Deregulation and Contracting Out Bill

HL Deb 04 July 1994 vol 556 cc1072-132

House again in Committee.

Schedule 9 [Employment Agencies etc.: Replacement of Licensing]:

Lord Jenkin of Roding moved Amendment No. 178B:

Page 93, line 35, at beginning insert ("Subject to section 3AA below").

The noble Lord said: As Members of the Committee will appreciate, the above is a paving amendment for Amendment No. 178E. I suggest that the amendments be debated together. I supported the Government in the Division just before the dinner break because, as was said by several of my noble friends, we are discussing a most valuable clause and schedule. In any act of deregulation it seems to me to be entirely right that such provisions which have been in force for many years should be challenged.

I believe that I should perhaps declare an interest. I am not a member of the trade union of which the noble Lord, Lord Jenkins, was a distinguished luminary for a number of years. However, one of my daughters who is a professional singer is a member and she is chairman of her branch of Equity. I have a second daughter who is also a professional singer. Therefore, the Committee will understand my interest in the schedule.

I do not believe that I need to repeat all the arguments put forward by the noble Lord, Lord Jenkins of Putney, when he spoke in the clause stand part debate as to why the entertainment industry is different. However, perhaps I may sum it up in the following words. The relationship of an actor or a singer with his or her agent is very different from that of almost every other employment agency client. Actors and singers depend on their agents to find them work and they pay them commission. Very often the money is paid by the theatre, the concert promoter or whoever it may be to the agent. The agent then deducts his commission from the amount and passes the remainder on to the client. If there is remuneration to come from, shall we say, royalties or from abroad for such work, that money will frequently be sent to the agent.

A great deal of money passes through the hands of entertainment agencies. It is one of the reasons that makes their clients particularly vulnerable. My amendment is aimed to achieve protection for such clients. The noble Lord, Lord Jenkins of Putney, made the fair point that many theatrical and entertainment agencies do a fantastic job for their clients; indeed, there is no questioning that fact. They act as intermediaries, as protectors, as advisers, as negotiators, and they ensure that the performer is working on a proper contractual basis. Moreover, so far as they are able—and bearing in mind the very competitive nature of the profession— they ensure that their clients work under decent conditions.

However, it must be remembered that people who enter such professions are in a most vulnerable and exposed position. They often depend entirely on what in other professions and occupations would be called "casual work"; that is, the one-off, the small tour. In particular, if it is an actor, it may be a matter of touring for a few weeks in the provinces. In the case of a singer, it may be a single performance for which he or she is hired. The client is hired, he or she gives the performance and that is it. Alternatively, it may be a tour of work on several occasions at three or four different centres around Europe and then that will be finished.

A performer may be able to establish a link with a particular conductor or group which can give him or her greater assurance. However, for many of the people involved, their livelihood depends on a constant flow of new, fresh work, most of which will come via their agent. Moreover, a great many more people seek such work than is actually available. Indeed, I have been given a figure in that respect which shows that, of 45,000 professional performers who are members of Equity, perhaps 80 per cent. are unemployed at any one time. There are long periods when an actor is said to be "resting" or when a singer is said to be "rehearsing".

There are also many other would-be performers outside the business who are not yet established and who are desperate to get into the profession. They are often very young and enormously ambitious. Many of them are stage-struck young girls; indeed, there is no shortage of stage-struck youngsters. That is why I believe that the profession is different.

There is a further unique point, as mentioned by the noble Lord, Lord Jenkins, regarding entertainment agents and it is one that has long been recognised by all governments. I refer to the fact that, unlike any other kind of employment agency where the agent is paid by the employer, entertainment agents are paid by the artist, the actor or the singer. That factor introduces yet a further vulnerability into the performer's situation.

The Committee has already decided that the clause and the schedule will stand. I must say that that has my support. We shall have an opportunity in a few moments to consider the amendment tabled in the name of my noble friend Lord Harmar-Nicholls as to whether in some way entertainment agencies might be taken out of the Bill. My amendment is a simple one. The point has already been made—indeed, I believe that it was made either by the noble Lord, Lord Wedderburn, or the noble Lord, Lord McCarthy—that it is only the Secretary of State who can refer a complaint to the industrial tribunal. I happen to believe that that is right. If we left every aggrieved client with the right to rush off to the industrial tribunal, the system would become gummed up. It is not at all unreasonable that such a case should go through the filter, bearing in mind that the penalty will be the removal of the livelihood of the offending agent.

However, I believe that there is something that people in such vulnerable professions might reasonably expect. If a performer has made a complaint to the Secretary of State about the oppressive or unfair behaviour of a particular agent and the Secretary of State then declines to make a reference to the industrial tribunal, I believe that the least that can be expected is that the complainant shall be entitled to a written explanation of the basis upon which that decision was made. According to my advice, I understand that that would then be justiciable under the procedure, the name of which escapes me, whereby the complainant could take the matter to court—

Lord Henley

I believe that my noble friend is referring to a judicial review.

Lord Jenkin of Roding

I am most grateful to my noble friend on the Front Bench. As always, he is a source of infinite wisdom.

However, without a reason being given in the letter of notification, I am told that it would be much more difficult to get such a decision reviewed. My amendment would give those often young but always vulnerable professional people some additional protec-tion in that they would ultimately have the safeguard of a court of law. That is the purpose of the amendment. It is quite a simple one. It simply states that if the Secretary of State: declines to exercise his power to refer the complaint to an industrial tribunal under section 3A(1), above, the Secretary of State shall furnish the complainant with a written statement of the reason for his decision". I think this is a very reasonable amendment and I hope that my noble friend will smile upon it. I beg to move.

Baroness Turner of Camden

The amendment is an improvement but only, I fear, a slight one. Amendment No. 178E, as the noble Lord, Lord Jenkin, has explained, gives some status to a complainant, which does not appear in the Government's version. However, it is only very slight and the individual who complains then has no access, so far as I can see, to any means of redress except when the Secretary of State sends him a statement of the reason for his not proceeding with a complaint.

Then there is the complicated and expensive provision, as the noble Lord has indicated, of judicial review. My objection to it is that I think that the whole system of industrial tribunals is not appropriate for this particular set of conditions. I really do not see why an individual should have to go through these procedures, particularly if at the end of it the only way of proceeding is by means of judicial review. It seems to me to be very complicated.

It would be very much better if an entirely different system were provided than the one proposed in Schedule 9. However, I accept that the noble Lord has attempted to make some sort of provision to give protection to very vulnerable people. Everyone who has spoken in this debate has accepted that a number of the people we are attempting to protect are exceptionally vulnerable, and that is particularly true of the entertainment industry. I would therefore be interested to hear what the Minister has to say in response, although I must say that I would much prefer an entire rewriting of Schedule 9, which perhaps we shall have the opportunity to do when we reach Report stage.

Lord Jenkins of Putney

I was interested to hear the amendment of the noble Lord, Lord Jenkin. Unfortunately I am bound to say—I say this with some reluctance because I think in itself it was a good amendment and extremely well moved—that it is the famous case of the attendant shifting the chairs on the 'Titanic". The ship will sink without the licensing system and therefore I prefer the amendment which we shall discuss shortly in the name of the noble Lord, Lord Harmar-Nicholls, which attempts to preserve, as regards the entertainment and theatre business, the licensing system itself. That seems to me to be an amendment which goes to the heart of things. The other amendment would still have resulted in Noel Coward saying to the noble Lord, Don't put your daughter on the stage Mrs. Worthington", —or rather Lord Worthington—without the licensing system.

Baroness Hamwee

I, too, am a little reluctant, particularly given the support from the noble Lord opposite to debates which I introduced earlier this afternoon, to introduce a note of questioning to this matter. I accept, as do other Members of the Committee, that there are problems in the entertainment industry. I do not quite have an interest to declare, but I work professionally as a solicitor on entertainment matters with a number of reputable agents. I had better say mat in case any of my clients get to know that I have spoken on this matter.

However, I am aware that it is a business where there are far too many people out for very fast and very easy bucks. It is not merely the innocent young girls who are star struck and attracted into the theatrical profession who are affected. Certainly in the music industry many people give no real thought to the finance or business side of their careers. They just want to get on with making music. They may enter the profession at the age of 18 and they see those in the profession as very grown up and authoritative. They expect those people to take care of them. It is because I see the vital need in the industry for a climate of trust to be fostered and to be maintained that I will support the noble Lord, Lord Harmar-Nicholls. I have risen to speak on this amendment to ask the noble Lord, Lord Jenkin, a question. As I read his amendment, it is about a cure of a particular problem rather than general prevention. I wonder whether he has received advice from the industry bodies as to the effectiveness of a cure, and indeed as regards how widespread the problem is.

Lord Jenkin of Roding

Perhaps I might respond immediately to the question of the noble Baroness. I was lobbied very close to home just before the weekend. I consulted Equity. I rang up that body and asked it what it thought of this measure. Equity thought it was rather a good idea. Since then I have received some briefing from that body. But I have to say that I have not attempted to go outside the entertainment industry.

Lord Wedderburn of Charlton

I wish to raise a brief point and to put on record a point about the amendment of the noble Lord, Lord Jenkin, to which one's heart easily responds. However, there is a problem as regards the head in one respect. As he rightly recognised, the ultimate sanction would be judicial review. It would be on that High Court procedure that this amendment would really rely. Of course judicial review can nullify the decision of the Secretary of State. It is questionable whether it can force him to take action in an industrial tribunal and the results of judicial review should always be remembered in the context of the coal mines. We nullified the Secretary of State's decision to close them down but I would not like the theatrical profession to face the same consequences as that particular judicial review proceeding.

8.45 p.m.

Lord Henley

Perhaps I may intervene. My noble friend asked whether I would smile upon his amendment. I am afraid that noble Lords opposite do not seem to have smiled quite as much as my noble friend was hoping. I wonder whether I can give a sort of weakish smile and say that I see what my noble friend is getting at but for reasons that I will go on to explain, I do not think that I can actually accept his amendment. As my noble friend explained, the amendment seeks to place the Secretary of State under a duty, in any case where he has received a written complaint from a person who believes he or she has been unfairly treated through improper conduct by an agency in the entertainment industry, to give detailed reasons to the complainant if he decides not to apply for a prohibition order to an industrial tribunal.

It may help if I explain briefly the department's policy. It is to investigate as a matter of priority any complaint against an employment agency or employment business operating in any sector of the agency industry. The department's objective in these cases is to establish whether there is evidence to substantiate the matters complained of. If there is such evidence, then there are obviously a number of options for action which are available to the department according to the circumstances of the case. Obviously in the case of minor or very isolated cases which are unlikely to be repeated, the department may simply warn the agency against further misbehaviour and subsequently keep a close eye on that agency's activities to ensure all is well. That is true whether one is talking about a licence, as in the old system, or about the new powers that we are proposing.

Obviously in more serious cases of breaches of employment agency law, the department may prosecute the agency in a magistrates' court. Anyone who is found guilty of an offence under the Employment Agencies Act 1973, or regulations made under it, would be liable to a fine, which in most cases can be up to £5,000. In cases where there is evidence to show that a person is unsuitable to carry on, or be concerned with the carrying on of an agency, whether because of misconduct or some other relevant reason, a proposal to refuse or revoke a licence may be made. Under the new arrangements set out in this Bill, the option of refusing or revoking a licence will obviously be replaced by an application for a prohibition order to an industrial tribunal.

As part of its service standards under the Citizen's Charter initiative, the department promises to keep complainants in touch with developments and to provide a written explanation of the result of the investigation. It therefore seems to me that in those circumstances my noble friend's amendments are unnecessary. I believe that if they were accepted, they would be unnecessarily onerous, given that the results of the investigation of a complaint may properly be enforcement actions other than making application to an industrial tribunal for a prohibition order.

The department intends to continue with its complaint investigation policy after the powers of prohibition in the Bill replace the current powers to refuse or revoke licences. It also intends to continue to fulfil its promise to provide complainants with written explanation of the results of its investigations.

The last point my noble friend made, with a little support from me, concerned the question of judicial review. It is my recollection—and I look opposite at those much more learned in the law than myself—that any decision made by the Secretary of State would be open to judicial review whether or not it was in writing in the manner suggested by my noble friend. It is a question of whether a decision has been made. I do not know whether that is sufficient to satisfy my noble friend. It is a matter on which I would prefer to take more expert advice before pronouncing on it with any authority. I hope that with that assurance my noble friend will accept that it is not necessary to put his amendment on the face of the Bill.

Lord Jenkin of Roding

I am grateful to my noble friend. He has given a valuable explanation of how he envisages his department will operate the provisions of Schedule 9. That was certainly part of my intention in moving the amendment. He also said that reasons will be given to complainants. In that case I can accept entirely his suggestion that the amendment is unnecessary.

I am grateful to my noble friend. I shall want to examine his words with care, perhaps with the advisers who consulted me. If necessary we can return to the matter at Report stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Harmar-Nicholls moved Amendment No. 178C:

Page 93, line 40, at end insert ("provided that no such order shall be made to prohibit the carrying of the business of a theatrical or entertainment agency.").

The noble Lord said: In moving Amendment No. 178C, I shall speak also to Amendment No. 178F. Several times, in resisting amendments which have been well argued, my noble friend has said that if people do not meet the standards that we require and desire, then we shall deal with the matter in other ways. I note that in the explanatory notes it is stated that agencies would still have to comply with the statutory requirements setting out standards of conduct and that they could be visited by inspectors. Licence requirements for those agencies would be vetted and would have to be maintained. However, that is after the damage we have in mind may have been done.

The purpose of my amendments—it appears from the comments that have been made that they have support on all sides of the Chamber—is to retain parts of the present system. The proposals would bring about the standards that the Bill seeks rather better than the alterations that are envisaged by removing licensing.

I do not want to sound pompous, but as I see it the purpose of a Committee stage is not to maintain every word and comma of an original draft Bill. If the experience of Members of either House shows there to be a weakness in the Bill it is not weakness on the part of the Government to recognise that and to amend the Bill.

I am sorry that the noble Lord, Lord Jenkins of Putney, wasted his excellent ammunition on the wrong amendment. He is always doing that. That does not alter the fact that in this case his evidence is sound. What makes it particularly worth listening to is the fact that it is based on practical experience of the item under discussion. In the case of the noble Lord, Lord Rix—I hope that he will join in the debate on these amendments —we are listening to someone with experience who knows what he is talking about. The Government should listen; they should not be so wedded to their own words and their own approach that under no circumstances will they deviate from them.

Lord Henley

Perhaps in order to save time my noble friend will give way. I was going to tell him that his amendments are not satisfactory and do not achieve what he intends. But I was certainly not going to base my arguments on that. I was going to argue against the amendments on the merits of my noble friend's intention. Therefore, at this stage there is no need for us to go into arguments about whether the amendments do what my noble friend intends. We all have some ideas as to what is intended. If my noble friend feels that they are not satisfactory he can come forward with more satisfactory amendments at a later stage.

Lord Harmar-Nicholls

I was not going to refer to the point my noble friend has just made. That was a private conversation. I was merely speaking in general terms about how we should do our job as parliamentarians. On that issue there is enough evidence to show that this Government are no more perfect than the 11 other governments I have supported in one House or another in terms of being certain that their own point of view is the right one. On too many occasions they are reluctant to deviate, even in the face of evidence which should cause them to do so. I argue that if there is a case for deviating from the wording in the Bill in this instance it should be done. There are good reasons why it should be done.

I have mentioned the noble Lord, Lord Jenkins of Putney, and the noble Lord, Lord Rix. We have heard from my noble friend Lord Jenkin of Roding. I believe that I can talk reasonably authoritatively. Here is a case where there is a possibility of licences being removed from people who had previously been judged worthy of having a licence. I have businesses which involve many licences. In the case of pubs, hotels and other companies with which I have been connected, the licence has been a very valuable tool. If one deviates from the standards which the licence is intended to uphold one goes to court and if one is found guilty of deviating from those standards one is fined.

On the basis of considerable experience, I wanted to impress upon my noble friend that if one wants to ensure that people uphold the standard, the one way to achieve that is if they think that there is a risk of losing their licence. People are not frightened of being fined. They may be very well defended, perhaps by the noble Baroness, and may get away with a lesser fine than would otherwise be the case. That is no deterrent. But the thought that they are likely to lose their licence is one way of ensuring that they maintain the standards laid down in statute.

The same applies to driving. As a magistrate I have found that if one wants people to recognise the dangers of exceeding the speed limit or deviating from driving standards, the risk of losing their licence is the deterrent which brings about the results we all want. A fine— although nobody enjoys paying fines—will not achieve that.

I suggest to my noble friend that in this category— the entertainment and theatrical industry—there is a real need to retain the licensed agents. Their great power has already been explained. I have no doubt that other speakers will produce more detailed evidence. However, those agents are proud to obtain the licence; indeed it is the very basis of their business. To remove the possibility of achieving the standards that we all want by removing the deterrent would be a grievous mistake.

I have a daughter who has been in the entertainment industry for a number of years, I believe with some considerable success according to all that one reads or hears. We know that many others have not had that good fortune. Many are attracted by the glamour—to use that word, although it often does not exist. We know that very often vulnerable young people are convinced that they can sing or dance or have a dramatic talent that ought to be taken into account. They are easy meat for the sleazy agent.

In 1973 licensing provisions were tightened up. We have had many examples of advantage being taken of those vulnerable young people. They have entered that glamorous, attractive profession but not to their advantage. In recent cases in the courts we have seen how differences arise with accredited agents who are beyond any suspicion. Such difficulties are not in anyone's best interests.

I believe that it is a good Bill. I believe that its main aim can only help those of us who seek to run small and medium-sized businesses. It will be easier to bring prosperity to the country if some of the brakes are removed. That is what the Bill does. My noble friend has already stated that he wishes to support the Bill because he has views similar to mine. I should like to believe that other noble Lards in other parts of the Chamber felt the same. However, on this specific item —it is only a small item—we recognise that the provisions in any Bill produced by any government are capable of improvement if the experiences of those in Parliament who have knowledge on the subject are shared.

The noble Lord repeated what I had looked on as a private conversation. If my amendment is defective in some way and cuts across an important part of the Bill, of which I was not aware, that is fair enough. Under those circumstances perhaps the noble Lord will indicate that he will give further thought to the matter in the light of evidence that he will receive. The noble Lord, Lord Jenkins, the noble Lord, Lord Rix, and my noble friend have already put their qualifications on record. Whether we consider the matter as parliamentarians or as the Government, nothing but good can come if the Government listen to the evidence that Parliament brings and are prepared to amend to some minor degree. That will avoid removing a deterrent and will make the standards that we wish to attain more certain.

I hope that my noble friend will consider the matter in that light. Perhaps we can avoid a vote on this occasion. If my noble friend gives us hope, we can produce an amendment at a later stage of the Bill which will not cut across any purity in the wording of the statute. If he can do so, he will help a Bill that we wish overwhelmingly to support. In doing so, he will recognise that even with the most carefully thought out ideas, there are occasions when one little segment is worthy of different treatment. I hope that my noble friend will accept that view. I beg to move.

9 p.m.

Lord Rix

At long last I can rise to support an amendment. Even though the amendment may well be defective in the Minister's eyes, I trust that an amendment with a similar effect—that is, the non-deregulation of employment agency licences for performing art performers—will be put forward at Report stage.

I am in perhaps a unique position in this Chamber since I am probably the only life member of Equity present. I have been a member of Equity for 52 years, since 1942. The number that I was given in those days was 9,800. I am afraid that the sands of time now indicate that well over 250,000 have entered the profession, and many have left. By a strange irony, those who suffered most from regulations over the centuries—actors, proscribed by parliaments and patents, censored by chamberlains and councillors, rejected as rogues and vagabonds—are as one in their opposition to the deregulation and abolition of the entertainment agents' licences. In that firm conviction they are supported by the employers and by the agents themselves who do not wish to see their licences cease to have effect. Only one body—it has already been mentioned by the noble Lord, Lord Henley —is in favour of deregulation; that is the Agents Association, which I believe is a quite small association. Its support is based on its fear of registration fees rising, nothing more, although the idea that an application to the Secretary of State, an industrial tribunal, a judicial review, and so on, is a cheap option stretches credulity to beyond reasonable limits; and the job would still not be available at the end of that time in this never-never land.

Put simply, all the performers' and employers' organisations, with the one exception that I have mentioned, plus others that I know not of, are very concerned that the abolition of licence requirements will, as we have heard, lead to the influx of a further number of cowboy agencies whose sole purpose is to set up bogus businesses, exploit youngsters and, if I may say so, actors as a whole. It has to be remembered that there are 45,000 members of Equity at this precise moment, 82 per cent. of whom are always out of work. I know Members of the Committee may say that that is their own silly fault for entering that particular profession. Unfortunately, it happens to be the profession that they have entered and that happens to be the unemployment level that they have to face.

Actors would probably be happier under Schedule 8 of this Bill. At least the slaughterhouses and knackers' yards enforcement functions ensure humane conditions of slaughter. Those for whom Equity and others are concerned would be fleeced and then slaughtered by cowboys, with humane conditions a last consideration.

Does the current licence system work? Well, clearly, as has already been indicated, there are problems. There will always be those who offend against regulations and the law, and the Department of Employment has never made available sufficient resources to track down all the offenders. There are about 2,500 licensed agents but only a handful of inspectors, and no spot checks are ever carried out. Nevertheless, the licensing system does at the very least allow some regulation for actors and is a deterrent to unscrupulous operators. It is a simple and effective method of control. After all, we have accepted the bans of marriage since the 11th canon of the synod of Westminster in 1200 A.D. We have only had to put up with the Employment Agencies Act and the notice of application for a licence since the year of our Lord 1973.

The Government's argument that the obligation to apply for and maintain a licence places a great burden on small businesses is so much hogwash—if Members of the Committee will forgive this further indirect reference to cowboys—for the fee is currently £114 and has not been increased for the past 12 years.

The Committee has already heard that, unlike in any other kind of employment, the agent is paid commission directly by the client: the actor, not the employer. Often too, payment is sent directly to an agent, who will deduct commission and then pass on the money to the client. I hate to detain the Committee with a personal story, but when I first became an actor-manager way back in 1950, I employed a booking agent (who is long out of the business and long dead, I hasten to add) who operated under those conditions. He and I lasted the first week, for I discovered that he and the manager had agreed terms 10 per cent. higher than those on my copy of the contract. The ill-gotten money would have been paid to the agent with no questions asked and the lower amount, less agent's commission, would have been sent on to me. Fortunately, because I was broke I had to go forward and ask for some money in advance. I had sight of the manager's contract and saw the fraud that had taken place. Even though I blackened the agent's name as much as possible, I did not have the financial resources to resort to litigation. If the agent concerned had been licensed though at that time—which of course he was not—that licence could easily have been revoked. To appeal to an industrial tribunal would have been expensive, cumbersome, ludicrously complicated and totally outdated by the time the decision had been reached.

Many other abuses will also be possible under the new system. At present it is illegal for agents to charge fees in advance of work unless they are licensed. Even now the law is often broken, but it will be flouted to excess once registration is no more. Crooked agents will be able to travel from town to town, offer so-called glamorous work to gullible "hopefuls", take the agency fee up front, and then scarper. Employers of actors will once again be able to become their agents too.

Again, I have a story for the Committee. Years ago, my predecessor at the Whitehall, a Mr. H.J. Barlow, who was in reality a nuts and bolts manufacturer in Wolverhampton, put up the money for and presented the play which preceded "Reluctant Heroes" called "Worm's Eye View". He also happened to back an artists' agency at the same time, and the majority of the actors then working at the Whitehall in "Worm's Eye View" were employed through that agency, which meant that the manager and the agent negotiated terms that were acceptable to them and not to the actor. It brings new meaning to that old feed-line addressed by an actor to a landlady: "What are your lowest terms for actors?". I will not repeat the response in this Chamber, but certainly Equity became involved in a monumental battle with Mr. Barlow and the agent concerned when all had doubts cast upon their parentage.

I have the following questions to put to the Minister. I hope that he will answer them in his response to this amendment. How many more inspectors will there be to investigate misconduct once the licence requirements have been repealed? What new powers will they have? Paragraph 12(2) of the 1973 Employment Agencies Act specifies that before repeal the Secretary of State is required to consult with the representative bodies of the industry. Why has no such consultation taken place? What guarantees will the Government give that the new system will be at least as effective as the old one? If the department does not have the resources to police the industry at present, why remove the only deterrent that there is? Will the Government accept that very specialised conditions pertain in the entertainment industry and in traditional arrangements between actors and their agents which require different considerations from those which pertain in other types of employment agencies?

Earlier this afternoon we debated an amendment on nurses. Perhaps I may suggest that a similar amendment for actors and artists generally might well fit the bill. At the turn of the century acts used to walk up and down the Waterloo Road passing managers and agents who were sitting in the windows of cafes working in collusion and discussing the artist's merits. If they wanted to engage him or her, the agent would hold up two fingers or three fingers, indicating £2 or £3 as the agreed sum for a week's engagement. The artist would turn up on Monday morning, play his week and at the weekend receive his pittance, less the agent's commission.

I hope that, even if this foolish Schedule 9 so far as the theatrical profession is concerned is finally accepted, it will not mean a return to those bad old days. However, it seems likely that cowboy agents may well hold up two fingers then to actors, industrial tribunals and the Secretary of State alike, only this time the gesture might well have a very different connotation.

9.15 p.m.

Lord McCarthy

No one who has spoken so far has disagreed with the intentions of the amendment of the noble Lord, Lord Harmar-Nicholls. The problem is that not only is the amendment defective, but it does something entirely different. First, it adds that no such prohibition shall be applied in the case of a theatrical agency. So there cannot be prohibitions, according to the noble Lord, Lord Harmar-Nicholls. But also we cannot have licences, because he does not do anything about the earlier part of the schedule which states that: Sections 1 to 3 (licences) shall cease to have effect". So in the context of the schedule the effect of the amendment would be to abolish licences and abolish prohibitions. There would be no regulation of the entertainment profession at all.

Surely it is critical, if there is to be an amendment on Report, as I hope there will be, to face the fact that licences must be retained. There are only two ways forward so far as we can see: prohibitions, which are of no use, and licences, which are of very considerable use. I hope that the Minister, even now, will agree with us.

Lord Henley

I am most grateful to the noble Lord, Lord McCarthy, for explaining to the Committee so coherently how inadequately drafted the amendments were. As I made quite clear in my comments to my noble friend, I have no intention of arguing against them purely on drafting grounds. I am sure that the Committee is well aware of the intention behind my noble friend's amendments—though when I looked at them this morning, I did not have the first idea as to whether, in opposing the suggestions of the noble Lord, Lord Jenkins of Putney, he was to some extent supporting me or whether he was trying to do what the noble Lord, Lord Jenkins, wanted to do with regard to theatrical agents.

It may help to repeat what I said before; namely, that we do not believe that the licensing system has proved as effective a means of controlling risks as it might have done. It is worth reminding the Committee that licensing itself does not establish the licence holder's honesty or reliability and it is not a guarantee of future good behaviour. The great majority of serious breaches of law—there are relatively few and we must be grateful for that—are committed by licensed agencies.

Furthermore, I believe that the minimum standards in the Employment Agencies Act 1973 and its regulations have been far more effective than the licensing system in protecting the agencies' users. Certainly we are retaining those standards with the new prohibition controls which will continue to offer continued protection from malpractice and abuse.

My noble friend Lord Harmar-Nicholls argued that we propose to act after the damage has been done, whereas in the case of licensing he suggests—I dispute it—that what happens does so before any damage has been done. As I made clear, there have been many cases where licensed bodies have committed such damage. So my noble friend's point does not stand up. The situation is not quite so simple at the moment. The position at the moment is such that if a noble Lord, say, as such an agency, breaks the rules, that noble Lord as an agency would be subject to the various remedies that I repeated earlier when I responded to the amendments of my noble friend Lord Jenkin of Roding: there would be the possibility of losing the licence.

At the moment we cannot deny a licence because the licensing authority—the department—happens to think that the person seeking the licence is a bad lot. There must be evidence. That is not so very different from the position we are proposing; that is, that the Secretary of State shall have power to go to the tribunal. I should point out to the noble Lord, Lord Rix, that it is not a question of a poor, impoverished and possibly unemployed actor or actress going to the tribunal; it is my right honourable friend the Secretary of State, who has the resources of the Government behind him, who will go to the industrial tribunal. If there are complaints about the use of the industrial tribunal we can discuss that on a later amendment.

My right honourable friend goes to the industrial tribunal to seek powers for a prohibition; to take away the licence from the person who has either behaved badly or who is unsuitable, on account of his misconduct or for any other sufficient reason, to do what the order prohibits". In other words, he has the same powers to seek a prohibition as my right honourable friend would have at the moment to deny a licence. All we are doing is saying that for the vast majority of worthy, reputable and honest agencies there is no need to go through the burden of seeking a licence.

The noble Lord, Lord Rix, also asked, quite rightly, about the number of inspectors and their new powers. With all due respect to the noble Lord, that is slightly beyond the question we are discussing at the moment. Even at the moment whether or not the number of inspectors is adequate is a matter for argument. Merely changing the procedure whereby we seek a prohibition rather than deny a licence does not affect the question. The noble Lord may have a perfectly valid point that there are insufficient inspectors. There may be a case for increasing the number of inspectors. But that is not the issue at the moment. I do not believe that the position is so different under our new procedures and it is not necessary to retain licensing just for one specific class of people. I hope therefore that my noble friend will feel able to withdraw his amendment.

Lord Rix

Before the noble Lord sits down perhaps I may make one point clear. At the moment when applying for a licence putative agents must advertise before they cause anyone to be employed or taken into the agency. In other words, that is "pre"-employing people through the agency, not "post". Objections to them as agents can be immediately reacted to by Equity —Equity has an endless blacklist—possibly before too much damage is done.

Lord Henley

I appreciate the noble Lord's anxiety. My point is that we cannot refuse a licence merely on suspicion that an agency is a bad lot. We would be in the same position if the noble Lord heard that one of his noble friends was setting up an employment agency. There is no reason he could not come to us to seek prohibition if he had appropriate evidence.

Lord Wedderburn of Charlton

Before the Minister resumes his seat perhaps I may put to him a specific point in the schedule in relation to the argument on which he rests his case. He says that the prohibition procedures are equivalent to the licence, without the licence, and will be as effective. Will he then turn his attention to the schedule?

It is not possible in the industrial tribunal, if one ever reaches that point, to make a prohibition order for longer than 10 years. The tribunal appears to have a discretion as to how long the prohibition shall last. The period of 10 years puts one on inquiry immediately about the parallel provisions in the Companies Act. It is almost impossible to read the schedule without seeing that the draftsman has obviously taken certain ideas from the Companies Act in relation to the disqualification of directors, as I mentioned earlier.

The noble Lord must say that either that has no application and tell us why, or he must agree that the procedure and discretion will be similar. Vast numbers of discretionary prohibition orders for company directors are for periods less than 10 years. It is obvious that tribunals will usually apply their discretion for imposing less than the maximum.

Once those factors are placed in the balance, can the Minister really say that this limited jurisdiction to the tribunal, even when one obtains a final decision—if the Secretary of State decides to bring any case at all—is the equivalent of a licensing section? As so many noble Lords have made clear, including the noble Lord, Lord Harmar-Nicholls, the fear is of losing one's licence; for example, if one drives a car one does not want to lose one's licence. Is he really saying that these are parallel procedures in the light of the specifics of the schedule?

Lord Henley

If you drive a car, you do not want to lose your licence. Similarly if you drive a car, you do not want to be prohibited from driving. I honestly do not see the distinction. My noble friend talked about the likelihood of fines not working and people not minding paying fines. We are not talking about fines. We are talking about prohibition. I really do not see that an analogy between this and the Companies Act, or whatever the noble Lord cited, is relevant. We have given the tribunal a maximum of 10 years. It is then up to the tribunal to decide what is the appropriate amount. Obviously in the most severe case it can be 10 years. But one can seek further prohibition later on if necessary. Similarly, under the current licensing system, one can come back and reapply for a licence in the following year.

Lord McCarthy

If the noble Lord says that it is as much like the existing system as possible, and bearing in mind what the noble Lord, Lord Rix, has said, will he accept an amendment on Report to put into the Bill a parallel to the advertising procedure whereby any new person who wanted a licence or wanted to go into this profession would have to have a public advertisement to which Equity could object?

Lord Henley

I shall not give an assurance of that kind. It is certainly something I would be prepared to take away and consider, but no more than that. One has to be very careful about bringing in the kind of regulatory process that the noble Lord is suggesting— the vast process of advertising—without considering the consequences. I shall, however, give an assurance that I will at least look at that but with, dare I say it, not the strongest hope of coming back to the noble Lord at Report stage with a satisfactory response.

Lord Rix

As I said in my speech, the department has not apparently had consultations with employers, employees and the agencies, as was laid down in the 1973 Act. Would it be appropriate if Equity, the TMA, the Society of West End Theatre and so on wrote to the Minister with some form of evidence so that he could consider an amendment at Report stage which would be acceptable in this area?

Lord Henley

We shall take note of any representations that we receive between now and Report stage, which is obviously some time off. I have to repeat, however, that I do not see any evidence that publication of the licence application as we have at the moment is the effective method of control which the noble Lord suggests. Perhaps I may give him some figures. Last year 4,513 new licence applications were received. Three hundred and one representations were made against those licence applications. None of those representations resulted in the refusal of a licence. That is quite a procedure to go through when I am suggesting an alternative procedure which will have the same effect and which will remove the burdens of the licensing procedure.

Baroness Hamwee

Perhaps I may make one small point which may be important if the matter comes back at a later stage. I have indicated that I support the thrust of the amendment of the noble Lord, Lord Harmar-Nicholls, but it refers to, the carrying of the business of a theatrical or entertainment agency". I wonder whether the noble Lord might consider the terms "theatrical" and "entertainment". As I read "entertainment" it encompasses "theatrical". Perhaps if one uses both terms it may suggest that areas such as music, film and so on are excluded. Will the noble Lord have that in mind if he does bring the matter back at a later stage?

Lord Harmar-Nicholls

Having listened to my noble friend I had it in mind to withdraw the amendment. In doing so I had it in mind to suggest something similar to what was suggested by the noble Lords, Lord McCarthy and Lord Rix. If my noble friend will allow me to say so, the real thrust of his answer was that the licensing system itself does not do what we say it should do. If that is the weakness, that means that we should strengthen the system for the issuing of the licence. If we can state in the Bill that the licence can be issued only when people have passed some test to show that they are worthy of holding it, perhaps that would get us out of the difficulty. However, in the light of all that has been said, and as there is plenty for us to get on with—

9.30 p.m.

Lord Henley

Before my noble friend withdraws his amendment, I had better put on record that the suggestions which he makes fill me with even greater horror.

Lord Harmar-Nicholls

That means that we will not have much of a chance if my noble friend is answering at Report stage. We had better get a new "answerer". In order to get this matter over and move on to the next business, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Turner of Camden moved Amendment No. 178D:

Page 94, line 32, at end insert:

("(6A) An industrial tribunal shall reach a decision on an application by the Secretary of State under subsection (1) above within the period of 60 days beginning with the date on which the application is received by the tribunal.

(6B) An industrial tribunal reaches a decision for the purposes of subsection (7A) above when—

1. (a) it makes a prohibition order under subsection (1) above, or
2. (b) it decides to refrain from making such an order.").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 178G with which it is grouped. In deciding that they want to do away with the licensing of employment agencies, the Government have produced a very strange schedule designed to allow the Secretary of State to prohibit an agency from operating after a cumbersome procedure, including reference to an industrial tribunal and onward to an EAT. I find that quite an incredible suggestion. We already have a system of licensing and to the best of my knowledge there has been no campaign or pressure from any quarter to depart from it. We are to have deregulation, but the Government seem reluctant to leave everything to the untrammelled market so we have this cumbersome schedule.

There are many reasons that I believe industrial tribunals are not the most appropriate bodies to handle this new function. Perhaps the most compelling and the one to which many Members of the Committee have already made reference in debate this afternoon and which I hope will cause the Government to think again, is that industrial tribunals are currently overwhelmed with work. I can well remember when industrial tribunals were first established. They were to provide a quick and easy remedy for employees; the proceedings were to be as informal as possible and employees should be able to represent themselves so that legal costs would not be incurred.

But we all know that things have changed since then: proceedings are now much more formal and legalistic since the volume of legislation in the employment field has grown, and the individual who goes along unrepresented by either a union official or a lawyer is at a disadvantage. In the meantime the system itself is under incredible strain with the number of cases before it growing each year. Nor is there an indication that the much-awaited end of the recession will bring about a reduction in the case load. There will still be redundancies and people who feel that they have been unfairly "sorted out". Moreover, individuals seem much more ready to assert their rights on the ground that there is now so much unemployment that they have little to lose by attempting to take on the employers through the industrial tribunal system.

As it is, 80 per cent. of the cases take up to 26 weeks to be heard and, if there is an appeal to the EAT, the case may not be heard for two years. Clearly, to put more onto an already overloaded system is simply not sensible. I am surprised that the Government should even try to do so. The president of the EAT has already complained strongly to the Government about the system, claiming that industrial tribunals are grossly overburdened and that the EAT itself is being swamped.

If the Government persist with this idea and we are unable to stop them doing that, at least they should put some time limit in the Bill. That will mean that the Government will have to put in more resources if they want the schedule to work. I beg to move.

Lord Rochester

In opposing the Motion that Clause 25 shall stand part of the Bill, I said that I was mainly concerned about the effect of the proposed arrangements on the administration of justice. I shall not repeat all that I said then. I believe that it is enough to reiterate that, unless the resources available to industrial tribunals are increased—the noble Lord, Lord Henley, gave no indication at an earlier stage that they would be— implementation of Schedule 9 is bound to add considerably to the delays already being experienced in the hearing of cases. It follows that I am sympathetic to the aim of this amendment in seeking to limit those delays.

Lord Henley

I do not believe that the need for the time limit for which the noble Baroness asks has been demonstrated by experience of the provisions. The industrial tribunals are independent bodies and it is for them to decide the appropriate time period for dealing with the proceedings before them.

The statutory procedural rules for industrial tribunals allow for respondents in proceedings to be given adequate time to notify whether or not they wish to contest a case and for all parties to be given notice of hearings. We believe that the tribunals must be permitted discretion to determine how much time should be allowed for these matters in particular circumstances.

We accept that it may be desirable for an industrial tribunal to hear an application for a prohibition order under these new provisions particularly speedily. I understand that the tribunals are well aware of the need for speedy hearings in such cases and I am confident that they will ensure that prohibition cases are dealt with as promptly as is consistent with fairness.

The noble Lord, Lord Rochester, is right to say that he raised the matter in earlier amendments. I did not respond then because I thought that it could be better dealt with on this amendment. In a sense, the noble Lord was asking how long it can take industrial tribunals to hear particular cases and what we are doing—I regret to have to say that I shall give the noble Lord figures—to reduce the delays inherent in the system at the moment. I can tell the noble Lord that for the period from 1st April 1993 to the end of March 1994, 54 per cent. of cases came to a hearing within 26 weeks in England and Wales. The figure for Scotland was 80 per cent. We accept that it is a disappointing percentage in England and Wales. That is due to the rapid increase in tribunal caseloads in recent years. Last year there were a record 72,000 applications nationally, a 145 per cent. increase on the 1988–89 figure.

What are we doing to reduce delays? We have increased the number of chairmen and administrative staff. We have expanded premises. We are enabling chairmen to sit alone in some cases. We have amended tribunal rules to encourage a more investigative approach. There have also been a number of efficiency improvements, including substantial investment in new technology. Tribunals are now able to start earlier and to sit for longer in the day. The chairmen are now sitting more days in the year than previously. We are also streamlining the administration. In addition, another seven full-time chairmen are being recruited for those regions where the delays are most severe. At our request, the Lord Chancellor has agreed to raise, for a limited period, the number of days for which part-time chairmen may sit—from 50 days to 70 days for those in practice and from 70 to 100 days for those retired from practice.

Perhaps I may also point out that expenditure on industrial tribunals has gone up from £12 million in 1988–89 to £25 million last year. The noble Baroness, Lady Turner, asked for an increase in resources. In addition, extra money is being made available for the recruitment of the seven extra chairmen mentioned earlier. We are confident that these measures will soon lead to a considerable improvement in the time taken for cases to come to hearing. Obviously, we shall keep matters under review.

Lastly, I believe that there is no precedent for limiting the time in which a tribunal must come to a decision on applications of this type. We see no good reason for creating one here. I hope, therefore, that the noble Baroness will not feel it necessary to press her amendment.

Baroness Turner of Camden

What the Minister said simply confirms me in my view that the industrial tribunal system is not the appropriate system for proceeding to deal with prohibitions under the proposed legislation. I am glad that further resources are being made available, but I have to point out that industrial tribunals were not originally intended to deal with such work. It seems to me that imposing a time limit for cases that are quite different from the normal type of industrial tribunal case would have been appropriate in the circumstances.

I do not intend to press the amendment now, but since the Government, although accepting that speedy decisions are necessary, are apparently unwilling to put in time limits, accept the amendment, or even say that they will take it away and think about it, we have no alternative but to look closely on Report at the schedule to see whether we can come up with some amendments which will provide a different means of enforcement from the industrial tribunal system, because that is inappropriate in the circumstances. However, having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 178E to 178G not moved.]

Baroness Turner of Camden moved Amendment No. 178H:

Page 97, leave out lines 14 to 21.

The noble Baroness said: I move the amendment in the absence of my noble friend Lord Clinton-Davis. The amendment is designed to remove from the Bill the provision that would repeal the licensing requirements for seamen's employment agencies. I gather that the Department of Trade and Industry says that the aim is to remove financial and administrative burdens from agencies while retaining protection from malpractice and abuse. I have a briefing from NUMAST, the union representing seamen, which states that it has not been aware that the section of the 1894 Merchant Shipping Act relating to seafarers' agencies has caused any unacceptable burdens to be placed on such enterprises. Indeed, it indicates that there seem to be more agencies than ever before. It is aware of some one-person agencies which are operated from private residential homes.

Clearly such agencies may not be inherently poor or any more likely than larger agencies to commit abuses. Nevertheless, they can be considered to indicate a sector which needs basic safeguards and a fair regulatory regime in place. Any deregulatory proposals affecting seafarers' employment agencies must ensure that any changes do not foster a climate in which abuses become more "prevalent and where—again we have this word —more cowboys are attracted into the sector. The union says, and I agree, that it goes without saying that supplying seafarers is different from supplying employees for shore-based work. The need to supply quality seafarers to vessels cannot be over-emphasised. It is important to note that the world shipping industry already suffers from low standards of employment and employment agencies.

In certain parts of the world some agencies still continue the practice of charging seafarers a fee to find work. In such instances, that can include taking a cut directly from seafarers' earnings. Such practices were outlawed by the UK in the Act to which I have referred. I gather that the union would strongly oppose any changes to the regulatory regime for agencies which could in any way enable less scrupulous agencies to use such practices. I am also informed that such practices are outlawed by ILO conventions to which the UK Government are a party. For those reasons, I beg to move the amendment standing in the name of my noble friend Lord Clinton-Davis.

Lord McCarthy

While supporting the amendment, I want to ask the Minister for some information. I cannot find out, so I ask the Government because they know everything, what is the position in relation to merchant seamen and whether it is lawful for them to be supplied from an agency which then charges them a fee. That point is important, because the Government are not going to abolish Section 6 of the 1973 Act, which of course does not cover merchant seamen. Section 6 of the 1973 Act states that agencies shall not be able to charge except in such cases or classes as the Secretary of State may prescribe.

I do not know, and I shall be interested to hear from the Minister, what are the cases under Section 6 of the 1973 Act where the Secretary of State allows charges to be made and how they relate to the existing position under the Merchant Shipping Act, where Section 111, as I understand it, provides that there should be no charges at all.

Unless that provision has been subsequently amended, we could get into a situation in which outside the merchant service it will still be the case that there is some control over the charges that are made, whereas if Section 111 has been abolished there will be no limitation on charges within the merchant service. Will the Minister clarify the position?

9.45 p.m.

Lord Henley

The noble Lord, Lord McCarthy, has made an important and interesting point. He will not be at all surprised if I seek advice on the matter, and I hope that that materialises before I finish speaking.

The amendment tabled by the noble Lord, Lord Clinton-Davis, which was moved so ably by the noble Baroness, Lady Turner, seeks to continue the: special licensing requirements for employment agencies which supply seafarers for merchant ships in the United Kingdom. The noble Lord appears to believe that these agencies are a special case and that without licensing their standards will drop.

We can see no justification for retaining separate legislation for seafarers' agencies. We do not accept that the licensing arrangements act as a deterrent to cowboy operators, either in the seafaring sector or, as I made clear earlier, elsewhere. Users of agencies may be at risk from some people in any sector of the agency industry, but we do not believe that licensing is not an effective means of protection.

The treatment of seafarers' agencies separately from the requirements of the Employment Agencies Act has long been regarded as an anomaly. Over half the 80 or so agencies licensed under the Merchant Shipping Act are also licensed under the Employment Agencies Act because of their agency activities other than for seafarers. We think it is right that they should need to comply with only one set of agency legislation.

The mere possession of a licence is not a guarantee of good behaviour or reliable conduct. We believe that the minimum standards of conduct in the Employment Agencies Act and its regulations, together with the enforcement activities of the Department of Employment's agency inspectors and the availability of the new prohibition power, will be far more effective than either of the present licensing systems in protecting the users of agencies.

The provisions in the Bill will not affect the training or manning of vessels. Shipowners are required by the Merchant Shipping (Safe Manning Document) Regulations 1992 to employ seafarers with sufficient training, qualifications and experience to ensure safe manning. Various Department of Transport recommendations take that further.

The repeal of licensing will also not affect current welfare arrangements. The existing merchant shipping legislation, which covers aspects of safety involving both ships and seafarers, is an effective means of protecting the welfare of seafarers.

Curiously, the noble Lord's amendment does not extend to the provision in the Bill which brings seafarers' agencies in Northern Ireland within the general provisions governing employment agencies in the Province. Why the noble Lord has excluded Northern Ireland is not for me to answer. However, it is worth bringing that to the attention of the Committee, and the noble Lord and noble Baroness can consider whether they wish to come back to the matter.

A licensing system which does not itself protect agency users can no longer be justified. I believe it is right that all the licensing requirements should be removed, but it is equally right that agency users should continue to be protected from harm. The provisions in the Bill, together with the existing standards for agencies and the continuation of enforcement, will provide a strong deterrent and an effective means to deal with any abuse across the agency industry as a whole.

Perhaps I may respond briefly to the point made by the noble Lord, Lord McCarthy. Under the new regime, Section 6 of 1973 Act will prevent charging in all cases except in the entertainment industry. Obviously that will now apply to seamen, and there are no plans to exempt seamen from Section 6 of the 1973 Act by regulation. I hope that that—

Lord McCarthy

Do I understand the Minister to say that under Section 6 of the 1973 Act the only classes for which one is allowed to charge are those in the entertainment industry, and that that will be main-tained? Therefore, after the abolition of the necessary sections in the 1984 Act, merchant seamen will be covered by Section 6 and any charges that are made will continue to be illegal. Is that correct?

Lord Henley

That is my understanding. I believe that there is one other group—namely au pairs—in respect of which (I believe but I speak off the record) a charge of £40 may be made. But it will not be legal to make a charge in respect of seamen. I hope that, with that explanation, the noble Baroness will feel able to withdraw the amendment.

Baroness Turner of Camden

I thank the Minister for that explanation. In particular, I thank him for the response that he made to the point raised by my noble friend Lord McCarthy. Quite clearly, the union organising seamen is concerned about that because it raised the issue of charging quite specifically with me. We are very glad to have the assurance that merchant seamen will not be subject to charges by employment agencies operating on their behalf in the future.

I should like to study carefully what the Minister said about the enhanced protection that he believes will still be available. Quite clearly, very special conditions apply to this section of the workforce. There is a need for a high level of quality and expertise because it is a fairly dangerous occupation. The need for people to be properly trained and competent in the exercise of their craft is extremely important.

Having said that, I thank the Minister for the assurances that he gave, particularly in relation to charging, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 9 agreed to.

Clause 26 [Unfair dismissal: selection for redundancy]:

Baroness Turner of Camden moved Amendment No. 178J:

Page 23, line 35, leave out ("omitted") and insert ("amended by inserting at the beginning the words "in the case of an undertaking in receivership'"').

The noble Baroness said: Clause 6 relates to employee rights in redundancy. I do not like this clause and I may well say so in more detail when we discuss the Motion, That the clause stand part.

Nevertheless, I have tabled Amendment No. 178J because I am anxious to highlight a particular situation which can arise in the case of insolvency. The rights of employees in insolvencies are meant to be protected under Section 122 of the Employment Protection (Consolidation) Act 1978. That provides that the Secretary of State will meet the following debts to employees upon insolvency: arrears of pay up to eight weeks; notice pay; holiday pay up to six weeks; and any basic award of compensation for unfair dismissal. Section 106 of the Act also permits the Secretary of State to make a redundancy payment to the employees where the employer is insolvent.

But—and this is really surprising—the law does not, apparently, protect individual employees so that their basic employment rights are respected in the event of a receivership. As I understand it, the insolvency of an employer automatically terminates an employee's contract of employment where there is the appointment of a receiver. It is then up to the receiver who shall be dismissed and who retained. The receiver has no obligation to consult anyone, including the unions, or to abide by an existing agreement.

I gather that there have been some bad examples of what can happen in such cases. For example, at Leyland Daf several hundred employees were made redundant at very short notice and no explanation was given as to how individuals were selected. No respect was given to the agreement which provided for enhanced redundancy terms. Individuals were simply told to contact the Department of Employment so that their minimum redundancy rights would be respected.

The amendment ensures that, following the appointment of a receiver, the receiver is bound to respect existing rights of employees. Therefore, I hope that the Minister will be willing to agree to the amendment. I beg to move.

Lord Henley

The amendment would amend Section 59(1) (b) of the Employment Protection (Consolidation) Act 1978 so that it did not apply generally, but would still apply to redundancy dismissals effected by receivers of an insolvent business; that is to say, redundancies effected by a receiver in contravention of any customary agreement or agreed procedure would be automatically unfair.

I believe that the amendment would create an unneccessary distinction between the rights of employees made redundant by insolvent businesses and those made redundant by solvent businesses. I do not believe that it is right, in principle, that such a distinction should exist; nor is it necessary. The law on unfair dismissal applies equally to businesses in receivership as it does to other businesses. Why then should it be automatically unfair for a business in receivership to dismiss in contravention of a customary arrangement or agreed procedure, but not for other businesses to do so? I do not believe that there are any reasons why it should.

Moreover, I would suggest that the position of insolvent businesses is a prime illustration of a situation where Section 59(1) (b) of the 1978 Act is outmoded and unduly rigid and why it is right that we should repeal it. Receivers of a business need to assess quickly the strengths and weaknesses of the company, including its workforce. They may need to reduce costs very quickly if the business is to continue to trade at all. That may and often will, sadly, mean redundancies. But it will be essential for the company and its remaining employees that the business has the best possible chance of recovery. To that end, I believe that the receiver needs the maximum flexibility to restructure the business, subject to him acting fairly in all the circumstances.

To constrain the receiver to make redundancies in accordance with an agreement or customary practice which may be outdated or totally unsuited to the insolvent business's immediate and future needs, would be folly. I do not believe that it would benefit anyone if, as a result, the business were to fail.

I would not want it to be thought that the Government believe that receivers should be free to act in an arbitrary or unfair manner. Of course, that is not the case. As I have already made clear, the law on unfair dismissal applies to insolvent businesses just as it does to others. Receivers will, therefore, continue to be under a duty to act fairly in all the circumstances. I believe that that is the right approach. Therefore, I hope that the noble Baroness will recognise that her amendment is undesirable and that she will consider withdrawing it.

Baroness Turner of Camden

Members of the Committee will not be surprised to learn that I do not find the Minister's response very acceptable. He said that the receiver is expected to act in a fair but not arbitrary manner. Of course, the receiver takes over from the employer in the event of insolvency and fills in, so to speak, for the employer in those circumstances. I fail to see why, in such instances, the receiver should not be equally bound by whatever agreement the employer has entered into. That is really all that we are asking for by way of the amendment. However, I suppose that that is really a little too much to ask, as the Bill seeks to remove agreement rights in another context. I also find that unacceptable as, indeed, I indicated in my opening remarks.

However, at this point in the evening there is little point in pressing the amendment. Therefore, I do not intend to do so. I shall, nevertheless, read most carefully the Minister's response to my amendment because it arises from certain situations which have been perceived to be unfair in the past. Indeed, I made specific reference to the Leyland Daf situation. I happen to know that the workers involved in that affair were very badly treated and that they felt most strongly about what happened to them. But, in the circumstances, it simply remains for me to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10 p.m.

Lord McCarthy moved Amendment No. 178K:

Page 23, line 35, at end insert ("where it can be shown that the customary arrangement or agreed procedure is no longer appropriate to economic circumstances or business needs.").

The noble Lord said: In moving Amendment No. 178K I wish to speak also to Amendment No. 178L. These two amendments are, in a way, probing amendments or perhaps revealing amendments. Their aim is to reveal the slender nature of the Government's case. They seek to replace the, as it were, total abolition of the protection provided by Section 59(1) (b) of the Employment Protection (Consolidation) Act 1978 with a kind of waiver. The waiver of the present protection depends upon establishing before a tribunal that an agreed procedure or custom, is no longer appropriate to economic circumstances or business needs".

I obtained that phrase from the Government's Notes on Clauses which constitute by far the clearest defence —the Committee will note how thin the document is —that the Government have put up for what they wish to do in the Bill. The Notes on Clauses state:

Section 59(1) (b) makes it difficult for employers to change outdated redundancy selection procedures without consultation and agreement"—

one might ask why they should want to do that without consultation and agreement; nevertheless it makes it difficult— even when no redundancies are in prospect. Even though they may withdraw from an agreement it may nevertheless he unclear whether they have succeeded in changing a customary arrangement".

The Committee will note that there is no further explanation as to how it becomes unclear or why it should be unclear if in fact it has been done. Never mind that! The Notes on Clauses state:

whether they have succeeded in changing a customary arrangement. Accordingly they cannot with confidence"—

of course, they must have confidence— select employees under the new arrangements they have instituted rather than old arrangements"—

here it comes— which may no longer be appropriate to their economic circumstances or business needs".

It therefore seems reasonable to suggest that if the Government had stated on the face of the Bill that employers could welsh on agreements or ignore established arrangements which they could establish before a tribunal were no longer appropriate, "to their economic circumstances or business needs" then they, presumably, would regard that as much more advantageous from their point of view than the special circumstances which they have to argue now. I cannot see any reason why the Government should not accept the amendment. If the Government cannot accept either of the amendments—one is a general one and the other applies to Northern Ireland—we have to come to the reluctant conclusion that they have certain other reasons for acting as they have. I beg to move.

Lord Henley

I am most grateful to the noble Lord for assuring the Committee that his amendments are merely probing amendments. My view when I saw the amendments was that they would undo all the good that the clause aims to bring about. They are undesirable and unnecessary.

There remains a misconstruction of the objectives —quite obviously—and effect of Clause 26. The noble Lord, Lord McCarthy, appears to believe that it will enable employers to ride roughshod over agreements they have made with their employees about redundancy selection procedures. He seems to think that employers will be able to ignore traditional selection methods at whim for no apparent reason. That is very far from the truth and very far from the Government's intention as any employer who attempted to act in such a way would find out to his cost.

The general unfair dismissal provisions provide strong protection for employees who are dismissed in such a cavalier fashion. They require an employer to act fairly and reasonably in all the circumstances. Where there are agreed or customary ways of going about dismissals, the industrial tribunal will look very carefully at why those have been ignored. In practice, employers will have to show that if they followed different procedures they had good reasons for doing so.

Section 59(1) (b) of the Employment Protection (Consolidation) Act 1978, which Clause 26 repeals, already contains an exemption where there are special reasons justifying a departure from the agreed or customary procedures. The noble Lord's amendments would effectively reiterate the present position. Nor, as I indicated, is the position the clause aims to introduce so very different. However, there is one difference which individual employees are likely to find of great importance. It is that the new regime will protect them as individuals on their own merits whereas the old regime protected the system. It meant that a hard-working, skilful and effective employee could be dismissed in preference to his or her less able colleague who had worked a little longer for the employer.

The employee who is dismissed in those circumstances would find no comfort in the protection of the present remedies. Nor would the employer, who could be inhibited by out-of-date procedures from ensuring a proper skills balance in the workforce and might find himself in the position of making redundant those very workers he most needed to ensure the success of his struggling business. I hope that the noble Lord will agree that that would be an undesirable state of affairs suited to the old days of trade union intervention, which no doubt the noble Lord hankers after, but not to the present day, when individuals should be free to be judged and rewarded on their own merits. I hope, therefore, that the noble Lord will see fit to withdraw his probing amendment.

Lord McCarthy

The noble Lord gets worse. I asked him a very simple question: what is wrong with my amendment? He said that the trouble with the amendment, like the trouble with not having an amendment and with not having this clause, is that it would make it possible for poor individuals to be sacked when they are working very hard and the skills balance would be upset.

I asked what is the problem if an employer wants legitimately to stop a first-in-last-out agreement. The Government have always tried to tell us that there is a mystery and that it cannot be done. They say that there is this terrible first-in-last-out understanding which penalises individuals and it cannot be removed. It appears to be like a swamp. It sticks. Even if you consult and give people notice it seems that the damn thing is still there, hanging round your neck. The Government never tell us why that is the case. They never cite examples of cases where the employer went through all the procedures, gave notice and negotiated in an attempt to do away with this terrible first-in-last-out procedure, but somehow the swamp got him in the end. It is a phantom.

The fact is that the overwhelming majority of first-in-last-out agreements have escape clauses. It is possible to say that, in special circumstances very similar to the present circumstances in the employment Act, you can break out of this wicked, vicious first-in-last-out system. It is only in the concept of the swamp, which is never specified and which looms everywhere, that the Government give any plausibility at all to this ridiculous clause.

Since it is so late at night I shall seek leave to withdraw the amendment.

Lord Wedderburn of Charlton

Before the noble Lord responds, perhaps I may put to him a parallel point. There is an escape clause not only in virtually all collective agreements, but there is an escape clause in the section, to which the Government made scarcely any reference in the debates in another place—namely, that the agreement does not apply if there are special reasons justifying a departure.

My noble friend's amendment seems to meet not only the Government's point but also the requirements of the section as it stands. The latest precedent in the employment appeals tribunal held that where a last-in-first-out agreement could well defeat the objective of carrying forward the company's business there was a special reason for it not to apply. Do the Government want to go beyond that? In rejecting my noble friend's amendments, do they want to go to a point where the agreement to which the employer has given his word does not defeat the objective of carrying on the business but is merely something that the employer does not want to observe? If that is so, the clause takes on a new light. That seemed to be the case in debates in another place. I wonder whether the noble Lord will maintain the Government's position on that point.

Baroness Seear

Will the noble Lord quote to us any known agreement of any responsible company that did not have an escape clause? I have never heard of a negotiated redundancy programme which merely accepted the last-in-first-out principle with no qualification whatsoever. Does the noble Lord know of any such agreement?

Lord Henley

Without notice, I cannot satisfy the noble Baroness.

Baroness Seear

I should be grateful if the noble Lord could do so.

Lord Henley

Perhaps we may leave that matter aside for one moment. With their references to swamps and other such matters, the two noble Lords seek to cloud the issue. Quite frankly, by means of his amendment the noble Lord more or less seeks to put us back into the position that we were in with the 1978 Act. As I made clear, the new regime proposes to protect, and will protect, those individuals as individuals on their own merits; whereas the old regime merely protected the system. I do not believe that I can take the noble Lord any further than that.

Lord McCarthy

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 178L not moved.]

[Amendment No. 179 had been withdrawn from the Marshalled List.]

On Question, Whether Clause 26 shall stand part of the Bill?

Baroness Turner of Camden

I oppose the Motion that Clause 26 stand part of the Bill. In my view, we have had enough legislation designed to remove rights from employees. We must now have, I would imagine, the least protected workforce in Europe. Section 59(1) of the Employment Protection (Consolidation) Act makes a dismissal unfair if an employer chooses employees for redundancy outside the terms of an agreement or of custom and practice. Presumably the Government argue that the need to behave in accordance with a freely negotiated agreement imposes restrictions on employers which prevent them from acting in a sufficiently flexible manner. But in other connections, of course, the Government are very willing to talk about the sanctity of freely entered into agreements. Now we are to have legislation which specifically gives the right to ignore such agreements.

What that does to industrial relations in practice one can imagine, although of course the Government are not in favour of any measure, no matter how slight, which appears to give some protection to employees against unfair practices by employers. They are interested only in protecting employees against the unions which they themselves have chosen to join. The Trade Union and Labour Relations (Consolidation) Act 1992 was intended to give effect to an EC directive on the need for consultation in order to reach agreement with unions on how to avoid or reduce the number of dismissals and to mitigate their consequences. The Government will no doubt argue that this specific provision in the Bill does not interfere with that since it is simply about selection for redundancy. But it is difficult to envisage how one can operate one without the other. I predict that if the Bill leaves both Houses unamended in this respect, there will be a number of cases before the courts; and those may even end up at the European Court of Justice.

However, that is the legal argument against the provision. There are other arguments which I should like to advance. Redundancy is for most people an unmitigated disaster. Gone are the days when people would willingly opt for redundancy, take their compensation and cheerfully go off to another job. That flexibility, so important for workers and even, I think, for many employers has now disappeared. The flexibility now talked of simply envisages that yet more people will find their way on to the dole queue. So everything must be done to mitigate the effects of redundancy for individuals. Consultation must take place with the relevant unions. Redeployment must be seriously considered as an alternative. If redundancy has to happen, the criteria must be seen to be fair and reasonable. At present an individual who feels that he or she has been unfairly selected for redundancy may go to an industrial tribunal with that plea and may even win the case and some compensation. The removal of the clause in the 1978 Act to which this clause of the Bill refers will very much reduce the opportunity for individuals to do that since whatever agreement over criteria existed will have been automatically expunged. I cannot see that the provision is at all reasonable. Again, I am not aware of any agitation for that to happen.

I suppose that the Government will advance their usual argument. We have already heard it advanced that the existence of the provision in the 1978 Act constitutes a burden on business, and that it prevents an employer from doing what he wants to do in the flexible way in which he wants to operate. But that does not ring with much sincerity to me, coming from a Government who have continued to pile social costs upon employers despite strong objections. Earlier this year we saw the Statutory Sick Pay Act; 8 per cent. of statutory maternity pay has now been made the responsibility of the employer; and earlier this year we had the decision about insurance premium tax, which every employer will have to pay on his employers' liability insurance. That is a tax on employment if ever there was one. So I do not believe this cry about anything that involves employee protection being a burden on business.

This particular clause gives a little bit of protection and some opportunity for unions to intervene in line with negotiated agreements. I hope that the Minister will not talk, as his honourable friend did in the other place, about having to do this because of "last in, first out" union agreements, particularly in view of the discussion that we have just had on the amendments of my noble friend Lord McCarthy. As has already been said, there are escape clauses in "last in, first out" union agreements. Agreements tend to be a great deal more flexible anyway than they used to be, since it is in everyone's interest to keep operations as cost-effective as possible. No, this is another anti-union, anti-employee proposition that has been slipped into this Bill —which has aptly been described as a total Henry VIII clause made into a Bill. I really do not think that we should let the Government get away with slipping this clause into the Bill in this way. I therefore oppose the Motion that this clause should stand part of the Bill.

10.15 p.m.

Lord Rochester

I, too, am seriously concerned about this clause. On a number of occasions in the past I have gone out of my way to speak in favour of the extended use of procedure agreements as a means of making industrial action a weapon only of last resort. If henceforth methods of selecting people for dismissal as redundant are to be disregarded even though they form part of agreed procedures, that seems to me to be a retrograde step in terms of the need to maintain good industrial relations.

The effect of this clause is that where redundancy selection procedures form part of an individual's contract of employment, they will remain legally binding. The noble Lord, Lord Henley, has already in effect confirmed that. It is only where the procedures are not part of the contract that they may be overturned by the clause. The Government's intention is apparently to do away with collective agreements requiring selection on the basis of formulas such as "last in, first out" which hamper employers in selecting employees for redundancy according to the needs of the business unless there are special reasons to the contrary.

But surely in those circumstances a right course is for employers to seek in good time to enter into new agreements with employee representatives that accord with their needs. After all, employers possess very strong bargaining counters in this matter if they are confronted with recalcitrant trade unions, including the ultimate sanction of withdrawing union recognition—a policy that can be readily adopted under current legislation.

That brings me to a related point. The European Court of Justice recently criticised the United Kingdom for its failure to require consultation, not with trade unions but with employee representatives when collective redundancies are contemplated. The court said that the UK had failed to implement fully the acquired rights directive of 1977 and the collective redundancies directive of 1975.I had quite a lot to say on that matter when we debated what is now the Trade Union Reform and Employment Rights Act 1993. Current UK legislation enacting those directives guarantees consultation only where there are recognised trade unions. As I see it, that legislation will now have to be amended. Employers will have to consult with employee representatives with a view to seeking agreement where multiple redundancies (probably more than 10) are envisaged.

In the face of that situation, what on earth do the Government hope to gain from insisting on the retention of Clause 26 when they will shortly have to introduce legislation of a completely different kind? The Committee will see that so far from supporting a clause which invites employers to renege on jointly agreed procedures, in my view there are compelling reasons why this clause should not form part of the Bill.

Lord Ashley of Stoke

I have come to expect penetrating and logical speeches from noble Lords and I have not been disappointed tonight. I also oppose the clause. I believe that it is a dangerous clause which sends the wrong signals to indifferent or bad employers and discourages them from acting in an intelligent way.

At Second Reading I declared my trade union interest in the Bill. I should now like to declare my personal interest in this clause. Many years ago I was a chief shop steward in a very tough company. I learned then what a free-for-all means. That is precisely what this clause creates: a free-for-all in which workers will suffer very badly. In consequence employers will suffer because industrial relations will be seriously damaged.

Today most companies strive to be efficient. That is welcomed. But if they do it by leaning on vulnerable employees, the efficiency of the organisation will suffer as a result of the ill will that is created. Unfortunately, redundancy is commonplace today but how it is handled can either preserve or destroy good industrial relations. I believe that the problem with this clause is that the impression that it creates is that it is permissible to slash the workforce at the whim of employers. Not all employers would interpret the clause that way. There are some very good employers. But the bad and indifferent employers will take advantage of the licence that this clause gives them.

Some employers are hostile to trade union activists; some of them always have been. Those trade union activists would be the first to go; older workers would stand very little chance of retaining their jobs; and disabled workers would be vulnerable. Those are three very important groups, trade union activists, older people and disabled workers. They will all suffer if this clause remains. I hope that the Government will be able to think again on the matter.

The Minister will remember that in the other place Members spoke eloquently about the personal tragedies of redundancy. Most noble Lords in this Chamber are more familiar with the management side of industry. Some may sympathise with their friends who have suffered financial disaster through Lloyd's. But we should be equally concerned about the tragedies suffered by the millions of ordinary workers who have lost their livelihoods and treat them with consideration. Ignoring arguments and refusing to consult with the unions will be not only deplorable; it will be an industrial relations disaster.

Good businessmen are already aware of the need for consultation and co-operation with the trade unions. They are sensitive to the fact that good industrial relations are crucial today, especially when other developed countries are developing their own. For the Government to dive backwards to the Victorian age of deference and touching forelocks is a disastrous move. If changes and agreements for redundancy are necessary, they can and should be made in consultation with the interests of both the firm and the workers. If agreements are broken and redundancies are bulldozed through, there will be tears all round and ultimately the employers will shed more tears than anyone.

Lord Wedderburn of Charlton

In support of my noble friend Lord Ashley, I must say that on this occasion the Minister's suggestion that the clause is one which promotes the individual against the collective is little more than a merry prank. First, Section 59(1) (b) of the 1978 Act is not concerned only with collective agreements; it is concerned with any arrangements or custom on which the employer is expected to make his selection for redundancy. It is in that respect that the Government's legislation would now give the employer the right not to behave reasonably, but in relation to the matter of selection to behave in any way that he sees fit, even if it means breaking his word.

This is another step back to master and servant law as anyone will understand who has looked at the way that other jurisdictions not so many miles away arrange these matters. They are not necessarily to be copied. But it is in marked contrast to almost every continental system that develops the flexibility of its labour law and does so by virtue of agreement with trade unions and employers or through tripartite institutions. This Administration is alone in western Europe in insisting that the only route to competitiveness is a repeated attack upon the rights of workers and their representatives at work. That is why they recently came to such a difficult pass in Luxembourg. Today the Government's motto has moved one step further: pacta suntexceptis dominis servanda; the master is to be given the freedom of his house.

I have two main objections to the clause and the arguments used in favour of it. The first in brief is this: in another place, in Committee on 24th March at columns 791 and 756, the Minister for Corporate Affairs —a somewhat odd title in this Government—said that we must get rid of the section and agreements such as LIFO (though LIFO is by no means the only arrangement caught) in order to keep the business going.

In relation to my noble friend's amendment, I put to the Minister the fact that the present Section 59(1) (b) does not operate if there are special reasons justifying a departure from the arrangement or procedure in the case of the employee in question. The individual employee is protected unless there are special reasons, because it is he who was chosen in breach of the selection procedure. If ever a section was about individuals unfairly and improperly selected, it is this section.

But the proviso in the section was recently upheld in the case of Rolls Royce v Price in the Employment Appeal Tribunal, 1993, where the court said that "special reasons" meant reasons which would, defeat the object of carrying forward the business in difficult times". One may think that if the present section did not allow for that, there may be something to be said for amending it. But it already covers that. All that Ministers have said so far, except for this evening which we will read with interest because the Minister has been going even further, is that such an agreement, may have been right for the time when it was negotiated but may be entirely inappropriate for current circumstances".—[Official Report, Commons, Standing Committee F, 24/3/94; col. 719.] Perhaps the Committee can imagine a Bill which allowed the purchaser of goods to escape from his obligations because the price at which he contracted to purchase the goods had become inappropriate to his current circumstances. That would not be acceptable. Why is this situation different? Because it is about the sale of labour power. To the Government labour power rests on different principles. We must always give the master the control of labour power whereas in other contracts normal principles would be upheld.

That is the first line of attack on this notion in Clause 26. The second, like Gaul, can be divided into three parts. The Government claimed, and the Minister claimed again tonight, that the rest of the law will be unaffected. That is a serious point. If the Government can make that statement, they will have a trench in which to retreat. But this is the case only in the most formal sense. Section 59(1) (b) has been a most important buttress of workers' rights where other sanctions are less effective.

I give three examples. First, where the procedure agreement on redundancy is incorporated into tide employee's contract of employment—the individual contract of employment—there are some remedies for breach of that contract but they are markedly inferior to the remedies which exist where at the same moment that employee is chosen, in breach of the procedure agreement, as the person to be made redundant and to be sent home to say, "I've lost my job". The Government Front Bench seems to regard the clause as something of a pleasant surprise that it can be happy with. If someone came to the Minister (who knows what will happen in the next few months?) and said to him, "I'm sorry, but in breach of all the promises I made to you, you have lost your job", I think he would feel a little aggrieved. Of course, we all know that it will not happen. But do the Government intend to restore any equivalent protection in these cases?

The second example is one to which the Rolls Royce case adverts as well. The application of special reasons in that case exempting the employer from his breach of agreement nevertheless left the employee—the Minister is quite right—able to show that the employer had acted unreasonably overall and was therefore liable for an unfair dismissal. I quote the principle from the noble and learned Lord, Lord Bridge, in the Judicial Committee of this House in the Polkey case in 1987: In the case of redundancy the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation". Those principles will still stand, but a message will go to the courts that it is not necessarily unreasonable for an employer to go back on his word without any reason That must be the message that will be put to the tribunals, to the EAT and to the Court of Appeal. It is part of the legislative development, and the courts today will look at Hansard as well. If the Minister is going to say that that will not be the effect for the tribunals and the Court of Appeal, let him put it on record tonight and we shall see whether they accept that rather illogical position. Once Section 59(1) (b) is repealed the courts will be told that an employer can go back on his word yet still act reasonably. The Minister says that it all depends on what is fair and reasonable under Section 57(3), and, of course, that is right.

The problem of consultation also involves the European directive to which the noble Lord, Lord Rochester, adverted. On 8th June the Government lost a major piece of litigation in regard to workers' representatives, but I do not wish to address that aspect of the case tonight. I make that quite clear. I merely point out that under the directive and now under our own law, because the Government amended the Trade Union and Labour Relations (Consolidation) Act before the case was adjudicated, it is necessary for the employer not merely to consult about the reasons for the redundancy, the numbers, the methods and so on, but he must, and I quote from the directive, begin consultations with the workers' representatives in good time with a view to reaching an agreement". The Government's amendment to the Act says, with a view to reaching agreement", which is not quite the same.

Nevertheless, let us assume that they are the same. What is the position if Clause 26 is passed? First, the domestic law on unfair dismissal will require consultation, although an employer may go back on his word and still be reasonable. Secondly, the central obligation of the European directive goes further. The employer must act, in good time with a view to reaching an agreement". Yet his lawyers will be saying, "Don't worry too much about that. Any agreement you make you can go back on as far as concerns selection of workers for redundancy". I ask the Minister to take this point centrally on board because it is very serious for the Government if they get it wrong. How is that compatible with a genuine implementation of the directive? Such a state of law renders the phrase that you must, consult with a view to reaching an agreement", devoid of serious meaning. It is only Section 59(1) (b) which stands behind the provision through the special circumstances of our industrial relations system, where the collective agreement is normally not binding between the employer and the trade union. It is therefore only this section and paragraph which stand behind the arrangement and which can give some assurance of certainty where an agreement has been made. To urge an employer to consult with a view to agreement and yet to repeal one of the major protections not for the trade union but for the individual worker is to assure the employer that he has little to fear if he decides to break the agreement if it is concluded. That flies in the face of the directive, which does not mean an agreement which the employer can put aside. I here advert to the decision on 8th June. There is a parallel that the Luxembourg court will not have an implementation, which in practice means that you may refuse to carry out the directive if you so feel fit.

This is a most serious section. For those Members of the Committee who are litigious, my interim view is that someone might well get an injunction to stop this breach of Community law. As the noble Lord, Lord Ashley, has said, most good employers will abide by their agreements. Why give the macho-management an easy evasion of consultation with a view to real agreement? That is what the Government are doing. I hope that they will think again.

Lord McCarthy

I merely want to ask the noble Lord a question. If he cannot answer it tonight, I want him to write to me or answer it on Report. I have read very carefully through all the statements of the Government and I can find only two cases, namely, Copeland v. Bennet in 1984 and International v. Reed in 1985, in which this Government allege that there has been any difficulty or problem about establishing, in effect, a special reason. Those cases do not prove the case.

I want the Government now or later, or to write later, to say what is the evidence in terms of specific cases in front of tribunals —because it must be there —where they have found employers who have been unable to use the special reasons excuse?

Lord Henley

I shall respond to that in due course. I was more than amused at the long speech from the noble Lord, Lord Wedderburn, where he touched on the acquired rights directive. The noble Lord was probably here the other day when I responded to a question from his noble friend Lady Castle on the directive. I made it quite clear that we would consider what action was necessary and that we would respond in due course.

What amused me was that the noble Lord made absolutely no mention of the proposals that came from the last Labour Government —I appreciate that that was many, many years ago —when they proposed in their draft TUPE regulations to implement the 1977 directive excluding the entire public sector. Does the noble Lord deny that?

Lord Wedderburn of Charlton

I shall not deny anything which the Minister says at this time of night. I was not referring to the acquired rights directive. I was referring to Judgment 383/92 which refers to Directive 75/129, 1975 which deals with consultation on redundancy, which is what this matter is about. I was not referring to acquired rights and transfer of undertakings at all.

Lord Henley

We shall be getting to that in due course. I believe that the noble Lord was referring to acquired rights—certainly, the noble Lord, Lord Rochester, did. I thought that out of interest Members of the Committee might like to be reminded yet again that it was the noble Lord's party—I believe that the noble Lord, Lord McCarthy, can confirm this, and I can probably quote him—which was going to implement that directive excluding the entire public sector.

Lord McCarthy

Is the noble Lord saying that what we did once the Government can do 35 times?

Lord Henley

I am not saying that. I am pointing out a tiny piece of hypocrisy in the party of the noble Lord opposite. They accuse us of implementating the acquired rights directive 1977, yet they were proposing to do so excluding the entire public sector. The noble Lord cannot deny that. I can refer him to a speech he made to that effect in 1981.

Lord McCarthy

Is the noble Lord referring to a speech that I made?

Lord Henley

Yes, in Hansard in 1981.

Lord McCarthy

I should like to check that out. I do not happen to have that report with me and I doubt it very much.

Lord Wedderburn of Charlton

And anyway, it is irrelevant.

Lord Henley

Well, we have to have our fun!

Lord Wedderburn of Charlton

At this time of the night?

Lord Henley

If I may, my Lords, let me turn to the provision before us. The provision will in fact help employers by removing uncertainty. I shall refer to some examples in due course. It was the deregulation task force which drew our attention to this outdated piece of legislation because at the moment employers are not clear where they stand in relation to the outdated procedures, even if they have withdrawn from them or changed them long before redundancies were in prospect. Some industrial tribunals have found cases one way; others have found the other way. Because of differing circumstances, employers cannot be confident that they can judge which way a tribunal would rule. The noble Lord, Lord McCarthy, quoted earlier the example of an industrial tribunal complaint in which the economic circumstances justified departure from customary agreements, but other cases have gone the other way.

Perhaps I may quote an example of which the noble Lord may be aware. I refer to the tribunal case of Cross International v. Reed where the loss of an order constituting some 75 per cent. of the employer's anticipated turnover did not qualify as such a reason. The company had set aside LIFO so as to retain the best employees, but the tribunal had been entitled to find that the situation was not so catastrophic or special. Despite the fact that there was the possibility of losing an order constituting 75 per cent. of the employer's turnover, that was held to be not so special as to justify that breach of procedure.

Lord Wedderburn of Charlton

I am glad that the Minister has quoted that case, but does he not accept that in the case of Rolls Royce v. Price in 1993 the law was developed in such a way that one can look at the special circumstances of the Cross case and see that the test is now whether the business will be prevented from keeping going? That case was in 1993.

Lord Henley

The noble Lord rightly quotes a later case. What I am trying to make clear is that there is still uncertainty in the case of the employers. The clause will remove that uncertainty and will mean that the employers will be clear that they can act in the interests of the business provided that they act reasonably. I emphasise that they will still be open to a employee's claim of unfair dismissal if he or she believes that the dismissal was unfair.

Where the measure allows employers to make better business decisions, I believe that it will help to improve performance and ensure the job security of those who are retained. The employers would be able to keep their best employees rather than be obliged to dismiss those workers who are most valuable to their businesses while having to continue to employ others who did not possess the qualifications, experience and levels of competence needed to restore business success.

I believe that the clause will reduce worries and uncertainties which may distract employers going through difficult times. It will also reduce the time that employers have to spend defending the decision before an industrial tribunal. All those effects will improve the employer's ability to act in the interests of the business, which will be in the long-term interests of the economy as a whole. As a result, I commend the clause to the Committee.

Baroness Turner of Camden

I really do find what the Minister has said quite unacceptable. I shall not follow him down the path of the acquired rights directive because, frankly, it is irrelevant to the point that we are discussing in relation to this clause.

The Minister referred to the need to end uncertainty for employers, but what about the employees? Surely the employees will face a great deal more uncertainty if they are not aware of whether or not the agreements or the custom and practice that have operated in their place of work will be followed. It is all very well to talk about the uncertainties faced by employers in such situations, but as I and a number of my noble friends have already indicated, redundancy is often a total and absolute disaster for employees. They have a right to have some knowledge that agreements entered into on their behalf either by their unions or as a result of the custom and practice applying in their place of work will be followed where redundancy may unfortunately threaten them and that attempts will be made to find them alternative employment and perhaps to redeploy them within the enterprise. Of course, they are also faced with increasing uncertainty as to what may be their fate if they go to an industrial tribunal, because industrial tribunals may in future, once the legislation is on the statute book, be less inclined to find for employees when they claim to be sorted out unfairly, if there are no procedures against which those decisions can be judged.

My noble friend Lord Wedderburn is right when he points out that such situations could well result in cases coming before the courts, and, as I said in my opening remarks, I should not be at all surprised if in due course cases were not heard before the ECJ in which the decision may eventually turn out to be in favour of the employee. At this time of the evening, I am afraid that there is not much point in pressing this matter to a vote, but it is totally unsatisfactory. We shall have to come back on Report to see whether there is anything that we can do in this area of the Bill, which I find unfair and another attempt to remove from employees a decreasing number of employment rights.

Clause 26 agreed to.

10.45 p.m.

Clause 27 [Power to repeal certain health and safety provisions]:

Baroness Dean of Thomton-le-Fyldemoved Amendment No. 180:

Page 24, line 11, at end insert:

("(1A) Regulations made under subsection (1) above shall in no way derogate from or revoke any provision maintaining or improving standards of health, safety and welfare of employees and the public").

The noble Baroness said: The amendment deals with the Health and Safety at Work etc. Act and the part of the Bill that seeks to give power to the Minister to deregulate. I hope that the long debate that we have had, which appears to have evoked a negative response from the Government Benches, will not be reflected in a similar result for this amendment. I say that because there is not a matter of great principle between us. It is a matter of government responsibility in an area which covers about 16 million employees and self-employed people.

It is said that the clause is in the Bill because there was a need to repeal out-of-date health and safety laws and regulations. In doing that, the wording of the Bill gives sweeping powers to the Minister, if he so chooses, to eliminate the effects of Section 1(2) of the Health and Safety at Work Act etc. 1974. Last year the Minister responsible asked the HSC to conduct a review. He drew its attention to that section in particular. That section places a legal requirement on the HSC to maintain and improve health and safety standards for people at work.

Having conducted its review, the commission returned to the Minister and said that it could recommend no changes to that section of the Act. In response the Minister accepted the recommendations, and said that the Government would not do anything which would undermine necessary—I put a question mark after necessary, because that is subject to discussion about what is and is not necessary— standards of health and safety.

I said that I did not feel that this was a matter of great principle, because the Government are on record as saying—indeed the Minister said it in this Chamber this evening—that it is not the Government's intention to interfere with health and safety provisions. Indeed it is true that due to the 1974 Act people at work in Britain have a better standard of health and safety than those of a number of our partners in the European Union. Of course, the provisions of the Act, and that legal requirement to ensure that good health and safety provision is not just maintained but is improved, are essential. We cannot be complacent about this matter. Last year, 1.6 million accidents occurred at work in the UK; there were 2 million health-related cases; and 143,000 serious accidents were reported to the HSE in the 1992–93 period. Even with that number reported, the HSE itself estimates that as many as two thirds of all non-fatal accidents go unreported.

It is against that background that I move this amendment. In the next three years the Government's health and safety budget will reduce by about 17.5 per cent. That alone is the cause of great anxiety. In addition, Sir John Bourn of the National Audit Office told Parliament about the concerns of the office in respect of the work that it carries out. Its report shows that approximately 1,500 inspectors are responsible for the enforcement of health and safety legislation in 650,000 workplaces. Last year in Britain 430 people lost their lives at work.

Against that background we cannot afford to be complacent, nor can we afford to rely on the assurances or statements of Ministers. We need to have provisions in the Bill so that workers in Britain—be they directly employed or self-employed—know that there is a legal requirement that cannot be to be overridden or eliminated which ensures the maintenance of good health and safety and an improvement in standards.

The Minister is on record as saying that the Government will do nothing to undermine necessary standards. In a letter dated 24th June to my colleagues in the TUC, the President of the Board of Trade stated something similar. The Health and Safety Commission, which is made up of employers and trade unionists, stated that it wants to see the full effect of Section 1(2) maintained.

Unless there is a hidden agenda, and unless the Government in using the phrase "necessary standards" really mean that the present protections are too stringent, there should be no problem about their accepting the amendment tonight. The hour is late and I have made my case; it has been debated in this Chamber many times. I hope that the Minister gives us some good news—better news than we had earlier tonight. I beg to move.

Baroness Turner of Camden

I support the amendment moved by my noble friend. This clause is very important. It gives the Government power to repeal provisions in the area of health and safety at work which have already been established in legislation; notably the Health and Safety at Work etc. Act 1974. Like other industrial countries, the UK aims to regulate health and safety at work within a legal framework. In recent years a series of European directives has been designed to strengthen employee protection in this area. There has also been a series of ILO conventions, which also provide for inspection. The body responsible in the UK is the Health and Safety Commission, a tripartite body which has earned great respect throughout industry and commerce.

Of course, things could be better and it is that which the Government should be addressing rather than seeking wholesale deregulation. As my noble friend pointed out, in 1992–93 there were 485 deaths resulting from industrial injuries. More than 27,000 major injuries and 138,000 minor injuries were sustained at work. As we know—because it keeps coming up before this House one way or another—the Government have substantially eroded the industrial injuries scheme. Public interest is aroused by disasters such as the "Piper Alpha" catastrophe, which led to a report by the noble Lord, Lord Cullen, and further tightening up in legislation. Nevertheless, who doubts that things would be a great deal worse without a framework and without enforcement?

I do not believe that the Government have made out an adequate case for the wholesale deregulation proposed in the clause. They state—and of course in this respect they are right—that there is a great deal of outdated legislation and that it should go. We do not quarrel with that. Presumably that is what the Government had in mind when in December 1992 they invited the Health and Safety Commission to review workplace health and safety legislation. The commis-sion was urged to pay special attention to the needs of small business, about which we often hear in this Chamber, and for which, unnecessary red tape is especially damaging". The commission undertook a review and, unsurprising-ly, its findings were that the current system of regulation has widespread support. Given the toll of death, illness and injury at work, few argue that it imposes inappropriate burdens on business. The document issued by the commission accepts that many regulations may be outdated, but it is firmly of the view, contrary to the ideas of the then Minister, that there is no particular burden on small firms. The document goes on to express the view that it would be neither right nor practicable to apply different health and safety standards to small firms, many of which would create high levels of risk for workers and the public.

Moreover, briefing that I have received from organisations representing inspectors—those who work at the sharp end —suggests that small-scale operations are often not low-risk areas. Indeed, small manufacturing firms have been found to have significantly higher major injury/accident rates than their larger counter-parts, even before their higher level of under-reporting is taken into account.

This amendment would enable the Government to deal with those aspects of legislation felt to be out of date. But it stipulates that the repeal of regulations should not have the effect of diminishing standards. Without such a requirement, the clause simply gives a blank cheque to the Secretary of State to do away with regulations which have been designed to protect employees.

It is true that it will be argued that there will need to be consultation with the Health and Safety Commission, but consultation does not imply agreement. The final word will still rest with the Secretary of State who may proceed to remove primary legislation from the statute book and then simply proceed or not by way of regulation. That is unsatisfactory and it is not surprising that it has aroused a great deal of suspicion and hostility among unions and those representative of professionals working in that area.

Hitherto, the Government have been anxious to assure everyone that they support absolutely measures designed to protect and improve health and safety at work. A few years ago they were prepared to facilitate the passage through this House of a Private Member's Bill, sponsored by myself and supported by my noble friends Lord Wedderburn and Lord McCarthy, to protect against unfair dismissal or discrimination those engaged off shore who blew the whistle on unsafe practices. That has now been subsumed in more comprehensive legislation. Therefore, on that occasion the Government were very anxious to demonstrate their support for improved health and safety at work.

Therefore, I hope that the Government will be prepared to accept the amendment this evening. I took the liberty of writing to the Minister in advance of this debate to indicate to him what we had in mind. I hope that he is prepared to accept what we are saying this evening.

Lord Rochester

On the face of it, this seems to me to be a reasonable amendment which the Government should accept.

However, in Standing Committee in another place, for reasons which I do not fully understand, it was claimed by the Minister that the effect of an amendment couched in somewhat similar terms would be to negate the clause. That is clearly not the intention of the noble Baroness, Lady Dean of Thornton-le-Fylde, in moving it. I hope that the Minister will not oppose the amendment on the ground that it too is technically deficient. If he does, I hope that he will at least agree to look again at the question between now and Report stage and if necessary, bring forward a government amendment which accords with the principle underlying Amendment No. 180 so that we can achieve the consensus which is clearly desirable in matters affecting health and safety.

Lord Ashley of Stoke

Perhaps I may say a few words in support of the amendment moved so ably by my noble friend. It is not a laughing matter; it is a very important matter.

It seems centuries since the insensitive and selfish employers advanced their businesses with a complete disregard for the health and safety of their workers. In fact, it is not all that long ago since health and safety legislation was introduced. As we have appreciated the risks more in industry, so employers and the community have accepted the trust of health and safety legislation; indeed, we have worked along with it and it has become an integral part of management. What we need now is for that process to be strengthened rather than weakened.

Legislation is necessary because it is individual workers who are vulnerable if new processes are introduced without caution or if employers start impulsive cost cutting to help profits. It is not the bosses' limbs, their lives or their health which is at risk; it is always that of the workers.

Clauses 1 to 4 of the Bill are a potential threat to health and safety legislation. Clause 27 adds to that threat. The Government claim that they need the clause to remove the dead wood of legislation, as my noble friend said a moment ago. Like all other legislation, health and safety legislation needs modernising and improving and no one would object to any changes, provided—and this is crucial—that they maintain and improve existing standards as is required by Section 1(2) of the 1974 Act and by my noble friend's amendment.

Frankly, it is very hard to take seriously the Government's claim that the clause only has limited powers of repeal because the detail of out-dated requirements has to be replaced by fresh detail. Indeed, that is a most remarkable claim. I say that because it does not seem to be borne out by current practice. There are suspicions that that is but an excuse to weaken health and safety legislation. However, the need for continued strong legislation is beyond dispute in view of the fact outlined by my noble friend regarding the number of accidents. The UK's record is very far from outstanding. I shall not go into the figures again at this late hour, but they are most disturbing. Moreover, the cost of accidents is estimated at some £10 billion to £15 billion a year. That is the burden on the country as a whole.

It is simply not good enough for the Government to be obsessed with "burdens" on employers. The burden is on workers with severe injury or illness, or on the widows of those who are killed—and many of us know those widows—and simply must be taken into account by any responsible government.

I hope that the Government will remember the lesson from the Chichester Sainsbury fire, and especially their role in that incident. In that case, local building regulations called for sprinklers and other safety devices on the roof of the new building. The company's appeal against that was upheld by the Department of the Environment. As a result, the fire burned down the building. The Government's role in that fire is typical of their attitude to the whole of industry. I believe that there will be similar consequences unless Ministers think again about this and other clauses in the Bill.

The Minister has tried to be helpful. I hope that he will also try to be helpful on Clause 27.I know that the noble Lord does not make the decisions, but I believe that the Government should reconsider the matter. This Chamber cannot initiate a change in attitude by employers with no improvements in monitoring, which are badly needed. However, it can ensure that legislation contains the essential requirement that there should be no change unless it maintains or improves standards of health, safety and welfare. That is crucial and it is the purpose of my noble friend's amendment. I hope that the Minister will feel able to accept it.

11 p.m.

Lord Monson

The noble Baroness, Lady Turner of Camden, spoke of the importance of employee protection. That is certainly something with which one would not wish to quarrel. However, the 1974 legislation extends somewhat paternalistically to the self-employed. Can we not assume that self-employed adults are perfectly capable of looking after themselves? Perhaps it was excessive restrictions upon the self-employed that the Government had in mind when they framed the clause.

Earl Attlee

Is the noble Lord aware that if the self-employed become successful, they then start to employ other people, even if it is only a matter of one or two employees?

Lord Strathclyde

I join with the noble Baroness, Lady Dean, when she says there is no great matter of principle between us. Of course there is not; we are both interested in providing for good quality health and safety legislation to help people in business. That is why both Ministers and the Health and Safety Commission have already made it abundantly clear that the power we are introducing in this clause is about removing outdated law, not about reducing necessary safety standards. It is designed simply to give Ministers the same powers with respect to pre-1974 legislation that they have already for post-1974 legislation.

In the Health and Safety Commission's recent Review of Regulation, carried out after extensive consultation with both sides of industry, about 50 regulations which predate the 1974 Act, were identified as being outdated and unnecessary. However, even though in many cases those provisions seek to regulate working practices which have long since been abandoned they cannot currently be repealed because of a technical deficiency in the Health and Safety at Work etc. Act. While the Act allows the repeal without replacement of post-1974 legislation, it does not allow repeal of pre-1974 legislation. The Health and Safety Commission alerted us to the deficiency and we are proposing Clause 27 to remedy that technical fault. I should remind the Committee that the majority of health and safety legislation can already be replaced or removed by secondary legislation under the Health and Safety at Work etc. Act.

The amendment proposes that any use of the power should not derogate from, or revoke, any provision maintaining or improving standards of health, safety and welfare of employees and the public. If a particular provision could be said to contribute in any way— however small and however outdated—to health and safety, then in practice, the power could not be used to repeal it. That is the effect of the amendment of the noble Baroness. I should remind the Committee that this would be the case even where the HSC itself advised that the provision should be repealed. Perhaps I can give an example. One of the provisions which has been proposed is the Cotton Cloth Factories Regulations of 1929. Most of the requirements of those prescriptive regulations, which now apply to a mere 20 factories in the United Kingdom, have already been replaced by modern legislation. The Health and Safety Commission has recommended that the remaining provisions would be better subsumed in the goal-setting requirements of the Workplace (Health, Safety and Welfare) Regulations which cover all aspects of the physical working environment. It has therefore proposed the regulations for repeal under the new power. If the amendment was carried, I am advised that we could not use the power to repeal the regulations because they require specific standards to be maintained.

It must be true that cluttering up the statute book and employers' shelves with such legislation does nothing to reduce the human and financial toll of accidents and occupational ill-health. Indeed, the confusion that extra redundant legislation can create among employers can hinder compliance with measures essential to safety which both sides of this Chamber entirely agree we should maintain. A simpler legislative framework aids compliance and enforcement and has to result in better standards of health and safety for employees and the public.

Use of the new power is subject to consultation with the Health and Safety Commission and any others Ministers consider appropriate. This is in line with what is provided by the Health and Safety at Work etc. Act for repeal of post-1974 requirements. The clause in addition provides for the affirmative resolution procedure. These safeguards are important and substantial. I felt that in the speeches by the noble Baroness, Lady Dean, and the noble Lord, Lord Ashley, there was more about how the Health and Safety Commission works in practice. I am advised that the latest HSE annual report shows an expected overall fatal injury rate which has dropped to the lowest levels ever reported. If we are genuinely interested in health and safety—and I take the noble Baroness and the noble Baroness, Lady Turner, at their word—we should be interested in minimising the amount of legislation and maximising knowledge, information and the implementation of legislation which genuinely improves safety.

I have to tell the noble Baroness that her amendment would not promote successful health and safety legislation. On that basis I very much hope that she will withdraw it.

Baroness Dean of Thornton-le-Fylde

I am obliged to the Minister for the detail of his answer but dissatisfied with the content. We are talking about legislation which covers 16 million people. That is a lot of people. The fact is that the health and safety legislation that we have had on the statute book since 1974 has helped to reduce the number of fatal injuries to which the Minister rightly referred. Even if the figures have been reduced, everyone goes to work in the morning expecting to go home that evening. When even a handful of people in Britain do not go home from work there is a need for legislation.

The Minister conceded that there was no difference in principle and that both sides of the Chamber are interested in good quality health and safety. The difference between us is that we on these Benches want to do something to maintain the legislative guarantees that people at work have.

I am encouraged by the fact that the Minister is now on record as saying at the Dispatch Box that it is the Government's intention to improve and maintain standards. However, while I do not intend to press the amendment this evening, I intend to return to it at the Report stage. I hope that the points that the Minister made about the technicalities and the difficulties that the amendment may present—which I do not necessarily accept—will be overcome at the Report stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 180A to 181 not moved.]

On Question, Whether Clause 27 shall stand part of the Bill?

Lord McCarthy

One good thing has come out of the debate at this stage. At least we know which side we are on. For years, ever since this Government began to introduce legislation about labour law, they have always sought to make an exception for health and safety. They have always tried to argue that health and safety was different and that on health and safety we were together. We have always said that unfortunately that is not the case, because everything in the Government's philosophy relating to cost, price and efficiency affects health and safety. Health and safety is one of the most expensive issues that you can ask an employer to take care of.

Lord Strathclyde

Perhaps the noble Lord will allow me to interrupt. I think that he is wrong. That is certainly not the Government's position. The Government believe that good and effective legislation on health and safety saves. It produces more efficient and productive companies. Investment in the health and safety of employees is positively beneficial. That is why we have supported the HSE in the way that we have.

Lord McCarthy

When the noble Lord says such things I wonder whether he can actually believe them. I suppose that he can.

The fact is that every time a union or an interest group proposes that a particular disease should be scheduled, all the employers oppose it because they know that it will be very expensive. You have to fight for every improvement in health and safety because it is extremely costly. It is as costly as wages, and sometimes more so. The employer has a case because it is sometimes difficult to substantiate that this highly expensive protection—a health guard, a safety precaution, or a fire protection; perhaps I may refer to the Torrey Canyon case—will protect. Health and safety is a highly controversial, extremely expensive factor. In that sense, it is good that the Government have at last got round to telling us honestly that they want to cut back existing health and safety standards because they cost too much. This very clause is the best example of that attitude.

What does the Health and Safety Commission say? ft did not ask what the Government are doing. The Government have made a great deal of fuss about the fact that they are only doing what the Health and Safety Commission ask them to do. The Health and Safety Commission pointed out that there was a technical difficulty which made it difficult to repeal what it regarded as outdated legislation without replacement. It did not ask the Government to take it away and to cut the Health and Safety Commission out altogether; but that is what the Government have done. The Government have taken the matter on themselves. Instead of the fountain-head of health and safety legislation coming from the commission or from the agency, it comes from the Government. The Health and Safety Commission has the residual role of being consulted.

The Government were asked on 24th March in Committee in another place whether they would say that the health and safety regulations which they proposed to repeal would be only those agreed by the Health and Safety Commission. The Government would not agree. They were asked whether they would repeal regulations if the Health and Safety Commission objected, and they would not agree. They said that if there were a burden on business those regulations would have to go.

The reason why we oppose the Motion, That the clause stand part is that the Government have come out from cover. They have accepted, as the task force said, that professional business-based costs must be taken into consideration. They must minimise the principle of extreme caution. They must have regard for the insubstantial benefit. In other words, health and safety can be too expensive. It can be a burden on business and if it is they do not want anything to do with it. As a result, we oppose the Motion.

11.15 p.m.

Baroness Turner of Camden

I did not originally put my name down to oppose the Motion, That the clause stand part of the Bill. I did not do so because I thought that the first amendment moved by my noble friend Lady Dean was so reasonable that it was highly likely that the Minister would accept it. In fact, I wrote to him thinking that he might well be prepared to do so. After all, what are our main concerns? We absolutely agree that out-of-date legislation should go. We are afraid that in the process good protective legislation will also disappear. Therefore the first amendment, while allowing for deregulation, simply made it clear that deregulation could not diminish the degree of protection already existing. But, if the Government refuse to accept that very reasonable proposition, we have no alternative but to oppose the Motion, That the clause stand part of the Bill.

I have already spoken at length about the need for legislation and the level of industrial injuries and deaths, which clearly represent a problem that the Government should be addressing. As the Minister said, of course there have been improvements; and I think that that is very much due to the legislation and the fact that the Health and Safety Commission has operated since 1974. But, quite frankly, total deregulation as proposed in the Bill, even with some rather nebulous safeguards, does not seem to me to be the answer to the problem of outdated legislation. Surely the issue could be dealt with in some other more reasonable way which did not have the effect of arousing the suspicions of many people working in the health and safety area who fear very much that the government proposals will mean a diminution of the standards that have already been established. I therefore support my noble friend.

Lord Wedderburn of Charlton

While on balance supporting my noble friends in their position on this clause, I do so rather more in relation to what the Minister said in another place than what the noble Lord the Minister said tonight. I am not prone to find elements of flexibility in the Government, but what he said —and we shall read his remarks very carefully— seemed to suggest that the need to put health and safety into this compass of new powers to deregulate by regulation was born of a passionate zeal for the archaeology of the law and jurisprudence on safety. What we heard about was a large number of regulations that were very old and had been missed out. The noble Lord nods his head. I am glad that I have thus far got it right. There are regulations on textiles which apply to only a few factories. In 1989, when there was deregulation all over the place in regard to this kind of law (regulations that had aspects of safety in them) those were missed out. The legislation failed to catch them. If we are merely giving the Minister new powers to pursue his zeal for archaeology, then my noble friend Lady Dean is right in thinking that he has agreed that these new powers will be used to remove outdated regulations and will continue to improve or maintain safety standards. I take it that tonight we have an element of the Government saying yes, that is just what we mean. If that is right, it is just a question of finding a form of words at Report.

Lord Strathclyde

I am deeply distressed by the debate we have had on Clause stand part, apart perhaps from the speech of the noble Lord, Lord Wedderburn, who, I believe, has grasped the truth of the Government's intention. I was particularly disappointed that the noble Lord, Lord McCarthy, should say that the matter is controversial. It is only controversial because the noble Lord makes it so. I have no desire to make the matter controversial; in fact, I think that it should be non-partisan. We should go together and decide that health and safety matters are important. So it is in Clause 27. We ask for a very simple power, designed to enable Ministers to repeal pre-1974 legislation. Similar powers already exist for post-1974 legislation under the Health and Safety at Work etc. Act. As the noble Lord, Lord McCarthy, correctly recognised, this was as a result of a request from the HSE.

The power is narrowly drawn. It is subject to extensive consultation; it is subject to approval by Parliament; and it will enable the removal of outdated and unnecessary health and safety legislation. At present those provisions cannot be repealed unless they are replaced, even if the risks that they seek to regulate no longer exist.

In providing for repeals without replacement the clause will enable further judicious pruning—the noble Lord, Lord Wedderburn, called it archaeology; I call it judicious pruning—of the legislation while not undermining the standards of health and safety. There is clear evidence from the HSE's review of regulation and the DTI's deregulation task force that the volume and complexity of legislation in health and safety and other fields is a legitimate concern of employers and workers alike.

Pruning legislation not only reduces the burdens on business. If people find it easier to understand their legal obligations they will be better able to comply, because they can focus more clearly on those requirements that are essential. Simpler legislation will also be easier to enforce. All this has to result in improved health and safety standards for workers, and I very much commend the clause.

I hope that following this debate we shall not be returning to the matter at Report. I believe that there should be no distance between us. The clause is based on common sense and on sound health and safety procedure.

Lord McCarthy

The Minister says that the measure is not controversial. Yet he will not accept a single one of our amendments. We have put down amendment after amendment after amendment. The noble Lord stands pat and will not accept any of them. He does not even suggest that perhaps he will come back at a subsequent stage, having moved a little. No. The Minister stands exactly where he is and says, "I am the reasonable man. Anybody who disagrees with me by an inch is unreasonable. There should not be disagreement because we are all on the same side".

Ever since the Plimsoll line, and ever since the very beginning of working hours legislation, there has been a debate about the cost of health and safety. Of course there are areas of common interest - there are in wage bargaining —but there are also areas of disagreement. More and more we know where the Government stand. They are on the side of the employers, as my noble friend said. The Government are against any extension. They stand pat where they are and because of their policy of burdens on business, they introduce legislation such as this to try to chip away at the existing standards of health and safety.

We do not accept that we do not have a disagreement. But we shall not divide the Committee tonight. We merely say that we do not believe that this clause is fair and equitable and that we disagree.

Clause 27 agreed to.

Lord Wade of Chorlton moved Amendment No. 181A:

After Clause 27, insert the following new clause:

("Uncompetitive practices

1. .—(1) No local authority shall act in a manner having the effect or intended or likely to have the effect of restricting, preventing or distorting competition between local authorities, approved inspectors and persons approved for the purposes of section 16(9) of the 1984 Act in the exercise of functions conferred by or under that Act.
2. (2) The Secretary of State may issue guidance as to how conduct restricting, preventing or distorting competition in the exercise of functions conferred by or under the 1984 Act is to be avoided in the doing of anything relating to building or building control.").

The noble Lord said: The explanation for the amendment is that, following the Building Act 1984, building control has been conducted by local authorities and one approved inspector, which is the National House Building Council. The purpose of there being those two bodies was that they should act in equal competition over the development of building control activities.

In practice, it has turned out that in many instances local authorities take advantage of their position by preventing competition between the two organisations. They take advantage through the regulations concerning other building activities, by being difficult on occasion with the builders and drawing attention to the other powers that they may have to control activities. That takes away the competitive option which should apply within the 1984 Act. The purpose of the amendment is to deal with those matters by making sure that no local authority shall act in a manner:

having the effect or intended or likely to have the effect of restricting, preventing or distorting competition".

It also draws attention to the fact that the Secretary of State may issue guidance to make it clear that anything "restricting, preventing or distorting competition" would be an offence. I beg to move.

Lord Strathclyde

Let me say at the outset how much I agree with my noble friend Lord Wade that local authorities or indeed approved inspectors should not indulge in uncompetitive practices. The question is whether the inclusion of a provision such as this one in primary legislation is the best way to tackle any problems that might exist.

The clause has arisen from complaints that local authorities have sought to put pressure on builders to use their building control services in preference to those of the competition, the NHBC. That complaint is not new. The Hansard report of 17th December 1987 records a written Parliamentary Question in another place and the response of the Minister concerning just such issues.

The Government do indeed deplore the concept that pressure might be brought to bear to distort competition. However, I am advised that no challenge to such practices has been brought to the courts and I cannot see that we have sufficient evidence to support the rather bureaucratic requirements of the new clause.

However, I should like to be helpful to my noble friend. The Department of the Environment already has discretion to issue guidance in matters relating to local authorities. If clear evidence of uncompetitive practices were forthcoming, guidance, possibly in the form of a departmental circular, would be issued without the necessity of additional legislation such as that proposed.

Therefore, I agree with my noble friend that local authorities should not indulge in uncompetitive practices. In view of those assurances and my request to my noble friend that he and his advisers should perhaps furnish us with further evidence, I ask him to withdraw his amendment.

Lord Wade of Chorlton

I am most grateful to my noble friend the Minister for being so helpful and understanding of this proposal. I should be grateful if I could take advantage of his suggestion that we should talk further about it. With that in mind, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wade of Chorlton moved Amendment No. 181B:

After Clause 27, insert the following new clause:

("Prosecution of offences under the Building Act 1984.

.At the end of section 113 of the Building Act 1984 (prosecution of offences) there shall be inserted the following:-

(2) A local authority shall not take proceedings in respect of an offence under section 57 above except with the consent of the Secretary of State." ").

The noble Lord said: This amendment follows from the previous amendment. It is possible for the local authority to prosecute or bring proceedings against an approved inspector and it is noted that on occasions that can be used to cause the approved inspector to think again or feel under pressure from the suggestions of the local authority.

The purpose of the clause is to disallow a local authority from taking proceedings unless it has the consent of the Secretary of State, the purpose being that it would make such an authority think again before taking action. I beg to move.

11.30 p.m.

Lord Strathclyde

The purpose of the building regulations is to ensure the health and safety of people in and around buildings. I am sure that the Committee will agree that, where an approved inspector knowingly and falsely claims that the building regulations have been complied with when they have not, it is right that he should be prosecuted in this way and prevented from practising for a substantial period.

Amendment No. 181B provides a filter before any such prosecution can be brought by a local authority. It is the Government's view that such a filter is not an appropriate response to alleged biased prosecution practices. Further, I am given to understand that there has been but one prosecution under Section 57 of the Building Act and so I cannot see that the problem of prosecutions is a significant one. Again, if my noble friend has some specific worries to erase, I shall be delighted to hear them.

It may be that this kind of provision would fit in with the appeals procedure mentioned by my noble friend Lord Vinson at an earlier stage of the Bill. However, I hope that my noble friend will not press the amendment.

Lord Wade of Chorlton

I am grateful to my noble friend for his helpful and careful reply. I beg leave to withdraw the amendment.

Baroness Young moved Amendment No. 181C:

After Clause 27, insert the following new clause:

("Limitation of inspection functions: independent schools

1. .—(1) The Children Act 1989 shall be amended as follows.
2. (2) In section 87 (welfare of children accommodated in independent schools), after subsection (2) there shall be inserted the following subsection—
• "(2A) Subsections (3) to (8) below have effect subject to section 87A."
3. (3) After section 87 there shall be inserted the following section—

"Limitation of functions under section 87.

87A..—(1) The following functions, namely—

1. (a) the duties imposed by section 87 on a local authority, and
2. (b) the powers conferred and duties imposed by that section and regulations made under it on a person authorised by such an authority,

• shall not apply in relation to a school if the school falls within subsection (2) below.

(2) A school falls within this subsection if—

1. (a) the school is one as regards which the Secretary of State is satisfied that there is (apart from section 87) a procedure for inspection which is sufficient to determine whether the welfare of children at the school is adequately safeguarded and promoted, and
2. (b) the Secretary of State has notified the local authority concerned that he is so satisfied." ").

The noble Baroness said: The purpose of Amendment No. 181C is to remove the requirement under Section 87 of the Children Act for the annual inspection of independent schools by social service departments of local authorities. Perhaps I may explain at the beginning that it only applies to schools that fall under the umbrella of the Independent Schools Joint Council. The Independent Schools Joint Council is made up of schools belonging to the Headmasters' Conference, the Girls' School Association, the Independent Association of Preparatory Schools, the Independent Schools Associated Incorporated, the Society of Headmasters and Headmistresses of Independent Schools and the Association of Governing Bodies. Subsection (2) of the amendment I hope makes clear the distinction which I draw between those schools and other independent schools. Under the amendment, all other independent schools outside the Independent Schools Joint Council will continue to be subject to inspection.

The Committee may well ask how the clause came to be included in the Children Act. The reason was that it was included in the Children Act at a late stage in its progress through Parliament because of a very serious case of abuse at a school called Crookham Court. No one defends what happened at that school. But it was an over-reaction by Parliament to suggest that because there was malpractice in an untypical school all other independent schools should be covered by this blanket legislation. Incidentally, Crookham Court School is outside the Independent Schools Joint Council and therefore would not be subject to my amendment.

Perhaps I may say at the outset how grateful I have been for the constructive discussions that I have had with my right honourable friend the Secretary of State, Mrs. Bottomley, my honourable friend Mr. Bowis and my noble friend Lady Cumberlege. The principal reason for the amendment is that I believe social service inspections are unnecessary. As this is a deregulation Bill it was appropriate to table the amendment at this time.

When I say that I believe the inspections to be unnecessary, let me tell the Committee to what inspections independent schools are currently subject. First, all independent schools must be registered with the Department for Education. They are subject to inspection by Ofsted and expect that to happen every 10 years. All ISJC schools are inspected every 10 years by ISJC itself, so every independent school covered by the amendment is inspected every five years.

The ISJC inspection teams are always led by a former member of HMI. Within the school itself all teachers are checked against list 99, all non-teaching staff are checked against the Department of Health list, and checks are made on peripatetic teachers. But, most important, if parents are not satisfied, they can always remove their children; and some of course do. It is important to remember that boarding is a private contract between parents and the school. Interestingly, these social service inspections do not happen in Scotland. Not for the first time, and no doubt not for the last, the Scots are wiser than we are in other parts of the United Kingdom.

There are other checks. There is hardly an independent school now without a telephone line where children can make private telephone calls home. I am quite certain that within a measured length of time many children will have their own hand-held telephones. Many schools also employ counsellors who are there to help over children's problems. But what makes a good school, whether independent or maintained, is the absolute commitment of the head and the staff—all the staff—to the highest professional standards. That is what schools strive for. Unless there is that real commitment, legislation, no matter of what kind, will not be as effective as it should be. I believe very strongly in individual and personal responsibility in the high standards of self-regulation and discipline within the area of education.

I would go further and say that independent schools today are not the remote and cloistered places of the past. They have to supply what parents want. And what working mothers above all want is flexibility. So most boarding schools offer full boarding—and usually the pupils can go out most weekends—weekly boarding for those who want it, and flexible arrangements for boarding lasting two or three weeks or even just for one night. Today's parents, who take great care over their children's future education, almost invariably inspect the boarding arrangements of their chosen school. When they conduct those inspections they are armed with a list of 20 questions supplied by ISIS so that you can make quite sure you are asking the right questions. Most schools will ask a senior pupil to show prospective parents around the school. Anyone who has had this experience knows that children can be extremely frank about the circumstances of their school. The whole boarding sector has altered over the past 20 years to meet the needs of today's children and their parents. Openness in all aspects of school life is a major consideration.

Noble Lords may well ask what happens when a case of abuse comes to light. Under the Children Act this must be reported to social service departments. The procedure to be adopted has been agreed jointly by the ISJC and officials in the Department of Health. That would continue under my amendment. I understand that the Social Service Inspectorate is to publish its findings as a result of some 200 inspections of independent schools. As far as the ISJC is concerned, there has not been a single case of a school reporting an allegation of abuse as a result of social service inspection. To the best of my knowledge, a number of suggestions for the improvement of the fabric of the buildings have been made, and those have been carried out.

I understand that social service departments have had a positive feedback from the schools and that is what I would have expected. Independent schools will keep the law and professional teachers would wish to work constructively with other professionals. No one can be complacent about abuse. In 1991 the ISJC was sufficiently concerned to fund jointly with the Department for Education the boarding school line experiment. This project, for which there was immense publicity in the media, enabled children to telephone Childline in complete confidence and speak to a trained counsellor. An independent study of the experiment revealed scarcely any cause for alarm in ISJC schools; fewer than 1 per cent. of all boarding pupils asked for counselling of any kind and not a single case of sexual abuse came to light.

No one would dispute that all sensible measures should be taken to combat child abuse. All schools should be subject to scrutiny, but, let us face it, not even social service departments can abolish sin. The amendment is designed simply to bring a sense of proportion to this inspection, recognising that where appropriate procedures are already in place, as we believe they are, there is absolutely no reason to add to them. To do so is simply expensive duplication, which this amendment is designed to remove.

I find it difficult to believe that, with all the problems which social service departments have to face and which we so frequently hear about in your Lordships' House —whether it is the complications of people coining out of long-stay mental homes and being helped back into the community; whether it is young people aged 16 leaving the care of social service departments and possibly finding themselves sleeping out under the arches of Waterloo—inspections of independent schools can rank as a high priority in all the problems that they have to face.

I hope very much that my noble friend, having listened to what I have to say, will be able to accept this amendment which I believe is based on common sense and a practical arrangement for dealing with independent schools in particular. I beg to move.

Baroness Hamwee

At this late hour perhaps I may say a word against this amendment which worries me more than a little. As the noble Baroness said, the provision is very new. The Children Act is not so old and the system has been in effect only since about 1991. I understand that the Department of Health has produced draft guidance on the inspection process and it is either now finishing or is about to finish a consultation process. Perhaps the Minister can explain the position to the Committee when responding to the amendment. If the position is that there is a consultation process either coming to an end or shortly to do so, I suggest that, among other matters, it would be sensible to await the outcome of that process.

The noble Baroness talked of what she described as an "over-reaction". Although the reaction of applying an inspection process may appear to be extreme, the problems to which it is addressed are, one hopes, very rare but where they occur they are extreme. I do not suggest that everything which may be uncovered may be abuse of the most extreme kind, but while there can be any suspicion that it may occur —I do not believe that the independent sector is any more or less liable to this sort of problem than the maintained sector —we should be certain that the inspection process is a good one.

I am not a normal reader of the News of the World, but I mention to the Committee that there is a report in fairly typically extreme language in that newspaper of 19th June of what it calls a "Probe at toffs' school". I do not know that the language is particularly helpful. The paper refers to the school in question as being described in the Daily Telegraph's Schools Guide as "the best in boarding education". I understand that the head is a member of the ISJC accreditation unit. If the article is a "probe", it is matter that is not yet determined and I am in no position to allege that what is suggested in the News of the World is entirely a matter of fact. Nevertheless, there is clearly some cause for concern.

The noble Baroness referred to inspections by Ofsted and the ISJC on a 10-yearly basis—in other words, between them, every five years. That does not seem to me to be terribly frequent. A child will pretty well pass through a sector of the system in that period. The noble Baroness also said that parents can remove a child if they are not satisfied.

My concern is that problems may not come to light or may take time in coming to light. Children who are at school away from their family may not, despite the provision of telephones and so on, quickly express or explain problems. There can be many reasons why a child would fail to report abuse: recrimination; guilt; fear that adults will not believe what is said; and perhaps not immediately knowing whether what is going on is normal and is a matter of right or wrong.

I have been contacted by the NSPCC—I do not know whether other noble Lords have been similarly contacted. I have also spoken to the National Children's Bureau which is concerned about the amendment and which told me that the NSPCC was also concerned. Both organisations have expressed their anxiety that the consultation process, to which I have referred, is concluded. They have also expressed their concern that the ISJC would probably be able to carry out an inspection on average only about every 10 years or so. I spoke to the head of the inspection unit in my own authority at the end of last week to get his view. He told me—it did not surprise me—that he felt that inspections should be as frequent as every year and perhaps even more frequent —not in order to disrupt the school (or whatever the establishment) but in order to build a relationship with those working in the school who would have the same interest as the inspectors in making sure that all was in order.

It is late but this is an important matter. I hope that the noble Baroness will not press the amendment and that she will accept that in making these comments I am suggesting that an inspection is not an intrusion. I agree with her that one cannot abolish sin, but I think that there is an obligation on society to seek it out.

11.45 p.m.

Lord Aldington

After what my noble friend said in moving this valuable, useful and excellent amendment, I do not think that there is much that needs to be added by anyone on this side of the Committee or even by myself whose name is on the amendment.

I should like to refer to some of the points made by the noble Baroness, Lady Hamwee, who said that it was important that the inspection process should be a proven process. That is what the amendment provides for. The noble Baroness cannot have grasped the importance of subsection (2). The noble Baroness spoke about the need to have inspections very frequently, but seemed to overlook altogether what my noble friend told the Committee about the way in which independent schools are run, and about the responsibility of the head and of all those who work under the head for pastoral care.

The system of inspection is only part of the process of ensuring the welfare of the children who are the responsibility of the head and the governing body. It is a good idea to have some system of inspection for each school. How frequent the inspection should be is best judged by experience. The NSPCC was quoted by the noble Baroness. It has drawn the attention of those who read that remarkable document, which I found lacking in common sense, to a 10-year period. My noble friend dealt with 10 years, and, alternatively, five years, but that is not the period of control and vigilance needed for these important matters.

There was a reference to the story reported in the News of the World, with which I am not well acquainted. I make the obvious point that that story has arisen under a system of inspection by a social services department. So I hope that my noble friend the Minister will feel inclined to accept the amendment tonight, or say that action along the lines suggested will follow. It is entirely in accord with the spirit of the Bill to remove burdens from those who run the schools, and to remove the burdens and unnecessary effort and cost from local authorities. That is what the Bill is about. If the proposal had been discussed properly instead of in the middle of the night on Report in the other place —it was never discussed here—it would not have been enacted in the form that it has been. I hope that my noble friend will accept this amendment, or something like it, which will get rid of the requirement.

Lord Beloff

Perhaps I may join in hoping for the same thing from my noble friend. We have here something at which a government should jump. Here is a proposal to reduce public expenditure without reducing an important service. It is clear that the service which is provided for independent schools by inspections by people with serious educational experience, enabling them to judge the schools, is likely to be as good as, or better than anything else that could be provided. It would cost the taxpayer nothing, and, as my noble friend Lord Aldington said, it would reduce the heavy burdens which at present lie upon social services departments.

Listening to the noble Baroness, Lady Hamwee, I gained the impression that two things were hopelessly confused. The purpose of inspection of an institution —a school in this case—is to see whether it, as a whole, is working properly, whether the people running it are qualified, doing their job, and devoted to the purposes of the institution. It has nothing to do, and could not in fact deal, with the occasional abuse or misfortune that may happen, even in a well run institution. If a child is unhappy for any reason, that has to be dealt with immediately. That child will not wait. It is not a question of five years. It is much too long if it has to wait for just one year.

What is needed, as my noble friend Lady Young said, is the provision, which is now increasingly available, for children to communicate immediately with their parents if something goes wrong, and for them to have someone in the school to whom they can turn. The idea of waiting, that some sort of fairy godmother from the social services department will turn up, and that all the children with problems will rush and cling to her skirts is a wild fantasy.

The business of inspection is to keep the schools running properly. It is to ensure that their heads regard themselves as in loco parentis. It has nothing whatever to do with the occasional abuse or misfortune which the best run institution may well experience.

Lord Boardman

At this time of night I shall not detain the Committee by repeating the argument in favour of the amendment, which I strongly support. The argument was clearly put by my noble friend Lady Young. However, I wish to make two points. First, the objective of the Bill is precisely that which is contained in the amendment; to remove from our system an expensive and bureaucratic form of resolution which is unnecessary and costly.

The noble Baroness, Lady Hamwee, referred to inspections taking place annually. I understand that the current inspections, which take place at five or 10 years, bear an annual cost in excess of £100 million. Annual inspections would cost £1 billion. There would be a vast expenditure of £100 million—let alone £1,000 million —on doing something which is already adequately and well covered by the system to which my noble friend referred. It is highly desirable that that should be cancelled out.

The noble Baroness, Lady Hamwee, said that the inspection of independent schools should be the same as that for maintained schools. She missed the whole point of the argument. My noble friend Lady Young made clear that the inspections which take place under the existing system of independent schools do not apply to maintained schools. It would be wrong to say that because maintained schools have a system of inspection that must be duplicated for independent schools and added to their system.

The amendment achieves the objective of the Bill to reduce unnecessary public expenditure—at least £100 million per year—and to remove a bureaucratic nonsense which slipped in in another place late at night. I strongly support the amendment.

Lord Strathclyde

I am immensely grateful to my noble friend Lady Young for moving her amendment and for the way she did so. The Government recognise that there has been considerable concern among independent boarding schools about inspections by social services departments under the Children Act. To fulfil a commitment made at the time of implementation of the Children Act, the Departments of Health and Education issued a consultation paper in April this year. That took into account the views expressed by the various interests in the light of their experiences of the early operation of Section 87 inspections.

The main changes proposed in the consultation paper were less frequent inspections and further clarification of what was required in relation to inspection duties. In particular, social services departments were advised to conduct their inspections in a more targeted and focused way. I know that these were welcomed by many of the leading schools in the country. But we have been asked to go further.

The Government accept the need for change and are very sympathetic to some of the objectives of my noble friend's amendment, particularly in relation to the role of other bodies in the inspection process and to the frequency of their inspections. I recognise the enormous amount of good practice that exists in independent schools. I have to say, however, that there has been evidence providing grounds for welfare concerns in relation to a few schools and it is important that suitable systems are in place to ensure that children are properly protected.

However, I suggest to my noble friend Lady Young that we would like to consider further the proposals and consult urgently with the welfare and educational interests. I hope that that gives my noble friend the necessary reassurance so that she will not press her amendment further. I hope that we will have reached a conclusion on the subject by the next stage of the Bill.

Midnight

Baroness Young

I thank my noble friends Lord Aldington, Lord Beloff and Lord Boardman for their support for the amendment. I should say to the Minister that, but for the lateness of the hour —I see that midnight is about to chime—many other noble. Lords would have been only too happy to support it. It commands a large measure of support both in this Chamber and outside it.

I was very disappointed that it did not have the support of the noble Baroness, Lady Hamwee. I am very surprised if that is the considered view of the Liberal Democrat Party on this matter. I too received a copy of the brief sent by the NSPCC. It was sent to me by a friend. As somebody who has supported the NSPCC both nationally and locally, I was absolutely astonished by its content and tone.

If that is the considered view of anybody working in a social services department, I hope that this will be borne in mind. The brief implied two things: first, that child abuse is rife in independent schools. That is an outrageous allegation, with the implication that everybody is guilty until proved to be innocent. Secondly, it implied that abuse goes undetected because children fail to report it for fear of not being believed.

As I have indicated, the ISJC, with the Department for Education, conducted that piece of research through Childline to demonstrate that there is no truth at all in that. Evidence has emerged both from Sweden and America which demonstrates that through persistent questioning children sometimes come to believe in events that have not happened at all. Swedish research suggests that, as a consequence, the burden of proof often becomes reversed, with the accused having to prove his innocence rather than the prosecution having to prove guilt. It is quite mistaken to suppose that routine inspections at intervals make any kind of significant contribution to the uncovering of abuse.

I shall not accept allegations that come from the News of the World. This is a very serious subject. I do not suggest that the noble Baroness, Lady Hamwee, based her argument on that, but we must not be led astray by newspaper allegations. One of the most dangerous aspects of this whole matter is that allegations are bandied about by various people. I have been astonished by the quite unsubstantiated allegations that I have heard. No school is named but allegations are made. That is extremely damaging and unprofessional.

The noble Baroness said that she thought and hoped very much —and forgive me if I misunderstood her— that people in the schools would have the same interests in the welfare of children as social services departments. Again, I am astonished that there should be any doubt about that. Independent schools and, indeed, maintained schools—all schools—have a vested interest in providing the highest standards of behaviour among the staff, in whichever part of the school they are employed. The suggestion that somehow independent schools regard that as being less important than do social services departments would be quite incorrect. Even if they were minded so to do, which of course they are not, parents would object. The market with regard to independent schools operates very quickly if there is trouble in the school. We should get that straight.

Baroness Hamwee

I must make it clear that I was not suggesting that those who run or teach in independent schools have any less concern for the welfare of their pupils than people in maintained schools. I was referring to the relationship between those who operate the school and the inspection unit. I believe that those interests would coincide and need to be developed. There is also a relationship in that respect.

Baroness Young

I take the noble Baroness's point. However, what is very important to remember within independent schools is the value that is attached to the pastoral care arrangements. Indeed, great care is taken in that particular matter.

However, to conclude the argument about social service inspections, I must say that one of the most unhappy features involved has been the repetition of the now politically correct thought that no teacher should ever touch a child. That is now taught to all teachers in training thanks to the modern view that came from the Children Act and other social service practices. It is regarded as dangerous.

When the social service department repeated the latter to the head of one girls' school known to me personally, she said that under no circumstances would she obey that injunction. She asked, "What if one of my young boarders comes to me with a real tragedy—for example, the death of her mother or father—am I not going to comfort that child?". If we are not very careful we shall be going down the path of having one-to-one questioning with children involving questions which often set parents against children and children against teachers. Indeed, that is a very doubtful path. In consideration of all such matters, I hope that such practices will be looked at and reconsidered as a matter applying not just to independent schools but also to anyone else. They are also happening in the maintained system and I believe that people will be just as worried about them as we are in the independent sector.

My noble friend the Minister asked whether I am prepared to withdraw the amendment. Quite frankly, I must tell him that I had intended to press it to a Division. I regard it as a very serious matter. Perhaps I may just reiterate the point made by my noble friends: it is a classic case of deregulation and something which we regard as being a quite unnecessary burden on schools and involving an enormous cost to public expenditure.

My noble friend the Minister raised various points. I am aware of the consultation paper and the suggestion that social services departments should inspect every four years. I should like to make it quite clear that we do not believe that that would serve a very useful exercise. In the course of a 10-year cycle, it would mean that there would be four inspections of schools—say, one every three years. Again, it does not seem to me to be a very sensible exercise. Moreover, it would be extremely disrupting to the school.

Further, under the consultation paper the prep schools—that is, the IAPS schools—would be subject to inspection every year. For all the arguments that I have given, I do not believe that that is necessary. However, my noble friend has said that both he and his colleagues would be prepared to look again at the matter. For my part, I would be prepared to tell him and his colleagues that, in the training sessions for the ISJC inspection teams, we would be happy to have a session from social workers talking about their work and giving additional information to the team if that was considered to be helpful.

However, having said that, I would not want my noble friend the Minister to be under the impression that I would be likely to settle for more than that. For all the reasons that I have advanced, I believe that my amendment makes quite clear the fact that such inspections are unnecessary. But with my noble friend's assurance that he will look again very carefully at the matter, I am prepared at this late hour to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

Schedule 10 [Miscellaneous Deregulatory Provisions: Consequential Amendments]:

Viscount Goschenmoved Amendment No. 182:

Page 99, line 36, at end insert:

("Charities Act 1993 (c. 10)

12. In section 47(3) of the Charities Act 1993—

1. (a) paragraph (a) shall be omitted, and
2. (b) in paragraph (b), for the words from "such" to "46(3) above" there shall be substituted "a charity other than one falling within paragraph (c) or (d) below".").

On Question, amendment agreed to.

Schedule 10, as amended, agreed to.

Clause 29 [Extent of Chapter II]:

Viscount Goschen moved Amendments Nos. 183 to 191:

Page 24, line 44, after ("16,") insert ("(Sporting events and activities on Sundays),").

Page 24, line 44, after ("16,") insert ("17(3),").

Page 24, line 44, after ("20,") insert ("(Offences under section 63 of the Charities Act 1992: creation of statutory defence),").

Page 24, line 44, after ("20,") insert ("(Applications for permits to conduct public charitable collections: time-limits),").

Page 24, line 44, after ("20,") insert ("(Annual audit or examination of charity accounts),").

Page 24, line 44, after ("20,") insert ("(Annual reports of charities),").

Page 24, line 44, after ("20,") insert ("(Annual returns by charities),").

Page 25, line 1, leave out ("Schedule") and insert ("Schedules").

Page 25, line 1, after ("6") insert ("and 7").

The noble Viscount said: These amendments have all already been spoken to. I beg to move Amendments Nos. 183 to 191 en bloc.

On Question, amendments agreed to.

Clause 29, as amended, agreed to.

Viscount Goschen

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at eleven minutes past midnight.