House of Lords
Introduction: The Lord Bishop of Truro
Iraq: Chilcot Inquiry
(11 years, 7 months ago)
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Lord Dykes
To ask Her Majesty’s Government whether they will hold discussions with the administrators of the Chilcot inquiry into the Iraq war to ascertain a date for publication.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
My Lords, the Government do not have any plans to hold such a discussion with the Iraq inquiry. Sir John Chilcot advised the Prime Minister last July that the inquiry would be in a position to begin the process of giving those subject to criticism in the report the opportunity to make representations by the middle of 2013, and that the inquiry would submit its report once that process had been completed.
Lord Dykes
With thanks for that Answer, can the Leader of the House reassure the House on a very important point—that high official circles in the UK and the US have not sought to interfere with the independent findings of the Chilcot inquiry, especially on the crucial decision to go to war together?
Lord Hill of Oareford
I can give that assurance. It is extremely important that this inquiry is independent; it was set up very deliberately to be independent and it must have that independence. It must consider the evidence that it has and reach its conclusions, which we will all be able to see in the fullness of time, but it must have a free hand to do that.
Lord Morris of Aberavon
My Lords, having been involved in the setting up of some public inquiries, I have noticed a tendency for them to be longer and longer. I understand the need to collect all the material evidence, and for all due processes to take place. In future, if any public inquiry is set up, should not a time limit be imposed and, furthermore, an extension granted only in exceptional circumstances?
Lord Hill of Oareford
I understand that point. However, with some of these very big inquiries it is difficult to be absolutely clear at the outset about what a suitable length of time is. It is right that the Chilcot inquiry on Iraq has been able to follow the leads that it feels it needs to follow, and had the time to do that. On the more general point about inquiries, I am sure the noble and learned Lord will know that one of the post-legislative committees that this House will set up in the new Session will look at the operation of the Inquiries Act 2005 and ask exactly these kinds of questions about whether we can learn lessons about the conduct of these inquiries, whether they can be done more quickly, their cost and so on.
Baroness Williams of Crosby
My Lords, I was one of those in this House who was perhaps most extensively and intensively involved in the whole of the Iraq issue—the invasion of Iraq and the situations that arose from the post-victory occasions, including the involvement of many contractors in the building up or otherwise of Iraq after the war. While I fully take the points made by the Leader of the House into careful account, it is also the case that the lessons to be learnt from an inquiry—and the lessons to be learnt from this are probably among the most important of all—depend a little on the passage of time between the findings of that inquiry and the use of those lessons to affect policy. I ask him to bear in mind, as he considers this, the gap between the necessary and right attempt to give people the right to respond, but also the importance of the conclusions for the future work of this Government’s policy as well as the policy of the Opposition.
Lord Hill of Oareford
I agree with the points my noble friend makes. To be clear, the timing of this inquiry is set by the inquiry itself. The Government have not set a timetable and we are not seeking to rush it. It must take the time. However, I take the point that we need to learn the lessons and that it has to be within a reasonable timeframe.
Lord Foulkes of Cumnock
My Lords, could the Leader of the House tell the House how the Government will take account of the conclusions and recommendations of the Chilcot inquiry on Iraq in deciding their policy on Syria?
Lord Hill of Oareford
First, we need the report to be concluded. Then, as the Chilcot inquiry has made clear, there needs to be a process whereby those people who are mentioned in the report have the chance to comment on it. Then the report will be published. Then everyone in this House, as well as the Government, will be able to draw the conclusions from the Chilcot inquiry, wherever that takes us.
Lord Hurd of Westwell
Could my noble friend inject a little urgency into this process? The furthest we got from him today was that we would have the benefit of the report in the fullness of time. In our experience, the fullness of time is fairly full.
Lord Hill of Oareford
We all know that certain formulations have a certain elasticity, and I take his point. The most recent pronouncement from the Chilcot inquiry itself is that it hopes to finish the report by the middle of this year. Then the process—the formal word is “Maxwellisation”—of giving individuals the chance to comment would follow. That is what the inquiry has said is its current expectation of the timetable to which it is working.
Lord Butler of Brockwell
My Lords, does the Leader of the House agree that the terms of reference of the Chilcot inquiry are so wide as to be almost infinite, and that the timing of the report’s publication depends not just on the handling of the representations but on the Government’s own clearance of what is to be included in the report? Will he undertake that that process will be done as quickly as the Government can manage?
Lord Hill of Oareford
I take both those points. On the Government’s co-operation with the declassification of documents as the process goes on, the Chilcot inquiry has said on the record that that process is working well. I know that the Government will co-operate as closely as they can to expedite that process of declassification as rapidly as possible.
Baroness Symons of Vernham Dean
My Lords, can the Leader of the House tell the House what is the period within which the people mentioned in the report have to respond to the report?
Lord Hill of Oareford
I am not able to give a precise timescale for that because that will, by definition, depend on what the findings of the report are, what the criticisms of individuals are and how long that process will need to take. However, I am sure that Sir John is as keen to publish his report, so that we can all see it, as everyone in this House is to get it done.
Female Genital Mutilation
(11 years, 7 months ago)
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Baroness Cox
To ask Her Majesty’s Government what information they have on the number of instances of female genital mutilation carried out in the United Kingdom in the past 10 years.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the prevalence of female genital mutilation in the UK is difficult to establish because of the hidden nature of the crime. However, the Government are absolutely committed to tackling FGM and protecting the 20,000 girls who a 2007 study estimated were at high risk of being subjected to FGM in England and Wales each year.
Baroness Cox
My Lords, I thank the Minister for his sympathetic reply. Is he aware that in 1983 I supported a Bill outlawing female genital mutilation in this country, which was strengthened by further legislation in 2003, but that according to research currently as many as 65,000 women living in this country have suffered FGM? It is feared that some may have undergone the procedure here and others sent abroad for the practice, but there has not been a single prosecution. Therefore, what effective provisions are being undertaken urgently to protect the estimated 30,000 girls currently at risk in this country?
Lord Taylor of Holbeach
I congratulate and thank the noble Baroness for her support in tackling this abhorrent form of abuse. The law alone cannot eliminate this practice, as I think noble Lords will agree, but it needs to be properly enforced, of course. The Government welcome the CPS action plan to address barriers to securing a prosecution. They have also funded some front-line organisations to encourage communities to abandon the practice themselves, issued multi-agency guidelines to support front-line professionals and published a statement opposing FGM.
Lord Walton of Detchant
My Lords, is the Minister aware that in the 1980s, when I was president of the General Medical Council, that council decreed that any doctor registered with the GMC who was found to have carried out the operation of female genital mutilation would be subject to the full disciplinary procedures of the GMC and would be accused of serious professional misconduct? Just as there have been no convictions, as far as I am aware there have been no references to the GMC of doctors accused of carrying out this procedure. How can that be explained?
Lord Taylor of Holbeach
It is difficult to explain except in terms of the very secretive nature of this crime and the unwillingness of victims to come forward. The noble Lord has rightly pointed to the key role that health and social services can play in providing support for communities in seeking to rid this country of this abuse.
Baroness Rendell of Babergh
My Lords, some months ago the Director of Public Prosecutions undertook to appoint a committee to produce a report on female genital mutilation, in all its aspects, in the United Kingdom and to publish it in the summer. May we know when that report is likely to appear because, as has been mentioned, there has never been a prosecution and the practice continues as it has done for about 25 years? Is it not time that we had this report so that we could look forward to something being done to put an end to this horrible practice?
Lord Taylor of Holbeach
I am sure that I reflect the sentiment of the whole House in thanking the noble Baroness for her interest in this matter and her engagement with it. The Government are not happy with a situation in which there have been no prosecutions. We are pleased that the Director of Public Prosecutions is engaging with that. We are working closely with the Crown Prosecution Service and we hope that the report of which the noble Baroness speaks will be made public and that we can build our strategy on it.
Baroness Trumpington
My Lords, this was the first work that I had to do when I held the office that the Minister holds today. When I tried to talk about this subject to the people involved, they said, “If you try to stop us, we’ll do it on the kitchen table”. Am I right in thinking that this kind of thought still exists among the people who wish to continue this horrible practice?
Lord Taylor of Holbeach
We know that there are some strong feelings on this issue. Indeed, yesterday there was a report of a campaigner being abused by people who disagreed with her. This is not an easy subject. It is a hearts and minds issue, so we have to influence these communities and encourage them to recognise that there is no religious or medical basis for this abuse of young people and it should stop. I can assure the House that the Government take it very seriously.
Baroness Gould of Potternewton
I am pleased to hear how seriously the Government take this issue. How much funding are they initiating in order to train teachers, nurses, health workers and carers to recognise when there is a possibility of FGM happening and when it has taken place? Also, how is that funding being distributed across the country? I declare an interest as the president of FORWARD.
Lord Taylor of Holbeach
I am very grateful to the noble Baroness for her involvement with FORWARD, which presented a key report that identified the 66,000 possible victims of this abuse. The amount of money spent is within individual department budgets, but there is a specific £50,000 budget dedicated to ensuring that this matter is fed across departments and that leaflets are produced. The Government are spending £35 million in countries where this practice is prevalent, in seeking to change the cultural background against which the abuse occurs.
Lord Chidgey
On that very point, my noble friend is possibly aware that, since 1997, DfID-supported anti-FGM education and empowerment programmes have led to some 5,500 communities in Senegal abandoning FGM. What discussions is the Minister’s department having with DfID to establish the impact of the success of those programmes on British African communities in the UK, particularly with regard to Somalia, where 98% of young girls are still mutilated, placing thousands of Somali girls in this country at risk?
Lord Taylor of Holbeach
My noble friend has identified Somalia as a particular area of concern. We are working very closely across all government departments. I think it is clear to noble Lords that the only way we can achieve progress is by using all the levers available to us: government departments; communities; and, through DfID, the overseas cultural base of this practice.
NHS: ECMO Machines
(11 years, 7 months ago)
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Baroness Gardner of Parkes
To ask Her Majesty’s Government whether extra-corporal membrane oxygenation (ECMO) machines that are capable of restoring heart functions some hours after an apparently fatal heart attack are in use in any NHS hospitals; and, if not, what consideration is being given to their installation.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the equipment and facilities to undertake cardiac ECMO support are available in all five NHS adult cardiothoracic transplant centres in England and in the five national respiratory ECMO centres, three of which share a location. Provision of cardiac ECMO support is a complex intervention with significant risks attached to it. A cardiac ECMO service requires a fully trained team to be available around the clock and does not consist of simply purchasing the medical equipment.
Baroness Gardner of Parkes
That is very good news and I thank the Minister for it. It is desirable to have these facilities available. Does he agree that the group which would benefit most of all from this would be young people who die suddenly and unexpectedly, often in the sporting field? This is a much greater tragedy for families than the more usual cardiac attack at a later age. Should not more publicity be given so that people involved in those activities know that such facilities are available? You could get a young person by helicopter to one of those centres within the number of hours that your life would be prolonged for.
Earl Howe
My Lords, there is, I understand, no intervention capable of restoring heart function some hours after a heart attack. The only exception is not applicable to heart attacks but to people who have had circulatory arrest due to hypothermia—for example, people who have been buried in avalanches or immersed in very cold water. That area is currently being researched. It is only in a very limited number of circumstances that ECMO support can improve a patient’s chances of survival following cardiac arrest—usually in patients who suffer in-hospital cardiac arrest following surgery.
Lord Patel
My Lords, as the noble Earl indicated in his opening remarks, a typical facility required in the provision of a service such as ECMO for adults who suffer acute myocardial infarction would include a perfusionist, intensive care facilities, an intervention cardiologist, a cardiologist expert in cardiac failure, a cardiac surgeon, together with specialist nurses. Preliminary results of studies suggest that the survival rate might be less than 30%. Does the noble Earl agree that more research is needed before such a treatment can be made available routinely?
Earl Howe
I fully agree. The noble Lord is quite right. ECMO cannot be provided by just any ICU team. It is a highly specialised treatment with significant potential for serious complications, and considerable expertise is therefore required, including having a multidisciplinary team of the kind that he outlined. In general, capacity has much more to do with having suitably trained staff than with having the equipment itself.
Lord Hunt of Kings Heath
My Lords, I refer noble Lords to my health interests. On the question raised by the noble Lord, Lord Patel, about evidence, would the noble Earl consider referring this to NICE for its expert advice?
Earl Howe
I shall certainly take that idea away with me, but I think that there is broad consensus among the medical community that the key to success with ECMO is getting the patients connected to the equipment quickly. Although it is a moving scenario, all the evidence so far suggests that ECMO confers no benefit if some hours have elapsed since the cardiac arrest.
Baroness Jolly
My Lords, services that need ECMO machines would currently, in the new world, be commissioned by NHS England. Will my noble friend explain to the House what role, if any, the department now has in commissioning such services?
Earl Howe
My Lords, the department itself no longer has a role in commissioning highly specialised services. NHS England is implementing a single operating model for the commissioning of 143 specialised services. That replaces the previous arrangement whereby 10 regional organisations were responsible for commissioning specialised services and, to be frank, there were wide variations in the standard of those services. The new operating model represents a significant change to the previous system and should result in better outcomes.
Baroness Masham of Ilton
My Lords, is the Minister aware that Glenfield Hospital in Leicester, which has ECMO, saved many lives in the swine flu epidemic last year and does more than just hearts?
Earl Howe
I am fully aware of that. Glenfield has been leading the development of ECMO services. It is one of the biggest ECMO centres in Europe. It is currently the largest provider of children’s ECMO in the country, treating about 70 paediatric ECMO patients a year, and now provides an adult service.
Baroness Knight of Collingtree
My Lords, can my noble friend clear up a point of confusion that may have arisen about his first Answer to this Question? It was reported in the Times newspaper by the science editor that people could be brought back from the dead up to seven hours after their hearts had stopped. Is that a report on which we can lay much credence?
Earl Howe
My Lords, my advice is that in most cases of cardiac arrest that is not possible. Where there has been circulatory arrest in the particular conditions that I described, such as immersion in very cold water, the heart can in some circumstances be restarted, but I would not wish to excite noble Lords’ interest in this technique without proper evidence. I am afraid that the article, which I did see, raises people’s hopes perhaps unfairly.
Earl Howe
My Lords, as the noble Lord knows, that decision is interdependent with the decision around the Safe and Sustainable review of children’s cardiac services. Until that issue is determined, it is not possible for me to say what will happen to the children’s ECMO service at Glenfield.
UK Industry: Competitiveness
Lord Haskel
To ask Her Majesty’s Government what steps they are taking to improve the competitiveness of United Kingdom industry.
Lord Peston
My Lords, on behalf of my noble friend Lord Haskel, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Lord Popat
My Lords, the UK economy is recovering from the most damaging financial crisis in generations. The Government are putting in place the right policies to deliver balanced and sustainable growth in the UK. That will take time. We are already seeing some progress. Between 2010 and 2012 the UK climbed from 12th to 8th in the World Economic Forum’s global competitiveness index.
Lord Peston
My Lords, noble Lords are stuck with me because my noble friend is in hospital and I hope that they will join me in wishing him a speedy recovery.
Lord Peston
My Lords, given the massive size of the current account deficit—almost unprecedented—would it not be to the advantage of our country to improve the competitiveness of UK industry if the external value of sterling fell drastically?
Lord Popat
My Lords, the external value of sterling fell from 2007 to 2009 and led to modest growth in exports. The impact may have been negated somewhat due to global demand weakness, especially in the European Union, which is our largest export market. Evidence suggests that export growth is driven more by changes in foreign demand than by price competitiveness or other factors.
Lord Bilimoria
My Lords, would the Minister agree that we are all very proud that a British university, Cambridge, has won more Nobel prizes than any other university in the world? However, would he also agree that that is in spite of this country underfunding research and development expenditure as a proportion of GDP? We spend less than both the EU and OECD averages. We spend half of what a country like South Korea spends. Do the Government not believe that we should be targeting to spend a proportion of GDP at least equivalent to the EU or OECD average to maintain our competitiveness? Otherwise, we are going to be penny wise and pound foolish.
Lord Popat
My Lords, this issue has been raised by the noble Lord in the past. Education is our fourth largest export earning. I agree with the noble Lord that we need to spend more money both on research at universities and on further investment in training provided by businesses. I will take the noble Lord’s point into account and will be happy to ask my colleague in the office to write to him to see what investment we are making in research at our universities.
Lord Forsyth of Drumlean
My Lords, could my noble friend explain why there has been a dramatic fall in the value of the pound and yet our export performance is pretty poor? What is the explanation for that and what can be done about it?
Lord Popat
My Lords, the value of the pound is determined by the international market. The fall in exports is mainly due to the current economic crisis, not just in the UK but in Europe as a whole. Half our exports are to the European Union and there are real issues in the European Union. The currency changes that take place quite often have a limited impact due to the very high import content in our exports. Hence any depreciation or the value of the pound going down will not have real impact on our exports.
Lord Barnett
My Lords, as competitiveness is not going to be helped in any way by the Chancellor changing his fiscal policy, despite the strongest advice from people he depended on until recently, such as the IMF, can we take it that he will now be totally dependent for improving anything at all on help from the new Governor of the Bank of England through increasing monetary policy, even though it may hurt current inflation?
Lord Popat
My Lords, the Chancellor has the right policies in place to reignite our economy, growth and competitiveness. We are supporting SME exports and have allocated a huge amount of money for infrastructure investment, including some for regional growth. We are encouraging the free flow of funds from the Bank and fiscal consolidation. With regard to the International Monetary Fund, we cannot recover or be competitive without addressing the huge debt that we have incurred over the past 10 years. Our most important priority is to see how we reduce our national debt.
Lord Hamilton of Epsom
Does my noble friend accept that the key to competitiveness is competition, and that this therefore makes it extremely difficult to improve competitiveness in large nationalised monopolies such as health and education?
Lord Popat
My noble friend raises a very important issue. In both health and education, there is very much a monopoly. We use the private sector in areas where it can deliver real value for money for taxpayers.
Succession to the Crown Bill
(11 years, 7 months ago)
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Lord Cormack
Lord Cormack
My Lords, this is the third time that I have raised this subject on the Floor of the House and I hope that my noble and learned friend will feel that this amendment is more modest and more acceptable than the two previous ones. The background is that the monarch in our country is also the Supreme Governor of the Church of England. Whether we use a modern or—as I personally prefer—a traditional liturgy on Sundays, and whenever we pray for the monarch, we pray for the Queen as the Supreme Governor. Because of the importance of this, and of establishment in our country, many of us feel that this Bill, to which we do not take exception in its main provisions, ought to have in it a recognition of this basic fact.
This modest amendment seeks to make explicit what is already implicit. When he replied to my amendment on Report, my noble and learned friend Lord Wallace of Tankerness—with whom I have had a number of discussions on this matter, for which I am extremely grateful—made quite plain that the monarch could not be a Roman Catholic, even though this Bill allows for successors to the Crown to marry Roman Catholics. This amendment does not in any sense cut across that and does not make any reference at all to the gender issue, which has been accepted throughout the House and in another place. What it very modestly seeks to do is to insert the following few words before Clause 2:
“Notwithstanding the continuing statutory requirement that no Roman Catholic can succeed to the throne”.
Then, of course, the clause continues, as in the Bill, stating that,
“a person is not disqualified from succeeding to the Crown or from possessing it as a result of marrying a person of the Roman Catholic faith”.
Therefore, there is absolutely no alteration to what is in the Bill. The amendment merely seeks to tackle what the right reverend Prelate the Bishop of Guildford said in his speech on Report about ambiguity. He gave an encouraging account of ecumenical relations and we were extremely grateful to him for that. Towards the conclusion of his speech, he also recognised that there was a continuing degree of ambiguity and expressed the hope that that could be tackled, either in the Bill, in an exchange of letters or in some other form.
The Lord Bishop of Guildford
My Lords, the noble Lord, Lord Cormack, has made generous and kind reference to my contribution on Report and I do not intend to labour and repeat the detailed comments that I made to the House on my understanding both of Roman Catholic canon law and realistic pastoral practice in the case of mixed marriages. I thought afterwards that here was a Church of England bishop getting up with the temerity to talk about what the Roman Catholic Church teaches and does. Therefore, I thought that I had better write to Archbishop Vincent Nichols and ask whether my contribution, as recorded in Hansard, was the case.
I have a letter in my hand from Marcus Stock, general secretary of the Catholic Bishops’ Conference of England and Wales, on behalf of the Archbishop. Speaking in that capacity, as well as in a Westminster capacity, Marcus Stock gives me full permission to share this letter with the noble and learned Lord the Minister. I have indeed done that; he may wish to make reference to it himself, and to earlier conversations with the Cabinet Office. That will presumably come out a little later.
I simply say that the exposition of what I understand to be Roman Catholic official teaching in canon law, and the pastoral and flexible practice in terms of the Roman Catholic rules over the upbringing of children in mixed marriages is completely confirmed in the letter that I have received. It was also his clear indication that this should be passed on to the Minister, which I have done. So I will not take up more of your Lordships’ time but say simply that what I said on Report is indeed the case in terms of Roman Catholic law and practice. I believe that should give some assurance with regard to the important matter raised by the noble Lord, Lord Cormack.
Lord Cormack
Of course, the right reverend Prelate and I have discussed this privately and in the company of others. Does he accept that the incorporation of this amendment into the Bill would in no way cast any different doubts or cause any problems with what he has just referred to?
The Lord Bishop of Guildford
I do not believe that that would be the case. Of course, it is up to your Lordships’ House to reach a decision on the amendment should the noble Lord, Lord Cormack, press it.
Lord Lea of Crondall
My Lords, is it not the case that when the right reverend Prelate the Bishop of Guildford made his statement previously, one or two of us asked whether that could somehow be put on the record in a more secure form? Is this not exactly the sort of way in which it could be put on record? Surely that sort of gloss, understanding or undertaking—however one wants to express it—by the Roman Catholic Church is worth more than an amendment, and I hope that the noble Lord, Lord Cormack, will perhaps consider that to be the case.
Lord Deben
My Lords, I hope that my noble friend Lord Cormack will think again about this amendment. It is a very difficult situation—we are where we are—but if you read the Act of Succession, you see words which none of us in this House would like to see applied today to Her Majesty’s Roman Catholic subjects, all of whom pray for Her Majesty every Sunday and every Mass. It is very difficult for us to take what is a piece of rampant discrimination. Frankly, for many of us, particularly the ex-Anglicans, the whole concept of a secular monarch being Supreme Governor of the Church of England is very odd, but we are where we are.
I merely ask my noble friend not to rub this in by adding yet more to it. Let us accept that both sides have come to what is an uneasy compromise in a world which thinks utterly differently. If you read the Act of Settlement, you have to wonder what the rest of the world must think about us tinkering with something that frankly ought not to be part of the constitution of the United Kingdom because it does not have anything to do with our view about equality and difference in a society such as ours. It is because of our history and we understand that and do not want to raise that, but please let us accept where the Government are.
I urge my noble friend not to press this. It is bad enough anyway. This merely makes it worse, and it would be helpful for my noble friend to recognise the degree of reticence on the Roman Catholic side on this issue, for many years and again now. Following the great wisdom that we have heard from the right reverend Prelate, this seems to be the moment to let it lie and to withdraw this amendment.
Lord Trefgarne
My Lords, I take a slightly different view from that of my noble friend Lord Deben and indeed have some sympathy with the amendment proposed by my noble friend Lord Cormack. As I see it, the Bill in its present form paves the way, possibly, for the heir to the Throne and hence the occupant of the Throne to be a Roman Catholic—although I know that there are other provisions that prevent that—and at the same time Supreme Governor of the Church of England. That seems to be an absurdity which has not been addressed by the Bill although it was pointed out in earlier stages.
I am happy to be told that I am entirely wrong in all this, that I have misunderstood that it will not happen and that there are ways and means of preventing it, in which case that is a good thing. That said, the position of the Roman Catholics as described by my noble friend is an important one, which likewise needs to be taken into account. I shall have a little bit more to say when we get to the Motion that the Bill do now pass, but for the mean time I address my remarks only to the amendment of my noble friend.
Lord Janvrin
I declare an interest as a former member of the Royal Household and I pay tribute to the desire of the noble Lord, Lord Cormack, to see this important point discussed in this House. What has just been said about making explicit what is implicit is important, but this amendment is not absolutely necessary. There are three reasons for that.
First, as has just been stated, we are where we are, clearly, with the Act of Settlement and the law of the land that the monarch must be in communion with the Church of England. Secondly, we have heard on several occasions that whereas there is legal certainty about where we stand in terms of the Church of England, the Catholic position on mixed marriages is more flexible and nuanced in its term that it is a pastoral matter. That is important. Thirdly, there is a precedent. There is a mixed marriage in the Royal Family where the children have been brought up as members of the Church of England.
My concern is that if we in the United Kingdom start introducing amendments that are not absolutely necessary, there may be desires in other realms to do the same and to start unravelling what is a most important piece of legislation that will strengthen the monarchy. I hope that in considering whether to go ahead with this amendment we can bear in mind that we must not allow a compromise across the realms to be undermined for the sake of something that is nice to have but not absolutely necessary.
Lord Fellowes
My Lords, in the light of the reassuring words of the right reverend Prelate the Bishop of Guildford, I wish to speak only for a moment on the subject of this amendment. I find very little fault with it. The fault that I do find is not in the amendment but in the effect it may have in reopening debate on others of the Queen’s realms. That may possibly give rise to other amendments that we would find less welcome. I have sympathy with the amendment and the motives behind it but I must say that I am not able to support it in this instance.
Lord Luce
My Lords, I am sure that the Minister will have concluded that raising the legislation with the other realms would create considerable complications. If I understood the noble Lord, Lord Cormack, aright, he was making it plain that the purpose of this amendment was to try to remove any misunderstandings that may still exist about the position of the Roman Catholic Church in connection with the children in line of succession arising from a mixed marriage.
In the debates that we have had over past few weeks, not least on Report, there has been considerable clarification. The Minister has said a lot more since the Second Reading and above all the right reverend Prelate the Bishop of Guildford has set out very clearly what he perceives to be the position of the Roman Catholic Church. The only thing that is missing is a clear endorsement of its position, as expressed by the right reverend Prelate, by representatives of the Archbishop of Westminster, or by the Archbishop himself. Given the remarkable progress that has been made in relations between the Church of England and the Roman Catholic Church it would be helpful to have that endorsement. I hope that the Minister can help us in that regard.
Lord Stevenson of Balmacara
My Lords, like several noble Lords who have just spoken, I take the view that this would insert into the Bill an unnecessary recital with no legal force. It would have the complication, as has been mentioned, of making it more complex and difficult to obtain agreement among all the 16 realms that need to agree to the proposals.
The intention of the noble Lord, Lord Cormack, is to seek further reassurance that despite the removal of the ban on Catholic marriages, no Catholic could ever succeed to the throne. He and others have made this point with some force throughout our debates. However, I wonder, as the noble Lord, Lord Deben, said, whether we are not pushing too hard on this point. Obviously the case has been made in an attempt to ensure that the Anglican supremacy is preserved. However, all that it serves to do is push our attention further toward the fact that the removal of the ban on Catholic marriages—obviously a welcome measure in itself—exposes the religious discriminations that remain. That is, no one who is a Catholic or who is not in communion with the Church of England can succeed to the throne.
It has been said that we are where we are, and I have some sympathy with that. However, we as a Parliament will need to return to some of these points in the not too distant future.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I understand that in tabling the amendment my noble friend Lord Cormack sought to put beyond doubt the requirement that the sovereign be a Protestant and in communion with the Church of England. I readily recognise the concerns expressed by my noble friend; at every stage of the Bill, he has clearly sought to find a means of addressing them. I readily acknowledge that this amendment is, to use his words, more modest than those that he moved in Committee and on Report. However, as has been indicated in our short debate, the Government believe that it is unnecessary as both the Bill of Rights and the Act of Settlement are unambiguous with regard to the requirement that the sovereign be a Protestant and in communion with the Church of England.
The Bill does not pave the way to change that. No one who is not in communion with the Church of England may ascend the throne. That rules out Roman Catholics as well as many other people. I have concerns that by attempting to reiterate this, and to single out the peculiar and particular prohibition on Roman Catholics, one risks causing offence. I am sure that that was not intended, but one does risk causing offence to many of Her Majesty’s loyal subjects when there is no good reason in law to do so. I do not believe that we should put into a Bill words that could cause unnecessary offence and reopen wounds. It has also been said that the amendment is unnecessary in law and could therefore lead to other jurisdictions that have responsibilities in this regard putting forward amendments and unpicking an agreement that has been very carefully constructed across the realms over a considerable time.
As the Supreme Governor of the Church of England, the sovereign must be both Protestant and in communion with the Church of England. For this reason, we are not removing the bar on Roman Catholics acceding to the throne, as set out in the Act of Settlement and Bill of Rights. Of course, we have heard expressed in a number of our debates the perceived problem of the heir to the throne marrying a person of another faith. That problem exists under present law; it is not one created by the Bill. Clause 2 merely provides parity of treatment between Roman Catholics and people of all other non-Protestant faiths.
Nevertheless, I have recognised and understand the profound concerns that have been expressed. As the House knows, following a commitment made in Committee, I met Monsignor Stock on behalf of Archbishop Nichols and the Catholic Bishops’ Conference of England and Wales to discuss this matter. As the right reverend Prelate the Bishop of Guildford indicated, Archbishop Nichols indicated that the wording had been discussed with the Cabinet Office. I have the specific consent of Monsignor Stock to say that he was speaking on behalf of Archbishop Nichols as president of the Catholic Bishops’ Conference of England and Wales, and can inform the House that the view taken by the Catholic Church in England and Wales is that in the instance of mixed marriages the approach of the Catholic Church is pastoral. It will always look to provide guidance that supports and strengthens the unity and indissolubility of the marriage. In this context the Catholic Church expects Catholic spouses to sincerely undertake to do all that they can to raise children in the Catholic Church. Where it has not been possible for the child of a mixed marriage to be brought up as a Catholic, the Catholic parent does not fall subject to the censure of canon law.
Lord Trefgarne
Would it be possible for a copy of this letter to be placed in the Library of the House?
Lord Wallace of Tankerness
My Lords, this was not a letter, it was a form of words that was agreed between Monsignor Stock and the Cabinet Office that I have placed on the record. There was a letter to me from the right reverend Prelate the Bishop of Guildford that enclosed a copy of a letter that indicated what I have just said. I do not believe that it is in my gift to say that it will be placed in the Library, but I reassure my noble friend that I have just used the words that were in that letter. I thank the right reverend Prelate the Bishop of Guildford for his contribution to our debates, both today and on Report, and for what he did following Report in engaging further with Monsignor Stock and the Catholic Bishops’ Conference of England and Wales. Indeed, on Report the right reverend Prelate, in a speech that I believe was very helpful to the House, concluded that the teaching of the Catholic Church on this matter,
“bears out the Government’s assurance that the Roman Catholic rules are not a block to the smooth functioning of the proposed succession rules”. —[Official Report, 13/3/13; col. 282.]
As I have stated both in Committee and on Report, we have a very clear signal that the overriding concern in Catholic pastoral guidance to couples in mixed marriages is the unity and indissolubility of the marriage. We have an equally clear signal from the Church of England, included in their briefing note to Members, that:
“The present prohibition … is not necessary to support the requirement that the Sovereign join in communion with the Church of England”.
Again, I recognise the concern with which my noble friend moved his amendment. I reiterate that the requirement that the sovereign be a Protestant remains as solidly placed in law as ever. In this context, I invite him to withdraw his amendment.
Lord Cormack
My Lords, I am grateful to those who have taken part in this brief but, I think, important debate. I listened with particular care to the speech of the right reverend Prelate and, of course, to what my noble and learned friend said. I believe that we have gone some distance in our three debates. We now have certain statements on the record that I believe are helpful to those of us who have concerns but are in no sense anti-Roman Catholic. My noble friend Lord Deben knows that when he left the Anglican Church to become a Roman Catholic, I honoured him for that decision. A similar decision was made by Miss Ann Widdecombe. I myself agonised at that time although in the end, instead of joining the Roman Catholic Church, I found myself elected to the General Synod to take the place that my noble friend had vacated.
I believe very much in the importance of our established church. However I may die, whether as an Anglican or as a Roman Catholic, I hope that the Church of England will continue as the established church of England. It is because of that, and because our constitution, as has often been said, is like a beautifully constructed watch, in that if you take one little piece out the whole thing will fall apart, that I have expressed my concern in three brief debates. The last thing I wish to do is to cause offence to anyone, particularly Roman Catholics, as I hold the Roman Catholic Church in high regard and always have. I very cheerfully pray, as we do frequently in Anglican churches, for the Pope. I would have liked to have seen something in the Bill that made explicit what is implicit, but I understand the points that have been made, particularly by the noble Lords, Lord Janvrin, Lord Fellowes and Lord Luce. Because I think that we have moved some distance, I will spare the House the exercise of going into the Division Lobbies.
On a final note, I hope that something can go into the Library of the House, as requested by my noble friend Lord Trefgarne. When I concluded my speech at the end of Report, I expressed the hope that at a fairly high level there could be an exchange of letters, and I hope that that is still possible.
I thank my noble and learned friend for the concern and sympathy with which he has listened to the arguments advanced. I beg leave to withdraw the amendment.
Lord James of Blackheath
“Union with Scotland Act 17066 In Article XXV, Section 2 of the Union with Scotland Act 1706, for “preserve the foresaid Settlement of the true Protestant Religion with the Government Worship Discipline right and Privileges of this Church as above established by the Laws of this Kingdom in Prosecution of the Claim of Right” substitute “preserve the declaration, uphold and maintain the rights and subject specified therein”.
Accession Declaration Act 19107 In the Schedule to the Accession Declaration Act 1910, for “according to the true intent of the enactments which secure the Protestant succession to the Throne of my Realm, uphold and maintain the said enactments to the best of my powers according to law” substitute “according to the true intention to the declaration, uphold and maintain the rights and subject specified therein”.”
Lord James of Blackheath
My Lords, this is in the nature of being a semi-probing amendment. I want to test the extent to which we have arrived collectively at answers to each of the four questions that I have developed through the currency of this Bill, and see whether my noble and learned friend the Minister can satisfy us, in his conclusions, that each of the tripwires and pitfalls that we have seen are now capable of being avoided. I come to this very much in the spirit of the finest executive I ever had the privilege of working with, who used to say, “Don’t give me people around me who know all the answers. I want the people who know all the questions”. It is in that spirit that I come, even though I stand here as somebody without any shred of qualification. I do not even have an 11-plus pass. Given that circumstance, it might be said that I have a right nerve to stand up here and ask these questions today in such an intensely legal affair but then, on the other hand, somebody has to.
In all this, I start by expressing my appreciation to my noble and learned friend the Minister for the considerable time, and the enormous patience and care, that he has given to answering each of the questions that I have raised directly with him. He has been absolutely splendid. My noble and learned friend will not be surprised to hear that while I have read every word he has written with great care, that is not the same as agreeing with every word I have read. It is clear that the principal point of difference between us is that he believes that I am relying on the entrenched status, as such, whereas it is the status and ordinary meaning of the statute law as it now stands, and as it relates to our duty and the Crown’s duty, that concerns me. I repeat: our duty and the Crown’s duty, which I do not believe are the same thing.
I was grateful to the Bill Office for agreeing to write to the Clerk of the House of Commons to ask what basis of interpretation it had placed on the use of a delegation of the royal prerogative in addressing its own debate on this subject. If I understand the very complicated answer correctly, it is along the following lines. The Crown cannot delegate something that it does not posses; it can delegate only the authority that it has, in which case it can delegate the power to us to give an opinion as to whether we want a Bill to pass and say “Content”, but it cannot delegate to us the authority to give it assent. That is retained by the Crown in all cases.
However, the Crown has to adhere to that in strict accordance with the coronation and proclamation oaths which precede it. Those oaths, passed through the Declaration of Rights in 1689, relate to all the powers that the Crown rightly held before the revolution. It ensured that the Crown could no longer deny that it was bound by the statute law with explicit changes to the coronation oath, made by enacting the Coronation Oath Act 1688. The settlement has been said by Her Majesty, on the occasion of the 300th anniversary of that great document, to be the sure foundation of our constitution. I am sure that Her Majesty would take that same view without any amendment today. It will be interesting to see, when and if the Bill passes to her for Royal Assent, how she will interpret that obligation in the context of those oaths.
The vulnerability here would arise if the passage of the Bill was deemed to represent a precedent by which to justify far more draconian changes than could be permitted to the established laws of this land under the Bill of Rights and to the detriment of the rights and liberties of the subject. By relying on such a precedent, in theory it is possible to introduce arbitrary power with a Bill of no greater apparent significance than this, to reintroduce the use of judicial torture or repeal the principle of “no taxation without representation”. These are, clearly, highly undesirable outcomes.
If this Bill is enacted with the addition of the amendment that I have proposed, from the next accession and beyond we would have the satisfaction—albeit that there may be a vulnerability prior to that accession —of knowing that the fundamental rights and liberties of the subjects have been restored absolutely. As such, I commend my measure as an opportunity that we ought to take. It is like a deep third man, in cricketing terms, by sweeping up all the bits that might otherwise trickle through. I commend my measure as an opportunity that we ought to take to hope, and later ensure, that no precedent might arise from this to the detriment of the rights and liberties of the subject. If we pass the Bill we risk setting a precedent with the potential for the worst possible outcome in the fullness of time, not knowing what future Governments and future authorities might wish to be brought to bear.
Lord Eden of Winton
My Lords, this is a bit of a minefield, so I tread with care and trepidation. I will make a very brief intervention, primarily to say to my noble friend how much I recognise the concerns he has expressed and the care with which he has followed these matters through. I know that he is extremely anxious, not only on his own behalf but on our collective behalf, that the legislation now going through the House is correct in so far as it seeks to affect the role and rights of the sovereign and sovereign succession and that it in no way undermines the position of any Member of your Lordships’ House, let alone that of any citizen outside the House.
I believe that the main answer to the questions that my noble friend raises rests in the sovereignty of Parliament. It is, as I perceive it, the right of Parliament to make alterations to legislation, even including the Bill of Rights. As I interpret it, the primary purpose of the Bill of Rights was to protect the interests and the rights of the people. The rights of the people are currently preserved in the powers and obligations of the Houses of Parliament and of the Government of the day. It is for us to make such amendments as we feel are necessary or desirable. In this particular case, a narrow amendment is being suggested which in a way underlines what was required of the sovereign at the time of the Bill of Rights; namely, that the heir to the Throne shall be a Protestant. There is nothing more to it than that. It therefore seems to me that we are exercising a traditional and constitutional right of Parliament to make amendments and alternations as we think proper. We are not in any way going against the obligations or commitments of the Crown. In carrying these matters forward, we shall be preserving the constitutional requirement in this country that the future monarch shall be a Protestant and a practising communicant member of the Church of England.
I do not think that the worries and anxieties my noble friend has expressed so profoundly are justified and, as he himself said, my noble and learned friend the Minister has given a great deal of care and attention to these issues and has written a letter of some considerable length to him that certainly satisfied me in the arguments put forward.
Lord Wallace of Tankerness
My Lords, I certainly understand that my noble friend Lord James of Blackheath has had serious, profound concerns about this Bill which he expressed even before Second Reading. I recognise the persistence and diligence with which he has continued to raise these issues. I am grateful for his kind comments and I think he would recognise that the comments and concerns he has raised have been given proper consideration.
It appears to me that my noble friend is concerned that, in allowing an heir to the Throne to marry a Catholic, this Bill would contravene the promises that each sovereign is required to make to maintain the established Protestant religion and in some way subvert the Bill of Rights or the Act of Settlement. It will come as no surprise to my noble friend that I disagree with his view, as I have made clear on a number of occasions in your Lordships’ House. Again, I want to make it quite clear that we are not amending the provisions of the Bill of Rights or the Act of Settlement which say that the sovereign has to be a Protestant.
My noble friend Lord Eden of Winton put his finger on the point. Indeed, I wrote at some length in my letter to my noble friend Lord James about the sovereignty of Parliament in the case of Jackson v Attorney-General in which the House of Lords considered the Parliament Act 1911. The late Lord Bingham said:
“The bedrock of the British constitution is, and in 1911 was, the supremacy of the Crown in Parliament … Then, as now, the Crown in Parliament was unconstrained by any entrenched or codified constitution. It could make or unmake any law it wished”.
With a former Lord Advocate, the noble and learned Lord, Lord Hardie, present, I had better say that there has been some question about that in some respects in Scotland following the dicta of Lord President Cooper in MacCormick v Lord Advocate. Nevertheless, Lord Bingham expressed that view very clearly in the Jackson case.
Given that the prohibition on the sovereign being a Catholic remains, we do not believe that there is any conflict between the Bill and the Accession Declaration or the promise made by the sovereign to preserve the Presbyterian Church in Scotland. I do not think I can really elaborate on it. My noble friend and I are going to have to agree to disagree because we believe that there is nothing in this Bill which subverts the Bill of Rights, the Act of Settlement or the oath which Her Majesty made on her accession. In the circumstances, I invite my noble friend to withdraw his amendment.
Lord James of Blackheath
I thank the Minister for his reply. I reassure him immediately that my concern here is not about the religion of the monarch. I gave up religion at the age of 19 when I was studying for ordination to the Church of England. I discovered that while the Catholics burnt people because they thought it released the soul to go to heaven quicker in order to plead for mercy, the Protestant church was allowing hanging, drawing and quartering on the forecourt of St Paul’s Cathedral—where we all walked last week—to be able to discharge the secular crime of treason under the guise of being a religious crime against the church. At that point my faith crumbled very rapidly and was never restored.
My concern here is not primarily those factors. It is that we are putting Her Majesty in a position where we are asking her to breach the coronation oath, which I would not do under any circumstances. I have provided a suggestion as to how we may circumvent that by borrowing an initiative of the Duke of Wellington from 120 years ago, but none the less we need to be sure that it would work and that is my concern. If the noble Lord will answer that, I will be happy to withdraw my amendment.
Lord Wallace of Tankerness
My Lords, I indicated on Report that I would report to the House once the necessary steps in each realm had been completed and we were in a position to commence the legislation simultaneously. I reiterate that commitment. As it may be of interest to your Lordships, I can inform the House that since our debate on Report, Royal Assent was given to the Canadian Succession to the Throne Act on 27 March. We received confirmation from the Government of Antigua and Barbuda that, based on the nature of their constitution, they will not need to legislate to give the changes effect, and that the Council of Australian Governments agreed on 19 April, last Friday, to a process to change their laws.
As I have indicated on a number of occasions, the provisions in this Bill have been carefully worked out in agreement with the realms, and it is important that we now proceed to pass this Bill and show that we have been able to fulfil the task asked of us by the realm Prime Ministers in Perth in 2001. It is an important piece of legislation that has its roots in securing better equality, and certainly we await with great expectation the birth of a child to their Royal Highnesses the Duke and Duchess of Cambridge. We wish them every health, in particular the Duchess as she proceeds towards the birth of her child. In doing so, we know that if this Bill passes, and if the required processes take place in the other realms, that child, irrespective of whether it is a boy or a girl, will take its place in line to the throne ahead of any subsequent siblings. Therefore, I beg to move that this Bill do now pass.
Lord Trefgarne
My Lords, I do not intend to delay the passage of this Bill for more than a few moments. It is sad that this Bill has been driven through with such speed. Many of us would have preferred a Joint Select Committee, for example, to consider some of the important constitutional implications that it raises, and indeed changes. However, that has not been the case, and therefore that, for now at least, must be that. This Bill has also set running the hare of what happens to the hereditary peerage with regard to the succession arrangements for hereditary peers. I must tell your Lordships that those arrangements are, as I understand it, a great deal more complicated even than they are for the Crown. I dare say that if Bills come forward for that purpose they will delay the noble and learned Lord very much longer than this Bill has.
Growth and Infrastructure Bill
19:10 - Division on Motion B1 - Ayes: 260 / Noes: 191 - Motion B1 agreed.
“Development orders: development within the curtilage of a dwelling house
(1) Section 61 of the Town and Country Planning Act 1990 (development orders: supplementary provisions) is amended as follows.
(2) After subsection (3) insert—
“(4) Any development order or amendment to an existing development order made after 1 January 2013 that grants planning permission for development within the curtilage of a dwelling house shall not apply within the jurisdiction of a local planning authority if that authority has resolved that it shall not.””
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 7 for the following Reason—
Baroness Hanham
“(2B) Without prejudice to the generality of subsection (1), a development order may include provision for ensuring—
(a) that, before a person in reliance on planning permission granted by the order carries out development of land in England that is a dwelling house or is within the curtilage of a dwelling house—
(i) a written description, and a plan, of the proposed development are given to the local planning authority,
(ii) notice of the proposed development, and of the period during which representations about it may be made to the local planning authority, is served by the local planning authority on the owner or occupier of any adjoining premises, and
(iii) that period has ended, and
(b) that, where within that period an owner or occupier of any adjoining premises objects to the proposed development, it may be carried out in reliance on the permission only if the local planning authority consider that it would not have an unacceptable impact on the amenity of adjoining premises.
(2C) In subsection (2B) “adjoining premises” includes any land adjoining—
(c) the dwelling house concerned, or
(d) the boundary of its curtilage.””
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, at Third Reading this House made an amendment to provide local authorities with further powers to disapply planning permission granted by a development order. As the House will be aware, the Commons noted the commitment made by the Secretary of State when discussing these issues to give further consideration to the concerns of both Houses, and it disagreed with this amendment.
Members of both Houses will have received from the Secretary of State a letter, which I forwarded to them, giving the result of his review of the situation, which has resulted in the amendment that we laid on Friday, and which we will now discuss. It may be helpful if I briefly outline again the thinking behind our proposal on extending the existing permitted development rights for homeowners wishing to extend their property. As I said at an earlier stage of the Bill’s consideration, these changes will make it easier for thousands of families to undertake improvements to their homes. In bringing forward these changes, we have looked across England and recognised that many people want to enlarge their homes. They want to do so not by much but sufficiently to create more living space, perhaps to care for elderly relatives or because of a growing family, and without the cost of having to relocate.
However, we have been clear from the outset that it is important to ensure that any impact on neighbours is acceptable. Concerns on this issue have been set out in this House by noble Lords in previous statements, by Members in the other place and in responses to our consultation. As I have said, the Secretary of State made a commitment in the other place that we would respond to these by bringing forward a revised approach.
I have tabled an amendment that delivers that commitment. This amendment makes it possible for the Government to put in place protections for neighbours where adjoining homeowners seek to use our proposed extension to their permitted development rights. We have reflected on the concerns raised by noble Lords. The noble Lord, Lord True, raised the issue of the rights of neighbours to protect the amenity of their homes eloquently on Report; the noble Lord, Lord Tope, expressed concerns that our proposals would set neighbour against neighbour; and, as the noble Lord, Lord McKenzie, put it, neighbours can impact dramatically on their neighbours’ quality of life. The amendment that we are proposing responds directly to this important issue.
In drafting our amendment, we have drawn on the principles outlined in the 2007 report Blueprint for a Green Economy from the Quality of Life Policy Group, which was chaired by the noble Lord, Lord Deben, in his previous life and Zac Goldsmith MP. Indeed, the noble Lord referred to this very report when arguing against the amendment that was made to the Bill at Third Reading. The Quality of Life report states that:
“Too much planning has become development control”.
It goes on to say that,
“the time and trouble that has been spent on dealing with planning applications for extensions and additions, porches and garages … cannot be seriously said to have been cost-effective”.
We agree with that, and with the report’s message that protecting neighbours’ amenity is important.
We are therefore introducing a light-touch neighbourhood consultation scheme. This recognises concerns that larger extensions could be built without offering neighbours any opportunity to express their views. Adjoining neighbours—not just the ones on either side but those who adjoin the rear of the property as well—will now be consulted where a homeowner wishes to use the new extended permitted development rights to build a good-sized extension. If neighbours think that the proposed extension will have an unacceptable impact on their amenity, they can ask the local planning authority to consider this—for example, if they think that it would totally overshadow their living space or that they would lose their privacy due to overlooking windows. Where neighbours raise concerns with the local authority, it will then consider the impact of the proposals on the amenity of those neighbours. It will make an objective decision on whether the development is acceptable or if the impact on neighbours’ amenity is such that it should not go ahead under permitted development rights.
We recognise that neighbours will have very different views on whether an extension impacts on their amenity, and that similar proposals on the same street may therefore have different outcomes. If a local authority is asked to consider the impacts of a proposal it will look at this on a case-specific basis. The outcome will not necessarily be the same as for other extensions in the street.
As the Secretary of State has made clear, local ward councillors will, in the usual way, have the opportunity to put forward their views on the desirability or otherwise of a proposed extension. The process for dealing with an indication that an extension is proposed will be that a homeowner wishing to build an extension will notify the local planning authority and provide plans and a written description of the proposal. The local authority will notify the adjoining neighbours—that is, the owners or occupiers of properties that share a boundary, including those at the rear. We will set out the details in secondary legislation but the intention is that neighbours will have 21 days in which to make an objection. If no neighbours object, the local authority will notify the home owner that they are able to proceed with the development. If any neighbour raises an objection, the local authority will then consider the case on the single issue of whether the impact of the proposed extension on the amenity of neighbours is acceptable.
It will be up to individual councils to decide how they handle the consideration of these proposals. We would expect it to work in the same way as for planning decisions: that is, for the council to decide whether the decisions are delegated to officers or made by a planning committee. If approval is not given, the home owner will be able to appeal against a refusal or may wish to submit a full planning application. The home owner will be able to appeal against a refusal of consent but, as with normal planning consents, neighbours will not be able to appeal against a grant of permission. This approval process will not be onerous and we do not expect that it will impose significant costs on local authorities, but we will discuss this and other implementation issues with the Local Government Association.
These proposals should remove the need for local authorities to feel that they have to resort to using Article 4 directions to remove the new permitted development rights. I assure noble Lords that we have listened very carefully to the concerns raised about the operation of Article 4, and we will work with the Local Government Association to update our Article 4 guidance as part of the review by the noble Lord, Lord Taylor of Goss Moor. This will make sure that the process is as clear and straightforward as possible.
The noble Lord, Lord True, clearly set out that he was concerned that our proposals took away,
“a neighbour’s right to have a say on a big and potentially overbearing extension shoved up outside their back door”.—[Official Report, 26/3/13; col. 982.]
As the Secretary of State made clear, we have listened to Parliament and responded directly to these concerns. The amendment gives local authorities a role where neighbours ask them to make a judgment while allowing home owners across the country equal opportunity to make use of the new permitted development rights. I look forward to hearing the views of the House. I hope that I have explained as clearly as I can how our amendment addresses the concerns raised about the impact of our proposals on neighbours and why, therefore, the House should agree with the other place that the amendment made here at Third Reading should not become part of the Bill. I beg to move.
Motion A1
Lord McKenzie of Luton
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 7”.
Lord McKenzie of Luton
My Lords, I should explain that we tabled this Motion, which insists on the position originally taken by your Lordships, as the clock was ticking on Friday without our then having sight of the government amendment. The Secretary of State, in announcing an uncharacteristic conversion to the spirit of consensus, gave neither us nor the Commons a clue as to what this revised approach to permitted development rights for home extensions might be. We have to continue to deliberate on these matters without the benefit of the results of the consultation on extended permitted development rights that concluded some four months ago. It is difficult to believe that they would not have some relevance to the matter in hand, yet still the information is withheld from us. However, I hope that the Minister might at least confirm one point for us this afternoon. The consultation included the proposal that changes to permitted development rights, including those relating to the curtilage of a dwelling house, should be in place only for three years and that developments would have to be completed within that three-year period. Does the consultation support that proposition?
We now have sight of the government amendment, and the benefit of correspondence from Ministers, and have to assess how far it addresses the concerns prompted by the amendment moved so comprehensively by the noble Lord, Lord True, an amendment that found favour around your Lordships’ House and that clearly had considerable support in the House of Commons. I do not propose to restate in depth the points made by the noble Lord, Lord True, and others with which we agreed, other than to say that the amendment reflects a demonstrably localist approach, scepticism that the extension of these particular permitted development rights would make a meaningful contribution to kick-starting growth, concerns that an unamended Article 4 direction process was not inevitably a secure or speedy route for local councils to override inappropriate centrally set permitted development rights, an acknowledgement that individuals can pursue planning permission in the absence of permitted development rights and, in the words of the noble Lord, Lord True, that the Government’s proposal,
“takes away a neighbour's right to have a say on a big and potentially overbearing extension shoved up outside their back door. What is more, it removes that vital process of moderation and conciliation that the local planning system provides in these matters”.—[Official Report, 26/3/13; col. 982.]
Baroness Gardner of Parkes
My Lords, I noticed that many of the views expressed by the spokesman for the Opposition agreed with points that I think are important and on which I therefore wish briefly to comment. The most important thing of all—from my own experience I found this very unsatisfactory—is that you cannot rely on getting notification. In cases in the past 12 months where I have been the immediate neighbour, I have twice not received notification. Secondly, clever people always put in their applications on Christmas Eve or at some time when they know that no one is around. It is important in those circumstances that extra time is allowed for the consultation based on the number of working days, not just days. The unprincipled policy is used regularly by clever people, even under normal planning regulations. Those two matters are important.
On other issues, I have been satisfied by discussions with the Minister that the Government really are thinking about these matters. The sunset clause is good but, for notification, the system that has been in use for years should be continued whereby a notice is posted on a lamp post, a hedge or something like that, so that some friend or neighbour passing by would say, “Did you see that they are building something next door to you?”. Even if you are away on holiday, you can ask your friend to let you know. However, if you come back from a three-week holiday, which is not unusually long—particularly if you go to Australia; it is hardly worth going if it is any less than that—it is important to be sure that nothing underhand is going to be slipped through in your absence.
Lord Shipley
My Lords, I should declare my interest as a vice-president of the Local Government Association. I have had many concerns in recent months over the proposals on permitted development. However, I am grateful to the Minister for these proposals, albeit that they were revised at the last moment. They go a long way towards improving the proposals on permitted development.
It would have been wrong to deny neighbours the right to object to an extension that might impact on the amenity of their property, particularly given the significant increase proposed in the scope of permitted development. While I am conscious that some 90 % of current planning applications are approved and only 10% are turned down, clearly the increase in the proposed permitted development level will produce a higher proportion of applications that are going to be challenged by neighbours. I agree with quite a number of the points made by the noble Lord, Lord McKenzie, who has asked a set of questions about precisely what detail the Government propose.
The Minister wrote to Members of Parliament explaining what the Government were proposing to do. It would help our understanding of the Government’s amendment if the Minister could clarify some of these details. First, it is stated that home owners wishing to build extensions under the new powers would notify their local council with the details. It is spelt out in some detail in the amendment, but I hope it will be absolutely clear that there should be a covering letter that explains all the detail that a third party might be interested in reading, that there should be a copy of the plan of the architect’s design, and that all details of design and materials should be submitted at that stage. Because of costs, this is not just a matter of planning permissions: it also impacts on building control.
The council is then to inform the adjoining neighbours that a letter and application have been received by a home owner. What does the word “inform” mean? That information should include every single detail that is known about the application so that neighbours who might be affected can make a rational contribution to the application and their views can be properly considered.
The question of who is an adjoining neighbour is defined in this amendment as someone who abuts the curtilage of the property. I suggest that that does not go quite far enough. I think it should be anybody who can see the proposed development site from any point on their property, because it will impact on their amenity if they can see it. But if they are at the diagonal point—in other words, not immediately adjacent to the side or to the bottom of someone’s garden—they may well be able to see the proposed development. Those people should have a right to object as well.
I agree entirely with the suggestion that three weeks is not adequate, partly because there is a tendency for the three weeks to start at the date on which the letter is sent. It seems to me that 28 days would be a better period by which a neighbour should be able to respond.
On the question of objections being received from neighbours, I heard on a news broadcast at the weekend, but perhaps I misinterpreted it, that ward councillors would have a role in making the decision, in arbitrating. I understand that that is not what is being proposed, but I would appreciate the Minister’s confirmation of that fact, because in my view it should go to the council’s planning committee.
Statutory consultees should also have a right to be consulted. I am thinking particularly of parish councils, because they have an existing role and it is important that that role is clearly identified.
On the issue of the fee, I had thought that the planning system was supposed to be financially self-sufficient: that is, that the expenditure on the planning system and planning officers was to be funded from fees received. I am not certain that it is right that someone who has applied for planning permission should not pay a fee. There is a case for saying that if there are no objections to what is a very simple matter, and with the council operating as a post box only, it would be legitimate for there to be no fee. But if it is more complex than that and takes up significantly more of the planning officer’s time, this ought to be looked at again.
Lord Deben
I rise only because my noble friend, like my right honourable friend, has drawn into consultation the Quality of Life report, which I chaired. I declare an interest as a vice-president of the Royal Town Planning Institute and an honorary fellow of the Royal Institute of British Architects. I think it important to rise simply because I would not like the House to believe that what is here in the amendment was what the Quality of Life report actually recommended. The reason for saying that is not because I wish to undermine what the Government have done but because the Government have been less radical than we suggested they should be. We said that in most of these cases it is not a matter of planning but of neighbours. It is a matter of sorting out what is fair dos, based on the principle that we believe in the rights of property. I ought to be able to do whatever I like with my property but I cannot do that in a world as closely knit as we are without taking into account what my neighbours feel about it. We said that it was ridiculous to tie up the planning system of the local authority to do this.
What should happen is that you would have a duty to tell your neighbours what you intended to do, with a plan and the rest of it. They would then have a month—28 days—to tell the local authority that they did not like it. The local authority would then have the right to do three things. First, it would have the right to say, “Well, this is a load of old rubbish and we’re not going to take any notice of it”. That seems perfectly reasonable, as you have to have a judgment in the first instance as to whether people are merely being difficult. We all know there are some people who can be difficult in any circumstances about anything, and anybody on a local authority knows that better than I do. The second thing that the local authority could do would be to say, “We think that this is a serious planning matter”—in other words, it was not a matter of neighbours, but something very fundamental, and it would therefore call it in, in effect, for a planning decision.
However, it would most likely say that this was a matter of neighbours and that they were going to appoint an arbitrator. Local authorities would have a panel of arbitrators, who would be very ordinary people, whose only job would be to go and see what the fair deal or reasonable thing would be in the case. Having decided that perhaps a slightly smaller extension would be fairer as far as the neighbour was concerned, they would say, “We will agree to this, if this change is made”. Alternatively, they would say, “We agree to it entirely”. They would start from the assumption that they would want to agree to the development; in other words, there would be an assumption in favour of development, because that seems to be reasonable given the nature of property.
The Government have taken this up. It is a huge improvement on the previous suggestion and a generous way of moving forward. I think my noble friend Lord True will probably feel that it is not quite what he wanted but we have gone a long way. However, there are three bits to it which I hope that my noble friend will think again about. In no spirit am I complaining about what she is doing—I am very pleased about this—but there are three things. First, I think that 28 days was probably a better period, simply for the reason that it is helpful for people over holidays and the like. Secondly, I wonder whether she could look again at enabling the local authority, even if it were not in the statute, to decide that this kind of thing was done by an arbitrator, not through the planning committee. I wanted to remove from the planning department questions such as, “Can I have a car port? Can I build a room in the already present roof of my garage? Can I put up a bit of an extension which seems quite sensible as my neighbour has exactly the same?”. All those things are really neighbours’ issues, and, frankly, when you consider the time spent and the shortage of planning officers, it is much more sensibly done by having a sensible man or woman looking and saying, “That seems perfectly reasonable”.
Thirdly, I hope that my noble friend will look at the one series of protections that we specifically put in, which is that this would not apply in an area which had been designated as a conservation area. In that area there should be a wider consultation than merely with one’s neighbours. I say to the Minister that I entirely support that it should be one’s contiguous neighbours because frankly, if we are going to go out to everybody who could possibly see the house, we are in real trouble. The idea that I could say that I ought to be able to complain because if I stood on the top of my house with a telescope I could see this house is just nonsensical.
We are trying to have a proper balance, and I think this amendment achieves that. I hope that the Minister will look at those three things, not least because I believe that our original proposition was an easier, simpler and ultimately more radical concept. However, I am pleased that we have had not merely half but three quarters of the cake and thank her very much for that.
Lord Cormack
My Lords, I agree entirely with what my noble friend Lord Deben says about conservation areas. I would like to make one point and ask one question of my noble friend the Minister. Like others, I thank her for the movement that has been made. I enthusiastically supported the amendment of the noble Lord, Lord True, either on Report or Third Reading. It seems that the Government have moved between half and three-quarters of the way.
Does the Government’s movement, which we welcome, take into account the time that it takes to build an extension? We have talked about loss of views and all that sort of thing, which are the obvious points, but some extensions seem to take an unconscionable time to build and the disruption of neighbours’ lives during the building can be not just an aggravation, but in some cases a real health hazard. I would like my noble friend’s assurance that permission to extend does not extend indefinitely.
Lord Beecham
My Lords, I join others in welcoming the Government’s partial, if deathbed, conversion to doing something about these proposals. I certainly endorse many of the comments that have been made about the problems that remain apparently unresolved. I particularly join the noble Lord, Lord Deben, in strongly urging the Government to look again at the issue of conservation areas, unless it is capable of being clarified that the proposals will not apply to conservation areas.
I draw particular attention to the wording of Amendment 7B, where in the preamble it says to insert:
“Without prejudice to the generality of subsection (1), a development order may include provision for ensuring”,
the safeguards to which the Minister referred. Why is that “may”? Why is it not the case that the development order will include these provisions rather than there being an option? It seems to me that it would be all too easy to evade the consequences of the partial progress that the amendment produces if it remains an option simply not to provide that in the subsequent development order.
Lord Phillips of Sudbury
My Lords, very briefly, in my 26 years as legal eagle on the “Jimmy Young Show” on Radio 2, there was no issue more sensitive and more repeatedly brought up than neighbour disputes relating to the extension of premises. It causes immense angst among our fellow citizens. People have mentioned rights of view and rights of light; there is no right of view, of course, and rights of light are notoriously difficult to judge and adjudicate on. I am entirely in favour of my noble friend the Minister trying to ensure that what comes out in the wash—I am thinking particularly of the subsidiary legislation—leaves minimum room for aggravation and disagreement.
For example, can anything be done about defining,
“the curtilage of a dwelling house”,
and the boundary of this? Those sorts of details may not seem important to us here because, I suspect, most of us live in rather spacious houses with gardens, but in terraced accommodation par excellence these issues are of huge importance. I am delighted to hear that the notice period is going to be 28 days but, to be honest, it needs to be 56 because these things can move very slowly and it takes less sophisticated mortals a long time to find out how to deal with some of these matters.
Lord True
My Lords, in rising, I feel rather like the ancient prophetess who went to see King Tarquin with the Sibylline Books and saw six of them promptly burned, only to have them accepted at the last minute. Like her, I am grateful for that. I thank my noble friend Lord Tope, the noble Earl, Lord Lytton, and the noble Lord, Lord McKenzie, for their support for this proposal at an earlier stage.
Of course, I thank my noble friend the Minister for her amendment. Unlike some in this debate, she has always understood the practical, human issues that are involved in seeking to end the rights of objection to developments which, as some have pointed out in this debate, may take more than half of a neighbouring back garden. Crucially, these may also create precedents in local planning in relation to character and new lines of building, which may well affect the person next door but one, who, under the proposal before us, still has no right to a say.
Parliament has secured some movement and I think many householders will thank goodness for your Lordships’ House for the role it has played in securing that. My view has always been—and remains—that faced with potentially overbearing developments, neighbours should have the right to defend the value and amenity of a home. For most of our population, that home represents the focus of all their lifelong work and aspiration and the bulk of their family’s wealth. That is the fundamental point. With the help of colleagues in another place and many of your Lordships, people in the Local Government Association and the local government world, and so many other people—ordinary people—this has finally been vindicated. I am very grateful to the Government for laying an amendment to protect these rights.
The question is: what do we do now? The noble Lord, Lord McKenzie of Luton, to whom I pay tribute for his role in not only this but all our local government debates, says that we should insist on the amendment for which I secured your Lordships’ support at an earlier stage. It is true that the Government’s amendment was laid before the House at the last possible moment last Friday. I might agree with him that it would have been better if it had come sooner. I myself suggested a way forward in which both sides would withdraw their amendments so that more timely discussion might take place on an agreed draft regulation specific to this issue, which could be debated later in both Houses after proper consultation. I actually think that would have been a better and more orderly course in Whitehall terms, but that is not where we are.
The Earl of Lytton
My Lords, I will not detain the House for long. My interest as a practising chartered surveyor in matters to do with planning is well known. The concern about this area of the Bill is not to prevent development from taking place but to ensure that the community should have some input. There is a serious and objectively important issue here. It is that the density of development is a construct, particularly in urban and suburban areas, that needs constant review and monitoring. Filling up open space with development—perhaps “filling up” is a rather pejorative term, but noble Lords will get my drift—touches on and concerns that issue, and produces long-term, quantifiable effects on value, amenity and the general sense of space. That affects not only the public perception but individual neighbours. It is very easy for someone with a very short-term agenda who simply wishes to have further space for whatever reason to try to construct something that is less than worthy in the context of the locality. I pay tribute, as I have before, to the way in which local planning authorities have protected this construct, this facet, of our built environment. It is important that there should be oversight. Policies to protect amenity space, light and air should none the less still have house-room here.
There are a couple of issues that I hope the Minister will be able to clarify. Another qualitative consideration that risks being lost is to do with materials—things like colour, finish and texture. They risk being lost under the process of prior notification where the principle of development is enshrined in a permitted development context. I appreciate that design guidance in supplementary planning documents may overcome this if it is sufficiently up-to-date and all-encompassing, but it is not always.
It has been mentioned already that the local planning authority will receive no fee, whatever the length and breadth of its administrative role may be in dealing with something under a prior notification regime. I think that that is probably an injustice, other than in circumstances where, as the noble Lord, Lord True, and others have said, it is a straightforward in-and-out issue.
We have heard about the issue of too much planning and overconcentration. I believe that I made a comment earlier in the course of the Bill about the colour of people’s front doors or the design of their windows. We need to try to distinguish between removing the overconcentration on the particular and the wholesale removal of scrutiny, because the two are not the same.
Comment has been made on how the service of notice would work. That must wait for another day, but I would instinctively prefer 28 days rather than 21.
A further area, that has already been pointed out by the noble Lords, Lord McKenzie and Lord Shipley, is the question of definitions—back garden as opposed to side garden, curtilage as opposed to plot area, setting as opposed to something else—and the basis of identifying the proportion of the plot actually built upon if you want to get some sort of absolute measure. I remember a situation where I made an application for a tenant’s garage. It was turned down because, although it was in a rural road, the planning officer decided that it was offensive to the “streetscene”. Anyone walking up the “streetscene”, where they saw one house every half-mile, will realise what I mean when I say that I did not think that “streetscene” was a concept that applied to something that was stuck behind a hedge up above a high bank. This occurred because, needless to say, the building was not built with a frontage onto a highway, as you might normally expect, but was built end-on to the highway, so front and back gardens had a boundary with the highway. It is this sort of muddle that needs to be sorted out, because for every plot that is governed by the standard criteria of an urban street, there are other ones that are not so governed because they are corner plots or otherwise different and individual. We need to somehow disentangle that.
The noble Baroness, Lady Gardner of Parkes, asked what the sanction will be for not complying with a scheme as prior notified. Indeed, that is something that we need to be very careful about.
On the whole, though, I believe that the Minister and her honourable friend have gone some way to try to deal with this business through this halfway house of prior notification. Prior notification is not an unusual construct, despite what the RTPI may wish to say; it is commonplace in agricultural permitted development, so I do not have any particular worries with it as such. If the Minister is prepared to give some sort of undertaking that the detail of this will be subject to consultation, not least consultation via the processes through this House, then I will be inclined to take the side of the noble Lord, Lord True, and be prepared to draw a line under this—to take half a bun or two-thirds of a bun, even if it is not the whole bun that we wanted to start with.
Baroness Hanham
My Lords, I thank the noble Lords who have spoken, particularly my noble friend Lord True, for the tenor of this debate. I accept that there is not everything that everyone would want here, judging by the questions, but the House seems to accept that we have moved a long way since we started on the Bill.
I want to reiterate that the revised approach that we are taking responds in a targeted and direct way to the concerns that have been raised. As noble Lords have said, there are already existing permitted development rights that have operated effectively for a number of years. The change is that those permitted development rights are extended with regard to the size of buildings. This is not new, although I well understand the concerns that noble Lords have raised. Our revised approach will now ensure that under the new rights, in the case of larger extensions, any objection from immediate neighbours will be fully taken into account before permission is granted. I will come back to “immediate neighbours”.
Lord Cormack
My noble friend has not yet reached this point, but will this also include the time that will be taken to build the extension? The disruption factor is very real in people’s lives.
Baroness Hanham
The noble Lord has jumped in ahead of me: no. Planning permission currently has no timescale of how long it should take people to do a development once they start. Indeed, I am sure that many noble Lords have torn their hair out at something that seems to be going on for a very long time indeed. Of course, the district surveyor or building regulation enforcers might begin to get worried about why progress was not being made, but I do not think that we can expect to put details of that in legislation. That also goes for the question raised by my noble friend Lady Gardner about enforcement. There will be the normal enforcement procedures of local authorities, which they are able to implement when they have concerns that something is being or has been built outside what has been approved. The problems with enforcement are much the same with any planning development as with our new, light-touch proposals.
I hope that I have covered most of the points on which I wanted to pick up. The noble Lord, Lord McKenzie, in particular, gave us a very long list of things that he was concerned about. If I have not addressed something that anyone has a burning question about and they want to ask me quickly now, then I am happy to pick it up, but I think I have covered everything that time allows me to. I am grateful to all those who have spoken. I look forward to hearing, as I think that I have, that this has moved a long way, which has helped with this aspect of the Bill.
Lord McKenzie of Luton
My Lords, I start by thanking the Minister for dealing extensively with the queries that were raised and all other noble Lords who have spoken in this debate. There are two strands to it. Most noble Lords believe that sufficient progress has been made by the amendment to be able not to stick with the amendment of the noble Lord, Lord True, if that is where they originally were. The noble Lord, Lord Shipley, said that it had gone far enough to be supported. The noble Lord, Lord Deben, said that it was a huge improvement, even if it was not as radical as he would have wanted, based on the Quality of Life report. The noble Lord, Lord Cormack, was thankful for the movement. The noble Earl, Lord Lytton, believed that it had gone some way. The noble Lord, Lord True, himself, believed that there had been real progress. The other strand is how much still needs to be consulted on, and some of the details still need to be fleshed out, notwithstanding what we have heard today. The noble Lord, Lord Phillips of Sudbury, the “legal eagle”, said that there should be minimum room for discretion, effectively, because this generates a lot of angst among people.
The key issue seemed to be about the period. We heard 21 days but the noble Baroness, Lady Gardner, and several other noble Lords, did not believe that was sufficient. On fees, bearing in mind the state of local government finance, the lack of support from central government, given the imposition, is a real issue. I also believe there should be further discussion and movement on the limitation of these arrangements to the immediately adjoining properties.
As I hope I said at the start, we tabled our amendment because we had not seen what the Government were then proposing and wanted something against which to benchmark what did come forward. However, on the basis of what we have heard and this debate, I beg leave to withdraw the amendment.
Viscount Younger of Leckie
That this House do not insist on its Amendment 25, to which the Commons have disagreed for their Reason 25A.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, I am grateful for the full and wide-ranging debate that has taken place during our consideration of the Growth and Infrastructure Bill. Last week the other place disagreed with the amendment to remove the employee shareholder clause from this Bill. In today’s debate I will explain why the Government support the position of the other place to retain it in the Bill.
I intend to focus my initial remarks on the announcement made by my right honourable friend the Minister for Business and Enterprise who gave an important assurance about jobseeker’s allowance claims. I will also explain to the House why I believe it is important to support greater choice for companies and individuals with the creation of a new employment status.
Last week, my right honourable friend the Minister for Business and Enterprise announced in the other place that jobseeker’s allowance claimants will not be mandated to apply for employee shareholder jobs. This means that individuals receiving jobseeker’s allowance do not need to worry about their benefits being affected if they do not wish to apply for, or accept, an employee shareholder job. This is an important point. The Government will not compel jobseekers to apply for these jobs even if the job fits within their job search specification and we will leave it up to jobseekers themselves to choose whether to apply or not.
During the Third Reading debate on the Bill we discussed the guidance that will be made available for jobcentre staff to help them understand the new employment status. We have now updated the draft guidance for DWP jobcentre advisers. It now states explicitly that a jobseeker cannot be mandated to apply for an employee shareholder job. A copy of the draft guidance was placed in the Libraries of both Houses on 16 April.
We are debating a wholly voluntary new employment status. As I have said throughout the debates, we do not want people to be coerced into accepting these new contracts and it is worth us considering other protections that this clause provides. On Report in the other place the Government amended the clause to give strong protections for existing employees, enabling them to turn down an offer of an employee shareholder contract by their employer. First, we created a new unfair dismissal right that applies from day one of an employee’s contract. This means that if an employee turns down an offer to change their contract to an employee shareholder one and they are dismissed because they said no, this would be considered an unfair dismissal. Secondly, we created a new right not to be subjected to a detriment from day one of an employee’s contract. This means that if an employee turns down an offer to move to an employee shareholder contract and they then suffer a detriment, such as being passed over for promotion or for a pay rise for no good reason, they may be able to make a successful claim at an employment tribunal. These two protections allow employees to turn down an offer of an employee shareholder contract if it does not suit them and they can do this with the knowledge that the law protects their decision.
The clause has further protections. The shares, which must be worth at least £2,000 when given to the employee shareholder, must be fully paid up by the employer. This is an important point because if the company became insolvent and the shares were not fully paid up, the employee shareholder would otherwise be liable to pay any outstanding amount against the value of the share. It is important that we consider the context in which the new employment status fits. Employment law offers a choice of different employment contracts.
Lord Lea of Crondall
I am most grateful to the Minister for giving way at this stage. However, he has rattled through the circumstances in which someone could apply for a job: he says there is no compulsion and that there are options. I want to put a question absolutely clearly and directly. It arises from the guidance, which post-dates where we were last time in this House; in fact, it post-dates where the Commons were a week ago. The guidance refers to the circumstances where the vacancy is an “employee shareholder job vacancy”. Where, therefore, is the option for the jobseeker who does not want to be an employee shareholder? There is none. Is it not disingenuous to suggest that there is an option?
Viscount Younger of Leckie
I thank the noble Lord for his intervention. This currently remains an entirely voluntary procedure and jobseekers will not face a detriment if they are due to apply for a position.
Lord Lea of Crondall
I am sorry; it is very unusual to intervene twice. However, where is the option? The Minister has said that there is no coercion. Of course there is none in the sense of having a whip, but where is the option to get a job if it is solely an “employee shareholder job vacancy”?
Viscount Younger of Leckie
I am not sure I entirely understand where the noble Lord is coming from. If a jobseeker is seeking a job there are various options for him or her to look at in terms of roles, and the employee shareholder role will be treated equally alongside any other option. The only difference is that there will be absolutely no detriment to that individual if they apply for an employee shareholder role, and if they decide to turn it down. On the matter of guidance, I clarify that it remains in draft form. If this is an issue concerning the way that the guidance is written up, I am more than happy to listen to the noble Lord if he has any comments to make.
Lord Monks
My Lords, I am grateful to the Minister for giving way. Is he therefore confirming in that reply that it will be possible for an employer to advertise employee shareholder contracts only? Is that what the Minister is confirming?
Viscount Younger of Leckie
The answer is that if an employer wants to recruit an employee shareholder, he or she will decide how to advertise for that. They may decide not to advertise. They have a range of options which include advertising nationally. They may choose to send the advertisement into a jobcentre locally or to spread it nationally. That remains open just as it is if they want to recruit for any other position.
Lord Monks
My apologies for coming in again. What is voluntary about that for the jobseeker in those circumstances—the applicant for the job in an area of the country where there may not be many jobs and that is the only status available?
Viscount Younger of Leckie
It remains the case that an employee looking for a position can decide for himself or herself whether to accept an employee shareholder role. It is a separate status compared to other statuses. There is no difference in terms of them deciding themselves whether they want to accept or turn down that particular role.
Employers and individuals are free to agree to the type of contract that is suitable for the job. We are not moving away from this principle; rather, we are enhancing it by offering a further option which will be right for some, but as I have made clear in previous debates, not right for all. There are already three established employment statuses in the labour market, all of which have different rights associated with them. The employee status has wide-ranging rights, including unfair dismissal, statutory redundancy pay, TUPE, maternity leave and pay, and adoption leave and pay, to name a few. The worker status has none of these rights. However, both employees and workers have a right to the national minimum wage, paid annual leave, a right not to be discriminated against, and rest breaks.
There is a further option for people seeking work. They may wish to become self-employed. If someone chooses to be self-employed, they must accept that they have very limited employment rights, such as the right not to be discriminated against. This clause offers both employers and individuals a further option: employee shareholder. This is likely to be a long-term relationship. I would not expect anyone to enter into an employee shareholder contract without carefully considering the implications. This new employment status, with share ownership and favourable tax treatment, will provide small growing companies with a new option to attract high-calibre candidates.
Lord Myners
The Minister says that he does not expect employees to enter into such contracts without careful consideration, and he thinks that this will be a long-term commitment. However, the articles of association of most companies place restrictions on the sale of shares. Will the Government require that there be no restriction on the employee’s ability to sell their shares for the highest price they can achieve, as opposed to having to sell the shares back to the employer at whatever price the employer might justify as being fair in those circumstances? Otherwise I do not see how the employee can form a view on the value of the consideration that they are being offered in exchange for giving up valuable employment rights. Will the Minister give us a clear answer on that question? I feel that he did not offer an entirely clear answer to the previous question from my noble friend.
Viscount Younger of Leckie
The noble Lord makes a good point. The matter of what types of shares and what shares are offered is very much left to the employee and the employer. That is a negotiation between the employer and the employee. The Government will not prescribe how that will come about because there are different types of shares, as the noble Lord will know only too well from his experience. It will very much depend on the type of company, the wishes of the individual who may be looking at an employee shareholder role, and the employer.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. When he says that the valuation and the convertibility of the shares will be a matter of negotiation between the employer and the employee, it is hard to see what the employee’s negotiating position would be. At the very least, should not the employee be given independent legal advice as to the valuation and the nature of the transaction he is entering into, which, after all, applies under existing employment law for compromise agreements and things of that kind? If it is to be a negotiation, surely the employee has to be informed, and not all employees will be particularly financially literate or employment experts.
Viscount Younger of Leckie
The matter of advice is very much applicable to settlement or compromise agreements, as my noble friend has pointed out. This concerns entering into an employment agreement, and therefore we do not see this as being appropriate. On the issue my noble friend has raised concerning share valuation, as he well knows, there are established means through actuaries whereby shares are valued. That is done all the time and it is a straightforward process. Again, that is very much a matter between the employer and the employee.
Lord Myners
I think the Minister has confirmed—but perhaps he could avoid any doubt about this—that it would be possible for the employer simply to say, “You can sell these shares only to me and only at the valuation that I judge appropriate, and without any reference to arbitration or a third party”. If that truthfully is the case, this policy is shambolic.
Viscount Younger of Leckie
I disagree entirely with the noble Lord because the employee shareholder will decide for himself. If he does not like the terms of the shares being offered, he does not have to enter into this particular agreement. It is wholly voluntary. He may be well advised to get some advice. He may decide himself to get some advice. That is not an issue.
Lord Adonis
My Lords, could the noble Viscount explain to us how jobseekers, who may have no resources whatever, will be able to get the advice that he has just told the House they would be well advised to get because of the very complex nature of the agreements and shareholding options into which they will be obliged to enter?
Viscount Younger of Leckie
Yes, I can answer that. However, the issues may not be that complex. It depends entirely on the agreement between the employer and the employee shareholder who is considering the new job. As the noble Lord well knows, a variety of sources such as lawyers and accountants can give this sort of advice to a prospective employee shareholder.
Lord Adonis
How do these jobseekers pay for this advice? Does the noble Viscount have a special fund which will be available to them? I know that plenty of people offer this advice but I am not aware that many of them offer it for free.
Viscount Younger of Leckie
To clarify what I said to my noble friend Lord Forsyth a minute ago, legal advice is clearly available for settlement agreements and compromise agreements. However, we have made it clear that it is not available at this time for those entering into a new employment contract.
Lord Deben
I wonder whether I can help my noble friend. When my companies give shares to our employees, not in return for anything but because they have worked for us for some time and we want them to be involved in the companies, we still find it difficult to explain the terms of those things, even though the terms, whatever they are, are a plus rather than a minus. I wonder whether it is right to suggest that this would not be a difficult thing for people to understand. That worries me considerably. I am very pleased that the Government have moved on the big thing for me, which concerned making it impossible to continue to have jobseeker’s allowance. That for me is a crucial matter. However, I wonder whether my noble friend does not underestimate the difficulty of explaining to somebody even the simplest of share options and share sales.
Viscount Younger of Leckie
I very much note my noble friend’s point. He has experience in this field. I say again that some negotiations may become complicated, but the employer and the employee shareholder will go into this with their eyes open. On the other hand, it may be a very straightforward and simple process. Indeed, the employee shareholder who is looking at this new role may decide that he is entirely comfortable with what he has seen, heard and, indeed, read. I clarify again that this is very much a matter between the employer and the employee shareholder.
Lord Myners
The Minister has just said that legal advice is available for settlement and compromise agreements but that it will not be available to an employee considering one of these contracts. Will he explain why legal advice would not be available? Will he then answer the question from my noble friend on the Front Bench on how a jobseeker seeking employment on the national minimum wage will be able to cope with the complexity of law and the articles of association and afford to take separate legal advice, which at a minimum would probably cost in the case of most lawyers the equivalent of close to a month’s wages on the national minimum wage?
Viscount Younger of Leckie
I can only reiterate that it entirely depends on the role on offer, the type of company and the type of employer as to how the discussions will go. An individual taking on a normal role, if I may put it that way—an employee role or a worker role—may find that sort of contract complicated, in which case they may have obtained their own advice and are still free to do so. This is a wholly different—
Lord Forsyth of Drumlean
I am most grateful to my noble friend for giving way and I shall try not to interrupt him again. However, can he explain to me why employment law as it stands requires employers entering into a compromise agreement to provide legal advice in order to make that agreement stand? They usually provide a reasonable amount of the cost of independent legal advice. If that is appropriate for a compromise agreement where people are surrendering certain of their rights, why should it not be appropriate where people are giving up their employment rights and entering into what may be a complicated and major financial decision, given the proposed levels of tax relief with capital gains relief of up to £50,000? What is the Government’s logic in saying that advice should be paid for by the employer in one case but not in this case?
Viscount Younger of Leckie
I know of many employee contracts—not those for an employee shareholder—where serious advice is required. However, the status of being an employee shareholder is wholly new. The individual concerned may well require advice but noble Lords are talking about the circumstances of entering the employment phase and the proposal we are discussing would set a new precedent. As we know, often very difficult discussions take place towards the end of the employment contract. That is where it has become the custom and practice for companies to pay fees. That is the difference. I hope that I may be allowed to move on.
The recruitment of skilled personnel is normally taken very seriously. It takes time and commitment and involves searching for suitable candidates, sifting applications and interviewing. This will be no different with the new employment status. In fact, companies will need to take time to consider whether this type of contract is right for them. The owner of a company offering the status should think about the impact of giving up equity in the company. This is a decision that is not easily reversed, as once you have given away your shares it may not be easy to get them back. We must remember that the owner is giving away a stake in the company. Companies will need to be sure that the person to whom they offer the contract is right for the company. An employee shareholder may be able to influence the decision-making of the company and take a share of the profits. This is not something a company would do without being sure that it was the right move for them.
The new status will not be applicable or suitable for all companies or all individuals but it might be right for some. This new employment status represents more choice for individuals and companies. I have been clear throughout our debates that the status is voluntary. Indeed, it may well be used only by a minority of companies, but what is important is that we allow them to choose what is right for their own personal and commercial circumstances.
Viscount Younger of Leckie
I hope that I may be allowed to finish. I urge the House to keep this innovative proposal as part of the Bill. We should not deprive individuals or companies of choice that may lead to more jobs and better company performance. Above all, it is good for growth in the UK. I beg to move.
Motion B1
Lord Pannick
As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 25”
Lord Pannick
My Lords, on 20 March, your Lordships’ House voted by a majority of 54 to exclude Clause 27 from the Bill. The reasons of principle and practicality as to why your Lordships’ House so voted remain valid. They were not altered by the vote of the House of Commons last week. Indeed, the debate in the House of Commons, which was limited by a timetable Motion to 45 minutes, barely addressed, let alone answered, the concerns which were expressed on all sides of this House on Report.
I remind your Lordships why your Lordships’ House voted to exclude Clause 27. I want to do so because the noble Viscount’s speech conspicuously avoided, if I may respectfully say so, all the concerns which the House expressed on Report. I commiserate with him because he has been asked to defend the indefensible.
The first point is that Clause 27 frustrates the very purpose of employment rights. We can, and do, disagree around this House and in the other place as to what the content of employment rights should be. That is entirely proper. They are debated and amended from time to time as we see the balance between employer and employee and as we perceive the public interest. However, over the past 50 years all Conservative and Labour Governments have recognised that an employer and an employee cannot be allowed to contract out of those employment rights which Parliament has seen fit to guarantee. That is because it would defeat the very purpose of conferring those employment rights. They are conferred precisely because freedom of contract—a voluntary agreement, as the Minister describes it—does not protect the worker or the job applicant who lacks basic bargaining power. To allow basic employment rights to become a commodity to be traded in the way that Clause 27 proposes would frustrate their very purpose. We would not envisage for a moment allowing a manufacturer of goods to contract out of his, her or its obligation to the consumer simply because the latter chooses, voluntarily, to pay a lower purchase price.
The need for protection in the employment context is most obvious in the case of the person who is seeking employment. The Minister in the House of Commons, Mr Michael Fallon, emphasised last week that a Clause 27 agreement is voluntary. The Minister repeated that statement today but, as he accepts, the employer may under Clause 27 advertise the vacancy on the basis that it will be filled only on Clause 27 terms. In the real world, outside the House of Commons, a person who is offered employment on Clause 27 conditions only is not voluntarily accepting such conditions. In the current economic climate, he or she will have no practical choice. I welcome the fact that the Government have removed one aspect of the unfairness of Clause 27—that is that a person refusing work on Clause 27 terms would have lost jobseeker’s allowance; a quite extraordinary position—but the fact that the Government have removed the most outrageous aspect of this proposal does not mean that what remains is acceptable.
The first objection is that the clause proceeds on a theory of voluntary agreement that frustrates the very purpose of conferring employment rights and is wholly unrealistic. The second objection is the damage that this clause will cause. A number of noble Lords from the government Benches—I repeat, from the government Benches—made this point on Report and in Committee far more powerfully than I could hope to do. The noble Lords, Lord Forsyth of Drumlean and Lord King of Bridgwater, both of whom served as employment Ministers, the noble Baroness, Lady Wheatcroft, the noble Lord, Lord Deben—all of whom I am very pleased to see in their places—and other noble Lords on the government Benches explained, from their extensive business and political experience, just how damaging it would be to industrial harmony to allow employers to buy off basic employment rights, how no sensible employer would consider this to be beneficial and how Clause 27 would do enormous damage to the cause of promoting employee share ownership. I am very sorry indeed that the Government have chosen not only not to listen to this House but not to listen to the wisdom and experience on their own Benches. The Minister must know that there is not just a lack of enthusiasm for this measure on his own Benches, there is a positive hostility to it that makes the Government’s insistence on pursuing this cause and this clause, in the word used by the noble Lord, Lord Deben, in Committee, “mystifying”.
The third objection to Clause 27 is that even the case which was advanced by the Government in the House of Commons last week does not begin to justify the broad scope of the clause. The Government’s case, as expressed last week by Mr Fallon, is that Clause 27 will encourage new and small high-tech companies which will be more willing to employ people with special skills. Even if noble Lords were to accept that assumption—and it begs a large number of questions —it would justify only a specific and narrowly drawn statutory provision tailored to the specific circumstances which are said to justify its enactment. The generality of Clause 27 inevitably means that it will be used and it will inevitably be abused by the Gradgrinds of this world. This concern was expressed on Report by the noble Lord, Lord Forsyth of Drumlean, in his powerful speech against Clause 27.
Lord Forsyth of Drumlean
My Lords, I hesitate to follow the noble Lord, Lord Pannick, who has set out very clearly and persuasively the points that we discussed before and which are causing concern to the House. I share his concern about the Commons debate, which, as he indicated, was guillotined. All the serious points that were raised in this House have not really been addressed by my noble friend. I exonerate him from any blame in that respect but they are important points. Many of them may be slightly peripheral to the substance that we are discussing here, which is about employment rights, but, for example, I remain concerned as to whether the estimate made that this could result in more than £1 billion disappearing in tax-avoidance schemes is correct. It is not clear to me whether the Treasury has found ways of ring-fencing this scheme, which provides for up to £50,000 of capital gains tax to be relieved, and whether this could not be used as a great tax-avoidance scheme.
I got a call this afternoon from a Mr Mark Florman of the British Venture Capital Association, who wanted me to know that all his members were absolutely behind this scheme and very much supported it. I said to him, “Why are they concerned about a scheme that enables people to give up, in effect, only their rights against unfair dismissal if they have been employed for more than two years and can have £2,000 worth of shares, tax-free? What conceivable interest can that be to the membership of the British Venture Capital Association?”. He said that it was keen to encourage share ownership and for employees to be involved in share ownership. I am sure that people on all sides of this House are keen on that concept. That is why I would strongly support any schemes that encouraged share ownership. However, this proposal mixes up two things—one is employment rights and the other is share ownership. It is not at all clear to me how it would be beneficial to either employers or employees to embark on this scheme.
Being a reasonable, moderate sort of fellow, I looked at where we had got to in this debate, and I looked at the vote in the House of Commons, where the majority was actually somewhat less than the Government’s majority. I looked at the short-term nature of this matter and thought, “Is it possible to find a way of making this look not more sensible but more practical?”. It seemed to me that the Government could have done two things. One was, as the noble Lord, Lord Pannick, pointed out, to ensure that people who were embarking on an employee shareholder contract were given independent legal advice that the shares were worth what the employer was telling them, on what the arrangements in respect of the valuation of the shares would be at the end of the period, and on what employment rights they were giving up and the consequences of that. That seems to be an entirely reasonable suggestion. Regarding the idea that people on low incomes can go and get legal advice on these matters or that issuing and putting values on shares in private companies is straightforward, I have to say to my noble friend that the entire investment banking industry is based on the premise that the valuation of shares is not straightforward.
There is also the idea that by giving people shares in return for employment rights the employee is in a negotiating position. However, they want a job and are not in a position to say no. Even if the provision was that the employer may provide legal advice at the request of the employee, that would not be enough because the thought would be, “It’s going to cost the employer £1,000 and if I say I don’t need the advice, I might have a better chance of getting the job”. The fundamental point was made by the noble Lord, Lord Pannick: the reason that we have employment rights—while I think they go too far in some respects—is that they even up the position between the employer and the employee. I am not particularly persuaded on this.
However, I thank the Government for at least taking up one point, which is to alter the guidance in respect of the jobseeker’s allowance. I was grateful to my noble friend for the letter that he sent us, but I have to say that amending the guidance to say that people who refuse to take up this voluntary agreement would not be found to be intentionally refusing employment is not a concession; that was just a mistake by the Government that they have now corrected. It is not right to present this as a concession. The concession that is needed is to protect the position of the employee against the unscrupulous employer, and independent advice is part of that.
My other thought was that the Government say that this proposal will be of interest to small firms. Some people suggested to me that there could be an exemption stating that the measure would apply only to small firms. However, on reflection, I do not think that that is the issue at all. This is a general provision for employees, and whether it is a big firm or a small one is not the key issue here.
I am also worried that my noble friend said in his opening remarks that it will not be easy for employers to get the shares back, but in his own guidance he makes it clear that these schemes can include a provision that requires the employees to give the shares back. What is the deal here? It is: “You give up your right to be protected against unfair dismissal. We will give you some shares that we tell you are worth a certain value, but you have no idea whether or not we are right, and when you get those shares you have to pay tax and national insurance on them if their value is more than £2,000. Then at the end, I, as your employer, if I decide to sack you, can take them back at a valuation that may be less”. That does not seem to be a scheme that will set the nation alight with people wishing to participate in it.
I have to say to my noble friend that this thing is not thought through. Not only that, but to those of us who have tried to be constructive—I was prepared to go along with this today if the Government showed some sensitivity to the concerns that have been so elegantly expressed by the noble Lord, Lord Pannick, and others—the Government seem determined just to railroad this through and not deal with the arguments. I, as a Conservative, perhaps a Thatcherite Conservative, am not identified particularly with employment rights, but I am proud that it was a Conservative Government that first introduced them because we recognise that there has to be a fair balance in the labour market.
I therefore say to my noble friend, can he not think again and at least offer us a concession in respect of the right to have independent legal advice paid for by the employer whose initiative this is, so that the employee is in a position to know exactly what they are being asked to sign up to?
Lord Flight
My Lords, I cannot match the advocacy of either the noble Lord, Lord Forsyth, or the noble Lord, Lord Pannick, but I feel that there is a saddening negativity towards these proposals. I am glad that everyone agrees.
A lot of the issues raised in this House have been addressed—in particular, the concern, which I completely supported, that it would be a nonsense if people were forced to give up the ability to claim their jobseeker’s allowances if they turned down the offer of an employee shareholder job. That is the most important issue of the lot. But there are other important issues where the proposals have been improved. I see the situation in the context of a half-way house between self-employment and standard, typical, large-corporation employment.
An interesting survey has been published by the RSA which finds that more than 30% of people in their 20s now want to be entrepreneurs, self-employed individuals who will have no protection rights whatever. In terms of giving up rights, there are three important areas, including unfair dismissal rights—which are not given up as regards improper grounds such as discrimination—rights to statutory redundancy pay, and certain rights to request flexible working hours and time to train. People retain a whole lot of other employment rights and the issue is not, by a long chalk, about giving up all your employment rights.
Of the concessions that have come from the Commons, the most important is that the Secretary of State will have power to regulate the buy back of shares. That does not amount to legal advice, which would be nice, but it does afford a protection there. I suggest that, in practice, what will happen if any businesses embrace these schemes is that there will be the usual sort of standard formula. If there is a buy back by the company, then there will be a prescribed price earnings multiple, or such like, on which to value them. That will unfold as time passes.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. I agree with his point about the tax allowance. If someone is awarded shares in the way that he has described and the value of the shares is, say, £20,000, will they then be liable to pay the tax and national insurance on that? Where will they find the money from?
Lord Flight
That is the very point that I made when we last debated the issue in this House. That is why I think the £2,000 limit is too low. The response to that is that it obviously depends on their tax rate. If people are accepting £10,000 worth of shares they may be able to find the tax which might be of the order of £2,000 to £2,500 on that award. It entirely depends. I also make the point that in more traditional entrepreneurial circumstances, which was my own experience, I had to put up the money myself and I had to remortgage my house to raise the money to start a business. I would like to see the limit raised, and I think for the scheme to work it will need to be raised, but we should not overstate the tax burden.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. Does that not then mean that the value of the employment rights you are giving up depends on how much money you are able to find in order to buy the shares?
Lord Flight
First of all, it depends on what is on offer. It is broadly for the company to decide the amount of employee shares that it is going to offer under this scheme. To repeat the point, the employment rights which are being surrendered, particularly as viewed by ambitious entrepreneurial types, are not perceived as of particular value. The grant of free shares is of value and, to the extent there is a tax bill, I wish it were lower, but the tax bill is not entirely outrageous. I suspect that the tax limit will be raised in due course.
It is easy to be negative and to pick holes in what has not yet been fully addressed. I would like to see some of the improvements that noble Lords have suggested. But I think to take a rather superior view of, “Oh, no, we really don’t want this”, is wrong. I think it should be given a try and the issues that need sorting out will be sorted out. There are substantial numbers of ambitious young people for whom the objective is not to work for the Civil Service or to work for Shell or Unilever and to have a secure job with a generous pension, but to have equity in the businesses they work for, to make that business work and to make their equity worth a considerable amount of money.
Lord Monks
My Lords, unfortunately, I was unable to be present at Report stage, but I was struck when I read in Hansard that the House of Lords was doing its job like it perhaps does not do enough in an admirable and exemplary non-partisan way, looking at the practicalities of this proposal, not looking for negativity but simply giving it some forensic examination, which has clearly not been done by many in the Government and many who supported it in the other place.
This proposal about shares for rights is implausible. It is difficult to see too many people showing any significant interest in it. If we want to abolish red tape, well, just look at this proposal. It is full of red tape. I believe it is also objectionable—the idea that somehow you can sell your rights or trade in your rights. It is very clear which rights you will lose. It is a lot less clear, for all the reasons that have been stated, what employees will get and how those shares will be valued.
The proposal is also perverse. In the Report stage debate the noble Baroness, Lady Wheatcroft, set out one example. If matters do come to redundancy, will the employer decide to get rid of those with shares who have given up their redundancy pay or those to whom the employer will have to pay redundancy pay? It could well be the employee shareholder who is first out of the door.
The advice that the House of Lords gave to the Government has been treated with contempt. It has just been brushed aside. That includes the advice given by distinguished former Conservative Employment Ministers who are loyal on nearly all occasions, but not on this one. That is not being negative. That is not looking for negativity. It was good advice that was given, it is good advice that is being given now and I hope that this time, if the vote goes the right way from the point of view of those of us who are critics, it will be listened to with a little more concern and consideration than it got last time.
The noble Lords, Lord Pannick and Lord Forsyth, have ably pointed out the fallacies and flaws in the proposal and I will not repeat those. However, I do not think that many employers will give it much of a second look unless there is some tax advantage which will no doubt come to light in due course. Some unscrupulous employers will do so and that is where the individual worker would need some source of independent advice about what they agree to and what they do not.
I find the position of the Business Secretary in this matter intriguing. He fought a battle against the Beecroft proposals, but let us remember—I am no fan of the Beecroft proposals—that he did not propose taking away rights to compensation for redundancy. He was talking about a single payment. It seems to me very strange and disappointing that the Liberal Democrats and the Business Secretary have let this clause slither through the processes of government in the interests no doubt of a deal with the Chancellor of the Exchequer. I hope for the Liberal Democrats’ sake that it is a good deal which compensates for their disgraceful agreement on this matter. I hope they will think again in the time that we have available and put this clause where it really belongs, which I believe is in the nearest recycling bin.
Baroness Warnock
My Lords, noble Lords may be somewhat surprised that I speak on this issue, but it so happens that I have spent a great deal of the past few months looking into employee shareholding and employee ownership and have had long discussions with Charlie Mayfield, who, as noble Lords know, is chairman of the John Lewis Partnership. He was consulted about this proposal and simply regarded it as laughable.
What kind of firms did the Government really have in mind when they invented this farrago—it seems to me—of nonsense? I believe that they had in mind the smallish high-tech firms that set up outside Cambridge, Oxford, Bristol and so on. They thought that all the people employed by this kind of firm were going to be high-tech experts and graduates of their local universities and that the company would be inventive and innovative and, when it got bigger, would probably sell itself off, having made a profit. I do not think, when this was invented, that the Government had in mind that large companies would really have any interest. In fact, I remember that on Report the Minister was reduced to saying, “Well, the good thing about this is that not very many people will take it up”. That seemed to be an extraordinary argument in favour of it. Does the Minister really think that this will be an option open universally to businesses, including retail and manufacturing ones, or is he still thinking, as I am sure the Government were at first, of these very small businesses where everyone starts off more or less equal—equally well educated, intelligent and able to get legal advice—and is anyway probably in it for the interest of the thing and its short-term life? Can the Minister answer that question?
Lord Deben
My Lords, the noble Lord, Lord Pannick, very kindly reminded the House of my words at an earlier stage, in which I used the expression “mystification”. My concern is that I start from rather a different position. I think that a kind of package could be put together that would represent that midway point between someone who was self-employed and someone who was fully employed, particularly in dealing with the kind of company that the noble Baroness, Lady Warnock, has just pointed to; indeed, I thought that was the intention. I am dismayed because I do not want to remove the possibility of a sensible experiment that would enable small firms, in return for shares, to recognise that, to use a phrase, “We are all in it together”. That seems perfectly respectable.
I could not go along with what was being proposed, as a matter of principle, until the change that has now taken place. I thought it unacceptable that someone should lose their jobseeker’s allowance because they had not entered into what ought, right from the beginning, to be a different kind of arrangement, which would have to be voluntary. I do not agree with the noble Lord, Lord Pannick, that, because the job would be advertised in this way, somehow or other it was not voluntary. There are lots of jobs that people decide they are not going to take because of the terms under which they are presented. I do not find that objectionable.
What I find so difficult with the Government’s proposition is that it seems that it will not work. Frankly, it does not matter much what we decide on this because I do not think anyone is going to take it up and I do not think it is going to happen. That makes me sad—not for the reasons of the noble Lord, Lord Monks, but because I actually think that there is a place for a system that would enable a partial involvement in the beginning of a small company, which would of course mean that you took some cognisance of the fact that it was a pretty rocky position and in return you got some sort of special advance. However, at every turn, we find that it does not quite work like that. All along the line, the sort of things that we might have liked do not seem to work out—not least, as my noble friend Lord Flight described, when it comes to the problem of how you pay for things and how you organise that. You begin to realise that this does not have the enlivening, enlightening and opening effect that the creators of this idea obviously thought it would have. I am not driven to the extremes of feeling that this is ghastly and awful thing, because I just do not think it is going to be taken up.
Lord Woolf
I apologise for interrupting and thank the noble Lord for giving way. However, does not everything he has just said, which I have listened to with great care, indicate that this is one of those situations where legal or financial advice from somebody competent is critical?
Lord Deben
The noble and learned Lord, Lord Woolf, puts me in the most difficult of positions. I have spent my whole life congratulating myself on being the only politician from Cambridge of my time who was not a lawyer, and therefore complimenting lawyers, or suggesting the need for legal advice, goes against the grain in a big way—but I have to say that he is right. However, that is not the only thing. The issue is how we make this a creative contribution to the development of small businesses rather than something that has become an argument not about that at all but about giving up employment rights, the need for legal advice and all those things. We did not start from the basis that we ought to have, which is what puts me into this huge position. I apologise therefore for not being enormously supportive. I still have to listen very carefully to decide quite how unsupportive I am going to be, but I say to my noble friend that I wish we could have turned this good idea into a good idea instead of turning this good idea into what seems to me to be largely not an idea at all.
Baroness Turner of Camden
My Lords, there are already in existence what I suppose you could call partnership schemes, where people can of course have shares and a partnership with a company without the necessity for the abandonment of employment rights. As this legislation stands at the moment, one cannot help feeling that this is a way in which the Government want to get rid of employment rights without appearing to do so by introducing a scheme under which the employee can be persuaded to voluntarily give up an employment right where they normally would not consider doing so because that would not be required.
I do not think that we can judge this on the basis that “We ought to have a scheme where people do participate”. Schemes like that are available. What is difficult about this is that the basis seems to be the abandonment of employment rights before the employee can get involved in any sort of share or partnership scheme. I think that that is what we object to very strongly; I, at least, have done so from the very beginning. It has always seemed to me that the Government themselves are not keen on employment rights. This is a way of getting rid of those rights without appearing to do so, simply by offering an employee something that really does not compensate for the loss of the very important employment rights that we have been discussing today. It is that sort of basis which is why I oppose this clause and why I fully support what the noble Lord, Lord Pannick, has said with great clarity. This is the situation that I take now, and I hope that the Government will be disposed to accept what we have said on this side of the House—indeed, on every side of the House—which is: do not proceed with this scheme. Not only will it not work, but it is not right and it does no good at all to employment and employment rights.
Baroness Brinton
My Lords, I want to start by thanking the Government for the concession on jobseeker’s allowance candidates and the fact that they will be not penalised, but I have to also agree with other colleagues on both sides of the House who have admitted that this is really the rectification of a mistake rather than a major concession. However, it is essential. It is critical because before it, any of the guidance to the DWP and Jobcentre Plus offices would have been unusable and unworkable for this system, and would have put candidates for such jobs at complete peril.
I am also pleased—I will not go into detail about this, but want to refer to it—that throughout the passage of this Bill we have consistently talked about the necessity of independent legal advice. That is not just for those who are currently unemployed and are being sent to interviews by Jobcentre Plus; it actually applies to anyone. I think of a young 23 year-old that I know who has just joined a high-tech company in Cambridge where I think hardly any of the employees do not have at least one degree and most have at least two. However, if you asked that 23 year-old about the way shares work, he would not understand them at all and would clearly need advice as well. Helpfully, the firm that he has joined has made sure that any new employee who gets access to the share scheme gets that advice, so there are some good examples around.
However, if this scheme does not offer that advice where there is an element of two tiers of employment, that means that such advice must be made available. Frankly, I agree with the noble Lord, Lord Pannick, and others who say that it is on a par with the formal legal advice required for compromise agreements.
Following the debate in the Commons last week, I shall focus on the Minister’s referral yet again to this being suitable for small high-tech companies, particularly in university areas and high-tech areas. Confession time: in the 1980s I was a venture capitalist, spinning ideas mainly out of universities, although not only Cambridge University, and that is one of the reasons why I have quite a lot of experience and knowledge of what is happening in those companies now.
It is quite clear that good, small high-tech companies already use employment share schemes, or share schemes for all their employees who come in right at the start. The reason why they do this is that they know it is going to be a very hard road to make the product successful, particularly if it has not even been developed yet. They know that as time goes on further rounds of money will be coming into the company, and that they will be diluted not just once or twice but to a very minimal amount. Therefore, £2,000-worth of shares on day one, which for argument’s sake might represent 10% of a brand new company, might actually end up being a tiny percentage once you have had three, four, or five rounds of venture capital and hedge fund money going in. As a result, an employee will have to wait a very long time before they see any benefit.
Again, having to pay for those shares up front is not just an issue for those who come from unemployment; it is an issue for those coming in at a very low starting salary who, in addition, have to give up their employment rights and are being told, quite frankly—in Cambridge, which I know quite well, everyone freely admits this—that it is extremely unlikely that you will see any return on any investment in the first 10 years of a high-tech company. If you do, then it is a real star and is to be applauded. However, the vast majority, 95% of firms, do not do that, and 90-plus% of the firms do not actually provide a return to shareholders because they are often sold at the point at which the shares are virtually worthless. So please can we stop deluding ourselves that small high-tech companies are perfectly suited to this? The good ones do it already, but why on earth would they then want to give up employment rights in return for an extra part of this very risky journey? It just does not add up.
I was slightly concerned when the Minister referred to self-employment for these sorts of firms. I understood from the chart that we have received with the Minister’s letter, for which I thank him, that they are outside employment law, and I think that the House would accept that. The references being made implied that self-employment might be an option for those working for the firm, and I think that would definitely be against HMRC guidance; if somebody is working principally for a firm then they should not be self-employed. I am concerned that we are perhaps beginning to develop a dialogue of a third tier of employment, and I hope that the Minister will be able to make it absolutely clear that self-employment is only for those who actually have a range of clients and customers and do not work for just one firm.
The noble Lord, Lord Deben, talked about how this might be a point for experimentation, but I think the experiment is already happening and has been happening through the examples that I have been giving, without the need to give up employment rights. In summary, I believe that this legislation is unloved, unnecessary, unwanted and, frankly, likely to be unused. I am concerned that this is not the best use of Parliament’s time. I am in the same position as the noble Lord, Lord Deben; I do not like voting against my own Government, but I just feel that there are too many flaws in this. It is not a hopeful scheme for the future; they are there working at the moment. Please, let us not compromise employment rights in return for shares that are very unlikely, for the vast majority of employees, to be worth anything at all.
Lord Forsyth of Drumlean
Before the noble Baroness sits down, I wonder if she could help us with the question that the noble Lord, Lord Monks asked: what exactly is the nature of the deal that has meant that the Liberals have taken a position that is well beyond Beecroft and which they were previously opposed to?
Lord Bilimoria
My Lords, when I first heard about this scheme, my initial reaction was to give the Government the benefit of the doubt because it encourages share ownership and enterprise—all good intentions. However, I have listened to the arguments of the noble Lords, Lord Pannick and Lord Forsyth of Drumlean, and to the noble Lord, Lord Deben, who has great relations with his coalition partners, summing it up by saying, “It won’t work”. The noble Baroness, Lady Brinton, has said the same.
I cannot understand this. I have started businesses and run businesses at different levels and I have given shares to my employees, so all this about £2,000-worth of shares—even the figure itself is baffling. Who on earth is going to go through all this for something as incentivising as £2,000-worth of a share incentive, although I know that that is a minimum figure, and then to have to get legal advice? Do people understand the practicalities of offering legal advice if every time someone applies for a job they have to get legal advice to go for the share scheme? Then the question was asked: what if these jobs are offered and the Government say that they are voluntary only? If a job is offered as an employee share job only, though, that is not voluntary. As an employee you either take that job on those terms or you do not. I think that the Government have the best of intentions, and they say that there will be no compulsion, but I cannot see this being taken up.
What research did the Government do before they came up with this scheme? We have heard from the noble Lord, Lord Forsyth, that Mark Florman says his members think that this is a great scheme. Did the Government check with Mark Florman before they proposed this scheme? Now the noble Baroness, Lady Warnock, tells us that Charlie Mayfield, who I respect greatly as one of the most successful chief executives in this country, running the John Lewis Partnership, says that this is laughable. That is the reaction of serious business to this.
Lord King of Bridgwater
My Lords, I think I am not the only Member on this side of the House who feels some embarrassment at finding ourselves in this situation. As has been said, particularly by the noble Lords, Lord Pannick and Lord Monks, this House passed a pretty categorical vote to suggest the omission of Clause 27. It included, among others, a previous Chancellor of the Exchequer—his name has not been mentioned here but he voted against it—and a former Cabinet Secretary. It was not the usual suspects causing trouble in the back reaches of the parliamentary process.
I thought that there was not much new to be said but I credit the noble Lord, Lord Bilimoria, for bringing a few additional points into this debate that I think are very relevant. I join in the recognition of what has been described, rightly, as a correction of a previous mistake; none the less, the Government have corrected the position over the jobseeker’s allowance. However, some of us were waiting to see the Government’s serious response to the very major criticisms that were made a month ago on Report. This House’s duty of revising, amending and inviting the other place to think again was carried out, and the Government were given time to consider how best to respond.
My good friend Mr Michael Fallon, who had the responsibility of introducing this determination to disagree with the Lords in their amendment, said that it really was entrepreneurs on one side and employment lawyers on the other—not just the noble Lord, Lord Bilimoria, but a few others of us have had some small involvement in industry, employment and entrepreneurial activity over the years. I was interested that the noble Lord, Lord Forsyth, referred to the director of the British Venture Capital Association. I was the director of a leading venture capital investment trust for a number of years and I do not think that a single person I knew in that industry would support it or think that it might be a good idea.
I understand entirely why the noble Lord, Lord Flight, made the comments that he did because they bore out and illustrated the point made by the noble Baroness, Lady Warnock: who is this really intended for? The noble Lord, Lord Flight, will recognise that he has a background in and vast experience of a world where people do not think first when they go into employment, “What are my rights?”. They are thinking, “What are the opportunities for me here to really earn a substantial reward?”—as we know, a number of them earn very substantial rewards indeed. I have to say to him that it is quite difficult to stand up, in the ping of a ping-pong, when we are meant to have finished our revision and amendments, and say there are a number of things that now need to be sorted out. That is not acceptable.
I disagree with one point made by the noble Lord, Lord Pannick, that this will do great damage to industrial relations. I do not think it will at all, on the grounds that the noble Lord, Lord Deben, mentioned. I do not think that a single major company will touch it and it seems absolutely inconceivable that you could try to introduce this status into any major company. If some of your employees are entitled to redundancy pay and some are not, and then you get a downturn in trade and you are determining who should be kept, and if one of those people who does not get redundancy pay then gets dismissed and is told that he does not have a claim for unfair dismissal—as I understand it; like my noble friend, I am not a lawyer—he would immediately have a claim under discrimination. The idea that you ease the employer’s burden and prevent it being drawn into the courts is of course not so.
I certainly support the Government’s ambition to see what we can do to reduce unnecessary and undue burdens on employers, which certainly on occasions prevent the growth of employment. There is no higher objective at the present time, in our very difficult economic situation in the world when jobs everywhere are in very short supply, than doing everything we possibly can to encourage employment. However, that does not mean that we must lose our good sense and go for a scheme that someone has dreamt up if we see that at the end of the day problems will arise.
I had hoped that we would see some new approach to the issue. If the Government are absolutely committed to this idea and trying out this new approach to employment and the creation of jobs, it seems without question that people will be asked to address questions that would test quite sophisticated advisers in this field—the noble Baroness, Lady Brinton, was absolutely right about small start-up companies full of incredibly clever young men and women who have particular technical or other skills but no financial experience. Has my noble friend got nothing to say about whether independent advice, which would be paid for by the employer, should be available to people who find themselves in that situation? If the Government are not prepared to move in that direction, I will find it impossible to support their position.
Baroness Wheatcroft
My Lords, my noble friend Lord King mentioned a degree of embarrassment at finding himself in this situation, which I certainly share. At least those of us who are opposed to this legislation are not alone. The Financial Times, that great bastion of employee rights, ran a leader the day after the last debate in this House in which it said that this legislation contained,
“little to like and a lot to fear”,
and it advised strongly against progressing with it, saying that if this clause went ahead,
“employee share ownership may begin to be perceived as a shortcut to strip workers of their rights”.
That is not what any of us in this House want to see. We know that employee share ownership is a good thing. We want to support the Government in everything they can do to spread it, but this clause is not the way. The number of ways in which this clause could backfire has been enumerated this afternoon. Not much attention has been paid to the potential tax avoidance involved. It has been mentioned, but the Office for Budget Responsibility itself put a label of around £1 billion on the costs that might be in there. Is that really what the Government want to see happen? How is that compatible with the current agenda of trying to cut back, quite rightly, on tax avoidance?
It is the way in which this clause could detrimentally affect the idea of share ownership that causes me the biggest problem. It might not be big companies that will use it, and it is a very strange defence of a piece of legislation to say that hardly anybody is going to use it. I have heard that rather often and it seems an odd way to go about government business. There will be unscrupulous companies below the FTSE 250 that see this as a way of getting the labour force that they want on the least good terms. That is not going to encourage good employee relations. We want to do what my noble friend Lord Deben referred to and encourage the feeling that we are all in this together. If we are to go for growth, getting that sort of motivation will be important. Depriving people of basic rights is not the way to do that.
There is a potential exception for start-ups, where everybody starts off in the same boat and you do not risk this idea of a two-tier scheme of employees. Small companies probably need a bit more flexibility. They already have two years in which they do not need to worry about tribunals or redundancy, but they might need a little longer than that. In that case, perhaps we might ask my noble friend the Minister once more to see whether he can persuade the other place and the Government that this clause should be very narrowly restricted in its implications and application. As a clause that creates something open to any business it is potentially very dangerous.
We have also heard about the problems of valuing the shares. In his valiant attempt to defend this proposal, my noble friend Lord Flight said that we might well reach a stage where the Government have to stipulate the price-earnings ratio on which these shares would be sold. This is not the role that I wish to see my Government undertake. It is fraught with problems. This entire clause needs another rethink, even at this late stage.
Lord Adonis
My Lords, the noble Viscount has been a Minister for a short time only, but I think I speak for the whole House in recommending that he be promoted to an earldom for services to masochism. We have now debated this proposal for twice as long as the House of Commons saw fit to devote to it last week. In the hours of debate in this House, there has been one Member only, besides the Minister, who has wholeheartedly supported this proposal, and we pay great tribute to him: the noble Lord, Lord Flight. Even he sounded a note of equivocation today, saying that he hoped that the many problems that there were still with the scheme could be “ironed out” while it was being implemented. This is not good advice to legislators on how we should conduct our business.
However, I am grateful to, or perhaps sorry for, the noble Lord, Lord Flight—because it weakened his case—that he did not repeat the argument that he used last time, which was that we did not need worry about the £1 billion of potentially lost tax revenue, to which the noble Baroness referred. He said:
“The Treasury will therefore not lose tax revenue as a result of the tax arrangements; it will merely not get as much as it might otherwise get”.—[Official Report, 20/3/13; col. 622.]
I am sure that is hugely reassuring to HMRC and to those of us who are loyal taxpayers and who do not need to worry about the fact that there is no money to pay for anything, because it is simply revenue that the Treasury might otherwise not have got.
Viscount Younger of Leckie
I thank noble Lords for their contributions to this debate. I reiterate that the Government would like to give individuals and companies more choice in how they discuss and agree employment contracts. The employee shareholder status provides this additional choice. I will start by addressing the issue raised by the noble Baroness, Lady Warnock, about who the policy is aimed at. She asked, in effect, whether anybody would want this employment status, and who would want to employ an employee shareholder. These themes were raised also by my noble friends Lord Forsyth and Lady Brinton.
I clarify again that we understand that the new employment status will not be appropriate for all companies and will not be taken up across the board. It will simply add to the options and flexibility available to companies and individuals in determining their employment relationships in the same way that workers or employees, part-time or permanent staff, are not suitable for all companies. We expect that the new status will probably appeal mainly to fast-growing, small, start-up companies and individuals, as this is the level where employment rights are seen to impact the most. We have never said that the take-up will be widespread. We have always said that it would apply to a small number of companies, should they wish to take it up.
My noble friend Lady Brinton again raised the issue of who this might apply to. She cited the Cambridge example. She is quite right that companies that are likely to take this up are those that are new. They are likely to be making products that they want to be successful in the long term. She is right to say that this can be an extremely long road. However, she is taking a particularly negative view of the opportunity for employee shareholders. If I heard her correctly, she said that employee shareholders would have to pay for the shares up front. That is not the case. They will be given the shares, which will be free, even though, clearly, they will have to pay tax on them.
My noble friend Lord Forsyth raised the issue of tax, and the cost of the new status. The Office for Budget Responsibility has stated that in the long term the policy may cost up to £1 billion, but that relates to periods beyond the 2020s. It is simply not possible to be certain about costs so far in the future. The noble Lord, Lord Adonis, also raised this issue. Moreover, the tax rules will contain protections to prevent abuse—again, this issue was raised by several noble Lords—such as serial use of the scheme, and rules to ensure that those who have a material interest in the company and who thereafter can influence decision-making will not be eligible for the tax advantages. The Government will keep the rules on tax under review. I hope that provides a measure of reassurance.
The noble Lord, Lord Monks, who is in his place, raised the issue of Beecroft. This familiar story was raised in Committee and on Report. A number of noble Lords suggested that this was Beecroft by the back door. It is not. The new employee shareholder status is different from the no-fault dismissal proposal. Individuals will become shareholders of the company at the start of the employment relationship. This is an important benefit conferred by employee shareholder status. Unlike in the case of no-fault dismissal, the employee shareholder status will be agreed between employers and individuals in contractual negotiations. Employers will also be free to offer improved contractual terms such as contractual redundancy payments in an employee shareholder contract.
The noble Lord, Lord Myners, raised the issue of share buyback. He asked whether in effect a company could force an employee shareholder to sell back their shares. A company may require an individual to sell back their shares as a condition of the shares. However, this type of restriction will affect the value of the shares, which the company must assess when granting the shares and attaching restrictions. This comes back to what I said earlier about negotiations needing to take place in advance of the contract being signed by both the employee shareholder and the employer.
The noble Lord, Lord Pannick, raised the issue of independent advice, as did a number of other noble Lords, including my noble friend Lady Brinton. We do not require a person who is moving from employee status to worker status to be given legal advice before becoming a worker. Therefore, it is not clear why we should require legal advice to be given when an individual moves from employee to employee shareholder status—a status that carries far more employment rights than that of the worker. Companies are not required to provide independent financial advice to people who are thinking of becoming employees or workers, and employee shareholder jobs are just like worker and employee jobs.
The Government will provide guidance on gov.uk about the new status in the same way that they provide guidance about employee and worker employment statuses. Using this information will help individuals to determine whether the employee shareholder status is right for them. I say again to my noble friend Lord Forsyth that the situation of individuals taking up employment with employee shareholder status is distinctly different from the often challenging and difficult discussions that can take place, and sometimes need to take place, to determine settlement agreements at the end of an employment.
The noble Lord, Lord Myners, raised the issue of general advice on complex articles of association. Our guidance will make clear to both employers and employees the sorts of issues to consider before making a decision. The guidance, as I mentioned earlier, is in draft form and we continue to welcome views to improve it.
Lord Forsyth of Drumlean
On this point of the valuation of shares, could my noble friend deal with the point that was made by the noble Lord, Lord Bilimoria, about liquidity? It is all very well to reach a theoretical value of shares, but the value is actually in what people are prepared to pay for them. In small private companies where there is no liquidity, how will you deal with that?
Viscount Younger of Leckie
It remains the case that these are discussions that must take place between the employer and the employee. Again, it is not for the Government to prescribe or give advice in this respect. That is a consistent theme that I have taken.
On the same theme of shares, as raised by my noble friend Lord Forsyth, we recognise that there may not be a market for private company shares and therefore it is important that, where appropriate, a buyback clause will be useful to both the employee and the employer. This is an issue that the noble Lord, Lord Myners, raised as well. We introduced in the other place a power to bring forward the regulations that would govern these buyback clauses in the event that employers were behaving unscrupulously. This would prevent employee shareholders being forced to sell back their shares at an unnaturally low price.
The noble Baroness, Lady Turner of Camden, made an assertion, or perhaps it was an accusation, that the Government want to remove employment status. I reiterate what I mentioned both in Committee and on Report, that this is not about removing rights, it is about creating a new employment status that offers a different set of rights and a mandatory share ownership. The status, I say again, is not compulsory for companies to use, and it will only be suitable for those companies that want to share ownership with their workforce. We must remember that employee shareholders will retain the majority of employment rights, including, for example, automatic unfair dismissal rights and the right to be paid the national minimum wage. We have consistently said that the new status will not suit all people or all companies. This is very much a common theme. However, for those who choose to use it, the employee shareholder status offers more flexibility and allows greater risk- and reward-sharing between people and companies.
My noble friend Lady Wheatcroft and others raised the issue of whether the employee shareholder scheme is open to tax avoidance, an issue that I touched on slightly earlier. It is a key aspect of the policy to allow employee shareholders to share in the success of their employers without paying capital gains tax on at least some of their gains. However, to guard against abuse of the tax exemption, there are several rules that limit the number of shares that can be exempt. For example, the rules will prevent repeated consecutive use or multiple simultaneous use of employee shareholder status to get around the limit. In addition, anybody who controls, alone or with other connected persons, 25% or more of the voting power in the company, will not be able to receive exempt shares. We will not allow people such as spouses or children who are connected to individuals who control 25% or more of the company to benefit from the exemption.
We have listened to the concerns and, as was mentioned earlier, we have acted to ensure that jobseeker’s allowance claimants will not be penalised if they decide not to apply for or accept an employee shareholder job. Together with protections for employees, our announcement about jobseeker’s allowance policy means that no claimant or employee can be forced to accept this status. I thank many noble Lords for their support in this particular respect.
The new employment status gives ambitious, talented individuals with entrepreneurial spirit an opportunity to share in the risks and rewards of being part of their employing company. I want to say something important in these closing stages. I have clearly listened this afternoon and I have heard the strength of feeling in the House towards this particular clause. I ask the House to support the Motion to agree with the Commons’ position that Clause 27 be retained. If the House does not support that Motion, I will ensure that the strength of feeling in the House today is conveyed to my ministerial colleagues.
Lord King of Bridgwater
Can the Minister confirm that the Government have not felt able to move towards a clause on the issue of availability of independent advice?
Viscount Younger of Leckie
That is correct. I did not make any movement in that direction. I reiterate again to my noble friend that I am not immune to the strength of feeling in the House this afternoon. I have clearly listened and I will be conveying all comments back to the other place and to my ministerial colleagues.
Lord Pannick
My Lords, I am grateful to the noble Lord for the skill and courtesy with which he has presented the Government’s case. I am also very grateful to him for his frank acknowledgment of the strength of feeling on all sides of the House in relation to Clause 27. Of course he will appreciate that only if this House stands by its previous decision and asks the Commons to think again will the Government and the Commons do so.
Your Lordships can rarely have heard a debate in which so many noble Lords with business experience and political experience on all sides of the House have carefully and eloquently explained why a Government proposal is either wrong in principle, or damaging in practice, or unworkable, or misses its target, or unbalanced, or all of the above. Noble Lords clearly have a variety of reasons for criticising Clause 27. It is striking indeed that no speaker this afternoon apart from the Minister was supportive of Clause 27 in its current form. Even the noble Lord, Lord Flight, who complained of what he described as “negativity”, said that the clause could not work if the shares were worth only £2,000 at the date of issue and accepted that other problems needed to be addressed.
The noble Lord, Lord Deben, asked rhetorically for advice on what the noble Lord should do, given his belief that a positive proposal in this context could be brought forward. It is not for me to advise the noble Lord, Lord Deben, but if I were doing so I would suggest to him and to other noble Lords who may be in the same position that the answer is clearly to reject the half-baked scheme currently before the House in the hope that the Government take this idea back to the drawing board—or perhaps, to use the expression of the noble Lord, Lord Forsyth, on Report, back to the bath in which he suggested that this idea was dreamt up—so that they can reconsider whether in this Bill, or in some future Bill, a more thoughtful and workable scheme could be brought forward.
The concern about Clause 27 is not politically partisan. The noble Lord, Lord King of Bridgwater, and the noble Baroness, Lady Wheatcroft, referred to a measure of embarrassment in their position. They should not be embarrassed. It is to the great credit of their Benches that so many noble Lords have spoken out and voted in favour of deleting Clause 27 or abstained on Report. I of course appreciate that it is not easy to do so, but it is in no one’s interest for this proposal to be enacted in its current form.
The Government and the House of Commons have so far given the most cursory consideration to the concerns expressed on all sides of this House. They should be asked to think again. I wish to test the opinion of the House.
Enterprise and Regulatory Reform Bill
(11 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:23 - Division on Motion A1 - Ayes: 210 / Noes: 180 - Motion A1 agreed.
22:11 - Division on Motion C1 - Ayes: 181 / Noes: 168 - Motion C1 agreed.
23:08 - Division on Motion agreed. - Ayes: 112 / Noes: 170 - Motion D1 disagreed.
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 35 for the following Reason—
Baroness Stowell of Beeston
That this House do not insist on its Amendment 35, to which the Commons have disagreed for their Reason 35A.
Baroness Stowell of Beeston
My Lords, in moving Motion A I will speak also to Motion B. We are now discussing the provisions in the Enterprise and Regulatory Reform Bill, which seek to reform the remit of the Equality and Human Rights Commission. I will turn in a moment to the specifics of the Motion and the amendments before us. First, let me remind the House why we are discussing the EHRC, or what we often more commonly refer to as the commission, Britain’s designated equality body and “A-rated” national human rights institution.
In May last year, we set out our plans to support the commission to become the valued and respected national institution that we all want it to be. Even the commission’s many supporters in this House have acknowledged that the first few years of its existence were anything but trouble free. I am not going to go into the detail of these problems again today, but I do want to be clear that the Government’s motive in making changes was and is to secure a successful future for the commission so it is in the strongest position possible to do its vital work.
We are already making progress. In the past three months alone we have agreed with the commission a new governance framework document and budget, both of which ensure that the commission is able properly to fulfil its important duties and protect its operational independence. The new chair, the noble Baroness, Lady O’Neill, and other members of the new board have now been in post for several months and are building on the work of their predecessors. We believe that the commission is going from strength to strength. Indeed, the working relationship between this Government and the commission is marked by a mutual respect and clear understanding of the distinct roles that each is there to fulfil and how we can work together towards a fairer society. I believe that this will be evident when we come to the next debate on caste discrimination.
Having given that introduction, let me move to the Motions in front of us. In the ERR Bill, the Government originally put forward two legislative changes that we believe will underpin the positive changes which our non-legislative reforms have already helped to bring about. This House rejected the Government’s amendments on Report, but the other place has disagreed.
First, we are asking noble Lords not to insist on their Amendment 35, which would remove from the Bill the repeal of Section 3 of the Equality Act 2006, what is otherwise known as the commission’s general duty. Section 3 imposes a general duty on the commission to perform its functions with a view to “encouraging and supporting the development” of a fairer society and it sets out five ways in which it should do this. As I have made clear during all of our debates, the statement included in that general duty is one we can all support because we all want a fairer and more equal society. However, it is this Government’s view that making this a statutory duty for the Equality and Human Rights Commission, in addition to its specific responsibilities to promote and to protect equality, diversity and human rights, dilutes the clarity of purpose necessary for it to be effective and successful.
The Government are clear that the commission’s core purpose is what I have just said—to promote and protect equality, diversity and human rights. That purpose is underpinned by the detailed duties contained in Sections 8 and 9 of the Equality Act 2006. The repeal of the general duty does nothing to affect the commission’s ability to fulfil these duties. It is our view that its focus on them will enhance its performance.
Baroness Campbell of Surbiton
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 35”.
Baroness Campbell of Surbiton
My Lords, it is with great sorrow that I find myself here at ping pong, seeking to reinstate Section 3 of the Equality Act 2006. I really do not do this lightly. I know that a challenge to the Government at this stage should be made only when it is absolutely necessary and all other routes have been exhausted. I had hoped that the Government would listen to the many and exceptionally well considered arguments made by all but two noble Lords on Report. I expected something more than a blanket no. That is why, having explained my reasons to the Minister last week, I have retabled the amendments that were overturned in the other place.
We have yet to hear of a single example of how the commission’s capacity to act as the guardian of equality and human rights in Britain will be improved by repealing the general duty in Section 3, a duty which gives a holistic direction to the commission based on principles of dignity, respect and fairness, and takes it to, but not beyond, legal enforcement in helping society change for the better. The Equality and Human Rights Commission itself has said that it now has sufficient focus and, in the absence of robust reasons for removing it, Section 3 should remain.
I ask your Lordships to recall where the duty came from and to consider where its repeal may take us in the future. Twenty years ago today, Stephen Lawrence was murdered by a group of young men for no reason other than the colour of his skin. The Metropolitan Police made a catalogue of errors in the investigation into his murder. Our criminal justice system failed Stephen Lawrence, and it failed his family in their quest for justice. It is a sad truth that it took this tragedy to create a moment of enlightenment. The inquiry, led by Sir William Macpherson, identified that racial discrimination could not be seen as the lone action of a few bad apples. It was part of the institutional culture of the Metropolitan Police.
That insight led to the sea-change in our approach to equality law and the structural support to promote and enforce it. The general duty embodies this shift in thinking. The role of the commission is not simply to seek compensation for those who experience discrimination. As Age UK has noted, it is to pursue cultural change to prevent such discrimination from occurring in the first place. This is not only about racial discrimination. It is about institutional discrimination and violations of human rights in all their guises and across society—for example, in parts of the NHS and our care system, as the EHRC demonstrated in its inquiry into older people’s treatment at home. It is also widespread in the criminal justice system and local authority practice, as the disability hate crime inquiry revealed. It is rife in the exploitation of migrant workers, exposed by the inquiry into the meat processing industry.
Ministers have argued that the general duty is symbolic and aspirational, as if this were enough to dismiss it out of hand. The general duty symbolises our commitment to preventing the kind of injustice faced by the Lawrence family, or the routine abuse of disabled young people in institutions because of indifference and cruelty. It aspires to a society founded on dignity, respect and equality—notoriously absent in these cases. However, contrary to what Ministers claim, the general duty is not, in fact, merely symbolic. Its repeal could have major implications for the commission’s role in monitoring equality and human rights. In the other place last week, the Minister told MPs:
“We are also changing the commission’s monitoring duty to ensure that it reports on its core functions, rather than on the state of society generally”.—[Official Report, Commons, 16/4/13; col. 217.]
At present the commission is required to monitor Britain’s progress towards the aims of the general duty. In so doing it holds up a mirror to society, as it did in its seminal report, How fair is Britain?. As the Minister indicated, if the general duty is repealed, the monitoring duty will be fundamentally changed—it will be limited to holding up a mirror to itself and asking only, “How effective is the commission?”. This is why Amendment 35 relating to Section 3 and Amendment 36 relating to Section 12 of the Equality Act 2006 are inseparable and must be considered as one.
The Minister went on to say that changing the monitoring duty,
“will also enable the EHRC to gain the respect hon. Members want it to have as our equality body and national human rights institution”.—[Official Report, 16/4/13; Commons, col. 217.]
This suggests a dangerous misunderstanding by the Government of the requirements of European Union law and the United Nations standards on the status and mandate of national human rights institutions. The likely effect of these proposals would be to prevent the commission, and therefore the UK, from complying with the requirement for equality and human rights bodies independently to monitor the national situation.
This could have very serious consequences. In the light of the Government’s package of reforms the international accreditation committee for national human rights institutions has announced that it will re-examine the commission’s status next month. I do not need to spell out to my noble friends the impact on the UK’s moral authority abroad if, as a direct consequence of these reforms, the commission were to lose its present A-accredited status. Such a development would no doubt be seized on by countries such as Zimbabwe and Iran. At a time when the UK is seeking a seat on the Human Rights Council that is not a risk we should be taking. I am sure noble Lords would agree that we must practise what we preach and lead by example.
The commission’s role as an agent of change matters to millions of people in this country, whether they are an elderly person in hospital, a woman fleeing a violent partner or a black teenager and his friend waiting for a bus. In a civilised society such as ours people in these vulnerable situations should feel confident that our institutions will accord them dignified and fair treatment as equal citizens. Justice is poorly served if our commitment to equality and human rights extends only to offering compensation after an event. For many, it is simply too late.
Today, of all days, we should remember why we put these measures in place and not be so foolish as to believe that it could never happen again. That is why, for the second time, I feel we must send these urgent messages to the other place that the general duty and the duty to monitor its aims must be taken very seriously and must stay. I beg to move.
Lord Low of Dalston
My Lords, I was sorry not to be here for Report stage of the Bill but I have read the debate carefully. It left no room for doubt as to the strength of support right across your Lordships’ House for retaining Section 3. In addition to the powerful and principled advocacy of the noble Baroness, Lady Campbell, and others, I attach particular importance to the comprehensive demolition of the Government’s case in legal terms by my noble and learned friend Lord Lloyd of Berwick.
Your Lordships will be pleased to hear that I do not propose to go over again all the substantive arguments again, which have been so comprehensively crawled over in Committee and on Report, about the value of duties that cannot be enforced in a court, for example, whether there is a place for the declaratory in legislation, the value of a unifying link between equality and other fundamental human rights—I was rather surprised that the Minister sought to deny that one in her wind-up—the fact that there is nothing in Section 3 that suggests or implies that the commission is to be solely or uniquely responsible for encouraging and supporting the goal of an equal society, the negative message sent by removing the general duty and so on. I think that these arguments have been comprehensively won.
Baroness Thornton
My Lords, I will make some very short remarks because the noble Baroness, Lady Campbell, and the noble Lord, Lord Low, have more than adequately explained why we find ourselves in this rather unfortunate position—I agree with the noble Baroness, Lady Campbell—of asking the Government to look again and asking another place to take this back.
It is important also to say that one thing has changed since we discussed this in Committee and on Report. That is that the EHRC has given this matter some further reflection. I congratulate the noble Baroness, Lady O’Neill, because it is a sign of the maturity of the organisation that it has changed its view on this matter at least a small amount. I will read out a statement that was issued, and that is about the only thing I will say. The statement about the repeal of Section 3 on its website says:
“However, the debate in the Lords and commentary by parties have underlined the importance which is attached to the general duty. Many people clearly believe that, both in terms of the perceived mission and role of the Commission, and the coherence of the legislation, it is valuable to retain the general duty. Unless the government can provide additional robust reasons for removing the general duty in the current situation, our analysis suggests the case for removing the Lords’ amendment in the Commons has not been made. The Commission therefore continues to support retention of the general duty and maintaining the position established by the Lords”.
We know from the previous debates and from listening very carefully to what the Ministers in this place and in the other place have said that there is actually no robust case for the repeal of the general duty. Your Lordships’ House took that view by a majority of over 50 when this was discussed on Report. I put it to your Lordships’ House that the one thing that has changed is in favour of the retention of the general duty, and I hope that the Minister will now weigh this issue in the balance and agree to leave Section 3 in place. Indeed, if the Government wish to review Section 3 or any other part of the equalities legislation then that should be done with prior consultation and the involvement of the Joint Committee on Human Rights. We on these Benches do not believe that that is desirable or necessary, but if it were to be done it should be done in a proper way, not as part of a Bill that addresses regulatory burdens on business and enterprise.
Lord Lloyd of Berwick
My Lords, the Minister has not advanced this evening any of the arguments that she advanced at the beginning of January for repealing Section 3 of the 2006 Act. I will therefore leave those arguments on one side.
Instead I will turn to the arguments advanced by the Minister in the other place. He asserted boldly that Section 3 of the 2006 Act should be repealed because it was not a core purpose of that Act. With great respect, that is exactly what it was. Section 3 was in a sense the core purpose of the 2006 Act, that purpose being to bring together for the first time in legislation equality rights with other fundamental human rights. The specific duties under Sections 8 and 9 were to be the means of bringing about that core purpose. That was the very point made by Professor Sir Bob Hepple in his report. He said that Section 3 is important because it states for the first time what he called the “unifying principle”. It is most unfortunate that the Minister in the other place, when he came to his reply, did not reply to that argument or to any of the arguments advanced in the other place; sound arguments and convincing arguments, they were all, unfortunately, left aside because there was no time to deal with them.
There is a hint, elsewhere in what the Minister said, that Section 3 is undesirable because it would, as it were, take the commission’s eye off the ball to the exclusion of the important duties under Sections 8 and 9. There was never much danger of that. In any event, the commission has now made it clear, if I am right, that it would now welcome the retention of Section 3. If that be so, surely we should leave it at that.
It is not often on these occasions that we should resist the view of the House of Commons at this stage of ping-pong. However, the Government have not given one single solid reason why we should repeal a provision that both Houses were in agreement on as recently as 2006. As I have said, the Minister did not deal with any of these arguments in his reply. We should give him another opportunity of doing so, and another opportunity to the other place to see if they agree with those arguments or not. For that reason, I will vote for the amendment in the name of the noble Baroness, Lady Campbell.
Baroness Hussein-Ece
My Lords, I pay tribute to the work and the steely determination of the noble Baroness, Lady Campbell. She has been inspirational in her continuing support for what she believes to be an important principle and issue. Many of us share her passion and determination.
It is very poignant that today we are again debating the general duty of the Equality and Human Rights Commission and its principle on the 20th anniversary of the terrible racist murder of 18 year-old Stephen Lawrence, and on the day of the memorial service that was held this afternoon in his memory, which I understand was attended by the Prime Minister and others.
Last month at an event to launch a book about the Macpherson inquiry, Doreen Lawrence said that, as a mother, for 20 years she had not been able to grieve and find closure because she had been forced to fight for justice, year after year. There are still individuals out there today who were involved in this murder and who have not been brought to justice. She wrote to the Prime Minister last November asking that he does not row back or seek to water down hard fought equalities legislation that all political parties came together to put on the statute book so recently to protect those who need protecting.
Huge progress has been made over many decades, particularly since, for example, my own family came to the United Kingdom, when racism and discrimination was rife. However, there is still much to do to ensure that our society becomes more equal, and that we maintain and build on such positive work, particularly since the Macpherson inquiry and its findings. It is irrefutable that more than a decade later, the Macpherson inquiry can rightly claim to have led to an overhaul of Britain's race relations legislation which created much stronger anti-discrimination powers that can be found anywhere in western Europe. Attitudes towards racism and policing have now changed as a result. However, there are still very many people and communities who need to be protected and encouraged to achieve their potential and not be limited by prejudice or discrimination. We need the commission to have the tools, the ability and the duty to monitor the progress in our society.
Lord Cormack
My Lords, whether it is a runner wearing a black ribbon in a marathon or a coffin draped in the Union flag, there is a real and proper place for symbolism. If this is all that we are debating, why on earth are we removing this particular symbol? In our last debate at Report, I abstained, feeling slightly guilty, I have to admit. One reason I abstained was that the commission had not come out with a clear, unequivocal statement such as has been quoted by the noble Baroness from the opposition Front Bench this evening. If the commission believes that having this symbolic duty does not retard its work or its progress, and if it believes that it is a declaration—and there is room for the declaratory as well as the symbolic—and that this is helpful to its work, with all the respect that I have for the noble Baroness, Lady O’Neill, and all the belief that I have in her capacity and competence, I can think only that she and her colleagues can be helped.
I wish we had no need for such a commission; I am sure we all wish that. It is one body that we would like to see work itself out of a job. Unfortunately, society as it is means that there is a need. If there is a need, there is a need to define. If there is a need to define, there is a need to say, in broad and simple terms, what the commission should be for and what it should be doing.
I admire greatly the noble Baroness, Lady Campbell. We know it is not easy for her to address this House. She does so with courage and most articulately. The case that she made this evening and that was so ably backed by the noble Lord, Lord Low of Dalston—we are pleased to see him back from his recent operation—was frankly an unanswerable case. I have to say to my noble friend who will respond to this debate: why? What is the point? What is the purpose? There are occasions when a Government have to fight for something that may be unpopular. I have gone into the Lobbies supporting Governments fighting for things that have been unpopular for over 40 years. Nevertheless, this is asked for by those bodies with which the commission has regular dealings. It is not going to add to the sum from the public purse. It is not going to obstruct the commission in the specific duties which it has to follow. So what is the point and what is the purpose of doing this?
In following up a point made by the noble Lord, Lord Low of Dalston, I have also to say that the other place, of which I was proud to be a Member for 40 years, has not exactly examined this matter with critical care and scrutiny. It has given it a quick turnover and sent it back. Well, at the end of the day, the view of the Commons, as the elected House, prevails; that is my constitutional view. However, I think we have to say to it again, “Look, you have got this wrong. Including this section is not going to impede the Government in their work. It is not going to do any damage to your economic strategy. It is not going to do any damage to your social strategy. What it is going to do is to give the commission what it believes to be helpful and necessary on what those bodies which deal with the commission believe the commission should have”.
I did abstain last time; I shall not abstain tonight. I hope that we can send a clear signal to the other place that it should back down, come off it and do something sensible.
Baroness Stowell of Beeston
My Lords, I am grateful for all contributions to this debate, and I mean that quite sincerely. As I respond, I am very conscious of the strength of opinion that has been expressed in your Lordships’ House this evening.
I will start by responding to a point raised by the noble Baroness, Lady Campbell of Surbiton, in response to my remark about us all wanting the commission to be as effective as it can be so that it is respected by everyone. I want to clarify what I mean by that because I think there are two separate issues here. One concerns the ICC’s status, or the commission’s A status being conferred on it by the ICC, and any suggestion that that is at risk. I reassure the House that the Government have had ongoing discussions with the ICC. I know that the chairman of the commission—the noble Baroness, Lady O’Neill—is continuing her dialogue with the ICC. The non-legislative changes that we have made around the budget and the framework document all strengthen the situation with regard to its status. I do not think that that is at risk. In talking about respect, I was trying to get at a slightly different point in that I want the Equality and Human Rights Commission to be respected not just by those of us who automatically take very seriously equality and human rights but also by those who do not. In order for us to create the kind of society that we are talking about in this context, we need the commission to be supported by everyone.
That takes me to another point that the noble Baroness, Lady Campbell, raised, and was echoed by my noble friend Lady Hussein-Ece, on the origins of Section 3 and the general duty. Today marks 20 years since the tragic murder of Stephen Lawrence. I cannot express to the House how much respect I have for Doreen Lawrence, who had to suffer the murder of her son for progress to be made in this country on some equality issues. That is beyond words. I pay tribute to everything that she has achieved and wish that she had not had to suffer in the way that she did in order to achieve what she has. However, I say with the greatest respect to the noble Baroness, Lady Campbell, and others who referred to the death of Stephen Lawrence in the context of the general duty, that that tragedy resulted in the introduction of the public sector equality duties in the Equality Act 2010. That terrible event did not result specifically in Section 3 and it is important to be clear on that point.
The noble Baroness, Lady Campbell, referred to reporting and monitoring. It is clear that the general duty then becomes a practical issue because the Act states that the commission is required to monitor that general duty and report on it. The noble Baroness suggested that by changing the monitoring requirements the commission would no longer be able to hold up a mirror to society and would be able only to hold up a mirror to itself in terms of what was happening when it produced its reports. I absolutely disagree with that. In my opening remarks, I made it clear that the new monitoring requirements would allow the commission to continue to hold up a mirror to society. It is our view that the new monitoring requirements will lead to a much more focused report, which we hope will have greater value for Parliament and other bodies that may want to refer to it.
The noble Lord, Lord Low, asked whether, in the absence of Section 3, the commission might be more open to judicial review as regards its work under Sections 8 and 9. The commission has never raised this concern in its briefings on the duty. We have no reason to think that the detailed and clear duties in Sections 8 and 9 would be made any more vulnerable by the removal of the general duty.
The noble and learned Lord, Lord Lloyd of Berwick, mentioned the advice given by Sir Bob Hepple and the Government’s response to his view. I say two things to the noble and learned Lord. First, at earlier stages of the Bill, we heard from the noble Lord, Lord Lester, a contrary view to that expressed by Sir Bob Hepple about the role of Section 3. Further, in our view, there is no indication that Section 3 has any interpretative value in relation to any other legislation, including the Equality Act 2010 and the Human Rights Act 1998.
The noble Baroness, Lady Thornton, and others pointed to the commission’s recent briefing and its statement that it supports maintaining the position established by the Lords for retaining its general duty. In response, I acknowledge that that is what the commission has said publicly and I understand and respect that view. However, in the same briefing paper it has also made it clear that removing the general duty would not affect the commission’s ability to do its work. On those matters, it is worth making it clear again that by removing the general duty we are not preventing the commission doing any of its very important and good work. It will not lose any of its vital powers of promoting equality, tackling discrimination and promoting human rights. As I have already said, when it comes to monitoring, producing quinquennial reviews in future should lead to it providing something more analytical and of greater value to those who want to use it as reference.
As I said when I first stood up, I am very aware of the strength of views expressed around this House. This is an issue where the noble Baroness, Lady Campbell, supported by all those who spoke tonight, feels differently from the Government. I have tried to set out again why the Government feel that this change will lead to a stronger Equality and Human Rights Commission, which is what we really want. When we come on to the next discussion about caste discrimination I will be able to reflect how important the role of the Equality and Human Rights Commission is. I ask your Lordships to agree with the Commons in their disagreement of the Lords amendment and the noble Baroness to withdraw her Motion
Baroness Campbell of Surbiton
My Lords, I would like to thank the Minister for her reply and to thank noble Lords who have contributed to this debate, the last debate, the one before it and the one before that. I have never worked so hard to protect a piece of legislation which the majority of people want and about which so many noble Lords from all sides of the House have spoken in favour. I find it quite incredible that something so symbolic and so important to the proper functioning of the Equality and Human Rights Commission has been such hard work.
I do understand that there has been improved mutual respect between the Government and the commission and the quality of the work has been enhanced. That is to be celebrated, but I still believe it is critical to retain the general duty and the monitoring duty for all the reasons that we have given in these debates since last year. I would like to thank the noble Lord, Lord Low, and the noble and learned Lord, Lord Lloyd, for helping me tonight to expand the arguments for the general duty. It would be wrong to rehearse them again now: we have exhausted them. I was particularly pleased to hear the noble Lord, Lord Cormack, express his passion and his very clear understanding of why the general duty is necessary to the work of the Equality and Human Rights Commission and also to the messages that we send out to the Lawrence family, to disabled people who are undergoing considerable difficulties in situations where, without a culture change, they will continue to be abused in institutions, and to others that we have mentioned throughout these debates. For them, I ask your Lordships to agree with my amendment tonight and to send it back to the Commons saying, “Please consider these arguments”, because they were only looked at in a very cursory way during the Commons debate. In fact, I believe the debate suffered a guillotine in the winding-up speech only three minutes after the Minister stood up. I ask the House to send this amendment back so that a proper debate can be had and the arguments examined properly. I ask your Lordships to agree to this Motion. I wish to test the opinion of the House.
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 36 for the following Reason—
Baroness Stowell of Beeston
That this House do not insist on its Amendment 36, to which the Commons have disagreed for their Reason 36A.
Motion B1
Baroness Campbell of Surbiton
As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 36”.
“Equality Act 2010: caste discrimination
(1) The Equality Act 2010 is amended as follows.
(2) After section 9(1)(c) (race) insert—
“(d) caste;”.”
37A: Because it is inappropriate to provide for caste to be an aspect of race for the purposes of the Equality Act 2010 without further consultation.
Baroness Stowell of Beeston
That this House do not insist on its Amendment 37, to which the Commons have disagreed for their Reason 37A.
Baroness Stowell of Beeston
My Lords, we come now to the issue of caste and whether it should be made an aspect of race and thus a protected characteristic under equality law.
The whole House agrees that prejudice and discrimination based on caste is wrong. It is unfair and unacceptable in a modern society and is certainly unacceptable in Britain. There is no place for it and we need to take the right action to ensure that there is no place for it. It was your Lordships’ view when we last debated this that caste should be directly and immediately included in the Equality Act as an aspect of race. The other place has taken a different view and said we should not legislate at all without further consultation. There has, as yet, never been a full public consultation on this issue.
I will be absolutely clear. The Government have listened to what your Lordships’ House has said. We acknowledge the widespread support among noble Lords for legislation and the strength of opinion that has already been expressed. Today, I will explain the additional steps the Government are taking in response to the strength of that opinion. Since we last debated this matter, significant concerns have also been expressed about the implications of legislation. These concerns have not come only from those we would expect to be against legislation. Her Majesty’s Opposition also raised legitimate and serious questions during the debate in the other place. As I said during our earlier debates, this Government are not against legislation as a way of tackling caste discrimination. However, we do not have all the information that we believe is necessary to decide that the power in the Equality Act 2010 should be exercised. We think a responsible Government should consider all relevant issues and the implications of legislation before going down that route.
During our previous debate, my noble and learned friend Lord Mackay of Clashfern suggested that having the provision for caste in the Equality Act had given the courts reason, which they might not otherwise have had, to doubt whether the existing legislation protects people against caste discrimination. This helps to illustrate a very important point. We must ensure that whatever we do next does not create new, unintended consequences which could make it harder for people to seek redress. However, at the same time, we must of course be conscious of the need to bring what we do next to a conclusion as quickly as possible.
If we are able, shortly, to reassure ourselves on these points and decide, after consultation, to exercise the power that already exists in the Equality Act, then an advantage of this power is that we can do so via secondary legislation. In other words, I want to reassure your Lordships that there need not be a requirement for new primary legislation and therefore any unnecessary delay. I should note, however, that the amendment brought before the House today would not permit any meaningful public consultation or allow any flexibility through secondary legislation in the way that the Opposition, among others, have been arguing. Caste would simply join colour, nationality and ethnic origin as an aspect of race in the Act, and that would be that.
In a moment I will explain what additional information and steps we think are necessary before the Government will decide, and what the timescale is for that decision. First, I shall summarise some of the concerns that have been raised. First, there are concerns about whether we are actually legislating on the right ground. Some organisations have suggested that descent is more appropriate than caste, and this is an issue that the Opposition have also raised in debates in the other place. I am aware that there are differing and strong views on the question of descent, which we cannot go into today. However, the fact that there is genuine uncertainty over the definition of what we are legislating about clearly suggests that we should not be adding further to the law before carrying out the sort of consultative process proposed by both the Government and the Opposition, although I acknowledge that the Opposition have a different proposal in terms of consultation.
There are also concerns about individuals having to indicate their caste in any monitoring. The NIESR report is clear that some people would not want to do this or indeed admit to caste existing at all. We all have to consider what business would need to do to comply sensibly with such a provision and, if so, what costs this would entail. Would there need to be a code of practice, and if so, would it be reliable in such sensitive matters? To take one important stakeholder in this area, the CBI has stated that,
“on this terribly complex issue time must be taken in order to craft the right intervention, rather than rushing the process in order to comply with the timetable of the ERR Bill”.
At the moment, I believe it is not clear that we have all the information that we need on these and other questions. A significant number of Hindu and Sikh organisations, including some representing people from the perceived lower castes, have expressed concerns that they have not had a chance to provide considered views and would be strongly opposed to immediate legislation on this. For example, the GAKM UK which represents the Mochi community, which is deemed one of the lower castes, believes that by enacting the clause in law, the Government could undo all the work done by our communities over the past 20 years to try to remove the differentiation by caste in all aspects of life.
I am, of course, aware that some noble Lords may say that this is the sort of argument that could have been used to delay the advent of race or indeed of any other discrimination law. However, there is a fundamental difference with caste in that not only do we wish to get rid of caste prejudice from British society, we actually see no useful value in caste itself, or of anyone defining themselves by their caste. In that sense it is not like colour or ethnic origin, or any of the other protected characteristics. We need to ensure that the action we take, particularly if in legislation, sets us towards this aim and not in the opposite direction of embedding caste as a concept in domestic law.
As your Lordships will be aware, on 1 March this year, the Government announced a programme of educational work within the affected communities. At that time we also said that the Equality and Human Rights Commission will investigate the right way of tackling the problem of caste prejudice and discrimination, using the evidence in the NIESR report and earlier material from ACDA and other groups as its starting point. In last week’s debate in the other House, the Minister for Women and Equality announced that in parallel with this work a public consultation will be undertaken on the use of the caste power in the Equality Act. As I have already stated, a full, balanced public discussion is something that has not previously happened, and we think it is crucial that it now does so.
Lord Avebury
My Lords, I, too, welcome the forthright statement by the Minister that caste discrimination is unacceptable, unfair and must be eliminated. However, I disagree with the diagnosis that she offered, which involves a delay at least until the end of the year before anything positive is done. I think that your Lordships will agree with the noble and right reverend Lord, Lord Harries of Pentregarth, that, having spent three years since the Equality Act waiting for the Government to declare their intentions on Section 9(5)(a), which they could have invoked at any time during that period, it is now time for your Lordships to make a decision on how we deal with this matter in law.
The basis of the argument about this proposal has shifted radically since your Lordships agreed to give the Government the power to extend by order the protected characteristic of race to include caste. At that time, the Government were not satisfied that discrimination on the grounds of caste existed in employment, education or the delivery of services. Now, three years later, from the Prime Minister downwards the Government accept that people in the United Kingdom do suffer discrimination on the grounds of caste, and that action needs to be taken against it.
They believe, however, that, unlike with discrimination on the grounds of any of the protected characteristics that are already dealt with in the Equality Act—age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation—caste is unique in being susceptible to treatment merely by education and conciliation. This is clearly a vain hope, as we see from the history of racial discrimination. The noble and right reverend Lord, Lord Harries, mentioned the repeated efforts of Fenner Brockway in the 1950s and 1960s, which, as I remember very well, fell on stony ground. Before the 1976 Act, introduced by my late friend Lord Jenkins of Hillhead, provided legal remedies for victims of racial discrimination in employment, education and the delivery of services, the Race Relations Board provided education and conciliation but those remedies were ineffective.
The Government say that there is no consensus for this amendment. I remember that the Conservative Opposition in the Commons, led by Mr Quintin Hogg as he then was, were against the 1968 Race Relations Bill on the grounds that it was unfair to private employers. As your Lordships know, many employers today would like to be able to discriminate on grounds of sexual orientation. There is no consensus there, but it did not stop us from legislating.
There is a consensus in favour of legislation among all the organisations in this country that represent the Dalits and other groups that are on the receiving end of caste discrimination, as we saw from the BBC “Newsnight” programme last week. Those bodies that have expressed concern draw their members from the higher castes. I challenge the Minister to produce a single Dalit who belongs to any of them.
Lord Parekh
My Lords, I oppose the amendment not because I disagree with its principle or disapprove of it, but because I believe that it is trying to go about achieving it in the wrong way.
The basic premise is that there is still a small amount of the practice of untouchability in Indian society in Britain and that it must be countered. I agree entirely. However, by using caste as a general category, you are going to catch too much at one end and too little at the other. The fact that there is untouchability is not only corroborated by some of the reports that have recently come out, but I myself discovered it in 1986 when I was deputy chair of the Commission for Racial Equality. I received a letter, sent from Birmingham, written by an Indian gentleman who said that his doctor had refused to examine him physically when he came to his home because he was an untouchable. In those days we used to have domiciliary visits, which sadly have stopped now. We wrote to the doctor and it turned out to be true. The doctor was reprimanded and I would like to hope that the practice had stopped. Of course, it does not stop just like that but a warning had gone out to the medical fraternity. This was in 1985 or 1986, and even after that there have been many cases of untouchability and therefore discrimination does occur. It needs to stop.
However, untouchability is only the egregious, extreme form of the caste system, because the system covers everybody. Although caste does not mean anything to me personally, you cannot be a Hindu without belonging to a particular caste, full stop. Talking about abolishing the caste system is extremely problematic because it could mean getting rid of the category, getting rid of the hierarchy among the categories or getting rid of the principle of heredity which determines the caste. Where do you start? I suggest that caste as a category of discrimination is therefore not in the same league as race, religion or any of the other protected categories. If we were to introduce this, there would be four major difficulties and I want to alert the House to them.
First, there will be frivolous complaints based on caste. I do not know how many of your Lordships are students of sociology or have Indian friends. However, let us say that I belong to a caste—whatever that may mean, since I have married outside my caste and my children have married outside their caste, race and religion. Nevertheless, technically I was born in the caste of goldsmiths because my father used to make gold and silver ornaments, so I am a goldsmith. Supposing that someone were to apply for a job in the university where I am a professor who happens to be a blacksmith, a shoe smith, a Brahmin or God knows what, and I do not appoint him because he is not terribly good. Supposing that he were go to the court and say, because I would be doing this not as a Lord but as a Professor, “Professor Parekh refused to appoint me on the grounds that I belong to a different caste”. We would belong to different castes, although he is not an untouchable. Since every Indian who is Hindu carries the caste mark with him, every action that he does with respect to another can be subsumed under one or another form of caste discrimination, so the first difficulty is that you will have an enormous range of frivolous complaints with no way of arguing for or against.
Secondly, once you take away the untouchability bit, there is no evidence of any kind to show that caste discrimination takes place. With respect to the untouchables, they do not have horns or carry any distinct mark of being untouchables. Sometimes, their surnames are a giveaway if you know Indian society but a large number of them—I have worked with them and I greatly admire them—have changed their surname so that it is not a giveaway. When somebody applies for a job, how would you therefore recognise that he is an ex-untouchable? That would be the second problem.
The third difficulty that one would have is that, as the Minister rightly said, we will be introducing the category of caste in our domestic legislation and once you do that, problems begin to arise. How do you define caste? Sociologists have tried for 200 years, ever since the Portuguese invented the word caste. It is not an English but a Portuguese word; when they came to India, they found that we were classified in a certain way and called it caste. In India, caste is very much in flux thanks to globalisation, urbanisation and so on, and in Britain it is even more so. Castes are therefore difficult not only to define but to distinguish. Once one introduces this kind of indeterminate, inherently nebulous category in law, one invites difficulties. One could easily pave the way so that in 10, 15 or 20 years’ time there might even be a pressure of the exact kind we have now, where people might be saying, “Let’s have a question on caste in the census”.
If my grandchild were to ask me today or 10 years from now, “Grandpa, what caste do I belong to?”, I would not know what to say. A category as indeterminate as that does not deserve to be enshrined in domestic legislation. For these and other reasons I would be opposed to the amendment, while making it absolutely clear—so that I am understood outside this House—that untouchability exists. It is an abominable practice; people are sometimes discriminated against and the noble and right reverend Lord, Lord Harries, at a meeting he organised, produced people who were able to give evidence.
Take for instance a bus driver who happens to be a Brahmin or whatever, and there is a person who works on the buses who he would not want to team up with because the guy is supposed to have a surname that indicates he may be an untouchable. It exists in small pockets in those places where people are recognisable. It is not a pervasive phenomenon, but even if it is not pervasive, it is still not acceptable. The point is that it is only one extreme form of caste. By introducing caste as a general category in this way one is trying to catch too much and will end up catching too little.
Lord Singh of Wimbledon
My Lords, I speak in favour of this amendment. I am particularly concerned about the level of misinformation and ignorance used in the other place to argue against legislation. The Minister in the other place made a statement, which was repeated today, that caste is a problem in the Sikh community as well as among Hindus. It is not only inaccurate, but frankly insulting to the Sikh faith. Guru Nanak, the founder of Sikhism, totally condemned the whole system of caste. Opposition to discrimination based on caste, birth, gender, race or religion or social status is an essential pillar of Sikh teachings. Sikhism emphasised equality of respect and opportunity for all members of our one human family centuries before these concepts were accepted in the West.
The Sikh gurus repeatedly taught the absurdity of caste, in which the shadow of a person of lower caste was said to pollute the food of a higher caste. Guru Nanak urged them to forsake all notions of caste and ritual purity and look to the inner worth of individuals. That tireless campaigner for human rights, the noble Lord, Lord Avebury, from whom we have just heard, commenting on the egalitarian teachings of Sikhism at the time of my maiden speech, rightly emphasised Sikh opposition to caste, quoting Guru Nanak’s observation that in his mother’s womb no man knows of caste. Let us get it right. The concept of caste is a hierarchical division of Hindu society into the Brahmins, the top or priestly caste, with Khatris or warriors below, followed by those in commerce and then at the bottom Sudras, cleaners or scavengers. Caste has two essential components: a hierarchy of importance and a notion of ritual purity. Both are rejected in Sikh teachings. When a person converts to Sikhism he or she is required to renounce any former allegiance to caste. By definition one cannot be a Sikh and have a caste.
Guru Nanak warned us about the negative cultural practices that over the years attach themselves to our different religions and distort underlying ethical teachings. It is true for all faiths and it is certainly applies to caste which has little to do with the ethical imperatives of Hinduism. As far back as the 1930s many leading Hindus condemned the iniquity of caste. While Gandhi felt education was the answer, Dr Ambedkar felt education was not enough and legislative action was also necessary. Later, as author of the Indian constitution, Dr Ambedkar successfully included prohibiting discrimination on grounds of caste.
Coming back to this country, we too find ourselves in a debate over combating the evil of caste by education or by legislation. In this debate we have had some widely improbable figures on the number of Dalits in the UK. No such playing with figures is necessary. Whatever the numbers, that which is evil remains evil and Dalits are fully entitled to protection against discrimination, whatever their number.
Many—most—Hindus reject caste discrimination, but without firm action its negative influence could continue for years. It has no place in our more enlightened 21st century, and those who suffer its worse effects should, like those who suffer racial discrimination, be protected by law. Here it is necessary to add that, contrary to misinformation being circulated, legislation will not require people to associate themselves with a particular caste, just as protection against religious discrimination does not require anyone to affiliate themselves to a particular religion.
In conclusion, I should like to emphasise my comment made when we previously discussed this issue. I firmly believe that without the debilitating influence of caste the uplifting ethical teachings of Hinduism will be much more to the fore. It is for these reasons that I support the retention of our amendment.
Lord Deben
My Lords, first, I am sure that the whole House has very much been touched by the words of the noble Lord, Lord Singh, which have clearly put this issue into a proper context.
I say to the noble Lord, Lord Parekh, something which I hope he will not find difficult. I am old enough to have been through all the discussions about discrimination against homosexuals and against people on the grounds of class, race and gender. I fear that the four reasons that the noble Lord presents are always presented in these cases. That does not take away from his own belief in it, but that is what people always say. They say that there are not very many. They say that it is very difficult to draw the distinctions. They say that the matter is being healed anyway because there is a great movement to ensure that it does not happen. They say that people will become more discriminatory if the law intervenes. That is what they always say. It may be more true about caste than about other things. I merely say that those are the same arguments, and I find it difficult to take those arguments in this case when I did not take them in all the other cases.
Secondly, the Government have rightly said, and I am proud that they have done so, that discrimination on the grounds of caste is unacceptable in any circumstance. We do now at least start this discussion from the same basis. That is not how it has been in the past, because there have been arguments that caste is somehow different, and that you should not say this because there are cultural and religious reasons why you may not make that statement. I think that we are now as one on that. I thank my noble friend Lady Stowell for speaking so clearly about that.
The Government have, however, put forward two arguments in the discussions that seem mutually contradictory. On the one hand, they have said that their legal advice is that the present law clearly covers caste. They have then gone on to say that they do not want to include caste because it would be expensive to employers. You cannot have it both ways. If the present law covers caste, that is a cost to employers anyway. If putting “caste” in merely clarifies matters, you do not increase the cost at all. You can increase the cost only if by adding “caste” you have a different category that was otherwise not covered.
I hope we will accept that the cost argument cannot be true or the Government’s whole case falls down. I really hope we will hear no more about the cost argument. If we do, we should not be saying that people cannot be discriminated against unfairly, wrongly and wickedly but that because it is expensive to deal with it we are not going to deal with it. I am sorry, but that is not the politics I entered into and I am not prepared to take that. Let us just get rid of the idea that, somehow or other, we can argue this case on the basis of finance. That is a totally different issue and nothing to do with the moral issue with which we are concerned this evening.
I turn now to the point raised by my noble and learned friend Lord Mackay. He will no doubt make the point himself, but it fits into my argument at this point so I hope he will not mind me referring to it. He said he believed that the legal advice that caste was already included in the law was right but that because the previous Government—and this is no criticism of them—had put into the law a triggerable mechanism that could say that caste specifically was referred to, the courts might find it suggested that caste was not covered by the present legislation. The Government therefore have a real responsibility to ensure that their opposition to caste is not befuddled or mixed up because of an odd circumstance that was meant to be helpful but that has this downside in the legal judgment.
That leads to this House accepting that we are now on all fours. We now all say that caste is unacceptable and that people who are discriminated against on grounds of their caste should have a legal remedy. We are also, I hope, saying that the reason for a legal remedy is not just to help the individuals concerned but to lay down a quality of our society that says that this is not acceptable. It is after all a quality of Indian society that it is not acceptable. It is a quality of Nepalese society that it is not acceptable, and the Bangladeshis are presently seeking to have exactly the same quality. The idea that passing this law would in some way be insulting to Hindus seems to me to be absolutely outwith sense, and we have to make that absolutely clear. All we are saying is that we would do in this country what other countries have already done. It has not been seen as an insult to religion there, so that is not a reasonable argument.
We have to distinguish, in what the Government have placed before us this evening, between our common view that this has to be done and the precise view as to how. The issue before us is therefore not whether it is reasonable to take action but the best way to do it. The noble and right reverend Lord, Lord Harries, made a powerful argument to say that we should take this decision now, that we have been arguing about it for too long and that if we take this decision now we can subsequently sort out the problems that may arise around it.
The Government say, “We accept that caste is totally unacceptable, but we have a problem because we think it is reasonable that some people who manifestly have something to say about this do not feel that they have had a proper time for consultation”. They also say that they are not sure that they are clear on a number of points. I disagree with the Government on both these issues, because first of all there has been as much consultation as was necessary. It is also quite clear how you deal with caste. That happens to be my view. However, this House has to take seriously the Government’s role in this. This is a very difficult thing for me to say because I have been thinking and fighting about it for some time. I try to think back to the time when I was a Minister.
The Government have to think about something that the noble Baroness has not mentioned: that you do not start a new policy—because making this a legal matter is a new policy, even though we have been talking about it for so long—in the best possible way if a significant number of people, with some justification, feel that they have not been properly consulted. I say to my noble friend that I am pretty suspicious of some of the people who asked for consultation, because they do not seem to me to be overwhelmingly representative. They seem to be pretty clearly directed by those whose own interests are not those of the Dalits, so one has to be very careful about this.
On the other hand, I believe that in a democracy we ought to make sure that everybody feels that their voice has been properly heard. Therefore the noble and right reverend Lord, Lord Harries, says, “That’s all very well; we can sort that out afterwards. We ought to pass the law now”. I would have agreed with him if I had not understood what I now understand: that you need only secondary legislation of an affirmative nature. It is not very difficult to pass such legislation.
I now have to say something pretty tough to the Government. My noble friend Lady Stowell has been absolutely exemplary in these discussions. I know of no one who has gone to such trouble to try to sort this through, and I do not say that in the usual House of Lords manner to be polite to everybody. I am not like that. I want to be polite to her because I believe it and I want to say that. However, I have to say something very tough to her, which is this. She is asking us to believe that the Government will go through consultation, that the noble Baroness, Lady O’Neill, and her team will investigate this, and that if they have a clear recommendation we have to believe and have faith in the Government that they will then legislate in this way. She cannot tell me that they will certainly do that, because that would be to put governmental power into commission, and I rather agree with her that you cannot do that in advance. I wish I could not agree, but having been a Minister I have to admit that.
If we accept the Government’s statement here—and we come to a time just after the end of this year and the Government have been presented, before the end of the year, with a clear indication from the equalities commission that legislation is necessary—I hope the Government will understand that we will never trust them again if they do not then legislate. I do not think the Minister is giving us weasel words, but let us just realise that this is not the moment to pass something through to get it out of the system and then come back and say “Well, we didn’t really mean that”.
Baroness Thornton
My Lords, do I sense that the House would like to move on? I think that is probably the right thing to do.
Baroness Flather
I would like to speak, and the noble Lord, Lord Dholakia, wants to speak. We have been waiting for our chance.
Lord Dholakia
My Lords, I indicated that earlier, but I gave way to the noble Lord, Lord Deben, because I thought he made a very important contribution.
I am delighted to contribute on this amendment and I support the point of view that has been expressed by the noble Lord, Lord Parekh. I served on the former Commission for Racial Equality and its predecessor bodies from its inception in 1965 until 1994, a period of nearly 30 years. Almost all Race Relations Acts made provision for the Commission for Racial Equality, the Community Relations Commission and all those bodies to review the legislation and, if it was inappropriate or lacking, to make recommendations so that the Government had the opportunity to amend it. As we saw in the Race Relations (Amendment) Act, this exercise was carried out by the previous Government.
I owe a special debt of gratitude to my noble friend Lord Avebury. He was elected in Orpington in the same year that I was elected to a county council in Sussex. He has been my mentor all these years, but sometimes friends disagree. My experience is based, like that of many people I meet on a regular basis, on the impact of one’s culture and faith, which to an extent shapes lives both here and abroad.
The first point I wish to make is that, like the noble Lord, Lord Parekh, and almost every one who has spoken, I abhor racial discrimination on any ground of treating people differently. Colleagues in your Lordships’ House will remember that I have in the past 15 to 16 years succeeded in moving amendments to secure equality in a number of legislative measures. Over the past two years, I have chaired a substantial number of consultations with communities and individuals on matters of caste discrimination. Let me make their point of view clear in case there is any doubt: they fully appreciate the need for equality legislation. Indeed, ethnic communities would not have a voice without such legislation. They are adamant that they would not want to deny any disadvantaged group the right to have recourse against discrimination on any grounds. Almost every one of them has made that position very clear.
Caste plays the least significant part in the lives of third and fourth generation youngsters from ethnic communities growing up in this country. We have moved away from the old days and old values of compartmentalising communities based on caste. A generation has grown up seeing no obstacle to crossing the caste divide.
The second point I wish to make is that race relations in this country have always been based on sound research. The work of the former organisation that some may remember, which campaigned against racial discrimination and was headed in its early days by the famous Lord Pitt who sat in the House of Lords, produced evidence which resulted in the first Race Relations Act outlawing discrimination in public places. The substantial evidence produced by the Street report in 1967 identified discrimination in employment, housing and general services and resulted in the introduction of the Race Relations Act 1968. Similar evidence on institutional racism resulted in the introduction of the 1976 race relations legislation. However, in essence, there is a lack of evidence on caste matters. The report produced by the national institute clearly acknowledges that there is no evidence to suggest the existence of large-scale discrimination in this country based on caste.
Communities feel let down that during the passage of the Equality Bill through Parliament, having acknowledged that the available evidence did not indicate that caste discrimination was a significant problem in Britain in the areas covered by discrimination legislation, Parliament proceeded to accept an amendment to the Equality Bill to include caste as an aspect of race by a ministerial decision. By doing so, the Act which was supposedly designed to simplify and streamline discrimination law in Britain seems to have defeated this very objective by including the concept of caste that has eluded clear definition in common parlance, let alone in legal terms—the point made by the noble Lord, Lord Parekh.
However, it would be a big mistake to extend the scope of the act to include caste in Britain without substantial evidence. Laws should be based on sound evidential research. The research by NIESR clearly acknowledges that there is no large-scale caste discrimination in Britain. The sample was far too small to reach a fair conclusion. Therefore, to yield to pressure groups and include caste within the scope of the Act will only rekindle the dying issue of caste.
I fear that we are still studying something that may be on the surface. A generation of people born here have broken the links with caste patterns and they find themselves engulfed in a practice that was prevalent in the early history of the subcontinent. I accept that there may be discriminatory practices—rightly described by the noble Lord, Lord Parekh—where caste may have played some role but there are ways of dealing with this subject. I had discussions with my colleague, Lynne Featherstone, when she was looking at the issue as government Equality Minister and I explained that there are other ways we can tackle this matter in the short term. I welcome the statement issued by Helen Grant, Minister for Women and Equalities in the other place, that education is the right step to take in this matter. I also welcome the contribution on this issue of the EHRC and the Government’s equality officers in examining the nature of caste prejudice and harassment as evidenced by existing studies. This will indicate if the matter should be addressed in future years either by legislation or by another solution. I am happy to assist those who have participated in consultation to set up their own formal structure which could be the basis for eradicating discrimination practices. A conciliation process must be at the forefront of such a strategy. The community can and must provide that. Since the EHRC is now involved, it is right that we reject the amendment until we are better informed.
Baroness Flather
My Lords, I seem to be the last speaker and I will take this opportunity to say what has been in my mind. It is very interesting that we have two Hindus speaking today against this amendment. On the previous occasion one of them was here but did not speak up, yet that was the time to make his points about why we should not have voted in favour of a caste discrimination amendment.
I have found that all Governments in this country have a great belief in so-called “community leaders”. Ever since immigrants first came to this country they have created this myth of community leaders: community leaders know everything about the community; they will tell us what the community wants; they are the important ones. They are not the ones to speak for all communities: they are the ones who shout the loudest. It has always been a big mistake to listen to people who say, “We are the community leaders”. Have you ever seen a woman as a community leader? Have you ever seen any women in any consultation? Have you seen any women among all these men who have been shouting outside the House of Lords about the caste amendment? The Hindus have come together for the first time ever, to my knowledge, to shout about the caste amendment because they feel that this dishonours them in some way. They dishonour themselves: caste is a fact. It is not created by us or in the minds of the British or other people; it is a fact that people discriminate on the basis of caste. It is endemic in social issues like marriage. As far as public things like employment and education are concerned, we have to watch out: we have to say, “No discrimination on the basis of caste”. It is no good our saying, “Leave it for next time”; that happens all the time. There will be more consultation and more evidence, but there is already plenty of evidence of discrimination. As someone has said, if there are six people being discriminated against, we should do something about it. We do not know how many people are discriminated against.
We have been told about the untouchables. Caste is not about untouchability but about someone of a particular caste not being accepted by a person of a higher or different caste. It is about not giving them the same treatment as you give to people of your own caste. In my parents’ house, we were from the merchant caste and had to have a Brahman cook, otherwise people in our house did not eat. None of us were allowed in the kitchen because we would pollute it. I have lived with caste all my life, from childhood.
Baroness Thornton
My Lords, I thank the noble Baroness, Lady Flather, for her remarks and I would not for a moment dare to have stopped her contribution to this debate.
The principle that we are discussing remains as simple and straightforward as it was when it was debated in 2010, in Committee on the Bill and on Report. The question is: how do we give legal protection to the victims of caste discrimination? That was reflected throughout the debates in the Commons and this House. It is the case that there is a lacuna in our equality legislation, and surely it is our responsibility to ensure that this form of discrimination, however few the cases are—even if there were only one—has redress under UK law. We do not need any more research to tell us that there is caste discrimination and that it needs a legal remedy.
On these Benches we have been doing what the Government until very recently had signally failed to do over the past two to three years. We have discussed the matter with and made ourselves available to all the groups that have an interest, including those who have reservations and are opposed. I remind the House that it is only because the noble and right reverend Lord, Lord Harries, raised this matter in Committee that the Minister agreed to meet the anti-caste-discrimination groups after refusing to do so for more than two years.
We accept that the Government have some ground to catch up on in the implementation of this legislation and, in the spirit of the cross-party support for this cause, we would like to help them to do so. I am particularly grateful for the constructive dialogue that I and my colleagues in the House of Commons have had with the Alliance of Hindu Organisations, the ACLC, the Sikh Council and the British Sikh Consultative Forum, among others, as well as the Anti Caste Discrimination Alliance and the Dalit Solidarity Network.
I know the House will agree that it is important to put on the record that this is not about vilifying an entire community. Caste discrimination is not specific to any one religion but to residual social and cultural practice, and I hope that the Minister will agree with that. We believe that it is vital that this amendment is carried today and sent back to the House of Commons, because if we do so I am sure that the next stage will be one of negotiation about how, not whether, we deal with caste discrimination.
There are two reasons for that. First, only if we pass this amendment again will the Government realise that the serious matter of caste discrimination has strong cross-party support led by distinguished parliamentarians from all parts of this House and the Commons. Secondly, there is evidence, as the Minister’s remarks revealed, that the Government are considering their position again. We believe that the House of Lords reaffirming its view on this matter will help in that process and permit a discussion on how to move forward. This is the invaluable role that the Lords can play in such matters.
Since the House last discussed this matter, we in the Labour Party have been addressing the matter of implementation with the wide range of different groups that I have already mentioned. We wrote to the Minister over the weekend with our views and offered support, help and co-operation in the implementation of this legislation.
Coming from Bradford, I know that the south Asian communities are among the most enterprising and fair-minded in the UK, and that those community leaders who first arrived in Britain in the 1960s and 1970s do not need any lectures from us on the evils of discrimination. Yet, just because discrimination is perpetrated by a very small number of individuals, that is no reason not to have legislation.
Although I start from a different position in relation to legislation from some of the organisations that I have mentioned, I believe that we are all united in the view that if legislation goes ahead, and we hope it does, we must ensure that the process of implementation is right so as to prevent the entrenchment, rather than the eradication, of caste distinctions in British society.
As soon as this legislation is passed, we think that before the clause is enacted the Government need to commit to conducting a consultation on the interpretation of the term “caste”, which should be set out in guidance or secondary legislation. This would allow time and space to deal with the genuine concerns that have been raised, such as ensuring that this is not interpreted as religion-specific.
The Government should commit to setting out guidance or secondary legislation that employers or public bodies should not seek information about caste identification, nor must there be any requirement on individuals to disclose their caste. We know that this is possible with sexual orientation and we suggest that that holds the way forward. The goal must be to eliminate, not increase, the number of people being identified by caste. Therefore, if the legislation proceeds, we ask that Ministers seek to underpin the guidance with that principle.
This consultation detail and guidance needs to be in place before the new law is enacted. We are therefore happy to support community suggestions that there should be a delay in the implementation of the new clause for perhaps one year, possibly two, after the Bill receives Royal Assent.
We have suggested that the Government should consider a timetable for a statutory review of the clause. There is a clear consensus and commitment across all communities to work to eliminate caste divisions in the UK and ensure that the UK remains, as one individual put it, “the great leveller that it is”. If it comes to a point where caste distinction has become a non-issue in the UK, we should recognise that legislation may not be needed any more, so perhaps there should be a review in 10 to 15 years from commencement.
I think the Government have not thought through their Talk for a Change education programme. It must not be a project that aims to better inform individuals about caste in a way that increases the awareness and use of caste as an identifier and divider. Will the noble Baroness clarify that the Government’s purpose is to facilitate initiatives within communities to address existing residual discriminatory practices?
The Minister will argue that the Government want to consult first on whether to provide legal protection, which I think is the point of her remarks. The Government have come a long way in thinking about this, but we part company from them because we believe that we need to pass this amendment now, to get the legislation on the statute book, and then to resolve the issues that flow from that. That is why we again support the noble and right reverend Lord, Lord Harries, from these Benches.
I regret that the noble Lord, Lord Deben, has, as it were, decided to cave on this matter, although I accept that he has made great threats to the Government, which I am sure they are taking on board. He is right that this is a question of trust. The Government have had two years, almost three, to deal with this issue and have done nothing at all until this moment. I wonder what guarantee can be given by the Minister, other than legal protection, about taking this issue forward; her remarks leave it open to doubt whether the Government are prepared to do so. If this House does not keep the Government’s feet to the flame on caste discrimination, we must fear that it will be kicked into the long grass again and that nothing will happen. I hope that the Minister will agree to this amendment today. If not, I hope that the House will again support the noble and right reverend Lord, Lord Harries, and a move to discuss implementation in a way that achieves the goal of eliminating caste-based discrimination.
Baroness Stowell of Beeston
My Lords, I am very grateful to all noble Lords who have contributed to this debate. There have been some important and powerful speeches tonight, as there have been at all stages of the passage of this Bill. I will do my best to respond to most of the points that have been raised but will try not to take too much time, so forgive me if I do not go into great detail.
First, in response to the noble and right reverend Lord, Lord Harries, I will just clarify something that I said which he picked up on. The Government are not suggesting that we should replace the word “caste” with the word “descent”. That is not something that we are proposing; I raised it purely to highlight that it that had been raised by others in the course of this debate.
Several views have been expressed in the Chamber this evening. The noble and right reverend Lord, Lord Harries, questioned a comment I made that some people do not want to be defined by caste. He argued that that should not lead to a decision that we should not recognise caste in law in order to protect against discrimination. I will make a couple of points in response to that. First, over the past couple of weeks in the discussions that the Government have had with different bodies, it has been made very clear to me while attending those meetings that some people do not want to be defined by caste and are worried that caste legislation would allow that. In response to the noble Baroness, Lady Flather, the person who made that point most forcefully to me was a woman from the Hindu community.
It was interesting and illustrative that the noble Lord, Lord Singh, made the point that caste is absolutely not a feature at all in the Sikh religion. The noble Lord, Lord Parekh, said that caste is something that can be recognised across a wide range of different faiths. Indeed, the noble and right reverend Lord, Lord Harries, talked about this being something that can be found in the Christian faith. There are clearly, just in the debate that we have had this evening, several views being expressed in this regard.
Lord Harries of Pentregarth
I thank the Minister again for the great care, thought and seriousness with which she has addressed this issue this evening and on other occasions, and the way in which the Government have clearly moved quite a long way in the direction of the supporters of the amendment. I thank all noble Lords for what they have contributed. I also pay tribute to those outside this House who believe that they are discriminated against, who have ensured that we have had this serious debate this evening.
In his thoughtful speech, the noble Lord, Lord Parekh, said that the issue of caste was so wide that ill founded complaints of discrimination would arise. He gave the example of himself from a goldsmith background perhaps not employing somebody from a blacksmith background and this being the subject of a complaint. But I cannot see that this would be essentially different from other areas of discrimination; for instance, a woman might complain that she is discriminated against because she is a woman and a tribunal would have to make up its mind whether it was because she was a woman or she simply was not up to the job. The situation is absolutely no different. The noble Lord then said that caste is such a wide concept that it really cannot be included in legislation at all. What about the example of India, which includes in its constitution the fact that caste discrimination is totally contrary to the legal system?
The noble Lord, Lord Dholakia, suggested that people in the third and fourth generations are not aware of their caste and, as it were, have outgrown it. I have to point out that that is not the evidence that the NIESR found. It found that there was bullying going on in school playgrounds on the basis of caste. The noble Baroness, Lady Flather, also mentioned coming across it when she was a teacher—sadly, it has not gone.
The noble Lord, Lord Gummer, rightly pointed out that even if there were only a few cases of discrimination, those people must be protected by law. What the noble Lord, Lord Gummer, said highlights the fundamental issue tonight.
Lord Harries of Pentregarth
I am sorry—we are old friends; we know each other from previous incarnations and go back to 1958, when I remember him this high. I apologise: what the noble Lord, Lord Deben, said highlights the fundamental issue of the kind of consultation that people have in mind.
The Government have in mind a wide-ranging consultation to decide whether legislation is necessary. Many of us are convinced that it is and that the consultation needed should be more sharply focused to ensure that the actual regulation that goes with it reflects what the communities most affected by it believe will be clear and workable in law. There is a clear difference between the kind of consultation that we have in mind and that the Government have in mind. We believe that it is important at this date to make it quite clear that legislation is necessary to protect people.
We have had such a serious debate tonight and the issues have been so thoroughly debated that I feel that it is right that the opinion of this House should be tested.
Viscount Younger of Leckie
That this House do not insist on its Amendment 38 and do agree with the Commons in their Amendments 38A and 38B to words so restored to the Bill.
Viscount Younger of Leckie
My Lords, this is an issue that has already been debated in some detail. Noble Lords will recall that the Government were nearly successful in persuading the House to accept the vote on Report, losing by the smallest of margins—indeed, by just two votes. Nevertheless I reassure noble Lords that the Government have listened to and carefully considered both the extensive arguments made, and the heartfelt concerns expressed, about the possible effects of this change. However, the Government feel strongly that a measure to reassure business is necessary, and the other place clearly endorsed that view by a majority of 75 when it voted on this issue last week.
This measure is one of a number of reforms designed to address the much wider issue of the perception of a compensation culture and the fear of being sued that this generates. It is a fear that drives employers to overimplement the law, incurring unnecessary costs, and that undermines their confidence to grow and develop their businesses. It is a problem that I believe we all recognise needs to be tackled, and one that we have not only considered in relation to this clause but, as many noble Lords will recall, debated in some detail in relation to my noble friend Lord Young of Graffham’s report Common Sense, Common Safety. It is because of this wider context and its detrimental effect that the Government remain of the view that it is not reasonable or fair that employers should be held liable to pay compensation when they have done nothing wrong and taken all reasonable steps to protect their employees.
We acknowledge that this reform will involve changes in the way that health and safety-related claims for compensation are brought and run before the courts. However, to be clear and to avoid any misunderstanding that may have arisen, this measure does not undermine core health and safety standards. The Government are committed to maintaining and building on the UK’s strong health and safety record. The codified framework of requirements, responsibilities and duties placed on employers to protect their employees from harm are unchanged, and will remain relevant as evidence of the standards expected of employees in future civil claims for negligence.
As I set out on Report, the clause provides for a power to make exceptions. It is already planned to make such an exception in respect of pregnant workers in order to comply with the terms of the relevant EU directive. We have thought carefully about whether there are more exceptions that should be made at this stage, but have not identified any other examples. However, I assure the House that we will seriously consider any further exceptions that are suggested.
To be successful in providing the reassurance that businesses need to overcome their fear of being sued, we need to take decisive action that will send a clear and effective message. The Government believe that the proposed single amendment to the Health and Safety at Work etc. Act achieves this by providing a consistent approach to civil litigation across all health and safety legislation, which will be simple for both employers and employees to understand.
To clarify a point of detail, I should also explain that amendments regarding the words “so restored to the Bill” have the effect of reinstating government amendments agreed without objection in Grand Committee. These amendments were made to comply with the Delegated Powers and Regulatory Reform Committee recommendation to remove a new regulation-making power that had been inserted as proposed new Section 47(2B) of the Health and Safety at Work etc. Act. The Government reflected on the committee’s comments and accepted that it was not necessary to take such a power, as there are no current plans to extend the policy to other legislation.
For the reasons that I have set out, I ask that noble Lords do not insist, as the noble and learned Lord, Lord Hardie, asks, on their Amendment 38. I beg to move.
Motion D1
Moved by Lord Hardie
As an amendment to Motion D, leave out from “House” to end and insert “do insist on its Amendment 38”.
Lord Hardie
My Lords, before addressing the main issue I should indicate that I have no objection to the amendments that the Commons introduced to reinstate the amendments that were agreed in Grand Committee, if the decision of the House is to refuse this amendment.
The main issue relates to Clause 61, which amends the existing law by removing a right of action that has existed for almost 150 years, permitting employees and their dependants to claim damages for injuries caused by an employer’s breach of statutory duties, which is designed to protect employees from serious injury or death. It is a separate common-law right of action and is distinct from the common-law action based upon negligence.
Baroness Turner of Camden
My Lords, the Government introduced at a late stage in the Commons proceedings, and with very little consultation, a clause to remove civil liability from health and safety offences. This would mean, as has already been explained, that a worker who is injured because their employer broke the law by failing to carry out a statutory obligation would find it much more difficult to claim compensation for the injury. It would also make the law much more complex. As a result, many workers or their dependants will lose out on compensation, causing further injustice.
The Government have claimed that they introduced this amendment to implement a recommendation from the recent Löfstedt report into health and safety regulations. However, Professor Löfstedt has since made it clear that this is not what he proposed and the government amendment went well beyond what he recommended.
We voted to remove the clause in a move that was welcomed by victims’ groups, the legal profession and health and safety professionals. The Commons, however, has voted to disagree with our amendment. I do not know why. We should maintain the position that we took up before; it is reasonable and fair. We have to remember that there are many industries anyway where there are inherent dangers to workers. Where there are statutory regulations, those should be applied and the workers should be able to claim if those statutory regulations are not complied with, which is what the present law provides for. We have been advised by lawyers concerned with these employment issues that if the amendment we are proposing is not carried and the Government’s position is maintained, we would be taking the law and the employment right consequent upon it way back beyond the beginning of the previous century. That really is quite unacceptable, and I hope therefore that your Lordships will agree to maintain the position that we took before as far as this clause is concerned.
Lord Faulks
My Lords, I was unable to attend previous debates on this clause but I have had an opportunity of reading what was said in your Lordships’ House and in the most recent debate on the amendment in the other place last week. I declare an interest as a practising barrister with experience in this area of the law and as a former special adviser to the last Government on an inquiry into the compensation culture.
Noble Lords, and particularly the noble Lord, Lord McKenzie, in a number of thoughtful contributions to the debate, suggested that to legislate on the mere perception of a compensation culture was to do so based on a “flimsy structure”. He accepted that there had been a problem of overcompliance with health and safety but he said that there was now a problem with undercompliance. I am unsure of the basis for this last assertion and it is not reflected by the report of Professor Löfstedt or by the report two years ago by my noble friend Lord Young of Graffham. Both identified a perception of a compensation culture, as did the report produced by Parliament when I was a special adviser. This cannot be dismissed on the basis that to respond to it is simply to pander to myths. There is a strongly negative effect on employers and indeed on schools and local authorities which feel the need to set up elaborate systems to combat largely hypothetical risks. Overcompliance costs time and money and makes it more expensive and less attractive to employ anyone, particularly for small and medium-sized enterprises.
The aim should surely be to ensure that all reasonable steps are taken to protect the health and safety of employees, but at the same time employers should not be overburdened with unnecessary and elaborate bureaucracy which can be the enemy of enterprise. I accept that this is a very difficult target to hit and I confess to being a little nervous about how much is left to regulation. However, I feel much more confident in saying that the debate, principally in the other place, was positively riddled with hyperbole. Both there and in your Lordships’ House the opposition Front Bench used the expression “a near impossible burden” when describing the prospects of a claimant bringing a successful action for injuries at work. I simply do not accept that. A breach of a regulation will be regarded as strong prima facie evidence of negligence. Judges will need some persuasion that the departure from a specific and well-targeted regulation does not give rise to a claim in negligence.
Many regulations are sensible, comprehensible and can be effectively interpreted both by employers and the courts, but this is not always the case. For example, the Management of Health and Safety at Work Regulations 1992 were revoked and re-enacted by similar regulations in 1999. Originally they did not give rise to a civil course of action—they now do. The regulations are extraordinarily wide and extraordinarily vague and seem to require extremely elaborate arrangements, ostensibly for health and safety purposes, in particular as to risk assessments. What a risk assessment is and how you prove you have done an appropriate one is problematic. It seems to require quite a number of employees simply to be devoted to compliance with the regulations rather than actually doing the underlying work.
It was said in the other place that this prospective change in the law was “not about compensation” but about “not being killed” and that the change was not simply a matter of red tape. I am afraid that I do not agree with the burden of those comments. Nor are the Government seeking to turn back the clock a hundred years. Rather, these provisions are a response to an overreaction to an entirely appropriate aim which is to ensure health and safety at work. The problem of overreaction is having a negative effect on enterprise. To borrow the title of the report of the noble Lord, Lord Young, the aim of this change in the law is to restore common sense and common safety. I support the Government’s position.
Lord Pannick
My Lords, I supported the noble Baroness, Lady Turner of Camden, and the noble and learned Lord, Lord Hardie, on Report, and I continue to do so. The Minister said earlier in this debate that we are considering cases where the employer has done nothing wrong. With great respect, that is a fundamental misunderstanding. The employer is liable only if the claimant can prove a breach of health and safety legislation. The employer is liable only if the claimant can prove that the breach has caused the injury. To require the employee also to prove negligence would impose an unreasonable burden. I take the point made by the noble Lord, Lord Faulks, that it is not an impossible burden. However, I suggest that it is an unreasonable burden because the relevant information will normally be information in the knowledge of the employer, and the costs and delay of the litigation—a point which the noble Lord, Lord Faulks, did not mention—would surely be disproportionate in all these circumstances to any legitimate interest, especially when the reality is that the employer can, and normally does, have liability insurance. For those brief reasons I will support the noble and learned Lord, Lord Hardie, should he divide the House this evening.
Lord McKenzie of Luton
My Lords, we remain steadfast in our opposition to the Government’s position, and fully support the case led by the noble and learned Lord, Lord Hardie, and spoken to in support by my noble friend Lady Turner and the noble Lord, Lord Pannick. We are dismayed that parliamentary process has allowed so little time for consideration of this matter in the House of Commons and that more than a century—in fact, nearly 150 years—of settled law is being overturned on the basis of such brief deliberation.
The arguments to remove Clause 61 from this Bill have not of course changed in the few weeks since we last debated the matter. Nor have the serious consequences which will ensue should we not carry the day. Removal of the existing right of an employee to rely on a breach of health and safety legislation represents a fundamental shift, and one which is to the detriment of employees.
We heard before, and again today, that having to prove negligence will provide a more difficult route to getting redress. The burden of proof will shift to employees, or to the family in the case of a fatality at work, there will be a requirement for more evidence-gathering and investigation, and the incurring of greater costs. In that respect there will be no lessening of the regulatory burden on employers. This change goes well beyond the issue of strict liability which the Government’s own impact assessment accepts is likely to give rise to only a small number of claims.
The issue of a near impossible burden referred to by the noble Lord, Lord Faulks, I think in our previous debate, was not applied generally but specifically to those circumstances where strict liability has hitherto been in force.
Lord Faulks
I am grateful to the noble Lord for giving way. The point is that there is always a claim, as I am sure he will agree, in negligence. Whether there is a breach of a regulation will be strong evidence of a departure from an appropriate standard of care. All that is changing is simply that it is not actionable per se. I would like the noble Lord to say why he adheres to his suggestion that there is a near impossible burden.
Lord McKenzie of Luton
The point I sought to make is that in some circumstances it has been accepted, I believe, that there is a near-impossible burden. That is not necessarily the case, but even the route to proving negligence is a greater burden than the route to proving breach of statutory duty, which is what operates generally at the moment. The “near-impossible burden” description was particularly applied to those areas where strict liability applies in circumstances related to the provision of equipment, where purchased, maintained and sourced by the employer, and the employee is in a disadvantaged position in seeking to prove negligence.
The impact assessment recites the belief in a compensation culture which is having an impact on the behaviour of business. However, even if true, why on earth should it be a justification for reducing access to justice for employees injured or made ill by their work? This cannot be a rational basis for acting. Why should employees bear the strain of tackling these perceptions? Where is the evidence that unreasonable claims are being made and indeed settled? If there are fewer claims, the beneficiaries, as we have heard, will be the insurance companies, the providers of employer liability insurance. Where the Government are particularly remiss is in failing to see this from the perspective of the individuals who are injured at work, because one way or another they and their families will bear an increased burden. They may be forced to place greater reliance on the health, caring and benefits system. What does the Minister say to those families whose circumstances may have been eased by receiving compensation but who face a life on benefits in the future? Health and safety impacts on the lives of millions of individual employees every day of the week. It is not some distant concept related to red tape.
There is undoubtedly some overcompliance with health and safety requirements, but there are ways in which this can and is being tackled. The register for consultants is one route that the HSE is seeking to apply. However, there is also undercompliance. The noble Lord, Lord Faulks, asks what my evidence is for that. Let us look at the data. People are still being killed at work and hundreds of thousands of people are injured every year. I spent three and a half years as Minister for health and safety. We know those sectors where there is a struggle to get compliance. It does not operate across the board. There are some very good employers who try to do the decent thing, but there are some who do not. This undercompliance has been made worse by restrictions on funding, by limiting the regulator’s role in proactive workplace inspections, and by the portrayal of health and safety as red tape and its undermining by myths that bear no relation to reality. Promoting the changes in Clause 61 will also send the wrong message to those employers who would undervalue health and safety and cut corners, safe in the knowledge that their chances of being held to account are diminished. This is to the detriment not only of employees but of those many employers who do the right thing.
The Government’s position is untenable. It is changing the settled legal position of over a century on the basis of anecdote and perceptions. It is making it harder, sometimes impossible, for employees to access justice when they are injured at work. It is undermining the cause of health and safety. The Government have failed to consult properly on this or make reference to the EU. They offer an inappropriate remedy to any perceived compensation culture which can and should be addressed by other means. Most of all, they are careless of the personal cost to those who are damaged by their work. That is why we support the amendment of the noble and learned Lord.
Viscount Younger of Leckie
My Lords, I have again listened with interest to the arguments made and thank noble Lords for their careful consideration of this very important issue. I start by challenging the noble and learned Lord, Lord Hardie, and the noble Lord, Lord McKenzie, on whether there is a compensation culture. The noble and learned Lord raised that point. I clarify again that my noble friend Lord Young and Professor Löfstedt underlined that health and safety regulations, more than any other area of regulation, suffer from misinformation and overcomplication in the media and elsewhere. I was grateful for the intervention by my noble friend Lord Faulks on this issue.
As Professor Löfstedt found in his independent review, these myths lead to confusion about what the law requires and a fear of being sued which drives employers to overimplement the law in an effort to protect themselves. This does not lead to better protection for employees but means that employers are spending significant time and resources on activities and services which are not necessary or far in excess of what the law requires. Concern about “getting it wrong” discourages employers from looking at ways to develop and grow their business and consequently from taking on new employees. I reiterate to the House that this is a real issue and that there is a perception in this regard. We believe as a Government that we should be tackling it.
The noble and learned Lord, Lord Hardie, referred to certain cases which were raised in the other place by the honourable Member for Middlesbrough. We have been able to check the facts of two of those cases. In both of them there is prima facie evidence of negligence on the part of the employer. We would expect that such cases would still be brought as negligence claims if brought after this amendment to the Health and Safety at Work etc. Act. It is important to clarify that point.
The noble and learned Lord, Lord Hardie, mentioned removing the right to compensation and depriving families of it in the event of an employer’s breach of statutory duties. The Government’s view is that it is fair and reasonable that this burden should be removed from an employer who has done nothing wrong. The fact that someone has been injured at work does not mean that they are automatically entitled to compensation. Ours is not a no-fault system. Many health and safety duties require the injured employee to show fault on the part of their employer. It is interesting to note that currently claimants do not recover compensation in about 30% of claims.
There can be cases of misfortune to which I alluded on Report, which cannot and should not be laid at the employer’s door. In order effectively to tackle the fear of being sued and of unjustified reputational damage, and the costly burdens on business this brings, employers need to know that they have a fair opportunity to defend themselves.
The noble Lord, Lord Pannick, spoke of the burden of proof shifting to the employee, as he put it, being unreasonable. However, the cases that will be most significantly affected by this change are those which would have previously relied on an absolute or strict liability duty. Under the existing system, employees have to prove that their employer breached the standard required in the regulations and that the breach caused the injury. In practice, the issues and evidence that will need to be examined in relation to a claim for negligence will be similar to those currently examined in relation to a claim for breach of a duty which is not a strict one and qualified by, for example, the wording,
“so far as is reasonably practicable”.
That point was raised earlier. Indeed, most cases are currently brought for both breach of statutory duty and negligence, so it is anticipated that most claims will still be able to be brought.
The noble Baroness, Lady Turner of Camden, said that a different approach had been taken to Professor Löfstedt’s recommendation. The Government agreed with Professor Löfstedt’s recommendation in principle, recognising the unfairness which results where employers are liable to pay compensation regardless of having taken all reasonable steps, and agreed to look at ways to redress the balance. Excluding civil liability only in relation to specific strict liability offences would mean making a large number of amendments to more than 200 regulations and could result in different approaches to civil liability being applied within a single set of regulations and across the regulatory framework. This would add a layer of complexity to the current system leading to greater uncertainty for both employers and employees about the duties that apply in respect of compensation claims. Making a single amendment to the Health and Safety at Work etc. Act has the significant advantage of delivering a consistent approach across all health and safety legislation.
I reiterate that this reform is not about reducing the number of claims made, but about establishing the important principle that employers should always have the opportunity to defend themselves against a compensation claim when they have done nothing wrong and have taken all reasonable precautions to protect their employees. By providing the reassurance that they will not be liable if an accident happens which is totally outside their control, this change will support responsible employers who take care to protect their employees by giving them the confidence not only to take sensible steps to manage health and safety risks but also to expand their businesses into new areas and activities and to take on new employees to achieve this. The Government believe this to be a fair and proportionate response to the impact that strict liability duties currently have in the civil litigation system.
Business is fully behind the need for action in relation to the perception of the compensation culture. More specifically, it is supportive of the approach that the Government want to take in relation to the issue of strict liability duties. I am most grateful to my noble friend Lord Faulks for his succinct intervention, backed by his experience in the field. This support was also reaffirmed by both the British Chambers of Commerce and the Federation of Small Businesses in correspondence received in the last few days. I therefore ask again that noble Lords do not insist on their amendment on this issue.
Lord McKenzie of Luton
Before the Minister sits down, can he just help us with one issue? If it is the Government’s position that the problem to be addressed is the perception of a compensation culture, why should that be addressed by making the reality of accessing compensation claims more difficult?
Viscount Younger of Leckie
I reiterate that the balance is not right. We have been much helped by the report from my noble friend Lord Young and Professor Löfstedt, who have provided this perception and provided the evidence to allow us to act. This is the right approach for the Government to take.
Lord Hardie
Does the Minister accept that regulations that have the qualification of reasonable practicability afford an employer the opportunity of defending himself against a breach?
Viscount Younger of Leckie
The noble and learned Lord makes a fair point. Employers will continue to need to have to defend themselves. The issue depends entirely on the particular case in hand but this government action redresses a balance that is long overdue.
Lord Faulks
Before the Minister sits down, I am sure he will agree that, while some of the regulations have the defence referred to by the noble and learned Lord, quite a few of them do not provide this defence at all and there can be automatic liability without any fault. Does he agree that one of the problems of the perception of a compensation culture—there was perhaps an inadvertent hint of this—is the fact that these changes are not welcomed by safety consultants or those who are concerned to gold-plate some of these regulations?
Viscount Younger of Leckie
I am grateful for the points made by my noble friend. That is a very helpful intervention.
Lord McKenzie of Luton
Can the Minister give us some examples of where there is gold-plating of regulations under health and safety provisions?
Viscount Younger of Leckie
I believe that I covered in Committee and on Report all the aspects that I need to.
Lord Hardie
I am grateful to noble Lords for their contributions to this short debate. I note that the Minister and the noble Lord, Lord Faulks, accept that there are a number of regulations which have the qualification of reasonable practicability. Those regulations afford the employer the opportunity of defending his actions by saying, “I complied with these regulations so far as was reasonably practical”. If he proves that to the satisfaction of the court then he will avoid liability.
That brings me back to a point that I sought to make earlier. Why should a right of action be excluded from those regulations? If the intention of the Government is that employers should not be blamed for something that they have not done and should have an opportunity to defend themselves, then the qualified regulations do precisely that. There is no justification in law or in logic for removing the right of action in those regulations, which, as I have said, comprise the majority of the regulations.
I am grateful to the noble Viscount for researching the cases mentioned in the other place by Mr McDonald. I accept what the Minister said—that two of the cases would have succeeded at common law, contrary to what Mr McDonald said. However, according to the Official Report, there was a specific finding by the court that there was no common-law liability in the case of the roofer and slater, Mr Hill, who,
“fell from scaffolding during the course of his work and suffered very serious injuries resulting in incomplete tetraplegia. The accident occurred as he came down the scaffolding on a portable ladder that was not fixed or in any way secured; he fell to the ground, causing the injury. His injuries were so severe that damages were agreed at just under £2 million. The court held that there was no liability at common law, but there was liability under the Work at Height Regulations”.—[Official Report, Commons, 16/4/13; col. 236.]
That is a specific example of a case where common-law liability was unsuccessful but the plaintiff managed to secure damages because the employer had failed to comply with regulations designed for the safety of his employees and that failure was the cause of the accident. If Clause 61 had been in force, Mr Hill would have received no damages because he would have failed to have established his common-law claim for negligence.
The issues have been well canvassed and I feel strongly that this clause interferes with a fundamental right. No justification has been put forward for it and the Commons has not really considered the Lords’ discussions on this matter and has given no reasons for disagreeing with Amendment 38. I would welcome the opinion of the House.
Viscount Younger of Leckie
My Lords, on Report we debated the amendment in the name of the noble Baroness, Lady Hayter, on letting and managing agents. I made it clear then that the Government could not accept her amendment but that we were giving most serious consideration to the issue of redress. The noble Baroness confirmed that it was a redress mechanism that she was seeking in her amendment.
The Government have given serious consideration to these issues. We have considered reports by the Office of Fair Trading, Which?, the Royal Institution of Chartered Surveyors and others, and we have listened carefully to the debate here and indeed in the other place. The Government recognise that the fact that not all agents belong to a redress scheme has been an issue of growing concern. We are satisfied that making this a requirement would provide both the means of addressing complaints when things go wrong and a means to improve service quality across these important parts of the housing sector.
Providing access to redress would deal with many of the failings that people are concerned about in their day to day dealings with letting and managing agents. At the same time, the existing consumer protection and leasehold legislation remains in place and is already available, and is indeed used for the more serious matters.
Having listened to the concerns raised most specifically in this House by the noble Baroness, Lady Hayter, and others, including my noble friend Lady Gardner, the Government have introduced in the other place an amendment in lieu of the amendment tabled by the noble Baroness, Lady Hayter. The government amendment gives powers to require letting and managing agents of privately rented and residential leasehold homes to belong to a redress scheme. It gets to the heart of what the noble Baroness, Lady Hayter, was seeking, but without subjecting letting and managing agents to the additional layers of regulation that are in the Estate Agents Act and on which her amendment was based.
I am pleased to say that, while clearly some would have liked the Government to have gone further than redress, this amendment has been warmly welcomed and was approved without Division in the other place. Indeed, the honourable Member for Streatham, shadow Business Secretary Chuka Umunna, described it as,
“a victory for tenants and landlords””.—[Official Report, Commons, 16/4/13; col. 229.]
The Government’s approach has also been welcomed by key organisations. For example, the National Approved Letting Scheme welcomed it as a common-sense approach to improving the consumer experience of renting and letting and a sensible alternative to the heavy-handed bureaucracy of a formal regulatory regime. Similarly, the National Landlords Association has endorsed the Government’s approach of meeting the challenge of regulating letting agents head on, rather than simply applying the standards of estate agency to a distinct sector with its own significant risks.
If these clauses are enacted, the next steps will be for the Department for Communities and Local Government to consult on the details of the measures and to go through the formal scrutiny processes so that the necessary orders can be brought forward for approval in both Houses. We would expect consultation to be under way by the summer.
In their consultations, the Government will wish to take account of a number of the points that have been raised in the other place, for example on how existing codes of practice will be reflected in the redress schemes. There were also questions in the other place about the residential leasehold sector, generally echoing concerns that have been raised by my noble friend Lady Gardner of Parkes. The Department for Communities and Local Government is taking forward work on these issues, following its recent round table meeting, which my noble friend attended. I know that it will continue to involve my noble friend and a broad range of other interested parties on these matters.
My honourable friend in the other place, the Housing Minister, Mark Prisk, has spoken to the honourable Member for Worthing West about the points that he raised on the Leasehold Advisory Service and has now written to him.
The Government consider that this amendment can make a real improvement to the operation of letting and property management agents, for a very modest and proportionate regulatory burden. I am grateful to bodies such as the Office of Fair Trading and Which? for rightly bringing attention to these issues, and to noble Lords who have worked hard to bring these measures within the current Bill, in particular the noble Baroness, Lady Hayter, and my noble friend Lady Gardner. I also acknowledge my honourable friend in the other place, the Housing Minister Mark Prisk, who has a long-standing interest in this issue and has worked hard to deliver a workable redress mechanism within the current Bill.
I therefore ask that noble Lords do not insist on their amendment and instead agree with the other place on its amendments in lieu. I beg to move.
Baroness Hayter of Kentish Town
My Lords, I welcome and support Motion E. I pay tribute to a number of key players who have brought us to this happy position. First, there is the coalition of those interested in the well-being of tenants and landlords, as the Minister has mentioned, such as Which?, Shelter and RICS, which have given me a lot of help not only in drafting but in the persuasion, if I may say, of this House and then the Government, who perhaps were a little reluctant to start with but have made a very large step forward. The coalition that came together included representatives of tenants and landlords, as has been mentioned, but also the British Property Federation, the Mayor of London and various London councils, as well as the professional organisations to which some of these bodies belong.
The amendments in lieu are not exactly the whole of what the House asked for in passing my original amendment, in that they do not include a role for the OFT in debarring agents who go seriously astray. However, I am confident that with the build-up of intelligence by the various redress schemes, evidence will come to light on which the OFT or Trading Standards will be able to take action.
Furthermore, as happened with estate agents and as has been suggested in the consultation, ombudsmen will develop codes of conduct for letting and managing agents—based, no doubt, on the professional codes that they have in place now—to give member agents guidance as to how an ombudsman will decide a case. That is perhaps a backdoor way to the adoption of a code, but is very welcome for all that.
In due course, I and consumer groups will no doubt be asking for further regulation of letting and management agents if this measure proves insufficient to protect landlords and tenants, and I have a feeling that the noble Baroness, Lady Gardner, is not about to let this wider issue drop.
For the moment, I conclude by thanking our Lords PLP staff, Beth Gardiner-Smith, Sophie Davis and Ian Parker, for their help, and saying a very genuine thank you to both the Ministers who are with us this evening. They took a lot of trouble to listen to our concerns very carefully and—I am sure at some personal risk to themselves—battled with their colleagues at the other end to win through. This House has brought some good home sense to an issue that is of great importance to thousands of our fellow citizens.
Lord Sharkey
My Lords, I want to say two things. First, I congratulate the noble Baroness, Lady Hayter, on her determination and persistence in pursuing the case for a redress system for letting and managing agents, and I thank the Government for agreeing to act.
Secondly, I want to ask the Government about timing. The Minister knows that the amendments are couched in terms of “may” rather than “must”, but I am sure that in this case that means “will”. The question really is: when do the Government expect to be able to bring forward the appropriate orders? As we have all said in discussions on this issue, the matter is urgent; people are suffering now. Can the Minister give some indication at least of the expecting timing of the orders?
If it were not getting on for midnight, I would also ask what on earth Commons Amendment 40A(6) actually means. But it is getting on for midnight, so I will not.
Baroness Gardner of Parkes
My Lords, I congratulate the noble Baroness, Lady Hayter. This is a great personal success on her part. She has been persuasive. She has managed to encourage us all by winning that important amendment, and without that we would never have got to this point where people have really looked at things and decided that something can be done.
As the noble Baroness said, this is not something that we are going to let die, or lie, because there is still so much more to be done. Another hopeful thing has been the new Minister for Housing. With experience and work in the field as a surveyor, he knows what we are talking about, and this has made a big difference, particularly when we have had various round-table meetings. People have adopted the attitude that they want to look into things further. We have been given hopes that that they will look into everything much further later in the year, and I will be pressing that in my questions. As you know, I am particularly interested in reducing the percentage of people required to have commonhold instead of leasehold, because that would solve a lot of problems, but everyone agrees that 100% is an impossible requirement.
I pay tribute to the two Ministers. My noble friend Lord Younger has done a great deal, and it is marvellous that he has allowed housing to come into this, which was such a BIS affair. I cannot speak too highly of my noble friend Lady Hanham, who knows the housing issue so well. It is due to her persuasiveness that we have managed to get things to this point and have received notice today of these amendments. As has been said, perhaps they do not deal with everything, but they go a long way and are a huge first step. That is what we need, and again I am delighted to welcome these changes.
Viscount Younger of Leckie
My Lords, I am grateful for the contributions to this short debate. We have heard a small number of contributions today on the amendment on the letting and managing agents. As we know, this is a practical measure that can be taken forward rapidly to make a real difference to the experiences of landlords, tenants, freeholders and leaseholders.
In an attempt to answer my noble friend Lord Sharkey’s question, although the timetable is unclear at the moment I am not out of step to say that we fully expect orders to be brought forward by the end of the summer. It might be earlier.
In conclusion, I commend this Motion to the House.