Small Business, Enterprise and Employment Bill

Lord Low of Dalston Excerpts

Wednesday 11th March 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness, Lady Thornton, for her amendment and all her supporters, including Grazia magazine. I pay tribute to her tireless campaigning on gender equality. This is a very timely debate, following International Women’s Day on Sunday. I am pleased to confirm that it is the Government’s intention to accept the noble Baroness’s amendment, subject to changes that I am proposing by way of government Amendments 58ZZA and 58ZZB.

Before turning to the amendments, I remind the House of some key facts about the pay gap and the work that the Government have already been doing to close the gap and improve transparency. First, it is important not to lose sight of the fact that, according to ONS figures, the gender pay gap has fallen to its lowest level ever. It has been virtually eliminated among full-time workers under the age of 40, which is a more positive way of looking at the statistics. We are broadening the career aspirations of girls and young women by encouraging them to get into STEM-related careers through the Your Life campaign. Opening up these highly skilled areas ensures that women are less concentrated in sectors that offer narrower scope for reward and career progression.

We have also championed the voluntary, business-led drive by the noble Lord, Lord Davies, to get more women on boards. Women now account for around 23% of FTSE 100 directors, up from 12.5% in February 2011, and there are now no all-male boards in the FTSE 100. It is a huge step forward. Last night I attended the fantastic dinner for women on boards, hosted by the Secretary of State for Business, Innovation and Skills and sponsored by Lloyds Banking Group, encouraging this key group of women to drive forward further progress, which I believe is very important.

We are modernising the workplace to give women a fair chance to get to the top. Last June, the right to request flexible working was extended to all employees, and from April we will introduce a new system of shared parental leave. Further, almost 2 million families could benefit from our new tax childcare scheme from autumn 2015, which is worth up to £2,000 per child.

In January we published new guidance for employees on the gender pay gap. Research has shown that organisations perform better when they have a good balance of women across teams and in senior roles. Our guidance helps women to check if they are being paid fairly and encourages good practice of the kind the noble Baroness mentioned. Furthermore, new EU software to help UK employers analyse their pay data can now be downloaded for free. We are already encouraging greater transparency about pay. We have banned pay secrecy clauses, changed company reporting on boardroom diversity and introduced mandatory equal pay audits for companies that lose equal pay claims. We have also been working in partnership with business to tackle the root causes of the gender pay gap and promote culture change and greater transparency through the Think, Act, Report initiative, which the noble Baroness mentioned.

Because of Think, Act, Report we now we have a powerful business community of best practice with more than 275 leading companies—the figure is right—employing more than 2.5 million people, leading the way on gender equality. Of course, Think, Act, Report was never intended as a substitute for Section 78; it is so much broader and has achieved a lot. We said that we would keep Section 78 under review and that is exactly what we have done. We now want to build on the progress we have made. We need to take into account that one size will not fit all and that is why the Government feel strongly that we must consult on how Section 78 is taken forward. I welcome the amendment from the noble Baroness, Lady Thornton. I am proposing two amendments to it—Amendment 58ZZA to ensure it fits properly with the Equality Act provision, and Amendment 58ZZB to require consultation before implementation—which the noble Baroness has graciously indicated that she will accept.

We know that business is particularly concerned about being required to report more information, so we also want to ensure that the Government actively engage business during a proper consultation. This will ensure that we find the best way of implementing Section 78 in a business-friendly way, making use of information employers already have available and without being bureaucratic. In order to bring forward tailored, workable regulations, it will be essential for the Government to consult business properly, as well as others with interests and expertise in the area. We want to ensure that the requirements on business can be fulfilled and that the data published are of real use. I am therefore grateful to the noble Baroness for agreeing to these important adjustments to her amendment.

[Lord Low of Dalston (CB)]

My Lords, I was glad to put my name to the amendment in the name of the noble Baroness, Lady Thornton, and I am equally delighted to support the government amendment that essentially accepts the noble Baroness’s amendment but makes some minor modifications to the text. In view of the welcome degree of consensus that is breaking out, I will endeavour to speak quite briefly.

The Equal Pay Act was passed in 1970—all those years ago—but 45 years on there is still a significant gender pay gap. In 2014, women in full-time employment earned 9.4% less than men in full-time employment. The gap was wider for part-time work. Female part-time employees earned 37.9% less than male full-time employees. For all employees, the gender pay gap was 19.1%.

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These are proportionate and modest amendments. The Government have already accepted the principle behind the approach. These amendments simply ask them to accept that it should not be restricted to the NHS and should be applied more widely, wherever the public interest is sufficiently involved to require a regulatory mechanism. I beg to move.

[Lord Low of Dalston]

My Lords, I have put my name to all these amendments, which have been spoken to so ably by the noble Lord, Lord Wills. I will speak very briefly to them in the order in which they were grouped.

I very much welcome the Government’s speedy response to the recommendations of the report by Sir Robert Francis on speaking up, or whistleblowing, in the NHS. However, like the noble Lord, Lord Wills, I am concerned that too narrow an approach has been taken to the issue of protecting whistleblowers in the job application process. Surely it is not right to adopt such a piecemeal approach to the development of legal protection for whistleblowers. This is why I support Amendment 58ZA, tabled by the noble Lord, Lord Wills, which calls for the protection of anyone who, in applying for a new job, is discriminated against for making protected disclosures or for blowing the whistle in a previous job. I emphasise anyone, not just workers in the NHS. The Government’s movement on this issue and their recognition of the principle is very welcome but, like the noble Lord, Lord Wills, I cannot for the life of me see why they should confine their approach to the NHS. Surely what is good for workers in the NHS must be just as good for workers in any other sector. This is an issue that many whistleblowers have said results in real hardship, as is evidenced in the Francis report. I believe that anyone who is not employed because the potential employer knows about their whistleblowing activity in a previous job should be able to remedy such discrimination in law.

I also support Amendment 59, as I believe that it will assist the Government in taking a cross-sector, strategic view of the UK whistleblowing framework. As the noble Lord has indicated, now is the time to put in place a structure that will collect and analyse not just the reforms in this Bill but recommendations from other inquiries that will impact on the whistleblowing framework, whether these come from the banking sector, the NHS, social services or the police. There is real value for employers, regulators, the Government and society as a whole in reviewing these issues on a regular basis. I hope very much that the Minister will see this amendment, which provides for a regular review of the whistleblowing framework, as a useful mechanism not just for identifying what is missing from the framework but also for helping to spread and encourage good practice among employers.

Turning finally to Amendments 59A to 59F, which give power to the Secretary of State to establish a number of national whistleblowing review officers, I agree with the noble Lord, Lord Wills, that a role such as this will help to plug the regulatory gap that exists in the whistleblowing framework. This would make it possible for such a national whistleblowing review officer role to be created, by order of the Secretary of State for Business, Innovation and Skills, in any industry, not just in the NHS, as the noble Lord, Lord Wills, said. This role complements the regulatory reporting provisions contained in the Bill that the Government intend should drive change in relation to whistleblowing across all industries. It will enable a review officer to be created in any sector or industry, whether that is financial services, the health and care sectors, or services in relation to vulnerable adults and children.

Given the very many scandals brought to light by whistleblowers in recent years—in our care homes, our schools and our local authorities—I consider that such a role could only do good in driving forward the development of good practice in whistleblowing across all sectors. What is more, a role that has the features described in this amendment will provide a quick and simple warning system for regulators and organisations where there is a failure to deal properly with a whistleblowing issue. I therefore look forward to hearing the Minister’s response on these amendments, which I am pleased to support.

[Lord Phillips of Sudbury (LD)]

My Lords, my name is also to this group of amendments. I thank the noble Lords, Lord Wills and Lord Low of Dalston, for making most of the points that need making, and making them forcefully.

It seems extraordinary that the Government should have introduced Amendment 58A in the wake of the 200-page report by Robert Francis QC, entitled Freedom to Speak Up and published only last month. It is bizarre that they confine the provisions in the amendment to the National Health Service, for reasons which have been touched on by the two Peers who have already spoken. The need for the protection of Amendment 58A is universal.

I should perhaps say that in my long legal career I have dealt with a number of whistleblowing cases, and was charged back in the 1980s with trying to register a charity which had as its principal purpose the support of whistleblowers. That was successful—not, I may say, without vast and prolonged effort, because at first the Charity Commission viewed the very idea as bizarre. In 1993, the charity Public Concern at Work was formed and is still operating with huge effect. All of us here tonight are grateful for the work that it has done and the information which it has provided to us under the leadership of Cathy James. Its work leads it even now—or perhaps more than ever now—to advise about 800 people a year who have personal, direct, often plangent problems in relation to their employment and their attempt to try to get those who employ them to take seriously malfeasance—sometimes corruption, sometimes wilful and terrible illegality.

Public Concern at Work is, as I said, better informed than any other agency in this country as to just what whistleblowers have to go through. Our point is that whistleblowers are not some little sideshow. If we are serious about attacking the widespread and growing corruption and criminality that, I fear, infects so much of what we value in this country, we have to support whistleblowers. Frankly, they are the only people who can uncover criminality at source, often at a time when, if it can be dealt with, doing so will save vast loss and suffering. One has to look only at the collapse of the financial markets of the world, led by the City of London in 2008, to realise just what terrible losses we have all suffered—trillions rather than billions—by reason of the fact that there were virtually no whistleblowers from within the City of London, or indeed the other financial centres, who were able to get the facts relating to what was going on in their entities to the authorities in time for them to take action.

Again, I have a certain amount of personal experience of this. One thinks, for example, of Paul Moore of HBOS. He blew the whistle, except that he blew the whistle to his own board, saying openly and clearly that the measures taken in that bank to balance risk and opportunity were unsustainable and were leading the bank, and had led the bank, into the most dangerous of situations. He not only got no succour when he took this matter up the scale in the bank but has not had a job in the City of London since then—we are talking about 2007 or 2008—despite his huge experience as a former partner at KPMG and senior financial officer at HBOS.

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[Baroness Neville-Rolfe]

We have very good evidence from the Francis review. We do not have evidence for all other sectors and, of course, the amendment would apply to the private sector and the coverage would be very wide-ranging. Several noble Lords asked why it is a two-tier system and the noble Lord, Lord Hunt, asked why we are not doing it universally. Sir Robert’s findings were health-specific. He reported that he had seen evidence of individuals suffering serious detriment in seeking re-employment in the NHS after making a protected disclosure. That is what we are talking about. The health sector has one of the highest instances of whistleblowing reporting, perhaps for the reasons that the noble Lord, Lord Hunt, suggested, and, consequently, has the greatest potential for discrimination against whistleblowers, who therefore cannot get another job. The NHS is one of the largest employers in the world, I am glad to say, and should operate to the very highest standards of integrity in its recruitment practice.

[Lord Low of Dalston]

I thank the Minister for giving way. She makes the case that we have particular evidence in relation to the health service and so she wants to act on the health service. With regard to all the other sectors that we have asked the Government to take into consideration as well, would it not be better to put a system in place to stop the scandal before it happens rather than wait and close the stable door after the horse has bolted?

[Baroness Neville-Rolfe]

I thank the noble Lord, Lord Low, for his intervention. We have to legislate in an informed and evidence-based way. We have brought forward the provisions on the NHS and it is very good that noble Lords opposite support that at this late stage. We are not in the same situation in relation to other sectors. There are various arrangements and we are making general improvements on whistleblowing.