Enterprise and Regulatory Reform Bill

Baroness Thornton Excerpts

Wednesday 14th November 2012 Lords Chamber

[Baroness Thornton]

My Lords, I am very pleased to participate in this Second Reading debate and to be part of my noble friend’s Bill team. We will try to do something useful with what is a pretty terrible Bill. Having worked on the Public Bodies Bill and the health Bill, there is quite a lot of competition for that prize with this Government. As other noble Lords said, the Bill is incoherent. It provides no compelling vision, no consistent message and no connected approach across government to drive growth. That is a shame.

I will concentrate on Clauses 56, 57 and 58, which are no less than a systematic undermining of the UK’s entire equalities infrastructure for what appears to be no reason other than dogma and political spite, which I hope at least the junior partners in the coalition will not support. The clauses relating to the Equality and Human Rights Commission—as even Vince Cable admitted—have no significant impact on business growth. The Government’s own impact assessment states that either they will have a negative impact or they will add nothing to the main purpose of the Bill. So why are they here? There is no tangible, quantifiable, empirical evidence linking the measures put forward in Clauses 56, 57 and 58 to business growth.

Clause 56 covers changes to the Equality and Human Rights Commission’s statutory powers and duties. I beg to differ from what I thought was the rather complacent view of the noble Lord, Lord Lester, about the dangers that face this body. The Bill seeks to amend Part 1 of the Equality Act 2006, which sets out the Equality and Human Rights Commission’s statutory powers and duties. It repeals Section 3, which sets out the general duty of the commission. It repeals Section 10, which imposes a duty on the commission to promote good relations between members of different groups. It repeals Section 19, which gives the commission powers in association with Section 10. It repeals Section 27, which enables the commission to make arrangements for the provision of conciliation in certain non-employment related disputes, and it amends Section 12, which requires the commission to monitor and report every three years on its progress. It reduces from three to five years the frequency with which the commission is required to publish a report on its progress.

These legislative changes should not be considered in isolation. In addition to the proposal to amend the legislative basis of the EHRC, the Government are undertaking a range of actions that seriously threaten the commission’s independence and effectiveness. By 2014-15, the EHRC will have had its budget cut by 62%. It will have lost 72% of its staff compared to when it was established in 2007. These are disproportionate cuts. They will make the EHRC about the same size as the former Disability Rights Commission—just one of the three equality commissions that it replaced.

In addition, the new framework document between the EHRC and the Home Office pays little heed to Part 4 of the Equality Act 2006, which states:

“The Minister shall have regard to the desirability of ensuring that the Commission is under as few constraints as reasonably possible in determining … its activities … its timetables, and … its priorities”.

This has drawn concern from the chair of the ICC, who stated that the new framework document significantly limits the EHRC’s freedom,

“to determine priorities without undue influence by the Government”.

The EHRC works to reduce inequality, eliminate discrimination and strengthen good relations between people. Undertaking these functions effectively requires proper funding of the EHRC, and the retention of its full legal remit and independence. I do not say that the EHRC needs to be funded—in case the Minister is under any illusions—as it currently is. Of course it has to play its part, as do all other government departments. However, the figures that I cited—

[Lord Lester of Herne Hill]

As the noble Baroness accused me of complacency, perhaps I could ask her to confirm that nothing in these changes will affect the guarantees of independence that together we wrote into the 2006 Act—some of which she referred to—nor the functions on enforcement that I quoted in my speech. The changes deal only with aspirational matters.

[Baroness Thornton]

I think that the noble Lord is quite wrong, and I will go on to say why. According to the Paris principles, a national human rights institute needs to enjoy financial autonomy that will enable it to determine its priorities and activities. General observation 2.6 on adequate funding, issued by the sub-committee on accreditation of the International Coordinating Committee of National Human Rights Institutions, states:

“Financial systems should be such that the NHRI has complete financial autonomy. This should be a separate budget line over which it has absolute management and control”.

The actions of the Government are undermining the EHRC’s celebrated A status. Is their intention to preside over the downgrading of our national equalities and human rights body so that we can join Sri Lanka, Kazakhstan and the Congo, for example, with a B status, for whatever reasons those countries may have a B status—it could be that they do not have a body or that their body is not independent of their Government—instead of being part of the A status group, which includes most of the western world?

Section 3 of the Equality Act requires the EHRC to encourage and support a society based on freedom from prejudice and discrimination, individual human rights, respect for the dignity and worth of each individual, equal opportunity to participate in society and a mutual respect between groups based on understanding, valuing diversity and a shared respect for human rights. Section 3 provides a guiding vision for the EHRC that unifies equality and human rights, which we discussed in 2006. While it is recognised that improvements are needed in the governance and management of the EHRC, confusing that with changing its legislative-provided remit is unjustifiable. Time should be allowed for the newly-appointed chair to implement the changes she wishes to make before the purpose of the organisation is undermined.

Vince Cable admits that there is no business advantage to be gained from removing Section 3 and terms it simply a piece of “legislative tidying-up”. However, there is a significant risk that removing Section 3 will prove to be a substantial loss. Professor Sir Bob Hepple QC, who I know has been a partner in crime of the noble Lord, Lord Lester, over many years, says that it has the potential to leave the Equality Act rudderless. Can the Minister explain exactly what getting rid of this general duty will do to encourage enterprise and grow the economy, or even what part of this duty puts a bureaucratic burden on business?

As to Section 10 of the Equality Act, which covers the duty to promote good relations, I can only assume that someone got out of the wrong side of the bed in a bad temper to draft this legislation to repeal the EHRC’s duty to promote good relations between members of different groups. That duty has been used in the past to include guidance on tackling political extremism in local elections, the kick racism out of football campaign and work carried out to improve social cohesion following the riots and troubles in Northern Ireland cities in 2001. Without this duty, the EHRC will be concerned only with regulating the vertical relations between organisations and individuals, rather than being able to undertake initiatives aimed at and positively influencing wider public attitudes and improving relations between individuals and groups. We need to keep all of this duty in the original legislation. As I have said, this legislation poses a threat and may lead to the removal of our A-grade status, which is a very serious matter.

I believe that we are at one across the House—many of us are with the noble Lord, Lord Lester—on Clauses 57 and 58. The Government seek to repeal Section 40 of the Equality Act 2010, which makes an employer liable for the repeated harassment of its employees by third parties, including customers, clients and service users. The noble Lord, Lord Lester, eloquently and adequately explained what that means and gave a very good example. There are many more examples, which I am sure will emerge in Committee.

While it may be true that there has been only one case of third-party harassment ruled on by an employment tribunal, it is also true that only four years have passed since the commencement of the provision and repealing it now would surely be premature. The TUC asserts that the introduction of Section 40 in the Equality Act has already led to a step change among employers, with actions undertaken to make it clear to service users that the harassment of their staff would not be tolerated. However—this is something which, I hope, will appeal to the Minister—there may be hidden costs to business of not prioritising action against third- party harassment. Harassment can have a significant effect on the mental and physical health of a workforce and be a major cause of work-related stress affecting performance and absence levels. I would also like to ask the Minister if repealing this provision would leave the UK in breach of EU law—the equal treatment directive 2002/73/EC which refers to the duty of employers to take measures to combat all forms of sexual discrimination, in particular preventive measures against harassment and sexual harassment in the workforce. I should also say that in the Government’s red tape challenge, there was no publicly available evidence of concerns being raised about this issue. When the Government consulted on third-party harassment, of all those who were asked, the vast majority, 71%, said that they opposed the repeal.

I turn now to Clause 58. Again, the noble Lord, Lord Lester, is quite right. Section 138 of the Equality Act 2010 means that a person who thinks that they may have been unlawfully discriminated against, harassed or victimised can obtain information from the person, employer or service provider they think has acted unlawfully against them. I think that the noble Lord, Lord Lester, was one of the authors of this legislation 40 years ago, so why the Government would want to remove it, I do not know. It is completely counterproductive. Some 80% of those who responded to this opposed the abolition of the questionnaire procedure, and there is no evidence to support the Government’s claim. In fact, case law makes it clear that businesses and other respondents find this to be a valuable way of dealing with issues before they reach the law or tribunals because they establish the facts and clarify the issues which are in contention. Indeed, the Government’s own impact assessment failed to provide any empirical support for removing this regulatory burden on businesses. I ask the Minister seriously to reconsider this part of the Bill as we proceed.

The Bill falls far short of the visionary legislation that the Government suggested. It is several Bills rolled into one, which is why a team of us will be dealing with those bits that form parts of our briefs. It has been labelled an enterprise Bill, but I do not think that that is the case. The Government are seeking to make fundamental changes not only to the employment rights of every person in this country, but to change the remit of the body charged with promoting a society free from discrimination. As a result of the changes proposed in Clauses 56, 57 and 58, this House should have very real concerns about the impact they will have on the most vulnerable in our society and, indeed, on our nation’s international credibility.