or is employed to give legal advice. The second safeguard provided by the new clause is that the advice must be covered by professional negligence insurance against the risk of a claim by the individual in respect of loss arising from the advice given. This will ensure that individuals who agree in these circumstances not to continue with or institute tribunal proceedings are adequately protected against being given negligent advice.

The clause also requires that the individual must have received independent legal advice on the terms and effect of the proposed agreement and in particular its effect on his ability to pursue his rights before an industrial tribunal. The agreement must be in writing, identify the adviser and state that the conditions regulating compromise agreements are satisfied.

The amendments also extend the order-making powers in Schedule 13 of the 1978 Act to provide powers to make regulations to ensure where an employee is reinstated or re-engaged in consequence of an agreement reached under the new provisions, there will be no break in his period of continuous employment.

Schedule 13 already provides for continuity to be preserved in certain cases. These cases include re-employment in consequence of the presentation of a complaint of unfair dismissal under the 1978 Act, and re-employment in consequence of an agreement reached with the help of an ACAS conciliation officer in connection with such a complaint.

The amendment provides that the order-making power will extend to re-employment resulting from compromise agreements reached under the new provisions in the 1978 Act, or the Sex Discrimination or Race Relations Acts. It also extends the order-making power to cover re-employment in consequence of the presentation of a complaint of dismissal under the Sex Discrimination or Race Relations Acts, and re-employment after conciliation by an ACAS officer in relation to such a claim.

No one can be compelled to enter into agreements of this type, but where they choose to do so, I hope that noble Lords will agree that the safeguards which the amendments require will offer a substantial degree of protection to individuals. They will also make available to employers a reasonably simple and speedy means of securing such agreements while at the same time avoiding unnecessary additions to the already heavy caseloads of the industrial tribunals. I commend the amendments to the House. I beg to move.

10.30 p.m.

Baroness Turner moved, as an amendment to Amendment No. 82, Amendment No. 82A: After Clause 37, in subsection (4), line 4, after ("associated employer") insert ("and to whom the employee has not been referred by the employer").

The noble Baroness said: We are not very happy about the proposal contained in Amendment No. 82 because we still have a fear, despite all the safeguards to which the noble Viscount has referred, that individuals could be pressurised or misled into waiving their statutory rights. It is quite true that the amendment seems to be fairly tightly drawn and that, as the noble Viscount said, agreements would only be valid where the employee receives independent written legal advice.

However, it seems to me that employers will be keen to use this new provision and could well encourage employees to seek legal advice. They might even be prepared to pay for such advice. Even if that is not done, the employer might suggest the names of lawyers to the employee and encourage him or her to seek advice at no cost. That would call into question the independence of the advice. It is for that reason that our amendment seeks to deal with that issue.

We want to insert: In subsection (4), line 4, after ("associated employer") insert ("and to whom the employee has not been referred by the employer").

We believe that that is a way in which the intentions of the amendment can be achieved since we certainly accept that the Government intend that the advice should be truly independent, and that the individual should not be put under any pressure at all to give up a statutory right. I have consulted with the TUC about this and they share this worry. They feel that if we can have an amendment on the lines suggested, it might deal with the whole question of the appearance of independence as well as the actuality of it so far as concerns the legal advice.

Therefore, I hope that the Minister will be prepared to look favourably on the amendment which we have tabled to his amendment. I beg to move.

Lord Mottistone

My Lords, from the employers' point of view the Government's amendment is very welcome. It opens an additional avenue for resolving disputes and as such it is a useful initiative. In particular, it is to be hoped that this amendment will help to reduce the increased litigation which seems to have arisen in recent years. It would be helpful if my noble friend, when he winds up this little debate, has a comment to make on whether he agrees that might be the case.

The only point about it is in relation to what we discussed in Committee as regards an amendment of mine which was seeking to change the 1990 rules in which ACAS is not prepared to formalise agreements reached between employers and employees. That is not handled by this. From what my noble friend the Minister said in Committee, I had hoped that he would tackle the problem then. Indeed, he went further than that. In part of his introductory speech, I thought that I heard him say that ACAS particularly takes the view that it will not get involved in matters which have already been agreed between an employer and an employee. It is perhaps therefore not worth pursuing the matter this evening - it is getting a bit late - and I propose not to move Amendment No. 90 when we reach it. In the meantime, I say again to my noble friend that this is a definite movement forward and that it is welcomed by employers. I hope that the House will agree to it when we come to take a decision on it.

Lord Rochester

My Lords, I, too, should like to give a general welcome from these Benches to the amendment moved by the noble Viscount, Lord Ullswater. I hope that he will give sympathetic consideration to the further amendment to his amendment which has been spoken to by the noble Baroness, Lady Turner.

Lord Wedderburn of Charlton

My Lords, these amendments address a very important, practical, yet sensitive area of employment law. Already with the protections of Section 140 of the 1978 Act, last year ACAS saw 35 per cent. of claims compromised with conciliation officers. This will affect not merely all 72,000 employees who registered claims with ACAS; it will fan out into the delicate nexus of management-employee trade union relations. All systems of modern labour law regard this as a sensitive area because it is easy for management to lean upon an individual employee to give up his or her claim. That is why the Government have tried to build in protections beyond those which Section 140 has so far provided and, as the noble Lord, Lord Mottistone, said, reaching into new areas of compromise of claims. I should like to ask whether those protections are adequate, although I share the ambition that the burden on industrial tribunals should, if possible, be relieved somewhat.

I shall take three points, although there are many. First, the Minister stressed that this applied only to a particular complaint. It might be that the Government should look a little more carefully at what is meant by that phrase and make it clearer in the clause.

Secondly - and this is the linchpin of the new policy which the Government are putting forward in the proposed new clause and in all the schedules that go with it - we have the basic protection of a lawyer who is insured (we are all in favour of that, especially the lawyer) and who is independent. That seems an admirable target to aim at, but it is not clear that it has been reached because the definition of "independent" is that in relation to legal advice to the employee, "independent" means that the advice is given by a lawyer who is not acting in the matter for the employer or an associated employer". One can immediately think of situations which are not within that definition. A lawyer could be acting for the employer on other associated matters. One would have thought that he, too, should be ruled out. It is a very loose definition and I ask the Minister to look at it again before Third Reading. It is a pity that this matter was not introduced earlier since it is so fundamental.

My third point takes us back to a debate that we had earlier this evening and to an announcement that was made then. If an employee is a member of a trade union, he or she is highly likely to ask that the matter be discussed not merely with an independent lawyer but also with local union advisers, and may ask and insist that that be done on work premises.

There is another point. One wonders whether the advice, whatever it is to be, should not be available to the employee at some suitable place and time. However, let us suppose that the employee demands this and that the employer then penalises the employee for his or her insistence. We cannot possibly know the impact of the clause on that situation because we do not know what are to be the clauses which the Government will introduce on Third Reading on precisely that issue - action short of dismissal in regard to trade union membership and activities. Those matters are now within the ambit of debate on the Bill, but are totally unknown to us. It may even be that the final draft of the proposals is unknown to the Minister. This is an increasingly serious position. It suggests that there may be a need to go back and look at some of those matters in context when we see the Government's proposals, and that to introduce them on Third Reading is a somewhat strange procedure.

It will, I think, be said that I have brought in the question of trade union membership. I have brought it in for a simple reason; namely, that the presence of the trade union, if required, is the linchpin of the definition of protection and proper protection in some of the Continental systems of labour law. Perhaps we should consider it, but, if we considered it, we would not know what it meant in terms of the protection of the employee until we saw the new clauses.

I therefore hope that the Minister will look carefully at the question of independence and the definition of independence of the lawyer concerned. He must also consider where and when the employee has the right to obtain that advice and, in respect of a trade union member, whether he can take the advice at the workplace, within working hours or not, if the request is made.

Lord Blease

My Lords, perhaps the Minister will help me when he replies. He will be aware that Amendment No. 82 is incorporated in Clause 51, which deals with Northern Ireland affairs, and there appears as Amendment No. 113. He will be aware also that this proposal was introduced late in the consultation period and that considerable correspondence passed between departments in Northern Ireland and Great Britain dealing with aspects of this matter in relation to Northern Ireland. There are different procedural arrangements through the Labour Relations Agency and conciliation officers. Certain safeguards were promised during the, consultation period. I am not aware that the people concerned are protected and I should appreciate the Minister's help now, rather than having to raise the matter at three o'clock in the morning, given the way we are proceeding at present. I shall now read from a Northern Ireland Committee, Irish Congress of Trade Unions, paper which states: Of greater concern would be the possibility that the proposed change might lead to employees being pressurised, either into seeking representation by solicitors, or waiving their statutory rights. If the definition of legal representation was confined to solicitors, we can see no reason why they should indirectly be given any special status in the operation of the legislation. ….. Equally important, the amendment might lead to Conciliation Officers finding their independence compromised if, in the course of a proposed settlement, employers demand that individual applicants waive their rights as part of that settlement. The Conciliation Officer in these circumstances might be asked by the applicants or the legal representatives for advice. The role of the Conciliation Officer would then effectively change from conciliation to arbitration, thus impairing the long-term independence of the Agency's conciliation work". The Minister will know this and it is on record that the Labour Relations Agency conciliation service has a success rate of about 80 per cent. Indeed, not one complaint has had to go to a labour court. Perhaps the Minister will tell me whether there are any safeguards here as regards the Northern Ireland situation.

10.45 p.m.

Viscount Ullswater

My Lords, the noble Baroness, Lady Turner, demonstrated that she and noble Lords opposite were clearly worried that we had not drawn the definition of "independent lawyer" tightly enough, their approach being that anyone whom the employer suggests to the employee should be ruled out, presumably in case they were biased in the employer's favour. While I have sympathy with the motives, I do not believe that such a provision is in any way necessary. Indeed, it might be unhelpful to the employee. Clearly, the lawyer cannot act for both parties to a dispute at the same time. The government amendments make that clear.

Furthermore, solicitors and barristers are professional people working within a code of professional ethics. They should not of course take on cases which would breach their professional rules. Employees are not compelled to take their employer's advice about whom to consult. I have to say to the noble Lord, Lord Wedderburn, that if they are not satisfied with the advice they receive, they do not have to take it. It is a voluntary process. It is believed to be a sensible one which would avoid the necessity of going before an industrial tribunal. Employees are free to consult no one and to take their case to an industrial tribunal if they wish.

I point out to the noble Lord, Lord Blease, that the procedure is voluntary. If an employee feels that he is not receiving the right advice, it is not a question of going from conciliation to arbitration. If he feels that the settlement that the employer is offering him is not the one that he wants and he feels that he can obtain a better one from an industrial tribunal, there is nothing to stop him from applying to one. The provision relates to when the two sides can agree.

However, an employee who is hoping to settle his complaint amicably with his employer and avoid a tribunal hearing and who has had no previous contact with lawyers might well ask his employer where he might find someone suitable. There can be no good reason to provide that, merely because he has done so, a term in a compromise agreement that he should refrain from seeking tribunal proceedings will be void. I hope that the noble Baroness will not seek to press the amendment. I believe that we have tackled the issue of independence adequately.

Baroness Turner of Camden

My Lords, I note that the Minister has said that our amendment to his amendment is unnecessary. It would not do any harm and it would send out the right signals to trade unions and others concerned with labour relations that the advice should be truly independent and that the individual should be under no pressure from any quarter to give up a statutory right. The employee is not in an equal position when he talks to his employer. He can often be easily intimidated. For that reason it was felt that it would be a good idea to spell out in the legislation that the advice should be seen to be independent, because the employee would not be referred to a lawyer by the employer but would seek his own independent advice.

I do not intend to press the amendment at this hour of the night. Having heard what the Minister has said about independence, and so forth, I beg leave to withdraw the amendment.

Amendment No. 82A, as an amendment to Amendment No. 82, by leave withdrawn.

The Deputy Speaker (Lord Cocks of Hartcliffe)

My Lords, Amendment No. 82. The Question is that the amendment be agreed to?

Viscount Ullswater

My Lord, I appreciate the guarded welcome given to the amendment by noble Lords. I understand that they may not be entirely satisfied with the terms of the amendment. I repeat to my noble friend Lord Mottistone that ACAS has been given clear advice that it has no statutory remit to become involved in such agreements, and it has formulated its policy accordingly. In cases where agreement has already been reached, it is, by definition, impossible for conciliation officers to seek to promote an agreement. The practice of validating or rubber stamping such agreements became a considerable drain on ACAS resources until it ceased after the legal advice was given in 1990. In 1989, the year before the service was withdrawn, ACAS dealt with well over 17,000 such cases representing 36 per cent. of the total number of cases received.

We believe that this is a useful way of freeing up the industrial tribunal process. The industrial tribunals will not be burdened with those cases.

On Question, Amendment No. 82 agreed to.

Clause 38 [Restriction of publicity in cases involving sexual misconduct: industrial tribunals]:

Viscount Ullswater moved Amendment No 83:

Page 54, line 38, leave out ("(4A)") and insert ("(5A)").

The noble Viscount said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 84 to 87. They are minor drafting amendments none of which affect the meaning of the clauses. Amendments Nos. 83, 85 and 86 renumber the new paragraphs inserted in the 1978 Act while Amendments Nos. 84 and 87 maintain consistency with the amendments proposed in Committee by the noble Baroness, Lady Turner.

On Question, amendment agreed to.

Baroness Turner of Camden moved Amendment No. 83A:

Page 54, line 43, at end insert:

("(aa) for cases involving allegations of discrimination on grounds of sexual orientation, or that an individual has been diagnosed as HIV positive or with AIDS, for securing that the registration or other making available of documents or decisions shall be so effected as to prevent the identification of any person affected by or making the allegation; and").

The noble Baroness said: My Lords, at the Committee stage we welcomed the Government's amendments designed to protect privacy in cases where sexual harassment was alleged and that the protection should extend to the person making the allegation and others concerned in the allegation. On reflection, however, we believe that there are other cases where it might be appropriate to make similar provision. Therefore, the amendment which we have tabled tonight involves cases of discrimination involving sexual orientation—I wait to hear what the Minister has to say in respect of his Amendment No. 84A and those which follow because it appears that the Government have moved towards our thinking —and persons diagnosed as HIV positive or with AIDS. We believe that such persons also need this protection.

I recall that when several years ago the House considered a previous employment Bill I tabled an amendment designed to give protection against discrimination in employment to persons diagnosed as HIV positive or with AIDS. I was advised by the then Minister that that was regarded as unnecessary. The Government believed—and indeed had issued guidance to the effect—that in almost all cases of discrimination on such grounds redress existed through the IT system because such discrimination was unfair.

There have been relatively few cases yet the Terence Higgins Trust has received more queries and complaints about employment discrimination than about any other matter. It seems likely that the fear of publicity deters people who might otherwise take cases to industrial tribunals. Of course, some celebrities have been willing to identify themselves as HIV positive or with AIDS but their very celebrity can give some kind of protection and they are not usually worsened financially as a result of the publicity. Not so the ordinary citizen. If, therefore, protection against unfair discrimination is to be made a reality such people must have privacy protection. I feel sure that otherwise they will continue to be unwilling to make use of such remedies as exist. I hope that tonight the Minister has been persuaded of the reasonableness and the justice of the amendment. I beg to move.

Viscount Ullswater

My Lords, Clauses 38 and 39 deal with tribunal cases where evidence is likely to be given which includes intimate personal details relating to the sex or sexuality of one or more of the parties or witnesses. What noble Lords opposite are proposing, however, extends into areas which the clauses were never designed to cover. They suggest that the powers given to industrial tribunals under new subsection 4A(a) should be extended to cover cases where two kinds of allegations were to be made; either of discrimination on grounds of an individual's sexual orientation—which new subsection 4A(b) is already intended to cover—or that an individual had been diagnosed as HIV positive or as having AIDS, which in the absence of any allegation of sexual misconduct are not relevant matters for the purposes of these clauses.

The powers conferred by new sub-paragraph 4A(a) will allow tribunals to remove permanently from decisions and other public documents any information which would identify any person making or affected by any relevant allegations. It is restricted to cases which involve allegations of indecent assault or other, more serious, sexual offences. That is a very small category of tribunal cases, and it is right that it should remain so.

Powers to remove names in those limited circumstances are largely necessary to ensure that industrial tribunals can comply with the Sexual Offences (Amendment) Act 1992, which forbids publication of the identity of a victim of an alleged sexual offence. Recording decisions without including the names of the individuals involved represents a significant departure from the principle of open justice, and in the interests of that important principle it would not be right to extend this provision further.

The noble Baroness, Lady Turner, has suggested that the provisions should be extended so that reporting restrictions might apply in cases involving sexual orientation or AIDS. The clause was not designed to cover allegations of discrimination relating to AIDS or HIV and without any element of sexual misconduct. To do so would go far beyond the intentions of the new powers and would have wide implications. The public consultation which preceded the government amendments introducing the clauses in Committee did not cover this proposal. It would not be appropriate to extend the clauses in this way at this late stage in the consideration of the Bill.

However, it was always the intention, as I made clear in Committee, that the definition of "sexual misconduct" used in Clause 38 should include adverse conduct related to the sexuality of the person at whom the conduct is directed. This definition determines the type of case where an industrial tribunal may make a restricted reporting order. For example, an industrial tribunal hearing a case where an employee was dismissed on grounds of his sexual orientation should have power to make a restricted reporting order, if it felt that would be appropriate.

It has been suggested that the wording used in Clause 38 is perhaps not quite as clear on this point as it could have been, and I am therefore pleased to introduce this small amendment, and a similar amendment to Clause 39, to clarify the point beyond any possible doubt. I hope that given that explanation and the Government's clarification the noble Baroness will withdraw her amendments.

Baroness Turner of Camden

My Lords, at this late hour I shall withdraw the amendment but I must express disappointment at the Minister's reaction to the proposition contained in Amendments Nos. 83A and 86A. My information is that people who have been diagnosed as HIV positive or as having AIDS suffer a fair amount of harassment and often discrimination in employment. One reason that they often fail to make use of the available redress by taking the case to an industrial tribunal is that they are afraid of the publicity that will arise if they do so.

The Minister says that the proposal has been introduced at a rather late stage and I accept that. However, I hope that the Government will undertake some further consultation in this area because there is a real case to be made. Even if it cannot be attached to this Bill I hope that at some time in the future, when a suitable vehicle arises, it will be possible to accord to people in that category the same kind of privacy protection which is intended in the Bill as it now stands. However, having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendments Nos. 84 to 86:

Page 55, line 7, after ("by") insert (", or as the person making,").

Page 55, line 16, after ("sex") insert ("or sexual orientation").

Page 55, line 27, leave out ("(4A)") and insert ("(5A)").

Page 55, line 46, leave out ("(4A) above") and insert ("(5A)").

The noble Viscount said: My Lords, I have spoken to these amendments. I beg to move.

On Question, amendments agreed to.

Clause 39 [Restriction of publicity in cases involving sexual misconduct: Employment Appeal Tribunal]:

[Amendment No. 86A not moved.]

11 p.m.

Viscount Ullswater moved Amendments Nos. 87 and and 87A:

Page 57, line 28, after ("by") insert (", or as the person making,").

Page 57, line 37, after ("sex") insert ("or sexual orientation").

The noble Viscount said: My Lords, I have already spoken to these amendments. I beg to move.

On Question, amendments agreed to.

Viscount Ullswater moved Amendment No. 88:

After Clause 39, insert the following new clause: Restriction of vexatious proceedings

(". After section 136 of the 1978 Act there shall be inserted— Restriction of vexatious proceedings.

136A.—(1) If, on an application made by the Attorney General or the Lord Advocate under this section, the Appeal Tribunal is satisfied that any person has habitually and persistently and without any reasonable ground—

1. (a) instituted vexatious proceedings, whether in an industrial tribunal or before the Appeal Tribunal, and whether against the same person or against different persons; or
2. (b) made vexatious applications in any proceedings, whether in an industrial tribunal or before the Appeal Tribunal,

the Appeal Tribunal may, after hearing that person or giving him an opportunity of being heard, make a restriction of proceedings order.

(2) A "restriction of proceedings order" is an order that—

1. (a) no proceedings shall without the leave of the Appeal Tribunal be instituted in any industrial tribunal or before the Appeal Tribunal by the person against whom the order is made;
2. (b) any proceedings instituted by him in any industrial tribunal or before the Appeal Tribunal before the making of the order shall not be continued by him without the leave of the Appeal Tribunal; and
3. (c) no application (other than one for leave under this section) shall be made by him in any proceedings in any industrial tribunal or in the Appeal Tribunal without the leave of the Appeal Tribunal.

(3) A restriction of proceedings order may provide that it is to cease to have effect at the end of a specified period, but shall otherwise remain in force indefinitely.

(4) Leave for the institution or continuance of, or for the making of an application in, any proceedings in an industrial tribunal or before the Appeal Tribunal by a person who is the subject of a restricted proceedings order shall not be given unless the Appeal Tribunal is satisfied that the proceedings or application are not an abuse of the process of the tribunal in question and that there are reasonable grounds for the proceedings or application.

(5) No appeal shall lie from a decision of the Appeal Tribunal refusing leave for the institution or continuance of, or for the making of an application in, proceedings by a person who is the subject of a restriction of proceedings order.

(6) A copy of a restriction of proceedings order shall be published in the London Gazette and in the Edinburgh Gazette." ").

The noble Viscount said: My Lords, in moving Amendment No. 88, I shall speak also to Amendments Nos. 98 and 115. It gives me great pleasure to bring forward the amendments. I hope that noble Lords on both sides of the House will welcome them.

As my noble friend Lady Gardner of Parkes described to us so vividly in Committee, some industrial tribunals experience serious difficulties with the occasional individual who habitually and persistently instigates vexatious tribunal proceedings without any reasonable grounds. Fortunately, such people are few and far between. They can, however, create an enormous amount of unnecessary work and inconvenience, both for the tribunals and for employers who have to waste time and money defending themselves against meritless accusations.

Tribunals do, of course, have powers to hold a pre-hearing assessment to warn parties that costs may be awarded if they continue with their cases and lose. Unfortunately, that has not proved a sufficient deterrent. One individual is known to have brought over 100 vexatious applications, and another somewhere between 60 and 70. The risk of having to pay costs does not appear to have deterred them one iota.

We are, therefore, now proposing that the Employment Appeal Tribunal should be given powers to make a "restricted proceedings order" which would prevent a litigant judged to be vexatious from continuing with any outstanding complaints or instituting further proceedings at an industrial tribunal, or before the EAT anywhere in Great Britain. Once the order had been made that litigant would only be able to pursue a case if the EAT gave its prior consent.

The new powers that the Government propose for the EAT are similar to the current provisions in Section 42 of the Supreme Court Act 1981 which cover England and Wales—similar provision is made for Scotland in the Vexatious Actions (Scotland) Act 1898—and lay down procedures for dealing with vexatious litigants before the courts generally. The powers given to the EAT will, however, address the specific problem of vexatious litigants before the industrial tribunals and the EAT itself in a manner appropriate to those tribunals. In particular, in making an order, the EAT, whether in London or in Edinburgh, will be able to take into account the litigant's conduct before tribunals in either jurisdiction. Equally, once an order is made it will apply throughout Great Britain.

We anticipate that such orders would be made in only a very small number of cases, where the EAT had satisfied itself that there was no doubt about the vexatious nature of the claims brought by the litigant. The order could be made by the EAT only on application from the Attorney-General or the Lord Advocate.

I hope noble Lords will agree that those powers are very carefully framed to ensure that they are only used where absolutely necessary and where there is no doubt about the intentions of the applicant. However, the powers should allow tribunals to deal effectively with the serious problem of vexatious litigants who have, although few in number, caused so much inconvenience and wasted effort in the past. I beg to move.

Baroness Turner of Camden

My Lords, as he rightly said, the Minister did undertake in Committee to consider the matter as a result of the amendment moved by his noble friend Lady Gardner of Parkes. I expressed some doubts then because it did not seem to me that there was much evidence of there being large numbers of people involved. However, I do understand that the one or two who, apparently, exist can cause a great deal of trouble and waste much time and public money.

We certainly do not intend to speak in opposition to Amendment No. 88 this evening. However, there is a point that I should like to raise with the Minister. In 1989, the Government introduced powers to impose a £150 charge on applicants to industrial tribunals. That could be imposed by a chairman sitting alone if he or she became convinced that there was no case or if the individual refused to accept a settlement proposing conciliation. Although those powers exist, I understand that they have not yet been put into effect. I am pleased about that because I recall that when they were introduced they occasioned a great deal of hostile comment.

However, it seems to me that if the Government have the procedures outlined in Amendment No. 88 in legislation they probably do not need the powers to impose the £150 charge. Given a choice, I would prefer the procedure set out in Amendment No. 88. If we have Amendment No. 88, which is specifically designed to deal with vexatious litigants, could the Government decide not to proceed with the £150 charge? That might be a good idea in the circumstances. Perhaps the Minister would care to address that point in his reply.

Lord Meston

My Lords, I too should like to welcome Amendment No. 88, although I question whether it goes far enough and deals with the problem in the right way. Having said that, I congratulate the noble Baroness, Lady Gardner of Parkes, on raising the matter at Committee stage. The real problem of vexatious litigants in industrial tribunals is clearly one which she has endured, as I have. One has spent endless hours listening to the ramblings and rantings of such people with the scant comfort that one is being paid for one's pains. Indeed, having heard tonight from the Government Front Bench that legal representation in tribunals is a regrettable trend, one suspects that one should not be there at all.

Vexatious litigants in tribunals, as elsewhere, cause worry and expense to those against whom they bring proceedings. They also waste the valuable time and resources of the already overloaded tribunal system, to the detriment of those who have good, arguable claims. Tribunals seem particularly afflicted by vexatious litigants; and, despite what has been said from both Front Benches, from my perspective such people do not seem to be as few and far between as has been suggested.

Tribunals seem afflicted in that way for a number of reasons. Those must include the absence of any legal aid to filter out hopeless claims and, as has effectively been conceded by the Government, the inadequacy of the various pre-hearing procedures and of the cost deterrents which are already in place. It has also to be recognised that vexatious litigants are often impervious to such sanctions.

The legal need for the amendment arises because of the ambiguous status of industrial tribunals. If they were clearly understood to be courts the existing mechanisms under Section 42 of the Supreme Court Act, to which the noble Viscount referred, would apply, as would the Contempt of Court Act, and no doubt their Scottish counterparts. I suggest that it would have been preferable, and simpler, merely to have provided that for the avoidance of doubt tribunals were covered by the existing machinery.

The amendment means that someone who is declared vexatious in ordinary civil litigation under the existing procedures is not prevented from starting a hopeless tribunal claim. Likewise, someone who is declared vexatious under the proposed new clause is not thereby restrained in any way from starting hopeless civil litigation in the courts. Moreover, the new clause does not even allow the fact that someone has been declared vexatious in the civil courts to be relied on when the proposed new machinery is operated in the EAT. That may mean that in some cases—and it may be in only a few extreme cases—two separate orders will have to be obtained.

It seems to me that now that industrial tribunals are to have an extended jurisdiction, including contractual disputes, it is unnecessary to have two separate procedures and that some thought could have been given to extending the existing arrangements under the Supreme Court Act and its Scottish equivalent to cover the situation more neatly. Therefore, I suggest that the amendment does not go far enough. I realise that the provision has been introduced at a relatively late stage of the Bill and therefore may be the product of insufficient consultation. I may be completely wrong about that; there may be good reasons for not having made the provision in the way that I suggest. I shall be grateful if the Minister will indicate the Government's thinking.

Baroness Gardner of Parkes

My Lords, I thank the Minister for bringing the amendment forward; I am most grateful to him. There has been considerable consultation on the matter. I therefore believe that it has been thought out more carefully than the noble Lord, Lord Meston, gave credit for.

The difference between the courts and tribunals may be deliberate rather than accidental. The prospect of someone being declared vexatious in both the courts and tribunals would be extremely rare; we expect few cases. The tribunal proceedings may not be fully understood by the courts and vice versa. Therefore, it is good to have separate procedures. It is certainly right that the employment appeal tribunal should be the body to hear the case. It has the full understanding of the employment situation.

Perhaps I may comment briefly on the point made by the noble Baroness, Lady Turner. I do not believe that at present it is proving necessary to have provision for the £150 charge. However, I hope that the Government will retain the power while seeing how matters proceed. There is a big difference between a person from whom one might ask for £150 and the person for whom one might go to the lengths of proceedings for a vexatious litigant. There is an interim stage at which a £150 deposit might be a wise deterrent. As I understand it, no date has been set for the introduction of such provision at present. I hope that the issue will be deferred while we see how the system works and decide whether the £150 charge needs to come into operation. We debated whether such a provision should be put in previous legislation; eventually it was. It would be a mistake to throw such a provision out without having tried it.

I ask the Minister to accept my thanks for the amendment that he has brought forward today.

Lord Wedderburn of Charlton

My Lords, perhaps I may pose a question to the Minister. We must congratulate the noble Baroness on the success which her proper campaign has achieved. Those of us who have achieved amendments of only one word or two lines are amazed at the victory of someone who has persuaded the Government to accept a whole clause.

My question follows what the noble Lord, Lord Meston, said. Reference was made to a vexatious litigant in the tribunals not being thereby vexatious in the civil courts unless so declared. Will that situation be so rare? The answer might depend on the response to the question that the Minister is taking away; he will tell us more at Third Reading. The question is this. How far is the new civil jurisdiction of the tribunal for breach of contract exclusive of the jurisdiction of the county court in the same cause or matter? I was not sure of the noble Baroness's answer to that question. If there is coterminous jurisdiction—it is not mutually exclusive—then someone who loses and becomes vexatious in the tribunals may well go to the county court to try his or her luck. If the vexatious litigant carried his character to another court in the same cause, it might be sensible to consider, with due protections, whether an automatic bar should be made in the other courts if there were a combination of jurisdictions.

I hope that at Third Reading the Minister will tell us the precise meaning of that part of the Bill.

11.15 p.m.

Viscount Ullswater

My Lords, of course, I should like to pay tribute first to my noble friend Lady Gardner of Parkes who is perhaps the author of the amendment. She has been persistent, as the noble Lord, Lord Wedderburn, said, but quite rightly so.

In answer to the noble Lords, Lord Wedderburn and Lord Meston, who asked me about Section 42 of the Supreme Court Act, any amendment to Section 42 of that Act would require consideration of the position of other tribunals and courts, which is beyond the scope of the Bill. In addition, Section 42, as the noble Lord, Lord Meston, pointed out, does not apply in Scotland where the Vexatious Actions (Scotland) Act 1898 applies instead. What is important is that we are intending to provide these additional powers to the EAT to deal specifically with proceedings before the EAT and industrial tribunals throughout Great Britain.

The noble Lords also said, "Well, maybe it was because we did not have any consultation and we brought it in rather at the last minute and this was our best attempt". I have to say that this is an area of legal policy and the relevant Whitehall departments have been involved in the drafting of the amendments. The Department of Employment has in any case been considering the matter for some time and has had considerable correspondence on the subject with the relevant government departments and the industrial tribunals.

The presidents of the industrial tribunals in England and Wales and in Scotland, the president of the employment appeal tribunal, the chairman of the employment appeal tribunal in Scotland and the Council on Tribunals have all been kept in touch with developments. So the noble Lord must accept from me that we have been consulting widely on those kinds of propositions.

The noble Baroness, Lady Turner, reminded us about the situation in the 1989 Act which gave new powers for a pre-hearing review that could require a deposit of up to £150 to continue with a case it considered hopeless. The deposit would be returned, however, unless costs were eventually awarded. As my noble friend quite rightly pointed out, the powers have not yet been implemented, but the intention is to do so when the rules are amended following the passage of the Bill.

However, while in our opinion they may deter someone from bringing a single groundless case, they are very unlikely to have any impact on a determined, vexatious litigant who will already be spending considerable sums on litigation. I am pleased that the noble Baroness, although she entered a caveat, has given this a form of welcome. I commend the amendment to the House.

On Question, amendment agreed to.

Clause 40 [Functions of ACAS]:

Lord Rochester moved Amendment No. 89:

Page 58, line 6, at end insert ("and encouraging the involvement of employees in developing solutions to problems." ").

The noble Lord said: My Lords, this amendment has to do with the duties of ACAS. There are certain points of similarity between it and Amendment No. 57 on which I received a dusty answer from the Government. I hope that the House will forgive me, however, if I deal with the same subject once more.

The amendment stems from one moved by the noble Lord, Lord Wedderburn, in Committee. It proposed that in place of the words in subsection (1) of what is now Clause 40, in particular, by exercising its functions in relation to the settlement of trade disputes under sections 210 and 212", there should be inserted: to encourage, in accordance with Article 118B of the Treaty of Rome as amended, the promotion of consultation and negotiation within the social dialogue between management and labour".

If the noble Lord, Lord Wedderburn, will allow me to say so, I would not have framed the amendment in quite the way he did, but I nevertheless said that I sympathised with it. I went on to say that in its 1991 report ACAS stated that in response to the Citizen's Charter it had prepared what it called the ACAS commitment. That committed the service to the way it carried out its statutory duty, among other things, in improving industrial relations and fostering employee involvement.

Under the heading "Resolution of Disputes" it stated: Before providing assistance ACAS always first encourages parties to make full use of any agreed procedures they may have for negotiation and the settlement of disputes". That sentence accords closely with the statutory duty set out in Section 210(3) of the 1992 Act.

However, under a further heading, "Advice and Assistance on Industrial Relations and Employment Issues", ACAS said that among other things it was committed to: encouraging the involvement of employees in developing solutions to problems as a prime means of promoting constructive employment relationships". That is a significant additional undertaking which does not yet feature among ACAS's statutory duties. It may therefore fairly be said that the encouragement of negotiations by ACAS already has a place in statute, but the promotion of employee involvement does not. In those circumstances I suggested in Committee that, in removing from ACAS's statutory duties the encouragement of collective bargaining, the Government should replace that duty with one to promote employee involvement in accordance with what ACAS was already doing.

In reply, the noble Viscount, Lord Ullswater, simply told me that ACAS already had the powers to consult where necessary and he did not believe it needed any further powers. That was not the point I was trying to make. I believe the noble Viscount now understands that from a discussion he was kind enough to have with me before Report stage. Of course I recognise that ACAS already has the power to consult where necessary. What I was seeking was statutory backing for ACAS's existing commitment, in advising others, to encourage the involvement of employees in developing solutions to problems. In Committee I said that I might bring forward on Report an amendment on those lines and that is what I have now done in tabling Amendment No. 89.

I appreciate that, in framing Clause 40 as they have, the Government have sought to give ACAS wide general powers and in particular the power to give advice. The Government have sought to leave the service free to determine for itself how that advice should be given. I have every sympathy with that approach. However, I also feel that the clause would be improved if within it some such words as are suggested in Amendment No. 89 were included.

Clause 40(1) already includes the words "in particular" in stating that it should be part of the general duty of ACAS, to promote improvement of industrial relations … by exercising its functions in relation to the settlement of trade disputes". I suggest that in its advisory function a duty to encourage the involvement of employees in developing solutions to problems is equally if not more important. The emphasis that ACAS itself places on this function is evident from a paragraph in its 1992 report which has just been published and which states: In 651 or as many as 83 per cent. of the completed larger exercises operational staff were able to encourage managements and employee representatives to consider their problems in existing or specially created joint working parties or other machinery of employee involvement".

I cannot think that in the light of that statement ACAS would be anything but happy to accept the substance of Amendment No. 89 as part of its statutory remit. But I do not suggest that legislative endorsement should be given to that function without consultation. I hope therefore that between now and Third Reading of the Bill the noble Viscount will agree to approach ACAS to see whether I am right in thinking that what is proposed in the amendment would be acceptable to the service. I beg to move.

Lord McCarthy

My Lords, we naturally support this amendment. I think that what the noble Lord, Lord Rochester, is trying to do is to give ACAS some positive functions—not just an advisory function but a positive, almost reformist function. Understandably enough from their point of view, the Government have changed the definitions of the functions of ACAS so that it is no longer concerned with the general duty to promote improvements in industrial relations by encouraging the extension, development and reform of collective bargaining. In other words, ACAS is no longer concerned with joint regulation per se and improvement of joint regulation. Rather, it is concerned with mitigating the consequences of that joint regulation by the settlement of trade disputes.

The amendment suggests that ACAS should be given some other positive function in the light of the decision of the Government that it should not be encouraging the spread and development of collective bargaining. The encouragement of involvement of employees in developing solutions to problems seems to be the most gentle, non-controversial but nevertheless important, function that ACAS might have. It is not negotiation; it is not even participation; it is not that funny modern word "empowerment". The amendment just speaks of involvement.

As the noble Lord said, ACAS itself has stated that it does that and wants to become more involved in that area. It therefore seems to me quite right, proper and reasonable that the Government should accept an amendment of this kind.

Viscount Ullswater

My Lords, over many years the noble Lord, Lord Rochester, has been promoting the case for employee involvement. His commendable commitment to that cause has been unflagging. It is not therefore entirely unexpected that he should seek to insert a reference to that important subject in the Bill.

When our legislative proposals are enacted, ACAS's overall aim will be neatly defined as promoting the improvement of industrial relations. That simple remit has the great advantage of permitting ACAS to decide for itself what it considers will be conducive to improved industrial relations in the light of the particular circumstances involved. If encouraging employee involvement is appropriate—as it will be on many occasions—ACAS will be free to recommend as much.

There is therefore no need to insert this additional wording in the terms of reference for ACAS. We should leave it in ACAS's capable hands to identify the appropriate response. In so doing, we also avoid the potential problem of signalling to ACAS that it should always favour this approach in each and every case, irrespective of the circumstances involved.

The noble Lord, Lord Rochester, referred to the ACAS commitment. That is a statement of ACAS's own policy and undertakings towards its customers. As such, it serves a very useful function. But it would be unwise to use the commitment as a source document for legislative purposes. If it did, we should be considering a long string of amendments, for the commitment contains various statements about ACAS's policies, only some of which are explicitly mentioned in legislation.

Employee involvement is a valuable concept. ACAS recognises that fact in its working practices. In most cases, ACAS approaches the resolution of disputes or problems by involving all the parties concerned. In 1992, 65 per cent. of ACAS's in-depth advisory projects in companies were conducted through joint working groups of management and employees.

We on this side of the House believe that the amendment is unnecessary. I am sure that the noble Lord will agree with me that ACAS already takes every opportunity to advocate the merits of employee involvement, wherever appropriate. Our legislative proposals will enable ACAS to continue in the same vein. I hope that what I have said will have reassured the noble Lord and that he will feel able to withdraw his amendment.

Lord Rochester

My Lords, I thank the noble Lord, Lord McCarthy, for his support. I am disappointed but not altogether surprised by the response of the noble Viscount. I am sorry that the Government seem to be unwilling to include within the scope of the clause some such words as I suggested. But at this time of night it would be pointless for me to pursue the matter further. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 90 not moved.]

11.30 p.m.

Clause 41 [Fees for exercise offunctions by ACAS]:

Lord Wedderburn of Charlton moved Amendment No. 91:

Page 58, line 31, leave out ("consulting ACAS") and insert ("giving ACAS the opportunity to consult such persons as it thinks appropriate over a period of one year and to propose to him alternative arrangements").

The noble Lord said: My Lords, we come to another aspect of the proposals on ACAS. I hear, ringing in my ears, the Minister's declaration to the last amendment, "Leave it in ACAS's competent hands". That is the motto of Amendment No. 91. Leaving it in ACAS's competent hands is exactly what the Government will not do when it comes to giving directions to ACAS that it must charge, and charge in the way the Minister requires.

It may be thought odd that my amendment leaves out the words "consulting ACAS", but it does so because of the way in which ACAS itself responded to the problem and saw how the Minister responded. In the recently published 1992 annual report, ACAS made it clear that the council wrote to the Secretary of State unanimously opposing the reserve power by which ACAS could be directed to charge for its collective conciliation, arbitration and advisory activities. The Minister seems to have taken no heed of that. It is well known that on some matters unanimous decisions of the ACAS council are not easy to obtain; historical precedents are many. But here it was quite clear.

The ACAS report goes on: The Council is clear that the freedom from Ministerial direction which was given to the Service on its creation in 1975 has been the essential foundation of its independence and proven impartiality I repeat, the "essential foundation of its independence and proven impartiality".

between employers and employees. A reserve power could well be regarded as a continuing threat to seek to influence or govern the ways in which, under the Council's direction, the Service exercises any, or all, of its statutory powers". It concludes by saying: The Council's concerns were not eased by being told that the Secretary of State had no current plans to exercise such a power".

Perhaps the Minister will tell us tonight whether or not Ministers have any plan to exercise those new powers. The points in the passage on page 29 of the ACAS annual report are quite clear and need an answer. Does the Minister accept that, the essential foundation of its independence and proven impartiality", is at stake? If he does not accept that that is at risk, what arguments does he address which will counter the proven impartiality and experience of the ACAS council, its chairman and the previous members of the body?

It is more regulation of collective labour relations which accompanies deregulation of individual labour relations and weakens employment protection for individual employees. And it is extraordinary that the Government are insistent on more and more regulation (even of the agency which is the jewel in the crown of voluntary collective labour relations whose history has been one of major success) in pursuit of ideology, of raising money wherever they can and of clipping the wings of the collective activities of ACAS, against the judgment which I read to your Lordships.

I suggest that the only way to deal with the matter is to allow ACAS to make counter proposals to the Minister; to give a reasonable time, perhaps a year. One would have thought that the Government would be able to see some sense in that. If not, they should withdraw the whole clause. That would be better. We will have much to discuss on Third Reading. Let us hope that they withdraw the whole matter. I beg to move.

Lord McCarthy

My Lords, it is important that we should seek to explain, discuss or raise the reasons why an organisation like ACAS would be fearful of making charges. It is quite permissible in my opinion, though not necessarily a good thing, that ACAS should charge for its publications. At the moment it does not charge. It has often been put that there is a great demand for ACAS publications—they are quite invaluable—which cannot always be met because it can only produce as many publications as its budget allows.

Some of its excellent publications on job evaluation, appraisal and so on would be capable of making quite a good income for ACAS. There may be an argument for charging for publications; there may even be an argument for charging for certain services, such as courses. There are problems about that because some of the very people that ACAS wants to come on those courses would not be able to afford the fees or would not pay for the courses. They have to be induced and encouraged to come. But paying for courses and paying for publications does not infringe the heart of the ACAS function. It is not intrinsically a bad thing to do. But to pay for conciliation, to pay for arbitration, to pay for mediation raises very considerable problems.

In industrial relations there are a few—a very few—examples of paid arbitration or paid mediation. Both sides put in an equal amount of money and the conciliator, mediator or arbitrator usually an arbitrator—performs a standing function. That is very unusual. It is done not for disputes of interest but for disputes of right where the organisations involved have had these arbitrators at work for years. They know them and accept this as a way of doing it and pay because they want a particular person. But the whole of the ACAS system is based on free access.

If one were to say that someone had to pay, and the employer paid, it would destroy the objectivity. It would certainly destroy the reputation. If one said—ACAS might be driven to say it in order to maintain its impartiality—that ACAS would charge, if the Government let it, a nominal sum and would insist that both sides paid an equal sum, all that would happen is that fewer people would go to conciliation, mediation or arbitration, and the expansion and development of the ACAS function would be reduced.

The amounts involved must be trifling. The important work that the organisation does is vital and irreplaceable. As my noble friend Lord Wedderburn said, it is madness to try to raise money is this way. This is a modest amendment. I hope that the Government will see their way through to accepting it.

Viscount Ullswater

My Lords, let me stress several points of importance to begin with. First, the subsection provides the Secretary of State with a reserve power only. It is our expectation that this reserve power will be used rarely. There are no current plans to use the reserve power. Its function is to protect the taxpayers' interests on occasions—infrequent occasions—where savings could be made to the public purse by charging for appropriate activities where ACAS has failed to do so. I think that the noble Lord, Lord McCarthy, has accepted the concept that ACAS could charge for a number of its services.

Secondly, the Government respect ACAS's independence. It is a precious asset, as the noble Lord, Lord Wedderburn, has said, which must be protected. Without this independent status, its work as a conciliator would be imperilled. Clause 41 in fact acts to enhance this independence by permitting ACAS for the first time to offset the cost to the taxpayer by charging for certain services where circumstances allow.

The requirement to consult ACAS in subsection (2) was introduced in recognition of this independent status. It was drawn up at ACAS's suggestion. It would be remiss for the Secretary of State to insist on charging without asking ACAS's advice.

The noble Lord's amendment allows, and I expect the intention is to encourage, ACAS to consult more widely over a period of one year, before taking a final view on a charging proposal. Where does this place ACAS? It becomes merely a co-ordinator of other people's views. Its effect would be to introduce cumbersome consultative procedures which could delay things for over a year. The noble Lord is truly taking a sledgehammer to crack a very small nut. Or perhaps he is hoping that the nut will just disappear while all this activity is going on over such a protracted period.

Noble Lords should remember that, at ACAS's own suggestion, subsection (2) already requires the Secretary of State for Employment to consult ACAS, and that ACAS is itself a broad church. Representatives from all sides of industry and commerce are represented on its council. In consulting with ACAS, the Secretary of State would in fact be consulting with a wide cross-section of the parties affected. If ACAS thinks its knowledge is incomplete, it can always take soundings beyond its council's membership. There is no need to enshrine this capacity expressly in the legislation because it is already implied.

ACAS undoubtedly performs a valuable function. It performs it well. Noble Lords can be assured that government will always act with great care to preserve this hard-won reputation. Encouraging widespread consultations on charging issues is unnecessary since the ACAS council is already well placed to comment on any proposal to charge from the Secretary of State. I therefore ask the noble Lord to withdraw his amendment.

Lord Wedderburn of Charlton

My Lords, it is tempting to take a different line to that which the Minister suggests. We are told that this is a reserve power to be used only rarely. We would like to know when and under what type of circumstances. One is entitled to have that explained. We are told that it is to protect the taxpayer. As my noble friend suggested, it is hardly likely to raise great revenue. The question which is raised on this side of the House is: at what cost to ACAS and the job which it does?

The Minister said that ACAS's independence is respected. It may be by him but it is certainly not by his clause. I felt that I did not have to spell out the reasons why essential functions of ACAS on conciliation, advice and arbitration, were threatened because ACAS has said so itself. What the Minister has not told us is why ACAS is wrong. He simply said that he respects its independence but he is going along with something which ACAS says is threatening to that independence. Perhaps my amendment is a sledgehammer to crack a nut. The clause is more like a sledgehammer to crack ACAS's nut in the hands of someone with a blindfold and who does not know when he is going to use the power.

It is a serious thing to do in terms of help to those involved in collective labour relations, employers as much as unions and employees. If the case is no better than that which the noble Viscount has explained to the House, I seriously suggest that the Government should look again at the clause to consider whether they wish to continue with it at Third Reading. To come up against something as central as this with an argument of the kind which we have heard, and so late in the Bill, complicates the business of this Report stage and Third Reading. It also does not do justice in any way to the realities of day-to-day labour relations.

As we come to this stage of the night the Minister looks more pleased. He knows what I am going to say. To reach a matter such as this concerning ACAS so late at night and to have to withdraw such an amendment, is a defect in our legislative system. There have been other amendments tonight equally poised in the darkness. They have had to be withdrawn in a House which could hardly be described as excited and crowded. It is a defect in the system which we use. It is absurd that we should go on in this way. I know not whether we should start at 10 in the morning, but something of that kind obviously has to be considered.

Perhaps I may make a final point to the Minister. I have moved an amendment to a provision which ACAS tells us is a direct threat to the heart of the organisation and I have no option but to withdraw it because of the time of night.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendment No. 92:

Page 59, line 6, at end insert ("(computing that cost in the same way as under subsection (5) above)").

The noble Viscount said: My Lords, this is a technical amendment to remedy a minor ambiguity in the clause as currently drafted. I beg to move.

On Question, amendment agreed to.

11.45 p.m.

Clause 42 [Careers services]:

Baroness Lockwood moved Amendment No. 92A:

Page 59, line 36, leave out ("ceasing") and insert ("who have not attained the age of 21 years and have ceased").

The noble Baroness said: My Lords, we come now to a number of important amendments on the careers service, and I have a great deal of sympathy with what my noble friend has just said about the time of night. The amendments on this subject were dealt with in Committee by my noble friend Lady David and in her sad and regrettable absence this evening I am dealing with them. In doing so, I must ask your Lordships' indulgence because I inadvertently agreed that Amendments Nos. 92A and 92B should be grouped, but they deal with quite separate matters and I should like to take them separately.

Amendment No. 92A has the purpose of ensuring that there is a duty to provide a careers service covering young people under 21 who are not in full-time education. New subsection (8) of the Bill creates a duty to provide careers services to young people in schools or further education colleges and to help them find a further placement in employment training or education on leaving school or college. A very important part of the work of the careers service is with young people who have left full-time education but have failed to find permanent full-time employment or who have lost one job and need to find another. Some of those young people may even be on youth training where the particular scheme does not involve college attendance.

Subsection (9) gives "powers" rather than specifying a "duty" to provide services more widely than in subsection (8), but there is also a power to charge for those services. It would be highly desirable for the statutory entitlement to a free service to be extended to young people in the first few years after leaving school or college. That would also recognise the reality of where much of the more difficult work lies at present. The amendment seeks to do no more than that, and I hope that it will have a sympathetic response from the Minister. I beg to move.

Lord Swinfen

My Lords, I have every sympathy with the amendment which has been moved by the noble Baroness. However, I am concerned that, inadvertently, it will prevent careers guidance to young people with special educational needs who, because of those special educational needs, continue full-time schooling beyond the age of 21. I believe that the noble Baroness would not have intended to cut out such guidance and I wonder whether she could look at this again, possibly before a later stage.

Lord Stoddart of Swindon

My Lords, I should not have thought that the amendment would do that but I, too, should like to support it. Its age grouping (of those up to the age of 21) is very important. It behoves the Government to give those young people every possible assistance to find employment.

We understand that a great deal of crime is committed by those between the ages of 16 and 25. Indeed, many of us think that the incidence of such crime is enhanced by the fact that those young people do not have any work to do. Therefore, I believe that it is incumbent upon the Government to give every possible assistance to that age group. It will not cost a great deal of money, but it may bring many benefits to the Government, both financial and social. I sincerely hope that the Government will give careful consideration to accepting the amendment.

Baroness Denton of Wakefield

My Lords, before I reply to the amendment of the noble Baroness, Lady Lockwood, perhaps I too may say that we on this side of the House shall miss the contributions of the noble Baroness, Lady David, on the careers service which she values so much and we express sympathy at her sad news. Perhaps I may also say that I believe the noble Baroness would not be much pleased with us at the hour at which this matter comes before the House again.

I understand the anxieties of the noble Baroness, Lady Lockwood, which have been endorsed by the noble Lord, Lord Stoddart, and the issue raised by my noble friend Lord Swinfen. I do not think that the noble Baroness seeks to establish an arbitrary division between those leaving education who are 21 or over and those who are under that age. It would be strange to have a duty to provide careers guidance services to those aged 21 who are in further education and then not continue that duty to help them when they have left. The noble Baroness appears to agree that it is necessary to draw a line around those for whom there is a statutory duty. The difference between us is that the noble Baroness wants to draw a neat, clear, fixed line which we think is not possible or desirable.

Careers services should so far as possible be responsive to and reflect individual needs and circumstances. Some people's careers guidance needs can easily be met in a brief interview while others need help over a considerable period of time. The duty on the Secretary of State should reflect that and we fully recognise the worries that the noble Lord, Lord Stoddart, raises. Determining exactly who does and does not fall within the group to whom there is a duty is also an issue in the current arrangements. We deal with it now through the Secretary of State's guidance. We can do so in future.

The arrangement also allows young people to choose between the job centre and the careers office. I appreciate that the issue is given sharper focus because of the power to charge and I understand the attraction of this amendment for the noble Baroness. She no doubt sees it as a guarantee that those under 21 cannot be charged, but it would of course leave everyone over 21 ceasing to undergo education open to charging.

I hope that I have assured the noble Baroness that we have the common ground of recognising the client's individual needs, and I hope that she will be able to withdraw the amendment.

Baroness Lockwood

My Lords, I am grateful to my noble friend Lord Stoddart for his support and to the noble Lord, Lord Swinfen. Perhaps I may tell the noble Lord that my reading of the Bill and the amendment does not have the effect that he suggests and I certainly would not want it to have such an effect.

I am sorry that the Minister cannot accept the amendment. I understand from what she has said that there is a great deal of sympathy and a certain amount of common ground, but there is a special case, to be made for the young people who have just come out of school or college and who are in those very early, formative years of trying to find work and a career. I shall look carefully at what she has said; but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Lockwood moved Amendment No. 92B:

Page 60, line 27, at end insert:

("(5) It shall be the duty of the Secretary of State to ensure that staff appointed to provide the relevant services referred to in subsection (2) of this section shall—

1. (a) hold the Diploma in Careers Guidance or a recognised equivalent, and
2. (b) have the appropriate competencies in accordance with agreed national standards approved by the Secretary of State.").

The noble Baroness said: My Lords, Amendment No. 92B makes it obligatory that staff employed by every contractor to perform careers guidance functions shall have the Diploma in Careers Guidance or a recognised equivalent. A similar amendment was dealt with in Committee. It is obviously important that staff employed to advise young people and to help them make a choice about their future careers should be properly qualified so that parents, young people and employers have confidence in the service. In Committee, in reply to a similar amendment, the Minister said: When making arrangements the Secretary of State will have to be satisfied that whoever she contracts with has sufficient expertise to provide the service that she has a duty to secure. That includes sufficient professional competence in the field of careers guidance".—[Official Report, 30/3/93; col. 853.]

The Minister suggested that a requirement for all staff to be qualified in the way set out in the amendment would rule out the small number of existing experienced staff who do not hold a formal qualification. The amendment does not seek to be restrictive in that way. It recognises that the existing diploma in careers guidance provides the foundation upon which future professional qualifications can build. It recognises also the work of the lead body for advice, guidance and counselling, meeting under the auspices of the National Council for Vocational Qualifications. The national council is seeking to establish NVQs for careers guidance staff. Therefore, the competence which any current member of staff may have acquired through experience, rather than formal qualifications, will be capable of being validated and recognised in future.

The amendment seeks to ensure that each and every new careers service contractor shall be required by law to employ careers advisers whose training, skills and professional qualifications and competency are to the level of the existing diploma in careers guidance, or a recognised equivalent, both of which would be acceptable to the National Council for Vocational Qualifications. Enabling individuals to choose between options, routes and providers is a highly specialised and competent task.

The Government lay down regulations for other professional services; for example, teaching. The service of careers guidance is just as important to the individual and the economy as other professional services. It is not acceptable to leave it to Secretaries of State to include comments about, first class guidance shall be provided", in specifications for tenders for future careers service contracts. We need to require all Secretaries of State, of whichever government, through the lifetime of this revised legislation, by regulation, to employ only skilled, trained and competent staff, to a level which has been specified. I beg to move.

Lord Rochester

My Lords, in the unavoidable absence of my noble friend Lady Seear, I support the amendment to which she has put her name. In Committee, the noble Baroness, Lady Denton, offered no convincing explanation as to how the Secretary of State would be able, from the centre, to provide for careers guidance that was sufficiently accountable and more responsive to local needs than that given under the present arrangements.

In Committee my noble friend Lady Seear asked specifically what criteria would be used in judging the merits of people competing to provide the best service and what would be the qualifications of those making the judgments. In reply the noble Baroness, Lady Denton, acknowledged the need to establish new careers service standards and audit arrangements, but there is nothing in the Bill to satisfy us about such matters.

In my view, it is particularly important that provision should be made on the face of the Bill as to the qualifications of those appointed to provide the relevant services and the standards to which they should conform. I therefore strongly support Amendment No. 92B. In order to save time, perhaps I may add that I subscribe to the other amendments which the noble Baroness, Lady Lockwood, will be moving.

Midnight

Lord Swinfen

My Lords, I too support the amendment. It is absolutely essential that those providing career guidance are properly trained and qualified, in particular when dealing with people who have disabilities.

Lord Stoddart of Swindon

My Lords, I too support the amendment so ably moved by my noble friend Lady Lockwood. It is not necessary for me to repeat her argument, particularly as I moved a similar amendment in Committee. The fact is that we are to have a fundamental change in the running of the careers guidance service. It appears that we shall have a competitive system. We need to be sure that the standards which have been built up by the local authorities in conjunction with others over a long period of time are maintained. Without the amendment there is no guarantee in the Bill that those standards will be maintained. During a long period of time many people have built up the service to its present pre-eminent situation. It would be a sadness indeed if, simply and solely to save a little money, we allowed those standards to fall. We need not lower standards of provision but at least as good and improving standards. I hope that the Minister will feel able to accept a good and reasonable amendment.

Baroness Denton of Wakefield

My Lords, I listened carefully to all the contributions in support of the amendment tabled by the noble Baroness, Lady Lockwood. There does not appear to be a great deal of difference between us. It is the Government's policy to ensure that we maintain a highly-skilled, competent and well performing careers service. The basis of the legislation is to ensure that it moves to provide uniformity to the highest possible standard and to reduce some of the unevenness which unfortunately exists.

Under the amendment anyone who did not hold the Diploma in Careers Guidance or a recognised equivalent would be prevented from providing services. This would include, for example, people who are currently able to join careers services as careers officers and study part-time to obtain the diploma; or, indeed, those who have Part 1 of the diploma working as a probationer careers officer to obtain Part 2 and the full award of the diploma. It may also cover all the clerical and administrative staff who are also a vital part of providing services. While we understand the philosophy behind the amendment, we believe that it would be extremely restrictive.

Perhaps I may reassure the noble Baroness that when making the arrangements the Secretary of State will have to be satisfied that whoever she contracts with has sufficient expertise to provide the service that she has a duty to secure. That includes sufficient professional competence in the field of careers guidance.

Any Secretary of State would be failing in his duty if he made arrangements for the provision of careers services other than with people competent to provide them.

The Diploma in Careers Guidance is the qualification recognised and part funded by the Secretary of State as being suitable for careers officers, and recommended in the Secretary of State's guidance. Through that recognition, it is the Secretary of State who sets the national standard for careers service training, not the local government management board, the local authorities or the Institute of Careers Guidance. The Secretary of State has that responsibility now and will have it in the future.

It is not a requirement of the current legislation that careers officers should hold a particular qualification: instead, it is left to the Secretary of State's guidance of a general character. And that is how we propose to handle it in future. This provides for arrangements which can reflect changing circumstances.

In proposing the second part of this amendment, the noble Baroness appears to want the Secretary of State to set up a certification or licensing procedure for staff. As the noble Baroness said, there is a lead body for advice, guidance and counselling, which is meeting under the auspices of the National Council for Vocational Qualifications to establish NVQs for careers guidance staff. When that process is complete, the NVQ framework should provide the necessary statements of competency and standards that will be required for work in careers services. Current careers service practitioners are fully represented on this lead body.

The national standards that providers will have to achieve will be set out in the Secretary of State's guidance to future providers. In short, she will be expected to act reasonably and responsibly in determining who is competent, whether or not such an amendment as is before us is contained in the legislation.

Also, providers will have to demonstrate their competence through the proposals they will make, which will be judged against the criteria that the Secretary of State will establish.

The noble Lord, Lord Rochester, questioned the nature of the criteria. The criteria against which bids from potential providers will be judged will be set out in a prospectus. The prospectus will be published and widely disseminated in good time for implementation. I anticipate that, in inviting bids, the prospectus would require bidders to satisfy several criteria. For example they would be expected to demonstrate that they have arrangements for the provision of a responsive, high quality service, provided impartially and free of charge at the point of delivery to young people, and one which gives particular attention to the requirements of those with disabilities; that they fully understand the outcomes and services to be provided, which the Secretary of State will define following wide consultation; that they understand the specific needs of the client groups in the defined area; that they have proposed an organisational structure and management arrangements which are appropriate to deliver the specified outcomes and services; that they can deliver the full range of outcomes and services to the required standards, and that value for money will be achieved; that they will be able to meet the needs of key local stakeholders; that they have a financially viable organisation and, importantly, can ensure a smooth transition from the existing to the new arrangements; that they have all the resources and skills required to deliver the required outcomes and services; that they have proposed arrangements which are realistic, practical and achievable; and that they have effective quality assurance arrangements which conform to the framework which the Secretary of State will define.

That is not an exhaustive, nor final list of criteria but an indication of what it is likely will be proposed. I hope that it will give your Lordships an indication of our determination to ensure that the standard continues to be high and that we shall build on the present foundations.

The Secretary of State is currently responsible for setting the standards for the careers service and she is also responsible for determining which qualifications are acceptable for this very important work.

The Secretary of State sets those standards now and will continue to do so; but I think that we should not try to make it a rigid requirement in the legislation.

If what is meant by an equivalent qualification is an equivalent careers guidance qualification, then we would prevent well-qualified and experienced people in, for example, the area of disability, or with business experience, or with access to specific industry knowledge relevant for young people, or with qualifications in recruitment and training, from being employed to provide the relevant services. We would be preventing careers services from employing the diversity of people from which they, their clients and customers can benefit.

A duty on the Secretary of State to secure vocational guidance in employment services for young people will require the setting of rigorous standards for providers. I repeat, any Secretary of State will need to be satisfied that those with whom they have an arrangement to provide services are capable of providing that service. That must include having competent, properly trained staff. I believe that Amendment No. 92B is unnecessary. I hope that the noble Baroness will agree with me.

Baroness Lockwood

My Lords, I thank the Minister for going into such detail about how the Secretary of State will establish standards for future careers guidance staff. She said that there is not a great deal of difference between us. I agree with that view. However, there is one major difference; namely, that we would like such a provision established on the face of the Bill. By involving the National Council for Vocational Qualifications and accepting NVQs as an equivalent qualification, I should have thought that that would have been in line with Government thinking on the matter. I understood that that was to build up NVQs and to ensure that translating experience and different qualifications into them would be acceptable.

However, having said that, I am most grateful for the support that I have received from all sides of the House. I shall read carefully the Minister's response. I hope that she, too, will look with care at what was said by those in favour of the amendment. We may perhaps be able to reach a compromise on Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.15 a.m.

Baroness Lockwood moved Amendment No. 92C:

Page 60, leave out line 47.

The noble Baroness said: My Lords, the amendment now before the House is linked with Amendment No. 93A. It has two purposes: first, to ensure that there is clear definition of "acceptable contractors" and that that must exclude "just anyone" which is more or less the term that has been used; and, secondly, that local education authorities should be involved in some way in all contracts. I should point out that that does not produce a strait-jacket, but simply maintains local accountability within a wide set of parameters.

As the Bill stands at present the term, persons of any other description could refer to absolutely anyone. That is surely unacceptable in legislation. There must be a clearer definition in the Bill of acceptable contractors; otherwise the Government are, I suggest, being negligent and abdicating their duty to provide a national framework of services for their citizens. As I said, we are not seeking to provide a strait-jacket. We recognise that there could be value in variety of provision, provided that sufficient safeguards exist to ensure local acceptability and accountability of the chosen provider.

In dealing with this subject in Committee the noble Baroness said that the aim is to ensure that the high standards achieved by the best are available everywhere and are improved upon. We want to see what is regarded as the best improved upon. The best providers at the moment are the local authorities. We need to learn lessons from them and to build on what they have achieved.

Amendment No. 93A has the purpose of securing the establishment of a broadly based partnership, irrespective of the contractor, throughout the country so that local acceptability and local accountability of the new careers service exist by design. There are two points: local acceptability and the establishment of broadly based partnerships to oversee the arrangements for the careers service.

In order that the new careers service is able to operate effectively it must be acceptable to local stakeholders. These include TECs, LEAs, employers, schools, colleges and parents as well as the various individual clients—those in need of careers information, guidance and placements. Careers guidance does not exist in a vacuum. Effective careers guidance is a process which depends upon the complementary role of those I have just mentioned.

On the subject of accountability, it is important that the new owners or contractors of the careers service are accountable to those major stakeholders as well as to the individual consumers. The new contractors, therefore, should involve representatives of the business, education and local communities. Those representatives would include a whole range of organisations. I should like to say to the noble Lord, Lord Swinfen, that I would hope that by including the education authorities and the local education service their experience could be brought to bear on the subject of the problems of the disabled and they could speak for those with a disability.

The Institute of Careers Guidance argues that the new careers service must be impartial and client centred. It must be unbiased and without pressure from opportunity planners and providers. It must take full account of factors affecting the labour market. It must be equally accessible to all clients. It must promote equality of opportunity. Finally, it must be delivered by skilled careers guidance staff who follow a nationally agreed code of practice. That would involve the principles of acceptability and of local accountability. I hope that the noble Baroness will be able to accept the two amendments. I beg to move.

Lord Stoddart of Swindon

My Lords, these are very important amendments. Again, I support them and the remarks made by my noble friend Lady Lockwood. The Government may wonder why on earth we are moving these amendments. During discussion of the previous amendment the noble Baroness said how much the Government wanted the careers service to remain a good service and wanted to develop and extend it. However, no reasons have been given as to why they wish to alter the present arrangements. It has been my experience that local authorities run the service in a perfectly reasonable manner. If they were not running it in a perfectly reasonable manner, why did the Government not intervene? The suspicion is that the Bill is only the thin edge of the wedge. We know that the present Government are privatisation mad. They believe that everything public should be made private. We know that they do not have much liking for local authorities and that they wish to remove virtually every service from those local authorities and make them mere providers. They do not really believe in local democracy because they are taking every service they can away from local, properly elected, representatives.

Therefore many of us are suspicious about what the Government are doing under the Bill. We see it as a first stage of removing completely the careers service and anything to do with it from local authorities. That is why we are worried about this specific provision. That is why the amendments have been moved today. The Government will have to put forward some convincing arguments and persuade us that they genuinely believe that the local authorities can work in partnership with the other providers, whoever they may be.

Finally, despite what the noble Baroness said on the last amendment, I believe that the Government are out to save money. By reducing the amount of money spent on this service they will inevitably injure the service. That would be sad indeed. When the noble Baroness replies, perhaps she will deal with that specific item. I hope that she will give us the assurance that the careers service will not be starved of finance as a result of the Government bringing in new providers who will have had no experience. Such providers will be like Group 4: it had no experience, almost killed prisoners in its charge, let them run away, and so on. I hope that the noble Baroness will be able to convince us of the Government's good will rather than their avid desire to save money at all costs and at anybody's expense.

Baroness Turner of Camden

My Lords, at this late hour I do not intend to make a speech in support of the amendments. Our Front Bench supports the amendments moved by my noble friend Lady Lockwood and spoken to by the noble Lord, Lord Stoddart. We share the view that the Government have a great deal of explaining to do as to why they seek to make changes in a set-up which has worked well to date and which has the support of a notable range of distinguished persons and organisations. I therefore agree with everything that has been said in support of the amendments.

Baroness Denton of Wakefield

My Lords, I fully understand the genuine concern over who will be allowed to provide careers guidance services, though I fear that the noble Lord, Lord Stoddart, would be suspicious of almost anything which came from this side of the House. I beg the House's forgiveness if I give a reply which is rather lengthier than we would expect at this hour of the night, but I think it is important that I try to reassure your Lordships. What we seek to achieve is to secure the future of careers services through new management arrangements that will enable them to reflect the changing needs and circumstances of the local community. I know that there is a strong feeling within careers services that they cannot stand still.

I believe that this amendment would place a stranglehold on change and continue to allow current providers a monopoly. It would restrict opportunities. That might be more readily understood if the Bill prevented local education and education authorities from providing careers services, but it does not do that. Instead, it will foster genuine competition in which the authorities will be free to play their part. I stress to the noble Lord, Lord Stoddart, that we have gone to considerable lengths in the legislation to enable local education authorities to have an equal opportunity to provide services.

Let me reassure your Lordships that when making the arrangements the Secretary of State will have to be satisfied that whomever she contracts with has the resources and skills that will be required to provide the services that she has a duty to secure. That will include competent, well-trained staff both to deliver careers guidance and to manage the service overall.

We believe that the local education authorities are not uniquely placed to provide careers services. Imposing a duty on them is therefore not a guarantee of the best arrangements. We want to get away from a preconceived management model as hitherto. We are working to put in place a model that will provide services to the satisfaction of clients, employers, education and training providers and will command the widest possible local support, with the management arrangements following from that rather than the other way around.

We understand that careers services must have access to the full range of education, training and employment providers. While local education authorities may be suitable, we believe that they are not the only potential providers able to gain the confidence of these stakeholders.

For example, independent schools have the Independent Schools Careers Organisation. Training and enterprise councils are providing funds which support other guidance agencies outside local education authorities, and other private providers of careers guidance have been established for some time. Many colleges are developing more substantial arrangements.

When the Government consulted over the future arrangements there was considerable interest in local education authorities and TECs joining together over the management of the service. Therefore, the legislation provides for joint ventures.

We also believe there is scope for careers services which can stand alone, but not stand apart from the stakeholders in education training and employment. The legislation therefore provides for that.

The legislation provides for a variety of organisations to run services and thus encourages arrangements which reflect the education and employer interest in each area in ways appropriate to those areas. That is very much locally focused.

The incentives in the existing system are based on the notion of local accountability achieved through a local authority. However, perhaps because of its size, the service has not always attracted as much local authority interest as it warrants and therefore this incentive has been weak. The incentive in the future will be competitive bidding, working to contract and the freedom to operate in more commercial, and therefore more innovative and flexible ways.

We want the organisations providing services to enjoy some element of commercial freedom to provide new kinds of services beyond the current and proposed services provided under the statutory duty. We want them to have the management flexibilities and incentives that at present are difficult to achieve within the current local authority arrangements. For example, the ability to sub-contract and to enjoy greater control over budgets at the operational level, so as to be able to respond to changing local circumstances more immediately.

The legislation provides an ideal opportunity to take a fresh look at careers guidance practice and promote best practice through the issue of revised guidance. Above all, the model is not centralist in that it gives considerable scope for locally-derived arrangements which encourage freedom of operation and innovation, but within a contractual framework which sets targets, determines results to be expected and funds accordingly. The current framework does not do this adequately. There is no clear correlation between funding, size of service, and quality of provision.

The Secretary of State would be failing in her duty if she made arrangements for the provision of careers services other than with organisations fully capable of providing them. The most appropriate way of ensuring this will be through the selection procedure which she will use.

In Committee the noble Baroness, Lady Seear, asked—the noble Baroness, Lady Lockwood, has also mentioned this—who would be ruled out under the heading of "persons of any other description". The legislation rightly places no restriction on the kinds of organisation with whom the Secretary of State can make arrangements for the provision of careers services. She will be looking for local solutions which meet local needs. She will also be looking for innovation and imagination as well as effective use of resources. What this means is that potentially bids could come from LEAs, from LEA derived organisations, from organisations in the private sector including Training and Enterprise Councils, or from combinations of these acting in partnership. One of the main purposes behind the legislation is to create management structures which will enable employers to have a closer involvement in the operation of services.

We welcome therefore the interest that is being shown by Training and Enterprise Councils and indeed other bodies with strong employer representation in the future of careers services. The legislation provides for this interest to be expressed through a direct involvement in the running of careers services. In particular, there is scope in the legislation for careers services to be provided as joint ventures between LEAs and bodies such as TECs. This is one way of achieving the kind of employer involvement in careers services and encouraging the kind of wider partnership between education and industry that we think is so desirable. However, any organisation which wishes to bid will need to demonstrate its capacity to deliver the full range of services to the standards defined by the Secretary of State.

I have already outlined the criteria against which bids will be judged and which will be set out in the prospectus. I hope I have clearly demonstrated the requirements which bidders will be expected to meet.

The Secretary of State will be required to secure the provision of services which satisfies the duty placed on her. She will have to specify services and set standards, and while she will be looking for innovative local solutions, she must be satisfied that standards are met everywhere. She will want providers to have sufficient local flexibility in proposing their arrangements to ensure that the services meet local needs and at the same time she must be assured that national standards are met. To achieve this she will have to be satisfied that the proposed providers of careers services will meet the needs of key stakeholders in the local community, to give her confidence that the services she has a duty to secure will be provided.

Any future careers service provider will, as now, have to have close working links with all the key stakeholders in its area. That will include schools, colleges, employers, training providers, appropriate groups in the community with an interest in the welfare of young people, and indeed, where the provider is not connected with the local education authority, the local education authority itself. Any future provider will have to show that it has, or can be reasonably expected to establish, such links.

Careers services are meant to serve their local communities, but they can only do that properly if they have access to education, employment and training opportunities beyond that community. That means that over functions such as the circulation of vacancy opportunities and information on clients there needs to be co-operation and co-ordination between careers services and the providers of opportunities.

That is particularly the case in the large conurbations and especially in London. At present careers services co-operate in that way and special arrangements exist in London. The London Central Careers Unit, managed by the City of London Corporation, provides a comprehensive vacancy distribution system covering the whole of London and co-ordinates the careers service interface with central London employers.

When implementing the legislation the Secretary of State will seek to ensure that the co-operation and co-ordination between careers services necessary for the proper fulfilment of the duty on her forms part of the arrangements that she makes.

In addition, such arrangements will seek to ensure that employers and training providers are properly involved and consulted over the development of systems for the co-ordination of careers guidance and employment services. That will require particular attention in the large conurbations and, as I said, especially in London.

On the subject of local acceptability, can we claim now that the current arrangements have local acceptability? What does local acceptability mean? Because they are acceptable to the local education authority does not mean that they have 100 per cent. local acceptability. Would the current arrangements pass the local acceptability test? That is exactly what we are about to find out. The way to ensure that arrangements are locally acceptable is to offer local people a choice and to offer local stakeholders more of a say in the new arrangements. We believe that by allowing flexibility in local arrangements we have a better chance of discovering what is acceptable and appropriate locally than we do now.

I also do not believe that we need to enshrine in legislation the need to establish a local body to oversee the arrangements. Any careers service will have to have ways of ensuring that it is in touch with local interests and that it is consulting with and listening to local stakeholders. Indeed, one way of doing that is to have local bodies of the type proposed.

Some local authorities find it useful to have such organisations, while others do not. Such bodies are not the only way for careers service provision to be informed by local opinion. There is diversity of practice over local consultation on a wide range of education, training and employment matters.

We should expect to see careers services of the future playing an active part in such consultation arrangements. But we do not wish to enshrine in legislation a particular way of doing that which would require each careers service to establish an administrative body in each area.

We believe that such arrangements should form part of the proposals that we receive and that they should emerge from the kind of consultations that any potential future provider will undoubtedly have to have. We genuinely want local arrangements that reflect local circumstances. I fear that this amendment will make that harder to achieve.

The Secretary of State already has a substantial responsibility for careers services. That will continue in future. In many respects it is not a new responsibility for the Secretary of State.

The proposed arrangements have been welcomed by the CBI and the TECs, and the essential intentions are welcomed by many careers service managers. We are building on and evolving from existing arrangements, not destroying them.

In closing, perhaps I can reassure the noble Lord, Lord Stoddart of Swindon, on the question of funding. I can best repeat the assurances given by my honourable friend Mr. McLoughlin when speaking on this matter in another place. He confirmed both that there were no plans to change the forecast level of government expenditure on careers services and that they would be provided with sufficient funds to fulfil the statutory duty of the Secretary of State. It is not a deliberate cost-cutting exercise, though I would stress that this Government believe strongly that we should always obtain value for money.

I regret the length of time my reply has taken. However, I hope that I have been able to give some assurances. I cannot accept the amendments, which merely seek to reinforce the status quo. I hope that they will not be pressed.

Baroness Lockwood

My Lords, I am afraid that the Minister has not reassured me. For a great part of her long response I felt that she had not seriously looked at the amendments that I proposed. They are in no way restrictive. I stated openly that there is a richness in variety of provision and that a variety of organisations needed to be involved. We heard the same comments from the Minister today as we heard on the previous occasion. Is the present system accountable and acceptable now? I felt that the noble Baroness, Lady Seear, hit that nail on the head in Committee when she said that a local service provided by local government was accountable; it could not be more accountable because the local authority could be turned out in an election. I shall not pursue that now.

I am extremely disappointed in the response from the Minister. The phrase, persons of any other description", certainly needs to be more clearly defined. The Secretary of State should specify in advance the criteria of being a fit person to contract to operate the new careers service. However, at this late hour I feel that I have no alternative but to withdraw the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.45 a.m.

Baroness Denton of Wakefield moved Amendment No. 93:

Page 61, line 6, at end insert ("; and in doing so the Secretary of State shall have regard to the requirements of disabled persons.").

The noble Baroness said: In moving Amendment No. 93 I shall speak also to Amendment No. 94. I welcome the opportunity to bring forward the amendments, which take account of the very real anxieties expressed in Committee and the discussions I have since had with my noble friend Lord Swinfen and the noble Baroness, Lady Darcy (de Knayth). In doing so I hope that I shall be able to allay those anxieties.

There is no specific duty in the current legislation to ensure that the requirements of those with disabilities are met. The Secretary of State sets guidance standards and issues advice on that and other areas. The careers service provisions for those with disabilities and other special needs are checked by the careers service inspectorate. It has sometimes been necessary to remind local education authorities of their duty towards those with disabilities.

I indicated in Committee that the proposed way of handling this important area is broadly as now. However, we have listened extremely carefully to what has been said and we want people to have confidence in what is proposed. In particular, we want those with disabilities and those who represent their interests to be reassured. We therefore decided to give careful consideration to an amendment. We recognise that there is value in placing an explicit duty on the Secretary of State which would signal that the Secretary of State should keep the requirements of those with disabilities in the forefront of her mind.

To achieve this we propose these amendments, which are along the lines of Amendment No. 242 in Committee proposed by the noble Lord, Lord Swinfen. The effect of the amendments will be that the Secretary of State will have an explicit duty to ensure that those with disabilities receive the service they require.

In proposing these amendments it is important to recognise that it has been the practice of careers services to employ staff who specialise in catering for those with disabilities, or to arrange access to specialised expertise. This is current best practice and we think it should continue. We will reinforce this by including requirements to this effect in the guidance the Secretary of State will issue. Our intention is to build on best practice and to bring all up to the standards of the best.

It is also worth reiterating the assurance given in Committee that we intend to include details in the guidance of a general character on how careers services will meet the guidance and employment service needs of those with disabilities, and we shall be consulting widely when drawing up this guidance. Consultations have already started. There have been preliminary discussions at official level with interested groups. These have been constructive discussions and all of these organisations have welcomed the opportunity to be involved. There will be a formal consultation, probably in mid-June, when a draft of the "guidance" will be circulated. Comments will be invited from a wide range of organisations, including those with an interest in the needs of those with disabilities and learning difficulties.

The Secretary of State's guidance will be enforced through contract and control over funding. We believe this gives greater control over standards and is the most effective way of ensuring that careers services meet the guidance and employment service needs of those with disabilities.

When speaking to Amendment No. 258 in Committee, the noble Lord, Lord Swinfen, made the point that charges to clients should not be so prohibitively high that careers services will be inaccessible to those in most need. I reiterate what I said in Committee that we recognise this issue and have great anxiety about it. There is no power to charge the statutory client group in schools, colleges and those who have left and are seeking to establish themselves in the next step in their career. For some young people, particularly those with disabilities, this may take some considerable time. The central point is that the group to whom there is a duty now, is the group to whom there will also be a duty in the future. Let me emphasise, too, that all current services and programmes for those with disabilities continue.

However, there may be charging for those outside of education. Charging would be for new kinds of guidance services currently only available in commercial guidance agencies and a few local authority careers services. There is no evidence that the current private providers of careers guidance charge more for their services to disabled people. It is not in the nature of the service that we envisage that extra charges would be appropriate.

The Secretary of State can also monitor charging policies to ensure that those with disabilities and learning difficulties are not being charged more for services. Such monitoring will follow from the duty on her to have regard to the requirements of disabled persons. This remains the Government's position on charging, and I hope that your Lordships can accept this in light of the proposed government amendment on the disability issue.

We have not included a specific definition of disability. We believe that a definition, along the lines of Amendment No. 243 tabled by the noble Lord, Lord Swinfen, in Committee, would be unnecessarily constricting in this context, and would not be in line with the nature of the government amendment.

The proposed legislation, which this amendment reinforces with respect to those with disabilities, seeks to ensure that the service provided will be focused on individuals and their requirements, rather than making particular types of provision for particular groups which might be appropriate in the case of education or training provision or indeed when seeking to establish the quota as in the Disabled Persons (Employment) Act 1944. We consider that by not accepting the definition of disability included in the amendment proposed by the noble Lord, Lord Swinfen, and others, people with learning difficulties are included.

I commend Amendments Nos. 93 and 94 to your Lordships and ask that they be included in the Bill. I beg to move.

Lord McCarthy

My Lords, I wish to ask the noble Baroness a question arising out of her reference to a "statutory client group". That is a new expression. Is that the same as the core?

Baroness Denton of Wakefield

My Lords, I said that we do not propose to change the service that is delivered free to the group which receives it now.

Lord Swinfen

My Lords, I welcome the amendments brought forward by my noble friend as a result of the amendments which I and others moved at Committee stage. I also thank her and her officials for the long and constructive meeting which we had last week. I believe that the noble Baroness, Lady Darcy (de Knayth) will agree with me that it was a very useful meeting.

I welcome the fact that there will be consultations with interested organisations on the guidance. I am sure that we shall all be very interested to see what transpires at the end. I appreciate that there will be no definition of what a disabled person is because I agree that by defining one can narrow down. I for one would like to make certain that the description of a disabled person is as wide as possible because we are learning about different disabilities and their causes, not on a daily basis but certainly as the years go by, and about the ways of dealing with them.

I also welcome the fact that there will be no additional charging. When my noble friend winds up on this amendment will she confirm that there will be no time limit on the amount of time which will be given in guidance to those with disabilities, because that can be a hidden method of charging? Very often a disabled person, particularly someone who is blind or with hearing or mental difficulties, takes much longer to be given the correct guidance. It takes much longer also for the persons giving the guidance to make certain that they understand what the needs are. It is a two-way process and not just on behalf of the disabled person. It requires time spent by the guider as well.

My noble friend did not mention specialist knowledge in dealing with disabilities. She may have done but if she did I missed it in her introduction. I do not want every group which gives guidance necessarily to have every particular specialist; but will there be specialists available, capable of dealing with all the different needs which are very much more diverse among disabled people than they are among able-bodied people, and obtainable at no additional cost? Specialist services, like those in any other realm of life, can be expensive.

Baroness Darcy (de Knayth)

My Lords, I too welcome these amendments so clearly introduced by the Minister. I thank the noble Baroness, Lady Denton, for the very positive meeting which we had and for bringing forward these amendments. I also congratulate the noble Lord, Lord Swinfen, on the calm, courteous, but persistent way in which he has pursued this matter. A great deal of thanks is due to him for these amendments.

I was delighted to hear the noble Baroness say that people with learning difficulties will be included. I hope that in the guidance it will specifically state that various other groups of people with disabilities will be included. We have specific learning difficulties including dyslexia and moderate and severe learning difficulties which are often referred to as learning disabilities. The list also includes those with mental health difficulties; those with emotional and behavioural difficulties, which I believe is quite an important client group; those with physical disabilities; those with visual impairments; those with medical conditions such as epilepsy and asthma; and those who are deaf or have partial hearing.

I should like to dwell on those with moderate learning difficulties. Those people are significantly slower in learning than the majority of people of their age. It is nothing to do with dyslexia or having English as a second language. SKILL - the National Association for Students with Disabilities, of which I have the honour to be president—says that this is a group that very much needs help and which benefits greatly from it. But such students can often fall through the net. If so, they encounter real problems in life and get into a downward spiral. When referring to people with learning difficulties, we are not talking only about those with severe learning difficulties. It is important that that is set out in the guidance.

I should also like to say a word about charging. I welcome what the Minister said. It is important, however, that the extra time needed by some disabled people who are seeking careers advice is not overlooked but is taken into account when the contract is issued. Again, we are talking particularly about those with moderate learning difficulties. I hope that the Minister can give some reassurance about the definition. I warmly welcome the amendments.

Baroness Denton of Wakefield

My Lords, I thank the noble Baroness and my noble friend Lord Swinfen for their remarks. I hope that I can reassure them on the matters which they have raised. There is no fixed time limit in providing the service to people with disabilities; the aim is to meet the needs of the client.

As I said in introducing the amendment, it is important to recognise that it has been the practice of careers services to employ staff who specialise in catering for those with disabilities or to arrange access to specialised expertise. That is current best practice and we think that it should continue. We shall reinforce that by including requirements to that effect in the guidance which the Secretary of State will issue.

The noble Baroness listed some of the areas of concern. These were spelt out to me in a letter from SKILL. As I said, we did not include a definition of disability because we believed that it would be restrictive. As the noble Lord said, there is change in this area, but the list of disabilities provided by SKILL would, I believe, be covered in most people's current idea of what "disability" means. That certainly includes people with moderate learning difficulties. We would not, however, include such a list in the Secretary of State's guidance which is of a general character. We shall be agreeing with providers the special arrangements that they will be making for those with disabilities and in doing so we shall seek to ensure that the providers of careers services have a comprehensive and up-to-date appreciation of the nature of disability and of the requirements of those who are disabled.

On Question, amendment agreed to.

[Amendment No. 93A not moved.]

Baroness Denton of Wakefield moved Amendment No. 94:

Page 61, line 12, at end insert ("; and in doing so the Secretary of State shall have regard to the requirements of disabled persons.").

On Question, amendment agreed to.

1 a.m.

Lord Stoddart of Swindon moved Amendment No. 94A:

Page 61, leave out lines 27 to 31.

The noble Lord said: My Lords, I moved an identical amendment in Committee and I have studied carefully what the noble Baroness said then. I have also read carefully the letter which she was kind enough to send to me on 28th April and, I believe, to other noble Lords also. In that letter she further clarified the Government's position.

However, it is clear—I think that I have made it clear tonight—that a fundamental disagreement remains between us. I wish to see a properly funded public service run by local authorities, perhaps in partnership with TECs, but basically free to all, whereas the Government view is that anything but the basic service should be charged for. The Government clearly wish to privatise the service and make it self-financing through charges. That will entail a completely new approach to the careers service.

In paragraph 2 of her letter to me the noble Baroness said that she hopes it is now accepted and understood that the legislation does not contain the power to charge for services provided to people covered by Section 8. I should like to be able to accept that entirely, but in paragraph 4 of her letter she goes on to say that it is the Government's policy to encourage people to take responsibility for and invest in their own future and that the Government believe that they should contribute to the cost. That is most confusing and gives the impression that the legislation is setting up the structure for charges to be made in the future.

Also in her letter the noble Baroness refers to Skill Choice which will provide £25 million in two years—that is, 1993–95—to part-fund the cost of individuals receiving careers guidance. However, again there is a reference to individuals and/or their employers being expected to make a contribution towards the cost. There is also a reference towards helping a market—back to that market word again—in providers to develop. In my view that sounds like a recipe for chaos and there certainly seems to be a danger that cost considerations will take precedence over quality of service.

I listened at great length to what the noble Baroness said about the Government's intentions for the service and I hope that my fears will prove to be unfounded, but we shall have to read her words carefully.

Finally, although the noble Baroness says in paragraph 7 of her letter to me that the power to make charges is not a requirement to do so, she must realise that, since apparently no extra money is promised for the service and that at present most LEAs spend more than the Government's standard spending assessment, they will virtually have to make charges if they are to discharge their duties to provide guidance services to young persons. I beg to move.

Lord McCarthy

My Lords, I am glad to hear that my noble friend Lord Stoddart thinks that the letter he received clarifies the position because it does not clarify it for me. I come back to the point that we support his amendment partly because, in the absence of any idea as to whom the Government think they will charge, we have to ask that there shall be no charges.

A great deal of emphasis is placed on the fact that the Government say they will not charge people covered by Section 8. I have looked at the new Section 8 on page 59 0.nd I cannot see what categories of people it covers. It tells us where they will be trained and about the Secretary of State's powers, but it does not tell us who these people are. Neither did the old Section 8 in the 1973 Act tell us who those people are. It referred to those at university, those not at university and anyone else. So we do not know from either the old Section 8 or the new Section 8 who the dickens these people are.

This evening we have heard a new phrase, "the statutory client group". I tried to get the noble Baroness to tell me whether the "statutory client group" was different from the core group. She did not tell me. We have now the statutory client group, the core group and the group covered by Section 8, except that neither the old nor the new Section 8 tells us who they are.

In the letter that the noble Baroness sent to my noble friend we are told a little. We are told that the people covered by Section 8 are predominantly young people. It says "predominantly", so there could be some old people. But presumably it does not include all the old people. Never mind. They are predominantly young people in schools and colleges, either full-time or part-time, and those having left—this is the vague bit—who are in the process of becoming established on the first rung of their careers. What is the first rung? If they reach the second rung they could be charged, could they? The letter explains that that could of course include people with disabilities, but not all people with disabilities, presumably. That does not explain the matter sufficiently.

In Committee, we asked the noble Baroness a series of questions. We asked whether the provision covered the unemployed. She said, "No". (co1.861.) so it did not cover the unemployed. They are within the core group or the statutory group. We asked whether it included people with learning difficulties. She said: The core client group will include young people who have ceased to undergo education and who, because of their disability, are experiencing an extended transition to settled employment".—[Official Report, 30/3/93; col. 861.] How extended is "extended"? How long is the transition? We still do not know. We are still not told who are the people in the core group, the statutory client group, or any other group, who can and cannot be charged. In the absence of a definition which tells us who they are, we have to be against charges.

Baroness Denton of Wakefield

My Lords, the Bill defines clients for whom the Secretary of State has a duty to provide a service as persons undergoing and ceasing to undergo the relevant education, which in turn is defined as education involving full-time attendance at any education institution in Great Britain, other than in the higher education sector, and education which is commonly undergone by people to fit them for employment involving part-time attendance at any education institution in Great Britain other than in the higher education sector.

Those clients form what I would refer to as the statutory client or core group, and it is for that group that the Secretary of State has a duty to secure relevant services. Details of that are in fact contained in Section 8 of the legislation. The service to clients under the Secretary of State's duty in Section 8, since there is no power to charge, must be free. I am assured that a power to charge for services covered by Section 8 could be achieved only through future legislation. It is not, as the noble Lord, Lord Stoddart, seemed to suggest, a means of changing the funding arrangement.

In Committee the noble Lord suggested that it may be better to define the group for whom charges can be made. I do not agree with him, but if it helps to clarify the matter let me do so. People who can be charged for services are people who are not in schools or attending colleges full or part-time or who have recently left. I have already said that young people in the labour market who need extended help on leaving school and college will not be charged. In essence, those who can be charged are adults outside of education.

The Government believe that adults should be encouraged to invest in their own career development and this includes investing in careers guidance. We believe that that is a decision that adults can take for themselves. We wish to see greater provision of those services and we shall be encouraging careers services to develop in this way.

People cannot, of course, be forced to pay for advice. They will pay for it only if there is a benefit. Careers guidance can benefit individuals and their employers by increasing job satisfaction, productivity and financial reward.

If the amendment is accepted it does not mean that we will then develop these new guidance services for adults free of charge. We have said that there is no plan to change the future level of central government expenditure on careers services. Thus if we were to provide careers guidance services free of charge to adults, that would mean reducing the service to young people. I am sure that the noble Lord did not envisage that as the aim of his amendment. While I recognise his anxieties, I hope that he will acknowledge that his amendment would be damaging in the development of the service and that he will withdraw it.

Lord Stoddart of Swindon

My Lords, I do not agree that my amendment will be damaging to the service. If I had thought that, I certainly should not have moved it. I believe that the proposed legislation will be damaging to the service. We must study closely in Hansard what the Minister said. I do not know that she completely answered the questions which were asked by my noble friend about exactly what the statutory group is. It appears to be made up of people in education, part time or full time. I hope that is right. However, the Minister did not make clear whether the service will be available free of charge to young unemployed people. Will it apply to them? If the young unemployed people must pay, how will the Bill help them? Are not they the people who need the help?

Those are real anxieties and I do not believe that the Minister has answered them. I appreciate that it is late at night but I believe that the Minister must look again at what she said and what we said. There are some serious anxieties that the service will be restrictive under the new arrangements and may well disadvantage groups which ought to be advantaged. With those words, I suppose that at this time of night I had better beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Lockwood moved Amendment No. 94B:

Page 61, line 44, at end insert (", and

( ) to ensure that written summaries of careers guidance with agreed plans of action, in relation to relevant services provided under sub-section 2 of this section, shall be provided to all individuals receiving individual careers guidance from the provider of such services.").

The noble Baroness said: My Lords, the purpose of the amendment is to provide an entitlement for individuals to have a written and agreed summary of careers guidance, irrespective of who provides the careers service. In Committee the noble Baroness, Lady Denton, said that she supported the thinking behind such an amendment. That was most encouraging; but, sadly, she did not agree that it was a matter that needed to be a statutory responsibility.

I disagree with that. I remind the Minister that we are not legislating only for this Government; we are legislating for future governments. The key entitlement for every individual receiving careers guidance under the new careers services must be that it entitles them wisely to choose their route and their options. That means that young people should be able to discuss some form of written summary guidance and agreed action with significant persons—that is, with parents, teachers, lecturers, employers and training providers.

It is nonsense to expect young people to remember all that has taken place through an intensive process of careers guidance. We do not expect Members of Parliament to recall what was said from debate to debate; indeed, it is sometimes difficult to recall what was said in a particular debate. Therefore, we cannot expect young people to remember all that has taken place. We are asking for an agreed summary in writing to be the entitlement for all individuals.

Looking at the details of other clauses of the Bill, there are many matters of operational practice which are covered by specific aspects of the Bill. The same is necessary here, particularly if, as I hope, we are seeking to establish a world-class careers service.

The CBI in its document Routes for Success spells out the critical importance of independent careers guidance leading to an up-to-date action plan based upon individual guidance. The Audit Commission report Unfinished Business calls upon the careers service to remain the champion of students, enabling them to choose options and routes based upon high quality information and individual guidance.

We do not specify what the summary should look like, its presentation nor, indeed, its contents other than that it needs to be an agreed statement of next steps. That is the principal purpose of a careers service. It is nonsense to have legislation, as we have now before us, setting up a careers service without specifying a requirement of all providers to produce something for all individuals which relates to the principal purpose of the careers service. I beg to move.

Baroness Denton of Wakefield

My Lords, I am afraid that I cannot agree with the noble Baroness, Lady Lockwood, that this matter needs to be a statutory responsibility within the legislation. The legislation aims to provide the overall framework within which the service will operate. Such a level of detail as proposed by the amendment is better covered in the guidance of a general character which will be issued setting out the nature of the services to be provided and the standards to be achieved.

That is a matter which is technically difficult to handle within the legislation. The trigger for the summary of guidance and action plan is meant to be whenever individuals received individual careers guidance. But when is that? Careers guidance practitioners tell us that careers guidance for young people is a process which extends over several years, involving a wide range of interactions. Is the young person to receive a summary of guidance and action plan every time he sees a careers adviser? The amendment provides no answer to that.

We believe that the provision of written summaries of guidance and careers action plans is an example of good practice. The Secretary of State has already invested a considerable amount of development funding to encourage that practice. We can expect that practice to continue. However, the appropriate place for advice about such matters is the Secretary of State's guidance of a general character. I hope that the noble Baroness will agree with me and will withdraw the amendment.

1.15 a.m.

Baroness Lockwood

My Lords, I am afraid that I do not agree with the Minister but I rather expected that response. I have no alternative but to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 94C not moved.]

Baroness Lockwood moved Amendment No. 94D:

Page 62, line 3, at end insert:

("( ) The Secretary of State may produce guidelines for local education authorities, education authorities or persons with whom he has made arrangements for the provision of services in connection with the transfer of staff involved in the delivery of such services.").

The noble Baroness said: My Lords, this amendment has the simple purpose of trying to safeguard the position of staff currently employed in the careers service. It is obvious to all that legislation such as this to transfer responsibility for the careers service is extremely unsettling and worrying for the careers service staff. At any time after the enactment of the Bill, competitive tenders may be invited for the service. The process may be repeated at frequent intervals, as the legislation makes no provision about the length of time of contracts. There will be the worry that competitive tendering will be used to drive down salary costs and worsen conditions of service—a service which, in any event, is not very highly paid.

As there is a relatively limited pool of trained careers officers, the professional staff may have some reasonable prospect of re-employment. At least, I would hope that that is so; but, after hearing some of the Minister's statements this evening, I am not quite sure. However, I am sure that the present careers officers are certainly hoping that some of the contracts will take advantage of the use of the qualified staff. But the position of employment assistants and clerical staff will be even worse than that of the professional staff.

The lack of security in both the long and short term is not helpful to staff morale or to the recruitment of any new staff of quality. Therefore, it is important, both for the quality of the service in the future and, I suggest, as an aspect of civilised treatment of staff, that the Secretary of State should clarify the arrangements for the transfer of staff that will apply whenever a new contract for the careers service is made.

Similarly, for those who might wish to bid to run the service, there is also an important consideration. Crucially, they too will need to know whether the Transfer of Undertakings (Protection of Employment) Regulations will apply. It will not be good enough to leave that to be discovered through legal action after the event, as happened in the case of the Home Office exercise to put education in prisons out to tender, mentioned by my noble friend earlier. The Secretary of State should therefore give the appropriate undertaking about the treatment of staff and their conditions of service and, I suggest, should also issue guidelines which make it clear that such undertakings are to be honoured. I beg to move.

Baroness Denton of Wakefield

My Lords, the circumstances under which the current staff of the service may become employed by the new provider of careers services will vary. They will depend largely on who the new providers are to be.

The Government's approach to establishing the new arrangements for careers services will be to emphasise the requirement for services in terms of the outcomes to be provided rather than the more detailed organisational arrangements or methods used for providing them. That is consistent with our approach used under the market testing programme. It would be inconsistent with government policy under the programme to require future providers of services to adopt particular conditions of service or use particular employees to do the work. We will, though, ensure all current and potential providers of careers services are, so far as possible, kept informed about the process for implementing the legislation so that they can keep staff informed and make plans that cover staffing matters. The prospectus that will be issued inviting bids will also require information on the staffing arrangements that providers plan to make.

Staff currently employed by careers services represent by far the largest source of expert and experienced staff that will be required by new providers. We expect, therefore, the majority to experience a smooth transition to the new arrangements. I would argue that there is no need for the amendment and I ask the noble Baroness to withdraw it.

Baroness Lockwood

My Lords, I shall read the Minister's response carefully. But, as I said originally, I think that it must be absolutely clear that there will be concern among present employees in the careers service. We should do all that we possibly can to reassure them about their future. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Lockwood moved Amendment No. 94E:

Page 62, line 38, at end insert:

("(13) The Secretary of State shall lay before Parliament an annual report on how the duties and powers conferred upon him under this section have been discharged in the preceding year, shall outline his proposals for the coming year, including details of any payments which he has made or proposes to make in the coming year, and in order to do so he shall—

1. (a) make arrangements for the inspection of services provided in accordance with this section, and
2. (b) appoint persons with knowledge and experience in the fields of education, industry, commerce, careers 950 guidance and the local community to a National Council to advise him on matters relevant to the arrangements or directions under this section.").

The noble Baroness said: My Lords, this is a very important amendment and, again, it relates to a subject which was discussed at Committee stage. The main purpose of the amendment is to ensure that there is independent inspection of the performance of the careers service contractors through an advisory national council and that the Secretary of State shall receive independent and well-informed advice concerning her, or his, duties, powers and arrangements.

The amendment moved in Committee took a different form. This amendment seeks to encapsulate the establishment of the national council, requiring the Secretary of State to produce an annual report on how his duties and powers have been carried out and are intended to be carried out, together with a requirement that any payments are clearly explained to Parliament. Without the establishment of a national council and a requirement on the Secretary of State to publish an annual report on how he has discharged and will be discharging his duties and powers, we shall not be guaranteed quality of service within a national framework.

The idea of the national council and the requirement for an annual report was debated very late at night in the Committee stage and some misconceptions on the part of the Minister were apparent. I had hoped that we might debate the subject earlier than on the previous occasion, instead of which we are now discussing it early in the morning. Nevertheless, I shall try to correct some of the misconceptions.

First, the amendment does not seek to call for an annual report on the work of the careers service. We need an annual report which relates to the wide-ranging duties and powers under the enabling legislation. That would need to incorporate matters relating to the guidance of a general character which the Secretary of State will issue to contractors. It needs to deal with the level of funding made available for contracts, key elements which were included in contract specifications, the number of contracts awarded, the geographic location covered, lessons learnt from inspections and so on. I suggest that that is what Parliament requires and should demand.

For that purpose the Secretary of State will clearly need advice and guidance from a knowledgeable and authoritative independent body on all matters relating to the duties and powers of the Secretary of State.

The noble Baroness, Lady Denton, appeared to indicate that there was some confusion about the functions of the proposed national council. The amendment states that the national council has a specific function in relation to: matters relevant to the arrangements or directions under this section". That is not a strait-jacket for Ministers in terms of specifying one function for the national council which cannot change through time. Rather, it is enabling legislation, as is Clause 42. The difference is that it requires the Secretary of State to establish a national council; and it enables the Secretary of State to utilise the national council from time to time for maximum benefit so long as its principal activities relate to advising him on matters relevant to his duties and powers.

There is no difference of opinion among the host of supporters for such a council. All see its functions as advisory. In Committee, the noble Baroness suggested that there was a difference and that the letter signed by Sir Christopher Ball, Sir Bryan Nicholson and Tony Watts in The Times did not call for a statutory national council. They were not calling for a regulatory national council; they were calling for an advisory national council to be on the statute book. I understand that a letter has gone from Sir Christopher Ball to the Secretary of State in which he specifically asked to discuss with the Secretary of State the possibility of amending the legislation to put such a council on the statute book, but with advisory powers. Therefore, I hope that that matter is now clear.

I believe that the Secretary of State has agreed to meet Sir Christopher with representatives of the Institute of Careers Guidance. That is gratifying. I hope that there will be a successful outcome.

I turn to the question of payments. In an annual report, Parliament surely must require all future Secretaries of State to publish details of any payments which they make in relation to powers under Section 10(4). Unless satisfactory answers are provided on the financing of the careers service we cannot have a proper national accountable service.

In Committee, the noble Baroness referred to the Secretary of State regularly meeting representatives of interested bodies such as the Institute of Careers Guidance, the National Association of Careers and Guidance Teachers, and so on. While that is to be welcomed, much of the consultation takes place on an individual basis with each group. The same is true of the consultations the noble Baroness and her officials have with other groups such as the Secondary Heads Association and the CBI. What she does not do is to bring them all together in a national forum where constructive shared discussion and debate can productively lead to better solutions than by meeting the individual groups one at a time. That is one of the reasons why we need a national council.

I hope that I have said enough on the principles underlying the amendment at least to evoke some sympathy from the Minister in view of the Secretary of State's pending meeting.

1.30 a.m.

Baroness Turner of Camden

My Lords, we moved Amendment No. 94C because we wish to support Amendment No. 94E. The original Amendment No. 94C called for the establishment of a national council but in a slightly different way. I support my noble friend Lady Lockwood. It is common ground with the Government that a careers guidance service of the highest quality is required. The difference of view between us is about the method by which this could best be achieved. We believe that a national council would provide a national framework for quality throughout the country and would provide authoritative independent advice to Secretaries of State on the development and delivery of quality careers guidance.

The national council should not include those directly concerned with contracting, but would consist of senior industrialists, educationists and other community interests, including those with expertise and with the knowledge to help clients with learning difficulties and disabilities.

The Government have already accepted the argument that special attention should be paid to the requirements of the disabled, and the national council would be one means by which such special needs could be safeguarded. Therefore, I hope that even at this late stage in the Bill, the Minister will feel persuaded of the reasonableness of and justification for the establishment of a national council, as suggested in the amendment.

Lord Stoddart of Swindon

My Lords, I too support the amendment. During the Committee stage I moved an amendment simply calling for a report to Parliament on the work of the careers advisory service during the preceding year. If the Government were moved to accept the amendment or give it serious and sympathetic consideration, it would assuage many of the fears that we have expressed this evening about the future of the service. If we felt that there was a national council which was supervising the service itself and the progress and quality of the service, perhaps we would become less suspicious of the Government's real purpose in the Bill. So I hope that the noble Baroness will feel able at least to say that she will consider the amendment seriously, even if she cannot go so far, at this time in the morning, as to accept it.

Baroness Denton of Wakefield

My Lords, the possibility of ensuring that the noble Lord, Lord Stoddart, is less suspicious is a tempting prospect. The Government fully understand the arguments which have been put forward by the supporters of the statutory national council. We also want to. see a better and more effective careers service, but we do not agree that a national council is the best way of achieving that. I know that the CBI is not calling for a statutory body, and I agree with it.

The careers service inspectorate includes staff with direct and recent experience of work in careers guidance and work in careers services. This includes the current chief inspector in England, so the Secretary of State does not lack advice from specialists. The Department of Employment also uses the careers service consultative group to inform best policy and practice with respect to careers services. The group includes heads of careers services, directors of education, the local authority associations, inspectors from the Office for Standards in Education, representatives of training and enterprise councils, which therefore bring in the business view which was mentioned, the Institute of Careers Guidance and other government departments. The Government, in their aim to provide the best careers service, would not wish to ignore any future sources of advice.

The Department of Employment has already begun to consult the careers service consultative group on how the legislation, if passed, might be implemented and it has supplemented that with many informal bilateral meetings with organisations represented on it and others, such as the Commission for Racial Equality and the Equal Opportunities Commission.

That has focused so far on the broad framework for implementation, but Ministers want to use the CSCG and members agree that it is the appropriate body through which the department should fulfil the undertaking given by my honourable friend Mr. McLoughlin in Committee in another place, to consult on the "guidance of a general character" which the Secretary of State will produce. This has proved to be a valuable forum for considering careers service matters. It will continue to operate with such modifications to its membership or role as are needed to reflect the new arrangements. That will obviously take into account the nature of any new providers. The Secretary of State and other Ministers meet regularly with all the relevant organisations and I should stress these include the National Advisory Committee for the Employment of People with Disabilities.

As I also said in Committee, the Secretary of State for Employment presents to Parliament jointly with the Chief Secretary to the Treasury an annual report which sets out objectives and expenditure plans for the next three years. This covers the department's work with respect to the careers service and it will continue to do so. The report also gives an account of the department's performance in meeting its objectives. This will allow people to measure the success of the growth of the new careers service. In addition, it has been the practice of successive Secretaries of State to provide annual reports on the work of careers services. These reports can be found in the Libraries of both Houses and I can assure your Lordships that such reports will continue to be published. There are ample opportunities through the usual channels for Members of both Houses to inquire about the work of careers services. I cannot see that anything of value will be added by imposing duties on the Secretary of State, as requested by this amendment, and I hope that it will be withdrawn.

Baroness Lockwood

My Lords, I am rather surprised at the response from the noble Baroness. I thought it might have been more sympathetic, particularly in view of the fact that the Secretary of State is meeting the three people I mentioned on, I believe, 17th May. It cannot be very encouraging for them to attend a meeting when we have had what appears to be a definitive statement from the Minister.

While the current careers service consultative group is, I am sure, a valuable group, its functions relate to a structure which is now being changed. I should have thought that as we are to have a new structure for the careers service we would also need a new structure for the consultative process. All we can do is to hope that the pending meeting with the Secretary of State proves to be more successful than the debates in your Lordships' House. For the time being I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43 [Careers services: ancillary services]:

Baroness Lockwood moved Amendment No. 94F:

Page 63, leave out lines 36 to 40.

The noble Baroness said: My Lords, this amendment is grouped with Amendment No. 94G standing in the name of my noble friend Lady Turner. The purpose of my amendment is to remove the two-year restriction on the supply of goods and services by local authorities. Clause 43 recognises that where a contract to provide the career service is placed elsewhere than with the local authority there may well be services which the career service would want the local authority to provide for it. However, restricting such arrangements to two years in subsection (5) makes this only a short-term expedient. It matches similar provisions in the Education Bill which would limit to two years the power of a local education authority to provide goods or services to a grant-maintained school. I suggest that the restriction is misplaced and based on the dogmatic view that the private sector should and will develop to provide the necessary services.

On the schools side, it has been opposed by grant-maintained schools themselves as well as LEAs as an unnecessary and undesirable restriction on schools in choosing the source of their goods and services. No scope is left for meeting the problem that may arise if a suitable private sector provider has not emerged by the end of the two-year period. Since careers services are not to be designated public bodies under the 1990 local authorities goods and services Act neither will limited trading at the margins be possible under that two-year period.

There are some important questions that the Government need to answer. Is it seriously being argued that if the contract for the careers service is given to a local authority owned company rather than to the local authority itself, that company would be unable after two years to purchase support services from the local authority? Would that restriction extend to premises which the careers service rents from the local authority and which the local authority has held for careers service purposes?

In the case of an LEA/TEC partnership, will one set of rules apply if the LEA signs the main contract and another if only the TEC signs the contract? Is it accepted that a local authority may do business with a careers service provider in its area where the business derives from functions retained by the local authority? Is it accepted that there will be some risk to local taxpayers' money where a local authority is awarded a contract for the careers service or is directed to provide it? Or is it the intention that the Secretary of State will cover any deficit to ensure that council tax payers in those areas can sleep as easily as those in areas where the careers service contract goes elsewhere?

All those are very important questions which arise under this clause. It is important that the Government should provide adequate answers to them before proceeding with the clause. I beg to move.

1.45 a.m.

Baroness Denton of Wakefield

My Lords, as I said when speaking on this matter in Committee, as the law stands many future providers of careers services would not be able to be provided with services from a local authority, even for a temporary period. We consider, as do many of your Lordships, that many new providers will find those services valuable in getting started.

Clause 43 gives local education authorities a power to provide services to future providers of careers services. The only restriction that we put on this power is that it should be for a transitional period of two years. I hope to reassure the noble Baroness that the commencement of legislation is not the start of the time limit. It starts from the point at which the new careers service begins to operate in that local education authority's area. So it cannot run out before a provider has been found, which she suggested was a fear. I hope that that reassures her.

We believe that two years from that point of the start of the service will give time for careers services and private providers of such goods and services to become established. We want providers to be able to use local authorities' administrative personnel and computer services for a transitional period to help them become established. That does not apply to premises. Negotiations on premises will come outside that area. But I must stress that we cannot give local education authorities a licence to trade indefinitely with careers service providers. Local authorities exist, and must continue to exist, primarily to perform their statutory functions. That is what the council tax payers are funding; they are not funding authorities to trade.

The noble Baroness raised many points. If I may, I will look at them in Hansard and write to her on the specifics. However, I can say that we believe that there will only be a need for the facility at the start of the implementation process and that removal of the two-year limit is not appropriate.

Baroness Lockwood

My Lords, the response by the Minister is extremely worrying. The provision is worrying in relation to the education service, but the two-year limit is even more inappropriate in the case of the careers service. However, I shall wait until she has read Hansard and looked at my questions before deciding what to do at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 94G and 94H not moved.]

Lord McCarthy moved Amendment No. 94J:

After Clause 44, insert the following new clause: ("Interpretation of "employee"

.—(1) Section 153(1) of the 1978 Act shall be amended in accordance with subsection (2) below.

(2) The words "'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment" and the words "employment, except for the purposes of sections 111 to 115, means employment under a contract of employment" shall be omitted and replaced by the following words "'employee' means an individual who has entered into or works under (or where the employment has ceased, worked under)—

1. (a) a contract of employment; or
2. (b) any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by that individual, whether such a contract is express or implied and, if express, whether it is oral or in writing;"

"'employment' except for the purposes of sections 111 to 115, means employment under one of the contracts referred to in the definition of 'employee' above".).

The noble Lord said: Amendment No. 94J is an attempt to widen the key definition of "employee". In fact it widens the definition of both "employee" and "employment". The aim is to bring in a wide range of employees who are excluded from the protection of the 1978 EPA, and therefore from protection from unfair dismissal, entitlement to notice, statement of terms or redundancy rights, maternity rights and so forth.

As we have been saying in previous amendments, it is time that the conventional definition of "employment" and "employees" was widened to bring them into line with the effective definition of "employees" in other Acts; for example, sex discrimination, race discrimination, the Equal Pay Act and the Wages Act. Indeed, we take the definition of an "employee", for the purposes of the Bill, from the Wages Act.

The present definition is an individual who has entered into or who works under a contract of employment. A contract of employment is therefore defined; it is a contract of service or apprenticeship, whether express or implied, whether oral or in writing. But it does not cover a contract "for" service. In fact, an increasing number of people in the labour force are employed in a contract "for" services rather than a contract "of' service. Indeed, the tendency is for more and more people in the economy to be defined as self-employed; as having a contract for service and therefore being excluded from the definition of employment which would enable them to enjoy a whole range of statutory rights.

A series of debates of a complex kind has developed in the legal process in order to decide precisely what the boundary line is between a contract "for" service and a contract "of' service; what the degree of control is; what the obligation to provide work is; whether the worker involved pays tax or national insurance and so forth. The result of the restrictive definition, as it has developed, is that the fastest growing section of the labour force is excluded from basic employment rights. What we are saying in our amendment is that such people should, on the basis of definitions which the Government themselves use, be included —for example, in the Wages Act. We have put that definition into our amendment to extend the area of protection. I beg to move.

Viscount Ullswater

My Lords, this amendment would considerably extend the coverage of the 1978 Act provisions, so that they applied to a large category of people who were self-employed. That would be quite inappropriate and would constitute an unjustifiable and considerable burden on employers.

The employment protection rights in the 1978 Act are rights which employees have against their employer. They have a contract of service with their employer, and the employer has duties towards his employees. They acquire rights, some of which require a period of continuous service with the employer before they qualify. The self-employed worker, however, will often have chosen that status because he considers that he benefits—for example, from the different tax and national insurance regime. He cannot expect to have it both ways.

I recognise, of course, that it may be argued that in some cases it is not easy to decide whether an individual is an employee or self-employed. However, industrial tribunals are well able to look at all the circumstances of the employment and decide where the line is drawn in any particular case.

I also recognise that the definition before us in the amendment would exclude self-employed people who were running their own businesses, themselves employing workers or sub-contracting the job in question. The Wages Act 1986 uses a similar definition for the right not to suffer unfair deductions from pay. However, that is a different matter. Individuals are entitled to be paid for the work they do, whatever kind of a contract they do it under, but I do not see why they should be entitled to unfair dismissal protection, which is a very different matter.

I must remind noble Lords opposite that there was a time when they wholeheartedly agreed with what I am saying. These provisions were introduced by the Labour Government, and that was considered right at the time. I hope that noble Lords will reconsider, and withdraw their amendments.

Lord McCarthy

My Lords, of course they were introduced by a Labour Government. All the good things in this world have been introduced by Labour Governments. But time marches on. We are saying that the definition of employment which was introduced by a Labour Government and was a perfectly reasonable definition then is not a reasonable one now. The Government accept it by implication, for it is not the definition they used in sex discrimination legislation, it is not the definition they used in equal pay legislation and it is not the definition they used—we have chosen this one because it is their own—in the Wages Act 1986. They used, as the noble Viscount admits, basically the definition that we are using in this amendment. So the fact that the Labour Government had a different definition in 1976 is not the point.

The Minister said that the self-employed had chosen their position. I do not believe that he lives in such a protected world that he does not know that employers now have a very real incentive to make workers become self-employed. Employers tell, them that they are self-employed. There was a great growth in the numbers of self-employed because the self-employed have no rights. That is what happens in a recession. There has been a growth in the numbers of self-employed because it suits employers to declare their workers self-employed and say that that is the basis on which they are going to employ them—for example, as labour only sub-contractors in the construction industry.

Workers do not necessarily choose to be self-employed. We are saying that, if we had the same rights for the self-employed as we have for the employed, the employer would be more able to make a rational decision, as would the worker, as to what his category should be. But now there is a premium. There is an incentive for the employer to categorise people as self-employed.

I do not believe that the noble Viscount has answered our questions. However, it is late at night. We have made our point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 94K not moved.]

2 a.m.

Viscount Ullswater moved Amendment No. 95:

Before Schedule 6, insert the following new schedule:

("SCHEDULE COMPROMISE CONTRACTS

Sex Discrimination Act 1975 (c.65)

1. In section 77 of the Sex Discrimination Act 1975 (validity etc of contracts)—

(a) in subsection (4), after paragraph (a), there shall he inserted—

"(aa) to a contract settling a complaint to which section 63(1) of this Act or section 2 of the Equal Pay Act 1970 applies if the conditions regulating compromise contracts under this Act are satisfied in relation to the contract;"; and

(b) after subsection (4) there shall be inserted—

"(4A) The conditions regulating compromise contracts under this Act are that—

1. (a) the contract must be in writing;
2. (b) the contract must relate to the particular complaint;
3. (c) the complainant must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed contract and in particular its effect on his ability to pursue his complaint before an industrial tribunal;
4. (d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the complainant in respect of loss arising in consequence of the advice;
5. (e) the contract must identify the adviser; and
6. (f) the contract must state that the conditions regulating compromise contracts under this Act are satisfied.

(4B) In subsection (4A)—

"independent", in relation to legal advice to the complainant, means that it is given by a lawyer who is not acting for the other party or for a person who is connected with that other party; and

"qualified lawyer" means—

1. (a) as respects proceedings in England and Wales—
   1. (i) a barrister, whether in practice as such or employed to give legal advice, or
   2. (ii) a solicitor of the Supreme Court who holds a practising certificate;
2. (b) as respects proceedings in Scotland—
   1. (i) an advocate, whether in practice as such or employed to give legal advice, or
   2. (ii) a solicitor who holds a practising certificate.

(4C) For the purposes of subsection (4B) any two persons are to be treated as "connected" if one is a company of which the other (directly or indirectly) has control, or if both are companies of which a third person (directly or indirectly) has control."

Race Relations Act 1976 (c. 74)

2. In section 72 of the Race Relations Act 1976 (validity, etc of contracts)— (a) in subsection (4), after paragraph (a) there shall be inserted— (aa) to a contract settling a complaint to which section 54(1) applies if the conditions regulating compromise contracts under this Act are satisfied in relation to the contract;"; and (b) after subsection (4) there shall be inserted—

"(4A) The conditions regulating compromise contracts under this Act are that—

1. (a) the contract must be in writing;
2. (b) the contract must relate to the particular complaint;
3. (c) the complainant must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed contract and in particular its effect on his ability to pursue his complaint before an industrial tribunal;
4. (d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the complainant in respect of loss arising in consequence of the advice;
5. (e) the contract must identify the adviser; and
6. (f) the contract must state that the conditions regulating compromise contracts under this Act are satisfied.

(4B) In subsection (4A)— independent", in relation to legal advice to the complainant, means that it is given by a lawyer who is not acting for the other party or for a person who is connected with that other party; and qualified lawyer" means—

1. (a) as respects proceedings in England and Wales—
1. (i) a barrister, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor of the Supreme Court who holds a practising certificate.
2. (b) as respects proceedings in Scotland—
1. (i) an advocate, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor who holds a practising certificate.

(4C) For the purposes of subsection (4B) any two persons are to be treated as "connected" if one is a company of which the other (directly or indirectly) has control, or if both are companies of which a third person (directly or indirectly) has control."

Wages Act 1986 (c.48)

3. In section 6 of the Wages Act 1986 (remedies for Part I contraventions and restriction on contracting out)— (a) in subsection (3) after the words "apply to" there shall be inserted "(a)" and at the end of the words so constituted paragraph (a) there shall be inserted the words "; or (b) an agreement to refrain from presenting or continuing with a complaint if the conditions regulating compromise agreements under this Part of this Act are satisfied in relations to the agreement"; and (b) after subsection (3) there shall be inserted—

"(4) The conditions regulating compromise agreements under this Part of this Act are that—

1. (a) the agreement must be in writing;
2. (b) the agreement must relate to the particular complaint;
960
3. (c) the worker must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed agreement and in particular its effect on his ability to pursue his complaint before an industrial tribunal;
4. (d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the worker in respect of loss arising in consequence of the advice;
5. (e) the agreement must identify the adviser; and
6. (f) the agreement must state that the conditions regulating compromise agreements under this Part of this Act are satisfied.

(5) In subsection (4)— independent", in relation to legal advice to the worker, means that it is given by a lawyer who is not acting in the matter for the employer or for a person who is connected with the employer; and qualified lawyer" means—

1. (a) as respects proceedings in England and Wales—
1. (i) a barrister, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor of the Supreme Court who holds a practising certificate;
2. (b) as respects proceedings in Scotland—
1. (i) an advocate, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor who holds a practising certificate.

(6) For the purposes of subsection (5) any two persons are to be treated as "connected" if one is a company of which the other (directly or indirectly) has control, or if both are companies of which a third person (directly or indirectly) has control."

Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52)

4. In section 288 of the 1992 Act (restrictions on contracting out)— (a) after subsection (2), there shall be inserted—

"(2A) Subsection (1) does not apply to an agreement to refrain from instituting or continuing any proceedings, other than excepted proceedings, specified in section 290 before an industrial tribunal if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement.

(2B) The conditions regulating compromise agreements under this Act are that—

1. (a) the agreement must be in writing;
2. (b) the agreement must relate to the particular complaint;
3. (c) the complainant must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed agreement and in particular its effect on his ability to pursue his rights before an industrial tribunal;
4. (d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the complainant in respect of loss arising in consequence of the advice;
5. (e) the agreement must identify the adviser; and
6. (f) the agreement must state that the conditions regulating compromise agreements under this Act are satisfied.

(2C) The proceedings excepted from subsection (2A) are proceedings on a complaint of non-compliance with section 188."; and (b) after subsection (3) there shall be inserted—

"(4) In subsection (2B)— independent", in relation to legal advice to the complainant means that it is given by a lawyer who is not acting for the other party or for a person who is connected with that other party; and qualified lawyer means—

1. (a) as respects proceedings in England and Wales—
1. (i) a barrister, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor of the Supreme Court who holds a practising certificate;
2. (b) as respects proceedings in Scotland—
1. (i) an advocate, whether in practice as such or employed to give legal advice, or
2. (ii) a solicitor who holds a practising certificate.

(5) For the purposes of subsection (4) any two persons are to be treated as "connected" if one is a company of which the other (directly or indirectly) has control, or if both are companies of which a third person (directly or indirectly) has control.").

On Question, amendment agreed to.

Schedule 6 [Miscellaneous amendments]:

Viscount Ullswater moved Amendment No. 96: Page 91, line 7, at end insert:

("Power to provide for continuity of employment following reinstatement or re-engagement

.In Schedule 13 to the 1978 Act (computation of period of employment), in paragraph 20 (re-instatement or re-engagement of dismissed employee)—

1. (a) in sub-paragraph (2) (a), for the words "complaint under section 67" there shall be substituted the words "relevant complaint of dismissal";
2. (b) in sub-paragraph (2) (c), for the words "section 134(3)" there shall be substituted the words "his relevant conciliation powers or";
3. (c) after sub-paragraph (2) (c), there shall be inserted—
• "(d) of the making of a relevant compromise contract.";
• and
• (d) after sub-paragraph (2) there shall be inserted—

"(3) In sub-paragraph (2)— relevant complaint of dismissal" means a complaint under section 67 of this Act, a complaint under section 63 of the Sex Discrimination Act 1975 arising out of a dismissal or a complaint under section 54 of the Race Relations Act 1976 arising out of a dismissal; relevant conciliation powers" means section 134(3) of this Act, section 64(2) of the Sex Discrimination Act 1975 or section 55(2) of the Race Relations Act 1976; and relevant compromise contract" means an agreement or contract authorised by section 140(2) (fa) or (fb) of this Act, section 77(4) (aa) of the Sex Discrimination Act 1975 or section 72(4) (aa) of the Race Relations Act 1976.").

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 97:

Page 91, line 47, at end insert: (". In section 166(1) of the 1992 Act (consequences of failure to comply with order of reinstatement or re-engagement), for "(5) (a)" there shall be substituted "(5)".").

The noble Viscount said: My Lords, this is a minor technical amendment which makes a correction to Section 166 of the Trade Union and Labour Relations (Consolidation) Act 1992. I beg to move.

On Question, amendment agreed to.

Schedule 7 [Consequential amendments]:

Viscount Ullswater moved Amendment No. 98: Page 98, line 19, at end insert: (". In paragraph 18(aa) of Schedule 11 to the 1978 Act (power for Employment Appeal Tribunal rules to regulate certain applications), for the words from "an application" to the end there shall be substituted the words "any application to the Appeal Tribunal may be made;".").

The noble Viscount said: My Lords, I spoke to this amendment with Amendment No. 88. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 99: Page 101, line 14, at end insert ("in").

The noble Viscount said: My Lords, this again is a minor technical correction to the provisions, which I am sure will prove uncontroversial. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 100: Page 103, line 3, after ("(1)") insert ("— (i) in paragraph (c) after the word "members" there shall be inserted the words "or secure confidentiality"; and (ii)").

The noble Viscount said: My Lords, this is a clarifying amendment following from our introduction of new Clause 6 at the Report stage of this Bill in another place. It ensures that the reference to Section 26 in Section 109 reflects the changes made to Section 26 as a consequence of Clause 6 inserting Section 24A in the 1992 Act. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 101 and 102 not moved.]

Viscount Ullswater moved Amendments Nos. 103 and 104: Page 109, line 27, leave out ("and"). Page 109, line 27, at end insert: ("( ) after the entry relating to "dismiss and dismissal" there shall be inserted— the duty of confidentiality" section 24A(3)", and").

The noble Viscount said: My Lords, these two amendments were spoken to with Amendment No. 5. I beg to move.

On Question, amendments agreed to.

Schedule 8 [Transitional provisions and savings]:

[Amendment No. 105 not moved.]

Viscount Ullswater moved Amendment No. 106: Page 110, line 6, after ("force") insert ("under which deductions were made in his case before that day").

The noble Viscount said: My Lords, this is a clarifying amendment which I beg to move formally.

On Question, amendment agreed to.

Schedule 9 [Repeals and revocations]:

Viscount Ullswater moved Amendments Nos. 107, 108 and 109: Page 113, line 4, column 3, after ("18,") insert ("in subsection (1), the words "council or" "). Page 113, line 5, column 3, leave out ("and"). Page 113, line 6, column 3, at end insert (", and in subsection (5), the words "council or" ").

The noble Viscount said: My Lords, these are purely consequential amendments flowing from Clause 34 of the current Bill. They remove references to councils in Section 18 of the Employment Protection (Consolidation) Act 1978. Such references will not apply when Clause 34 is enacted. I beg to move.

On Question, amendments agreed to.

Viscount Ullswater moved Amendment No. 110: Page 115, line 32, column 3, at end insert: ("In section 154, the words "and 64A".").

The noble Viscount said: My Lords, this again is a minor drafting amendment which repeals an additional reference to that section which is found in the Trade Union and Labour Relations (Consolidation) Act. Schedule 9 has the effect of repealing Section MA of the 1978 Act. I beg to move.

On Question, amendment agreed to.

Clause 51 [Northern Ireland]:

Viscount Ullswater moved Amendment No. 111: Page 66, line 27, at end insert: ("( ) section 26,").

The noble Viscount said: My Lords, these are technical amendments to Clause 51 which deals with the application of the Bill's provisions to Northern Ireland. I beg to move.

The Deputy Speaker

My Lords, is the Minister moving these en bloc?

Viscount Ullswater

My Lords, yes.

The Deputy Speaker

My Lords, with the leave of the House, I shall put the question on Amendments Nos 111 to 114 en bloc. The Question is, That these amendments be agreed to.

Lord Blease

My Lords, I am disappointed. Six major amendments have been tabled since Committee stage and I felt sure that the Minister would seek to qualify at least some of them in the Northern Ireland context, especially Amendments Nos. 113 and 114. Even this Report stage has underscored the importance of the Bill to the Government, and to management and employees throughout the United Kingdom. The controversial and critical aspects of the legislation are reflected in the size of the Bill - 116 pages. The number of amendments that have been tabled, the length of the speeches and the time that has been allowed for debate are surely an indication that this is an extremely important piece of legislation.

The amendments to Clause 51 specifically deal with vital trade union and employment factors in Northern Ireland—factors which will bring wide and sweeping changes to industrial relations in the Province. There are three distinct subsections to Clause 51 which I believe require some explanation, but the Government have not given it and I believe that that should be placed on the record of the House.

An explanation was clearly and ably given by the Secretary of State, Sir Patrick Mayhew, in a press release from the Northern Ireland Office on 6th November. I do not apologise for quoting from it because I believe that, in the interests of Northern Ireland, it is necessary to place it on the record of the House. The statement reads: The Trade Union Reform and Employment Rightl Bill … includes an enablement whereby certain provisions may be extended to Northern Ireland by means of an Order in Council subject to the negative resolution procedure. The provisions to be extended to Northern Ireland deal with EC obligations (relating to proof of an employment relationship, procedures for handling redundancies and protection against dismissal of health and safety workers), employment rights (relating to pregnant workers, sex discrimination and industrial tribunals procedures) and the abolition of Wages Councils. It is my intention to introduce such an Order as soon as possible following Royal Assent". That is, as soon as the Bill has passed through both Houses.

The Secretary of State added: The application to Northern Ireland of provisions equivalent to the remainder of the Bill and the provisions of the Employment Act 1990 will be considered in due course following discussions with local bodies". That relates to the second subsection of Clause 51.

The Secretary of State went on to say: The negative resolution procedure will be used to ensure that the Northern Ireland legislation can be put in place on the same time scale as that in the rest of the United Kingdom". I readily accept that, and I think that many in Northern Ireland would agree to it.

The Secretary of State added: The key features of the remaining provisions of the Bill and the trade union reform provisions contained in the Employment Act 1990 are set out below. Their application to Northern Ireland will be considered in due course following discussions with both sides of local industry". I continue the quotation by referring to matters which will be in the affirmative resolution order: Ending of the pre-entry closed shop (ie refusal of access to employment on grounds of non-union membership to be unlawful); outlawing of secondary action (ie action by workers who have no dispute with their own employer); unions to be responsible for calls by any of their officials, including shop stewards, to take industrial action; postal voting and independent scrutiny to be required in relation to industrial action ballots; seven days' notice of industrial action to be given to employers; Citizen's rights to take proceedings to prevent unlawful industrial action affecting the delivery of goods or services (this is a Citizen's Charter commitment); right of workers to join a union of their choice; workers to give written consent before union subscriptions can be deducted from wages; and powers of Certification Officer to investigate financial affairs of a union to be strengthened". I have quoted that document at length because it is important in the Northern Ireland context, particularly given the controversial nature of the procedural arrangements through the negative and affirmative Order in Council. The matter requires some explanation and was ably presented by the Northern Ireland Minister, the noble Earl, Lord Arran, on 27th April in this House when he said: While the Government recognise that this procedure is not ideal, in the circumstances of direct rule it is the only practical way to deal with the majority of Northern Ireland legislation".—[Official Report, 27/4/93; col. 2251. Even at this late stage the matter of negative and affirmative Order in Council procedure in Northern Ireland should at least be mentioned. Perhaps a simple reply by the noble Earl would be acceptable to the many people who attempt to understand why those procedures have to be adopted.

Since the Bill was presented in another place there have been difficulties about communication and consultation at various levels. One point regarding Clause 51 may indicate some of the drafting and consultative problems that have arisen. When the Bill was tabled in this House there was a list of 10 clauses for a negative Order in Council procedure. An explanation was given as to why those 10 clauses should be presented. We now have an additional six which I do not believe meet the criteria that were originally stated.

I shall conclude by saying that, sorry to say, there are many problems in Northern Ireland. Industrial relations is one of the more positive aspects of life in the Province. Past and present Northern Ireland Office Ministers and many others with experience and knowledge of industrial relations have paid tribute to the high standard of workshop practice and the collective bargaining and industrial relations in Northern Ireland. It is not my view that workers in management or employees are any better or more skilled or better motivated than their counterparts in other parts of the United Kingdom. The good relations that have been praised by Ministers and others arise from the practical, realistic and decent human relationships and the immediacy of the communications network in Northern Ireland when dealing with industrial relations matters. I am disappointed that the Minister, realising the problems in Northern Ireland and with a view to continuing good relations practice through legislation, did not give qualification to it. Perhaps I may ask him, although I do not expect a reply tonight, whether on Third Reading he will come forward and give some qualification to the points that I have raised.

2.15 a.m.

Viscount Ullswater

My Lords, I apologise to the noble Lord, Lord Blease, if I have offended him. I saw him sitting patiently in his place. I commend him for his patience and persistence in putting his case that Northern Ireland should be better understood. As it was after two o'clock in the morning I thought that I would move the amendments formally. I knew that that would give the noble Lord an opportunity to comment on them. I would then have the opportunity to address some of his fears. Nothing that the noble Lord quoted from Sir Patrick Mayhew's press notice is contradicted by the Bill in its present form or by Amendments Nos. 111 to 114.

The amendments will enable the new employment rights provisions that have been added to the Bill since its introduction to be replicated in Northern Ireland by means of an Order in Council subject to the negative resolution procedure.

There are no good reasons why Northern Ireland workers should not benefit from those important new rights on the same timescale as their counterparts in Great Britain, and the use of this procedure will enable the Northern Ireland legislation to be put in place on a similar timescale to that in the rest of the United Kingdom.

Under the Northern Ireland Act 1973 this matter is "transferred" and is therefore intended to be available for legislation by any future devolved administration. Successive governments have taken the view that during direct rule legislation on transferred matters for Northern Ireland should generally be effected by separate Order in Council, with the force of primary legislation. That is what will happen in this case. I should point out that industrial relations legislation for Northern Ireland is normally made by a separate order in council.

I hope that with those few words I have been able to allay some of the fears expressed by the noble Lord.

Lord Blease

My Lords, I thank the Minister for responding at this late hour.

On Question, amendment agreed to.

Viscount Ullswater moved Amendments Nos. 112 to 114: Page 66, line 28, at end insert: ("( ) sections 28, 29 and 30,"). Page 66, line 32, leave out ("and 37, and") and insert: ("37, (Agreements not to take proceedings before industrial tribunal) and Schedule (compromise contracts),"). Page 66, line 32, at end insert: ("( ) section 38, and").

On Question, amendments agreed to.

In The Title:

Viscount Ullswater moved Amendment No. 115: Line 5, leave out from second ("and") to ("the") in line 6.

The noble Viscount said: My Lords, this is purely a drafting amendment. I beg to move.

On Question, amendment agreed to.

House adjourned at seventeen minutes past two o'clock.