Lords Sitting of 8 July 1999

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by Lord Bishop of Ely.): The LORD CHANCELLOR on the Woolsack.

Reproductive Health
Viscount Craigavon Viscount Craigavon asked Her Majesty's Government:
What key future actions and benchmarks about reproductive health were agreed at the recent special session at the United Nations General Assembly, and how Her Majesty's Government will respond.
Baroness Amos: My Lords, the report adopted at last week's UN General Assembly Special Session on the five-year review of the International Conference on Population and Development (ICPD+5) includes key future actions to curb the spread of HIV, to improve maternal health outcomes and increase access to sexual and reproductive healthcare in developing countries, including for young people. We shall be discussing these recommendations with our developing country partners and with United Nations health and development agencies, and taking them forward in our programmes.
Viscount Craigavon: My Lords, I thank the Minister for that Answer, which reflects the encouraging attitude that the Government are displaying. Does the noble Baroness accept that part of the effect of this successful United Nations process has been the integration of population into broader development policies? Does she also accept that this issue is no longer just about numbers but about the key role that population policies can play in matters such as sustainable development, giving women choices, environmental issues and the simple reduction of poverty? Given this new UN framework, can the Minister say whether the Government will continue to use that as a basis to give priority and urgency to the matter of population in the policies of the department?
Baroness Amos: My Lords, I entirely agree with the noble Viscount, Lord Craigavon. It is extremely important that a systematic approach is taken to the development of the health sector in developing countries. It has been shown that it is only by doing so that we can deal will some of the very concrete and real problems that exist in the areas of reproductive health.
Lord Alton of Liverpool: My Lords, will the Minister take this opportunity to reassess the contribution of Her Majesty's Government to the Chinese Population Association, through the UNFPA and IPPF, of many millions of pounds over the past decade and the use of that money in programmes of forced sterilisation and abortion of Chinese women? The fact that this monstrous abuse of human rights in China has been aided and abetted by the
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use of British taxpayers' money is surely a matter of some infamy—certainly in supporting a regime that now has a policy which prohibits more than one child per family; indeed, it is the only country in the world where it is illegal to have a brother or a sister.
Baroness Amos: My Lords, the UK gives no bilateral support, either financial or technical, to family planning programmes in China. However, as the noble Lord said, we give core annual grants to support the efforts of UNFPA and IPPF to improve reproductive health throughout the world. These organisations do not only work in China. Both organisations are working in China to bring about changes in policy and practice by promoting services to improve health and choices in ways that respond to the individual needs of the Chinese population.
Baroness Gould of Potternewton: My Lords, a key feature of the United Nations Special Session was its committed aim to develop programmes to improve access to sex education. In view of the importance of this knowledge, can my noble friend the Minister indicate what action the Government propose to take to support those programmes and to deal with the estimated 1.2 billion adolescents who are excluded from such information?
Baroness Amos: My Lords, I can tell my noble friend that there was a great deal of discussion about the position of young people who are most at risk, both physically and psychologically, of sexual and reproductive ill-health. In terms of the specific programmes and policies which we aim to support the report stated very clearly that school children need to be instructed in sexual and reproductive health issues to teach them responsible sexual behaviour. We shall allocate more resources for adolescents' sexual and reproductive health. It is important to provide special family planning information, counselling and services for sexually-active young people. It is also important to promote the duties, responsibilities and rights of parents, who will want to give guidance to their children about their sexual and reproductive health. So this was a very important area in the document which came out of the meeting.
Lord Redesdale: My Lords, although I support the lead role that the DfID has taken in the area of reproductive health, does the Minister agree that HIV and AIDS are now one of the main causes of infant mortality and that the only way of actually combating what is now such a widespread epidemic in Africa is to spend a vast amount of additional money on finding a vaccine?
Baroness Amos: My Lords, I can tell the noble Lord that we think it is important to work on prevention, because it will take such a long time to get to the point where a vaccine is available. Indeed, if current trends continue, over 40 million people will have been infected with HIV by the year 2000 and 95 per cent of them will be in the developing world. In fact, we have supported

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the international AIDS vaccine initiative, and we think that a safe vaccine effective against strains of HIV most common in the developing world is within our grasp during the next 10 years. Therefore, prevention and working on a vaccine are both important.
Lord Moynihan: My Lords, does the Minister share the concerns of the chairman of the Special Session's ad hoc committee, Anwarul Karim Chowdhury, that the vitally important population and development programmes may suffer due to the drying up of resources, despite the much welcomed political commitment that has been made? What assurances can the Minister give to allay those concerns?
Baroness Amos: My Lords, there has been an agreement that the developed world will give substantially to the budget to assist with the implementation of ICPD+5. The United Kingdom Government have a budget for health of £250 million through the DfID, a substantial proportion of which is through multilateral donor organisations, as well as funding some NGOs through our bilateral programmes. So, although there has been a residual concern, we feel very strongly that this is an area which is receiving, and will continue to receive, adequate support.
Baroness Flather: My Lords, does the Minister agree that the key point here is that all children born, whether into developing or developed countries, should be wanted and should be born because mothers and fathers—or, at least, mothers—want to have them? Does the Minister also agree that all steps should be taken, whether it concerns a developed or an under-developed country, to make that so? Children should not be brought into this world if they are not cared for once they are born.
Baroness Amos: My Lords, that is one of the reasons that we feel it is important to put reproductive health strategies, maternal health strategies and other health strategies within a broader context of trying to ensure that we have a world which is sustainable and where we aim to eliminate poverty.

Curriculum Proposals: Marriage
3.10 p.m.
Lord Northbourne Lord Northbourne asked Her Majesty's Government:
Why the Secretary of State for Education and Employment's proposals published on 13th May for the new curriculum for personal, social and health education and for citizenship omit any reference to marriage.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, marriage will not be neglected. The curriculum proposals are based on the report of the Personal, Social and Health Education Advisory Group, Preparing Young People for
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Adult Life. This states clearly the importance of helping pupils to understand the value of family life and the institutions that support it, including marriage. We accepted the report in full. The proposals are currently out for consultation. My right honourable friend the Secretary of State for Education and Employment has already made clear that the final curriculum framework will include an explicit reference to the importance of marriage. This is in response to the representations already received.
Lord Northbourne: My Lords, I am most grateful to the noble Baroness for that helpful and encouraging Answer. Does she agree that there is a substantial body of research which suggests that children who grow up in happy, stable, two-parent families have, on average, a better chance of achieving their potential, and that marriage with all its faults is probably the best way the human race has so far discovered of supporting and sustaining that kind of long-term relationship? Therefore, it is extremely important that children should have an opportunity to know the facts about partnerships and marriage and to discuss their implications while they are still at school.
Baroness Blackstone: My Lords, it is important that we should do everything we can to make sure that children grow up in happy and stable circumstances, and marriage is often the background in which that kind of happiness and stability can be created. At the same time, it is important that we are sensitive to the fact that there are large numbers of children in our schools who do not have that good fortune. It would be sad if anything that we did in schools made those children feel even more inadequate. This is an area where we want teachers to be sensitive. Teachers are receiving training to achieve just that.
The Earl of Lauderdale: My Lords, does teaching the importance of marriage include reference to its durability?
Baroness Blackstone: My Lords, of course.
Lord Phillips of Sudbury: My Lords, is it not also true that one of the four themes proposed for personal, social and health education is the,
"development of satisfying and effective relationships recognising and respecting difference"?
I believe that I have quoted that extract correctly. Would that not be an extraordinarily useful general acquisition for all our young people?
Baroness Blackstone: My Lords, that is a helpful contribution. It is, of course, the case that many children come from backgrounds and homes where traditional family patterns do not exist. We need to respect that. We also need to persuade children and young people that they have to be tolerant, that there are many different models, and that different models work for different people. That is something that should be taught in our schools.
Baroness Young: My Lords, is not the noble Baroness concerned that the Government's White Paper on the family makes clear that marriage is the best way for

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couples to live—I may not have the terminology exact, but that is certainly its intent—but the document from the noble Baroness's department on values does not mention marriage and seems to many of us to be putting in front of children unsafe and unreliable forms of living?
Baroness Blackstone: My Lords, I am not sure whether the noble Baroness heard my first Answer, but I thought that I had made it clear that Preparing Young People for Adult Life makes it absolutely clear that a stable family background is important and that the report refers to marriage. The foreword by the Secretary of State does so. The other document which considers revisions to the national curriculum is out for consultation. My right honourable friend the Secretary of State has already made it clear that we shall respond to the representations that have been made about marriage.
The Lord Bishop of Ely: My Lords, is the noble Baroness aware that her reply gave great pleasure to these Benches? Is she also aware that we believe that it is possible to say all the positive things which have been said in government publications without implying any of the negatives which have sometimes been thought to follow from those positives? Is she aware that we would give the sensitive treatment of these issues our full support?
Baroness Blackstone: My Lords, I am enormously grateful to the right reverend Prelate for his welcome of the Government's position on this matter and for his support, and that of his Benches, for a sensitive approach to what is a sensitive issue.
Baroness Blatch: My Lords, is it true that the Government have plans to lift the clause in the Act which bars teachers in schools from proselytising homosexual relationships as a preferred way of life?
Baroness Blackstone: My Lords, I do not think the noble Baroness has the matter quite right. Section 28 does not relate to teachers in schools; it is about local education authorities.
Baroness Strange: My Lords, does the Minister agree that,
"The joys of marriage are the heaven on earth,
Life's paradise, the great princess, the soul's quiet,
Sinews of concord, earthly immortality"?
Baroness Blackstone: My Lords, I am afraid that I am not able to match the noble Baroness in replying to that!
Lord Campbell of Alloway: My Lords, is it within the remit—it may be—of the Department for Education and Employment to give definitive advice about marriage?
Baroness Blackstone: My Lords, the Department for Education and Employment has responsibility for the school curriculum, including questions of personal, social and health matters that affect all young people.
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I think it is right that the department. through listening to advice from experts in this area, should then provide a framework which schools can use.

Healthcare Waste Disposal
3.17 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
Whether standards for the disposal of healthcare waste are satisfactory.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, there are stringent controls in place to ensure that healthcare waste is disposed of satisfactorily. Under Part II of the Environmental Protection Act 1990 healthcare waste must be disposed of under a waste management licence issued by the Environment Agencies. The purpose of a licence is to ensure that waste is disposed of in ways which protect the environment and human health. Contravention of licence conditions is a criminal offence.
Baroness Gardner of Parkes: My Lords, I thank the Minister for that Answer. Does he accept that material which has been in contact with body fluids or patients' wounds is especially dangerous waste and that sharps—that is, blades and needles—are the most dangerous? As the best healthcare waste management involves minimisation, segregation and isolation, can he tell us what proportion of National Health waste is disposed of on site where these materials have been used?
Lord Whitty: My Lords, I cannot give the total figures but largely as a result of improved segregation techniques there has been a substantial reduction in the total amount of clinical waste—from 128,000 tonnes to just over 100,000 tonnes over the past three years—which is disposed of under these regulations.
Lord Clement-Jones: My Lords, the Minister mentioned the stringent controls with regard to healthcare waste. However, I am sure he is aware of a major national investigation that has been conducted by the police and the Environment Agency into the activities of a major healthcare waste disposal contractor. Can he tell us a little more about the activities of the Environment Agency and the Health and Safety Executive with regard to issuing new guidance on healthcare waste disposal, which has not been updated since 1992?
Lord Whitty: My Lords, I cannot comment on individual cases. Continuous work is carried out by both the Environment Agency and by the Health and Safety Agency in relation to the handling and transportation of clinical waste. A number of specific codes have been issued which address particular problems. For example, last year a code was issued by the NHS on clinical waste disposal treatments and technology as alternatives to

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incineration; the previous year we issued Healthcare in waste management—segregation of waste streams in clinical areas, which addressed the segregation problem to which the noble Baroness referred. So there has been quite a lot of additional guidance recently.
Viscount Addison: My Lords, can the Minister say how many breaches of these standards have been committed in the last year? Is he satisfied that there are enough inspectors?
Lord Whitty: No, my Lords. There are a number of different agencies—the Environment Agency, the Health and Safety Agency and the NHS—and I cannot give an aggregate figure.
Lord Dixon-Smith: My Lords, I am sure the Minister will agree that the proper disposal of waste is entirely dependent upon meticulous and detailed management. The least hazardous and most cost effective way of disposing of healthcare waste is on-site. If that can be done it reduces the management risk. However, many hospitals still have their clinical waste removed. Can the Minister say what is the cost of that removal to the National Health Service? Can he give any indication of how long it will be before hospitals in general have their own disposal facilities?
Lord Whitty: My Lords, the short answer to the noble Lord's questions is that I cannot give that information. The noble Lord is exaggerating the problem. A fair amount of clinical waste can be disposed of relatively easily externally to the place of creation provided that care is taken and the codes are followed. Toxic or otherwise dangerous waste—which is a relatively small proportion of total healthcare waste—is covered by tighter regulations under the Special Waste Regulations 1996. Clearly hospitals, health centres and those who deal with that kind of waste must observe special precautions. However, a fair amount of the total clinical waste is not of that level of danger.
Baroness Gardner of Parkes: My Lords, is the Minister aware of the serious problem of healthcare material being misused by drug addicts and then thrown onto the ground in local authority areas throughout most of the country? Children are at particular risk because the needles and syringes have a fascination for them. What controls are there, or could there be, to deal with this problem? It does not really fit into any of the official methods of disposal.
Lord Whitty: My Lords, I agree with the noble Baroness. Syringes, cartridges and other carriers of drugs are, regrettably, often disposed of irresponsibly and completely outside the waste disposal system. The only control is effective local authority waste disposal. Inevitably some things slip through. It is a problem which local authorities are well aware of.

Kosovo: Russian Deployment
3.23 p.m.
Lord Kennet Lord Kennet asked Her Majesty's Government:
Whether the NATO Council unanimously approved the request to Romania, Bulgaria and Hungary to deny their airspace to Russian planes bringing peace-keepers to Kosovo.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, requests for overflight clearance are a matter for individual nations. The North Atlantic Council, which, as the House knows, operates by consensus, agreed on 16th June that the NATO military authorities would advise nations of requests which related to deployments to Kosovo approved by Commander KFOR. On 26th and 27th June, Romania, Bulgaria and Hungary asked NATO to check whether Commander KFOR had yet given formal approval to particular Russian deployments; the NATO military authorities confirmed that he had not. Arrangements for the Russian deployment were concluded successfully on 5th July, and we are pleased to note that the deployment is now proceeding smoothly.
Lord Kennet: My Lords, while the hitches and confusion are comprehensible, what is against KFOR now coming under the direct control of the United Nations—in other words, what is against the British general commanding KFOR becoming the servant of the United Nations? If that were possible, it would provide automatic assent and obedience to his orders, not only by Russia but by China if it was involved, which it probably is not. Would not it make sense to have a shot in this direction? It would avoid this necessary action on behalf of world civilisation being conducted by a partial alliance and would allow it to be conducted by a universal alliance of all humanity?
Baroness Symons of Vernham Dean: My Lords, I do not agree that there was confusion over the matter; it was a very straightforward matter which has been satisfactorily resolved. As for whether it would be right to bring KFOR under the command of the UN, those who have watched the matter carefully will agree that the agreements which have been reached have been negotiated very carefully. Any suggestion that the agreements should now be unravelled and put into a different arena would be counter-productive.
Lord Renton of Mount Harry: My Lords, what advantages does the Minister think the Russians gained by sending a surprise rapid expeditionary force of tanks from Bosnia to Pristina to gain control of the airport? Does not that show that at heart the Russians are still more interested in gaining territory than in negotiating? What does that suggest for the long-term peace prospects in the Balkans?
Baroness Symons of Vernham Dean: My Lords, the noble Lord should ask the Russians what advantage they thought to gain. It was certainly not a move to which

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Her Majesty's Government were privy. The Russian deployment at Pristina is continuing, with the Russians managing the ground facilities and the NATO deployment controlling the airspace. I am pleased to say that since 5th July, the issues left outstanding from the negotiations of 28th June have now been resolved. We very much look forward to working with Russian colleagues in order to ensure peace and security in Kosovo.
Lord Clinton-Davis: My Lords, instead of raking over dead embers, is it not a matter of some gratification—not least for the people of Kosovo—that those involved as peace-keepers are now working together in purposeful collaboration? Is not that the point?
Baroness Symons of Vernham Dean: Yes, my Lords, that is very much the point. The agreement on the technical details which we were able to reach on 5th July has underpinned Russia's involvement in KFOR. Her Majesty's Government welcome that agreement. It clears the way for an enhanced NATO-Russian co-operation over Kosovo.
Baroness Williams of Crosby: My Lords, is it not of the greatest importance that we are absolutely certain that the Russian troops will be fully integrated into the NATO operation in such a way that the opening-up of any fault lines on ethnic grounds in Kosovo can be avoided? Is the Minister satisfied that the full integration of Russian forces in every area of the province will take place?
Baroness Symons of Vernham Dean: Yes, my Lords, I am satisfied on that point. The agreement reached on 5th July has preserved NATO's unity of command and has given Russia a distinct role within the German, French and US sectors, but not its own sector. As I have indicated, there is some Russian participation on the ground at Pristina airport, which is in the British sector. There are some 750 Russian troops at the airport, about 1,000 in the German sector and smaller deployments in the French and United States sectors. The political direction and tactical control will be provided by NAC but Russia will retain full political and military control of its contingent.
Lord Moynihan: My Lords, I should be grateful if the Minister would give the House an update on the refugee picture in Kosovo as of today.
Baroness Symons of Vernham Dean: My Lords, I hope the noble Lord will forgive me if I tell him that my figures are as of yesterday, 7th July. They indicate that some 618,000 individuals have returned to Kosovo. That means that about two-thirds of the regional refugees have returned in less than three weeks. The picture is slightly different depending on whether we
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are talking about Macedonia, Albania or Montenegro. However, we are seeing a general return to Kosovo, which is very heartening.
The Earl of Lauderdale: My Lords, can the noble Baroness tell the House anything about the demilitarisation of the KLA?
Baroness Symons of Vernham Dean: My Lords, the commander of KFOR is responsible for overseeing the demilitarisation of all the armed groups in. Kosovo, covered by UNSCR 1244. The KLA undertaking is a unilateral commitment setting out how the KLA will comply with its obligations under the United Nations Security Council resolution.
On 30th June, the Kosovo Albanian forces accepted the KLA's undertaking; so they accepted what had been said on their behalf by their civilian leaders as set down in the agreement that had been signed by Mr Thaqi on 21st June. So the undertaking has been agreed politically and at military level by the KLA.
Lord Monson: My Lords, have any promises been made to Bulgaria and Romania as a reward for their co-operation with NATO over the Kosovo operation?
Baroness Symons of Vernham Dean: My Lords, the Prime Minister has made it clear that we want countries such as Romania and Bulgaria to join the alliance as soon as they can. There is no pre-ordained order for future invitations. Each candidate will be judged on its own merits. NATO will issue any invitations to nations willing and able to assume those responsibilities and obligations as it determines they are ready for such an invitation. The next review process—the next summit—will take place no later than 2002.

Immigration and Asylum Bill
3.31 p.m.
The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Immigration and Asylum Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 34,

Schedule 1,

Clauses 35 to 46,

Schedule 2,

Clause 47,

Schedule 3,

Clause 48,

Schedule 4,

Clauses 49 to 73,

Schedule 5,

Clauses 74 to 75,

Schedule 6,

Clauses 76 to 77,

Schedule 7,

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Clauses 78 to 85,

Schedule 8,

Clauses 86 to 93,

Schedule 9,

Clauses 94 to 144,

Schedule 10,

Clause 145,

Schedule 11,

Clause 146,

Schedule 12,

Clauses 147 to 158,

Schedules 13 to 15.—(Lord Williams of Mostyn.)

Lord Renton: My Lords, I gladly support the Motion moved by the noble Lord, which, I am glad to say, states that we should deal with the Bill in a Committee of the Whole House in the order in which the clauses are set out in the Bill, taking the schedules with the clauses as they arise.
However, it should be borne in mind that this is a very long Bill, containing 158 clauses and 15 schedules, and that parts of it are controversial. Bearing in mind that we have only a relatively short time left in this Session, how many days are the Government prepared to let us have for discussion in what will necessarily be a long Committee stage?
Lord Williams of Mostyn: My Lords, I thank the noble Lord for his support for the Motion. Speaking personally, I have listened to his advice when we have had this sort of discussion in the past. We thought that this was the best way of dealing with the matter. As to the number of days, I undertake to give careful attention to what the noble Lord has said, and it must remain a matter for the usual channels.
On Question, Motion agreed to.

Academic and Academic-Related Staff Pay and Conditions Bill [H.L.]
Read a third time; an amendment (privilege) made; Bill passed, and sent to the Commons.

The Post Office
3.34 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, with the leave of the House, I shall now repeat a Statement on the Post Office which has been made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
"I wish to make a Statement on the Post Office White Paper which the Government published today. This White Paper sets the agenda for the Post Office to offer a world-class service for the 21st century.
"Today's announcement is good news for the Post Office and all those whose livelihoods depend on it, because it can now build for the future with real confidence. It is good news for the Post Office's
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millions of customers, who will benefit from improved services from a new, modernised Post Office and from greater competition for postal services.
"It brings an end to the uncertainty that has dogged the Post Office over the last decade: uncertainty over its role and place in society; uncertainty over its long-term viability and ownership; uncertainty over the universal service obligation; and uncertainty over the Post Office network. Today we provide certainty and a new sense of direction and purpose—based on modernisation and reform.
"Throughout the world, postal markets are changing at an increasingly rapid rate. Globalisation of postal services, the growth of faxes and e-mail, more demanding customers and greater liberalisation of markets are driving change as never before. It is not a question of whether markets will become more competitive, but how far and how fast. The Post Office already faces fierce competition, not only from private sector couriers, but also from other post offices throughout Europe and from the Internet. I know that the Post Office management see change and greater competition as an opportunity and not as a threat—an opportunity to enter new markets and to overhaul the Post Office's business processes; an opportunity for new ventures and new alliances; an opportunity to prove that the Post Office can compete against the best in the world and do so successfully.
"But in order to compete effectively and fulfil its potential, the Post Office needs greater flexibility. If it is not given greater freedom to expand into wider and international markets it will find itself confined to a diminishing sector of the postal market, saddled with falling value and shrinking profits.
"That is why in this White Paper the Government are mapping out the most radical set of reforms since the modern Post Office was created in 1969—reforms which will ensure that the Post Office can provide the services we need in the 21st century.
"The White Paper proposes that the Post Office be subject to a combination of effective market disciplines coupled with regulation and be allowed new commercial freedoms. Operating at arm's length from Government, it will have the freedom to grow and the means to succeed.
"Existing mail services will be maintained and indeed strengthened as, for the first time, the universal service obligation, including the requirement to deliver to all addresses, will be laid down in law. That will guarantee the uniform tariff for these services. The cost of a stamp will be the same, regardless of the distance of delivery. And the free service for visually impaired people will continue.
"Stronger competition and better regulation will work together to keep prices down and improve service quality and consumer choice. As part of the balanced package that we are bringing forward, greater commercial freedom must be matched with some liberalisation.

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"The White Paper therefore proposes a reduction in the monopoly from the present £1 to 50p or 150 grammes with effect from 1st April 2000. A new independent postal services regulator will promote consumer interests, regulate prices and ensure that the Post Office provides a high level of service to all households and businesses. And consumers' views will be championed by a greatly strengthened Post Office Users National Council which will have the power to refer poor performance by the Post Office to the Regulator and will be able to recommend the levels of fine to be imposed for bad service.
"The Post Office Counters network, which plays such a valuable role in local communities, particularly for the less mobile, will be strengthened by our decision to put the Horizon project back on track. We shall equip all 19,000 post offices with a modern, on-line computer system.
"It will enable the Post Office to modernise and improve the service it gives to existing clients and customers, and to win the new business on which the future success of the Post Office network will depend.
"For the first time the Government will lay down minimum criteria in order to ensure that everyone in the UK has reasonable access to post office counter services particularly in rural parts of the country and areas of social deprivation. The new regulator and the users' council will monitor the network against these criteria.
"We have agreed arrangements with the Post Office for maintaining a network of Crown offices which will handle at least 15 per cent of the total counters' business. Where appropriate, new Crown offices may be opened.
"The Government will set out clear objectives for the Post Office, but they will not be involved in day-to-day business operations. The Post Office board will be responsible for running the Post Office, based on a rolling, five-year strategic plan, agreed with the Government.
"Clear duties, real powers and the necessary resources to promote the consumers' interests will be given to the independent regulator and the users' council. Annual reports will be published by the Government, by the Post Office, by the regulator and by the users' council on their roles and their performance during the year.
"We will implement as much of this package as possible through administrative action and secondary legislation. However, primary legislation will be needed as soon as parliamentary time permits to complete the full package of reforms.
"Primary legislation will be necessary to transform the Post Office into a public limited company which will both underline the new commercial freedoms and help to establish clearly the separate functions of ownership and management by subjecting the Post Office to the full range of company law. In particular, the directors will owe their duty to the company—not directly to the Government.
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"There have been suggestions from some quarters that this is part of a plan to privatise the Post Office by stealth. There are no such plans. As we said in our manifesto, we intend to provide commercial freedom while retaining the Post Office in public ownership. I can therefore inform the House that the Act of Parliament to create the Post Office as a plc will make it clear that we would not seek to dispose of Post Office shares without further primary legislation.
"Of course, we cannot ignore the possibility that the Post Office might wish to enter into a joint venture or strategic alliance with another company and might wish to cement this with a limited sale or exchange of equity. In such cases it would not always be sensible or practicable to seek parliamentary approval through a separate Act of Parliament. However I can assure the House that any such proposal would be debated and voted on in both Houses.
"To ensure that the Post Office can compete in the fast moving domestic and international postal market, we will give the Post Office the greater commercial freedom it has long desired. This will help the Post Office to be more competitive and more responsive to market developments and evolving customer demands.
"The Government's financial demands on the Post Office will be reduced to match commercial dividend rates. From April next year, it will be cut to 40 per cent of post-tax profits—more than half the rate at which profits have been removed from the business in recent years. This will be worth an estimated £150 million a year going directly to the Post Office.
"We will also allow the Post Office to borrow at commercial rates for growth investments up to £75 million a year without approval from the Government. This will give the Post Office greater freedom to enter into acquisitions, joint ventures, alliances and partnerships.
"But the Government recognise that the Post Office has been starved of resources as a result of the approach of the previous government. The Post Office cannot wait until April next year for the additional resources necessary to ensure that it can compete in the modern postal market. We therefore intend to take action immediately.
"I am pleased to inform the House that in this financial year we shall reduce the Government's financial demand on the Post Office to 50 per cent of post-tax profits and will allow borrowing of up to £75 million. This will provide an immediate cash boost to the Post Office of £175 million.
"Taken together, our proposals for greater commercial freedom will bring over £600 million into the Post Office over the next three years.
"I am confident that this White Paper maps out a future for the Post Office that will allow it to compete and win. We have a clear vision of a British Post Office which is world class and which aims to be among the most successful in the world.

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"This White Paper gives the Post Office management the commercial framework they need to turn this vision into reality. It is now up to them, working in partnership with the workforce, to respond to the exciting challenges ahead.
"This White Paper will put right the neglect of the past and deliver a Post Office which is fit for the 21st century. I commend it to the House."
My Lords, that concludes the Statement.
3.45 p.m.
Baroness Buscombe: My Lords, I thank the Minister for repeating the Statement regarding the long-awaited White Paper on the future of the Post Office. While we welcome the Government's support for improved services, for greater competition, for more postal services and more flexibility for the delivery of those services, we are disappointed that the Government have effectively backtracked from the proposals clearly set forth in a Statement made by Peter Mandelson in another place in December last year.
The reason for the backtrack is, in our view, quite clear. It is because of the continuing, awkward power struggle between New Labour and the trade unions, with the inevitable result of a halfway house—an unsatisfactory and, we now hear, for many who work in the Post Office, an alarming and disturbing compromise. This is not full liberalisation of the Post Office, although I predict that it is an important first step to privatisation—a mere temporary measure.
The Secretary of State seems almost offended in his Statement that this is a route to wholesale privatisation by stealth. However, he cannot be surprised when, in his Statement in another place in December last year, Peter Mandelson stated:
"I should make it clear that we certainly do not rule out the possibility of introducing private shareholding into the Post Office—for example, through the sale of a minority stake in it—at a later stage".—[Official Report, Commons, 7/12/98; col. 21.]
Further in the Statement he said:
"[But] at present wholesale privatisation—
favoured by the Conservative Opposition—
"would not be a realistic option".
But the White Paper goes far beyond measures proposed by the previous government which looked to freeing up 'the Royal Mail alone—a measure which was strongly resisted by this Government when in opposition. Now they are in government, I suggest that we shall privatise every part of the Post Office.
I wish to place particular emphasis on the future for post offices in rural areas. We are especially concerned following the Secretary of State's clear statement in another place earlier today in response to a question in relation to the Post Office network that,
"I cannot guarantee that every network facility that exists today will remain for the future".
In that regard I am concerned with the minimum criteria which the White Paper mentions wherein the Government will seek to develop criteria for the Post Office network to ensure that the network is reasonably accessible to all.
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We welcome the Government's intention to equip post offices with the latest technology, providing access for everyone to an increasing range of services. But we are concerned about the true meaning of "reasonably accessible." We hope that access will not be dependent on the recipient also being equipped with the latest technology, for example e-mail, as opposed to a Post Office counter within a reasonable distance of one's home.
While we greatly appreciate and welcome the strengthened Post Office Users National Council, we have other concerns with regard to the ability of the council to respond to individuals and their wish and will to have redress against poor performance by the Post Office.
This Statement raises many questions for the future of the Post Office. I put the following questions to the Minister. How does the noble Lord expect the Post Office to compete effectively in world markets without the full commercial freedom that the privatised Dutch and German post offices enjoy? To what borrowing restrictions will the Post Office be subject? Will taxpayers' money be at risk? Further, what guarantees can the Minister give that rural post offices will not close? Does he agree with the fears of the National Federation of Sub-Postmasters that one-third of post offices are under threat as a result of the Government's abandonment of the benefit payment project?
3.50 p.m.
Lord Razzall: My Lords, I echo the words of the noble Baroness on the Conservative Front Bench in welcoming this extremely significant Statement on the future of the Post Office. The noble Baroness was quite right to focus on two main issues that emerge from the Statement. The first is the absolute determination of everybody on this side of the House to ensure that the key paragraphs on page 3 of the Statement, relating to reasonable access to post office counter services in rural parts of the country and to areas of social deprivation, are carefully monitored. We must ensure that the programme of post office closures, which was started and accelerated to a great extent by the previous government, does not continue under this Government. I am sure that everyone in the House would like an assurance from the Minister that the deterioration in rural services and areas of social deprivation will not be allowed to continue.
The second critical issue on which the noble Baroness touched was privatisation. For those who have studied this matter, clearly there has been a big row. That is not surprising given that the proposed public limited company structure is different from that which we all thought would be adopted for the Post Office. It would be helpful if the Minister could confirm that there is no intention to privatise the Post Office. A clear statement to that effect would go a long way towards diminishing people's fears. In the Statement one sees the phrase "there are no such plans". I suspect that when British Telecom became a plc, as it did before privatisation, the government could legitimately have said that they had

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no such plans to privatise it. We do not want to know whether there are any plans but we do want an undertaking that that will not happen.
To transfer the whole of the assets of the Post Office—its property, undertaking and employees—will be a massive legal and financial task. First, does the Minister, via his officials, have any idea of the professional costs, which will be borne ultimately by the new plc, involved in performing that transfer? Secondly, has the noble Lord any comment to make on the potential criticism following the Statement in December that, while the Post Office would be given commercial freedom, it would be subject to public sector control with regard to salaries and pay'? Concern was expressed in a number of quarters that if the Post Office wanted to compete on an international basis, but was subject to public sector principles related to pay and salaries structures, the freedom of its board to manage it in the way it thought fit would be impeded.
Thirdly, is it correct that, following the creation of Post Office plc, the company will be subject to all the transparency to which any other UK listed company is subject, in particular the disclosure of prices paid for significant acquisitions which currently are not disclosed? Finally, does the Minister accept that the borrowing limit of £75 million which has been lifted is a relatively small amount of money to free from public sector controls? Does it not need to be kept under review? It may well be that that limit needs to be significantly higher.
3.57 p.m.
Lord Sainsbury of Turville: My Lords, the Opposition must decide whether they are accusing the Government of back-tracking or wholesale privatisation. They cannot have it both ways. I humbly suggest that the reason for this confusion is the same as that which has dogged the Conservative Party for the past 18 years, with the result that it is paralysed in dealing with this issue. Quite simply, this is exactly in line with what Peter Mandelson said in introducing this matter in December. We have created a company that will have commercial freedom. To do that we have adopted the structure of a plc, which we believe to be the best form, but the body will remain in public ownership. We do not rule out the introduction of private equity at some time in the future, but we have no plans to do so. That was exactly what we said on the previous occasion.
As to rural sub-post offices, for the first time clear criteria are being laid down for access to the network. We cannot say that no rural sub-post office will ever close. The fact is that they are private commercial businesses and we cannot guarantee that they will remain open. For the first time we are laying down clear criteria for accessibility which we believe should give people confidence that we take this matter very seriously. The regulator will also have a role in monitoring the network and seeing that those criteria are applied.
The noble Lord, Lord Razzall, asked about the cost of the task of turning the Post Office into a plc. I cannot give any figures, but. I do not believe that the cost will
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be huge because the basic structure already exists. What will be changed are the financial structures and those related to governance. The assets are already allocated to that body, and we do not believe that that will be a hugely complicated task.
I was asked about the freedom of the new body in terms of salaries and pay policy. We have said that this must be taken into account in public sector policy and have resonance with it. At the same time, we will probably introduce new parameters so that there is greater flexibility. Therefore, salaries and pay will not be controlled in exactly the same way as in the public sector. We believe that that will give the Post Office all the flexibility that it needs to pay the necessary salaries and wages to motivate staff and acquire the people they need to carry out its new tasks. The new body will have the transparency of a plc, and that is the reason for using that structure. That is a standard, agreed format 'which will be clear not only to the workers in the organisation and everyone in this country but elsewhere. Everyone will know the basis of the organisation with which they are dealing.
As far as concerns borrowing, the new body will be able to borrow £75 million each year. If any project is over £75 million, the body will have to obtain government permission for it, but we have made it very clear that we shall look at major projects that are in the strategic plan and that if they meet the criteria that we have set out, in terms of robustness, no undue risk and being commercially sensible, we shall allow them to go ahead. This gives the Post Office the freedom it requires.
4 p.m.
Lord Molyneaux of Killead: My Lords. the Statement seems strangely familiar to those of us who went through this debate about a decade ago, and for that reason one must support the whole project.
Can the Minister clarify one point? He referred to the office of regulator, apparently in singular form. In the office of the regulator will there be subordinates with special knowledge of the four areas of the United Kingdom?
Finally, if a post office, great or small, is listed for closure, at what level will the consultations take place?
Lord Sainsbury of Turville: My Lords, I should have said that the regulator will take the form of a commission, made up of a number of people. I am sure that we shall pay very serious consideration to the points the noble Lord has made with regard to that body, so that different parts of the United Kingdom are reflected within it. We shall, of course, continue and, indeed, increase the consultation process, particularly on areas such as Crown offices, so that local people are fully involved.
Lord Clarke of Hampstead: My Lords, where can I find the reference to a plc in Labour Party's manifesto documents? I have with me today all the consultative documents, the preamble to the manifesto and the

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manifesto's precursor. I should like to be directed to where the Labour Party said that it would create a plc for the Post Office.
I should have declared an interest. I spent over 50 years of my life directly associated with the Post Office and in latter years have continued that association as a trustee of the Post Office pension funds. I apologise for not having said that immediately. Anyone who has had a long connection with the Post Office, or even a short connection, will welcome the commercial freedom that is heralded in the White Paper. While being happy about that, I think that today is a sad day for the Post Office. I share the view of the noble Lord, Lord Mackay of Ardbrecknish, who said only yesterday in this House:
"whatever gloss the Minister puts on it, either today or tomorrow in the Statement, is not the creation of a plc with share capital the first step on the route to privatisation?".—[Official Report, 7/7/99; col. 877.]
I listened to the Statement in the other place and heard the assurances that were given. I am still unconvinced that there are enough safeguards.
That brings me to a specific question. Having heard the Secretary of State say today that the concept of an independent, publicly owned corporation was fundamentally flawed, I would welcome the comments of my noble friend the Minister on those fundamental flaws, because the matter of commercial freedom and all the other aspects of the White Paper could easily have been dealt with without the creation of a plc. I would love to know the fundamental flaws in the suggestion for an IPOC, which is an independent, publicly owned corporation.
Finally, I should like to ask whether the Post Office pension fund and staff superanuation scheme are unaffected. As the main one has been in surplus for many years, and the Post Office has enjoyed the benefit of a contributions holiday for so long. I should welcome an assurance that both pension funds are unaffected by the White Paper.
Lord Sainsbury of Turville: My Lords, I do not think the question of a plc was covered in the Labour Party manifesto, but things do happen in this world that were not covered in that manifesto. We said in the manifesto what we would do; we did not say that everything we did in government would be covered by it. There are very good reasons why we should use a plc format in this case. Perhaps I may rehearse them before coming on to why I do not think that an independent, publicly owned corporation is the right way.
As I said, the main argument is that we need to have a model that is clearly understood by people both within the organisation and outside. The plc format is clearly understood, is backed by legislation, and everyone understands it.
The problem with the argument for an independent, publicly owned corporation is specifying exactly what that means. It could mean a body that is exactly the same as the body we have today, with the same lack of definition. It could describe exactly the organisation that
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we are putting in place. We are putting in place a publicly owned corporation which is independent, and to stress the independence we are using the plc format, which makes it very clear that the body has commercial freedom. The argument against an IPOC is simply that it is not at all clear what it is, and if the Post Office is to take, as I hope it will, full advantage of its opportunities and commercial freedom, it must have a structure which everyone understands and which it can use.
As far as I know, the Post Office pension fund is not affected in any way, but I shall write to confirm that that is the case. I am sure that it is.
Lord Crickhowell: My Lords, is not there a fundamental contradiction in what the noble Lord the Minister has said? He has talked a great deal about commercial freedom. He has talked about a company that can compete in world markets. Yet he has also talked about a £75 million borrowing limit, a sum which he would have thought was pretty modest in an earlier incarnation. Does this not suggest that the Government are determined to keep very tight control over the so-called "independent" plc? How will the company operate with commercial freedom in a tough and highly competitive world market if it has to return to the Treasury every time it wants to borrow more than that?
Lord Sainsbury of Turville: My Lords, even in my previous incarnation I thought that £75 million, which is at least the cost of two supermarkets, was a large sum of money. I need to make it very clear that the £75 million is simply the amount that the Post Office can borrow automatically, without obtaining Treasury permission. The fact that the Post Office acquisition of German Parcel for around £300 million took place makes it very clear that this is no paper undertaking, but represents a serious increase in the commercial freedom of the Post Office.
Lord Ezra: My Lords, as someone who has pressed regularly from these Benches for greater commercial freedom for the Post Office, and has expressed grave concern over the large sums extracted by the Treasury from post-tax profits, I am very pleased with the Statement. However, following on from the last question, I should like to probe further about the relations of the Government with the new board; the Government representing the shareholders, the nation. We heard that the Government will agree a five-year, rolling strategic plan. How will the Government call the Post Office to account on this? If opportunities arise for major acquisitions or joint ventures not in the plan, will the Post Office have to go back to the Government? How free will it be to operate in a market which, as the noble Lord the Minister explained to us, is evolving rapidly, globally and technologically, and in which one cannot anticipate in what directions opportunities will arise?
Lord Sainsbury of Turville: My Lords, I totally agree with the noble Lord that this is an absolutely key issue. Clearly, it is important that there is a five-year

1035
strategic plan and that the Government, as the major shareholder, are confident about that plan. But the whole reason for doing it in this way is that the Post Office would have the freedom, even if a project were not in the strategic plan, to come forward and ask for the money to be made available for it. We have laid down criteria for this. The main one is that it should be a commercially robust project and pose no undue risk to the company. Clearly, if it is in line with the strategic plan, the decision will come more quickly, but we are not ruling out other proposals which take account of specific opportunities that arise in the market.
Lord Stoddart of Swindon: My Lords, is my noble friend aware that I have been in this and another place long enough to know that if the Statement had been made by a Tory:Minister there would have been hell to pay in the House of Commons and, indeed, here? That would have been perfectly justified because undoubtedly this is the first move towards privatisation, whether under a Labour government or a Tory government. What the Government are doing is opening the door to privatisation. Make no mistake about that.
I ask the Minister three questions. First, he said that this will not mean privatisation, but he also said that it would be possible for a sale or exchange of equity between the Post Office and private firms. Is not that a sort of privatisation, if private firms can invest in the Post Office and the Post Office in private firms?
Secondly, the Minister said that primary legislation will be needed to dispose of the Government's equity. Is it not possible, as in the case of BP, to dispose of that equity through a Finance Bill rather than a special Bill, because they are very different?
Thirdly, what is there to safeguard the Post Office pensioners and contributors from the same problems that the electricity supply pension scheme had, when pensioners' money was used to pay for redundancies made in that industry?
Lord Sainsbury of Turville: My Lords, if I have not made it clear, let me now do so: this is not seen as a step towards privatisation. It will put in place a clear structure for the Post Office. There is no great virtue in debating whether an exchange of equity between two companies is or is not privatisation. I hope that we can all agree that if the Post Office—in a world which is seeing increasing internationalisation of the market—is to have a level playing field on which to compete against other post offices, it must be able to undertake that kind of operation. It is not the same as privatisation, because the equity will still be held on a majority basis by the Government and, therefore, it will be Government-owned.
The essential issue is that the Post Office should be able to take advantage of this opportunity. Primary legislation will be needed to sell the shares because that will be put into the Bill that sets up the plc.
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As far as the pension fund is concerned, I need to check, but I assume that the money in the pension fund belongs to the people who put it in and, therefore, cannot be taken out or penalised in any way.
Lord Renton: My Lords, I agree with what my noble friend on the Front Bench said about the need to support rural services. I remind the Minister that in the industries that have been privatised, such as electricity, water and many others, there is always an obligation to provide a public service. To the villages that have post offices, they are not merely a convenience for those of us who happen to have motor cars but a necessity, especially for old age pensioners. If they live some distance from a town, old age pensioners would be at a grave disadvantage if their local post office closed. Will the Minister bear that in mind?
Lord Sainsbury of Turville: My Lords, I take that point very seriously. Rural post offices are enormously important to their communities and the reason for that goes beyond simple commercial criteria. They are the foundation of many villages and their community life. I emphasise again that—for the first time—accessibility criteria will be included in the Bill and the regulators will have a responsibility to monitor their fulfilment. We cannot guarantee that post offices will not close, because they are private businesses and if the owners decide that they cannot continue we cannot necessarily put something in their place. We are well aware of the importance of rural sub-post offices. That is why we are specifying those criteria and will put in place, for the first time, a regulator outside Government who will monitor the network against that criteria.
Lord Monkswell: My Lords, I thank my noble friend for his statement this afternoon. Perhaps I may ask him a couple of quick questions. He referred to the modern Post Office being formed in 1969, but I am sure that the Government will be aware that the history of the Post Office in this country goes back 350 years and it was 180 years ago that the penny black came into existence.
The statement says that the directors of the new Post Office plc will owe their duty to the company. That cannot be right. Surely they will owe their duty to the shareholders of the company, who are the 55 million British citizens in this country. The statement continues by mentioning joint ventures and strategic alliances with other companies. We can understand why those may be necessary in the modern, global market, but will the Minister assure us that any sale or exchange of equity will be limited, not wholesale?
Lord Sainsbury of Turville: My Lords, while it was right to pick on 1969 as the date when the modern Post Office was set up, I agree that it has a long history. When I sat on a commission in the late 70s to review the Post Office, a friend of mine produced a long list of all the commissions that had sat previously to review the Post Office. There is nothing new in the world, and the Post Office certainly has a long history. I would point to 1981 as a significant date, when the Post Office was separated from telecommunications.

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In plc law, the duty of the directors is to the company, and through the company to the shareholders. As the Post Office will be a publicly-owned company, the directors' duty will continue to be a duty to the Government and the people of this country. I confirm that any exchange of equity will be limited.
Baroness Oppenheim-Barnes: My Lords, I apologise for not being here right at the beginning of the Minister's statement. I know that the regulator will protect consumer interests, but what will be the position of the new Post Office plc in relation to the fair trading legislation? Currently, the Post Office has wide exemptions as a public undertaking. Will it be subject to all the regulations, rules and provisions of the fair trading legislation?
Lord Sainsbury of Turville: My Lords, I hesitate, especially with my noble friend Lord Borne sitting behind me, to make a statement on that point, but I can say that the regulator will have the powers to adjudicate on issues of fair competition, as well as his regulatory powers. I believe that that is the position for most of the regulators. I will check on that point and let your Lordships know if that is wrong.
Lord Borrie: My Lords, the Minister kindly said in answer to the noble Lord, Lord Molyneaux, that the regulator is not to be a single individual but will be constituted as a commission. Is that a good sign that the Government will introduce a utilities regulation Bill in the near future? That idea comes from Labour, and is contrary to the model the Conservative government used, which constituted regulators as individuals. I hope that the new model will be extended to the other utilities so that they will have a commission or board to share the decision making.
Lord Sainsbury of Turville: My Lords, this is an idea whose time has come and it can be seen to be a sign of the way thinking is moving.

Employment Relations Bill
4.20 p.m.
Report received.
Schedule 1 [Collective Bargaining: Recognition]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page 18, leave out lines 25 to 32 and insert—
("2A.—(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) The meaning of collective bargaining given by section 178(1) shall not apply.
(3) References to collective bargaining are to negotiations relating to pay, hours and holidays; but this has effect subject to sub-paragraph (4).
(4) If the parties agree matters as the subject of collective bargaining, references to collective bargaining are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a
1038
declaration, or the parties agree, that the union is (or unions are) entitled to conduct collective bargaining on behalf of a bargaining unit.
(5) Sub-paragraph (4) does not apply in construing paragraph 29(3).
(6) Sub-paragraphs (2) to (5) do not apply in construing paragraph 32.")
The noble Lord said: My Lords, in moving Amendment No. 1, I should like to speak also to government Amendments Nos. 9 and 52 and then to respond in due course to Amendment No. 8 in the name of my noble friend Lord McCarthy.
The purpose of Amendment No. 1 is to clarify the scope of collective bargaining and how it may be altered. We wanted it to be absolutely clear that even if the CAC issued a declaration of recognition, the union and employer could agree to alter the scope of collective bargaining to include matters other than pay, hours and holidays.
Amendment No. 52 clarifies the scope of collective bargaining in Part III of the schedule, which is the part that deals with changing the bargaining unit, by introducing new paragraph 74B. It also allows the parties to vary a bargaining method imposed by the CAC under Part III, in new paragraph 74C. This mirrors the existing provision in paragraph 29 for bargaining methods imposed under Part I.
I now turn to the issue of whether a union should be required to give up an existing collective bargaining agreement in order to apply for recognition under Part I. Amendment No. 8, to which my noble friend Lord McCarthy will speak, covers this point, as does the Government's Amendment No. 9. I shall not pre-empt anything my noble friend may say, but perhaps I may explain why the Government want to deal with this issue in a slightly different way from that proposed by my noble friend.
We have proposed Amendment No. 9 which changes one of the preliminary tests an application must pass in order for the CAC to accept it. The test currently requires the CAC to reject applications for recognition in a bargaining unit if any union, including the applicant union, is already recognised to conduct collective bargaining on behalf of one or more workers in the bargaining unit. One effect of this is to require a union which has a very limited but possibly long-standing recognition agreement—covering the union's role in disciplinary matters, for example—to give up that recognition in order to apply for statutory recognition under Part I.
That is not an unusual arrangement. In my own company, I recognised a union for disciplinary matters and such issues as the location of the business but not for pay, hours and holidays because my employees preferred to negotiate on these matters individually with me. The point is: should such recognition for what might be called "non-core" issues bar the union from seeking recognition through the procedure for pay, hours and holidays?
I do not think it is desirable for a union to be required to end a recognition agreement covering the "non-core" issues if both the employer and union are happy with it.

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The union should be able to seek recognition on the "core" issues of pay, hours and holidays without being forced first to tear up an existing agreement. Amendment No. 9 therefore provides that a voluntary agreement which does not include bargaining about pay, hours or holidays does not bar the recognised union from applying under Part I. The employer will, of course, still be able to terminate the voluntary agreement if he wishes. It may be that an employer, faced with an application for recognition on pay, hours and holidays, wants to renegotiate on the matters for which he already recognises the union. The Government's amendment allows for that. I beg to move.
Lord McCarthy: My Lords, the Government have introduced this change or modification—I do not want to call it a "volte-face" because they may not like that—at a very late stage. We argued this point in Committee and the Minister said that we could not have it. Never mind, he now comes along and says that the Government will not function in such a way that unions which are recognised for matters other than wages, hours and conditions have to quarrel this away in order to negotiate about core conditions. To my colleagues and I in Committee, that seemed to be only common sense. If you have a Bill, the object of which is to encourage and assist recognition, you do not, as I said in Committee, operate pontoon; you do not say that people have to twist or bust. You say that if you have a little non-core recognition, you can come along and see whether you can get core recognition. If you do not get it, you still have what you had in the first place. You do not have to go back to square one.
In practice, I do not think that employers who have allowed a certain limited amount of recognition of the kind the Minister described in his own company will cancel it if their employees want to extend it. The real difficulty will be those employers who give no recognition at all, who would not be seen dead with recognition and where the union would have to come from a position of non-recognition to a position of core recognition. In that circumstance—I thank the Government for making a concession at this late stage—my amendment has no purpose because it was an attempt to get the Government to limit their existing position so that it applied only to new unions. The Government have come round to that. Therefore, my amendment has no purpose and I do not intend to move it. I thank the Government very much.
Baroness Miller of Hendon: My Lords, I intervene in the debate on this amendment for only one reason. It is right and proper—I am sure the Minister will indulge me—that at the very earliest possible moment of the Report stage I should get something off my chest.
This Bill began in the other place, but it was then completely recast by the government amendments, so that the Bill that left there was totally different in form from the one that had started. The Bill which your Lordships have been asked to deal with was therefore the Employment Relations Bill Mark II. The Government extensively amended the Bill in Committee so that we now have Mark III. However, some 48 hours
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before this present stage, the Government tabled some 16 pages of amendments to Schedule 1 alone, plus about another dozen spread around the Bill. So what we are really being asked to consider is the Employment Relations Bill Mark IV.
I certainly accept that several of the amendments that the Government have introduced at this stage are to honour pledges made to the Opposition at earlier stages; and for that I most certainly thank the noble Lord. I also appreciate the courtesy of the Minister and his staff in sending me part of the material "hot off the press", as it were. But what this really shows is that the Government are once again legislating on the hoof. That means that they are churning out ill considered Bills which they have to amend as they progress through Parliament, or as with an amendment that the Government will certainly be introducing later today, a year after an Act has received Royal Assent and three months after it has come into effect.
Having got that off of my chest, I add that some of those belated amendments may need a little further amendment. I have not had very much time to look at them, so where I have something to say, I shall try to indicate that. It may be that we shall have to deal later with any reservations that I am left with.
With regard to Amendment No. 1 itself, we have no objection to this further clarification of the meaning of "collective bargaining".
Lord McIntosh of Haringey: My Lord, I thank the noble Baroness for the typically courteous way in which she rebukes me. As I think I said in Committee, there are three kinds of government amendment. First, there are those which respond to points made at an earlier stage by the Opposition or indeed by Government Back-Benchers. Secondly, there are those which are tidying up amendments—it is not a political matter; it happens under all governments. Thirdly, there are those which mark changes in policy.
I fully accept the noble Baroness's point that it is undesirable for the third type of amendment to be introduced at a late stage. I apologise for the fact that that happens in some cases. It will happen in amendments put down for consideration today. We try to keep those to a minimum but we do not always win.
I thank my noble friend Lord McCarthy for his recognition that Amendment No. 9 achieves the point he made in Committee. That was what we intended. I do not apologise for the fact that we are flexible and listen to debate. That is, after all, the purpose of a revising Chamber. I commend Amendment No. 1.
On Question, amendment agreed to.
4.30 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 2:
Page 18, line 42, leave out ("21") and insert ("50")
The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 2, 3 26, 27, 55 and 56. The amendments are identical. They propose to increase the definition of a small business which is

1041
exempt from the provisions of the Bill requiring compulsory union recognition from one with fewer than 21 employees to one with fewer than 50.
I make no apology for bringing back the amendment. I believe that it is of vital importance to the stability of small businesses. Small businesses are constantly praised by the Government, in particular the incumbents of the office of Secretary of State for Trade and Industry, of whom we are now on our third in just over two years. They acknowledge them as the potential engines of new enterprise and employment. Yet time after time their legislation ignores the difference between small businesses and large ones. Ever increasing administrative burdens are placed on them. I shall not take up your Lordships' time with a catalogue of those burdens because we are now debating another stumbling block being placed in their path—another disincentive to expansion for a small business which survives its dangerous first three years
The possibility imposed by the Act is that if the business has grown large enough to reach a small threshold in number of employees, it may then be faced with a demand for unionisation—a union which, if history is anything to follow, will want to alter the flexible working, multitasking and other processes of "mucking in" together which help those small business get off the ground.
Do not think that I decry the usefulness of unions in larger businesses. I believe that they are a useful tool, reducing the need for negotiating with individual employees and helping to smooth out problems when they arise. However, in the case of small businesses a union inevitably creates the atmosphere of "them" and "us" which does not happen when a handful of people work together. This is especially so when, in a business of the size the Government propose as the starting point, fewer than a dozen employees can impose their will on the other 10 who are probably working alongside them in the same building, if not in the same room.
When this amendment was discussed in another place, the Secretary of State agreed to take the power to alter the number from 21. Paragraph 6(6)(b) now gives him the powers to vary the number of workers. I optimistically assume this means that he concedes that it is possible for the Government to have got their numbers wrong and that the threshold of 21 may, as we predict, be just too low. On the other hand, the power may have been inserted merely to keep the Opposition quiet.
I am not happy to leave the matter in what I believe is an unsatisfactory state. This is especially so as the power to vary the number is so ambiguously worded that it means that the Secretary of State could reduce still further the figure of 21. Indeed, in his response to the debate on the amendment in Committee, the noble Lord, Lord McIntosh of Haringey said—ominously, in my opinion,
"We acknowledge that it may have to vary in either direction. It could be too stringent or not stringent enough".—[Official Report, 7/6/99; col. 1174]
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In other words, having got their foot in the door with the figure of 21, the Government could reduce the figure to 11, five or even three. The Government have the power to vary the figure. There would seem no reason why they should not start at the more sensible and appropriate figure of 50. The reason I refer to an appropriate figure of 50 is because of the recommendation of the Commission of the European Union concerning the definition of small and medium-sized enterprises which was dated 3rd May 1996. I shall paraphrase it and quote from it. It recorded that as long ago as 1990 the Commission had proposed to limit the proliferation of definitions in use in the Community. In 1992 it proposed a threshold of 50 employees for a small business, and 250 for a medium-sized business. The 1996 report states:
"Some programmes will fix very varied thresholds".
That is what the Government are doing in this Bill. The report continues:
"In a single market without internal frontiers, the treatment of enterprises must be set on a set of common rules".
Of all the criteria used for defining a small business including the turnover, the report says that,
"the number of employees is undoubtedly one of the most important and must be regarded as imperative".
That is from the preamble. The formal recommendation in Article 1 paragraph 2 states that,
"a 'small enterprise' is defined as an enterprise which has fewer than 50 employees".
That should be clear enough to the Government.
Because I do not wish to be accused of selective quoting, I point out that the same paragraph includes modifications to ensure that businesses with a high annual turnover, or large balance sheet net worth, or those which are not independent, do not fall into that definition. We on this side of the Chamber would not object if the Government were to accept the Commission's recommendation for the purposes of this Bill but in return applied the modifications proposed in the same paragraph.
In Article 3 of the same document, the Commission undertook to adapt the statistics it produces for various purposes under size classes of one to nine, 10 to 49, and 50 to 249 employees—and then two other categories with which we are not concerned today. The Fourth Council Directive, No. 78/660/EEC, has been amended to incorporate the criteria proposed in the recommendation. It will be no use for the Minister to tell us that the figure of 21, which I described to the Committee as seemingly having "been plucked from the air", is not related to small businesses and was chosen for some other reason.
I remind noble Lords that in the preamble to the recommendation the Commission decried the use of varied thresholds for different purposes. Only a year ago, in June 1998, in the Late Payment of Debts (Interest) Act, a small company was defined as one with fewer than 50 employees. Perhaps the Minister will explain the Government's different approach in the two Acts. What does that say as regards consistency? I told the Committee that despite the Government's claim to have consulted widely over the provision, the IOD, the EEF and the Small Business Bureau are not content with

1043
that figure. The Government have to pay at least as much attention to them, and to the European Commission, as they do to the unions. The proposals seem to be in breach of the EC directive by which we are bound. I beg to move.
Baroness Hogg: I support the amendment moved by my noble friend. The Bill as draf:ed is peculiarly insensitive to the needs of small businesses, in particular small service businesses. I am concerned that the Bill does not seem to make a sufficient distinction between part-time and full-time employees. Small catering businesses, for example, may well at times employ over 20 part-timers but in real terms are small businesses with low turnover.
I refer to Amendment No. 2. The Bill appears to make it necessary for the number to exceed 20 on one day only because the line in the Bill ends with the word "or" rather than "and" before moving to the averaging proposal over 13 weeks. That seems to border on the ridiculous. I should be grateful for reassurance from the Minister.
Lord Cavendish of Furness: My Lords, I have declared an interest in this subject; I refer noble Lords to the Second Reading debate. I have businesses that would be affected by the Bill.
I support the amendment moved by my noble friend Lady Miller of Hendon. She makes a compelling case, to which I do not have much to add. I have been involved in businesses that employed only a few people and in some that employed 200 or more. I do not believe that either figure is correct. If there is to be compulsion—I do not like that anywhere—my instinct is that somewhere in the region of 80-plus might be a suitable figure for union recognition.
It must be acknowledged that much that emanates from the European Community attracts distrust, and even hatred, among the fraternity of small businesses. However one aspect, of the EC that small businesses admire, and would like to see developed further, is the single market. My noble friend made a particularly important point when she said that recommendations from the EC about the definition that support and enhance the workings of the single market should be encouraged. I support the amendment.
Lord Wade of Chorlton: My Lords, I hope that the Government will look sympathetically at this amendment. As the Government have said on many occasions, it is important that we do not do anything to hinder either the start-up or the growth of small businesses. They are the key and the major employers in the country. Small businesses are delicate flowers, and it takes little to disrupt the investment for growth and development that is the necessary to our future economic success. This is an important amendment and I hope that the Government will support it.
Lord McCarthy: My Lords, this may be a point of order, although I am not sure whether we have such things in this place. Is this not a waste of time? These
1044
amendments are virtually the same as those about which we had a long and protracted debate in Committee. Is it right that we should go over the same ground twice?
4.45 p.m.
Lord McIntosh of Haringey: My Lords, we are at Report stage. There are strict rules governing what happens at Third Reading, but, unfortunately, there are much less clear rules about what follows between the Committee and Report stages. It was interesting to hear again the arguments advanced by the noble Baroness, Lady Miller. I had heard them before and I had read them. However, she was able to remind noble Lords who did not pay the attention that I did to her speech in Committee about her concerns.
Before I move on to the substance of her amendments, I must correct a misapprehension that the noble Baroness has about the operation of the 21-worker limit. She laboured under that misapprehension in Committee and she continues to do so today. On 7th June, she said:
"The employer must recognise the union if a mere nine employees—40 per cent of the workforce—requires it and the majority vote in support. In other words, if only three bother to vote, it would take just two votes to approve.".—[Official Report, 17/6/99; col. 1161.]
That is not correct. It must be my fault because I have not explained properly the workings of a recognition ballot.
In order for a union to win a recognition ballot, a minimum of 40 per cent of all workers must vote in favour of recognition—I repeat, they must not just vote, but vote in favour. Therefore, if there are 21 workers, at least nine of them must vote in favour of recognition. If only three people bother to vote, the union will not be recognised. The union must also gain the majority of the votes. Therefore, if 10 workers are in favour and 11 are against, the ballot will be lost and recognition will not be granted.
I return to the issue of a threshold for small businesses. A fundamental reason for having a statutory scheme for union recognition is to provide a means for workers to be represented collectively by a trade union when they wish it. I know that the noble Lord, Lord Cavendish of Furness, does not like that; he has said it before and he said it again today. I appreciate his point of view, but that is what the Bill is about. There is a strong argument that the right to be collectively represented should not be subject to any threshold. Some of my noble friends agree with that argument: they take the view that the situation should be the same as that which pertains to health and safety legislation. It does not have any threshold for small businesses—for rather obvious reasons.
There is a further argument that employment relations in the smallest businesses are different—more personal and less formal—and that statutory collective bargaining is inappropriate in such cases. We listened to both sides and we were persuaded that the smallest firms are, on the whole, different. That is not to say that there is anything wrong with collective bargaining in these firms: some small firms already recognise unions. I told your Lordships in Committee and again today of my

1045
experience in this area. There is nothing to stop such businesses continuing to recognise unions if they so wish.
We accept that to apply the statutory provisions to firms with 20 or fewer workers could be onerous and inappropriate. That is why we propose the threshold at that level. I disagree with the noble Baroness, Lady Miller, now as much as I did in Committee when she suggested that there must be a single threshold for all purposes. I have already given the example of health and safety legislation, where I think everyone would agree that there should be no threshold. There are much higher thresholds for works councils under European legislation. There is no reason why there should not be thresholds of 20, 50 or 80—as the noble Lord, Lord Cavendish of Furness, advocates on this occasion—for different purposes. There is nothing magical about any of those figures.
The noble Baroness asked whether we had consulted about the matter and she pointed out that the Federation of Small Businesses and the Institute of Directors, in particular, oppose the threshold of 20. I note that she did not mention the Confederation of British Industry. In any case, the fact that she was able to support her argument by referring to those organisations proves that we consulted fully.
Of course, this figure—any figure—is arbitrary to some extent. The noble Baroness suggested 50 employees, but a firm with 50 employees is a much more substantial undertaking. In many branches of activity, a firm with 50 employees would be considered to be a medium or even a large business—I think particularly of agriculture or retailing. A restaurant or a hotel with 50 employees—I return to the remarks of the noble Lord. Lord Cavendish of Furness—is not a minnow in the hospitality industry. A business of that size must, of necessity, have a more developed personnel function.
We have proposed a realistic, fair and workable solution. However, if that proves not to be the case, as a last resort the Bill confers the power to vary the figure upwards or downwards if that is shown to be necessary. The noble Baroness said that the Bill now contains that power and that that is some sort of admission on our part. However, the Bill has contained that power from the beginning and it was envisaged initially in the White Paper. We are talking about excluding 8.1 million people—or about 31 per cent of the total workforce—from the statutory recognition provisions in this Bill. I think that we have demonstrated, both in Committee and on this occasion, that that is reasonable.
The noble Baroness, Lady Hogg, asked about the calculation of 21 workers. If the numbers fluctuate, workers may find it difficult to know whether a firm employs 21 people on a given day. The Bill proposes two tests: either the employer has 21 workers on the day that the application is received; or the firm had an average of 21 workers over the preceding 13 weeks. The situation is more complicated than the noble Baroness seems to believe. That test is outlined in paragraph 6 of Schedule 1 to the Bill. It aims to ensure that an employer
1046
who gets word that an application is about to be submitted cannot avoid recognition by sacking enough workers to get below the threshold for a few days. I do not think the noble Baroness would wish to encourage such a practice.
Baroness Hogg: My Lords, surely what is sauce for the goose is sauce for the gander. The fact that the word "or" appears means that they would have only to choose a day on which employment was over that number for the full panoply of the Bill to apply.
Lord McIntosh of Haringey: My Lords, unfortunately, employers have the power to decide how many people work for a business; employees do not. Therefore, it cannot be sauce for the goose in the same way as sauce for the gander. No, we have given full consideration to the matter and reached the right conclusion. I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Miller of Hendon: The Minister will not be surprised to know that I am disappointed with his response. Incidentally, I am grateful to him for pointing out my mistake in the number needed to start the whole procedure. However, I do not believe that he has dealt with my problems. I have never mentioned in this House that I started my own small business. I had to do this kind of thing, it would never have got off the ground and expanded into three countries. It is only right that I should test the opinion of the House.
4.50 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 126; Not-Contents, 134.

Division No. 1

CONTENTS

Aberdare, L.

Charteris of Amisfield, L.

Addison, V.

Clanwilliam, E.

Ailsa, M.

Clark of Kempston, L.

Alexander of Tunis, E.

Coleraine, L.

Allenby of Megiddo, V.

Coleridge, L.

Annaly, L.

Cope of Berkeley, L.

Archer of Weston-Super-Mare, L.

Courtown, E.

Astor of Hever, L.

Cox, B.

Attlee, E.

Crickhowell, L.

Bathurst, E.

Cross, V.

Belhaven and Stenton, L.

Davidson, V.

Bell, L.

Denham, L.

Biddulph, L.

Dixon-Smith, L.

Biffen, L.

Dundee, E.

Birdwood, L.

Dundonald, E.

Blatch, B.

Dunleath, L.

Bowness, L.

Eden of Winton, L.

Brabazon of Tara, L.

Ellenborough, L.

Bridgeman, V.

Elles, B.

Brougham and Vaux, L.

Elton, L.

Burnham, L. [Teller.]

Fookes, B.

Buscombe, B.

Gainford, L.

Cadman, L.

Gardner of Parkes, B.

Campbell of Alloway, L.

Glentoran, L.

Carnock, L.

Gormanston, V.

Cavendish of Furness, L.

Gray, L.

1047

Harding of Petherton, L.

Northbrook, L.

Harlech, L.

Northesk, E.

Harmsworth, L.

Norton of Louth, L.

Hayhoe, L.

O'Cathain, B.

Henley, L. [Teller.]

Onslow of Woking, L.

Higgins, L.

Oppenheim-Barnes, B.

Hogg, B.

Park of Manmouth, B.

Holderness, L.

Plummer of St. Marylebone, L.

HolmPatrick, L.

Rees, L.

Hooper, B.

Renton, L.

Howe, E.

Renton of Mount Harry, L.

Jenkin of Roding, L.

Renwick, L.

Keyes, L.

Roberts of Conwy, L.

Kintore, E.

Romney, E.

Kitchener, E.

Rotherwick, L.

Knight of Collingtree, B.

St Davids, V.

Lauderdale, E.

Seccombe, B.

Long, V.

Shaw of Northstead, L.

Lucas. L.

Skelmersdale, L.

Lucas of Chilworth, L.

Strafford, E.

Lyell, L.

Strathcarron, L.

McConnell, L.

Strathcona and Mount Royal, L.

Marlesford, L.

Strathmore and Kinghorne, E.

Massereene and Ferrard, V.

Swansea, L.

Merrivale, L.

Tenby, V.

Mersey, V.

Teviot, L.

Miller of Hendon, B.

Thomas of Gwydir, L.

Milverton, L.

Trumpington, B.

Monk Bretton, L.

Vivian, L.

Monson, L.

Waddington, L.

Montrose, D.

Wade of Chorlton, L.

Morris, L.

Weatherill, L.

Mountevans, L.

Westbury, L.

Munster, E.

Wharton, B.

Murton of Lindisfarne, L.

Wise, L.

Napier and Ettrick, L.

Wynford, L.

Norfolk, D.

Young, B.

NOT-CONTENTS

Acton. L.

Falkland, V.

Addington, L.

Farrington of Ribbleton, B.

Alli, L.

Fitt, L.

Amos, B.

Geraint, L.

Archer of Sandwell, L.

Gilbert, L.

Ashley of Stoke, L.

Goodhart, L.

Bach, L.

Gould of Potternewton, B.

Beaumont of Whitley, L.

Graham of Edmonton, L.

Berkeley, L.

Grenfell, L.

Blackstone, B.

Hacking, L.

Borrie. L.

Halsbury, E.

Bragg, L.

Hamwee, B.

Brookman, L.

Hanworth, V.

Bruce of Donington, L.

Hardy of Wath, L.

Burlison, L.

Harris of Greenwich, L.

Calverley, L.

Harris of Haringey, L.

Carlisle, E.

Haskel, L.

Carter, L.[Teller.]

Hayman, B.

Christopher, L.

Hollis of Heigham, B.

Clarke of Hampstead, L.

Hughes, L.

Clement-Jones, L.

Hughes of Woodside, L.

Clinton-Davis, L.

Hunt of Kings Heath, L.

Cocks of Hartcliffe, L.

Irvine of Lairg, L.[Lord Chancellor.]

Crawley, B.

Currie of Marylebone, L.

Janner of Braunstone, L.

David, B.

Jay of Paddinigton, B.[Lord Privy Seal.]

Davies of Oldham, L.

Desai, L.

Jeger, B.

Dholakia, L.

Judd, L.

Dixon, L.

Kennet, L.

Donoughue, L.

Laming, L.

Dormand of Easington, L.

Levy, L.

Dubs, L.

Longford, E.

Evans of Watford, L.

McCarthy, L.

Ezra, L.

Macdonald of Tradeston, L.

Falconer of Thoroton, L.

1048

McIntosh of Haringey, L.[Teller.]

Rogers of Riverside, L.

Russell, E.

Mackenzie of Framwellgate, L.

Sainsbury of Turville, L.

McNair.L.

Sandberg, L.

McNally, L.

Sawyer, L.

Maddock, B.

Serota, B.

Mar and Kellie, E.

Sewel, L.

Merlyn-Rees, L.

Shepherd, L.

Methuen, L

Simon, V.

Milner of Leeds, L.

Simon of Glaisdale, L

Molloy, L.

Simon of Highbury, L.

Monkswell, L.

Smith of Clifton, L.

Montague of Oxford, L.

Smith of Gilmorehill, B.

Morris of Castle Morris, L.

Stone of Blackheath, L.

Morris of Manchester, L.

Strabolgi, L.

Murray of Epping Forest, L.

Symons of Vernham Dean, E

Newby, L.

Taylor of Blackburn, L.

Nicol, B.

Thomas of Walliswood, B.

Phillips of Sudbury, L.

Thornton, B.

Pitkeathley, B.

Thurso, V.

Plant of Highfield, L.

Tomlinson, L.

Ponsonby of Shulbrede, L.

Tordoff, L.

Prys-Davies, L.

Turner of Camden, B.

Puttnam, L.

Uddin, B.

Ramsay of Cartvale, B.

Walker of Doncaster, L.

Randall of St. Budeaux, L.

Wallace of Saltaire, L.

Razzall, L.

Warner, L.

Rea, L.

Watson of Invergowrie, L.

Redesdale, L.

Wigoder, L.

Rendell of Babergh, B.

Williams of Crosby, B.

Richard, L.

Williams of Elvel, L.

Rochester, L.

Williams of Mostyn, L

Rodgers of Quarry Bank, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
5 p.m.
[Amendment No. 3 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 4:
Page 19, line 20, at end insert—
("() For the purposes of sub-paragraphs (1)(a) and (1)(b) there shall be excluded from the number of persons classified as "workers"—

(a) directors or any company secretary or other officers or manager of a limited company,

(b) shareholders in any private limited company or company whose shares are not quoted on any recognised stock exchange, and

(c) members of a partnership.")

The noble Baroness said: My Lords, having considered the argument made by the Government in Committee when they rejected this amendment, I feel that I have no alternative but to bring it to the attention of your Lordships again.
The amendment excludes from the definition of workers the directors, the company secretary and any other persons who are regarded as officers of the company. There can be no logical reason to include such persons in the quorum required to trigger the recognition procedure. That is even true in the case of a small company with, say, three directors and a company secretary, which would represent 20 per cent of the target figure of 21 proposed in the Bill.
It is equally illogical if the company secretary is, as so often happens, an outside accountant who has nothing to do with the operation of the company, except to sign a couple of forms every year. Logic does not enter the Government's ambitions. The more people, however irrelevant, who can be counted as workers, the greater chance there is for an ambitious trade union organiser to try to reach the magic figure. That is likely to be a two-edged sword because the board of a company that is inclined to resist union recognition would presumably vote against it in the ballot so that the union starts off with an assured X number of votes against it. However, far be it from me to tell the union how to manage to obtain votes!
The amendment refers also to shareholders, specifically in the private company or one that is not quoted on the Stock Exchange. That would be a case where employees have helped to finance the business for which they work by acquiring shares in it. They are, in effect, part owners. They are no different from minority partners in a business which is not a limited company. Even the Government do not consider that individual owners working in their own business are employees for the purposes of the Bill.
The noble Lord, Lord McIntosh of Haringey, argued that only officers of the company who had a contract of employment were workers for the purposes of the Bill. He went on to say:
"I am sure that the noble Baroness is not arguing that those who have contracts of employment should be excluded from the head count implied in the cut-off point of 21".
I must apologise to the Minister for not having made myself clear on the previous occasion. That was precisely what I was arguing.
The noble Lord has told us on several occasions about his experiences when he was engaged in his own market research business. Perhaps as a director with or without a contract he may have regarded himself as one of the workers. Perhaps as a long-term honorary principal of the London Working Men's College that may possibly have coloured his thinking on the subject. I am sure that he held that position with the greatest of honour.
I said "Working Men's College" and not "Working Persons' College". I cannot resist saying that in view of an amendment that I tabled in Committee on the Greater London Authority Bill.
Lord McIntosh of Haringey: My Lords, let me assure the noble Baroness that the letterhead of the Working Men's College and the sign outside say the "Working Men's College for Men and Women". The original title was formed in 1854 and there would have been some disquiet if we had changed it.
Baroness Miller of Hendon: My Lords, I am delighted to hear that. That ties in with how I tried to change the word "chair" to "chairman" in the Greater London Authority Bill because I consider the word "chairman" as all embracing. I am glad that it is all embracing in the Working Men's College.
Notwithstanding what a model employer the noble Lord undoubtedly was, I do not imagine that his employees regarded him as just another member of the
1050
staff. He was the boss and they did what he told them—at least I should imagine that they did. That is the real test of who or who is not a worker. Are you the teller or the "tellee"? The same applies to the hundreds of thousands of directors of the hundreds of thousands of small family businesses around the country whose directors do not consider themselves workers, and whose employees, without knowing the niceties of the existence of employment contracts, would laugh if you described a director as one of the workers.
I was only too right—as I often am!—to want to treat directors with or without a contract of employment as not being employees for the purposes of the Bill. I stress for the purposes of the Bill alone. In February the Court of Appeal in the case of the Secretary of State for Industry v. Bottrill said that whether an employer and employee relationship existed could be decided only by having regard to all the relevant facts. If an individual had a controlling shareholding, that was a fact that was likely to be significant in all situations and sometimes may be decisive. On the other hand, the industrial tribunal had held that the fact that Mr Bottrill had a contract made him an employee. The Court of Appeal upheld that decision against the Secretary of State on the facts of that case.
Why do I mention a case that seems to contradict my argument on this amendment? We have the Secretary of State vigorously arguing before the Court of Appeal at the expense of thousands of pounds of taxpayers' money while attempting to save a disproportionately few pounds for the redundancy fund, that a director, even with a contract of employment, is not an employee.
Now the Minister argues exactly the opposite. If the Minister is right, we could have a situation in a company with two directors where one is treated as an employee and the other is not. That would be ludicrous. The Court of Appeal said that every case depended upon the relevant circumstances.
Here we want absolute certainty and consistency. We do not want the question of whether there should or should not be a ballot to depend upon the outcome of a piece of litigation between the employer and the union and the view that the court takes on the facts of that director's status. In this case we can have that certainty by saying that, with or without a contract, a director is not to be counted as a worker. I beg to move.
Viscount Thurso: My Lords, perhaps I may ask the noble Baroness whether, if there were a ballot in a small firm with a family worker who is a director—not a worker—and that director was to vote for union recognition, that would be the most comprehensive argument in favour of union recognition in that firm.
Baroness Miller of Hendon: My Lords, I must apologise to the noble Viscount. My Front Bench was talking to me and I did not hear what he said. I am sure that he would not say anything that was incorrect.
Lord McIntosh of Haringey: My Lords, I do not know that I can act as intermediary.

1051
Perhaps I said something in Committee that could have led to confusion. I said to the noble Lord, Lord Tebbit, that persons who do not have a contract of employment do not count as workers. The relevant definition which I mentioned is the one in Section 296 of the Trade Union and Labour Relations Consolidation Act 1992. The definition of worker in that Act includes those with contracts of employment, but also,
"an individual who works or normally works or seeks to work … under any other contract whereby he undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his".
In other words, some people who do not have contracts of employment count as workers.
I am sorry to see that the noble Baroness has tabled Amendment No. 4 because that means that she was not convinced by my arguments, or perhaps she did not understand my arguments—both of which are my fault—that such an amendment is quite unnecessary. I understand her concern that an inventive union organiser may try to establish that the directors of a company are workers, but the definition of a worker in the 1992 Act is clear: directors of a company are not workers unless they have contracts of employment or other contracts bringing them within the definition that I have read out.
Most directors, and particularly non-executive directors, will not normally be workers. However, where they do have such contracts it would surely be wrong in principle not to include them in the count. Surely that works both ways. From the union's point of view, you want to get up to the 21 workers and in a tiny minority of cases, just to the threshold. But, from the union's point of view, surely you do not want to have—this is the point made by the noble Viscount, Lord Thurso—people who, because they are directors and also workers, will inevitably vote against recognition. The noble Baroness, I think, is arguing against her own case. The point I want to make is that the commonsense definition which the noble Baroness wants is already part of the 1992 Act which was enacted under the government of her party.
Similarly, the question of share ownership is not relevant to who counts as a worker. No one qualifies as a worker of a company simply by virtue of holding shares in it. The noble Baroness's amendment would mean that any employee who did hold shares in the business would not count as a worker for the purposes of the schedule. I cannot see why employees who participate in a share scheme should lose their rights to take part in a ballot on union recognition. Again, the argument seems to be against the noble Baroness's own interest. If you exclude those who rake part in an employee share ownership scheme, you are going to exclude people who might be inclined to support the management.
In a small family business, family members helping out may or may not count as workers. That would depend on the basis on which they worked. The noble Baroness, Lady Hogg, is not in her place, but I am responding in part to what she said on the previous amendment. It would depend on whether they were paid or purely voluntary, the frequency and regularity with
1052
which they worked, and so on. If they are workers, surely they should count towards the threshold. People should not be deprived of their rights simply because they work in a family business. But if they are not workers as defined, they will not count.
Finally, members of a partnership do not normally count as workers, since they do not have contracts of or for employment. They are the owners of the business. Some partnerships do have a category of "partners" who receive a salary. The John Lewis Partnership is usually given as an example, although those shares in the business are held in a trust and the so-called "partners" do not own the business but are employees. 'The "partners" who receive a salary are generally accepted to have a different status from "real" partners. Again, the existing definition is good enough.
I hope that in the light of this further explanation, the noble Baroness will accept that the definition of "worker" in the Bill, which comes from previous legislation over a period of time, is perfectly adequate for the purpose and that she will withdraw her Amendment No. 4.
Baroness Miller of Hendon: My Lords, the noble Lord the Minister had no need to take the blame or to think that I had not understood his response properly because he had not explained it properly the first time. I am quite sure that he explained it very well the first time and he has explained it very well the second lime. I do not really want to accept it, but I certainly will. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 5:
Page 22, line 23, at end insert—
("Notice to cease consideration of application
15A.—(1) This paragraph applies if the CAC has received an application under paragraph 10 or 11 and—

(a) it has not decided whether the application is admissible, or

(b) it has decided that the application is admissible.

(2) No further steps are to be taken under this Part of this Schedule if, before the final event occurs, the parties give notice to the CAC that they want no further steps to be taken.
(3) The final event occurs when the first of the following occurs—

(a) the CAC issues a declaration under paragraph 20(2) in consequence of the application;

(b) the last day of the notification period ends; and the notification period is that defined by paragraph 22(5) and arising from the application.")

The noble Lord said: My Lords, I should like to move Amendment No. 5 and speak also to Amendments Nos. 7, 24, 25, 28, 29, 53 and 54. I apologise for the delay in tabling these amendments. The idea behind them is relatively straightforward, but we have to do some very careful checking to make sure that there are no unintended or unhelpful consequences.
Let me start by repeating what I said in Committee. The Government intends to exclude from the scope of Part II any purely voluntary agreement, including all

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agreements made before Schedule 1 comes into force. Part II, which refers to voluntary agreements, will apply only to those agreements made in consequence of an application for recognition under paragraph 3 of Part I. These are referred to as "agreements for recognition" in our amendments. In essence, these agreements will be binding on the employer for three years. After three years, the employer will be able to derecognise the union without having to apply to the CAC, just as if the union had been recognised voluntarily.
We believe this change is necessary and desirable for several reasons. It closes a loophole by which an employer could agree recognition, perhaps after a union's application had been accepted by the CAC and a bargaining unit determined, and then derecognise the union. In this way an employer could avoid recognition even if all his workers were union members. So these amendments would make "semi-voluntary" recognition binding for three years, just as statutory recognition is binding for at least three years.
By providing a union with some security in a recognition agreement, and by providing the employer with more flexibility to derecognise than does statutory recognition, this change will promote voluntary—or perhaps I should say semi-voluntary—agreements. If the parties can reach agreement without a ballot, perhaps with the help of ACAS or the CAC, or after the bargaining unit has been determined, they do not need to go through the entire statutory recognition process—involving balloting and so on—in Part I.
We have also provided a procedure whereby an employer or union can complain to the CAC that a bargaining method agreed after recognition has not been followed. If the CAC finds that this is indeed the case, it will be able to impose a bargaining method. This will apply whether the original recognition was via the statutory process in Part I or was an agreement for semi-voluntary recognition under Part II. Wholly voluntary agreements will not be affected.
Turning to the text of the amendments, Amendment No. 5 requires the CAC to cease work on an application for recognition if the parties request it to do so. This is a prerequisite for semi-voluntary recognition, but it is also a commonsense clarification. Amendment No. 7 allows an employer or a union to apply for a bargaining method to be determined if the union was recognised under Part I; an equivalent for semi-voluntarily recognised unions is inserted by Amendment No. 25. Amendment No. 24 first sets out, in the new paragraph 40, the detail of what constitutes semi-voluntary recognition, and secondly provides, in the new paragraphs 41 and 41A, for the necessary interpretative provisions. It thirdly provides, in paragraph 41B, a procedure for resolving disputes about whether recognition is semi-voluntary, and finally sets out in paragraph 41C, the consequences of semi-voluntary recognition. Paragraph 41D ensures that bargaining arrangements are ended if recognition is ended.
Amendment No. 25 provides a period in which a semi-voluntarily recognised union and an employer may seek to agree a bargaining method without the involvement of the CAC, as well as a procedure for the
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imposition of a method by the CAC if either party fails to carry out the agreed method. Amendment No. 28 ensures that the procedure may be used only by independent unions, and Amendment No. 29 prohibits the unilateral withdrawal of an application for an agreed method if the CAC is required to determine a method.
Finally, Amendments Nos. 53 and 54 make a change to Part IV, the derecognition provisions, which is consequential to the changes to Part II. Because derecognition of a semi-voluntarily recognised union is not allowed for three years, but can be done at any time thereafter, it is necessary to remove semi-voluntary recognition from the scope of Part II. That is what Amendments Nos. 53 and 54 seek to do.
These amendments make important changes, which I flagged up when we considered Part II of Schedule 1, to the way in which the schedule deals with voluntary recognition. Genuine voluntary agreements will fall outside the scope of Part II, but voluntary agreements made as a result of applications under Part I will be more attractive to employers and unions. These are changes which we have considered at length and we believe they are of benefit to all parties. I beg to move.
Lord McCarthy: My Lords, it is very difficult for us to know how to react to these amendments because they are, as the Minister himself said, extremely complicated and they come at very short notice. It is extremely difficult to trace through and see precisely what is left of the old Part II. One cannot say that it is subject to subsequent correction and change because this is the last moment. If we get this amendment wrong now and we do not complain about it now, we shall not have another opportunity to do so because here we are in the upper House at Report stage.
Nevertheless, as I understand it—indeed, as the Minister explained it—this is far better than the pseudo-monster of Part II, which is on the face of the Bill. I was always against Part II. I could never gain an honest admission from people that they had invented it or that it was their idea. No one would say who asked for it; it just appeared. It was supposed to be there because unions had complained about the non-enforcement of their collective agreements by employers.
The first objection to that view is that, when you investigate what unions are complaining about, it invariably turns out that they are not complaining about the non-observance or non-enforcement of a written, formal agreement; they are talking about employers taking back customs and practices which were never put in writing and which we never really agreed at all. They are complaining about sudden, immediate acts of management authority. They have not got it written down and do not have protection, but they think they have. Therefore, I was always extremely sceptical that they would get much out of this.
Secondly, if the unions did challenge, what they were being asked to do under the Part II now in the Bill was to turn their existing agreement, or some other construction of it, into a legally enforceable document. But no one would have wanted that. We do not have

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any legally-enforceable collective agreements in this country. That is not the tradition; it is not the method. That is part of the problem about the way that this Bill seeks to enforce recognition. However, I shall leave that point aside for the moment. So, if this were taken seriously by employers, unions would suddenly find that they were being asked to accept all kinds of legally enforceable restrictions on, for example, their relations with their shop stewards or their members or, indeed, on the use of industrial action. They would not want that anyway on the second ground.
Thirdly, if it ever came to the point of the CAC wanting an existing agreement to be legally enforceable and beefed up in some way and the employer did not like it, the obvious reaction for the sensible employer would be to derecognise the union. We would have a rash of derecognitions if ever the unions sought to put the pseudo-barmy Part II into effect. Therefore, the fact that that has gone cannot be a bad thing; indeed, it is an entirely good thing. I regard it as the second great concession which has been made this afternoon and am grateful for it.
However, why do we not just abolish it? Why have we thought up another pseudo-Part II to put in its place? It is possible that I do not understand it because it has been put forward at the last minute. Therefore, I have a few questions for my noble friend the Minister. I understand—I am sure I have this bit right—that it is confined to applicants for recognition; in other words, it cannot affect anyone who does not apply.
Secondly, it applies where you have gone for recognition because the employer will not grant you this, but you have not got the ballot and you have not had a CAC declaration which will turn itself into a "method", whatever this is, and be enforced. Indeed, if you had got that far, this part of the system would not apply. It also applies if one party signs what I believe my noble friend called a "semi-voluntary" or "partly-voluntary" agreement but the other party doubts whether there is in fact an agreement. So you can go to the CAC and it will determine whether the agreement which was signed is really an agreement. I cannot imagine the circumstances in which this would arise; but never mind.
The other occasion when it arises is where one party says, "We have got an agreement but the other party is not carrying it out". If I have got it right, those are the circumstances. I have several points to make. First, I find it impossible to envisage such a situation ever arising in the real world. Employers who refuse to recognise, and who take themselves to the stage where they appear before the CAC which makes an award against them, will not suddenly recognise half-way through, sign what actually turns out not to be a proper agreement and then fail to observe it. This is a world about which I know nothing at all. As I said, I cannot envisage such a situation arising. But, never mind, if it does not arise, you might say that it does not matter.
However, it is not clear to me what happens if it should arise. What answers are given by the CAC? Let us suppose that such a situation did arise and one party, perhaps a union, goes to the CAC and says, "This
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agreement is not an agreement". What does the CAC do? It may give a declaration, but are there any sanctions behind this? Do you then move on to a legally enforceable method? Does the CAC then write the agreement because the agreement in question turns out not to be an agreement? That is not very clear to me. On the other hand, let us suppose that it is an agreement and the problem is that it is not being carried out. What is the sanction? If the CAC decides that the agreement exists, that it is a good one but that it is not being carried out, what is the sanction? Is it the same old sanction that appears in other parts of the Bill; that is to say, "specific performance"? Do we go back to a situation in which the CAC puts in what is in effect a legally enforceable agreement and then, if the employer does not take notice, the union can, so to speak, go to court and seek to impose it on him because he is breaking a contract and it can get "specific performance"?
If that is the case, what have we added? What have we done? What would be different if we took this provision away? If there were another sanction at this stage—for example, one that the Government had rejected, like compulsory arbitration—that would be saying something different. But I do not think that that is here and I do not see it in the Bill. Frankly, having got rid of the old Part II, I am not convinced that we need the new Part II at all.
Lord McIntosh of Haringey: My Lords, perhaps I may reassure my noble friend on one point immediately. When a totally new amendment is introduced on Report, it is perfectly proper under the conventions of the House for any noble Lord to table an amendment to that amended part of the Bill on Third Reading. It will inevitably be new material and there would be no difficulty in that respect. However, my noble friend's argument is much more detailed than that. Perhaps I may try to reassure him, although I do not know whether I can cover all the possibilities that he envisaged in his speech.
My noble friend is quite right in his first assumption. These amendments and Part II are about applicants for recognition; in other words, those who have made an application for recognition under paragraph 3 of Part I and started off the statutory procedure. My noble friend then went on to ask whether these are cases where there has been no ballot or where the procedure has not been completed. The easiest way to describe it is to say that it will apply where the procedure for statutory recognition has been started but has been aborted by the employer agreeing recognition, perhaps after a union's application had been accepted by the CAC and a bargaining unit determined, although it could be aborted at quite a number of different stages. Then, under the provisions of the Bill, without these amendments and with the statutory procedure having been aborted, the employer could derecognise the union. In that way, the employer could avoid recognition even if all his workers were union members. That is why we have brought in the semi-voluntary procedure.

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My noble friend also asked about sanctions and suggested a number of alternatives. The sanction here is that a semi-voluntary recognition is binding for three years, just as is the case with statutory recognition. We believe that to be an effective and appropriate sanction.
Part II will apply only where there has been a formal application under Part I and the parties reach agreement for recognition without a ballot or membership count; for example, the employer and the union may disagree only about the bargaining unit. But once that has been settled by the CAC, they may be able to agree recognition.
The point of these amendments is to ensure that the employer can be held to that recognition for three years and the agreement enforced, if necessary, through the imposed procedure, as recognition under Part I can. My noble friend has far more experience than I of whether this is likely to happen on the ground, but I hope he will agree that this was a loophole—at least in theory—and that what we have done to Part II closes that loophole and—as I think he acknowledges—is an improvement to the Bill. I beg to move.
On Question, amendment agreed to.
5.30 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 6:
Page 23, line 15, leave out from beginning to end of line 24 and insert—
("(2) Within the decision period the CAC must decide whether the application is invalid within the terms of paragraphs 38A to 38H.
(3) In deciding whether the application is invalid, the CAC must consider any evidence which it has been given by the employer or the union (or unions).
(4) If the CAC decides that the application is invalid—

(a) the CAC must give notice of its decision to the parties,

(b) the CAC must not proceed with the application, and

(c) no further steps are to be taken under this Part of this Schedule.

(5) If the CAC decides that the application is not invalid it must—

(a) proceed with the application, and

(b) give notice to the parties that it is so proceeding.

(6) The decision period is—

(a) the period of 10 working days starting with the day after that on which the parties agree an appropriate bargaining unit or the CAC decides an appropriate bargaining unit, or

(b) such longer period (so starting) as the CAC may specify to the parties by notice containing reasons for the extension.")

The noble Lord said: My Lords, in moving Amendment No. 6 I wish to speak also to Amendments Nos. 12 to 23, 49, 51, 60 to 69 and 80. All of these amendments deal with how the CAC handles applications. There are three main subjects covered by them, all of which are interlinked: the reapplication of preliminary tests, three-year bars on repeat applications and clarification of the derecognition procedures.
At present, preliminary tests are applied by the CAC when it receives an application for recognition. The tests are set out in paragraphs 30 to 38 and are applied by
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paragraph 14. Some of them are intended to rule out applications which would disrupt other bargaining arrangements by imposing statutory recognition on top of them. However, if the bargaining unit changes during the process, under paragraph 16 or 17, the tests need to be reapplied to ensure that no existing collective bargaining arrangements are affected.
Amendment No. 6 provides for the preliminary tests relating to a particular bargaining unit to be reapplied if the bargaining unit changes, and Amendment No. 20 gives the tests themselves. Amendments Nos. 12, 14, 21, 22 and 23 are consequential to Amendments Nos. 6 and 20.
Turning to the issue of three-year bars on repeat applications, I should like to draw attention to what the Government set out in the White Paper, Fairness at Work:
"New applications for recognition or de-recognition will not be considered by the CAC until three years after the date on which a previous application was determined".
That is set out in paragraph 4.18 on page 25.
A three-year bar on reapplications for recognition after a failed request and on applications for derecognition after a successful application for recognition has been in the schedule since it was first introduced in another place. Amendment No. 18 will mean that successful applications for derecognition bar recognition of the same union in respect of that bargaining unit for three years; Amendments Nos. 15 and 19 are consequential to it. Amendments Nos. 60, 61, 63 and 67 bar reapplications for derecognition for three years after an unsuccessful application; Amendments Nos. 62, 64 and 69 are consequential.
Amendment No. 80 concerns the three routes by which an employer may seek derecognition: having fewer than 21 workers, a "standard" procedure and a procedure for use if the union was recognised via the "automatic" recognition procedure in paragraph 20. The schedule does not currently make any provision for dealing with multiple applications. The amendment would give the Secretary of State power to direct the CAC as to the order in which competing applications for derecognition should be treated by the CAC. The Government intend that an employer should have to choose a single ground on which to apply for derecognition, rather than being able to run several applications simultaneously or consecutively. The other amendment of substance in this group is Amendment No. 51 which makes explicit provision for the withdrawal of applications under Part III. This is equivalent to the provision in Part I, paragraph 15. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 7:
Page 28, line 21, at end insert—
("Method not carried out
29A.—(1) This paragraph applies if—

(a) the CAC issues a declaration under this Part of this Schedule that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of a bargaining unit,

(b) the parties agree a method by which they will conduct collective bargaining, and

(c) one or more of the parties fails to carry out the agreement.

(2) The parties may apply to the CAC for assistance.
(3) Paragraph 29 applies as if "paragraph 28" (in each place) read "paragraph 28 or paragraph 29A".")
The noble Lord said: My Lords, this has already been spoken to with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
[Amendment No. 8 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 9:
Page 28, line 33, at end insert—
("(1A) But sub-paragraph (1) does not apply to an application under paragraph 10 or 11 if—

(a) the union (or unions) recognised tinder the collective agreement and the union (or unions) making the application under paragraph 10 or 11 are the same, and

(b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include pay, hours or holidays.")

The noble Lord said: My Lords, this has already been spoken to with Amendment No. 1. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 10:
Page 28, line 35, leave out ("64(3)") and insert ("66(1)")
The noble Lord said: My Lords, in moving Amendment No. 10 I wish to speak also to Amendments Nos. 11, 36, 39, 40, 57, 58, 59, 78 and 79. These amendments all correct cross-references and grammatical errors. Only two are of any real substance, but all are necessary. Amendments Nos. 10 and 11 correct a cross-reference, while Amendments Nos. 36, 39 and 40 are grammatical. Amendments Nos. 57 and 59 correct another cross-reference; Amendment No. 58 corrects a third.
The two amendments of any substance are Amendments Nos. 78 and 79. These refer to the power of the CAC to request the Secretary of State to amend the automatic recognition procedure and the power of the Secretary of State to issue guidance to the CAC on how automatic recognition should operate. The present text refers to the procedure in paragraph 20, which is in Part I of the schedule. However, there is an equivalent provision in Part III, in paragraph 70. Amendments Nos. 78 and 79 allow the CAC to comment on the operation of the procedure in both parts and for the Secretary of State to issue guidance which applies to both. paragraph 20 and paragraph 70. So these amendments are purely for consistency. I beg to move.
On Question, amendment agreed to.
Lord McIntosh, of Haringey Lord McIntosh, of Haringey moved Amendments Nos. 11 to 25:
Page 28, line 37, leave out ("64(3)") and insert ("66(1)")
Page 29, line 32, leave out (", and") and insert ('or proceeds under paragraph 18 with an application relating to a bargaining unit,
(aa) the application has not been withdrawn,
(ab) no notice has been given under paragraph 15A(2),")
Page 29, line 34, at end insert (", and
(c) no notification has been made under paragraph 22(2)")
Page 29, line 46, after ('unit") insert ("or proceeds under paragraph 18 with an application relating to a bargaining unit")
Page 30, line 10, after ("37") insert ("or 37A")
Page 30, line 1. after ("declaration") insert ("under paragraph 27(4)")
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Page 30, line 13, at end insert ("; and this is so whether the ballot concerned is held under this Part or Part III of this Schedule")
Page 30, line 24, at end insert—
("37A.—(1) This paragraph applies if the CAC issues a declaration under paragraph 99(3) that bargaining arrangements are to cease to have effect; and this is so whether the ballot concerned is held under Part IV or Part V of this Schedule.
(2) An application under paragraph 10 or 11 is not admissible if—

(a) the application is made within the period of 3 years starting with the day after that on which the declaration was issued.

(b) the relevant bargaining unit is the same or substantially the same as the bargaining unit to which the bargaining arrangements mentioned in sub-paragraph (1) relate, and

(c) the application is made by the union which was a party (or unions which were parties) to the proceedings leading to the declaration.

(3) The relevant bargaining unit is—

(a) the proposed bargaining unit, where the application is under paragraph 10(2) or 11(2);

(b) the agreed bargaining unit, where the application is tinder paragraph 11(4).")

Page 30, line 25, leave out ("and 37") and insert ("to 37A")
Page 30, line 28, at end insert—
("General provisions about validity
38A.—(1) Paragraphs 38B to 38H apply if the CAC has to decide under paragraph 18 whether an application is valid.
(2) In those paragraphs—

(a) references to the application in question are to that application, and

(b) references to the relevant bargaining unit are to the bargaining unit agreed by the parties or decided by the CAC.

38B.—(1) The application in question is invalid if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit.
(2) But sub-paragraph (1) does not apply to the application in question if—

(a) the union (or unions) recognised under the collective agreement and the union (or unions) making the application in question are the same, and

(b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include pay, hours or holidays.

(3) An agreement for or declaration of recognition which is the subject of a declaration under paragraph 66(1) must for the purposes of sub-paragraph (1) be treated as ceasing to have effect on the making of the declaration under paragraph 66(1).
(4) In applying sub-paragraph (1) an agreement for recognition (the agreement in question) must be ignored if—

(a) the union does not have (or none of the unions has) a certificate under section 6 that it is independent,

(b) at some time there was an agreement (the old agreement) between the employer and the union under which the union (whether alone or with other unions) was recognised as entitled to conduct collective bargaining on behalf of a group of workers which was the same or substantially the same as the group covered by the agreement in question, and

(c) the old agreement ceased to have effect in the period of three years ending with the date of the agreement in question.

(5) It is for the CAC to decide whether one group of workers is the same or substantially the same an another, but in deciding the CAC may take account of the views of any person it believes has an interest in the matter.
38C. The application in question is invalid unless the CAC decides that—

(a) members of the union (or unions) constitute at least 10 per cent of the workers constituting the relevant bargaining unit, and

(b) a majority of the workers constituting the relevant bargaining unit would be likely to favour recognition of the union (or unions) as entitled to conduct collective bargaining on behalf of the bargaining unit.

38D.—(1) This paragraph applies if—

(a) the CAC accepts an application under paragraph 10 or 11 relating to a bargaining unit or proceeds under paragraph 18 with an application relating to a bargaining unit,

(b) the application has not been withdrawn,

(c) no notice has been given under paragraph 15A(2),

(d) the CAC has not issued a declaration under paragraph 20(2), 25(2), 27(3) or 27(4) in relation to that bargaining unit, and

(e) no notification has been made under paragraph 22(2). (2).

(2) The application in question is invalid if—

(a) at least one worker falling within the relevant bargaining unit also falls within the bargaining unit referred to in sub-paragraph (1), and

(b) the application in question is made by a union (or unions) other than the union (or unions) which made the application referred to in sub-paragraph (1).

38E.—(1) This paragraph applies if the CAC accepts an application under paragraph 10 or 11 relating to a bargaining unit or proceeds under paragraph 18 with an application relating to a bargaining unit.
(2) The application in question is invalid if—

(a) the application is made within the period of 3 years starting with the day after that on which the CAC gave notice of acceptance of the application mentioned in sub-paragraph (1),

(b) the relevant bargaining unit is the same or substantially the same as the bargaining unit mentioned in sub-paragraph (1), and

(c) the application is made by the union (or unions) which made the application mentioned in sub-paragraph (1).

(3) This paragraph does not apply if paragraph 38F or 38G applies.
38F.—(1) This paragraph applies if the CAC issues a declaration under paragraph 27(4) that a union is (or unions are) not entitled to be recognised as entitled to conduct collective bargaining on behalf of a bargaining unit; and this is so whether the ballot concerned is held under this Part or Part III of this Schedule.
(2) The application in question is invalid if—

(a) the application is made within the period of 3 years starting with the date of the declaration,

(b) the relevant bargaining unit is the same or substantially the same as the bargaining unit mentioned in sub-paragraph (1), and

(c) the application is made by the union (or unions) which made the application leading to the declaration.

38G.—(1) This paragraph applies if the CAC issues a declaration under paragraph 99(3) that bargaining arrangements are to cease to have effect; and this is so whether the ballot concerned is held under Part IV or Part V of this Schedule.
(2) The application in question is invalid if—

(a) the application is made within the period of 3 years starting with the day after that on which the declaration was issued,

(b) the relevant bargaining unit is the same or substantially the same as the bargaining unit to which the bargaining arrangements mentioned in sub-paragraph (1) relate, and

(c) the application is made by the union which was a party (or unions which were parties) to the proceedings leading to the declaration.

38H.—(1) This paragraph applies for the purposes of paragraphs 38E to 38G.
(2) It is for the CAC to decide whether one bargaining unit is the same or substantially the same as another, but in deciding the CAC may take account of the views of any person it believes has an interest in the matter.")
Page 30, line 31, after ("35(1)") insert ("or 38D(1)")
Page 30, line 34, after ("35(2)") insert ("or the application in question referred to in paragraph 38D(2);
but an application cannot be an original application unless it was made under paragraph 10(2) or 11(2)")
Page 30, line 37, after ("35") insert ("or is invalid by reason of paragraph 38D")
Page 31, leave out lines 5 to 21 and insert—
("Agreements for recognition
40.—(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) An agreement is an agreement for recognition if the following conditions are fulfilled in relation to it—

(a) the agreement is made in the permitted period between a union (or unions) and an employer in consequence of a request made under paragraph 3 and valid within the terms of paragraphs 4 to 8;

(b) under the agreement the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of a group or groups of workers employed by the employer;

(c) if sub-paragraph (5) applies to the agreement, it is satisfied.

(3) The permitted period is the period which begins with the day on which the employer receives the request and ends when the first of the following occurs—

(a) the union withdraws (or unions withdraw) the request;

(b) the union withdraws (or unions withdraw) any application under paragraph 10 or 11 made in consequence of the request;

(c) the CAC gives notice of a decision under paragraph 13(7) which precludes it from accepting such an application under paragraph 10 or 11;

(d) the CAC gives notice under paragraph 14(4)(a) or 18(4)(a) in relation to such an application under paragraph 10 or 11;

(e) the parties give notice to the CAC under paragraph 15A(2) in relation to such an application under paragraph 10 or 11;

(f) the CAC issues a declaration under paragraph 20(2) in consequence of such an application under paragraph 10 or 11;

(g) the CAC is notified under paragraph 22(2) in relation to such an application under paragraph 10 or 11;

(h) the last day of the notification period ends (the notification period being that defined by paragraph 22(5) and arising from such an application under paragraph 10 or 11);

(i) the CAC is required under paragraph 39(3) to cancel such an application under paragraph 10 or 11.

(4) Sub-paragraph (5) applies to an agreement if—

(a) at the time it is made the CAC has received an application under paragraph 10 or 11 in consequence of the request mentioned in sub-paragraph (2), and

(b) the CAC has not decided whether the application is admissible or it has decided that it is admissible.

(5) This sub-paragraph is satisfied if, in relation to the application under paragraph 10 or 11, the parties give notice to the CAC under paragraph 15A before the final event (as defined in paragraph 15A) occurs.
Other interpretation
41.—(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) In relation to an agreement for recognition, references to the bargaining unit are to the group of workers (or the groups taken together) to which the agreement for recognition relates.
(3) In relation to an agreement for recognition, references to the parties are to the union (or unions) and the employer who are parties to the agreement.
41A.—(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) The meaning of collective bargaining given by section 178(l) shall not apply.
(3) Except in paragraph 45(2), in relation to an agreement for recognition references to collective bargaining are to negotiations relating to the matters in respect of which the union is (or unions are) recognised as entitled to conduct negotiations under the agreement for recognition.
(4) In paragraph 45(2) the reference to collective bargaining is to negotiations relating to pay, hours and holidays.
Determination of type of agreement
41B.—(1) This paragraph applies if one or more of the parties to an agreement applies to the CAC for a decision whether or not the agreement is an agreement for recognition.
(2) The CAC must give notice of receipt of an application under sub-paragraph (1) to any parties to the agreement who are not parties to the application.
(3) The CAC must within the decision period decide whether the agreement is an agreement for recognition.
(4) if the CAC decides that the agreement is an agreement for recognition it must issue a declaration to that effect.
(5) If the CAC decides that the agreement is not an agreement for recognition it must issue a declaration to that effect.
(6) The decision period is—

(a) the period of 10 working days starting with the day after that on which the CAC receives the application under sub-paragraph (1), or

(b) such longer period (so starting) as the CAC may specify to the parties to the agreement by notice containing reasons for the extension.

Termination of agreement for recognition
41C.—(1) The employer may not terminate an agreement for recognition before the relevant period ends.
(2) After that period ends the employer may terminate the agreement, with or without the consent of the union (or unions).
(3) The union (or unions) may terminate an agreement for recognition at any time, with or without the consent of the employer.
(4) Sub-paragraphs (1) to (3) have effect subject to the terms of the agreement or any other agreement of the parties.
(5) The relevant period is the period of three years starting with the day after the date of the agreement.
41D.—(1) If an agreement for recognition is terminated, as from the termination the agreement and any provisions relating to the collective bargaining method shall ease to have effect.
(2) For this purpose provisions relating to the collective bargaining method are—

(a) any agreement between the parties as to the method by which collective bargaining is to be conducted with regard to the bargaining unit, or

(b) anything effective as, or as if contained in, a legally enforceable contract and relating to the method by which collective bargaining is to be conducted with regard to the bargaining unit.")

Page 31, line 23, leave out from beginning to end of line 28 and insert—
("42.—(1) This paragraph applies if the parties make an agreement for recognition.
(2) The parties may in the negotiation period conduct negotiations with a view to agreeing a method by which they will conduct collective bargaining.
(3) If no agreement is made in the negotiation period the employer or the union (or unions) may apply to the CAC for assistance.
(4) The negotiation period is—

(a) the period of 30 working days starting with the start day, or

(b) such longer period (so starting) as the parties may from time to time agree.

(5) The start day is the day after that on which the agreement is made.
42A.—(1) This paragraph applies if—

(a) the parties to an agreement for recognition agree a method by which they will conduct collective bargaining, and

(b) one or more of the parties fails to carry out the agreement as to a method.

(2) The employer or the union (or unions) may apply to the CAC for assistance.
42B.—(1) This paragraph applies if an application for assistance is made to the CAC under paragraph 42 or 42A.
(2) The application is not admissible unless the conditions in sub-paragraphs (3) and (4) are satisfied.")
On Question, amendments agreed to.
[Amendments Nos. 26 and 27 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 28 and 29:
Page 31, line 33, leave out from beginning to end of line 37 and insert—
("(4) The condition is that the union (or every union) has a certificate under section 6 that it is independent.")
Page 33, line 13, at end insert—
("(5A) If the CAC accepts an application, the applicant may not withdraw it after the end of the agreement period.")
The noble Lord said: My Lords, these amendments were spoken to with Amendment No. 5. I beg to move.
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 33, line 27, at end insert (", and
("(b) provisions relating to the collective bargaining method apply in relation to the unit.")
The noble Lord said: My Lords, in moving Amendment No. 30 I wish to speak also to Amendments Nos. 31 to 35, 37, 38, 41 to 48 and 50. These amendments concern the treatment of voluntary and semi-voluntary recognition under Part III of the schedule; that is, the schedule dealing with changes affecting the bargaining unit. 'The amendments can be classified in two categories. The first category is amendments to the scope of Part HI which mean it will apply only to unions which were recognised through the statutory process in Part I. The second category of amendments ensures that Part HI deals appropriately with outside bargaining units; that is, with workers falling within a new unit who are covered by a different collective agreement. The amendments deal with the various categories of recognition in the outside unit; that is to say, voluntary, semi-voluntary and statutory. There are also some minor or consequential changes.
I turn to the amendments. Amendments Nos. 30 and 31 ensure that Part III applies only if there is a collective bargaining method. This is for the avoidance of doubt and for logical consistency. Amendment No. 32 is for consistency of wording with Amendment No. 30. Amendments Nos. 34 to 38 and 43 mean that Part III applies only to statutory recognition. If a union and an employer have agreed voluntary or semi-voluntary recognition, it will be up to them to negotiate a change in the bargaining unit if the employer's business changes.
Amendments Nos. 41, 42, 45, 46 and 48 correct a deficiency in the schedule. Paragraph 66 deals with the case where the CAC decides on a new bargaining unit which

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contains workers covered by another statutory recognition arrangement. As it stands, the schedule says nothing about how workers in the new unit covered by a voluntary or semi-voluntary agreement should be treated. Amendment No. 46 rectifies this by inserting a new paragraph 66A, similar in construction to paragraph 66, which provides that if a new unit contains workers covered by a voluntary or semi-voluntary recognition agreement recognition will cease for members of the original unit but the voluntary or semi-voluntary bargaining arrangements will not be affected.
Amendment No. 44 is a minor amendment to allow for the possibility that there may be more than one outside bargaining unit. Amendments Nos. 47 and 50 improve the procedure for dealing with outside bargaining units if there is more than one new unit. At present, paragraph 67 allows the CAC to re-declare recognition in an outside bargaining unit minus any "bites" taken out of that unit by new units. The CAC has to do so separately in relation to each new unit. However, it is possible that more than one new unit will each take a "bite" out of a single outside unit. In this case it would be better for the CAC to wait until it has dealt with all the new units before sorting out what remains of the outside unit. That is what Amendments Nos. 47 and 50 do. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 31 to 54:
Page 33, line 33, at end insert ("which apply in relation to the original unit.")
Page 33, line 34, leave out first ("the")
Page 33, line 43, leave out from beginning to end of line 12 on page 34
Page 35, line 14, leave out ("or agreement")
Page 35, line 32, leave out ("or 47")
Page 38, line 30, leave out ("in") and insert ("under")
Page 38, line 45, leave out ("or agreement")
Page 39, line 12, leave out ("or 47")
Page 40, line 6, leave out ("appropriate or units which are") and insert ("(or units which are)")
Page 40, line 9, leave out ("appropriate or units which are") and insert ("(or units which are)")
Page 40, leave out lines 18 and 19 and insert—
("(1) This paragraph applies if in the CAC's opinion the new unit contains at least one worker falling within a statutory outside bargaining unit.
(1A) In such a case—")
Page 40, line 27, leave out ("the outside unit") and insert ("each statutory outside bargaining unit containing workers who fall within the new unit")
Page 40, line 29, leave out ("or 47")
Page 40, line 30, leave out second ("the") and insert ("an")
Page 40, line 45, leave out ("An") and insert ("A statutory")
Page 41, line 9, at end insert
("66A.—(l) This paragraph applies if in the CAC's opinion the new unit contains—

(a) at least one worker falling within a voluntary outside bargaining unit, but

(b) no worker falling within a statutory outside bargaining unit.

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(2) In such a case—

(a) the CAC must issue a declaration that the original bargaining arrangements, so far as relating to workers falling within the new unit, are to cease to have effect on a date specified by the CAC in the declaration, and

(b) the original bargaining arrangements shall cease to have effect accordingly.

(3) The original bargaining arrangements are the bargaining arrangements as defined in paragraph 46.
(4) A voluntary outside bargaining unit is a bargaining unit which fulfils these conditions—

(a) it is not the original unit;

(b) a union is (or unions are) recognised as entitled to conduct collective bargaining on its behalf by virtue of an agreement with the employer;

(c) the union (or at least one of the unions) is not a party referred to in paragraph 46.

(5) The date specified under sub-paragraph (2)(a) must be—

(a) the date on which the relevant period expires, or

(b) if the CAC believes that to maintain the original bargaining arrangements would be impracticable or contrary to the interests of good industrial relations, the date after the date on which the declaration is issued;

and the relevant period is the period of 65 working days starting with the day after that on which the declaration is issued.")
Page 41, leave out lines 10 to 33
Page 41, line 34, after ("66(1)") insert ("or 66A(1)")
Page 43, line 45, at end insert
("(8) Paragraphs (a) and (b) of sub-paragraph (6) also apply if the CAC issues a declaration under paragraph 25(2).")
Page 44, line 5, at end insert—
("73A.—(1) This paragraph applies if—

(a) the CAC has proceeded as stated in paragraphs 66 to 72 with regard to the new unit (if there is one only) or with regard to each new unit (if there are two or more), and

(b) in so doing the CAC has issued one or more declarations under paragraph 66.

(2) The CAC must—

(a) consider each declaration issued under paragraph 66, and

(b) in relation to each declaration, identify each statutory outside bargaining unit which contains at least one worker who also falls within the new unit to which the declaration relates;

and in this paragraph each statutory outside bargaining unit so identified is referred to as a parent unit.
(3) The CAC must then—

(a) consider each parent unit, and

(b) in relation to each parent unit, identify any workers who fall within the parent unit but who do not fall within the new unit (or any of the new units); and in this paragraph the workers so identified in relation to a parent unit are referred to as a residual unit.

(4) In relation to each residual unit, the CAC must issue a declaration that the outside union is (or outside unions are) recognised as entitled to conduct collective bargaining on its behalf.
(5) But no such declaration shall be issued in relation to a residual unit if the CAC has received an application under paragraph 49 or 58 in relation to its parent unit.
(6) In this paragraph references to the outside union (or to outside unions) in relation to a residual unit are to the union which is (or unions which are) recognised as entitled to conduct collective bargaining on behalf of its parent unit.

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(7) If the CAC issues a declaration under sub-paragraph (4)—

(a) the declaration shall have effect in place of the existing declaration that the outside union is (or outside unions are) recognised as entitled to conduct collective bargaining on behalf of the parent unit, so far as the existing declaration relates to the residual unit;

(b) if there is a method of collective bargaining relating to the parent unit, it shall have effect in relation to the residual unit with any modifications which the CAC considers necessary to take account of the change of bargaining unit and specifies in the declaration.")

Page 44, line 20, at end insert—
("Withdrawal of application
74A.—(1) If an application under paragraph 49 or 58 is accepted by the CAC, the applicant (or applicants) may not withdraw the application—

(a) after the CAC issues a declaration under paragraph 52(3) or 61(3),

(b) after the CAC decides under paragraph 60(2) or 60(3),

(c) after the CAC issues a declaration under paragraph 66(1), 68(2), 69(3) or 70(2) in relation to the new unit (where there is only one) or a declaration under any of those paragraphs in relation to any of the new units (where there is more than one),

(d) after the union has (or unions have) notified the CAC under paragraph 72(1) in relation to the new unit (where there is only one) or any of the new units (where there is more than one), or

(e) after the end of the notification period referred to in paragraph 72(1) and relating to the new unit (where there is only one) or any of the new units (where there is more than one).

(2) If an application is withdrawn by the applicant (or applicants)—

(a) the CAC must give notice of the withdrawal to the other party (or parties), and

(b) no further steps are to be taken under this Part of this Schedule.")

Page 44, line 20, at end insert—
"Meaning of collective bargaining
74B.—(1) This paragraph applies for the purposes of this Part of this Schedule.
(2) Except in relation to paragraphs 52(5), 61(5) and 66(6), the meaning of collective bargaining given by section 178(1) shall not apply.
(3) In relation to a new unit references to collective bargaining are to negotiations relating to the matters which were the subject of collective bargaining in relation to the corresponding original unit; and the corresponding original unit is the unit which was the subject of an application under paragraph 49 or 58 in consequence of which the new unit was agreed by the parties or decided by the CAC.
(4) But if the parties agree matters as the subject of collective bargaining in relation to the new unit, references to collective bargaining in relation to that unit are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a declaration that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of the new unit.
(5) In construing paragraphs 52(3)(c), 61(3)(c), 67(5)(b), 68(2)(c), 70(6)(b) and 72(6)(b}—

(a) sub-paragraphs (3) and (4) do not apply, and

(b) references to collective bargaining are to negotiations relating to pay, hours and holidays.

Method of collective bargaining
74C.—(l) This paragraph applies for the purposes of this Part of this Schedule.
(2) Where a method of collective bargaining has effect in relation to a new unit, that method shall have effect as if it were contained in a legally enforceable contract made by the parties.
(3) But if the parties agree in writing—

(a) that sub-paragraph (2) shall not apply, or shall not apply to particular parts of the method, or

(b) to vary or replace the method,

the written agreement shall have effect as a legally enforceable contract made by the parties.
(4) Specific performance shall be the only remedy available for breach of anything which is a legally enforceable contract by virtue of this paragraph.")
Page 44, line 39, leave out from beginning to end of line 2 on page 45
Page 45, line 5, leave out from ("declaration") to end of line 8
On Question, amendments agreed to.
[Amendment Nos. 55 and 56 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 57 to 69:
Page 45, line 38, leave out ("(1)(b)") and insert ("(1)(a)")
Page 45, line 49, leave out ("81") and insert ("80")
Page 46, line 2, leave out ("(1)(b)") and insert ("(1)(a)")
Page 46, line 32, at end insert—
("(4) An application is not admissible if—

(a) a relevant application was made within the period of 3 years prior to the date of the application,

(b) the relevant application and the application relate to the same bargaining unit, and

(c) the CAC accepted the relevant application.

(5) A relevant application is an application made to the CAC—

(a) by the union (or the unions) under this paragraph,

(b) by the employer under paragraph 86, 87 or 106, or

(c) by a worker (or workers) under paragraph 91.")

Page 48, line 38, at end insert—
("88A.—(1) An application under paragraph 86 or 87 is not admissible if—

(a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 86 or 87,

(b) the relevant application and the application under paragraph 86 or 87 relate to the same bargaining unit, and

(c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

(a) by the union (or the unions) under paragraph 81,

(b) by the employer under paragraph 86, 87 or 106, or

(c) by a worker (or workers) under paragraph 91.")

Page 49, line 2, leave out ("and") and insert ("to")
Page 49, line 28, at end insert—
("91A.—(1) An application under paragraph 91 is not admissible if—

(a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 91,

(b) the relevant application and the application under paragraph 91 relate to the same bargaining unit, and

(c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

(a) by the union (or the unions) under paragraph 81,

(b) by the employer under paragraph 86, 87 or 106, or

(c) by a worker (or workers) under paragraph 91.")

Page 49, line 39, leave out ("and") and insert ("to")
Page 54, line 40, leave out ("to the CAC")
Page 54, line 44, leave out ("to the CAC")

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Page 54, line 47, at end insert—
(" 107A.—(1) An application under paragraph 106 is not admissible if—

(a) a relevant application was made within the period of 3 years prior to the date of the application under paragraph 106,

(b) the relevant application and the application under paragraph 106 relate to the same bargaining unit, and

(c) the CAC accepted the relevant application.

(2) A relevant application is an application made to the CAC—

(a) by the union (or the unions) under paragraph 81,

(b) by the employer under paragraph 86, 87 or 106, or

(c) by a worker (or workers) under paragraph 91.")

Page 55, line 1, leave out ("to the CAC")
Page 55, line 9, leave out ("and") and insert ("to")
The noble Lord said: My Lords, Amendments Nos. 57 to 59 were spoken to with Amendment No. 10; Amendments Nos. 60 to 69 were spoken to with Amendment No. 6. There is a misprint in Amendment No. 60 as it appears on the Marshalled List. The second sub-paragraph should be "(5)". With that minor amendment, I beg to move Amendments Nos. 57 to 69 en bloc.
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 70:
Page 56, line 18, at end insert—
("114A. An application under paragraph 114 is not admissible if the CAC is satisfied that any of the unions has a certificate under section 6 that it is independent.")
The noble Lord said: My Lords, in moving Amendment No. 70 I shall speak also to Amendments Nos. 71 to 75. The Bill allows voluntary recognition of unions which do not hold a certificate of independence. If workers are happy to be represented by such unions, there is no problem. But we do not think it would be right for an employer to be able to prevent workers from being represented by the independent union of their choice by recognising a non-independent union. Part VI of Schedule 1 therefore provides a procedure for workers to request and, via a ballot, to require an employer to derecognise a non-independent trade union.
On Report in another place, the Secretary of State said that,
"there is an issue that the Government want to consider further: where a staff association or a non-independent union has applied for a certificate of independence, whether the CAC should not consider any application for derecognition until the outcome of that process is known".—[Official Report, Commons, 31/3/99; col. 1185.]
On further consideration, we believe it is right that a union which may be independent of control of the employer and which has applied for a certificate of independence should not be subject to derecognition under Part VI unless it fails to obtain that certificate. These amendments put the principle into effect. An application for derecognition made by workers after the union has applied for a certificate of independence will be suspended pending the outcome of the union's application to the certification officer. If the certification officer grants the certificate and the union becomes independent, it can no longer be derecognised under the
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procedure. If, however, the certification officer refuses the certificate, then the workers' application for derecognition can go ahead.
However, we believe it is important to prevent unscrupulous employers using an application for a certificate of independence by a sweetheart union which they control to delay a perfectly fair application under Part VI. We have therefore provided that the union's application must be made before the application for derecognition, to prevent applications made simply to delay matters. An application for derecognition will be stalled only until the certification officer reaches a verdict on the union's application for a certificate of independence. If the certification officer refuses the certificate, the application will then be allowed to proceed, even if the union appeals against the certification officer's decision. Of course, if an appeal is made and succeeds at any time during the course of an application for derecognition, the application will lapse. Paragraph 117D, which is inserted by Amendment No. 73, achieves this. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 71 to 75:
Page 56, line 25, at end insert—
("(115A. An application under paragraph 114 is not admissible if the CAC is satisfied that—

(a) the union (or any of the unions) has made an application to the Certification Officer under section 6 for a certificate that it is independent, and

(b) the Certification Officer has not come to a decision on the application (or each of the applications).")

Page 56, line 29, leave out ("and 115") and insert ("to 115A")
Page 57, line 11, at end insert—
("117A.—(1) This paragraph applies if—

(a) the CAC accepts an application under paragraph 114,

(b) during the period mentioned in paragraph 117(1) or 117C(3) the CAC is satisfied that the union (or each of the unions) has made an application to the Certification Officer under section 6 for a certificate that it is independent, that the application (or each of the applications) to the Certification Officer was made before the application under paragraph 114 and that the Certification Officer has not come to a decision on the application (or each of the applications), and

(c) at the time the CAC is so satisfied there has been no agreement or withdrawal as described in paragraph 117(1) or 117C(3).

(2) In such a case paragraph 117(1) or 117C(3) shall cease to apply from the time when the CAC is satisfied as mentioned in sub-paragraph (1)(b).
117B.—(1) This paragraph applies if the CAC is subsequently satisfied that—

(a) the Certification Officer has come to a decision on the application (or each of the applications) mentioned in paragraph 117A(1)(b), and

(b) his decision is that the union (or any of the unions) which made an application under section 6 is independent.

(2) In such a case—

(a) the CAC must give the worker (or workers), the employer and the union (or unions) notice that it is so satisfied, and

(b) the application under paragraph 114 shall be treated as not having been made.

1071
117C.—(1) This paragraph applies if the CAC is subsequently satisfied that—

(a) the Certification Officer has come to a decision on the application (or each of the applications) mentioned in paragraph 117A(1)(b), and

(b) his decision is that the union (or each of the unions) which made an application under section 6 is not independent.

(2) The CAC must give the worker (or workers), the employer and the union (or unions) notice that it is so satisfied.
(3) In the new negotiation period the CAC must help the employer, the union (or unions) and the worker (or workers) with a view to—

(a) the employer and the union (or unions) agreeing to end the bargaining arrangements, or

(b) the worker (or workers) withdrawing the application.

(4) The new negotiation period is—

(a) the period of 20 working days starting with the day after that on which the CAC gives notice under sub-paragraph (2), or

(b) such longer period (so starting) as the CAC may decide with the consent of the worker (or workers), the employer and the union (or unions).

117D.—(1) This paragraph applies if—

(a) the CAC accepts an application under paragraph 114,

(b) paragraph 117A does not apply, and

(c) during the relevant period the CAC is satisfied that a certificate of independence has been issued to the union (or any of the unions) under section 6.

(2) In such a case the relevant period is the period starting with the first day of the negotiation period (as defined in paragraph 117(2)) and ending will the first of the following to occur—

(a) any agreement by the employer and the union (or unions) to end the bargaining arrangements;

(b) any withdrawal of the application by the worker (or workers);

(c) the CAC being informed of the result of a relevant ballot by the person conducting it;

and a relevant ballot is a ballot held by virtue of this Part of this Schedule.
(3) This paragraph also applies if—

(a) the CAC gives notice under paragraph 1 17C(2), and

(b) during the relevant period the CAC is satisfied that a certificate of independence has been issued to the union (or any of the unions) under section 6.

(4) (n such a case, tile relevant period is the period starting with the first day of the new negotiation period (as defined in paragraph 117C(4)) and ending with the first of the following to occur—

(a) any agreement by the employer and the union (or unions) to end the bargaining arrangements;

(b) any withdrawal of the application by the worker (or workers);

(c) the CAC being informed of the result of a relevant ballot by the person conducting it; and a relevant ballot is a ballot held by virtue of this Part of this Schedule.

(5) If this paragraph applies—

(a) the CAC must give the worker (or workers), the employer and the union (or unions) notice that it is satisfied as mentioned in sub-paragraph (1)(c) or (3)(b), and

(b) the application under paragraph 114 shall be treated as not having been made.")

Page 57, line 15, after ("117(1)") insert ("or 117C(3)")
Page 57, line 22, at end insert—
("(c) the reference in paragraph 97(4) to the CAC refusing an application under paragraph 97(2) included a reference to it being required to give notice under paragraph 117D(5)")
The noble Lord said: My Lords, I have just spoken to these amendments. I beg to move them en bloc.
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 76:
Page 59, leave out line 42
The noble Lord said: My Lords, in moving Amendment No. 76 I shall speak also to Amendment No. 77. These amendments remove references to a worker's breach of contract from the provisions on detriment and dismissal connected with recognition in Part VIII.
I should start by explaining what these amendments are not intended to do. They are not intended to allow workers to breach their contracts in pursuit of union recognition. The purpose of the amendments is to prevent employers from circumventing the provisions which protect workers from detriment or dismissal arising from campaigning about recognition.
The existing text of the Bill is deficient in two ways. First, it would allow employers to write into workers' contracts a requirement not to campaign about recognition. Obviously, that would undermine the entire purpose of providing protection for workers in the schedule—indeed, of providing the schedule itself.
Secondly, in providing that actions in breach of contract are not protected, the schedule is currently different from other detriment and dismissal provisions—for example, Section 44 of the Employment Rights Act 1996—because those provisions do not contain any mention of breach of contract. Retaining the existing text in the Bill might be taken to imply that a worker is always protected under other similar provisions where he acts in breach of contract. Again, that is obviously not desirable.
These amendments would continue to protect a worker from detriment or dismissal if, and only if. the worker's action is reasonable. In most cases it will be unreasonable for a worker to breach his or her contract, so I do not believe this change represents a substantial alteration of the provisions. It does, however, reduce the risk of circumvention of the provisions by unscrupulous employers and of unintended consequences on other legislation. On that basis, I hope that the House will agree that this is a desirable change. I beg to move.
Baroness Turner of Camden: My Lords, I thank my noble friend for introducing this amendment. My recollection is that this was one of the issues we raised in Committee. I am very glad that the point has been accepted and I hope the House will give it full support.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 77 to 80:
Page 61, leave out lines 32 and 33
Page 62, line 14, after ("20") insert ("or 70")
Page 62, line 24, after ("20") insert ("or 70")

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Page 62, line 44, at end insert—
("Directions about certain applications
139A.—(l) The Secretary of State may make to the CAC directions as described in sub-paragraph (2) in relation to any case where—

(a) two or more applications are made to the CAC,

(b) each application is a relevant application,

(c) each application relates to the same bargaining unit, and

(d) the CAC has not accepted any of the applications.

(2) The directions are directions as to the order in which the CAC must consider the admissibility of the applications.
(3) The directions may include—

(a) provision to deal with a case where a relevant application is made while the CAC is still considering the admissibility of another one relating to the same bargaining unit;

(b) other incidental provisions.

(4) A relevant application is an application under paragraph 81, 86, 87, 91 or 106.")
The noble Lord said: My Lords, I have spoken to Amendments Nos. 77 to 80. I beg to move them en bloc.
On Question, amendments agreed to.
Clause 3 [Blacklists]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 81:
Page 2, line 2, leave out ("recruitment") and insert ("discrimination in relation to recruitment or in relation to the treatment of workers")
The noble Lord said: My Lords, in moving Amendment No. 81, I shall speak also to Amendments Nos. 83 and 84 which are consequential upon it.
When the House last debated this matter, I referred to the fact that the Delegated Powers and Deregulation Committee had questioned aspects of our approach. We have reflected in particular on the comments made by the committee that the power should define more clearly the prohibition. We have looked again at Clause 3(1)(b) of the Bill, which describes the purposes to which blacklists are put. As drafted, the subsection seeks to prohibit lists which are,
"compiled with a view to being used by employers or employment agencies for the purposes of recruitment".
The main use of blacklists is undoubtedly in recruitment. However, the Government acknowledge that there exists a very real possibility that lists may be compiled and used to discriminate against workers already in employment. For example, the information could be used to encourage the dismissal of workers currently in employment.
The Government have therefore reflected on this issue and we conclude that the current form of words has too narrow a focus. It contains a potential loophole that might permit the use of blacklists to discriminate against existing members of a workforce.
Amendment No. 81 amends subsection (2)(b). It does so by expanding the prohibited purpose to include the use of lists for the purposes of discrimination against the existing members of a workforce as well as against prospective workers who are applying for work. I think it will be agreed that this is a sensible amendment. It closes the loophole
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that I have described and ensures that employers can be prevented from relying on the lists to sack or otherwise penalise their existing employees.
Amendment No. 83 is a consequential amendment to the interpretative subsection (5). It provides that the use of "worker" in Amendment No. 81 has the same meaning as it has in Clause 13 of the Bill, so ensuring that it covers agency workers, home workers and persons in Crown employment. This is a sensible definition. It will ensure that some of the more vulnerable members of the workforce are protected.
Finally, I turn to Amendment No. 84, which is also consequential. As currently drafted, subsection (6) states that terms used in the clause have the same meanings as they have in the Trade Union and Labour Relations (Consolidation) Act 1992.
The amendment ensures that the term "worker" in this clause, which is defined in subsection (5). is excluded from that rule of interpretation. That is necessary because the 1992 Act gives a different and narrower meaning to "worker". The amendment is therefore clarificatory and avoids interpretative confusion that might otherwise occur. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 82:
Page 2, line 8, at end insert—
("() include provision for or about the grant and enforcement of specified remedies by courts and tribunals;
() include provision for the making of awards of compensation calculated in accordance with the regulations;
() include provision permitting proceedings to be brought by trade unions on behalf of members in specified circumstances;
() include provision about cases where an employee is dismissed by his employer and the reason or principal reason for the dismissal, or why the employee was selected for dismissal, relates to a list to which subsection (1) applies;")
The noble Lord said: My Lords, this provision amends Clause 3, which gives a power to the Secretary of State to bring forward regulations to prohibit the compilation, dissemination and use of blacklists. The clause does not contain the substantive provisions themselves.
We know that the drafting of these regulations will be a complicated matter. We want to ensure that they are well targeted and deal with wrongdoing without outlawing the proper use of information about trade unionists.
We have repeatedly stated our intention to consult in detail on the draft regulations. We shall be especially interested in views about how the sanctions against blacklisting should be defined and how the prohibition can be enforced in the courts or in the tribunals.
As currently drafted, the clause unnecessarily confines the range of enforcement methods and remedies which can be included in the regulations. Some important options might be closed off before we even began to consult on them. For example, it is

1075
unclear whether the Government would have the power to introduce regulations which gave the courts or the tribunals the authority to order blacklisting organisations to stop disseminating their lists and to ensure that such orders can be enforced. It is also unclear whether the regulations could enable compensation to be awarded to individuals who have lost their jobs or failed to find employment because their names were included on the lists.
In addition, we want to explore the possibility that unions should be able to bring proceedings on behalf of their members. It might be possible for multiple cases to be handled as one by a union, saving time for the tribunals or the courts, as well as the parties.
The amendment allows such options to be explored during the consultations by expressly stating on the face of the Bill that the regulations could include such remedies. Obviously, I do not wish to pre-judge the results of the consultation. There is no presumption on our part that the regulations will definitely include such solutions. But certainly they appear to be worth examining in closer detail.
The amendment therefore removes an unhelpful rigidity in the power to regulate in this area. It opens up the possibility that the regulatory regime can be more finely attuned to the views of those who are being consulted. I beg to move.
On Question, amendment agreed to
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 83 and 84:
Page 2, line 28, at end insert—
(", and
"worker" has the meaning given by section 13.")
Page 2, line 29, at beginning insert ("Subject to subsection (5),")
The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Schedule 3 [Ballots and notices]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 85:
Page 66, line 16, after ("and") insert ("depending on the circumstances")
The noble Baroness said: My Lords, this amendment relates to what has been called the "health warning" that the Bill requires shall be inserted on a strike ballot form. It tells the employee his rights not to be dismissed in rather one-sided words, referring only to where such dismissal would be unfair, without mentioning the fact that in some circumstances it might be fair.
In Committee, I proposed an amendment to redress the balance. In reply, the noble Lord, Lord McIntosh of Haringey, said that my amendment was unnecessary. However, after further discussion the noble Lord relented and generously agreed to look at the matter again. 'The noble Lord has honoured that promise, and my amendment now contains the wording that both meets my point and, I believe, is acceptable to the Government. I beg to move.
Lord McIntosh of Haringey: My Lords. this amendment seeks to amend the wording of the statutory health warning statement which all voting forms must contain, to make it clear that the dismissal of striking workers after the eight-week period may not necessarily be unfair. The health warning as set down in Schedule 3 simply reads that the dismissal "may be unfair", and the noble Baroness is concerned that it does not explicitly make the point that dismissals could be fair. She will remember that, as a market researcher, I am used to the idea that a question should contain both options in order to be a proper question.
We rejected the noble Baroness's amendment previously on the grounds that, strictly speaking, the health warning conveyed the notion that dismissals could be fair or unfair. However, as she said, we undertook to look at the matter again. The noble Baroness clearly feels strongly about this issue, and I want, as she does, to make sure that the wording is as clear as possible. In those circumstances, we are happy to accept the amendment.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 86:
Page 66, line 16, at end insert—
("() In the definition of "strike" in section 246 (interpretation) after "means" there shall be inserted "(except for the purposes of section 229(2))".")
The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendment No. 87. These two amendments contain the Government's proposals to amend Schedule 3 on industrial action ballots and notices.
Amendment No. 86 arose from a helpful discussion that we had in Committee on our proposals to define overtime and call-out bans as "action short of a strike". My noble friend Lord Wedderburn drew attention to our failure to spot the need to amend Section 246 of the Trade Union and Labour Relations (Consolidation) Act 1992. I undertook to look at the matter again. I have done so, and I conclude that we need to make a consequential change to Section 246 of the 1992 Act along the lines of my noble friend's suggestion.
Amendment No. 86 makes it clear that the general definition of a strike given in Section 246 does not apply when it comes to the categorisation of overtime and call-out bans as "action short of a strike" for the purpose of the balloting provisions. The amendment helps avoid possible confusion in the future and ensures that Section 246 cannot be drawn upon, as it was in the recent Connex v RMT case, to justify the classification of such action as a "strike".
Amendment No. 87 deals with the treatment of merchant seamen during industrial action ballots. Obviously, such workers move around. They are often away from home. That can create problems for them during industrial action ballots because, to comply with the existing law, most ballot papers have to be

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sent to their home addresses. If members are away at the time, it can be very difficult, if not impossible, for them to vote.
The current law allows seamen to be balloted on board ship, or at a port where the ship is, as long as they are at sea or at a foreign port during the entire period of the ballot. This helps the balloting process to a certain extent. But it does not deal adequately with the situation where a seaman is at sea for just a part of the balloting period. In such circumstances, it may be impractical for a seaman to return to his home address. For example, he might well be staying at a port elsewhere in the UK awaiting embarkation.
Amendment No. 87 deals with these circumstances. It enables the union to send the ballot paper to the ship or to a UK or foreign port where the ship is, if its member is at sea or at a foreign port for any time during the balloting period. In deciding whether to do this, the union must judge whether it would be convenient for the member to receive the ballot paper in this way. In practice, this judgment should not pose difficulties for unions. If in doubt, they can always ask their members in advance of any ballot what their movements are expected to be. The amendment makes it easier for individual seamen to participate in ballots.
I also want to take this opportunity to give notice to noble Lords that we are considering a further amendment to Schedule 3. This concerns the simplification of the law on separate workplace ballots. This aspect of the law is notoriously complicated and we are continuing our efforts to identify a suitable way to clarify its effects. If successful, we hope to come forward with an amendment at Third Reading. I apologise for proceeding in this way. But I hope noble Lords will agree with me that it would be best for us to proceed only when we are sure that our proposals are correct in every respect. I beg to move.
On Question, amendment agreed to.
6 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 87:
Page 66, line 16, at end insert—
("Conduct of ballot: merchant seamen
. In section 230 (conduct of ballot) for subsections (2A) and (2B) there shall be substituted—
"(2A) Subsection (2B) applies to a merchant seaman if the trade union reasonably believes that—

(a) he will be employed in a ship either at sea or at a place outside Great Britain at some time in the period during which votes may be cast, and

(b) it will be convenient for him to receive a voting paper and vote while on the ship or while at a place where the ship is rather than in accordance with subsection (2).

(2B) Where this subsection applies to a merchant seaman he shall, if it is reasonably practicable—

(a) have a voting paper made available to him while on the ship or while at a place where the ship is, and

(b) be given an opportunity to vote while on the ship or while at a place where the ship is."").

On Question, amendment agreed to.
Clause 5 [Training]:
[Amendments Nos. 88 to 90 not moved.]
Schedule 4 [Leave for Family and Domestic Reasons.]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 91:
Page 70, line 2, leave out ("conferred by the regulations") and insert ("under this Chapter")
The noble Lord said: My Lords, this is a purely technical amendment to new Section 75(1)(e) of the Employment Rights Act, which provides that an employee who has maternity rights under her employment contract and under the statutory scheme can choose to exercise whichever is the most advantageous to her in any particular respect. This is similar to the existing provision in the Employment Rights Act.
The need for the amendment is simply because the Bill as drafted refers to rights conferred by regulations whereas the rights in question are in fact contained in the primary legislation.
I wish also to speak to Amendments Nos. 93, 94 and 95. These amendments address the issue of a maximum limit on parental leave raised by the amendment which the noble Baroness tabled in Committee, and which she kindly withdrew when I offered to consider further and bring forward a revised version today.
The amendments affect the fallback parental leave scheme which we are intending to set out in regulations. They provide for some additional powers to ensure that the fallback scheme can, if considered appropriate, set a maximum period of leave to be taken at one time or within a given period.
Let me clarify what will be the result. The Bill already provides for the minimum length of an absence to be set out in regulations, and the most that an employee could take overall will be governed by the entitlement, which will be three months, in line with the parental leave directive.
As a result of these amendments we will have more options to shape the fallback scheme in line with the views we have already received, the matters raised in this House, and in response to our impending consultation. We will have more flexibility to arrive at a balanced scheme. For example, we could provide for a single period of leave to be taken as a minimum period of a week, but no more than a month.
We could limit the amount of leave which could be taken in a given timescale, say six months or a year, without reducing the overall entitlement. We could set out a fair and reasonable framework while leaving it to the individual to choose whether or not to take their leave as a single block or in shorter spells within the framework.
Amendments Nos. 96 and 97 are technical. Their object is to achieve our aim of ensuring that employers and employees have the maximum possible freedom to make their own parental leave arrangements. The amendments replace the existing provisions on collective and workforce agreements in new Section 81 with a more flexible arrangement, which is to be inserted at the end of new Section 78. Our intention, as I made clear in Committee, is to encourage businesses and their workforces to come to their own agreements about how parental leave will operate for them.
We want to ensure that there is sufficient scope for agreements to replace or supplement the statutory provisions, except where these are set in stone as minimum requirements. It will not be possible for collective and workforce agreements to undermine certain minimum requirements; for example, the entitlement to at least three months' leave to care for a child, and the precondition of a year's service in order to qualify for the entitlement, although we will always applaud more generous provision where it can be afforded.
However, there are more discretionary matters, such as the notice requirements or the arrangements for taking leave in short or long periods, where workforces and their employers could agree something different from the fallback scheme which will be provided for in the regulations.
Under the existing provisions, collective and workforce agreements can only substitute for the statutory scheme to the extent that they cover the same ground as the regulations, whereas this amendment will ensure that any relevant agreement can substitute, provided that the contract of employment incorporates or operates by reference to a collective or workforce agreement which provides for parental leave.
This will ensure more flexibility in practice—the light touch we are aiming for. In effect this amendment will also help to ensure that all parties are clear when an agreement is substituting for the discretionary fallback provisions. I commend our amendments in this group to the House and beg to move.
Baroness Miller of Hendon: My Lords, Amendments Nos. 93 and 97 to which the noble Lord has just spoken modify the disruption that may be caused to an employer by the introduction of the concept of parental leave. I am particularly pleased that the Minister considered carefully what we said earlier about the cost to industry and commerce and the loss of competitiveness. We believe that any reduction in those burdens, even the modest ones proposed in the
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amendment, are most welcome. I am especially pleased to see the alteration of line 43 on page 70, so that any regulations by the Secretary of State may specify the maximum period of parental leave as well as the minimum, which is all the Bill originally provided.
As the noble Lord, Lord Sainsbury of Turville, said, I proposed a similar amendment in Committee and I wanted to require the setting of minimum and maximum limits. He replied that it would require further consideration, although the principle was accepted. I am glad that there has been further consideration. I am happy that by altering the word "and" to "or" the Government have found a solution.
However, I wish to point out in the gentlest possible manner that after the passing of the amendment the clause would read that regulations may,
"specify a minimum or maximum period of absence".
I do not know whether it is correct, but my legal adviser tells me that this might prevent a regulation from specifying both parameters. I am certain that the Secretary of State will sort it out when he gets round to issuing the regulations. Subject to that minor quibble, we support the amendments.
I turn to Amendments Nos. 91A and 92 which are grouped with the noble Lord's amendments. Amendment No. 91A is a one-word amendment to the important provision entitling a worker to parental leave. Parental leave is something in addition to the maternity leave to which a mother is entitled. Throughout all the discussion about the provision, it has been made clear that parental leave shall be unpaid. The noble Lord, Lord Sainsbury, told the Committee:
"We are absolutely clear and we have been from the outset that there will be no requirement to pay for parental leave and the Bill provides for that".—[Official Report, 16/6/99: col. 318.]
On that basis, I withdrew my identical amendment. I do not for one moment doubt the noble Lord's word, I am absolutely certain that if he says it is in the Bill, it is somewhere in the Bill. But despite a careful search, I cannot find it, nor can my advisers, nor the trade association which has briefed me on some aspects of the Bill. It may well be that we have overlooked a clause. However, I thought it best in the end to bring it back so that the Minister could tell me where it is. I am sure it would be helpful. The fact is that it is not in an obvious place where an employer can easily put his finger on it; it should be, even if it is repeated elsewhere in the Bill. For the sake of absolute clarity, I hope that the Government will accept my amendment which merely reflects what they say is the current position. Therefore, they should not have a problem with it.
Amendment No. 92 instructs the Secretary of State as to the nature of the regulations he may make in relation to parental leave. The detailed wording is in the text, but in very shortened form, and provides that

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the regulations must not impede small and medium size undertakings. It also entitles the employer to postpone the right to parental leave for what are called "justifiable reasons" listed under four headings. This is not just a wish list from the Opposition or industry but exceptions that are specifically allowed for by the working time directive which is the basis of the imposition by the Government of that obligation on industry and commerce. In accepting the limitations imposed by these amendments the Government would demonstrate their good intention neither to goldplate any regulations nor to impose any that constituted an undue burden on commerce, especially small and medium size enterprises.
Lord Sainsbury of Turville: My Lords, I totally understand the concern of the noble Baroness that employers should be free of any doubt that parental leave is to be unpaid. But, as I assured her when we debated in Committee, there is no cause for concern. The Bill makes clear that there will be no requirement for employers to pay parental leave.
Perhaps I may rehearse the arguments to make the position absolutely clear. These provisions are about introducing unpaid parental leave. New Section 76 does not itself confer a right to paid leave. It provides for the Secretary of State to make regulations which will in turn provide for a right to parental leave. As I affirmed in Committee, new Section 77 makes clear that any terms and conditions required by the regulations to continue during parental leave cannot include terms and conditions about remuneration. I can assure the noble Baroness that the effect is to ensure that parental leave cannot be required to be paid and, therefore, her amendment is unnecessary.
I turn to Amendment No. 92. The noble Baroness and I are at one on the principles behind the amendment, if not on the method of dealing with them. The Government strongly believe that legislation must not damage business competitiveness and in particular that the needs of small businesses are paramount. The Prime Minister has only recently reaffirmed the need to ensure good regulation. This means the minimum provisions necessary to ensure a bottom line of acceptable standards. Noble Lords will recall that in Committee I announced that we were adopting a new approach to the regulations. My right honourable friend the Secretary of State for Trade and Industry intends to operate with a light touch.
The basic right to parental leave will be set out in the regulations but we will encourage employers and employees to make their own arrangements. The Government's amendment to follow new Section 78 of the 1996 Act will make it possible for regulations to provide for employers and employees to opt out of the details of the regulations through collective and workforce agreements. These regulations will provide a fall-back arrangement which automatically take effect if employers and employees cannot agree on, or do not wish to make, their own arrangements. We
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shall consult further on the details of the fall-back scheme, including the provisions relating to the postponement of leave.
I fully share the concern of the noble Baroness that employers should be able to postpone leave if necessary. It is clearly right that, faced with perhaps several requests for leave at a busy time, the employer should be able to say, "I'm afraid not now, but later." We want to consult on what the regulations should say. My concern is that the amendment would pre-empt that consultation. I hope that the noble Baroness is reassured that in resisting the amendment we are not rejecting the principles it embodies. We have taken account of the views of the business community throughout the process and have gained the support of both sides of industry for our minimalist approach to the regulations.
6.15 p.m.
Baroness Miller of Hendon: My Lords, I am reassured by what the Minister said but when I read the wording of the Bill the position relating to unpaid leave is not clear. I shall certainly have another look at the matter.
On Question, amendment agreed to.
[Amendments Nos. 91A and 92 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 93 to 97:
Page 70, line 38, at end insert—
("() require parental leave to be taken as a series of periods of absence in all cases or in specified cases;").
Page 70, line 43, after ("minimum") insert ("or maximum")
Page 70, line 44, at end insert-
("() specify a maximum aggregate of periods of parental leave which may be taken during a specified period of time.").
Page 71, line 43, at end insert—
("() Regulations under section 76 may provide for specified provisions of the regulations not to apply in relation to an employee if any provision of his contract of employment—

(a) confers an entitlement to absence from work for the purpose of caring for a child, and

(b) incorporates or operates by reference to all or part of a collective agreement, or workforce agreement, of a kind specified in the regulations.")

Page 72, line 45, leave out from beginning to end of line 8 on page 73
On Question, amendments agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 98:
Page 73, leave out lines 13 to 43 and insert—
("Dependants
TIME OFF FOR DEPENDANTS
57A.—(1) An employee is entitled to be permitted by his employer to take a reasonable amount of time off during the employee's working hours in order to take action which is necessary—

(a)to provide assistance on an occasion when a dependant falls ill, gives birth or is injured or assaulted,

(b) to make arrangements for the provision of care for a dependant who is ill or injured,

(c) in consequence of the death of a dependant,

(d) because of the unexpected disruption or termination of arrangements for the care of a dependant, or

(e) to deal with an incident which involves a child of the employee and which occurs unexpectedly in a period during which an educational establishment which the child attends is responsible for him.

(2) Subsection (1) does not apply unless the employee—

(a) tells his employer the reason for his absence as soon as reasonably practicable, and

(b) unless paragraph (a) cannot be complied with until after the employee has returned to work, tells his employer for how long he expects to be absent.

(3) Subject to subsections (4) and (5), for the purposes of this section "dependant" means, in relation to an employee—

(a) a spouse,

(b) a child,

(c) a parent,

(d) a person who lives in the same household as the employee, otherwise than by reason of being his employee, tenant, lodger or boarder.

(4) For the purposes of subsection (1)(a) or (b) "dependant" includes, in addition to the persons mentioned in subsection (3), any person who reasonably relies on the employee—

(a) for assistance on an occasion when the person falls ill or is injured or assaulted, or

(b) to make arrangements for the provision of care in the event of illness or injury.

(5) For the purposes of subsection (1)(d) "dependant" includes, in addition to the persons mentioned in subsection (3), any person who reasonably relies on the employee to make arrangements for the provision of care.
(6) A reference in this section to illness or injury includes a reference to mental illness or injury.")
The noble Lord said: My Lords, in moving Amendment No. 98 I wish to speak also to Amendments Nos. 103 to 110 and 112. The Government are committed to putting in place a framework of fair and decent statutory rights which will help employees to balance their work and home responsibilities. At the same time, we are determined to ensure that this statutory framework does not place unnecessary and unjustifiable burdens on employers. Our competitive economy depends upon strong, modern businesses. Good working practices contribute to a competitive business by encouraging a committed and productive workforce. But too many demands on employers will undermine their competitive edge. This is an important reason why the Government are committed to cutting bureaucracy and burdensome regulations. I hope that
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what we are doing will be welcomed by the noble Baroness who, I know, shares some concerns about this provision.
In tabling this group of amendments we have listened to representations in the other place and concerns raised by business that the provisions on time off go beyond what is necessary to achieve our aims. In particular, the noble Baroness drew attention to this matter by tabling a number of amendments in Committee. We have never wanted to adopt the wording of the parental leave directive. It would lead to a too narrow and begrudging approach. That fosters the wrong culture of distrust and fear and goes against our main objective to support employees who have caring responsibilities.
We want to ensure that employees who have to take time off work to deal with an emergency involving someone else who depends on them are able to do so without fear of victimisation. But we recognise that the Bill as published provides a wide right to time off for domestic incidents, and we are persuaded that it could be interpreted as going beyond our policy intentions. The provisions were never intended to allow employees time off to get their washing machines mended, for example. We had intended to use the regulation-making powers if necessary to clarify the matter. However, employers were concerned that such a wide provision in the Bill could easily be abused.
These amendments will put the provision back on a proper footing and cut out the risk of abuse by those who may seek to take time off to deal with running repairs to the home. The statutory right will be limited to urgent cases of real need. The emergency must involve a dependant who is either a family member or someone who relies upon the employee for assistance in the particular circumstances. By "family member" I mean a child, parent, husband, wife, partner or other household member, but not someone who is in the household because he or she is the employee, tenant, lodger or boarder of that employee. By "someone who relies upon the employee for assistance" I mean an individual for whom the employee has primary caring responsibility or someone who is involved in a serious emergency where the employee is the only person who can help: for example, an elderly neighbour living alone who falls and breaks a leg.
We have now set out clearly on the face of the Bill the circumstances in which leave can be taken. In so doing we will remove the need for long and complex regulations, or for collective or workforce agreements to opt out of the regulations. This approach has been supported by the CBI. The majority of employers already allow time off in emergencies and we do not want to discourage them from doing so. This amendment ensures that all employees will be entitled to time off in specific circumstances which most of us would accept.
Let me spell out what the amendment is intended to cover. We intend the right to apply where a dependant becomes sick or has an accident, or is assaulted, including where the victim is distressed rather than physically injured. It provides for reasonable time off, if an employee suffers a bereavement of a family member,

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to deal with the consequences of that bereavement, such as making funeral arrangements, as well as to take time off to attend the funeral.
Employees will be able also to take time off in the event of the unexpected absence of the carer, where the person is a dependant of the employee. So if the childminder or the nurse does not turn up, the employee will be able to sort things out without fearing reprisals at work.
Employees may have to take time off to attend to a problem arising at their children's school or during school hours—for example, if the child has been involved in a fight, where the child is distressed, or if the child has committed a serious misdemeanour which could lead to expulsion. Again, the provision will secure their right to do so.
A father will have the right to be on hand at the birth of his child. After the birth, a father may be able to take parental leave to care for his child—but that is a matter which we will leave for the time being to the parental leave consultation.
I hope everyone can agree that all these are sensible, limited circumstances in which every employee should be able to take a reasonable amount of time off if necessary in order to deal with the matter.
We have not set a limit on the amount of time which employees can take off. This right is to help people deal with emergencies. A limit would not make sense and could be seen as a minimum, which employees might well consider an entitlement to be added to their annual leave. In all cases, the right will be limited to the amount of time which is reasonable in the circumstances of a particular case. For example, if a child falls ill with chickenpox the leave must be sufficient to enable the employee to cope with the crisis—to deal with the immediate care of the child and to make alternative longer-term care arrangements. The right will not enable a mother to take a fortnight off while her child is in quarantine. In most cases, whatever the problem, one or two days will be the most that are needed to deal with the immediate issues and sort out longer-term arrangements if necessary.
I am sure we can all agree that it is only reasonable to expect employees to notify their employers of their absence, the reason for the absence and, where possible, the duration of the absence, as soon as reasonably practicable. The amendment builds in this requirement.
This right gives important protection to employees. No employee should have to fear victimisation or dismissal for taking time off if his or her child has an accident; and an employee will be able to complain to an employment tribunal if the employer has unreasonably refused time off.
I am sure these amendments, which provide clarity without bureaucracy, will receive widespread support from noble Lords. I hope the noble Baroness will be satisfied that they meet the concerns raised about this issue, including those of business. I commend them, and I beg to move.
Baroness Miller of Hendon: My Lords, as the noble Lord the Minister said, the amendment deletes the whole
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of the former proposed clause and replaces it with an entirely new one. We on this side of the House entirely welcome that.
The major amendment that the Government have introduced is to get rid of the proposal that the rule should be prescribed in regulations, which would be thought up some time later. I hope that this new method will be adopted in other Bills, rather than the Government's producing what are largely enabling Bills on many important topics.
I congratulate the team of Ministers who have been dealing with the matter and the team of officials in the Box who have found a way of dealing with it at the appropriate time. In this case they have bitten the bullet, and despite the inability of the Minister of State in the other place to define a domestic incident they have now spelt out in straightforward terms exactly the circumstances in which such leave is to be taken.
The Bill as originally drafted was vague and woolly. The noble Lord the Minister was correct when he talked about it not being a matter of time off to have a washing machine repaired. I think that may have been something to which I referred when I said how woolly the Bill was. In fact, it seemed wide and woolly but it looked nothing less than gold-plating the European Union's directive, which used the expression "force majeure".
My own amendment was to specify what should be covered, by using the EU's own wording. Perhaps it is just as well that this will not now be necessary, because in 1904 Mr Justice Walton was asking "What is the meaning of force majeure?" In 1915 Mr Justice Bailhaghe complained that the words were taken from the Napoleonic Code; and in 1922 Mr Justice Sankey said that he absolutely regretted the introduction of foreign words into English statutes without any definition being given. I apologise for my having attempted to do that in my amendment. I am only glad that the Government have done the right thing and told us precisely what is involved. I have, of course, withdrawn my amendment defining the grounds of such leave.
I am also very glad to see that the Government have in their new subsection (2) adopted my intended amendment requiring the employee to do the minimum courtesy of informing his employer of the reason for taking such leave and to predict the date of his return. Therefore, I am able to withdraw my amendment covering that point as well.
Amendment No. 103, to page 73, line 45, inserts the concept of reasonableness to judge an employer's conduct if he refuses such leave. This is also most welcome. The Department of Trade and Industry has often been reluctant in other cases where I have argued for acceptance of "reasonable", as if it was not sure whether it could reasonably understand what "reasonable" meant. It is absolutely great that in this case it has been accepted. This change of heart, and the insertion of just two words that I never thought I would hear the Government utter, enabled me to withdraw an entire amendment covering 15 lines and containing two subsections and four paragraphs.

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Yet again I am pleased to note that the Government have now inserted a new and detailed amendment, defining in subsection (3) the dependants whose problems, to use a wholly inadequate word, might give rise to the need for such leave. It may be recalled that I proposed an amendment along those lines at an earlier stage to eliminate what I described as a limitless definition in the Bill. The Government did not accept my amendment, but the noble Lord, Lord Sainsbury of Turville, said that they would consider the matter carefully. He said:
"We need to arrive al a definition which is effective, but simple for employers to operate".—[Official Report, 16/6/99; col. 318.]
Although the wording of the Government's definition is quite different from that which I proposed, I am grateful that they have taken my concerns on board and have dealt with the matter in a most satisfactory manner in the new clause.
I mentioned my amendments, en passant, not to detract from the reasonable way in which the Government have dealt with these matters but to give credit where credit is due, which I like to think is down to me. We support that amendment as well as Amendments Nos. 104 to 112.
After all this good will, it is perhaps churlish of me to mention my own very minor amendment, Amendment 98A, to the Government's amendment. This inserts "unpaid" to qualify the time off provided for in the opening words of the Government's new clause. I will not take up much time in arguing this point as I dealt with it in connection with the new clause 76 inserted by the Schedule. If we agree that an employee should be entitled to time off because of a serious domestic emergency, there is no reason why his or her employer should be compelled to pay him at the same time.
Of course I accept, and it is right, that most employers will be sympathetic and probably would not dream of docking any pay. But some, particularly small firms, may have no alternative, especially if they have to employ somebody to make up the time and work of their absent employee. In all the discussions in the other place it was made clear that parental leave was to be unpaid. That was in the explanatory notes to the Bill, though I did not find it in the Bill itself. I do not believe that there is any reason why there should be a distinction in the case of emergency leave. On the assumption that that is the intention, this clarification will put the matter beyond argument. I hope that the Government will find it possible to accept this minor modification of their very good amendment, which we otherwise support.
Baroness Pitkeathley: My Lords, the House will not be surprised that I rise to speak very warmly in support of Amendment No. 98 in particular. It gives employees who are carers the right to take a reasonable amount of time off in order to deal with a whole range of difficult caring situations, such as making arrangements for residential care if alternative care arrangements break down.
The amendment sets out very clear parameters for both employers and employees about the right to time off. It is particularly welcome that it is phrased in such
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a way as to encompass a wide range of caring situations and does not discriminate against different groups of carers, such as those looking after unmarried partners or those who have responsibilities for people living outside the family home. I particularly welcome the fact that the amendment mentions the kinds of problems that are stress-related and are not just to do with physical injury.
Carers' national associations, which have been campaigning for many years for the right to time off for working carers, welcome the amendment. It fulfils a pledge made in the national strategy for carers that they would have time off from work to deal with caring situations. This is part of a package of family-friendly employment policies which I welcome most warmly, and I know that all working carers will do so too.
6.30 p.m.
Lord Sainsbury of Turville: My Lords., the provision to which this amendment relates, new Section 57A of the Employment Rights Act 1996, will be incorporated into a part of that Act which includes a number of different provisions for time off for various reasons. The amendment is not necessary; indeed, it could cause some confusion. I shall explain.
In the case of some of those provisions—provision for time off for ante-natal care is an example—the section providing for the right is immediately followed by another section providing for the time off to be paid. In the case of others—for example, the section providing for time off for public duties—there is no following section providing for remuneration. New Section 57A will not be followed by a remuneration provision. The clear result will accordingly be that an employer is under no obligation to pay the employee in respect of the time off provided for.
Were we to make the amendment, it would create confusion about how other provisions for time off were to be interpreted. It would be arguable that, because the word "unpaid" appeared in Section 57A but not Section 50 (which provides for time off for public duties), employees taking time off under Section 50 had to be paid for the time off taken.
Should the noble Baroness, Lady Miller, need any further persuasion on the point, she could consider new Section 57B which will be inserted into the Employment Rights Act 1996 after Section 57A. It provides that an employee may make a complaint to an employment tribunal if his employer has unreasonably refused to permit him to take emergency leave but it does not entitle him to complain that the employer has failed to pay such leave. I hope that that illustration helps to reassure the noble Baroness that the amendment is not necessary.
Baroness Miller of Hendon: My Lords, I thank the Minister for his clear explanation. I would not wish to make the issue more complicated and I am satisfied with the Minister's explanation. I beg leave to withdraw my amendment.
Amendment No. 98A, as an amendment to Amendment No. 98, by leave, withdrawn.
On Question, Amendment No. 98 agreed to.
[Amendments Nos. 99 to 102 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 103 to 110:
Page 73, line 45, leave out ("failed") and insert ("unreasonably refused")
Page 74, leave out lines 15 to 30
Page 74, line 44, leave out ("for domestic incidents") and insert ("under section 57A of that Act (dependants)")
Page 75, line 6, leave out ("for domestic incidents") and insert ("under section 57A of that Act (dependants)")
Page 75, leave out line 14 and insert ("under section 57A of that Act (dependants),".")
Page 75, line 40, leave out ("for domestic incidents") Page 76, line 27, leave out ("for domestic incidents")
Page 77, line 19, leave out ("for domestic incidents") and insert ("under section 57A")
On Question, amendments agreed to.
The Minister of State, Department of Trade and Industry (Lord Simon of Highbury) moved Amendment No. 111:
Page 77, leave out lines 24 to 26.
The noble Lord said: My Lords, the noble Lord, Lord Meston, who is not in his place on the Liberal Democrat Benches—
Lord Razzall: My Lords, he is a judge now.
Lord Simon of Highbury: My Lords, thank you. I need eyes in the back of my head. I wish to thank the noble Lord, Lord Meston, because during Committee stage he tabled an interesting amendment which had been inspired by the decision of the Court of Appeal in the case of Carver v. Saudi Arabian Airlines. In that case, the employee's contract of employment, at the time it was made, required her ordinarily to work in Saudi Arabia. As a result, when she was dismissed she was deprived of the redress she sought through an employment tribunal, even though by that time she had worked in the UK for four years. In turn, the Government have been inspired to take the matter further and bring forward this present group of amendments.
We have been considering the operation of Section 196, which limits the operation of the Employment Rights Act 1996 to employees who ordinarily work in Great Britain. It is a complicated section, the result of several consolidations, some relating to legislation at least a quarter of a century old. After careful consideration, we have concluded that the complexities are unnecessary. International law and the principles of our own domestic law are enough to ensure that our legislation does not apply in inappropriate circumstances. There must be some proper connection with the UK first, and in such cases it is right that UK law should apply.
Other legislation has no need of such restrictions. We believe that now is the time to simplify the provisions in line with our commitment to simplify and improve regulation, which my noble friend the Minister mentioned a moment ago. Furthermore, repealing the section has a number of other significant advantages. It ensures that we are fulfilling our EU obligations, which
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in some circumstances mean that European-derived rights should apply to individuals working abroad who may not currently be covered. It extends employment rights to employees temporarily working in Great Britain and thus implements some of the provisions of the posting of workers directive which otherwise would require further regulations later this year.
It also means that people like Mrs Carver, who had worked for some years in the UK but was nevertheless excluded from claiming under the Employment Rights Act 1996, will be able to rely on the protection of our legislation as should be the case. I do not claim that the amendment will have drastic effects in practice. Very few cases like Mrs Carver's arise, and the additional costs to employers will be minimal. Nevertheless, it takes forward an important principle and modernises and simplifies our legislation.
We are taking care of the special position of seafarers. Special provisions already apply to them under existing Sections 196 and 199. We will ensure that the amendment to Section 199 maintains their current position, if necessary through a technical adjustment at Third Reading.
The new clause grouped with the amendment I have moved, makes a parallel change to the Trade Union and Labour Relations (Consolidation) Act 1992, removing the territorial restrictions in that Act on rights to be consulted about mass redundancies. The other amendment is a purely technical change to powers in the 1992 Act to extend rights to offshore installations. Currently no procedure is specified for making the order. The amendments will provide for negative resolution in line with that in the Employment Rights Act 1996. I hope noble Lords will join me in welcoming this group of amendments. I beg to move.
Lord Razzall: My Lords, I shall try to clarify the interchange that just took place. My noble friend Lord Meston no longer sits on the Liberal Democrat Benches because he has become a judge and has joined the Cross Benches. Having said that, I know that I speak on his behalf in thanking the Minister for making those concessions.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 112:
Page 77, line 41, leave out ("for domestic incidents") and insert ("under section 57A").
On Question, amendment agreed to.
Baroness Young Baroness Young moved Amendment No. 113:
Page 5, line 12, at end insert—
("() This section shall not apply to an employer who shows that to comply with it would conflict with his religious beliefs and conscience.")
The noble Baroness said: My Lords, the amendment and the related Amendment No. 116 are concerned with a matter of conscience. They are not difficult to understand and the issue has been debated in another place. They are tabled at the request of the Plymouth

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Brothers. I should perhaps start by saying that I do not belong to that organisation. However, I understand the sincerity of their religious beliefs.
The Plymouth Brothers have asked me to say how grateful they are for the care and sympathy they received following written and other representations made during the passage of the Bill. They are asking for freedom to practice their religion as they believe appropriate.
The Plymouth Brothers are a small community. They run some 1,200 businesses, mainly small ones, and they employ some 6,500 people—all but 2,000 of whom are members of the organisation. They are generally regarded as very good employers, but they do not believe that it is appropriate for trade unions or employees associations to intervene in industrial relations.
When the Minister in the other place replied to similar amendments, he said that,
"the Government cannot accept that the religious freedom of employers, who are, after all, free to choose whether to employ others and how to arrange their affairs, should take precedence over the rights of individuals to form and join trade unions for the protection of their interests".—[Official Report, Commons, 30/3/99; col. 993.]
This raises an awkward point, to which I drew attention when the Human Rights Bill was going through the House, as to what should be done when the rights of two groups of people clash as each group is entitled to certain rights. That is the situation with which we are confronted. It is appropriate that the rights of those with deeply held religious convictions should be considered.
It is rather disingenuous to say that all employers are free to employ whoever they wish. Of course an employer will not take on someone that he does not regard as appropriate, but one cannot be certain in any business where you may not require to employ someone who has specialist skills but who is not a Plymouth Brother. So I do not think that that argument entirely stands up.
I would be very worried about the final argument the Minister used. He said there was a danger that any religious exemption would be a loophole through which unscrupulous employers would seek to exploit the Bill. If one thing is absolutely clear about the Plymouth Brothers, it is that they lead a highly disciplined and different life front almost everyone else. The idea that anyone, unless he was prepared to lead this kind of life, could just join in simply does not stand up.
It is worth reminding the House that the Plymouth Brothers have important features of their conscientious beliefs. They arise out of an innate belief of what is morally right or morally wrong. It is not based on a whim or a fancy or on personal or political preferences but on what is perceived to be a moral principle. It is a deep conviction, not a shallow or a superficial one. A person holding it would feel that it was his duty to do so. It is durable, being held with a degree of tenacity and consistency over time, and it is held regardless of any question of personal advantage or disadvantage. One has only to look for a short period of time at the
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kind of lives the Plymouth Brothers lead to realise that the idea that other organisations could somehow claim an exemption on this ground simply is not true.
I very much hope that the Government will view the amendment with sympathy. It is a very real point; it is a matter of human rights; and it is a difficult situation. But I do not think that such an amendment could be exploited by other organisations in different circumstances. We have a duty to consider minorities and to make sure that their interests are protected. I hope that the Government will look at the amendment sympathetically. If the wording is not quite right, I shall be more than happy to take the amendment away and reword it. I am speaking on a very real point of conscience and one which I think the House will recognise as being unlike any other situation. One cannot imagine any other employer claiming this exemption unless he had these beliefs. I beg to move.
6.45 p.m.
Baroness Miller of Hendon: My Lords, I support the amendment. I was particularly moved by what my noble friend said about the features of real conscientious belief. I believe that in this society we should be tolerant and make exceptions for the really genuine religious beliefs of our fellow citizens. I am proud when I think how much this country does to welcome people of different ideas, to be tolerant of them and to accept them. I say that as someone who comes from a minority religion and as a grand-daughter of four people who were persecuted in different countries. I find standing at the Dispatch Box in the House of Lords very moving. I believe that our people really are tolerant and do their very best to accommodate the ideals of all the different religions.
The idea that anyone would invent a device to avoid legislation such as this, particularly in following a religion like the Plymouth Brothers, which is a difficult religion to follow, is nonsense. It would be taking avoidance tactics to the extreme for someone to invent a whole new religion just to keep the unions out of his business. The Plymouth Brethren are an established and well respected sect. It may well be that some people consider their views and practices somewhat quirky, but their views are genuinely held. No one could claim to be a Plymouth Brother without following very rigorous requirements, including the banning of radio and television and not being able to join in any associations. Only last week my husband was out to dinner. In the course of conversation the gentleman with whom he was friendly told him that he had just taken over a business in Plymouth. Indeed, it was a business that had been owned by the Plymouth Brethren. My husband's friend told him that he was amazed when he discovered that his whole sales force in the business had cars but had taken the radios out of the cars because the Brethren did not allow them.
It is impossible for the Brethren to deal with the unions in this way, but I cannot imagine that the whole trade union structure would come crashing to the ground if the Government were able to accept the amendment and show some acceptance of the views of the few members—it would not be many—who might be

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involved. My noble friend said that it might be the case that her amendment could be better worded. Perhaps the Government could take the amendment away and look to find some accommodation in order to help people who have a deeply held religious view. I support my noble friend.
Lord McCarthy: My Lords, one sympathises with a great deal of what has been said in support of the amendment, but it does not really fit in with what I know of the fundamental objections of the Plymouth Brethren. Those objections are to external associations. For example, although they do not believe in joining trade unions and would not join trade unions, they do not say that they will dismiss anyone who they find is a member of a trade union. That would be regarded as outside their purview. If one of their employees came up and reasonably requested to be accompanied at a hearing by another employee who is already in their employ, I cannot see why their fundamental objection of being yoked with unbelievers would apply with regard to this part of the clause. The only part of the clause to which they might object is where a trade union official came in from outside and provided that representation. But I believe that they would find no difficulty in applying nine-tenths of Clause 10. I cannot remember—I am sure that the noble Baroness is right—exactly what was said in Committee by the Minister. However, we are not talking about trade unions but about workers who reasonably request to be accompanied at the hearing.
If the noble Baroness's amendment were passed, a person could exempt himself on religious grounds or on grounds of conscience from the effect of Clause 10. An individual worker could reasonably request to be accompanied by a fellow worker and could be told by an employer, "I have a conscientious objection". I do not think that that is right.
Lord Simon of Highbury: My Lords, the two noble Baronesses on the Opposition Benches have made it clear that this is a case which raises the issue of conflict of interest due to religious beliefs. They have both cited the group of the Brethren. I make it clear that I do not comment in any way on anyone's right to be a Brother. I very much endorse the positive remarks made.
However, I wish to talk about the principle. That may not arise solely for the Brothers. There may be other cases where we have to address this principle. The aim of the amendments is to exempt the Brethren from a legal obligation to give their workers the right to be accompanied—the right that we are discussing at great length in Clauses 10 to 14 of the Bill.
The noble Baroness, Lady Young, mentioned—perhaps she will correct me if I am wrong—that 2,000 people employed by the Brethren are not members of the Brethren. If that is the case we are concerned with their status. It may be a minority of the employees whom the Brethren employ but they may wish to join trade unions and call on the unions to assist them if they find themselves in dispute with their employer. The Brethren do not recognise that right.
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The amendments raise the difficult issue of whether workers' rights under law should be curtailed because of their employers' religious beliefs. The Government totally respect people's religious freedoms. But they also respect the right to freedom of association, as my noble friend Lord McCarthy made clear, and the right to form and join trade unions. I am sure that the noble Baroness is aware—I believe that it was mentioned in her argument—that both religious and trade union freedoms are enshrined in the European Convention on Human Rights. In tabling the amendments, I am sure that the noble Baroness is thinking of Article 9 of that convention which provides the right to freedom of thought, conscience and religion.
That article provides the right. It also says that freedom to manifest one's religion or beliefs may be subject to,
"such limitations as are prescribed by law and are necessary in a democratic society … for the protection of the rights and freedoms of others".
Article 11 provides that,
"Everyone has … the right to form and to join trade unions for the protection of his interests".
The Government's view on the issue has already been stated, as the noble Baroness recorded correctly, in another place and was debated in depth. It remains that, although the Article 11 right is subject to a similar qualification about the protection of the rights and freedoms of others, the reality is that the right of individuals, most of whom have no choice but to be employees, to join trade unions would take precedence over the religious freedom of employers who are free to choose whether to employ others and how to arrange their affairs.
The Government are therefore satisfied that the Bill is in conformity with the European Convention for the Protection of Human Rights and Fundamental Freedoms. The Government do not agree that workers should be deprived of their statutory rights to be accompanied at grievance and disciplinary hearings because of the religious beliefs of their employers. Moreover, there must be a danger, however small, that that can be used as a loophole, although I do not want to make that a major argument. We are arguing the point of principle in the human rights convention.
With all respect to the Brethren, we do not accept the amendments. I note that in the 1990 legislation when the right to employment as a member of a trade union was put to both Houses and the Brethren applied for exemption, the previous government did not offer them exemption under that legislation. Purely on the ground of consistency, I hope that the arguments of principle and practice will be accepted. I ask the noble Baroness to withdraw the amendment.
Baroness Young: My Lords, I find that a disappointing reply. The Minister has explained the arguments put forward in another place more sympathetically and more clearly than was done in another place. He is saying that the rights of the trade unionists must override the rights of religious freedom.
Lord Simon of Highbury: My Lords, my statement was that the rights of the individual to make a choice

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about association with a union override the rights of an employer to hold a religious belief and determine individual rights of others in employment.
Baroness Young: My Lords, I accept entirely that that is what the Minister said. It is a debatable point on two rights: which, one is superior to the other. The fact that it was raised in earlier legislation may or may not be right. I am not one who has always felt that everything the Conservative government did was right. Unlike some people, I think for myself on a number of occasions. It is a serious point about human rights. It is not a matter to laugh about. People who hold these beliefs are entitled to them; and in this Bill and in the 1990 legislation they are being discriminated against. In effect, that is what is being said.
I am glad that the Minister did not suggest that this issue is a major loophole. I do not think that that is true. My noble friend Lady Miller explained clearly the restrictive lives that these people lead. The idea that many people will lead similar lives and want to find a way through the law is most unlikely. I am glad that that argument has been dropped.
It is a sad day when the Government cannot accept the amendment. That we have reached this stage says something sad about society. I shall withdraw the amendment, but I shall consider carefully whether I shall return with some newly drafted amendment at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 114:
Page 5, line 20, leave out ("an official of a trade union") and insert ("employed by a trade union of which he is an official")
The noble Lord said: My Lords, in moving the amendment, I speak also to Amendments Nos. 115 and 117. All these amendments serve to clarify important terms used in Clauses 10 to 14. Amendments Nos. 114 and 115 deal with the accompanying companion, while Amendment No. 117 deals with the hearing. I shall speak to them together.
Amendments Nos. 114 and 115 concern the list of persons who may be an accompanying person. Noble Lords will be aware that this subject has been much discussed in another place and, more recently, during consideration by this House of Clauses 10 to 13 at the second day in Committee.
I recall that the debate centred on an amendment tabled by the noble Baroness, Lady Miller. It sought to minimise the scope for people who were not fellow workers to act as an accompanying person. The Government do not believe that the right should be confined to fellow 'workers only. This would cast the right too narrowly and it would exclude some of the most appropriate and effective individuals—experienced trade unionists—from performing a standard function of a trade union.
I think noble Lords from all sides of the House would not disagree with me on that point. Indeed, during the debate on 16th June, the noble Lords, Lord Gladwin of Clee and Lord Tebbit, both made helpful remarks about
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the wealth of expertise and experience that full-time and lay officials can bring to bear during grievance and disciplinary proceedings. However, the Government are mindful of the concerns of those who believe that allowing unqualified or inexperienced outsiders to participate in internal procedures might be unhelpful or even disruptive.
As a consequence, we have revisited the list of people who may be an accompanying person with a view to ensuring that only those who are suitably qualified for the task will be entitled to act as the accompanying person. We consider that the right for a fellow worker to act as a companion should remain as it is. Of course, in many cases the fellow worker will also be the local union representative. Fellow workers are qualified to perform this function on the basis of their intimate knowledge of the employer and local employment practices.
Our concern in these amendments is with the outsiders who can attend hearings. To that end, the first of these amendments has the effect of stating that officials who are employees of a union are suitable outsiders who can act as an accompanying person. This category includes the majority of full-time union officials. These people are extremely experienced in a variety of representative roles, and there can be no question about their competence to act as an accompanying person.
The second amendment, Amendment No. 115, limits the lay officials—that is, officials not employed by the union—who may act as an accompanying person. It does this by placing a qualifying condition on lay officials that they may act as an accompanying person only if certified in writing by their union as competent to carry out the accompanying function. As I have said, this does not affect the right of a worker to have a fellow worker who is a lay official as his companion because that is allowed under subsection (2)(c). Fellow workers are a separate category of persons who may be companions.
The amendment should provide an important measure of quality assurance to both employers and workers, shielding both parties from the incompetent or inexperienced. Workers and employers can of course jointly agree to the involvement of an outside lay official who does not possess the necessary certification. However, they are not required to do so. I should add that it is not the Government's intention to place a burden on trade unions by insisting that their lay officials undertake any formal accreditation by a third party. That would be expensive and bureaucratic. A trade union will simply need to certify in writing that its officials who are to perform this kind of work are competent so to do.
It is up to the unions to decide how they operate this accreditation process. Unions have a strong interest in ensuring that they field suitable lay representatives: otherwise, full-time officials might have to be called in to sort out difficult or botched cases. Unions stand to lose members and the confidence of employers if their service is seen to be second rate. Most trade unions already provide training for their lay representatives,

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often via the educational services of the TUC. I would imagine that unions will not consider issuing a certificate to new lay officials at least until they have completed a basic shop steward's course or have been in post for a certain length of time. For the purposes of clarity, the Advisory, Conciliation and Arbitration Service code on the new right could well include guidance to unions on this issue. The ACAS council membership comprises some eminent trade unionists and it is well placed to advise on the matter.
These are sensible amendments that will benefit all parties to grievance and disciplinary hearings. Individuals will have the assurance that their accompanying companion is competent and employers can rest assured that their procedures will not be thwarted by inexperience or incompetence.
I turn now to Amendment No. 117. During our debates on the right to be accompanied in grievance and disciplinary hearings, we have had discussions about the definition of a hearing to which this right should apply. I am thinking in particular of observations made by my noble friend Lord Monkswell at Second Reading and of the debate on Amendment No. 266 tabled by the noble Lords, Lord Meston and Lord Razzall, during the second day of Committee on 16th June.
Noble Lords will recall that the Government rejected that amendment on the grounds that it was too widely drawn and would cast doubt on the provisions of Clauses 10 to 14. The Government have reflected on these questions and we have looked particularly at Clause 13 to see whether the definition of a hearing to which the right should apply can be improved.
It is the Government's clear intention that the right should apply where a disciplinary or grievance hearing addresses a serious issue. However, as currently drafted, subsection (4) implies that hearings about serious issues could take place at which the right would not apply because the hearings do not form part of any pre-existing procedure. If allowed to stand, the present wording might enable employers to argue that they did not operate a procedure, even though they held hearings to deal with serious grievance and disciplinary matters. It might complicate matters for workers, who would be required to demonstrate that, de facto, a procedure existed through custom and practice. It might also present problems for tribunals in deciding whether a procedure in fact exists. This issue would be particularly difficult to decide when the employer had never, or seldom, held hearings in the past. We believe that this weakness in the Bill should be addressed. This amendment contains an improved form of words that makes it clear that the right to be accompanied applies to all hearings where serious issues are at stake.
I wish to make two things clear. First, this amendment in no way affects the provision that the right applies to hearings about serious disciplinary and grievance matters only. It certainly does: we are not providing a loophole through which minor or trivial issues can slip into the right. Secondly, it remains the case that the Bill does not require employers to establish disciplinary procedures where they do not have them; nor are they required to hold a hearing where a procedure exists. Of course, as I have made clear in earlier debates on this subject, a failure by
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an employer to deal with a grievance or a disciplinary issue in an appropriate procedural manner can count against him or her should tribunal proceedings ever result.
Noble Lords will be aware that the Government are aiming to encourage employers to establish procedures as a matter of good employment practice. This message will be underlined in the new code of practice setting out in more detail how the right to be accompanied will apply in practice and taking account of my argument to the House. I am pleased to inform noble Lords that ACAS has agreed to draw up the code. In so doing, it will, in effect, be revising and extending the existing code. ACAS has an excellent reputation for providing sound advice and practical guidance on industrial relations, and I am sure that noble Lords will join me in welcoming that news.
The amendments will ensure that, whenever an employer holds a hearing about a serious matter, the right to be accompanied—and accompanied appropriately—will apply. In so doing, it will make clear the obligations and entitlements of both employers and workers and it will remove uncertainty as to the law's intended effect. I beg to move.
Lord Razzall: My Lords, I support the amendment entirely, but I wonder whether the Minister will consider a point raised by the Royal College of Nursing that falls slightly outside the amendment as drafted.
I understand that the Royal College of Nursing has a practice of using unpaid stewards to represent members of the college at disciplinary hearings. Those stewards are neither employed by the same organisation as the member nor paid officials of the trade union. Will the Minister confirm that Amendment No. 115 will enable the Royal College of Nursing to continue that practice?
Baroness Miller of Hendon: My Lords, we certainly welcome Amendments Nos. 114, 115 and 117. Amendments Nos. 114 and 115 narrow the definition of a trade union official—which, as the Minister may recall, concerned us somewhat. We were, and perhaps still are, slightly worried that there will be a new profession of trade union advocates travelling from one firm to another and intervening in problems that would be better settled internally.
We believed that the person who accompanies a worker to a hearing should either be a colleague employed by the same business, or an official of the union to which the worker belongs or which has negotiation rights with the employer. What we believe should not be allowed, because it is undesirable, is that the shop steward from union A, working for company B, can accompany worker C who is employed by company D. If that is as confusing as it sounds, the ideal solution would be to have only three parties; the employer, the worker and the union official from the union recognised by the company, unless there is no such union.
We are also concerned that the accompanying union official should at least have some qualifications or experience in disciplinary and grievance proceedings because we believe that it is all too easy for an inexperienced advocate, trying to make a name for himself, to exacerbate an already delicate situation. This

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is one of those instances in which I might have liked to table a constructive amendment, but I believe that it is far too late for probing amendments.
I welcome the Minister's comments on the problem that 'we believe exists and should like to learn whether he is prepared to consider further modifications either here or in the other place in order to ensure that the Bill promotes good employment relations rather than to risk unnecessary strife by outsiders.
I thank the Minister for tabling Amendment No. 117. Once again, the Government have taken on board concerns that were expressed at an earlier stage by Members on both sides of the House and by his noble friends. The new layout and few alterations in wording have made all the difference. The clause now gives a more positive definition of disciplinary proceedings, and breaking it up into separate lettered paragraphs has made it much easier to understand and has provided greater clarity.
Lord Simon of Highbury: My Lords, I thank both noble Lords opposite for their generous support for the rewording of the clauses. It is clear that we gained from the good debate we had on the issue in Committee.
In answering the two questions which were raised, I can confirm to the noble Lord, Lord Razzall, that unpaid stewards could accompany provided that they are authorised by the union. It would be a question of authorisation. Secondly, I say to the noble Baroness, Lady Miller, that the Government do not have in mind revisiting the terms of clauses, but, if she still has doubts, many of the points she raised will have light thrown upon them by the redrafting of the ACAS code and the advice that is given under those circumstances about how good relationships between management and union, which we know are the preponderance of the relationships in this country, can be furthered everywhere within our industrial community. We should prefer to operate through the code, so perhaps that is the most promising answer at this stage.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 115:
Page 5, line 21, at end insert—
("() an official of a trade union (within that meaning) who has been certified in writing by the union as competent to act for the purposes of this section,")
On Question, amendment agreed to.
Clause 11 [Complaint to employment tribunal]:
[Amendment No. 116 not moved.]
Clause 13 [Interpretation]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 117:
Page 8, line 1, leave out subsection (4) and insert—
("(4) For the purposes of section 10 a disciplinary hearing is a hearing which could result in—

(a) the administration of a formal warning to a worker by his employer,

(b) the taking of some other action in respect of a worker by his employer, or

(c) the confirmation of a warning issued or some other action taken.

1100
(4A) For the purposes of section 10 a grievance hearing is a hearing which concerns the performance of a duty by an employer in relation to a worker.")
On Question, amendment agreed to.
Lord Monson Lord Monson moved Amendment No. 118:
Page 8, line 11, leave out ("the United Kingdom") and insert ("Great Britain")
The noble Lord said: My Lords, in moving Amendment No. 118, I shall speak also to Amendment No. 119. During Committee, I suggested that the term "the United Kingdom" in Clause 13 was erroneous, since with one tiny exception the Bill does not apply to Northern Ireland. Moreover, the term "Great Britain" is used everywhere else in the Bill.
I sensed from the reply of the noble Lord, Lord McIntosh, that he had some sympathy with my point. Accordingly, I tabled Amendments Nos. 118 and 119 to rectify what appears to be a drafting anomaly. I beg to move.
Lord Simon of Highbury: My Lords, I am grateful to the noble Lord, Lord Monson. He has raised a detailed but extremely useful point; namely, that an inconsistency exists between the definitions used to define "working day" in Schedule 1 and Clause 13. As noble Lords will recall, during the debate on 17th June the noble Lord, Lord Monson, suggested that references to United Kingdom in Clause 13(5) had been caused by a drafting error. The noble Lord was correct; he has a very sharp eye and I am glad to see that that can exist with bifocal help.
The noble Lord will also know that I have since confirmed in writing to the noble Lord that the inconsistency does not reverse the overall effect of Clause 37, which provides that the Bill does not apply to Northern Ireland. However, I recognise his concern that allowing such an inconsistency to stand might create unnecessary confusion on that matter. It certainly might inconvenience employers, workers and their unions when they come to apply the law in practice.
The Government are mindful of the need to reduce any scope for confusion. I am grateful to the noble Lord for spotting the error and I am happy to accept his amendments correcting it.
Lord Monson: My Lords, I am grateful to the Minister for his reply and his kind words.
On Question, amendment agreed to.
Lord Monson Lord Monson moved Amendment No. 119:
Page 8, line 16, leave out ("the United Kingdom") and insert ("Great Britain")
On Question, amendment agreed to.
7.15 p.m.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 120:
After Clause 14, insert the following new clause—

NATIONAL SECURITY EMPLOYEES
(". Sections 10 to 13 shall not apply in relation to a person employed for the purposes of—

(a) the Security Service,

(b) the Secret Intelligence Service, or

(c) the Government Communications Headquarters.")

The noble Lord said: My Lords, Amendment No. 120 concerns the sensitive issue of national security. As currently drafted, Clause 13(1) applies the right to be accompanied in grievance and disciplinary hearings to persons in Crown employment. It therefore applies to employment within the Security Service, Secret Intelligence Service and the Government Communications Headquarters.
The staff of the security and intelligence agencies have a unique status. The sensitive nature of their employment sets them apart from other workers and we have therefore given further consideration as to their inclusion in this part of the Bill.
On reflection, we consider that it could create genuine difficulties for the security and intelligence agencies if outsider union representatives were allowed as of right to attend hearings at which highly confidential information might be disclosed. I should stress that the problem is not that such people are trade unionists; rather, the difficulty is that they are outside the security and intelligence agencies. The same difficulty would arise if the accompanying person came from any other walk of life. It is with this in mind that the Government believe that the security and intelligence agencies' staff should be excluded from the provisions on the right to be accompanied.
I am aware that the House might be concerned that employment relations in the agencies might suffer if the right to be accompanied did not apply to these staff. Obviously, staff in the agencies—just like any other workers—need to be treated fairly if they are to give of their best. I can assure the House on this point. The security and intelligence services already have good grievance and disciplinary procedures in place, which are tailored to meet their own needs, providing fair treatment yet minimising security risks. For example, the procedures allow for individuals to be accompanied at hearings, usually by fellow workers. At GCHQ, the accompanying person can be a trade union representative.
As noble Lords will be aware, there are amendments yet to be debated which, if accepted, will bring into the Bill provisions which will open up access to employment tribunals for staff engaged in security and intelligence work. That is a major step. In that context the new entitlements are relevant because they will also help to ensure that internal procedures are applied faithfully in practice. Any failure to do so may count against the agencies at the tribunals which I have just mentioned.
This amendment deals sensibly with the special case of the security and intelligence agencies in the knowledge that the agencies already operate sound procedures and have well-understood employment practices. I beg to move.
Lord McCarthy: My Lords, perhaps I can ask the Government to be flexible in this matter. They have changed the Bill so many times that they cannot say that they cannot change it any more. There has yet to be Third Reading.
It is true, as the noble Lord, Lord Simon, says, that there is no reason why we should insist on a Clause 10 that enables someone in the Security Service or the Secret Intelligence Service or the Government Communications Headquarters to bring in people from outside. We are talking about fellow workers. Most of Clause 10 talks about the choice from among fellow workers. Surely, it would be possible to amend the Bill so that that is clear and so that those three categories of people were able to take their advisers and spokespersons from inside the organisation but not from outside. That could be done at Third Reading.
Lord Watson of Invergowrie: My Lords, I want to speak in a similar vein. Coming from a background as a Civil Service trade union general secretary, I know relatively little of the arrangements that apply to the Security Service or to the Secret Intelligence Service. As a trade union official in the Civil Service arena, I know much about the Government Communications Headquarters. A couple of years ago, when the Government were elected, I was personally involved in the return of trade union representation to GCHQ.
One of the issues that we have campaigned on is the unfair treatment of staff at GCHQ, as we saw it, with regard to industrial tribunals. I know that efforts have been made to provide alternatives, but I am not sure whether the Government are correct in regard to GCHQ. Have the Government had consultations with the PCS, the union involved in representing the staff at GCHQ, and what has been the out-turn of such negotiations? If there have not been any consultations or discussions with the PCS, why not? Perhaps they will be prepared to do so before we get to the final position on this legislation.
Lord Norton of Louth: My Lords, I sympathise with the arguments set out by the noble Lord, Lord Simon, as to why people employed in those categories need special consideration. Before accepting that the clause stand part, I want to ask the Minister whether the Government have considered whether there are any private sector employment areas where similar issues of security apply. I am thinking of data centres in private companies where sensitive information regarding people's financial, medical and legal records is kept and other such secure environments. There may be other situations to which the same considerations may apply. Does the Minister know whether they need to be accommodated in a similar way?
Baroness Park of Monmouth: My Lords, I had not intended to speak on this amendment. I did not know

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that this matter was to be raised. As a former member of one of the services involved, I want to express my appreciation to the Government for the fact that they have accepted and recognised that there are problems in those areas. I am not speaking of GCHQ, about which I know nothing, but I feel considerable relief and appreciation of the fact that the Government have accepted and put forward this idea.
Lord Simon of Highbury: My Lords, I shall say two things to the noble Lord, Lord McCarthy. Clearly, there is nothing on the face of the Bill to prevent employees being accompanied by a companion of their choice from within their own employment. I made that point clear when stating the case. Indeed, it is part of existing procedures that they do so. Putting such a matter on the face of the Bill is unnecessary because the right is already covered.
Of course, GCHQ workers currently can be accompanied by a union official. If I am correct—I believe I am—in some cases hearings have been held where employees have been accompanied by an outside trade union official. I believe that both cases put forward by colleagues from my own Benches are cases that are merely trying to put on the face of the Bill matters that are already covered by current practice: by a member of the same organisation accompanying the employee or, in the case of GCHQ, a union official.
I am not aware that consultations have taken place with PCS, but I am aware that GCHQ rules allow assistance by friend, colleague, welfare officer or Civil Service trade union official in oral representations, subject to the proviso that the adviser is a member of GCHQ. The argument will be considered, but I do not believe that adding anything to the face of the Bill will add to the extremely good procedures that I am aware that both services currently have in place.
On the question of the private sector's interest in having separate arrangements, we have consulted widely on the terms of the Bill to date. I am sure that those cases have been adequately put. Of course, where there are security issues, the nature of ACAS advice is helpful in outlining the way in which matters can be taken forward. However, I do not believe that the face of the Bill is the place for differentiating private sector experiences. For that reason, we do not intend to change the way in which the procedures are currently written.
On Question, amendment agreed to.
Schedule 5 [Unfair Dismissal of Striking Workers]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 121:
Page 79, line 3, leave out ("eight") and insert ("four")
The noble Baroness said: My Lords, this is a short amendment that I hope I can explain with equal brevity.
Along with other industrial nations, we ascribe to the right to strike rather than the more civilised, less disruptive and less aggressive process of compulsory binding arbitration, a topic that I may bring to your Lordships' attention when time permits on another occasion.
An employee exercising his rights to impose that sanction on his employer should not be subject to dismissal unless he commits some tortuous or criminal act or unless a time arises when it is reasonable for his employment to be terminated. The difference between us and the Government is how long that time should be. We believe that eight weeks is grossly excessive. Very few industrial disputes last for as long or longer than that. That period can only be regarded as a potential restriction on the rights of the employer to protect his business after a reasonable time.
The present provisions make any dismissal within the eight-week period unfair, whatever the behaviour of the union or the employee. Let us suppose that as a bargaining tactic the union declines to negotiate or merely goes through the motions of negotiating for the greater part of the eight week period; that it refuses to enter conciliation, to take the dispute to an independent arbitrator or to honour an established agreement to resolve disputes. It may do any or all of those things in order to weaken the employer and to reduce its powers to oppose a claim.
No doubt the Government have chosen this long period remembering the outcome of the dispute in which the print unions were involved with Rupert Murdoch. The purpose of this Bill, according to the Government, is to be even-handed between employer and employee, which it most certainly is not in this case. They also say it is to foster good industrial relations, which I believe the unbalanced provision in this clause most certainly will not do. On the contrary, it will only serve to encourage obstinacy and a continuance of bad relations after the dispute is resolved, as inevitably it will be.
Bearing in mind that a strike comes at the end of a period of negotiations or discussions, four weeks should be long enough to concentrate the minds of the employees and their representatives on finally reaching a settlement without inflicting further loss and damage to their employers and possibly their co-workers who may not be involved in the dispute. I beg to move.
Lord McIntosh of Haringey: My Lords, this issue was discussed at some length in the House of Commons and an amendment was tabled by the noble Baroness at Committee stage, although she decided not to move it. We do indeed intend to deter employers from dismissing workers soon after industrial action has begun. Precipitate dismissals are undesirable, they often complicate industrial disputes, and they make them more difficult to resolve. Dismissal should be seen as one of the last resorts, not one of the first. That is, of course, the approach taken by the large majority of businesses. Relatively few employers ever consider sacking workers who take industrial action. Only poor employers, or those involved in prolonged and intractable disputes, seriously consider this option.
Our proposals mean that it will be automatically unfair to dismiss workers for the first eight weeks of action. We want to set a period which allows a reasonable time for the parties to resolve their dispute and therefore avoid the possibility of dismissals. In our judgment—and I admit it is a judgment—eight weeks

1105
gives enough time for detailed and serious discussions to take place, possibly involving third parties such as ACAS.
The noble Baroness's amendment to reduce the period to four weeks is too short a time span for sensible negotiations always to take place. Obviously, we hope that disputes can be settled within a shorter period. Most of them are. Whenever that happens the eight weeks does not apply. Indeed, our proposals actually encourage early settlements by encouraging negotiation. However, it is not our intention to put pressure on the parties to reach agreement within a period when it is just not possible to do so. Some disputes are complicated, they take time and skilful negotiation to resolve. We have therefore framed the protection to ensure that the parties have sufficient time to work through their problems.
The noble Baroness argued that this was an incentive for unions to delay real negotiations towards the end of an eight week period. I cannot accept that. When a dispute is taking place the people on strike are not getting any money, or at least they are not getting any money from the employers. There is always an incentive for unions to resolve a dispute as early as they possibly can, and for that an eight week period is reasonable. It provides enough opportunity to hold constructive negotiations and explore all avenues to resolve the dispute. I hope the noble Baroness will not press this amendment.
Baroness Miller of Hendon: My Lords, the noble Lord the Minister said that it was a question of judgment and he is quite right. He thinks eight weeks is correct. I think that four weeks is correct. He mentioned that he thought four weeks was precipitate. I do not think it is precipitate. We have become so friendly over this Bill that it would have been nice to make a suggestion of splitting the difference and going for six weeks, but, listening to the noble Lord the Minister, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 122:
Page 80, line 13, leave out ("(7A)") and insert ("(7C)")
The noble Lord said: My Lords, I should like to move Amendment No. 122 and speak also to Amendments Nos. 123 and 124. Their purpose is to ensure that the new circumstances, in which selection for redundancy amounts to unfair dismissal added to Section 105 of the Employment Rights Act 1996 by paragraph 5(3) of Schedule 5, is inserted at the correct point in the section, and that the cross-references in that section to that new circumstance, and another circumstance added by the Tax Credits Act 1999, are right.
In drafting paragraph 5 of Schedule 5 we have unintentionally made incorrect consequential amendments to Section 105 of the 1996 Act regarding the right not to be dismissed by means of selective redundancy. Section 105 has to be changed in the light of the new right introduced under Schedule 5 to ensure that an employee cannot be fairly dismissed by selective
1106
redundancy if he is either selected for participating in official industrial action during the first eight weeks of industrial action, or if he is selected for redundancy after the eight week period and the employer has failed to take reasonable steps to resolve the dispute.
To take account of the new provisions, paragraph 5 inserts a new subsection 7A into Section 105 of the 1996 Act. However, since its enactment in 1996, subsections 7A and 7B have already been inserted into the Act (via the National Minimum Wage Act 1998 and the Tax Credits Act 1999 respectively.)
These amendments simply ensure that all the references are right. I beg to move.
Baroness Miller of Hendon: My Lords, I have to say to the noble Lord the Minister that I am very grateful for his explanation of what these amendments are about. I have to say that because they were tabled so late I did not have an opportunity to read them properly and I could only understand about 7A changing to 7C and 7A being got rid of and putting in 7B, and then, further on, we had to take out 7A and insert 7C. Because the explanation came late I did not understand it and I think that the note I have is not really joined to the amendment. As it concerns Schedule 5 perhaps the noble Lord the Minister could answer a question—either by way of a note from his advisers or, alternatively, by writing to me.
I understand that the Bill provides for a worker who is dismissed during that protected period of eight weeks, which we were discussing a moment ago, to be able to claim compensation for unfair dismissal. Will the noble Lord the Minister say what factors will determine the amount of compensation payable? More specifically, will there be scope for the award to be reduced if the employer can demonstrate that the union failed to behave reasonably during this period? If the noble Lord the Minister is able to help me with that I shall be most grateful. Otherwise I shall feel that I have merely stood up out of turn.
Lord McIntosh of Haringey: My Lords, what these amendments do is to add selection for redundancy as a possible new circumstance which amounts to unfair dismissal. That is all it is doing. It does not change any of the unfair dismissal procedures.
On the issue of what will affect the compensation payments, that clearly is a complicated issue outside the scope of these amendments and I will therefore have to write, in detail if necessary, to the noble Lady. In brief, the answer is that the award will be based on the tribunal's assessment of the individual's circumstances and behaviour. A tribunal may take into account any misconduct which led to his dismissal but that does not include his participation in industrial action. If the individual's conduct has contributed to a selection for dismissal—for example, behaviour on the picket line—then it can be taken into account by the tribunal in determining both the case and the award.
I hope that that may be enough and that I may be spared the duty of writing to the noble Baroness. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 123 and 124:
Page 80, line 14, leave out ("(7)") and insert ("(7B) (inserted by Schedule 3 to the Tax Credits Act 1999)")
Page 80, line 15, leave out ("(7A)") and insert ("(7C)")
The noble Lord said: My Lords, these amendments have been spoken to. I beg to move en bloc.
On Question, amendments agreed to.
Lord Razzall Lord Razzall moved Amendment No. 125:
After Clause 16, insert the following new clause—
DISCRIMINATION IN THE WORK-PLACE ON GROUNDS OF SEXUAL ORIENTATION
(" .—(1) The Secretary of State may make regulations for the purpose of prohibiting, in relation to any employment matter, discrimination by an employer against another person on grounds of that person's sexual orientation.
(2) In subsection (1) ''employment matter" includes—

(a) the offer or refusal of employment;

(b) the termination of employment;

(c) terms and conditions of employment;

(d) the provision of training or skills development opportunities;

(e) promotion and career progression.

(3) Regulations under subsection (1) may—

(a) specify the types of action, or failure to take action, which are to be taken to constitute discrimination for the purpose of this section;

(b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals and on the Employment Appeal Tribunal in relation to cases brought under this section;

(c) provide for penalties to be imposed or, as the case may be, compensation to be awarded in respect of offences committed under paragraph (a) above.

(4) No regulations shall be made under this section unless a draft has been laid before, and approved by resolution of, each House of Parliament.")
The noble Lord said: My Lords, 'with the leave of the House, in moving Amendment No. 125 it might be convenient if I spoke also to Amendment No. 126. Amendment No. 125 is the same amendment that was moved from these Benches in Committee which goes to the requirement to insert a clause in the Bill dealing with the issue of discrimination against employees or potential employees on the grounds of their sexual orientation. We have brought this back today but we do not propose to re-debate the issues that were discussed extensively in Committee.
It is certainly common ground between the Liberal Democrat Benches and the Government Benches that this is a serious problem for employees and potential employees, so I do not really need to rehearse on Report the nature of the problem. There have been some extremely tragic and difficult cases in recent years. The Government accept that there is a problem. I believe that the noble Baroness, Lady Blackstone, indicated last year, when the Bill on sexual orientation and discrimination ran out of time, that this was an area where the Government were proposing to legislate.
Having listened carefully to what the Minister said in Committee, and having read the Government's remarks in Hansard—, I wonder when we are going to have action in relation to the problem. The Government have
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emphasised that the Bill is the last of their cornerstone pieces of legislation affecting rights of employment in this country and that the regulations being made under it and under previous legislation set the framework under which employer and employee rights will be established. But we are now half-way through the Parliament leading to the next general election. If no action is taken in the area by way of this Bill, my fear is that we will have no legislation this side of the next general election to deal with the issue.
The response of the Minister in Committee was that it was a very complicated issue and that the Government were having extensive consultations upon it. Secondly, they had received the report from the Equal Opportunities Commission which said that they must legislate. Thirdly, the attitude was, "It is not my ministry which is responsible. Therefore, don't ask me to do anything about it because, after all, I am a DTI Minister not a Department for Education Minister." I do not regard that as a satisfactory response on such an important point. I return to the fundamental tenet of my argument; namely, that the Government are saying that this is the final piece of their fundamental legislation on employment relations. Surely it is in this Bill that the framework of protection ought to be inserted to enable the necessary consultation to be undertaken, the necessary regulations to be drafted, and the necessary preparations to be made before those regulations are implemented. It must be 'within the framework of this Bill, not a future Bill, which, I fear, we will not get this side of the next general election.
Amendment No. 126 deals with potential discrimination with regard to age. This is a totally different issue to the one covered by Amendment No. 125. Again, I do not want to tease the Minister as we did in Committee with the fact that the Government have changed their mind on this issue since they were in opposition. At that time they made it very clear that, once elected, a Labour Government would bring in legislation to outlaw discrimination on the grounds of age. The then Tory Government took the view that this was best dealt with by a voluntary code. Although I do not know what the current Tory position is., the Government's position has now changed since their days in opposition. They now believe that this would be best dealt with by way of a voluntary code.
Having read carefully what the Minister said in Committee, the major thrust of my argument is that the arguments that were used against our amendments were put forward on the assumption that, on the face of it, such amendments sought to deal with the very tricky issues which would have to be dealt with in the consultation process. However, that is far from the case. Both amendments simply provide a legislative framework within which the Government can bring in the necessary regulations to outlaw the practices which, after very necessary and extensive consultation, would be determined as appropriate.
If we look at what is happening on the ground with the minimum wage Act and the working-time directive, we find that the Government are conducting a never-ending consultation process with employers and business in order to establish amendments to the

1109
regulations and modify them. I envisage that that process will happen with regard to the age discrimination regulations which are covered under the Bill. For those reasons, I ask the Government to think again on both of these important issues. I beg to move.
7.45 p.m.
Baroness Turner of Camden: My Lords, I was, unfortunately, unable to be present in Committee when these issues were debated. I had attached my name to the amendments, but I was suffering from flu and was unable to be here. I hope that the Government will be prepared to consider these amendments seriously. I am sure that noble Lords will recall that I have on several occasions sought to introduce legislation on the subject of sexual orientation by way of Private Members' Bills. On two occasions, the Bills I introduced into the House gained the support of your Lordships but failed to make any progress in the other place.
Therefore, this Bill provides us with an opportunity to deal with discrimination in the workplace, which we know does take place. Indeed, the Government acknowledge that it is a problem. It cannot be too often stated that there is no protection in law against discrimination on the grounds of sexual orientation; no protection in law against being treated less favourably; no protection against being paid less; no protection against harassment, no protection against discrimination in promotion and appointment; and no protection, really, against dismissal. I do not want to go into the details here because, as the noble Lord, Razzall, said, they were fully dealt with in Committee. However, there are employers who have equal opportunities policies which cover sexual orientation. In my view, it is necessary to try to change bigoted attitudes, which we know exist. Amending the legal framework is one of the ways in which this can be done. Therefore, I support the amendment.
I also support the amendment as far as concerns age discrimination. I was involved in the work done by the Carnegie Third Age Committee some years ago. Its report was debated in the House at that time. The research undertaken by the committee revealed very considerable discrimination on grounds of age throughout UK industry and commerce. This was even more marked during the years in which mass redundancies, especially in manufacturing industry, became common. Many people who took early retirement did so rather unwillingly, knowing that it was unlikely that they would secure other employment despite the fact that they were some years off retirement age. Some firms later regretted their willingness to dispense with experienced and loyal staff. I therefore welcome the amendment. Having had the opportunity to consider the matter since Committee, I hope that my noble friend the Minister will be able to offer us something in response to the issues which have been raised.
Earl Russell: My Lords, I, too, express my support for these amendments. There is a certain illogicality about discrimination. When women were first admitted
1110
to jobs in the Northern Irish Civil Service, they were allowed to have three children but were not allowed to be married. They were not allowed to be married because, in those days, it was thought that women who worked were not married. However, because the service wanted to be non-discriminatory, it was decided to extend to women all the other qualifications for male employees. This included the limitation to three children, which was understood within certain quarters of the unionist community to be an anti-Catholic provision. That was a really curious mish-mash of logic.
When you get discrimination surviving in what is in part an anti-discriminatory culture, you get these illogicalities multiplied. It is surely better to accept the basic simple point that the only ground on which you select candidates for a job is fitness to do that job, and the only ground on which you keep people who are doing a job is the competence with which they do it. If one accepts that, one ought to accept that discrimination on grounds of sexual orientation is wrong, contrary to the interests of the person and contrary to the interests of the business, just like discrimination on grounds of race, gender or any other grounds.
I do not assert that there is any objective right to work, but I think that there is a right to contest for work, to compete for it on equal terms. When the penalties for not actively seeking work are so severe and when the penalties for voluntary unemployment are so severe, it is vitally important that that should be the case. This is particularly relevant to homosexuals, because a large proportion of those who lose work because of their sexual orientation are forced out by a process of harassment of the sort which women working for the first time in a previously all-male industry have come to know painfully well.
In these cases, if you cannot convince a tribunal that you were forced out, you are found guilty of voluntary unemployment and you lose benefit for anything up to 26 weeks. That is a severe penalty for something which is in no way your fault. I think it important that the law should not encourage that. I also think that this is an issue of public policy and that thinking of it from the point of view of the Department of Social Security accepting this amendment would be in line with government policy because the basic thrust of government policy is to remove obstacles to people seeking work. They want more people to be able to seek work and therefore fewer to be dependent on the budget of the Department of Social Security. That, I think, with small qualifications, is an objective we would all share. However, people who are discriminated against for their orientation cannot effectively seek work, so the Government are pickling a rod for their own back. Even the Treasury might see an interest in accepting this amendment.
I also support Amendment No. 126. There are arguments of some importance for that arising from the welfare reform Bill which we shall consider next week. That Bill contains clauses which compel recently bereaved widows to start actively seeking work after six months and which deny incapacity benefit to people who have not paid any contributions within the previous two years. That is an increase in the compulsion to seek

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work. In return for that people deserve an adequate and equal chance of getting work. Unless Amendment No. 126 is accepted, they will not have it. If the Minister does not accept this tonight, we may return to it on the welfare reform Bill.
Lord Sainsbury of Turville: My Lords, as I explained in Committee, the Government are sympathetic to the concerns raised by the noble Lord, Lord Razzall, in this amendment and in Amendment No. 126 which I shall also address.
As I said in Committee we stated in our manifesto,
"We will seek to end unjustifiable discrimination wherever it exists".
However, I think we are talking about means here. I hope I explained in Committee that given the number of different issues involved here I do not think that this Bill is the appropriate place to deal with them. If we do not deal with this matter properly we are in danger of making the situation worse rather than better.
The Government have repeatedly said that they deplore discrimination on the basis of sexual orientation and are appalled by the treatment which some gay men and lesbians experience. We recognise that there is a gap in the protection we offer to those discriminated against on grounds of sexual orientation, in comparison to measures to prohibit discrimination on grounds of race and disability, for example.
However, for the reasons that I gave in Committee, this Bill is not the appropriate vehicle for this large topic. Not only would it be a radical step away from the intentions set out in the Fairness at Work White Paper on which we consulted, but it would rightly require extensive consultations in its own right. I do not accept that this can be dealt with simply by regulations. As I shall mention later, I believe that there are some deficiencies in the way this amendment is drafted which would not permit it to be covered in regulations. We must get the basic principles right and cover all the issues. I see no reason why there should not be another piece of legislation. This is a bedrock piece of legislation that does not preclude other pieces of legislation being introduced.
However, this does not mean that the Government are ignoring this important issue. As I said in Committee, the Equal Opportunities Commission formally presented to the Government last November its recommendations following a review of sex equality legislation. These included a proposal that there should be specific legal protection for lesbians and gay men. The Government—particularly the Department for Education and Employment, which lead, on this policy—are carefully considering this and the EOC's other recommendations. However, there were 62 recommendations and therefore the matter requires careful consideration.
We are also considering the Better Regulation Task Force's suggestion of a non-statutory code of practice. The task force is generally in favour of making current legislation work better. It also points out the importance of evaluating a code of practice before taking any further steps. There is also a further angle which has to be considered properly; namely, the wider European
1112
developments. I am, of course, referring to Article 13 in the Amsterdam Treaty. Now that this new treaty is in force, the Commission will be able to bring forward recommendations which the Government will consider positively and constructively.
This Government well appreciate that this is an important and sensitive issue. We need to make sure that whatever action is taken, the results will not be counter-productive to gay men and lesbians. We will want to be sure that in removing injustice we are doing so thoughtfully and in full knowledge of the impact of any legislation, and that would require full consultation with many relevant parties such as industry, the Forces and the Churches. In Committee we discussed the different angles to this matter. If we do not approach them properly, I believe that will be counter-productive.
For that reason I regret that the Government cannot support this proposed new clause. Although it is not clear whether a legislative measure would be the appropriate way to proceed, I hope that those proposing this new clause are reassured of our commitment to act in this area. Our differences are over means rather than the objectives. I trust that this amendment will be withdrawn.
I turn to the amendment promoting age diversity and tackling age discrimination in employment. This is a key part of the Government's strategy of building a country where everyone, whether young or old, can play their full part. The question the Government have asked, and continue to ask, is: which is the most effective way to achieve this goal? It would have been easy to legislate, as the noble Lord, Lord Razzall, has proposed. But the use of legislation—again I am afraid that I repeat what was said in Committee—has not proved to be the best way forward in this complex area.
As noble Lords are aware, my honourable friend the Minister for Employment carried out a year-long consultation on this issue. The result of this consultation was the publication of a non-statutory code of practice on 14th June this year. The Government developed this code with some key social partners, including the TUC, CBI, the Employers Forum on Age, Age Concern, the Institute of Personnel and Development, the Federation of Recruitment and Employment Services and the Institute of Management. This code has been widely welcomed. Those groups which in the past have lobbied for legislation in this area have praised the code. The Better Regulation Task Force has also endorsed the Government's approach.
I hope that noble Lords will forgive me if I do not repeat all that I said in Committee. Suffice to say that the code's effectiveness will be fully evaluated by February 2001. The results of that will help inform future plans for legislation in this area, including the approach the Government will take to proposals for EU directives or regulations under Article 13 of the new Treaty of Amsterdam.
This Government are far from inactive in this area. We share the commitment of noble Lords to action against unjustified age discrimination in the work-place. Where we differ is over the means. We do not believe the time is right for a legislative measure such as that

1113
which has been proposed. We have just produced the code and the essential thing now is to evaluate what progress we make on that. I am sure that the House would agree with me that we should see how well the code works before considering whether regulations are necessary. I ask the noble Lord to withdraw his amendment.
Earl Russell: My Lords, before the Minister sits down, I thank him for a very careful reply. In order to avoid wasting his or his colleague's time, perhaps he can give us one more piece of information. If this is not the right place to press for Amendment No. 125, where is?
Lord Sainsbury of Turville: My Lords, I hoped that I had made it clear that the Government were considering this issue. We shall come forward with proposals, and that would be the time to join with us in pressing this issue forward.
8 p.m.
Lord Razzall: My Lords, I thank the Minister for his response. Obviously I am disappointed that the spirit of co-operation which has been created over the Bill has not extended to meeting the points that I and my noble friends have made. Having listened to the answer given by the Minister, the Government are on stronger ground on Amendment No. 126 than they are on Amendment No. 125. In both Amendments Nos. 125 and 126 I have no doubt about the Government's commitment. In Amendment No. 126 they have followed the commitment with action. I am worried that with Amendment No. 125 their commitment has not been followed with action and, as I indicated earlier, I fear that we are a long way off action. In withdrawing the two amendments tonight, I give notice that we may wish to return to them, certainly to Amendment No. 125, at Third Reading.
Amendment, by leave, withdrawn.
[Amendment No. 126 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 127:
After Clause 20, insert the following new clause—
NATIONAL MINIMUM WAGE: COMMUNITIES
(". The following shall be inserted after section 44 of the National Minimum Wage Act 1998 (exclusions: voluntary workers)—
"Religious and other communities: resident workers.
44A.—(1) A residential member of a community to which this section applies does not qualify for the national minimum wage in respect of employment by the community.
(2) Subject to subsection (3), this section applies to a community if—

(a) it is a charity or is established by a charity,

(b) a purpose of the community is to practise or advance a belief of a religious or similar nature, and

(c) all or some of its members live together for that purpose.

(3) This section does not apply to a community which—

(a) is an independent school, or

(b) provides a course of further or higher education.

(4) The residential members of a community are those who live together as mentioned in subsection (2)(c).
(5) In this section—

(a) "charity" has the same meaning as in section 44, and

(b) "independent school" has the same meaning as in section 463 of the Education Act 1996 (in England and Wales), section 135 of the Education (Scotland) Act 1980 (in Scotland) and Article 2 of the Education and Libraries (Northern Ireland) Order 1986 (in Northern Ireland).

(6) In this section "course of further or higher education" means—

(a) in England and Wales, a course of a description referred to in Schedule 6 to the Education Reform Act 1988 or Schedule 2 to the Further and Higher Education Act 1992;

(b) in Scotland, a course or programme of a description mentioned in or falling within section 6(1) or 38 of the Further and Higher Education (Scotland) Act 1992;

(c) in Northern Ireland, a course of a description referred to in Schedule I to the Further Education (Northern Ireland) Order 1997 or a course providing further education within the meaning of Article 3 of that Order." ").

The noble Lord said: My Lords, I beg to move Amendment No. 127. I bring forward the amendment in the expectation that we will all agree that this is a common-sense measure.
The Low Pay Commission has recently recommended that the position of the intentional communities under the national minimum wage should be clarified. Members of those communities are not "workers" in the way the term is normally understood. Resident members of intentional communities share living accommodation and tasks with the purpose of advancing a common religious or spiritual aim. They are often required to engage in work on behalf of the community in which they live. Their basic requirements such as meals and accommodation are met by the community. In many instances, residential members also receive small sums of money. Some communities treat their residential members as workers, issuing contracts of employment. But these workers are working because they share common aims and aspirations. They reside together as one community, sharing in the common tasks. Their work is driven by considerations quite apart from the desire for financial reward.
These individuals would probably not be regarded as "workers" at all but for the arrangements that many of the communities have put in place—for example, by issuing contracts of employment. Indeed, I should make clear that the traditional religious communities in monasteries and the like are in any case completely outside the legislation already as there are no contractual obligations and therefore no workers' rights. But certain

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other communities run the risk of being caught up in the new law if we do not make this amendment. That is because in many cases we understand that their arrangements could be construed as creating contractual obligations.
Let me be absolutely clear: this exemption is about members of genuine intentional communities. Workers who are not "members" will be protected by the National Minimum Wage Act and will benefit from the protection in that Act against detriment and unfair dismissal. We do not wish any establishments which are not ''intentional" in this sense to be included; that is why we specify that those working for residential educational bodies will not be exempted.
These are genuinely unique circumstances and only some 1,000 individuals will be covered by the exclusion. The Low Pay Commission recommended that the exemption would need to be,
"clearly and tightly refined … we would not want to inadvertently create loopholes".
We have done this. I therefore commend this amendment to the House.
The Lord Bishop of Ely: My Lords, I wish to express the gratitude of these Benches for the inclusion of Amendment No. 127. The Minister has spoken about the intentional communities, which are, in a way, a modern off-shoot of the monasteries which are very much a feature of our culture. They are places where men and women practise an extremely modest way of life as a vocation in order to benefit their fellow human beings. They include the L'Arche communities, where remarkable work is done with people suffering from acute learning difficulties; the Pilsdon community; and the Emmaus UK community, which supports homeless people and which began in my own diocese. The acceptance of the case for making an exception of these communities is very generous and gracious. I wish to express my gratitude for that.
Part of the amendment makes explicit the fact that the exemption will not be applicable to communities providing courses of further or higher education. As I am about to become principal of one such community and thus to leave both my diocese and your Lordships' House, I wish to place on record my deep gratitude for the kindnesses which have been extended to me here. I count it an extraordinary privilege to have participated, on a very modest scale, in your Lordships' proceedings. I shall continue in my new place of work to offer my prayers for the success of your Lordships' deliberations.
Lord Brookman: My Lords, I, too, welcome the statement from the Minister. People have expressed concern to me about the possibility of loopholes in the legislation. Their main concern is that people who work for or are employed by charities and communities will not be eligible for the minimum wage. There should be no loopholes through which one can drive a tractor. We should be specific about what we are saying: that people who work for or are employed by charities and communities will be: eligible for the minimum wage.
Baroness Miller of Hendon: My Lords, I, too, welcome the amendment by which the Government seek
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to alter the National Minimum Wage Act 1998. We think it is right that there should be this exemption and we on this side of the House are pleased about it.
Perhaps I may remind your Lordships that when the National Minimum Wage Bill was before the House I proposed an amendment then that would have given the Secretary of State power by Statutory Instrument to give total or partial exemption in certain areas. I will not repeat what was said, other than to say that the last area was occupations or categories of persons. It would have been a power that the Secretary of State need not have used, but we would not have had to come back with further legislation.
Your Lordships were kind enough to pass my amendment—the only one that was passed—with a generous majority of 58. We won with the very welcome support of the Liberal Democrat Benches at that time. However, when the Bill was returned to the other House, the Minister of State drew himself to his full height and denounced the amendment as one which wrecked the whole Bill. It certainly did not.
Perhaps I may make one point. The beneficiaries of this amendment are persons who reside in a religious community; they do so voluntary. I have heard what the noble Lord who has just spoken said. I hope he will forgive me, but I cannot remember his name.
Lord Brookman: Brookman, my Lords.
Baroness Miller of Hendon: My Lords, he: will never forgive me. He is always so nice to me outside the Chamber. I am terribly sorry that I did not remember his name.
There is another category of persons whose situation is not voluntary. I refer to people who by reason of one incapacity or another live in some other sort of community or need to attend day centres and who for therapeutic reasons do some sort of work for which they receive token pay. I am not talking about people who are just employed but about those who are able to do only a little in certain circumstances. They, and those who look after them, are no less deserving of exemption from this legislation than a group of devout monks who work to support themselves and share the income. It is right that such people have been exempted; I should have liked the provision to extend further.
However, we cannot re-fight old battles. Any exemption from the legislation has our support and we welcome the amendment. The only other point I wish to make is that what is sauce for the goose should be sauce for the gander. That is why I have tabled Amendment No. 127A, which is grouped with this one.
As I explained, we believe that this group is no less deserving and certainly needs to be exempted. It comprises those whose employment chances are impaired because of one of various misfortunes: they have fallen into a category through absolute disability or sickness or as the result of an accident. They include, for example, people with learning difficulties living in sheltered accommodation who are able to engage in craftwork which is then sold by the establishment's gift shop for the benefit of the residents. They include

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people with some physical disability which prevents them from working full-time or at the same rate as a colleague on the next bench. They include those whose medical advisers believe that working will help improve their physical or mental condition but who find it difficult to find regular employment.
In 1998, the Joseph Rowntree Foundation, an organisation whose opinions are generally approved of by the Government, said in a report:
"Disabled people may have been affected by a much wider and systematic shift in employment patterns. As the supply of labour expanded faster than demand, employers have been much more selective in their choice of staff. Marginal workers, such as disabled people, have been excluded … Preliminary evidence shows that very few have found jobs".
In its evidence to the Low Pay commission for the purposes of the National Minimum Wage Act, the National Institute for the Blind stated (at page 39):
"Blind and partially sighted persons face bleak prospects in employment … Significantly blind and partially sighted people are concentrated in lower paying semi-skilled and routine manual occupations. Many … are therefore caught in poverty even when they are working".
In the debate on this very amendment just a little over a year ago, I said that,
"It is simplistic to suggest that the solution to their problems will be to increase their pay entitlement. On the contrary, we believe that such action would increase their problems. It would make employers even less inclined to employ disabled people so long as they can employ able-bodied persons to do the same work for the same pay, possibly at a higher rate of productivity".—[Official Report, 22/6/98; col. 63.]
I go further than that. It would be positively disruptive if two people working side by side, one being substantially less productive and subject to frequent absences for medical reasons, were to be paid at the same rate.
The Government saw two main objections to my amendment. First, they said that it would be used as a device by unscrupulous employers to exploit vulnerable people. That is not right. There are many publicly minded employers who employ disabled workers, at some inconvenience and expense to themselves, and regard it as a duty, rather than doing it for some ulterior and unworthy motive.
As recently as 20th June, the Sunday Telegraph made a powerful case for exemption for the disabled. The article is far too long for me to quote in full, but I urge the Minister to read it, as I feel certain that he will reject my amendment. If he were to read that article over the weekend, he might speak differently about my amendment at Third Reading. To paraphrase the article heavily, it states that as many as 10,000 disabled and mentally handicapped people could lose their jobs due to the rigid application of the national minimum wage rules.
There is much more that I could say in speaking to the amendment. But it is late. I believe that I have made my point. I urge all three Ministers on the Front Bench opposite to obtain a copy of that Sunday Telegraph. It would make excellent weekend reading. At this stage, I should be happy to hear the Minister's response.
8.15 p.m.
Lord Sainsbury of Turville: My Lords, first, in relation to Amendment No. 127, I assure the House and noble Lords who have spoken that we see this as a specific and tightly constrained provision to deal with a small group of 1,000 individuals in particular circumstances. That is extremely important.
We are delighted to be able to deal with this problem in a common-sense way and meet the needs of the right reverend Prelate the Bishop of Ely. Perhaps I may say on behalf of the whole House that we shall miss his wise advice and we wish him well in retirement.
Turning to Amendment No. 127A, perhaps I may promptly prove that we do see this as a tightly constrained amendment. I shall of course steel myself and read the article in the Sunday Telegraph. However, I had hoped that one extremely small, fully justified and tightly drawn amendment for intentional communities would not lead to a call from the Opposition for a larger amendment and one which rests on extremely shaky grounds.
I am aware that the amendment was also tabled and debated when the National Minimum Wage Bill was in this House. The Government's position has not changed since then. Neither has the advice of the Low Pay Commission, nor indeed the views of the majority of organisations representing disabled workers and their employers.
The position is this. There can be no question of discriminating on grounds of ability when it comes to the right to the national minimum wage. I believe that it is morally wrong to differentiate in this way. I do not imply, of course, that the noble Baroness seeks to discriminate unfairly. I know that the amendment was tabled with the best of intentions. But a statutory minimum wage is there to protect the weakest and most vulnerable from exploitation. And those who have a disability are often (though by no means always) in this category as workers.
Perhaps noble Lords will allow me to quote from the Association for Supported Employment, which is widely regarded as one of the foremost groups representing disabled workers. The association stated in a letter about this issue to Margaret Hodge at the DfEE that its members,
"unreservedly support the national minimum wage",
and that,
"people with a disability should not be made exempt from the national minimum wage".
There is no escaping the complexity of the issue as it relates to benefits and employment programmes. Of course this department is working closely with Ministers at the DfEE, the DSS and the Department of Health to examine the impact of the minimum wage law on the overall package of work-related and disability benefits for people in this position.
Indeed, the House may wish to be aware that the Department of Social Security has already increased the earnings limit for those carrying out therapeutic work to take into account their increased earnings as a result of

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the national minimum wage so that they will not suffer any loss in the hours that they can work while claiming incapacity benefit.
But so far as changes to the National Minimum Wage Act are concerned, I stress again that exemptions are not the answer. I leave the last word with the Low Pay Commission. Having taken evidence from numerous organisations in this area, the commission concluded that,
"there are compelling arguments for treating disabled workers in the same way as other workers".
I hope that the noble Baroness will not press her amendment.
On Question, amendment agreed to.
[Amendment No. 127A not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 128:
After Clause 24, insert the following new clause—
ACAS: REPORTS
(" .—(1) In section 253(1) of the Trade Union and Labour Relations (Consolidation)) Act 1992 (ACAS: annual report) for "calendar year" there shall be substituted "financial year".
(2) In section 265(1) of that Act (ACAS: report about CAC) for "calendar year" there shall be substituted "financial year".")
The noble Lord said: My Lords, perhaps I may speak to government Amendments Nos. 128 and 133 together. Both amendments deal with our proposals to amend the period of the reporting cycles for ACAS, the CAC and the certification officer respectively.
Under the Trade Union and Labour Relations (Consolidation) Act 1992, the annual reports of ACAS, the CAC and the Certification Officer are required to be produced on a calendar year basis; however, the accounts of the three bodies are required to be produced on a financial year basis. The ACAS council has indicated that it would be helpful to it to produce its annual report on a financial basis. This would enable it to follow current Treasury guidance. The quinquennial review currently being undertaken on ACAS has also indicated that this would be a sensible measure to adopt. The Government fully agree with ACAS and the quinquennial review that this is therefore a sensible policy step to take. It is fully consistent with open government requirements. In changing the period of the ACAS reporting cycle, it is of course eminently sensible to change the reporting cycles of the CAC and the certification officer on a similar basis. I urge noble Lords to accept the amendment. I beg to move.
On Question, amendment agreed to.
Schedule 6 [The Certification Officer]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 129:
Page 82, line 30, at end insert—
("() It shall be lawful for the court or certification officer to declare an application by the same person alleging any similar or related failure described in this section to be vexatious so long as in the individual matter the declaration does not infringe the European Convention on Human Rights."")
The noble Baroness said: My Lords, this amendment is to deal with the problem of a vexatious applicant, colloquially a serial complainer. It is someone who
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launches complaint proceedings on some grounds or other that are dismissed. He then launches another claim on the same or possibly similar grounds that might well have been raised in the first case. "If at first you don't succeed, try, try, try again." That is not a fanciful scenario. In another context I imagine that most employment panels can tell stories of their regular customers.
The High Court has power to debar a vexatious litigant. Now that employment tribunals, the CAC and certification officers are taking on so much more work of a quasi-judicial nature, it is essential that they should have the power to make things difficult for the persistent claimant who persistently fails to justify his claims.
This clause meets some part of the problem by making the remedy available to the certification officer so that he at least can quickly dispose of vexatious claims. There is one necessary qualification. Debarring an application for being vexatious is not to take place if, in the particular circumstances of the case, it would infringe the European Convention on Human Rights. The convention permits debarring steps in appropriate cases. If such procedure is appropriate to the ordinary civil courts, there is no reason why it should not be available to the certification officer. I beg to move.
Lord Simon of Highbury: My Lords, as the noble Baroness made clear, this amendment deals with vexatious litigants, serial complainers. It was, of course, discussed at length during Committee stage when the Government introduced an amendment to enable the certification officer to refuse to hear complaints by individuals who have been declared vexatious by the courts. The purpose was to ensure that, so far as possible, the certification officer is not distracted by unnecessary cases. This is now set out in paragraph 23 of Schedule 6.
The noble Baroness tabled a similar amendment at Committee stage, although she subsequently was kind enough not to move it. Then, as now, there was much common ground between us in terms of our objectives. We both want to see a safeguard inserted to provide some protection for the CO. The difference is that our provisions cover all the CO's complaints jurisdictions whereas this amendment deals with only one of those jurisdictions: complaints about access to a union's accounting records. This does not sit well with the existing law on the treatment of vexatious litigants.
The noble Baroness also seeks to give the CO a power to declare people to be vexatious litigants. We consider this to be a powerful sanction. The CO has a very specialised role which does not include powers to impose penalties on individual union members. It would be inappropriate, in our view, for the CO to be given a wider power to declare individuals vexatious litigants.
The amendment refers to the European Convention on Human Rights. Denying individuals access to the courts or the certification officer is a very serious matter. It clearly raises human rights issues, as the noble Baroness rightly said. We have deliberately framed our proposals to ensure they provide some basic safeguards to vexatious litigants. For example, the certification

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officer will be obliged to consider all applications made by these individuals. He cannot just ignore them. If he feels the vexatious litigant has a proper case, then he can hear it. Likewise, our proposals allow for the vexatious litigant to apply to the courts for his case to be heard, if the certification officer refuses to determine an application.
In view of this explanation, I hope the noble Baroness can withdraw her amendment and instead lend her support to the government provisions in this area, to which I shall speak on the following three amendments.
Baroness Miller of Hendon: My Lords, I am pleased to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendments Nos. 130 to 132:
Page 88, line 30, at end insert—
("(3A) A person may not apply under subsection (1) in relation to a claim if he is entitled to apply under section 80 in relation to the claim.")
Page 91, line 43, leave out ("VII") and insert ("VIIA")
Page 91, line 46, after ("apply") insert ("to a complaint under section 37E(1)(b) or")
The noble Lord said: My Lords, I wish to thank the noble Baroness for easing the passage to government Amendments Nos. 130, 131 and 132 together. They are technical amendments intended to remove inconsistencies in the Bill concerning Schedule 6 and the certification officer.
I begin with Amendments Nos. 130 and 131. As I have already noted, the Government introduced an amendment in Committee to enable the certification officer to refuse to hear complaints by individuals who had been declared vexatious by the courts. In drafting the schedule, only applications made under Section 41 of the Trade Union and Labour Relations (Consolidation) Act 1992 were exempt from the vexatious litigants provisions. After further reflection, another exemption from the provisions has been identified.
Under Section 37E(1)(b) of the 1992 Act, the certification officer, on receiving a complaint from a trade union member regarding the financial affairs of a union, must consider exercising the powers given to him under Sections 37A and 37B of the 1992 Act. These powers enable the certification officer to call upon a trade union to produce records relating to its financial affairs where the CO thinks there is good reason for the union to do so. Likewise, the CO has the authority to appoint inspectors to investigate the financial affairs of trade unions in certain circumstances.
The CO does not actually determine complaints under these sections. His role is regulatory rather than quasi-judicial. As a result of his own inquiries or the findings of the inspectors, he might, in appropriate circumstances, decide to prosecute for offences falling within his competence or refer the matter to other agencies, like the police. In this sense, he is not dealing with union members as litigants but as individuals who have provided him with information in his regulatory
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capacity. It would therefore be inappropriate to include such provisions which deal with the treatment of vexatious litigants.
There is another reason why this section should be excluded from the vexatious litigants part of the schedule. If the CO takes the decision not to exercise the powers given to him under Sections 37A and 37B, he must inform the union member of his decision. However, he is not required to give reasons for refusing to exercise the powers, though he may choose to do so.
Conversely, under the vexatious litigants provisions newly added to the Bill in paragraph 23 of the schedule, the CO will always be required to give reasons for refusing the application.
As the schedule is currently drafted, Section 37E(1)(b) of the 1992 Act falls within the vexatious litigants provisions. Consequently, if a union member were to take a complaint to the CO under Section 37E(1)(b) and if the CO decided not to exercise his power, there would be no requirement on the CO to give reasons for the refusal if the complainant has not been declared vexatious. Perversely, if the complainant has been declared a vexatious litigant, the CO would be required to give reasons for the refusal. This would obviously create an illogical situation for the certification officer and highlights the contradictory nature of the provisions already existing under Section 37E(1)(b) and those contained under paragraph 23 of Schedule 6.
Amendment No. 130 therefore removes complaints referred to the certification officer under Section 37E(1)(b) from the new vexatious litigant provisions.
I turn now to Amendment No. 131 which also relates to the vexatious litigant provisions. As I have already noted, paragraph 23 of Schedule 6 gives the CO the power not to entertain a complaint from a vexatious person. However, in drafting the provisions we inadvertently failed to extend that power to cover complaints heard under the new Part VIIA of the 1992 Act. Paragraph 19 of Schedule 6 adds a new Chapter VIIA of the 1992 Act to establish an entitlement for trade union members to complain to the CO about certain alleged breaches of the rules of their trade unions. It was always intended that breaches of union rules should fall under the vexatious litigant provisions, and Amendment No. 131 remedies this drafting error.
I turn to Amendment No. 132, which is the final Government amendment to Schedule 6. Schedule 6 establishes an entitlement for trade union members to complain to the certification officer about certain alleged breaches of the rules of their unions, including rules relating to the balloting of members on any issue other than industrial action. Under the current law, trade union members must generally apply to the court about such breaches. However, in drafting the schedule we overlooked the point that the certification officer already has jurisdiction to hear cases of breaches of rules in respect of political fund ballots. Section 80 of the Trade Union and Labour Relations

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(Consolidation) Act 1992 gives the certification officer power to hear complaints about breaches of a union's rules relating to a political fund ballot.
What is more, the procedural requirements under Section 80 of the 1992 Act are different from those which are to apply under the new provisions. It would therefore be undesirable if the same complaint could be heard under two separate jurisdictions and under two different procedures. This minor amendment, therefore, ensures that complaints about breaches of a union's political fund ballot rules cart be made to the certification officer only under Section 80 of the 1992 Act and not under the new provisions outlined in Schedule 6. The Section 80 procedures have worked well in practice and have not placed excessive administrative burdens on the certification officer. I urge the House to accept the amendments. I beg to move.
On Question, amendments agreed to.
8.30 p.m.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 133:
Page 92, line 20, at end insert—
("Annual report by Certification Officer
. In section 258(1) (Certification Officer: annual report) for "calendar year" there shall be substituted "financial year".")
On Question, amendment agreed to.
Clause 27 [Partnerships at work]:
[Amendments Nos. 134 to 137 not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 138:
After Clause 28, insert the following new clause—
EMPLOYMENT RIGHTS: EMPLOYMENT OUTSIDE GREAT BRITAIN
(" .—(1) In section 285(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (employment outside Great Britain) for "Chapter 11 (procedure for handing redundancies)" there shall be substituted "sections 193 and:94 (duty to notify Secretary of State of certain redundancies)".
(2) After section 287(3) of that Act (offshore employment) there shall be inserted—
"(3A) An Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.".
(3) Section 196 of the Employment Rights Act 1996 (employment outside Great Britain) shall cease to have effect; and in section 5(1) for "sections 196 and" there shall be substituted "section".
(4) After section 199(6) of that Act (mariners) there shall be inserted—
"(7) The provisions mentioned in subsection (8) do not apply to employment on board a ship registered in the United Kingdom if—

(a) the ship is registered at a port outside Great Britain,

(b) under his contract of employment the person employed works wholly outside Great Britain, or

(c) the person employed is not ordinarily resident in Great Britain.

(8) The provisions are—

(a) sections 8 to 10,

(b) Parts II, III and V,

(c) Part VI, apart from sections 58 to 60,

(d) Parts VII and VIII,

(e) sections 92 and 93, and

(f) Part X.".").

On Question, amendment agreed to.
Schedule 7 [Employment Agencies]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 139:
Page 92, line 35, at beginning insert ("subject to subsections (1B) to (1E) below,")
The noble Baroness said: My Lords, in moving Amendment No. 139 I should like to speak also to Amendment No. 140. I crave the indulgence of the House in this matter. My notes on these amendments are somewhat lengthy, but I feel so strongly about this matter that I cannot omit any part of them. I shall speak rather quickly so that I do not take up too much of your Lordships' time.
Amendment No. 139 is just a paving amendment to make way for Amendment No. 140 which is the substantive provision. Under the Employment Agencies Act, which has operated perfectly satisfactorily since 1973, the Secretary of State has power to make general regulations. Paragraph 2(2) of Schedule 7 introduces a new regulation which gives the Secretary of State power to restrict or regulate,
"the charging of fees by persons carrying on such [employment) agencies and businesses".
It is no exaggeration to say that on an ordinary interpretation of those words that draconian power would enable the Secretary of State to put employment agencies out of business by making it totally uneconomic for them to trade either by stipulating unreasonably low fees or even prohibiting the charging of any fees at all in certain circumstances. In case it be thought that this is too fanciful an interpretation. I read a shortened extract from paragraph 266 of the Explanatory Notes:
"Examples of matters on which regulations may be made include … restricting the ability of … employment agencies to impose terms on employers which seek to prevent or discourage … them dealing … with workers supplied to them.
Where businesses seek to impose charges in any of these circumstances regulations might limit the size of those charges … or prohibit them altogether".
That is the whole point. The object of the 15 words in this sub-paragraph is hidden among the 15 lines of the Explanatory Notes.
At a meeting with the noble Lord, Lord Simon, last Monday, for which I thank him, he assured me that the Government's objective was not to ban charging for temp to permanent engagements but merely to regulate the fees. But that is not what the clause says, and that is

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not what the Explanatory Notes say it says. At the very least, it seems to me that this may be New Labour taking the first step on the road to price controls.
The Government want to ban employment agencies from conducting simple, straightforward, everyday transactions with employers that have been carried on with their willing clients for years, even decades. That simple transaction goes like this. An agency sends an employer a temporary worker in return for a fee which includes the worker's wages, tax and national insurance that the agency pays, as well as the agency's charge or commission. The most common kind of temp is a secretary or clerical worker. The employer decides that she entirely fits into his business and he invites her to take a permanent job with him, which she accepts.
The agency has a clause in its contract with the employer that in this very common situation the employer will pay the agency the commission that it usually charges for the finding of permanent employees. One may ask: what is wrong with that? I confess that I do not know. There may be all kinds of reasons put forward. One is that somehow it would put the employee at a disadvantage because the employer for whom she had been temping might be inhibited from offering her a job because he would be liable to pay a commission. I believe that that is absolute nonsense. The very fact that this is a regular, indeed daily, type of transaction proves that it does not inhibit workers from finding permanent jobs that way.
Employers who look for permanent workers have to get them from somewhere. If they do not pay a commission to an agency for the promotion of a temp to a permanent employee they will pay it to an agency for finding a total stranger; or else the employer will have to spend time and trouble, and quite a lot of money, advertising and interviewing prospects on their own, including any number of unsuitable people whom the agency would have weeded out in advance. That is one of the services that an agency provides to its clients.
Together with many other employers, I have found excellent permanent employees from among temps who have worked for me, and I have been more than pleased to pay the commission. In effect, temp to permanent arrangements are often trial engagements on both sides. I always asked my temps why they did not take a permanent job rather than face the uncertainty of blank periods and constant changes of employers while temping. The fact is that temps work in that capacity for a variety of reasons. Some like the variety of work that temping gives them; most do not want a permanent job but to work as and when it suits them; others want the flexible hours that such work provides or to use temping as a means of finding a permanent job by trying out potential employers themselves. Far from putting a temporary employee at a disadvantage, it gives them the opportunity to find an employer and a job that suits them. Perhaps it is the workers who do not find jobs via the temporary worker route who are adversely affected.
The other untenable reason proffered by the Government for seeking these powers is that a poor ignorant employer may not realise that by hiring a temp and then converting him or her into a permanent
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employee will cost him a fee. I would have thought that even someone newly arrived from the planet Zorg would realise that you do not get something for nothing, or that you can in effect poach somebody else's employee with impunity and without paying a fee—apart from the fact that this potential liability is invariably spelled out in the agreement with the agency. Failure to read an agreement that one signs is no excuse, but in order to ensure that there is no possible misunderstanding most agencies specifically refer to the condition in a covering letter.
At Committee stage I proposed a very simple amendment that called on the Government not to make any order which interfered with the commercial arrangements between what might be described as consenting adults—the agency and its client—so long as they did not interfere with an employee's rights. The Government rejected it out of hand.
In order to meet the Government's specious and totally flawed argument against my very simple amendment, I now propose a much more elaborate one which takes into account what the Minister told me then. It requires the contract with the employer and the contract with the worker to state clearly that a fee will be charged to the employer, not to the worker, if the worker takes permanent employment with the business for which he or she has worked on a temporary basis. The clarity is achieved by the words being spelt out in prominent characters in the two contracts, being surrounded by a printed box and being initialled by the employer and the worker.
To anticipate a possible objection from the Government, I have also made it quite clear that an employee may not suffer detriment by refusing to acknowledge the potential arrangement, which will not be of any effect in any case if he or she does not convert a temporary job into a permanent one. There is no cause for the provision tucked away in Schedule 7. It is not merely an exercise in nannyism, to protect employees from possible exploitation or to protect unwary employers from a hidden, unexpected liability. The Unfair Terms and Conditions Act would do that. It is not in response to any public outcry about an injustice to either employers or employees. In fact, the Government have at no stage in this legislation, particularly before your Lordships, produced the slightest evidence of any abuse or of any real public demand for it.
The noble Lord, Lord Simon of Highbury, told the Committee:
"Some in the industry admit that they use "temp to perm" fees to stall that process".
With the greatest respect, that is a totally misleading spin on whatever the Government say they have been told.
My noble friend Lord Tebbit, speaking on the same amendment, told the Committee on the basis of his former connection with an employment agency that,
"temporary staff are an asset of the agency".—[Official Report, 16/6/99; cols. 397–98]
What the agencies are doing when they charge a commission when one of their employees whose services they hire out as a temp is taken into permanent

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employment by one of their clients is to prevent blatant poaching by someone who has had that asset—the temp—on trust. It is also to ensure that when employers decide to keep a temp permanently they are compensated for the loss of revenue generated by the temp and the cost of finding a replacement.
Among those who have lobbied me on this subject is the Federation of Recruitment and Employment Services, a trade association representing over 50 per cent of the industry, with 5,500 offices in membership throughout the country. The industry has an annual turnover of a staggering £16 billion. Each week it finds temporary work for about 1 million people. Each year it finds permanent jobs for 450,000 people. Some 16 per cent of the industry's revenue comes from temporary to permanent fees. FRES estimates that about 170,000 of those for whom the agencies find permanent jobs—that is, just over a third—do so via the temp-to-permanent route. That belies the totally unsupported and specious suggestion that it somehow inhibits people from finding jobs or puts temps at some disadvantage. Many employers recruit staff exclusively by this means. Many disadvantaged people find that the temp-to-permanent route offers them the opportunity of a permanent job following rejection by employers on the grounds of age or recent illness and—reprehensibly and illegally—on the grounds of some disability. Recruitment agencies play an important part, not just in placing people in jobs, but in helping difficult candidates to find jobs.
The industry says it is difficult for it to understand the Government's attitude to it, especially on this issue, where everybody—employers and employees alike—is content with the system. I suspect what the problem may be. Although the agencies have not said this, I wonder whether in some of the deep recesses of old Labour—not on the Front Bench, I hasten to add, but perhaps behind—people are waiting to pounce and settle old scores. In 1983 the Labour Party's extreme Left-wing election manifesto—the noble Lord will not be surprised if I repeat it again—said:
"We will take urgent steps to abolish private employment agencies".
"Urgent steps"! What was the reason for having that in the manifesto? Again I quote. It was to:
"ensure that the Manpower Services Commission develops a national job centre network".
That was nationalisation through the back-door, and in that case nationalisation without compensation. I know that the Minister will tell me that that is a great exaggeration, but that is exactly what I think it is. In Committee when I quoted the same words, I invited the noble Lord to assure us that New Labour had forsworn that ambition. Answer came there none then. Maybe tonight some answer will come.
I said in Committee that I was prepared to assume that the Government had simply not understood the destructive nature of these proposals. I again say that if they claim they do not know, then it is not for want of being warned by the: industry and my honourable friends in the other place, even in advance of the draft regulations. The fact is that their proposals will put the
1128
agencies out of business, or at least make their operations unviable, simply because they cannot recruit temporary workers only to lose them through the poaching that the Bill would encourage. The proposals will make it harder for thousands of people, many of them single mothers, to obtain temporary work. 'They will make it harder, if not impossible, for employers and temporary workers alike to find suitable staff and positions by a straightforward system under which employees are in effect working on a trial basis and at the same time can discover, while still being paid, whether they like the work, the employer and, equally important, their potential colleagues.
I repeat, this provision provides for no known need and removes no injustice or abuse. It is in this Bill for no good reason. If it is eventually passed, it will, I believe, also be found to infringe the article in the Treaty of Rome which prohibits any restriction on the free movement of labour, and it is entirely possible that the Government will find themselves dragged off, kicking and screaming, to the European Commission to be told once again that their conduct is illegal.
Noble Lords opposite, including the Ministers, know that I do everything that I can to save them from this fate. I therefore urge the Government to accept the modification to their proposed powers that this modest amendment calls for. I beg to move.
8.45 p.m.
Viscount Thurso: My Lords, I have had the great pleasure of taking part in most stages of the Bill—nearly all the Committee stage and all the Report stage from this Front Bench. Today, I believe, I have uttered only two sentences, so I ask your Lordships' indulgence if I now break my duck and go to three or four.
I have considerable sympathy with the noble Baroness, Lady Miller of Hendon, not because I am a director of a recruitment agency—we do not deal 'with any temporary staff at all; we are concerned purely with what is euphemistically called "executive search"—but because as an employer I have used temporary staff from time to time and some of those staff have become permanent members of our staff. On one occasion without my knowledge—I found out about it afterwards—somebody who had been working for us for some nine months took a permanent position. It was arranged by the person who employed him that he simply left for a week, left the agency and came to us a week later. We thereby rather neatly avoided paying a commission. I am not proud of that, but it is what happened.
I have great sympathy with the noble Baroness, Lady Miller, but I think she has attacked this matter from the wrong angle. I regard the key issue as being one of time. Clearly, if a temporary employee comes to work for a week or a month and then becomes permanent much of what the noble Baroness says is right. But where a temporary employee has worked for six or nine months I do not see why there should be the penalty of an extra commission. If the noble Baroness

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could have framed her amendment on the grounds of time it would have had much more chance of success than the way she has chosen.
Lord Blackwell: My Lords, I cannot add much to the arguments advanced by my noble friend Lady Miller, but when a government bring forward regulations the onus is on them to prove that the regulations are necessary and that they fully understand their implications. From all that has been said, I for one am not convinced that the regulations in this sense are necessary under this Bill.
Lord Simon of Highbury: My Lords, I wish it were as simple as to say that I would meet length with strength.
We had an opportunity in Committee to discuss a broader amendment put down by the noble Baroness, Lady Miller of Hendon, which sought to constrain generally the powers of the Secretary of State to regulate the conduct of employment agencies and business. Amendments Nos. 139 and 140, which she has put down now, cover the same ground, but they speak in particular to the issue of charging fees known as the "temp to perm" in our language.
I do not propose to go over all the ground again and I am sure that your Lordships will be pleased to hear that. Suffice it to say that the draft regulations published by the Department of Trade and Industry in May—to be made under the power which the amendments would qualify—do not seek to cap or limit the size of the fees at all. We are seeking only to ensure that bureaux do not use the fees as a means of deterring employers from taking temporary workers into permanent employment in circumstances where they are not themselves prepared to commit to finding work for the employees.
I would not want the House to take at face value, for example, the rather misleading paid advertising from the group mentioned by the noble Baroness, Lady Miller, which put the case for the agencies, so they thought. It appeared in the form of a news report in Monday's Evening Standard which wrongly claimed that we are seeking to abolish temp-to-perm fees. I make it clear again, for the record, that the Government's proposals will not abolish the fees. The proposals stem from the proposition that it is not right for a price to be put on a temporary worker's head that restricts the range of potential employers he can work for without him getting anything in return. The draft proposals in the consultation document do not cap or limit the size of fees. Bureaux will remain entirely free to protect their legitimate interests by charging temp-to-perm fees, provided that they have committed to provide work for the worker.
We have made it clear that we are open to alternative suggestions to the ones we have put forward in the draft regulations on which we are consulting, provided they meet concerns about the abuse of temp-to-perm fees. We will consider any such proposals carefully, but I am sure that the noble Baroness, Lady Miller, will appreciate that to accept her amendments would pre-empt the result of that consideration, and indeed the
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consultation exercise itself. Were she totally focused on my statement, she would understand why we are not prepared to accept the amendment until we have considered the consultation.
In addition, we have some doubts about the legal effect of the amendment. First, there could be uncertainty about what would be reasonable for charges. Secondly, regulating charges to employment agencies will not in fact cover charges by bureaux acting as employment businesses. Thirdly, no sanction is provided for breach of the provision that would make it unlawful for agencies to refuse to provide services to workers who do not agree with the fees being charged. Those are three technical points. Therefore, we should await the consultation and we should note that the Government are prepared to make the regulations subject to the affirmative resolution procedure. We also do not want to have the provisions on the face of the Bill because they affect a dynamic market place.
Far from spending more time on issues such as whether we are from the planet Zorg, I wish to stay firmly on the ground. Schedule 7, line 35, which is the offensive line in the view of the noble Baroness, Lady Miller, does not state that we wish to cap or affect the fees in limitation terms. If we had, we would have drafted it to read:
"restricting or regulating the level or amount of fees".
The Bill actually says:
"restricting or regulating the charging of fees".
That is a different issue to which I have already spoken. We will consult and, in the meantime and given what I have said, I would ask the noble Baroness, Lady Miller, to withdraw the amendment.
Baroness Miller of Hendon: My Lords, I have to tell the Minister that I did not see the advertisement in the press earlier in the week, so I do not know what it said. I have recently had a briefing from the group. The briefing that I had before, when I felt strongly about the issue, was from Adecco, and the Minister said that it had also briefed him. Given that it is one of the largest employment agencies in the world, certainly in this country, I thought that its view was necessary.
The Minister thought that I was not listening carefully to what he was saying. In fact, I was listening so well that I heard the slight rebuke in his voice. So that he does not think that I do not understand everything that he has said to me, I will read what he has said very carefully in case I missed some wonderful word of wisdom. I heard many words of wisdom from the Minister and I would not want him to think that I did not. I also heard what the noble Viscount, Lord Thurso, said about introducing a time-scale to the amendment.
I reserve the right to return to the subject, but in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 140 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 141:
After Schedule 7, insert the following new schedule—
("NATIONAL SECURITY
1. The following shall be substituted for section 193 of the Employment Rights Act 1996 (national security)—
"National security.
193. Part IVA and section 47B of this Act do not apply in relation to employment for the purposes of—

(a) the Security Service,

(b) the Secret Intelligence Service, or

(c) the Government Communications Headquarters."

2. Section 4(7) of the Employment Tribunals Act 1996 (composition of tribunal: national security) shall cease to have effect.
3. The following shill be substituted for section 10 of that Act (national security, &c.)—
"National security.
10.—(l) If on complaint under—

(a) section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (detriment: trade union membership), or

(b) section 111 of the Employment Rights Act 1996 (unfair dismissal), it is shown that the action complained of was taken for the purpose of safeguarding national security, the employment tribunal shall dismiss the complaint.

(2) Employment tribunal procedure regulations may make provision about the composition of the tribunal (including provision disapplying or modifying section 4) for the purposes of proceedings in relation to which—

(a) a direction is given under subsection (3), or

(b) an order is made under subsection (4).

(3) A direction may be given under this subsection by a Minister of the Crown if—

(a) it relates to particular Crown employment proceedings, and

(b) the Minister considers it expedient in the interests of national security.

(4) An order may be made under this subsection by the President or a Regional Chairman in relation to particular proceedings if he considers it expedient in the interests of national security.
(5) Employment tribunal procedure regulations may make provision enabling a Minister of the Crown, if he considers it expedient in the interests of national security—

(a) to direct a tribunal to sit in private for all or part of particular Crown employment proceedings;

(b) to direct a tribunal to exclude the applicant from all or part of particular Crown employment proceedings;

(c) to direct a tribunal to exclude the applicant's representatives from all or part of particular Crown employment proceedings;

(d) to direct a tribunal to take steps to conceal the identity of a particular witless in particular Crown employment proceedings;

(e) to direct a tribunal to take steps to keep secret all or part of the reasons for its decision in particular Crown employment proceedings.

(6) Employment tribunal procedure regulations may enable a tribunal, if it considers it expedient in the interests of national security, to do anything of a kind which a tribunal can be required to do by direction under subsection (5)(a) to (e).
(7) In relation to cases where a person has been excluded by virtue of subsection (5)(b) or (c) or (6), employment tribunal procedure regulations may make provision—

(a) for the appointment by the Attorney General, or by the Advocate General for Scotland, of a person to represent the interests of the party;

(b) about the publication and registration of reasons for the tribunal's decision.

(8) Proceedings are Crown employment proceedings for the purposes of this section if the employment to which the complaint relates—

(a) is Crown employment, or

(b) is connected with the performance of functions on behalf of the Crown.

(9) The reference in subsection (4) to the President or a Regional Chairman is to a person appointed in accordance with regulations under section 1(1) as—

(a) a Regional Chairman,

(b) President of the Employment Tribunals (England and Wales), or

(c) President of the Employment Tribunals (Scotland).

Confidential information.
10A.—(1) Employment tribunal procedure regulations may enable an employment tribunal to sit in private for the purpose of hearing evidence from any person which in the opinion of the tribunal is likely to consist of—

(a) information which he could not disclose without contravening a prohibition imposed by or by virtue of any enactment,

(b) information which has been communicated to him in confidence or which he has otherwise obtained in consequence of the confidence reposed in him by another person, or

(c) information the disclosure of which would, for reasons other than its effect on negotiations with respect to any of the matters mentioned in section 178(2) of the Trade Union and Labour Relations (Consolidation) Act 1992, cause substantial injury to any undertaking of his or in which he works.

(2) The reference in subsection (1)(c) to any undertaking of a person or in which he works shall be construed—

(a) in relation to a person in Crown employment, as a reference to the national interest,

(b) in relation to a person who is a relevant member of the House of Lords staff, as a reference to the national interest or (if the case so requires) the interests of the House of Lords, and

1133

(c) in relation to a person who is a relevant member of the House of Commons staff, as a reference to the national interest or (if the case so requires) the interests of the House of Commons.

Restriction of publicity in cases involving national security.
10B.—(1) This section applies where a tribunal has been directed under section 10(5) or has determined under section 10(6)—

(a) to take steps to conceal the identity of a particular witness, or

(b) to take steps to keep secret all or part of the reasons for its decision.

(2) It is an offence to publish—

(a) anything likely to lead to the identification of the witness, or

(b) the reasons for the tribunal's decision or the part of its reasons which it is directed or has determined to keep secret.

(3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(4) Where a person is charged with an offence under this section it is a defence to prove that at the time of the alleged offence he was not aware, and neither suspected nor had reason to suspect, that the publication in question was of, or included, the matter in question.
(5) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of—

(a) a director, manager, secretary or other similar officer of the body corporate, or

(b) a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(6) A reference in this section to publication includes a reference to inclusion in a programme included in a programme service, within the meaning of the Broadcasting Act 1990."
4. Section 28(5) of the Employment Tribunals Act 1996 (composition of Appeal Tribunal: national security) shall cease to have effect.
5.—(1) Section 30 of that Act (Appeal Tribunal Procedure rules) shall be amended as follows.
(2) In subsection (2)(d) for "section 10" substitute "section 10A".
(3) After subsection (2) insert—
"(2A) Appeal Tribunal procedure rules may make provision of a kind which may be made by employment tribunal procedure regulations under section 10(2), (5), (6) and (7).
(2B) For the purposes of subsection (2A)—

(a) the reference in section 10(2) to section 4 shall be treated as a reference to section 28, and

(b) the reference in section 10(4) to the President or a Regional Chairman shall be treated as a reference to a judge of the Appeal Tribunal.

(2C) Section 10B shall have effect in relation to a direction to or determination of the Appeal Tribunal as it has effect in relation to a direction to or determination of an employment tribunal."
6. After section 69(2) of the Race Relations Act 1976 (evidence: Minister's certificate as to national security, & there shall be inserted—
"(2A) Subsection (2)(b) shall not have effect for the purposes of proceedings on a complaint under section 54."
7. Paragraph 4(1)(b) of Schedule 3 to the Disability Discrimination Act 1995 (evidence: Minister's certificate as to national security, &c.) shall cease to have effect.")
The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 145 and 148. I put forward this measure which is designed to allow, even in the most sensitive cases, staff of the security and intelligence agencies to present a complaint under employment legislation, including the Race Relations Act 1976 and the Disability Discrimination Act 1995, in as similar a way as possible to other employees.
Since 1996, there has been no general ban preventing access by staff of those agencies to employment tribunals. However, agency staff and other Crown servants may be excluded from certain rights conferred by employment legislation. The Secretary of State has power, for example, to exclude those in Crown employment on national security grounds from some of the rights given under the Employment Rights Act 1996 and to certify, with conclusive effect, that an act giving rise to a complaint of unfair dismissal was done on grounds of national security, with the effect that such an act is not unlawful. Government policy has been to exercise this power on a case-by-case basis, and only when national security considerations cannot be met by existing safeguards.
These issues have been raised in annual reports by the Intelligence Services Commissioner, Lord Justice Stuart Smith, and the statutory Intelligence and Security Committee. The Government are committed to establishing enhanced procedures for agency staff who feel that they have been unfairly dismissed.
The amendment contained in the new schedule introduces a more liberal regime while safeguarding national security interests. It removes the power of Ministers to remove rights under the Employment Rights Act 1996 from those in Crown employment. However, the rights introduced to the 1996 Act by the Public Interest Disclosure Act 1998, relating to whistleblowing, will continue to be excluded. The power contained in Section 10(5) of the Employment Tribunals Act 1996 allowing a Minister to issue conclusive certificates certifying that an act was done on grounds of national security will be repealed, as will the similar conclusive certificate powers contained in the Race Relations Act 1976 and the Disability Discrimination Act 1995.
Staff of the security and intelligence agencies and others in Crown employment will be able to present a complaint to an employment tribunal in the normal way. However, Ministers may direct that Crown employment proceedings be heard by a specially constituted employment tribunal where national security issues are concerned, and accordingly the amendment says that tribunal regulations may provide for such tribunals. We have in mind that senior chairmen and lay members will sit in these circumstances. As I said, Ministers will have this power of direction only in relation to Crown employment but the tribunal president, or a regional

1135
chairman will be able to order that a specially constituted tribunal should sit if they consider it expedient on grounds of national security.
The amendment also allows the tribunal regulations to make provision enabling a Minister of the Crown, in Crown employment cases, to direct a tribunal to use special procedures if he considers it expedient on grounds of national security. Tribunals will also be able to use the special procedures of their own motion on national security grounds. Under this provision, Ministers will be able to direct a tribunal to sit in private and to exclude an applicant and his representatives during all or part of particular proceedings, to conceal the identity of witnesses and to take steps to keep secret the reasons for its decision. It will be an offence to publish anything which is likely to identify such a witness or the reasons which are to be kept secret, and new Section 10B of the Employment Tribunals Act 1996 sets out the penalty for such an offence. Where the applicant or his representative are excluded from proceedings, the tribunal regulations will be able to provide that the Attorney-General, or the Advocate-General for Scotland, will be able to appoint a special advocate to act in the interests of the applicant. The regulations will also be able to provide that, where an applicant or his representative have been excluded, the tribunal will not be able to publish to the applicant any part of the written reasons which contains evidence given during the period of the exclusion. However, the applicant will be made aware that part of the reasons has been removed.
Similar provisions to those relating to employment tribunals so far as composition and special procedures are concerned will apply to the Employment Appeal Tribunal. The new paragraph 10A of the Employment Tribunals Act 1996 relating to confidential information is simply a re-enactment of what is currently Section 10(2)(b) and (3) of that Act. New Part 11 to Schedule 8 makes a number of repeals consequent upon the provisions I have just described.
This amendment significantly improves the right of access of employees of the intelligence and security agencies to employment tribunals and is a progressive measure in line with the Government's commitment to open government. I commend it to the House. I beg to move.
9 p.m.
Lord Brooke of Alverthorpe: My Lords, I spoke earlier on Amendment No. 120, which removed from the face of the Bill protection for people employed by the Security Service, the Secret Intelligence Service and GCHQ. Some of us were unhappy about that but we were comforted by the Minister's statement that further provisions would be tabled later. These amendments will provide for protection in front of industrial tribunals which hitherto has not been available, certainly not for the staff of GCHQ and those in the secret services. In general terms I welcome them. This is a move in the right direction, giving rights to people who hitherto have been denied what ordinary employees elsewhere have had. But the rights are heavily circumscribed by the requirements of national security.
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While I welcome this move in the right direction, I am unhappy to be faced at such short notice with these lengthy amendments. I have an uneasy feeling about them. I hope that the Minister can set my unease to rest. Mention is made in the amendment of Crown employment in general. Mention is made of staff of the House of Lords. Mention is made also of staff of the House of Commons. As far as I am aware, under the previous Act such staff were fully entitled to refer to the tribunal. They did not have similar constraints laid on them as I perceive are now being laid down by the provision.
I may be entirely wrong. If I am, I hope that the Minister will put me right. I will then be able to sleep tonight when I go home. I have an uneasy feeling about this extensive amendment. I suspect that it comes in the main from the security services. They have a good record for presenting amendments late. They are invariably long and they are invariably all embracing from their point of view. I am a little uneasy about some of the later references to the way in which corporate bodies can be prosecuted. There is mention of the Broadcasting Act 1990. There is a whole range of issues here. It seems to smack to some extent of closing up on openness rather than freedom of information, which many of us are after.
I may be entirely wrong. It is a long amendment and I do not fully understand it. I give the amendment a general welcome but I hope that my noble friend can set my mind at rest that there is not an extension to other employees. But if I am right, I hope that there will be some reflection on these extensive amendments before we reach the next stage.
Lord Sainsbury of Turville: My Lords, perhaps I may reassure the House on this point. The new paragraph 10A of the Employment Tribunals Act 1996 relating to confidential information is simply a re-enactment of what is currently Section 10(2)(b) and (3) of that Act. That is the part which refers to the situation of the staff of the House of Commons and the staff of the House of Lords. We have simply repeated that. I would not want to hazard a guess as to why it was put in there in the first place. But it is there, and we are simply repeating it. I can assure my noble friend that the amendment represents a vast opening up of the rights of these staff to have their cases properly considered.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 142:
After Clause 33, insert the following new clause—
TRANSFER OF UNDERTAKINGS
(" .—(1) This section applies where regulations under section 2(2) of the European Communities Act 1972 (general implementation of Treaties) make provision for the purpose of implementing, or for a purpose concerning, a Community obligation of the United Kingdom which relates to the treatment of employees on the transfer of an undertaking or business or part of an undertaking or business.
(2) The Secretary of State may by regulations make the same or similar provision in relation to the treatment of employees in circumstances other than those to which the Community obligation applies (including circumstances in which there is no transfer, or no transfer to which the Community obligation applies).
(3) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
The noble Lord said: My Lords, your Lordships may recall that at the Committee stage the Government sought to introduce a new clause relating to the transfer of undertakings, but ultimately declined to move the amendment as the Delegated Powers and Deregulation Committee had indicated that it wished to have an opportunity for prior consideration. We undertook to return to the matter on Report, and are now doing so. Perhaps I may take this opportunity to offer my sincere thanks to the Delegated Powers and Deregulation Committee for its considered and helpful comments on this matter. I am grateful, too, for the alacrity with which it produced its report. We have of course been very pleased to take on board the points it raised and trust that the revised version of the amendment now before the House will meet with its full approval. I hope it will be helpful to your Lordships if I explain the background to this.
The Transfer of Undertakings (Protection of Employment) Regulations 1981—commonly known as the TUPE regulations—implement the EC Acquired Rights Directive and safeguard employees' rights when the business in which they work changes hands between employers. The Government are committed to revising the regulations, which in their current form are operating less than effectively, leading to much unnecessary dispute and litigation. This will build on our success during the UK presidency last year in securing other member states' agreement to a revision of the directive itself.
Officials in my department are currently working up detailed proposals, in liaison with colleagues elsewhere in Whitehall and in informal discussions with the main employer and employee representative bodies and other outside interests, in line with social partnership principles. Our aim is to seek views on these proposals by way of a formal public consultation document to be published later in the year, accompanied by draft regulations, and to have the new requirements in place by next spring.
We have found a remarkable degree of consensus among the social partners and other interested parties as regards the main issues of substance to be addressed in the revision of the regulations. I pay tribute to the CBI, the TUC and other bodies—including the TUPE Forum, which represents all parties involved in public sector contracting—for the constructive approach they have taken on these issues and for the assistance they have given us in developing our proposals.
As this work has progressed, however, it has become clear to us that some of the changes we may decide to make could not be achieved under the existing powers in Section 2(2) of the European Communities Act 1972. In particular, extending the scope so as to give rights to individuals in situations where they would not have them under the directive could not be done under those
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existing powers. This limits the options available for tackling two major areas of uncertainty in the regulations: their application to contracting-out operations and their application to transfers involving public sector bodies. If we had to rely on the existing powers alone, this could prevent us from putting forward proposals to meet the widespread expectation, shared by employer and employee bodies alike, that the new regulations will apply comprehensively where changes occur in service contracting. Specifically, it could prevent our ensuring that the recontracting or bringing back in-house of a contracted-out service was covered in cases where the conditions in the directive were not met but where there was a wish to provide consistent treatment.
The existing powers would also be insufficient to allow us to apply the regulations to transfers of purely administrative functions between public administrative bodies, leaving it necessary for alternative administrative or legislative arrangements to be made in each case, as, indeed, has to be done at present. The amendment seeks to remove these technical obstacles so that we can be certain that we have sufficient powers to achieve what we are likely to be asked to achieve when we go out to formal public consultation.
I hope that I have succeeded in making clear what are some undoubtedly complex legal points. I commend the amendment to the House.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 143:
After Clause 33, insert the following new clause—
MINIMUM WAGE: INFORMATION
(".—(1) Information obtained by a revenue official in the course of carrying out a function of the Commissioners of Inland Revenue may be—

(a) supplied by the Commissioners of Inland Revenue to the Secretary of State for any purpose relating to the National Minimum Wage Act 1998;

(b) supplied by the Secretary of State with the authority of the Commissioners of Inland Revenue to any person acting under section 13(1)(6) of that Act;

(c) supplied by the Secretary of State with the authority of the Commissioners of Inland Revenue to an officer acting for the purposes of any of the agricultural wages legislation.

(2) In this section—

"revenue official" means an officer of the Commissioners of Inland Revenue appointed under section 4 of the Inland Revenue Regulation Act 1890 (appointment of collectors, officers and other persons), and

"the agricultural wages legislation" has the same meaning as in section 16 of the National Minimum Wage Act 1998 (agricultural wages officers).")

The noble Lord said: My Lords, in moving Amendment No. 143, I shall speak also to Amendments Nos. 149 and 150. Amendment No. 143 will make enforcement of the minimum wage more effective while reducing the bureaucracy for business. As most noble Lords will know, the Inland Revenue has overall responsibility for enforcement of the national minimum wage. At present, if Revenue officers get information

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about someone paying below the national minimum wage while they are carrying out their tax and national insurance duties they cannot pass the information to their national minimum wage colleagues. It is not permitted, even if it might help them to identify employers paying below the national minimum wage.
This Bill offers us the opportunity to tidy up the matter in a way which allows the use of information so that Revenue officers can pass information obtained in respect of tax and national insurance contributions to their national minimum wage colleagues and others appointed under the National Minimum Wage Act where this would help them in their national minimum wage enforcement work. Of course, all other existing strict Revenue safeguards on the confidentiality and disclosure of information remain in place.
We are talking about commonsense arrangements to allow one part of a government department to exchange data with other parts of that department, and with other departments for national minimum wage purposes.
The clause simply allows our national minimum wage officers to access the Revenue's tax and national insurance contributions information to assist them in their national minimum wage enforcement work. It does not set a precedent for ever-widening exchange across government; it is limited and specific. It will mean the vast majority of employers are unlikely to be visited by national minimum wage officers. This is because we will only target those employers who are "high risk." This will be done by the use of a sophisticated risk assessment model. Using tax data will ensure those employers paying above national minimum wage are unlikely to receive a visit. The amendment allows for sensible administrative arrangements to be put in place. For example, the amendment will allow national minimum wage officers to be passed information held on Inland Revenue databases for tax and national insurance purposes when planning their targeted inspections of employers. And when the Revenue begin operating working families' tax credit in the autumn, there is clear scope for unearthing national minimum wage abuses through claims by workers for tax credits.
Employers, including the CBI, have always made clear they want the national minimum wage effectively enforced. The measure will ensure that this is achieved. It will also reduce bureaucracy for business. Noble Lords may be aware of the recent report by the Federation of Small Businesses which complained about the proliferation of different government inspectorates. This amendment is in the interests of good government, in the interests of low paid workers, and in the interests of legitimate businesses. I commend it to the House.
9.15 p.m.
Baroness Miller of Hendon: My Lords, the Minister said that these are sensible proposals that are good for the employees, employers, the collection systems and so on. I could not agree with him more. When the National Minimum Wage Bill came before your Lordships in 1998, we proposed of amendment to the effect that the records kept for the purposes of PAYE should be sufficient for the purposes of the Act. We also urged
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that if the Inland Revenue and the Benefits Agency were to be amalgamated this April they should be the enforcement body for the purposes of the national minimum wage. That amendment was rejected, and I cannot say that I do not approve of it now that it has been reintroduced in this form a year later.
I mentioned to the noble Lord, Lord McIntosh, that I was going to rub the Ministers' noses in it, and the noble Lord said that he expected no less. However, I will not do so at this late hour. I am sure that the Ministers know exactly how I feel. I am glad that they have seen the light at long last because this is a very important matter.
I believe that slipping this amendment into a totally unconnected Bill gives rise to a further important criticism. An ordinary member of the public—who does not have access to specialised text books that have full annotations and are updated throughout the year—will not know that the copy of the Act that he looks up somewhere or other is incomplete because this provision is not where he would expect it to be. That is no way to produce legislation. Therefore, even if I do not rub the noble Lords' noses in anything, it is right that I record a strong protest about this slipshod method of legislating.
On that happy note, I must mention one important reservation of which the noble Lord is already aware and to which he referred in introducing the amendments. We agree that the amendment is necessary in order to break down the Chinese wall between the Inland Revenue and those responsible for carrying out the enforcement functions of the National Minimum Wage Act 1998. However, the Inland Revenue could pass information to the Secretary of State who could then pass that information to anyone he appoints to enforce the Act or to anyone involved with agricultural wages legislation. Secrecy about a taxpayer's affairs is normally regarded as sacrosanct by the Inland Revenue.
I know that there are some exceptions, which are understood and accepted. However, we seek the Minister's assurance that this is an exception—I believe that he has said that. I realise that the Minister cannot tie the hands of Parliament in any way—and I do not ask him to do so. However, I would like the Minister to give your Lordships another unequivocal assurance that this clause will not be treated as a precedent. If the Government are minded to seek similar powers for any other purpose, they must do what they have done in this instance and introduce primary legislation.
Lord Brooke of Alverthorpe: My Lords, I welcome this amendment—and I assure the Minister that there is no sting in the tail of my welcome. He will be pleased to hear that.
The credit for this change does not go entirely to the Opposition. Those of us who have a civil service background pointed out the deficiencies of the changes through the TUC. As we near the end of this Session, it is proper to record that the TUC suggested that there could be a more sensible and cost-effective approach It was proposed that hundreds of tax officials should meet employers and examine pay-as-you-earn and national insurance records, yet they were prevented by the

1141
legislation from passing on information to their other colleagues who were considering the national minimum wage. We urged a change in that area, and I think that the TUC should be congratulated—especially in view of the fact that the Opposition have been congratulating themselves so much this evening.
This is the right thing to do and I trust that it will not set a precedent. It will ensure that the national minimum wage is implemented properly and complied with by employers throughout the country.
Lord Sainsbury of Turville: My Lords, I reiterate the point that I made earlier: this measure does not set a precedent for ever-widening changes across government. It is limited and specific. The noble Baroness made the point previously that records that are used for one purpose should be available to cover other purposes. We have never objected to that proposal; we think it is a very good idea. We thought only that her previous amendment was not necessary in order to achieve that aim.
On that basis, I am happy to say that the noble Baroness has played a part in this process. I assure her that this is a very specific and limited measure. I think that the whole House agrees that it is a sensible way to reduce bureaucracy.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 144:
After Clause 33, insert the following new clause—
DISMISSAL OF SCHOOL STAFF
(".—(1) In paragraph 27(3)(b) of Schedule 16 to the School Standards and Framework Act 1998 (dismissal of staff: representations and appeal) for "for a period of two years or more (within the meaning of the Employment Rights Act 1996)" there shall be substituted ", within the meaning of the Employment Rights Act 1996, for a period at least as long as the period for the time being specified in section 108(1) of that Act (unfair dismissal: qualifying period)".
(2) In paragraph 24(4)(b) of Schedule 17 to the School Standards and Framework Act 1998 (dismissal of staff: representations and appeal) for "for a period of two years or more (within the meaning of the Employment Rights Act 1996)" there shall be substituted ", within the meaning of the Employment Rights Act 1996, for a period at least as long as the period for the time being specified in section 108(1) of that Act (unfair dismissal: qualifying period)".")
The noble Lord said: This technical amendment is needed to ensure that the provisions governing the dismissal of school staff on fixed-term contracts under Schedules 16 and 17 to the School Standards and Framework Act 1998 take account of recent reductions in the qualifying period for unfair dismissal. These provisions are due to commence on 1 September and provide for the proper treatment of staff on fixed-term contracts whose contracts will not be renewed. Under the Acts, school governing bodies will be required to hear representation of appeals before terminating the contracts of staff on fixed-term contracts where they have been employed for two years or more. This two-year period was the qualifying period for unfair dismissal current at the time the Act was passed. But
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the qualifying period in the Employment Rights Act was changed by order on 1st June from two years to one year. This amendment reflects that change.
The Government would always encourage the fair treatment of staff whatever their length of service but consider that statutory rights and proceedings in relation to unfair dismissal should be required only after one year's service.
By referring to the qualifying period that may be specified under the Employment Rights Act rather than an actual length of time, the amendment would ensure that the change on 1st June and any change to be made by a future order is accurately reflected in the dismissal provisions of the School Standards and Framework Act. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 145:
After Clause 33, insert the following new clause—
NATIONAL SECURITY
(". Schedule (National security) shall have effect.")
On Question, amendment agreed to.
Schedule 8 [Repeals]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 146 to 148:
Page 96, column 3, leave out lines 35 to 38
Page 100, line 14, at end insert—
("8A. EMPLOYMENT RIGHTS: EMPLOYMENT OUTSIDE GREAT BRITAIN

Chapter

Short title

Extent of repeal

1996 c. 18.

Employment Rights Act 1996.

Section 196. In section 199(6), the words "Section 196(6) does not apply to an employee, and". In section 201(3)(g), the word "196,", Section 204(2). In section 209(2)(g), the words "196(1) and". In section 209(5), the words ", 196(2), (3) and (5)".")

Page 101, line 22, at end insert—
("11. NATIONAL SECURITY

Chapter

Short title

Extent of repeal

1995 c. 50.

Disability Discrimination Act 1995

Paragraph 4(1)(b) of Schedule 3, and the word "or" immediately before it.

1996 c. 17.

Employment Tribunals Act 1996.

Section 4(7). Section 28(5).

1998 c. 23.

Public Interest Disclosure Act 1998.

Section 11.

On Question, amendment agreed to.
Clause 38 [Extent]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 149 and 150:
Pare 17, line 22, leave out subsection (2)
Page 17, line 30, at end insert—
("() Apart from section (Minimum wage: information) and subject to subsection (1), the preceding sections of this Act shall not extend to Northern Ireland.")
On Question, amendments agreed to.

Ministerial and other Salaries Order 1999
9.21 p.m.
Lord Carter Lord Carter rose to move, That the draft order laid before the House on 29th June be approved.
The noble Lord said: My Lords, on behalf of my noble friend the Leader of the House, wish to draw the attention of the House to the order. The purpose of the draft order before your Lordships is to implement increases in salary for a number of Ministers and certain other office holders in this House.
The increases in question are those recommended by the independent Senior Salaries Review Body in its Report No. 43 in March of this year. The Prime Minister announced the Government's acceptance of these recommendations in a Written Answer in the other place on 31st March, Commons Hansard, WA col. 716.
I should perhaps declare an interest at the outset. As will probably not have escaped your Lordships' notice, one of the salaries to be increased is my own. Hence my enthusiasm for seeking your Lordships' agreement to the order. The procedure is that changes in salary of this kind—by which I mean increases of salary other than the normal annual uprating—are authorised by an Order in Council under the relevant sections of the Ministerial and Other Salaries Act 1975. The Act requires the text of the order to be approved in draft by each House before being submitted to Her Majesty. It is that approval that I am inviting the House to give today.
The changes affect a number of offices and it would perhaps be helpful if I listed them. They are: Ministers of State; Parliamentary Under-Secretaries of State; the Government Chief Whip and the Deputy Chief Whip; the Leader of the Official Opposition and the Opposition Chief Whip. I have every hope that the inclusion of these last two posts will lead to an unusually warm degree of cross-party enthusiasm for the order.
In addition, the SSRB recommended, and the Government accepted, equivalent increases for the Chairman of Committees and the Principal Deputy Chairman of Committees. These salaries do not appear in the order itself, but they will be implemented administratively when the order comes into force. The individual increases are set out in the draft order. In brief, the SSRB recommendation was that the salaries of each of the posts I have mentioned should be increased by £8,500, in addition to the standard annual uprating which other ministerial posts have received. This produces the figures in the order.
These are quite substantial increases. The recommendation reflects the SSRB's finding that, since the 1996 changes to the pay arrangements for Ministers in another place, the salaries of these posts in your Lordships' House has fallen behind to an unreasonable extent.
The proposed one-off increase is, broadly speaking, equivalent to the amount by which the MPs' salary paid to Ministers in the Commons was abated prior to the 1996 changes and so restores that relativity. The arguments, which the Government accept, are set out in detail in Chapter 4 of the SSRB's Report No. 43.
The draft order implements precisely the Senior Salaries Review Body recommendations and I commend it to the House. I beg to move.
Moved, That the draft order laid before the House on 29th June be approved.—(Lord Carter.)
Lord Henley: My Lords, I thank the noble Lord the Government Chief Whip for moving this order. I shall also declare an interest of a similar kind to that declared by the noble Lord.
I can assure the noble Lord the Government Chief Whip that I shall be brief. I was hoping that one of my noble friends would respond to this on the basis that they would not have had an interest in the order in the way that I do. I appreciate that whoever moved the order from the Government Front Bench would have an interest. Therefore, it may be more appropriate that either myself or my noble friend Lord Strathclyde should respond to this.
We welcome the increase, and we welcome it on the part of Ministers, who I know from experience work exceedingly hard. They have been left behind by increases to their colleagues in the Commons. Therefore, it is right that some catching up should take place.
I have one query to put to the noble Lord the Government Chief Whip which is not directly related to this matter, but I hope I can raise it on this occasion. It is a matter that I hope the Government will consider at some point. As the noble Lord is aware, only two on our Benches are salaried in any way. A number of other colleagues on this Front Bench work extremely hard. I have observed the work of my noble friend Lady Miller of Hendon. I refer to the work that she did last night, the night before and probably the night before that in an extraordinary number of Bills. The same is true of a large number of my noble friends who give of their own, acting as representatives of Her Majesty's loyal Opposition.
In regard to the Opposition Benches, I believe that at some point—I am glad to see a nod of agreement from the noble Lord, Lord Graham of Edmonton—a system ought to be instigated to make an appropriate payment—if that is the right word—or some means of helping to assist them in terms of carrying out their functions. We are grateful for the recent increase that I believe has been offered in terms of what is traditionally called Short money, but I have a sneaking suspicion that that

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ought to go further and ought somehow to cover the individuals who help rather than just for the operation of the Front Bench.
I appreciate that the Government Chief Whip will not necessarily wish to respond to those points this evening. I shall be perfectly happy if he does not. I make those points now to put them into his mind so that he can think about them for the future.
Having said that, with a degree of self-interest, I support the order.
Lord Rodgers of Quarry Bank: My Lords, I have no wish to impede or unreasonably delay the order before the House. The noble Lord, Lord Carter, said that there is Cross-Bench enthusiasm for the order, but that enthusiasm does not extend to these Benches, to which the order in large part is irrelevant.
I have two brief comments to make on paragraphs 1 and 2 in the order. I do not like and never have liked the linking of ministerial salaries to Civil Service salaries. That always seemed to me to be putting the cart before the horse. That is because of the lack of nerve of Ministers, including Prime Ministers, in governments over a long period and the feebleness of parliamentarians, who have often lacked the bottle to stand up for what is perfectly reasonable and which could be justified were they all prepared to say so. I recognise that this is now an accepted formula. That does not make it better, but I see no point in disputing it further on this occasion.
My second point on paragraphs 1 and 2 of the order is to endorse something said by the noble Viscount, Lord Cranborne, in the debate on the Ministerial and other Salaries Bill on 16th October 1997. He said:
"Certainly we on this side of the House, with our recent experience of ministerial office, see no reason why Ministers should not be rewarded for what are after all long hours and sometimes, it seems, more kicks than halfpence".
I endorse that view. I think that Ministers ought to be properly paid, and I recognise fully, for the reasons to which I have referred, among others, that that has not always been the case.
The second remark of the noble Viscount, Lord Cranborne, was of a different kind:
"I hope, if I may say so, that the noble Lord the Lord Privy Seal"
a reference to the noble Lord, Lord Richard—
"will not allow his colleagues to wear hair shirts too publicly in a sort of competitive bidding for who can take the lowest salary increase."
As the noble Lord, Lord Richard, said at the time, he was a sybaritic figure in this House and elsewhere and was very unlikely at any time to wear a hair shirt. The noble Viscount, Lord Cranborne, went on:
"I am not entirely convinced that this kind of public wearing of sackcloth and ashes either adds to the dignity of political life, which is an honourable profession, as I am sure the noble Lord will agree, or indeed that the public are convinced by it."
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I simply endorse what the noble Viscount said. These are matters which are not so much for the noble Lord, the Lord Carter, to bear in mind. I hope, however, that his colleagues at every level in both Houses will seek to justify proper salaries for themselves and others.
Paragraph 3 of the order refers to the salaries of the Leader of the Opposition and the Opposition Chief Whip. It is interesting to look back to 1975 when the primary legislation was passed. It related to payment to the then Leader of the Opposition in your Lordships' House of £3,500 and to the Opposition Chief Whip of £2,500, since when there have been increases of rather over 15-fold. I attribute that mainly to inflation, and certainly I do not wish to deny the recipients the salaries indicated in the order. I do not in any way begrudge them the increase. They have responsible roles and they do the job well.
The primary legislation is now a quarter of a century old. There have been many developments in that time in both Houses. One of those developments has been in the role of the third party. I do not think I have to declare an interest but I should like to be able to declare a potential interest. The potential interest is clearly in recognition of the role of the third party in this House and of other parties which may be represented here, now enshrined by custom and practice and indeed identified in our Companion to the Standing Orders.
I think it is accepted, speaking, as I do, from the Liberal Democrat Benches, that we have a very important role to play in the House. I believe that the duties we perform and the stress experienced by the leader—and I speak of the office, not of the present incumbent—and by the Chief Whip—and again I speak of the office and not of the present incumbent—in our proper constitutional role is very little different and certainly not much less than that experienced by the Leader of Her Majesty's Official Opposition in this House and the Opposition Chief Whip. This matter should have been addressed many years ago. I am not asking for anything like a substantive reply from the noble Lord, Lord Carter, tonight, but I am putting down a marker.
In doing so I endorse and recognise what the noble Lord, Lord Henley, said about other spokesmen from both Front Benches in opposition, though, if I am allowed to say so, listening to our debates over the last few days, I wondered whether, if there were to be salaries for Front Bench spokesmen, they should be graded in such a way that higher salaries were paid for shorter speeches. Apart from spokesmen in opposition, they were all Members of your Lordships' House.
I hope the time will come, perhaps early in the next Session, when this question of allowances to all Members is looked at urgently and, if necessary, by means of an independent inquiry. I hope that in due course the Government, after discussion with all parties through the usual channels, and with the Cross Benches, will indicate how they propose to tackle this very important matter in the new House which will come into being when the present legislation is through.
Lord Graham of Edmonton: My Lords, I should rise and say that everything I wanted to say has been

1147
said very well, but that I intend to repeat what I have heard. However, as we all know in Parliament, the opportunity that we have tonight is rot only to debate what is in the order but also what is not in it.
I begin by asking my noble friend the Government Chief Whip to take back to his colleagues what I believe—I speak on behalf of all of my Back-Bench colleagues—is a thoroughly deserved, radical review of the remuneration which they are paid. There has been no dispute about that this evening.
I see the noble Lord, Lord Henley, sitting opposite. When he was part of the then government and we were in Opposition, he will recall that we always fully supported them in the general case that was building up, shall we say, over the past seven or eight years that Ministers in the House of Lords had been left behind in one 'way or another. If this is in fact part of the unfinished business of the past 10 years, I think it is both fitting and proper that we should discuss the matter.
However, like the noble Lord, Lord Rodgers, I should like to use this opportunity to give general support for what is in the order and discuss what we ought to do. I should like to remind the House that it was the then Lord Privy Seal, the noble Viscount, Lord Cranborne, who told the House in 1996 that the Prime Minister had written to Sir Michael Perry, the Chairman of the Senior Salaries Review Body, in the following terms:
"As you know, changes in the structure of civil servants' pay mean that new arrangements need to be found for determining Members' pay for 1997 onwards.
I would be grateful if you and your colleagues on the Senior Salaries Review Body would under your standing terms of reference undertake a comprehensive review with the following remit.
'The Senior Salaries Review Body is asked to undertake a comprehensive review of the level and structure of parliamentary pay and allowances and to make recommendations for the future. The review should cover each of the following items:
(i) the salary of Members of the House of Commons'—
that was done, and very gratefully received by my former colleagues in the House of Commons; that is finished business.
'(ii) the salaries of Ministers and other office-holders'
that was done in the other place and that is part of the finished business—
'(iii) all allowances, comprising the Office Costs Allowance, Motor Mileage Allowance, Additional Cost Allowance and the London Supplement'—
that was done and is also part of the finished business.
'(iv) the severance pay and pensions arrangements for MPs and Ministers'—
that, too, is part of the finished business. However,
'(v) the rates of Peers' expenses allowances and the Secretarial Allowance for Ministers and other paid office-holders in the House of Lords'".—[Official Report, 6/2/96; col. WA 14.]—
has yet to be addressed. Therefore, I would be grateful if my noble friend the Minister could take that on board and help us understand where we are in that respect.
It is interesting to look at the comparisons here; for example, one could compare the fact that the House of Commons finished sitting at 7.30 p.m. tonight, but we will probably be here until about 10 o'clock. We may well also reflect on the fact that those in the other place
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will adjourn for the Summer Recess earlier than this House and will no doubt return at a later date than we do. I do not separate and keep in a compartment the matters that affect the House of Lords. Of course we need to look after ourselves. I say that because people in other parts of the Parliamentary Estate look after themselves. If we do not speak up for ourselves, no one will take any notice.
I want to place on the record the fact that, in a Written Answer not many years ago, the noble Baroness, Lady Blatch, told the House that the total salary cost for Members of the House of Commons was £22,934,000. That worked out at an average salary of £35,229. In addition, the total cost of the allowances gave an "average allowance cost" of £66,972. However, the total for the Lords was £6 million—as opposed to a figure of £23 million—and the average remuneration for the Lords was £6,700.
It is certainly not my intention to draw unfavourable comparisons but I believe that the difference in those figures is ludicrous. As has been said, that matter needs to be looked at. The noble Lord, Lord Henley, made a clear case for support for parties in opposition. We were delighted to support the previous government when it conceived not the Short money but the Cranborne money. We knew then—as we knew that we would win the next election—that the greatest beneficiary of the Cranborne money would be the then government when they moved into opposition, and so it has proved. We know that that helps the party machine and the part), in general. When the Senior Salaries Review Body reported in 1987 it was aware of the anomalies but nevertheless felt unable to endorse a recommendation made by its management consultants; namely, that parties within the House of Lords should be allowed to nominate a limited number of active Back-Benchers for a higher level of allowance. Therefore the issue is not new. In my view it has not been dealt with seriously. I hope that the Minister will be able to tell us that it has been decided not out of a sense of jealousy or of greed but out of a sense of equity and entitlement that Back-Bench Members—that is, other than Ministers—are entitled to a better crack of the whip.
The first allowances were introduced in 1957 and comprised the magnificent sum of three guineas a day. They have gradually aggregated over the years. The aggregation is not bad but the base from which the allowances started is causing them to be out of kilter. A Member of the House of Lords who wants to do his job well is given about £70 a day. He is a Member of a Parliament which is doing important work. I think that that is scandalous and it certainly should be looked at. I take the point that has been made several times, especially by the noble Lord, Lord Rodgers; namely, that we are moving into a new era. I shall not discuss the concept of a full-time or part-time House and whether this is a professional or a non-professional Chamber. An opportunity should be found in the early days of the new Session—say from November onwards—to discuss this matter on an all-party basis. My colleagues have been patient and they understand the priorities involved. However, if we do not speak up

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for ourselves no one else will. These increases are thoroughly deserved and well earned, but there are others waiting in the queue.
9.42 p.m.
Lord Carter: My Lords, on behalf of all my ministerial colleagues I thank all noble Lords who have spoken for their kind words about the work that Ministers in this House do which has been recognised in the increases that we are discussing. I am extremely grateful to the noble Lord, Lord Henley, for his comments and also for not asking me to respond to them in detail this evening.
I can be extremely brief. The noble Lord, Lord Rodgers, asked about a salary for the Leader of the Liberal Democrats. I intend no disrespect to noble Lords on the Liberal Democrat Benches when I say that they do not at present form Her Majesty's loyal Opposition. Historically the view has been taken that in both Houses the Leader of the Opposition has a particular function to perform which warrants a separate salary. At some stage Parliament may take the view that the office of leader of the third largest party holds a position in our national life that warrants a salary. However, it would not be proper for me to propose that constitutional innovation this evening.
My noble friend drew attention—rightly in my opinion—to the fact that your Lordships' House provides extremely good value for money. I rather expected that the question of the Back-Bench allowances might arise this evening, although they are strictly outside the scope of the order we are discussing. The Senior Salaries Review Body is due to review the level of parliamentary pay and allowances next year for its report early in 2001. It is open to all Members of your Lordships' House to put forward views and evidence to the review body as part of that review.
Perhaps I may pick up a point made by my noble friend Lord Graham. The transitional House which will follow the reform of your Lordships' House will create a situation which did not exist when the SSRB's
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timetable was previously agreed. I will be very surprised if noble Lords do not draw this matter to the Government's attention once the transitional House is in place. I cannot say more than that this evening. I am sure your Lordships will draw the appropriate conclusion.
I repeat my thanks to all noble Lords who have participated in this short debate. I beg to move.
Lord Dormand of Easington: My Lords, before my noble friend sits down, perhaps he would deal with one point. He has mentioned the SSRB. From what he said, I presume that it will be well into next year before it makes any recommendations, without any guarantee of implementation. The order we are considering tonight—which has my support—concerns an increase in salary. Can my noble friend say what the difference in dates will be? If the recommendations are approved tonight—I think the order will be approved—what will be the difference in dates between when that is implemented and the likelihood of Back Benchers receiving what might or might not be an increase?
Lord Carter: My Lords, I am afraid my noble friend will find the potential gap longer than he would like. If the order is approved this evening, the implementation will be back-dated to 1st April 1999. We are told that it will appear in the July pay cheque.
Under the previous arrangements, at the moment the SSRB is due to review the level of allowances in the year 2000 for a report early in 2001. So that would be the gap, if you like. As it stands at the moment, ministerial salaries will be back-dated to 1st April of this year and the SSRB report on allowances, which are outside this order, will not be available until early 2001.
Perhaps I should repeat the point I made earlier. The transitional House will create a new situation. I shall be surprised if a number of your Lordships do not attempt forcibly to draw this matter to the attention of the Government once the transitional House is in place.
On Question, Motion agreed to.
House adjourned at fourteen minutes before ten o'clock.