HL Deb 04 December 1997 vol 583 cc1570-84

9.22 p.m.

Baroness Turner of Camden

rose to ask Her Majesty's Government whether they will amend the Companies Act to include a requirement for companies to set out in their annual reports their equal opportunities policies in relation to age, disability, gender and race and what steps they are taking to further those policies.

The noble Baroness said: My Lords, I rise to commend to the House a modest measure concerning equal opportunities. In doing so, I apologise to the House that we are debating this measure much later than I had originally thought.

Our economy and society is weakened and damaged if people are excluded from opportunities in employment simply on the basis of arbitrary and unfair stereotypes and preconceptions, whether they are on grounds of age, gender, race, disability or for any other reason. We have had measures on the statute book for more than 20 years in relation to discrimination based on race and sex. More recently, we have acquired regulation of discrimination on grounds of disability.

When in opposition, my party made known its intention to introduce legislation concerning age discrimination, in which I have taken a particular interest, notably in supporting the work of the Carnegie Third Age Programme. I was one of several who spoke in your Lordships' House as long ago as 1994 in a debate on the Carnegie Report on the Third Age introduced by my noble friend Lord Stallard. In that debate noble Lords from all parties joined in condemning the waste and folly of debarring experienced and willing older people from work simply because they were over a certain age. That report was widely welcomed and respected for the quality of its research and analysis.

If the intentions relating to age become law, we shall have in place a comprehensive set of statutes regulating the major causes of discrimination which will fill the present unfortunate vacuum created by the exclusion of age from legislative attention. It will remove any last impression that ageism is a form of discrimination which is seen as less important in the eyes of Parliament.

Let us not assume that this is an insignificant problem. The total number of registered unemployed people of all ages today is 1.46 million; that, of course, is the claimant count and many of us believe that the actual number of unemployed is rather higher than that. The number of people over 50, but under normal retirement age, who are either registered unemployed or classified as economically inactive—and I emphasise the phrase "economically inactive"—is 2.8 million.

Although the passing of legislation against age discrimination would represent good and valuable progress, we may have to wait quite a long time to see it enacted. In requiring companies to set out their equal opportunities policies in annual reports I believe that the Government would be sending out a clear signal of their intentions. It would be an early warning, a precursor to change that employers should prepare for and heed.

The various statutes which are already in place have served us reasonably well, both in outlawing the worst forms of discrimination and in acting as a deterrent to employers. But none of us can be satisfied with progress when we look around us. Ethnic minorities still experience much higher rates of unemployment and hold a lower proportion of skilled jobs than white people; women are still seriously under represented in senior managerial jobs, as well as in Parliament.

For some six years I was a member of the Equal Opportunities Commission. The commission did and still does valuable work in enabling both men and women to enforce anti-discrimination law, but inequalities still remain. While on the subject of the EOC, I was somewhat concerned to receive a letter from the chairman in the past two or three days indicating that the commission is under the impression that its grant-in-aid could be cut. That would be a great pity because, as I understand it, the commission was given the impression a year ago that its grant-in-aid would not be cut, or reviewed, for another two years. It is quite obvious that the equality programme of the present Government requires the assistance of a body like the EOC. I shall be glad to hear from my noble friend the Minister what the situation is in relation to the commission's grant-in-aid.

My proposition to your Lordships is based on my belief that legislation to deal with these matters is necessary but not sufficient. Parliament has the power and responsibility to influence both behaviour and attitudes through the statutes which it approves. However, real changes in attitudes and behaviour will only come about if employers are convinced not only that it is legally prudent but also that it is in their business interest to eradicate all forms of unfair discrimination from their businesses.

My proposal is that the Companies Act should be amended to require employers within its scope (those employing over 250 people) to include in their annual reports a simple statement covering the employer's equal opportunities policy—namely, the policies relating to gender, race, age and disability—and the steps being taken to further it. At present, the Act requires employers to give information on their policies concerning disabled employees and on the steps being taken to encourage and implement employee involvement and participation. I suggest to the House that this is a partial, though important, treatment of discrimination and that the measure I propose would represent an opportunity to encourage employers to view equal opportunities in a much more integrated and comprehensive way. Such a requirement would also constitute a regular reminder to businesses that these are matters which merit attention and policy at the most senior level.

I have been encouraged in considering whether to put forward the proposal by the knowledge that it is unlikely to be seen as either controversial or unduly onerous. These policies already exist in many forward-looking, enlightened businesses. Where they do not exist, they should. This measure would be an important spur to their creation.

I also draw noble Lords' attention to the decisions which have been taken by many leading employers to include such statements of their own accord and without any statutory requirement to do so. I refer, for example, to such employers as SmithKline Beecham, Northern Foods, the BBC, Booker and Zeneca. We shall not rectify the damage caused by unfair discrimination through laws alone, important and essential though they are. We need action on several fronts, gradually and steadily bringing it home to employers that the arbitrary exclusion of people from employment for reasons which have nothing to do with their ability to do the job in question is totally unacceptable and has no place in the modern workplace. Not only are such practices inequitable and deeply frustrating for those affected by them; they also deprive employers who practise them of the real business benefits of a diverse and balanced workforce and of the widest possible range from which to select and recruit.

The House may agree with my view that unfair discrimination is rarely practised out of malice or prejudice, although I acknowledge that neither is unknown. Much more frequently it comes about through ignorance and neglect. Carnegie's work on age discrimination, for example, reveals that it often occurs as a result of relatively junior recruitment staff using age limits as an effective but unfair way of cutting down long lists of applicants. Sometimes, too, it occurs because those making appointments are worried about having people working for them who are older than themselves and who may show them up through their greater experience and maturity. Neither practice stands up to any objective scrutiny. They ignore the examples of intelligent employment of older people, for example, as mentors and trainers, as a source of recruitment when younger people are not available, and as the all important memory of an organisation without which the lessons of experience are dangerously ignored. But the abuses and prejudices are likely to be eradicated only if a business has in place a genuine set of policies and practices endorsed at the most senior level and reinforced by example and monitoring.

The measure which I propose is aimed precisely to bring that standard of employment policy into place on a much more widespread basis. It is, moreover, a proposal which has been specifically endorsed and welcomed by the TUC and its affiliated unions. It would represent a standard against which good practice could be audited and measured by employers themselves, by organisations representing their employees and by interested external organisations. It is not an artificial, externally imposed standard but one designed by the individual business to suit its own circumstances.

I commend this measure to the House as a valuable means of maintaining momentum in the promotion of equal opportunities. This is a topic which requires regular stimulus and promotion. It calls for many different actions both inside and outside organisations to keep it on the agenda. There has been an enormous and welcome change in attitudes over the past 20 or 30 years. Discrimination against people on gender, ethnic origin, disability and, increasingly, age grounds, is widely seen as unacceptable, and yet it still happens. The Government have repeatedly and, I believe, sincerely said that they seek a fairer society. This measure is a small step along that road. In that context I commend it to your Lordships.

I look forward this evening to the maiden speech of the noble Lord, Lord Dholakia. I am pleased that he has chosen this subject on which to speak tonight because I know that he speaks from a wealth of experience in this area. I commend the measure to your Lordships.

9.33 p.m.

Lord Dholakia

My Lords, I consider it a great honour to contribute in your Lordships' House. I do so with all humility but also with a sense of pride that the composition of your Lordships' House now reflects, to a small extent, the multi-racial and multi-cultural society we live in. Of course, there is a twinge of nervousness on my part as would be the case with anyone contributing for the first time in this historic place.

The noble Baroness, Lady Turner, and I serve on the council of Save the Children Fund and I am well aware of her concern for justice and fairness, whether on the grounds of gender, race, disability or age. My involvement in race relations goes back over 30 years. I joined the National Committee for Commonwealth Immigrants set up by the then Prime Minister, Harold Wilson, and continued with the Community Relations Commission and the Commission for Racial Equality. I make no secret of the fact that in those early years of colonial encounters, in many cases with the remnant of the master-servant relationship that existed then, it was difficult for many of us who wished to make our homeland in this country to make a happy start. There were those who exploited race for political purposes. Equally, others fought for justice and fairness. It is right, therefore, that we pay tribute to the many who have helped to shape our multi-cultural society.

I remember working in the early 1960s with my noble friend Lord Lester, who has an even better record than I have. I worked with him in campaigns against racial discrimination in the 1960s. His record of fairness is ably demonstrated by his work on race relations legislation and now on human rights legislation.

I shall fail in my duty if I do not put on record the valuable contribution of my noble friend Lord Jenkins of Hillhead, whose foresight and concern about equality resulted in race relations legislation during his time as Home Secretary in another place. His definition of integration is as valid today as it was in 1966 when he addressed a gathering of voluntary liaison committees. I remember this distinctly because I was present. He said that integration was not a flattening process of assimilation but one of equal opportunity, accompanied by cultural diversity, in an atmosphere of mutual tolerance. How right he was then and how right he is now. Equally, we should not forget the contribution of the late Lord Bonham-Carter who chaired the Race Relations Board and the Community Relations Commission. It is a great delight after all these years to see the contribution of all those people who fought for justice and fairness.

For as long as I can remember I have expressed my concern about the rights and plights of the minority communities: the right to live in peace, to receive an education, to get a job, to raise a family free from fear, and, above all, the right to be treated fairly without reference to race, colour, national or ethnic origins. Those are the issues at the core of everything that needs to be done. They stand at the heart of every issue. No longer can a society live at peace with itself or prosper in all ways if an individual or an establishment denies minorities the right to those ideals by directly or indirectly discriminating against them.

Even after 50 years of ethnic minority settlement in this country, many agencies are unwilling to give credence to the fact that the system might treat people from different ethnic backgrounds in an unequal manner. The slogan often bandied about is that fairness, after all, is blindfolded and therefore colour blind and impartial. Trends in race relations show that racial discrimination is still persisting at a depressingly high level. Successive annual reports from the Commission for Racial Equality make it clear that minorities are still to be found disproportionately among the poor, the unemployed, the homeless, those who have never worked, those who are stopped and searched, in penal and mental institutions, among the under-achievers in schools and as victims of racial harassment and violence.

The response of the noble Baroness, Lady Turner, is timely. There are sound reasons for amending the Companies Act so that we are all aware of what steps are being taken to further equal opportunity policies within companies.

Perhaps I may cite just three reasons. It is in companies' interests to convince potential employees, clients and customers of their intention to act fairly. It is in their interests to value the potential, ability and needs of all sections of the community. Public high profile statements are a key element. They have a major public relations value and no company acting in the public or private sector can afford to underestimate that factor.

The self-interest or business case argument is important. We cannot ignore the key moral and social responsibility argument, which is supported by both the Government and the Liberal Democrats. It fits well with the social cohesion and the good corporate citizenship role which companies can play.

This one amendment in the Companies Act would provide a significant reinforcement of current non-discrimination legislation. It would increase the public accountability of companies with regard to the relevant laws and the corresponding codes of practice.

For too long, equal opportunities policies have been strangled by the gulf between what we want to achieve and what we have actually done. My colleague, Sylvia Denman, a prominent black woman, who until recently was a member of the Criminal Justice Consultative Council, recently said: Equality and quality are inseparable. Making sure that we treat everyone with respect, dignity and fairness is not something that you do today and forget tomorrow. I wonder if some of the impetus from the disturbances of the early 80s has been lost because there is a tendency to think it has all been taken care of". One of the arguments often advanced is that measures such as those proposed by the noble Baroness, Lady Turner, are likely to put an additional burden on companies, which still have to comply with a lot of bureaucratic paperwork. I am afraid that that is a very weak argument that smacks of doing nothing. People are this country's greatest asset. Race and colour have no significance in people's ability to provide a service. That fact has been recognised by the Commission for Racial Equality. Let me pay tribute to the chairman of the CRE, Sir Herman Ouseley, and his staff, who have continued to identify equality targets, despite all the adversity and hostility they suffer. It is indeed a credit to them that they have never compromised on issues of racism and racial discrimination.

The CRE has issued a leadership challenge, which invites people in positions of influence in all areas of society to give a personal lead in promoting the principle of racial equality, together with the practical action that will make it a reality. The leadership challenge invites leaders to use their positions on committees and boards to put racial equality issues high on the agenda. It invites them to report on issues concerning racial equality and its achievement in their annual reports, public statements and speeches. There is a positive benefit to companies in ensuring that they and their organisations are at the forefront of best practice. It will encourage leadership among their colleagues and demonstrate the success of their equality programmes.

A large number of organisations, including those of employers and trade unions, have accepted this challenge from the Commission for Racial Equality. They cannot all be wrong. The publication of company records will demonstrate their employment practices. Acceptance of the challenge will allow people's talents to be used to the full and ensure that selection decisions are based on objective criteria. It will allow a company to become an employer of choice, to get closer to customers and understand their needs and to operate internationally with success. It will help sustain a healthy society, make a company more attractive to investors and avoid the cost of discrimination. Companies should accept this challenge because it is the basis on which they could provide a high quality of service, free from discrimination.

The bottom line of my contribution is that equality and fairness are the cornerstones of the democratic process that we are all used to. If at any time we deny an individual the fairness and equality he or she expects, we have no right to claim those ideals for ourselves. Thank you, my Lords, for your patience.

9.43 p.m.

Baroness Dean of Thornton-le-Fylde

My Lords, I rise to support my noble friend Lady Turner. Before turning to the discussion, I should like, on behalf of all noble Lords, to extend the very sincerest congratulations to the noble Lord. Lord Dholakia. He praised many of his colleagues, and he was right to do so; but his contribution was born out of his own personal experience and his commitment over many years when people chose not to discuss this topic publicly but to close their eyes to it. The noble Lord has made a powerful and thoughtful contribution to that topic this evening. We look forward to hearing many more contributions from the noble Lord.

In addressing the issue before us tonight I shall concentrate on ageism. In so doing I wish to declare a retrospective interest. I was a member of the Carnegie committee of inquiry into the third age. I must confess that when I joined the committee I was not into the "third age"—I was just under 50—but our work took us so long that I was into the third age when we finished.

We discussed the issue of how to persuade companies to address this problem. We had to bear in mind that there was much that mitigated against people as they grew older. Pension schemes were often used by employers as an excuse not to employ someone in the older age bracket; or perhaps the lack of ability to become multi-skilled or an inability to take on the new information technology with which we increasingly work.

We considered calling for legislation to ban discrimination on the grounds of age and looked to the experience of the United States, which was ahead of us in that area of employment. We came to the conclusion that we would not call for legislation; we would see how the report percolated through society. We felt sure that responsible groups would face up to the issue.

What happened is what often happens in reality: good companies responded; bad companies did not, nor did companies which preferred to turn their faces against it. Without anticipating what may be said by the Minister when he declines to accept this Motion, I should like to share with the House some of my experiences over the years in representing individuals and looking at many company annual reports. Since I left the trades union movement I have been a non-executive director for Plcs. I know how the process works on the ground, round the boardroom table.

Companies go through their reports with a fine-tooth comb. It is the only connection they have with their shareholders and the outside world, and is an indication of where they stand on certain issues. I fully accept that a company report is a retrospective financial statement of a company, showing how it has performed, what the directors are paid and other financial aspects. But some of the first good practice we saw was a declaration of health and safety policies. It did not bring down companies. It did not turn the world upside down when they had to consider and print those policies. We have also seen introduced on the statute book the Disability Discrimination Bill which places requirements on companies.

Another aspect of my work was to be a founder member of Target 2000, which concerned discrimination and equal opportunities for women. One of the requirements of a company joining was that annually it would monitor, and publish the results of that monitoring, its own internally set targets for bringing women through the system. Surprise, surprise! After two years of that requirement being introduced, companies started publishing voluntarily in their annual reports their equal opportunities policies. Good companies did that. Why? Because they saw it as an asset and the badge of a good employer.

What is the difference between all those examples and a company publishing its employment policies on ageism? How does it approach that issue? I suggest that in this world, where we talk of the interconnection between various aspects of our lives—our business or our personal lives—and we talk about the interconnection of good education flowing through to good health and so forth, there is also an interconnection for our community when we consider the fact that 2.8 million people over 50 years of age in Britain have either retired early or are not economically active in our society.

Is it not also a fact that the longer you stay active the less dependent you are on the community? And the less dependent people are on the community the less money is required from the community to look after people who are not active. Many companies which have these forward-looking employment policies based on healthy ability and an all-round view recruit people from the older age group as well. In my experience, the best kind of workforce is not one from a particular age bracket but one from across the ages, with people working as a team. That is what helps a company to succeed. We frequently hear these dreadful terms "down staffing", "letting people go" and "releasing people", all of which mean making people redundant. This leads to companies losing their memory bank, which is damaging those companies. How different it would be if companies applied equal opportunities policies based on the ability to do a job or the ability to be able to retrain when companies are going through change.

I believe that this is a small measure to ask for. Many companies publish their employment policies in their reports; not many publish their attitude to ageism. Perhaps that is because they have not been confronted with the suggestion. As good companies take these changes on board, we shall see a drift towards such policies. Not much has really happened since the Carnegie third age report was published. I hope that the patience over the years of the noble Lord. Lord Dholakia, and his contribution to the mainstream of society will mean that he will not need so much patience in this area. I hope that we do pick it up and run with it. We have now a new government full of vigour and energy. Impatience gets places. I hope that my noble friend the Minister will be able to respond positively to the debate.

9.52 p.m.

Baroness Thomas of Walliswood

My Lords, my first and very pleasant task is to second the words of the noble Baroness, Lady Dean of Thornton-le-Fylde, and welcome my noble friend Lord Dholakia to these Benches and thank him for a remarkable speech. Nothing is ever better in this or any other House than to hear someone speaking from their own experience. Not only that, but he reminded us of a fundamental human truth. We are all harmed by other people being harmed by discrimination. It is a canker in society. If we can be discriminating to other people, who is to say that one day that weapon will not be turned on we who do the discriminating? We all look forward to future contributions from my noble friend in the debates in this place.

It is a great pleasure for me also to speak in the debate. I come to it from a slightly different background. I have been involved for many years in my party in policy-making in terms of equal opportunities for men and women. Indeed, with Polly Toynbee, I chaired the first policy group to make a policy decided by both the SDP and the Liberals when we were in alliance. That is one of the best things I have done, and it was on the subject of freedom and choice for women. So we did something that was worth doing.

I wish to reinforce one or two points which have already been made. Sometime ago I had the opportunity to take part in the appointment of doctors. I asked one of my colleagues, "It seems to me that we get a number of very good women candidates reaching the last hurdle and then we never employ them". Incidentally, I could have said the same about doctors from different racial origins. The very senior person to whom I was speaking replied, "Well, I do not believe that that is discrimination quite yet because many of these women do not have the same background as the best of our men in terms of the research that they have done", and so forth. "However", he added, "if it is still going on in five years' time"—that is about a year from now—"then it will be discrimination because the younger doctors coming up are quite the equal of their male counterparts".

I do not know what is happening in the medical profession, but at that time I remember hearing the phrase, "A good Tommy's man is always a good Tommy's man". That was justification for offering a post to an individual doctor. I thought to myself, "Keep your ears open on this one because there is something going on here". That is just a little example.

I wish to reinforce the point made about the importance of leadership. As many noble Lords know, I come from local government. It has made such a difference there when leading members of an authority have backed efforts to be extremely careful in their recruitment policy or to be absolutely rigorous in ensuring that people are not discriminated against, for example, because they are disabled. I remember the enormous pleasure that people working in my county council felt when they achieved the two-tick symbol for their employment policies towards disabled people.

These factors reinforce each other. It will not happen often in any organisation. One will not get equality of opportunity unless one has leadership from the top. But when you have that, it is amazing how quickly organisations adopt new practices to the benefit of everybody.

I support very much what is said in the Question before us today. It would be of great use to all of us if we knew more about the recruitment, selection. training, remuneration, promotion, holiday and leave allocations and pension policies of major companies. Not only that but, as other noble Lords have said, these matters, presented attractively, are of positive benefit to the company involved, not only because it enables the company to recruit the best people available but also in these days of ethical investment there will be a number of people who will be more likely to invest in such companies because they are pursuing ethically respectable policies and are openly doing so and declaring themselves—in other words, nailing their colours to the mast.

That is what one does when one talks about one's policies in the annual report. One is saying, "This is us. We are these people. We manage these things in this way". How much better it would be to make these declarations than simply to make the normal, traditional, complimentary remarks about the hard work that the staff have done in the past year—and well done, chaps! That is not enough in these times when, as the noble Baroness reminded us, employment security is by no means what it was some years ago.

Finally, I have been concerned about the rights of women. Employment patterns for women have traditionally been different from those for men as regards level of salary, the job done and so on. Women's careers have been interrupted in ways that men's careers traditionally have not been. But the situation is changing. Even a man can no longer assume that he will start work at 16, 18, 23 or, indeed, at any age and remain in employment for the rest of his life. Moreover, some men now positively want to share the joys and difficulties of child-rearing. In a few years' time I think that we shall see men's career patterns become increasingly similar to those of women.

Some men, like some women, will be strong career people. They will put their careers first. They will push their way through any glass ceiling or difficulty to have the job and career pattern on which they have decided. Others, however, will not—and for a variety of reasons. All the employment practices that we have encouraged in order to enable women to play their full part in employment may also be welcomed by men in the workplace. For all those reasons, I am delighted to support the noble Baroness and the terms of her Unstarred Question.

10 p.m.

Baroness Blatch

My Lords, I join other noble Lords in recognising a most excellent maiden speech from the noble Lord, Lord Dholakia. He clearly spoke from what seemed almost a lifetime of experience before coming to this House. We shall be the beneficiaries of all that expertise. I look forward—if my noble friends were with me tonight they would also look forward—to hearing very much more from the noble Lord in future debates.

I have a difficulty with the debate. I find it difficult to take issue with almost anything that has been said in terms of employers' obligations, not only to their staff, but also to their potential staff and to that reservoir of talent which is out there among women, the ethnic minorities, disabled people and those of us who happen to be on the wrong side of 50. However. I am reading the wording of the Unstarred Question and I shall address the very specific proposal that is now before the House, so anything that I say does not detract one iota from my recognition of the importance of these issues.

As the noble Baroness, Lady Dean, noted, the primary purpose of annual reports is to record key financial and economic information. Many companies use their annual report both to reflect on the previous year and to look forward to the coming year. I believe that it is absurd to require by law statements of policy and of progress towards achieving the aims and objectives of that policy in relation to equal opportunities to appear in annual reports. Presumably, if we are talking about legal requirements, there will also be sanctions for failure to meet that requirement.

The noble Baroness, Lady Turner. said in passing that the requirement would relate only to those companies with 250 or more employees. That is not made clear in the Unstarred Question and it is a new understanding for me. If the aim is to benefit the aged, those with disabilities and the ethnic minorities, and to enhance the equal treatment of men and women, the restriction of the measure to companies with 250 or more employees discounts more than 80 per cent. of our companies. A very large percentage of companies employ many fewer than 250 employees. If we are now to accept that the Unstarred Question relates only to companies with 250 or more employees, we have a difficulty.

I hope that your Lordships will forgive my cynicism, but whenever I hear the suggestion that something is just one more "small" additional task for companies, I am reminded of the continuous cry "Just one more penny on income tax will solve all ills." I do not accept that a company that does not specifically address its equal opportunities policies in its annual report is failing to meet its obligations to non-discriminatory practices.

The noble Baroness, Lady Dean, made a very important point, and on that I rest my case. She referred to the extent to which companies have moved along the road to doing things voluntarily. I believe that that is the best way to encourage companies to address these issues more publicly and to communicate their policies to the wider community. Equal opportunities is an important issue for the reasons given in the excellent maiden speech of the noble Lord, Lord Dholakia. Companies have made great progress in pursuing equal opportunities policies. In the case of gender, race and disability, employers already have an obligation under the law, and there is redress for any aggrieved employee.

My principal objection to the matter before the House today is the compulsory nature of it. This is to be imposed upon companies. That can be the only interpretation placed upon it because the word "requirement" is built into the Question. When the Prime Minister recently addressed a gathering of representatives of European Union member states to discuss the problems of unemployment across Europe and to search for solutions, he was in the happy position of having inherited the lowest rate of unemployment— and still falling—throughout Europe. At that time the Prime Minister emphasised the need for flexibility and minimal regulation of business. I say "Amen" to that.

However, when one considers the additional burdens to be imposed on business, or being actively contemplated, the idea of adding a further requirement in the form of this measure is unthinkable. Future burdens on businesses include measures in the Competition Bill now before this House; the application of the minimum wage; the adoption of the social chapter, including matters such as the part-time and temporary workers directive; a directive which shifts the burden of proof in sex discrimination cases on to employers—in other words, following an accusation by an employee the employer would be deemed guilty unless and until innocence was proved—the possible extension of works councils to companies that employ as few as 50 employees, with sanctions against an employer who fails to conform; and the entitlement of employees to three months' unpaid maternal and paternal leave on the birth or adoption of a child. Another measure is the working time directive. All of these measures add costs to business.

It is all very well for the Government to say that they oppose some of these measures, for example, the possible extension of works councils to very small companies. However, where qualified majority voting applies, this country can be out-voted. As if all of that was not enough, an additional clause in the Teaching and Higher Education Bill, which is to have its Second Reading next week, gives 16 and 17 year-olds an entitlement to time off work with pay for studies at the expense of employers. I believe that the cost of that is between £80 million and £120 million.

The issue of equal opportunities is a very important one, but to take the superficial, almost box-ticking approach, of using the annual report to address this area of policy is no answer. Why stop at equal opportunities? What about health and safety, fire regulations and endless other areas of policy where there is a legal requirement to address these matters in annual reports? Certainly, there is a legal obligation to deliver health and safety and non-discriminatory policies. There are endless, very important policy areas without any requirement to address them on an annual basis in the report. What information goes into an annual report should be a matter for the company itself. Already a number of requirements must be met.

The Hempel Committee has some interesting comments to make in its interim report on corporate governance. The report agrees that it is no good just ticking boxes. All that does is create an air of cynicism. If the Government believe in flexibility and minimal regulation to allow companies to flourish, expand and thereby create yet more opportunities and jobs, then they will reject this measure.

10.10 p.m.

Lord Haskel

My Lords, I am most grateful to my noble friend Lady Turner for introducing the debate. Despite the fact that we were reminded this afternoon by the Lord Chairman that it is only the speaker who comes after the maiden speaker who congratulates the maiden speaker, I should like to say a few words to the noble Lord, Lord Dholakia, about his contribution, and welcome his important and extensive experience in a multi-racial society. What he said struck a chord with me because I, too, am an immigrant into this country. I came here as a child. Many of the things that he said reflected my experience. To have someone like him with us in the House of Lords will make an important contribution to a greater understanding of the problems faced by those who come here as immigrants.

Noble Lords have raised many issues. The Government take them seriously, but we do not believe that statutory reporting requirements are, in general. the answer to those issues. The reason is a practical one. Non-financial reporting requirements are notoriously difficult to define. They are also difficult to audit and enforce. That non-financial reporting, in my experience, tends to define low and minimum standards. There is sometimes a place for legislation to establish minimum standards, but there is a much better case for encouraging rather than prescribing good practice in those areas to encourage higher standards.

The Companies Act is concerned with core reporting requirements for companies and minimum standards. During my 30 years in business I found that higher standards come from peer pressure and peer example and from the economic need to secure a competitive and flexible workforce. I say to my noble friend Lady Dean that it is the ethos that directors create which is important or, as the noble Baroness, Lady Thomas. put it, the leadership that they show.

In most cases therefore direct policy action by government, or the promotion and dissemination of best practice, will be more effective in raising standards in a particular area. What are the Government doing about that? We are pursuing a package of positive and complementary policy strategies which will help to underpin best practice. We are working to encourage companies' own efforts to develop that best practice. It seems to be working.

I warmly welcome the lead which business organisations such as the Employers Forum on Age is providing to its peers in promoting the benefits of a mixed age workforce. I join my noble friend Lady Turner in applauding the fact that on the reporting issue some UK companies are already developing policies of the kind she suggested as a matter of best practice. She mentioned Northern Foods, SmithKline and Zeneca. They are all examples of companies which, I believe, have done so. Those firms confound some of the points that the noble Baroness, Lady Blatch, put to us.

I should like also to compliment and thank those many organisations such as the EOC, Age Concern and the Race Relations Board which have helped companies to adopt best practice by preparing a well thought out code of practice for them.

The Government are not in any sense complacent about the problem. It remains to be tackled. We agree that discrimination in employment is wrong, wasteful, unfair and makes bad business sense. The employer who operates in that way will lose out, as many noble Lords have told us. That employer will lose out to competitors who take a modern and inclusive view and approach to employment practice. The economy will also lose out because all companies are not performing to the same high standards as our best companies. Hence the Government's concern.

The Government are therefore actively developing a framework that will help to deliver these objectives. Our strategy is to look further than measures which simply target a particular problem, vital though these are. We aim to tackle those root causes of company underperformance which limit job opportunities; and we aim to help companies develop their own best practice strategies.

It is UK competitiveness which is at the heart of the Government's campaign for jobs. Dynamic and inclusive relationships between companies and the whole of the workforce are central to the competitiveness agenda. And we believe that an important element of this competitiveness is that every individual in work should have the right to decent minimum standards of fairness at work, enforceable by law. We have already begun to deliver this aim. It is not an additional cost and regulatory burden, as the noble Baroness, Lady Blatch, suggested. It is a contribution to making the economy more competitive. We have set up the Low Pay Commission, we are preparing a National Minimum Wage Bill and we are preparing a White Paper on fairness at work.

The noble Baroness, Lady Turner, has rightly drawn attention to practices which continue to lead to division in society. In her Question she speaks of age, disability, gender and race. I would like to set out briefly what we are doing about each of these.

In the area of gender, the Equal Opportunities Commission is undertaking a statutory review of the Sex Discrimination Act 1975 and the Equal Pay Act 1970. The commission will report its findings to the Secretary of State for Education and Employment in April next year and the Government have given a commitment carefully to consider any recommendations put forward by the commission.

My noble friend Lady Turner asked about the equal opportunities grant in aid, and I thank her for giving me notice of that question. There is no question of grant in aid to the Equal Opportunities Commission being discontinued. We expect the level of grant in aid to the commission for next year to be announced in the near future.

The Government are also deeply committed to racial equality. The Government believe that the Race Relations Act is a well regarded piece of legislation which works well. However, we have promised to keep the legislation under review. A number of recommendations have been received in relation to the Act and the Department for Education and Employment is looking at these as part of its overall race relations strategy.

We have also taken action in relation to the disabled. In his Budget the Chancellor announced an additional £195 million set aside from the windfall tax to fund a range of measures, as the final element of the Government's welfare to work strategy, to help disabled people and those with long-standing illnesses into work and training.

About 25 per cent. of all disabled employees work for employers currently excluded from the Disability Discrimination Act; that is, those with fewer than 20 employees. Yesterday the Government launched a consultation exercise to gather views and evidence on whether the threshold should be reduced so that the Act's employment rights can be extended to more disabled employees and job applicants.

The Government are firmly opposed to unjustified age discrimination in the labour market. I agree with my noble friend Lady Turner and others that older workers are a valuable resource and the Government recognise both the contribution which they can make to society, and the experience and reliability which they can bring to their jobs. My noble friend Lady Dean called it "memory". I share also her experience and feeling towards ageism. Of course, it makes good economic sense to keep people employed as long as possible. But it is important to ensure that any action to tackle age discrimination in employment will bring real and lasting benefits.

In that regard, we have already taken some action. The Government's new deal for the unemployed will benefit older workers. From June next year, the new deal will offer payments of £75 per week to employers who recruit people aged over 25 who have been unemployed for two years or more. That will include a number of older workers. There will also be opportunities for study—and there is no age discrimination on that—for up to 12 months in employment-related courses which are designed to reach an accredited qualification. The life-long learning White Paper will be a statement of the Government's commitment to that.

There are other examples of important work. The noble Baroness mentioned the Carnegie Third Age Programme. I am aware that that has done much to raise awareness of third age issues and age discrimination; for that it is to be congratulated.

There is no quick fix to the problem of discrimination or unfairness in the workplace. There is a need for further concerted action and persuasion in relation to those issues. There is still a need to change some deeply entrenched attitudes and expectations among employers and individual workers. I hope that in setting out today the Government's strategy on employment issues I have been able to illustrate and convince noble Lords of our deep commitment to equal opportunities in the workplace. The Government sympathise entirely with the very good intentions behind the noble Baroness's suggestion. That is why we are taking direct and comprehensive action on a number of fronts to end discrimination in the workplace and to promote employability.

House adjourned at twenty-one minutes past ten o'clock.