Deregulation and Contracting Out Bill

HL Deb 13 October 1994 vol 557 cc1007-110

3.39 p.m.

Earl Ferrers

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Earl Ferrers.)

On Question, Motion agreed to.

Lord Williams of Elvel moved Amendment No. 24A:

After Clause 15, insert the following new clause:

("Deregulation of the affairs of Lloyd's. 1982 c. xiv

.—(1) Subject to the following provisions of this section, the Lloyd's Act 1982 is repealed.

(2) This section shall come into force on a date appointed in an Order made by the Secretary of State for that purpose, provided that such a date shall not be earlier than two years after Royal Assent.

(3) No Order shall be made under subsection (2) above unless the Secretary of State is satisfied that arrangements are in place—

1. (a) to deregulate the affairs of the Society of Lloyd's so that its members can freely and voluntarily associate for the exchange of information and for the provision of guidance on good market practice, and
2. (b) to ensure that the Society has no power to make bye-laws or to impose other regulations on its members.

(4) Before making an Order under subsection (2) above the Secretary of State shall lay before Parliament a report giving his reasons for being satisfied with regard to the matters referred to in subsection (3) above.

(5) Any Order made under subsection (2) above shall be subject to annulment in pursuance of a Resolution of either House of Parliament.").

The noble Lord said: My Lords, your Lordships will remember that we had a discussion and, indeed, a debate in Committee on the position of Lloyd's. I moved an amendment at the time to remove the exemption of Lloyd's under the Financial Services Act. The amendment I move today adopts a rather different line of approach. I accept the argument that simply removing an exemption under the Financial Services Act would not necessarily deal with the problems in which many noble Lords were interested and which were discussed in Committee. Moreover, in the intervening period between the Committee and the Report stages, your Lordships will have read of the Gooda Walker decision in the courts which seemed —and I use the word "seemed" advisedly—to establish civil liability against those undertakers who had acted with negligence.

Perhaps I may reiterate two points I made in Committee. I accept that Lloyd's is an important institution. I accept that the Lloyd's community has contributed some £15 billion to the United Kingdom's invisible earnings since 1983, averaging some 31 per cent. of the total UK invisibles contribution. I accept also that Lloyd's generates employment directly or indirectly for some 60,000 people and that it is an institution which we should all try to encourage and value.

The second point I should like to reiterate is that in no sense am I suggesting in the amendment that there should be some bail out for the names who have lost money because of their membership of Lloyd's. That is not my purpose and it never will be. As I explained in Committee, I am interested in the future of Lloyd's. I believe that the time has come —and, perhaps, if I get on to my amendment, the time will come—for the 1982 Act to be reviewed and possibly replaced by something better.

I turn now to my amendment. The first subsection seeks to repeal the Lloyd's Act 1982. Your Lordships will be aware that the 1982 Act set out a basis of regulation for those businesses which operate under the umbrella of Lloyd's. Indeed, subsection (6) of the preamble to the Act—I quote from the legislation— says: It is expedient in order to enable the Society to regulate the management of its affairs in accordance with both present-day requirements and practice and the interests of Lloyd's policy-holders that, (a) there should be established a Council of Lloyd's to have control over the management and regulation of the affairs of the Society".

Paragraph (b) goes on: The said Council should have power to make byelaws"—

I emphasise the word "byelaws"— for the purposes of such management and regulation, including byelaws making provision for and regulating the admission, suspension and disciplining of members of the Society, Lloyd's brokers, underwriting agents and others".

By any standards, Parliament has given Lloyd's the power of regulation. There is no doubt—I hope that there is general agreement about this—that the regulation of Lloyd's over the past years since the passage of the 1982 Act has been, in some senses, defective. There have been problems; there have even been scandals. I trust that there is general agreement that, in certain but not all cases, the regulatory mechanism set up by the 1982 Act has not worked well.

Therefore, the question I put to your Lordships by way of the amendment today is: can something better be devised? I have no particular formula that I wish to advance. Indeed, it would be very difficult to advance a formula which would replace the whole of the Lloyd's Act 1982 at the Report stage in the spillover period of the Session. Nevertheless, I believe that there are some measures which your Lordships may wish to consider. Subsection (1) of my amendment simply says that, the Lloyd's Act 1982 is repealed". That sets the tone for what is to follow. Subsection (2) says that that repeal of the 1982 Act cannot take place at the earliest for two years and that, thereafter, it must be subject to various provisions with which I shall deal in a moment. I recognise the fact that if your Lordships agree to repeal the 1982 Act instanter there would be chaos in the market. Speaking about the importance of Lloyd's, for reasons which I hope are self-evident I trust that none of us has any interest in creating chaos in the reinsurance market.

I have therefore put forward the suggestion that there should be at least a two-year moratorium on any move to repeal the Act. If your Lordships agree to the amendment, mature consideration might suggest different ways of regulating Lloyd's, or not regulating Lloyd's. In subsection (3) of the amendment, I argue that the Secretary of State shall only repeal the 1982 Act if he is satisfied that there are certain deregulatory measures which are appropriate. My suggestions is that the Society of Lloyd's should be almost reconstituted as a trade association so that members of that society, can freely and voluntarily associate for the exchange of information and for the provision of guidance on good market practice". That seems to me to be in line with the arrangements of the Association of British Insurers, which is the association which governs such companies—although "governs" is a loose word—and which is the trade association for the insurance companies in the London market. There is no compulsion to join and there is no compulsion not to do so.

Clearly, if that formula is not satisfactory, the Secretary of State need not act under my amendment. If he is not satisfied that the new formula is right, he simply does not produce an order. If he is satisfied, then the Secretary of State, under subsection (4) of the amendment, has to produce reasons why he is satisfied. The crucial point in my amendment is in subsection (3) (b), which states, that the Society has no power to make bye-laws". If you have no powers to make bye-laws, then the whole question of disciplinary procedures comes into the debate.

This may be a way forward; I am not saying it is necessarily the right way forward. All I am saying to your Lordships is that we have had debates in your Lordships' House and we have had Starred Questions in your Lordships' House from many noble Lords on the Benches opposite about the future of Lloyd's. On our side we wish to reassure the House that we wish the businesses which operate under the umbrella which is now known as the Society of Lloyd's to be able to continue to operate in a sensible manner. The Gooda Walker decision has brought a certain interest into the matter because we now know that—subject to the overturning of the decision, and I do not wish to comment on the future of that—underwriters have a civil liability for negligence. It is therefore useful—I hope I can persuade your Lordships to be sensible—that the amendment should be accepted on the basis that it gives two years at least for the Government, and those in authority, and those who are interested, to think up a better way of regulating Lloyd's than the 1982 Act. It is useful to have an indication on the statute book that that investigation is taking place without prejudice to the arrangements that may come in the longer term. I would hope that any arrangement that is come to on the regulation of Lloyd's would be less regulatory and less bureaucratic.

I think I have made the case; I would only say one more thing. We have had a number of debates on the future of Lloyd's in your Lordships' House. We have had a number of Starred Questions, as I have said. Nothing concentrates your Lordships' minds more, if I may say so from experience, than legislation in front of your Lordships. If your Lordships decide to put this amendment into the Bill—I hope the Government will accept it as such—it will be because your Lordships think that there is a case for reviewing in the long term, after a two-year period, the 1982 Act. I believe that is right and I hope very much that your Lordships will accept the amendment. I beg to move.

Lord Henley

My Lords, when I first heard the noble Lord speak to his amendment I thought that he had obviously rather changed his tack from the way he approached Lloyd's during Committee stage. As the noble Lord reminded us, he then proposed an amendment which I think I argued—I am not sure if the noble Lord eventually accepted this—could hardly have been called deregulatory. At first sight the words the noble Lord has set before us obviously do not suffer from such a defect and I certainly would be the first to congratulate the noble Lord on his ingenuity in framing the amendment in such a way that we have the opportunity to debate it. But I am afraid I have to say that I believe his amendment is misguided, to say the least, and I do not think it actually has much to do with deregulation. I think I also ought to say in passing that I believe the amendment is in itself deeply flawed, in that any repeal of the 1988 Act—

Noble Lords

1982 Act!

Lord Henley

My Lords, my apologies, any repeal of the 1982 Act would not in itself, as I understand these things, revive those Acts repealed by the 1982 Act and therefore I think that, before the Secretary of State did something, we would be left with virtually nothing, almost a void, in the powers conferred by this new amendment.

The amendment itself seeks, as the noble Lord told the House, to abolish the current regulatory regime of Lloyd's and would do away with the proper protection that Names now enjoy. The pleas which usually come to Ministers are for a strengthening of the protection for Names, and this runs in totally the opposite direction. Deregulation is not about removing necessary safeguards and we believe that the Lloyd's market is an area which needs regulation.

The regulatory regime of Lloyd's has been carefully studied over the past decade or so. In 1986 a committee of inquiry under Sir Patrick Neill examined whether the regime gave Lloyd's Names the same sort of protection as that envisaged under the Financial Services Act. The committee made a number of recommendations to Lloyd's to achieve this end and every one of those recommendations has been implemented. Since then, further improvements have been made following, for example, the reports of the Morse and Walker panels and the Rowland task force. I am not persuaded that the existing regime should be done away with, or that it should be significantly modified.

I assumed that the delay in the commencement of the effect of the provision provided for in the proposed subsection (2) was intended to allow time for the introduction of some new regulation or legislation, following the noble Lord's previous attempt to make underwriting at Lloyd's subject to the Financial Services Act. Despite the limitations which would be imposed on such provisions by the proposed subsection (3), I do not think that that approach is compatible with the deregulatory objectives of this Bill. Moreover, I believe that the amendment is unsatisfactory in giving only imprecise guidance to the Secretary of State about the way in which he could discharge the responsibilities laid on him. Further, I do not believe that this Bill, and the Report stage of this Bill, is necessarily the time and place to debate these matters. If the noble Lord wishes to press this amendment, I would certainly have to advise Members of the House most strongly to reject it.

Lord Williams of Elvel

My Lords, I am disappointed by the Minister's answer. I really do not think he has addressed my arguments. My arguments were, if I may repeat them to the boredom of your Lordships, that the regulatory mechanism which Parliament had conferred on Lloyd's by the passage of the 1982 Act is a regulatory mechanism, that that had not worked and that it was time to think of something else—not think of something else on an autumn afternoon in your Lordships' House, but to think of something else in the longer term. The noble Lord did not even mention the Gooda Walker judgment, which has important effects on the protection of Names which, the noble Lord, Lord Henley, seemed to feel was a subject on which the Government would wish more regulation.

Furthermore, the Minister did not seem to me to address the genuine worry of the House, expressed in a number of debates and Starred Questions, about the regulatory system of Lloyd's. If he had said, "We should leave Lloyd's a period of time, two, three or four years or whatever it may be, to work out its problems"—it is doing its best to work out those problems and I give all credit to those who are in authority in Lloyd's working out those problems—and if the Minister had said, "That is what we the Government would like to do", then I would have had some sympathy with his position: he did nothing of the sort. I have to say to noble Lords opposite in all seriousness that this is the last chance that you will have to call into question the regulatory regime of Lloyd's as it is under the 1982 Act. It is the last chance because, however many times your Lordships may debate the question, however many Starred Questions or Unstarred Questions may be asked in this House, nothing will change unless your Lordships put something into legislation. We can debate the subject endlessly, but nothing concentrates the Government's mind so much as putting something into a Bill.

The amendment that I move is very simple. It does not commit the Government to do anything at all other than accept that there is in legislation a clause which stipulates that the Government must have another look at the 1982 Act and, subject to certain deregulatory mechanisms, should produce better things for Lloyd's. I would hope for the success of Lloyd's under that new regime.

I see that I am not going to get any joy from the Minister. I therefore have to seek the opinion of the House.

4 p.m.

On Question, Whether the said amendment (No. 24A) shall be agreed to?

Their Lordships divided: Contents, 81; Not-Contents, 132.

Division N0.1
CONTENTS
Alexander of Tunis, E.	Kilbracken, L.
Allen of Abbeydale, L.	Kirkhill, L.
Archer of Sandwell, L.	Longford, E.
Barnett, L.	Lovell-Davis, L.
Birk, B.	Macaulay of Bragar, L.
Boston of Faversham, L.	Mar and Kellie, E.
Bottomley, L.	Marsh, L.
Brimelow, L.	McCarthy, L.
Brooks of Tremorfa, L.	McIntosh of Haringey, L.
Bruce of Donington, L.	Merlyn-Rees, L.
Campbell of Eskan, L.	Milner of Leeds, L.
Carmichael of Kelvingrove, L.	Molloy, L.
Carter, L.	Monkswell, L.
Cledwyn of Penrhos, L.	Morris of Castle Morris, L.
David, B.	Mulley, L.
Dean of Beswick, L.	Murrary of Epping Forest, L.
Dean of Thornton-le-Fylde, B.	Napier and Ettrick, L.
Donoughue, L.	Nelson, E.
Dormand of Easington, L.	Nicol, B.
Eatwell, L.	peston, L.
Elis-Thomas, L.	Pitt of Hampstead, L.
Ennals, L.	Plant of Highfield, L.
	Richard, L.
Ewing of Kirkford, L.	Robson of Kiddington, B.
Falkender, B.	Sainsbury, L.
Farrington of Ribbleton, B.	Scanlon, L.
Gallacher, L.	Serota, B.
Gladwyn, L.	Shaughnessy, L.
Gould of Potternewton, B.	Shepherd, L.
[Teller.]	Southwark, Bp.
Graham of Edmonton, L.	Stallard, L.
[Teller.]	Stoddart of Swindon, L.
Hamwee, B.	Strabolgi, L.
Haskel, L.	Taylor of Blackburn, L.
Hilton of Eggardon, B.	Thomson of Monifieth, L.
Hollick, L.	Tordoff, L.
Hollis of Heigham, B.	Turner of Camden, B.
Houghton of Sowerby, L.	Wallace of Coslany, L.
Howie of Troon, L.	Wedderburn of Charlton, L.
Irvine of Lairg, L.	White, B.
Jeger, B.	Williams of Elvel, L.
Judd, L.	Williams of Mostyn, L.

NOT-CONTENTS
Aberdare, L.	Chesham, L.
Addison, V.	Clanwilliam, E.
Ailsa, M.	Clark of Kempston, L.
Allenby of Megiddo, V.	Colnbrook, L.
Archer of Weston-Super-Mare, L.	Colwyn, L.
Arran, E. [Teller.]	Courtown, E.
Ashbourne, L.	Cox, B.
Astor of Hever, L.	Cranborne, V. [Lord Privy Seal.]
Astor, V.	Cross, V.
Attlee, E.	Davidson, V.
Balfour, E.	Dean of Harptree, L.
Banbury of Southam, L.	Dixon-Smith, L.
Belhaven and Stenton, L.	Downshire, M.
Benson, L.	Eden of Winton, L.
Birdwood, L.	Elles, B.
Blyth, L.	Elliott of Morpeth, L.
Boyd-Carpenter, L.	Elphinstone, L.
Brabazon of Tara, L.	Elton, L.
Bridges, L.	Faithfull, B.
Burnham, L.	Foley, L.
Butterworth, L.	Fraser of Carmyllie, L.
Cadman, L.	Fraser of Kilmorack, L.
Caithness, E.	Gainford, L.
Caldecote, V.	Gardner of Parkes, B.
Campbell of Alloway, L.	Gisborough, L.
Carnegy of Lour, B.	Goschen, V.
Chelmsford, V.	Gridley, L.

Hailsham of Saint Marylebone, L.	O'Cathain, B.
Harding of Petherton, L.	Orkney, E.
Harvington, L.	Orr-Ewing, L.
Hayter, L.	Oxfuird, V.
Henley, L.	Pearson of Rannoch, L.
HolmPatrick, L.	Pender, L.
Hooper, B.	Perth, E.
Howe, E.	Pike, B.
Hylton-Foster, B.	Plummer of St. Marylebone, L.
Inchyra, L.	Pym, L.
Inglewood, L.	Rankeillour, L.
Jellicoe, E.	Reay, L.
Kenyon, L.	Rennell, L.
Kimball, L.	Renton, L.
Kings Norton, L.	Renwick, L.
Kintore, E.	Rodger of Earlsferry, L.
Lane of Horsell, L.	Romney, E.
Lauderdale, E.	Sainsbury of Preston Candover, L.
Lloyd-George of Dwyfor, E.
Long, V.	Saint Oswald, L.
Lucas of Chilworth, L.	Saltoun of Abernethy, Ly.
Lucas, L.	Seccombe, B.
Mackay of Ardbrecknish, L.	Shannon, E.
Mackay of Clashfern, L. [Lord	Shaw of Northstead, L.
Chancellor.]	Simon of Glaisdale, L.
Macleod of Borve, B.	Skelmersdale, L.
Malmesbury, E.	Soulsby of Swaffham Prior, L.
Marshall of Goring, L.	St. Davids, V.
Merrivale, L.	Stodart of Leaston, L.
Mersey, V.	Strange, B.
Milverton, L.	Strathclyde, L. [Teller.]
Monk Bretton, L.	Strathcona and Mount Royal, L.
Montgomery of Alamein, V.	Teviot, L.
Morris, L.	Thomas of Gwydir, L.
Mottistone, L.	Trumpington, B.
Mountevans, L.	Ullswater, V.
Mowbray and Stourton, L.	Vaux of Harrowden, L.
Munster, E.	Waterford, M.
Norrie, L.	Wise, L.
Northesk, E.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.8 p.m.

Lord Carter moved Amendment No. 25: Before Clause 16, insert the following new clause:

("Industrial and Provident Societies

.—(1) Sections 249A to 249E of the Companies Act 1985 (which remove the audit requirements for certain small companies) shall apply to industrial and provident societies.

(2) The time limits for the filing of annual accounts by an industrial and provident society shall be the same as those provided for companies under the Companies Act 1985.

(3) The registration fee and annual filing fee for an industrial and provident society shall be the same as the registration fee and annual filing fee for a limited company under the Companies Act 1985.

(4) In section 2(1) of the Industrial and Provident Societies Act 1965 (which provides for minimum membership) there shall be substituted "four" for "seven".

(5) In this section, "industrial and provident societies" has the same meaning as in the Industrial and Provident Societies Act 1965 and 1967.")

The noble Lord said: My Lords, Amendment No. 25 deals with a number of matters which would relieve the burden of regulation on industrial and provident societies.

In speaking to the amendment I should declare an interest as the Chairman of the United Kingdom Co-operative Council—the first council in the history of the co-operative movement. It has in its membership the Co-operative Wholesale Society, the Co-operative Insurance Society, the Co-operative Bank, the Co-operative Union, the Federation of Agricultural Co-operatives, the Federation of Housing Co-operatives, the Association of British Credit Unions, the National Federation of Credit Unions, the Welsh Co-operative Training and Development Centre, the Scottish Co-operative Development Centre, the Industrial Common Ownership Movement and Industrial Common Ownership Finance. I have listed those deliberately to show the wide range of the co-operative movement. I have the support of the whole movement on this amendment and I have had the help of the movement in drafting it.

I can deal with each of the subsections of the new clause comparatively briefly. Subsection (1) deals with the audit requirements for industrial and provident societies. The amendment intends that the audit requirements for certain small companies should also apply to industrial and provident societies. The audit requirements for small companies have been relaxed. Those with a turnover of less than £90,000 will require no audit while those with a turnover of between £90,003 and £350,000 will require only a compilation report signed by a qualified accountant. The; amendment intends to achieve the effect that requirements for industrial and provident societies follow suit.

I am briefed by the Industrial Common Ownership Movement which points out that many of its members have a turnover of much less than £350,000. Therefore, those which are registered as companies will benefit from the relaxation of the audit requirements for companies, but would not do so if they were registered as industrial and provident societies. In fact, during the past decade there has been a significant move, for example, by worker co-operatives, away from the Industrial and Provident Societies Acts towards the Companies Act. That is not a healthy trend. Were it to be the case that small IPS co-operatives have to pay full audit fees while small company co-operatives do not, it would lead to fewer new co-operatives opting to be industrial and provident societies, which is what they should be. To coin a phrase, we are looking for a level playing field so that co-operatives will then choose their legal structure on a proper basis rather than on the cost of administration.

We believe that it is highly inequitable that the deregulation which has been applied to small companies should not be applied to industrial and provident societies. I argue that co-operatives effectively are being penalised for selecting a more appropriate legal status. Such a penalty tends to drive co-operative enterprises away from the Industrial and Provident Societies Acts— that is, the Acts under which they should be registered— and towards the Companies Act purely on the ground of cost saving.

We believe that it is an unnecessary burden on co-operative societies. I understand that the Treasury may look kindly on the proposal and may have some suggestions to make in that regard. It would be helpful to be told, when the Minister replies, whether the Treasury is considering the matter and the direction in which its thoughts are moving.

Subsection (2) deals with the time limits for the filing of annual accounts by an industrial and provident society. Again, it might seem a minor matter but it can be of considerable inconvenience. The administrative section of the registry for friendly societies continues to ask for accounts to be lodged within three months of those year ends which finish at or before 31st March in any year. The co-operatives respond to that request by stating correctly that since the accounts have not been seen by the members and the annual general meeting is not until a certain date, the accounts cannot be lodged until approved. The registry always accepts that explanation. It seems to be a waste of time and resources. The intention of subsection (2) is to give the same time limit for the filing of accounts for industrial and provident societies as is allowed for companies under the Companies Act. That seems to me to be very straightforward.

Subsection (3) deals with an anomaly, an injustice, and a burden on co-operative societies. I refer to the registration fee and the annual filing fee. The basic charge for registering an industrial and provident society ranges from £200 to £535 while the basic charge for registering a company is only £50. It is true that a co-operative does not have to pay an annual filing fee, which for companies is £32 a year. However, the charge is a large burden on co-operatives, in particular small ones which seek to start up. When a new organisation is being set up, the additional cost is far more of a burden than the few pounds annually when it is fully established.

The registry also has to charge for submissions, change of registered office, and amendments to rules. Those items are free for companies. I put forward the same argument as previously: we wish to see a level playing field which makes the rules the same for both types of corporate bodies so that groups do not choose their structure on the basis of saving money. Many co-operative societies are small and quite poor organisations. The provision would be only fair. For the life of me I cannot see any reason why those organisations have to bear this heavy, basic charge for registration of £200 to £535 while a company can be registered for £50.

Subsection (4) deals with what seems to be an almost archaic provision in the Industrial and Provident Societies Act which states that the minimum number for a co-operative society should be seven. As I read the amendment, I have to admit immediately that there is a grave error in the drafting which I had not noted. The amendment states "four" but should read "three". I do not know how that error got through; I can only apologise. The Government will be glad to know that I shall not press the amendment to a Division. If the Government were minded to accept the provision, the figure should be "three" and not "four". It should be an odd number, as indeed is the figure seven. However, we believe that it is archaic that the minimum number required to form a co-operative is seven. We argue that the figure should be three. It would then be easier for co-operatives to get started. It is important that it is an odd number so that there is a casting vote.

The provisions might not seem important but they are important to co-operative societies. They would help to lift some burdens on those societies which is the purpose of the Bill.

Subsection (5) is consequential and is required for drafting purposes. I beg to move.

4.15 p.m.

Earl Ferrers

My Lords, I am grateful to the noble Lord, Lord Carter, for explaining his worries and reservations to which his amendment refers. We have some sympathy with the aim underlying much of his proposed new clause, although I am bound to say that we have reservations on certain specific points.

We are keen that, as far as possible, the audit requirements of industrial and provident societies should not be significantly more onerous than those which are placed on public limited companies. Indeed, this point was put to us earlier this year by the Voluntary Services Deregulation Task Force and we have agreed that the audit thresholds for industrial and provident societies should be set in line with those which were announced for companies in last year's Budget and which recently came into force.

An exception would need to be made for societies, including credit unions, which accept deposits and which are not subject to banking regulation by virtue of the Banking Act (Exemption) Regulations. In order to protect depositors, those societies ought, we believe, still to be required to submit a professionally audited account each year. In addition, we consider that societies wishing to take advantage of the reduced audit requirements ought first to get the approval of their members.

Whereas the audit thresholds for companies are set in terms of turnover, the threshold in the Friendly and Industrial and Provident Societies Act 1986 refers to the aggregate receipts and payments of a society. The two concepts are not directly comparable, but an appropriate level of receipts and payments could be chosen so that companies and industrial and provident societies of roughly equal size would be subject to the same audit requirements.

As regards the second part of the noble Lord's proposal, I have to say that the registration requirements of an industrial and provident society differ from those of a company. In particular, the chief registrar has to be satisfied that a society is a bona fide co-operative or is conducting business for the benefit of the community, before accepting its registration as an industrial and provident society. This involves the staff of the registry examining in detail the rules of each organisation which wishes to register as an industrial and provident society. It may therefore be more costly than the equivalent registration function for companies. The registration fee must reflect the cost to the appropriate government body of carrying on the work. So I believe in this case that it is right that Companies House and the Registry of Friendly Societies should have the flexibility to charge different fees for the different functions they fulfil.

This increase in the audit threshold is by no means the only measure which the Government have planned to make life easier for industrial and provident societies. No fewer than five items have been included in the illustrative list in the booklet Cutting Red Tape which was published alongside this Bill as being suitable for use of the order-making power in Clause 1. Perhaps the most important is the measure to extend the period for submitting annual accounts, which again will bring industrial and provident societies into line with companies. Other changes will make it easier for societies to register, to amend their rules and to wind up; will allow them to charge a reasonable fee for providing a copy of their rules; and will extend the time limit for submitting charges to the Registry of Friendly Societies, once again bringing them into line with the requirements placed on companies.

The noble Lord, Lord Carter, was worried about the time limits for industrial and provident societies. I can tell him that the question of limits is under discussion at present. But some societies, particularly housing associations, receive public funds and the receipt of annual financial returns is an important means of ensuring that the funds are properly applied, along with other regulatory measures. It may be appropriate to extend the current limits after discussion with the interested parties, bearing in mind the limits which are applied to public companies.

We shall in due course consult on exactly what changes should be made. The deregulation order-making power in Clause 1 of the Bill is designed for exactly those kinds of useful changes and we intend to use it for that purpose. I am sure that easing the burden of regulation on smaller industrial and provident societies will be welcomed by the co-operative movement.

I am grateful to the noble Lord, Lord Carter, for saying that he does not intend to press the amendment. I realise that he proposed it in order to obtain an explanation and find out the Government's thinking. I hope that I have been able to satisfy him on many of his anxieties.

Lord Carter

My Lords, before the noble Earl completes his reply, I do not think that he answered the point on the change in the number of members from seven to what is now "four" in the amendment but should be "three". Perhaps he can comment.

Earl Ferrers

My Lords, perhaps I may consider the point. I apologise to the noble Lord if I did not give the answer he requested. I now realise something which had slipped my mind but which has re-entered it, as happens periodically. I am grateful for that curious ability. I welcome the proposal for a review of the minimum number of members required to set up an industrial and provident society. However, given the diverse nature of the sector, I think an amendment would be inappropriate without further consideration based on widespread formal consultation with representatives of the whole sector. That is what we intend to do.

Lord Peston

My Lords, again, before the noble Earl sits down, can he clarify what he said earlier to my noble friend? He was sympathetic to what my noble friend said, and I found that most attractive. Did I understand him to say that whatever kind of changes one may look for along those lines could certainly be achieved within the order-making power in Part I, Chapter I? In other words, (he noble Earl is confident that it could be done in that way if, in due course and after consultation, the Government were minded to do so.

Earl Ferrers

Yes, my Lords. That is the impression which I intended to convey to the noble Lord. We intend to consult and, having done so, the ability for us to make changes will exist in the order-making powers in Clause 1.

Lord Carter

My Lords, I am extremely grateful to the Minister for his helpful answers. As he said, the amendment was intended to bring the matter into the open and confirm that the deregulation powers could be used in that respect. I still think that it is a little hard, even if there has to be a difference in the registration charge. Whether it needs to increase by the power of ten from £50 to £535 for the so-called extra cost involved I query. However, the answer was extremely welcome. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 26: Before Clause 16, insert the following new clause:

("Amendment of the Credit Unions Act 1979

.—(1) The Credit Unions Act 1979 shall be amended as follows.

(2) In section 1, for paragraph (b) of subsection (2), there shall be substituted—

1. "(2) (b) that admission to membership of the society is restricted to persons all of whom fulfil a specific qualification or qualifications which are stated in the rules and which allude to the common bond which exists between members of the society; and
2. (c) each member applying to join a credit union will be proposed and seconded by existing members to whom the new applicant is known."

(3) In section 1, for subsection (4), there shall be substituted—

"(4) The qualifications for admission to membership which shall be stated in the rules shall be—

1. (a) those submitted to the appropriate registrar by persons intending to register a credit union, and
2. (b) those approved by the appropriate registrar providing he is satisfied that registration would be in the public interest and in the interests of members and would not jeopardise the existence of the common bond between them."

(4) In section 6, in subsection (1), for "twenty one" there shall be substituted "forty", and in subsection (2), for "five thousand" there shall be substituted "ten thousand".

(5) In section 11, in subsection (3), after "in subsection (2) above", there shall be inserted "the rules of a credit union may state that".

(6) In section 11, in subsection (4), for "five years" there shall be substituted "ten years" and for "two years" there shall be substituted "four years".").

The noble Lord said: My Lords, this amendment deals with credit unions and, like the previous amendment, is intended to lift the burdens which the unions now feel lie upon them. As I mentioned earlier, I have the full support of the Association of British Credit Unions, and the National Federation of Credit Unions who briefed me on the matter.

If the amendment were to be accepted or if the Government said that they were minded to do something along the lines of the amendment, it would save the Government a great deal of time and achieve a major deregulation of a significant part of the financial services sector. The Government have made clear that they want the deregulation initiative to include reform of the credit union legislation which was mentioned in the White Paper, Deregulation: Cutting Red Tape.

The White Paper listed areas of legislation suitable for deregulation. Item B3 on page 17 has the heading: Amendment to the Credit Unions Act 1979".

Two proposals are made under that heading: the extension of the maximum limit of shares and loans and additions of new categories of common bond. The first was put into effect in February under the delegated powers of the Registry of Friendly Societies. The new clause would put the other proposal into effect.

If the Government do not accept the amendments then they would have to bring forward a proposal under the order-making powers. I have therefore argued that the Government could save themselves much time and effort merely by agreeing to the new clause.

There are six proposals in the new clause for amendments to the Credit Unions Act 1979. I shall go through them carefully. The amendments have emerged as a result of almost a year of consultation and consideration within the credit union movement. The Association of British Credit Unions was encouraged by the January White Paper to consider other aspects of deregulation at its annual conference in Edinburgh in March. The proposals which came from that conference have been refined for discussion with other credit union bodies, the National Consumer Council and the United Kingdom Cooperative Council, of which I am chairman. They have also been discussed with the Registry of Friendly Societies. I am not saying for a moment that government officials have in any way given approval to the proposals, but so far as I am aware they have not raised any major objections to them.

It may help noble Lords to know that a credit union is a mutual savings organisation by which members of a particular community or employees of a particular employer make regular contributions and are then able to receive loans at low rates of interest. For example, a credit union has just been formed among the employees of British Airways. There are other substantial organisations which are now considering the formation of credit unions among their employees.

The groups are mainly voluntary although there are a number of credit unions which employ full-time staff. They enable people who might not be able to get commercial credit to obtain some form of loan, often for a necessary article of expenditure, for domestic equipment, or sometimes to pay for holidays or cars. They are not only important elements in the building of self-sufficiency and creditworthiness among deprived communities; they are also increasingly to be found among the employees of large enterprises. I mentioned the example of British Airways. Some substantial local authorities are also considering the formation of credit unions for their employees.

Perhaps I may explain the various changes. The common bond is the basis of a credit union. That common bond is established between the individuals on a residential basis, an employee basis or on the basis of some form of association.

The credit union movement feels that the amount of time and expense incurred by government departments is quite excessive in establishing that a common bond actually exists. The rationale behind the new clause which I am proposing would give the supporting body— a board of management of a company or a tenants' association, for example—the opportunity to create its own common bond. It would therefore save considerable time for the regulator. Examples of that are mainly in the residential areas: for example, a housing development in Hull where the tenants want to form a credit union. The members would be much more strongly informed of their common bond than would a civil servant based in London. I understand that there is a degree of sympathy from the regulator on the issue. Effectively, it would streamline the process.

It is also recommended that each member applying to the credit union would be proposed and seconded by existing members. That would strengthen the common bond concept. Obviously, the actual registration would still have to be approved by the regulator but the emphasis which the amendment places on the supporting body is the need to establish the common bond.

On the number of members, the present law states that the minimum number required to create a credit union is 21 and the maximum number is 5,000. It can be amended by the appropriate regulator on the submission of appropriate information.

The credit union movement in general feels that 21 is an extremely low number and does not make the credit union a viable proposition. For prudential reasons, it feels that 40 would be more applicable and would thereby create a larger fund. On the other hand, the maximum number of 5,000 has limiting factors, especially for large companies or local authorities—I have already mentioned British Airways—which wish to start a credit union taking into consideration their employees and partners. It is therefore suggested that the maximum number should be raised from 5,000 to 10,000. The non-qualifying membership should be 10 per cent. of the membership. All that this clause requests is that the credit union has the powers to ensure that loans that are given to non-qualifying members do not exceed the value of their shares.

The amendment also relates to the repayment period of loans. The current situation is that the law restricts the maximum period of repayment to five years in the case of a secured loan and two years in the case of an unsecured loan or such a period as can be specified. It takes into consideration the initiative that has been taken by the Government to extend the maximum limit on shares and loans in relation to liabilities—in other words, larger credit unions are now able to make loans of larger amounts. For that reason it is recommended that the five-year period be extended to 10 years and the two-year period to four years. That will enable the borrowers of larger loans to repay those loans within their own budget. If larger loans were granted and the repayment period were to remain at two years and five years, then there would be no benefit to the borrower.

I hope that the Minister, when he replies, will be as helpful as he was on the last amendment. As I said, this amendment is intended to lift the burden on a number of small but very important organisations within the financial sector. I hope that the Minister will be able to give an encouraging reply. I beg to move.

4.30 p.m.

Earl Ferrers

My Lords, the noble Lord, Lord Carter, has made a very helpful speech. He explained in detail—which I appreciated—the concerns that he has over an area which is quite complex, technical and difficult. As the noble Lord said a number of quite small organisations are involved and these matters are very important to them. I can tell the noble Lord straight away that the Government are very sympathetic towards the aims that he has put forward in his amendments to the Credit Unions Act 1979.

As I said on the previous amendment, it is exactly for these types of proposal that we brought forward the deregulation order-making power in Chapter I of the Bill. The proposals have been included in discussions as part of a series of amendments which are designed to ease the setting up of credit unions while at the same time strengthening the protection that is afforded by them to their members. To that end discussions have taken place between the Registry of Friendly Societies and the representatives of the credit union movement, and these are still continuing.

The proposals in the noble Lord's amendment would go some way towards relaxing the qualification for membership of a credit union, forming the common bond, which is the basis of all credit unions. But further work needs to be carried out on the detail in order to ensure that there is an appropriate regulatory regime in place to ensure the protection of members within the more relaxed framework that would ensue.

The noble Lord said that it would save a lot of time if we accepted his amendment. I can see that that is a very persuasive argument. The Government believe that it is right, and that it would be in the interest of credit unions, that the consultation on these proposals should be completed before we come to any decisions. Once they are completed, we can use the deregulation order-making power under Clause 1 of the Bill once it is enacted in order to make the necessary changes to the Credit Unions Act.

I am sure that the issues that are raised in the amendment will form a significant part of the reforms to the Credit Unions Act that we shall in due course propose. I believe that those will be welcomed by the movement. As I said, I believe it to be right that the consultation should be completed. I hope that what I have been able to say to the noble Lord will give him comfort, not only in regard to our attitude but in regard to what is actually happening.

Lord Carter

My Lords, I am grateful to the Minister for that reply. It is helpful. I hope when the consultation process is being concluded that it will not take too long. The credit union movement is now up and moving. It has had a considerable period of expansion. The quicker the necessary changes can be introduced the better. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 26A: Before Clause 16, insert the following new clause:

("Industrial and provident societies registered in Wales:Removal of restrictions on delivery of documents in Welsh

.—Section 30 of the Welsh Language Act 1993 (which gives companies whose registered office is situated in Wales the power to deliver certain documents in Welsh) shall apply to co-operative societies registered under the Industrial and Provident Societies Act 1965 whose registered office is situated in Wales as if they were companies.").

The noble Lord said: My Lords, this amendment deals with a matter of anomaly and, it seems, injustice to those whose first language is Welsh. It was—it is to be hoped unintentionally—produced by the Welsh Language Act.

Section 30 of the Welsh Language Act 1993 gives a number of concessions to companies that are registered in Wales and enables them to register a number of their documents in connection with the company in Welsh. For some extraordinary reason Section 28 of the same Act, which deals with industrial and provident societies in Wales, does not give that same permission. Indeed, the only change that is allowed to a co-operative society which is registered in Wales is to substitute for the word "limited" the Welsh word —here I shall need some coaching from my noble friends Lord Cledwyn and Lord Prys-Davies as I am sure I shall get it wrong— "cyfyngedig" (or, as noble Lords will know, the abbreviation is "cyf, which is the same as Ltd. for limited). It has been pointed out to me that that is unreasonable. This was not intended to be a joke; it is a serious point. It was brought to my attention by the Wales Co-operative Centre which says that all it can do at the moment is use the Welsh word "cyfyngedig" instead of "limited", but they cannot have the same rights in law as companies have.

At the moment they have to register rules and submit all their statutory documents in English. They can, if they so wish, also submit Welsh translations, certified as such by a solicitor, and those will be filed in a public file with the English versions. It seems to me that this is a discrimination against Welsh co-operative societies. Therefore a very simple amendment is required. The drafting may not be perfect—I did it myself—but if the Government are prepared to accept the sense of the amendment I am sure that they can draft it better. All it requires is a statement that the same powers as are given to companies registered in Wales to lay certain documents in Welsh should apply to industrial and provident societies that are registered in Wales. I beg to move.

Lord Prys-Davies

My Lords, I am grateful to my noble friend Lord Carter for tabling this amendment and for the way in which he presented the case for the amendment. The noble Earl the Minister may recall that we touched upon this matter in this House when the Welsh Language Act 1993 was before the House. The issue was not then fully explored and therefore the difficulties have not been resolved.

There are a large number of provident and industrial societies registered in Wales. Many of them conduct their business in Welsh. They operate in areas which are predominantly Welsh speaking. They find it odd indeed that whenever they have to provide documentation for the registry they have to provide a translation, unlike a limited company.

I hope very much that the Minister can come up with an encouraging response to my noble friend. I wish to make just one additional point; namely, that if the Minister is unable to accept this amendment, it will seem to many people in Wales that the law as it stands is a denial of the principle of the equality of the two languages in this particular sector.

Lord Cledwyn of Penrhos

My Lords, I apologise for my lateness in attending the debate. I am very grateful to my noble friend Lord Carter for introducing a subject which is, as the House knows, of considerable importance in the Principality. I am glad that my noble friend was so capable in mastering the Welsh language. I am told that he now stands a good chance of becoming an assistant Druid in some parts of the Principality.

I know that the co-operative movement in Wales feels deeply on this point. It would be a mistake not to take careful account of its views and opinions at this time. The co-operative establishments are spread throughout Wales from Gwent up to Anglesey. They are a popular centre and used extensively by the people in large and small towns. But what the House in general and the Minister in particular must bear in mind is that the Welsh Language Act, which was debated in detail in this House and in which my noble friend Lord Prys-Davies played a major role, made plain that the Government were anxious to do everything possible to preserve and strengthen the use of the Welsh language. Several impressive speeches were made on this subject by the noble Earl, Lord Ferrers. I am bound to say that I now regard him as one of the champions of the Welsh language. I hope that he will make a constructive and helpful speech at the end of this debate.

We have made a great deal of progress in preserving and helping the language over the past 25 to 30 years. In my view, we have reached a point at which the people of Wales generally are appreciative of the attitude of all political parties towards this problem. With that in mind, I plead with the noble Earl to be as helpful as he can be in regard to this amendment.

Earl Ferrers

My Lords, I wonder whether I may welcome the noble Lord, Lord Carter, to that very select body of English Peers who happen to take part in legislation dealing with Welsh matters. I well recall the Welsh Language Bill. The noble Lord, Lord Carter, was not a participant in those debates. I think that I was the only Englishman to participate in that Bill. I did it with a certain amount of temerity but it was a highly educative experience. The noble Lords, Lord Prys-Davies and Lord Cledwyn, were formidable participants in that Bill. I am glad that it reached the statute book and is now having a considerable degree of success helping in the preservation of the Welsh language.

I am bound to say that the noble Lord, Lord Cledwyn, does me the greatest honour when he says that he regards me as one of the champions of the Welsh language. That is too generous a compliment to one who finds that he cannot say one word in Welsh. However, I take the compliment in the spirit in which it was meant.

For fear of of having the noble Lord, Lord Carter, think that I am like a gramophone needle which has become stuck in a groove, perhaps I may just say again that I am enormously sympathetic to measures which will remove the unnecessary burdens from societies. The proposal in the amendment has the advantage also of being consistent with the thrust of the Government's policies in relation to the use of the Welsh language. We should be entirely willing to consider bringing forward a measure, through the use of the order-making power, once we have had consultation about this matter. That would be together with other measures that we had discussed.

I believe that this is an appropriate matter for the order-making regime. I hope that the noble Lord, Lord Carter, as well as the noble Lords, Lord Prys-Davies and Lord Cledwyn, will be satisfied in so far as we shall try to do what we can to meet the points about which they are concerned.

Lord Carter

My Lords, there is only one aspect of the Minister's reply that I find disappointing. He did not attempt to say, as I did, cyfyngedig for the Welsh form of "limited". I understand his reluctance.

I am extremely grateful to him for confirming that the amendment is within the scope of the Bill and that the Government now look kindly on it. I am extremely grateful and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

Schedule 7 [Schedule to be Inserted in the Betting, Gaming and Lotteries Act 1963 after Schedule 5]:

Earl Ferrers moved Amendment No. 27:

Page 84, line 14, at end insert: (""betting transaction" includes the collection or payment of winnings on a bet and any transaction in which one or more of the parties is acting as a bookmaker;").

The noble Earl said: In moving this amendment, I shall speak at the same time to Amendments Nos. 28, 29, 30, 31, 32 and 33. These amendments are all designed to overcome an unintended anomaly in the coverage of the new rights protecting betting workers in relation to Sunday working. The British Greyhound Racing Board has reminded us that at greyhound racing tracks, unlike horse-racing courses, the betting operation is run not by an independent betting company but by the track owners themselves. This means that, if the provisions of Schedule 7 were left as they are at present, the position at greyhound racing tracks would be that the new protections did not simply cover those employees who are actually dealing with betting transactions, as was the intention and as would be the effect in relation to all other race tracks. They would have covered all employees including those whose work had nothing whatever to do with betting—workers such as those who operate the turnstiles, those who provide catering facilities and so forth. Similar activities of that sort are part and parcel of the leisure industry, where Sunday working is already commonplace and no special protections are justified.

It was never the Government's intention that the provision should have a different effect at greyhound racing tracks than at horse racing courses. The amendments simply remedy that inconsistency. I beg to move.

Lord Peston

My Lords, these amendments relate to the schedule concerning the rights of betting workers, as the noble Earl said. In due course we shall deal with the question of whether there is an anomaly between betting workers and other workers with regard to those days of work. My noble friend Lady Turner will raise such matters in due course under other amendments.

I wish to raise—if we had more time, I would do it at great length—questions about the precise words which appear in the amendments. I have a number of questions which I hope the noble Earl will be able to answer. I do not want to do a rather poor imitation of the noble Lord, Lord Peyton of Yeovil, but my questions have to do with the wording and drafting of the text.

In Amendment No. 32 the word "bookmaker" is defined. Is that an original definition of "bookmaker"? In other words, is this the first time that we have endeavoured to place in statute the definition of the word "bookmaker"; or is there a standard definition of "bookmaker" which is simply being carried over? In particular, am I right to understand that the definition of "bookmaker" would, put in this way, certainly include the Tote? That is to say, from this point of view, since the amendment says "conducting pool betting operations", the Tote would be defined as a bookmaker? Those are two questions for clarification. The first is about the original definition of "bookmaker" and whether we are making here an original contribution to the law. The second question asks whether I am right to infer that "bookmaker" includes Tote.

The second matter which I wish to raise, about which I was not certain because the noble Earl was dealing with very complicated matters, concerns Amendment No. 27. Why does the word "includes" appear? It says: '"betting transaction' includes the collection". Why is "betting transaction" not defined simply as: any transaction in which one or more of the parties is acting as a bookmaker"? What am I to infer from the additional words: includes the collection or payment of winnings on a bet"? It would never occur to me that a betting transaction did not include that.

My real aim is to ask whether I am missing something which explains why that has to be spelt out. It seems to me that a betting transaction consists of everything connected with betting—full stop. Is there something I am missing? I am always suspicious when I see additional words and wonder whether I have missed something very important.

With regard to Amendment No. 29, what is the point of putting: the bookmaker acts as such at the track, being work which consists of or includes dealing with betting transactions"? Is that any different from saying that the bookmaker is a bookmaker? What does that tell us?

I have no desire to ruin the schedule. But, as someone who is extremely interested in betting and in what is a bookmaker and so on, I am totally bewildered by that whole collection of statements. However, my main question is this: has "bookmaker" not been defined at law before and could we simply say that a bookmaker is a bookmaker as understood in statute? I hope that I have not gone too quickly.

Earl Ferrers

My Lords, I am grateful to the noble Lord, Lord Peston—or perhaps not so grateful—for asking such detailed questions because we have come down into the realms of parliamentary draftsmanship. I know that he is much more experienced than I because he said that he is interested in bookmakers and betting; I have only a marginal interest because I usually find that I lose any money that I place. One of the matters with which the noble Lord was concerned related to the definition of "bookmaker" and whether or not it was an original definition. A definition exists in the Betting, Gaming and Lotteries Act which excludes the Tote. The definition in Amendment No. 27 includes the Tote. The amendment is simply for technical drafting reasons of neatness. It was always the intention to cover employees of the Tote as well as employees of bookmakers. The noble Lord can therefore be content in that regard.

The noble Lord, Lord Peston, said that he was concerned about the words, includes the collection or payment of winnings on a bet". He wondered whether he had missed something or whether there was something peculiar in the wording. He has not missed anything. It is merely a question of explaining what the transaction is. Again, in relation to Amendment No. 29, he was concerned with the words, the bookmaker acts as such at the track, being work which consists of or includes dealing with betting transactions". There is nothing significant or sinister in that wording. It merely explains what happens.

Lord Peston

My Lords, I break the rules slightly by thanking the noble Earl. I ask him to accept that when it comes to betting transactions there is only one side on which to be, and that is the side of the bookmaker, as he quite rightly said.

On Question, Amendment agreed to.

Earl Ferrers moved Amendments Nos. 28 to 33:

Page 84, line 16, leave out ("or totalisator operator").

page 84, line 17, leave out from ("which") to end of line 19 and insert ("the book-maker acts as such at the track, being work which consists of or includes dealing with betting transactions,").

Page 84, line 22, leave out ("betting transaction are effected at").

Page 84, line 22, at end insert ("is open for use for the effecting of betting transactions;").

Page 84, line 25, at end insert: (""bookmaker" means any person who—

1. (a) whether on his own account or as servant or agent to any other person, carries on, whether occasionally or regularly, the business of receiving or negotiating bets or conducting pool betting operations; or
2. (b) by way of business in any manner holds himself out, or permits himself to be held out, as a person who receives or negotiates bets or conducts such operations;").

Page 84, leave out lines 37 to 39.

The noble Earl said: My Lords, for the convenience of the House I shall move Amendments Nos. 28 to 33 en bloc. I beg to move.

On Question, amendments agreed to.

Clause 18 [Sporting events and activities on Sundays]:

Baroness Turner moved Amendment No. 33A:

Page 20, line 19, at end insert: ("(2) Section 4 and Schedule 4 of the Sunday Trading Act 1994 shall apply to persons employed for the purpose of enabling any sporting event or activity to take place on a Sunday, as if they were shop workers within the meaning of that Act.").

The noble Baroness said: My Lords, this is a simple amendment which attempts to correct an anomaly which exists and which to some extent was confirmed to exist by what the Minister said in moving the previous amendments. I refer to the anomaly if individuals who work on greyhound tracks or any other sort of racetracks, are defined as betting workers —betting workers are fairly precisely defined both in the schedule and in the amendments just carried—or shop workers, they are covered by the protections afforded by the Sunday Trading Act if they are required to work on Sundays. Obviously those who work at race tracks are required to work on Sundays.

However, the same protections do not apply to other workers engaged at greyhound tracks and other sporting events even though they are now expected to work on Sundays as well. I refer to such people as administrative workers, the clerks who work behind the scenes, catering workers, cloakroom attendants and so forth. Without those people race functions and so forth could not take place. They can now be required to work on Sundays but have none of the protection afforded by the Sunday Trading Act. A number of us were concerned that those protections were not sufficient, but at least they give some protection to people who want a choice and do not want to be made to work on a Sunday.

In my view it is likely that the Sunday Trading Act would not have been passed had the Government not been prepared to make some concessions in relation to workers who do not want to work on Sundays. The present Bill gives us an opportunity to ensure that individuals who have to work on Sundays at racecourses and who are not necessarily connected directly with betting—though it will be difficult to decide whether or not a clerical worker is involved with the betting transaction—are afforded some protection. It is much more sensible to have an overall amendment of the kind suggested in Amendment No. 33A, which enables any person who has to take part in working on a Sunday for the sake of running a racetrack or other sporting event, to have the same protection as provided by the Sunday Trading Act for shop workers, and indeed is now being provided by the schedule and the amendments just carried for people clearly designated as betting workers. I beg to move.

Lord Boyd-Carpenter

My Lords, I am not too happy about Amendment No. 33A. Some of your Lordships may remember that we discussed at great length and in great detail in the Sunday trading legislation debates the difficulties that may apply to those who worked in shops on Sundays. Amendment No. 33A proposes to extend those provisions into a wide and imprecisely defined area for the purpose of enabling any sporting event or activity to take place on a Sunday. That is a wide and imprecise reference and I am bound to say that I shall not be happy to accept the amendment unless my noble friend the Minister is able to clear up those doubts.

Lord Rochester

My Lords, I feel that there is a gap in the Bill in that, as the noble Baroness, Lady Turner, said, people who are not strictly betting workers under the definition, but are nevertheless obliged to work on a Sunday as clerks or in some other administrative capacity to enable a sporting event to take place on a Sunday, may be denied the employment rights provided by the Bill.

I hope that the noble Earl, Lord Ferrers, will respond to the amendment sympathetically on behalf of the Government and at least accept its underlying principle. Even if he agrees with his noble friend Lord Boyd-Carpenter that the amendment as at present drawn is too wide, perhaps he will agree to bring back at Third Reading a government amendment to cover what the noble Baroness, Lady Turner, has in mind.

Lord Kimball

My Lords, I am sure we all appreciate the reasons why the noble Baroness, Lady Turner, tabled Amendment No. 33A. But I want to add to what my noble friend Lord Boyd-Carpenter said, particularly on behalf of horse racing and greyhound racing. In fact the amendment would impose a wholly inappropriate rigid structure on those sports.

The situation is not like that of the shop workers. They are on fixed term contracts for a fixed number of hours. The kennelmaids and stable lads will probably not work every Sunday and will probably only be concerned with racing on 12 Sundays in a year. I do not believe that many greyhound stadiums will operate on more than half the number of Sundays in a year. It is therefore inappropriate for a girl starting off with greyhounds from Kent, motoring into London, attending meetings and taking the dogs back, to have to work a fixed number of hours. The same applies to all other sports.

While appreciating, therefore, the spirit in which the noble Baroness tabled the amendment, I hope that she realises that such a rigid structure for casual workers and for people working with animals in particular is not appropriate.

5 p.m.

Lord McCarthy

My Lords, I hope that the Minister will not take that argument on board. The Government were very reasonable in what they said during the passage of the Sunday Trading Act. They were willing to change their attitude towards the people who did not work on Sunday and had taken jobs not expecting to work on Sunday. The definition which eventually went into the Bill was a reasonable and wide one. Nevertheless, it had certain anomalies, and this is one of them.

As was said by the noble Baroness, Lady Turner, the most logical step would be to extend the definition, if it is going to cover betting workers, to all betting workers so involved. In answer to the previous speaker, we are not saying that there should be a rigid structure. We are not saying that kennel maids should be made to work from six to nine every other Wednesday. We are saying that they should not have to work on Sunday if they do not want to and that they cannot be dismissed if they say that they will not work on Sunday. That is all that we are saying. If that is fair for the workers covered by the Bill, we think it is fair for the workers covered by the amendment.

Earl Ferrers

My Lords, when I saw the name of the noble Baroness, Lady Turner of Camden, on the Marshalled List I thought that we must be having some kind of return to the Sunday Trading Bill discussions. Sure enough, I was not far out! She is concerned, as she was then, about the rights of workers. I understand that. But my noble friend Lord Boyd-Carpenter is entirely right in saying that to accept the amendment would go far wider than betting. It would refer to all other sporting events. My noble friend Lord Kimball is right that it would be wrong to impose such a rigid structure and that it would be inappropriate.

Let us consider for a moment why that is so. Schedule 7 provides rights for betting workers who do not wish to work on Sunday. Until Clause 17 appeared betting was unlawful on Sunday and therefore betting workers have not been required to work at all on Sunday. When Clause 17 comes into force that will change completely and people will be able to bet on Sunday. Therefore it is entirely right that the betting workforce should be protected from having to work on Sunday. Sporting events, on the other hand, have taken place on Sundays for years. The provisions of Clause 18, which enables charges to be made for admission to sporting events, will have little effect on the amount of sporting events which will take place. Indeed, the law preventing charging has been widely ignored and employees throughout the leisure industry have widely expected to work on Sundays. There has been no question of a sea change in their working conditions as a result of Clause 18. In those circumstances I think it would be wholly wrong to burden employers with new restrictions. That is entirely different from giving protection to betting workers who until this law is passed have not had to work on Sundays and who will thereafter be able to work on Sundays and should therefore thereafter also be able to have the protection from working on Sundays.

Baroness Turner of Camden

My Lords, I note what the Minister says and also the comments of the noble Lord, Lord Boyd-Carpenter. I am inclined to agree, having listened to what has been said, that the wording is rather widely drafted. Nevertheless my concerns were largely for those people at greyhound racing tracks or race tracks who are working side by side with people defined as betting workers but who are not themselves betting workers. They may be carrying out other kinds of functions at the race track without which the race track cannot function. They may be cloakroom attendants, catering workers or clerical workers working behind the scenes. As I said earlier, it may be difficult to define what part of a clerical worker's work in those circumstances is directly associated with betting and what part is not. Therefore it seemed to be necessary to have an amendment which at least ironed out that anomaly.

I accept what has been said about the drafting of the amendment but I nevertheless suggest to the Government that they should look at the kind of case that I have been making, specifically in regard to race tracks and betting. I heard from a Member in another place that he had already been approached by constituents who are employed on a greyhound racing track in his constituency who are worried that some of them will be covered by the legislation, which will give them the opportunity to decline to work on a Sunday, while others working on the same race track will not be so covered. However, in view of what has been said I shall not press the amendment today but I should like to look again at the situation at race tracks.

Earl Ferrers

My Lords, perhaps with the leave of the House I may put one point to the noble Baroness. She is concerned that clerical workers, cloakroom attendants and so forth will not be covered or that people who mow the grass or sweep up the leaves will not be covered. If we were to go down that route we would be protecting those people whereas those mowing the lawn or sweeping the leaves at a cricket match or cloakroom attendants at a cricket match would not be covered. That is why we think it would be wrong to separate those people and why we think the right course is to refer only to those people who are the betting workforce.

Baroness Turner of Camden

My Lords, with the leave of the House, I thank the Minister for that explanation. I recognise that there are anomalies, whichever way one looks at it. Nevertheless, if people are working at the same place and some have protection while others do not, the anomaly is much more stark. I should like to consider what has been said to see whether it is possible to do anything further at Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 [Repeal of Part I of the Shops Act 1950]:

Baroness Gardner of Parkes moved Amendment No. 34:

Page 20, line 31, leave out from ("shall") to end of line 32 and insert ("be amended as follows.

(2) For sections 1 to 3 there shall be substituted—

"Hours of closing. 1. Where, in relation to England and Wales, the council of any district or London borough and, in relation to Scotland, an island or district council, is satisfied that there is the likelihood of unreasonable disturbance to residents in the neighbourhood, they may by resolution determine that all shops or any class of shops in the whole or any part of its area shall be closed for the serving of customers from such hour and for such period as it may consider appropriate, provided that no determination shall require any shop to close earlier than eleven o'clock in the evening or to remain closed beyond five o'clock in the morning.

(3) Sections 4 to 13 and 15 to 16 of that Act shall cease to have effect.

(4) For section 14 there shall be substituted.

"Penalty. 14. Where any shop is open for the serving of customers in breach of a resolution made by a relevant authority under section 1, the occupier of the said shop shall be guilty of an offence and liable to a fine not exceeding level 2 on the standard scale."").

The noble Baroness said: My Lords, in moving this amendment it is important to make it clear that I am not in any way attempting to challenge the Shops Act or to disturb the Sunday trading issue because that is where at the Committee stage of the Bill my noble friend Lord Bridgeman, who brought forward a very similar amendment and who has asked me to bring forward this amendment today, fell foul of the fact that people are still thinking of the confusion with the Shops Act. The issue here is something quite different. It is about whether or not there is a need to protect residents in areas where there is a heavy shopping or business presence. It seems to me that it would be very premature to take away from local authorities all powers to take care of residents in the late hours of the night or the small hours of the morning.

I have carefully read the Committee stage debates and I know that statements were made that local authorities can deal with nuisance if the noise is above a certain level. I admit that that is true. But that is not one of the biggest problems. One of the biggest problems is people walking up the street and then banging car doors or deliveries in the middle of the night. Indeed, in London there have been lorry bans in many areas at night because so many people living above shops could not get any sleep if lorries were delivering at night.

The wording of the amendment before the House answers one of the points raised in Committee by the noble Lord, Lord Monson. He thought that nine o'clock was too early—and I agree—and he suggested 11 p.m. Therefore, 11 p.m. has been included in the amendment. However, what worries me still about the amendment which is not of my own drafting—not that my drafting ability is anything—is that it refers to a resolution by the council. That could be open to abuse. An officious council might be determined to stop all activity completely and therefore one might end up with too strong a power remaining. I feel that there must be some intermediate point. There must be some way by which a resolution of the council could by some form of regulation be approved by someone else—by the Government or by someone appointed for the purpose. That would take away the risk of a council deciding that shops must not open in a particular area simply because the council did not happen to like it.

Over the years, I have seen many changes in London in terms of politics and attitudes and I have seen many strange ideas come into being. Of course, some councils may make objective judgments. At one time, the criterion for deciding bus lanes was objective, but it became subjective and some councils wanted bus lanes everywhere irrespective of whether they would be used. I have seen many different facets of this situation.

When I served on the Greater London Council, my constituency contained an establishment called The Pink Elephant. Whenever it applied for a late night music and dancing licence, it kept getting its licence no matter what the residents said. Busloads of people used to come in to complain, but the application was heard centrally at County Hall although the people who knew the real situation were the local people in Enfield. What was happening came to light eventually when Southgate station had to be closed because so many people were armed with knives made out of sawn-off saw blades. Lots of shop windows were smashed and at long last it was realised that there was a real problem. It was the liquor licensing magistrates who eventually managed to get the place shut down when it appeared that there was not enough profit in selling liquor until all hours. Those magistrates had much more effect than the GLC and its consideration of the late-night music and dancing licence.

I mention that story because it highlights what I fear is the risk if the Government completely remove all forms of control and allow shops to operate in residential areas such as Queensway, Camden and King's Cross. Those areas already have problems at night although shops are not permitted to open late. If all controls are thrown out, I believe that we would come to regret that very much because, after the event, it will be impossible to rectify things for those living in the area.

Although it is not unanimous in its view, the Association of Chief Police Officers is strongly in favour of some controls remaining, particularly on public safety grounds. The noble Lord, Lord Stallard, has tabled an amendment on that matter. I believe that there should be some objective way of judging such matters and that they should not be left to subjective decision-making. It is the principle that is important. I should like the Government to consider whether there is some way of retaining an element of control for local people through their elected representatives. Perhaps there could then be a backstop and a second source to confirm that decision-making. That would ensure that decisions were not taken on strange grounds. I beg to move.

Baroness Turner of Camden

My Lords, I rise to support Amendment No. 34. In Committee, a number of us expressed concern about the disturbance which the total deregulation of shopping hours would bring to neighbourhoods that one could normally expect to be fairly quiet at night. It is very much a question of balance. It is argued that it is to the advantage of shoppers, particularly those who work during the day, to be able to have access to shops at all hours. On the other hand, consumers are also residents.

I live in an area where there is a mixture of shops and residential property. After 6 p.m. or 7 p.m. the neighbourhood gradually gets quieter. However, it boasts—if that is the right word—one of the busiest shopping areas in London and many blocks of flats are built above the shops. The roads that adjoin the shopping areas are normally quiet at night, but if shopping hours are totally deregulated one can imagine that that peace will soon be disrupted. Many urban areas in this country contain a mixture of residential and shopping accommodation. What may suit a person as a consumer may not be at all acceptable if it begins to affect that person adversely as a resident.

Noise is already a major problem in many of our cities. There is noise from radios and amplifiers and from those who apparently cannot exist without the constant thump of pop music at all hours. The quality of life of many people, particularly older people who relish a little quiet, is being diminished.

The amendment gives powers to local councils (which should know their areas—in any event, councillors are accountable to the local electorate) as well as the right to rule that shops should not open at night. It also provides penalties for shops that breach such a local council requirement. It has been pointed out to me that decisions made by local councils can be subjected to judicial review if it is felt that they are in some way or other unfair.

I notice that the amendment has been grouped with Amendment No. 34A, which is to be moved by my noble friend Lord Stallard. I am in complete agreement with my noble friend on this because I happen to live in the area of the council that is responsible for King's Cross and I can well understand why the local council is concerned that total deregulation should not add to the existing problems of the area. Therefore, I very much hope that at least the views behind these amendments, if not the amendments themselves, will commend themselves to the Government.

5.15 p.m.

Lord Boyd-Carpenter

My Lords, we had a great deal of discussion on this matter on the Sunday Trading Bill, when your Lordships expressed differing views, but ultimately decisions were reached. For my part, I am not very happy about the idea of now, under this Bill, reopening that discussion. If we reopen it, we may be letting ourselves in for a fairly prolonged debate. That was certainly our experience with the Sunday Trading Bill. We shall also be getting into the position of suggesting that that Bill was too unrestricted. Therefore, for my part, I think that we should leave this matter alone at this point. I do not think that it is wise to reopen in this Bill, which, after all, is intended to be a deregulation measure, the issues of Sunday trading, late-hours shopping and larger shops.

Lord Monson

My Lords, with respect to the noble Lord, Lord Boyd-Carpenter, I am afraid that I do not think that we can seriously regard these amendments as reopening our debates on the Sunday Trading Bill. This is a different matter.

As the noble Lord knows, I am in favour of deregulation, but exceptions have to be made from time to time. In a free society, there is only one justification, in my view, for preventing shops, offices, factories, putts and all other forms of commercial enterprise from opening for as long as they wish—24 hours a day, seven days a week, if they so choose—but that one sole justification is a very important and conclusive one. It is to safeguard the physical and mental wellbeing of people who happen to live near the establishments in question or along the routes leading to and from them. In other words, where the freedom of one group of individuals to trade conflicts with the freedom of another group of individuals to get a decent night's sleep, it must be the freedom of the second group which prevails. Therefore, I support the amendment in principle.

I quibble only with the detail. How many people want to go shopping at 5 a.m? How many shopkeepers want to go to the trouble of opening their shops at 5 a.m? If a six-hour closing period is thought to be correct—I think that it may be—why should not it run from midnight to 6 a.m? Apart from that, however, essentially I support the amendment.

I suggest that the Government take the amendment seriously because, for every potential Conservative voter who is ecstatic and overjoyed at the prospect of being able to shop at 5 a.m., there must be at least 100 other potential Conservative voters who are livid and outraged at the thought of their sleep being disturbed by the occasional individual who exercises that right. The implications are obvious.

Lord Gisborough

My Lords, surely the great majority of shops are not going to open in the middle of the night in the future any more than they do now. Some shops, however, rely on late-night opening for their profits, given that they are competing with the multiples during the day. I believe that those who want to use such shops live in areas where the need for such shops has been proved. There are people such as shift workers, hospital staff, policemen, cabbies, postal workers and others who for some reason create a demand in the early morning. If there is that demand, the opening should be allowed.

Lord McCarthy

My Lords, I hope that the Government will address the problem and not the words. It may be that the two amendments are not perfect and that something should be done on Third Reading. The problem is the issue. It is not a question of closing all shops that open late at night or all night. We need: something that can be done readily about the small minority of shops—it may not be the shopkeepers' fault—which become the centre of noise and rowdyism and, in the end, of crime.

We have a shop at Oxford called 7-Eleven. It should be called Eleven-7 because from 11 to 7 it is the centre of all kinds of things in the city which should be put down. It is difficult to do anything about that shop and the minority of other similar shops. We want the Government to look at the problem. There must be some way of exercising some influence when shops become the centre of such difficulties. That is the point that I should like the Minister to address.

Lord Lucas of Chilworth

My Lords, some noble Lords have argued that the amendment safeguards certain situations. They have talked about noise and so forth. What they have really been talking about is the inadequacy of the existing law, such as, for example, the Environmental Protection Act. If that law is at fault then that is what we should address, not the regressive state which would occur were the amendment accepted by your Lordships. As my noble friend Lord Boyd-Carpenter said, the point hinges on the issues of Sunday trading which we discussed for so many years and for such a long time this year.

The provision will hit the smaller shopkeepers, the very people whom we want to encourage to stay in business and to be employers. I know the 7-Eleven group mentioned by the noble Lord, Lord McCarthy. He said that the shop has become a focal point. If it is a focal point, the police and the local authority know where to go, because trouble congregates around there. It should be dealt with by the existing legislation. To accept the amendment would be a bad thing. It would restrict the trading of a number of people who have traded successfully without great problems in the past. Such shops meet customers' needs. I hope that the Government will not be sympathetic to the amendment.

Lord Stallard

My Lords, my Amendment No. 34A is linked with this amendment. It may be for the convenience of the House if I speak in the general debate but reserve my position until the end of the debate. I have listened to the short debate on Amendment No. 34. I had no difficulty understanding what the noble Baroness, Lady Gardner, was saying. My noble friend Lady Turner in seconding the amendment supported her. The noble Baroness is seeking to tackle the unreasonable circumstances that may affect residents as a result of some shops trading throughout the night.

The noble Baroness gave King's Cross as an example. Everyone mentions King's Cross when they are looking for an example of such a nuisance. Noble Lords might have gone further up in the same borough and mentioned the Roundhouse which is fast becoming much of a muchness in the nuisance stakes. There will be examples of the problem that the noble Baroness mentioned in other areas. I support the approach she proposes as a possible solution.

My amendment is slightly, but importantly, different in as much as it is intended to tackle a more specific problem, where it is necessary to have some control over late night shop hours in the interests of public order and safety and the prevention of crime. It is different from the broad brush approach of the previous amendment.

I should like to describe as an example the situation that has existed in the King's Cross area. This example will give your Lordships a better picture of what we are trying to say in the amendments. My noble friend Lady Turner mentioned it also when the subject was debated in Committee. My amendment is not intended to outlaw 24-hour shops per se. That is an important point. It contains safeguards which will allay many of the fears expressed in the earlier debates and again this evening. The King's Cross area has long been a centre for prostitution, no doubt because of its location as a major transport interchange.

From the summer of 1992 the situation in the King's Cross area became horrific. There was open dealing of crack, cocaine and heroin, accompanied by frequent violent incidents as drug dealers fought for control of the streets. There was an upsurge in prostitution, with many of the women being themselves addicts and conducting their business in any convenient corner. Innocent passers by, local residents, and even their children, were being assaulted and robbed by drug users to support their habit. The estates were littered with condoms, needles and other drug users' detritus.

Residents from Camden and Islington were driven to despair, and rightly demanded action from both the councils and the police. An effective partnership was formed with Camden and Islington councils—the two local authorities involved—the Metropolitan Police and the British Transport Police. Action was taken on a number of fronts. I shall list some of them. There was a joint police-Camden council operation against a hotel suspected of harbouring drug activities. Armed police raided the premises and the council then secured the building and took out a control order on it. The Metropolitan Police mounted what was called "Operation Welwyn" in which the major dealers were filmed over several weeks to provide evidence for prosecution. In a 48-hour swoop over 50 of the best known dealers were picked up. Floodlighting was introduced to illuminate the frontage and doorway of former banking premises. Trees were pruned where they obstructed observation. Street lighting was improved. Bus shelters were removed where they served as gathering points and offered concealment from observation.

I mention those points to demonstrate the successful partnership which was forged between the local authorities and the police to deal with these problems. The police and the local authorities brought their different powers and abilities to bear on the problem. It was estimated at that time that 150 dealers were active in the area, each capable of earning up to £2,000 a day. Open dealing was taking place not just by day but throughout the night.

Should anyone here think that I am exaggerating the severity of the situation, I am sure that arrangements could be made to show a convincing video tape which was taken by the police and used as evidence. It is available to be shown to people who are interested. It is an interesting video and shows a whole number of problems which could apply also to other areas. That could be arranged if anyone thinks I am exaggerating.

A key element of "Operation Welwyn" mounted by the police in relation to night-time activities was the action taken by Camden and Islington councils to restrict the licences of five night cafes to 1 a.m. closing. I do not accuse those cafes of complicity in illegal activities. I am not saying that, but they provided legitimacy for the presence of criminals in the area throughout the night. They attract these people, although they are not involved in illegal activity themselves. The initiative taken has been a success, and whereas the trade in drugs and sex has not been eliminated entirely, it is estimated that the number of drug dealers has been reduced by two-thirds. Robust policing does, and needs to, continue.

In March this year Metropolitan Police Commissioner, Sir Paul Condon, stated: Up until April last year the substantial number of 24-hour fast food outlets gave the drug dealers and prostitutes a legitimate excuse for being in the area at night. After receiving co-ordinated representations from both the police and local residents, Camden Council restricted the licences for those premises so they could remain open only until 1 a.m. This was enormously helpful to us in gaining control of the night time drug dealing and prostitution". Operations such as Welwyn are likely to be replicated in other parts of London and elsewhere.

That brings us to the nub of the problem with Clause 20. The joint statement from the two local authorities and the head of Operation Welwyn expresses the fear that all-night shops in situations such as King's Cross may provide an alternative cover for drug dealers and prostitutes to congregate at night, and the authorities will have no effective power to regain control of the streets. In effect, it would almost wipe out all that has been gained as a result of the co-operation between the police and the local authorities to date on these serious problems. It may well encourage similar problems to show themselves in other areas.

As has been pointed out, shops will be the only public venues which will not be subject to some form of regulation where that is necessary. Already in King's Cross there are shops whose intention is to trade into the early hours and in some cases all night, including one which has opened only in recent weeks. I am given to understand that on the suggestion of the local police some have agreed voluntarily to close at 1 a.m. or 2 a.m. in recognition of the difficult local situation. We respect that, but there is at least one that is not willing to reach such an agreement. There may well be others if they are encouraged.

In this situation, it cannot be right for the interests of a small number of traders to be placed above those of the safety and well-being of the whole community. The King's Cross situation is extreme but, unfortunately, it will not be unique in stressed areas of our cities. The local authorities are working with the community, private business, the police, the health service and other bodies to regenerate the area around King's Cross. Local authorities have been granted estate action funds in King's Cross for works in which community safety is a key component.

It is to be hoped that in time the character of such areas will change. Although not provided in the amendment, I believe that it would be straightforward to include a provision which limited the duration of any order to, say, 12 months and thus provide for periodic review, when any renewal of the order must be justified once again. The amendment is intended to deal with particular circumstances, not to impose global rules. An unreasonable order is open to challenge in the courts.

The amendment provides only a reserve power to make an order within specific times. Many authorities will not wish to make, nor could they justify making, orders covering the whole of their areas or orders covering the whole period from 11 p.m. to 5 a.m. The amendment improves upon the Shops Act: by providing for local decision making to deal with local situations rather than the blanket restrictions of the current Act. Local authorities are best placed to know their own local conditions and to apply their powers sensitively and responsibly. I give as an example the licensing of night cafes. While Camden council requires caf6s in King's Cross to close at 1 a.m. it has granted 47 other licences, of which 13 run through to 5 a.m. and 15 others to 2 a.m. or later. So it is being responsible and reasonable in respect of licences. That is not the behaviour of an authority which uses its powers arbitrarily. Indeed, it seems to me unlikely that any local authority whose resources are limited will wish to impose a further burden of enforcement on itself unless it is clearly in the interests of the community.

Anxiety has also been expressed that a local authority's decision would be unfettered. The amendment sets out grounds: that it is in the interests of public order and safety and the prevention of crime", under which a local authority will be able to make an order. A local authority is open to representations by interested parties and it must make its resolution in public session. That is not unfettering. As your Lordships know, a local authority must be able to justify in law that its powers are exercised appropriately. Therefore, there are sufficient safeguards in that direction as regards local authorities.

No doubt we would all prefer that the power conferred by this amendment was not necessary. Unfortunately, I believe that some communities require this protection and I hope that by citing the example of King's Cross I have given at least some food for thought. People may well be in similar circumstances in urban city areas. I hope that your Lordships will agree that the measure proposed is not too high a burden on business when set against the serious problem of the crime in our society which it is designed to tackle. I shall reserve my position to speak on the amendment when it is called.

5.30 p.m.

Baroness Hamwee

My Lords, I too support these two amendments. The noble Baroness, Lady Gardner, appears to have some reservations about her amendment, which are unnecessary. A perfectly appropriate degree of objectivity is contained within her amendment and within that tabled by the noble Lord, Lord Stallard, in the references to the likelihood of unreasonable disturbance and the interest of public order and safety. Indeed, the noble Lord has explained the approach that must be taken in reaching the decision and I agree that the decision would be open to challenge.

I will not take time by repeating all that has been said but merely say that I agree with the noble Lord's comments in support of his amendment and Amendment No. 34. Perhaps I may comment on one or two points that have been made. Reference was made to the closing hour of 11 p.m. My experience at a local level has been that the noise to which the amendments are aimed is the kind that one would hear late in the evening. People trying to get to sleep want to be able to settle down at around 11 o'clock. I should find it extremely convenient to be able to go shopping at midnight or later but perhaps I am not entirely a normal person in that regard. It is right that people who live over shops and near shops should be able to keep such hours.

The noble Lord, Lord Gisborough, referred to the requirement in some places for shops to serve a particular local need. That is precisely the kind of balance which a local authority will be able to take into account when assessing whether to place a restriction on its local area. It was also said that the amendment will hit the smaller shopkeeper. It would be sad if we believed that shopkeepers could keep going only if they could trade between 11 p.m. and 5 a.m. That is no way for our economy to go forward. I support the amendments.

Lord Henley

My Lords, I very much hope that we can close this shop before 11 o'clock tonight. I should certainly like to get to bed. I have listened to the anxieties of all who have spoken that if Part I of the Shops Act is repealed without replacement local authorities will have no power to close shops in the late evening. I understand those anxieties. Obviously, some people fear that the result will be the widespread 24-hour opening of shops with the possibility of increased rowdiness, disturbance and noise to local residents. The noble Lord, Lord Stallard, expressed the fear that 24-hour shops may provide a cover for criminal activity. I shall deal with his amendment in a moment.

That hypothesis rests largely on the belief that many shops within residential areas and on high streets will wish to open for longer in the evenings than they do at present and are prevented from doing so only by the rigours of the 1950 Act. I find it difficult to accept that view. Those shops which wish to open now are not being deterred by the 1950 Act for which the penalty is only a maximum of £500. Shops are deterred—and the noble Lord, Lord Monson, referred to this—by a lack of demand and there is no evidence to suggest that patterns of demand will change in any substantial way if Clause 20 becomes law.

The vast majority of shops shut well before 8 p.m. and do not open again until 9 a.m. Local authorities, which have had the power to enforce the closing hours of 8 p.m. on weekdays and 9 p.m. on one late day under the 1950 Act, have rarely chosen to do so. The major retailers, including Sainsbury and Tesco, have indicated that they do not intend to alter their opening patterns.

Lord McCarthy

My Lords, does the noble Lord not agree that, during the passage of the Sunday Trading Bill, we were told that the problem was that the provisions of the 1950 Act were not enforceable and that the sanctions were not good enough? We were told that, if we abolished the restrictions on Sunday trading, we should have enforceable sanctions. That is what we want now—enforceable sanctions on the shops which break the law.

Lord Henley

My Lords, that was the very point that I was making. I said that a fine of a mere £500 had very little effect. The noble Lord may find it useful to bear with me and listen to my argument.

The major retailers, including Sainsbury and Tesco, have indicated that they do not intend to alter their opening patterns. It is difficult to imagine that large numbers of people who do not do so currently, even the noble Baroness, Lady Hamwee, will suddenly choose to do their shopping late in the evening.

Rowdiness and the disturbance of local residents does undoubtedly occur. I do not wish in any way to sound complacent in dealing with the amendments. But, I venture to suggest, the source of such behaviour is not the sort of premises which may not open late now but will legitimately be able to do so if Clause 20 becomes law. By focusing on possible unreasonable disturbance to residents, I believe that my noble friend is showing concern about groups of young men or girls larking about, shouting, slamming car doors and so on. That behaviour must be deplored, and I should be the first to do so, but it is more commonly associated with other kinds of premises: pubs, clubs and late night take-aways.

If something needs to be done about noise in the streets or outside pubs and cafes, let it be done in the proper context. The licensing and noise abatement laws are the proper vehicles for the control of noise nuisance. To address the problems through controls on shops which have little or no association with it would, in my view, be wholly inappropriate. Therefore, I regret to say that I find it difficult to offer any crumb of support for my noble friend's amendment.

Turning to the more serious question of criminal activity, I assure the noble Lord, Lord Stallard, that the Government are equally concerned about the problems of serious street crime. We are always prepared to support local initiatives against crime and the prevention of crime, but the means must be appropriate and effective. We have been told that some local authorities have used their powers to close late night cafes which have become associated with criminal activity and that that has reduced the incidence of drug dealing by depriving the dealers of a place to go and an excuse to linger. Such co-operation is exactly the kind of partnership which the Government wish to encourage.

It has also been suggested that, after closing late night cafes in this way, there is a fear that all-night shops could provide alternative cover for criminal behaviour. I do not find that persuasive. I suggest that late night shops are a quite different case and a very different animal. Of course, it may be possible to pass drugs surreptitiously in a shop, in the daytime quite as much as at night; but, unlike in a pub or cafe, there is nowhere to sit and other customers are likely to be constantly moving about the premises.

There is no suggestion made, I know, that the night cafes which have been ordered to close early were actively encouraging the use of their premises for the purposes of crime. In the case of shops, many small traders already work closely with the police in the pursuit of shop thieves. They have nothing to gain and much to lose from their shops becoming the haunt of criminals. Indeed, many would argue that the additional light which late night shops shed in the streets contributes to greater public safety.

This is a serious matter, and I do not wish in any way to diminish the seriousness of it. But it is also a very local problem, whereas the power which the noble Lord proposes is extremely wide. If these amendments were accepted, they would apply to Scotland as well as England and Wales, and yet in Scotland I understand that late night shops are not seen as a problem either to the police or to local authorities. In particular, as the noble Lord will be aware, Scottish drug dealing is focused more on large housing estates than in town centres.

I believe that Clause 20 is a modest and necessary piece of deregulation which will not lead to widespread changes in retailing. Local authorities have wide-ranging powers of licensing and control, as do the police. If a new power is needed, which I am not convinced it is, it does not need to be directed at the kind of premises which this repeal will permit to open legally.

Therefore, I hope that my noble friend and the noble Lord, Lord Stallard, will not feel it necessary to press their amendments.

5.45 p.m.

Baroness Gardner of Parkes

My Lords, I thank the Minister for that reply. I agree with one or two aspects which he brought out, but not with others. I agree with him that it is a very local problem. That is why, in bringing forward this amendment, I do not seek wide, sweeping powers so that a tiny council in the middle of nowhere could suddenly decide to impose unreasonable restrictions. I know that it has been said that there would be a power to have that reviewed. Nevertheless, that would be a time-consuming and expensive process.

It is very much a local problem and it may occur anywhere without warning. Suddenly different areas become the focus of those real problems. We should not throw out the last possibility of controlling the problem through the shops system. As has been made clear, cafes and licensed premises are all subject to restrictions.

Many residential leases of people living in blocks of flats even forbid the playing of a musical instrument or the making of a noise after 11 o'clock at night. Therefore, it is considered fairly normal that people need to get some sleep. I do not believe that it would be a problem to impose the restriction at 12 o'clock.

However, I believe that the Minister has entirely overlooked the large numbers of trading standards officers who will be required. Local authorities will have to supervise what goes on in those shops at all hours of the night. That will require large numbers of additional trading standards officers. Further police presence will be required. The noble Lord, Lord McCarthy, made an extremely valid point. The noble Lord, Lord Lucas of Chilworth, said that those are the very places which the police will need to attend. That is true but, while they are there, they will not be able to sort out other problems elsewhere. Therefore, that will mean that extra police will be needed.

I do not believe the power should be so widespread that it applies anywhere and everywhere. However, I believe that power should be retained to enable a local authority to deal with a problem in a particular area. With my down-under connections, I should point out that, in Australia, areas are classified in different ways so that some areas are subject to no restrictions at all while others are more tightly controlled at certain times.

I believe that this matter is much more serious than the Minister appreciates. I hope that between now and Third Reading we shall be able to persuade him to consider the matter and come forward with a solution, because I am convinced that there must be a solution. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Stallard moved Amendment No. 34A:

Page 20, line 31, leave out from ("shall") to end of line 32, and insert ("be amended as follows—

2) For section 1 to 3 there shall be substituted—

"Hours of closing

(1) Where in relation to England and Wales the council of any district or London borough and in relation to Scotland an island or district council is satisfied that it is in the interests of public order and safety and the prevention of crime within their area, they may by resolution determine that a shop or shops in the whole or any part of its area shall be closed for the serving of customers from such hour and for such period as it may consider appropriate, provided that no determination shall require any shop to close earlier than eleven o'clock in the evening or to remain closed beyond five o'clock in the morning.

(3) Sections 4 to 13 and 15 to 16 of that Act shall cease to have effect.

(4) For section 14 there shall be substituted—

"Penally. 14. Where any shop is open for the serving of customers in breach of a resolution made by a relevant authority under section 1, the occupier of the said shop shall be guilty of an offence and liable to a fine not exceeding level 2 on the standard scale."").

The noble Lord said: My Lords, in moving the above amendment, I shall not speak any further on the matter than I did earlier. I listened to the Minister's response and I must confess that I am a little disappointed. He seemed to have missed some of the points set out in my amendment. I am certainly not saying that shops should be prevented from opening for 24 hours. Indeed, that is not mentioned in my amendment. In fact, we have gone out of our way to say that shops throughout the boroughs are open 24 hours a day but that there is a specific problem in that particular area which needs special treatment. That is what we are saying in the amendment.

We have also included the safeguard—and everyone knows this—that if a local authority makes an order it has to justify such an order so that it can be challenged through the judicial process; that is, by an aggrieved party or right up as far as the Minister. The Minister seemed to suspect that what we are proposing would mean a blanket ban on shops opening for 24 hours and in other respects. We are not saying that; we are saying that the council would not use such powers unless it was absolutely essential. Indeed, the council would have to prove and justify whatever order it made.

As I said, I was a little disappointed with the Minister's response. It did not seem to me to go far enough. Like the noble Baroness, I should like to have the opportunity to reconsider the matter and perhaps have a discussion with the Minister between now and Third Reading. In any event, I should like to reserve my position as regards bringing the amendment back in a slightly different form at the next stage. I beg to move.

Lord Henley

My Lords, I do not believe that I can add anything to what I have already said. However, I am very grateful for the helpful and constructive approach that the noble Lord has taken. Without making any promises or offers, I should certainly be prepared to have further discussions with the noble Lord in relation to such problems.

Lord Stallard

My Lords, in view of the Minister's response, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Henley moved Amendment No. 35: After Clause 20, insert the following new clause:

Repeal of remainder of the Shops Act 1950

(". In the Shops Act 1950—

1. (a) Part II (conditions of employment), and
2. (b) section 67 (business of hairdresser or barber not to be carried on in Scotland on Sunday),

shall cease to have effect.").

The noble Lord said: My Lords, in moving the above amendment, I should like to speak also to Amendments Nos. 62 and 84 to 91. The House will recall that in Committee my noble friend Lady Young moved an amendment to remove Sections 22 and 23 of the 1950 Act. Other noble Lords spoke in support of that amendment. During the debate my noble friend Lord Skelmersdale argued that the other employment measures which are contained in Sections 17, 19, 21 and the third schedule to the 1950 Act were also outdated and should be repealed. In responding to that amendment, I asked that it should be withdrawn so that we might bring forward our own amendment on Report after taking soundings within the industry.

The Government have consulted leading retailers and other interested parties within the retailing industry. The overwhelming view is that the remaining employment measures limit employment flexibility in the retail industry and serve little purpose in today's labour market; they would, therefore, welcome repeal of those provisions. Retailers make increasing use of flexible and varied patterns of working which not only prove to be popular with employees but are also beneficial to customers, who are guaranteed appropriate levels of service.

The amendments would also have the effect of repealing Section 67 of the Shops Act 1950, which prohibits hairdressers and barbers in Scotland from carrying on business on Sundays. The Government have already announced their intention to repeal Section 67 after Royal Assent by way of the deregulation order-making power. In view of the fact that we not intend to repeal the result of the 1950 Act, it makes sense to repeal Section 67 at the same time as the other sections.

Repeal of Section 67 will permit hairdressers and barbers in Scotland to open for business should they wish to do so. There is no reason to restrict hairdressers and barbers when all other shops in Scotland are allowed to trade freely on a Sunday. The repeal of that section will therefore remove the anomaly.

The House has already agreed to repeal of Part I of the 1950 Act. The amendments now before us seek to repeal the other remaining substantive provisions of the Shops Act 1950. The measures that are to be repealed have become—as I believe we all would agree— outdated and are matters which are best left to employers and employees to decide for themselves. I beg to move.

Baroness Turner of Camden

My Lords, as the Minister rightly said, the amendment seeks to remove from the statute book Part II of the Shops Act 1950, which deals with conditions of employment in shops. I must say that I am not at all happy about the amendment. Since seeing the amendment, I have had a look at the Shops Act 1950. It is quite true, I agree, that much of it is outdated and could do with modification. However, what is proposed in the amendment is the total abolition of the employee protection contained in Part II of the Act. That includes protection in regard to young persons (particularly in relation to night work) seats for female shopworkers, sanitary and health and safety arrangements, and so on.

It can of course be argued that a number of those provisions do not need to be included in a separate shops Act—or, indeed, in separate legislation—as other legislation already exists and, in any event, we have the Health and Safety Commission to take care of health and safety issues generally. However, the deregulation involved in the Bill exposes often very vulnerable people to a worsening of conditions with no protection at all. Because they wanted to get Sunday trading accepted, the Government decided to provide for special protection for workers who did not want, or could not agree, to work on Sundays. I shall not go over the arguments regarding Sunday trading again, because we are now discussing a very different measure and one which is concerned not with Sunday trading but with total deregulation.

Workers in shops may suddenly find themselves faced with the obligation to work very different hours from those which they envisaged when they became shopworkers at a particular establishment and may find themselves with no protection. A very large number of such workers are women. Many may find it difficult to work at night if they are expected to do so after the passage of the Bill. But, whereas the worker expected to work on Sunday who cannot or does not want to will have some protection—not enough of course; but, nevertheless, some protection—that will not apply in regard to what is the even more understandable opposition to working at night. Needless to say, there is no obligation upon the employer to pay a premium rate for such work. In these days of unemployment, many people may feel impelled to do such work even though their family circumstances may make it difficult.

Therefore, while I do not disagree that much of the 1950 Act is out of date, I am not happy about the way in which the Government have proceeded. It seems to me that, in the deregulation of all shop hours, they have missed an opportunity to provide some protection for vulnerable people. I believe that there is a case for the Government to reconsider the situation, because wiping out all protection is, in my view, a little too much. There is a case for ensuring that vulnerable people have some protection. If we as parliamentarians do not seek to protect such vulnerable people, many of whom are not members of unions or who find it difficult in any event to join them, no one else will do so. It is incumbent upon us to see that that is done.

Baroness Young

My Lords, I should like to intervene briefly as my noble friend the Minister mentioned the fact that the amendments are in response to those that I moved in Committee. As the noble Baroness, Lady Turner, will know, I said then—and I repeat it now—that I was not in support of the decisions taken on Sunday trading. However, having got Sunday Trading —which is what the majority of people in your Lordships' House and in the other place wanted—I believe that there must be a degree of consistency. I just wanted to tell my noble friend the Minister that I am very glad that he had brought forward the amendments, which have dealt with a number of anomalies that arose from the previous Act.

Lord Rochester

My Lords, I supported the amendments put forward by the noble Baroness, Lady Young, in Committee (following the enactment of the Sunday trading legislation) to repeal Sections 22 and 23 of Part II of the Shops Act 1950, which relate to employment on Sunday. I also saw the force of the comments made by the noble Lord, Lord Skelmersdale, on whether Sections 17 and 19 (regarding half-day holidays and mealtimes) were still justified. But I am, to say the least, surprised that the Government have now decided to do away altogether with Part II of the Shops Act. It is odd that they should make this proposal only at the penultimate stage of the Bill's progress through the House. The noble Lord, Lord Henley, has told us, as I understood him, that there has been consultation with employers about this. But has there been any consultation with representatives of the retail workers who will be affected by this blanket deregulation of their employment conditions?

Like the noble Baroness, Lady Turner, I question particularly whether Section 31 of the Shops Act, which provides some protection for young people, including girls who are required to work at night, should be repealed without further thought being given to the dangers to which such young people may be exposed in perhaps having to travel home late at night when adequate public transport may not be available. As the noble Baroness said, the Government's attitude in this respect is in marked contrast to the protection afforded by the Sunday Trading Act to employees working on Sunday. I await with considerable concern what the noble Lord, Lord Henley, will have to say in reply to that particular point.

6 p.m.

Lord McCarthy

My Lords, the logic of special legislation for special groups is not wiped out when one wipes out general legislation. Long before we had special legislation for special groups we had protection for underground workers, for children and for shopworkers. We had protection for shopworkers because they were thought to be an easily exploited group of people who were difficult to unionise and where the employer, particularly the small employer operating at the margin, was in a powerful position. That situation is still the case today and one does not solve that or answer that by pointing to the fact that one is allowing Sunday trading. I thought that was accepted when the Sunday Trading Bill went through the House. The Government certainly were not trying to abolish the whole of the Shops Act when that legislation was going through the House, and therefore the argument remains: why are we doing it now?

I believe the Government said—I may have got this wrong —that they had consulted leading employers. How leading were these leading employers? Of course if one consults Marks & Spencer, one knows that that firm would not dream of having freezing shops or of having no lavatories or no seats available. Of course Marks & Spencer would not do so as it is a leading employer. However, if one consults the less than leading employers, they may say, "Yes, we would like to get rid of the measure". I know why they want to get rid of it. They want to get rid of it because they do not have lavatories and because their shops are freezing and there is nowhere to sit. That happens because the Shops Act is not enforced, any more than most other legislation is enforced, because we do not have anyone to enforce it and because the penalties are small. The answer to that is not to abolish the measure because it is embarrassing. The Minister said that he approached leading employers, but did he approach leading trade unions? Did he approach USDAW or the GMB and what did they say? Did they say that they were quite willing to see this part of the Shops Act abolished? I doubt very much that they did. Finally, the Minister said that the benefit of the proposed action is flexibility. Does the giving of half-day holidays affect flexibility, or the provision of seats for female employees? Does the control of temperature, the provision of lavatories or of sanitary regulations affect flexibility? Of course it does not; it affects the degree of exploitation and that is why the measure should not be abolished.

Lord Wedderburn of Charlton

My Lords, before the Minister replies, as I cannot speak after his intervention, I should say that I made a mistake when I first saw these amendments in thinking that perhaps when one looked into them one would appreciate that the Minister's proposition would be that there was plenty of protection elsewhere. He may be going to say that. However, on the short examination that I was able to make of the matter, I did not think that was true. I shall not list the detractions which I think exist, having heard my noble friends put many of these points to the Minister, but I shall explain what my intervention is directed at. Does the Minister agree or not agree with the particular changes which are alleged to be being made? There can be no doubt that some conditions of employment are being affected in a deleterious manner.

Will the Minister publish what he and his department understand to be the standards which are being deregulated without standards being introduced by other legislation, for example, by the Sunday Trading Act, by new regulations on health and safety and other such measures? I can quite believe there is a delicate and difficult interaction between these things but surely the Government are under an obligation to publish a list of the areas which they say are being deregulated and which are not swept up, as it were, by the protections in other statutory instruments. I would like the Minister to consider whether he would undertake to do that, whether or not he agrees with my noble friends.

Baroness Seear

My Lords, I should like to ask the Minister to think again about the issue of night work for young people. I thought that it was increasingly agreed that youngsters under the age of 19 are largely trainees and that we want them to study to get qualifications. This is really not compatible with having those people working at night at that age. We really must be more consistent in our approach to how we treat young people as young trainees or young workers, or whatever it is we want them to be. If one wants to raise the standards of competence of young people, one does not start by putting them on night work.

Lord Henley

My Lords, I feel that Members of the House, or perhaps I should say certain Members of parties opposite, are making something of a mountain out of a molehill here. I merely said that in moving these amendments we were removing the remaining rather outdated measures in the Shops Act. I start with the noble Baroness, Lady Turner, because certainly her own colleagues, and now the noble Baroness, Lady Seear, have taken this up. She went to the Shops Act and cited provisions that had been repealed long before. Sections 18 and 20, which relate to provisions protecting young workers, and Sections 24 to 36 went in the Employment Act of 1989. There is no use looking at the king's printers or queen's printers' copy of the Shops Act; those sections have long since gone. What we are talking about are the residual sections that are left; sections such as 17, 19 and 21 which deal with matters such as meal times, holiday occurrence and other conditions which we believe are far better left to the employers and the employees themselves.

Baroness Turner of Camden

My Lords, will the Minister give way? The main point of my argument was that although this part of the Act was now being repealed, it had given the Government an opportunity to produce some alternative legislation to give protection to vulnerable workers. It had been expunged without any alternative; that is the main point, not that some of it had been repealed already. The whole lot is going and nothing is being put in its place. That is the point.

Lord Henley

My Lords, the provisions I referred to went with the Employment Act of 1989. The workers we are talking about are protected by general employment law. I would be quite happy to ask officials in the Department of Employment to produce a short paper for the noble Lord, Lord Wedderburn, listing the employment protection that workers generally have. But what I am saying is that I see absolutely no point in leaving these minor, rather useless and rather irrelevant provisions in the Shops Act of 1950 and this seems a perfect opportunity to sweep them away and get rid of them. As I said, I think those are matters that are far better left to negotiations between—

Lord Rochester

My Lords, the Minister has referred to a number of items in Part II of the Shops Act which have already been dealt with by earlier legislation. Will he say whether that applies specifically to the section about which we have been mainly concerned; namely, Section 31 dealing with night employment?

Lord Henley

My Lords, I am open to correction and I shall look at Hansard tomorrow, but I thought I said that the protection applying in the Shops Act to young persons, Sections 18 to 20 and Sections 24 to 36—I believe 31 comes somewhere between 24 and 36 so it is included—were removed and repealed by the 1989 Act. Therefore, I should say categorically that Section 31 has gone.

The last point I should like to deal with is the question that the noble Lord, Lord Rochester, asked about consultation. It was also referred to by the noble Lord, Lord McCarthy. I seem to remember that I gave a commitment in Committee that there would be consultation. My understanding is that the department I was then in—the Department of Employment—wrote to over 60 organisations, including trade unions, involved in the retail industry seeking their views on the repeal of the remaining provisions of the 1950 Act. I stress again that the majority of the replies received favoured repeal. The minimal opposition to repeal was generally confined to trade unions.

Lord McCarthy

My Lords, it is not a question of minorities. If you want to consult the workers' side, that means one union. It is not a question of a majority or minority. What did USDAW say?

Lord Henley

My Lords, I just said that. There was no need for the noble Lord, Lord McCarthy, to intervene. I said that at that stage there was opposition, which was generally confined to trade unions. But the majority of responses were in favour of these changes.

Again I stress that these are very minor provisions of the 1950 Act. The other provisions have long since gone. There seems no point in keeping them on the statute book.

On Question, amendment agreed to.

Clause 27 [Slaughterhouses and knackers' yards: uniting of enforcement functions]:

6.15 p.m.

Lord Carter moved Amendment No. 36: Leave out Clause 27.

The noble Lord said: My Lords, in moving Amendment No. 36 I shall speak also to Amendment No. 41. These two amendments, which deal with Clause 27 and Schedule 8 are concerned with the proposed creation of a new national meat hygiene service. The clause and the schedule facilitate the creation of the service, which will assume the current responsibilities of local authorities in respect of meat hygiene and animal welfare.

Your Lordships will know from reading the press and other sources that there is increasing anxiety about the cost, accountability and role of the meat hygiene service on the grounds that the service it provides will be more expensive and less accountable than the service currently provided by local authorities. There is concern that it may fragment the existing food hygiene and safety framework with possible consequences for consumers and business. It will have no direct contact with consumers, who will continue to deliver their complaints about meat to the local authority. The measure is not a deregulatory one; it will lead to further confusion and provide for yet another enforcement agency which the industry must deal with.

Clause 27 and Schedule 8 transfer local authority animal welfare functions to agriculture Ministers. Ministers intend to transfer other local authority meat hygiene and inspection functions to the MHS using existing legislation.

The suggestion by the Government that the clause unites enforcement functions relating to slaughterhouses is misleading. The Government took a decision, without consultation, to use their powers under the Food Safety Act 1990 to issue slaughterhouse licences. They did so without revoking the responsibility of local authorities to issue the same licences, thus creating an unnecessarily confusing licensing regime.

By using the provisions of the Bill to remove the role of local government, which the Government had duplicated, the Government claim that they are deregulating. However, the duplication was entirely of the Government's own making.

The crucial point is that in future licences will be issued by the State Veterinary Service which, with local authorities and the meat hygiene service, will continue to have a role in meat hygiene. The replacement of one regulatory agency with three in just one sector of the food industry can hardly be regarded as deregulation. It would be simpler and more efficient for business to deal with a single local authority enforcement agency. In addition, consumers would have more confidence in a single enforcement service which monitored the hygiene of meat from the slaughterhouse to the kitchen table and which was accessible to hear their concerns.

The Government have argued that the MHS will provide a more consistent and cost-effective service. They also argue that local authority charges vary from plant to plant, yet there is no evidence to suggest that there is widespread dissatisfaction in the meat industry with the current system. Indeed, research indicates that slaughterhouses have no objection to local authority charges per se but only to one expensive element of them. That element relates to the cost of veterinary supervision, which will underpin the regime of the MHS.

In a parliamentary reply on 20th May 1994 the then junior agriculture Minister, Mr. Nicholas Soames, reported that the average charge for an official veterinary surgeon was £28 per hour whereas for a local authority meat inspector the cost was only £12 per hour. A survey of local authorities in June 1994 indicated that average hourly official veterinary surgeon charges were nearer £35 an hour, with a maximum charge reported as being £80 per hour. The survey also revealed that 20 per cent. of red meat slaughterhouses had organised a collective withholding of meat inspection fees and charges. In the majority of cases, however, slaughterhouses were withholding only the cost of employing the veterinary surgeon, indicating a preparedness to continue to pay the traditional local authority charge.

We have to be careful of anecdotes, but only a fortnight ago I spoke to a veterinary surgeon in the West Country. He was a very experienced man having almost a lifetime's experience in a large animal practice. He told me that he was an official veterinary surgeon but had had only a fortnight's training and did not have the first idea of what he was supposed to do in the slaughterhouse. He was very concerned about the responsibilities that he had been given and the lack of training that had been provided.

The view that this expensive element of meat inspection is largely unnecessary is shared by the scrutiny team of the DTI which in 1993 found that the EC meat hygiene directives imposing a veterinary regime had been introduced without any reference to risk assessment, without examination of the size of the inspection system and without assessment of the cost of compliance.

The assumption that there is an opportunity for greater cost-effectiveness is not therefore apparent, particularly as existing local authority staff will transfer with protected terms and conditions of employment. In addition, the service will require a greater level of management and bureaucracy to operate. That point was recognised by the Government's own Preston Committee of 1985, which rejected the need for a centralised agency on those very grounds.

There are no pressing reasons for creating a new meat hygiene service, which will have difficulties in dealing with the demands of industry and of consumers in the way that the more flexible local authorities can. There is no public health rationale behind its creation. As the Government propose only to alter the administration of the service and not its mechanics, there is little opportunity for greater cost-effectiveness, consistency or efficiency. Indeed, the central and regional bureaucracy which will be necessary to administer it will result in higher charges.

In 1990 local authority costs were £32 million, spread over 700 abattoirs and 100 poultry plants. Yet the meat hygiene service wants £40 million to cover the approximately 400 abattoirs which will be left by 1995 and an unchanged number of poultry plants which are being allowed a large measure of self-regulation. In effect inspection costs per plant will have doubled, yet there will be no measurable improvement in public health or consumer protection.

Your Lordships may well ask, if that is the case, why it is happening. The reason is very simple; it goes back a long way. The Ministry of Agriculture, Fisheries and Food claims that the service is needed to implement fully EC Directive 91/497. However, to go back before the EC was even heard of, the real reason for the decline in small slaughterhouses has been local authority and Ministry intervention. It has long been the policy of those authorities, declared openly in 1922 in Ministry of Health Circular 282, that steps should be taken to secure the concentration of slaughtering in as few slaughterhouses as possible. Such a course would both facilitate the inspection of meat at the time of slaughter and enable a large proportion of animals to be killed under conditions which conformed to the requirements of public health. A 70-year campaign is now approaching fruition.

In other words, for more than half a century the meat industry has been modified for the benefit of regulators seeking to make their own task easier in the name of promoting public health. The unremitting pressure to close smaller abattoirs was part of a policy devised in 1922 and has been an active policy ever since.

To bring the matter up to date, MAFF relies on the claim that the service is needed fully to implement EC Directive 91/497 on the hygiene of red meat, the negotiations for which a Department of Trade inquiry found were not wholly or even mainly motivated by hygiene concerns. MAFF says that the service is necessary because the EC Commission does not like dealing with local authorities. However, I understand that nothing in EC law requires the creation of this new service. I ask the Minister to give chapter and verse to show that this has to be done to fulfil the requirements of the EC directive.

There are still 479 abattoirs despite the best attempts of MAFF to close down the smaller units. I feel strongly that there is much sense in maintaining a local meat inspection service.

I have expressed the argument strongly. There will be increased central bureaucracy. For 70 years it has been the ambition of MAFF to bring the service under its control. The arguments against the meat hygiene service can be summarised as follows. This quango is more expensive and will be less cost effective than the traditional local authority service. The creation of the new quango undermines the process of government where the service to the community is to be withdrawn from democratically elected local authorities. I realise that that argument will not sway this Government. It will vest an unelected, official body which is theoretically under the control of the Minister but which will in fact be largely autonomous. The charging structure of the quango will unfairly penalise the small slaughterhouses and other businesses—it is already happening—expediting their closure, adversely affecting the small farmer, animal welfare and ultimately the consumer. Your Lordships may be familiar with the problems of having to haul casualty animals for long distances to find a slaughterhouse which will take them.

In causing or expediting the closure of small slaughterhouses, the agency will do nothing to improve food hygiene and safety; in fact the reverse is probable. By dealing with hygiene as a separate issue, and by replacing one agency with three, the MHS undermines the integrated structure of public health control in England and Wales. I hope that when the Minister replies he will admit that insufficient thought has been given to the issue on the ground of cost. There has not been the independent inquiry that we should have had. I hope that the noble Earl will accept the sense of the amendment and will now give more time to see how the provision can be made to work properly for the benefit of the consumer, the meat industry and for local authorities. I beg to move.

Lord Tordoff

My Lords, I am not an expert in slaughtering or knackering —although as the Bill wends its weary way I might wish to rephrase that later in the evening. No one can compete with the expert knowledge on these matters of the noble Lord, Lord Carter. I merely wish to reinforce what he said. From these Benches, we see the provision as yet another attack on local government and a way of transferring matters to central government. The mechanisms by which the Government pull everything into Whitehall in the name of subsidiarity are astonishing. They have even upset some of their own supporters. I read a speech by the Member for Norfolk North West, Mr. Henry Bellingham—not a noted raving red radical—who made some critical comments about new agencies. I am not allowed to quote but I shall paraphrase. He managed to drag in the Child Support Agency. I shall not attempt to do so. What that agency has to do with slaughtering, I do not know. However, he pointed out the danger that the provision will be too inflexible to provide a local service. It seems to be axiomatic that that is so. There seems to be no good reason for such a provision except the excuse that it can be blamed on Brussels, for some reason or another. I am sure the noble Lord, Lord Bruce of Donington, will approve of such an argument. However, even in this case I am sure he will accept that it is a fallacious argument. It is far more important that these matters are left to those people at the local level who know what they are doing, namely the local authorities. I hope that the Government will reconsider the matter.

Lord Soulsby of Swaffham Prior

My Lords, having had experience and responsibility during my career for meat inspection and food hygiene—not knackering, I might add—in the city of Edinburgh some considerable time ago, I have an interest in the amendment and the schedules.

It is somewhat regrettable that the meat inspection service and food hygiene service in England, are well behind those of many countries in the western world. They are, too, well behind the situation in Scotland. I believe that the schedule will improve the situation in the United Kingdom by transferring authority for the service to the Ministry of Agriculture in England and to the respective Secretaries of State for Wales and Scotland.

We lag behind other countries of the world in meat hygiene. The schedule relates to the safety of the food we eat. I believe that the provision will improve the situation. It has long been recognised that the soundness and wholesomeness of meat and meat products require that inspection within the food chain should come under a single seamless system. That is the system proposed under the schedule, beginning with the welfare of animals prior to slaughter, their humane slaughter, through professional meat inspection services and thereafter to distribution and retailing, if one follows the food chain. I believe that the best situation will be achieved under the paragraph in the schedule.

I am not sure whether the noble Lords will wish to press Amendments Nos. 37 and 38 which provide for an independent body to investigate. I wonder why they consider the amendment necessary because many of the conditions envisaged under the schedule are self-evident. In this country we need to improve our meat inspection and food hygiene services. I believe that the schedule provides for that.

Earl Ferrers

My Lords, I wondered what on earth had got into the noble Lord, Lord Carter, this evening for him to have been so adamantly opposed to a matter that is quite simple in principle. The purpose of Clause 27, and Schedule 8 to which Clause 27 gives effect, is to allow Ministers acting through the meat hygiene service to undertake responsibility for welfare at slaughterhouses. The provision removes the need for slaughterhouse operators to deal with two separate inspectorates, one for welfare and the other for hygiene. That is a simple proposition. I cannot see why it should have incurred so greatly the wrath of the noble Lord, Lord Carter.

The establishment of the meat hygiene service has been generally welcomed by the industry, by organisations representing meat inspectors and by veterinarians. I am surprised that it seems to be only the noble Lord, Lord Carter, who does not like the idea. He stated that there was not enough consultation, that not enough thought had been given to the matter and that there was no independent inquiry. Before the decision was taken to establish the meat hygiene service, extensive consultations were undertaken on the tasks. Those included the welfare functions of the service and the scope of the service's activities. That detailed consultation involved the views of interested people. It included a panel representing the trade, enforcement bodies, professional bodies and consumer bodies. The noble Lord, Lord Carter, stated that we had not discussed or consulted enough. Such study seems to me to be rather good consultation.

Following the announcement in 1992 of the intention to create the meat hygiene service, the Minister of Agriculture has continued to consult through representatives of interested parties, meeting with individual local authorities, plant managers, veterinarians, inspectors and consumers. The noble Lord, Lord Carter, says that there has nor. been enough consultation. I do not know how much more he wants. We shall consult until doomsday if we continue like: that. The consultation will continue up to and indeed after the launch of the meat hygiene service.

My noble friend Lord Soulsby of Swaffham Prior made the important point that we are behind other countries in the meat hygiene service. I fear that that may well be so. If it is, then it is something which we must put right. I think that in a way the noble Lord, Lord Carter, almost admitted that when he said that he had spoken to an official veterinary surgeon who said that he had been given two weeks' training and did not know what on earth he was doing. I would not comment upon a conversation which the noble Lord had with someone whom I did not know. That may well be right but, if so, then it is an argument for saying that something should be done.

The meat hygiene service will be able to provide a more consistent service than can possibly be provided now through the approximately 300 local authorities which now enforce hygiene rules in licensed meat plants. The service will have strict standards of inspection and will be a better use of resources. It will not produce the increase in bureaucracy to which the noble Lord referred. It will continue to enforce existing statutory hygiene and welfare requirements. It will be an aim of the service to encourage improvements in the standards of operation to match those of the very best. There is a discrepancy between the standards which are applied throughout the country.

We must ensure that the slaughter industry can operate in the most efficient way possible. We intend that the meat hygiene service will undertake hygiene inspection in slaughterhouses from April next year. It will employ veterinary surgeons to do the hygiene inspections. However, it is those trained veterinarians who are also the people best placed to judge the welfare of animals. Welfare and hygiene inspections go hand in hand and are usually undertaken in slaughterhouses by the same staff. Therefore, transferring the welfare duties from local authorities to the agriculture Ministers, in addition to the hygiene duties, will remove the need for two sets of inspectors to work in slaughterhouses.

I think it would be a nonsense to have two sets of inspectors, one operated by local authorities and one operated by the meat hygiene service. Clause 27 and Schedule 8 remove this unnecessary burden on slaughterhouse operators. For the industry it may be just a small step forward but it is an important one. We should not overlook the potential for improvement in the welfare of farm animals at slaughter as well. Many local authorities are most diligent in the monitoring of welfare provisions but the standard is not uniform and is not as good as it could be. If we move the welfare enforcement to the one service, that will provide a consistency and uniformity which cannot exist at present with about 300 separate enforcement bodies. This can only be for the good so far as the welfare of farm animals is concerned.

Clause 27 and Schedule 8 allow for the removal of an unnecessary burden from the slaughter industry and for the raising of animal welfare standards at slaughter. Those are good reasons for allowing this to continue and for not agreeing to the noble Lord's amendment.

6.30 p.m.

Lord Carter

My Lords, the noble Earl is never more agreeable than when he is hurt and offended by something that has been said from the other side. When he says on behalf of the Government that this is a nice simple change, it is like the Greeks bearing gifts—we look on it with some anxiety.

The seamless robe of efficiency to which the noble Earl referred is effectively three agencies doing what was previously done by one. It is interesting that the Minister referred to consultation. Of course, if you talk to the large operators in the meat industry they are in favour, because the proposals close down small slaughterhouses. That is why they like it. Some of my best friends are veterinarians, but if you talk to veterinarians they like the proposal because they will staff the new service. As I pointed out, that has been their ambition since 1922.

In terms of internal inquiries, I understand that an inquiry was authorised by Mr. John Gummer in 1991 when he was the Minister with responsibility for agriculture. For some reason, the report was not published, even in summary. However, I understand that the consultants found that there would be no major savings. The Minister knows and has mentioned that the local authority associations remain firmly opposed to it. I made the point in my speech that the Government created the duplication in the first place and then, when they take away a layer of duplication that they themselves have created, they say they are deregulating. I am sure that the consultation will continue. I believe that a chief executive has already been appointed and I understand that there will be a need for 1,000 more central staff to run the new organisation.

I did not think that I would change the Government's mind but I thought it was important to put the point on the record. I believe this is the first time the House has had a chance to discuss the new meat hygiene service and it is important that the views are clearly expressed. We now have the Government on record saying what they expect to happen. We do not think that it will happen in the way they say. The closure of the small slaughterhouses will continue and the flexible and local service to which as farmers we have been used will slowly disappear. I believe that the Government will come to regret this.

Earl Ferrers

My Lords, with the leave of the House, I just wish to correct the noble Lord, Lord Carter, over one point. He said that the service would require an extra 1,000 people to administer it. That is not so: altogether it would be a maximum of about 80.

Lord Carter

My Lords, that is the information which I have been given but I certainly take the Minister's word for it. All I can say is that we shall watch with care throughout the meat industry. I am sure that fanners, the meat industry and consumers will watch the situation and we shall have to see whether the high expectations which the Ministry has for the service, which for a long time it has wished to bring under its control, are fulfilled in practice. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 8 [Slaughterhouses and Knackers' Yards: Uniting of Enforcement Functions]:

[Amendments Nos. 37 to 41 not moved.]

Clause 30 [Controls on London lorries: replacement of discretionary exceptions]:

Baroness Hamwee moved Amendment No. 42:

Page 24, line 2, after ("that") insert ("with comparable levels of enforcement").

The noble Baroness said: My Lords, in moving Amendment No. 42, I speak also to Amendments Nos. 43, 44, 45 and 46. With these amendments, we return to the question of the London night-time and weekend lorry ban. Perhaps I may briefly remind your Lordships of the scheme. It is operated and financed by 20 of the 32 London boroughs and the City of London, running an order which restricts heavy goods vehicles without exemption permits from using excluded roads —the excluded roads are mainly trunk roads—from nine o'clock in the evening to seven o'clock the next morning on week days and from one o'clock on Saturday for the rest of the weekend. The order, which is administered by the scheme, allows for fines of up to £1,000.

The scheme covers vehicles over 16½ tonnes and exempted vehicles must have permits fixed in the cab and exemption plates fitted. The scheme currently covers 30,000 vehicles operated by 3,300 hauliers. It has only five enforcement officers, but in co-operation with the Metropolitan and City Police, it brings about 2,000 prosecutions a year.

In January this year, the Department of Transport announced that it intended to abolish the permit scheme but to retain the requirement that heavy vehicles which enter London at night must not use the restricted streets unless they have necessary business there. I myself and those who run the scheme, as well as many Londoners, are worried that, if there is no permit scheme, there will be no effective ban.

The amendments in this group fall under two headings. Amendments Nos. 42, 45 and 46 deal with enforcement and the other two with the balance between the different interests. Turning first to the matter of enforcement, my underlying concern is that, if there is no effective scheme, there will be no effective ban. At present, it is quite straightforward to prosecute offending vehicles. Their registration numbers can be observed without the vehicles being stopped and it is

estimated that there is something like 70 per cent. compliance with the order, as against something like 50 per cent. in the case of other lorry restriction orders. About 2,000 prosecutions were brought last year; the large majority of them are successful, despite the small number of staff involved.

If the permit scheme is abolished but the ban continues, in effect a prima facie offence will be committed if a vehicle is in a restricted street during the prescribed hours without a proper reason for being there. However, I believe that in reality it would be impossible to prosecute. It would be unsafe for the police, having simply sighted a vehicle on a restricted street, to charge someone with an offence without knowledge as to whether or not the driver had a bona fide reason to be there. There would be warning letters, which those who run the scheme believe would be unsatisfactory as they would give the opportunity for fabricated reasons. Vehicles could be stopped, but there are great logistical problems in stopping them. The enforcement officers employed by the scheme are not themselves permitted to stop vehicles so they would need police assistance. As I said, currently they can be in the street, see an offending lorry go past, make a note of it and pursue the matter afterwards. If a vehicle is stopped, the driver could not be forced to give evidence which might incriminate himself. It is not unlikely that hauliers' associations would give advice to drivers as to how to behave in that situation and would probably advise them to remain silent.

There are not many places where vehicles could conveniently be stopped. As I said, this scheme applies to vehicles over 16.5 tonnes. Of itself, the stopping of a vehicle of that size is a real intrusion on the environment. By nature, most of the restricted roads are residential. A stop would be likely to take several minutes of an officer's time. At the moment, observing a lorry going past takes a matter of a few seconds. In reality, I believe that the number of stops by the police would be very few. Inevitably the risk of being caught would be quite minimal.

I do not suggest that the police would be reluctant to enforce the ban but, as we all know, they have priorities that have to be juggled. It is estimated that a twenty-fold increase in police assistance would be required if no permit scheme were in place. Indeed, the very genesis of the scheme took account of the straightforward method of enforcing it.

The report of the Wood committee published in 1983, Heavy Lorries in London, from which this scheme was designed, stated that, The essence of the case put forward by the … Police was that lorry bans could not be effectively enforced unless the identification of offending vehicles were to be made simple and straightforward"; and that, banned vehicles must be readily identifiable". It also said: The more complicated the task which is entrusted to the police the lower it is likely to come in their order of priorities".

That comment, it seems to me, shows great common sense, and it has been borne out in practice.

Amendments Nos. 45 and 46, dealing with enforcement, suggest the insertion of words referring to the impairment and expense of enforcement. Both those amendments are intended to deal with the test that the Secretary of State must apply before he exercises the power of removing the permit scheme.

That is the enforcement aspect. The other aspect is, as I have described it, the balance between different interests. We had a debate in Committee about the burden that would be removed and what scale of burden the Secretary of State should take account of in removing the permit scheme. When the proposals were announced there were references to the scheme going because it was an "undue burden". That word "undue" is not in the Bill.

I appreciate the lateness of the hour and I shall deal with the matter as quickly as I can, but perhaps we may look briefly at the scale of the present burden on industry. The London Boroughs Transport Scheme commissioned a report from Touche Ross, the management consultants, as to the costs to the UK road haulage industry of administering the permit scheme. The report estimated that the total annual sum that would be saved by the industry as a whole in administering the scheme if the system were abolished next year would be £437,000—in other words, less than half a million pounds for the whole industry That broke down to £5 per permit (per lorry) for large operators; £17 for medium-sized operators; and £72 for small operators. Those are not, I suggest, very great sums. They could certainly not be regarded as a real burden.

Currently, the scheme requires participating vehicles to be fitted with air brake silencers. There is a cost there of some £87 per vehicle. But it is a one-off cost, and regulations will come in fairly soon which require such silencers to be fitted in any event.

The Touche Ross survey also highlighted the fact that vehicle operators sometimes attribute to the permit scheme costs which are not really the costs of the scheme. They include fines and legal costs resulting from prosecution and also the cost of re-routing, if they have to do so, in order to avoid the restricted roads. The costs of prosecution and re-routing, the cost to the operators of enforcement, would, if the ban is effectively continued, remain costs to the industry. They cannot properly be regarded as costs to be taken into account when assessing the burden.

Although hauliers dislike the bureaucracy of the scheme, they do not object to it per se. They made a number of suggestions to improve the scheme. Nobody would object to looking at ways to improve it. I think we would all agree that, if the bureaucracy could be reduced and the effectiveness be retained, it would be an entirely good thing.

The noble and learned Lord, Lord Simon of Glaisdale, made some extremely helpful comments in Committee about the meaning of the word "undue". Noble Lords produced a number of synonyms: "commensurate" was another one. The noble and learned Lord commented that the Minister, in responding, enumerated … burdens which he says are necessary. They are due burdens. It is the other ones he wants to sweep away: I sympathise with him in that. They are the undue burdens".—[Official Report, 4/7/94; col. 1023.]

That is the burden—if I may put it that way—of my amendments; namely, I seek to restrict the Secretary of State's powers so that he needs to assess those burdens.

I hope that I have covered fairly rapidly the issues involved. As I said, no one would object to a reduction in bureaucracy. But it must not be at the expense of a very effective scheme that has done a great deal to protect the environment of London over the past few years. I beg to move.

6.45 p.m.

Lord Bruce of Donington

My Lords, I propose to detain the House only very briefly on this amendment. In order that I may be brief, I should say straight away that I agree almost entirely with what was said by the noble Baroness, Lady Hamwee, on this matter. For the moment I should like to deal only with the permit aspect of this whole question.

As I understand it, the whole purpose of these proposals for deregulation was to remove from the statute book any regulations that were entirely obsolete or which did not serve any particular useful purpose to the common good of the ordinary person in this country. Indeed, in so far as deregulation achieves the removal of obsolete Acts or regulations from the statute book, that is entirely desirable.

What bothers me about this matter is the distinct possibility—I put it no higher than that—that certain very powerful associations, some of them associated by subscription or otherwise with the Conservative Party and indeed quite properly so, seek to do away with regulations which are inconvenient to them and cause them what they consider to be unnecessary expense without, at the same time, taking into account the views of the ordinary population. If ever there is to be a series of measures necessary to preserve the quality of life of ordinary people living in their own homes, wherever they may be—to preserve some degree of quiet and offer at weekends and late at night the degree of serenity to which we are all entitled —surely nobody can complain about the operation of a permit scheme by 20 of the local government authorities in London.

It is not as though the number of lorries above 16½ tonnes has diminished over the years so that the regulation is no longer necessary. On the contrary, the number of vehicles over 16½ tonnes is increasing. It is necessary for extreme vigilance and local control to be applied. To ensure that, surely it is far better that the existing measures are retained under the authority of those who are directly elected by local populations. Those people are sensitive to their needs and possibly are more acquainted with the practical effects than many of the people in central government.

Therefore, unless there is any compelling reason for taking the matter out of the hands of local authorities (and so far I have heard no good reason at all) it ought to be left with them. Even though this subject is outside my normal interest, during the time that elapses between now and Third Reading I shall make further inquiries into this matter. But unless I hear something very convincing tonight I cannot see any reason why, at the behest of the Freight Transport Association or any other large body of interested parties, there is any further action to be taken. I sincerely hope that the noble Viscount will agree to this series of amendments. Otherwise, many of us may feel it necessary to sustain them in the Division Lobby.

Viscount Montgomery of Alamein

My Lords, I have one or two worries about this matter which have been mentioned by both the noble Baroness, Lady Hamwee, and the noble Lord, Lord Bruce. The first concerns the London boroughs. I reside in the Royal Borough of Kensington and Chelsea. Indeed, 20 years ago I was a councillor there and therefore I should declare some interest. One of the few residual responsibilities remaining to the boroughs which have not been removed must be that of maintaining the quality of life. The abolition of permits seems to me likely to cause a diminution in the quality of life, given that there will be a widespread increase in lorry traffic.

I know that the argument will be deployed that the police can deal with this matter. The noble Baroness, Lady Hamwee, mentioned that point. But the problem is that it puts an additional burden on an ever decreasing number of policemen. So how will the situation be handled? It will be alleged that there will be savings, but it is difficult to see what they will be, given that the police force is rather stretched. I do not see how the situation can be controlled. I hope that the Minister will be able to give us some reassurance on this matter.

Lord Monson

My Lords, the House will be grateful to the noble Baroness, Lady Hamwee, for moving this series of amendments so comprehensively and persuasively. I strongly support the amendments.

I too should declare an interest as a long-standing resident of the Royal Borough of Kensington and Chelsea who, with my family and neighbours, has benefited enormously from the exiting restrictions on the movement of heavy goods vehicles during the night. Nobody I have met wants the existing restrictions weakened in any way; neither the residents of the borough nor the overwhelmingly Conservative dominated borough council. Once again, the Government will risk shooting themselves in the foot if they resist these amendments.

Lord Jenkin of Roding

My Lords, I spoke at Committee stage in support of similar amendments. I have re-read the debates, including the speech of the Minister at that time, my noble friend Lord Mackay of Ardbrecknish, and I have read the speech of Mr. Norris in another place. I remain deeply puzzled by a policy which says, on the one hand, that a lorry ban is a good thing and we intend to keep it on, but, on the other hand, that we do not want an effective means of enforcing it. I find that contradiction bizarre.

I have always been a firm believer in the dictum of Alexander Pope: what is best administered is best. I must say that with the best will in the world I cannot see that abolishing the permit scheme will lead to an effective enforcement of the ban. I cannot help feeling that the commercial interests, which I believe are the only interests that my noble friends have consulted, have been perfectly prepared to go along with the idea of keeping the ban so long as the permit scheme is removed because they suspect that the chances of their lorries being picked up are therefore massively reduced.

One has only to consider the problem. I do not want to detain the House too long. The noble Baroness, Lady Hamwee, dealt very comprehensively with the whole issue. But if there is no sign on the lorry to indicate that it has a permit the police and the five enforcement officers about whom we have been told therefore have to suspect every lorry. Furthermore, if there is no permit scheme, how do they decide whether the lorry is or is not entitled to be in the forbidden street? They have to look at the documentation or cargo that the lorry may be carrying. The idea of wanting to keep the ban but not to have an effective means of enforcing it is totally inconsistent.

I feel tremendous support for the Bill and have great admiration for the Ministers who worked so hard to bring it forward. But I cannot help feeling that this is an example of how my noble friends, no doubt with the best will in the world, have in this case listened to what I might call the producer interests. I do not spit out the words "Freight Transport Association" with the same venom as the noble Lord who spoke a moment ago managed to do; but there is a consumer interest and an environmental interest involved.

I am in consultation with my noble friend on the Front Bench about aircraft noise. It is the same issue. There is an indeterminate number of people who will suffer if the noise increases. It is very specific commercial interests which may have to pay a small cost to make sure that the policy is properly enforced. There has now been substantial doubt thrown on whether the cost estimates on the basis of which the decision was taken were right. There is a long report from the transport consultants Oscar Faber, which I have now had a chance to look at. I shall not weary the House by reading from it, but it is perfectly clear that if this measure is to be enforced effectively and if the ban is to be enforced without the permit scheme, there is no question but that the costs will be higher both for the enforcing agencies and the transport industry.

The transport industry argue that by abolishing the permit scheme and making the savings that would thereby be achieved, there will be a net saving. They are making the blatant assumption that the new scheme will absolutely not be enforced. I therefore come back to the first matter that I put to the noble Lord: there is no point in introducing a ban unless it is going to be enforced. Why introduce legislative changes which, if they are enforced, will increase the costs?

Nothing that I have read in any of the arguments at Committee stage or in another place have satisfied me that that logic is false; it is unassailable. I hope that the noble Baroness will press her amendment.

7 p.m.

Lord Burnham

My Lords, nobody can be in any doubt about the benefit of quiet to those who live in the boroughs of London. However, I was involved in the last posturings of the Greater London Council in 1984 when it introduced the scheme for lorries at night and at weekends. There was no difficulty whatever in obtaining a permit and anybody who had any business at all in London could obtain a permit to allow them to drive at night and at weekends.

The lorry drivers do not drive through the night for pleasure; they do it either because they have business where they are going and therefore possess a permit, or they are trying to get from A to B which is probably the other side of London. The noble Lord, Lord Bruce of Donington, said that he was sure that there were no fewer 16.5 tonne lorries on the roads now than in 1984. The difference is that it is now much easier to travel through or around London without going into private streets making noise and disturbing residents. The lorries go round the M.25, up the M.11 or along the M.20 to the Channel ports. To a large extent they no longer need to go through the centre of London and they do not do so.

I wish to make one further point. If your Lordships have ever examined a permit it will be appreciated that they are fairly small and usually displayed on the back of the vehicle. If the lorry is parked in the middle of London no doubt an enforcement officer could find it. But by the time a lorry has driven past an enforcement officer and he has discovered that it does not display a permit—having searched for it among all the other displayed signs on the backs of lorries—the lorry is out of sight and he has no chance of catching it.

Lord Henderson of Brompton

My Lords, I should like briefly to ask the Minister to listen to the powerful pleas that have come from all around the House and particularly from his own Benches. The speech of the noble Lord, Lord Jenkin of Roding, was so powerful that the Minister could not fail to say to the House at the very least that he must take the matter away and think about it and thereby avoid a Division at this hour of the night and at this stage of the Bill. The Minister may wish to come back at Third Reading having reconsidered the proposals in the light of what has been said.

The matter is extremely important. We are all agreed that all authorities want to preserve the inner London boroughs from heavy lorries at night and at weekends. If we are all agreed on that, why not leave well alone and allow the existing process of licensing by local authorities to stand? It has existed for a considerable time and is apparently done well. We are all in favour of deregulation; but not deregulation for its own sake.

As far as I can gather—depending on how the new system works which the Minister wishes to introduce— it would be more expensive for the police to operate the proposed scheme efficiently than if the scheme were to be left as it now stands. I am not an expert on this matter; I have not been able to compare the costs of the two schemes in any detail and in any case it is too complicated for me to understand. I am told that the present system is cheap and efficient and does not need to be disturbed. I should have thought that that was a good Conservative principle to let well alone.

Viscount Goschen

My Lords, the proposals contained in the clause we are discussing will allow for the removal of the red tape and bureaucracy imposed on lorry operators by the London-wide night-time and weekend lorry ban. The ban provides valuable environmental protection for Londoners. The exemption permit system operated by the London Boroughs' Transport Scheme is undoubtedly highly bureaucratic and imposes a heavy burden on industry.

I entirely understand that noble Lords who have spoken this evening wish to be confident that the clause will not lead to a reduction in the standards of environmental protection for Londoners. I recognise the importance of the protection afforded by the London lorry ban. But let me assure your Lordships at the outset that we have no intention whatever of undermining that protection in any way. We do not intend to remove the permit scheme of the London lorry ban until we are quite sure that enforcement of any amended scheme will be of at least equal effectiveness.

Under the government proposals there will be a general exemption for lorries which need to make night-time and weekend deliveries in London. They will be expected to use trunk roads and other roads exempt from the ban as far as possible. Drivers who fail to comply with the ban will face prosecution. The environmental protection that the ban offers should not be reduced, particularly if local authorities target some of the savings that they make from the abolition of permits at improved enforcement. I understand that the LBTC carry out a limited number of roadside stop checks every year. The main constraining factors are apparently the lack of availability of the police, as only they currently hold the power that is required to stop vehicles. The general position on the stopping of vehicles is currently being looked at by Ministers. It is a complex and sensitive issue which will inevitably require long and careful consideration before any conclusions can be reached or changes made.

If permits were to be abolished we estimate that the 21 London boroughs which currently make up the London Boroughs Transport Committee would save in the region of £400,000 per year. That is around 40 to 50 per cent. of the total annual cost of running and administering the ban. If those boroughs wished, the savings or a proportion of them could be used to beef-up enforcement and particularly the crucial roadside stop checks. For instance, £400,000 would pay for the equivalent of an additional eight full-time police officers if the LBTC decided that it wished to spend the money in that way. We should consider how many more vital stop checks could be made every year from those savings. There are precedents for that kind of direct payment; for example, the Department of Transport itself paid the police directly in the past for its assistance in stopping vehicles.

I do not believe that the House should be under the impression that the present system provides a panacea for trouble-free enforcement. Under the permit system a lorry of over 16.5 tonnes is entitled to leave the exempt route network only at the nearest practical point to its destination. That will not change.

Having considered the system currently in force of using inspectors with clipboards or whatever to examine permits as the lorries pass by, I cannot deny that it is undoubtedly an easy way to enforce the ban. But it is dangerous in that it can easily lead to a false sense of security. Many of the vehicles observed with permits may be contravening the ban, perhaps breaching the strict routeing arrangements or wider environmental standards. I understand that there may also be some follow-up of vehicles observed with permits. But the only thorough and fully effective check of a vehicle is to stop it at the time, make a proper inspection and, if necessary, conduct a further investigation.

The noble Baroness, Lady Hamwee, mentioned the question of prosecution. It should be said that if under the new proposed system a driver was charged with being in contravention of the ban the onus would be on him to prove that he met the requirements of the proposed exemption. For example, he would have to show that the beginning or end of his journey was in London and that he was taking the appropriate route. Contrary to what I believe the noble Baroness said, vehicles stopped could be prosecuted without warning letters and a warning could be made at the roadside.

We do not believe it would be appropriate to include on the face of the Bill a requirement for the Minister to ensure that enforcement will be effective. Enforcement will remain the responsibility of the local authorities concerned. I can, however, reiterate my assurance that no order would be made if there were reason to believe that it would jeopardise effective enforcement. Moreover, we believe that Amendments Nos. 42 and 45 are misguided. They relate to how the existing order was enforced. Any new arrangement will impair enforcement of the permit system because there will no longer be a permit system. What it will not do, as I have sought to reassure the House, is to impair in any way the enforcement of the ban itself. That is what really protects the environment for Londoners—the ban itself. We believe that the new arrangements could lead to more effective enforcement.

Amendments Nos. 43 and 44, which are grouped with Amendment No. 42, relate basically to costs and burdens. There is no doubt that the existing permit system operated by the boroughs imposes a burden on business. The administrative demands made by the scheme reduce the cost effectiveness and efficiency of the road haulage industry. Even by the LBTS estimate business is spending almost £500,000 a year to meet the bureaucracy of the present permit system. The lorry operators themselves believe that the amount is very much higher. We estimate that the cost to the industry could be up to £3 million per annum.

As I have already explained, we are confident that the ban could be operated effectively without the permit system. We do not accept that the change will lead to extra costs for business. Effective spot checks on driver documentation will reduce the need for lengthy correspondence between operators and the LBTS about alleged offences. Moving away from the permit system will remove the need for operators to fill in the complex forms, to obtain permits and to renew them every year It will remove the need to apply for a temporary permit if a different vehicle has to be used for a journey and will remove the red tape and bureaucracy which the freight transport industry has complained about so strongly.

As to the burden of stop checks, those are already a feature of the enforcement system. Nor will carrying documentation which can demonstrate a vehicle's destination create a new burden. How many lorries deliver or collect goods now without some form of delivery note or written order confirmation or similair documentation? In any case that is already a requirement of the existing permit conditions.

For all these reasons we do not believe that our proposals would add to the overall burden imposed by the order. If we considered there would be a serious risk of that being the result we would not go ahead with the order. However, to clarify the matter further, I am prepared to give a commitment that we will bring forward an amendment to the effect that the Secretary of State should only make an amending order if that order imposes less of a burden on the carrying on of business. That would make it explicit that the order could only be made if it resulted in a system less onerous than the existing arrangements. An order will only be made following consultation with representative organisations. Their views will be fully taken into account before an order is made. These safeguards make a test of proportionality on the face of the Bill unnecessary.

With regard to Amendment No. 46 relating to consultation, under the terms of this clause the Secretary of State is already required to carry out consultation with such representative organisations as he thinks fit before making an order. I can assure the House that the consultation we would undertake about an order under this power would include the London local authority associations, the London Boroughs Transport Scheme and the Metropolitan and City Police as well as lorry operator associations. Consultation with the local authority associations, the LBTS and the police will ensure that the views of enforcement agencies are properly canvassed.

I have sought to set out the details of the Government's proposed plan and exactly why we feel the savings that will be made from stopping the current permit scheme will bring forward dividends. I have said that those dividends can be used for more effective enforcement. That is the crux of our proposals and I hope that the noble Baroness will withdraw her amendment.

Lord Peston

My Lords, before the noble Viscount sits down, my name is attached to this amendment but I did not feel any need, given the excellence of other contributions, to join in. However, I did feel that his noble friend Lord Jenkin of Roding made a devastatingly logical point, which was that either the Government's system will be less effective or it will cost more. Sitting here, I was hoping that the noble Viscount would at least make some effort to rebut what his noble friend was saying, which I found totally convincing. What the noble Viscount has talked about has nothing to do with what most noble Lords have said. Indeed, the offer he is making has nothing to do with that either, because we are not discussing an amendment to do with costs in the sense in which he is discussing them. We should like some statement from the Government saying that if a new effective system costs more, or could be shown to cost more, the Government would not proceed with it. That is what I understood the noble Lord, Lord Jenkin, to be saying and that is what I felt was the basic argument. I did not hear a word from the noble Viscount saying that the Government would not proceed if that could be demonstrated. That is what we are discussing here.

Viscount Goschen

My Lords, with the leave of the House, I feel that I have covered those very specific points. We do not believe it will cost more because we feel there are savings from what we consider to be the present heavy administrative system. Chasing the amount of paper that these officials are required to do is not a sensible system for the 1990s. Nor do we feel that enforcement would suffer. I have sought to demonstrate the way in which funds released from the savings I have described could be used to pursue more effective enforcement. I believe that I have covered those points and that the Government's proposals will benefit Londoners in the way I have described.

Baroness Hamwee

My Lords, I thank the noble Viscount for that reply and indeed for the commitment which, whatever the outcome this evening, I am sure the Government will pursue. I and other noble Lords— perhaps the noble Lord, Lord Jenkin of Roding —will be glad to discuss in detail with him precisely what an amended scheme might be. Those who have been involved in the matter up to now have not been convinced that any amended scheme—it is the first time I have heard the word "scheme" used by the Government—or any new arrangements could be effective.

Given the lateness of the hour and sensing the feelings of many of your Lordships, rather than deal in detail with the comments of the noble Viscount other than to say, because I cannot resist it, that I quite relish the chance for the London boroughs to use the savings to employ their own police officers to enforce the scheme, I wish to seek the view of the House.

7.18 p.m.

On Question, Whether the said amendment (No. 42) shall be agreed to?

Their Lordships divided: Contents, 42; Not-Contents, 63.

Division No.2
CONTENTS
Airedale, L.	Dormand of Easington, L.
Attlee, E.	Drogheda, E.
Brightman, L.	Graham of Edmonton, L. [Teller]
Bruce of Donington, L.
Carter, L.	Halsbury, E.
Cornwallis, L.	Hamwee, B.
Dean of Thornton-le-Fylde, B.	Haskel, L.

Henderson of Brompton, L.	Peston, L.
Hylton-Foster, B.	Rea, L.
Jenkin of Roding, L.	Redesdale, L.
Judd, L.	Rochester, L.
	Rodgers of Quarry Bank, L.
Kilbracken, L.	Seear, B.
Kilmarnock, L.	shannon, E.
Lawrence, L.	Shepherd,L.
McCarthy, L.	Stoddart of Swindon, L.
McNair, L.	Thomson of Monifieth, L
Merrvale, L.	Tordoff, L.[Teller.]
Meston, L.	Turner of Camden, B.
Monkswell, L.	Vivian, L.
Monson, L.	Wedderburn of Charlton, L.
Montgomery of Alamein, V.	White, B.

NOT-CONTENTS
Arran, E [Teller.]	Kenyon, L.
Astor of Hever, L.	Knutsford, V.
Astor, V.	Lane of Horsell, L.
Balfour, E.	Lauderdale, E.
Blyth, L.	Long. V.
Boardman, L.	Lonsdale, E.
Boyd-Carpenter, L.	Lucas, L.
Brougham and Vaux, L	Mackay of Ardbrecknish, L.
Burnham, L.	Mackay of Clashfern, L. [Lord
Cadman L.	Chancellor.]
Camegy of Lour, B.	Mersey, V.
Chesham, L.	Milverton, L.
Clark of Kempston, L	Morris, L.
Craigmyle, L.	Motastone, L.
	Mowbray and Stourton, L.
Cranborne,V. [Lord Privy Seal.]	Northesk, E.
Dixon-Smith, L	ORKNEY,E.
Downshire, M.	Plummer of St. Marylebone, L.
Elles, B.	Prior,L.
Elliott of Morpeth, L.	Rankeillour L
Elton, L.	Renton, L.
Ferrers, E.	Rodger of Earlsferry, L.
Fraser of Carmyllie, L.	Sharples, B.
Gisborough, L.	Shaw of Northstead, L.
Goschen, V.	Soulsby of Swaffham Prior, L.
Harding of Petherton, L.	st. Davids, V.
Haslam, L.	Stewartby, L.
Henley, L.	Strange, B.
Hesketh, L.	Strathclyde, L. [Teller.]
HolmPatrick, L.	Torrington, V.
Howe, E.	Trumpington, B.
Inglewood, L.	Wise, L.
Ironside, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 43 to 47 not moved.]

The Earl of Arran

My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, may I suggest that the Report stage begins again not before 8.25 p.m.

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

The Sitting was suspended from 7.27 to 8.25 p.m.]

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

Baroness Turner of Camden moved Amendment No. 48:

Page 95, line 10, after ("State") insert ("or an independent trade union").

The noble Baroness said: My Lords, I shall speak also to Amendment No. 49, which has been grouped with Amendment No. 48. The House will be aware that we on this side of the House have the gravest doubts about the wisdom of doing away with the necessity of licensing employment agencies. In Committee, we sought, without success, to remove the clause from the Bill. We are now faced with doing what we can to ameliorate the possible effect of the clause and the schedule.

The Bill as it stands removes the requirement for employment agencies to be licensed. There appears to have been little pressure from any quarter to do away with the licensing requirement. Indeed, even the Government in doing away with the requirement seem to acknowledge that something must be done to give a form of protection to individuals utilising the services of such agencies.

Schedule 9 contains powers for the Secretary of State to prohibit persons from carrying on business as agencies in the event of abuses. The procedures for the exercise of that power by the Secretary of State involve a reference to industrial tribunals. They will be able to make prohibition orders on application from the Secretary of State if the tribunal considers that anyone involved is unsuitable on account of misconduct or any other sufficient reason which prevents them from being able to run an agency.

There are a number of objections to the proposals, some of which have been aired already. First, there is the heavy workload already borne by industrial tribunals, which results in delays in hearing cases of unfair discrimination or dismissal. There is likely to be a considerable delay between a case being uncovered and it eventually being heard by a tribunal. In the meantime persons accused of being unsuitable to carry on an agency will be free to continue with their exploitation of the unemployed people who may register with them. It must not be overlooked that the users of agencies are often people desperate to find employment, and sometimes so desperate that they will put up with abuses if they think that at the end of it they will be placed in some suitable situation.

Secondly, there is the fact that the schedule as worded does not give an individual who may feel that he or she has a grievance, or has been defrauded, any actual individual means of redress.

Amendment No. 48 provides that, in addition to the Secretary of State, an independent trade union may make a reference in an endeavour to deal with an agency that is improperly run or where misconduct of any kind damages individuals who may be union members. That surely makes a great deal of sense. It would take the pressure off individuals, who would then have an organisation to speak for them at an industrial tribunal and to make their case.

It may well be argued, however, that not everyone belongs to a union. Indeed, many of the people who normally look to agencies to find employment may not be union members or in some cases not even eligible. Nonetheless, it seems sensible that it is the individual who seeks the assistance of such agencies who will most need protection. I am very surprised that in these days of increased pressure for consumer protection nothing has been done in the Bill by the Government to give any support or cover to the consumer of employment services.

The amendment gives the individual a right to make an approach via the Secretary of State, and obliges the Secretary of State to investigate and respond. It may be argued that that does not differ all that much from the amendment that was moved in Committee by the noble Lord, Lord Jenkin. The noble Lord did not press his amendment because he was then assured by the Minister that Schedule 9 would be so operated as to look after the individual interests about which we are all concerned. It may well be that the use of such a mechanism, if it were on the face of the Bill, would obviate the necessity in some cases for the reference to an industrial tribunal. As a result of an investigation, the employment agency might feel compelled to reform itself or perhaps to compensate the aggrieved individual. In any event, the possibility would still exist of a reference to an industrial tribunal as a backstop.

In my view, it is necessary that something of that kind should be on the face of the Bill, despite the discussion that we had in Committee on a similar issue. These amendments are a "second best" at continuing the system, which is perfectly all right, but in Committee we failed in our attempt to remove the provision from the Bill. In these circumstances, I commend the amendments to the House. I beg to move.

8.30 p.m.

Lord Rochester

My Lords, I wish to speak in support of Amendment No. 49. In Committee, I said that because of my industrial experience I began from the position of feeling considerable sympathy with the Government's aim in introducing deregulatory legislation. However, I was at a loss to understand why what is now Clause 31 and Schedule 9 have been included in the Bill. No one in the relevant taskforce asked for these provisions and I believe that there was no consultation about them.

At the time I expressed an anxiety about the effects of the change proposed in Schedule 9 under which, at the instance of the Secretary of State, employment agencies can be prohibited from operating by an industrial tribunal only after abuses have been uncovered and complaints made. I was particularly anxious about the effects of the proposed arrangements on the administration of justice in this area. There are already widespread misgivings about the delays which now occur in the hearing of cases before industrial tribunals. The effect of Schedule 9 would be to add to those delays. Moreover, the Government have given no indication that they are thinking of increasing the resources to be made available to industrial tribunals on this account.

Amendment No. 49 will do nothing to remedy that defect but at least it is a positive move to satisfy people who have a stake in the operation of a particular agency by enabling them to make representations to the Secretary of State and to have their complaints investigated and answered within a reasonable period of time. Unlike Amendment No. 48, Amendment No. 49 leaves the Secretary of State as the initial arbiter of whether a complaint should be referred to an industrial tribunal. Moreover, it opens the field to others besides trade unions. Therefore, in my view it is to be preferred to Amendment No. 48, which I hope in the circumstances the noble Baroness, Lady Turner, will not press. I hope that instead she will give precedence to Amendment No. 49. I shall listen carefully to what the Minister has to say in response to the discussion.

Lord McCarthy

My Lords, the first amendment is simpler than the second but we realise that it will not find acceptance because it contains three terrible words; "independent trade union". There is not much hope for that. Therefore, we have tabled the second amendment, which is not as effective but deals with individuals who have a concern. It does not try to superimpose a trade union's rights alongside the Secretary of State but merely provides that an individual who has a concern can, as it were, ask the Secretary of State to look into a matter.

The amendment provides that the Secretary of State shall give an answer within a fixed period. We believe that that is a modest way of going about the difficulty. Our difficulty was that, after a long and productive discussion in Committee, when all kinds of people on all sides supported the general view that the Government had not made their case, the Government were not prepared to do anything. We pointed out the vulnerability of the workers involved and the fact that there was no one in the industry—not the, employers, producers or directors—who wished to see the system abolished. We also pointed out that there had been no consultation and that the whole thing had come as a complete surprise.

We have received no answer from the Government except—and I am trying to summarise the arguments that they used in Committee—a contradiction. On some occasions they were saying that there were no abuses and that the system worked so well that we could abolish it. That may be what the Minister will say tonight. If one took that attitude towards legislation in general, as the crime rate fell you would sack the police. If a thing is successful you do no abolish it; you assume that it is working.

Perhaps the Minister felt that that was a rather thin argument because on other occasions he had another argument. Unfortunately, it contradicted his first argument. It was that, although there were no abuses, if one looked closely there were some because, despite the regulation, some people still had to pay premium payments to obtain jobs. The argument was that because there were still some abases we could abolish the system because it was not working. If you took that view you would get rid of the driving test because some people still drive dangerously.

The fact is that, whatever we say, the Government still wish to abolish the system. They have asked all the Ministries to find something to abolish and this has been put forward. Nobody wants it, it will do no good, no bureaucracy is involved but they want to abolish it. There is no evidence and, in the absence of evidence, we hope that the Government will accept the most modest of our amendments.

Lord Wedderburn of Charlton

My Lords, I rise to support my noble friends in what they said about Amendment No. 48 and to advance some propositions in regard to that amendment and Amendment No. 49. I wish to suggest in particular the suggestion that an independent trade union should have locus standi in such matters by the following route of argument. First, the Government are clearly stepping backwards from a procedure which was preventive to one of enforcement. That we regret; prevention is better than any form of enforcement. However, as regards enforcement, under their proposals only the Secretary of State can use the procedure.

Amendment No. 49 would introduce what is the usual old orthodox British method of the individual being able to take some steps by himself or herself. The difficulty is that our orthodox methods of enforcement—and no law is worth anything if it is not adequately enforced— is highly unsatisfactory. In sex discrimination cases, for example, and in equal treatment generally, we know that we lack an efficient mechanism for class or group actions when the Equal Opportunities Commission is unable to stand in court very much in that regard. On the whole, English legal procedures have been unable to expand the concept of class actions in the way in which they have been expanded in the United States and, in a different way, in Continental jurisdictions.

Amendment No. 48 appears on the Marshalled List, especially now that we can look forward to an alternative employment law within a short space of time, because in almost every other comparable jurisdiction— certainly of Western Europe —independent trade unions are given a locus, a standing, to enforce the interests not only of their own members but of employees in the trade or occupation.

This is a case in which a government who really cared about the enforcement of a new system with regard to employment agencies would look at individual rights but also at the rights of associations, independent trade unions and other groups which could more effectively bring class actions in the tribunals albeit that there is no legal aid available for bringing actions in tribunals. That point has not been made. Of course some form of legal aid would be necessary.

The Government should think about the amendment. As my noble friend Lord McCarthy said, they will not accept it because they are terrified by the words "independent trade union". It is a term of art in employment law and it will stay there on the record as a guide post, I hope, for future action.

Lord Henley

My Lords, the first amendment seeks to enable a trade union —not an individual as the noble Baroness, Lady Turner, seemed to imply—to make an application to an industrial tribunal in its own right. The measures in Schedule 9 to enable an industrial tribunal to prohibit persons from involvement with agencies on the application of the Secretary of State are intended to replace measures which currently exist in the Employment Agencies Act 1973. Those measures are the powers to refuse or revoke employment agency licences according to laid down procedures.

Under these current powers, the Secretary of State alone is given the responsibility of deciding whether or not to proceed with a proposal to refuse or revoke a licence. He does this on the basis of information provided by others and of evidence collected by inspectors. In so doing, he must have regard for the wider public interest in whether or not the agent in question should be allowed to operate.

The Government believe that that is the way decisions about whether or not there should be an application for an industrial tribunal to make a prohibition order should be handled. It must be right that such decisions should continue to be taken on the basis of the general public interest rather than from the much narrower interest of a user of an agency or a representative of users.

The noble Lord, Lord Rochester, and the noble Baroness, Lady Turner, spoke to the second amendment, which is in two parts. First, it enables any person to make application to the Secretary of State seeking a prohibition order. Secondly, it provides for the Secretary of State to investigate a complaint if appropriate and obliges him to respond to the complainant within 30 days of the complaint.

The first part of the amendment appears to assume that it is open to the Secretary of State to make a prohibition order under new Section 3A. That is not the case. New Section 3A simply provides for the Secretary of State to make application for a prohibition order to an industrial tribunal. Only a tribunal will have the power to make an order. However, if the purpose of the first part of the amendment is to give the defined persons a right to ask the Secretary of State to apply for an order I sympathise with the thinking behind it, but I have to say that a specific provision such as this is unnecessary. It has always been open to any person to make a complaint about the conduct of an employment agency or employment business to the employment department and it will continue to be open, without any need for an express provision.

I also sympathise with the reasoning underlying the second part of the amendment. But I do not believe it is appropriate to impose a legally-binding deadline of this sort in the legislation. It will not always be possible to investigate and decide what to do about a complaint in a set time.

I can assure the House that, after the repeal of licensing proposed in this Bill, the Department of Employment's inspectors will continue to investigate all complaints or other information about the activities of people concerned with agencies. Such complaints may be made by trade unions and other representatives as easily as by individuals.

As to the proposed obligation for the Secretary of State to respond to complainants within 30 days, the Department of Employment already meets this in practice. Under the Citizen's Charter initiative, the department promises publicly to tell complainants what is happening in an investigation within four weeks of the receipt of the complaint. The department also follows this up every four weeks until the investigation is completed. On completion of any investigation, the department gives a written explanation of the outcome to the complainant. In those circumstances, it seems to me that the second part of the amendment would add nothing of value. Therefore, it seems to me that these amendments are unnecessary and undesirable and I hope the noble Baroness will not press them.

8.45 p.m.

Baroness Turner of Camden

My Lords, I thank the Minister for his explanation of the way in which he envisages that Schedule 9 will apply and the way in which his department will respond to complaints. For that reason, he believes that Amendment No. 49 is unnecessary.

I can understand why he should say that, but, on the other hand, I ask him to accept that what is happening here is a departure from a practice which has been in operation without any complaint since 1973; in other words, the requirement that agencies should be licensed. Therefore, we are in a rather different situation as a result of legislation being introduced by the Government.

Again, I am not surprised by the Minister's response to Amendment No. 48. The amendment was drafted by my noble friend Lord Wedderburn of Charlton and it seemed to me at the time to be a valuable amendment. A group of people may be involved in making a complaint and those people would have some means of access to an industrial tribunal to make a complaint. They could do that through an organised body that is able to present a case to an industrial tribunal.

Under Amendment No. 48 an individual would not have that right but the organisation to which the individual or group of individuals belonged would have that right. On the other hand, under Amendment No. 49 an individual would have the right to make an approach to the Secretary of State. It seems to me that in a situation where there is a quite new departure— licensing will no longer exist—it would be useful to have on the face of the Bill provisions to indicate that individuals who felt aggrieved because licenses were no longer required for employment agency businesses to operate would know that there was provision on the face of the Bill for some redress and investigation.

However, I fear that there is no point in pressing the amendments at this time of night. It is quite late and therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 [Unfair dismissal: selection for redundancy]:

Baroness Turner of Camden moved Amendment No. 50:

Page 25, line 19, at beginning insert ("Subject to subsection (3A) below,").

The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendment No. 53. Amendment No. 50 is a paving amendment for Amendment No. 53. That seeks to draw attention to what I believe to be an anomaly which exists at present, and I am indebted to the Civil Service unions for the text which is now before your Lordships.

For reasons which I confess I do not understand I am informed that Crown servants, which includes all ranks of civil servants, are excluded from provisions affecting other employees with regard to redundancies. The amendment does not attempt to alter the arrangements which the Government now propose and with which we attempt to deal in our other amendments. It merely seeks to give Crown servants the same cover as that for other people.

Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 sets out detailed provisions with regard to consultation about projected redundancies. This Bill does not seek to amend those provisions. But they do not apply to Crown servants.

I know that it will probably be argued that the position of Crown employees is safeguarded by the existence of something called PIN 5, which I gather is one of the Civil Service procedures handling redundancies. On the other hand, although 1 am told that the Civil Service unions have received helpful assurances that PIN 5 will apply, nevertheless they are concerned that they are not legally binding responsibilities with regard to Crown employers.

That is especially important in connection with the present organisation of the Civil Service. With the devolution of management from the centre and the spread of the Next Steps agencies, the unions fear the increased likelihood of significant disputes arising between themselves acting on behalf of staff and devolved Civil Service management about the handling of redundancies. They have received legal advice that, in the event of such disputes arising, the legal remedies available to them and to the members in Crown employment would be significantly weakened unless there is a provision in the legislation of the kind indicated in Amendment No. 53.

I understand that there have been some exchanges between the unions and the department and that there has also been an indication that the Government understand the nature of their concerns. Therefore, now that we have tabled the amendment and given the House the chance to debate it, I hope that the Minister will be able to come forward and say that the Government are prepared to accept it or one of very similar wording. I am sure that it was not the intention that Crown servants—and by that I mean all ranks of civil servants—should be disadvantaged any more than it is envisaged that ordinary employees will be disadvantaged as a result of the passage of the Bill. I beg to move.

Lord Rochester

My Lords, in Committee I joined in opposing the Motion that Clause 32, as it now is, should form part of the Bill. I did so essentially because if methods of selecting people for redundancy are henceforth to be disregarded, even if they form part of agreed procedures, that seems to me a retrograde step in terms of the need to maintain good industrial relations. As I understand the position that would exist once Clause 32 becomes part of our domestic law, employers wishing to select people for redundancy would still have to engage in consultation with trade union representatives with a view to reaching agreement but the decisions that they then took might, except for what are called in the relevant Act "special reasons", be regarded as reasonable even though they involved reneging on the agreement reached. When the Trade Union and Labour Relations (Consolidation) Act 1992 was being debated in your Lordships' House, I complained that, in confining consultation to trade union representatives rather than extending it to employee representatives generally, the Government had not fully implemented the European directive on collective redundancies. As I see it, the 1992 Act will now have to be amended to comply with the recent ruling of the European Court of Justice.

In Committee, I said that, in those circumstances, I could not see why the Government were insisting on the retention of Schedule 9 in its present form. But, in the end, their view prevailed and the schedule remained intact. We must now respect that decision of the House. However, even in providing for consultation with trade union representatives alone, as the noble Baroness, Lady Turner, said, there is one glaring omission in that, by virtue of Section 273 of the 1992 Act, Crown servants and, therefore, their Civil Service union representatives are specifically excluded from the consultation requirement.

I attached my name to Amendment No. 53 because I believe it is important that the Government should put the matter right by accepting such an amendment. Alternatively, if they think that the wording is defective, they can undertake to bring forward their own amendment on Third Reading.

Lord Henley

My Lords, I am not sure whether I should begin my response by using the phrase "giving assurance". I do not think that those are the right words to use. However, I believe that it would be helpful if I tell the noble Baroness that her amendment is defective. I shall not play too much on that fact; nevertheless, it is defective. If she would like details on its defects, that is something that we may perhaps consider later. I should like to explain, first, why I believe that the amendment is unnecessary and then give certain assurances that I hope the noble Baroness will accept.

Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 places a duty on employers to consult recognised trade unions about proposed redundancies. Crown employment is excluded from the provisions of the Act. As the noble Baroness made clear, the amendment seeks to reverse that position.

The House will be aware that the provisions were first enacted in 1975 and implement the European Union collective redundancies directive. Article 1(2) of the directive states that it will not apply to workers employed by public administrative bodies or establishments governed by public law. The directive does not, therefore, require Crown employees to be covered. I am sure that the noble Baroness will seek to assure me that that does not prevent the Government from going further than the directive. Obviously that is the case. However, the Bill is aimed at deregulation— that is, at removing unnecessary and burdensome legislative provisions. The extension of existing legislation is not consistent with that aim.

The amendment is also unnecessary. When the provisions now contained in the 1992 Act were first enacted, an undertaking was given that the Government would act consistently with the legislation. I should like to repeat that assurance. The commitment remains. Government departments and agencies will consult with a view to reaching agreement as, indeed, is already the case.

I believe that the noble Baroness made clear that the Treasury and the Council of Civil Service Unions agreed in 1991 that the old Civil Service model redundancy agreement should be replaced by a document entitled, Redundancy: Principles and Procedures to which the noble Baroness referred. It sets out the principles which government departments and agencies, under the terms of the Civil Service management code, follow when drawing up their redundancy arrangements. I need not spell out all the details of the document. As the noble Baroness will be aware—and, indeed, as one would expect—it requires departments facing redundancies to handle them in accordance with good industrial practice and, in line with government policy, to act consistently with those statutory consultation provisions which do not apply to the Crown.

Moreover, in addition to the right of appeal to an industrial tribunal against unfair dismissal, established civil servants have a separate right of appeal to the independent Civil Service Appeal Tribunal. They are entitled to a minimum of six months' notice of redundancy. Those arrangements compare very favourably with the general statutory requirements.

I hope, therefore, that the noble Baroness will understand that her measure, however well intentioned, is technically deficient. I can expand on that point if she feels that it is necessary. However, the amendment is unnecessary and inconsistent with the purpose of the Bill. In view of the assurances I have been able to repeat to the noble Baroness —I hope she is grateful for them—I trust that she will feel able to withdraw the amendment.

Baroness Turner of Camden

My Lords, I thank the Minister for his response. I welcome the assurances which will now go on the record and which—it is to be hoped—will allay some of the fears which have been expressed to me by the Civil Service unions. However, I must say that they have received assurances of a similar kind in the past and they still wished to have the amendment, which I accept may be technically flawed, placed on the Marshalled List for debate by the House. Their legal advice is that, in order to have complete protection, they need to have something on the face of the Bill.

There is little point in pressing the argument at this hour of the night. I shall ensure that the assurances that will now appear on the record reach the notice of the Civil Service unions. As I said, it is to be hoped that many fears will to some extent be allayed as a result of what has been said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9 p.m.

Lord Wedderburn of Charlton moved Amendment No. 51:

Page 25, line 19, at beginning insert ("Subject to subsection (3B) below,").

The noble Lord said: My Lords, in moving Amendment No. 51, I shall speak also to Amendment No. 54. I should point out that the former is a paving amendment. I apprehend that the noble Lord, Lord Rochester, has already addressed part of this pair of amendments. It would be surprising perhaps if the Government were eager to accept them because since 1979, with one area of exception, the Government have favoured amendments of employment law only when they have increased the prerogatives and power of management and weakened the position of trade unions, and indeed, more important in some respects, weakened the position of individual employees. The area of exception of course arises within the domain of European Community law—as technically I think it should still be called—and compels them to adopt a less troglodytic policy by signposts that are very different from their own.

It is compliance with the European directive, along with a very simple point of morality, which lies behind the amendment. Section 59, which I may say did not originate with a Labour Government, is of course almost in the same form in the Industrial Relations Act 1971. I wondered how many Members of this House who piloted the Act of 1971 on to the statute book would support its wholesale repeal, but I do not see many of them this evening—it may be that they are at the seaside at Bournemouth.

Lord Henley

1981!

Lord Wedderburn of Charlton

1981, my Lords— no, 1971. The Minister has it; it is 1971. The Government seek to repeal this section, which requires employers to keep agreements made concerning the criteria for selection for redundancy—that is, in the narrower sense of redundancy now that we have two definitions—unless there are special circumstances which justify a breach of that agreement. Because they must keep that agreement, or renegotiate it, as is often done, a dismissal of a worker in breach of it is automatically unfair. I would have thought that that was a very simple proposition of morality apart from anything else.

If the clause in this Bill passes unamended, the dismissal will no longer be automatically unfair because an employer can go back on his word about the criteria for dismissal and break his own agreement, even if he does so the day after making it. The worker would then have to show that the dismissal was unreasonable in other ways—I stress the words "in other ways"—and the employer's breach of the agreement would not be sufficient for a remedy of any kind after the repeal of Section 59. It would be interesting to know how many Members of this House have been made redundant and to know what it is like to come home saying that they have lost the wage on which the family depends. That is what is at stake.

There are many such agreements between employers, mainly with trade unions or with groups of workers, about the criteria for selection. However, very few of them—many surveys show this—are the crude "last in first out" model that the Government always speak about. They are nearly always flexible procedures and they are frequently renegotiated. In fact one of the jobs of good management is to renegotiate such matters quite regularly. That is one of the jobs of trade unions, too. Where agreements are brought up to date, that happens. What the Government discovered, according to the noble Lord, Lord Henley, in Committee, was that all of this area of law was outdated. I quote from col. 1107 of Hansard of 4th July—not that anything turns on the date. It was, said the noble Lord, the deregulation task force which drew our attention to this outdated piece of legislation".—[Official Report, 4/7/94; col. 1107] One wonders who brought it to the attention of the task force. He continued, 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". He went on to say, 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". Cases often go one way and then the other way. What these employers need is not new legislation but better lawyers to win more cases. It is not so confusing to a first year student to know that some cases go one way and others go another way. There was no argument of any substance for these being outdated principles. Is it an outdated principle that one should keep one's word and that the employer should renegotiate what he has agreed rather than just break it? Indeed the section as it stands—as it did in 1971, and has always done— contains an exceptions clause, (an exceptions proviso), as regards whether there are no special reasons justifying a departure from the arrangement.

There is case law—the noble Lord was right in this respect—regarding tribunals and the superior appellate courts making findings on what is a justifiable special reason for departure from agreed arrangements. By repealing Section 59 altogether, the Government would give management the right to tear up its agreements in the face of a workforce which is about to suffer redundancy. The point is that in doing that the Government will once again risk a contravention not merely of a simple point of morality but also of the European law on the matter.

European Directive No. 129 of 1975, as amended in 1992, requires us in our law to oblige employers who propose to make workers redundant to consult with those workers' representatives and to begin consultations with those workers' representatives in good time with a view to reaching agreement We adjusted our law in the Act of 1993 to bring in those words— to consult with a view to reaching an agreement". On 8th June 1994 the European Court of Justice held that we had not done enough in terms of designating a machinery for workers' representatives. Therefore the Government have these issues on their plate. To come up with this proposal at a time when they have to face the even more difficult task of devising a machinery for workers' representatives in every such case is really quite astonishing.

The grounds for saying the measure will make our law worse are not difficult to understand. I shall try to propound them in a couple of sentences. The employer must come to a consultation with workers' representatives in good faith, seeking to make an agreement, presumably to which he will adhere (that would certainly be the assumption of the European Court in Luxembourg)—not an agreement which he can or wishes to break. How can it be said that there is compliance with the requirement, after he has made such an agreement, if he can be permitted to say, "I have changed my mind. I shall ignore the agreement and select employees in a different way"? Such a state of the law will fly in the face of the requirements of the directive. Indeed anyone who reads the judgments of 8th June will see clearly—in some ways for us English lawyers this is a somewhat unusual teleological approach of the court—the purpose of the provision and of interpreting it in a broad way. I have absolutely no doubt at all that the court will not accept agreements which can be broken as sufficient evidence of implementation of the directive. The Minister knows that perfectly well and so do his advisers.

The member state is obliged to provide effective, proportionate and adequate deterrent remedies against a breach of the standards required by the directive. That is a further principle of Community law. Section 59 as it stands is an integral part of the law sanctioning standards of consultation with a view to agreement. It is true that it does not impose itself via Section 188, which the Minister will tell us is another matter. It imposes itself through a direct statement that breaches of such agreements are unfair dismissals.

It is there that the enforcement of the criteria for the selection for redundancy on which the employer must consult with a view to agreement bites. Take away Section 59 and the employee in such circumstances is in much worse case.

In these matters the Government are in grave danger of flouting the court in Luxembourg. For example, it is well known that employers are bound under the directive to inform the competent authority, which in this country is the Department of Employment, about their redundancy consultations and to give employees an opportunity to comment. Yet in 20 years not one proceeding has been taken for a failure of an employer to give that information, although it is well known that not all do so. In some cases Ministers have spoken of such matters being confidential.

The imbalance is too great. All that the amendment does is to demonstrate that—even though the protections of Section 59 are repealed in every other case, where the employer is doing what the directive requires him to do (and Amendment No. 54 is based on words which reflect that)—namely, to consult the representatives of workers … with a view to reaching agreement, on this matter of criteria for selection—the obligation to observe the agreement remains, and, where it is breached, there is the effective and proportionate remedy of making such a dismissal unfair. I beg to move.

Lord Rochester

My Lords, as the noble Lord, Lord Wedderburn, indicated, I have already in effect spoken to the amendment in what I had to say on the previous amendment. Therefore, I do not believe that it is necessary for me to do more now than to say that I support the amendment moved by the noble Lord, Lord Wedderburn.

Lord McCarthy

My Lords, my noble friend Lord Wedderburn explained what the amendment is intended to achieve and that we regard it as necessary because if we pass the Bill as now drafted we shall be in conflict with the EC directive.

I want to go back to a debate in Committee which was left in the air. The issue is why the Government have come forward at all with this proposal and why they insist on saying that it is necessary because tribunal practice is unclear.

I submit to the House that tribunal practice is not at all unclear. The attempt to argue that without legislation of this kind British industry will be stuck in a fog and will find themselves forced to impose "last in first out", or LIFO, principles in contradiction to the needs of the enterprise is phantom land. I find it very difficult to discover whether the Government believe that. My noble friend Lord Wedderburn asked where the notion came from. It could have come from extremely ignorant employers who have never been near a tribunal in their lives, or it could have come from Conservative Central Office. I cannot find a third party.

A custom can be changed. Customs are changed all the time. A custom is what we do now. If we do something different tomorrow then that becomes the custom. There is no problem and no mystery. If you want to change an agreement, you can change it, as my noble friend Lord Wedderburn said. "Last in first out" agreements have been changed. It was the case in the 1960s and 1970s that it was very difficult to escape from such a LIFO agreement because employers did not want to. They thought that that was a perfectly reasonable principle. Most employers operated it.

However, in the hard, difficult days of the 1980s, employers went to their unions and said that they could not operate LIFO agreements on that basis because they sometimes wanted to keep young people or people in certain occupations and with certain skills, or sometimes they even wanted to sack people with bad absentee records. They wanted to include that in the agreements, and the unions agreed. Therefore, the Government will find that 90 per cent. of the agreements are not purely "last in first out" agreements. They could not endure on that basis. Trade unions do not have the power to impose such agreements.

If employers go to a tribunal and say that they have not observed the "last in first out" principle because they were in a difficult position and had an occupational preference, a worker efficiency preference or a youth preference, or they had a health preference and had got rid of the lame and the sick, the tribunal would accept that, whether or not there was an agreement. Of course, this is where ignorance comes in. Of course, they may say to you, "You want occupational preference and efficiency preference but you must operate those criteria objectively and fairly, and if you don't then it's unfair dismissal." Some ignorant employers may believe that they have had unfair results because they do not understand that they have to consult, to offer people alternatives, and to be objective in applying the criteria. Every time anything goes wrong, those employers say, "That's because of old UFO". If that is so, they are ignorant employers. They have never been near an industrial tribunal. Alternatively, they do not note what their lawyers tell them when they go to an industrial tribunal.

The industrial tribunals give their side members and chairmen an employment law handbook if they wish to take it (although the assumption is that the chairman knows its content). An Employment Law Handbook, Series 2, No. 1, is produced by IDS. This is what the chairmen and side members are told, free of charge, about LIFO. The handbook states: This criterion is safe, objective, easy to administer and generally fair, but is fast becoming outmoded in skilled or semi-skilled occupations as well as at more senior levels because it fails to address the precise needs of the employer in a given situation. Accordingly, where other factors are important, LIFO may fairly be dispensed with". That is what tribunal members are told. Basically that is the principle that they apply. The only people who think that LIFO hangs around employers' necks are those who know nothing whatever about the concept.

In Committee, and in another place, we asked the Government to cite cases. The cases that they cite never work. The Government cited Cross International v. Reed. In that case the tribunal did not accept the employer's arguments. As the noble Lord, Lord Wedderburn, said, sometimes you win; sometimes you lose. Sometimes the tribunal says in effect, "We have never heard such a pile of old codswallop in our life". That is basically what the tribunal said in Cross International v. Reed. The tribunal decided that the idea that one could lose 75 per cent. of one's turnover if one did not dismiss people in the way that had occurred— without consultation, without any reasonable action—is nonsense; and the case was lost. People go to tribunals, but they do not realise why they have lost the case.

In such circumstances, I believe that the Government have responsibility—and tribunals seek to carry that out by circulating the position regarding the law—not to legislate at large to abolish perfectly reasonable standards but to educate the ignorant. They have responsibility to say to people, "If you observe these rules, LIFO won't be hanging around your neck. If you don't like the custom or if you don't like the agreement, change them. There is no mystery". However, the Government do not do that. Perhaps they prefer mysteries because it makes it easier to knock off rights.

9.15 p.m.

Lord Monkswell

My Lords, I had not intended to enter the debate. We have had some impressive contributions. However, the noble Lord, Lord Wedderburn, stated that he did not think anyone in this House had experienced redundancy and its impact. I have and perhaps it would be useful for noble Lords to have a brief explanation of what I regard as the kernel of the amendment.

We have heard about morality and about legality. But at the end of the day, surely the whole objective of law making—and that is what we undertake in Parliament— is to ensure that the people of this country can live and work together satisfactorily. In order to do that, one needs fairness in a place of work. In order to have fairness, it is important that those involved in the negotiation of agreements negotiate in good faith, and, having come to an agreement, stick to it If there is no legal impediment to their tearing up the negotiated agreement it is likely to lead to a tremendous sense of unfairness, resentment and—dare I say it?—interference in the activity of the industrial undertaking.

I have experienced being made redundant. However, my experience goes a little wider. Not only was I an ordinary worker who at the end of the day was made redundant, but I have negotiated as a shop steward for union members. I have also had the experience of being a manager in industry and, effectively, negotiating from the other side of the table. In my last 10 years in industry from 1979 to 1989, the company for which I worked had to reduce the number of employees by two-thirds. We started with about 1,500 employees and by the time I left the company we were down to about 500. That was not because of any malevolent wish on the part of management to penalise the workforce. It was caused by the economic circumstances engendered by the Thatcher government.

I remember having a conversation with the managing director of the company. I asked: "Why don't you go down to London and argue and explain to government Ministers that their policies are crucifying our company?" Do you know what his answer was? He said: "Yes, we've done that. I have been part of a delegation from the local engineering employers' federation to speak to Keith Joseph"—who was then Secretary of State for Industry—"and it was like talking to a brick wall".

I hope that the arguments on this side of the House tonight will not be like talking to a brick wall. The result of that debacle, that ideological attitude, was that Britain lost one-third of her manufacturing capacity in the early 1980s. It did the country no good, it did individual companies no good and it did British people no good. I implore the Government at this stage to think sensibly and arrive at a system of law which will ensure that industrial undertakings can operate efficiently and effectively, with everyone working together.

Lord Henley

My Lords, I have no intention of following the arguments put forward by the noble Lord, Lord Monkswell: he will understand that I do not accept them.

The noble Lord, Lord Wedderburn asked whether we would be eager to accept his amendments. He then tried to make a persuasive case but I have to tell the House that the simple purpose of the amendments is to nullify the effect of Clause 32 by disapplying it to any situation where the employer is under a duty to consult about redundancies.

As the noble Lord and others will be aware, employers are already under a statutory duty under Part IV Chapter II of the Trade Union and Labour Relations (Consolidation) Act 1992 to consult recognised trade unions about proposed redundancies. Following the European Court ruling of 8th June concerning the UK's implementation of the EC Collective Redundancies Directive, that duty will be widened in due course to cover situations where there are no recognised trade unions. The effect of the amendments would therefore be to render Clause 32 ineffective in virtually all redundancy situations. Let me remind the House that the effect of Clause 32 is that employers would no longer have to pay regard, in selecting for redundancies, to "customary agreements".

Collective agreements and customary arrangements are entered into on an entirely voluntary basis and it is always open to either party to withdraw. In the case of redundancy selection procedures, however, that freedom may be only theoretical. If a procedure becomes obsolete or unsuited to the current needs of the business, the sensible course is to replace it with a more modern arrangement. As things stand, however, any employer who acts in this eminently reasonable manner runs the risk of incurring unfair dismissal claims under Section 59(1) (b) of the Employment Protection (Consolidation) Act 1978. I believe that that cannot be right.

The ordinary unfair dismissal provisions will continue to apply. Those provide perfectly satisfactory protection for individuals against being dismissed without justification. Under those provisions, employers are required to allow fair procedures. In deciding what is fair, the tribunal will take into account all the circumstances surrounding the case. That will include the ACAS code of practice; and case law has established that in redundancy cases it includes warning and consulting employees, adopting a fair basis for selection and taking reasonable steps to redeploy. Any employer who saw the repeal of Section 59(1) (b) as a dispensation to dismiss at whim would quickly find himself paying compensation to those who suffered from such arbitrary behaviour. But I cannot believe that many would act in such a misguided manner.

The noble Lord also argued that Section 59(1) (b) is necessary to give full effect to the directive. That is simply not the case. The directive requires employers to consult, with a view to reaching agreement about proposed redundancies. However, it may not be possible to reach agreement. The directive recognises that a failure to agree may not be the fault of the employer. Yet, were these amendments to be passed, where no agreement can be reached and an employer proceeds with the redundancies (as he is perfectly entitled to do under the directive) he risks a finding that the dismissals are automatically unfair because they did not accord with past practice or an earlier agreement. That earlier agreement may have been reached years and years ago and may no longer be at all relevant.

Lord McCarthy

My Lords, can the Minister cite a case in which a tribunal said that?

Lord Henley

My Lords, I cannot give the noble Lord an example of the sort that he seeks. I am stating the law as it is at the moment, and that is the position that employers could easily find themselves in—and particularly if the noble Lord pursues the amendment that he wishes to pursue. I hope—although I very much doubt it at this hour of night—that I persuade him that it is not necessary to pursue this amendment.

I also believe that it is nonsense to suggest that the repeal of Section 59(1) (b) to which we have been referring would allow or encourage employers to go through the motions of consultation and then simply ignore the outcome. An industrial tribunal will have regard to all the employer's actions and will take full account of whether an employer consulted in good faith and whether the dismissals were effected in accordance with any agreement reached. It is right that it should do so and, if an employer has acted unfairly or improperly, it is right that the tribunal should find that the dismissal was unfair. It cannot be right that it is unfair solely on the basis of past practice or some outdated agreement. Therefore, as I said, I believe that the amendment moved by the noble Lord's noble friend Lord Wedderburn is misguided and I hope that the noble Lord will agree to withdraw it.

Lord Wedderburn of Charlton

My Lords, I thank the Minister for his reply. I apprehend, however, that it is not only I who will be very surprised and somewhat disappointed. This is a very tender area for the Government. Of course Clause 32 would be very largely curtailed if this amendment were passed. As the Minister quite fairly said, it would be very largely curtailed within the area in which it can lawfully operate. The supremacy of Community law—that is, Community law within union law—cannot be effective if its effect is to prevent the directive being implemented. As the Minister said, it would not have full effect. It is not a question of the directive having full effect; it is a question of whether it is properly implemented. It cannot be implemented unless the remedies are adequate.

It is perfectly true that the ordinary remedy of unfair dismissal, which the Minister went into, will remain. But the employer will be able to say in most cases: "This is a redundancy; that gets me to stage one". When it comes to stage two, he can say: "Well, it's got to be shown to be unreasonable", and all sorts of matters will be taken into account. But the tribunal will know—or if it does not, the employer's lawyers will say so—that the law has been changed in regard to going back on the criteria for selection. That used to be automatically unfair, but it is not any more. It is something that can be looked at, but it gives nothing like the protection that there is now.

Again my proposition to the Government is: please look at this matter again; you cannot give proper effect to the directive by implementation unless you say, "We are asking the employer to consult with a view to agreement". Of course, that does not mean that there must be an agreement in every case. Nobody has ever suggested that. Nobody has raised the matter of whether agreements are years and years old. I do not know why the Minister goes on about agreements being years and years old. He knows perfectly well that agreements are renegotiated; and he knows perfectly well that there is a special circumstances proviso in the section. It really is tiresome of the Government to come up with these quite absurd justifications for what is morally unjustifiable. Not a word did the Minister say as to why an employer should be allowed to go back on his word on the Tuesday for an agreement that he had made on the Monday. He did not say a single word about that. Somebody in a task force has dreamt this up.

It happens that the Government are on very dangerous ground in not complying, by implementing the directive properly, with—I stress this—proper, effective, deterrent and proportionate remedies without this section. Why do the Government want to do this? As my noble friend Lord McCarthy said, there are dozens of cases in which matters are renegotiated. Who has come along with all these cases that need this piece of deregulation? I suspect that what has happened is that the Department of Employment could not think of enough to fill its quota for deregulation and came along with this quite astonishing clause, saying "Let us deregulate this".

Left to myself, I should want to challenge this clause at every possible opportunity but I know we are not supposed to do that at this time of night. I leave it to my noble friend on the Front Bench to see what we do with the matter; otherwise, the amendment could just lie where it falls.

The Chairman of Committees (Lord Ampthill)

My Lords, is it the noble Lord's wish to move the amendment or to withdraw it?

Lord Wedderburn

My Lords, I am told by imperative authority that I must say one way or the other. In that case, I beg leave to withdraw the amendment. The Government, however, will rue the day.

Amendment, by leave, withdrawn.

[Amendments Nos. 52 to 54 not moved.]

9.30 p.m.

Clause 33 [Power to repeal certain health and safety provisions]:

Baroness Turner of Camden moved Amendment No. 55:

Page 25, line 28, at end insert ("(providing always that standards of health, safety and welfare of employees and the public are maintained.)").

The noble Baroness said: My Lords, we turn to another aspect of employment—the important aspect of health and safety.

The House will know that the powers to repeal certain health and safety regulations and some health and safety legislation arouse very great concern. In Committee we sought to articulate some of our worries in this area. The Government argue that many regulations are outdated and it is appropriate that they should be removed. However, the power given in this clause to override existing health and safety legislation is very substantial. There is a real fear that this could lead to a decline in standards of health and safety.

The Bill has been represented as part of the Government's drive to end burdens on business. We have heard that phrase used earlier this evening. It has been argued that some small firms in particular may face difficulties in meeting modern health and safety legal requirements. That may be so. But it seems to me that that is an argument for providing such firms with help and guidance rather than risking a reduction in standards. We should not lose sight of the fact that industrial injuries and illnesses themselves are a burden on business; indeed, on the community as a whole. Occupational accidents and ill health cost the UK up to £16,000 million a year. In 1991 there were over 473 work-related deaths and 30,000 people suffered major injuries as a result of workplace accidents.

The Health and Safety Commission does a marvellous job reducing risks. Indeed, the executive is one of the few remaining tripartite bodies with representation from both sides of industry. It is a format which is successful. However, it has suffered from cuts in funding. I am told that the budget for 1994–95 was cut by 2 per cent. I am also informed that by 1995–96 it will be cut by 10 per cent. We must bear that in mind when the Government tell us, as they will, that the new powers are subject to consultation with the Health and Safety Commission.

We have been assured in the other place that there is no hidden agenda. The Government want more cost effective regulation. If they are truly anxious that standards must be maintained—frankly, I should like to see them improved and there is a strong case for that, as the figures that I have quoted indicate—let us at least try for a minimalist amendment at Report. What objection can there possibly be to inserting the wording suggested in the amendment. It says simply that the powers may be exercised, providing always that standards of health, safety and welfare of employees and the public are maintained".

That really is as minimalist as one can get. Accidents like the recent one arising from the collapse of a ramp on a ferry result in much publicity. The recent appalling disaster to the Estonian roll-on roll-off ferry alerted the public to the dangers that can arise in the present competitive environment where the temptations to cut corners in pursuit of profit can be very real. As I indicated, accidents—often fatal—occur quite regularly in workplaces.

This morning I received a parliamentary briefing from the Royal College of Nursing whose members are expressing grave concern about the provisions of the deregulation Bill. It is worried about the cost to the National Health Service of accidents at work. It says that nurses have a higher incidence of absence through back pain, for example, than any other group of workers. It is extremely anxious lest the Bill, unamended, may mean a decline in standards. I hope therefore that the Government will see their way to accepting this minimal amendment and will confirm that the powers of the Bill when it becomes an Act will always be exercised with a view to maintaining standards of health, safety and the welfare of employees and the public. I beg to move.

Lord McCarthy

My Lords, I wish to take the Government back to the arguments previously used in this matter and ask them not to use those same arguments again. The Government previously said that they are simply doing what the Health and Safety Commission wants them to do. They say that the Health and Safety Commission tells them that they cannot get rid of outdated legislation before 1974 if they do not put anything in its place. If we accept the Bill as it stands it simply means that the legislation before 1974 can be abolished and nothing put in its place. The Government say that it is a minor clearing up of something required by the Health and Safety Commission.

That is totally untrue. It is true that that is what the commission said. But it is not what the Government are doing. If the Government were doing what the Health and Safety Commission wanted, there would be provisions in the Bill saying that in future the Health and Safety Commission could do to legislation before 1974 what it can now do to legislation after 1974. That is all. We would not be arguing. We would not be debating, and we would not be tabling amendments.

The Government are doing far more than that. They are taking the entire power—pre-1974 and post-1974— to themselves. In future the Secretary of State will decide. All that will happen to the Health and Safety Commission is that, if it is lucky, it will be consulted. Its whole function is being taken away and we cannot pretend that the reasons given by the Government have anything to do with its requirements at all.

Why are the Government doing this? It can only be because their friends tell them that health and safety is becoming too expensive. The amendment tests that out. If it is not because health and safety is becoming too expensive, the Government will accept the amendment. If it is not accepted, it is because the Government know that employers have opposed and fought every attempt to impose health and safety conditions upon them from the Plimsoll line down to the ferries. They will always oppose that; it is extremely expensive. It is often difficult to prove. There is a basic conflict of interest between the workers who believe they may be affected and the employers who are thinking of the cost. The Government are not doing what the Health and Safety Commission wants them to do if they do not accept the amendment. They are doing what their friends and the employers want them to do and they should say so.

Baroness Dean of Thornton-le-Fylde

My Lords, I support the amendment. Health and safety are absolutely crucial. I sometimes sit and listen to debates in this House and take myself back to the industrial scene. I look at the reality of what exists in the workplace day in and day out. For instance, last year the health and safety inspectorate had to issue 11,000 enforcement notices and institute 2,000 court proceedings against companies which breached the present laws on health and safety. As my noble friend Lady Turner said, just under 500 people lost their lives last year at work. This amendment only maintains the position that changes which take place must maintain the standards that are already in place. Even though we have made tremendous progress in this whole area—and I do not deny that—it is not sufficient to say that we should throw out the baby with the bath water and not have the controls that currently exist in legislation.

I remember very clearly when last we debated this issue at the Committee stage. We were told by the Government Front Bench, "Have faith. It is not our intention to reduce health and safety standards. Our commitment is equal to yours. We do not want to reduce the standards of health and safety. Of course we are concerned about people in the workplace". It is difficult to have faith and to believe what is being said when alongside that one sees that over the next three years just under 20 per cent. of the funding of the Health and Safety Commission will be taken away when we still have, despite an Audit Commission report, only 1,500 health and safety inspectors who are responsible for more than 650,000 workplaces.

For instance, in the printing and paper industry there were two separate very effective industry groups operating. Without so much as a "by your leave" or any consultation they were told that they were to be merged. In the printing industry the British Printing Industries Federation for the employers, the Newspapers Publishers Association for the newspapers and the unions in the industry, the graphical, paper and media unions, joined together and complained strongly that they had not been consulted and said that they opposed the merger of the two organisations. In March this year the Health and Safety Executive said that workplace accidents and health damage cost the community up to £16 billion.

We have good health and safety standards. We want to maintain those standards. I suggest that this amendment goes some way to achieving that. In the review of health and safety regulations conducted by the Health and Safety Commission, on the page over from the then Secretary of State, Michael Forsyth, the chairman of the commission says: Our evidence is that the current system has won widespread support, including both the legislative framework and standards. Given the toll of death"— just under 500 last year— illness and injury at work, few"— employers as well as employees— argue that it imposes inappropriate burdens on business". Health and safety is not a burden on business. It is a responsibility. Yet despite the high standards we still have many accidents and deaths in industry. People go to work each day hoping, rightly, that they will go home safely when they finish their work. I strongly urge the Minister to accept the amendment. If the Government really mean that they support good standards they will accept it.

Lord Henley

My Lords, I thought that the noble Baroness, Lady Turner, was under a misapprehension in moving the amendment but it was clear from what the noble Lord, Lord McCarthy, had to say that that was not the case. I start by giving a categoric assurance that, as we made clear at the Committee stage and in another place, we have no intention of reducing safety standards, and I shall go on to say just how good our safety standards are.

The clause merely gives the Secretary of State the same power with respect to pre-1974 legislation—I am grateful to the noble Lord, Lord McCarthy, for making this point—as he already has with respect to post-1974 legislation. It will be used to remove outdated and redundant law, not to diminish necessary safety standards. In fact, the Government's objective is to improve health and safety at work by making it easier for managers and staff to understand the law. We would not help them by keeping obsolete health and safety legislation on the statute book; nor would we help the Health and Safety Commission which has identified some 50 outdated and unnecessary provisions. Those provisions were identified during the commission's recent review which was carried out after extensive consultation with both sides of industry.

I remind noble Lords who forget this that the Health and Safety Commission is a tripartite commission with representatives from both employers and trade unions. Its view is that the provisions no longer serve a useful health and safety purpose either because the risks or the control measures to which they refer no longer exist or because other legislation is sufficient to maintain standards in practice. However, due to a technical defect in the Health and Safety at Work etc. Act 1974, they cannot be repealed or revoked.

Clause 33 simply remedies that technical fault. The amendment, on the other hand, would put us and the Health and Safety Commission right back at square one, making the clause unusable. I can give an absolute assurance that my right honourable friend the Secretary of State will listen to suggestions from the Health and Safety Commission and consult the commission as appropriate.

9.45 p.m.

Lord Peston

My Lords, I interrupt the noble Lord simply to ascertain that I can understand his logic in which I take a great interest. As the Minister said that the only purpose of the clause is to remove provisions that are redundant—I think that that is what he said—it cannot possibly hold him up in any way if he adds the words contained in the amendment because if the provisions are redundant, they are not relevant to maintaining those standards, whereas if the provisions are not redundant, they are relevant to maintaining those standards. The one thing that the amendment cannot possibly do is to stop the Minister getting rid of redundant legislation. It might do other things—

Lord Henley

My Lords, I think—not surprisingly— that the noble Lord did not listen to what I was saying. The provisions seek to put my right honourable friend in the same position as regards pre-1974 legislation as compared with post-1974 legislation to ensure that he has the same powers to get rid of something that is "redundant", as the noble Lord puts it. I should like to see the Secretary of State in the same position with regard to pre-1974 legislation as is the case under the Health and Safety at Work etc. Act 1974, which gives him those powers.

Lord Peston

My Lords, I always listen incredibly carefully to the noble Lord because I am extremely interested in what he has to say. That is why I am always looking for the logic of what he has to say. He said that if the amendment is added, the provisions cannot do the job that they are meant to do. That is logically impossible. If the amendment is added, the provisions are, at the most, otiose. That may be the noble Lord's argument, but it has not been his argument. He said that the amendment would be damaging, but he has not said a word that could remotely suggest why the amendment might be damaging given that he wants the provisions in the Bill.

Lord Henley

My Lords, I said that I was simply trying to put my right honourable friend in exactly the same position with regard to pre- and post-1974 legislation. That is the case. That is the point that I was making—

Lord McCarthy

My Lords—

Lord Henley

My Lords, I am not taking any more interventions. I remind the noble Lord that we are on Report.

I was going on to remind the House that we already have the power to repeal the majority of post-1974 health and safety law. I believe that about 300 statutory instruments have been revoked over the past 20 years. I remind the House that despite the pre-Ark speech that we heard from the noble Lord, Lord McCarthy—it might might have been from the noble Baroness, Lady Dean—that has not led in any way to any undermining of the standards. I assure the House that we have seen expenditure on the Health and Safety Executive increase in real terms by between 35 and 40 per cent. since 1990. Even more importantly, however, the fatal injury rate, which is quite a good guide as to how things are going, has fallen to its lowest level ever reported. It is now less than half the rate in the early 1970s and our health and safety record is among the best in the world. It is certainly better than that of most of our major EC partners. Those figures speak for themselves.

As I said earlier, the use of the new power is subject to consultation with the Health and Safety Commission and to the affirmative resolution procedure. Again, I should like to assure the House that these provisions are sufficient to ensure that there is no threat whatever to the necessary standards of health and safety. I therefore invite the noble Baroness to withdraw the amendment.

Lord Wedderburn of Charlton

My Lords, before the Minister sits down, I waited to see whether he would cover this aspect of the matter. He has not done so, but I feel sure that he has it in his brief or can give me some answer. These new powers to repeal apply to pre- and post-1974 regulations, and, after the 1974 Act especially those made under Section 15 of the Health and Safety at Work etc. Act. That is provided for in Clause 33(1) (b).

It is my belief, and my knowledge in some cases, that regulations made to implement European directives on this matter (the framework directive of 1989 and the manual handling regulations of 1992) have been made primarily under Section 15 of the 1974 Act. In that event, the clause gives a new power to the Secretary of State to revoke, repeal or amend regulations made in order to implement the European directives; that is, the framework directive and the eight daughter directives, as they are called, and there will be more. Is that the Government's intention? If it is their intention, have they given notice to the Commission, as I believe they are bound to do?

Lord Henley

My Lords, I shall have to write to the noble Lord on that point. The point that I was trying to make about the amendment is that noble Lords are trying to constrain the Secretary of State's power to remove redundant, otiose powers from pre-1974 legislation. We already have the power to remove those post-1974. We seek to have that power, and to implement it by the same means, as regards pre-1974 legislation.

Baroness Turner of Camden

My Lords, the Minister has responded to the amendment in a way which leaves me puzzled. I thought that there would be no reason why an amendment which merely says, "OK, the powers will still be there, but they will be exercised in such a way that standards of health, safety and welfare of employees and the public are maintained", should be unacceptable. Nothing that he has said convinces me that the amendment is otiose, as has been suggested, or would interfere with those powers in any way.

If it is true that the intention is not to reduce standards in any way—the Minister says that the Government are committed to maintaining standards—I cannot for the life of me see why it is not possible to accept the wording that we have put down. All I can say is that it is widely believed, judging from some of the briefing that I have received, that as the Bill stands, it will provide an opportunity for standards to decline. If we want to put the matter beyond reasonable doubt, it would be sensible to accept wording which says, "OK, the powers will be exercised." No one disagrees with the idea that we want to get rid of pre-1974 legislation which is out of date. We had all those arguments in Committee, and I understand them well. But I still do not see why it is not possible to exercise those powers, with which the amendment does not interfere, in such a way that people are assured that standards of health, safety and welfare of employees will be maintained. I do not see why that is not possible, and I do not believe that the Minister's reply deals with those arguments in any way.

However, it seems to me that at this point in the proceedings—it is 10 minutes to 10—there is little point in pressing this to a Division. I should have thought about doing so if it were earlier. We shall have to have another look at this issue on Third Reading, because, as I said earlier, there is a feeling that if we do not amend this provision in some way and establish on the face of the Bill that standards will be maintained, fears will continue that the Government have allowed some leeway for standards to be lowered, no matter what assurances they have given this evening. However, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Henley moved Amendment No. 56:

Page 26, line 4 at end insert:

("(2A) Instead of consulting such other persons as the appropriate authority considers it appropriate to consult under subsection (2) above, the authority may require the Health and Safety Commission or, as the case may be, the Health and Safety Agency for Northern Ireland to consult such persons as it considers appropriate for the purpose of deciding how it should respond to consultation under that subsection.

(2B) Instead of consulting a person whom the appropriate authority considers it appropriate to consult under subsection (2) above, the authority may require the Health and Safety Commission or, as the case may be, the Health and Safety Agency for Northern Ireland to consult the person for the purpose of deciding how it should respond to consultation under that subsection.

(2C) The appropriate authority may require consultation under subsection (2A) or (2B) above to be carried out in accordance with the authority's directions.").

The noble Lord said: My Lords, the amendment will allow the Secretary of State to authorise the Health and Safety Commission to carry out consultation on his behalf. It will give a similar option to the Department of Economic Development in Northern Ireland.

As currently drafted, the clause requires the Secretary of State to consult the Health and Safety Commission and such other persons as [he or she] considers appropriate". The effect is that any consultation carried out by the Health and Safety Commission will not satisfy the requirement to consult "any others appropriate". This means that the Secretary of State will either have to consult industry and others, instead of the commission doing so, or to duplicate the consultation which may already have been undertaken by the commission.

We have already given assurances that we intend to use the new power, mainly in response to suggestions by the commission. Indeed, in the Review of Regulation the Health and Safety Commission has already recommended a number of provisions which should be repealed or revoked using the Clause 33 power.

In the circumstances, it will normally be more appropriate for the Health and Safety Commission to undertake consultations on the reforms which it has suggested. The amendment avoids the need for the Secretary of State to duplicate consultation which has already been undertaken. I beg to move.

Lord Wedderburn of Charlton

My Lords, I wish to ask the Minister a question. I do not understand the amendment. Halfway through it states: the authority may require the Health and Safety Commission or [the agency] to consult such persons as it considers appropriate". I am bothered by the floating "it". Is the "it" the authority, the commission or the agency?

Lord Henley

My Lords, perhaps the noble Lord will bear with me because my copy of the Marshalled List has slipped away. It may be better if I pursued the matter further by means of correspondence. Will the noble Lord remind me from where in the amendment he is quoting?

Lord Wedderburn of Charlton

My Lords, it is subsection (2A).

Lord Henley

My Lords, if the noble Lord will bear with me, I should prefer to write to him on this detailed aspect. However, I have now received advice from further quarters and I understand that "it" equals the Health and Safety Commission or, in Ireland, the agency.

Lord Wedderburn of Charlton

My Lords, the Minister might have a further look.

Lord Henley

My Lords, the noble Lord suggests that I have another look because there is some confusion. I can assure the noble Lord that I shall do so and I hope that, with that assurance, the amendment will be accepted.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 57:

After Clause 33, insert the following new clause:

Inspection of independent schools

(". After section 87 of the Children Act 1989 there shall be inserted—

"Suspension of duty under section 87(3).

87A.—(1) The Secretary of State may appoint a person to be an inspector for the purposes of this section if—

1. (a) that person already acts as an inspector for other purposes in relation to independent schools to which section 87(1) applies, and
2. (b) the Secretary of State is satisfied that the person is an appropriate person to determine whether the welfare of children provided with accommodation by such schools is adequately safeguarded and promoted while they are accommodated by them.

(2) Where—

1. (a) the proprietor of an independent school to which section 87(1) applies enters into an agreement in writing with a person appointed under subsection (1),
2. (b) the agreement provides for the person so appointed to have in relation to the school the function of determining whether section 87(1) is being complied with, and
1094
3. (c) the local authority in whose area the school is situated receive from the person with whom the proprietor of the school has entered into the agreement notice in writing that the agreement has come into effect,
• the authority's duty under section 87(3) in relation to the school shall be suspended.

(3) Where a local authority's duty under section 87(3) in relation to any school is suspended under this section, it shall cease to be so suspended if the authority receive—

1. (a) a notice under subsection (4) relating to the person with whom the proprietor of the school entered into the relevant agreement, or
2. (b) a notice under subsection (5) relating to that agreement.

(4) The Secretary of State shall terminate a person's appointment under subsection (1) if—

1. (a) that person so requests, or
2. (b) the Secretary of State ceases, in relation to that person, to be satisfied that he is such a person as is mentioned in paragraph (b) of that subsection,
• and shall give notice of the termination of that person's appointment to every local authority.

(5) Where—

1. (a) a local authority's duty under section 87(3) in relation to any school is suspended under this section, and
2. (b) the relevant agreement ceases to have effect,
• the person with whom the proprietor of the school entered into that agreement shall give to the authority notice in writing of the fact that it has ceased to have effect.

(6) In this section—

1. (a) "proprietor" has the same meaning as in the Education Act 1944, and
2. (b) references to the relevant agreement, in relation to the suspension of a local authority's duty under section 87(3) as regards any school, are to the agreement by virtue of which the authority's duty under that provision as regards that school is suspended.

Duties of inspectors under section 87A.

87B.—(1) The Secretary of State may impose on a person appointed under section 87A(1) ("an authorised inspector") such requirements relating to, or in connection with, the carrying out under substitution agreements of the function mentioned in section 87A(2) (b) as the Secretary of State thinks fit.

(2) Where, in the course of carrying out under a substitution agreement the function mentioned in section 87A(2) (b), it appears to an authorised inspector that there has been a failure to comply with section 87(1) in the case of a child provided with accommodation by the school to which the agreement relates, the inspector shall give notice of (hat fact to the Secretary of State.

(3) Where, in the course of carrying out under a substitution agreement the function mentioned in section 87A(2) (b), it appears to an authorised inspector that a child provided with accommodation by the school to which the agreement relates is suffering, or is likely to suffer, significant harm, the inspector shall—

1. (a) give notice of that fact to the local authority in whose area the school is situated, and
2. (b) where the inspector is required to make inspection reports to the Secretary of State, supply that local authority with a copy of the latest inspection report to have been made by the inspector to the Secretary of State in relation to the school.

(4) In this section—

1. (a) "proprietor" has the same meaning as in the Education Act 1944, and
1095
2. (b) references to substitution agreement are to an agreement between an authorised inspector and the proprietor of an independent school by virtue of which the local authority's duty in relation to the school under section 87(3) is suspended."").

The noble Earl said: My Lords, I shall speak also to Amendments Nos. 59 and 60. These amendments relate to the inspection arrangements for independent schools. I believe that it is only proper to inform your Lordships, so as to remove any ambiguity, that I happen to be a Fellow of Winchester College. Having declared an interest, I should add that it has no bearing whatever on the amendment standing in my name, which I now seek to move.

At the Committee stage my noble friend Lady Young moved an amendment, the effect of which would have been to remove the requirement in Section 87 of the Children Act 1989 for local authorities to inspect the arrangements for the welfare of independent school boarders in the case of schools where the Secretary of State was satisfied that adequate alternative arrangements for such inspections were already in place. My noble friend explained that the amendment applied to schools falling under the umbrella of the Independent Schools Joint Council.

My noble friend Lord Strathclyde advised the Committee that the Government accepted the need for change and that we were sympathetic to the main objectives of my noble friend's amendment but that we considered it important that suitable systems should be in place in order to ensure that children were properly protected. My noble friend Lord Strathclyde offered to consider our noble friend's proposal further. This we have done.

The amendments which I now propose will enable an independent school to opt for inspection for welfare purposes by an organisation other than the local authority. The clause provides that the Secretary of State can appoint an organisation—an organisation which already inspects independent schools for other purposes—to undertake the welfare inspection functions in relation to independent schools which are currently undertaken by local authority social services departments.

The Secretary of State will have to be satisfied that an organisation which wishes to be appointed under these provisions will have proper welfare expertise within its inspection teams. Inspections will be expected to be undertaken at specified intervals, and organisations will be required to report any cases of child abuse or suspected child abuse to the local authority. The local authority has a duty, under the Children Act, to make necessary inquiries when it receives such information.

I hope that this amendment, which has been drafted after discussion with the Independent Schools Joint Council, will be acceptable to my noble friend and to the House. I believe that it is a sensible measure which will maintain the necessary protection of children living away from home in independent boarding schools. I beg to move.

10 p.m.

Baroness Young

My Lords, I thank my noble friend Lord Ferrers for moving the amendment. As he said, it is in response to the amendment which I moved in Committee and I am most grateful to him. I place on record also my thanks to my right honourable friend Mrs. Bottomley and my honourable friend John Bowis for their help and extensive consultations during the course of the summer.

I am more than happy to accept the amendment, which I know will be welcomed widely in the schools within the Independent Schools Joint Council.

As there seems to have been no further comment on the amendment, I should like to make one further point. I know that organisations have briefed your Lordships. I should like to re-emphasise the important distinction between independent schools which fall within the umbrella of the Independent Schools Joint Council and other independent schools. In inspecting its own schools, the ISJC uses independent experts—for example, former members of the Her Majesty's Inspectorate—to lead those visits and to write the reports. There is no question of schools within the ISJC resisting external scrutiny.

I make that point because other independent schools outside of the ISJC will still be subject to the same system of inspection by local authority social services departments as they were before the amendment came before the House.

I do not believe that anyone in the independent schools world is against inspection. Indeed, as I said before, all schools are subject to inspection by Ofsted and by the ISJC, and that will continue. Schools today have a commitment to openness. That is what parents want and that is what I am quite sure we all believe to be right. Of course, it is extremely important that the procedures should work properly.

Child protection is a matter for vigilance not just at intervals of one year, two years, four years or any other number of years but every day. Perhaps I may give one example of what I mean by that. I know of a recent case of a school which was inspected extremely thoroughly by a social services department, which gave it an excellent report. A month later, the school's own internal procedures resulted in a member of staff being suspended from duty. I say that merely to illustrate how difficult it is for inspections to achieve what some people would like them to achieve. But what is really important—and this applies to any school, whether it is an independent or a maintained school—is the responsibility and vigilance of the head and the staff.

I return to what I said at the beginning. I am very grateful to my noble friend Lord Ferrers for moving the amendment, which I am glad to accept. I know that it will be welcomed widely among the schools of the Independent Schools Joint Council.

Baroness Hamwee

My Lords, I spoke to the amendment moved by the noble Baroness, Lady Young, at the last stage of the Bill. At that point, I confessed to be greatly anxious that the need for change had not been demonstrated to my satisfaction. I have to accept that the amendments have been tabled with the greatest of faith, but I have heard no evidence tonight to suggest that the current system is not working nor have I heard what benefits the proposed changes will bring to children.

I know that it is common ground that there are problems even if we differ, perhaps, as to their scale. In Committee, I recall that the noble Baroness said that less than 1 per cent. of all boarding pupils had asked for counselling during the period of the ChildLine project. However, I read her words in Hansard and realised that even 1 per cent. of all boarding pupils probably represents a very large number of children. I am sure that the noble Baroness will agree that, however small the scale of the problem, we must be well aware of its seriousness.

During the six-month period of the project run by ChildLine in 1991—it was in part, I understand, a special helpline operated for children at boarding schools—155 allegations of sexual abuse were received from children. Some of that abuse had been going on for a considerable time. A number of children said that they were too ashamed to tell their parents. They did not want to worry their parents. They did not think that they would be believed, and so on.

The current system under the Children Act has been in place only since 1991. As I said, I am not aware of any evidence which shows that it is not working. I understand that the Department of Health has recently surveyed a sample of 250 heads of independent boarding schools. The results seem to indicate that the current process is something that should be continued. Indeed, 77 per cent. of those evaluating the inspections believe that the inspection process was "useful" or "very useful". There are a number of other statistics all of which bear out a very high level of satisfaction. I must confess that satisfaction on the part of the heads is only part of the story. It is possible that those who are not satisfied are those for whom one should have the greatest concern.

At the last stage of the Bill, the Minister said that he would consult. The noble Earl, Lord Ferrers, mentioned consultation with the ISJC since that time. I no longer have my copy of Hansard for that date; namely, 4th July. However, I have made a note that at col. 1128 the noble Lord, Lord Strathclyde, said that he would consult with education and welfare interests. When responding, perhaps the Minister can say whether there has been other consultation between that time and today.

I should like to ask the Minister a few questions, as clearly the Government are intent upon proceeding with the amendment. First, I should like him to comment on the frequency of inspection. I understand that there is draft guidance soon to be published which recommends inspection not less than every four years. I believe that that has been a bone of some contention. Secondly, I should like to know how the competency of staff will be assessed and what training there will be for those who inspect under the new system. Thirdly, what monitoring arrangements will be put in place? Clearly, this is a matter which has to be kept under the most scrupulous review.

In addition, using an analogy, I am concerned about a matter which was debated by your Lordships in the context of the last Education Act which related to the relationship between an inspectorate and those whom it inspects. I have often felt that the value in the education system of local education authority inspectors is that they can create a relationship with the schools they inspect. It is not a matter of a one-off inspection on an infrequent basis; it is a whole culture and a whole web of support and advice that is being woven.

I have to say that I feel it would be a mistake to nibble away at the Children Act. In the case of crime, the fact that the police do not prevent all crime does not lead any of us to suggest that we should get rid of the police. The fact that not all child abuse has been ended should not, I think, push us in the wrong direction as to the inspectorate. I know that ChildLine wrote to the Secretary of State in the summer. I wish to quote one sentence from the letter which stated: "All we hear at ChildLine indicates the need for greater independence in inspection, not less".

Baroness Dean of Thornton-Ie-Fylde

My Lords, I, too, would hope that the Government would reconsider their position on this amendment. Tonight each of the three speakers who have spoken on this matter so far have referred to the earlier debate and the amendment of the noble Baroness, Lady Young, that was discussed on 4th July. That took into account the 1991 ChildLine special line for independent boarding schools which was funded by the Department for Education. In that debate the noble Baroness said that the ChildLine scheme between January and July of that year had failed to uncover a single case of sexual abuse. I am not suggesting, as I have too much respect for the integrity of the noble Baroness, Lady Young, that that error—it is a serious error as regards the ChildLine report—was in any way ill-intentioned.

The fact is that during the six months that the line was open—as has been said by the noble Baroness, Lady Hamwee —155 children from independent schools rang that line and complained of sexual abuse, mainly from their teachers. Some 35 additional children complained of physical abuse. Some 27 per cent. of the children in those cases said that the abuse had been taking place for some time. That in no way implies that sexual abuse occurs more often in independent schools than in other establishments, or that independent schools are bad, but it indicates that there is a problem in this area as there is in other areas. That applies to maintained schools also. That regrettable fact, that not one single case of sexual abuse was uncovered, is to be found in Hansard. That fact was part of the process that led to this amendment appearing this evening.

It is to be regretted that the Independent Schools Joint Council repeated the error to which I have referred when it made its submissions to the government department. I have the report here that was submitted by ChildLine to the department. The report gives the statistics. So concerned was ChildLine about this matter that it wrote not only to the government department but also to the Independent Schools Joint Council to express its serious anxiety.

In that same debate on the amendment to which I have referred, the noble Baroness, Lady Young, said that the social services inspectorate was going to publish its findings of 200 inspections of independent schools. I am not aware that that report has been published, and if it has been published, I have not seen it. However, I wonder whether it is the same report as I am referring to because the social services inspectorate also interviewed 250 head teachers of independent schools asking them about the present provisions of social services departments in carrying out their inquiries. Although that report also has not been published, it has been quite widely circulated. I shall be interested to hear, in the Minister's response, whether that has been taken into account, because the information that I have of the evaluation of the 250 head teachers of key aspects of Section 87 inspections by their local social services departments shows that 90 per cent. evaluated those contacts outside formal inspection as helpful or extremely helpful. Eighty-seven per cent. evaluated the standards and criteria used by their social service departments in inspecting their schools as either mainly appropriate or fully appropriate. Furthermore, 87 per cent. evaluated the inspection report produced by their social services department. I ask the Minister whether it is the intention to publish that report and, if so, to comment on those responses from the head teachers.

As for the change which is suggested tonight, I understand that it is correct that the Independent Schools Joint Council has been consulted. However, other organisations with expertise in this area have an independent view. I gather that the metropolitan authorities oppose the changes. Children's welfare agencies such as ChildLine and the NSPCC oppose them, as do social services directors. Even Ofsted has said that its job is to evaluate and inspect educational standards and that it does not have the expertise to examine the welfare of children.

I ask the Minister what is wrong with the present system relating to children's welfare. In what way would these changes benefit children whom we are all concerned to see have proper provision? I do not accept that children's welfare and safety is a fit topic for a deregulation Bill. It is far too important.

If the Minister is determined to press ahead, with the amendment it will be crucial for the welfare of children to produce guidelines as to how the inspections are to take place. I am grateful to the Minister for saying that that will happen. I hope the Government accept that they, not the people who may be appointed, will be answerable directly for any serious anxieties which may arise.

I hope that the Minister will answer the anxieties strongly and understandably held by agencies concerned with the welfare of children, whether or not they are in independent schools. I believe that this fundamental change, on which there has been very little consultation and for which there is little evidence to show that it is necessary, is wrong.

10.15 p.m.

Lord Boardman

My Lords, I had not intended to be present and I do not propose to speak on the merits of the issue. It is unfortunate that although my noble friend Lady Young paused for a considerable time after the amendment had been moved by my noble friend on the Front Bench to allow interventions from the opposite side of the House in order that she might respond, the noble Baroness opposite waited until my noble friend had spoken.

Lord Peston

My Lords, this is not my speech under the rules governing Report stage. I take considerable offence at what has been said. I personally remained silent and advised my colleagues to do the same out of courtesy to the noble Baroness, Lady Young, since the amendment was introduced specifically on her behalf. I felt that it was correct to allow her to have the first say. Therefore, I am extremely unhappy about what the noble Lord has just said.

Lord Boardman

My Lords, I note what the noble Lord, Lord Peston, says. However, I believe that it is unfortunate.

Lord Peston

My Lords, I will not accept such a remark. I have to ask the noble Lord to accept that there was a specific reason of courtesy for a much respected Peer. I went out of my way to make certain that she was the first person to speak after the Minister. I hope that the noble Lord, Lord Boardman, will accept that that is why I and my noble friends did not speak immediately.

Lord Boardman

My Lords, I fully accept that the noble Lord had good reasons. However, I believe that it is unfortunate because my noble friend would have welcomed an opportunity to reply to any criticism made of the amendment, which was the inspiration of my noble friend, and she did not have an opportunity to do so.

I shall not attempt to respond to the criticisms, but there was a pause in order that noble Lords who felt differently could make their points, to which my noble friend, who had inspired the amendment, could respond. I believe it unfortunate that the noble Baroness did not have the opportunity to respond. I understand the point that the noble Lord, Lord Peston, makes. However, I felt that my comment was fair.

Lord Monkswell

My Lords, I readily admit that I may not have understood the Minister's opening remarks, or the purport of the amendment. Perhaps the Minister will be able to clarify it for me. However, as I understand it, the amendment allows for inspectors inspecting the independent sector from an educational point of view also to inspect it with regard to the point of view of the welfare of the children.

If my understanding of the amendment is correct, I am worried. We should all recognise that two separate professions are involved—the education profession, and those professionals who undertake the inspection of schools, whether of the independent or state sector, who are not only teachers in their own right but also senior teachers with special expertise in inspection. One could almost say that they are professional educational inspectors.

The social workers who will be involved in inspection regarding the welfare of children will no doubt be professional social workers. They will be senior social workers who have developed a professional expertise regarding inspection for determining the welfare of children. Those two professions are separate and distinct. Such professional expertise would be arrived at after academic study and professional experience, specialising in the specific area of activity.

1 am sure that a number of people in this country will no doubt develop professional expertise in both fields. However, I am not sure whether there is a body of people with such expertise in those twin professions to enable them to undertake the two inspection functions. It worries me that the provision may be suggesting that one profession can do another profession's job.

I may have misunderstood the amendment, and its intention. If I have understood the intention correctly, I believe that the House has every right to be concerned.

I am not sure whether I heard one remark correctly: that those people who are already inspectors for the independent sector tend to be retired professionals. If that is so, it worries me—and I believe that the House is right to be anxious—that those who have retired from their professional life, whose professional expertise may not be completely up to date and whose experience no doubt was good over a number of years but who may not be fully up to date with the latest legal situation and best practice, are the people involved in the important task of inspection to ensure the education and welfare of children in this country.

Lord Peston

My Lords, I am in some difficulty about rising, because I am sensitive to the remarks made by the noble Lord, Lord Boardman, especially as I am rather critical of some of the matters in the amendments. Following what he said, if the noble Baroness, Lady Young, wished to intervene, I should not be shouting "Order, order". Others may, but I should give her all the leeway possible to respond to anything others may say.

I start with the question raised by my noble friend Lady Dean. Are these fit amendments for the Bill? I am not remotely persuaded that they are, because the Bill is meant to be about deregulation, and regulations that are oppressive, the removal of which would take away an undue burden relative to the benefits of the regulations. That has not been remotely demonstrated with respect to the amendments. In other words, since noble Lords opposite—particularly Ministers—have complained fairly frequently about some of the amendments which we have put down, I do not see how they can expect to get away with this amendment. I have to place on record that it does not fit the purposes of the Bill as outlined originally by the noble Lord, Lord Strathclyde, and as stated early in the preamble to the Bill. I think that my noble friend is right, it does not fit the Bill. To put it differently, what we need is a great deal of effort about the burden on the one hand and the benefits on the other. I put that clearly to noble Lords.

I have a series of questions which I am sure will indicate my lack of understanding about how it will work. Am I right that someone has to pay for all this? If so, could I be told who will pay for it? Will it be paid for by the schools themselves? Therefore, will the new inspectors become clients of the schools? If they do, how do we use the word "independent" when it comes to such matters? Is there a cash nexus involved here or is there somewhere else in the amendments or in the Bill a suggestion that the cost will be met by the taxpayer? I think that is an important question. I assumed that it would be paid for by the schools themselves. If so, one runs into the question of what one means by "independent" when one is paying the people concerned.

My next question has already been touched on, but I would like clarification. Is it true that the local authority, or rather its social services department, remains ultimately responsible for the welfare of the children? Is it true that nothing in the amendment will remove the local authority's responsibility? Am I right that it will remove the authority's inspection function but that the authority will remain responsible? I am not certain that I am right but I proceed on the assumption that I am and that ultimately the local authority remains responsible. I then become a little lost. Again, I echo one or two of the words of my noble friend, I am at a loss as to what will happen in practice when all this happens. To whom does the inspector report? To the school? To the Secretary of State? When the inspector discovers something wrong, where does the local authority come into it? Does there remain a statutory obligation?

Lord Tordoff

My Lords, perhaps the noble Lord will allow me to intervene. He touches on an interesting point and I can see that in a case like sexual abuse there may be the need to report to the police or some similar authority. But in the case of something like bullying, which is clearly an important part of the review that has taken place, bullying is not something which one can report to the police or the authorities. The noble Lord, Lord Peston, has an important point.

Lord Peston

My Lords, I am grateful to the noble Lord, Lord Tordoff. It was not sexual abuse that was dominating my thinking on the point, although it is the kind of matter that people raise. I take the welfare of children to be much broader than that. I do not want a great debate on independent schools and boarding schools but one reason why people like me would not let our children within a million miles of such places is that we as parents regard ourselves as responsible for the welfare of our children. We do not care to place them in the hands of other bodies. I know that noble Lords opposite take a different view but I regard myself and always have regarded myself as responsible for my children's welfare.

Responding to the noble Lord, Lord Tordoff, I take welfare in the broad sense of what he would talk about in terms of the welfare of one's children. Since he mentioned bullying, I include psychological bullying, which is just as important as physical abuse. But my central point remains, as it were, the chain of command. I am not quite clear how all of this can remotely work. In the end, who is the responsible person?

Perhaps I can go further. This is, in some sense, about inspecting schools. But what happens to the whole question of the individual child, or the individual child's parents? To whom do they have the right of complaint? What is the avenue they can take? If anybody suspects that there is something wrong in an individual case— and the inspection arrangement has nothing to do with it—do they still go to the local authority and say, "There is something wrong here. Someone's got to do something about this"? I am indebted to the noble Lord, Lord Tordoff. Perhaps the answer is to go to the police. But I am bound to say that, for me, this whole area is left somewhat obscure.

In the end this is as good an example as any of "If there's nothing wrong, why try and fix it?". I cannot see that any case has been made for saying that this is an area where we ought to intervene. I can think of enough things that are wrong with our country and where one could intervene. This is one of the areas where it totally escapes me as to why suddenly we are given over two pages of amendments on a subject of this kind.

I conclude by, in a sense, apologising to the noble Baroness, Lady Young. She knows that I am usually extremely sympathetic to many of her concerns. I think she can tell that I am less than sympathetic in this case. But if she wants to tell me off, then I will not say, "Order, order".

10.30 p.m.

Earl Ferrers

My Lords, a number of points have been raised and I shall do my best to answer them. At the start I must say that I was surprised at the reception this amendment received from a number of noble Lords who found themselves less sympathetic to it than I would have expected.

Anyone who deals with these matters knows that it is quite right that children have to be protected. That is the reason why these inspections have been carried out. We then say: how shall we best do this? The fact is that in many of these instances where children are in independent schools people send their children to those schools because that is the way they want their children to be brought up. It is an individual contract between the parents and the school. The child is sent to the school and there is an understanding that the child will be brought up in the way that you expect. If you do not like what is happening you remove the child from the school. That is a free choice that is given to everyone.

The noble Lord, Lord Peston, asks: why on earth do you want to make this change if there is nothing wrong? The fact is that over the course of the past few years these inspections have been fairly intrusive. Social services have gone to schools, they have made their inquiries and they have been, as I say, quite intrusive. For example, I draw this thought to the attention of the noble Lord, Lord Peston. It is correct that there should be a guardianship of children, but one has to be very careful that in the effort to retain a guardianship over children it does not become intrusive into the life of the school. Often one finds that children are asked questions by inspectors away from the masters. They are asked whether the masters are behaving correctly towards them, and so forth. That can in some ways be undermining, and one wonders whether that is the correct duty of social services. Why is that being done? It is being done in order to ensure that there is no abuse, whether of a sexual nature or of a bullying nature.

We are saying that of course it is right that there should be a protection for the children, but that protection ought to be done—it should be done—by independent schools, by those who are capable of doing it. There is an inspection that is done by the schools themselves. My right honourable friend will have to be satisfied that any organisation which wishes to be appointed under these provisions will have proper welfare expertise within the inspection teams. There is a perfectly sound argument for saying that there are teams of people—inspection teams—who would be more appropriate than the social services in certain circumstances for doing this kind of work.

The noble Lord, Lord Monkswell, referred to welfare. One might reasonably ask: what is the difference between welfare and pastoral care? When a child goes to a school, he is given into the care of the school. The noble Lord, Lord Peston, said that he would not like to do that. I can understand that he may not wish to do that. But plenty of people do; and when they do send their children to a school, that school is responsible for the pastoral care of the child. There is very little difference between the pastoral care and the welfare.

What there must be is trust. That trust has to be between the parent and the school. In order to ensure that that trust is maintained within the bounds of reason and respectability, there has to be some form of inspection to make sure that people are not going completely off the rails.

Most independent boarding schools have had the benefit of two visits from the Social Services Department. From those it is evident that schools have taken the advice of the inspectors and have put in place procedures which ensure that the welfare of the children in those settings is safeguarded. Where allegations of abuse are made, the existing arrangements under Section 47 of the Children Act continue to apply.

There is no doubt that the inspections have created quite an upheaval in the schools. Some of your Lordships may think that that is a good thing. I feel that it is questionable. It is right that there should be an upheaval in the school if there is something wrong; but I think that it is wrong for there to be an upheaval in the school if there is nothing wrong.

A commitment was given by the Government at the time when this provision was originally considered by Parliament that the arrangements under the Children Act should be reviewed in the light of experience. The review of inspections to date under Section 87 has shown that in most cases Social Services Department inspectors are carrying out their inspections sensitively and sensibly. The majority of schools have found their reports helpful. But in too many cases there were examples of intrusive and inclement actions or attitudes by a minority of social workers and the review found a need to clarify the recommendations which were made to schools by the inspectors and to improve consistency across the country.

I was asked how often the inspection is likely to occur. I understand that it will be about every four years. During the first few years the operation of the inspections showed that most independent schools now have adequate procedures in place to ensure that the welfare of children is safeguarded.

The organisations which are appointed to undertake these inspections will, in the case of schools' associations, wish to monitor more closely any schools which are accredited by them about which there are any significant welfare concerns. The Secretary of State will decide on the basis of the application who should become an approved body and the training and expertise of the inspectors. The approved body will be under a statutory duty to inform the local Social Services Department if there is any question of child abuse and the Social Services Department has the responsibility of investigating the matter under Section 47 of the Children Act. It would have to take such action as is appropriate under that Act.

I was asked whether the report will be published. No decision has yet been taken on the publication of the inspector's report.

I explained earlier that the Secretary of State will have to be satisfied that any organisation that wishes to be appointed under these provisions will have to have proper welfare expertise within its inspection teams. The inspections will be expected to be undertaken at specified intervals and organisations will be required to report any cases of child abuse.

I was asked whether local authorities were responsible for the welfare of children. As I said originally, in the case of an independent school to which a child is sent, it is a contract between the parent and the school. It is the school that is responsible for the welfare of the child. When anything goes wrong, the local authority is the ultimate body which will be responsible. Local authorities are responsible for the welfare of children and if there is a risk of significant harm the local authorities must be notified. They hold powers under Section 47 of the Children Act to make inquiries.

I come back to my original point. Of course it is right that schools should be inspected. They should be inspected for their educational ability and their pastoral qualifications to make sure that nothing goes wrong. But we must be careful not to indulge in some kind of hunt on the basis that schools must be inspected in (case there should be something wrong and, by so doing, almost insinuate that there must be something wrong and therefore have to find out if there is something wrong. It is one thing to have an inspection which says, "We want to make sure that the school is conducting itself in a proper fashion"; it is another to make an inspection of a school which almost incites the children to think that there must be something wrong and therefore to complain about things.

I say only this. It is a point worthy of remembrance. If children are encouraged to say things against their teachers which may be lies, they can destroy the reputation of the teachers straightaway and without foundation. In all these matters a delicate balance must be maintained. There is a balance between the welfare of the child and the responsibility of the school and the teacher. We believe that it is right that there should be inspections but that they should be undertaken by bodies which have the approval of the Secretary of State and not just by the social services. That is the reason for the amendment, which I hope your Lordships will approve.

On Question, amendment agreed to.

Clause 35 [Extent of Chapter II]:

Earl Ferrers moved Amendments Nos. 58 to 62:

Page 26, line 29, after ("sections") insert ("(Licensed premises at international ports: permitted hours) (1),").

Page 26, line 29, leave out ("and").

Page 26, line 29, at end insert ("and (Inspection of independent schools)").

Page 26, line 33, leave out ("Section") and insert ("Sections (Licensed premises at international ports: permitted hours) (2),").

Page 26, line 33, after ("19") insert ("and (Repeal of remainder of the Shops Act 1950) (b)").

The noble Earl said: My Lords, with the leave of the House I shall move Amendments Nos. 58 to 62 en bloc. They have already been spoken to. I beg to move.

On Question, amendments agreed to. [Amendment No. 63 not moved.]

Clause 39 [Determination of applications for licences]:

[Amendments Nos. 64 and 65 not moved.]

The Earl of Arran moved Amendment No. 66:

Page 31, line 37, leave out ("and had been so specified for a prescribed period").

The noble Earl said: My Lords, in moving Amendment No. 66 I shall speak also to Amendments Nos. 67, 70, 71 and 74 through to 79. They are technical amendments. I beg to move.

On Question, amendment agreed to.

The Earl of Arran moved Amendment No. 67:

Page 31, line 47, leave out from ("licence") to end of line 4 on page 32 and insert ("as an operating centre of the holder of that licence.

(5B) In paragraph (a) of subsection (5) of this section "operator's licence" does not include a licence granted under section 67A of this Act, and the reference in that paragraph to a place being specified in an operator's licence does not include a place being so specified—

1. (a) by virtue of an interim direction such as is mentioned in section 68A of this Act;
2. (b) if such conditions as may be prescribed in relation to the exercise of the right of any person to appeal against that place being so specified are not satisfied;
3. (c) if such conditions as may be prescribed in relation to the review under section 69J of this Act of the decision so to specify that place are not satisfied; or
4. (d) by reason of being situated within a place that is so specified."").

On Question, amendment agreed to.

Clause 41 [Duration of licences and grant of interim licences]:

[Amendment No. 68 not moved.] Clause 42 [Variation of licences]:

The Earl of Arran moved Amendment No. 69:

Page 36, line 40, leave out from beginning to end of line 6 on page 38 and insert:

("(2) Where the application relates to an existing operating centre of the licence-holder in the licensing authority's area—

1. (a) any of the persons mentioned in section 63(3) of this Act may object to the grant of the application on the ground that the use of that operating centre in any manner which would be permitted if the application were granted would cause adverse effects on environmental conditions in the vicinity of that centre;
2. (b) subject to subsection (5) of this section, any person who is the owner or occupier of any land in the vicinity of that operating centre may make representations on that ground against the grant of the application; and
3. (c) (whether or not anyone objects or makes representations under paragraph (a) or (b) of this subsection) the authority may refuse the application on that ground.

(3) For the purposes of subsection (2) of this section, an application shall be taken to relate to an operating centre if—

1. (a) granting it would or could result in an increase in the number of vehicles, or the number of vehicles above a certain weight, that have that centre as their operating centre; or
2. (b) any undertaking recorded in or condition attached to the licence that the application seeks to have varied or removed relates to that centre.

(4) Where the application is for a place in the licensing authority's area to be specified in the licence as an operating centre of the licence-holder—

1. (a) any of the persons mentioned in section 63(3) of this Act may object to the grant of the application on the ground that that place will be unsuitable on environmental grounds for use as an operating centre of the licence-holder; and
2. (b) subject to subsection (5) of this section, any person who is the owner or occupier of any land in the vicinity of that place may make representations against the grant of the application on that ground.

(5) A person may not make representations under subsection (2) (b) or (4) (b) of this section unless any adverse effects on environmental conditions arising from the use of the operating centre or place in question would be capable of prejudicially affecting the use or enjoyment of the land there mentioned.

(6) If any person duly objects or makes representations under subsection (4) of this section against an application for a place in the licensing authority's area to be specified in the licence as an operating centre of the licence-holder, the authority may refuse the application—

1. (a) on the ground that the parking of vehicles used under the licence at or in the vicinity of that place would cause adverse effects on environmental conditions in the vicinity of that place;
2. (b) subject to subsection (7) of this section, on the ground that that place would be unsuitable on environmental grounds other than the ground mentioned in paragraph (a) of this subsection for use as an operating centre of the licence-holder.").

The noble Earl said: My Lords, this is a further technical amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Arran moved Amendments Nos. 70 and 71:

Page 38, line 12, leave out ("and had been so specified for a prescribed period").

Page 38, line 25, leave out from ("licence") to end of line 33 and insert ("as an operating centre of the holder of that licence.

(9) In paragraph (a) of subsection (7) of this section "operator's licence" does not include a licence granted under section 67A of this Act, and the reference in that paragraph to a place being specified in an operator's licence does not include a place being so specified—

1. (a) by virtue of an interim direction such as is mentioned in section 68A of this Act;
2. (b) if such conditions as may be prescribed in relation to the exercise of the right of any person to appeal against that place being so specified are not satisfied;
3. (c) if such conditions as may be prescribed in relation to the review under section 69J of this Act of the decision so to specify that place are not satisfied; or
4. (d) by reason of being situated within a place that is so specified."").

The noble Earl said: My Lords, with the leave of the House I shall move Amendments Nos. 70 and 71 en bloc. I beg to move.

On Question, amendments agreed to.

Clause 45 [Review and transfer of operating centres]:

[Amendments Nos. 72 and 73 not moved.]

Schedule 11 [Schedule to be Inserted in the Transport Act 1968 after Schedule 8]:

The Earl of Arran moved Amendments Nos. 74 to 79:

Page 101, line 29, leave out from ("specified") to ("in") in line 32.

Page 101, line 32, leave out ("(other than one granted within that prescribed period)").

Page 102, line 7, at end insert (", and the reference in sub-paragraph (2) to a place being specified in an operator's licence does not include a place being so specified—

1. (a) by virtue of an interim direction such as is mentioned in section 68A of this Act;
2. (b) if such conditions as may be prescribed in relation to the xercise of the right of any person to appeal against that place being so specified are not satisfied;
3. (c) if such conditions as may be prescribed in relation to the eview under section 69J of this Act of the decision so to specify that place are not satisfied; or
4. (d) by reason of being situated within a place that is so pecified.").

Page 103, line 7, leave out from ("specified") to ("in") in line 10.

Page 103, line 10, leave out ("other than one granted within that prescribed period").

Page 103, line 29, at end insert (", and the reference in sub-paragraph (2) to a place being specified in an operator's licence does not include a place being so specified—

1. (a) by virtue of an interim direction such as is mentioned in section 68A of this Act;
1109
2. (b) if such conditions as may be prescribed in relation to the exercise of the right of any person to appeal against that place being so specified are not satisfied;
3. (c) if such conditions as may be prescribed in relation to the review under section 69J of this Act of the decision so to specify that place are not satisfied; or
4. (d) by reason of being situated within a place that is so specified.").

The noble Earl said: My Lords, with the leave of the House I shall move Amendments Nos. 74 to 79 en bloc. I beg to move.

On Question, amendments agreed to.

Clause 56 [Duration of licences]:

Amendment Nos. 80 and 81 not moved.]

The Earl of Arran

My Lords, I beg to move that further consideration on Report be now adjourned.

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

House adjourned at a quarter before eleven o'clock.