HL Deb 18 July 1995 vol 566 cc114-41

3.8 p.m.

Report received.

Clause 1 [Meaning of "disability" and "disabled person"]:

[Amendments Nos. 1 and 2 not moved.]

Schedule 1 [Provisions Supplementing Section 1]:

[Amendments Nos. 3 to 7 not moved.]

Baroness Gardner of Parkes moved Amendment No. 8: Page 47, line 15, at end insert (", HIV disease").

The noble Baroness said: My Lords, this is rather a surprise. I was concerned that we might not arrive at my amendment before supper time, so I am quite pleased.

This amendment is almost self-explanatory. We discussed this matter in considerable detail in Committee. Sufferers from HIV disease are the most discriminated against among those who have any adverse medical condition. The inclusion of this term in the list of progressive conditions in the schedule would signal to employers that the Government are not prepared to tolerate the unreasonable and often very ill-informed attitude that people have towards sufferers.

I should also like to take up various points that were made by the noble Lord, Lord Mackay, in Committee. He was concerned that, were this amendment relating to HIV disease to be accepted, people could, and would, put forward a case for almost every other disease to be included. I point out to him that no other amendment relating to any other type of condition has been put forward. This is the only one where such a condition has been specified, either in Committee or on Report. That is evidence that the situation is quite unique and that the condition should be included in the schedule.

Accepting this amendment now would be in line with the declaration that the Government signed at the December 1994 paris AIDS Summit. I wonder, also, how they chose the three conditions that they did choose without considering HIV. It is very serious and very important; it should be considered. This addition to the Bill would be a recognition of the true medical situation in relation to this progressive condition. It would do a great deal to offset some of the almost hysterical, and very often inaccurate, reporting on this illness, so distressing to sufferers and to relatives and others who dearly love them and who have to suffer alongside them what is almost invariably—some people say entirely invariably—a terminal condition. It is not always terminal because people die of other related illnesses before AIDS itself. This matter should not be taken lightly. I hope that the noble Lord realises how seriously the House feels. This is an issue of great importance. I beg to move the amendment.

Lord Rea

My Lords, I personally, wearing my medical hat, strongly support this amendment. I hope very much that the Minister will be able to agree to it.

Lord Kilmarnock

My Lords, I, too, support the amendment, to which my name is attached. I hope very much that it will be acceptable to the Minister, especially as it excludes what the noble Lord described in Committee on 13th June as a latent condition with no symptoms as yet. That is what I believe caused him the most concern on the last occasion. The noble Baroness's new wording solves that difficulty. Also, as the noble Baroness mentioned, the amendment is in the spirit of the commitment made by the Government at the Paris AIDS Summit on 1st December 1994, at which all signatories solemnly declared, our determination to ensure that all persons living with HIV/AIDS are able to realize the full and equal enjoyment of their fundamental rights and freedoms", as well as, our determination to fight against poverty, stigmatization and discrimination"— the last being particularly the subject of this Bill. All signatories also undertook in their national policies to, protect and promote the rights of individuals, in particular those living with or most vulnerable to HIV/AIDS, through the legal and social environment". Those are the undertakings that the Government accepted. They may not like the style of that type of continental declaration, but that is what they put their name to, in the person of Mrs. Bottomley.

There is also an important domestic point. I did not realise that this would be the first amendment discussed, the previous batch of amendments not being moved. Therefore I am afraid that I did not hear the noble Baroness's opening remarks. She may have made this point. If the Government want to police this Bill merely through an advisory council rather than through a commission with teeth, it is even more important that it should be made clear on the face of the Bill, both to those likely to be affected and to their advisers, what rights and remedies are available to them in the normal courts and tribunals of the land.

There are in addition important employment points to be considered. They were made notably by the noble Baroness, Lady Jay, and to some extent by me in Committee. Although, as the noble Lord said on 13th June, this is not a general anti-discrimination Bill, it is certainly an employment discrimination Bill, at any rate in this part. We do not want young people to be thrown on to benefits when it is quite unnecessary for long periods during the progression of their disease. On all those grounds, I find it hard to see how the noble Lord can resist the noble Baroness's redraft of her amendment. I look forward very much to hearing his reply.

3.15 p.m.

Baroness Masham of Ilton

My Lords, I was meant to have my name added to this amendment. I support it. There are many progressive conditions, such as Parkinson's disease and motor neurone disease, which are other good examples. But HIV is different.

Last Sunday in church, in the bidding prayers, was one that asked for special understanding and compassion for those who had HIV and AIDS. There seems to be something that encourages discrimination against those who have HIV. One of my fellow health authority members on the FHSA, for instance, just cannot understand what HIV means, and the devastation and loneliness that it can bring if the needs of those who have HIV are not understood. I hope that the Government will include this amendment on the face of the Bill. We should continue to do all that we can to make society understand the continuing need for education in respect of these most complicated and life threatening viruses. When this matter is not heard about, people—especially the young—think that the problem has gone away. It is very dangerous. I hope that the Government will understand this.

Lord Addington

My Lords, briefly, we on these Benches support this amendment. It is sensible and most appropriate.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

My Lords, like other noble Lords who have spoken, I come to this amendment quickly, and with some surprise. The debate was much shorter than I expected.

I think my noble friend knows that I have some sympathy with the need to reassure people who have symptomatic HIV that their condition is covered by the definition in the Bill. I hoped that I had made it clear in Committee that we agree that current medical opinion recognises that HIV is a progressive condition. I said then that if courts or tribunals took a view contrary to medical opinion, then we would put the position beyond doubt through regulations. I believe that at the time my noble friend expressed some disquiet about that and indicated to me that she did not think that I was going far enough—indeed, she has done so on a number of occasions since the Committee stage.

I had intended to offer reassurance to my noble friend and other noble Lords who have spoken that we would make regulations to make clear that HIV is a progressive condition, that we would consult to see just how the regulations should be framed and that we should bring forward those regulations from the beginning. But I know from conversations that I have had with my noble friend and the speeches that I have just heard that some noble Lords would not feel that that was a sufficiently certain course of action and would prefer something on the face of the Bill where, in paragraph 8 we indicate three examples of a progressive condition; namely, cancer, multiple sclerosis or muscular dystrophy.

I have listened with some care to that argument over the past few weeks and to the speeches this afternoon. I am not entirely sure whether or not it was their brevity which helped to convince me, but I think that I now accept the argument that it would perhaps be right to put this matter on the face of the Bill in the place that I have just mentioned—paragraph 8—as one example of a progressive condition. I should underline the fact that the list is a list of examples. It is not meant in any way to be a complete list. There are other conditions, some mentioned by the noble Baroness, Lady Masham, which would also come under the heading of "progressive condition" and will be dealt with.

There is a fairly marginal difference between putting something on the face of the Bill and making the same provision in regulations, but I appreciate that that marginal difference is very important to those people who have HIV and those who work with those who have it. I am not entirely certain whether I can accept the words "HIV disease" as defining clearly the change from simply having HIV in the bloodstream diagnosed by a medical test and in fact beginning to see some symptoms.

I should like to consider further with the draftsman exactly what the best form of words might be in order to indicate this crossover position. When I have done so and he has come up with an exact term so that we mean what we all want to say, I shall bring forward a suitable amendment on Third Reading. Third Reading of the Bill will not take place until the spillover, so there is time for it. It is the speed with which we reached this amendment that slightly threw me off balance. I am still trying to work out the consequence of such speedy action. I do not suppose that it will allow me to get home early this evening!

I come back to the serious point that I am making to my noble friend. I hope that she will feel that my assurance to come forward at Third Reading with an amendment properly worded, in order to do exactly what she and other noble Lords have asked, will enable her to withdraw her amendment. I hope that she will accept that I have agreed to her argument in its entirety and that I can completely satisfy her when we come to Third Reading.

Baroness Gardner of Parkes

My Lords, I am absolutely delighted to hear that. I shall wait with interest to see what emerges. Some years ago when, on a similar occasion, the amendment came forward, the draftsman had simply altered a capital "T' to a small "t" or vice versa. I shall wait to see what happens.

The Bill makes quite clear that one must have one's day-to-day activities affected. It cannot simply be that one has had a positive test. My noble friend need not be concerned on that point. I am very grateful to him. The point made by the noble Lord, Lord Kilmarnock, who is chairman of the All-Party Aids Group, that ordinary people will use this Act if there is no commission—I support the noble Lord in that view—makes it particularly important to have it. I am most grateful to my noble friend. I shall not delay the House any longer. I thank him and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Past disabilities]:

[Amendment No. 9 not moved.]

Schedule 2 [Past Disabilities]:

The Minister of State, Department for Education and Employment (Lord Henley) moved Amendment No. 10:

Page 47, line 32, leave out paragraphs 3 and 4.

The noble Lord said: My Lords, in moving this amendment I shall also speak to government Amendments Nos. 11, 21 to 23, 34, 39, 65 to 67, 69, 71, 75 to 77 and 80. I shall also speak to a number of other amendments tabled in the name of the noble Baroness, Lady Hollis, and other noble Lords.

Clause 6 as presently drafted has come under criticism for allowing too much discretion to employers to treat disabled people less favourably and for being too complex, particularly in the formulation of its relationship to Clauses 5 and 7. Noble Lords and Members in another place have themselves raised concerns. The fact that the justifications would be subject to an employer's opinion, albeit one which must be shown to have been reasonably held, has caused concern. The use of the undefined and perhaps vague word "unsuitable" has also led to adverse comment.

We listened carefully to the points raised by Members in another place and noble Lords on all sides of the House. It has become clear that Clause 6 as presently drafted does not meet the requirements for which it is intended. To address those issues, Clauses 5 and 6 have been redrafted to reduce the complexity and provide a simpler and clearer test for reasons which would justify less favourable treatment. The amendments considerably simplify this part of the Bill, including removing an entire clause. Amendments to Part III are not so substantial. Because of the importance of those clauses, I feel that I must be clear about the implications of the changes. I beg the indulgence of the House while I explain the position at some little length.

Amendment No. 23 substitutes for a fixed list of specific justifications a principle that can be applied much more easily in the wide and varied range of circumstances that can arise in the field of employment. Less favourable treatment of a disabled person would thus be justified if the reason for it were both material to the circumstances and substantial. It is clear that the set of conditions in Clause 6(4) is too limited to cope with every set of employment circumstances. For example, issues may depend on the type of job, the type of disability and its effects, the nature of the position being taken and many other factors. For that reason we have found it immensely difficult to draft a satisfactory, exhaustive list. The new provisions will be easier to understand and operate.

We are keen to take a consistent approach in Part III of the Bill. Therefore, we have brought forward amendments to improve the wording of Clauses 14, 15 and 16 in relation to goods and services and Clauses 19 and 20 relating to premises. The approach that we now propose for the right of access differs from that proposed for the employment right.

Amendments Nos. 67, for goods and services, and 78, for premises, retain the concept of a reasonably held opinion and fixed list of justifications. We are satisfied that this continues to be right and relevant in the very different context.

Service providers often have to take very quick and perhaps less informed decisions when serving someone. So an opinion-based approach remains appropriate. Nevertheless, the proper degree of objectivity is imposed because the opinion must be shown to be reasonably held. We also propose to retain the key circumstances in which less favourable treatment is justified. We believe that it is possible under Part III to identify the key reasons which might justify less favourable treatment by service providers due to the more limited relationship between a customer and a service provider. Those are set out in Amendments Nos. 67 and 78, and are essentially the same as those presently contained in Clauses 15(3) and 20(2), although we have tightened the wording of subsection (4) (c) to refer to where treatment is "necessary" in order for the service provider to provide the service to members of the public rather than "reasonably necessary". We have taken account of the views of those who are concerned that service providers might be able unfairly to pass on the extra cost of service provision to disabled clients and customers. Let me be clear that service providers will not be able to pass on to disabled people the costs of complying with their duties.

Subsection (5) of Amendment No. 67 ensures that any increase in the costs of the goods or services resulting from compliance with a Clause 16 duty should be disregarded for the purposes of subsection (4) (e). With both approaches, there are regulation-making powers which could be used to clarify areas of difficulty that might arise.

Amendment No. 21 deals with the comparator for assessing whether treatment is "less favourable". In the Bill, discrimination occurs against a disabled person if, for a reason which relates to his disability, he is treated less favourably and the employer cannot justify the treatment. If an individual cannot demonstrate that he has been less favourably treated in some way, then there will have been no discrimination. However, it is important to define the test correctly to avoid confusion and unnecessary litigation.

Currently the comparison is with the treatment of a person who does not have the disability in question. For example, there may be two employees who cannot type—one because of arthritis and one (who is not disabled) because he has never been taught. Both would argue that he is not treating the disabled person less favourably than someone without that disability. He is treating all people who cannot type in the same way. That argument may well succeed and the person with arthritis would have no ground for complaint, even though the employment was refused for a reason relating to disability.

Amendment No. 21 would ensure that the comparison is made with people to whom the reason in question does not apply. It correctly reflects the need to show that the treatment was for a reason relating to the disability and not necessarily the mere fact of disability. Thus, if the employer is rejecting people who cannot type he will be treating more favourably those who can. The person with arthritis who did not get the job can show that he or she was treated less favourably than the person with typing abilities who did. The employer may well be able to justify that treatment—for example, if a disabled person was not adequately able to do the job, even taking account of any reasonable adjustment. But at least the disabled person would have to be given the consideration due under the Bill.

With regard to the right of access, Amendment No. 65 mirrors Amendment No. 21 in providing that the comparison in the definition of discrimination should be with, people to whom that reason does not apply". The wording of Amendment No. 65 will provide a more objective definition of discrimination than the provision as presently drafted, which refers to, other members of the public". The revised wording will make it clear that if a disabled person is refused service—for example, in a cafe—for a reason connected with his disability, where non-disabled people are happily served, that will be a prima facie case of discrimination unless the service provider can prove that the less favourable treatment was justified under subsection (4) of Amendment No. 67. The service provider could only refuse service if, for example, the presence of the disabled person effectively meant that other customers were not receiving the service that they had paid for. Service could be refused in that case under subsection (4) (c). Amendments Nos. 75 and 76 re-word in a similar manner the definition of discrimination in relation to premises.

Amendments Nos. 22 and 34 are consequential as a result of the re-draft of Clauses 5 and 6. Amendment No. 22 deletes the words, "under section 6". They would no longer be appropriate because Amendment No. 34 deletes Clause 6 as the issues of adjustment have been incorporated into the new Clause 5 resulting from Amendment No. 23. Amendments Nos. 66 and 69 mirror those for the purposes of the right of access to goods and services, as do Amendments Nos. 77 and 80 in relation to premises.

Amendment No. 39 is a consequential amendment which makes clear that the duty on employers to make adjustments is not self-standing. It is only relevant to determine whether an employer has discriminated against a disabled person. It transfers what is currently in Clause 5(3) to Clause 7. Amendment No. 71 replicates that change for the right of access. Amendments Nos. 10 and 11 are consequential and are needed because the provision to which they refer has been deleted by Amendments Nos. 21 and 23.

I believe that these amendments considerably improve and clarify the provisions of Parts II and III and I hope that I have the support of the House in moving them. I shall not address the other amendments of the noble Baroness, Lady Hollis, at this time. If she wishes to speak to them, when I wind up I shall address the various points that she and others raise. In the meantime, I beg to move.

3.30 p.m.

Baroness Turner of Camden

My Lords, I thank the Minister for his explanation of this long group of amendments and also thank the Government for what they have done. They have taken on board the arguments that we made in Committee and have thoroughly redrafted the sections of the Bill in order to meet our criticisms.

The only point arising in the three amendments standing in my name and that of my noble friend, to which the Minister referred, arises in Amendment No. 24 where we suggest that the employer should take advice as indicated in the code of practice as a basis for his opinion. Apart from that, the Government appear to have encompassed all the arguments we made in Committee and we are grateful that they have done so.

Lord Addington

My Lords, this great layer of government amendments has effectively dealt with the problems I raised in Amendments Nos. 26 and 28. I can only thank the Government and say that I hope that this atmosphere of co-operation will continue throughout the passage of the Bill.

Lord Henley

My Lords, as someone who came to this Bill rather late, I find it strange to be among such sweetness and light. I hope that I shall enjoy this stage and the later stage. I am also grateful to noble Lords for sparing my voice, which I fear may not last the evening.

Perhaps I can briefly address the point raised by the noble Baroness, Lady Turner, in her Amendment No. 24, which seeks to place a duty on the employer to take advice, as indicated in the code of practice, as a basis for his opinion. The effect would be that the employer would have to seek advice every time he made a decision which might or could result in less favourable treatment of a disabled person.

We agree that employers ought to seek help and assistance, if they need to do so, when making a decision which may affect a disabled person. The duty under this clause may not be fulfilled unless the employer is knowledgeable, follows the code or seeks advice from a knowledgeable source on disability. However, where we differ is in regard to the need to make it compulsory in every case to seek advice, regardless of the necessity, before he can lawfully make that decision. That would be a bureaucratic requirement which takes no account of the many different avenues of advice that are available to employers through a number of different groups. For example, in some situations there may be no need to take specific advice, whether or not the code of practice suggests doing so, because the employer has adequate information available from another source. In any event, the code will not be an exhaustive manual on when to seek advice, on what and from whom, in all the various possible cases. Its job is to provide practical guidance. We are sure that it will prove helpful but it cannot cover every single circumstance. It would be wrong, therefore, to place such a requirement on the face of the Bill.

I hope the noble Baroness accepts that explanation and I commend the amendment to the House.

On Question, amendment agreed to.

Lord Henley moved Amendment No. 11:

Page 47, line 38, leave out paragraphs 7 and 8.

On Question, amendment agreed to.

Clause 3 [Guidance]:

[Amendments Nos. 12 and 13 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 14:

Page 2, line 21, leave out ("issued under this section").

The noble Lord said: My Lords, in moving Amendment No. 14, with the leave of the House I shall speak also to my Amendment No. 15. Clause 3 enables the Secretary of State to issue guidance about matters to be taken into account when determining whether an impairment has a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities. The guidance which Clause 3 introduces is already subject to consultation before being issued by the Secretary of State. The consultations must be with people whom the Secretary of State considers appropriate.

Your Lordships will recall that some anxiety was expressed in this House by the noble Lord, Lord Lester, and my noble friend Lord Renton about the question of parliamentary scrutiny. As I said in Committee, the Government accept that there is a strong case for making the guidance under Clause 3 subject to the same parliamentary scrutiny as we have in Clause 38, which deals with the codes of practice on employment. I repeat what I said on that occasion: I am very conscious of the importance of the powers of Parliament, as are all Ministers; and we accept the point that Parliament must be given adequate opportunity to scrutinise the guidance.

We have chosen to apply the negative procedure. This is in line with the code of practice and the majority of the regulation-making powers. Noble Lords will recall that the Delegated Powers Scrutiny Committee regarded this procedure as appropriate for these regulation-making powers and I do not believe it is any less appropriate for the guidance under Clause 3. I very much hope that the amendments will be welcomed.

Noble Lords will notice that subsection (4) of Amendment No. 15 states: In preparing a draft of any guidance, the Secretary of State shall consult such persons as he considers appropriate".

I see that my amendment is grouped with an amendment in the name of the noble Baroness, Lady Hollis, which tries to set out the people whom the Secretary of State might consult. That amendment comes up on all occasions and at all times. I am not sure whether it will help the speed of proceedings if I indicate that my answer to this attempt to put on the face of the Bill a list of the people the Secretary of State might consult is the same as it has been to other attempts in other Bills to include such a requirement. Perhaps I may make it clear that when we go out to consultation we shall ensure that we take account of all the sectors which will be affected. We shall be consulting all those whom we believe have an interest. Where appropriate, that will include the CBI, business organisations, the TUC and others. Interestingly enough, over the past few days I have seen the beginnings of some of the consultation documents arising from the Pensions Act. I recall some of the discussions we had previously about who should be consulted. I can assure the noble Baroness that we seem to be consulting as wide a range of people as she requested me to consult on a number of occasions when she asked me to put such a requirement on the face of the Bill.

Baroness Hollis of Heigham

My Lords, why did not the noble Lord accept our amendment?

Lord Mackay of Ardbrecknish

My Lords, the point I make, and have made before, is that I believe it is unnecessary to start listing the organisations. On various occasions consultation may be on a different angle, and a different group of people or organisations may require to be consulted. It is much more important that the Secretary of State should be under a general obligation to consult those he thinks appropriate and whom he thinks are interested. There is the further point that the consultations are usually accompanied by some form of press release and anyone who has missed out is well able to come in and give us their views. In my years in government I have never found that people were, so to speak, backwards in coming forwards.

I hope that I have explained not only why I commend my amendment to the House but why on this occasion, as on every other occasion when this attempt is made, I do not think it wise to add to the Bill what the noble Baroness wishes to add.

The Deputy Speaker (Lord Ampthill)

My Lords, I should remind the House that, as the noble Lord has spoken to Amendment No. 15, if it should be agreed to I shall be unable to call Amendment No. 16.

Lord McCarthy

My Lords, that is the problem, is it not? The noble Lord said that he likes it when we have brevity and that he likes it when we spring surprises. When we do that he is apt to agree with us. We agree with him that his amendments seem to be a significant advance on the previous position. We accept and welcome them. All I want to say about Amendment No. 16 is that it arose out of previous amendments moved in Committee and there are subsequent amendments which cover this ground. We shall be raising them then. Therefore, in that context, I shall not be moving Amendment No. 16.

3.45 p.m.

Lord Renton

My Lords, perhaps I may speak briefly to what my noble friend Lord Mackay of Ardbrecknish has said. First, we ought to feel indebted to him for having strengthened and clarified the position of Parliament in this matter. I expect it has dawned on noble Lords that in recent years we have entered a new phase in our legislation. For centuries we thought of primary and secondary legislation. We also knew that in the background there were departmental directives which did not require the consent of Parliament, or consultation with Parliament, or parliamentary approval of any kind, and did not have the force of law. Now we have entered this new and third phase of parliamentary consent. We have to give guidance. One wonders to what extent the guidance is more than just casual advice to those concerned and to what extent it is binding upon them. One has to read Amendment No. 15 in order to the best of one's capability to find out the answer to that vital question. The answer is contained, first, in subsection (7). I shall refer to subsection (9) in a moment.

Subsection (7) states: If, within the 40-day period, either House resolves not to approve the draft, the Secretary of State shall take no further steps in relation to the proposed guidance". That gives Parliament a negative function—to disapprove the guidance if it does not think it is right. But it does not mean, from the positive point of view, that parliamentary approval is necessary in advance. It is a fine distinction, I know. Then we come to subsection (9), which states: The guidance shall come into force on such date as the Secretary of State may appoint by order". The words "come into force" seem to suggest that the guidance has the force of law and that if the guidance is not obeyed those who fail to obey it will incur some kind of penalty, not necessarily a criminal penalty but will find themselves at a disadvantage of some kind. However, that does not seem to be the case.

I wonder whether my noble friend can clarify that point because I think it is constitutionally quite important. The subsection states: The guidance shall come into force". That seems to give it something approaching the force of law and yet it cannot have the force of law unless there is a sanction to enforce it. We are entitled to be enlightened on that point.

Lord Campbell of Croy

My Lords, I spoke on this point during the first day of Committee on 13th June. I welcome the government amendment which my noble friend then indicated he would bring forward. I am a member of the Select Committee on the Scrutiny of Delegated Powers but I speak for myself in the House. The Select Committee's report on the Bill did not draw the attention of the House to this matter because it was not subordinate legislation—regulations—but guidance. This is a precedent, and a good one, because we have all noted that under the guise of guidance very significant matters as important as regulations—perhaps more so—could be issued without Parliament having any chance to discuss them or to throw them out.

In the Bill as originally drafted the guidance had to be laid before both Houses of Parliament but neither House could do anything if it disagreed with it. The negative procedure is appropriate, as I indicated when I spoke on this point on 13th June. My noble friend Lord Renton, who on that occasion moved an amendment proposing the affirmative procedure, also now agrees with that. I rise to speak simply because I believe that this is an important precedent for Bills on other subjects in the future. I am sure that the Government and others concerned will take note that guidance will be an important matter as well as subordinate legislation and regulations.

Lord Swinfen

My Lords, perhaps I may briefly express my support for the group of amendments and ask my noble friend the Minister whether he can advise the House on the following points. Should the guidance need to be altered at any time, will such an alteration have to come before both Houses of Parliament in the same way? What weight will the guidance, once approved by Parliament, have in a court of law or before a tribunal?

Lord Mackay of Ardbrecknish

My Lords, perhaps I may, first, thank your Lordships for the welcome given to my amendments. My noble friend Lord Renton made, if I may so describe it, a nice point when he asked me whether the use of the word "force" in Amendment No. 15 has some significance and whether that indicated that the guidance has a legal standing, together with the backing of legal sanctions. The use of the word "force" in that context does not imply legal sanctions and the rule of law indicated by my noble friend. If he turns to Clause 3(3) of the Bill—and the whole thing has to be read as one—he will see, as indeed will my noble friend Lord Swinfen, that it says: A tribunal or court determining, for any purpose of this Act, whether an impairment has a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities, shall take into account any guidance issued under this section which appears to it to be relevant". I believe that those words clearly show that the guidance is not intended to be binding on the courts and tribunals. Therefore, to that extent, it does not have the force of law. Nevertheless, courts and tribunals will have to take the guidance into account. I hope that that answers the point. In future, perhaps draftsman ought to find another word in case my noble friend has touched upon a serious point in that respect. However, I have no doubt that the draftsmen will read what my noble friend said about the use of the word "force" in the legislation.

As regards the question about revision, my noble friend Lord Swinfen will see that subsection (11) of Amendment No. 15 says: The Secretary of State may—

  1. (a) from time to time revise the whole or part of any guidance and re-issue it; [and]
  2. (b) by order revoke any guidance".
Should the Secretary of State change the guidance, my noble friend asked whether he would have to come back to Parliament and go through the whole procedure again. Indeed, he can be assured that the Secretary of State would have to do so. I hope that those assurances will put my noble friends' minds at rest and that the House will accept my amendments.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 15:

Page 2, line 23, leave out from beginning to end of line 26 and insert: ("(4) In preparing a draft of any guidance, the Secretary of State shall consult such persons as he considers appropriate. (5)Where the Secretary of State proposes to issue any guidance, he shall publish a draft of it, consider any representations that are made to him about the draft and, if he thinks it appropriate, modify his proposals in the light of any of those representations. (6)If the Secretary of State decides to proceed with any proposed guidance, he shall lay a draft of it before each House of Parliament. (7)If, within the 40-day period, either House resolves not to approve the draft, the Secretary of State shall take no further steps in relation to the proposed guidance. (8)If no such resolution is made within the 40-day period, the Secretary of State shall issue the guidance in the form of his draft. (9)The guidance shall come into force on such date as the Secretary of State may appoint by order. (10)Subsection (7) does not prevent a new draft of the proposed guidance from being laid before Parliament. (11)The Secretary of State may—

  1. (a) from time to time revise the whole or part of any guidance and re-issue it;
  2. (b) by order revoke any guidance.
(12)In this section— 40-day period", in relation to the draft of any proposed guidance, means—
  1. (a) if the draft is laid before one House on a day later than the day on which it is laid before the other House, the period of 40 days beginning with the later of the two days, and
  2. (b) in any other case, the period of 40 days beginning with the day on which the draft is laid before each House,
no account being taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days; and
guidance" means guidance issued by the Secretary of State under this section and includes guidance which has been revised and re-issued.").

On Question, amendment agreed to.

[Amendment No. 16 not moved.]

Clause 4 [Discrimination against applicants and employees]:

Baroness Hollis of Heigham moved Amendment No. 17:

Page 2, line 29, at beginning insert ("Subject to section 8 below").

The noble Baroness said: My Lords, the amendment returns us to the issue that we discussed in Committee; namely, the exclusion of small firms from the operation of the Bill. I should like, therefore, to move Amendment No. 17, which is the paving amendment, and to speak also to the subsequent amendments in the group, especially Amendments Nos. 42 and 44 standing in the name of the noble Lord, Lord Swinfen.

The Bill makes it illegal for companies which employ over 20 people to discriminate unreasonably against disabled people. However, if a firm employs fewer than 20 people, it may discriminate whether or not it is reasonable for it to do so. The point of the amendments is to seek to bring more companies within the purview of the Act. Hence we warmly support the amendment tabled in the name of the noble Lord, Lord Swinfen, which would reduce the exemption of companies to those which employ 10 or fewer people; in other words, what most people would regard as small companies.

Why does this group of amendments matter? Small companies employ 35 per cent. of the working people in this country—17 per cent., if you exclude the self-employed. In much of the country, especially in rural areas in Scotland, in Wales and in Northern Ireland, there are no companies, or very few of them, which employ more than 20 people. If they are to be exempt from the Bill, it means that the legislation will not apply in much of the country. Therefore, huge parts of the country will not fall within the range of the Act. For example, it means that an employer with 18 staff would be able to place discriminatory adverts; he could refuse to interview a disabled person; and he could refuse to consider whether, by adjusting, say, the position of the office furniture, a disabled person might have the opportunity of becoming an effective employee. Do we really want that? Do we really find that acceptable?

However, if the same employer were to expand slightly and take on another two staff, thereby employing 20 people, he would immediately come within the framework of the Act. Why then do we have this cut-off point with the very high figure of 20 so that smaller firms that fall below it are exempt? It comes from the old quota system set up before the war whereby businesses employing more than 20 staff had to employ 3 per cent. disabled people. If one was going to employ 3 per cent., the figure of 20 made some sense; otherwise, one would be dealing with fractions of a person. However, that figure has been imported into legislation 50 years later without, I suggest, any of the justification that underpinned the old quota system.

Subsequent legislation in similar areas, whether it be on health and safety or on sex discrimination, has either had much lower figures or no figures at all for exemption. Certainly most surveys, including those from the Government's Employment Department, often assume that what is meant by "small companies" is 11 people—for example, 10 staff or fewer.

Why are the Government holding on to the figure of 20 as a cut-off point below which firms are exempt from the Act? First, the Government have argued the point on the burden of cost to small firms. I have to say that I do not think that that is true. The Government themselves expect that the average cost of physical adjustments to employ disabled people is around £200. That is not my figure or that of disabled people: it is the Government's figure. They believe that the average cost of adapting premises in a small firm to enable it to employ disabled people will, on average, be just £200.

Secondly, small companies, exactly like large ones, are protected from costs if they are unreasonable. If, for example, it would require a lift which was most expensive to make a firm's premises reasonably accessible for the disabled, that would be an unreasonable cost and no employer, whether large or small, need make it. Therefore, a small company is already protected, as indeed is a large one, from doing anything which is unreasonable given its circumstances. In other words, if the cost of employing a disabled person is unreasonable, the firm is not required to spend the money in order to do so.

Similarly, as we discussed in Committee, it is not true that employing disabled people entails unreasonably high costs in personnel terms; for example, as regards turnover or sickness. Indeed, all the evidence from disability organisations suggests that, on the contrary, disabled people have a better and steadier attendance at work than most able-bodied people. Certainly, their record is second to none.

Therefore, the first argument of cost used by the Government against reducing the threshold of exemption is, I suggest to your Lordships, not true. The physical cost—around £200 on average—and the personnel costs are, if anything, nil. The Government's second argument about why we should keep the figure of 20 is that small companies should not have to worry about the burden of regulation.

However, by definition the same small companies which are employing people are companies which market goods or services. They make and sell things. They manufacture goods or produce a service. Therefore, even if, as an employer, they are exempt from this law by virtue of the fact that they employ 18 people, they still have to conform to the law as a seller or provider of goods, services and products. Exempting small firms from the employment provisions does not mean that we are exempting them from the whole array of provisions, but only from one part. They will still have to take on the burden of responsibility of knowing what the legislation requires when it comes to marketing and making available their goods, services and products. Whether small companies like it or not, they still come within the purview of much of this legislation. Therefore, they will need to know the provisions of the legislation irrespective of whether we reduce the employment threshold. Indeed, it could be argued that employing disabled people could make a small company better able to adjust its goods, services and products to meet the needs of disabled people.

So, the first argument used by the Government was that of cost—I do not think that that is a valid argument—and their second argument was that small companies do not want the burden of this legislation. I have tried to suggest that, whether small companies like it or not, they come within the framework of the Bill as producers, manufacturers and suppliers of goods and services. The Government's third argument is that small companies do not want this legislation. I do not deny that small businesses are probably unenthusiastic about it. Indeed, there are a lot of things about which small businesses are unenthusiastic, including politicians. Small businesses would prefer not to be burdened by VAT. Small businesses would rather not have to seek planning consent if they want to extend their buildings. Very often, small businesses would prefer not to have to observe health and safety regulations. Very often, small businesses would rather not accord part-timers certain rights in terms of pensions and the like. That is understandable, but that does not mean that it is desirable or that we should support it.

Like all of us, any small business has a responsibility to the community. Equally, any small business can seek advice and guidance from a wealth of organisations, from chambers of commerce to local authorities and enterprise agencies. Small businesses may not be enthusiastic about the legislation, but they can certainly cope with it. In any case, the number of employees is no guide as to whether a company can or cannot afford to employ disabled people. Smaller companies such as legal practices or small information technology firms are well able to deal with the legislation and find disabled people attractive employees. Size has no relation to the value of a company, its turnover, profitability or the type of people that it should employ. Therefore, it is irrelevant to import the figure of 20 into this legislation.

What would be different if your Lordships accepted this amendment and those in the name of the noble Lord, Lord Swinfen? What would change? Well, genuinely small companies—that is, those employing fewer than 10 people, such as corner shops and small start-up businesses—would remain exempt. That would enable the latter to become established. However, we are saying that a company which employs more than 10 people—and certainly one which employs nearer 20—is an established business. There is no reason why it should not conform to the employment provisions of this Bill, just as it must conform to the provisions relating to goods and services. Any costs that are required to enable such a firm to employ disabled people must be reasonable. Under the Bill, no small company can be required to do anything that is unreasonable.

We are asking your Lordships to support an amendment to say that the small companies which it would be reasonable to exempt are those employing fewer than 10 people and that firms which employ more than that number should come within the framework of the Bill. That would allow disabled people across the country to exercise their rights as we would wish them to do. I beg to move.

4 p.m.

Lord Swinfen

My Lords, I thank the noble Baroness for so ably moving Amendment No. 17 and for speaking to the group of amendments. I shall therefore restrict my remarks to my amendments, Amendments Nos. 42 and 44, which, as the noble Baroness said, are designed to increase the number of firms covered by the Bill and the number of employees who will have protection against discrimination on the basis of disability.

As the noble Baroness said, the Bill as drafted exempts firms with fewer than 20 employees. My two amendments would mean that only firms with fewer than 10 employees would be allowed to discriminate on the ground of disability when employing someone. The noble Baroness mentioned that 35 per cent. of our workforce work for firms with fewer than 20 employees. If the self-employed are excluded, the figure comes down to 17 per cent. If my amendment were accepted, that figure would be reduced further, to 11 per cent. It is, I understand, a fact that women are more likely to work in small firms and that the proportion of small firms is considerably higher in rural areas such as Northern Ireland, Scotland and parts of England. Disabled people in those areas and women who are disabled will thus receive less protection when looking for work if these amendments are not accepted.

The commonsense understanding of what constitutes a small firm is, I feel, closer to 10 than to 20 people. The chief argument put forward by the Government for the exclusion of so-called "small" employers is that they should not have to worry about the additional regulations involved. However, as has already been said, it is curious that the Government propose to exempt such employers only from Part II, not from Part III, of the Bill. If a firm providing a service will not be allowed to discriminate against a disabled person, why—unless it really is a small firm—should it be allowed to discriminate against disabled people when it comes to employment?

In many respects, the amendment is a compromise. A law which permits discrimination by some employers sends the wrong message to all employers. It suggests that disabled people are a burden which should be imposed only on those who can afford it. As the noble Baroness said, disabled people are generally considered extremely reliable by those who employ them. Their employers are often very reluctant to let them go when they move to another employer or retire. In the United States, firms with fewer than 15 employees are exempt, while I understand that in both New Zealand and Australia all employers were included in the legislation from the beginning and there were no exemptions on the grounds of the size of a firm. I strongly support the amendment.

Baroness O'Cathain

My Lords, my amendments, Amendments Nos. 46, 47 and 48, are grouped with Amendment No. 17 and it is appropriate to speak to them now. Although they do not deal specifically with the issue of 10 or 20 employees, they are tangential to it. I should add that I am not sure whether the wording of my amendments is correct, but perhaps that point could be considered later.

The Confederation of British Industry has been briefing me on this issue. It accepted from the start that 20 employees should be the cut-off point. Indeed, it is happy that the cut-off point is set at 10 rather than any other figure. The amendments seek to require the Secretary of State to undertake a review whenever he wishes to amend the cut-off figure of 20 employees—according to the Bill, it seems that the number can be moved downwards only—and not only after four years.

We want a review because it is imperative that business is aware of the parameters within which it is operating. It cannot at one minute be 20, the next 15, and then, say, a year later, 10. We want a clear procedure to ensure that all relevant regulations are reviewed when any change which would affect small firms is contemplated. I hope that my noble friend will listen to these requests.

Lord Rix

My Lords, I support specifically Amendments Nos. 42 and 44 to which my name is attached, although I must admit that I do not feel entirely at ease with them as it is my strong view that no firm should be exempt from the legislation just on the basis of size. We all know of wealthy small firms and of larger ones which are struggling to keep going. Taken in isolation, the number of staff employed in a firm provides no satisfactory picture of its capacity to accommodate a disabled employee.

However, we must move forward. So I urge the Minister to look again at this issue. At the moment we are in danger of making detailed regulations, firms establishing their practices and procedures, and legal rulings being made on the basis of a threshold which is likely, as we have heard, to shift within five years. The amendment might help us to minimise the nonsense we are at risk of creating.

Lord Addington

My Lords, I support the amendments, especially Amendments Nos. 42 and 44. I see that my name is against Amendment No. 44 but not against 42. That is a mistake. I support both amendments. We are talking about the drawing of an arbitrary line. The noble Baroness was correct when she drew a historical precedent for the number of 20. As almost every speaker involved in this short debate has pointed out, the number of employees a firm has is no guarantee of its state.

The concept of reasonableness would surely be better than any figure, because if it is reasonable for a reasonably prosperous firm to make a small accommodation for a disabled person, that would make more sense than just saying that because a firm has X employees it is excluded or it must make some arrangements for disabled employees. There is a far stronger logic here. Reasonableness is already in the Bill.

I have never liked the idea of having an arbitrary line. In Committee I opposed the inclusion of the clause in the Bill. However, if the arbitrary line is to exist, it should be drawn at the lowest practical figure. If one has 10 employees, that would mean that the business is small. Whether businesses are rich or poor, are doing well and have good prospects, are factors we cannot bring into the Bill. At least we can ensure that the businesses are genuinely small. I hope that all Members of the House will support the amendments as they address the issue of ensuring that only the minimum number of firms are excluded from a concept which is based on reasonableness and fairness.

Lord Hamilton of Dalzell

My Lords, working at the coalface, so to speak, of those who are getting people with disabilities employed, I have to tell the House that the Bill is known as the magic wand syndrome. The technique of getting people employed is, first, to convince the disabled person that he is capable of doing the job. We employ educational psychologists who encourage disabled people to apply for advertised jobs and talk to firms to persuade them that they can usefully employ disabled people in their businesses. We then send the disabled person to the interview and ensure that all the equipment is provided to ensure that he or she can do the job.

There are many small firms which employ disabled people, and I fear that by regulating so that they cannot refuse to employ them or say that they think it is a bad idea, and using a foot-in-the-door technique to employ disabled people, will mean that the door will be shut firmly when one appears on the scene.

My great fear about the Bill is that it will produce less employment for disabled people than if the matter is left alone. So I support the Government's view that the line should be drawn at 20 people.

4.15 p.m.

Lord Campbell of Croy

My Lords, I spoke at earlier stages of the Bill on this subject, and I shall not repeat what I said then. I favour a reduction of the threshold of 20, but I understand also the reasons for that being done by stages because small firms have not been involved in this before. The National Federation of Self-Employed and Small Businesses vociferously supports their exclusion, but of course that is what one would expect. Nonetheless, its reasons are not just reasons of expense.

The Government made an amendment in Committee last month which, as I understand it, means that there will be a review five years after the coming into force of the Bill when enacted. The whole concept of reasonable adjustments, which is the basis of the Bill, would apply where a small firm had special circumstances or difficulties which would not be encountered by a large firm. Taking that into account, I believe that the reduction should take place in due course.

I favour the inclusion of smaller firms and a gradual reduction of the threshold. However, I should be grateful to have reassurance from the Government about their intentions, and that they do, with the amendment they made last month, intend, when it is practicable and does not cause great damage to individual firms, to lower the threshold by stages.

Lord Monson

My Lords, this is a wide-ranging group of amendments. I turn first to Amendment No. 30. I hope that the noble Baroness, Lady Hollis, will not think me in any way frivolous or nit-picking if I suggest that the wording of the amendment is a little ambiguous as well as far-reaching. She talks about "the future existence of the employer", which implies that only if the employer is so driven to despair by the provisions of the Bill that he contemplates jumping off the top of a 10-storey building will any exemption be made for him. The phrase "future existence" might well be replaced by the words "economic survival". But even that seems to me to go a little too far.

After all, a small firm could be earning £15,000 a year gross before the employer draws any salary. If as a result of the Bill the gross profit before salary were reduced to £12,500, the employer would survive but he or she would still be obliged to endure considerable hardship.

I turn now to the amendments in the names of the noble Lords, Lord Swinfen, Lord Rix and Lord Addington. In Committee they moved an amendment which would have obliged the Secretary of State to reduce the minimum of 20 to a minimum of 10 within a period of years, and subsequently to a minimum of five within a further period of years. This amendment goes much further than that. It suggests that the number be reduced to 10 immediately.

It is unusual on Report to introduce an amendment which is more extreme than the amendment introduced in Committee. Normally one tries to reach a compromise on Report which will find favour with the House as a whole. I believe that the Government are right in sticking to their guns and insisting upon starting with a minimum of 20.

Lord Renton

My Lords, I find the difficulty with this subject is that generalisation is almost impossible. If we take Amendment No. 42, which I somewhat favour, my noble friends Lord Swinfen and Lord Rix want the threshold reduced from 20 to 10. In a wide range of industries that means a very small factory, but this provision refers to farming. At MENCAP we have taken the trouble in the past to train mentally handicapped people to look after animals. It has been a successful experiment over the years. They have gone into horticulture as well.

I happen to live near a farm of just over 2,000 acres which 40 years ago employed 10 men. Now it employs only four men. A farm with 20 men, which is what the Government have in mind, is a very big farm indeed these days. I am glad to say that it is the kind of farm, especially in the west country, on which one would find several mentally handicapped people employed looking after animals.

We do not want to reach the situation in which, with regard to such farms, we are putting the clock back. We do not want to reach the situation in which the farmer says, "Look here, I have a very big farm but I employ only 16 men". These days, that is an enormous farm. To say that such a person should not be required even to consider employing a mentally handicapped person seems to me to be most unfortunate.

The coming Recess is an opportunity for further thought. I hope that the Government will use the Recess, before Third Reading takes place in the overspill period, to take wide consultation on this matter, in particular with the National Farmers Union, the Country Landowners' Association and so forth. They may well find that the generalisation that they have in mind is a bit dangerous and that more particularisation may be necessary, much opposed as I am to too much detail in statutes.

Lord Henley

My Lords, I wish to begin with a point made by my noble friend Lord Campbell of Croy. He asked for confirmation that in due course the Government will reduce the threshold. Obviously, I cannot give my noble friend that assurance but I can say that we are committed to having a review after four or five years, as he knows full well. If the review is to be of any substance I cannot comment on its likely outcome, but obviously we will look at all the available options. If after such a review it is believed to be desirable to reduce the number we would be quite prepared so to do.

I shall deal with the amendments in order, beginning with Amendment No. 17, which was introduced by the noble Baroness, Lady Hollis. It would make Clause 4 subject to the provisions of Clause 8. The amendment is intended to be taken in conjunction with the substantive Amendment No. 41. The effect would be to make sure that the definition takes account of the intended Amendment No. 41.

That amendment at the very least introduces considerable uncertainty; uncertainty for the employer with fewer than 20 employees and uncertainty for disabled people. On the one hand, employers with fewer than 20 employees will have a duty not to discriminate against people with disabilities. On the other hand, they will not have to do anything to remedy any substantial disadvantage a disabled person may experience.

The clause as currently drafted is perfectly clear. It recognises that small firms would face particular difficulties in complying with this complex and innovative legislation and excludes them from the employment part of the Bill. As my noble friend Lord Mackay of Ardbrecknish noted during the Committee stage of the Bill, small firms would face two burdens if they were not exempted from this part of the Bill. The noble Baroness, Lady Hollis, based her argument on those two burdens. They were the cost burden and the burden of administering the Act, understanding it and keeping it in mind on the few occasions when they might need to recruit a disabled person. The noble Baroness's amendment fails to address the latter burden.

That said, there is nothing in the Bill that prevents small firms employing disabled people and we will be promoting the employment code of practice to small firms and encouraging them to comply.

I turn to Amendment No. 30, which would introduce a new justification making it possible for employers with fewer than 20 employees to treat a disabled person less favourably if to do otherwise would put their business at risk.

I believe that the noble Baroness is aware that Clause 8 of the Bill exempts employers with fewer than 20 employees from the employment part of the Bill. We have included this exemption for a good reason. Small firms would face particular difficulties in complying with what I have described as complex and innovative legislation. The noble Baroness spoke of that regulatory burden. I have to say that many small firms do not have specialist personnel who can deal with the adjustments that a particular disabled person might need, nor are they likely to have access to the expertise required to make and maintain such adjustments. Furthermore, it could be disproportionately expensive for small firms to comply with these requirements when they might only occasionally affect any given small firm.

I accept that small firms are covered by Part III of the Bill, but I believe that they will have disabled customers much more often than disabled employees or disabled applicants for work. I believe that they would be able to remain familiar with Part III much more readily than they would with the complex parts of Part II. A disabled applicant might contact a small employer only on an average of every year or so. It would be very hard—unreasonably, we believe—for firms to remain sufficiently in touch with their duties under Part II in order to have a chance of avoiding a tribunal complaint. Moreover, the degree of reasonable adjustment needed for a disabled customer under Part III is likely to be less than that required for a disabled employee under Part II.

There is a great deal of difference between what a business might have to do to help a disabled customer who might spend no more than a few minutes in a shop and what might be expected by way of help for a disabled employee who might be working for many years for the employer.

I believe that this amendment sends quite the wrong message. The Bill as drafted strikes a proper balance by recognising the legitimate interest of disabled people and the reality of the problems faced by employers. The noble Baroness's amendment implies that the obligations in the Bill could be so onerous as to bring small firms to the brink of jeopardy. Further, it would imply that larger firms can actually be put in jeopardy because it provides no similar justification for them. The amendment is an example of somewhat outmoded thinking. It ignores the realities of the burdens that may be placed on businesses and gives no thought to the implications. The noble Baroness has not adequately addressed the question of whether the Bill sends the specific message to employers that the obligations in it may bring their businesses to the brink of failure.

In practice, of course, any damage to employment prospects would be caused long before this precarious state has been reached, when difficulties of the kind indicated in the amendment would mean the business had to stop expanding and taking on any new recruits, including disabled people.

In any event, the amendments passed earlier by the House to Clauses 5 and 6 allow employers to justify less favourable treatment if the reason is material to the circumstances of the particular case and substantial. I can think of no more substantial a reason than the business being put at risk. This would apply to a firm of any size. The noble Baroness's Amendment No. 30 is unnecessary even in the context of small firms being included in the employment provisions.

I turn to the amendments in the name of the noble Lords, Lord Swinfen, Lord Rix and Lord Addington. Amendments Nos. 42 and 44 ignore the burdens that the employment provisions of the Bill could place on small employers. The Bill already provides for a power to vary the threshold by regulation. That will enable us to ensure that any changes made, and their timing, take account both of experience gained in operating the new right and other relevant circumstances. Such circumstances could include, for example, economic conditions affecting small firms at the time. We would, of course, look carefully at any evidence that smaller firms were treating disabled people unfairly and would take that into account in the review which we are committed to undertake.

Lord Renton

My Lords, I thank my noble friend for giving way. I wish to make a point that is quite relevant. When making the regulations for exemption will it be possible to deal with one particular type of industry differently from another type of industry?

Lord Henley

My Lords, I do not know whether I can answer that point immediately. I would like to consider it, just as I would the general point that he asked us to consider during the summer; that is, whether we could look at other definitions of businesses which might allow for the point that my noble friend was addressing.

In relation to earlier proposed amendments to the clause I have argued about the disproportionate impact on very small companies. We accept that the concept of reasonable adjustment would take costs into account. But that does not take into account the amount of work that a given small employer would have to do to become familiar with the legislation which he or she might never, or very rarely, need to apply within that firm. It contains quite difficult concepts to protect disabled persons against discrimination—concepts which are unnecessary under sex and race legislation and therefore unfamiliar to employers. It would also be burdensome to investigate and decide on the appropriateness of the adjustments. Even in health and safety legislation, thresholds have been used to exclude small firms from provisions which are administratively onerous.

I accept that noble Lords have argued that they are still excluding small firms but are merely changing the starting point from 20 to 10. I believe that my noble friend Lord Swinfen talked about a common sense definition of a small firm having 10 employees rather than 20. There is a degree of subjective judgment about that. There are a number of different definitions of a small firm. My noble friend quoted the example of the Americans with Disabilities Act which now has a threshold of 15, although it was originally 25. The Department of Trade and Industry uses the figure of 200; the European Union uses 150; and the Companies Act, for some accountancy purposes, uses 50. The noble Lord, Lord Carter, may remember the Statutory Sick Pay Act of some five or six years ago. The definition that was eventually arrived at in that Act did not include the number of employees at all but was based on the size of the national insurance bill. Therefore, it is extremely difficult to get those matters right.

However, it is our clear view that the figure of 20 which we are used to in disability legislation—the Disabled Persons (Employment) Act 1944—is about right. Firms with more than 20 employees already have experience of that legislation. But the matter can be reviewed in years to come. Therefore, I hope that my noble friend will not press that amendment.

With Amendments Nos. 46 and 47 my noble friend Lady O'Cathain is hoping to ensure that before the Secretary of State seeks to change the threshold in Section 8 by order, she must hold a review, whether the order is to be made within the first four years of the operation of the section or at any later time. At the moment, the Bill ensures that a review would precede such an order before the fourth anniversary. It also ensures that a review is held immediately after the fourth anniversary if one has not been held beforehand. I believe that my noble friend has a point. It seems to me that the Government should always hold a review before deciding to change the threshold, and so if she will withdraw these amendments, I am prepared to consider the issues and return with any necessary amendment at Third Reading.

On Amendment No. 48, however, I am not sure that I can be quite so helpful. In the first part of the amendment, my noble friend is seeking to ensure that any review takes account of the effects of Part II of the Bill and regulations made under it—such as any on the duty of reasonable adjustment—on the employers who would be brought into coverage by Part II should the threshold he lowered. However, the second part of the amendment commits the Secretary of State to amending regulations to reflect the circumstances of such employers. The Government are not prepared to commit themselves to being obliged to change regulations when it is not clear who should judge it necessary to make changes and when we are not convinced that there would be circumstances that changes to regulations, because of the inclusion of smaller firms, would be necessary.

I can give my noble friend these assurances. It is inevitable that any decision on whether to make an order reducing the threshold will have to take due account of the effect this would have on the employers who would be brought into coverage. That must be an important factor in any decision of this kind. Secondly, if an order were to be made, it would also be appropriate to consider the effects of the current regulations and whether adaptations were required or provision for any special circumstances that might be thrown up by the extension of coverage. But it seems much more likely that we would wish to change—and much more helpfully so—the code of practice. This would obviously be reconsidered at the time if, as I say, we were to be convinced that it was appropriate to lower the threshold following a review. In the light of those assurances, I hope that my noble friend will withdrawn her amendments.

I hope that I have dealt with all the points raised principally by the noble Baroness, Lady Hollis, and other noble Lords and I hope that they will feel that on this occasion it is not necessary to press the amendments to a Division.

4.30 p.m.

Lord McCarthy

My Lords, I am trying to follow the Minister's argument. I think that he said that it is all right to impose the burden of non-employment requirements on small employers because they would have many disabled customers. However, it is not all right to impose the employment conditions on them because they might have few disabled employees. He went on to say at the same time that it is reasonable to impose the non-employment burdens because that would not cost much and it was not much bother, but if there are a lot of disabled customers, surely it would cost quite a lot and cause quite a lot of bother. He then went on to say that it is unreasonable to impose the burdens in relation to employment conditions because it would cost a lot and cause a great deal of bother, but he has said already that there would not be many disabled employees. How does he square all that?

Lord Henley

My Lords, the noble Lord's tortuous mind has rather confused matters. I was talking not so much about the cost but about the regulatory burden. The noble Lord will understand that a very small firm is unlikely to have available the specialist personnel team to deal with those matters. Therefore, the regulatory burden imposed by an Act of this sort in terms of employment would be very great. That would not be the case under Part III in relation to customers.

Baroness Hollis of Heigham

My Lords, first, I thank all noble Lords who took part in this short but important debate. The debate is dealing with how many people will be brought within the purview of the Act and how many disabled people will be debarred from its protection by virtue of the size of the company which they would wish to be employed by. That is the question.

The noble Baroness, Lady O'Cathain, speaking on behalf of the CBI, reminded us that its position is one of benevolent neutrality towards the amendments. I think that that would be a fair way of describing it. At earlier stages briefing from the CBI made it very clear that it did not feel that there should be any exclusion as such. Nevertheless, it is benevolently neutral towards the amendments.

The noble Lord, Lord Hamilton of Dalzell, preferred to rely on persuasion. I believe that that was the gist of his argument. I would prefer that, but we have had 50 years of persuasion and disabled people's rights have not been met adequately in the eyes of the Government. That is precisely why we have this Bill today. As the noble Lord said, good employers respond to persuasion but bad employers do not. That is why we have this legislative framework. The only question is who it should encompass.

The noble Lord, Lord Renton, was concerned that that legislative framework should not encompass those, for example, in the farming industry, where it might not be appropriate. He is absolutely right. But I happen to have sitting next to me my noble friend Lord Carter who knows far more about agriculture than I can ever hope to. He reminds me that for a farm to employ more than 10 people and therefore to come within the framework of the legislation—if the amendments of the noble Lord, Lord Swinfen, were to be accepted—it would have to have well over 3,000 acres, or more if it was arable. As a result, only a very tiny percentage of farms would be affected by the Act. Therefore, in practice, agriculture will not come within the framework of the Bill.

The Minister revisited two of the arguments which I tried, perhaps inadequately, to address when I moved the amendment. The first was as to cost, although to be fair the Minister did not challenge that Amendment No. 17, in conjunction with the amendment tabled by the noble Lord, Lord Swinfen, would represent costs to small firms. He did not challenge me on that. He accepted the government figure that the average cost for physical adaptations and so on is likely to be about £200. Moreover, personnel costs in terms of turnover, staying power within work and reliability, if anything, act in favour of disabled people, who have proved so often to be good employees. The Minister did not challenge that. In other words, he accepted that disabled people do not represent a financial or personnel cost to small firms. The Minister accepted that and did not challenge it.

What he did say was that employing disabled people would represent a regulatory, administrative burden to those who own, run or manage such small companies. I believe the Minister said twice that they did not employ specialist personnel because there were only 15 or 20 staff employed. That is true, but the other side of that is that precisely because the company is small and has 12 or 14 people, the manager or the employer will know what the job requires in detail and will know therefore whether the disabled person coming forward has the appropriate attributes for that job. Precisely because he is a "hands on" employer, he will have the expertise that in larger companies has to be seconded to some specialist outside. Therefore, he is likely to make a much better fit of the job and the disabled person than the larger companies would. I believe that the Minister has helped to make my point for me.

I return to the basic point. All employers, whatever their size, are not required to make any expenditure for disabled people that is unreasonable. No companies of whatever size are required to employ disabled people where their disability makes them less suitable for the job. In other words, any company with fewer than 20 staff—and if the House were minded to accept the amendment of the noble Lord, Lord Swinfen, any company with fewer than 10 staff—has that double protection already. It does not have to incur unreasonable costs and it does not have to employ a disabled person where that is unreasonable. If that is the case at present, they do not need the further protection of size as well. Size is irrelevant. We are merely excluding the corner firm.

Lord Hamilton of Dalzell

My Lords, will the noble Baroness give way? Is she not making my point, that if employers are protected so well by Clause 7, it is persuasion which has to make them employ people rather than this Act?

Baroness Hollis of Heigham

My Lords, I wish with all my heart that the noble Lord, Lord Hamilton of Dalzell, had history on his side. It is because he does not that, after years and years and years of discussion and debate, the Government—not we—have brought forward what is a good Bill which will give disabled people major rights in the fields of employment and of goods and services. However, unless we accept this amendment, large numbers of disabled people and large swathes of the country will be exempt from this Bill, and exempt unnecessarily because they are already protected by the structure of the Bill which states that no employer should incur unreasonable costs and no employer should employ a disabled person whose disability makes him less suitable for the job. Given that, I would suggest that size is not relevant and that we should bring the figure down to 10 so that more disabled people can enjoy the rights that I hope this Bill seeks to offer them. I wish to test the opinion of the House.

4.43 p.m.

On Question, Whether the said amendment (No. 17) shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 137.

Division No. 1
Addington, L. Jenkins of Hillhead, L.
Airedale, L. Judd, L.
Annan, L. Kennet, L.
Archer of Sandwell, L. Kilbracken, L.
Barnett, L. Kinloss, Ly.
Beaumont of Whitley, L. Kirkhill, L.
Berkeley, L. Lester of Herne Hill, L.
Broadbridge, L. Lovell-Davis, L.
Brooks of Tremorfa, L. McCarthy, L.
Bruce of Donington, L. McIntosh of Haringey, L.
Cadman, L. Mackie of Benshie, L.
Callaghan of Cardiff, L. McNair, L.
Carmichael of Kelvingrove, L. Mar and Kellie, E.
Carter, L. [Teller.] Marsh, L.
Castle of Blackburn, B. Masham of Ilton, B.
Chandos, V. Mayhew, L.
Clifford of Chudleigh, L. Merlyn-Rees, L.
Clinton-Davis, L. Milner of Leeds, L.
Cocks of Hartcliffe, L. Monkswell, L.
Craigavon, V. Morris of Castle Morris, L.[Teller.]
Dahrendorf, L.
Darcy (de Knayth), B. Nicol, B.
David, B. Peston, L.
Dean of Beswick, L. Prys-Davies, L.
Donaldson of Kingsbridge, L. Rea, L.
Dormand of Easington, L. Redesdale, L.
Dubs, L. Richard, L.
Eatwell, L. Rix, L.
Ewing of Kirkford, L. Rodgers of Quarry Bank, L
Ezra, L. Russell, E.
Falkland, V. Sainsbury, L.
Farrington of Ribbleton, B. St. Albans, Bp.
Geraint, L. Sandwich, E.
Gladwin of Clee, L. Seear, B.
Glenamara, L. Simon, V.
Gould of Potternewton, B. Stallard, L.
Gregson, L. Stoddart of Swindon, L.
Grey, E. Strabolgi, L.
Hamwee, B. Swinfen, L.
Harris of Greenwich, L. Taylor of Blackburn, L.
Haskel, L. Taylor of Gryfe, L.
Hilton of Eggardon, B. Thomas of Walliswood, B.
Hollick, L. Thomson of Monifieth, L.
Hollis of Heigham, B. Tonypandy, V.
Hooson, L. Tope, L.
Howie of Troon, L. Tordoff, L.
Hughes, L. Turner of Camden, B.
Hylton, L. White, B.
Hylton-Foster, B. Wigoder, L.
Jay, L. Williams of Elvel, L.
Jay of Paddington, B. Williams of Mostyn, L.
Jeger, B. Wise, L.
Addison, V. Hogg, B.
Ailsa, M. Holderness, L.
Aldington, L. Hood, V.
Alexander of Tunis, E. Hothfield, L.
Ampthill, L. Howe, E.
Astor of Hever, L. Inchyra, L.
Balfour, E. Inglewood, L.
Barber of Tewkesbury, L. Ironside, L.
Bathurst, E. King of Wartnaby, L.
Belhaven and Stenton, L. Knights, L.
Beloff, L. Knollys, V.
Blaker, L. Lauderdale, E.
Blatch, B. Leigh, L.
Bledisloe, V. Lindsay, E.
Blyth, L. Lloyd-George of Dwyfor, E.
Bolton, L. Long, V. [Teller]
Borthwick, L. Lucas, L.
Boyd-Carpenter, L. Lucas of Chilworth, L.
Brabazon of Tara, L. Lyell, L.
Braine of Wheatley, L. McConnell, L.
Brougham and Vaux, L. Mackay of Ardbrecknish, L.
Bruntisfield, L. Macleod of Borve, B.
Burnham, L. Manton, L.
Campbell of Alloway, L. Marlesford, L.
Campbell of Croy, L. Merrivale, L.
Carlisle of Bucklow, L. Mersey, V.
Carnock, L. Milverton, L.
Carr of Hadley, L. Monson, L.
Chalker of Wallasey, B. Mountevans, L.
Chelmsford, V. Mowbray and Stourton, L.
Chesham, L. [Teller.] Munster, E.
Clark of Kempston, L. Murton of Lindisfarne, L.
Coleraine, L. Nelson, E.
Coleridge, L. Northesk, E.
Colnbrook, L. O'Cathain, B.
Courtown, E. Onslow, E.
Cranborne, V. [Lord Privy Seal.] Orr-Ewing, L.
Oxfuird, V.
Cross, V. Park of Monmouth, B.
Cumberlege, B. Pearson of Rannoch, L.
Davidson, V. Pender, L.
Dean of Harptree, L. Peyton of Yeovil, L.
Pike, B.
Denman, L. Pym, L.
Denton of Wakefield, B. Quinton, L.
Dixon-Smith, L. Rankeillour, L.
Dormer, L. Rawlinson of Ewell, L.
Downshire, M. Reay, L.
Dundonald, E. Rees, L.
Elibank, L. Renfrew of Kaimsthorn, L.
Elles, B. Renton, L.
Faithfull, B. Ridley, V.
Foley, L. Rodger of Earlsferry, L.
Fraser of Carmyllie, L. Saltoun of Abernethy, Ly.
Fraser of Kilmorack, L. Sandford, L.
Gainsborough, E. Sharples, B.
Gardner of Parkes, B. Shaw of Northstead, L.
Geddes, L. Slim, V.
Goold, L. Soulsby of Swaffham Prior, L.
Goschen, V. Stodart of Leaston, L.
Gray of Contin, L. Strange, B.
Grimston of Westbury, L. Sudeley, L.
Haig, E. Thomas of Gwydir, L.
Hailsham of Saint Marylebone, L. Thomas of Swynnerton, L.
Trumpington, B.
Hamilton of Dalzell, L. Tugendhat, L.
Harding of Petherton, L. Vaux of Harrowden, L.
Harmar-Nicholls, L. Vivian, L.
Hayhoe, L. Wyatt of Weeford, L.
Henley, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

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