Lords Sitting of 26 February 2002

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I am to make an official visit to Brussels on Monday 4th March and Tuesday 5th March, when the House will sit. I shall be holding meetings with members of the European Commission, the European Parliament and the European Court of Justice. I am also attending a meeting of the Cabinet on Friday 8th March, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Commonwealth Heads of Government Meeting
Lord Blaker Lord Blaker asked Her Majesty's Government:
What results they hope to see from the forthcoming Commonwealth Heads of Government Meeting.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, Her Majesty's Government hope that the results of the forthcoming meeting will include, among other issues: the launch of the High Level Review Group's report on modernising the Commonwealth; the Commonwealth's response to international terrorism; the Commonwealth's support in preparing for the world summit on sustainable development; the celebration of 50 years of dedicated service by Her Majesty the Queen; and the support of the 17th Commonwealth Games in Manchester later this year. Zimbabwe will also be discussed.
Lord Blaker: My Lords, I am grateful for that full reply. I hope that the outcome of some of the proposals mentioned by the Minister will be fruitful. It is clear that the election in Zimbabwe in 11 days' time cannot possibly be free and fair. If the Commonwealth Heads of Government Meeting does not take stern measures against Mr Mugabe, will not the influence and value of the Commonwealth suffer a crippling blow?
Baroness Symons of Vernham Dean: My Lords, let me make it clear that Her Majesty's Government will continue to press for the suspension of Zimbabwe from the Commonwealth, as we did at the CMAG meeting a couple of weeks or so ago. That will continue to be our position. However, consensus will be needed in order to achieve it. In my initial Answer, I said that
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one of the issues on which we hoped to make progress was the High Level Review Group report. That includes clarifying the remit of the Commonwealth Ministerial Action Group. We hope to expand that remit in order to allow the CMAG to be able to take decisions which are currently only in the purview of heads of government. I hope that that gives the noble Lord some indication that we are preparing the ground for the kind of eventuality that he fears.
Viscount Waverley: My Lords, in her initial response the Minister referred to discussions on international terrorism. Could the Commonwealth steal a march on the United Nations by utilising similar Commonwealth-wide legal traditions to adopt the spirit of UN Resolution 3173 on terrorism, following the ironically named 1986 Harare scheme on money flows, extradition and confiscation?
Baroness Symons of Vernham Dean: My Lords, we are not about "stealing a march" on the United Nations; we are about complementing the very useful work that the United Nations has undertaken. The Commonwealth plan of action on terrorism already includes a recommendation that the Harare scheme for mutual assistance in criminal matters should be reviewed and that it should be updated and fully implemented.
Our aims for the Heads of Government Meeting are focused in areas where we can add value and avoid duplication of the counter-terrorism work being undertaken elsewhere—not only in the UN but also in the G8. That is also one of the thrusts of the high level review. I hope that the points mentioned by the noble Viscount will also be covered.
Lord Hughes of Woodside: My Lords, is it not the case that the general parroting that there cannot be a free and fair election in Zimbabwe actually undermines those in Zimbabwe who are contesting the elections? Is it not the case that the continued demand for sanctions on Zimbabwe has led to the withdrawal of the EU observers, which people are now saying is a bad thing? Should we not be trying to encourage all those people in Zimbabwe who have the courage to stand up for freedom and democracy to go out and vote? Then, if President Mugabe does not win the election, we shall not continue saying that it was not free and fair—that is what he will say if he loses.
Baroness Symons of Vernham Dean: My Lords, I agree with my noble friend that it is enormously important that everyone in Zimbabwe is encouraged to go out and cast his or her vote on a free and fair basis, having found out as much as they can in these difficult times about the candidates for whom they could vote. I cannot agree with my noble friend if he is suggesting that the EU should not have withdrawn its observers. I do not believe that the EU had any choice in the matter given that the Government of Zimbabwe chose to try to dictate to the European Union exactly who should be on the EU team. There will be election observers. The Commonwealth will have observers

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there. So will the SADC, and South Africa is deploying quite a substantial team. So I can agree that we want everyone to go out and cast their vote on a free and fair basis.
Lord Howell of Guildford: My Lords, how many Commonwealth observers will there be? Zimbabwe is a huge country, and I understand that the number is a rather miserable 40. Now that the EU has withdrawn its observers—we should not discuss now who is to blame—is there not a case for Her Majesty's Government to finance a substantial increase in the number of observers so as to provide some hope of rescuing people from the fiasco and horror of Zimbabwe and having something approaching free and fair elections?
Baroness Symons of Vernham Dean: My Lords, I am happy to be able to tell the noble Lord that that is exactly what we have done. Concerns were voiced by the noble Baroness, Lady Park—who is not in her place today—when we last discussed the issue. The noble Lord is right that there is currently a team of only 39 or so Commonwealth observers, although I believe that more will be brought in before the election takes place. The SADC has a team of 37 and South Africa is deploying a team of 57 observers and a 20-strong delegation of parliamentarians. We increased the budget on 22nd February. Initially we had pledged £130,000 to the Commonwealth election observer mission. We have expanded that by £120,000, which we pledged a few days ago, as I said. I hope that that highlights the importance that we place on the issue and the recognition that we have given to the points raised on it.
Lord Shutt of Greetland: My Lords, will the Minister consider a different result in the Zimbabwe election—the possibility that Morgan Tsvangirai will win? In those circumstances, should not the Commonwealth be planning now for positive action and assistance to give those brave leaders and their people a fresh start in democracy and with their economy?
Baroness Symons of Vernham Dean: My Lords, of course we should not assume the outcome of the election, although we should not deceive ourselves, because the situation is very heavily weighted against the opposition. We have discussed in your Lordships' House how difficult it has been for the opposition to operate. I am afraid that we saw another example of that only yesterday. Of course it is possible that the opposition could win. I hope that the work that is being put in place by the Commonwealth Ministerial Action Group and the work that will be taken forward at the Commonwealth Heads of Government Meeting will allow that expanded remit for the CMAG to be able to take the sort of helpful action that the noble Lord indicates may just be necessary if the free and fair election that many of your Lordships would like takes place.

Particulate Emissions
2.45 p.m.
Baroness Gale Baroness Gale asked Her Majesty's Government:
What is their estimate of the effect on life expectancy in the United Kingdom if particulate emissions were to be reduced by one-third.
Lord Filkin: My Lords, reducing particulate emissions by a third is possible and can be estimated to increase life expectancy by one to six weeks on average, although it is likely that some people may benefit much more than that.
Baroness Gale: My Lords, I thank my noble friend the Minister for that reply. Does he agree that there is still much more to be done to prevent global warming? Is the Minister aware of the recent research carried out by Professor Mark Jacobson of Stanford University? He says that diesel soot is a major contributor to global warming and that reducing the amount of diesel soot in the atmosphere would have a great effect on global warming. Diesel soot has a short life-span of about two to three weeks, whereas carbon dioxide has a life-span of 50 to 1,000 years.
Noble Lords: Oh!
Baroness Gale: My Lords, those are the figures.
Is the Minister also aware of recent research by Nottingham University that shows that children living near main roads have a greater incidence of asthma because of exhaust fumes? Again, that has been linked with small soot particles.
Will the Government take that recent research on board and take any action needed to investigate further the effects of diesel soot? Will the Minister—
Noble Lords Noble Lords: Oh!
Baroness Gale: My Lords, I have just about finished now, I think. Will the Minister give an undertaking that the Government will take that action and, in doing so, will improve the situation on global warming and improve the health of the nation, especially of our children?
Lord Filkin: My Lords, I was rather hoping that my noble friend would not ask such a short Question and therefore I would have been out of time. But I shall have a go at a couple of the specifics. The Government are aware of the Stanford University report and of the argument that diesel soot affects health and has an impact on global warming. Expert opinion suggests that carbon dioxide is by far the most important contributor towards global warming simply because it persists for so long. Therefore, carbon dioxide will be around for 100 years, affecting ozone.
I am sure that the Committee on the Medical Effects of Air Pollutants will look at the recent Nottingham University study to see whether it runs counter to the experience to date that there is no strong or clear

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correlation between exhaust fumes and the incidence of asthma. If so, we shall be keen to study it further, no doubt with more research.
Lord Astor of Hever:My Lords, what proposals do the Government have to reduce the high level of fine particulates on public transport? According to the National Asthma Campaign, passengers on the London Underground are subjected to seven times as much pollution as those on other forms of commuter transport and a 40-minute journey on the Tube is as had as smoking two cigarettes.
Lord Filkin: My Lords, the noble Lord will be well aware of the Government's central air quality strategy to make a significant further reduction in air particulates generally. He will be aware of the considerable progress that has been made over recent years. Our air is substantially cleaner than it was some years ago. That came as a slight surprise to me when I was briefed for the Question.
With regard to the future, we are currently consulting on targets to reduce by a half the standard that should be aimed at from 40 micrograms per cubic metre to 20 micrograms per cubic metre. That is a severe reduction in the overall target, including a reduction in the London target. Broadly speaking, London Underground will have responsibility, as will others, for contributing towards that significant reduction and improving air quality in the capital. The possibility of further specific issues is an interesting and important question. If there is further information, I shall be pleased to correspond further.
Baroness Scott of Needham Market: My Lords, the Government have recently published regulations giving environmental health officers the power to stop vehicles at the roadside to test for emissions. Is the Minister aware that, in the pilot areas, it has been shown that fines meet only 60 per cent of the costs incurred by local authorities in setting up the tests? Will he please consider ensuring that local authorities are able at least to meet their costs?
Lord Filkin: My Lords, unfortunately, no public policy principle automatically provides that fines must cover detection and enforcement costs. If it did, the treasurer might be a happier chap in the circumstances. Pilots are, however, for exactly that purpose—to see what we can learn from them. If the LGA and local authorities made representations on the issue, I am sure that they would be given appropriate consideration.
Lord Ezra: My Lords, does the Minister agree that a dramatic reduction in particulate emissions in built-up areas could be achieved if buses, taxis and public vehicles generally were to convert from petroleum and diesel engines to alternatives such as biofuels, LPG, natural gas and electric power? Is he aware that that is being done with very positive advantages in other countries?
Lord Filkin: My Lords, the noble Lord is broadly right: if all heavy public transport vehicles operated on
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LPG or other fuel sources, particulate emissions would be reduced. However, the Government are not issuing enforcement notices saying that everyone must do that. We are seeking through the tax and !fuel regime to provide incentives for vehicle owners and operators to move to types of transport and fuel that are more efficient and emit lower levels of particulates. There is some early evidence that that is bearing good fruit.

Sterling Exchange Rate
2.52 p.m.
Lord Tebbit Lord Tebbit asked Her Majesty's Government:
Whether they regard the present level of sterling as stable and competitive.
Lord McIntosh of Haringey: My Lords, the Government do not comment on day-to-day movements in the foreign exchange market. While the Government do not have a specific: exchange rate target, a stable and competitive pound is sought over the medium term.
Lord Tebbit: My Lords, the Minister's Answer comes as no surprise. Does he recollect that on the two occasions when this Question was previously asked, the Government confirmed that although an object of their policy is indeed to have a stable and competitive rate for sterling, they do not know whether the current rate is either stable or competitive? How will the Government know when this desirable. optimal position is reached?
Lord McIntosh of Haringey: My Lords, I have had the privilege of answering the noble Lord, Lord Tebbit, once on this matter. My noble friend Lord Davies had the privilege on an earlier occasion. The answer, as the noble Lord knows very well, is the same. We talk about a stable and competitive pound over the medium term because we should not be answering questions about the current exchange rate or about daily changes. As he also knows very well, if certain Ministers—not myself, but perhaps the Chancellor of the Exchequer—were to comment daily on the exchange rate, it might affect that exchange rate. That would not be very desirable.
Lord Peston: My Lords, does my noble friend agree that the exchange rate has been extraordinarily stable for at least the past two years? The question about a stable exchange rate answers itself: we have one.
Lord Tebbit: That is not what the Minister said.
Lord Peston: My Lords, the Minister assumes that the noble Lord can do what I do and look up the data in various government publications.
Is it not also the case that, although the exchange rate is not very competitive for some sectors of the economy—manufacturing is under pressure—it is

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extremely competitive for the service sector? Overall, the economy is extremely competitive, as one can tell from the fact that we have no difficulty in financing our overseas borrowing in any manner we wish. The answer to the Question is therefore pretty self-evident.
Lord McIntosh of Haringey: My Lords, like my noble friend Lord Peston, I can read the figures, and I am certainly happy to observe what they show. He is entirely right. On the whole, the exchange rate has been pretty stable over a recent period. However, that implies no judgment as to whether it is competitive, which is what the noble Lord, Lord Tebbit, asked. Exchange rates are the result, rather than the cause, of other economic policies. They are the result of low and stable inflation, which this Government have achieved, and the result of stable and sound public finances, which, again, we have achieved.
Lord Kilclooney: My Lords, as the United Kingdom trades more in dollars than in euros, and as the United Kingdom has a greater percentage of its trade in dollars than has the euro zone, is not the sterling-dollar exchange rate more important to United Kingdom business and trade than the sterling-euro exchange rate?
Lord McIntosh of Haringey: My Lords, the Bank of England basket of currencies and exchange rates calculated on that basis shows that the euro is more significant than either the dollar or the yen and represents more than half of our trade. I am therefore afraid that the noble Lord is not correct in his initial premise.
Lord Barnett: My Lords, surely my noble friend the Minister will be surprised that, given his vast experience of macroeconomic and financial matters, the noble Lord, Lord Tebbit, does not recognise that the best way of achieving currency stability would be to be inside a single currency, namely the euro. Will my noble friend try to explain that point to the noble Lord?
Lord McIntosh of Haringey: My Lords, I speak for the Government and not for the noble Lord, Lord Tebbit. Indeed, I did not gather from his question even whether he was in favour of a stable and competitive pound.
Lord Newby: My Lords, does the Minister agree—
Lord Saatchi: My Lords, the Minister—
Baroness Symons of Vernham Dean: My Lords, I believe that it is the turn of the Liberal Democrat Benches.
Lord Newby: My Lords, does the Minister agree that the best way of achieving both a stable and competitive exchange rate is to be within the euro zone? Does he therefore agree that it would be sensible for the
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Government to announce now the date on which a referendum on the issue will take place? If he finds that an unpalatable thought, will he at the very least announce the date on which the Government's assessment of the five economic tests is to be published?
Lord McIntosh of Haringey: My Lords, no thoughts are unpalatable—it would just be a bad thing to do. What we have to do now is to carry out our assessment of the five economic tests, which is what the Treasury is going to do. When and if we reach the conclusion that the five economic tests have been met, the issue will then be decided by government, by Parliament and by the people of this country. There is no point in rushing decisions of that sort.
Lord Lawson of Blaby: My Lords, does the Minister agree with the remarks made yesterday at Chatham House by Mr Ed Balls? It would certainly dispel some of the confusion if he could say clearly that he does. In particular, does he agree that sterling's current rate is not opportune if one is thinking of joining the euro? Equally, does he agree that it would be wholly wrong to massage down the rate in order to seek to join?
Lord McIntosh of Haringey: My Lords, I am afraid that I have not had the advantage of reading the remarks by the economic adviser to the Treasury. Although I shall do so with great interest, I am unable to comment on them at the moment.
Lord Stoddart of Swindon: My Lords, the noble Lord, Lord Barnett, and others suggest that the best way of achieving a stable currency is to join the euro. However, is it not a fact that, in the past four years, the most unstable currency in the world has been the euro? In fact, the euro has depreciated against every other major currency, including our own, by at least 15 per cent and against the American dollar by much more.
Lord McIntosh of Haringey: My Lords, it certainly was the case that, in the initial months or so following the euro's introduction, there was a decline in its value. However, the figures for the period show that variations in the euro-sterling exchange rate and in the Bank of England's effective exchange rate against all currencies very closely follow the same pattern. I do not think that that leads us to the conclusion that the noble Lord, Lord Stoddart, would wish us to reach.
Lord Saatchi: My Lords, as always the Minister is very relaxed about the sterling exchange rate. Is he equally unconcerned about the position of Britain's balance of payments, perhaps the acid test of our competitiveness? Last year it fell into an all-time record deficit of £33 billion, a staggering sum which amounts to nearly 8 per cent of our GDP.
Lord McIntosh of Haringey: My Lords, if the noble Lord, Lord Saatchi, wishes to table a Question on the balance of payments he is entirely free to do so.
Lord Blackwell: My Lords, the Minister may not have read Mr Balls's remarks, but can he repeat the

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assurances he has previously given the House that the Government will not intervene to attempt to change the exchange rate, and in particular the sterling-euro exchange rate, prior to a referendum?
Lord McIntosh of Haringey: My Lords, I have always said, when answering questions such as this, that if we allow for the fact that the size of our reserves, both those held by the Treasury and by the Bank of England, are equal to approximately one day's trading on foreign exchange markets, the opportunities for intervention are extremely modest. Any intervention that took place would have to be by common agreement among the major economies of the world. I can probably go so far as to say that that is unlikely to be achieved.

Public Processions: Policing
3.1 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
What guidance has been given to police forces in regard to the holding of traditional and peaceful parades and ceremonial events by veterans' associations or voluntary uniformed youth organisations.
The Minister of State, Home Office (Lord Rooker): My Lords, the Association of Chief Police Officers has issued guidance to police forces on the policing of public processions and events. The Government fully support ACPO in its view that events of national significance, such as Armistice Day parades and services, should be allowed to proceed. Such events, including those involving scouts and guides, should also be supported by local government, by which we mean that they should not be a means of raising revenue.
Lord Hardy of Wath: My Lords, I thank my noble friend for that Answer, which suggests that the Government are as well disposed to these events as they are to the work of the organisations concerned. In view of that, will Her Majesty's Government ensure that both local authorities and police forces are advised that it is in the interests of the community for these organisations to prosper and for their activities to continue to command public support and helpfulness?
Lord Rooker: My Lords, I have always taken the view that that is what people pay their local taxes for and therefore it would be quite wrong for these ex-service veterans and uniformed youth, most of which, though not all, are charitable groups—they are not commercial undertakings—to be prevented from holding traditional parades by excessive charging for road closing. That is a matter for local authorities and not the police. To that extent the ACPO advice is useful. It has not yet been ratified by the Local Government Association. I hope that it will be.
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However, the position stands that these events should be supported and should not be snuffed out by excessive charges for closing roads.
Lord Carlile of Berriew: My Lords, I echo the thanks of the noble Lord, Lord Hardy, for the Minister's helpful response. Can the Minister confirm that ACPO will not set a prescriptive list in stone? Many new organisations are springing up which give sustained and devoted public service and may well he the boy scouts of the future. Can the Minister assure the House that ACPO guidelines will allow for developments to include such organisations in the future?
Lord Rooker: My Lords, I certainly hope so. I declare an interest in that I was in the BB rather than the scouts. When we paraded on a Sunday around Birmingham as the ninth company in the 1950s the roads were a lot safer. That is a crucial point for the youth organisations; the roads must be safe. Tragedies have occurred in the past.
Many groups exist throughout the country which are not necessarily national. Many are youth groups. They organise annual customary events and they should be allowed to flower in the future. They should not be prevented from doing so by excessive bureaucracy and over-charging by local authorities. In respect of ACPO, the police would not charge anyway. They would not be involved in the policing of such events.
Lord Dixon-Smith: My Lords, the noble Lord, Lord Hardy of Wath, would not have had to ask this Question if it had not been for the officious application of regulations by a particular person in a particular place. We must therefore acknowledge that a form of regulation exists.
Can the Minister assure the House that there is sufficient discretion within the regulations to ensure that this situation need not arise again? If he cannot give that assurance, can he assure the House that he will take the matter away and look at it to ensure that sufficient discretion is introduced in the future?
Lord Rooker: My Lords, the noble Lord, Lord Dixon-Smith, is quite right. It is not for me to speak for my noble friend. But I suspect the Question was prompted by an event last year involving girl guides in the Rotherham area. They did not proceed with their parade because of a £500 charge for road closing for 30 minutes. I might add that it was not a small group; it involved 1,000 girl guides.
But that is not the point. We are coming up to the summer and the Golden Jubilee. Many such events will be planned. We do not want them snuffed out because of excessive bureaucracy or because some hard-pressed treasurers from local government see it as a revenue-raising operation. That is neither the intention of the Government nor of ACPO,and should not be the intention of local government. I have already gone much further than I should have gone in my response today. But I have made it abundantly clear that I fully support the thrust behind my noble friend's Question.
Lord Mackenzie of Framwellgate: My Lords, my noble friend the Minister mentioned ACPO guidance. Does he agree that there may be a problem with ACPO guidance in that police chiefs do not have to accept it? There may be a case for strengthening the backbone of ACPO in that type of situation.
I suggest it is wrong in principle that people in different areas should receive different treatment according to where they live simply because the chief constables are different. I hope the Minister agrees with me that ACPO guidance should carry more weight.
Lord Rooker: My Lords, it is up to police chiefs. The decision to charge for services is a matter for the chief constable. But the ACPO policy encourages the police to support the events we have been discussing which are of national and local significance—scouts and guides, armistice and ex-service veterans—without charge. But normally the police would not be involved. Road closures are a matter for local authorities and not the police. In fact, the police do not have any legal power to stand at road junctions to prevent traffic as a march goes past. These issues are totally different from public order issues where notice is required to be given. I have no knowledge of different chief constables operating the policy differently. I certainly hope that the ACPO guidance will be accepted and ratified by the Local Government Association.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m., my noble and learned friend Lord Falconer of Thoroton will, with the leave of the House, repeat a Statement being made in another place on the resignation of Mr Martin Sixsmith. It is hoped that the Statement will be repeated after the speech of the noble Lord, Lord Razzall, and before the speech of my noble friend Lord Borrie in the Employment Bill debate.

London Local Authorities Bill [H.L.]
The Chairman of Committees (Lord Tordoff): My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(The Chairman of Committees.)
On Question, Bill read a second time, and committed to a Select Committee.

British Overseas Territories Bill [H.L.]
3.8 p.m.
Lord Grocott: My Lords, on behalf of my noble friend Lady Amos, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Grocott.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[The page and line refer to Bill 40 as first printed for the Commons.]
COMMONS AMENDMENTS
1 After Clause 5, insert the following new clause—
"The Ilois: citizenship

(1) A person shall become a British citizen on the commencement of this section if—

(a) he was born on or after 26 April 1969 and before 1 January 1983,

(b) he was born to a woman who at the time was a citizen of the United Kingdom and Colonies by virtue of her birth in the British Indian Ocean Territory, and

(c) immediately before the commencement of this section he was neither a British citizen nor a British overseas territories citizen.

(2) A person who is a British citizen by virtue of subsection (1) is a British citizen by descent for the purposes of the British Nationality Act 1981 (c. 61).

(3) A person shall become a British overseas territories citizen on the commencement of this section if —

(a) subsection (1)(a) and (b) apply in relation to him, and

(b) immediately before the commencement of this section he was not a British overseas territories citizen.

(4) A person who is a British overseas territories citizen by virtue of subsection (3) is such a citizen by descent for the purposes of the British Nationality Act 1981 (c. 61)."

2 Clause 7, page 3, line 12, after "Schedule I". "insert—
"(aa) section (The Ilois: Citizenship)"
Lord Grocott: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 and 2. These amendments were tabled in another place. I speak in place of my noble friend Lady Amos who is en route to the Commonwealth Heads of Government Meeting in Australia.
Noble Lords will be aware that the British Overseas Territories Bill passed unamended last year through all its stages in this House. Since then a government amendment was made in Committee in another place to bring within the scope of the Bill a specific group of people connected with the British Indian Ocean Territory who, without that amendment, would, through no fault of their own, have been excluded from the benefits of the legislation.
Under present nationality law first-generation children born outside an overseas territory to at least one parent with British Dependent Territories citizenship inherit that citizenship automatically. But before 1983, British nationality law prevented the inheritance of British nationality by children born outside the territories to a British Dependent Territories citizen mother.
The Government took the view that, in respect of the British Indian Ocean Territory, it was unfair to exclude from the citizenship provisions of this Bill a small number of first-generation children born to mothers who were British Dependent Territories citizens but whose fathers were not. These people had, if you like, been doubly disadvantaged not only by their parents' exclusion from the British Indian Ocean

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Territory with effect from 26th April 1969 but also by the fact that the correction to the earlier gender discrimination which was made in the British Nationality Act 1981, and took effect in 1983, was not retrospective. The Commons amendments which we are considering today would put right that unfairness.
Throughout the parliamentary process this Bill has been warmly and widely welcomed by all parties in both Houses. I believe that the government amendments agreed in another place further strengthen what is already a good Bill. I commend them to the House.
Moved, That the House do agree with the Commons in their Amendments Nos. 1 and 2.—(Lord Grocott.)
Lord Redesdale: My Lords, I raised this issue at Second Reading. Unfortunately, I asked rather too many questions and the noble Baroness was unable to reply at that point. The issue, which we on these Benches warmly support, was not raised again until it arose in the Commons. It has been outstanding for some time. However, I have a couple of questions on the amendments. Now that citizenship has been granted to those who have been disadvantaged, how will that affect their present nationality? Will they have to give up the passports they hold currently or will they be given joint citizenship? On a point of clarification, why was the date of 1st January 1983 chosen as a cut-off point?
Baroness Rawlings: My Lords, we welcome the new clause as it closes an important loophole in the Bill and goes some way to rectify the sense of injustice felt by the islanders at their treatment by Britain in the 1960s. The arrangements made by the British and United States Governments saw the people of the Chagos Islands removed from their homes and conveyed to other Indian Ocean islands. It is faintly disappointing that the Foreign and Commonwealth Office forgot those worthy people. One hopes that there are no other parts of the world of overseas territories that have been mislaid.
I pay tribute to the honourable Member for Islington North for raising the issue at Second Reading and, with the honourable Member for Linlithgow, for bringing the matter to the attention of honourable Members in another place. I believe that many Members of your Lordships' House were also unaware of the islanders' plight. As we are now aware, the islanders feel dispossessed of what was their homeland and feel too that they have been shabbily treated by Britain.
The recent case in the High Court won them the right to return, but no date was set for it to be effective. The question remains whether it applies now or in 2016 when the lease expires. The judgment appears to contain no qualifications. The Bill would have excluded those born while the Ilois were in exile from their islands from qualifying for British citizenship. That would have been unfair and unreasonable. We welcome the resolution of this matter this afternoon. The amendments are welcomed. We on these Benches fully support them, as we have the Bill throughout its progress.
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Overall this is a very important, welcome and much supported Bill. It works towards a partnership, as the White Paper desired, and demonstrates our commitment to the citizens of the British Overseas Territories wherever they may be. Once again, I commend the work that has been done on the Bill and the Minister's courtesy while navigating its passage through the House and clarifying its clauses. We fully support the Bill and welcome this final stage.
Lord Grocott: My Lords, I am grateful indeed to both the noble Lord. Lord Redesdale, and the noble Baroness, Lady Rawlings, who have given warm support to the legislation throughout its passage. I am also grateful for the support they gave to the Commons amendments. I say to the noble Baroness, Lady Rawlings, that the generosity of her comments is much appreciated in respect of my honourable friends the Members for Linlithgow and for Islington North who, as she rightly said, have pursued the issue, as I am sure it has been pursued by Members of this House before I arrived here.
The noble Lord, Lord Redesdale, asked about the effect the legislation's coming into force would have on the citizenship of the people who are covered by the amendments. So far as UK law is concerned, those people can have British and Mauritian citizenship. The noble Lord asked specifically about the dates involved. The two crucial dates in relation to the group of people we are discussing are 1969, or more specifically, as I mentioned earlier, 26th April 1969, which was the date when the people of these territories lost the right to reside in the territories; and 1983, which was the date when the British Nationality Act came into force. Those are the precise reasons for those two dates. If any further clarification is needed, I am sure that it can be dealt with in correspondence. I note the warm support for the measure. At least, I take silence to he warm support. I commend the amendments to the House.
On Question, Motion agreed to.

Land Registration Bill [H.L.]
3.17 p.m.
The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments he now considered.—(Baroness Scotland of Asthal.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[The page and line refer to Bill 48 as first printed for the Commons.]
1 Clause 69, page 25, line 10, at end insert—

"(3) The registrar may—

(a) arrange for the provision of information about the history of registered titles, and

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(b) authorise anyone who has the function of providing information under paragraph (a) to have access on such terms as the registrar thinks fit to any relevant information kept by him."

2 After Clause 93, insert the following new clause—
"Electronic settlement
The registrar may take such steps as it thinks fit for the purpose of securing the provision of a system of electronic settlement in relation to transactions involving registration."
3 Clause 101, page 36, line 27, after "section" insert "69(3)(b) or"
4 Clause 104, page 37, line 2, after "provide" insert ", or arrange for the provision of,"
5 Page 37, line 4, after "section" insert "by the registrar"
6 Page 37, line 5, leave out "the registrar" and insert "he"
7 After Clause 104, insert the following new clause—
"Incidental powers: companies

(1) If the registrar considers it expedient to do so in connection with his functions under section 69(3)(a), 92(1), (Electronic settlement) or 104(1) or paragraph 10 of Schedule 5, he may—

(a) form, or participate in the formation of, a company, or

(b) purchase, or invest in, a company.

(2) In this section—

"company" means a company within the meaning of the Companies Act 1985;

"invest" means invest in any way (whether by acquiring assets, securities or rights or otherwise).

(3) This section is without prejudice to any powers of the registrar exercisable otherwise than by virtue of this section."

8 Clause 134, page 45, line 17, leave out subsection (5)

9 Schedule 5, page 55, line 9, after "provide" insert ", or arrange for the provision of,"

Baroness Scotland of Asthal: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 9 en bloc. These are all technical amendments. In general terms they make clear that the Chief Land Registrar may secure the provision of an electronic settlement system in connection with electronic conveyancing and that the Chief Land Registrar may delegate this and certain other functions to third parties, including a company in which he is involved.
I shall briefly describe the effect of each amendment. Amendment No. 1 clarifies the power of the Chief Land Registrar to delegate the provision of historical information. Amendment No. 3 is consequential on Amendment No. 1. The Lord Chancellor will not prescribe the fees to be charged by third parties for historical information. Amendment No. 2 introduces a new clause enabling the Chief Land Registrar to secure the provision of an electronic settlement system for electronic conveyancing.
Amendments Nos. 4 and 9 make clear that the Chief Land Registrar may delegate both the provision of consultancy and advisory services and the provision of education and training in connection with the Land Registry network. Amendments Nos. 5 and 6 are consequential on Amendment No. 4.
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Amendment No. 7 inserts a new clause clarifying the power of the Chief Land Registrar to form, or participate in the formation of, or purchase, or invest in, a company in connection with the provision of: historical information (Clause 69(3)(a)); the Land Registry network (Clause 92(1)); an electronic settlements system (Amendment No. 2); consultancy and advisory services (Clause 104(1)) and education and training in relation to the use of the Land Registry network (paragraph 10 of Schedule 5).
Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 9 en bloc.—(Baroness Scotland of Asthal.)
Lord Goodhart: My Lords, I have tried as hard as I can to find some way of objecting to the amendments but, at the end of the day, I have found myself unable to do so. They are all fairly minor amendments but they appear to add some improvement to the Bill. In particular, it is plainly desirable that the registrar should be able to take steps to facilitate electronic completion of the electronic settlement, which is clearly an integral part of electronic conveyancing. For that reason, I am happy with the amendments. It seems to me that this is a highly useful Bill which will do much to improve and simplify the system of conveyancing. To a limited degree, the amendments enhance it further.
Baroness Buscombe: My Lords, I thank the Minister for her explanation of the Commons amendments. I have only two points to make. The first is in relation to Amendment No. 2 concerning the electronic settlement system. We also agree that this is a very good idea. It all seems to make good sense in principle and, indeed, we hope very much that the system will do so in practice.
However, with regard to piloting the system, we suggest that it may make sense to pilot, first, the e-conveyance system. Once that is shown to be working, we should allow it to come into full operation before piloting separately the electronic settlement system. Electronic conveyancing is an enormous leap forward and one which we welcome. However, a number of variables can go wrong. In that sense, we believe that it would be advisable to take a step at a time in order to minimise error.
My second point is in relation to Amendment No. 7. That amendment seeks to empower the registrar, if he considers it expedient to do so in connection with his functions, to form, or participate in the formation of, a company or purchase or invest in a company. Again, in principle we do not have a problem with the registrar forming a company in order to expedite his functions in relation to electronic settlement, the collection and dissemination of historical material, the provision of consultancy or advisory services and the provision of education and training in relation to the registry network. We consider that to be a very good idea.
However, while we can see the practical advantages of setting up separate, institutionally distinct operations, we question, particularly in relation to the

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electronic settlement system, what would happen in, we hope, the remote event that the company found itself in financial difficulty. Can the Minister reassure us that in such a situation the Government would be required to bail out that company?
Baroness Scotland of Asthal: My Lords, first, I thank both the noble Lord and the noble Baroness for responding in the way that they have. I thank in particular the noble Lord, Lord Goodhart, for finding no error. I should like that noted for the record; it must be a first.
In relation to the question posed by the noble Baroness as to whether electronic settlement must be carried out at the outset, the answer is: no. The existing system will suffice but a settlement would obviously improve operations. We hear what she says in relation to roll-out. The noble Baroness will know that it is our intention to pilot the electronic conveyancing system with great care in order to ensure that the mechanics of the system work very well.
In relation to the noble Baroness's second point concerning the financial system and what would happen if a difficulty arose, I am not in a position to make a commitment. Of course, at present it is a wholly hypothetical issue. However, we hope that the system will work primarily for financial institutions and that it will work well. We shall obviously keep the matter under review, but we note what the noble Baroness said in relation to such a situation.
On Question, Motion agreed to.

Employment Bill
3.25 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that this Bill be now read a second time.
I am very pleased to have the opportunity to introduce this Bill to the House. I believe that it is an extremely important piece of legislation and one which will make a significant contribution to our economic and social well-being. Perhaps I may explain, first, why I believe that to be so.
I shall start by putting the Bill into the context of the Government's overall strategy. We all agree, I am sure, that one role of government, and in particular of my department, is to do all that we can to increase the productivity of British businesses and in that way strengthen UK competitiveness. Many factors, of course, influence productivity. But a crucial factor, and one where this country has not always been successful, is that of the relationship between the management and the workforce.
The purpose of the Employment Bill is to ensure that this country has a modern labour market fit for the 21st century. The labour market operates, like all markets, in a regulatory framework. It is the job of government to create the right framework. That is one of the things that the Bill is about.
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In addition to the right regulatory framework, we also need to ensure that incentives exist to get people into the labour market in the first place. We need to ensure that people have the skills that they need to add real value, that those skills keep pace with the ever-changing world, and that people with skills stay in the labour market. We need to ensure that the market is flexible so that businesses can respond quickly and effectively to changing consumer demand and to the challenges of competitors. Most of all, as I have already mentioned, we need to encourage effective work organisation and good employment relations between employers and their employees.
Those are critical issues and the gains that we have already made since 1997 are very real. The national minimum wage, the New Deal and the working families' tax credit are proving to be very effective incentives in getting people into the labour market. Our focus on education and training and the reforms that we are making in those areas are helping to address the skills problem. The same is true of the family-friendly policies that we have introduced, especially those aimed at making it easier for mothers to come back to work if they choose to do so, thus ensuring that valuable skills do not disappear from the labour market. We have the most flexible labour market in Europe and this is paying off with our higher employment rates.
The minimum standards that we have introduced to protect the most vulnerable workers have helped to get us out of the downward spiral of low wages and long hours and to foster instead a workplace culture of high commitment and high trust, where skilled and motivated employees help their companies to compete on the basis of quality of output rather than purely on cost of input. The minimum wage, the working time regulations and the Employment Relations Act have all helped businesses down the path of more effective work organisation.
But significant problems remain. The Bill which I present to your Lordships today builds on our achievements and addresses the problems. It does so in specific ways which I shall now outline to the House. I begin, if I may, with Part 3 of the Bill, which deals with dispute resolution. This is probably the most contentious part of the Bill and addresses the historic UK problem of poor workplace relations.
We estimate that nearly 6 million ernployees do not have access to adequate grievance procedures at work and that around 3 million have no workplace procedures at all. Inevitably that means worse industrial relations and more employment tribunal hearings. Your Lordships have seen the results of the Survey of Employment Tribunal Applications. There may be some disagreement over the exact interpretation of the figures, but it is clear that a significant proportion of cases that come before tribunals—more than a third of cases in the period covered—are cases where no attempt has been made to resolve the dispute in the workplace before recourse to the tribunals. This must be wrong. It is in everyone's interest to try, where possible, to get these problems resolved at as early a stage as possible.

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Protracted disputes which end up at a tribunal are bad for the employee; they are stressful; the settlement is seldom particularly large; and statistics show that the person involved is likely to end up in a lower paid job or without a job as a result, regardless of whether the case was won or lost. They are also bad for the employer. The average cost of responding to a tribunal application is estimated at £2,000. A rough estimate of the total cost to business last year, when there were 130,000 tribunal cases, was about a quarter of a billion pounds.
Of course, there is a cost to the economy as a whole; not just the cost to the taxpayer of coping with the rapid increase in numbers of tribunals, but, more importantly, the cost to our productivity and competitiveness of a complete breakdown of the employment relationship from what may start off as a relatively minor in-work dispute. In such circumstances, recourse to a tribunal or court should be a last resort, something to be turned to only when there is no other way of solving the problem. That is what the Bill aims to achieve by introducing a statutory basic minimum procedure to be followed in grievance and discipline cases.
The impact of our new procedures on the outcome of cases—the balance, if you like, between the two sides in each case—should be neutral. By legislating for statutory workplace procedures, we are not making it easier or harder for workers or employers to win cases when they go to a tribunal. We are saying, rather, that there should be fewer cases altogether that need outside intervention, and that the way to achieve that is to follow three simple steps: first, to explain the matter in writing; secondly, to hold a meeting to discuss the matter; and, thirdly, to offer a further meeting on appeal.
That will work in a balanced way. An employee has a right to that procedure, but he or she also has a duty to use it. Employees will not be allowed to lodge certain cases with a tribunal—with some important exceptions—until they have followed at least the initial step. If at a tribunal either side is found to have failed to follow the procedures properly, either side can see the award adjusted by up to 50 per cent. I want to stress that that approach is not at the expense of one interest group over another. It is about more efficient work organisation and a reduction in litigation. That is why both the business community and the trade unions have welcomed the statutory basic procedures that we are introducing through Part 3 of this Bill.
I should mention the changes that we are making in Part 3 to unfair dismissal rules. They are important, but again I want to stress that they are balanced. On the one hand, we are making it automatically unfair to dismiss a worker if the employer has not followed the new statutory procedures. On the other hand, we are allowing tribunals to ignore procedural irregularities, over and above the statutory procedures, if it can be shown that they make no difference to the decision to dismiss, provided, of course, that the dismissal was fair
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in all other respects. Those are complex matters and I am sure that noble Lords will want to scrutinise them carefully during the Committee stage.
Of course, there will be cases that cannot be resolved in the workplace. For those cases the Government are determined to provide a modern, fair and efficient tribunal system. Tribunal reforms are dealt with in Part 2 of the Bill. The Government believe that while in recent times the tribunal system has coped admirably with a large increase in the number of cases, it needs to change to meet new demands and to reflect how much the world and especially the labour market are in a constant process of change.
For example, the Bill puts a new focus on settling cases amicably. It introduces a fixed period of conciliation during which parties can concentrate on trying to find a solution to their problem on which they can both agree with the expert help of ACAS. That will cut down on prolonged negotiations that do not get resolved until, sometimes quite literally, the parties are on the steps of the tribunal. We hope that that will allow ACAS to concentrate on claims that need the most help and that it will help to reduce wasted administrative effort by the Employment Tribunals Service.
The Bill also places a new focus on consistency. Over time the tribunal system has grown and changed, and those who work in it and use it are unanimous in supporting the new powers in the Bill for the presidents of the employment tribunals to issue practice directions.
There are minor changes to the costs regime in the employment tribunals. An award of costs is a very rare event in such tribunals. There are no provisions, as in the courts, for the loser to pay the costs of the winner. Employment tribunal costs awards can be made only when a party has brought a hopeless case that has no prospect of success. Equally, that applies to the claim that an applicant has brought and to the defence that a respondent makes to it, or where a party has behaved abusively or unreasonably in bringing or conducting a case.
Last year 130,000 claims were made and there were 247 awards of costs. All agree that such claims do not belong in the system and that the people who have had their time and effort wasted in fighting them deserve compensation. At the moment costs awards primarily cover legal fees, but we know that many parties, particularly many applicants, do not use legal help. The Bill changes the rules for awarding costs so that compensation can be paid for the time a party has spent on such cases. It will also allow costs orders to be made against a paid representative, which includes lawyers and employment consultants who charge for their services, but excludes trade union representatives, CAB and legal advice centre staff and other not-for-profit advisers.
The Bill makes similar changes regarding wasted costs in the Employment Appeals Tribunal. It gives the Secretary of State the power to prescribe a form to be used in instituting and responding to employment tribunal claims and allows tribunal claims to be

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determined in writing where both parties and the tribunal consider that that is right. It also clarifies the legislation governing pre-hearing reviews to allow for the striking out of weak cases at a pre-hearing stage.
These are not radical provisions. They will not change the world overnight. But we believe that they are sensible and modest proposals which will ensure that we have the right regulatory and enforcement framework to support our other changes. As with other provisions in the Bill, we have consulted widely on the proposals. We have listened to the views of the judiciary, user groups, trade unions, advisory bodies, employers, ACAS and others.
I should also mention the important work of the Employment Tribunals Systems Taskforce, chaired by Janet Gaymer. The taskforce is currently looking at how the employment tribunal system can be made more efficient and cost-effective for users and at the need for new investment against the background of sharply rising demand for their services. The taskforce will report in the spring.
I turn to Part 1 of the Bill, which introduces new rights for parents that will ensure that they can spend time with their children when it is most valuable, which is when they are young. We are fulfilling our commitment to introduce for the first time pay and leave rights for fathers and for adopting parents. In addition, the Government are extending maternity leave and simplifying the rules governing maternity leave and pay.
At this stage it makes sense also to mention Clause 47 on flexible working. That clause, the result of the valuable work of Professor Sir George Bain's taskforce on flexible working, gives employees the right to apply for flexible hours if they have children under six or disabled children under eighteen, and puts a duty on employers to consider such requests seriously. Of course, employers may turn down such requests, but the onus will be on them to explain clearly, in writing, why they are doing so. We want to get away from the knee-jerk reaction that says, "We cannot accommodate anything that deviates from our standard hours", without even thinking about why not. We want businesses to understand that they also have much to gain from more flexible working patterns for their employees.
It should, I trust, be self-evident that these new family-friendly measures will have a positive effect. Most obviously, they will be beneficial to working parents who are struggling to balance their work and family commitments. For the first time, fathers can take paid time off to be with their new-born children, over and above their contractual rights to paid holidays. Because the pay will be statutory, the cost will be borne principally by the state rather than by the employer. Adopters will at last have the right to paid time off, with adoption leave and pay available for the same periods as maternity leave and pay: 26 weeks' paid leave followed by 26 weeks' unpaid leave. Where couples adopt, one partner will also have the same right to paid paternity leave as other new parents.
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I think we would all agree that such recognition of the valuable role played by adoptive parents is long overdue.
So these measures benefit employees in a very direct way. But they will also benefit business and the labour market as a whole. To return to the themes I outlined at the start of this speech, these new family-friendly rights provide incentives for people to return to the labour market if they wish to do so, thus helping to retain skills in the labour market, and will encourage businesses to look at more flexible and more efficient ways of organising their work.
Finally, Part 4 also contains important new rights. It comprises a group of related but separate provisions which all contribute in their different ways to the overall objectives which I outlined at the start of my speech.
The introduction of an equal pay questionnaire will enable the facts of a case to be established early. It will encourage not only the collection of evidence but also the settlement of cases before they proceed to tribunal. This is about a basic issue of social justice. The absence of transparency on pay information contributes to, and perpetuates, the gender pay gap. It is also of course about creating a modern labour market—one where people are rewarded on the basis of the job that they do, not their gender.
Another long-standing problem in the workplace, as I mentioned, is the skill level of those in work. The Bill introduces a right to time off for union learning representatives. That will ensure that vulnerable groups of workers such as older men, people from ethnic minorities and part-timers who, at the moment, often miss out on training and development opportunities, are given support and encouragement from their representatives, who are very skilled at reaching precisely these groups.
Of course there is more than one way to address the problem of getting people into the labour market. The Bill also attacks the problem through the benefits system. This is not entirely a DTI Bill; it also contains provisions which are the responsibility of the Department for Work and Pensions. I have already mentioned statutory maternity pay in. Part I. In Part 4 we have included measures which ensure that partners of people receiving working age benefits will receive advice about finding work through work-focused interviews.
We have taken powers to allow us to use information collected by the Inland Revenue to help us evaluate the effectiveness of employment and training initiatives in moving people into sustainable work. That information will also be used in relation to paying and rewarding providers of employment training initiatives.
Finally, Part 4 also contains the important provisions on equal treatment for fixed-term employees. We are ensuring that people on fixed-term contracts cannot be treated less favourably than their colleagues on permanent contracts. We are outlawing the abusive use of consecutive fixed-term contracts. Fixed-term contracts have a legitimate and important

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role to play in a modern, flexible labour market. We want to ensure that they are used fairly to meet the needs of business and employees and not as a way of cutting costs to the detriment of the employee.
We have consulted widely on the provisions in the Bill. We have listened and we have responded to what we have heard. For example, we have designed the new paternity and adoption rights to mirror the simplified maternity provisions. Business representatives asked for that in their responses to our consultation and we listened to them.
This approach has allowed us to bring forward a Bill which has the broad support of both sides of industry. There are, of course, some dissenting voices, as with all legislation. But the range of organisations which support these measures is impressive and ranges right across the spectrum.
On the new statutory procedure for all employers, the British Chambers of Commerce said:
"It is in the best interests of employers to embrace these procedures, as it is they who often lose unfair dismissal cases because they have no procedures in place".
The TUC said in its press notice that it,
"welcomes the Employment Bill plan for grievance and disciplinary procedures".
John Monks went on to say that,
"much of this Bill can be warmly welcomed".
The CBI spoke of its belief that,
"good internal procedures are important in the workplace and that all workplaces should be encouraged to have a basic minimum set of procedures for dealing with a disciplinary matter or employee complaints".
Unison said:
"We welcome the announcement of the extension of maternity leave and pay. We also welcome the majority of proposals in this framework for simplifying maternity rights".
I could give other examples, but I hope that these limited extracts are sufficient to show that this Bill is indeed a balanced package which is built on a general consensus about the right way to go forward.
I look forward to hearing noble Lords' thoughts and comments on the Bill. I am sure that when we come to scrutinise it in Committee there will be many valuable contributions made. I know that there are issues in this Bill which are of great concern to some Members, and that an enormous amount of expertise on these matters resides in this House. We have consulted widely on the Bill. We shall listen very carefully to any arguments put forward for change. The Bill is not a radical one but it has, I believe, the potential to have a significant and beneficial impact on employment relations in this country. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Sainsbury of Turville.)
3.46 p.m.
Baroness Miller of Hendon: My Lords, here we go again. This is the third major Bill directly affecting employment that this Government have introduced in a period of less than five years in power, an average of one every 18 months. That is to say nothing of the
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hundreds of statutory instruments, orders and EU directives, often extra gold plated by Whitehall, that have descended on the shoulders of British industry and commerce.
However, I thank the Minister for his very full, clear and detailed explanation of the latest 60 pages, 55 clauses and 8 schedules of employment legislation, not a single hint of which was given in the Queen's Speech.
The Bill covers a wide range of issues that in many respects are unrelated. A number of them have important practical implications for all employers, large and small. But there is little in the Bill that could not have been included in the 1999 Employment Relations Bill. I suspect that we are being subjected to a kind of "salami" tactic whereby, drip by drip—or rather slice by slice—our employment law is being moulded into conformity with large parts of the EU. Indeed, the Minister for Employment Relations and the Regions admitted that even more employment legislation was in the pipeline when he told the other place on Report that,
"we are committed to reviewing the whole of the Employment Relations Act".—[Official Report, Commons, 12/2/02; col. 155.]
At an earlier stage the Minister said that,
"we can use a provision in the Employment Relations Act 1999 to review the complicated worker-employee issue".—[Official Report, Commons, 27/11/01; col. 928.]
I should be most grateful if the Minister could explain to me the difference between a worker and an employee. I remember very well, when we dealt with the National Minimum Wage Act, the Government refused to accept the word "employee" and insisted on the word "worker". In this Bill we also have the word "staf".
The Bill contains a plethora of new regulations which cover paternity, maternity and adoption rights and, of course, still more trade union rights. Many of those burdens on commerce start in Brussels. In the past few days we have seen a large kite flying over that city in the form of further so-called rights to be accorded temporary workers.
It is fair to say that we give a general welcome to Parts 1, 2 and 3 of the Bill, including the "family friendly" policies in the workplace. But we have some problems with Part 4. We are concerned that we know so little about the final shape of the legislation due to so much of it being contained in regulations yet to be published.
As my honourable friend the Member for Maldon and Chelmsford East said in response to the Government's task force report:
"We welcome measures to enable parents to maintain their place in employment … while spending time with their family…. It is also good news that the Government has ruled out an automatic right to work flexible hours which could have significantly added to the burdens on employers, particularly those in small firms".
Since those remarks about flexible working hours were made by my honourable friend, the Government have introduced in the other place the new Clause 47 which contains 195 lines of legislation on this subject. There is also the wide-ranging regulation which proposed

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new Sections 80F, 80G and 801 to the Employment Rights Act 1996 authorise the Secretary of State to make. I venture to suggest that employers and employees, especially small employers and individual employees alike, will find the rules an administrative nightmare to understand and a fruitful field for litigation before tribunals, as well as a potential cause of jealousy and dissension among employees in the same workplace.
We support the requirement that employees should use internal grievance procedures before resorting to litigation. Let us not mince words, that is what is involved in employment tribunals. However, we are concerned that some of the new arrangements will create confusion and uncertainty for employers. That is because a number of workplace issues, such as ill-health and redundancy, fit neither the proposed grievance nor the disciplinary statutory procedures. I suspect that the complex procedures of Schedule 2 were introduced only after the Government decided to drop the idea of a deposit as an alternative means to inhibit frivolous claims. The procedure, having been somewhat hastily prepared, is also vague and may need better definition, especially as there is no guarantee that the employer will be all right, even if he follows procedure to the letter.
I am also given to understand that the proposed new ways of handling disputes, which may inhibit access to tribunals, causes concern to some Law Lords. I shall be interested to hear their views to discover whether that is the case during our consideration of the Bill. It is significant that the Government have watered down their initial proposals in that regard in the face of pressure from their own Back-Benchers and the unions. Not the least of those reversals is their backing off from the proposal to require applicants to industrial tribunals to pay a refundable deposit as a means of inhibiting hopeless or vindictive claims or those launched in the hope of persuading the employer to pay something because of their nuisance value.
The Government gave as the reason for changing their mind that the proposal,
"did not have widespread support".
That was despite the fact that it was supported by the Federation of Small Businesses, the Institute of Directors and 80 per cent of those who responded to a Forum Business Survey. We may return to that question later, especially as the Government believe that dispute resolution will cost commerce up to £94 million a year in running costs alone.
Your Lordships may be interested to know that the growing number and cost of employment tribunal claims has been of concern to employers for a long time. The number of claims has risen from more than 29,000 in 1988–89 to more than 130,000 in 2000–01. That is due to changes in employment law introduced by the Government which have contributed to a compensation culture. It is not just the increase in workers' rights but the reduction in the qualifying period for unfair dismissal claims and the significant increase in compensation levels that lead employees to
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launch speculative claims, relying on the fact that, at the least, they have a nuisance value and, without the deposit to which I referred, they have nothing to lose.
It is surprising that, while Clause 22 provides for the Secretary of State to enable tribunals to make awards of costs and expenses against a party's representative because of the way in which the representative has conducted proceedings, the Government have set their face against penalising an unreasonable claimant for launching a wholly untenable claim. That may be an attempt to intimidate employers from being legally represented and to inhibit their representative's conduct of a case. In the High Court, an award by a trained and experienced judge of costs against lawyers is an absolute rarity.
The Government have stated that the aim of the Bill is,
"to deliver a balanced package of support for working parents at the same time as reducing red tape for employers and makmg it easier to settle disputes in the workplace".
Well, if that balancing act can indeed be achieved, it will be a miracle. I am not sure that the Government think that we will achieve exactly that. I am glad to note that the two weeks' paternity leave will have to be taken in one block and around the time of the birth. because that entitlement will bear especially hard on small firms with only a few employees.
The Bill demonstrates some of the Government's weak submission to union demands to "gold plate" the already oppressive EU directives by giving identical pay and pension rights for employees on short and fixed-term contracts as are enjoyed by permanent workers. Let us consider what the honourable Member for Twickenham described in the other place as,
"the classic example of bad regulation".
He was referring to the working time directive and pointed out that neither trade unions nor employers were consulted before the Department of Trade and Industry rushed in to produce what he rightly called,
"an enormously convoluted set of detailed regulations running to some 80 pages",
whereas, as he rightly pointed out, in Holland one page had sufficed. In a phrase that I wish that I had thought of, he said that that was,
"gold plating on an epic scale".—[Official Report. Commons, 27/11/01; col. 885.]
That sort of thing makes those of us on these Benches worry where the Bill, and especially the as yet unpublished secondary legislation, will lead us. We can find the threat of the Government's intention to indulge in ultra-gold plating in the note to Clause 45, where they admit their intention,
"to prevent pay and pensions discrimination against fixed term employees, in addition to implementing directive 1999/70/EC".
That is in addition to the directive, so we get the directive and a little more as well. None of our EU competitors will be so burdened; we shall be alone.
The Bill requires that fixed term workers shall not be treated less favourably than other etnployees. There are several ways in which any disadvantage can be made up without the over-prescriptive regulations

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threatened by the Government. Why do they not say specifically what they intend in the Bill, rather than tucking away proposed secondary legislation in a note? We do not know what that legislation will provide.
The introduction of flexi-working has many advantages for individual employees but, as with everything, there is a downside. The burden of providing that facility to workers with children will fall on those workers in small businesses who do not have small children but who may care for others such as elderly parents. However, like the Confederation of British Industry, we are relieved that there will not be an automatic right to flexi-time and that the matter should be properly considered.
Every measure in the Bill will add to employers' costs. None will do major damage on its own, but cumulatively they may be devastating. Apart from the cost of running dispute resolution, to which I referred, flexible working is estimated to cost £286 million a year. I shall not take up your Lordships' time by detailing the almost £248 million that the Government admit could be the cost of implementing the Bill's other measures.
Our major objection to the Bill is that, not for the first time during the regime of this Government, we are presented with what is largely an enabling Bill. I know that I say that every time I come to the Dispatch Box. We will have to await the detail in the form of ministerial decrees—euphemistically called statutory instruments—which parliamentary procedure affords only minimal opportunity to scrutinise and, in practice, none to modify.
We shall wish to examine closely the provisions of Clause 42, which introduces the concept of equal pay questionnaires, as the Minister mentioned. They should not be used as fishing expeditions to obtain information not directly linked to an employee's pay claim. In addition, confidentiality and privacy issues are associated with disclosing information about the terms and conditions of employment of individual employees that should be dealt with in primary legislation, not left to regulations, especially as the human right to respect for that privacy will be breached.
I must also mention Clause 43, which introduces rights for what are called union learning representatives, the number of whom can be determined by the union without the employer's agreement, despite the fact that the employer must bear the cost of the time off. I can hope only that the learning representatives will not be a means for unions further to infiltrate the workplace. The present state of industrial relations, as most people probably realise, is rapidly accelerating back to how it was in the 1970s and early 1980s. I notice that noble Lords on the Benches opposite are smiling or even laughing at me: I am used to it, for they do it so often. I still say what I believe in and what I think is right.
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I can hope only that the learning representatives will not be a means for unions further—I beg your Lordships' pardon, I got so confused that I was going to repeat the same paragraph. I made my point sufficiently the first time, so I shall move on.
It is only right for me to mention that there are already 3,000 learning representatives. Where they have been established on a voluntary basis, there appears to be no problem, and they are welcome. However, the Bill would change a voluntary arrangement to a compulsory one. When my honourable friend asked the Secretary of State whether any employers' organisations supported the concept of learning representatives, the quick and simple answer was, "The Confederation of British Industry".
That was not correct. In fact, the CBI said:
"The CBI supports the concept of learning representatives—but the right to appoint union learning representatives without the employer's agreement is unacceptable—In particular, the CBI opposes the right for unions to determine the number of union learning representatives without the employer's agreement".
Perhaps, the noble Lord, Lord Sainsbury of Turville, will now be able to answer that same question, but this time correctly. Have any employers' organisations unequivocally supported the concept of compulsory learning representatives, as set out in the Bill?
Mr John Monks, the general secretary of the TUC, recently said:
"The unions are back in business".
There is nothing at all wrong with strong unions, except when their agenda is still the them-and-us approach of the bad old days. We have hatched a new brood of militant trade union leaders, such as those in the rail unions. The RMT has recently chosen Mr Bob Crow, an ex-communist and a disciple of Arthur Scargill. The present agenda of his union is not to secure better pay and conditions for his members but to obtain the immediate reinstatement of a comrade from the hard Left Socialist Alliance who, as a train driver, has been disciplined for a breach of safety requirements.
Lord Lea of Crondall: My Lords, can the noble Baroness inform the House whether the words "social partnership" have ever passed her lips?
Baroness Miller of Hendon: My Lords, they have indeed. I believe in social partnership; I do not believe in it when it has gone wrong.
Mr Crow's avowed long-term objective is to secure the re-nationalisation of the railways. Some unions have still to learn that their members' prosperity and job security depends on the prosperity and competitiveness in the world marketplace of their employers. That is the truth: they must work together. If one does not work with the other, it is no good.
We must also examine the rather curious provisions of Clause 49, which relates to work-focused interviews for partners. The Explanatory Notes tell us that,
"Partners of working age benefit claimants who are themselves of working age will be required to take part in a work-focused interview".

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I see the hand of the Treasury in that, as it seeks to cut down benefit entitlements by trying to coerce the other partner into work. I am relieved—the noble Lord may agree with me—that the Conservative Party did not come up with that concept. The howls emanating from the other side of the House would have been deafening, and I would have been in more trouble than,it seems, I sometimes am.
What a badly drafted clause it is. A "partner" is a person who is a member of the same "couple" as the claimant. A "couple" is then defined as having,
"the same meaning as in the Contributions and Benefits Act".
Apart from putting a lay claimant to the trouble of looking at another Act, instead of simply repeating the definition, the draftsman may well have got the name of the Act wrong. I hope that the Minister will put that right at the next stage.
What, in fact, is a partner if the couple are not married? The 1992 Act refers to an unmarried couple as a man and a woman living together. Will the Benefits Agency demand the right to review couples' sleeping arrangements? If the provision does not apply to same-sex couples who do not have to submit to the interview, there would seem to be some discrimination against heterosexual couples. Perhaps the Minister will consider inserting a clause with a clearer definition, entirely self-contained within the Bill, so that every claimant and his or her partner will know their obligation without reference to a law library or a lawyer.
What is the whole purpose of the exercise when, as the notes make clear,
"The measure will not place any requirement on partners beyond taking part in interviews. (For example, they will not be required to attend training courses or seek work)"?
We know that the work-focused interviews will require the Government to take on up to 650 extra civil servants at a cost of about £35 million, and even the Treasury will not give an estimate of the savings—if any—that it will make as a result of that piece of job creation.
Before leaving Clause 49, which is in the "Miscellaneous and General" part of the Bill, I ask the Minister to confirm whether it is part of—or, indeed, instead of—the welfare Bill, which was mentioned in the Queen's Speech, as distinct from this Bill, which, as I have already said, was not.
Schedule 7 contains what are called "minor and consequential amendments". I give the Minister advance notice that I shall introduce one of my own to clear up an ambiguity in the 1999 Act, which he and I have discussed verbally and in correspondence.
It is difficult for me to come to a conclusion about the Bill. Like the proverbial curate's egg, it is certainly good in parts. On the other hand, there are parts where it is clear that the Government are working to a different agenda. There are also parts in which the Government want to regulate strictly the purely personal working relationship between small employers and their staff. There is even an agenda of creating a working environment in the United Kingdom equal to the rigid practices applicable on
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mainland Europe, ignoring, say, Germany which must now re-think the social costs that have left 4 million people unemployed. Perhaps the view of those of us on these Benches can best be summarised by a quotation from the amendment to the Second Reading Motion in the other place:
"although it contains welcome measures which promote family friendly practices … and which seek to improve dispute resolution procedures, it depends excessively on secondary legislation which is likely to impose significant extra burdens on business, especially small businesses; and … will impose extra costs on business, further damaging British competitiveness at a time when manufacturing industry is already in a fourth successive quarter of recession".
Lord McCarthy: My Lords, does the noble Baroness agree with me that when her party—and the party of the noble Lord, Lord Henley, who is sitting behind her—was in power, there were just as many regulations as we have? Is the noble Baroness telling us that, if her party ever got into government again, it would have no regulations?
Baroness Miller of Hendon: My Lords, 1 shall say nothing of the kind. I would never commit myself or my party—which will be in government—to that. Since the Labour Government took us into the social chapter, the number of directives has grown enormously.
4.9 p.m.
Lord Razzall: My Lords, as the Minister will be aware, we on these Benches have, unlike those on the Conservative Benches, consistently supported the Government on the three major pieces of employment legislation that they have brought in since taking office in 1997. That has been our position, and we welcome the provisions of the Bill in so far as they introduce maternity, paternity and adoption leave, and we also welcome the introduction of flexible working practices.
However, we are concerned that a Bill which we would have assumed was designed to deal with those matters, providing continuity to the previous three pieces of legislation brought in by the Government, has had added to it a number of provisions that are worrying. Our concerns may not be for the same reasons as those of the noble Baroness who has just spoken, but rather for a number of reasons which I shall try to summarise in the course of my remarks.
First, I turn to Parts 2 and 3 of the legislation dealing with reforms to employment tribunals and dispute resolution procedures. In his opening remarks, the Minister referred to the Employment Tribunal System Taskforce, recently set up by the Lord Chancellor and the Secretary of State for Trade and Industry to consider how the employment tribunal system could be made more efficient and cost effective for users. As the Minister indicated in his opening remarks, the taskforce is due to report in the spring of this year. However, notwithstanding the report of the taskforce, which was commended by the Minister in his opening speech, we find that the Government and, presumably, the Department of Trade and Industry have taken the

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view that they will not wait for that report, but rather they will put their imprimatur on the Bill with regard to what they already believe employment tribunal reform should be. The Bill must be brought forward now in order to secure the worthwhile alterations on maternity leave, paternity leave and so forth.
On reading the debate held in another place, it appears that that has been based on an assumption made and voiced, I think, by one of the Government Ministers in another place, Alan Johnson, that the DTI believes that 62 per cent of all cases that come before employment tribunals in this country are brought forward in a form that could have been resolved by grievance or dispute procedures. Despite considerable attempts made over the past few months by the noble friends of the noble Baroness, Lady Miller, to establish where that figure came from, we have not yet received a satisfactory answer.
I am sure that noble Lords will be disturbed by the significant concerns expressed by the president of the Employment Tribunals for England and Wales. He is of the view that those figures are incorrect—
Lord Sainsbury of Turville: My Lords, I rise briefly to point out to the noble Lord that, as has been debated in this House, we have brought forward the two reports and they have been deposited in the Library of the House.
Lord Razzall: My Lords, I accept the point made by the Minister. However, I am sure that he is aware that Judge Prophet, the president of the Employment Tribunals for England and Wales, takes the view that the figure cannot be correct because a large proportion of those who come before employment tribunals have already left employment as a result of alleged dismissal, redundancy or whatever it might be. Therefore he finds it difficult to accept the figure used by the DTI in its dispute resolution document; that is, that 62 per cent of all cases are brought by those who ought to have gone through the grievance procedures.
However, in a sense that is by the way because the significant point here, and to which I shall return, is that the Employment Tribunal System Taskforce was set up precisely to look at these issues. When the Minister responds to our debate, I should like him to justify why, at a point before the taskforce has reported, Her Majesty's Government have felt it necessary to implement the provisions of Part 2 and, to some extent, Part 3. The assumption being made by many working in the employment tribunals field is that this has happened because the DTI has an agenda with which they disagree. It may well be that the DTI is correct in its assumption on the agenda, but bearing in mind the strong representations that have been made by the president of the Employment Tribunals for England and Wales, and bearing in mind the Government's welcome commitment to consultation in relation to such issues, I think that the Government do need to justify why at this stage they are tacking on these measures to such a worthwhile Bill. I mention that in particular because, as was indicated both by the
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noble Baroness and by the Minister, we can anticipate further employment legislation from the Government into which the measures could have been fitted perfectly easily once the taskforce has reported.
Significant issues need to be discussed in relation to Part 3, many of which we shall wish to probe in Committee. In general terms, concerns have been expressed in a number of quarters to the effect that the Bill's proposed dispute resolution procedures will undermine ACAS. Noble Lords will be aware that the ACAS Code of Practice on Discipline and Grievance is widely adhered to and respected. Ministers in another place have admitted that there is no doubt that, if the Bill is passed in its current form, significant alterations will have to be made to the ACAS code of practice. Concerns have been expressed that the code will be watered down rather than strengthened, as it were, in the light of the provisions of the Bill. We would have assumed that the code should have been strengthened. Furthermore, it has been implied that best practice, as set out by ACAS, is not suitable for small employers. That, I think, is an assumption that this House should make at its peril.
A number of specific clauses in the area of dispute resolution have given cause for concern and will need to be dealt with in Committee and perhaps on Report. I turn first to Clause 34(2) which will amend Section 98 of the Employment Rights Act 1996. Noble Lords will know that this provides that dismissal will not be unfair for the reason only that a procedure has not been followed. From these Benches we take the view that this subsection provides rather a blunderbuss approach to overturn a decision reached by the House of Lords in 1988 which will be familiar to all practitioners in the area. However, in Committee we shall want to probe whether it will be more difficult to persuade human resources managers to follow a procedure if they think that they can get away with not following it simply by arguing that the employee would have been dismissed anyway. Serious concerns have been expressed about the "blunderbuss effect" caused by the drafting of this clause.
The second point that I wish to highlight in my remarks on Second Reading with regard to dispute resolution concern the modified procedures provided in Schedule 2. Concerns have been expressed with regard to the use of the modified procedures in cases of gross misconduct. We understand clearly the intention of the legislation, but it is possible that rogue employers will seek to use the modified procedures set out in this schedule in an abusive manner. In Committee we shall need to look carefully at those issues.
As I said earlier, we welcome Clause 45 and the introduction of the provisions on fixed term work. The noble Baroness, Lady Miller, will know that these provide for the implementation of European Council Directive 1999/70/EC. However, we should like to ask why the Government have chosen to limit the provisions to employees only rather than to apply them to all workers. Certain categories of workers

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such as agency staff and casual workers are to be excluded from these welcome provisions. We shall seek to probe that area in Committee.
Clause 49 is a cause of considerable concern because apparently it would give JobCentre staff full discretion in deciding whether or not the partner of someone claiming benefit should be called for interview. Such a measure clearly requires primary legislation. The benefits in question include not only income support and jobseeker's allowance but incapacity benefit, severe disablement allowance and invalid care allowance—which suggests that some partners of people in receipt of benefits payable to carers and disabled people would be expected to attend an interview or face one at home. They may come under pressure at an interview—on the assumption that if they can turn up for one, they can turn up for a job interview and take a job. The Government need to look seriously at the implications of Clause 49—particularly for disabled persons and their partners.
Having expressed some of our reservations albout the Bill, I welcome the provisions in respect of maternity, paternity and adoption leave, and flexible working Lime. We regret, however, that the Government have chosen to add a hotchpotch of measures—many of which are ill thought out and ought to be subject to separate legislation.

Martin Sixsmith
4.22 p.m.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, with the leave of the House, I wish to repeat a Statement made by my right honourable friend the Secretary of State for Transport, Local Government and the Regions in another place. The Statement is as follows:

"With permission, Mr Speaker, I would like to make a statement on the circumstances surrounding the resignation of Mr Martin Sixsmith from the post of Director of Communications in my department.

"On 14th February the Daily Express and the Daily Mirror reported that my special adviser Jo Moore had sought to schedule an announcement on the day of the funeral of Princess Margaret.

"Both papers reported that an e-mail had been sent from Martin Sixsmith to Jo Moore in the following terms: 'Dear Jo, there is no way I will allow this Department to make any substantive announcements next Friday. Princess Margaret is being buried on that day. I will absolutely not allow anything else to be.'

"In fact no such e-mail was sent from Martin Sixsmith to Jo Moore. Nevertheless the Daily Mirror reported yesterday Martin Sixsmith apparently told the reporter concerned on 14th February 'every aspect of your story is correct. I'm happy with it.'

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"On the morning of 14th February the Prime Minister's official spokesman briefed the Lobby on the allegations contained in the Express and the Mirror using an explanation that had been agreed with Martin Sixsmith.

"Subsequently that lunchtime and into the afternoon it seems that one or more officials from my department began to brief the press that the line used by the Prime Minister's official spokesman was incorrect. At least one official appears to have spoken on this basis saying he was ringing on behalf of Martin Sixsmith.

"So what we had was a concerted attempt by a very small number of civil servants in the press office to undermine the department. I should stress that only a very small number were involved and their actions are being investigated. The vast majority work in a very good, committed and dedicated manner.

"On the morning of Friday 15th February I met with my Permanent Secretary, Sir Richard Mottram, to discuss the situation. Sir Richard told me that in his view the positions of both Martin Sixsmith and Jo Moore had become untenable. He felt that the best thing for the department would be if they both left their posts because relationships within the department and with its Ministers had broken down. He recommended that we should seek their resignations. I agreed with Sir Richard's recommendation. I said that I would talk to Jo Moore and Sir Richard said he would talk to Martin Sixsmith.

"We were clear that the department could not carry on with the communications department in the state that it was. As I made clear on the Dimbleby programme at the weekend, I believed both should go.

"Jo Moore agreed to resign. Mr Sixsmith agreed to resign. I announced the resignations. The details of the events that day are set out by Sir Richard Mottram in his statement of yesterday.

"Since then, there have been a number of meetings and discussions involving Mr Sixsmith in an attempt to resolve the detailed terms of his departure. I have not been directly involved in those negotiations. I have not met or spoken to Mr Sixsmith since his resignation and the detail of these discussions has been conducted by Sir Richard Mottram.

"I made it clear to Sir Richard Mottram, however, that in my view, and this view is strengthened by the events of recent days, Mr Sixsmith should not be given a job elsewhere in government. Ultimately, I was not in a position to block any arrangement about his future employment elsewhere in the Civil Service, and I accepted that discussions between Sir Richard Mottram and Mr Sixsmith would continue. Those discussions focused on him either getting another job in government or being compensated according to the terms of his contract.

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"It was because in the end this decision about his future, beyond leaving my department, was not for me to take that I sought to make clear on the Dimbleby programme that I was not personally involved in the discussions with Mr Sixsmith on an alternative Civil Service job. But if my answers on the programme gave the impression that I did not put forward a view, or make clear my views to others inside and outside the department, that is obviously something I regret and I welcome this opportunity in the House to clarify matters.

"It is true that I was not personally involved in the negotiations. It is also true, however, that I believed Mr Sixsmith should not be given another job. I did not see the Dimbleby programme as the suitable place for detailed discussion about a personnel issue. Indeed, it is with some regret that I stand here now, making clear what my views of Mr Sixsmith are.

"I should emphasise that this is not an argument between elected politicians and civil servants. As the Prime Minister has repeatedly made clear the dedication, professionalism and political impartiality of the British Civil Service is one of the country's greatest assets. I wholly endorse that view.

"My department, like every other, is staffed by dedicated and hardworking people who impartially serve governments of any colour. What is at issue here is whether one or two unnamed officials, acting quite contrary to the traditions and ethos of the Civil Service, can be allowed to disrupt and undermine the vital work of a Department of State. I do not believe they can.

"I will not allow this issue to distract myself, my ministerial team or the department from delivering on the challenging agenda ahead of us. Long after this issue is forgotten people will judge us by what really matters. I will not shy away from taking the tough decisions—whether in relation to Railtrack, reforming local government finance or making sure none of our regions is left behind.

"What matters to the people of our country is seeing improvements to our transport system; once again valuing local government; providing decent homes for our people; regeneration of our communities. That is what we are committed to do as a Government. And that is what I am delivering and will continue to deliver as Secretary of State for Transport, Local Government and the Regions".

My Lords, that concludes the Statement.
4.19 p.m.
Viscount Astor: My Lords, throughout the country passengers are waiting for trains on the railways and the Tube, planes are diverted because of the inadequacy of the half-privatised air traffic control system, and motorists are stuck in ever-longer traffic jams. That is the daily reality of the Government's total failure with transport after five years in office.
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I must of course thank the noble and learned Lord, Lord Falconer, for repeating the Statement. Is he not ashamed and embarrassed to come to the House with a Statement about the office politics of the department that is supposed to be sorting on that mess? So much for an integrated transport policy. The Secretary of State cannot even run an integrated private office.
To restore morale in the department, will the Minister express full confidence in Sir Richard Mottram and in the career civil servants in the department? Will he accept publicly that it was a gross error not to have dismissed Jo Moore after her appalling behaviour on 11th September? In view of the comments about Mr. Sixsmith, can the Minister assure the House that Ms Moore will never again be appointed to any public post in this Government?
I wish to ask the noble and learned Lord six questions. Who took the decision to remove Mr Sixsmith from his post? Who decided, at what time, and by what means, that the announcement of the resignations would be made? Can the noble and learned Lord tell the House what Mr Sixsmith did wrong to be sacked from the Department of Transport?
On Sunday, the Secretary of State said:
"I had absolutely nothing to do with and no discussions about Mr Sixsmith's departure. Personnel matters are dealt with not by me but by the permanent secretary".
How does the Minister square the apparent contradiction between this claim and the Permanent Secretary's statement yesterday when he said:
"It was clear to me that this situation could not continue and that Jo Moore and Martin Sixsmith should both leave their posts, because relationships within the department and with its Ministers had broken down. I discussed this with Mr Byers. He agreed with my proposal"?
How does the Minister square that?
Why did the Secretary of State say on 15th February that Mr Sixsmith had resigned when it is quite clear that he had not resigned? Was he misled by the Permanent Secretary? How did he get it wrong? Mr Martin Sixsmith said again today that he did not resign. If he is not telling the truth, where is the letter of resignation? Are the Government and the noble and learned Lord saying that Mr Sixsmith is now not telling the truth?
In the Statement, the Secretary of State says that Mr Sixsmith should not be given a job elsewhere in government. The Secretary of State has sought to end a civil servant's career. He denied it originally but has now admitted it. Is not this gross interference in the management of the Civil Service and, indeed, all the codes that go with it?
Too often the Government seem to believe that if the cause is just or a Minister needs a boost, any spin will do. They cannot conceive that it may be time to apologise or that they may be wrong. The reality is that there is now a shadow over the reputation and the functioning of the department that cannot be removed until the Secretary of State shows the sense of honour that he has so far not shown and steps down. We have been led too often into his world of half truths and

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conflicting statements. Remember Rover and BMW; Railtrack and the chairman's meeting; the rail regulator; Mr Bob Kiley, the London Transport commissioner; and now Mr Sixsmith and Sir Richard Mottram. Is it not astonishing how many people the Secretary of State meets who seem to misrepresent afterwards what he says to them? He is obsessed with spin and presentation. Indeed, two years ago he was reprimanded by the Trade and Industry Select Committee for this very thing.
The Secretary of State has become incapable any longer of effective management or of carrying the loyalty of his department. He is now part of the problem; he cannot be the solution. If the Secretary of State, Stephen Byers, stays, who will invest in London Underground? Who will finance rail investment? Who will lend more money to NATS? Would he not be more respected if he stepped aside and gave the country what it needs—a new Minister to work with the Civil Service and to deliver results on our roads and railways?
4.33 p.m.
Lord McNally: My Lords, the noble Viscount, Lord Astor, has raised a number of detailed questions about the minutiae of this affair. In some ways, this may well play into the Government's hands because they would like to ring-fence this issue in the minutiae of who said what to whom. I should like to go further and probe the Minister about the Government's views on a wider philosophy.
In the Statement, the Secretary of State says that,
"people will judge us by what really matters".
In another place, he has been well supported by honourable Members, who have spoken about transport, roads and so on and have said that those are the things That really matter. However, I put it to the Minister that—especially in this House—as well as those things really mattering, so does the principle of an independent Civil Service, selected and promoted on merit. So, too, do the standards of public administration. I should like to use this opportunity to probe the Government about how they are approaching those responsibilities—the ones that really matter.
Before I do so, I should like to question a point made by the noble Viscount, Lord Astor. It is extraordinary that in his Statement the Secretary of State confirmed that he gave the view that Mr Sixsmith was not suitable for transfer to another department. That surely is outside the code of conduct for Ministers and is not proper behaviour. Perhaps the noble and learned Lord can confirm that Ministers are not expected to interfere in personnel matters in that direct way.
The Secretary of State also said that, as well as Mr Sixsmith, there were at work in the department,
"unnamed officials, acting quite contrary to the traditions and ethos of the Civil Service".
These are extremely serious charges. Can the Minister say whether the specific civil servants are under inquiry at this moment and whether they will be named and
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disciplined? Or will this charge be left hanging in the air as another part of the smokescreen surrounding the Government's explanation?
Is the Minister aware that outside the Downing Street bunker—if he is, he must be the only one everyone now believes that the department needs a fresh start under a fresh Minister? The Government can send Mr Byers wherever they like, but that department needs a new start.
Does the Minister agree that this is not only a matter of a single Minister and an individual civil servant? The Labour Party had 18 years to think about it, and has had five years to practise it. Yet it has got its relationship with the career Civil Service into a terrible mess. There is something about this present mess that goes to the very heart of government—for instance. the way in which the Prime Minister handles his Cabinet and his special advisers in No. 10; the way in which he lets loose the Downing Street press machine and the lack of guidance to the press offices in individual departments. There is a need for the Government to clearly state, and underpin with action. the NorthcoteTrevelyan principles which have stood us in good stead for 150 years.
Do the Government believe that there is a genuine conflict between the purely information role of press officers and their wider political propaganda role? What does the Minister think of Mr Charlie Whelan's suggestion that all press officer posts should be political appointments so that the role they play within government is clear? Will the Government introduce a Civil Service Bill? If not, what is the reason for delay?
Does the Minister agree that in these past four or five years, by the way they have allowed their special advisers to act the Government have missed a wonderful opportunity to reform our system of administration to enable us to bring in outside experience—including outside political experience—to the betterment of government?
Does he agree that there is also a responsibility on the senior civil servants—the so-called mandarins—to protect the Northcote—Trevelyan principles? They should be able to say, "No, Minister" as well as. "Yes, Minister". If a Minister and a government go beyond those principles, they should have the courage to resign.
In some ways it is not appropriate that a transport Minister should be answering these questions because this is not about transport policy but about governance and probity in government. We are lucky in this House because the Minister responding is well known not only as a departmental Minister but as one of the Prime Minister's close confidants, a man to whom he listens. Will he tell the Prime Minister that this is not a matter to be dealt with by bluster and braggadocio, but by looking at the crisis of confidence that really and genuinely exists in our Civil Service at the moment and acting on it? If the Prime Minister

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does not, he will deserve the contempt, and ultimately the punishment, of the electorate for failing in one of his most fundamental duties.
Lord Falconer of Thoroton: My Lords, I agree with the noble Viscount, Lord Astor, that what people are most concerned about in this country are the problems of transport and that we should be concentrating on seeking to resolve them. That is what my right honourable friend in another place is seeking to do. He asked me to express full confidence in Sir Richard Mottram and I do so without hesitation. He asked me to express full confidence in the Civil Service in my department and I do so without hesitation. Speaking personally, as regards the particular areas with which I am concerned in my department, which are housing, planning regeneration and other matters, the quality of service I have been provided with from the Civil Service has been second to none and the relationship between Ministers and the Civil Service has also been second to none. I believe that we should get this matter into perspective.
The noble Viscount, Lord Astor, asked six questions, which I shall try to answer. I did not quite get down the sixth because he veered between question and abuse. It was quite difficult to determine what was the question and what was the abuse. The first question was: who took the decision that Martin Sixsmith should resign? Perhaps I may read from the personal statement made by Sir Richard Mottram yesterday. He said,
"On Friday, February 15, it was clear to me that this situation could not continue and that Jo Moore and Martin Sixsmith should both leave their posts, because relationships within the department and with its ministers had broken down. I discussed this with Mr Byers. He agreed with my proposal. We agreed he would talk to Jo Moore and I would talk to Mr Sixsmith".
He then describes his discussion with Mr Sixsmith and the statement continues:
"He"—
that is Mr Sixsmith—
"agreed that he was willing to resign on three conditions: that Jo Moore should also resign; that he and I agreed the terms in which his resignation would be presented in a manner which did not blame him; and that he needed to understand the financial terms under which he would leave, although he said these were unlikely to be a difficulty for him."
Sir Richard then describes Mr Sixsmith going to the hospital appointment and said,
"I agreed that he would take up his hospital appointment, which he told me he could do and return to the department by 3.30 pm. At this stage"—
and these are the words of Sir Richard Mottram—
"I informed the Secretary of State and the Cabinet Secretary that Mr Sixsmith had agreed to resign".
My right honourable friend in the other place agreed with the contents of the statement in his Statement in the other place. Sir Richard continued:
"Because he failed to return to the department for some two hours after the time we had agreed, the detailed terms of his resignation had not been finalised nor put in writing by the time it was announced together with that of Jo Moore—earlier than had been planned because of a leak— at 4.45 p.m. on the Friday. The
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terms of the Secretary of State's announcement were discussed with me. They did not attribute any blame to Mr Sixsmith and were consistent with the discussion I had had with Mr Sixsmith on his second condition".
Those are the circumstances of Mr Sixsmith's resignation, as set out by Sir Richard Mottram. The statement sets out clearly how the decision was taken.
The second question from the noble Viscount was: who took the decision on the timing when the resignation was announced? The announcement was made by the Secretary of State at 4.45 p.m., as Sir Richard Mottram's statement makes clear. That was discussed with Sir Richard. The third question was: as it has been said that my right honourable friend the Secretary of State has nothing to do with personnel, why did he get involved in the decision about Martin Sixsmith going? Again, I refer to the statement made by Sir Richard Mottram. It was he who came to the conclusion that,
"the situation could not continue".
He discussed it with Mr Byers and,
"He agreed with my proposal".
That is how the Minister became involved, and it was made absolutely clear at all stages by Mr Byers that that was his involvement.
The fourth question was: was the Secretary of State misled by the Permanent Secretary? What the Secretary of State announced at 4.45 p.m. was that Mr Sixsmith and Ms Moore had resigned. Sir Richard Mottram says in his statement,
"At this stage"—
which is 3.30 in the afternoon of Friday—
"I informed the Secretary of State and the Cabinet Secretary that Mr Sixsmith had agreed to resign".
It was on that basis that the Secretary of State made his Statement at 4.45 p.m.
The fifth question was: where is the letter of resignation? As Sir Richard Mottram's statement makes clear, there is no letter of resignation because there were still three issues to be resolved. As I say, I could not grasp the sixth question because of the mixture of abuse and question. If the noble Viscount would like to repeat it, I shall be more than happy to try to answer it.
Viscount Astor: My Lords, the noble and learned Lord has offered me the opportunity to repeat the question and I am grateful. Mr Sixsmith has repeatedly said, and said today, that he did not resign. Is the Minister saying that Mr Sixsmith is not telling the truth?
Lord Falconer of Thoroton: My Lords, I believe that that is a slightly disingenuous question, if I may say so with the greatest respect.
Sir Richard Mottram's statement makes it absolutely clear that there was a discussion about resignation. Noble Lords must draw their own conclusions as lawyers as regards this matter. The detail has been set out of all the facts; namely—and I quote,
"He agreed that he was willing to resign on three conditions".

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Then Sir Richard sets them out. Those are the facts.
As regards the noble Lord, Lord McNally, he, perhaps with some sense, moves away from the minutiae of the issue and asks whether it does not indicate a malaise. The malaise that he seeks to identify is the relationship between Ministers and the special advisers on the one hand, and the Civil Service on the other. I most emphatically reject the suggestion that it is indicative of any sort of generalised malaise. Of course, it is plain from these events that there has been a problem in the Department for Transport, Local Government and the Regions in relation to the press office, but that is not a problem that spreads across to Ministers and their special advisers and their relationship with civil servants.
My own personal experience has been that relationships between civil servants and Ministers have been good. In the vast majority of cases, special advisers also get on well with civil servants and that can be demonstrated by my own department where the two remaining special advisers have a good relationship with civil servants.
The noble Lord asked whether all press officers should be politicised, as Charlie Whelan suggests. Most emphatically not. The vast majority of government press officers should continue to do their jobs in the best traditions of the British Civil Service.
4.47 p.m.
Lord Boardman: My Lords, can the noble and learned Lord make it clear that Martin Sixsmith did not resign and has not resigned? It is clear from the statement from Sir Richard Mottram that Mr Sixsmith said that he was willing to resign on three conditions, which were to be discussed on his return from hospital. They have never been discussed or clarified and therefore there is no evidence of resignation. Can the Minister confirm that that is so?
Lord Falconer of Thoroton: My Lords, noble Lords can continue pressing me as much as they like on this matter. The facts are set out very clearly. If it is the noble Lord's conclusion that Mr Sixsmith has not resigned, then so be it.
Lord Clinton-Davis: My Lords, will my noble and learned friend confirm that it is his view that the Secretary of State for Transport will be judged, not on this transient issue which the Opposition are using as a sledgehammer, but on the important issues of whether the ideas on transport which he substantially and effectively follows, and which largely he inherited from the Opposition, will be dealt with? Can my noble and learned friend say whether the letter of resignation, which the Opposition continually refer to, is as illusory as the case proposed today?
Lord Falconer of Thoroton: My Lords, I agree entirely with the first part of the question. My right honourable friend in another place will be judged on his success or failure in relation to transport and other issues which are his responsibility and not, as my noble
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friend said, on these transient issues which the noble Viscount described as "office politics". As I have made absolutely clear, my right honourable friend said that there was no letter of resignation.
Lord Simon of Glaisdale: My Lords, is not this extraordinary intervention merely the latest phase of a deplorable situation that we have seen developing in a major government department? Is it not high time that the position of special advisers was reviewed, with civil servants being restored to the position that they have enjoyed, to the general admiration of the public, of giving the decisive advice to Ministers, as has been the case since the Trevellyn-Northcote Report, and also of ensuring that information is given impartially?
Lord Falconer of Thoroton: My Lords, from my experience, the Civil Service has continued fearlessly, as always, throughout the time of this Government to give impartial advice in the best interests of the state, whether or not Ministers want to hear it. In the vast majority of cases, I do not believe that special advisers hinder or damage that process; indeed, far from it, they make it easier. As many civil servants recognise, Ministers are frequently unavailable and it is useful to have special advisers who can reflect their views to civil servants. It is not a bad development: it is one that began under previous governments, as they would acknowledge. Where the arrangement works well, as it does in the vast majority of cases, it is beneficial both to the Minister and to the Civil Service.
Lord Phillips of Sudbury: My Lords, in a spirit of, I hope, non-partisanship, I ask the Minister to look at the broader context of today's announcement. Whatever we may say in this House, I believe he will agree that the British public is fed up to the back teeth with the manner in which much of the press relations of the present Government—and, indeed. of the previous government—have been conducted. There is a real breakdown of trust between the public, the Government and Whitehall that is damaging politics and democracy.
I fully accept that the press are involved in this state of affairs, as well as the Government, but can the Minister say whether there are any means of having less partisanship and manipulativeness on the part of government press departments, and more frankness and fairness? Unless we manage to introduce a new way to deal with press relations, I believe that the whole of politics will continue seriously to suffer.
Lord Falconer of Thoroton: My Lords, it is obvious to all of us that the standing in which politicians are held by the public generally, and right across parties, is not high. We must ask ourselves what form of conversation should politicians have with the electorate in order to seek to increase the standing of politicians. I believe that the standing of politicians with the nation is most important. For example, in my job as Minister responsible for regeneration, I notice that, in some cases, there are now more people voting for members of the boards for New Deal for

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Communities than there are in local authority elections. What does that say about the standing of politicians? Perhaps it indicates that in some cases it is those on the ground who might affect people's lives who are regarded as more important than elected politicians.
Lord Waddington: My Lords, does not the noble and learned Lord find it rather strange that in his Statement the Secretary of State seems to be trying to create the impression that there was no e-mail at all? Is it not agreed that there was an e-mail, albeit to the Secretary of State rather than to Jo Moore, about the subject of whether it was right to make an announcement on the day of Princess Margaret's funeral? Perhaps the noble and learned Lord can tell us why the Secretary of State appears to be dissimulating in this way in an effort to disguise the fact that there was such an e-mail? When Mr Byers announced on 15th February that Mr Sixsmith had resigned, do the Government now accept that no resignation by Mr Sixsmith had been finalised? Will they further accept that there is no earthly reason why Mr Sixsmith should have made a firm commitment to resign at that stage when there was no firm agreement on the terms of his resignation and the amount of compensation to which he is undoubtedly entitled?
Lord Falconer of Thoroton: My Lords, there was an e-mail from Mr Martin Sixsmith to the Secretary of State concerning the events of Friday, and the announcement. In his Statement, the Secretary of State referred to a purported e-mail—
Lord Waddington Lord Waddington: That is playing with words!
Lord Falconer of Thoroton: No, my Lords. The Secretary of State set out in detail the words of a purported e-mail published by the Daily Mirror and the Daily Express. They were not the terms of any email sent from Mr Sixsmith to the Secretary of State: it was in different terms. The Statement notes that such an e-mail was sent from Martin Sixsmith to Jo Moore. That is a reference to the e-mail wrongly quoted by the Daily Mirror and the Daily Express. I have set out the circumstances of what happened between Mr Sixsmith and Sir Richard Mottram. Noble Lords must draw their own conclusions in that respect.
Lord Campbell-Savours: My Lords, is not the underlying injustice in this whole affair the fact that a decent, honest and honourable man, Mr Byers, who some of us know very well—someone who is capable and who knows how to take real decisions in his department, as happened once in my former constituency when an important decision was quickly taken by him—has been totally undermined by perhaps two (certainly by one) as yet unidentified officials in his own department whose identity we shall need to know in the end? Further, he has been undermined by unreliable tittle-tattle and a frenzy of irresponsible activity in the national media.
Lord Falconer of Thoroton: My Lords, it is obviously not professional for someone in the department of Mr Byers to express unfavourable views about him to the newspapers. However, Mr Byers does not seek to defend himself. He simply seeks to say, "Give me the opportunity to get on with the job that I have been given. That is what the British people want me to do".
Lord Butler of Brockwell: My Lords, perhaps I may begin by warmly welcoming the reference in the Statement, and in the Minister's response, to the dedication of the Civil Service in helping the elected Government to carry out their aims. I agree with the noble and learned Lord that the relationship between Ministers, civil servants and special advisers is generally very productive. But when it breaks down, as it clearly has on this occasion—and, indeed, has done sometimes in the past—embarrassment and failure invariably follow.
I return to two questions asked by the noble Lord, Lord McNally, that I do not believe the Minister has answered. First, allegations were made in the Statement about other civil servants. Those allegations should not have been made unless, as a matter of fair process, there has been an inquiry that has established those involved and through which the civil servants have had a chance to reply. Can the Minister tell us whether such an inquiry has taken place and been completed? Secondly, can the Minister answer the point about the preparation of the Government's promised Civil Service Bill, which is awaited?
Lord Falconer of Thoroton: My Lords, the noble Lord is absolutely right to point out that I failed to answer the question put by the noble Lord, Lord McNally. I apologise to the noble Lord, and to the House, for that omission. I quote from the Statement. When talking about a very small number of civil servants in the press office seeking to undermine the department, the Secretary of State said:
"I should stress that only a very small number were involved and their actions are being investigated".
So an investigation is in progress, but not yet completed.
I turn to the question regarding a Civil Service Act. As the Government have made clear—indeed, I believe that this was made clear when the noble Lord was the Cabinet Secretary—there will be legislation to cover the Civil Service. We have made a commitment in that respect and the legislation will be introduced as soon as legislative time allows. As the noble Lord will know, that is a matter of judging priorities at the time of the Queen's Speech.
Lord Blaker: My Lords, I return to the points made by my noble friends Lord Boardman and Lord Waddington. I rely entirely on the Statement by the Secretary of State and on what the noble and learned Lord has said. There was an agreement to resign, subject to three conditions. Two of those conditions were ones mentioned by my noble friend Lord Waddington. There was no agreement on whether Mr Sixsmith would get another job or whether he

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would receive compensation. Those are two vital points. It is perfectly understandable that the agreement was not complete when Mr Sixsmith left for the hospital. It is, therefore, not surprising that he was astonished when he heard on the radio after leaving hospital the news of his resignation. Could the explanation simply have been that the Secretary of State was in a hurry?
Lord Falconer of Thoroton: My Lords, the explanation as given by Sir Richard Mottram in his statement again I apologise for repeating myself —is that,
"At this stage"—
that is, at 3.30,
"I informed the Secretary of State and the Cabinet Secretary that Mr Sixsmith had agreed to resign".
That is what Sir Richard told Sir Richard Wilson, the Cabinet Secretary, and Mr Stephen Byers, and on that basis the Statement was made. As to whether or not there is in law a resignation, I have set out the facts and noble Lords must draw their own conclusions.
Lord Bridges: My Lords, will the Minister pursue more urgently the possibility of the legislation relating to the Civil Service mentioned by the noble Lord, Lord McNally, and by my noble friend Lord Butler? Is not the truth that the Government have acted to take administrative decisions in the area of the hitherto unwritten constitution? It would seem that we are getting into some difficulties in the absence of any agreed framework of law as opposed to previously agreed unwritten conventions. Would not the Government be wise to bring this matter forward rather more urgently than they have apparently considered hitherto?
Lord Falconer of Thoroton: My Lords, as I have indicated, we have committed ourselves to such a Bill and we shall bring it forward as soon as legislative time permits.
Perhaps I may take up the noble Lord's point and refer back to a comment by the noble Lord, Lord Butler. By and large, the relationships between special advisers and civil servants work well. There is no legislation in the world that will make relations good. One should be realistic about that.
Lord Avebury: My Lords, will the noble and learned Lord deal with the other question put by my noble friend Lord McNally, which he has so far not answered; namely, what was the propriety of the Secretary of State expressing the opinion that Mr Sixsmith should not be employed in any other government department, and how was that compatible with the ministerial code of conduct?
Lord Falconer of Thoroton: My Lords, my right honourable friend made it clear in his Statement:
"Ultimately, I was not in a position to block any arrangement about his future employment elsewhere in the Civil Service".
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That is the important point. He makes it absolutely clear in his Statement that he is not in a position to do anything to block any arrangement about Mr Sixsmith's future employment. As to expressing views, I do not think that it is improper for a Minister to express views.
Lord Stoddart of Swindon Lord Stoddart of Swindon: My Lords—
Baroness Blatch Baroness Blatch: My Lords—
Noble Lords Noble Lords: Order!
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, perhaps we should hear the noble Baroness, Lady Blatch, first and then the noble Lord, Lord Stoddart.
Baroness Blatch: My Lords, like my noble friend Lord Waddington, I believe that there has been a gratuitous omission from the Statement by the Secretary of State. He said that no e-mail was received by Jo Moore. That is true. But there was an e-mail, and the terms of e-mail related to the inadvisability of news being released on the day of Princess Margaret's funeral. Therefore, they were very similar in nature. Does the Minister agree that, not only was it sensitive of Martin Sixsmith, but it was entirely responsible, in the light of what happened after the events of I 11th September, to give such a warning?
Secondly, on television on Sunday the Secretary of State said unequivocally:
"I had absolutely nothing to do with, and no discussions about, Mr Sixsmith's departure".
In the light of what the Minister has said today, and what the Secretary of State has said, and in the light of the statement by Sir Richard Mottram, it is the case that discussions did take place about Mr Sixsmith's departure; therefore, there has been an untruth spoken by somebody.
Lord Falconer of Thoroton: My Lords, first, as to the e-mail, I hope I made it clear in answering the question put by the noble Lord, Lord Waddington, that there was indeed an e-mail—not in the terms set out in the Statement by my right honourable friend. I also made it clear that it was sent by Martin Sixsmith to the Secretary of State. I did not say, "but it was copied to Jo Moore as well". The question that the noble Baroness is asking is: do you agree that the actual, real e-mail was an appropriate e-mail to send? I have absolutely no complaint about the real e-mail that was sent. Perhaps I may make it clear that what my right honourable friend is saying in his Statement is that the e-mail that was not sent was the e-mail purported to be quoted by the Daily Mirror and the Daily Express.
Lord Waddington: My Lords, the Minister is not giving any explanation as to why the Secretary of State is concealing in his Statement that there was an e-mail

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in almost identical terms which was quite properly sent by Mr Sixsmith, and very appropriately sent by him to the Secretary of State.
Lord Falconer of Thoroton: My Lords, I do not think for one moment that the Secretary of State is seeking to conceal the existence of that other e-mail, which is well known. As to the second question, I think have already answered it.
Lord Mackie of Benshie Lord Mackie of Benshie: My Lords—
Lord Stoddart of Swindon Lord Stoddart of Swindon: My Lords—
Lord Williams of Mostyn: My Lords, it is the turn of the noble Lord, Lord Stoddart.
Lord Stoddart of Swindon: My Lords, perhaps I may return to the question put by the noble Lord, Lord McNally relating to the accusation against a small group of civil servants undermining and disrupting the work of the department. I have been around these premises for 32 years. Never before have I heard such an accusation made by any Minister against any group of civil servants or any individual civil servant. It is a very serious accusation and an allegation against individuals who do not yet have any opportunity to reply for themselves. I understand from the Minister's remarks that an inquiry will take place. When it is complete, will those civil servants be named outside the protection of parliamentary privilege so that they will have some redress?
Does the Minister agree that, if what the Secretary of State for Transport said is true, it constitutes in reality a conspiracy—I use the word advisedly—by a group of employees in a department of state against that department and against one of Her Majesty's Ministers? That is a very serious matter. I hope that it will be treated as such by the Government.
Lord Falconer of Thoroton: My Lords, the Statement said:
"one or more officials from my department began to brief the press that the line used by the Prime Minister's official spokesman was incorrect … So what we had was a concerted attempt by a very small number of civil servants in the Press Office to undermine the department. I should stress that only a very small number were involved and their actions are being investigated".
I am not in a position—nor do I think it remotely appropriate—to give any kind of assurance as to what the results of the investigation will be. Whether it is appropriate to publish the results will depend on the results.
Lord Borrie Lord Borrie: My Lords, may I seek to—
Lord Lawson of Blaby Lord Lawson of Blaby: My Lords—
Lord Williams of Mostyn: My Lords, we have taken the 20 minutes allowed. However, this is an important
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matter and I have the sense that the House would like to hear from the noble Lord, Lord Lawson. That must then be the last speaker. We are expending the time.
Lord Lawson of Blaby: My Lords, I am grateful to the noble and learned Lord, and I apologise to the noble Lord, Lord Borrie, for coming in as the 12th man in place of him.
Is the Minister aware that I entirely agree with the general issues of grave concern voiced by the noble Lord, Lord McNally? No Civil Service Act, however desirable, will make up for the determination of Ministers to maintain standards of integrity and acceptance of the ethos of public service as Ministers in previous governments have done, and which, I am afraid, are slipping today.
The Statement is about Mr Sixsmith. May I ask a simple question? If Mr Sixsmith did nothing wrong, why was he asked to resign?
Lord Falconer of Thoroton: My Lords, I am sorry to keep coming back to the view of Sir Richard Mottram, but—
Lord Lawson of Blaby Lord Lawson of Blaby: You are sheltering behind it.
Lord Falconer of Thoroton: No, my Lords, I am not sheltering behind it. Sir Richard Mottram is a civil servant respected on all sides of the House. He said:
"It was clear to me that the situation could not continue and that Jo Moore and Martin Sixsmith should both leave their posts, because relationships within the department and with its Ministers had broken down".
It is not good enough for the noble Lord, Lord Lawson, simply to sweep aside what Sir Richard Mottram has said, because it is the ethos of men such as Sir Richard Mottram that we all wish to uphold.

Employment Bill
Second Reading debate resumed.
5.10 p.m.
Lord Borrie: My Lords, I shall try to bring your Lordships' minds back to the Second Reading of the Employment Bill, after the exciting minutes that we have spent on the other matter. For those of your Lordships who would like to remain, my contribution will focus mainly on Parts 2 and 3.
I recall giving evidence in the 1950s with others from the Society of Labour Lawyers to the Franks committee on tribunals and inquiries. I was then—and still to a degree am—an enthusiast for tribunals as an alternative to the ordinary courts in settling disputes, especially in specialised areas such as social security and employment.
In 1957, the Franks report accepted that tribunals were likely to be cheaper than the courts, more readily accessible, more expeditious and freer from technicality. That probably sounds a bit idealistic today. Over the intervening 40 to 50 years tribunals have tended to become ever more like the ordinary

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courts, with their formalities and detailed procedures and, above all, because to a large extent they have, to put it crudely, been taken over by lawyers. When employers at employment tribunals are represented by a lawyer. it is natural that the employee feels disadvantaged if he is not represented by a lawyer as well, even though tribunal chairmen invariably try to assist the unrepresented employee to put his case.
In view of that, it is not surprising that the Government are rightly concerned at the growing numbers and consequent cost to everybody concerned of employment tribunal cases. Indeed the issue might have been dealt with a few years ago in earlier legislation, as the noble Baroness, Lady Miller, suggested. Parts 2 and 3 have been designed to increase the cost disincentives on those who bring broadly unjustified claims and to require internal procedures to be used fully before an approach may be made to a tribunal. I am aware of the argument—which we shall no doubt hear deployed in due course by my noble friend Lord Wedderburn of Charlton—that the Government may have exaggerated the case for the changes by talking up abuse by employees of the employment tribunal system—
Lord Wedderburn of Charlton: My Lords, would my noble friend like to wait and see what I say about that`?
Lord Borrie: My Lords, I was anticipating a little because I have read some of what my noble friend has written, but I am happy to say no more about it at this stage.
My view—and it is natural that I should give my view rather than that of my noble friend—is that there is every reason in principle for legislating to ensure that internal dismissal and grievance procedures in the workplace are created where they do not currently exist and that their use is fully encouraged. I am told that most larger employers have such procedures, but far too many smaller and medium-sized employers have no internal procedures. I favour the requirement and the no contracting out provisions in Clause 30.
In parentheses, I may want to raise in Committee the question of whether Clause 30 affects the disclosure of wrongdoing regime in the Public Interest Disclosure Act 1998. I hope that it does not. Clause 30 may need to be amended to make it clear on the face of the Bill that an employee may properly make appropriate disclosures of wrongdoing in the workplace to regulators such as the Financial Services Authority without first having to raise the matter internally.
While I favour the concept of Clause 30, I have serious doubts about Clause 31, which requires tribunals to vary compensatory awards for failure to use internal procedures before approaching a tribunal. The Government will know that Judge Prophet, the president of the employment tribunals, has published a paper that is highly critical of Parts 2 and 3 of the Bill. He asks why an employee dismissed for redundancy should risk having to lose part of his redundancy payment, to which he seems to be fully entitled under law, because he has not used to the full his former employer's internal procedures. Similarly, on the other
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side of the argument, why should an employer have to pay an employee or former employee up to 50 per cent more than the employee's actual loss for failure to use his own internal procedures? Judge Prophet suggests that the Bill seems to mix up compensation assessment and a penalty.
Of course, there must be some enforcement procedure if parties are to be encouraged sufficiently and effectively to use internal procedures before going to a tribunal. Judge Prophet reminds us that a tribunal can always stay proceedings that have been launched at the request of an employer who has proper grievance procedures, pending the completion of the internal processes using those procedures. Tribunal proceedings may then be unnecessary because the parties have resolved their differences through those internal procedures. The Bill could require tribunal proceedings to be stayed pending the outcome of internal procedures. That would be a more straightforward and fairer sanction than attacking the amounts of compensation to which someone is entitled.
Part 2 introduces tougher cost disincentives to discourage abuse of the tribunal system. I see value in the Bill's proposals to award costs against paid representatives and to extend costs to cover lost management or preparation time. However. existing regulations already give tribunals the power to impose costs on any party who behaves,
"vexatiously, abusively, disruptively, or otherwise unreasonably".
Tribunals can even award costs against a party who has brought proceedings that are misconceived—that is, those that have no reasonable prospect of success.
According to paragraph 58 of the Explanatory Notes, the Government want to widen the powers because existing regulations,
"do not give tribunals a general power to award costs against the losing party, in the absence of these factors"—
that is, the factors that I have just mentioned. Why should the Government want a more general power? The clue seems to be in paragraph 60 of the Explanatory Notes. They want a general power to award costs for "time wasting". I am not exaggerating. One cannot even be more precise than to say "time wasting". Currently, that is all that is being said in the proposals. What the term means, or may mean, will he known only if the Government choose to make the appropriate regulations. There is nothing in the Bill to help us with the meaning of time wasting.
I would suggest that an employee or employee's representative who seeks to make an effective application may often seem to a tribunal to he time wasting, especially if that tribunal subsequently refuses the application. If the tribunal does not feel that my application is justified, it may well feel that I have wasted time. However, if the time wasting does not amount to vexatious or unreasonable conduct—which is already covered by costs regulations—why should it be condemned in costs? Clause 22. which is what I am talking about, is much too broad and could,

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on the Government's own explanation of their intentions, be a serious and unjust disincentive to bringing what may be—or may not be—a valid claim.
Your Lordships may be surprised to hear me say that I commend the Bill, which I largely do. I commend the parts of it about which I have not spoken. For the sake of time, I have chosen to concentrate on the provisions about which I have serious reservations.
5.21 p.m.
The Lord Bishop of Hereford: My Lords, I should first apologise to noble Lords who remain in the House for not being in my place when the Minister began his introduction, surprised as I was by the speed with which we have reached this item of business. Noble Lords had the same experience yesterday evening. I hope that the Minister will accept my apology.
I shall speak very briefly, and very differently from recent speeches by noble Lords, about Part 1—the provisions relating to parental leave—and the implications of those provisions for childcare, good family life and a stable society.
The Church of England Board for Social Responsibility responded in detail to the Government Green Paper, Work and Parents: Competitiveness and Choice, which was published just over a year ago. We recognised the radical change that has occurred in the past 20 or 30 years in the part played by women in the world of work. That is much to be welcomed, although of course it has enormous implications for childcare and for family life. It is good that there is an increasing recognition of the vital part that fathers play in the care and nurture of children, not least in their very early years. The emergence of the "new father", with his nappy-changing skills, is a very important and welcome development. On reflection, however, I think that it is not all that new: I was a pretty dab hand at nappies myself 38 years ago.
We therefore warmly support the Bill's proposals on paid parental leave for fathers. Childbirth is an amazing and wonderful experience, and any father who is present at the birth of his child will know how profoundly moving it is—although fathers do well to be properly modest about their part in the process. Childbirth is also a time of radical change in the relationship between mother and father, a change that can make the man feel distinctly vulnerable as love and loyalty have to begin to be shared in new ways. It is a very good use of public money to enable fathers to spend more time at home after the birth of a child and to become used to being almost equal partners in childcare.
The same warm welcome applies to the provision on adoption leave. For children to remain in care must be the policy of last resort. But adoption is not easy however confidently and knowledgeably it is approached and however wise and careful the support given to adoptive parents. I declare an interest as an adoptive parent; there has been plenty of grief and bewilderment as well as delight and happiness and fulfilment. It is excellent that adoption leave is being introduced.
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We should, however, like to urge that adoption leave be extended in certain cases to extended family adoption; not of course to step family adoption or to adoption by existing foster parents, who will already have established a very close relationship with a foster child. However, there are not infrequent cases in which a member of the extended family adopts a child, which is often the option that is in the child's best interests and most likely to lead to a stable long-term future. The Bill currently makes no provision for such leave. It may be, for example, that grandparents are the best people to adopt, but that may be at considerable cost in terms of income forgone. They should be able to qualify for any help that is available.
The Government rightly attach very great importance to encouraging people into work, which is fulfilling in itself and the best remedy for poverty and for deprivation. However, the emphasis on work as the answer to these social problems raises considerable issues about family life. How can we strike the right balance between work and family care? The ecumenical Church report Unemployment and the Future of Work, published five years ago, contains some very wise insights into these issues. They bear repetition and careful study. How can the participation of both parents in the labour force be reconciled with the stability of marriage and the upbringing of children? If I use the word marriage, it is not because I want to exclude or denigrate other forms of stable partnership which are so widely found in society today. Seven years ago, the Church published a report entitled Something to Celebrate that looked sympathetically and realistically at various forms of partnership, although of course we believe that marriage is the ideal relationship, and certainly the ideal relationship for the bringing up of children.
Do the Government's proposals recognise the reality of unstable, casual, low-paid work in which there is very little commitment on the part of employers to their employees? The provisions concerning qualification for enhanced maternity pay and leave are still strict, and this part of the Bill is fearsomely complex. If the Bill's provisions do not always fit patterns of low-paid employment, there would be grounds for real concern about whether, even with the provisions, women in low-income families will have enough money to eat properly during pregnancy and be able to make real choices between hanging on to desperately needed paid work, however poorly paid, and staying at home to look after children.
There are serious issues surrounding overwork and the rhythm of work. Looking at society as a whole, it is extraordinary how some have managed to secure significantly reduced hours of work, to well below 40 hours a week for many people, whereas many others have come to accept—even, I fear, to expect—hours of work and a pace of work that would have been regarded as intolerable 20 or 30 years ago. These changes—this workaholic lifestyle—are especially evident among high-flyers in the City, for example, at

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one end of the spectrum, and among the lowest paid at the other; freely chosen by the former, but forced by circumstances on the latter.
The changes raise serious questions about the balance between work and family life and make one wonder whether the Government's emphasis on raising skills levels and on competitiveness, as understandable and desirable as those things may be, may not be ignoring the fundamental need of human beings for rest and for rhythm and for families to have time off together, not simply round childbirth but at other times as well. The Sabbath principle is one which we need to recapture and to treasure.
There is much in the Bill to be welcomed most warmly. The Churches will be glad to celebrate in particular paid paternity leave and adoption leave and the provisions on flexible working. However, we have to signal the urgent importance of the needs of the poorest members of society, and the need of all human beings, especially families with young children, for a rhythm of regular alteration between work and recreation—a rhythm that the 24-hours-a-day, sevendays-a-week society has already done much to compromise if not in some cases to destroy. The crown of creation, in the profound and picturesque account of the book of Genesis, is not the creation of humanity, but the day of God's rest.
5.30 p.m.
Lord Davies of Coity: My Lords, like John Monks, the General Secretary of the TUC, I believe that much of this Bill is to be welcomed. I certainly do not see it in the extreme terms as described by the noble Baroness, Lady Miller of Hendon. Nevertheless, a number of questions need to be raised on the Bill, particularly in relation to Parts 2 and 3 on dispute resolution and employment tribunals. However, this afternoon, very much like the right reverend Prelate the Bishop of Hereford, I shall draw attention to some of the terms in Part I.
I should like to raise the issue of payment during paternity and adoption leave for those earning less than the national insurance lower earnings limit, currently standing at £72 a week. That is an issue affecting millions. Around 2.5 million people work for less than that amount every single week. This issue was raised in the other place during both First and Second Reading and the Committee stage. I am pleased to see that since the original drafting of the Bill, which excluded this large group of workers from any entitlement to payment during paternity or adoption leave, a system of reimbursement similar to that for maternity allowance will be set up for low-paid parents on adoption leave. That will help both the low paid and those with breaks in their employment to qualify for payment during adoption leave.
However, I am less supportive of the proposals to help low-paid parents during paternity leave. While the Government recognise that those earning below the lower earnings limit would need some financial recompense to enable parents to take any time off work when a baby is horn, the benefits system is a very
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cumbersome means of obtaining financial support for a two-week period. It is not geared to accommodate those needing benefits for a short period with little or no notice of a start date.
There are 600,000 men who earn less than the lower earnings limit and the Government estimate that. of those, around 5,000 per year will wish to take paternity leave. That is a substantial number of people who will be affected. Often the lowest paid families are those in most need of support and the opportunity for a father to bond with a new baby and to support his partner during and after the birth will be the most valuable help to hold that family together.
There are many reasons why it is impractical for people on low earnings to claim benefits for a short time, however much they may wish to spend those important times with their families. Fathers will not know for certain exactly when the baby will be born and when they will need to take paternity leave, so it will be extremely difficult for them to apply for benefits appropriately. Even if it proves possible to improve the system to help prospective fathers to claim early, all experience of the benefits System indicates that it would be impossible for fathers to receive benefits immediately they went off work on paternity leave.
People who earn under £72 a week do not have savings. Nor do they tend to have access to any credit. They are unable to do without payment for two weeks, especially at such an expensive time as the birth of a baby. The Minister will be aware that claims for income support, for housing benefit and council tax benefit have to be made to different agencies and take several weeks to process. Problems with the housing benefit system have been well documented. People on very low incomes have no savings and simply cannot afford to wait for the benefit payment to come through, especially at such an expensive time as the birth of a new baby.
Under the current rules, claims cannot be made until the period of claim is known. The sad Fact is that, even if they could receive benefits several weeks later to make up for the lack of wages during paternity leave, for low-paid fathers that is not an option. They will therefore be unable to take their paternity leave.
In Committee in the other place the Government argued that keeping the necessary payroll records for those earning under the lower earnings level would be disproportionately burdensome for employers. However, employers have to keep payroll records already for many purposes, such as ensuring that people are paid correctly and receive at least the national minimum wage; to prove to Inland Revenue auditors that those people should not be subject to PAYE or national insurance contributions; P60s have to be provided for those who have more than one job so that their income tax can be calculated, based on their total earnings from all sources.
At the time that paternity leave is introduced, many of those earning less than the lower earnings limit will also qualify for the new working tax credit and, once they have children, for the children's tax credit as well.

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Records of their pay throughout the year will need to be kept for those purposes. It would seem to me that the simplest method for reimbursing those people earning less than £72 a week would be for them to receive paternity pay at 90 per cent of the average weekly pay. That calculation is the same as that to be used for those earning between £75 and £111 per week, so it will be known to employers.
I sincerely hope that this issue will be looked at further. I hope too that, on reflection, the Minister will agree that the only disproportionate burdens that are being proposed are those to be imposed on low-paid fathers wishing to take paternity leave. Therefore I hope that he will bring forward amendments in Committee in line with the view I have expressed.
5.36 p.m.
Baroness Turner of Camden: My Lords, this is a complex Bill—really it is two Bills. The first section, dealing with maternity, paternity and adoption, is quite different from the second part and might almost be an entirely separate Bill. It is family friendly. It has rightly been welcomed by trade unions and even, although with some reservations, by the CBI. It is a great advance and although there are some issues—like affordable childcare and some of the issues referred to by my noble friend Lord Davies of Coity—that still present problems for some families, the Government are to be congratulated on having responded to widespread concerns about these matters and to have done so in so positive a manner.
I do however have some worries about the second part of the Bill dealing with conflict resolution. Like most former trade union officials in this House, I have considerable experience of dealing with employment tribunals. In my day we called them "industrial tribunals" and I am old enough to remember when they were first introduced. I believe that their existence has made an enormous difference to working lives. Once they were introduced, employers could no longer deal as they wished with individual work people; work people had rights and the means to enforce them.
The Government seem to have accepted complaints from employers' organisations that there has been an escalation in claims before tribunals and that a "compensation culture" has emerged with work people going to ETs without attempting to resolve issues internally—so there is a huge number of cases. The figure of 130,000 for last year was mentioned by the Minister and by the noble Baroness, Lady Miller. But out of a workforce of around 25 million that is surely not huge. Moreover, in recent years there have been quite valid reasons for the increase.
There has been a decline in manufacturing industry with large numbers of dismissals. There has, unfortunately, been a decline in union membership—hopefully now being reversed. If the CBI is anxious, as it says it is, to ensure that issues are resolved through internal procedures, it could do more to urge its members to recognise and negotiate with independent trade unions. ACAS has asserted that where there is
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union involvement and union-negotiated procedures, it is much easier to resolve issues internally, and I hope the noble Baroness, Lady Miller, will take note of that. There has been an increase in discrimination cases, perhaps due to the increased number of women in the workforce.
The proposals in this Bill, if passed unamended, will undoubtedly result in fewer cases before employment tribunals. The Government have said that there could be between 20 and 30 per cent fewer cases. and that bothers me. The percentage of vexatious or frivolous cases before ETs has been stated as being as low as 0.2 per cent. That must mean, therefore, that numbers of valid cases simply will not reach tribunals at all.
I shall now deal with the parts of the Bill which I feel could be reconsidered or amended. As I understand it, access to tribunals could in future be denied to an employee who has not complied with the statutory internal procedure or the compensation that he or she receives could be much reduced. That could be very unfair in the case of an individual who is no longer in employment, who has been dismissed or has made allegations of discrimination or harassment. I understand that it is intended that such employees would not have to comply with internal procedures before getting to an ET, but, so far as I can see, that is not on the face of the Bill. Perhaps the Minister will explain to the House how that is to he achieved. Incidentally, as I think my noble friend Lord Borrie mentioned, there is already provision for conciliation by ACAS before cases come before an ET. Frequently nowadays cases are resolved at conciliation. The statutory procedures make no requirement for the employer actually to investigate; nor is there any provision for the employee concerned to be accompanied. Both provisions are desirable in any fair procedure.
Several unions have raised with me what appears to be a reversal of the so-called Polkey judgment of the House of Lords. Under current law if an employer fails to follow appropriate disciplinary procedures before dismissal the dismissal may still be unfair even if the employer had some substantive basis for dismissal. It would appear that Clause 34 reverses that despite the fact that ETs accept that minor procedural lapses by employers do not necessarily cause a dismissal to be unfair. It is felt that a reversal of the Polkey judgment would have the opposite effect from that intended by the Government in that employers will not feel bound to follow internal procedures negotiated with unions.
Then there is the provision in Clause 22 which gives the Secretary of State powers to authorise tribunals to order that one party makes payments to the other in respect of time taken in preparing his or her case. Clearly, employers are much more likely to spend more defending a case than an applicant making it. Employers are likely to have personnel and other senior staff whose time could be costed and claimed as the cost of preparation. The measure also introduces the idea of double recovery as parties could get back their legal costs plus preparation costs. That could be substantial. It will be difficult for ETs to apply such an

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arrangement in a fair and equitable way and may well serve as a further deterrent to applicants considering taking a case.
A further cause for concern arises from Clause 25. It would appear that the Secretary of State may redesign the form of application to a tribunal. When tribunals were first introduced the idea was that they would be easy of access for people who would often be unrepresented and would therefore try to represent themselves. The form was intended to be simple to complete even for those with language difficulties. I am afraid that if it is left to government departments to draw up forms, they will resemble some of those to which I have objected in the realm of social insurance, or else tax forms which are many pages long and difficult to complete except by the educated and literate. I hope that failure to complete the form appropriately will not be another reason for denying or delaying access to a tribunal.
I turn to Part 4. Clause 43 gives union learning representatives statutory rights in all workplaces where independent trade unions are recognised by their employers for collective bargaining purposes. The unions will have to give the employer notice in writing that the employee is a learning representative of the union. but the measure does not give unions any new collective rights to bargain over training. There appears to have been some employer lobbying against that clause. The noble Baroness, Lady Miller, also expressed her disagreement with it. I believe that she is profoundly mistaken and that the lobbying is also wrong. Everyone now agrees that training and retraining are important. Arranging for employees to have information and encouragement to train is vitally important. The clause provides the basis for a sensible and constructive partnership between employers and recognised trade unions. The Government are to be congratulated on bringing that forward. I hope to persuade the noble Baroness, Lady Miller, of that during the course of discussion on the Bill.
Clause 45 refers to fixed-term work and seeks to implement the EU fixed-term work directive. This seeks to improve the quality of fixed-term working by ensuring equal treatment with comparable permanent workers and preventing abuse arising from the use of successive fixed-term employment contracts or relationships. I understand that draft regulations were issued by the DTI in January and that these are now the subject of consultation.
I have been approached by the Association of University Teachers which is concerned about certain aspects of the clause and the regulations. Generally speaking the AUT welcomes the regulations but points out that the use of fixed-term contracts in higher education has risen to a high level. The draft regulations propose that the maximum duration of FTCs should be four years. The AUT believes that it should he two years and that service prior to implementation of the regulations should be counted. It says that many employees in higher education have suffered years of employment on successive fixed-term contracts and for them to wait another four years after the implementation of the regulations to be able to
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claim their right to equality of treatment with permanent employees would be unfair. I was surprised to learn that 84,000 workers in higher education are employed on FTCs and that most had accepted an FTC only because contract work was the only form of work that was offered or was available. I hope that the Minister will say that these legitimate concerns will receive attention.
Other issues may well arise during the course of discussion in Committee and there are certainly some areas where I believe that the Bill could be improved by appropriate amendments. However. I welcome the Bill. As I indicated earlier, there is a great deal in it which is thoroughly to be welcomed. I congratulate the Government on introducing it.
5.46 p.m.
Lord Henley: My Lords, I begin by following my noble friend Lady Miller in offering my congratulations to the noble Lord, Lord Sainsbury, on his lucid and clear introduction of this fairly complicated Bill which, as all speakers have pointed out, covers a number of subjects. I am sure that the noble Lord will enjoy this Second Reading more than he did yesterday's debate tilting at windmills in Wales when he seemed to have considerably less support from his own Back Benches, these Benches or, for that matter, any Benches at all.
When my noble friend Lady Miller sat down, the noble Lord, Lord McCarthy, made an intervention to the effect that when this party was in government we regulated a lot. He referred to me as one of the regulating Ministers. I fully accept that we regulated and I fully accept that all governments have to regulate. The question is how much they regulate. I think that even the noble Lord would accept that there has been a great increase in regulation over the past four or five years. The important thing is to get the regulation right and to regulate at the right times.
I give an example from social security. When one has a Bill dealing with a new benefit it is right that there should be regulations in that Bill to allow that new benefit to be increased as time goes by. No one would think it right that those kind of things should be left to primary legislation. However, what is wrong is when the Bill itself merely acts as a framework for the regulation provided by the Secretary of State and it is then left to the Secretary of State to bring forward regulations creating the benefit. The benefit itself should be set out by the legislation but one can leave the increases to the annual uprating and all those processes which are quite right and proper matters for regulation.
Further, as regards the noble Lord's accusations that we over regulated, while we were in office we made great efforts to deregulate. As the noble Lord will remember, within this House we introduced a special committee to look at all delegated powers. While we were in government there was not one recommendation of that deregulation committee that we did not accept in its entirety.

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I return to the Bill and the general attitude of the Government to their legislation. I refer to a briefing sent to me by the Engineering Employers' Federation which states:
"The Bill is largely enabling legislation that provides the Secretary of State with extensive powers to introduce secondary legislation through Regulations or Orders. This approach to legislation inevitably prevents detailed Parliamentary scrutiny of these important areas of new legislation".
I agree wholeheartedly with that. That is why I wanted to make the point that one should regulate on some occasions but not on others.
During the passage of the Bill I also look forward very much to the Government tabling further amendments, as I believe they indicated in another place that they might do, in order to put more flesh on to the Bill and to take out some regulations relating to matters which quite properly should be dealt with in primary legislation. No doubt we shall be able to pursue those matters in due course as the Bill passes through Committee and later stages.
I now move on to the subject of paternity leave and associated measures. Perhaps I may refer back to 11 years ago this day when I introduced the Disability Living Allowance and Disability Working Allowance Bill. I believe that the noble Baroness, Lady Turner, took part in that debate. It was precisely 11 years ago today. I remember it well because I was extremely grateful to the noble Lord, Lord Carter—now the Government Chief Whip—who was then acting as social security spokesman for the Opposition. The noble Lord, Lord Carter, and no doubt the noble Baroness, Lady Turner, and others all kept their speeches admirably short. We finished the Second Reading in record time, allowing me to go across the road to St Thomas' where my only daughter was born later that evening. Therefore, as a result of actions by the now Government, I experienced a degree of paternity leave—albeit a very brief period—some 11 years ago.
Having mentioned that, I want to turn to the issue of the introduction of paternity leave. I want to ask why on earth it is being introduced at all. What is the point? Who is clamouring out for it? Who needs it and, if it is needed, why should the leave be for only two weeks? The right reverend Prelate referred to the importance in the brave new world in which we live of fathers being at home learning how to change nappies. I am sure that for many that will take considerably longer than two weeks. He also referred to the vital importance of fathers being with their families. I fully agree with that. But is two weeks right at the beginning of a child's life necessarily the right way of going about this matter? Are there not far more important times in a child's life when some form of paternity leave should be on offer?
I also have considerable concerns that when a benefit such as this is introduced, there is the likelihood that, like Topsy, it will grow and grow. We are told that in this case the benefit will last for only two weeks more or less immediately following the birth of a child. I believe that we can all make a fairly strong prediction
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that over the years there will be greater and greater pressure to increase the rates and the times, all in the name of equality.
One should also refer, as I believe my noble friend Lady Miller did, to the effect of such a benefit on employers and, in particular, on small employers. We all know that the noble Lord, Lord Sainsbury, has great experience of large employers. We all know that his own family firm is well able to cope with the type of benefit that we have. Whenever a new benefit is introduced, we always hear many large employers or their representatives making the perfectly valid point that any good employer will introduce that benefit anyway and that any good employer can cope with such a benefit.
However, even with the allowance that is to be built in for the small employer—I understand that it is to be 105 per cent compensation—the benefit will not be that easy. Such an employer might easily be able to carry it but, in the event, it may be a key worker who is being lost, perhaps at a bad time. That is not a situation with which any good employer can cope. I suspect that it is far better to leave large employers to introduce the benefit if they so wish or small employers to introduce if they can. Why do we not leave it to the market?
I now turn to the issue of maternity leave. I have no objection to maternity leave. It is right and proper that we make appropriate provision for mothers to take leave at the time of a child's birth. But here we also see a further major increase. We are told that ordinary maternity leave will be increased to 26 weeks followed by an additional 26 weeks of unpaid maternity leave. Employers—again, small employers will find this particularly difficult—will have to keep jobs open in effect for a year, often with the added complexity of finding a replacement who, at the end of that year, may or may not have to be kept on, depending on whether the employee taking maternity leave decides to come back.
Again, when he comes to reply, perhaps the Minister can tell us approximately what proportion of those within his own department or within the department of the noble Lord, Lord Sainsbury, who take maternity leave return to work at the end of that leave. On anecdotal evidence, and certainly in my own experience, not all those who take maternity leave and say that they will return to work do so. It would be interesting to know what evidence the department has of the numbers who do or do not return.
That brings me to the subject of the rebate. I mentioned that I had noted that it was to be repaid for some small employers at 105 per cent. However, I understand that for the vast majority of employers the amount of rebate for both paternity and maternity leave will be only 92 per cent. Surely it should be 100 per cent with, in addition, some compensation for the costs that the employers incur in administering what is essentially a state social security benefit.
I turn to what I believe is Part 4—it may be Part 3— of the Bill concerning tribunal reform and the resolution of disputes. We all know that there has been

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an extraordinary rise in the number of applications to industrial relations tribunals. I should be grateful if the Minister could confirm the figures that I have; that is, that in the year 2000 there were some 130,000 applications. That represents a 25 per cent increase on the previous year and almost a 300 per cent increase over the past decade. According to CBI estimates, such applications bring an annual cost to business of some £630 million per annum in terms of management and legal and recruitment costs alone. I should be grateful for the Government's comments on the CBI figures as well as confirmation of the other figures.
With that in mind, I am very sympathetic to the Government's desire to reduce this burden and to try to ensure that disputes are resolved at an earlier stage. I noted the Minister's confirmation that more than a third of cases come to tribunals without any earlier in-house attempt to resolve the dispute. But, while I share the Government's aim, I am certainly concerned that the complexity of some of the proposed new arrangements will create only further confusion and uncertainty for employers. For example, a number of workplace issues, such as ill health and redundancy, do not fit neatly into either the proposed grievance or disciplinary statutory procedures. There is also likely to be uncertainty about the inter-relationship between the proposed new statutory procedures and the ACAS code of practice on that subject. As I said, I hope that we can pursue those matters in greater detail in Committee.
I end by saying that much of the Bill—certainly parts of it—is admired in different parts of the House. However, I believe that there is much in the Bill to provide us with a busy Committee stage and, I hope, later, a fairly busy Report stage and Third Reading as we try to add flesh to the Bill. I certainly hope that the Government will be prepared to add a degree of flesh to their own skeleton in due course.
5.58 p.m.
Lord McCarthy: My Lords, I want to make wo preliminary points in order to explain the attitude which my noble friends and I adopt towards this Bill. As my noble friend Lady Turner said, and as she demonstrated in the points that she made, we intend to be constructive in relation to the Bill. We intend to be helpful. You may be awkward; others may be wreckers; but we shall be as constructive as we can.
Secondly, although I do not intend to say much about these matters tonight for obvious reasons, we do not deny that parts of the Bill are excellent. It is not so much a curate's egg; it is more a manky meat sandwich. Parts 1 and 4 are first class, but Parts 2 and 3 leave a great deal to be desired. The Bill goes wrong in the middle.
The Government make no attempt to disguise what they are trying to do, although they appear to be moving away from that a little. It is there in Routes to Resolution. The middle part of the Bill is intended to force a reduction in the number of applications by between 23 per cent and 31 per cent, or by between 30,000 and 40,000 cases. Perhaps the Minister can tell
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the House whether that is to be achieved in a year, in 18 months, and whether the effect will be cumulative, so that in three or four years' time there might not be any cases at all.
The main objective of Parts 2 and 3 of the Bill is to bring about a significant reduction—about a third—in the number of hearings and, therefore, the number of applications. It is also clear why we must have such a reduction in applications. It is because there has been an unprecedented increase in litigation. The British worker is mad about litigation. He or she wants his or her day in court. Because of the unprecedented rise in litigation there has to be some way of stopping the flood. And the flood will be brought under control by the tough provisions in Parts 2 and 3.
We have four objections to that argument. First, there is no evidence whatever—not one scruffy piece of data—to support a rise in the propensity to litigate. Secondly, we can explain, with good reasons, the increase in hearings and the increase in applications that have taken place, for example, since 1990. There are good explanations for the rise. Moreover, applications will continue whether this Bill is enacted or not. They are inevitable. I shall say why that is the case in a moment, but it has nothing to do with an increased propensity for litigation. This Bill directs itself at the wrong objective.
Thirdly, the detail of the Bill, on which more will he said in Committee, will actually generate hearings and applications. That is what Judge Prophet said. In sc. far as it will have an impact, the Bill will add to disputes rather than reduce them. Fourthly, it will put the heaviest burden on the weakest, unsupported applicants.
I shall deal first in detail with the fact that there has been a 300 per cent increase in the number of applications since the early 1990s. In relation to what has been claimed from the Benches opposite, it is important to realise that there is nothing unusual about that. In some years, the figure falls: in some years, it rises. But it is swings and roundabouts. In the long term, there is a more or less steady rise in applications.
The reason the Government felt justified in introducing barriers to access was not the rise in the number of applications over the past 20 or 30 years but the fact that they have taken on board the argument that there has been a rapid increase in the propensity to litigate and that they have as evidence for that the survey, Findings from the 1998 Survey of Employment Tribunal Applications. I make it clear to the House that the survey has not yet been published. The report has not been professionally proof read. Last week, as a result of letters and parliamentary Questions, a few copies were placed in the Library of this House, but it is not available to the press and it has not been published. However, parts of it have been selectively quoted by Ministers. That is the problem.
For example, in Routes to Resolution, it is said:
"There is worrying evidence that employees are increasingly resorting to litigation to sort out work-based disputes".

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It is then claimed that,
"64 per cent of applications to employment tribunals come from employees who have not attempted to resolve the problem directly with their employer in the first instance".
But those words are not in the survey. To this day, we do not know where they came from. The survey poses the quite different question of.
"whether or not there had been a meeting to try to resolve the dispute before the application was made".
That is in the survey. I am quite sure that that is what the Minister now uses, but to this day where the mysterious business about going directly, not going past go and not collecting £200 came from, we do not know. Perhaps the Minister will tell the House.
Over the past few days I have noticed that the Government do not like the figure of 64 per cent—they make it 62 per cent—and now they have changed it to 37 per cent. The noble Lord, Lord Wedderburn, in an intervention to a Question that I asked a week or so ago, talked about the 62 per cent and the 64 per cent. On 5th February the Minister did not refer to 62 per cent or to 64 per cent, although it was actually 60 per cent as far as the applicants were concerned. He said that what was,
"absolutely clear was that in 37 per cent"—
it has now gone down to 37 per cent—
"of cases there was no communication whatever".
But noble Lords will not find that in the survey either. I do not say that there was an intention to mislead the House, but they never read the survey. That is not what the survey says. What the survey says is that in 37 per cent of cases the question asked was whether there was a meeting to resolve the dispute.
When one considers that question, one can see that any applicant could believe that there was a meeting but that it was not to resolve the dispute. The applicant could have thought that the meeting made matters worse. The employer could have refused to have a meeting. We cannot use such evidence—particularly when it is 37 per cent—as an indication of a rise in the propensity to litigate.
I do not apologise for making this point. But the Government should have advisers who tell them such matters. A trend cannot be taken from a single survey. After three or four surveys over a period of 10 or 15 years, one can then say that the figure is rising or decreasing. We do not know what people would have said if that question had been asked in the previous two surveys. So we have no trend.
However, we have some trends that can be used to see what is happening. For example, if there had been a move away from the use of conciliation so that the proportion of disputes settled by conciliation had fallen and the number of people who pressed themselves forward for a hearing had gone up—if it
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was 50:50 and not two-thirds—we could say that there was an increase in the propensity to litigate. But there is no sign of that.
Lord Wedderburn of Charlton: My Lords, on the contrary.
Lord McCarthy: On the contrary, as my noble friend says. If there had been an increase in frivolous cases, in vexatious cases, and it was not 0.4 per cent, but 5 per cent, 10 per cent or 15 per cent, we could say, "Ah, they are bringing bad cases, they are litigating more and more and they are getting worked up". There is no change whatever. One could say that more cases were being lost and that thousands of cases are being brought, but they keep losing them because they like their day in court, but the contrary is the case. In so far as there is a trend, they are winning more cases, which may be one of the reasons why the CBI is so exercised.
So there is no evidence of an increased propensity to litigate. It follows that there is no justification for an attempt to turn down the capacity of tribunals by at least a third over an immeasurable period of time.
I turn to the second case against the Bill. There is a considerable volume of respectable research, much of it paid for by the department, and much of it published since the survey and contradicting the survey. The survey was, of course, years and years in the wilderness. People carried out this telephone survey about four years ago. Somehow it never got published. Even now Ministers have not read it.
But Burgess, Propper and Wilson published a survey entitled, Explaining the growth in the number of applications to industrial tribunals 1972–1997. That survey covered a much longer period. It had a trend, of course. I think that my noble friend Lady Turner was referring to some of the evidence in that survey. I do not want to repeat that evidence because the House will know about it now. The weakness of the survey was that it did not really weight the various causes; it simply listed them.
My opinion is that there are two main reasons for the rate of increase over the past 25 years. The first is the increase in jurisdiction. Even when the Conservatives were in office, they could not stop having to implement all kinds of EU directives. Therefore, the jurisdiction and numbers of the tribunals went up. One can put a very close line between the spread of jurisdictions and the waxing and waning of tribunal cases. That is the fundamental relationship. Of course we shall get a lot more in the next few years or so when further directives come in.
The second reason is in some ways far more significant, because we can do something about it. It is the collapse of an alternative means of independently deciding a case. At the moment, outside small parts of the public sector there is no alternative for a worker to the employer's last word other than going to a tribunal. There is nothing else. The overwhelming majority of disputes procedures have no independent element. One has to take what the employer says. Even if one thinks that the employer is not giving one one's

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legal rights, one has nowhere to go except to a tribunal. That is the result of the collapse of collective bargaining and the decline in trade union organisation.
When I came into the business, large parts of the private sector had systems of arbitration, mediation and independent assessment which gave male manual workers, for the most part, some form of independent assessment which did mean that in the end they did not have to take the employer's last offer. But the only alternative now to the employer's last offer is to go to the tribunal.
While that remains the case, unless one can find a way of giving workers an alternative to the employer's offer without going to a tribunal, the number of cases will continue to increase. Of course one could make the way in which one restricts access to the tribunals absolutely lethal, but I do not suggest that the Bill does that.
So I come to my third argument. That is with regard to the statutory procedure. I should say that I am not against a statutory procedure. I think that it is a knacky little wheeze, but it depends what it says. The statutory procedure that we have, and the way that it is written in this Bill adds to the issues in dispute. We shall go into this matter much more in Committee. Judge Prophet is most persuasive on the issue. But then the TUC, the Law Society and Judge Prophet make the same argument. In writing to the Minister, Judge Prophet said:
"The Tribunal would be forced into considering whether or not internal strategy procedures have been completed. If not why not? And further forced into a straitjacket of having to find an automatic unfair dismissal when that is not based on a just assessment of the merits of the case. At every hearing where any right is being considered a formula must be applied, so complicated that even the judiciary who have looked at the clause are uncertain what it reads. Pity the ordinary employee and the small business. Even longer and longer hearings are inevitable".
That is the case the way the Bill is framed. We should advance reasoned amendments in Committee to try to change that because it is not inevitable.
I come to my fourth and final argument. It is the possible consequences of Clause 25. The problem with Clause 25 is that it is a pig in a poke. No one knows what the Government will put into Clause 25. This clause enables them to rewrite dear old ET1. There never was a form so sweet, simple and straightforward as ET1. The only thing that one could get wrong was one's date of birth. It is a form which anyone can fill in, as my noble friend Lady Turner said. Compare it to those terrible income tax forms that we have to struggle with or to the social security forms that people have to fill in. ET1 should be preserved in aspic. But it will not be preserved in aspic; it will be rewritten. We have asked but we are not told what will be put into the new ET1. Anything could go in.
I could write such an ETI. I do not suggest that the Minister is going to do so. But no one would apply. It would be elaborate and it would be plausible. One could say, "Well, we are going to have a statutory procedure so of course you have to make sure that this statutory procedure has been complied with". One
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would not just say, "Have you complied with a statutory procedure?" One would say, "Describe it. Tell me about it." Then one would say, rather like the Conservatives did about the strike clause, that people should know what the penalties were. They should know that they could be fined. Put that all in, and you could write a new ET1 which would cut applications by 50 per cent or more because no one would understand what it required. I would like to know—the Minister can tell me tonight—whether it is the case that ET1 is to be rewritten. The Law Society is very worried. If there is the intention to rewrite it, how will that be done?
The final point I make is that those of us who dislike the meat in the sandwich do not deny that the Government have a problem—the real long-term problem of the perception of rights of work inevitably expanding. All the time people are thinking of new rights at work that they should have. There are all kinds of forces out there in society, not merely in British society but in Europe and elsewhere, which are bringing new worker rights across the agenda.
If we are soon to have protection against discrimination on grounds of sexual orientation, religion, faith, age and so on—all of which I suppor—there will inevitably also be a demand for a rise in the adequacy of the procedures and arrangements for dealing with those rights. That is why it is ridiculous to talk about cutting tribunals down by 30 per cent. We are in it, and it will get bigger. There is only way that one can stop it or reverse it fairly, decently and properly, apart from suddenly reviving the trade union movement so that it can do everything that it did in the past. Even then, it did not do sex very well. It would not have done race very well, and it might not have done gay rights very well, but it was all right on unfair dismissal.
So some legal form of worker rights has to continue. But people must have real rights within a statutory procedure so that they are induced to move into a voluntary system of independent mediation and arbitration which gives them back what they have lost. If the Government are prepared to do that, then this Bill could be a first-class Bill. In Committee and on Report, we hope to offer a more civilised and more practical way out of the Government's problem.
6.19 p.m.
Lord Haskel: My Lords, I certainly agree with what my noble friend the Minister said about productivity. During a recent stay in the United States, I became more aware than ever of how increased productivity leads to increased prosperity for all. What will the Bill do for productivity in British industry? The answer is that no one really knows. As my noble friend the Minister pointed out, productivity does not depend only on industrial relations—letting people go does not improve productivity unless there is investment and change. Restrictive practices at work and restricted employers' rights to hire and fire do riot improve productivity. They probably increase costs and hence reduce wages to cover those costs.

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Most people in industry instinctively feel that decent standards at work, a mechanism for resolving disputes, a procedure for airing grievances, protection for employers and employees taking lawful action and family-friendly flexibility at work must make some contribution towards improving productivity. Economists may not be able to measure it but people at work feel it.
That is why the Bill is helpful. It is helpful because it helps industrial relations move with the times. It brings them into line with modern thinking—especially thinking about the balance between work and family life. It reinforces the cultural changes that are taking place—perhaps the new rights of which my noble friend Lord McCarthy spoke. The right reverend Prelate the Bishop of Hereford explained how over the years we have become more aware of the needs of parents when children are born, and the Bill moves with the times in trying to satisfy those needs. Flexibility in hours worked, especially when children are young, is an important aspect of that modern thinking. Chapters 1 and 2 of the Bill acknowledge that.
The Bill also acknowledges that nowadays we understand that it is better to resolve disputes at the workplace than to let them become grievances at an industrial tribunal. The Bill encourages employers to use best practice in resolving disputes and employees not to pursue frivolous cases. Of course, good employers already have much of that good practice in place. A greater problem lies in the insistence by many financial institutions that shareholder value takes priority. Experienced managers balance the interests of staff, shareholders and customers equally. It is inexperienced managers who interpret family-friendly policies as weakness, as diminishing shareholder value, and are thus reluctant to introduce them. The Bill and the guidance in it should help to overcome that.
The Bill introduces union learning representatives. I agree with my noble friend Lady Turner that that must help productivity by addressing the shortage of skills. Surely, no one can object to that as long as it is effective. I welcome the proposed safeguard that the representative must be experienced and knowledgeable about skills, training and continuous professional development.
Of course, there is a lot of detailed provision about the workings of industrial tribunals and discipline and grievance procedures that may well benefit from the knowledge and experience of experts. We can certainly question whether eight weeks is a reasonable time for it to be unlawful to sack workers in the course of a dispute or whether two weeks of paternity leave is reasonable—as the noble Lord, Lord Henley, asked. But such matters are essentially a matter of compromise. No hard and fast rule can be laid down. Of course, there are those who will abuse the system. Industrial relations depend on a modicum of trust, but we cannot legislate for that. What is important is that the Bill recognises that it is wrong and impossible for the Government to impose unreasonable settlements.
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That is all very well, but what impact will Bill have on small and medium-sized companies? Does it mean more red tape? After all, as the noble Baroness, Lady Miller, reminded us, small companies have had to absorb the social chapter, the Human Rights Act 1998, all the tax credits introduced by the Chancellor, the Employment Relations Act 1999 and now face the Bill. One can argue that the Bill will act as yet one more disincentive. I do not agree. I see in the Bill not a lot of meaningless regulation but a fair bit of guidance and best practice about what one has to do to be a good employer in a modern business. Most people want to be good employers because that is how they keep their best staff and their business thrives. It probably helps productivity, too.
The Bill provides guidance about what procedures work in modern industrial relations management. Many small companies welcome such guidance because not every employer has the time, expertise or experience to work it all out for himself. So if six months' maternity leave is being family friendly, fair enough. If a woman's skills are so valuable that a business cannot cope with her absence for six months, small company managers will find a way. They are used to wheeling and dealing. They will come to some sort of arrangement with her to come back part time, to do some work from home, or whatever.
Incidentally, it is a welcome gesture from the Government that Clause 21 says that they will pay maternity benefits in advance to small companies. Perhaps my noble friend the Minister can tell me whether that is a precedent and whether we can look forward to other payments in advance to benefit small companies.
Small companies know that it is good practice to have a procedure for resolving disputes. It saves a lot of pointless argument and discussion. I agree with my noble friend Lord Borrie that having to formalise procedure, as the Bill requires, and giving guidance as to what it should provide should be no real burden. Many companies which have not got round to doing that will welcome it. That should avoid disputes and grievances going to an industrial tribunal because of ignorance or omission. Any sensible employer or employee will prefer discussion to the cost of going to industrial tribunal, the stress and the cost of finding and recruiting new staff or of finding a new job. Of course, there is more to come in secondary legislation, but I hope that the government will frame it in the same helpful manner, encouraging progressive, modern management thinking.
My noble friend the Minister spoke about the work of the Advisory, Conciliation and Arbitration Service. The Bill should not diminish the importance of ACAS. It is a valuable resource for resolving disputes and getting people back to work. The real cost to the economy of disputes is not so much the lost time but the lost opportunities and output. So I hope that the Government will not use the Bill as a reason to cut back ACAS. ACAS does a wonderful job for small and medium-sized companies. I agree with the noble Lord, Lord Razzall, that its code of practice is sensible and balanced and acts as a valuable benchmark in disputes.

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As my noble friend said, the Bill is an attempt to balance the rights and responsibilities of employers and employees. It tries to move with the times and put the point of balance where contemporary society thinks that it should be. I think that that judgment is fairly accurate; in fact, I think that it veers toward the more progressive side of the balance and I welcome that. The fact that our economic situation is reasonably sound demonstrates that we are moving in the right direction and at about the right speed with progressive employment policies. That is why I welcome the Bill.
6.28 p.m.
Baroness Sharp of Guildford: My Lords, I asked to speak in this debate because I am interested in two fairly narrow aspects of the Bill. The first concerns Clause 43 and the introduction of statutory learning representatives; the second concerns Clause 45 and the issue of fixed-term contracts. As always when speaking in a Second Reading debate in this House, one learns a great deal and I must say that I found the speech of the noble Lord, Lord McCarthy, extremely forceful and shall in future regard the Bill as, as he said, a manky meat sandwich, with the central part revamping employment tribunals being the suspicious part.
However, my real interest lies in those two more specific aspects: first, Clause 43 and the appointment of statutory learning representatives, which set an interesting precedent for the Government. I pick up the point that the noble Lord, Lord Haskel, made: it is about productivity. In his introduction, the Minister made it clear that that was what he was concerned about with regard to the appointment of the representatives. The whole issue of Britain's underlying productivity, the productivity gap and the need to improve workforce training underlies a great deal of the Government's present programme.
I shall remind the House of the wording used in the Pre-Budget Report. I do not know how many noble Lords read it in detail. There was much consideration of the issue of workforce training. Paragraph 3.98 reads:
"In Budget 2001, the Government also said: 'the current voluntary approach has secured increased participation in workplace training since 1995, but this is not enough—.
In paragraph 3.102, it says:
"Level 2"—
that is, the equivalent of five grades A to C at GCSE—
"is effectively the minimum standard that 19 year-olds are now expected to have acquired. The Government wants those in the adult workforce who, possibly through no fault of their own, have not attained level 2 qualifications to have the opportunity to do so".
The following paragraph reads:
"The Government is already looking at possible fiscal measures to improve UK skills. The PIU set out a range of options to overcome harriers to training, one of which is a statutory right to time off for training and development. The Government is considering this suggestion as one of the possible ways of taking forward the commitment made in Budget 2001 and will carry out a full regulatory impact assessment and wide consultation on the development and implementation of any new policy".
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The Pre-Budget Report then proposes four specific suggestions as to how the matter might he taken forward. First, there is,
"financial support for employers whose staff take time off to train".
Secondly, there is,
"free learning provision and accreditation for employees without level 2 qualifications".
We saw that in the Learning and Skills Bill, when those aged under 19 were given the right to free tuition up to level 2. There is also reference to,
"some form of arrangement for individuals to take up training—such as a minimum entitlement for all employees who have not attained basic skills or level 2 qualifications to paid time off each year to train towards the standard".
Finally, the report refers to,
"extended information, guidance and support. for employers and individuals … these could include arrangements along the lines of Union Learning Representatives".
So, the Pre-Budget Report went a great deal further than the Bill.
Why have the Government backed off from including in the Bill possible time off for learning. up to level 2? When it exists for statutory learning representatives, why not carry it that bit further? I can immediately hear the noble Baroness, Lady Miller of Hendon, exploding at the idea. She was already somewhat unhappy at the idea of statutory learning representatives and thought that people might abuse that position.
Clearly, there is a genuine problem for small and medium-sized businesses—and other employers—with the potential avalanche of time off that might he given, but the Bill gives us one or two interesting precedents. First, we are already looking at payment for paternity and maternity leave and government compensation for small firms, in particular. Secondly, there might be a way forward by adopting the approach proposed in the Bill towards flexible working time. Should not employees who wish to take time off to study for a relevant level 2 qualification—I stress that level 2 is not high—have the right to ask their employers for such time off, as with the provisions on flexible working time in Clause 47? Employers should have a duty to consider such requests for time off and the right to refuse them if t hey can demonstrate that it would cause positive harm to business.
In their manifesto, the Government also suggested, alongside the commitment to introduce statutory learning representatives, that there should be: a commitment to introduce statutory training levies where agreement was reached between the social partners. A short while ago, we approved the Construction Industry Training Board and the Construction Engineering Industry Training Board orders. At that time, I asked the Minister—the noble Lord, Lord Davies of Oldham, was answering for the Government—what had happened to that commitment. He did not really give me a satisfactory answer.

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I recognise that the issue of skills crosses boundaries between departments. It is partly the responsibility of the Department for Education and Skills, as well as of the Department of Trade and Industry. In these days of joined-up government, we need an answer to that question. I reiterate it: what has happened to the commitment? It was a manifesto commitment on the part of the Government, why do we see nothing of it?
The other issue is fixed-term contracts, which have already been mentioned by the noble Baroness, Lady Turner of Camden. Several times, I have spoken about the use of fixed-term contracts in higher education. There are something like 84,000 workers in higher education on fixed-term contracts. That is 42 per cent of the workforce in higher education and over 50 per cent of those working in what are called the pre-1992 universities—our research universities. I know that the noble Lord, Lord Sainsbury of Turville, knows well the problems posed by fixed-term contracts. In 1999, the Bett report highlighted the considerable abuse of such contracts by some in the university sector and especially the degree to which women were found to be disproportionately numerous among those working on fixed-term contracts and on lower pay than other staff.
The European directive that is incorporated in Clause 45 offers us an opportunity to put such poor labour relations in universities behind us. Regulations have been published but, as the noble Baroness, Lady Turner of Camden, said, there are two fields of particular worry to the Association of University Teachers. First, although the regulations ban the use of fixed-term contracts for more than two consecutive spells of two years—four years in all—prior service on fixed-term contracts is not taken into account. Therefore, when the regulations come into effect in 2002, somebody who has already done something like 10 years on a short-term contract will still have to work out another four years. That is not fair. Secondly, as my noble friend Lord Razzall said, we are concerned that certain classes of employment may be exempted and that employers may seek sector specific exclusions on the grounds of what is called objective justifications. On what grounds would such an objective justification for an exclusion be made? Could it be challenged?
I have had a specific interest in the Bill. There are wider implications, and there is much in the Bill relating particularly to maternity and paternity leave, family-friendly policies, flexible working time and fixed-term contracts that I welcome. Having listened to the noble Lord, Lord McCarthy, I now have great doubts about the middle part of the Bill.
6.38 p.m.
Lord Lea of Crondall: My Lords, if any more noble Lords start their speeches by citing John Monks's agreement that the Bill has many positive features, I shall start to feel uneasy about the parallel with Mark Antony's funeral oration: they are "all honourable men".
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I begin by accentuating the positive. There are many European influences, including the provisions on paternity leave and pay, adoption leave, improvements in maternity provision and, most recently, the provisions in Part 4 outlawing consecutive fixed-term contracts.
All of those, interestingly, are the consequences of and show the great benefits of social partner agreement. I am glad that those words have escaped the mouth of the noble Baroness, Lady Miller of Hendon. I hope that there will be other occasions when she will make that reference. They reflect a great deal of hard work on such issues as the gender pay gap and flexible working. In my judgment, union training representatives will mark an extremely welcome innovation, even though the noble Baroness, Lady Miller, may think that they could reflect a contradiction in terms.
Rights for fixed term contract workers mark a major reform, combined as they are with parallel rights for part-time workers. These kinds of workers form an increasing proportion of the workforce. If it is the case that the next reform for agency workers has been remarked on by some employers to be a bridge too far, then let me point out that that is what they always say about any reform. However, as a result, in the future, some employers may well wish to employ people on a regular basis, not on a fixed-term contract, a short-term or part-time basis or on an agency basis. They may wish to employ people on a proper, regular basis, which is all to the good. Indeed, a short visit to a pub these days is all that is needed to overhear someone saying, "I think that, for the first time, I am going to get a regular job in the construction industry. I am to have four weeks' paid holiday". Millions of workers have never had such rights. The reforms mark one of the incoming tides of history to which my noble friend Lord McCarthy eloquently referred.
I turn to a more general point about employment rights. Either Jung or Freud—I do not know which said that work is central to people's lives, both men and women. That is true of the membership of this House. Over the past 40 years, the tribunal system has considerably enhanced the quality of working life. It has de facto enhanced the quality of contracts of employment, a point to which my noble friend Lady Turner of Camden has attested.
We have to calibrate these points, as it were, but it is true to say that some of the recent increase in tribunal activity has been due to a reduction in the base of collective bargaining, a point made by my noble friend Lord McCarthy. It would be a logical desire on the part of Her Majesty's Government to reverse that process. I hope that it will be a moral that my noble friend on the Front Bench will underline.
The introduction of pro rata rights for so-called atypical workers—who have started to become rather less atypical and more typical—has marked a major reform under the Social Chapter which was and remains a very popular part of Labour's 1997 election manifesto. I recall vividly that it was also popular in

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the preceding campaign for the European elections. "Vote for the Social Chapter" proved to be a popular slogan.
Perhaps I may turn to the aspect of the Bill which has generated the most discussion; namely, the default procedure for dispute and grievance resolution. Those noble Lords with a background in the trade union movement—we should declare our interests; I do so all the time—believe that the extension of rights to which I have referred will create a larger workload for employment tribunals. Many of these new rights are to he accorded to workers who have not previously enjoyed them. As a result, and as a consequence of European legislation under the Single European Act signed by the noble Baroness, Lady Thatcher, and under the Social Chapter, we shall see an increase in the workload. I mention this because I hope that my noble friend on the Front Bench will comment on it. Whatever the percentage, such cases will not be of the kind often characterised as the modern "rush to litigation" or the rush to statutory procedures on the ground that individuals have suddenly become more litigious. Perhaps my noble friend will confirm that that is a point which may properly be made.
My noble friend Lady Turner also drew attention to a point to which I attach the greatest importance and believe is the main strategic question. Those of us with experience of industrial relations would, I believe, all agree on one thing: that if procedures could be satisfactorily agreed within a company or place of employment, settled there and the procedure taken forward and then finished on a basis agreed by both sides as the finishing point, that would require joint ownership of the procedures and thus fewer cases would be taken to tribunals. That is logical and correct. But that does not arise and is quite different from the scenario where an additional hurdle has been placed in front of issues going there, because it is quite different in terms of confidence in and the credibility of the procedure. I was very pleased to hear my noble friend Lord McCarthy make that crucial a nd fundamental distinction.
It is in this respect that some of us feel that the Bill has not got it quite right. I want to put forward a suggestion as to how to improve the sense of engagement of the workforce with the default procedure in the Bill as and when it is translated into action in the workplace. I suggest that if the criterion is that the procedure has to win the confidence of all those concerned, that will mean that, through the voice of their representatives—and they will have to invent some if they do not have them; how otherwise can they respond?—the workers will agree that they can settle matters through the internal procedure. The question I wish to put to my noble friend on the Front Bench is this: is that what the Government want? I think that they do want that, but I should like to hear it confirmed. Do they wish to see a procedure which will be capable of settling many matters in the workplace?
If the answer is in the affirmative, what will be conducive to achieving that? After all, we already have it in firms which recognise trade unions. Indeed, it is
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almost a definition of trade union recognition that there is a procedure agreement covering individual grievances, properly negotiated, just as is the case with regard to substantive terms such as pay, holidays, hours and pension arrangements. So the Bill sets out a benchmark procedure which in all cases will apply as a floor. Leaving aside whether trade union agreements are in place, what about the other 50 per cent or so of cases where the default procedure will be freestanding? Exactly how will it be introduced?
The role of ACAS has been cited, and rightly so, in a number of contributions made both here and. in the other place. What will be the relationship between the ACAS code and the default procedure set out in the Bill? I think that the Government intend to ask ACAS to revise the code in due course in order to ensure that it recognises the new statutory procedures. But there is a danger of best practice being driven out by the minimum terms. I do not say that; it is a point which has been forcefully made in today's briefing from the Industrial Society. I shall quote one paragraph:
"The Bill's dispute resolution provisions will undermine ACAS. The ACAS Code of Practice on Discipline and Grievance is widely adhered to and respected, but we fear that the lesser procedures in the Bill will instead become the norm amongst employers. The Minister's statement at Commons Committee stage, that ACAS will be asked to produce a new, in effect, lower level code, is shocking. Admitting it will be necessary as a result of the Bill is an admission that the procedure requirements are being downgraded".
We need, as a minimum, to consider strengthening the Bill to provide for workplace consultation on the application of the default procedure, in the circumstances of each individual workplace. It should be made available in draft form to the entire workforce and an opportunity given to submit any feedback within, say, one month. Employees could then agree a reaction even if the trade union is riot recognised, which—to cheer up the noble Baroness, Lady Miller—is in the spirit of the information and consultation provisions agreed by the Council of Ministers and the European Parliament. If agreement is reached. that is fine. That is the trade-off. There is no way around it, quick fix or short cut.
One issue of practical application is the sense in which a grievance has been properly investigated—rungs one and two of the individual's right to a voice. There will be much greater acceptance of the procedure's validity if that feedback is taken into account from the start. If, for example, feedback included the request for every issue to be investigated at a certain level, that would lead to a more acceptable result. That also ties in with the right of a worker to be accompanied in a grievance by a legally qualified person, lay union representative or something in between. That also links to the need to retain the word "hearing" from the 1999 Act in place of "meeting", to avoid ambiguity in tribunals on the right to be accompanied. On that point, will my noble friend make a statement that would be seen in the courts as definitive?

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On the Polkey principle, and despite the slight adjustment made in the other place, I will quote not the TUC but today's briefing from the Industrial Society, which advocates removing Clause 34(2)(2):
"This Clause provides that a dismissal will not be unfair for the reason only that a procedure has not been followed. It is inconsistent with strengthening the adherence to procedures and reverses the House of Lords decision in Polkey v. AE Dayton Services 1988. HR managers have told us that it will be even more difficult to persuade managers to follow a procedure if they think they can get away with it by arguing that the employee would have been dismissed anyway. Nor is it clear when Polkey will not apply nor the weight of the burden of proof. If this is to be left to the tribunals, then it can only result in more claims to clarify the uncertainty.
"Clause 34(2)(2) should be removed altogether. Failing that, it should be altered so as to limit its effect to the 100 per cent contribution cases—where the employee gets no compensation:
"Delete: 'if he shows that he would have decided to dismiss the employee if he had followed the procedure'.
"Insert: 'if he shows that the fairness of the dismissal was not affected by his failure to follow the procedure.'".
I will mention some of the other questions that I shall be raising so that my noble friend the Minister can consider where some of us are coming from before the Committee stage.
One area of concern is the new power to award costs in relation to the time and resources committed by the parties in preparing a case. We must avoid the problem of double recovery. If we are to achieve a level playing field, we should not include a whole army of employer representatives ticking up costs, which would scare off the applicant if only on the issue of costs. Employers' costs are much easier to quantify, as they are likely to have human resources directors and other senior staff whose time and salary can be taken into account. I draw attention also to the opposition of the Law Society to Clause 28, which gives tribunals powers to strike out cases at preliminary hearings, before any evidence is heard.
Irreversible trends in society create a demand for the exercise of rights. Unlike King Canute, we ought to recognise those trends.
6.54 p.m.
Lord Wedderburn of Charlton: My Lords, I congratulate my right honourable friends and my noble friends on bringing forward proposals in the Bill on family-friendly leave, equal pay questionnaires, which is a most important issue, and the implementation, albeit the rather inadequate implementation, of the directive on fixed-term work. I say that not because the fixed-term work directive is European. I never understand why just legislation cannot be passed by this Parliament, leaving aside the problems of the European Parliament, to which my noble friend referred.
I congratulate my right honourable friends and my noble friends also on the important provisions for union learning representatives. The Conservative Opposition in another place, in a rare Division in Committee, voted against statutory rights for learning representatives in Part 4. They see that as some sort of
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promotion of the emergence or infiltration, as the noble Baroness, Lady Miller, said, of a gang of Jacobins coming through the tunnel, with whom an employer might one day be forced to discuss training and further education for workers.
Those are all prudent and admirable provisions but I have a large number of doubts about others. I add my voice in support of the noble Lord, Lord Davies of Coity. The provisions for low-paid workers to which he referred are quite inadequate and must be looked at again. I share the doubts of some noble friends, the Law Society, the Industrial Society, the TUC and a number of trade unions, in respect of Parts 2 and 3 and the crucial Schedule 2, which has been widely sensed as the price of acceptance by employer organisations of the Bill's welcome features.
Some of us will want to test Parts 2 and 3 in Committee, which unhappily will not take place in this Chamber, not least because those parts were not tested in another place. The Government's objective, as stated in their response to consultation, is,
"an estimated reduction of between 30,000 or 40,000 applications compared with current levels".
Those are not vexatious or unreasonable applications, of which 247 were penalised last year. Forty thousand cases must go.
The Government's overall objective is to settle industrial problems and grievances at the level of the workplace, without litigation. No one with any sense of adequate industrial relations could oppose that objective but the key issue is how that should be done fairly and sensibly. Small employers should be compelled to have grievance procedures but that reform should have been enacted years ago. Should that aim be pursued by attempting, as the Bill does, to ban workers even from applying to tribunals and penalising those who dare to apply contrary to new and unfair conditions? The Bill's method of restricting access to justice must be unjustified, unless it can be shown that workers are abusing access to enforce their rights and that the conditions imposed are fair. The case has not been proved on either limb.
Since the publication of the surveys that I shall mention later, the case has become more tenuous. I have never believed that employment tribunals and litigation should be or can be a substitute for proper negotiation in the workplace and a strong trade union movement to represent work people. But the provision of a backstop legal process in the form of tribunals for individual grievances had become, one thought, a bipartisan policy since 1970. It is now central to the culture of our working life. It was not possible for another place to debate the proposed restrictions on workers' access to justice, even though some probing amendments were eventually tabled. The information was not available, so Members of another place had not read it—like the Opposition. I understand that the noble Baroness has not seen the SETA survey which is in the Library. She will correct me if I am wrong. Secondly, the Government's guillotine fell upon the few amendments that were put down on Report. In the light of those two features, the responsibility of this House is to look again at Parts 2 and 3 of the Bill.

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Since September 2001, my noble friend Lord McCarthy and I have asked for discovery and publication of two full reports—first, the Survey of Employment Tribunals, or SETA, and, secondly, the Awareness of Employment Tribunal Rights survey carried out slightly before it. Both were available to the department early in 2001. Last Monday, in the depths of the Recess—and it gives me no pleasure to say this, but it is not a day when facts should be obscured—the SETA report was deposited in the Library of the House. The "awareness report", as I shall call it, was, I understand, deposited at five o'clock on Friday. That is not the way in which policy should be made.
Little snippets from these reports were quoted again and again in another place, but no one could refer to them to see whether the quotes were correct. I add my voice to that of my noble friend Lord McCarthy in saying that not even what has now been published shows that the Government's figures are right or even sustainable. Indeed, a social scientist in higher education who used the statistics as they have been given would really have to reconsider his position.
I turn now to my objections to Parts 2 and 3 of the Bill. I appreciate that the Opposition are making some play of this, but I am not sure that they have much standing to do so in view of their record. My first objection is to the wide regulation power in the Bill. There is far more than is needed to meet the stated objectives and assurances given by my honourable friend the Minister in another place.
My second objection is to the unfair and uncertain set of conditions which will operate as implied terms and will be imposed on all workers employed under the 25 million contracts of employment in the land, banning them from applying to tribunals or penalising them for doing so under new admissibility criteria—even when they have been treated illegally by an employer—unless certain unreasonable conditions are completed. The unreasonable conditions are contained, of course, in Schedule 2, to which so many people have now objected.
I pause to say that anyone familiar with tribunal work knows very well that disputes about whether these conditions have been fulfilled may well increase by thousands in pre-hearing reviews, if people get the opportunity. The president of the Employment Tribunals Service, who, contrary to the letter distributed to Members of the House from the Minister in another place, has maintained full consultation with the Secretary of State and Ministers on this matter, said that these conditions are,
"frankly absurd and will be a nightmare to administer".
These unfair provisions respond to years of pressure by the CBI, the chambers of commerce, the Federation of Small Businesses and the Institute of Directors. There is no supportable reason for this change of policy—it is a radical change of policy—icon the Government's part.
As to the first objection—the width of the regulation-making power for secondary legislation—I must admit that I rather expected my noble friend the Minister to introduce these parts of the Bill with a
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spirited rendering of "I'm Henery the Eighth I am" because so many clauses give the Secretary of State power to interpret them. In the new Clause 33, which was inserted at the last moment in another place, there is a provision that it will not be the courts which will decide whether there has been compliance with the new unreasonable conditions but the Secretary of State. He will say whether there has been compliance with the provisions set out in the Bill.
I leave it there because that leads on to Committee points and I want to restrict myself today to Second Reading points. But they are points that must be put on the record at this stage. We shall certainly press the Government to be rather more exact and to give the Bill—which is at the moment, in many ways, a skeleton—a rather more respectable physiognomy and add some flesh to the bones.
I repeat, the Bill's method of promoting workplace settlement by means of restricting access to justice can be justified only if it can be shown that workers are abusing access to justice in the tribunals. That is the key issue. That is why the Minister in another place constantly referred to these figures.
In 1968, the Donovan report—which is a better starting point than Franks—made quite clear the principles which were to be observed, not only in this country but in many European countries. Tribunals must be easy to access, cheap, not subject to the usual regime of costs and sensibly run—that is, informal. Unhappily, the Bill threatens a host of those principles.
It threatens a new cost regime—we do not quite know what—even though the Leggatt report said that nothing should be changed until more research was done. It proposes new awards for management's estimated "preparation" time—a proposal obscure in its terms which we shall have to amend. This is an opening which will clearly be used to intimidate workers with a good case who want to take action against illegal management acts, making them fearful of approaching the tribunal. Imagine if your case had crossed the desk of the noble Lord, Lord Simpson, at Marconi, and you were told that you had to pay for his preparation time. That would cost you a pretty penny. This provision must be looked at.
The provision in the Bill to abolish the principle adopted by the courts—the Polkey rule—that employers must observe all relevant contractual procedures before the dismissal of a worker could be fair must be jettisoned.
Of all things, the Bill aims to cut down the duties of conciliation officers from ACAS. Why? As my noble friend said, conciliation has increased faster than applications. The Bill will impose new rules whereby a worker with a good prima facie case will never even get to a tribunal or could be penalised for doing so. Most of the new rules are based on the statutory grievance and discipline procedures in Schedule 2 and are implied in every contract in the land. They are unfair and not, as the TUC wanted and made clear, based on the more fair procedures of the ACAS code, which is not perfect but is obviously more fair. Indeed, the

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ACAS code will not survive. It was made clear by the Minister in another place that it will have to be rewritten after this Bill.
It is admirable that the Bill will compel small employers to adopt grievance and disciplinary procedures, but the new rules are not even handed. They give the employer the last word in every dispute; they do not even require investigation before a dismissal; and they tell a worker who is thrown out of the works, told to clear his desk and go, that he must come back and use the procedure. It is a fantasy land. I agree with my noble friend—I doubt whether the Bill will save 40,000 cases. But the Government are determined on this matter; otherwise they would not include it in the Bill.
How did this sorry story come about? It is necessary to say a word about how this has happened because it is so unlikely, especially for my Government. How did it come about? We know that the CBI and employers' organisations have been grumbling since 1980 about the cost to business of workers enforcing their individual rights at work. They complain of the cost of tribunals enforcing workers' rights. They spent years demanding more law in industrial relations and now they have it they do not like it being enforced. A right which is not enforceable is an exercise in frustrated rhetoric. It is not surprising that the claim about costs does not take account of the justification of the claims.
Let us be clear. British employers are not alone. The French employers' organisation, MEDEF, has now launched a campaign to cut down the jurisdiction of the Conseils de Prud'hommes in France and the Italian employers have convinced the Berlusconi government to accept demands to slash employment protection rights. It is a fairly general phenomenon. Yet research shows that of the applications made in this country, those that succeed at a hearing have remained at a fairly steady rate since 1988. I thank the Minister who not only sent me by post a copy of the SETA survey, which saved me half a day, but also for sending me in the middle of this debate a reply to a Parliamentary Question which shows that since 1986 the proportion of successful applications has scarcely varied. Indeed, it increased again last year.
So where are the indefensible demands by applications to tribunals launched in a frenzy of litigious fever? As my noble friend has said, they do not exist. Employees' applications for remedies in the employment tribunals have been steadily increasing for two decades. Of course, one can gain a percentage increase according to where one starts. The Government are right that between 1990 and 2000 the number has tripled, but if one starts in 1990 and goes to 1996, the figure is multiplied by 2.5. If one considers the years from 1996 to 2001, the increase is by a factor of 1.3. There has been no marked recent increase.
Here I depart slightly from my noble friend Lord McCarthy. The research by Dr Earnshaw and her colleagues in 1998 and by Dr Burgess and his colleagues published shortly thereafter, have given us five factors which are the reason for the steady increase
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in applications to tribunals and which the Government actually recognise in one of their documents. The five factors are these. First, discrimination cases increasing related to increasing female participation in the workforce. Secondly, unfair dismissal cases increasing because of growing employment in small enterprises, where there are inadequate or no procedures. Thirdly, redundancy cases related to the decline in manufacturing employment. Fourthly, cases related to the decline in trade union membership. Fifthly, the steady extension in the jurisdictions of the tribunals over the years. That is important.
But in 2001, the leading scholars in the subject, Professors Deakin and Morris, concluded:
"The perception that the system is being abused by unmeritorious applicants is based on anecdote rather than research".
They knew very well what the research said. Why did the Government change it? Why did they begin by saying 64 per cent, which was subsequently revised to 62 per cent on a reworking of the data lost or unavailable for a long period? The Government said:
"Sixty four per cent of applications to the employment tribunals come from employees who have not attempted to solve the problem with their employer directly in the first instance".
One should read the SETA document which I see that my noble friends on the Front Bench have been doing assiduously throughout the debate. They will not find it there because that is not what it says. We have been able to study this document for eight days in the Recess, but it is not there. It states:
"When combined, these findings suggest that, in 62 per cent of cases, the applicant did not meet with the employers to try to resolve the dispute. These findings have to be interpreted with some care".
In some cases, contact may have been made in writing or by telephone. In other instances a representative might have intervened on the applicant's behalf. Alternatively, the grievance may have only arisen after the employment relationship had been terminated, when the applicant did not have access to the use of an internal procedure. Alternatively again, the applicant may have felt the internal procedure was not a suitable mechanism. We all know of those cases, which are cases of sexual and racial harassment and so forth, where the applicant would have to approach the same manager.
But the Minister in Committee in the other place— this is crucial to the issue—returned again and again, like a dog with a bone, to the evils of the 62 per cent and 64 per cent of applicants who had done nothing to try to solve the dispute. Noble Lords may wish to refer the reports of 11th December and 18th December and to many other parts of the proceedings. But suddenly, after the Bill had been published and long after the new policy on access to justice had been formulated, the Minister suddenly produced another figure. He said,
"In 37 per cent of applications there was no attempt to resolve the problem before the application was made".

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Even on what we knew then, that seemed very strange because the Government themselves had quoted from the Awareness Survey:
"Around 7 per cent of people who have experienced problems (with employers) did not seek advice or make contact with their employer to resolve the problem—The remaining 93 per cent of employees who had experienced a problem said that they had tried to resolve the problem".
For the convenience of my noble friends on the Front Bench, that is from page two of the background paper.
There appears to be something very odd about the ministerial arithmetic: 37 per cent had not tried to resolve the problem, but 93 per cent had. That was enough to make one search the published evidence, when it was made available, and to look very carefully at what was said at page 24, where three sets of questions and answers are combined. My noble friend on the Front Bench shakes his head, but if he looks at that page he will find—
Lord McIntosh of Haringey: My Lords, I was not shaking my head as the noble Lord, Lord Wedderburn, believes. I was shaking my head al the suggestion from the Opposition Front Bench that the noble Lord's speech was too long.
Lord Wedderburn of Charlton: My Lords, I am sorry if the Opposition or anyone else believes that my speech is too long to set out the facts. These are not Committee points. I use Second Reading for Second Reading points. Noble Lords will find on page 24 of the report that three sets of questions and answers are combined uniquely in the report, without there being a table giving the individual questions and answers. That is unique.
The re-worked answers are combined to show that no attempt to try to resolve the dispute took place between the parties. What do the researchers say? They do not say that the employees failed to try to resolve the dispute, but that:
"This is probably the most comprehensive indicator of lack of dialogue available from the data".
I agree that there is a lack of dialogue. Small employers should be made to have procedures. But that is no reason whatever to impose a prohibition on access to justice to a worker who is told by his employer, "Clear your desk. I am not having a meeting with you".
That case falls within the statistics. Yet it is on the misinterpretation of these two re-worked statistics that public policy has been reversed. Access to justice will be denied to workers if the Bill goes through. I beg the Government to think seriously about what we shall press for in Committee and on Report—that Parts 2 and 3 of the Bill must be revised and reconstructed. I beg the Government to think again and give us a Bill all parts of which we can support.
7.20 p.m.
Lord Moynihan: My Lords, I have a number of substantive points on the Bill that I should like to make. I should also like to make a few general points about employment legislation. However, I should, first, declare my interests, which are threefold: I am
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both an employee/employer with Consort Resources Ltd, and a parent. Therefore, the changes proposed in the Bill will affect me on all three counts.
The Government have said that the aim of the legislation is to,
"deliver a balanced package of support for working parents, at the same time as reducing red tape for employers and making it easier to settle disputes in the workplace".
It is against that bench-mark, as the noble Lord, Lord, McCarthy, rightly implied, that the Bill must be judged. On a practical day-to-day level we have come a long way since I studied McCarthy texts in detail and the days of belligerent industrial relations. Yet today there are still two interests and often two agendas at stake.
On this day-to-day level, as we know, the interests of employers and those of employees do not always coincide. When it comes to employment legislation, a fine line must be negotiated between them to achieve best practice results. This line is the difference between what must be enforced by regulation and what is best left to a voluntary approach, though accept that that is a hard one to tread. Sensible measures to raise standards in the workplace are always welcome. While governments can have a role to play in that respect, it must be remembered when drafting legislation that there is a very strong link between good employment relations and success in the market-place. After all, productivity depends on employers and employees working together in an effective partnership. Regulation is rarely the best way to achieve that partnership.
The Bill before us is no exception. From the effective reversal of the Polkey decision to the right for parents to request flexible working, it is a delicately balanced package. The stakes are high, especially for a Bill whose impact will be felt at the same time as the cold shadow of darkening economic skies. A harsher climate is facing British businesses today. Get it wrong, ignore the gloomier economic forecast, allow the sharp edge of Britain's competitiveness to be blunted and not only employer and employee, but every British citizen, will be the loser. Get it right and we will have equipped our workforce—employer and employee alike—with the tools to ride out economic downturns.
Businesses are increasingly concerned about the growth and complexity of new employment rights and about the rise of what has been termed "the compensation culture". In that context, regulation does carry a health warning with it, and that is particularly so with over-prescriptive regulation. That is why I advocate a light touch approach, working with the grain of existing best practice, regulating where unavoidable and taking particular account of the needs of small firms. All of those measures are necessary.
That is the context in which I have considered Part 1 of the Bill, which concerns statutory leave and pay. I should like to place on record my unreserved support for family-friendly working—a point eloquently summarised by the right reverend Prelate. Family-friendly working practices make sound business sense

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when it comes to retaining skilled staff. On that basis, I do not believe that they are an optional extra for the majority of employers. A seismic shift has taken place in our society. The workplace has lagged behind; but, like other areas of our national life, it, too, must adapt to the reality of the modern family.
However, in offering that support for the Government for many aspects of Part 1, I hope that I shall not inject too much of a controversial note into today's debate when I raise two reservations that also emerge from this part of the Bill. The first is with regard to ensuring that these measures have the desired effect in improving the position of women in the workplace; and the second is with regard to the effect that they will have on small businesses.
The provisions of the Bill will give mothers a choice on how to combine their work and family responsibilities. It will allow them to fulfil their role as parents without compromising their role as employees, and vice versa. Any measure that increases the supply of skilled workers by making it easier for women to return to work should be welcome. However, it is very important that this provision does not backfire and have the negative and unlooked-for effect of discriminating against the very group that it is intended to help. I hope to explore that point further during detailed discussion in Committee.
In particular, small businesses will find it difficult to comply with the Bill's provisions. It will be genuinely difficult for some of them to keep jobs open for up a year and to train temporary staff, with no guarantee that their employees will return. I must emphasise that I am not arguing against these measures in the Bill, but I believe that employment legislation must, above all, be realistic and not idealistic.
I take further the points made during this debate on small businesses. I believe that it is important to acknowledge that the Bill's provisions affecting small businesses are not cost free. That does not mean that those costs are not worth paying; and, indeed, that the long-term gains from them will not benefit society far more than the short-term costs. However, all regulations in the workplace impose costs, both direct and indirect, on employers, other employees and society as a whole. It does not mean that regulation is wrong, but it means that choices and priorities will sometimes have to be made. Businesses are not infinite shock absorbers. They can only absorb so much in the way of cost burdens.
At this point in my remarks it is sensible to say a few words about flexible working, although, as we know, this proposal appears later in the Bill. In principle, I support the moves to implement the recommendations of the Work and Parents Taskforce, so that parents of young children are given the right to ask for serious consideration of flexible working arrangements. Employers will have a duty to find a solution, wherever possible, that suits both the worker and the business.
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Clause 47 was originally tabled under a schedule of "minor and consequential amendments" in another place. However, there is nothing minor about it. It is perhaps one of the most significant clauses in the entire Bill. As has been pointed out, the drafting of this new clause has caused concern. Some of the language in it is very odd, and that is a matter that must be addressed in Committee.
I should also like to make a few comments on Parts 2 and 3 of the Bill, especially with regard to employment tribunal reform and dispute resolution. There has been a general welcome for the measure to modernise the employment tribunal system, particularly outside the Chamber and this evening's debate, and to encourage dispute resolution in the workplace through dialogue rather than litigation. I, too, share that welcome. There is no doubt that it is a step forward for employees to use internal grievance procedures to resolve disputes in the workplace without going to tribunals. Any measures that help to deter trivial or vexatious applications are both necessary and desirable.
I have a number of major reservations about Part 4 of the Bill. The clause to place trade union learning representatives on a statutory footing, which the CBI has called a "step in the wrong direction", falls into that category. The idea of increasing the amount of training in the workplace is a good one, but the mandatory requirement imposed by the Bill for employers to recognise and provide time off to an unlimited number of union learning representatives, without having any say in their appointment or selection, is not. Indeed, although the proposal could have benefits, which I certainly recognise, compulsion sends all the wrong signals. The point about compulsion should be at the centre of our debates. Learning representatives will add value only when they work in partnership with employers. Compulsion is only likely to add to costs.
The proposals on fixed-term working are also an area of concern. Here I should like to echo the words of the noble Baronesses, Lady Turner of Camden and Lady Sharp. They will have far-reaching implications for university teachers, given the endemic use of FTCs in higher education. It is clear from this evening's debate that we shall be returning to that point in Committee. I welcome that clear consequence demonstrated by the speeches that focused on the issue.
However, the Bill will also give fixed-term employees equivalent rights, including rights involving pay and pensions, which were not covered by the original EU directive on which this part of the Bill is based. As my noble friend Lady Miller mentioned, there was considerable debate in Committee in another place on this "gold-plating"—to use her words—of the EU directive. Moreover, these regulations can be brought in at a later date. The point about introducing the regulations at a later date by statutory instrument causes me concern. It means that they are unlikely to be subjected to widespread debate or consultation.

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In that context, does the Minister accept the CBI's belief that the introduction of pensions under the fixed term regulations will be extremely complex and costly to administer? How will the proposed new rights for employees on fixed term contracts be implemented in a way that imposes minimal burdens on businesses?
Finally, I want to refer briefly to the use of information for or relating to employment and training, which is dealt with in Clause 50 and in Schedule 6. This raises some important issues of confidentiality—even perhaps of human rights—which I should like to flag now as matters to be raised in Committee. I should like to know whether such confidential information will be shared with the private sector contractors who do the work. If it is not, they will have no way of validating the assessment by the Department for Work and Pensions of how much money is owed to them. If that is the case, anyone who has contact with the department will have to accept that their earnings patterns thereafter will become something of an open hook. I understand the underlying need for the provision, but I consider it to be a drastic step and one which smacks of a Big Brother state tracking private citizens as a result of engaging with the Department for Work and Pensions or one of its contractors.
The Bill was described earlier as a "curate's egg"—good in parts, and I agree with that assessment. It is a well-intentioned Bill. Although its individual parts may not appear to impose an onerous load, taken as a whole its cumulative effect will be to add to the burden of new regulatory compliance, administrative obligations and organisational flexibility.
Moreover—this is a key point—the Bill depends greatly on enabling secondary legislation for its effect. As has been mentioned, again eloquently, before us we have a skeleton the bare bones of which have yet to be fleshed out. Such leap in the dark legislation only contributes to my concerns.
At the beginning of my remarks, I made it clear that employmenl legislation must tread a very fine line. The Bill is in danger of crossing that line. I do not believe that it does so yet, but any further concessions risk destabilising the employer-employee relationship, to no one's advantage and at the expense of our economy as a whole.
7.32 p.m.
Lord Gladwin of Clee: My Lords, at this time of night when you are the last man in, you become aware of two things. One is that most of the things that you want to say have been said. The other is that the Chamber is usually peopled by Members who have already made their speeches and are anxious to hear the Minister's reply and get on with the next business. I have been crossing out large chunks of my remarks so I shall detain the House for only a few moments.
I declare an interest. I was formerly an official of the GMB trade union and spent 30 years infiltrating British industry—in most cases, I must say to the noble Baroness, Lady Miller, at the invitation of the
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employer. My experience which is more germane to this debate is that I have been a member of two employment tribunals and am currently a member of the Employment Appeals Tribunal—which experience brings me directly to those parts of the Bill that give me and many others cause for concern.
I firmly believe that all employers should have in place a fair procedure for resolving disputes in the workplace. Unfortunately, as the Minister in another place remarked, there are 600,000 workplaces where no such procedure exists. That is why I welcome the proposal in the Bill to require employers to adopt such procedures. However, these statutory requirements are skeletal—a word used by a number of speakers.
Frankly, if the Government wanted to increase the number of workers covered by in-house grievance and disciplinary procedures, all they had to do was to make the ACAS code of practice the statutory requirement. The Minister in another place said that the jump from having no grievance and disciplinary procedure to being legally required to observe the provisions of the ACAS code of practice would be too much for many small employers. If that represents some of the pressure being exerted on the department, why not do it in a staged way, according to the number of employees—requiring the large employers to apply the ACAS code immediately, which most follow anyway, but allowing smaller and medium-sized employers to follow suit at a later date?
We have considerable experience of staged legislation being introduced in order that employers can catch up with the requirements. That proposal was suggested in debate in the other place. Perhaps I may be forgiven if I am wrong, but I believe it was supported by the leading spokesman for the Conservative Opposition, Mr Philip Hammond, and also by members of the Labour Party. The suggestion was turned down by my honourable friend Alan Johnson—but not in a very convincing way. Noble Lords have only to read the Committee stage proceedings to see the point I am making.
The problem with the proposals in the Bill are, as I have said, skeletal. For example, there is no requirement for an employer to carry out a proper investigation before proceeding to discipline or dismiss an employee. Such a procedure would in itself be unfair. Another example is the absence of any reference to the right of a worker with a grievance or of a worker facing possible disciplinary action by the employer to be accompanied at the meetings referred to in the statutory procedure. The third example is the use of the word "meeting" in the three-step procedure. The final stage is an appeal and should, therefore, be described as a "hearing". That is a point to which we shall return in Committee. The details of the interpretations of the clauses will, as I understand it be set out in regulations, but the three examples I have given are important omissions which should he remedied and set out on the face of the Bill.

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I have two further concerns on which I should welcome comments from my noble friend. The first relates to cases of alleged gross misconduct where the employer can use the modified procedure set out in Schedule 2 to the Bill. But again there is no requirement for an investigation before dismissal. In these circumstances the sacked worker is appealing from outside the workplace. In my experience that rarely, if ever, leads to reinstatement if the appeal is successful. My worry is that some rogue employers will see the modified procedure as a way of sacking people and thinking afterwards; and that we shall see an increase in unfair dismissal claims coming before tribunals.
At this point I must declare a further interest. I am a member of the council of Public Concern at Work. My final concern is the impact of the Bill, particularly Clause 30, on the Public Interest Disclosure Act 1998. The noble Lord, Lord Borrie, referred to the issue, and I shall not repeat his remarks. However, I ask the Minister for an assurance that there will be no conflict between the statutory procedures for dispute resolution set out in the Bill and the safeguards for whistle-blowers in the Public Interest Disclosure Act.
7.39 p.m.
Lord Sharman: My Lords, in the spirit of the noble
Lord, Lord Gladwin, I shall endeavour not to detain your Lordships too long in winding up. It is difficult to disagree with the stated objectives behind the Bill. Patricia Hewitt, Secretary of State for Trade and Industry, said that the Government's priority was,
"to deliver a high-skill, high-productivity economy".
She went on to say:
"Productivity is not about working people into the ground; it is about skilled people in high-performance workplaces, where employers and employees work together in an effective partnership".—[Official Report, Commons, 27/11/01; col. 864.]
The question is whether the Bill takes us down the road towards achieving that stated objective, with which, as I have said, it is difficult to disagree.
I welcome in particular the family-friendly provisions in Part I. It is generally accepted that the modern British economy faces some potential longterm problems of increasing the supply of skilled and unskilled workers. Much of that supply will have to come from older workers who have retired prematurely or from women, who traditionally have taken long and often involuntary absences from employment. Any provisions, such as maternity or paternity rights, that make it more comfortable for women to return to work should be welcomed and encouraged, as long as they are properly balanced. The provisions in Part 1 go a long way towards achieving that objective.
However, as the Law Society's commentary on the Bill says,
"the Bill is a wasted opportunity to clarify the existing problems of definitions in maternity provisions, such as the right to accrue holiday entitlements under the Working Time Regulations during periods of statutory leave, or the haphazard and unfair treatment of bonus payments".
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Those problems of definition will now be replicated in paternity and adoption situations, when the Bill could have provided clarity across the board. I ask the Minister to consider introducing amendments in Committee to clear up some of those problems.
As the noble Baroness, Lady Turner, rightly said, that brings us to the end of what could have been a nice separate Bill, which I am sure that my party would have worked diligently to help the Government pass through this House at record speed. However, we then come to what the noble Lord, Lord McCarthy, referred to as the "manky meat"—Part 2 on tribunal reform. Why the provisions have been introduced in this Bill at this time is puzzling at best and incomprehensible at worst, when the Leggatt report is sitting on the table. I am not a lawyer, but I understand that the report applies to all tribunals, with the stated aim of simplifying their processes. Why could we not wait until some of that was implemented?
Secondly, as my noble friend Lord Razzall remarked, we have an Employment Tribunal System Taskforce which is also studying the problem. Why not wait until it has reported? I shall not go on about the problem of tribunal reform. Many people who are much better equipped to comment on those provisions have done so. However, it seems to me that the provisions will not achieve what is stated in the priorities. They will not make things better between employers and employees. I entirely endorse the contention that any procedure that requires the filling in of a form—even a simple form—immediately puts people in the hands of lawyers and the legal process. I have grave reservations about that.
Part 3 deals with dispute resolution. The noble Lords, Lord Lea and Lord Razzall, have referred to the grave concern expressed by the Industrial Society that the process of ACAS will be undermined by the procedures. My party has some significant reservations about Schedule 2. The absence of any requirement for employers to investigate before decisions are taken is incomprehensible. Good management would always want to find out the facts. An overall requirement that any hearing should be conducted fairly would be an added benefit.
I can think of some genuine reasons why employers might have to dismiss employees without a hearing. In such circumstances, they should not be penalised. However, the provisions as drafted might well encourage employers to dismiss employees for gross misconduct even if it is not appropriate. We shall need to look at that carefully in Committee.
Clauses 33 and 34, which deal with the failure of applicants and employers to follow procedures. need fundamental re-examination. In both cases they may well achieve the opposite of what is intended.
We then come to Part 4, on which my noble friend Lord Razzall has already expressed our concern that the flexible arrangements envisaged in Clause 45 should apply to all workers, including agency workers and others. We shall need to look at that in some depth.

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Finally, 1 repeat my party's opposition to Clause 49. Dr Vincent Cable, the Liberal Democrat spokesman on trade and industry in another place, said on Second Reading:
"the provisions are not only inappropriate, but extremely reactionary…
The clause will mean that, in future, the partners of disabled people in receipt of a variety of disability benefits will be required to submit to the work test. If they fail that test, as currently defined, benefit sanctions will ensue.
That worries us deeply, because there is no evidence that the process will encourage disabled people's partners to work. However, there is a lot of evidence to suggest that many such partners, although they are not being paid, are working, in the sense that they are carers. Driving those people into work would be inhuman in some cases, and enormously costly to the state, which would have to fulfil the caring responsibilities".—[Official Report, Commons, 27/11/01; cols. 886–87.]
I am not sure whether the Bill is a curate's egg or a manky meat sandwich, but I am sure that we have enough to get our teeth into in Committee.
7.49 p.m.
Lord Rotherwick: My Lords, I declare an interest in that I run a small business and also own and manage office accommodation that is home to a number of small firms. Oxfordshire is one of the most successful counties for small businesses in Great Britain. I also declare that my wife and I have a 15 month-old baby. I am not sure that I would like to be thought of as a new father with nappy-changing abilities, as the right reverend Prelate the Bishop of Hereford said, but over the past 15 months I have become only too aware of the importance of paternity leave and the challenges that parenthood imposes on a husband and wife.
I therefore consider the Bill with a balanced mind, both as husband to a mother who is a key worker in an IT industry and requires maternity leave to nurture a newly born child and as an employer concerned about the Bill's impact. I should also say that I hope that a few noble Lords will agree with me that it is disappointing to see that the Bill does not deal with the paternity leave of Whips in your Lordships' House.
As the noble Lord, Lord Razzall, said, this is a mishmash of a Bill that has a number of aims, some of which we can accept, some of which we have reservations about and some of which we cannot accept. My honourable friend in another place, Mr Hammond, said:
"It is largely an empty box—a skeleton of primary legislation—the full impact and effect of which we shall not be able to judge until we see the regulations that should accompany it".—[Official Report, Commons, 27/11/01; col. 921]
My noble friend Lord Moynihan also alluded to that point.
It should also be said, on a brighter note, that the accompanying Explanatory Notes are exemplary in their clarity. Sadly, they will have no impact on interpretation of the Bill once it becomes law.
We hope that when the Bill becomes law, our businesses, especially small businesses, do not lose too much of their competitiveness in relation to their world competitors. Undoubtedly some groups, including the trade unions, would wish the Bill to go
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further. Employers may be anxious to give less away. Trade unions have done much good, but businesses must be competitive to continue to employ and expand. We must not go back to the old days of the state continually being required to hail out failing businesses that have become uncompetitive due to had work practices.
As my noble friend Lady Miller said, the Government state that the Bill's aim is to,
"deliver a balanced package of support for working parents, at the same time as reducing red tape for employers and making it easier to settle disputes in the work place".
Those are admirable aims. However, no matter how worthy the Government's aims in reducing red tape, their rhetoric does not reflect their action.
It may be of interest to the noble Lord, Lord McCarthy, to hear that there has been a torrent of legislation in this area. Indeed, there have been more than 3,856 new directives this year alone—the highest number ever. It must come as no surprise to the Government that—although the move was popular, as the noble Lord, Lord Lea, said—since they signed up to the social chapter, Britain has fallen from ninth to 19th in the world competitiveness league. More worryingly, our productivity growth has gone from being above the G7 average to below it.
We should always remember that small businesses comprise 99 per cent of all businesses in this country, employ 44 per cent of the private sector workforce and generate 37 per cent of the output. They also create almost all new jobs in the economy. If British industry is to live successfully in an ever-changing economic environment, there must be a cessation of the indirect costs on business that the Government have created in successive waves of regulation. Those regulations impose both direct and indirect costs on business. We may not have gone as far as some of the countries in the European Union in creating disincentives to job creation, but it is important that we strike a fine balance between employees' rights and a loss of competitiveness in Britain's firms.
As a Fellow of the Industry and Parliamentary Trust, I have spent a number of days with BAE Systems. In those days I have become more aware than ever before of the importance to a firm of being able to recruit, train and retain skilled workers. Employees tend to be dedicated to the firm they work for not only because they enjoy the working environment and the challenges of the workplace, but because the firm recognises the employee's requirements to have a fulfilling family life as well. Families that have time to nurture their children give their children a good start in life and offer them the best chance of growing up to be contributors to society.
It is clear that the proposed extension of rights to paid and unpaid leave for maternity, paternity and adoption will increase the opportunity for families to create a caring and secure environment for children. The higher rates of statutory pay and longer periods of entitlement will help employees who are fortunate enough to benefit. Time will tell, however, whether the

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legislation has over-egged the pudding and whether in times of economic downturn firms will find these rights to be the straw that breaks the camel's back.
Professor George Bain—who is much quoted by Labour Members in another place, and also by the noble Lord, Lord Sainsbury—said that,
"very often it is a case of employee versus employee because one person's flexible working is quite often someone else's inflexible working".
Last November, we saw a high-profile tribunal case in which WPC Michelle Chew of Avon and Somerset Police was refused permission to work the same days each week so that she could take her children to nursery school. Avon and Somerset Police said that all officers had to work varied shifts, while critics believe that special treatment would lead to a backlash against working mothers by men and childless couples. The tribunal ruled that the force had breached the Sex Discrimination Act 1975. One should obviously consider the effects of giving benefits to one section of society that might have negative implications for another section of society. Why should one section of society shoulder the burdens created by the flexibility requirements of another section of society?
We are glad to be able to welcome the Bill's other main strand—proposals to improve disputes, resolutions and tribunal procedures. It must be right to have as much clarity as possible in this sphere, thus one hopes improving the number of disputes resolved in the workplace. Can the Minister tell us whether ACAS will receive further resources to ensure that it can provide a more comprehensive and more effective service?
As my noble friends Lady Miller and Lord Moynihan outlined in their speeches, in Part 4 the Government propose to impose on employers a requirement to recognise and provide time off to unlimited numbers of union learning representatives without giving them any say in their selection or appointment. Like my noble friends, I am concerned about this part of the Bill. One wonders whether it is simply a pay-off to the Government's union paymasters. Although we believe that union learning representatives can play a valuable role in the workplace, it is respect for them by their employers that will make their roles worth while.
We accept the Bill's broad objectives, which are most well intentioned. Taken individually, the objectives may not seem to constitute an unacceptable burden. However, given all the other new burdens of regulatory compliance, administrative obligation and organisational inflexibility that the Government have imposed, we must take the utmost care in placing further burdens on our businesses. We should also put the debate in context. The Government's proposals are being presented after three successive quarters of manufacturing recession, and businesses across all sectors are reeling under the seemingly unstoppable flow of new regulation. At a time when the global economy is heading towards a sharp downturn and jobs are being lost at an accelerating rate across the
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UK, we must ask whether this is the time to impose new burdens which will make Britain's economy less competitive.
8 p.m.
Lord McIntosh of Haringey: My Lords, perhaps I may take the analogy of my noble friend Lord Lea of Crondall and say that I do not believe I have heard so many Mark Anthonys in the course of an afternoon and evening in any debate in this House before. I rather liked the formulation of my noble friend Lord McCarthy, which he did not quite finish. He is not in his place! I have pages of reply I am not supposed to give.
Lord Razzall: My Lords, perhaps I may suggest that the Minister omit those pages of reply.
Lord McIntosh of Haringey: My Lords, I am supposed to omit them.
Lord Wedderburn of Charlton: My Lords, if my noble friend will allow me to intervene, I understand that my noble friend Lord McCarthy was urgently summoned by Hansard.
Lord McIntosh of Haringey: My Lords, I am not criticising him in any way. I see he is back in his place and that has added five minutes to my speech!
I wanted to say that his formulation was rather apposite and which I can paraphrase as being: I engage in constructive criticism; you are critical and he is a wrecker. There were not quite any wreckers here, or at least not in the open. So it becomes particularly complicated to respond to the variety of interesting and well thought-out points that have been made.
Let me start by referring to what the noble Lord, Lord Henley, said in relation to small employers. There was an implied criticism of my noble friend Lord Sainsbury for being a large employer. The noble Lord. Lord Henley, should know that we have divided the work between us. I spent 30 years as a small employer, starting with no employees at all and ending up with only around 35.
Lord Henley: My Lords, if the noble Lord will give way, there was no criticism whatever of the noble Lord, Lord Sainsbury, for having been a large employer in the past. I have every admiration for large employers. I just think that their interests are different from those of small employers.
Lord McIntosh of Haringey: My Lords, they may well be, which is why we have representatives of both kinds of employer on the Government Front Bench on this occasion.
However, leaving the personal qualifications on one side, let me immediately turn to the open criticism expressed particularly by the noble Baroness, Lady

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Miller, about the ethos of the Bill, which she described as being the ethos of a compensation culture. That is far from the analysis that we make of the Bill.
Baroness Miller of Hendon: My Lords, I thank the noble Lord for giving way. I thought I made it perfectly clear that we welcomed Parts 1, 2 and 3 of the Bill. We had some problems with Part 4. When the noble Lord reads Hansard he will see that I was talking about the number of tribunals. I referred in part to compensation and in part to the shortening of the qualifying period. I did not describe the Bill in that. way at all.
Lord McIntosh of Haringey: My Lords, indeed I accept that entirely. I noted with great pleasure that the noble Baroness was supporting Parts 1, 2 and 3, though not all of her colleagues were quite as favourable to significant parts of the Bill.
The noble Baroness, Lady Miller, asked specifically about the development of the tribunal system. She was worried about the tribunal system being over-loaded and its capacity being increased by the size of the claims. But the median award for unfair dismissal, for example, was only £2,700 in the last full year. When we consider that the average week's pay is £450, the noble Baroness will agree that that is a very low figure. If anybody is tempted to go to a tribunal on the basis of the possibility of large profits, they will be sadly disappointed. I do not believe that that is a significant basis for people going to tribunals.
A number of noble Lords—the noble Lord, Lord Henley, and my noble friend Lord McCarthy from a rather different point of view—commented on the increase in the numbers of tribunal cases and their costs. I can confirm the figures given by the noble Lord, Lord Henley, in relation to the increase and my noble friends Lord Wedderburn and Lord McCarthy spelt them out. But that is not the Government's fundamental concern in putting this legislation forward. That is not the reason why we are doing it. That is not the way in which we understand the increase in tribunals' business and I shall be coming to that point in more detail later.
Lord McCarthy: My Lords, I thank my noble friend for giving way. Can he explain why in Routes to Resolution it says it is?
Lord McIntosh of Haringey: My Lords, I shall spend a good deal of time discussing exactly that matter. I am introducing it only in the context of the burdens on business which was the starting point of the first speeches.
I shall move on immediately—clearly noble Lords are impatient for later parts of my speech—and deal with the family-friendly aspect of the Bill. It is good to say that that achieved wide support from virtually everybody in the House, with the exception of the noble Lord. Lord Henley, who appears to be opposed to the paternity leave provisions. I notice that his opposition is not shared by his own Front Bench and I take some comfort from that.
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The right reverend Prelate the Bishop of Hereford made some particularly welcome remarks in relation to paternity and adoption leave. He made an interesting point about the possibility of an extension to extended family adoption. I can see there may be difficulty in the definition of that. But he will know that in November last year the Government announced an examination of civil partnerships—what the French call "pacs". Clearly there are wider implications, not just for the issues covered in this Bill, but also for issues such as benefits and pensions. It is better that that review takes place and he taken into account.
I understand the concern of the right reverend Prelate about both parents working and the consequent effect on family life. But there is considerable misunderstanding on this shared by the noble Baroness, Lady Miller, and the noble Lord, Lord Sharman. Alan Johnson made it clear at Second Reading in another place that there is nothing here which will force anybody into work. When the work focus interviews include partners, they are designed to improve the match between the potential labour force and jobs available. There is no element in the Bill of what the Americans call "work fare".
The noble Baroness, Lady Miller, made a point about the contributions and benefits Act. That is the Social Security Contributions and Benefits Act 1992. It is spelt out in full in the previous clause in the Bill.
My noble friend Lord Davies made some interesting points about the issue of payment during paternity and adoption leave for those earning below the lower earnings limit. He suggested that there should be a percentage of average weekly pay. It is not possible to deal with that problem in the Bill, but we believe that the solution is an amendment to the existing benefits system. We will amend the income support regulations for those entitled to paternity leave but riot to statutory paternity pay. In relation to the problem of speed of settlement, the target for the Benefits Agency is 12 days, though their average is actually better than that.
The noble Lord, Lord Sharman, wanted us to take the opportunity to clear up anomalies in the maternity regulations. The working time regulations apply to all of those situations—maternity leave, paternity leave and adoption leave—and in particular they provide for the accrual of holiday entitlement, which was one of the issues with which he was concerned.
I turn to what is the major area—justifiably so—of controversy in the Bill. I was asked by my noble friends Lord Lea, Lord McCarthy and others whether we want fewer cases going to tribunals. We do. But we do not want that at the price of anybody's individual rights nor at the risk of employees not being able to make valid and reasonable claims. We do not want the reduction because we feel that there is a large number of vexatious claims. The figures are well known on that. Nowhere in the Bill is there a proposal that there should be a denial of the right to go to employment tribunals. We do however think that where possible—I stress the words "where possible"—there should be

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settlement by agreement. We believe that that is to the benefit of both employers and employees. To that extent I hope that our intentions are the same as those of the noble Lords, Lord Wedderburn, Lord McCarthy, and others who have spoken. But I must emphasise in particular to the noble Lord, Lord Lea, that resolution by agreement in the workplace does not prevent a tribunal claim. He used the phrase "prohibition on access to justice" and the noble Lord, Lord Wedderburn, talked about unmeritorious applicants. Unmeritorious applicants do not, and never have, constituted a significant feature in our thinking. What we want is off-line settlement of as many disputes and claims as possible, as I say, for the benefit of both employers and employees.
There has been—
Lord Lea of Crondall: My Lords, I am sorry to interrupt at this point and I am grateful to my noble friend for giving way. However, when he says that there will be an emphasis on making provision for agreement, will he not reflect that that may well require some amendment to the Bill as it stands at the moment?
Lord McIntosh of Haringey: My Lords, I do not believe so but we shall study with great care any amendments that are tabled, as we do with any subject. I ought now to turn to something which exercises the minds of a number of noble Lords; that is, the evidence on which it is claimed we are putting forward this legislation. The noble Lord, Lord Razzall, said that we had claimed that 62 per cent of cases could have been resolved outside tribunals.
The noble Lords, Lord McCarthy and Lord Wedderburn, both gave considerable expositions of the survey of employment tribunal applications as if that was the fundamental reason and justification put forward by the Government for this legislation. I am a survey researcher by trade and I read the survey with some care. I do not believe that the interpretations which have been put on the survey by noble Lords this afternoon stand up or are justified. Some other interpretations may have been made in public which are not justified, but my noble friend Lord Sainsbury made it clear on 5th February in response to a Starred Question just what that survey does and does not say. The survey is a survey of applicants to employment tribunals. It says nothing, because it knows nothing, about cases which have not gone to industrial tribunals. If I were to make decisions about industrial tribunals, I should want to know about the cases which did not get there. The survey is not adequate for that purpose.
Lord McCarthy: My Lords, will the noble Lord tell me then which survey he is using? He is making policy. He says that the surveys to which we have been given access are not a basis for policy so he must have some other secret surveys that we still do not know about.
Lord McIntosh of Haringey: My Lords, that is a conspiratorial view of history which is not worthy.
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I said no such thing. I propose now to say what that survey says. The survey comprised interviews with applicants to employment tribunals, both employees and employers. It asked what happened before the relevant case came before the tribunal. Some 62 per cent said that there had been no meeting. The survey did not say why that was. That question was not asked. As I say, 62 per cent said that there had been no meeting and 37 per cent said that there had been neither a meeting nor a written communication nor any other form of communication between the employee and the employer. That is all it says. It makes no further claim than that.
Lord Wedderburn of Charlton: My Lords, does my noble friend therefore not agree with the proposition—as I take it he does not—that over three in five of the applications to tribunals come from applicants who have not attempted to resolve the problem directly with their employer in the first instance? Those are not my words but those of the Minister in another place who introduced the Bill as a central reason for stopping these applications.
Lord McIntosh of Haringey: My Lords, I challenge the view that it is a central reason for stopping the applications. As regards the word "attempted", I cannot tell from the wording of the survey whether such attempts took place or not. I imagine that in a large number of cases if a meeting had been attempted it would have been achieved, or certainly if written communication had been attempted it would have been achieved. I do not believe that significant numbers are involved in that regard. This is a distinction without a difference. Frankly, the issue of this survey has been taken as far as it can be taken. It has little significance in policy making terms and I do not think that we should spend any more time on it.
Of course, there are all kinds of reasons why there should be no communication between employees and employers. As Judge Prophet said, that could be because some people left employment before they had an opportunity to start any communication. That is a legitimate reason for not entering communication. I am not saying, and the Government are not saying, and have never said, as the noble Lord, Lord Razzall, claimed we had said, that 62 per cent of cases could have been resolved outside tribunals. That is not the case that we are making. We are making the case that communication between employees and employers is greatly lacking and that if we could find ways to encourage communication between employees and employers that would be to the benefit of employees and employers and may also have the effect of influencing the number of cases which come before tribunals.
I turn to a matter where I hope that the noble Lord, Lord McCarthy, and I will be more in agreement. He gave a number of reasons for the increase in tribunal activity, in particular the increase in the jurisdiction of tribunals and the fact that there is no alternative to tribunals with what he described as the collapse of collective bargaining. The noble

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Lord, Lord Lea, referred to the new rights which employees have which can be put before tribunals. The noble Lord, Lord Lea, also referred to the Deakin and Morris research. All of those are good reasons—which are not and cannot be influenced by this Bill—why there has been an increase in tribunal activity. However, that is not a reason for our failing to do what we can—that is what we are trying to do in the Bill—to achieve ettlement outside tribunals. I believe that any fair and objective judge of this debate will also come to that conclusion. I am not saying—
Lord Wedderburn of Charlton: My Lords, will my noble friend allow me to make a legal point?
Lord McIntosh of Haringey: My Lords, I hope that I may be allowed to finish this point. I am not saying that there are not possibilities of amending the legislation in Committee which may make a difference to its effectiveness. However, I hope that the noble Lords, Lord Wedderburn, Lord McCarthy and Lord Lea, will agree that what we are trying to do is the right thing,
Lord Wedderburn of Charlton: My Lords, I am most grateful for those last few words on which we shall ponder deeply. I interrupted my noble friend only to be quite sure about the position. Does he accept that now still, as the Government accepted in their Routes to Resolution document and in the background paper which preceded it, the five reasons given by Dr Burgess in his research carried out for the department are still the five reasons which basically are the cause of the steady and regular increase of applications to tribunals? I accept that and I am sure that my noble friend should. I hope that he does.
Lord McIntosh of Haringey: My Lords, there are many reasons why there have been increases in applications to the tribunals. I have no doubt that the research of Dr Burgess and the Deakin and Morris research and the Earnshaw research and all of the other research which has been carried out have made positive contributions to that. My point about all of those is that the object of this exercise is not to impose any restrictions on access to justice through the tribunal system. That is the fundamental principle which must be accepted here. We are trying, first, to improve what happens between employees and employers. If we are doing it in the wrong way, I have no doubt that my noble friends Lord Wedderburn and Lord McCarthy will seek to show us how to do it better. We shall listen with respect, as we always do, and we shall seek to come to a proper judgment.
It was also claimed—by the noble Lord, Lord Razzall, in the first instance—that we are jumping the gun with regard to the taskforce. The noble Lord, Lord Sharman, claimed that we are jumping the gun in relation to the Leggatt report. The taskforce simply does not have those terms of reference. It is concerned with the operational efficiency of the tribunal system and, therefore, could not deal with the matters dealt
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with in the Bill. The Leggatt report—the noble Lord, Lord Sharman, had to wait a year for a response to his own report; therefore he knows what I am talking about—concerns unifying all the tribunals, and it may take a considerable time to come to fruition. I do not believe that he would wish that to happen.
Lord Sharman: My Lords, I thank the Minister for giving way. Is he aware that I have not yet received a reply to my report?
Lord McIntosh of Haringey: My Lords. I saw it a month ago. I am completely astonished. I believed that it came through on a normal public mailing. I apologise to the noble Lord. Certainly a late draft is available and I shall inquire into its status.
I wanted to say a brief word to my noble friend Lord McCarthy about ETI. I believe that he would also wish me to say a word about ET3. We have no objection to the wording of ETI and no particular objection to the wording of ET3. There is no desire to make any of them more complicated. But ETI and ET3 are usually in application at present and we believe that, by prescribing them, we can bring them into use in every case. We consider that to be an advantage. A minor problem in relation to Eli is that it is not available by electronic means, but I am sure that that can be overcome without major difficulty. In any event, the task force is looking at the application form. Thus, a further stage is taking place in relation to that.
I turn now to the issue of ACAS. A number of noble Lords believe that there is somehow a diminution of ACAS's powers, influence and contribution in what is proposed in the Bill. Certainly the statutory three steps do not comprise competition to the ACAS code. They are not intended to do so. They do not replace the ACAS code; they simply provide a bedrock. They provide what can be provided within the context of legislation. Legislation must be considerably more precise, more definitive and more unchallengeable in the courts than a code of practice.
We have the greatest respect for the code of practice but it does contain a very large number of words such as "reasonable" and "normal". We need both the code of practice and the statutory bedrock. There is no intention whatever by either ACAS or the Government to weaken the ACAS code—I say that to my noble friend Lord Lea—or certainly—I say to my noble friend Lord Gladwin—to make the ACAS code statutory. I say to the noble Lord, Lord Rotherwick, that the ACAS funding is not at issue in this Bill. If more funding is required, no doubt that can be discussed.
I shall say a brief word about unfair dismissal. Again, I disagree with those who claim that the Bill brings about a reversal of the Polkey judgment. I disagree with the noble Lords, Lord Razzall and Lord Moynihan, on that point. The "no difference" defence does not guarantee that an employer acted reasonably. Dismissal will still be unfair if an employer behaves unreasonably.

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My noble friend Lady Turner raised the valid and interesting point about harassment and violence. She is, of course, right to say that it would be wrong for us to demand a complaint to employers in harassment or violence cases. Those will be dealt with in regulations under Clauses 30, 31 and 33.
My noble friend Lord Borrie brought up the issues raised by Judge Prophet about staying the tribunal rather than changing the penalty. We want these procedural changes to take place before a matter comes to a tribunal rather than when it is at the tribunal. What happens at the tribunal is, indeed, a matter for the taskforce. But the point here is that we are not requiring applicants to take up their grievances first.
The only changes that are being made—I say this to my noble friend Lady Turner in particular—are not a widening in the cost regime in general but changes to particular aspects of paid representatives and case preparation. My honourable friend Alan Johnson made it clear that he will consider a limit on compensation for case preparation if that is necessary. I believe that that should answer the claim in relation to double recovery.
I turn to the issue of gross misconduct and the modified procedures on gross misconduct. My noble friend Lord Gladwin and the noble Lord, Lord Razzall, both want investigation to be carried out before a dismissal takes place. I have had to dismiss people for gross misconduct by saying, "Just go. Get out. Clear your desk and be out in half an hour", because the situation was desperate and staff morale would have been destroyed if I had not done so. But, of course, not all gross misconduct results in instant dismissal. Clearly when it does not, it is desirable and necessary that an investigation takes place.
I believe that I can give my noble friends Lord Borrie and Lord Gladwin the assurances that they want on the matter of public interest disclosure. First, most whistle-blowing, as the Public Interest Disclosure Act provides for, is not in the form of a grievance between an employee and an employer. Nevertheless, the Bill and the accompanying regulations will ensure that there is no conflict with the Public Interest Disclosure Act.
With regard to the issue of "employees" versus "workers", the definitions of both those are in the Employment Rights Act 1996. There is a government review of employment status in process. Meanwhile, we did not consider it advisable to use the concept of "workers" here rather than "employees" as we are, for example, trying to match paternity regulations, which are based on employees, with maternity regulations, which are also based on employees. We should encounter problems if a different definition were used.
With regard to equal pay questionnaires, the issues raised were those of confidentiality. I do not deny that they are significant issues but they are no different from those which have already been raised in race
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discrimination, sex discrimination and, above all, disability discrimination regulations. I do not believe that there is any new cause for concern.
I was astonished by some of the things that were said from the Opposition Benches about union learning representatives. I believed that we had all agreed that the improvement of skills in the workplace was a priority for improving productivity in this country. The offer of trade unions to participate in that by providing, as they already have done. 3,000 union learning representatives, even when they do not get time off from work, seems to me to be an offer which should not be looked at askance. The Bill only says that the time off should be compulsory; it does not say that trade unions must provide union learning representatives. Of course, none of the employer organisations is unequivocally in favour of the representatives, but nor are the trade unions. This is a perfectly reasonable compromise.
I do not disagree with what was said by the noble Baroness, Lady Sharp, with regard to what is provided for in last year's Pre-Budget Report. Clearly we shall continue to pursue those matters. They were pursued in the November PIU report on training and learning and they were in our election manifesto. We shall not let them drop. The advantage of pursuing them here and now is that consultation was carried out by the Department for Education and Skills in May last year and we have an opportunity to bring the measures into force.
On fixed-term working, it is claimed that we have here gold-plating in the sense that we include pay and pensions. I agree that including pay and pensions is not in the directive, but in doing so we shall not be alone in Europe. Clearly, it is important that we should provide equal treatment for fixed-term employees as is provided for in the directive, not just for those in universities, but also for those in all sectors of employment. I understand the concerns about successive contracts, but surely the most important point is equal treatment. which is provided.
I am sorry that I have broken all the rules, but with interruptions, I have tried to answer questions. I look forward not to a two-sided debate, but a multi-sided debate in Committee and at later stages of the Bill. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Grand Committee.

Royal Assent
The Deputy Speaker (Baroness Lockwood): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

International Development Act,

Sex Discrimination (Election Candidates) Act, European Communities (Amendment) Act, Travel Concessions Eligibility Act,

Civil Defence (Grant) Act,

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Northern Ireland Arms Decommissioning (Amendment) Act,

Homelessness Act,

British Overseas Territories Act,

Land Registration Act.

Adjacent Waters Boundaries (Northern Ireland) Order 2002
8.32 p.m.
Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton rose to move, That the draft order laid before the House on 7th February be approved [19th Report from the Joint Committee].
The noble Baroness said: My Lords, I beg to move the Motion standing in the name of my noble and learned friend Lord Williams of Mostyn and, with the leave of the House, I shall speak also to the Sea Fisheries (Northern Ireland) Order 2002.
The effect of the first order is to determine the Northern Ireland zone for the purposes of Section 98 of the Northern Ireland Act 1998. In doing so it establishes the boundary between the parts of the sea within sea fishery limits which are to be treated as adjacent to Northern Ireland and those parts which are not to be so treated. The order mirrors the boundary with the Scottish zone created under the Scottish Adjacent Boundaries Order 1999.
Within the Northern Ireland zone the Department of Agriculture and Rural Development will exercise the powers relating to fisheries to be devolved to it from the Secretary of State for Northern Ireland under the Sea Fisheries (Northern Ireland) Order 2002, to which I shall come in a few minutes. I commend the order to the House.
The second order essentially transfers functions relating to sea fisheries from my right honourable friend the Secretary of State to the Department of Agriculture and Rural Development in Northern Ireland.
Hitherto, while most fisheries matters were devolved to the Northern Ireland Administration, the responsibility for making some subordinate legislation remained with the fisheries Ministers in the UK acting jointly. For example, we intend to devolve the ability to make subordinate legislation such as the licensing of Northern Ireland fishing vessels and rules governing their operation; the ability to legislate for technical conservation matters such as defining the mesh size of fishing nets that may be used by Northern Ireland fishing vessels; and the minimum landing size of a variety of fish species. The list is intended to be illustrative and is by no means exhaustive. Under the Northern Ireland Act 1998 there is provision to devolve that function. By amending certain statutes, that is all that this draft order achieves. I emphasise that no new powers will be created.
Noble Lords may also wish to note that the equivalent powers in respect of the Secretary of State for Scotland were transferred to the Scottish Executive under the Scotland Act 1998.
Article 3 of the order sets out the main pieces of primary legislation to be amended; namely, the Sea Fish (Conservation) Act 1967, the Fisheries Act 1981 and a number of other enactments relating to sea fisheries. Schedules 1 to 3 set out in detail how those enactments are to be amended and the powers transferred from the Secretary of State for Northern Ireland to the Department of Agriculture and Rural Development. In broad terms the order transfers to the Department of Agriculture and Rural Development functions relating to sea fishing in the Northern Ireland zone; sea fishing by Northern Ireland fishing boats; and various statutory provisions relating to sea fisheries as amended by Articles 6 and 7.
I stress again that this is a purely technical provision, transferring functions so far as they relate to sea fisheries and no new powers are being created. I commend the order to the House.
Moved, That the draft order laid before the House on 7th February be approved [19th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)
Lord Glentoran: My Lords, I thank the noble Baroness for moving the order. It is one more step on the road to full devolution for Northern Ireland, which has to be good.
Lord Shutt of Greetland: My Lords, I also thank the noble Baroness for moving the order. I believe that this is a further step to devolved government in Northern Ireland. From these Benches, we give it our blessing.
On Question, Motion agreed to.

Sea Fisheries (Northern Ireland) Order 2002
Baroness Farrington of Ribbleton: My Lords, I beg to move.
Moved, That the draft order laid before the House on 7th February be approved [19th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)
On Question, Motion agreed to.

National Stadium
8.37 p.m.
Lord Corbett of Castle Vale Lord Corbett of Castle Vale rose to ask Her Majesty's Government where they consider that the national stadium should be sited.
The noble Lord said: My Lords, this debate concerns the question of where Her Majesty's Government consider that the national stadium should be sited. If the Minister were to say Solihull, Birmingham, I would be perfectly willing to sit down and we could all go home! It was worth a shot.
Plans for an English national stadium for football, rugby and athletics are already four years behind schedule and up to £300 million beyond the original

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budget. As things stand, six years after Sport England selected Wembley as the preferred site for the stadium and put £120 million of lottery money behind it, not one brick has been laid upon another.
It is to no one's credit that there have been six years of dithering. It is bound to lead to the question: if the FA has got nowhere in six years, what real prospect is there that it can get all the finance, procurement and planning permission in place by April, the deadline, or perhaps I should say more accurately, the new deadline, set by the Government? Only yesterday the Secretary of State insisted that,
"by the end of April we [shall] know once and for all whether the national stadium will be built at Wembley".—[0fficia/ Report, Commons, 25/2/02; col. 428.]
Those are no doubt words that all noble Lords will recall.
The Government claim that they are neutral over the stadium's location. The Secretary of State in her Statement of 19th December last year, at col. 302 of the Official Report, spoke of "government support" for the stadium and, at col. 308, she described the Government's role as that of a "facilitator". I welcome that in the sense that it leaves the Government free to support the Birmingham-Solihull bid if Wembley cannot get its act together and meet the new deadline. But, more widely, I do not believe that the Government will be seen by the public as neutral, any more than the last Conservative government were over the siting of the Dome. The people of Birmingham and the West Midlands remember how they were cheated out of the national millennium exhibition by that government fraudulently altering the wording of the bid document after the tenders were in. Their claimed neutrality was no more than a mask.
I take the view that government have a right and a duty to act in the national interest to decide upon the best location for the stadium in consultation with the FA and others and then to give their support as a willing facilitator.
The development of major sports facilities is a matter of legitimate interest to the Government. The choice of site for this stadium involves judgments about the value of the regions and how it can assist regional development, investment and employment and ensure that London and the South East do not automatically get every plum that is going.
I can tell the Minister that if either the Government or the FA think that a new Wembley would assist a London Olympic bid, they are wrong. Mr Simon Clegg, chief executive of the British Olympic Association, was quoted in the Guardian on 9th February this year as saying:
"The focus for any British Olympic bid is very much on the east end of London. The Mayor of London has made it clear that he would not allow the bid to go ahead unless it were centred on the East End".
The requirement that major Olympic venues are within 30 minutes travelling time of any Olympic village would rule out Wembley anyway.
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The International Olympic Committee did not insist on the capital hosting the last Olympics in Australia. Nor did it do so when they were last held in America. It has no right to try to dictate which cities should be able to bid for the games. In the United Kingdom there is every good reason why the games—like the World Indoor Athletics Championships scheduled for Birmingham next year—should not take place in this overcrowded capital.
I believe that the FA's preference for Wembley is based on a single fallacious financial claim. That is set out in the Carter review, at page 13. It states that,
"the FA's view [is] that premium seat income will be significantly lower in Birmingham than Wembley".
This is crucial because premium seat income—that is, corporate hospitality, parking, private boxes, restaurants and income from television rights—accounts for £70 in every £100 of stadium income. It is only the other £30 in every —100 that comes through the sale of tickets, in other words through the turnstile.
Given a theoretical choice between Wembley and Birmingham-Solihull, it is no surprise that the premium seat income is assessed as potentially higher at Wembley. But that is not the choice. Mr Doug Ellis. the energetic chairman of Aston Villa FC, tells me that Bastion, the company that specialises in corporate sales for stadia world-wide, is confident that once a Birmingham-Solihull stadium is standing there, the premium seat income will equal that expected by a Wembley site.
In any event, looking at the designs for both stadiums, as Mr Ellis points out, corporate facilities at Birmingham-Solihull are far superior to those envisaged at Wembley. There is just one example that I should like to give. A 12-seater box at Wembley would come with just one reserved parking space. That means that the other eight clients would have to rely on very inadequate, tatty public transport serving the stadium. There is no guarantee of transport improvement since the Government have neatly passed that burden on to the Mayor. At Birmingham there is room for four reserved parking spaces for each 12-seater box. These matters are extremely important, given the money that rides on the back of the sale of boxes.
There are other strong arguments why the Government should get behind the Birmingham-Solihull bid. First, the project is cheaper and needs no government or lottery money. Secondly, it will be managed by the NEC Group which welcomes 5.5 million visitors a year to more than a thousand events at five of Europe's leading venues in the area. Thirdly, Birmingham and the region have a track record for developing major capital projects and events on time and on budget, such as the Millennium Point, the project which is leading the regeneration of Birmingham's east side. Fourthly, the site is at the heart of the country's transport network —motorways, a mainline railway station and an international airport, none of which applies to Wembley. Fifthly, and most importantly, the Birmingham-Solihull stadium is backed in a survey by 69 out of every 100 football fans and 55 out of 64 premier and league football club chairmen.

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At the very least I should like the Minister to repeat the undertaking given by the Secretary of State in December that, should the Wembley bid fail by the end of April,
"the strong proposals from Birmingham should be taken forward".—[Official Report, Commons, 19/12/01; col. 302.1]
I also want the Government to insist on a stadium which can host national and international athletics. The technology now exists to achieve that without the need to erect and dismantle an elevated track.
This is not being anti-London. It is a plea to site the English national stadium where the fans and the clubs want it and where access is easiest from all parts of the country. I want the Government now to listen to fans and clubs and to support a home for the game at the heart of the nation to be located at the heart of the nation—al Birmingham-Solihull.
8.46 p.m.
Lord Glentoran: My Lords, I thank the noble Lord, Lord Corbett of Castle Vale, for giving us another opportunity to discuss and debate this very thorny problem.
With noble Lords' agreement, I should like to take a few seconds out to pass on the congratulations of this House to all those medal winners in the recent Winter Olympic Games and to all those coaches, leaders and managers of a super performing team.
I return to the subject. We now have the third Minister for Sport since 1997 and the second Secretary of State for Culture, Media and Sport in the same period. The national stadium concept was started by my party in 1996. So far as I can see, the only significant happenings since have been a grant by Sport England of £120 million to the FA and the closure of the Wembley Stadium by the FA. If anyone thinks that the noble Lord, Lord Corbett, and I have colluded on this matter, please be assured that we have not. This is a sad and sorry story as told in the standing committee's report, The unpicking of Pickett's Lock, to which I referred when last we debated this topic, and also of course in some detail in the excellent report recently produced by Patrick Carter.
The national stadium project is for a national stadium for Association Football only, as stated yesterday in another place by Mr Olner and not corrected by the Secretary of State. In the light of this, a number of alternatives have to be re-examined: first, and in particular, the need for a national stadium at all; and, secondly, as the noble Lord, Lord Corbett, has already saidl, its location.
The alternatives basically are four. These are analysed very clearly in the excellent report by Patrick Carter. They revolve around Wembley, Birmingham, Coventry and the no stadium option. I can reassure the noble Lord, Lord Corbett, that I, as a Millennium commissioner, was a supporter of Birmingham.
Let us look at the no stadium option first. The no stadium option, or "England on the road", has many good facets. It is economical; it puts lumps of money into a number of clubs around the country; it does not have a residential overhead cost for the FA, the
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Government or for anyone else; and, perhaps most importantly of all, it spreads the opportunity for that huge band of supporters of English football to get first-class viewing of British internationals in different parts of the kingdom without having to travel from, for example, the North East to London.
However, there are also countries in Europe that do the same thing—Germany, Italy and Spain—none ofwhich have national stadiums; all of which have seriously high-level international football teams. But there is one major difference—the size of the stadiums currently available in this country, excluding Twickenham, which has severe planning limitations, and the Millennium Stadium in Cardiff, which is of course in Wales. England's six largest stadiums are all in or north of Manchester and hold only between 40,000 at Everton and 67,000 at Newcastle. That compares with Italy's four largest stadiums in Rome, Milan, Naples and Turin—arguably, spread well around the country's major population zones—which hold between 69,000 in the smallest and 86,000 in the largest.
So if the no national stadium option is to be chosen, funding will clearly be needed significantly to enlarge the nation's top stadiums and we will need to find one suitable club or location in the South and one in the South West—which are not obvious.
Perhaps the way forward is a national stadium. but where and how should it be funded? An athletics stadium incorporated within the Football Association's national football stadium is unrealistic. If that fact is accepted, Sport England's lottery grant should be returned forthwith. That grant of £120 million was arguably given to the FA before there was any certainty of a financially viable project. It was spent on purchasing the land at Wembley and, we are told, various design fees. The money is secured on the land value, which Mr Carter now tells us in his report is likely to be only £30 million. It is time to examine in some detail how Sport England came to allow that grant to the FA in the first place, how the procurement procedures have been followed and how the money will be repaid should it be found that the grant agreement and financial directives have not been fulfilled.
I declare an interest—as perhaps I should have done earlier—as a Millennium commissioner, which I have been since the commission's inception in 1994. During that time, I have had considerable experience of the funding of and the necessary business plans for projects worth £100 million-plus, including the Millennium Stadium in Cardiff, Scotland's Hampden Park of Dreams and the Dome, among others. As has been pointed out by both Patrick Carter and Gerald Kaufman and his committee—albeit in different contexts£government should not interfere in the management of such projects or the decision-making process.
If government money is to be used—and in the case of a national football stadium it should not be—it should not be committed until all matching funding is secure and a robust business plan has been submitted

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and tested by the relevant professionals. That was my case when supporting Birmingham for the Dome—the economics seemed more easily to be met. The business plan and the inherent debt management will obviously relate directly to the overall capital cost and the income streams when in operation.
The Millennium Stadium in Cardiff was completed for less than £150 million, as I discussed with the noble Lord, Lord Faulkner of Worcester, at the weekend. It holds 73,500 people. It has the versatility of an opening and closing roof. It is used as a national stadium not only for football but for rugby—which is not available for our national football stadium because the Rugby Football Union will not get out of Twickenham. At present, for five years it has the benefit of hosting the major events of the FA and the Football League, such as that of last weekend. However, Cardiff is still finding it difficult to pay off its debts and pay its way, despite holding 73,500 people, costing only —150 million and having a really full programme.
This is a project for the FA and the FA alone. Rebuilding Wembley at a cost of £600 million to £700 million as an Association Football stadium only will make no difference to our ability to attract world-class sporting events other than football. If we were at some time to attract the Olympic Games to London, the money would become available to convert a rebuilt Wembley, or to allow for the use of Twickenham over a very restricted timescale for sport other than football or rugby. I listened to what the noble Lord, Lord Corbett, said about half an hour's travel ride. I have competed in three Olympic Games and can assure him that I have certainly travelled for considerably longer than half an hour between venues. I suspect that my noble friend Lord Coe will support me in that assertion.
From all the £100 million-plus projects that I have seen I find it impossible to believe that a national stadium without a permanent tenant and costing more than £500 million could ever be viable. However, the Government appear to have got themselves well and truly committed to that course. If that is the case, they should get off the fence, decide on the place and say so.
8.56 p.m.
Lord Fowler: My Lords, I congratulate the noble Lord, Lord Corbett of Castle Vale, on raising the issue this evening. I was a neighbour of his for more than 20 years when we had adjoining constituencies in Birmingham. We battled against governments of both colours; all that unites us even more is that we have both been unsuccessful in our battles. Nevertheless, what the noble Lord said this evening had force. Of course, I join in my noble friend's congratulation of our medal winners in the winter Olympics. I also agree that there are some fundamental questions to be answered about the financing of the national stadium project and the pledges that have been given. What my noble friend said went to the heart of one of the central issues.
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I should like to take a rather different course from that of my noble friend. I remember with some pain, as does the noble Lord, Lord Corbett, the history of the Millennium Dome. I remember the mistakes that were made in financing the project and the fundamental mistake of siting the exhibition in Greenwich. Above all, I remember listening to the barely disguised and rather patronising message that, in contrast to Greenwich, the Midlands was incapable of organising and hosting such a national exhibition. It was suggested that such national events could take place only in London; London was the only choice.
Of course, the Dome was a fiasco; there is no question about that. It was a very public failure. Most of those who advocated the Greenwich site as the automatic and only choice have now mysteriously melted away. The so-called obvious site became a music-hall joke, with few public friends left.
If I may put it this way, the danger for the Government is that, unless they are lucky, the Wembley project will go the same way. So far, it has been characterised by dispute and argument, by an inquiry into procurement and by all kinds of questions about the financial arrangements. A so-called troubleshooter has already been imported to try to sort out the mess and we have not yet laid a single brick—the project has not yet got under way.
If I may put this gently to the Minister, that hardly bodes well. Through its constant change of Ministers, the Government are hardly helping the process. Indeed, the latest ministerial intervention, that of the Secretary of State yesterday during Questions in another place, trying, as she put it, to clarify the position in relation to athletics, succeeded only in further obscuring the position. If that was clarification, I should hate to see her in a deliberately obscuring mood.
There are many negative things that can be said about the planning of the Wembley stadium, but that is not the fundamental point that I want to make this evening. My central point is that, in planning on Wembley—going for the Wembley option—we are losing an enormous opportunity to have a stadium that would be better in every respect. The country would do better. It is worth remembering how much lottery money is pledged and how much taxpayers' money could go in. There are national issues involved, and there are certainly governmental issues. The national stadium should be sited next to the National Exhibition Centre on the outskirts of Birmingham.
I say that for several reasons. First, there is a greenfield site that would be substantially easier and cheaper to develop. That would have the undoubted support of the public in the Midlands and, I suggest, the public further afield. It would also have the support of a formidable number of dedicated people in the Midlands, including people such as Doug Ellis, who has already been mentioned. Secondly, the site in the Midlands already has excellent communications by rail and motorway. The contrast is stark: Wembley has always been a nightmare to get to and to get away from.

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I shall point out just one deficiency with Wembley: it needs a new Underground station at Wembley Park. There is no conceivable question about that, but it is anything but clear that that is on offer. In fact, there is the prospect of a planning dispute involving Brent council and possible further delay in the whole process. In contrast, the basic communications infrastructure in Birmingham is already there; the facilities already exist.
The opportunity to go to Birmingham should be taken for those reasons, but from the point of view of the public—perhaps the most important—it is the most convenient and accessible venue. Wembley is not the middle of the country: no doubt, it has many advantages. but it cannot claim that. Birmingham is. That is why, as the noble Lord, Lord Corbett of Castle Vale, said, all the surveys that have been carried out show that opinion is heavily in favour of Birmingham and the Midlands. By any objective analysis, the figures are overwhelming.
My last point is that, apart from those practical reasons and arguments—which I think are overwhelming—a decision to move to the Midlands would have enormous symbolic importance. It would mean that, as a nation, we were saying that important national meeting places could be sited successfully outside London and that there is no reason why they must be in the capital and many reasons, given the congestion, why they should be moved outside. London is not the automatic first choice. Over the past 20 years we have seen the renewal of our big regional cities. That is one of the most dramatic things that have taken place in this country. The big regional cities outside London have come back into their own, and we have seen a marvellous regeneration in cities such as Leeds, Manchester and, of course, Birmingham.
I fear that the signal that we will give if we persist with Wembley is that we intend to continue with the same old tired and often unsuccessful policies that we followed in the past. That is the signal that we will give if we go the Wembley way. There is an opportunity to move away from that, and we are likely to be more successful. I hope that we will take that opportunity.
9.4 p.m.
Lord Faulkner of Worcester: My Lords, I declare a non-remunerated interest as a non-executive director of the Cardiff Millennium Stadium, nominated by Cardiff County Council. Like other noble Lords, I congratulate my noble friend Lord Corbett of Castle Vale on initiating the debate and on the vigour with which he has put the case for Birmingham. It is a pleasure to find myself a sandwich between two distinguished Olympic gold medal winners on the other side of the House, the noble Lords, Lord Glentoran and Lord Coe.
The debate over the siting of the national stadium has not, so far, reflected well on some of the individuals and organisations that have taken part in it. It contributed to the premature ending of ministerial careers in the Department for Culture, Media and Sport and to the removal from office of
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people in the sporting and business worlds who used to be part of the process. The "Now you see it. now you don't, now you see it again" approach to the inclusion of athletics in the Wembley design lay at the heart of the problem. Most people assumed that, if Wembley were to be a genuine national arena, as opposed to simply a football and rugby stadium. it had to include a provision for athletics and, ideally, be suitable for at least the opening and closing ceremonies or an Olympic Games.
A further difficulty was that the earlier designs for Wembley were far too grandiose and contained provision for an hotel and office block. The business plan that contained those did not work, and the FA—in desperation, I suspect—asked the Government to join it as partners in the project, just before last year's election. Ministers refused to do that and. instead, commissioned the review chaired by Mr Patrick Carter, to which noble Lords have referred. The interim report was published on 19th December, and it is a model of good sense and clarity. It pulls no punches on why the original project failed and offers a logical way forward.
Mr Carter did, however, draw attention to several concerns relating to corporate governance, the earlier procurement process and potential conflicts of interest. In his covering letter to the Secretary of State, Tessa Jowell, he said that she should satisfy herself,
"as to the achievement of Government value for money in procurement standards and any associated accounting issues".
The Secretary of State accepted that advice and refused to give the green light to Wembley when she made her statement in another place on 19th December. The final decision will now be taken in April.
The Football Association is devoting all its attention to establishing whether Wernhley can work. For the moment, it assures me that Birmingham has been put on the back burner, as indeed is the option of having no national stadium. That is an interesting thought, to which the noble Lord, Lord Glentoran, referred. I have a great deal of sympathy with what he said. That is because we have the best range and the largest number of modern, safe, top-class football grounds in Europe. The practice of "England on tour", necessitated by the closure of Wembley, has worked well with fans in all parts of the country enjoying the experience of seeing England play in their home city.
However, there has been the problem that we do not have sufficient club grounds with a big enough capacity, a point made by the noble Lord, Lord Glentoran. I am told that tickets for recent England matches played out of London have tended to sell out in only four hours. A beneficial side-effect of this has been an improvement in the standards of crowd behaviour at England matches, with fewer displays of xenophobia and racism from sections of the England crowd, which many of us always found so unpleasant at Wembley.
Let us assume that what one might call the historical issues relating to the choice of Wembley—matters of corporate governance, procurement practices and the

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like—referred to in the Carter report and described by the Secretary of State in her statement on 19th December, are satisfactorily resolved and that Wembley and Birmingham are judged together on a fair basis. Which of the two projects is likely to produce the best outcome for football? I shall deal first with football.
I am concerned that, wherever it is sited, the national stadium does not become a drain on the finances of the game as a whole. As the governing body, the Football Association has a responsibility for football at every level. Its commercial activities should be sufficiently successful to allow it to support and subsidise the game at the grass roots. Noble Lords will have heard me point out on previous occasions that the task would be easier if the wealth generated at the very top via the Premier League was to be redistributed more generously. But I fear that every urge to redistribute is then subsumed in the Premier League by an obsession to avoid relegation, which leads to players being bought for ridiculous transfer fees and often paid obscene salaries to be in the squads.
Meanwhile, although such wealth exists in the Premier League, seven Football League clubs are now up for sale, a number are on the brink of administration or are already in administration, and a few could collapse at any moment. Against that background, it is vital that the Football Association does not threaten its viability and hence its capacity to help the game's development by pouring money into a national stadium and receiving no return from it. I am assured by the FA that it would not allow that to happen. That is obviously an important part of the deliberations it is conducting at the moment.
The Carter report makes it clear that a critical element in the funding projections is premium income, to which my noble friend Lord Corbett referred. At Wembley, 70 per cent of the income would come from only 15,000 premium seat holders. What is more, according to the Carter report, some £50 million of that premium income could be underwritten and paid up front. I have no difficulty in the principle of encouraging people with money effectively to subsidise the less well-off in the crowd. Indeed, that was a recommendation made in the final report of the Football Task Force. There we considered that at club level the income generated from what one might call the high rollers should keep down the prices for other fans.
I was interested in the comments made by my noble friend with regard to Birmingham and premium income, but we have to acknowledge, as does the Carter report, that there is nothing like the same prospect that Birmingham could attract the same amount of premium income as could a successful Wembley. A further factor—I accept that this is hardly Birmingham's fault—is that if a choice is made anywhere other than Wembley, the —120 million worth of lottery money paid by Sport England will have to be repaid. Mr Carter reckons that the Wembley land value is only about —30 million, so that the FA would lose £90 million on that basis.
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I will support the Wembley decision if it is possible to prove that the athletics element in it can be retained. Noble Lords have referred to the Questions put yesterday in another place when the Secretary of State stated that:
"If athletics events are not to be hosted at the stadium, the money—as the FA has always made clear—would be returned".—[Official Report, Commons, 25/2/02; col. 428.]
I made some inquiries of the DCMS via the Library of this House. The department has been informed that the Secretary of State has asked Sport England to examine and evaluate the revised proposals for the national stadium, and that both the IAAF and UK Athletics must have the power to insist that their technical requirements in terms of athletics facilities will be taken into account. If that is so and it is possible for athletics to be accommodated in a new design, I am willing to support Wembley—perhaps the only person in this debate to do so.
The Secretary of State said yesterday that there is no question of further Government money being put towards the stadium, apart from £20 million for transport infrastructure. However, I understand that there may be £21 million available from a London development agency. When my noble friend replies, perhaps he can give some indication of where that money will be spent. If those amounts are spent, the public commitment to Wembley would be £161 million, out of the £835 million that the stadium will cost—including the £120 million lottery grant to buy the site.
As the noble Lord, Lord Glentoran said, that contrasts with a lottery grant of just £46 million from the Millennium Commission towards the cost of the Millennium Stadium in Cardiff, plus relatively minor contributions from the county council and the Welsh National Assembly. Even if the cost of the land is removed from the Wembley total, the resulting £715 million construction cost for a stadium with a 90,000 capacity is more than five times that of Cardiff. I wonder whether an additional 16,500 seats can account for a difference of £575 million.
I commented in the exchanges on 19th December that this match had gone into extra time. I was wrong. It looks to me as though we are having a replay. We all hope that the match will soon come to an end and that we will have a decision.
9.15 p.m.
Lord Coe: My Lords, I declare an interest as the president of the Amateur Athletic Association of England.
I congratulate the noble Lord, Lord Corbett, on instigating this debate. He was a doughty fighter and advocate for his constituents when he was in another place and no less doughty when fighting on behalf of sport in numerous Select Committees. His case tonight—elegantly made, together with that of my noble friend Lord Fowler—is that our national stadium should be sited in Birmingham. After the past seven years of muddle and confusion bordering on farce, I am tempted simply to settle for a stadium anywhere.

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I do not wish in this short debate to enter too deeply into the arguments for location, important though they are, but to examine the dilemma that faces. UK athletics wherever the national stadium is built. I wish that its location were the only issue in this sorry saga that is still to be settled.
Your Lordships will need no reminding that the original proposals for a national stadium were for three sports—football, rugby league and athletics. My noble friend Lord Glentoran was right that those proposals were clear that the stadium was supposed to meet the standards necessary for international events without unacceptable compromise by any of the three sports. The lottery funding agreement that paved the way for the use of £120 million of public money by Sport England for the stadium was given to protect the status of all three sports. It is clear that that has not been the case.
Rugby league has made its arguments. I will speak about athletics, which have emerged as the losing triplet in the relationship. It is now clear that UK athletics were from the outset never fully involved in the project. Key decisions were often made with little or no reference to athletics. There have been examples of changes of plan, design and strategy that left athletics with little more than 24 hours to respond before public announcements were made.
The lack of a viable athletics component within the national stadium proposals set off a trail of events that led to the embarrassment of losing for London the World Athletics Championships in 2005 and the equally embarrassing search for an alternative—that included, for a year or two, Pickett's Lock. It also left the Government with a dilemma over the status of the £120 million of lottery money that was given to the project.
I find it surprising and more than slightly alarming that lottery funding was granted to a project that had demonstrated neither viability nor planning consent. The Culture, Media and Sport Select Committee described the premature grant by Sport England as a cavalier and egregious use of public funds—and 1 agree. Now the Government propose that Wembley will revert to the 1999 plans for a football stadium that would he athletics compliant at additional cost, by way of a demountable athletics platform. Upon that compliance rests the destiny of £20 million that the Football Association agreed to repay Sport England if athletics could not be accommodated.
Upon that compliance rests too the destiny of the £120 million lottery grant made available to the Football Association and the £40 million that has so loosely been talked about by Tessa Jowell as a legacy for British athletics and compensation for losing a world athletics championship as a result of the muddle.
Three questions need answering. I am sure that the Minister will address them in his concluding remarks. First, why have athletics, the prime loser, been consistently marginalised in so many of the decisions—including key discussions in 1998 and 1999 and about the repayment of the —20 million of lottery
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funding to Sport England? Secondly, Sport England committed itself to build an athletics compliant stadium. An athletics compliant stadium and a stadium capable of staging major track and field events are two very different things. I could spend a large part of the Summer Recess making my garden athletics compliant. But I doubt whether I could pull the wool over the eyes of the International Association of Athletics Federation sufficiently for it to have confidence in my claim to send the stars of track and field to Dorking for a world championships.
If a national stadium is to meet full compliance without compromise, we need to be able to examine the proposals for essential ingredients such as warm-up tracks, jump areas and throwing areas. Without them, the stadium may still be described as compliant but the UK would not realistically be in a position to hid for and host major championships.
Will Wembley have these ingredients? Only yesterday, Tessa Jowell, when asked about these matters in the other place, said that,
"there is a difference between being athletics capable and actually being able to host athletics events".—[Offlcia' Reporl, Commons, 25/2/02; col. 428.]
Thirdly, the erection of an athletics platform will be a major effort, both physically and financially. For both these reasons, there would seem to be little incentive for the stadium owners to bid for events that will cost them millions of pounds and put the stadium out of use for lengthy periods in order to stage an athletics meeting.
The debate is about more than the location of a stadium. We have already lost a world athletics championship and, with it, much international credibility.
An athletics compliant stadium is not enough. If the selective use of the word "compliant" is simply a way for the FA to hold on to public money by appearing to fulfil its lottery agreement but with no real intention of creating a stadium fully capable of and owners fully committed to holding major events, then once again athletics and the public are losers.
Ministers should be open about this. I am sure that noble Lords would be very grateful for a reaffirmation from the Minister today that any national stadium will have an athletics track and will be designed in a way genuinely to afford athletics the opportunity to mend some of its bridges internationally and stage leading events. But I fear that he cannot give that.
Of course the location of any stadium is important and every major population centre will have just cause to make a claim. I hope that over the next few years the UK can find a political and sporting unanimity of purpose to forge a successful Olympics bid. I have to say—probably to the dismay of the noble Lord, Lord Corbett—that experience tells me that for a bid to be successful the games will have to be in London and, as the noble Lord said, probably to the east of London. If that is the case, it would seem appropriate for a national stadium to be sited in our capital city.
9.23 p.m.
Lord Lyell: My Lords, I am grateful to the noble Lord, Lord Corbett, for allowing us to discuss this subject today. I am particularly grateful to the usual channels, which have placed me in my traditional position of tail-end Charlie at the back, with what I call the tin medals among our golden gods, whom I admire greatly. I am pleased that my noble friend Lord Glentoran has spoken. I used to know him as "Mr Dixon" at school 50 years ago. I remember being in the students bar in Glasgow University in 1964 and watching him. He may be amazed that last week, at home, I was drinking a toast to Mr Alain Baxter, who trains not in a huge stadium but in a wild area of the Cairngorms. He at least won a medal, which was particularly welcome for those of us who ski throughout the winter with the parliamentarians, and drew admiration from the champion couch potatoes of your Lordships' House.
To me, the national stadium at Wembley means two words—"Empire Stadium". I believe that the existing site was prepared around 1923. I am just old enough to remember the 1948 Olympics, where a splendid lady from the Netherlands called Fanny Blankers Koen won a number of medals. Perhaps my noble friend Lord Coe will be able to enlighten me on that.
To me, Wembley as a national stadium should be "compliant", as my noble friend put it. When the Minister winds up I hope that he will he able to explain to me and my noble friend why it is that in Italy, Roma and Lazio play at the Stadio Olimpico and Bayern Munich play at the Olympic stadium. I am not too sure about the Stade de France, and whether that is athletics compliant. Why is it that England and the Football Association, which wishes to hold the Government to ransom as we have been hearing this evening, say that the stadium must be for Association Football only?
If the stadium is used for other purposes, then one will have serious problems. I recall that in 1970 the Cup Final at Wembley was almost dragged down to becoming a shambles in that divots were coming off after five minutes since the stadium had been used for equestrianism and horse jumping just one week before that game. No doubt that situation was assisted by financial demands and problems, but that can be taken into account if a stadium has to meet costs. The point of premium income was raised very forcefully by the noble Lord, Lord Corbett, and the money needed for the upkeep of the stadium. That comes very much into play.
As regards pure geography, I speak as a Scot who spends a good deal of his time in England. I believe that I have paid twice to go to Wembley. On the last occasion I was a guest of the Swiss to watch the opening game of the European Championships, 1996. I went with a police escort in the Swiss ambassador's car. It took one and a half hours to get there and another hour to get back. I believe that the road and railway system will get better. Then one will be able to get to Birmingham. The point was raised very forcefully by the noble Lord, Lord Corbett, about a
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premium box, which I believe we call an executive suite in football. To have one box with one parking space is ludicrous. As the noble Lord pointed out, one box with four or five car parking spaces and room for plenty of visitors, plus the station at the National Exhibition Centre, are very big pluses.
I begin to worry about what happens when the lights go out. I think of the great amounts of money and the hype about 25 years ago in Montreal. It was a wonderful stadium. I understand that the liability has been paid off. Is it ever used? I suspect that it is a mere ghost.
As regards Sydney 2000, I have been reading of rumours already that there are problems and that the financial clouds are just beginning to appear on the horizon concerning the upkeep of that marvellous stadium. That can be done during an Olympic year and during major events, but the stadium is there for life.
I shall be impudent tonight and ask your Lordships to look at what a tiny nation like Scotland can do. The noble Lord, Lord Faulkner, raised the point about the enormous value for money which has been achieved in the Millennium Stadium at Cardiff. We have our own opinions about a purely football stadium in Glasgow. There is a national football stadium at Hampden Park which meets the five-star UEFA standard. I am not quite sure whether it is dancing girl compliant or for all kinds of other sports. It will seat 52,000 persons and the total cost was £74 million.
That shows what can be achieved with value for money for one sport. For Wembley the figure is —835 million and rising. Can one compare any other nation with England—or, in the case of my noble friend Lord Coe, it will be the United Kingdom—for athletics, but also for football and rugby? What else is going to be performed at this national stadium? I can see exactly what is going to happen. There will be pop concerts and all kinds of other events because the overheads are fairly fierce and the costs will have to be met.
I do not believe that there is a limitless pool of people who will be prepared to scatter money around for these premium and directors' boxes. I find that very hard to believe. Perhaps noble Lords have observed that I have two letters after my name—CA. I also have two others; namely, CB, which stand for "cynical so-and-so". I am afraid that I am beginning to worry about this whole affair.
I was most interested to hear the remarks made by the noble Lord, Lord Faulkner. I agree with him. Since the demise of Wembley, the England football team has gone around the nation. I agree with him about loutish behaviour. I have visited Wembley when the England team has been playing, not necessarily when they have been playing Scotland. What upset me, and, interestingly enough, very many other people—not just foreign visitors, but more percipient English commentators—was the booing and appalling racket and cacophony that arose when the visiting team's national anthem was played. I am sure that that did not happen at Newcastle, Manchester, or at any other of these stadia.

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It is not necessary to draw the biggest crowds, particularly with Association Football, if the event is played in the capital city. As far as concerns Scotland—if I am treading on some corns I do so ever so lightly—we have our own national stadium. But 10 years ago, thanks to Hampden being redeveloped, international matches were played in Aberdeen. I remember going to Aberdeen one evening where I watched an under-21 match featuring Scotland versus Germany. Normally, all over Europe, such a match would attract 3,000 to 4,000 people; but, in Aberdeen, 28,000 bodies were present. It was a full house, completely sold out. Why? Everyone was proud of his team and got a chance to see them play. Above all, the result went very well for Scotland. I am given to understand that the new Scottish coach still remembers that result. It shows what can happen. It is not necessary to have a national stadium: all that is needed is the chance for all people in the nation to see their boys—perhaps girls—playing in a stadium elsewhere around the country.
I begin to worry when I hear talk of these enormous sums of taxpayers' and of lottery money being spent on developments that seem to be a little like some of the foundations that might he around Wembley; in other words. on shifting sands. Therefore, I await with interest—indeed, with hated breath—to hear the noble Lord's response.
9.32 p.m.
Viscount Falkland: My Lords, when the noble Lord, Lord Corbett, advertised this debate, it seemed to me that the time-scale between 19th December, when the noble Baroness, Lady Blackstone, repeated a Statement made by the Secretary of State in response to a Private Notice Question, and tonight was a little too short. However, I am very grateful to him for having introduced the debate because we have been able to address a number of issues that we were not able to cover on the previous occasion. It has concentrated our minds marvellously.
On the previous occasion, the noble Baroness arid I handed words about definitions as regards what was a "national stadium". My view—one that I still hold—is that it is necessary to be quite precise in that respect. We are not talking about a national stadium; we are talking about a national football stadium. The noble Baroness disagreed with that view, but, judging by his remarks, I believe that I have the support of the noble Lord, Lord Glentoran. Indeed, as the noble Lord, Lord Coe, correctly said, the basis of the funding put in by Sport England (—120 million of lottery money) was that a national stadium was one that could accommodate the national game of football, rugby league and athletics.
I absolutely agree with the view expressed about the rapidity with which Sport England was prepared to grant this money, which has been described—and repeated, again, by the noble Lord, Lord Coe, in words that I like because they have a good ring to them—as being a "cavalier and egregious" use of public funds. It is a lesson for the future and one that I hope will not be repeated.
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The pro-Birmingham lobby has come on a good deal since 19th December. I congratulate those who are totally committed to that on the way in which they have "honed their weapon". I am now almost convinced that they are right—certainly as regards a national football stadium. Time is short and I shall not repeat the reasons why I thought that Wembley was not a starter—not least because of the difficulty of access. Even with the moneys pledged by the mayor to increase the transport links, the situation at Wembley was unsuitable. I believe even more so now that it is unsuitable, either for a national football stadium or for a national stadium.
I do not know whether Birmingham is the answer, but I am very much persuaded by what the noble Lord said, particularly in relation to what he described as the premium seat income position. I do not think that he entirely convinced the noble Lord. Lord Faulkner, if I understood his remarks correctly. but these are interesting points. We are now getting to the nitty-gritty of the problem—the way in which people see their investment being returned. We look forward to further debate on the matter and possibly to an answer from the noble Lord on the Government Front Bench when he replies to the debate.
A number of questions were raised on 19th December which, although only a short time has elapsed, need an answer. What is happening consequent on the interim report of the Patrick Carter review of the English national stadium? Has anything happened since 19th December? Wishes were repeated on 19th December for firm proposals—which are eagerly awaited—from the promoters of the world stadium team, and that they should come within a reasonable time-scale. The noble Baroness, Lady Anelay, asked quite correctly: what is a reasonable time-scale? Perhaps the noble Lord will he able to tell us in his reply. Are we in the middle of that time-scale? Are we at the beginning of it? Birmingham's interest must be becoming even more lively—which is why the noble Lord has honed his arguments. It was stated that if it was not done in that time-scale Birmingham must be considered as a possible alternative.
There is a great deal of talk about government standards of propriety and so on, and a lot of high-flown language is used. Perhaps the noble Lord can tell us precisely what "propriety" and "irregularity" mean in relation to this project. "Best procurement practices" were talked about, as were "corporate government arrangements". What is more appropriate at this time is for the noble Lord to answer one simple question. He need not worry about "corporate government arrangements" and all the high-flown terms—which I believe are a bit of a smokescreen for government confusion about where they should go next. The question to answer is: are the Government happy about the way in which the Football Association is leading the project? I think we should know that.
We are all concerned about the £120 million of lottery money, and the Government must be concerned about it. Very good arguments have been made in the debate as to how the money was granted,

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and also for its return if the criteria are not met. What is the reaction to that? What about the independent value-for-money assessment that was mentioned? Has too short a time elapsed to deal with it? I repeated a number of semi jocular comments that were made in the newspapers about the contractor, Multiplex, and received quite persuasive letters from the construction company saying that I should certainly not believe what I read in the newspapers as most of it was incorrect. The company said that it was absolutely guiltless of the charges made in certain newspapers. What has the Comptroller and Auditor-General said? He was mentioned on 19th December. Has he had time to consider these matters?
I dare say the Minister does not have time to deal with those issues tonight, but I expect that we shall address the subject again and again. I hope that it does not become what the noble Lord, Lord Glentoran, has already described as a sad and sorry story. The project shows all the signs that should make us nervous. We need some firm leadership and reassurance tonight from the Government. We did not get that on 19th December, but I hope that we can be at least partly satisfied tonight.
The noble Lord, Lord Coe, obviously knows all about the technology involved in the proposed alteration of the plans to produce a platform for athletics, but it sounds a very Lego-like solution to me and hardly one that stands up against international comment and criticism of what we should do. Somebody asked whether the Stade de France is athletics-compliant. Of course it is athletics-compliant; it is compliant with everything. It is compliant to the extent that it can hold concerts by Celine Dion for 80,000 people. Johnny Hallyday—for those who are familiar with that old-time singer—has also attracted huge numbers to that stadium. It is compliant with everything and it cost only £240 million. The estimate for Wembley is more than £700 million. I would not bet on that being the final figure. I would bet on at least a 25 per cent escalation.
I see the noble Lord, Lord Corbett, laughing. I am glad that what I am saying is not a message of sorrow and anguish. I hope that the Minister can reinforce that sentiment.
9.42 p.m.
Baroness Anelay of St Johns: My Lords, I also thank the noble Lord, Lord Corbett, for giving us the opportunity to return to the important subject of the national stadium. The Government's Statement in December should have lifted the veil on the future of the national stadium. However, if, before it, the Minister might have been wearing seven veils, Salome-like, afterwards the number had gone up to 70 veils. I hope tonight that he will take the opportunity to be more transparent.
In December, the noble Baroness, Lady Blackstone, said that the question of where the stadium was to be sited could be resolved only if the FA met the four criteria set by the Carter report. By saying that, the
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Government made clear that they had a vital role to play in the siting of the stadium because they are setting the standard. It is therefore right that they should be asked to make a progress report. The Minister has been asked some specific questions that could be answered tonight. Even if we are told that we have to wait until April for the final score, extra time or a replay, there are some questions that should be answered tonight, which is perhaps half time.
It is already more than 500 days since the last ball was kicked at Wembley. We have heard many reminiscences tonight about the historic stadium. As a young person—far too many years ago to recall—I saw Wembley stadium almost empty as I watched schoolgirls play hockey. Even then it was not easy to get there and back, and I only lived north of London.
Returning to the important issues raised in the Statement on 19th December, can the Minister assure the House tonight that the scheme is now on time and that all the details will finally be resolved in April? If the Government's timetable for finalising the project is not met, of course supporters of other bids, which naturally include Birmingham, have a right to expect that their proposals will be considered. As ever, I listened with great interest to the forceful, eloquent and definitely consistent advocacy of my noble friend Lord Fowler and the noble Lord, Lord Corbett, on those matters. Birmingham certainly has good advocates in this House.
One has to recall that, in the past five years, the Government have done their level best to distance themselves in Parliament from taking responsibility for decisions on the national stadium. They said that the decision about whether there was a national stadium at all and where it was to be built was for the FA and the FA alone. For example, on 19th December 2001, the noble Baroness, Lady Blackstone, said that,
"it is for the Football Association to take the project forward and … the Government's role is to act as a facilitator".—[0fficia/ Report, 19/12/01; col. 308.]
As noble Lords have pointed out today, so far the story has been one of too much meddling by the Government and not enough leadership. Indeed, Patrick Carter, in the foreword to his interim report, stated that,
"the Government was perceived as interfering in the project to its detriment and the very public difference of opinion between Government and the FA led to a loss of confidence on the part of potential lenders"
to the Wembley project.
First, the Government decided that there should be a national stadium at Wembley with athletics. The stadium concept was launched on 29th July 1999. That design was presented in November of that year, at the same time as planning permission was sought. Then, the right honourable Chris Smith decided that there should be a national stadium at Wembley without athletics. Noble Lords will remember that that decision was branded by the Select Committee of another place, at paragraph 23 of its report, as one that was beyond the proper responsibilities of the Secretary of State and taken in a hurry on flimsy and subjective grounds.

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Then—as the noble Lord, Lord Faulkner, said—in a case of, "Now you see it, now you don't". the Government decided that they could not decide what to do. They could not decide whether there should be a national stadium, or whether athletics should be a part of it anyway. So, in December, in another place, the Secretary of State made that memorable statement—if she ever writes a dictionary, heaven help us all—that the stadium must be "athletics capable". My noble friend Lord Coe rightly pointed out that saying that something is athletics capable is not the same as saying that it is capable of hosting athletics events; otherwise, just about anywhere could be athletics capable. I suppose that even your Lordships' Chamber could be used for a steeplechase. I am not volunteering, by the way.
It is important for noble Lords to be told by the Government just how far they have progressed in obtaining from the FA assurances that the plans for Wembley will ensure that the stadium can be used to host national and international athletics events. If not, as my noble friends Lord Coe and Lord Glentoran have pointed out, a series of pertinent and serious questions must be asked about the £120 million grant made by Sport England. I certainly look forward to the Minister's response to the searching questions asked by my noble friends on the lottery financing.
As the noble Viscount, Lord Falkland, recalled, in December, the noble Baroness, Lady Blackstone, said that it was up to the FA to come up with a timetable. I was therefore keen to find out just what kind of timetable we are talking about—this year, next year, sometime or whenever. In December, the noble Baroness said that she had,
"every expectation that it will do so quite soon".—[Official Report, 19/12/01; col. 308]
One might expect "quite soon" to mean two months. Has it happened yet? Are the Government still waiting?
On 19th December 2001, the Minister told the House that the Government had told the FA and Wembley National Stadium Limited that if they were to continue with the Multiplex contract, they must set in train an independent assessment of the value for money which it represented, and that they must ensure that corporate governance and procurement arrangements hereafter represented best practice before the Government would proceed any further with support for the project. I thought that my noble friend Lord Lyell made some interesting and valid points about value for money from the Scottish experience in Glasgow.
Are the Government now satisfied that all aspects of the stadium procurement meet government standards of propriety and regularity? Has that independent value for money assessment been commissioned in relation to the proposed contracts with Multiplex? If so, which company has been commissioned to carry it out'? Does it meet the standards set out by the Minister in December? Can the Minister assure the House that the company has no previous or likely future involvement in the project?
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I turn to a matter reported in the Daily Telegraph of 16th January—I do not know whether the Minister is aware of the report—which stated that,
"The Government will now play a more direct role in the running of the Wembley project with ministers approving those who will form a new board for Wembley National Stadium Ltd".
That has serious implications. Is it true that the Government have been involved in scrutinising, along with Sport England and the FA, the list of possible candidates of those who will serve on the board in the future?
Serious problems have been raised by all noble Lords tonight with regard to the issue of the siting of the national stadium and whether there will be a national stadium at all. It is a matter of great national interest and pride. It is vital for the future of our sporting reputation and for our sportswomen and sportsmen that the Government show leadership—not meddling—and ensure that the question of where the national stadium is sited is resolved, and resolved now.
9.51 p.m.
Lord Davies of Oldham: My Lords, this is the first debate since the conclusion of the Winter Olympics. As the noble Lord, Lord Glentoran, indicated, our successful competitors in those Olympics are to he congratulated and it is only right that a former gold medal winner should have led the way in offering those congratulations this evening. I take pleasure in joining with him.
The second group of congratulations is to my noble friend Lord Corbett on introducing the debate with his characteristic vigour and also with his innate sense of timing. As was indicated from the nature of the debate this evening, this is an extremely live issue. We are on the point of important questions being resolved and it is vital that the House has this opportunity of contributing to the debate and eliciting further information, which I hope to be able to provide to reassure noble Lords on a number of issues.
I praise my noble friend's contribution and the contribution by the noble Lord, Lord Fowler. on the Birmingham proposal but should perhaps make this point. The Government are neutral in this sense: should the FA make the decision that it does riot intend to go forward with the Wembley project, Birmingham has put forward a most coherent and persuasive viewpoint which ought to be looked at with the greatest seriousness. We expect that to be the course followed if the FA decides not to pursue the Wembley project. Of course, at this point the FA has still to make that decision.
This House is rightly concerned about the Government's responsibility for aspects of public money with regard to the proposal. I hasten to add that we are predominantly talking about lottery money and not about taxpayers' money, though of course there is an element of taxpayers' money with regard to aspects of infrastructure. Nevertheless, the Government's interest in this debate relates to the fact that the prime mover is the Football Association and it is the Football Association which will take the

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decision. The Government have made absolutely clear that that decision will be backed by the support of public funds only if it meets the proper criteria.
The reason the FA must take the lead is that there is no question of public money guaranteeing the future viability of the stadium. It must be run as a commercial development in terms of the football fixtures, possibly rugby league fixtures and athletic fixtures which it merits and which produce revenue for the stadium. After all, it is a commercial venture and it is only right that the Football Association should address itself to the issue of what it regards as the most viable financial proposal.
The Carter report, to which several noble Lords referred, reflected the fact that the likely revenues from Wembley were greater on the premium seat issue than those likely to emerge from Birmingham. But, of course, as my noble friend indicated this evening, Birmingham has fought back by indicating that there are arguments to suggest that a stadium in Birmingham could guarantee high levels of premium seat returns. At the end of the day that is a matter that the Football Association must take into account. The Government are neutral on the issue of location. As the noble Baroness, Lady Anelay, mentioned, we are massively concerned about the viability of any proposal and, therefore, the appropriateness of the allocation of moneys from the lottery which have been identified up to now—hence the four conditions established on 19th December in the Statement made in the other place and repeated in this House.
I say to the noble Viscount, Lord Falkland, that considerable progress has been made. An exchange of letters has occurred between the Secretary of State and the chairman of Wembley National Stadium Limited which indicate just what the four criteria establish and make absolutely clear that the Government's interest will be sustained by ensuring that those criteria are met. It is the responsibility of the Football Association to ensure that those criteria are met. I say as categorically as possible that there is no question of fudge and potential delay. As regards the timescale for the operation, there is a deadline of the end of April. If the Government are not assured of the viability of the Wembley proposal and the Government's criteria have not been met, we shall have to consider whether or not to invest lottery money in the project.
I indicate clearly and straightforwardly that a decision will be taken in the fairly near future. I reassure my noble friend and his supporters who advocate Birmingham's case that, should the Football Association reject Wembley and if it wants to attract public moneys to the venture—everyone can see that the viability of the project depends upon a certain contribution of lottery money and support for the infrastructure—it would need to consider the Birmingham proposal, which has been formally presented and carefully considered, as an alternative.
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The debate was bound to focus on the crucial issue to which, as we would expect, the noble Lord, Lord Coe, referred; namely, athletics. It has been suggested that perhaps the Government have not been entirely clear about what they expect from Wembley in terms of athletics and in terms of that part of the lottery grant which relates to athletics. The noble Lord clarified all our minds when he indicated that the stadium is not conceived as the basis for an Olympic Games bid. It is clear that the structure of the stadium and the multiple role that it will play will not meet the criteria of international athletics. If we are to make a bid for the Olympic Games in the future—I for one, as a keen enthusiast of sport, hope that we do—we shall need another stadium specifically for athletics. I reassure the noble Lord that that concept still needs to be realised.
I refer to the moneys that were potentially to be devoted to Pickett's Lock. However, that stadium was not constructed. It is for the athletics authorities to decide whether that concept is to be realised in terms of a whole range of support for our future athletes or whether a stadium suitable for an Olympic bid should be constructed elsewhere.
But Wembley must have athletics capacity if it is to meet the requirements of the moneys allocated to it against the expectation of such capacity. The difference is straightforward. The facilities which are needed to host a major athletics event over a series of days will be beyond the capacity of Wembley. However, the project clearly can envisage athletics events which will bring in considerable revenue and it will provide a focal point for significant events in this country. But the hosting of those events will be different from the hosting of events as significant as the World Athletics Championships or the Olympic Games.
I am eager to emphasise—reference has been made to the fact—that the Government are working closely with the National Audit Office and the Office of Government Commerce to ensure that all due issues of propriety relate to this commercial project. Clearly we have an obligation to do so. Public moneys are being allied to a predominantly commercial venture and it is only right that the correct processes are followed.
On 19th December considerable anxiety, reflected in a Statement on that occasion, was expressed about the progress that had been made at that point with regard to the stadium. There will be no question of the project being viable in terms of claiming public funds unless it meets the criteria. As I said, the deadline is 30th April. Therefore, I believe that we are in a position to respond to the anxieties which were clearly expressed in this House in December.
All those who hold sport dear have expressed considerable anxieties over a number of years about the delay in relation to this project. My fondest memory of the old Wembley was when I had the fortune of attending a Cup Final with a ticket which cost 50p—such were the glories of pre-inflationary

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days a long time back. One cannot get away from sentiment with regard to the twin towers if one was present at the World Cup Final.
Having said that, we all recognise that the new Wembley must be a commercially viable project. It has received a significant allocation of public money. If it does not meet the criteria, then the issue of the return of the public money becomes a very live matter. I am sure that all noble Lords expect and hope that, with the judicious application of public money from the National Lottery, we shall in due course see a national stadium which will greatly enhance our sporting capacity in this country. On that basis, I commend the processes which are being pursued by the Government. Although my noble friend has used the occasion of this evening's debate to stress the claims of Birmingham, I believe that he and I share a
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commitment to the development of a national stadium, whether it is at Wembley, in Birmingham or elsewhere.

HSBC Investment Banking Bill [H.L.]
The Examiner's certificate that the further Standing Orders had been complied with was ordered to lie on the Table and the Bill was committed to an Unopposed Bill Committee.

Homelessness Bill
Returned from the Commons with the amendments agreed to.
House adjourned at four minutes past ten o'clock.