Apprenticeships

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 26th June 2014 Grand Committee

[Viscount Younger of Leckie]

My noble friend makes a good point. As it is a very specific question, I will write to him with the particular openings and opportunities for funding in that area.

[Lord Young of Norwood Green]

My Lords, I will keep an eye on the clock and be brief. I have one comment and a couple of questions. On the subject of public procurement contracts, I refer the Minister to the Crossrail experience, where every subcontractor is employing apprentices. There is no deterrent there and no need for one. We are not talking about every public procurement contract, just those over £1 million.

Secondly, the Minister still talks about the total number of apprenticeships. I know that the actual number is true, but it is time we started to disaggregate them so that we deal with adult apprenticeships and then find the total number in the 16 to 24 age range. There has been a decline in these in the past year—certainly for those under 19—and that is worrying, given the number of NEETS.

Lastly, I would be grateful if the Minister could tell us how many more Group Training Associations have been created.

[Viscount Younger of Leckie]

We have run out of time, so I will write to the noble Lord to address his issues.

To complete my speech, we owe it to future generations and to the tourism industry to ensure that the physical fabric of our great country is maintained.

Royal Mail: Universal Postal Service

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 19th June 2014 Lords Chamber

[Viscount Younger of Leckie]

Yes, and I know that the chief executive of Royal Mail made a few comments about this a few weeks ago. I should, however, reassure the House that Royal Mail delivers more than 99% of all letters and 37% of parcels. Other suppliers—that is, the incoming competition—directly deliver around 24 million items per year, compared to the 55 million items per day delivered by Royal Mail. So the competition is healthy but is not a threat.

[Lord Young of Norwood Green (Lab)]

The noble Viscount said that only Parliament can change the universal postal service, but is he not concerned about the fact that we have had already one massive increase in stamp price, with a further increase being projected by Royal Mail? Should he not, therefore, take a bit more seriously the threat of competition and the way in which it emerging? I can only reinforce the point that my noble friend Lord Hoyle made about the need to ensure that Ofcom, in delaying unnecessarily the response on this vital issue, does not undermine what everyone in this Chamber treasures—the universal postal service.

[Viscount Younger of Leckie]

The restrictions were laid down by this Government when we came into power, with the Postal Services Act going much further than any restrictions put down by the previous Government. Competition is healthy, and it is very much a matter for Ofcom to review the progress of Royal Mail. Ofcom continues to do that and will give a proper, full assessment at the end of 2015.

Living Wage

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 9th June 2014 Lords Chamber

[Viscount Younger of Leckie]

We encourage businesses to pay the living wage—indeed, the living wage or above. However, I say again that a mandated pay floor, completely detached from an affordable level, is likely to bring about job cuts. The National Institute of Economic and Social Research has estimated that increasing the national minimum wage to the living wage would cause a net job loss of 160,000.

[Lord Young of Norwood Green (Lab)]

My Lords, I trust that the Minister would agree that the introduction of the minimum wage in fact benefited millions of people who were on appalling levels of pay. Perhaps the problem with the minimum wage has been to ensure its consistent enforcement. At long last, the Government have got down to improving those measures but we still have a long way to go. What consideration has been given, first, to increasing the penalties, secondly, to ensuring that local authorities play a part in ensuring enforcement of the minimum wage and, thirdly, that all those who fail to pay it—including a major premier football club—are named and shamed?

[Viscount Younger of Leckie]

The noble Lord makes some good points about enforcement. We are taking strong action on this front. He will be aware that 25 other firms have been named and shamed in the past few days. The case of the Premier League football club that the noble Lord raises was dealt with under the old naming policy, pre-October 2013, and did not meet the financial criteria of £500 per worker so could not be considered for naming.

United Kingdom: Exports

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 8th May 2014 Lords Chamber

[Viscount Younger of Leckie]

Yes, indeed. Design is very much embedded in many of the manufacturing companies, and much work is being done on that. My noble friend mentioned the creative sector, and she will be aware that the sector employed nearly 1.7 million people in 2012, which represented 5.6% of the UK total. So it is a most important sector, and we continue to promote it. Part of that involves the Government setting up the Creative Industries Council.

[Lord Young of Norwood Green (Lab)]

My Lords, has the Minister had time to reflect on the impact of the Government’s immigration policies on services? This was brought to mind by a letter that I received today from one of his colleagues, the noble Lord, Lord Ahmad of Wimbledon, who tells me that,

“we do recognise that these necessary visa reforms have had an impact on perceptions overseas and that we need to get better at communicating that all genuine students are welcome here and that there are opportunities for them to both study here and work after graduation”.

We certainly need to get better, because the number of overseas students taking up places in England’s universities decreased by 4,500 in one year, the first fall in 29 years.

[Viscount Younger of Leckie]

My focus and the Government’s focus is on promoting the UK. The professional and business services sector is the UK’s largest economic sector, contributing 12% to UK employment and 11% of gross value added. To take up the noble Lord’s point about jobs, the PBS sector employs 3.8 million people, accounting for £147 billion to the UK economy. I do not at this stage want to get into the visa aspect, but I wanted to point out the importance of the sector.

National Minimum Wage

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 1st April 2014 Lords Chamber

[Lord Young of Norwood Green]

To ask Her Majesty’s Government what plans they have to mark the 15-year anniversary of the minimum wage, which took effect on 1 April 1999.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

Since 1999, the national minimum wage has grown faster than average earnings without an adverse effect on employment. Going forward, we want to ensure that the benefits of growth are shared equally. The best way to mark this anniversary is to commit to continue to deliver benefits to the low paid through the national minimum wage for the next 15 years and for many years thereafter.

[Lord Young of Norwood Green (Lab)]

I thank the Minister for his reply and congratulate the Government on their new-found conversion to the benefits of the minimum wage—and even the living wage. It makes a pleasant change from the previous opposition of the Conservative Party and the CBI and their predictions that it would cause massive job losses. Does the Minister agree that the minimum wage depends on effective enforcement? What are the latest figures and are we actually naming and shaming those who are still not obeying the law? Are there any plans to increase the minimum wage?

[Viscount Younger of Leckie]

My Lords, the naming and shaming scheme, as the House will know, came into effect on 1 October 2013. The new rules are part of the Government’s efforts to toughen enforcement of the national minimum wage and to increase compliance. By naming and shaming employers, it is hoped that bad publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the national minimum wage. The Government have accepted the Low Pay Commission’s recommendation of the first real increase since 2007. We welcome its assessment, and 2014 could mark the start of a new phase of bigger real increases in the minimum wage.

National Minimum Wage (Amendment) Regulations 2014

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 24th February 2014 Grand Committee

[Viscount Younger of Leckie]

I thank noble Lords for their contributions during this very brief debate and I hope to address all the points that were raised.

The noble Lord, Lord Jones, raised important points about young people. It is true that there is much more work to be done. Although the deterioration of the labour market situation for young people predates the recession and this Government and the recession hit the employment rates among young people particularly hard—I think that everybody is aware of that—there are signs of recent improvements in the statistics.

In the three months to November 2013, there were 920,000 unemployed young people. While that figure was down 39,000 both over the quarter and over the year, that number illustrates how much work we need to do and must do. However, around a third of young people were in full-time education. The unemployment rate for this group was 18.1% in the three months to November 2013—young people make up around 9% of the total population. The number of young people on the claimant count has fallen for 19 consecutive months and was 315,000 in December 2013. In addition, the number of young people who have been claiming JSA for more than 12 months is down by around 25% over the year.

Youth unemployment remains lower than after past recessions: for example, 9% of 16 to 24 year-olds have left full-time education and are workless, against 12% back in 1993 and 14% in 1984. I thought that it might be helpful to produce some context for this discussion but at the same time reiterate how much more work there is to be done.

The noble Lord, Lord Jones, referred to Wales—a very important country and I say so as a Scot. I should clarify that the national minimum wage is a reserved matter. Changes to the penalties regime will cover the United Kingdom. Traineeships will be available only in England and the bespoke exemption will apply only in England. Therefore, in effect, it is not applicable in Wales and there will be no impact there.

The noble Lord also raised the issue of policing to prevent underpayment and asked how many people made up the enforcement unit within HMRC. That is a very specific question on which I will be very happy to write to him to give the figures.

The noble Lord, Lord Young, raised the issue of pay for traineeships. As he said, the general view is that traineeships would not be paid; there is no obligation for employers to pay. It is very much hoped that all employers will see fit to pay for meals and for some transport, but there is no obligation to pay them. He also mentioned skills in maths and English. As he knows, we are progressing with those skills for those people who do not have the necessary GCSEs.

On IT, the noble Lord made a very good point. I think that it is fair to say—and it is a bit of a generalisation, I know—that most young people are pretty savvy when it comes to IT, but it is noted that the noble Lord has raised that issue. It is not part of the programme, but it is noted and I shall take it away.

[Lord Young of Norwood Green]

I agree with the Minister that they are savvy in some ways. Most of them have PhDs in social networking, though not necessarily in the dangers and risks. I am interested in IT skills as they would apply to enhancing their employment prospects, which is a slightly different sector.

[Viscount Younger of Leckie]

I fully accept that point. I shall endeavour to write to the noble Lord with some information on that if we have it, looking specifically at the traineeships and IT.

The noble Lord asked whether the 50% reduction in penalties applied if someone was a repeat offender. The answer is yes. It applies only to the financial penalty. Just to be clear, the employer has to pay back the full arrears to employees within 14 days for the 50% reduction to be applicable.

The noble Lord raised an important point about quality and asked how we would ensure the quality of the traineeships. We have put in place a number of measures to ensure that the work experience is a high-quality learning experience for each young person. Only providers who are graded good or outstanding by Ofsted are eligible to deliver traineeships. The Department for Education has published guidance on what is required to ensure that the work experience is of good quality. Providers are responsible for actively monitoring the work experience placement and working with employers to ensure that it meets each individual’s needs. Providers are given funding to support them to do this, and we have commissioned an external evaluation of traineeships starting from the first year. My department, BIS, is funding the Education and Training Foundation to deliver a traineeship support programme for providers delivering traineeships, focused on ensuring that they are high-quality programmes. I hope that gives some reassurance to the noble Lord.

The noble Lord, Lord Young, raised the matter of naming and shaming. I can assure him that that is very much on our radar. He will be aware that the revised national minimum wage naming and shaming scheme came into effect on 1 October 2013. As I said earlier, the new rules are part of government efforts to toughen up enforcement of the national minimum wage and to increase compliance. By naming and shaming employers, it is hoped that our publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the national minimum wage. This is on top of financial penalties, to which I just referred, which employers already face if they fail to pay the national minimum wage. As for the timing—which was the specific question from the noble Lord—I cannot give a precise date, but we are likely to start naming employers very soon.

The noble Lord, Lord Jones, asked about the total amount of finance available for enforcement in the latest year available. HMRC enforces the national minimum wage on behalf of the Department for Business, Innovation and Skills. The national minimum wage enforcement budget allocation for 2013-14 is £8.3 million.

The noble Lord, Lord Young, asked a question as to what financial support is available to young people on traineeships. I mentioned earlier that employers are not required to pay young people, but I failed to mention that young people on traineeships will be undertaking educational training and will be able to apply to existing programmes of financial support aimed at learners, including the £180 million bursary fund for those aged 16 up to 19 and the discretionary learning support fund for those aged 19 up to 24. I hope that gives a fuller answer than my previous one.

I believe that I have covered all the questions raised, but I would like to reiterate, in conclusion—

--- Later in debate ---

[Lord Young of Norwood Green]

I asked the Minister for some clarification on the figures that he quoted for HMRC—the amount that was in arrears—so that I could get a clearer picture of how well HMRC is succeeding in tackling this problem. He did not really return to that. There were two figures that I wrote down: one was £45 million in arrears, and I am not quite sure what period of time that related to; the other figure he quoted was something like £3.9 million in wage arrears. I just could not make sense of those; that might be my fault rather than his, so that is why I asked for clarification.

[Viscount Younger of Leckie]

The noble Lord is right to ask for clarification, not to the extent that we do not have the figures. The best thing to do would be for me to write to the noble Lord with the figures. There is a tabulation in front of me and I think it is better to give those specific figures, and to copy in any noble Lords here today who might also like to see them.

I would like to conclude by reiterating the value of the government-funded traineeships programme in England, which is providing young people with the skills and experience they so vitally need to take their first step into the labour market. Traineeships are a central pillar in this Government’s commitment to tackling youth unemployment. These regulations simply clarify the fact that employers offering work experience opportunities to young people as part of a traineeship on their journey towards employment will not be required to pay the national minimum wage, as is the case with other government programmes that include work experience. These regulations will now be debated in the other place in the charge of my honourable friend Jenny Willot MP.

Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 24th February 2014 Grand Committee

[Lord Young of Norwood Green]

My Lords, to continue, I was making the point that it was interesting to hear the Minister talking about threshold firms. One of the continuing problems with the construction industry, as I was saying, is still the problem of bogus self-employment, especially on large sites where it makes a difference. I know, for instance, that there are some more enlightened managers of some of the large projects who have been trying to encourage companies not to engage in this and, as they should do, to register people for PAYE who are in fact continuously being employed; this would obviously count towards the threshold for the training levy. It would be interesting to hear whether the Minister has any views on that and whether he agrees with me that this is a continuing problem.

With those questions and that slight reservation, I welcome the order.

[Viscount Younger of Leckie]

I thank the noble Lords, Lord Young and Lord Jones, for their contributions to this afternoon’s debate. I would like to address several questions that were raised and, if I may, start with the noble Lord, Lord Jones, who asked how much was paid by the Government in grant to the ECITB. I can reassure him that the funding for the ECITB is raised from the employer levy, so the ECITB does not receive any grant-in-aid funding from the Government. However, all funds are accountable to Parliament, which might give some further reassurance.

The noble Lord, Lord Jones, also raised the history of ITBs and the background to the closure of the ITBs back in the 1980s. It is nice for me to know that he thought that I might have been too young in the 1980s to understand, or to have been around for, the levy system, but it happens that I was employed by a major multinational textiles firm at the time and was working in human resources. I remember very clearly working with my superior to monitor and fill in the levy forms, which were pretty extensive, so I have some experience of that.

Bringing us forward to the modern day, I should say that the training boards continue with the support of employers, and the Government do not want to impose levies on industry but are responsive to employers who can benefit from such arrangements. That is the case for construction and engineering construction, which have mobile and flexible workforces. Who knows, other industries by sector may approach the Government for a similar regime. There are none so far, but the noble Lord makes a good point.

The noble Lord, Lord Jones, raised the issue of how the ECITB is monitored. The Minister in the other place has an annual meeting to review the performance of each ITB. The performance and accounts are for public record and are published annually. The Secretary of State for Business, Innovation and Skills appoints all the board members, and Government officials attend all the board meetings regularly to review performance with the boards.

The noble Lord, Lord Jones, asked about small businesses, with a particular focus on SMEs. It is very much a feature of the industry that the majority of employers are larger. I am happy to have a discussion with the noble Lord outside about my views about how small businesses are progressing.

On apprentices, the noble Lord may well know that we have managed to find 1.5 million apprenticeships since 2010. The noble Lord, Lord Young, also asked about apprenticeships and how many in the 16 to 18 year-old and 19 to 25 year-old bracket were involved in public procurement contracts. Although we do not have a breakdown of the numbers by age group or in public procurement contracts to hand, the nature of the engineering industry is likely to mean that the majority of apprentices will be aged 19 or over. I will certainly write to the noble Lord with any concrete figures that we can find to enlighten him.

The noble Lord, Lord Jones, asked who chairs the ECITB and who its CEO is. It is nice to be able to name names for once. The board is chaired and led by Andrew Collinson, who has extensive experience in the engineering construction industry, and the chief executive is David Edwards. The key feature of such boards is that they are employer led, and all the board members have experience of the industry and can speak on behalf of employers.

The noble Lord, Lord Young, raised the issue of bogus self-employment, to paraphrase his question. That is an issue in the construction industry. The orders cover not just PAYE but labour-only contracts. I agree that that matter needs further consideration, and I am grateful to the noble Lord for raising that point.

The proposal before the Committee relates to the engineering construction industry, and it continues to be the collective view of employers in the industry that training should be funded through a statutory levy system in order to secure a sufficient pool of skilled labour. I commend the order to the Committee.

[Lord Young of Norwood Green]

Before the noble Viscount sits down, I meant to ask this question during my contribution—I apologise to him. Were the figures he cited of 2,500 apprenticeships and 30,000 learners an increase on previous years? If he does not have the answer, obviously I understand.

[Viscount Younger of Leckie]

It may be appropriate for me to help the noble Lord by writing to him, but this might also be a moment to explain that the ECITB supports about 2,000 apprenticeships every year. I think I need to give a more precise and concise answer about the year-on-year figures, which I will endeavour to do.

Economy: Manufacturing

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 10th February 2014 Lords Chamber

[Viscount Younger of Leckie]

My noble friend makes a very good point. Indeed, manufacturing has changed enormously. Although I do not have a precise definition for him, it is true that manufacturing includes myriad small businesses that are working very hard not just within the UK but in helping our export drive.

[Lord Young of Norwood Green (Lab)]

My Lords, any growth is welcome but it is worth noting that manufacturing is still lagging behind services and construction in this week’s PMI figures, which measure business confidence. Is the Minister aware that concerns have been voiced by major manufacturers, including Nissan and Hitachi, about pushing Britain towards the exit door in Europe? A report from the manufacturers’ association, EEF, shows that manufacturers want to remain part of the European Union with no ifs or buts.

[Viscount Younger of Leckie]

I shall give a very quick answer to the noble Lord. We are working extremely hard to develop markets in Europe, which at the moment are proving to be quite challenging.

Small Businesses: Late Payments

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Wednesday 18th December 2013 Lords Chamber

[Viscount Younger of Leckie]

My noble friend makes a good point, of which the House will certainly now be aware—as am I.

[Lord Young of Norwood Green (Lab)]

My Lords, in January the Minister of State said that he would name and shame FTSE 100 firms that failed to sign up to the prompt payment code. However, companies that pay their small suppliers in 90 or 120 days could still be signatories to the code. In fact, at least one FTSE 100 company extended its payment terms and then signed up to the code. The Government know that 2,000 firms went bust last year due to late payments. Is it not time that they implemented minimum standards for all signatories to the prompt payment code? That is not really a lesson, but a strong recommendation for practical action.

[Viscount Younger of Leckie]

There are two points there. First, on the example to which the noble Lord alluded, my honourable friend the Minister of State in the other place followed up quickly on that particular issue. That major company spoke to its suppliers, which were content that there was no particular issue. As far as we are aware, none of the suppliers has complained to the Institute of Credit Management, which they are entitled to do, so it is not possible to judge the merits of that particular case. However, the noble Lord makes a good point.

Young People: Apprenticeships

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 28th November 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, I welcome the opportunity to set out what the Government are doing to encourage young people to take an apprenticeship. I am most grateful to my noble friend Lady Wilcox for tabling this debate and to noble Lords who have raised some important points. This also gives me particular pleasure because in recent times my noble friend Lady Wilcox served as a BIS Minister in my role.

Apprenticeships are at the heart of the Government’s drive to give people of all ages the skills that employers need to compete in the expanding, competitive global market. As several noble Lords have pointed out, strong returns arise from apprenticeships. As my noble friend Lady Wilcox has said, that is why we have seen a record 1.5 million people start an apprenticeship since 2010.

The fundamental underlying principle of an apprenticeship is that it is a paid job that incorporates on and off-the-job training that leads to nationally recognised qualifications. After investing heavily in an apprentice, it makes business sense for employers to keep employing individuals once their apprenticeship ends. We need to do more to spread the word that apprenticeships are good for the economy, good for business and good for individuals. The noble Lord, Lord Haskel, raised the issue of the Richard review and claimed that the implementation plan had given permission to label any training an apprenticeship. With his other comments, I take issue with him and with the points that the noble Lord, Lord Young, made about the numbers. This is not just a numbers game. Our aim in reforming apprenticeships is to make the programme the new international benchmark for excellence. This is about quality, not number-counting, and we are determined to raise all apprenticeships to the standards of the best so that the programme is rigorous, responsive and meets the changing needs of our economy in the decades to come.

I pay tribute to my noble friend Lord Baker of Dorking for his groundbreaking, unstinting and exciting work on university technical colleges, and in particular his work on addressing the shortages in STEM. The right reverend Prelate the Bishop of Derby raised an interesting point and gave an interesting example about the Rolls-Royce training programme, which we know is one of the very best in the country. He also raised a point about the university technical colleges and the need—

[Lord Young of Norwood Green]

My Lords, I do not like to interrupt, but if we are to pay tribute, as we should, to the noble Lord, Lord Baker, we should also be sure to pay tribute to Lord Dearing. It was a joint initiative of both noble Lords, and he made such a great contribution that I felt it was appropriate to remind the House of it.

[Viscount Younger of Leckie]

The noble Lord, Lord Young, is absolutely right, and I certainly pay tribute to Lord Dearing for the work he did in this area. My overall point is that we need to combine practical training and vocational training, as the right reverend Prelate pointed out, and we very much focus on that, mixed, of course, with the provision of academic study. I should also make the point that there is a shortage of science and engineering skills in this country. Again, the right reverend Prelate alluded to this, and it is very much on our radar that we should look at this in respect of apprenticeships.

Apprenticeships must be high quality, rigorous and focused on what employers need. The reforms we are making will put employers in the driving seat of developing apprenticeships that are more rigorous, more responsive and deliver the right skills. Additional rigour will come from a demand for higher standards that will stretch apprentices by setting higher expectations for achievement in English and maths, requiring more assessment at the end of an apprenticeship, and recognising an apprentice’s achievement through a grading system that ensures excellence that is clearly seen and widely understood. These changes build on those already introduced to raise quality, such as the minimum 12 months duration.

My noble friend Lady Wilcox raised a concern about over-bureaucracy. More responsiveness will be possible from the sweeping away of lengthy, convoluted, unnecessarily complex frameworks to bring in new, short, clear standards that are written by employers, not bureaucrats. Apprenticeships will then be able to focus on the skills and expertise that employers want and need. Reviewing the standards every three years will ensure that they remain relevant. The Government are also taking specific steps to support access to apprenticeships for young people as part of their work to deal with youth unemployment. We want apprenticeships to be held in the same high regard as university degrees. My noble friend Lord Stoneham and the noble Lord, Lord Young of Norwood Green, rightly alluded to this very important point. Young people must be able to choose the right route to the skills and knowledge they need for their career. Careers advice and guidance at the right time have never been so important. It is crucial that schools, colleges and universities play their part alongside the National Careers Service in inspiring and helping young people to make those choices. The noble Lord, Lord Aberdare, spoke about the importance of schools taking responsibility for promoting apprenticeships. If time permits, I should like to say more about the careers advice questions that were asked during the debate.

Apprenticeships must also be open to all. Not all young people leave school ready for the demands of an apprenticeship. I paid tribute earlier to the work done by my noble friend Lord Baker and Lord Dearing on university technical colleges. We have also introduced traineeships which enable 16 to 23 year-olds to develop the skills, experience and confidence they need to compete for an apprenticeship. Higher apprenticeships provide opportunities for able young people to undertake apprenticeship training at a level equivalent to a degree. It is precisely because apprenticeships must be open to all that the Government cannot create an “entitlement”, or a guarantee, that an apprenticeship will be available for every young person who would like one. Recruitment decisions must rest with employers for apprenticeships as much as for other jobs. Through the Education Act 2011, we have prioritised apprenticeship funding for vulnerable young people—those aged 16 to 18 and those aged 19 to 24 who have a learning difficulty or disability, or who have been in local authority care when they have found a place. This guarantee has priority over funding for other places in line with our focus on supporting vulnerable groups in all areas.

My noble friend Lord Addington, supported by my noble friend Lord Cormack, referred to vulnerable groups—my noble friend Lord Addington focused particularly on those with dyslexia—and exclusion in relation to apprenticeships. I reassure them by saying that all apprenticeships stretch and prepare individuals for sustained employment. Dyslexia should not present an insuperable barrier to those candidates who demonstrate competence and commitment in their chosen field. Access to Work and Additional Learning Support are two possible sources of funding to help provide equipment or other assistance for apprentices with dyslexia. The Government certainly recognise that there is more to be done to support apprentices with learning difficulties or disabilities and we aim to improve the operation and delivery of apprenticeships without jeopardising the standards that make them so valuable to apprentices and employers. I would be delighted to meet my noble friend Lord Cormack and the organisations that he mentioned, should that still be appropriate.

We fully fund apprenticeship training for 16 to 18 year-olds. This reflects the fact that they are likely to need more supervision and support initially and take longer to become fully productive in the workplace. For all young people, the National Apprenticeship Service—NAS for short—works with organisations that provide careers advice to make sure the benefits and demands of an apprenticeship, including what employers look for when recruiting, are understood and can be fully explained to the young people with whom the organisations work. NAS also provides an online apprenticeship vacancies job site. Between 12,000 and 20,000 vacancies are on the site at any time and can be accessed in a number of ways convenient to young people, including through Facebook, Twitter and apps for iPhones and Android phones.

My noble friend Lady Wilcox made a very valid point about the esteem of apprenticeships. Apprenticeships are something to aspire to and apprentices should be awarded recognition for their work just as graduates are. As I have said, our goal is to see an apprenticeship place valued equally to one at university. Celebrating success is so important to this. National Apprenticeship Week 2014, on 3 to 7 March, is an excellent opportunity to do just that. I know that all noble Lords will lend cross-party support when the time comes.

Apprenticeships are also promoted at large-scale events, including the Skills Show in Birmingham this month. More than 80,000 people attended that and large numbers of young people took up the offer to “have a go” at more than 40 different skills offered at different stands. The show is now going nationwide with 220 local events planned between now and December 2014. Organisers expect that more than 200,000 young people will attend the events. This shows that there is keen interest in skills and apprenticeships.

My noble friend Lady Wilcox, supported by the noble Lord, Lord Aberdare, and the right reverend Prelate the Bishop of Derby raised the issue of the careers service, and asked particularly how the new careers service is performing. They raised the issue of careers advice at schools and the important point as to whether options other than university are provided and discussed. As part of the new agenda, the National Careers Service will work with schools, colleges and employers to bring greater cohesiveness to careers guidance. We want these new arrangements to be in place from October 2014 when the new National Careers Service contracts will start.

The noble Lord, Lord Stoneham, raised the issue of apprentices in the public sector and the need for more transparent data on this. We do not currently measure a breakdown of apprenticeships in the public and private sectors. However, the fast-track Civil Service apprenticeships scheme was launched in October and is taking 100 18 to 21 year-olds through a two-year apprenticeship. At the end of the scheme they will, if successful, have earned a higher level qualification at level 4. We do intend to expand the scheme for another cohort, which we hope will be launched in early 2014. In addition, Civil Service Learning is currently working with its prime contractor to put in place a single provider or a consortium to offer to partners an easier way of sourcing apprenticeship services.

The right reverend Prelate the Bishop of Derby and my noble friend Lady Wilcox raised the issue of learning to be good citizens as well as gaining skills for work. National Citizen Service is a life-changing experience open to all 16 and 17 year-olds across England. It is a unique three-week full-time programme of fun and discovery that benefits both young people and society. Participants build skills for work and life while taking on new challenges and adventures and learning new skills and making new friends. Taking place outside school and term time, the part-residential programme is made up of four sections that focus on personal and social development, including leadership, teamwork and communication. This works alongside the apprenticeship reforms, so I am pleased to mention it.

My noble friend Lord Shipley raised the important point about the need for more apprenticeships in engineering and manufacturing, a point to which I alluded earlier. The new higher apprenticeships are available or are in development in sectors including construction, advanced engineering, engineering environmental technologies, energy and utilities including water and waste, and space engineering. It is important to articulate to young people the career opportunities in STEM-based occupations via STEM apprenticeships.

Time has pretty well run out.

[Lord Young of Norwood Green]

Before the Minister sits down, if time does not allow a response now, I should welcome a written reply on the question of public procurement contracts and apprenticeships and on the question of encouraging group training associations and ATAs.

[Lord Haskel]

Before the Minister sits down, will the Government take steps to rationalise the 48 schemes identified by the CBI from three government departments all of which can apparently be referred to as apprenticeships?

Intellectual Property Bill [HL]

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 23rd July 2013 Lords Chamber

[Viscount Younger of Leckie]

My Lords, before I begin today, I should like to take this opportunity to thank noble Lords for their continued interest in this Bill and for their insightful contributions to the debate. The Government have listened to the points raised by noble Lords and have given careful consideration to all aspects of the Bill. Since Grand Committee, I have met representatives from the International Chamber of Commerce, and have been working with my officials to continue to engage with stakeholders to understand their concerns and alleviate them where possible. My officials have also issued a plain English guide to the Bill, particularly aimed at small and medium-sized businesses. It can be found on the IPO website. I hope that the amendments brought forward by the Government today will reassure both noble Lords and industry representatives that their concerns are taken very seriously. The Government believe that these amendments present a balanced and considered approach.

I am also pleased to report that since we debated the issue of e-lending in Grand Committee the Government have announced funding for the public lending right scheme, which will allow this valuable work to be taken forward. I am sure noble Lords will agree that that is a very positive development.

Turning to the amendments before us, during our first day in Grand Committee we had a brief discussion about the recommendations of the Delegated Powers and Regulatory Reform Committee. The committee and its members gave careful consideration to the order-making powers set out in the Bill. As my noble friend Lord Clement-Jones suggested in the debate:

“Simply reading the committee’s report is pretty persuasive by itself”.—[Official Report, 11/6/13; col. GC 344.]

The Government also found the report persuasive. We have given detailed thought to the committee’s recommendations and I am pleased to bring before the House today amendments that will implement the changes suggested.

Amendment 1 concerns Clause 8, which permits the UK to accede to the Hague agreement concerning the international registration of designs. The amendment specifies that any order giving effect to these provisions must be considered and approved by a resolution of both Houses. Amendments 2 and 3 relate to Clause 11, concerning the introduction of an opinions service for designs. These amendments ensure that the first time that regulations are introduced to implement the opinions service they, too, must be subject to the scrutiny and approval of both Houses. Noble Lords will note that the Delegated Powers and Regulatory Reform Committee recommended that thereafter the negative resolution procedure should apply. The Government believe that this is wholly the right approach. Once the service has been set up, following full discussion in Parliament, any changes that need to be made to suit the needs of business users can be implemented more quickly.

I also take this opportunity to briefly set out why the Government have tabled a further minor and technical amendment to Clause 21. As noble Lords are aware, Clause 21 is intended to simplify the way in which the UK currently meets its international obligations to extend copyright protection to works from other countries and their citizens, delivering clearer information for users. The need arises from the fact that the UK is a signatory to a number of international copyright conventions and treaties. This obliges the UK to extend copyright protection to works and performances created by citizens of other member countries or to works that originate in other member countries. These obligations are reciprocal: UK copyright holders benefit from the same protection in those countries.

One of these international agreements is the Berne convention, which has been amended a number of times since its original incarnation in 1886 and most recently in 1971. A small number of countries have not yet caught up with the 1971 update. This minor and technical amendment makes it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. The purpose is to ensure that countries that are not signatories to the most recent Act do not receive lesser copyright protection in the UK than those that are. I beg to move.

[Lord Young of Norwood Green]

My Lords, these government amendments implement the DPRR 3rd report recommendations and we welcome them on that basis. On the Clause 8 orders giving effect to the Hague agreement, the DPRR Committee found that the Bill created a Henry VIII power, and commented that it,

“would therefore expect to see some justification for the negative procedure that is to apply”.

However, the committee did not consider that the case for the negative procedure had been made for orders under new Section 15ZA and recommended that the affirmative procedure should apply instead. We are glad to see the Government accepting that recommendation.

Clause 11(1) inserts new Section 28A into the Registered Designs Act 1949 to provide for the registrar—that is, the Comptroller-General of Patents, Designs and Trade Marks—to give an opinion about matters specified in the regulations with respect to designs of a kind described in subsection (1)(a) and (b). The new section is purely enabling in that the whole provision about the new opinions service is to be set out in negative regulations. Subsections (2), (4), (5) and (7) set out provisions that the regulations must contain—for instance, about protecting the registrar from liability in respect of an opinion and about appeals. BIS explains, in paragraph 13 of the memorandum, that the intention is that the new opinions service will be similar to the existing patents opinions service. That service is provided for in Section 74A of the Patents Act 1977, but it is important to note that almost all the provision appears in the Act, with only one power to make regulations to provide for an exception.

The committee was not convinced by the Government’s argument for a need for flexibility and was critical that they did not explain why more provision cannot go into the Bill—for instance, about the scope of the opinions service. The committee remained unpersuaded that the negative procedure was appropriate for the introduction of this new service entirely by regulations, and recommended that the affirmative procedure should apply on the first exercise of the powers under new Section 28A, which is why we welcome the Government’s decision in this regard. We also welcome the fact that the Government now make it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. As the Minister assured us, this ensures that countries that have not signed up to the most recent Act of the Berne Convention do not receive any less copyright protection in the UK than those that have, and therefore we welcome the government amendment.

[Lord Clement-Jones]

My Lords, I join the noble Lord, Lord Young, in thanking the Minister for responding so effectively to the concerns raised on Report. I hope that these swallows which are already evident on Report will mean a summer for the rest of the Report stage.

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[Lord Young of Norwood Green]

My Lords, this amendment seeks to ensure that the Secretary of State consults with appropriate consultees before conferring, removing or varying court jurisdiction. In addition, where sufficient numbers of patent cases in the UK allow, he should confer on each separate legal jurisdiction throughout the United Kingdom a court which has local divisional court status, allowing patent cases where appropriate to be heard in that legal jurisdiction. This will effectively preserve the status quo under the existing national and EU patent regimes.

Article 7 of the unified patent court agreement provides that each contracting member state may request and may have one division of the court of first instance of the unified patent court within its jurisdiction for every 100 patent cases in each calendar year during three successive years prior or subsequent to the date of entry into force of the agreement. That is subject to a maximum of four such divisional courts per such jurisdiction. The Intellectual Property Bill as drafted does not place any obligation on the Secretary of State to consider or confer divisional local jurisdiction on the High Court in England and Wales, the Court of Session in Scotland or the High Court in Northern Ireland.

The society believes that, given the constitutional make-up of the United Kingdom, it is important that each separate jurisdiction continues to provide local access to a court and is fairly represented within the overall unified patent court structure. Without a local designated divisional court, local businesses will be forced to litigate outside their geographical areas. We suggest that a failure to confer local divisional court status may raise access to justice concerns, increasing costs and inconvenience to all businesses and litigants—including SMEs who may be impacted heavily by a potential additional cost in bringing or defending actions. I beg to move.

[Viscount Younger of Leckie]

My Lords, the amendments in this group relate to the unified patent court. Amendment 10, tabled by the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, seeks to ensure that the Secretary of State will consider setting up separate local divisions of the unified patent court in three parts of the UK should there be enough case load to justify more than one local division. As I highlighted in Committee, ensuring local access to justice is a key element of the unified patent court. That is why the agreement makes provisions for local divisions. The agreement does not oblige participating states to host a local division, which can be set up and disbanded upon request.

It is important that the unified patent court serves the needs of businesses throughout the United Kingdom and the Government are committed to ensuring that all areas of the United Kingdom will have access to the court. I can assure noble Lords that the Government are already giving careful consideration to the number and location of local divisions that may be hosted in the UK. I cannot say at this time exactly how many local divisions the UK may host because it is not yet clear whether there will be enough cases to justify having more than one local division. The reason for this uncertainty is that there is no common agreement among the participating states on how the number of cases in each jurisdiction will be counted. It is important that a consistent approach is taken to assessing the case load in different countries. The issue will be decided by the participating states before the court comes into being.

While it is not possible to say for certain how many local divisions may be hosted in the UK, I can give noble Lords every assurance that the Government are open to locating local divisions in different parts of the UK. The Government are working closely with the devolved Administrations and the court services in Scotland and Northern Ireland as well as England and Wales to ensure that the needs of businesses throughout the United Kingdom are taken into account. Noble Lords may be also interested to know that the Intellectual Property Office, in partnership with the Chartered Institute of Patent Attorneys and the IP Federation, is running a series of stakeholder events about the unified patent court rules in early September. One of these events will be hosted in Edinburgh. Given that the issue of UK-based local divisions is already under consideration, it is neither necessary nor appropriate to prescribe in primary legislation their number and locations.

I now turn to government Amendment 11. This technical amendment to Clause 16 is intended to provide certainty that the Government will be able to establish fully the unified patent court. The amendment introduces new Section 88B into the Patents Act 1977. It does not extend the scope of the power conferred by Section 88A of that Act. The necessity of tabling an amendment to this clause has only recently come to light as a result of the ongoing legal analysis being conducted as part of the implementation process. That analysis has identified a potential uncertainty which could, if not addressed now, result in a significant delay in bringing the unified patent court into effect.

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[Lord Young of Norwood Green]

My Lords, my noble friend Lord Howarth has comprehensively analysed the need for more transparency and the need to protect integrity. We support the basis of the amendment and I look forward to hearing the Minister’s response.

[Viscount Younger of Leckie]

My Lords, Amendment 12 tabled by the noble Lord, Lord Howarth of Newport, relates to representations, lobbying and advocacy concerning intellectual property. It would place a duty on my right honourable friend in the other place, the Secretary of State Vince Cable, to maintain an open register of all lobbying which has taken place.

I wish to assure noble Lords that this Government take the issue of lobbying very seriously. This is the most transparent Government ever. I am pleased that the noble Lord, Lord Howarth, while not necessarily agreeing with that, certainly recognised it in his speech. We are the first Government to publish proactively meetings that Ministers and Permanent Secretaries have had with external organisations. We publish an unprecedented amount of information about whom Ministers and senior officials meet. This information is published on a quarterly basis.

The noble Lord, Lord Howarth, is right in saying, however, that the public are worried about lobbying. The Government also recognise that the public are concerned that some lobbying activity is opaque, allowing certain powerful organisations and individuals to exert a disproportionate influence on government in the shadows. We need to combat the sometimes negative perceptions of the relationship between lobbyists and government by giving people confidence that the process is transparent.

That is why only last week the Government introduced the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill, which again the noble Lord, Lord Howarth, alluded to. This Bill will bring forward a statutory register of lobbyists, which will make it clear whom lobbyists are lobbying on behalf of when they meet Ministers. Noble Lords will have the opportunity to debate this Bill, which, subject to timetabling, will be before the House later this year.

The noble Lord, Lord Howarth, tabled an amendment in Committee which would have required the annual report on the IPO’s activities, which is to be introduced by Clause 20, to include information on approaches by third parties. In Committee, as Minister for Intellectual Property, I committed to publish proactively a list of all meetings between the chief executive of the IPO and external organisations. This demonstrates the Government’s very real commitment to transparency. I also remind the noble Lord that the IPO responds to requests made by Parliamentary Question and through the Freedom of Information Act. Since 1 July 2012, the IPO has received 184 FoI requests, only five of which relate to lobbying activity.

Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Wednesday 17th July 2013 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

I beg to move that the order be considered by the Committee. Primary authority is a statutory scheme, which was launched in 2009. Under the scheme, businesses can form a partnership with a single local authority, the primary authority. This gives the business a single point of contact to help it to comply with regulation. There are currently 785 businesses and 104 local authorities in partnerships covering more than 64,000 premises. They provide support on complying with many regulations, including regulations on health and safety, age-restricted sales and trading standards. The purpose of the order is to extend the primary authority scheme to cover additional regulations not currently within it. It will enable businesses to benefit from primary authority in relation to three additional regulations: first, Part 1 of the Housing Act 2004; secondly, the Sunbeds (Regulation) Act 2010; and, thirdly, the Single Use Carrier Bags Charge (Wales) Regulations 2010.

Reducing regulatory burdens on business is important for growth. It is essential that businesses are able to comply with regulations efficiently. In their responses to the consultation on these proposals, businesses told us that they need reliable advice and confidence that their approach to compliance will be treated consistently. We know that businesses value primary authority. Not only have they told us so in consultation but recent evaluation showed that more than 90% of business respondents would recommend primary authority to others. That is why the Government are committed to ensuring that as many businesses as possible can share in the benefits of it and that the scheme covers a wide range of regulation.

The savings are not for business alone. By reducing duplication in the enforcement of these regulations, primary authority saves time for local authorities, too. It allows them to use their time better to target rogue traders and help businesses to deal with the most severe risks. Moreover, local authorities that choose to become primary authorities can recover the costs from the business.

Lastly, but very importantly, primary authority increases protection for consumers. The majority of UK businesses want to protect their customers and follow the law, but they need advice that they can rely on and need to know that the law will be applied consistently. This enables them to invest in compliance—for example, by putting policies in place or by training staff.

We have opened up eligibility for primary authority to many more businesses through the Enterprise and Regulatory Reform Act 2013. From October, this will enable businesses that share a “common approach to compliance”, such as trade associations and franchises, to enter primary authority partnerships. This order strengthens primary authority further. It will allow businesses to access primary authority for additional areas of regulation. I shall now discuss these extensions in more detail.

First, Part 1 of the Housing Act 2004 is a crucially important piece of regulation for improving the standards of the private rental sector in this country. Let me provide an example of the benefits that primary authority can bring to this area. A landlord may have received conflicting advice from two local authorities on how best to fireproof his properties. By obtaining appropriate advice from a primary authority, he will have the confidence to spend money on installing new fire doors, knowing that they are suitable. The Government have considered the detailed consultation responses on the inclusion of Part 1 of the Housing Act. Lettings businesses and some local authorities were in favour of the extension but many local authorities had reservations. We have worked closely with housing authorities to ensure that there will be no unintended consequences. We are confident that the intention of the legislation to provide risk-based protections will be supported by primary authority but we will continue to monitor its application. The Government believe that the benefits of the primary authority scheme should be extended to the private rental sector. Primary authority will provide an avenue for advice that gives certainty to landlords, thereby giving them the confidence to invest in properties. As one local authority commented, the extension,

“would give better consistency and help with raising standards amongst private landlords”.

I turn to the second extension, which is to include the Sunbeds (Regulation) Act 2010. Bringing this law within the scope of primary authority will mean that if a leisure company wants to offer sunbeds for use, it can receive advice about how best to ensure that these are not used by children. Moreover, a business unsure about the additional legislation in Wales, made under this Act, can gain assured advice about the health information that it needs to display. As a local authority in Wales commented:

“This would benefit businesses by fostering a consistent approach to the understanding of the proper implementation of the Act and Regulations”.

Thirdly, the final extension to primary authority which we are discussing today concerns adding Welsh regulations on single-use carrier bag charging to the scheme. This existing regulation requires businesses to charge customers in Wales for certain carrier bags. Primary authority will ensure that businesses, whether based in Wales or not, can access robust and reliable advice on complying with this Welsh legislation. For example, many businesses deliver products to customers in Wales from England. They will be able to gain advice on the requirements to keep records of the charges made to customers.

This extension is welcomed by national businesses such as Asda, which has stated that it wants,

“a common approach to such a straightforward issue that affects our sites across a number of local authorities”.

Its benefits will also be felt by smaller retailers. The Association of Convenience Stores has said:

“The ability to obtain assured advice in relation to the Welsh carrier bag levy would be beneficial for retailers and help to ensure a consistent approach to enforcement across Welsh local authorities”.

We have listened to businesses. They have told us that primary authority is valuable to them because it delivers consistency and reliable advice. They have told us that they would recommend primary authority to other businesses and that they would like these areas of legislation included within the primary authority. This order will extend the scope of primary authority, enabling businesses to access its benefits for these additional areas of legislation. It will give businesses a further tool to reduce the burden of complying with these regulations, allowing them to concentrate on growing their business. I commend this order to the Committee.

[Lord Young of Norwood Green]

My Lords, we welcome this approach. If, as the Minister said, it reduces duplication and gives more consistency, what is not to like? I listened carefully as he went through the various areas where it would extend the application of a primary authority and I have a couple of questions. Is there any impact at all on local employment partnerships? While I welcome the fact that landlords will not get conflicting advice, I could not help thinking about the tenants. What impact will the measure have on them in terms of being assured that there will be consistent advice?

As regards bringing sunbeds into the scope of primary authority, not only children but adults often overindulge in that area. However if there is consistency, again that seems a good thing. Similarly, as regards carrier bags, anything that reduces their population—I am constantly picking them up as I walk my dog—is welcome. However, the impact will be felt mainly in Wales. The question is: when will we have this sensible legislation extended to England?

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[Lord Young of Norwood Green]

I think that I had almost reached a conclusion. I think the Minister mentioned something about monitoring, and I was going to ask whether there was a fixed review period in relation to that.

[Viscount Younger of Leckie]

My Lords, first, I thank the noble Lord, Lord Young of Norwood Green, for his collegiate approach and for his general welcome for this statutory instrument. He raised a couple of questions. The first was whether LEPs would be impacted. I can confirm that there is no direct impact on LEPs as they operate independently from local authorities and the primary authority scheme. However, if a LEP decides that it wishes to address the issue of the burden of compliance within its area, it is free to encourage the uptake of the primary authority scheme among businesses.

The second question related to the effect on tenants of the changes that we are making to primary authority and to the landlord housing scheme. The Government believe that it is important that tenants are protected and that landlords in the private rented sector provide safe and healthy housing. Primary authority is consistent with this. By giving businesses certainty about their obligations, primary authority makes it simpler for lettings businesses to comply with any regulation. When businesses understand what is expected of them and know that it will be applied consistently, they are more likely to invest in compliance, which leads to raised protection for tenants. The noble Lord, Lord Young, asked about the fixed review period, and I can confirm that there will be a review after three years.

Finally, just before we broke to vote, the noble Lord asked whether this will protect adults as well as children using sunbeds. Primary authority advice will be available to cover the full range of protections under the Act, which creates a duty on businesses in England and Wales to ensure that no person under 18 uses or is offered the use of a sunbed on their premises. The Act also gives powers to the Secretary of State and Welsh Ministers to enact further secondary legislation in England and Wales. In 2011, Welsh Ministers introduced measures in Wales under this Act that further regulate the sale and hire of sunbeds and require the provision and display of health information and the provision of protective eyewear. This will protect both children and adults. The inclusion of the Sunbeds (Regulation) Act 2010 within the scope of primary authority will therefore cover the enforcement of these areas. I hope that that answers all the questions raised by the noble Lord, Lord Young.

[Lord Young of Norwood Green]

There was one other thing. I was interested in carrier bag usage in Wales. Have the Government given any consideration to extending charges for carrier bag usage to England?

[Viscount Younger of Leckie]

That is a fair question. We are not able to comment on it at present, so I will take note of the question. The UK Government have not yet reached a decision on mandatory charging for carrier bags in England. We are first monitoring the results in Wales and Northern Ireland and the outcome of the Scottish consultation on such a charge. We need clear, robust data before making any decisions. That way, we will be aware of any unintended consequences of the actions.

As the noble Lord will be aware, extending primary authority to Welsh regulations on single-use carrier bag charging affects only Wales. Therefore government policy regarding England is at present unaffected.

Companies and Partnerships (Accounts and Audit) Regulations 2013

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Wednesday 17th July 2013 Grand Committee

[Viscount Younger of Leckie]

My Lords, I thank my noble friend Lord Hodgson and the noble Lord, Lord Young, for their contributions to this rather short, succinct debate. I am very sorry to hear that my noble friend Lord Hodgson is so pessimistic about these proposals to make improvements to reporting. He made one or two good points, and I will pick them up, but he will not be surprised to hear that I do not agree with all the points he made.

My noble friend made a good point about the size of the report. The noble Lord, Lord Young, mentioned concern about extending the report to include a strategic report given the history of reports and the example of my noble friend Lord Hodgson of a report that was 15 pages a few years ago and is now 70 pages. It will be up to companies to decide how long their reports will be and, no doubt, they will want to make them as succinct and readable as possible to include the extra requirements. I hope that will include cutting down on other areas so that the reports will be more readable.

My noble friend Lord Hodgson was concerned about the disclosure of risk. He raised an important point. The guidance on the strategic side of the report will provide guidance for businesses on deciding their key risks. He made the important point that it is quite challenging for a company to decide what risks are under its control and what risks are not, such as the economy. The guidance is designed to help with that approach but it will be up to the company to decide what it puts into its report on an annual basis. This guidance will be published for consultation and I encourage my noble friend to respond when it comes out.

My noble friend Lord Hodgson and the noble Lord, Lord Young, raised the safe harbour provision. The answer to the question, “Is there a safe harbour provision for directors?” is yes. The detail is in paragraph 17 of the schedule. It extends the safe harbour provision in Section 463 to the strategic report. The Companies Act permits directors a defence that they were not reckless, and we have made a consequential change to the law to extend this safe harbour defence to the preparation of the strategic report. I hope that that gives some comfort to my noble friend Lord Hodgson.

My noble friend Lord Hodgson raised the issue of the numbers of women being included in the report. It is fair to say that he was somewhat exercised by this. However, I hope I can reassure him, and answer a question about this matter from the noble Lord, Lord Young, by saying that this is about ensuring that businesses are managing their boards better to understand their customers, investors and staff. Evidence suggests that diverse boards are better boards and help employees who may hope to move up into management. The whole objective is to be transparent and to provide full and purposeful figures and to allow stakeholders to look at the reports. The measure is designed to be helpful to them as opposed to simply not including them.

My noble friend Lord Hodgson did not agree that the single figure disclosure would provide accurate and useful information for shareholders. I think that he was referring to the new figures that will be required. He gave the example of a director’s pension. I totally understand his point about pensions being pretty complex and that to reduce them to a single figure is challenging. As regards the example that he gave, it would be fair to say that, just as in company reports and auditing reports, you would have a codicil saying, “This figure is particularly high because of a particular aspect”, which would make the issue clear. Perhaps my noble friend was making the broader point that if you put in single figures the whole time you may obscure the bigger picture. I hope I can reassure my noble friend that companies will have guidance on this and will have to make simplicity a byword when reporting these figures. The regulations will prescribe the minimum requirements but there is nothing to stop companies providing any other material that would help shareholders better understand the information or put it into context, which is the nub of the matter. My noble friend asked whether the Government would undertake to review the regulations and their effects. The noble Lord, Lord Young, also asked about reviewing. The Government have committed to review the regulations in 2017, which is not too far off, so I hope that gives some comfort.

The noble Lord, Lord Young, asked whether the strategic report would include a company’s ethics policy, which is an interesting point. The annual report will promote discussion at the annual general meeting on the ethics of the company’s business practice, so I hope that reassures the noble Lord. He also raised an interesting point about charitable donations and asked why we were planning to cut the figures relating to those donations. The format of the charitable donations disclosure required companies to disclose the name of the recipient, the amount and the true purpose. For those companies which make a lot of donations this was becoming a burdensome requirement. The total figure is still included in the accounts but the objective of this move is to leave out figures that are becoming somewhat meaningless and rather burdensome.

The noble Lord asked whether these measures had any tax consequences. There are no direct consequences and the tax transparent status of partnerships is unaffected. The changes that we are proposing do not amend the tax law. The noble Lord also asked about pay ratios and, specifically, why we did not require companies to report on the pay ratio between directors and the average worker, which is a fair point. Companies will have to say more about how the remuneration committee has taken into account employee pay and publish the percentage increase in the pay of the chief executive and that of the workforce. However, disclosure of pay ratios has its limitations and could provide misleading information. For example, a company with a large number of low-paid employees would have a big ratio but a company that had outsourced such employees, which might be less socially responsible, will none the less have a better ratio for entirely artificial reasons.

The noble Lord, Lord Young, asked whether apprenticeships could be covered in the report. Indeed, the company can include in it additional useful material. Where a company has several apprentices, we hope that it will inform shareholders of that and shout it from the rafters.

[Lord Young of Norwood Green]

I refer not only to apprenticeships but to training, given the importance of reskilling.

[Viscount Younger of Leckie]

Training, I would argue, comes under human resources policy. Again, it would be up to companies to decide whether they want to include specific training aspects. There is no obligation to do so, but they are wise to do so if it is going to materially benefit shareholders.

The noble Lord, Lord Young, asked why payment to creditors was omitted. The disclosure required companies to make a statement as to how they paid their creditors. Most companies, even rogue traders, stated that they paid their creditors on time. So we feel that the work on the prompt payment code, to which I alluded in my speech, will provide a better response.

The noble Lord also asked why there was a request to state the principal risk, which was a point that I made earlier in response to a question from my noble friend Lord Hodgson. It implements the terms of the EU accounting directive. That was a separate and extra point that I wanted to make.

I hope that I have answered all questions raised. If not, I shall be more than happy to write to noble Lords.

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[Lord Young of Norwood Green]

I asked about the effect of the action plan and the requirement to report on business and human rights, and whether it had embraced or taken into account the UN Ruggie principles.

[Viscount Younger of Leckie]

Indeed, the noble Lord did ask that question. The human rights reporting requirement is broadly worded deliberately. However, it was inspired by the words of Professor Ruggie, which may be of some comfort to him. The FRC will provide guidance on how this may work.

Royal Mail

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Wednesday 10th July 2013 Lords Chamber

[Viscount Younger of Leckie]

My noble friend would probably be surprised if I gave an accurate answer to the first question, so I will pass on that one. In terms of the price, as I mentioned, the prospectus will be produced at some point between now and April 2014, which is the period during which we anticipate the sale will take place. Market conditions and investor demand will also be part of that aspect.

[Lord Young of Norwood Green]

I raised a number of questions that the Minister did not answer and, before he sits down, I request that he addresses those in writing. I do not have time to reiterate them all. I also could not help but observe that the right reverend Prelate did not get an absolutely explicit answer on the uniform tariff and the universal service obligation. Maybe I missed something.

[Viscount Younger of Leckie]

I will be very happy to write to the noble Lord, Lord Young, on any questions that I have not managed to answer.

Intellectual Property Bill [HL]

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 18th June 2013 Grand Committee

[Viscount Younger of Leckie]

My Lords, Amendment 28AA would create a new statutory role of “Director General of Intellectual Property Rights”, with a duty to promote intellectual property rights. A very similar amendment to the Enterprise and Regulatory Reform Bill was proposed by my noble friends Lord Jenkin, Lord Clement-Jones and Lady Buscombe, who is not in her place today.

The functions of this new role are already being carried out. As Minister for Intellectual Property, I have a role to champion the IP system as a whole. That includes the vital role of not only protecting the interests of IP rights owners but considering the different interests of future businesses, consumers and other users and creators of IP. A balanced IP system promotes strong and competitive markets, and encourages innovation and creativity.

My role as IP Minister is to create and sustain the best possible balance. I am supported in this role by the IPO, whose objectives I set through its annual corporate plan. The IPO is responsible for promoting innovation by providing a clear, accessible and widely understood IP system that enables the economy and society to benefit from knowledge and ideas.

In particular, I am supported by the chief executive of the Intellectual Property Office, who is a director-general within the Civil Service. The chief executive is appointed by the Secretary of State. He or she is directly accountable to the Secretary of State, to me as the responsible Minister and to the Permanent Secretary as the principal accounting officer. The chief executive is responsible for the administration of the relevant statutes, in this case the Patents Act 1977, the Copyright, Designs and Patents Act 1988, the Trade Marks Act 1994 and associated legislation. He or she also advises the Secretary of State on all aspects of national intellectual property, related EU and international legislation and on relevant policy issues. It seems to me that these are precisely the tasks that one would expect a director-general of IP to perform, and we have a director-general doing them.

We have heard the suggestion that a director-general for IP owners is needed to convince holders of IP rights that the Government are supportive of their interests. The Government have already introduced or supported a wide range of beneficial measures, from enhanced R&D tax credits and incentives for animation to longer copyright for music performances, and from easier access to justice through the courts to encouraging a new IP crime unit in the City of London Police to tackle online IP crime. It is clear that we have done much for IP-intensive industries, as my noble friend Lord Clement-Jones acknowledged in the Grand Committee on the ERR Bill. I appreciate his general support today—when compared, perhaps, with his views during the passage of the ERR Bill—and I am grateful.

The need for balance in IP policy has been recognised for many years. For example, when the current Copyright, Designs and Patents Bill was debated in the other place in 1988, the former honourable Member for Sedgefield, Tony Blair, said the following:

“The difficult balance that we have to strike … is between ensuring that industry has a proper incentive to invest and recognising that the consumer must be protected against the lack of competition that will inevitably come from copyright protection. If we protect industry too much the consumer will suffer through the abuse of monopoly, and if we give too little protection to industry it will lose the incentive to invest. Our task is not to choose between the interests of industry and the consumer but adequately to balance those interests”.—[Official Report, Commons, 25/7/88; col. 38.]

I am most grateful to the noble Lord, Lord Howarth, for clarifying that point earlier in this debate.

The duties of the proposed director-general are significant in what they do not include. There is no duty to consider the impact on consumers, other businesses or the advance of research. He or she need not have regard to the benefits of competition, and the development of high-quality evidence does not appear to have been given priority. These are not optional extras but important considerations in their own right. Although the Government understand the intention behind the amendment, we do not believe that this additional role is necessary. In addition, I am not fully convinced that a role that does not acknowledge the balance of interests necessary to good intellectual property policy would benefit creators, rights owners or the UK.

The noble Lord, Lord Young, raised some important points, some of which I may have addressed earlier. He suggested that the IPO is efficient at registering but does not champion IP rights. As I mentioned earlier, the Intellectual Property Office is under my control as Minister for IP. I do not know about my transition from Ivan the Terrible to Peter the Great but reiterate that I am a proud Intellectual Property Minister. However, importantly, I do not agree that it is my role to champion current IP rights holders over future ones or to have one set over another.

The noble Lord, Lord Young, questioned what the IPO has done to support rights holders and IP businesses. As I mentioned earlier, the IPO is taking a wide range of actions to help business. I refer noble Lords to my lengthy letter last week, which set out some of these activities on business support and enforcement. I have here—which I can wave, Chamberlain-style—a copy of the IPO achievements for 2012-13. Noble Lords are most welcome to read it.

The noble Lord, Lord Young, asked if intellectual property should be embedded in considerations across departments in Whitehall. Having the IPO as the centre of IP expertise and policy in government, to which departments can turn, helps to facilitate this. Furthermore, IPO policy officials actively reach out to other departments—DCMS and the Ministry of Justice, to name but two—on cross-cutting intellectual property issues. This system works for a wide range of policy areas and is the norm.

My noble friend Lord Clement-Jones said that the Government and the IPO must show that they have the interests of intellectual property holders at heart. He is right. The Government have done much, including extending the copyright term in music performances and the tax incentives for research and development in animation, which I mentioned earlier.

The noble Lord, Lord Howarth, said that the Government should not be championing intellectual property rights to the detriment of others; in other words, he was focusing on the public interest balance. Again, this is absolutely right. The IPO acts in the public interest, running the IP system in order to maximise innovation and creativity in the widest possible sense.

I hope that on the basis of the information I have provided, specifying in some depth the role of the chief executive of the IPO, as well as my own passion for the role as IP Minister, the noble Lord will withdraw his amendment.

[Lord Young of Norwood Green]

My Lords, I have not quite struck a consensus in Committee on this occasion. Even those who were supportive before seem to have decided that the ship was going down. Nevertheless, it has been a useful debate.

Of course, I concur with the critics, such as my noble friend Lord Howarth, who talked about the importance of getting the balance right between IP rights and public interest. I would not demur from that and I would not say that this is a perfect amendment. However, if nothing else, it has again required the Minister to define the way that, as the IP Minister, he acts within his department and with other departments. In that respect, it has been useful. It was unfortunate that he referred to Chamberlain, as his career was terminated rather abruptly, so perhaps he should choose another analogy in future when he is waving a piece of paper. Nevertheless, I take the point that he made.

The noble Lord, Lord Clement-Jones, was right to say that we will judge the Government by their actions. The reference to the Digital Economy Act brought a feeling of nostalgia and I hope that we will see it fully enacted. Nevertheless, I thank noble Lords for participating in the debate and, taking into account those responses, I beg leave to withdraw the amendment.

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[Lord Young of Norwood Green]

My Lords, I thank the noble Lord, Lord Clement-Jones, for his comprehensive contribution, as well as my noble friend Lord Howarth. I think that they have covered the waterfront on this one. The only thing I would add is: can the IP Minister tell us what has happened to the Digital Economy Act? I look forward to his response. Basically, we support the premise that is contained in this amendment.

[Viscount Younger of Leckie]

My Lords, I thank my noble friend Lord Clement-Jones for his amendment. This amendment and the following one fall within the remit of the Secretary of State for Culture, Media and Sport. However, as I work ever more closely with my colleagues in DCMS where there is some crossover in policy, I am more than happy to discuss these amendments today.

The Government recognise the opportunities presented by the lending of e-books by public libraries and recently commissioned an independent review of e-lending in libraries in England, led by William Sieghart, which my noble friend Lord Clement-Jones referred to. Noble Lords will be aware of the public lending right—PLR—scheme which enables authors and other rights holders to receive payments in exchange for their works being loaned out free of charge by public libraries.

More than 23,000 authors, illustrators, photographers, translators and editors who have contributed to books lent out by public libraries in the UK receive PLR payments each year, up to a maximum of £6,600 per rights holder. This is, in effect, compensation for the mandatory nature of the PLR scheme. Rights holders are automatically included in the scheme, although some authors waive their right to receive PLR payments.

At present, e-books, audiobooks and e-audiobooks—which I shall collectively call e-books for convenience—are outside the scope of the PLR scheme. This is regardless of whether those books are downloaded on library premises or downloaded remotely, such as at home. It is very important to note that public libraries are able to lend e-books, both on library premises and remotely, without the PLR scheme being extended. Library authorities offering e-lending reach appropriate agreements to license the lending of e-books by contracting the services of third party aggregators who liaise with publishers on rights holders’ behalf.

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[Lord Young of Norwood Green]

I welcome that nugget of information but it is a nugget in that there is quite a lot more in the Digital Economy Act. I was taking the opportunity to ask generally and I quite understand that that requires a complex answer. If the Minister will write to us with more information, it will be eagerly received.

[Viscount Younger of Leckie]

I was attempting to give a fuller answer in that I, too, understood that it was a slightly more complex question and that is why I would like to give a holistic answer covering the noble Lord’s general point about the timing and the rollout of the Digital Economy Act.

My noble friend Lord Clement-Jones asked why we should not just provide a token amount of remuneration in respect of PLR. By EU law, remuneration must be more than merely illusory. Although the UK has a degree of discretion as to the amount, the European Commission’s case law has said that it must be real and reflect the loss of remuneration, so the availability of funding is relevant to any extension. My noble friend also asked what the implications were if these changes were not made. To clarify that point, library authorities can continue to lend e-books without the extension of PLR.

The noble Lord, Lord Howarth, asked whether the issue is one of cost and, if so, whether a token amount can be paid. My noble friend Lord Clement-Jones made a similar point. The financial implications must be given consideration but I assure noble Lords that the Culture Minister is giving this proper consideration even as the challenging economic circumstances continue. With this in mind, I hope that my noble friend will withdraw his amendment.

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[Lord Young of Norwood Green]

My Lords, we support in principle the amendment of the noble Lord, Lord Clement-Jones, and would be interested to hear the ministerial response.

[Viscount Younger of Leckie]

My Lords, I listened carefully to the speech of my noble friend Lord Clement-Jones. In so doing, I was multitasking and was able to calculate that my noble friend has pledged to dress himself up in no fewer than three layers of party clothes, which, I imagine, must be quite an impressive sight. Given that this is the last amendment that I will be speaking to in Committee, I want briefly to thank all Peers who have contributed and engaged in Committee on the Bill. I realise that there will be more to speak about on Report and I look forward to further discussions.

The effect of the amendment tabled by my noble friend would be to increase the maximum penalty for online copyright infringement to 10 years’ imprisonment. While I recognise that there appears to be a discrepancy between the penalties obtainable from the two offences of online copyright infringement, with a maximum of two years’ imprisonment, and physical copyright infringement, with a maximum of 10 years under the Copyright, Designs and Patents Act, I cannot support harmonisation of the two offences, given my understanding of the area.

Prosecutors are already using our current fraud legislation to obtain convictions for online infringement, with substantial penalties, up to a maximum of 10 years’ imprisonment. The existing legislation allows for effective prosecutions to be made without reliance on any specialist intellectual property knowledge. Last year, for example, the owner of the website Surfthechannel—which linked to pirated copies of films and TV—was sentenced to four years in prison on two counts of conspiracy to defraud, more than the two years available under the CDPA.

The important economic aspect of this was addressed by the Digital Economy Act when it came into force in 2010. This raised financial penalties on digital offences to £50,000, in line with physical copyright theft. The Government have no evidence to support the suggestion that an increased sanction for online copyright infringement would either increase the number of prosecutions brought forward, increase the length of sentences passed down to those found guilty of infringement or deter more people from infringing. We have not consulted on this and we have no plans to do so.

With existing legislation already providing the necessary penalties and prosecutors having a range of options already at their disposal, at the present time I see no reason to increase sanctions under the Copyright, Designs and Patents Act, despite there being a slight discrepancy. In particular, changes should not be made without carrying out the appropriate consultation to gather evidence of the impact.

I hope that this has clarified the Government’s position to my noble friend, and I ask him to withdraw his amendment.

Intellectual Property Bill [HL]

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 13th June 2013 Grand Committee

[Viscount Younger of Leckie]

My Lords, the amendments tabled by the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, relate to the unified patent court. I will address each amendment in turn.

Amendment 25C seeks to ensure that the Secretary of State takes account of the views of the courts services and any other appropriate body when using the power to confer or amend the jurisdiction of a court. These bodies are already closely involved in the implementation of the unified patent court. Establishing this court is an enormous task that requires resources and expertise from across government. It is for this reason that the Government have set up a task force responsible for UK implementation of the unified patent court agreement. This task force is a joint endeavour between the Department for Business, Innovation and Skills and the Ministry of Justice, and I can assure noble Lords that Ministers and senior officials from each department are fully engaged in this matter.

Officials from Her Majesty’s Courts and Tribunals Service are leading on work to establish the UK-based divisions and on the discussions with European partners through the preparatory committee of the unified patent court. Similarly, officials from the Ministry of Justice are leading the work for the UK on the selection and training of judges for the unified patent court. The devolved Administrations in Scotland and Northern Ireland and the courts services in those jurisdictions are represented on the steering board which oversees the work of the task force. Noble Lords may be interested to learn that the Chancellor of the High Court and the patents judiciary in England and Wales are also involved in the work of the task force. The judiciary is represented on the steering board of the task force, and officials meet the judges on a regular basis.

I can confirm that the Government are consulting the Administrations in the crown dependencies and the British Overseas Territories on whether they wish the unified patent court agreement to apply to their territories. This forms part of the usual procedure for ratifying the agreement.

Given this close engagement across government departments and with the devolved Administrations, I trust that noble Lords will agree that the views of all concerned will be taken into account when implementing the unified patent court agreement.

Amendment 25C also seeks to ensure that local divisions of the unified patent court will be set up in each jurisdiction of the UK. I appreciate the arguments in favour of setting up a local division in England and Wales, Scotland and Northern Ireland. Ensuring local access to justice is a key element of the unified patent court, and this is why the agreement makes provisions for setting up local divisions. Let me be clear that no decision has yet been made about how many local divisions the UK will host and where those divisions may be located. Contracting states of the unified patent court agreement are not obliged to host a local division. Local divisions can be set up and disbanded upon request by a contracting state. These requests will be considered by the body that will govern the administration of the unified patent court. Noble Lords may also be interested to learn that it will be possible for a local division to sit in different locations as the need arises. A travelling local division could provide an alternative to hosting more than one division. This amendment would fix in primary legislation the number and location of any local divisions the UK may host. It is undesirable and unnecessary to be prescriptive in this case as it would restrict the UK in the administration of any UK-based local divisions in a manner not provided for in the unitary patent court agreement.

Amendment 25D raises a number of points. First, the amendment would require the Secretary of State to consider the need for “reasonable” access to courts across the United Kingdom. As I have already said, the Government are working closely with the devolved Administrations in Scotland and Northern Ireland to ensure that the needs of users throughout the UK are addressed.

Secondly, this amendment places a limitation on how the power may be used to require the payment of a fee. As it stands, Clause 16 is intended to account for various circumstances where a fee might be required. The Government do not currently anticipate that fees for the court will be paid directly to any government department. However, the details of the financial arrangements of the court are still being negotiated through the preparatory committee that has been set up by the contracting states of the unified patent court agreement. It is anticipated that court fees will be paid directly to the unified patent court. A change to UK law to facilitate the payment of a fee to the court, as proposed by Amendment 25D, is not required. The agreement sets out high-level principles for how the unified patent court fees will be decided, but it will be for the members of the preparatory committee, including the UK, to agree the level of court fees. In agreeing the level of fees for the court, the preparatory committee will need to balance the need to ensure that the court is accessible to users with the requirement that the system will eventually be self-financing. Ensuring the system is accessible and eventually self-financing is a priority for the UK, and the final details will be carefully considered before we ratify the agreement.

Thirdly, this amendment raises the issue of how the power may be used to align UK law with sections of the unified patent court agreement. As it stands, Clause 16 is intended to ensure that provisions of the Patents Act which relate to national patents may be aligned with equivalent provisions in the unified patent court agreement should this be necessary. For example, it may be desirable to align the law on infringement so that the same provisions apply for European bundle, unitary and national patents. This may be necessary to avoid a situation where patents valid in the UK will be subject to different infringement laws depending on whether they were national patents granted by the IPO or European rights granted by the European Patent Office. The unified patent court agreement does not make any provisions for national patents so it is necessary to ensure that the power conferred specifically allows for this eventuality. This amendment would not allow such an alignment to be made because the power would be restricted to giving effect to the provisions of the agreement.

Finally, this amendment would remove the ability to use the power conferred to amend any enactment other than the Patents Act. This would be an important omission from the scope of the power to ensure that the UK can fully implement the unified patent court agreement, which must be avoided. In light of all that I have highlighted, I ask noble Lords not to press their amendments.

[Lord Young of Norwood Green]

I thank the Minister for that very comprehensive and constructive response. He has shed light on a number of areas that we were concerned about, especially the inclusion of Scotland on the steering board. He talked about judges being trained. Do we have a figure for that yet or are we still determining the need? Other than that, the Minister certainly covered the waterfront, so to speak, and we will obviously read his response carefully. I welcome his openness and the range of the response. Given that, I beg leave to withdraw the amendment.

Intellectual Property Bill [HL]

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 11th June 2013 Grand Committee

[Viscount Younger of Leckie]

My Lords, Amendments 2 and 5 address various points in relation to the qualification criteria in the Bill. I will first turn to Amendment 2, which would change the definition of qualifying country in relation to the meaning of “original” in Section 213(4) of the Copyright, Designs and Patents Act 1988.

The amendment would change the definition to the United Kingdom and European Economic Area. In practice, that will mean adding Iceland, Liechtenstein and Norway to what is currently proposed and removing a number of countries—I hope that noble Lords will bear with me and not succumb to slumber as I read the whole list. Those that would be removed are: Anguilla, Bermuda, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Channel Islands, Falkland Islands, Gibraltar, Hong Kong, Isle of Man, Montserrat, New Zealand, the Pitcairn Islands, Henderson, Ducie and Oeno Islands, St Helena and Dependencies, South Georgia and the South Sandwich Islands and the Turks and the Caicos Islands.

The amendment would mean that the geographical areas used in the definition of “commonplace”, which is under debate here, and “qualifying country”, which is in Section 217(3) of the Copyright, Designs and Patents Act 1988, would be different. This would create an anomaly in the Act and a level of complexity, which the Bill, on principle, is trying to remove.

I would like to pick up on some points that the noble Lord, Lord Young of Norwood Green, made because he asked for and deserves a more substantive answer on the reasoning behind the decisions that we made. Aligning the geographical coverage and qualification is a logical harmonisation. Legal rights should be subject to the same eligibility tests wherever they arise. Otherwise, examples of unfairness would occur. It will make it easier for a person to know whether they qualify for an unregistered design right and it will help to resolve disputes more quickly. It will be easier for businesses and users to understand how they can qualify for an unregistered design right.

Furthermore, I want to explain why the Government were consulting on changing the definition of “commonplace”, as in Clause 1, to cover the whole of the EEA, even though the Bill is only amending coverage in the EU. Following the consultation and on further reflection, the Government came to the conclusion that an additional layer of complexity to the law would be created in the eligibility criteria for design right if the geographical areas were different for the definition of “qualifying country” and for “commonplace” to which the noble Lord alluded.

Similarly, Amendment 5 would introduce a new definition. It proposes a change to the requirements for businesses that qualify for unregistered design right, specifying that the business must have,

“a real and effective industrial or commercial establishment”,

in any qualifying country.

The current definition of a business that qualifies for the UK unregistered design right includes the requirement that it must carry on a,

“‘substantial business activity’” in a qualifying country”.

The term “substantial business activity” is already used elsewhere in the Act—for example, for qualification criteria for copyright performances in Section 206. The term is not defined in the Act, but does not appear to have been the subject of significant case law, which suggests that the term has not caused problems in practice.

Although the wording suggested in Amendment 5 has its basis in EU law, the Government believe that to introduce this term into UK law could create confusion and uncertainty about the qualification criteria for unregistered design rights. The Bill is trying, where possible, to reduce complexity in the law. The Government believe that these amendments would lead to additional complexity, not reduce it.

The noble Lord, Lord Young of Norwood Green, asked whether there was a definition of “commonplace”. There is no statutory definition in terms of its meaning. However, the word “commonplace” has to be tested objectively in the design field in question. The case of Fulton v Totes puts a gloss on the meaning of the territorial extent of “commonplace”, suggesting that the UK market is relevant. Therefore, the Bill seeks to clarify the territorial scope of the definition of commonplace and align it with qualification requirements. I ask the noble Lord to withdraw his amendment.

[Lord Young of Norwood Green]

I thank the noble Lord, Lord Clement-Jones, for his contribution, which, in a much more succinct manner, referred to the two key objectives—if we could achieve them—of coherence and ensuring that this legislation does not lead to a UK-business disadvantage. I thank the Minister for his reply but, given the range of his response, I wondered whether, in relation to the criteria that one is trying to establish—not making things more complex than they already are—any registered or unregistered design right had ever emanated from the Pitcairn Islands. No doubt the Bill team can give us that information at some point.

To be serious, we will reflect on the Minister’s answers and, in the mean time, I beg leave to withdraw the amendment.

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[Viscount Younger of Leckie]

The noble Lord again makes a good point. The default position is that it is down to the wording of the contract. However, having said that, I will write to the noble Lord to clarify what further protections there might be for the commissioners. As a matter of clarification, where a designer is employed, the employer will be the owner of the design. I hope that, in the mean time, this provides sufficient reassurance to the noble Lords, Lord Young and Lord Stevenson. I ask the noble Lord, Lord Young, to withdraw his amendment.

[Lord Young of Norwood Green]

I thank those who have participated in the debate. My noble friend Lord Howarth raised an interesting point about the balance of rights between the commissioner and the designer. We have had some explanation from the Minister, but I welcome the fact that he will write to us, too. The Minister also talked about working with stakeholders to ensure greater understanding in this area. Again, we would welcome more details of the nature of that work. I do not necessarily expect the noble Viscount to have the answer here, but perhaps he could let us know. Finally, we have been talking about contracts. Is there potential for an unfair contracts Act in relation to what we have been discussing? With those questions, I beg leave to withdraw the amendment.

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[Viscount Younger of Leckie]

My Lords, Amendments 10, 11 and 12 would require regulations made under the power of Clause 8 to be subject to the affirmative resolution procedure. In addition, Amendments 18 and 19 would require regulations under the power of Clause 11 to be subject to the affirmative procedure.

Noble Lords will have had the opportunity to consider the report of the Delegated Powers and Regulatory Reform Committee, which was published on 6 June. While the committee accepted the majority of the delegated powers included in the Bill, the report recommended that the powers included in Clause 8, which concerns the Hague agreement, and Clause 11, which relates to the design opinions service, should require the affirmative procedure. I very much welcome the committee’s report and the time that its members have dedicated to scrutinising this Bill. The work of the committee is very important in ensuring that the implications of legislation are fully considered, and I wish to put on the record how much I value its detailed consideration of the Bill.

The report was published only two sitting days ago, so I hope that noble Lords will allow me a little more time to discuss with my colleagues across government the committee’s very worthy proposals in the appropriate level of detail that the report deserves. I have listened very carefully to all comments made this afternoon by noble Lords and I am certain that this issue will be returned to on Report.

The noble Lord, Lord Young, asked why there was a difference of approach with regard to negative versus affirmative resolutions. Traditionally, regulations in design law have been commenced by negative resolution, including in relation to a similar international agreement—namely, the Madrid protocol, which the noble Lord may be aware of. However, at this current time, I hope that I have given certain reassurances and I ask the noble Lord to withdraw his amendment.

[Lord Young of Norwood Green]

My Lords, I welcome the assurance given by the Minister. In the circumstances, it is perfectly reasonable that he requires a bit more time, and I therefore beg leave to withdraw the amendment.

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[Viscount Younger of Leckie]

My Lords, Amendment 17 would remove the right of appeal to an appointed person in respect of opinions given under the design opinions service. The Government believe that the right of appeal is extremely important. In this case, businesses who receive a design opinion from the registrar should have the right to appeal that decision to an appointed person. This ensures that a person who is aggrieved by an opinion is able to get a second view on whether the opinion was arrived at correctly in the first place. In particular, it is an important next step before parties consider formal legal proceedings, which could be time-consuming and costly.

Offering a route of appeal for the design service reflects the principles established in the existing patent opinions service. The patent service has been well used, as has the ability for the opinion to be subject to a review procedure. Furthermore, a right of appeal was considered particularly important in the light of the European Convention on Human Rights: an adverse opinion could affect the value of the right and hence the proprietor’s ability to make use of it in business. It is therefore important to offer an appeal for design opinions to ensure that the necessary safeguards are in place.

Noble Lords commented that the routes of appeal against a decision by the Intellectual Property Office include an additional route of appeal to the High Court. This is because decisions by the IPO can be legally binding and can have an impact on a party’s rights. In contrast, the opinion provided by the opinion service is non-binding—indeed, it is an opinion, as the noble Lord, Lord Borrie, pointed out. That is why in subsection (6) of Clause 11, the proposed new section sets out that:

“An opinion given by the registrar under the regulations is not to be treated as a decision of the registrar for the purposes of section 27A.”

The opinions service is designed to be low cost and non-binding. The route of appeal available—an important principle to uphold, given the underlying economic value of the property right—is also low cost and appropriate to the non-binding nature of the opinion offered to parties. The noble Lord, Lord Borrie, raised an issue of cost. I can reassure the noble Lord that the cost of the service will be subject to compensation. In the mean time, I ask that the noble Lord, Lord Young, withdraws this amendment.

[Lord Young of Norwood Green]

My Lords, I thank my noble friend Lord Borrie for reminding us that this is a helpful, low-cost route and further testing whether the wording in the Bill is right. I thank the Minister for the clarification but would ask that he checks the wording to ensure that it does not introduce any ambiguities. In those circumstances, I beg leave to withdraw the amendment.

Industrial Training Levy (Engineering Construction Industry Training Board) Order 2013

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 20th May 2013 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, the purpose of this order is to seek authority for the Engineering Construction Industry Training Board—the ECITB—to impose a levy on employers in its industry in 2014, and this will relate to an assessment of employers’ payroll in the 2012-13 financial year. The prime purpose is to meet the skills needs of the industry.

I believe that it is worth spending a little time elaborating on the reasons why there is a statutory training levy in the engineering construction industry. The engineering construction industries construct and maintain the power and utilities essential to the UK’s infrastructure. The industries include coal and gas power, offshore oil and gas, chemicals and pharmaceuticals, steel and metal smelting, nuclear power and renewable energy. The construction and maintenance requirements for these industries call for a mobile, flexible and highly skilled workforce. It is the employers in these industries who have, since 1991, come together to support collective action through the levy to develop the workforce, manage risks and address skills needs.

Similar statutory arrangements are in place for the wider construction industry, which operates under a separate levy order passed in Parliament in 2012. The Government have made, and continue to make, major investments in skills and training. However, while the Government have a role in setting the framework for success, employers need to be in the driving seat if we are to equip the workforce with the skills that employers need. The ECITB has a central role in training the workforce and supporting the industry to achieve sustainable growth. In doing this, the Government look to the ECITB to minimise bureaucracy and ensure that support to employers is relevant and accessible. The ECITB is employer-led, rather than government-led, and its role is to encourage the provision of adequate training of employees and prospective employees in its industry. It provides a wide range of services, including setting occupational standards, developing vocational qualifications and delivering apprenticeships, as well as paying direct grants to employers who carry out training to approved standards.

Employers in the engineering construction industry continue to support a statutory framework for training. The ECITB is a model of the successful application of such a framework, and the order that we are considering today will enable these statutory levy arrangements to continue. I welcome this order as evidence that employers in the engineering construction industry want to continue to invest in the skills of their workforce.

The ECITB operates under the provisions of the Industrial Training Act 1982. That Act permits the ECITB to raise a levy on employers so that the costs of training are shared more evenly between companies in the industry. This order gives effect to proposals submitted to us for a levy to be collected by the ECITB in 2014. It is a condition of the ITA that a levy order is made affirmative as a resolution in the House where it involves the imposition of a levy estimated to be in excess of 1% of emoluments—that is, essentially wage costs—for some employers.

The orders can be made only if the Secretary of State is satisfied, first, that the amount of levy is appropriate in the circumstances; secondly, that the proposals are necessary to encourage adequate training in the industry; and, thirdly, that the previous levy order received support from the majority of employers and the levy rates remain unchanged. I confirm that my right honourable friend in the other place, the Secretary of State for Business, Innovation and Skills, is satisfied that these conditions have been met.

The Act also requires the ECITB to include proposals for exempting small employers from the levy. This order therefore provides that small firms will be exempt if their expenditure on payroll and sub-contract labour is below a certain threshold that the industry considers to be appropriate, and I will come to the details of the thresholds in a moment. Those firms that are below the threshold and exempt from paying the levy are still able to benefit from grants and other support from the ECITB, and indeed many of them do so.

The ECITB does not propose to make any changes to its levy rates or small firms exemption thresholds. The rate for site employees will remain at 1.5% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £275,000 or less on payroll costs for on-site employees will not have to pay the levy. The rate in respect of off-site employees—often referred to as “head office” employees—is 0.18% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £1 million or less in respect of payroll costs for off-site employees will not have to pay the levy.

Of all the establishments which are considered to be leviable by the ECITB, it is expected that around 35% will be exempted from paying the levy. For the ECITB, the one-year proposal is expected to raise around £20 million in levy income. The Committee will note that the ECITB order covers a one-year period. The Industrial Training Act requires ITBs to submit proposals—and I quote—“from time to time”. These proposals may provide for levies to be imposed for a period of up to three years.

The ECITB has proposed a one-year levy order because, in view of the current economic conditions, employers considered that flexibility should be retained on the issue of future levy rates. It is anticipated that next year the ECITB levy order will also cover a one-year period, with the intention of realigning with the Construction Industry Training Board to a three-year levy cycle from 2015 onwards.

The Committee will know from previous debates that the ECITB exists because of the support it receives from employers and employer interest groups in its sectors. As I indicated earlier, there is a firm belief that without the ECITB there would be a serious deterioration of the quantity and quality of training in the industry, leading to a deficiency in skills levels. Consultation with the industry in 2012 demonstrated that there is strong support among employers for a levy system, with 71% of employers liable to pay a levy in 2014 supporting the levy arrangements. Only 2% of employers indicated that they opposed the levy. Those that did not express a view are not counted as supporting the levy. This draft order will enable the ECITB to continue to carry out its vital training responsibilities, and I commend it to the Committee.

[Lord Young of Norwood Green]

I thank the Minister for his comprehensive contribution. I must admit that I found it interesting because, by mentioning all the different industries, he stressed their importance. As he rightly said, this is a mobile, flexible and highly skilled workforce. Our one concern is the point that he raised near the end of his contribution: because of the somewhat fragile state of the economy, which is clearly impacting on these industries, they are going for only a one-year levy. I do not expect the Minister to have the answer to this but I should be interested to know what impact this will have on the number of apprenticeships that are likely to be offered. These are highly skilled industries and these apprenticeships are highly sought after, so it is a bit worrying that they have decided to go for only one year.

It was interesting as well that the Government are proposing an alignment with the ECITB in 2015, which is probably a step in the right direction. I could not help reflecting that, in looking at that level of support from the employers, a levy is perhaps one way of ensuring that all employers contribute to training in industry. It gets us away from the idea that so many employers have. They seem to think that they do not have to bother and can poach their skills from other employers. However, with those couple of questions and that slight caveat, we offer our support to this statutory instrument.

[Viscount Younger of Leckie]

I thank the noble Lord, Lord Young, for his general support for this order. I will indeed refer back to him in writing on the one-year levy and the impact that it has on apprenticeships. I should make the point that the support that the ECITB is giving for skills is over and above the other schemes and initiatives that this Government are taking, which the noble Lord will be aware of. I listened in briefly to the previous debate in this Committee concerning apprenticeships, and it is the case that the previous Government indeed started off much on the apprenticeship scheme. This will add to that. It is pleasing to note that apprenticeship numbers are holding up and, indeed, increasing. There were 849 apprentices recruited in 2012, a figure which I hope I can improve upon with an increase as time goes on.

The other point to make about apprenticeships is that they remain the prime route into the industry; the noble Lord raised this point. The ECITB supports and promotes apprenticeships to employers. That is a very important part of what it does. It also provides financial support and grants for apprenticeships. In 2012, demand for apprenticeships was much tighter than expected, indicating rising employer confidence and additional demand from employers—in particular, in the nuclear sector. I know that I could say more about apprenticeships but I am very pleased that there is overall support for this order. I commend it to the Committee.

UK Clothing Sector: Safety

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Monday 13th May 2013 Lords Chamber

[Viscount Younger of Leckie]

The issue of wages is clearly linked. We have obviously been talking about a very serious health and safety issue with the factory collapsing. I alluded to wages before and, again, further pressure needs to be brought on organisations to be sure that a decent wage, however defined, is paid out in these particular countries.

[Lord Young of Norwood Green]

My Lords, does the Minister agree that if the owner of that company had listened to the concerns of the workers who complained the day before about cracks in the building then this tragedy could possibly have been averted? That stresses the importance of having independent trade unions, independent health and safety committees and workers committees in these factories if we are to ensure a safe future for the workers.

[Viscount Younger of Leckie]

The noble Lord makes a very good point. From our perspective in Britain, we need to exert as much pressure as we can to encourage greater communication between workers, workers’ representatives and Governments in countries such as Bangladesh.

Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 12th March 2013 Lords Chamber

[Viscount Younger of Leckie]

Consultation was just one part of the process, but this policy has been thought out—we believe, and we would say this, wouldn’t we? —extremely carefully. Having taken a lot of conversation wider than this particular consultation, we believe that this is the right way forward. I would remind your Lordships that we have also consulted businesses. In terms of the time, I repeat myself by saying that we have gone from the 90 down to the 45—it is not 90 to 30—because we have actually spoken to businesses and other organisations to get the information that we need.

I would like to conclude by saying that between 50% and 80% of employees subject to collective consultation are not actually made redundant. All are kept in suspense as they wait to find out who stays and who goes. If people do become unemployed, most leave unemployment quickly. Of those making a new jobseeker’s allowance claim, over 50% have left the jobseeker’s allowance within three months, and over 70% have left within six months.

Finally, union respondents did not provide any proof that reducing the minimum period would cause problems. Where anecdotal evidence was provided, it suggested that meaningful consultation can help reduce the number of redundancies, but these are rarely significant in number. I commend the order to the House.

[Lord Young of Norwood Green]

My Lords, I thank the Minister for his response, even if I did not agree with the tenor of it, or the basis on which they have decided on this legislation. I thank all my noble friends and colleagues who have participated in this debate. They have raised a number of interesting points. As I think my noble friend Lord Monks made clear, this is not going to help industrial partnership or improve productivity. I do not think that the Minister has addressed the problem that the noble Lord, Lord Monks, drew to his attention about the question of establishments and where there is still large-scale redundancy taking place in the organisation as a whole.

My noble friend Lady Dean raised a couple of important points about the fact that the conditions, certainly for senior management, are often vastly different from those for the workforce as a whole. They have a significantly longer period to find alternative employment. As she rightly pointed out, this is taking rights away from workers, and although we heard a lot of talk from the Minister about employers and consultation, he did not really address the point about the bad employers who do not engage in any meaningful consultation.

My noble friend Lord Watson made a point that perhaps I did not stress enough when I pointed out—in response to the Minister, who said that workers would quickly find alternative employment—that we only wish that were the case. I think that he acknowledged in his reply that it would not necessarily be as easy as that. My noble friend Lord Watson pointed out that while they may move to alternative employment, it is often for significantly less pay and inferior conditions. It is not a particularly good climate at the moment to seek alternative employment.

My noble friend Lord Lea has pointed out that the cost of this falls on the workers. It means that their pay for those 45 weeks will be significantly reduced. His point about the importance of the machinery of consultation, which is much more evident in other countries in Europe, is an exceedingly valid one. The Minister talked about the importance of companies acting quickly. I would say to him that it is not about them acting quickly; it is about them having a strategic plan for their business that ensures that it survives. As we have seen so often in recent large-scale redundancies in the high street, they have not actually had a survival plan; HMV is the example that springs to mind. It is not the workers’ fault in these situations; it is not that they have not been prepared to contribute to the company in terms of ideas or loyal working—that is not the cause of the problem.

The Minister says that those made redundant will be a minority, and that crowds out the interests of the remaining workforce. Those who remain in employment are one thing; our sympathies are more with those who will have to look for alternative employment. We do not think it is a question of people being kept in suspense; it is a question of being able to have meaningful consultation and explore the alternatives that my noble friend Lord Monks referred to, whether it is retraining, redeployment or restructuring of the company. When it comes to certainty, there is one thing you gain in these situations: the certainty that significant numbers are going to be made redundant, and the only uncertainty is whether you will be able to get significant alternative employment.

As a number of my noble friends have said, this proposal by the Government is not going to improve the overall situation, in terms of either productivity in companies or stimulating growth of employment. Nevertheless, although I am not by any means satisfied by the Government’s response, and I hope that the Minister is going to reply in detail to some of the questions, I withdraw the amendment.

Enterprise and Regulatory Reform Bill

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Tuesday 26th February 2013 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I have great respect for my noble friend Lady Turner because she brings not only sincerity but a wealth of experience to these issues. I will be interested to hear the Minister’s response to the amendment.

I want to raise with the Minister the question of funding for ACAS, on which we had an exchange prior to his inauguration in his current role. The noble Lord, Lord Marland, in his response in Committee in relation to funding for ACAS to support the work of the conciliation, said:

“We will produce in the new year a further impact assessment on how this process will work and whether the funding should be upfront, which the noble Baroness asked for. We are working to determine the extent of the funding and how best it is to be provided. I hope that by the time we get to the Report stage in the Chamber, quite a lot of the questions will have been answered”.—[Official Report, 5/12/12; col. GC 198.]

I do not know whether the Minister is in a position to respond, but I look forward to his response.

[Viscount Younger of Leckie]

I thank the noble Lord, Lord Young of Norwood Green, for that question, which I will address in due course.

I recognise that the amendment tabled by the noble Baroness, Lady Turner, is prompted by her concerns that the purpose of this clause is to prevent those who feel that their employment rights have been breached from reaching an employment tribunal. I reassure her that it is not. While it is and will remain the case that those who wish to bring a claim to an employment tribunal should be able to do so, we recognise that, for many, this can be a costly and stressful process. We are therefore committed to providing parties with the opportunity to resolve their disputes without the need for judicial determination, and early conciliation will do just that. However, while it will be mandatory in most cases for prospective claimants to present the details of their case to ACAS in the first instance, the decision to engage in early conciliation will be entirely voluntary.

Where the claimant or, indeed, the respondent declines the offer of conciliation, or where conciliation has failed, there will be no alternative but for the conciliation officer to conclude that settlement is not possible. A certificate will be issued as soon as that point is reached, either within a few days or after one or two weeks, and the prospective claimant will then be able to proceed to tribunal should they wish. Those prospective claimants for whom determination at tribunal is the preferred or only solution will be able to lodge their claim once the certificate has been received. This will be the case for all prospective claimants, not just those with an unfair dismissal claim.

The second amendment proposed by the noble Baroness would have the effect of removing the requirement for the conciliation officer to try to promote the reinstatement or re-engagement of a prospective claimant by the employer or, if that is not what the prospective claimant wants or it is not practicable, to seek to agree an appropriate sum by way of compensation. This is the same requirement that currently rests on conciliation officers in fulfilling their post-claim functions. While I accept that reinstatement or re-engagement may not be an attractive solution to many prospective claimants, that will not be the case for all. It is right, therefore, that the conciliation officer should endeavour to promote such an outcome where it is right to do so, and, where it is not, then seeking to reach an agreed sum by way of compensation could mean that the dispute will not need to come before an employment tribunal.

I turn to the first of the government amendments in this group. Schedule 2 amends various pieces of primary legislation so that the relevant time limits for bringing a tribunal claim will be extended where necessary in order to provide sufficient time for early conciliation to take place so that the claimant is not disadvantaged. Currently, other than in a small number of jurisdictions, claimants have three months from the date of the matter giving rise to the claim in which to lodge the claim with the employment tribunal. The amendments made by Schedule 2 address concerns that the early conciliation process will disadvantage prospective claimants by consuming some of the limitation period and therefore the time in which they have to prepare any claim that they want to lodge with an employment tribunal, and thereby dissuade them from engaging fully with the conciliation offered by ACAS.

Schedule 2 effectively stops the clock for those jurisdictions where early conciliation applies so that the time during which a claim is subject to the early conciliation process will not count for the purposes of calculating the passage of the limitation period for that claim. In addition, where the limitation period would expire during the prescribed period for early conciliation, or within a month after the day on which the ACAS certificate is deemed to have been received, Schedule 2 automatically extends the limitation period for that claim so that the claimant has one calendar month from the deemed date of receipt of the certificate in which to lodge that claim at an employment tribunal.

This amendment changes none of that. It is no more than a technical amendment to correct one of the references in the schedule. Section 18 of the Employment Tribunals Act 1996 lists the claims for which ACAS conciliation is available and, as conciliation is not available for claims in respect of breaches of Section 188A of the Trade Union and Labour Relations (Consolidation) Act 1992, it is therefore inappropriate for the changes to the limitation period made by Schedule 2 to apply to such claims. It is, however, the Government’s intention to amend the list of proceedings in Section 18 by secondary legislation in due course. We will add Section 188A to that list and, when we do so, will ensure that the extension to the limitation period applies in such cases too. Amendment 15 will therefore ensure that the changes made to limitation periods by Schedule 2 apply to the right claims.

I now turn to Amendments 22, 36 and 91, which is our second set of government amendments. As many noble Lords will be aware, a recent judgment of the European Court of Human Rights in the case of Redfearn v UK found that the UK has an obligation to ensure that individuals who have been dismissed on the grounds of political opinion or affiliation are able to bring a claim before an employment tribunal in order that the tribunal can decide whether the dismissal was fair.

Mr Redfearn was dismissed from his job as a bus driver following his election as a British National Party councillor. His work involved transporting passengers, the majority of whom were Asian. There were no complaints about his performance. None the less, his employers took the decision to dismiss him on the grounds that his political affiliation would give rise to considerable anxiety among passengers and their carers, and jeopardise the reputation of his employer.

The European Court of Human Rights considered that it was both reasonable and appropriate for the UK to have a requirement for a qualifying period of service before an employee can bring an unfair dismissal claim. However, the court held that where the reason for the dismissal was the employee’s political opinion or affiliation, the qualifying period, which prevented employees such as Mr Redfearn who had not acquired the qualifying period of service from bringing claims for unfair dismissal, breached the Article 11 right to freedom of association. The court said that where the reason for dismissal was the employee’s political opinion or affiliation, the state should at least allow for an independent evaluation of the proportionality of such a dismissal in the light of all of the circumstances of the case.

Like the majority of people in this country, we in this House do not share Mr Redfearn’s political views, but the protections provided for in Article 11 also extend to those whose views offend, shock or, indeed, disturb. The Government have therefore decided to bring forward this amendment, which will mean that the two-year qualification period will not apply to claims where the dismissal was on the grounds of political opinion or affiliation. Importantly, employers will still be permitted to argue that they had a fair reason for dismissal and that it was reasonable to dismiss for that reason. Dismissals for political reasons will not be automatic unfair dismissals.

Amendment 36 provides that the provision will apply only to claims where the effective date of termination is after the date on which this section comes into force, while Amendment 91 provides that the clause will come into effect two months after the date of Royal Assent of this Bill.

I now turn to government Amendments 16, 35, and 87—the third set of government amendments. The purpose of Amendment 16 is simple: to ensure that the information held by ACAS in the course of performing its duties is properly protected. As noble Lords will know, particularly many of those on the Benches opposite, ACAS undertakes a range of functions in the course of pursuing its general duty of improving industrial relations, including not only the provision of conciliation in individual and collective disputes, but also advice and guidance via its helpline as well as mediation and training. As a consequence, ACAS holds large amounts of information about individuals and organisations that should not, quite rightly, be a matter of public record. The introduction of early conciliation will add further to this pool of information. While ACAS is able to rely on the provisions of the Data Protection Act 1998 and the Freedom of Information Act 2000 to ensure that certain sensitive information is not released, these provisions are not comprehensive enough to safeguard all the records held as part of the operation of early conciliation.

This and previous Governments have taken the view that information relating to respondents in employment tribunal claims should not be made publicly available until the matter is due to come before the tribunal—both to protect employers from unfounded claims that are subsequently struck out and to allow the parties the space to resolve the matter without the need for a hearing. To this end, the register of claims was closed in 2004, a decision that has been reviewed and affirmed by this Government following lobbying for it to be reopened.

There have been a number of requests to ACAS for the release of information relating to claims made to the employment tribunal since the register closed, but these have been refused on the grounds that the information held is a court record. Such a justification will not apply to records held as part of early conciliation and it is therefore necessary to provide ACAS with the protection to allow it to carry out its role with the confidence of those with whom it has contact. The amendment will introduce a prohibition preventing ACAS from releasing specified information, and this will cover information not otherwise protected. While breaching the prohibition carries a criminal penalty, the decision about whether or not to press charges will be a matter for the Director of Public Prosecutions.

Amendment 35 provides that the prohibition will apply only in respect of requests made after the clause comes into force, which, as provided for in Amendment 87, will be immediately on Royal Assent. I hope that noble Lords will agree that this is a necessary step to ensure that ACAS continues to have the trust and respect of all those it serves.

The final amendment in the group, Amendment 38, removes an unnecessary provision from the Bill. The amendment deletes a transitional provision relating to Clause 17 which is no longer required.

I turn to the question raised by the noble Lord, Lord Young of Norwood Green, about whether we can provide further information on additional resourcing required by ACAS. I promised to come back to him. The consultation on implementing early conciliation closed on 15 February and my officials are now considering the responses. The decisions which flow from this will inform the additional resourcing necessary. I can reassure the noble Lord that ACAS will be properly resourced to deliver early conciliation.

I hope that the noble Baroness, Lady Turner, is reassured by what I have said and will therefore withdraw her amendment.

--- Later in debate ---

[Lord Young of Norwood Green]

My Lords, I thank the Minister for addressing the specific concerns that we raised in Committee. I wish to put that on record. Obviously, I share some of the concerns of my noble friend Lady Turner, which were echoed in part by the noble Baroness, Lady Brinton, who, in her usual forensic way, rightly drew to our attention not only the question of diversity but the guidance that should be issued. I, too, will be interested to hear the Minister’s response on those aspects.

[Viscount Younger of Leckie]

I thank the noble Baroness, Lady Turner, supported by my noble friend Lady Brinton, for setting out some of her concerns about this clause. I have certainly listened very carefully to the noble Baroness, Lady Turner, who spoke so eloquently.

The Government have also listened to noble Lords’ concerns about the Lord Chancellor’s order-making powers. I have already spoken about the amendments that we have brought forward to address the points that noble Lords made in Grand Committee. In answer to the question raised by my noble friend Lady Brinton, we have no plans to steer the Lord Chancellor on the necessity to have a panel and to prescribe proceedings as such. However, we are working on that important point that she made and on the diversity point, which I also want to pick up on.

I should also make the point that there is no evidence to suggest that judges sitting alone—this is implicit in the noble Baroness’s question—will have a negative impact on the determination of discrimination appeals, which can be brought only on a point of law. This might address the question that was raised by the noble Lord, Lord Young. The Equality Act also covers a range of sectors, including service provision, property rights and education. Only one of these, work, is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts where judges sit, and have always sat, alone.

I hope that I have been able to reassure the noble Baroness, Lady Turner, to some extent—I am not sure that I have—and other noble Lords that this measure, which is a proposal that was supported by 60% of those responding to the Resolving Workplace Disputes consultation, is not intended to undermine the value that lay members bring to the tribunal system as a whole. Nor will it have the adverse consequences that they fear.

--- Later in debate ---

[Lord Young of Norwood Green]

My Lords, I, too, welcome government Amendment 34, which implements protections that we called for in Committee. The amendment took us a bit by surprise considering that in Committee the Government were so adamant that the amendment was not necessary and when we met the Minister just a fortnight ago, we had no indication that they had changed their mind. However, no matter when the epiphany occurred, we are delighted that the Government have now conceded that specific protection is needed. I was going to say that we should not look a gift horse in the mouth, but given the problem with horses and food standards perhaps that is not an appropriate metaphor.

As the noble Lord, Lord Low, has explained, Amendment 29 would place vicarious liability on employers for the actions of their employees where bullying or harassment of whistleblowers by their co-workers occurs. My noble friend Lord Touhig gave the details of the case involving nurse Helene Donnelly, so I will not reiterate them. However, one of the key findings of the Robert Francis inquiry into the Mid Staffordshire NHS Foundation Trust was around the culture of intimidation and lack of transparency which prevented more individuals speaking out and blowing the whistle on bad practice, which ultimately led to patient safety being put at risk.

Throughout the passage of this Bill, we have argued that the thrust of Clause 15 is to increase the barriers to protected disclosures just at the time when events from the Savile case to Mid Staffs show us that we should be making it easier, not harder, for individuals to feel able to blow the whistle on serious misconduct. We welcome the fact that on this area, as with the Government’s later amendment around good faith, and on blacklisting, the Government have listened to concerns raised across this House and in another place and have brought forward amendments to change the direction of travel. Nevertheless, as has been mentioned by other noble Lords during this debate, there is a need for the Government to clarify the extent to which liability attaches to the worker who perpetrated the harm. The judgment of Lord Justice Elias in the case of NHS Manchester v Fecitt makes apparent the need for clarity on this point, as the case turned on the fact that protection afforded under PIDA for whistleblowers was against retributive action by the employer and not co-workers. I would be grateful if the Minister would confirm that the lack of liability attached to the worker will in no way impact on the extent of the liability now placed on the employer for the actions of their employees.

[Viscount Younger of Leckie]

My Lords, as I said earlier, we agree with the aims of this amendment and think that noble Lords are right to seek to mirror the equivalent provisions in the Equality Act 2010. However, the first part of the amendment does not entirely reflect the relevant provision in the Equality Act and, as drafted, that part of the amendment would not enable a whistleblower to bring a claim against a co-worker if they cause them a detriment. The equivalent provision in the Equality Act does allow for claims against co-workers and we think that it is right that the legislation is the same here.

Before I conclude, let me explain this thinking, particularly in view of the comments made by the noble Lord, Lord Low of Dalston. Individuals have a personal responsibility to make sure that they act in the right way towards people with whom they interact. The law recognises this in many different ways. For example, the law of negligence makes you personally liable if you crash your car into someone and contract law makes you liable if you misrepresent an item that you are selling to somebody. If you are a taxi driver and you crash your car into someone, or a salesman and you misrepresent an item you are selling, the principle of vicarious liability means that your employer will be liable, too. We think that the same should be true in whistleblowing. If you cause a co-worker a detriment after they blow the whistle, perhaps by bullying them, you should be liable for that conduct and your employer should be liable, too. This amendment therefore will encourage workers to behave appropriately to each other and will encourage employers to have the right processes in place to protect whistleblowers. I hope that noble Lords will agree with this approach and I ask the noble Lord, Lord Low, to withdraw his amendment.

Amendment 30 relates to the Government’s introduction of a public interest test to the whistleblowing protections. As noble Lords will be aware, the Government have introduced the test to rectify the loophole which has occurred as a result of the decision in the Parkins v Sodexho case. This decision widened the scope of the protection to include disclosures concerning breaches of personal contracts rather then being restricted to matters of public interest. This amendment would amend the test the Government have introduced. It would mean that a qualifying disclosure would have to be in the health, safety and general interest of the workforce, and this is somewhat narrower than the test which currently exists in Section 43B of the Employment Rights Act 1996. This would impose a stricter qualifying criteria than the test which will exist in Section 43B after the Government’s amendment introducing a public interest test comes into effect. The result would be less protection for whistleblowers and this means that many may choose not to make disclosures, despite the fact that the disclosures would be in the public interest. The Government’s introduction of a public interest test is simply to amend the legislation in light of the Parkins v Sodexho ruling and return it to operating within its original remit.

Before I conclude, I want to respond to some comments that the noble Lord, Lord Touhig, made relating to the Mid Staffordshire fiasco. The Government had intended to call for evidence on vicarious liability and other whistleblowing areas following the completion of the Bill. However, the Mid Staffs inquiry has provided evidence which was previously lacking in relation to vicarious liability. It is therefore prudent to make a change now through the Enterprise and Regulatory Reform Bill to introduce protections into the whistle- blowing framework. I hope that that answers the point about the timing of our amendment alluded to by the noble Lord, Lord Young of Norwood Green.

The noble Lord, Lord Touhig, also raised the use of taxpayers’ money to gag whistleblowers. I think that he mentioned the sum of £15 million. As I am sure he is aware, the use of settlement agreements to resolve a dispute is a common practice in both the public and the private sectors as a means of avoiding the cost and stress of employment tribunals. They often involve a sum of money. However, in the cases to which he refers, they cannot buy silence as such clauses are null and void in the whistleblowing context. Therefore, I hope that the noble Lord will not press the amendment.

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[Lord Young of Norwood Green]

Opposition Amendment 31 would use the new power introduced in Committee by the Government to amend the definition of “worker” in Section 43K of the Employment Rights Act in order to extend protections to job applicants.

The purpose of this amendment is to make clear within the Public Interest Disclosure Act, the legislation which establishes specific protection for whistleblowers, that individuals should not face discrimination from consideration for future employment because they have made a protected disclosure in the past. The blacklisting of so-called troublemakers by companies is an issue that is particularly important at the moment. Evidence of blacklisting on a vast scale, including allegations in relation to major public projects such as Crossrail and the Olympic Park, is incredibly serious. We now know of the existence of secret files on thousands of workers in the construction sector, including by the construction firm Balfour Beatty, which has confirmed that it conducted blacklisting checks on individuals seeking work on the construction of Olympic venues. Many of those affected still have no idea that they were included on the secret construction blacklist, only uncovered by the Information Commissioner’s Office in a raid in 2009. This action will have resulted in many people—possibly thousands—being denied employment and their livelihoods, many of them on the basis that they have raised concerns over issues of misconduct or health and safety in previous workplaces, where it is absolutely in the public interest and the interest of the surrounding workforce that these concerns be raised. This is a national scandal and the Government must do everything in their power now to ensure that, first, if blacklisting is proven, adequate sanctions are taken against the perpetrators and, secondly, the law is strengthened to provide greater protection for workers in the future.

The amendment would use the new power that the Government have introduced to extend protection to job applicants from discrimination by an employer on the ground that they have been a whistleblower in the past. At present, if a prospective employer accesses a blacklist or becomes aware of a job applicant’s whistleblowing history and decides on that basis not to give them a job, the applicant has no cause for legal action, a point highlighted by Mr Justice Langstaff in the case of BP v Elstone in 2010, when he stated:

“It is true that the statute does not prohibit action against a whistleblower should he be recognised as one when an applicant for employment, as it might have done”.

The Equality Act 2010 provides protection at the point of recruitment, but, just as is the case for harassment of whistleblowers by co-workers, it is crucial that PIDA—the legislation providing specific protection for whistleblowers—is brought into line with these provisions.

Since Committee stage, we have had a very fruitful discussion with the Minister on this specific point, during which the Minister indicated that the Government would be willing to look at the inclusion of job applicants within the definition of “worker” for the purposes of PIDA. This was followed up in a letter from the Minister, in which he stated that, in relation to the new power in the Bill to expand this definition, before exercising this power, the Government are planning a call for evidence on these and other issues,

“such as the need to protect job applicants who have suffered because they were blacklisted for blowing the whistle”.

I thank the Minister for listening on this important issue. I ask him to confirm to the House that this is still the Government’s intention, that the Government are minded to include job applicants within this definition, and that this review will be carried out soon after the enactment. I beg to move.

[Viscount Younger of Leckie]

My Lords, the issue of whistleblowers finding it hard to find a new job once they have blown the whistle against an employer was discussed in Grand Committee, and the Government agreed to take the issue away, as the noble Lord, Lord Young of Norwood Green, has said, and consider the problem that had been presented.

The Government very much understand the concerns here and, in considering this issue and looking at the provisions we are putting in place, are confident that if there is evidence showing that this problem exists, it can be addressed through secondary legislation. By taking a power to amend the definition of “worker” in Section 43K of the Employment Rights Act by secondary legislation, the Government have allowed themselves time to consider the scope of the definition of “worker” and to determine who needs to be covered. If changes, such as the inclusion of job applicants or other groups, are then necessary, these can be achieved in a relatively short time by making an order to amend Section 43K. With that in mind, I hope noble Lords will agree that there is no reason to make this decision at this point without first considering any evidence to confirm the existence of a problem. Once this Bill has completed its passage, the Government will launch a call for evidence to establish whether there is a case for reviewing the legislation, including its scope. The Government have agreed to meet the chair of the PCaW whistleblowing commission, Sir Anthony Hooper QC, and look forward to discussing whether and how we might work together.

I hope that this goes some way towards reassuring the noble Lord, Lord Young, that the Government are taking action in this area. With that in mind, I hope that he can agree to withdraw his amendment.

[Lord Young of Norwood Green]

I have listened carefully to the Minister’s remarks, which I welcome broadly. I trust that the secondary legislation will be affirmative legislation. I hope that he regards this issue as time critical. From listening to the tenor of his remarks, I feel that he does. We believe that the evidence is out there. Having heard the Minister’s comments and hoping that he will take into account the points I have made, I beg leave to withdraw the amendment.

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[Lord Touhig]

My Lords, on the good faith test, I certainly welcome Amendment 33, as I think it does mitigate the effects of the introduction of a public interest test as set out in Clause 15. The removal of the good faith test at the initial stages of a whistleblowing claim cuts down the number of hurdles that a whistleblower has to satisfy in order to establish a prima facie case. Having worked closely with the charity Public Concern at Work from the very first time I introduced a whistleblowing Bill when I was a Member of the other place, I know that it, too, welcomes the Government’s response here, as it certainly attempts to strengthen the protection of whistleblowers.

The publication of the Francis report, about which I spoke a moment ago, and the recent revelations about the NHS chief executive, show, in my view, that there is a compelling case for reviewing whistleblowing. We had attempted to persuade the Government in the past that the Public Interest Disclosure Act should be reviewed. I certainly welcome the Minister’s remarks. If I understood him correctly, he said that the Government will work very closely with Sir Anthony Hooper, who is to chair the commission that Public Concern at Work has now set up to look at these matters. I am very pleased that the Government will be co-operating with the commission. It will start taking evidence in March. It is in the interest of all of us that we make sure that as much information as possible goes to this commission so that if a strong case is made for further review, revision or amendment of the Public Interest Disclosure Act, we can do that together in the interest of protecting people who blow the whistle to protect us.

[Lord Young of Norwood Green]

My Lords, I welcome government Amendment 33, which implements an amendment tabled by my noble friend Lord Wills in Committee. This amendment addresses concerns that were raised across all sides of the House that the Government’s decision to introduce a public interest test to the Public Interest Disclosure Act would discourage whistleblowers from coming forward by placing an additional legal test on individuals in order for them to be assured of protection from retributive action by their employer.

It was already the case that in order for whistleblowers to qualify for protection under PIDA it had to be shown that the individual had made such a disclosure in good faith. Throughout the passage of the Bill, we have argued, alongside Public Concern at Work, the organisation that first lobbied for the protection of PIDA, that the combination of a public interest test with the existing good faith test will create legal uncertainty over how these two conditions should interact and potentially dissuade many more individuals from coming forward with concerns. As I and many other noble Lords have repeatedly said, now is not the time to be putting up more barriers to individuals who may blow the whistle but are scared of the consequences, as the Francis report highlighted.

The Government need to be doing all they can to foster a culture of greater openness and transparency within institutions such as the NHS in order to ensure that people feel supported and listened to when raising concerns. We welcome the move by the Government to remove the good faith test from PIDA, leaving just public interest as the primary test for any disclosure made in relation to protections under that Act. It implements what we have been calling for throughout, which is greater clarity and certainty around the Act, and we thank the Government for listening and responding to those concerns. I also endorse the points made by my noble friend Lord Touhig about the forthcoming commission and examining the need to review PIDA. Once again, I thank the noble Viscount and we will support the amendment.

[Viscount Younger of Leckie]

I thank noble Lords for all the discussions we have had on this important issue. We are all agreed that it is important that the legislation supports whistleblowers when making the very difficult decision to blow the whistle. The Government have outlined their reasons for this provision and I hope that it meets the concerns that noble Lords had in this area. I thank them for flagging this issue to the Government and, in particular, I thank the noble Lord, Lord Wills, whom I see in his place, for his help and advice on this matter. I hope that noble Lords agree with this approach.

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[Lord Young of Norwood Green]

My Lords, I will be brief because my noble friends Lord Lea and Lord Monks covered the territory very well. I was glad to see that they received some support from the noble Baroness, Lady Brinton. I doubt that the Minister will rush to fully embrace the suggestion that the 10% trigger should be changed. However, one thing that the previous Government did and that this Government have maintained is employee engagement. Many statistics demonstrate that the more companies engage with their employees, the more they will improve their productivity. That was demonstrated in 2007-08 when companies were in serious trouble and there was a very positive response from trade unions. Therefore, there is a justification for the proposal made by my noble friend Lord Lea and supported by my noble friend Lord Monks, and I await with interest the Minister’s response.

[Viscount Younger of Leckie]

My Lords, I thank noble Lords for their interventions in this short debate. I will start by clarifying a point about the 10% hurdle. It does not need to be 10% of employees at a single point in time. Cumulative requests over a six-month period totalling 10% would trigger the requirement. It may be helpful for noble Lords to understand that.

I share the view of the noble Lord that employees can make an important contribution to the commercial decision-making process—an issue brought up by the noble Lord, Lord Lea of Crondall. They have a shared interest in the long-term success of the organisation, as well as having experience and knowledge that can increase operational effectiveness. The noble Lord, Lord Young, made a strong case for the inclusion of employees to this extent.

There are many ways in which employees can be consulted by their employer—formally or informally, voluntarily or as a result of statutory requirements. The Information and Consultation of Employees Regulations 2004 are one such formal mechanism. They implement a European directive and were developed through a landmark framework agreement between the CBI and the TUC. If 10% of employees request formal information and consultation arrangements, the employer is required to introduce such arrangements in accordance with the regulations. Employees can make the request direct to the employer, but, if they are concerned about raising their heads above the parapet, they can make the request to the Central Arbitration Committee and their names will be kept confidential from the employer.

It is true that the take-up of the right to formal information and consultation has been low, but I do not believe this means that we should remove the 10% trigger. If there is no demonstrable interest from employees, it is surely unreasonable to require employers to introduce information and consultation machinery. Employees are unlikely to be committed to engagement and discussions risk becoming desultory, wasting the time of all concerned. Nor should it be difficult for a workforce to secure the necessary number of signatures if formal information-sharing and consultation is of genuine value. Unions can play a role by ensuring that employees are aware of their rights and by helping them make the case more widely to colleagues. As the Parliamentary Under-Secretary of State for Trade and Industry, the noble Lord, Lord Sainsbury of Turville, said at the time, the regulations,

“balance the rights and responsibilities of employees and employers”.—[Official Report, 21/12/04; col. 1712.]

Enterprise and Regulatory Reform Bill

Debate between Viscount Younger of Leckie and Lord Young of Norwood Green

Thursday 31st January 2013 Grand Committee

[Lord Young of Norwood Green]

My Lords, these government amendments, brought forward in response to the DPRRC recommendations, put flesh on the points that we made in respect of the previous group. As we said, we support the introduction of measures to deal with orphan works and believe that extended collective licensing is the way forward. We also want to see the copyright hub being developed, as we have said. These amendments go some way towards ensuring greater clarity over the standards to be set for collecting societies and transparency in how the powers that the Government are taking will operate in practice, and we are happy to support them.

The amendments proposed by the noble Baroness, Lady Buscombe, aim to put more detail into the Bill on how the Government intend to supervise collecting societies and on what might constitute the minimum conditions and procedures that might be required, which would ensure that the Government can step in and require a body to adapt the Government’s standards for collecting societies. I shall listen carefully to what the Minister says in response to the amendments proposed by the noble Lord and the noble Baroness, but at present we take the view that much of what is requested is more appropriate for secondary legislation.

I take the opportunity to say, as somebody who spent a few months of my life dealing with the previous Digital Economy Bill, of which orphan works were a part, but they unfortunately disappeared in the wash-up process, it is nice to know that at long last we seem to be getting near to liberating orphan works for the collective benefit of society as a whole. I welcome the Minister’s comments.

[Viscount Younger of Leckie]

First, I appreciate the general support of the noble Lord, Lord Young of Norwood Green.

On Amendments 34 and 50, there is already provision in the Bill for consultation before the appointment of a code reviewer. We have considered the proposals to put all processes for the appointment of an ombudsman and the implementation of a statutory code on the face of the Bill. However, the Government, together with stakeholders, need to learn how the schemes work in practice and respond as they evolve. This will help us quickly to remedy any unforeseen issues that result in problems or injustices for rights holders. We have considered Amendments 35 to 42 carefully and believe that the term “licensing code ombudsman” more accurately describes the functions of the role. That role is to investigate and determine disputes about a collecting society’s compliance with its code of practice.

On Amendments 43 and 51, as I noted with regard to Amendments 34 and 50, the Bill already makes provision for consultation when appointing a code reviewer. This is important to ensure independence of process. Codes of practice will be subject to specific criteria, which will be set out in regulations subject to consultation. Therefore, the Government do not consider that additional consultation is necessary.

We have spent some time looking at Amendments 44 and 45 on the power to impose sanctions on individual directors. Where it can be demonstrated that a director is responsible for non-compliance with a code, it is only right that they should be sanctioned. The default should not be to penalise collecting society members. The Government agree with the intent behind Amendment 46, which is consistent with the comments made by the Delegated Powers and Regulatory Reform Committee. Therefore we accept this amendment.

On Amendment 47, I confirm that an appeal mechanism will be available for decisions on non-compliance and for any resulting sanction. This was earlier clarified in government Amendment 46B.

Finally turning to Amendment 48, the Government can confirm that these fees will apply only to a licensing body being regulated. If a licensing body adopts a code of practice which complies with the criteria specified in the regulations, no fees arise in connection with paragraph 1 of the schedule. In addition, paragraph 6(2) of the schedule contains a protection for licensing bodies, limiting the aggregate amount of fees payable for administration and operation of the regulations.

I shall respond to a number of questions raised by noble Lords. In her general comments, my noble friend Lady Buscombe raised the code criteria, which should be subject to consultation. Although I may well have covered this in my previous speech, the code criteria will largely be based on minimum standards on which there will already have been consultation. Specified criteria will be part of the regulations and will be consulted on.

In her general comments, my noble friend Lady Buscombe also raised the work done by the collecting societies on self-regulation. The Government welcome the work they have done and what they have achieved. I repeat that self-regulation is the preferred option, but we need a back-stop if it fails, a protection for licensees and members when dealing with monopoly suppliers. My noble friend Lady Buscombe also said that fines should be used only as a last resort. I entirely agree that they should be a last resort. We do, however, need an ultimate sanction, and fines would provide that.

My noble friend Lady Buscombe also mentioned collecting society revenues which are distributed to members, who are affected by fines, instead of giving help to failing collective societies. I agree with her; this is why, if a director is responsible, he or she, rather than the collecting society members, should be held accountable. Finally, my noble friend Lady Buscombe asked what triggers statutory regulation. The provisions for an independent code reviewer, who will independently assess the performance against the code, are the trigger. I hope that I have answered all the questions raised by noble friends and, if not, I will certainly write to them.

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[Viscount Younger of Leckie]

My Lords, I concur with the noble Lord, Lord Young, in his interesting remarks that the interests of employees are important as a company cannot excel, or indeed properly function, without a workforce that is committed, motivated and content. This includes being content with their remuneration package in relation to their peers and superiors.

I should also like to pick up the point he raised concerning companies taking into account employees’ pay and their views. He is quite right: in revised remuneration reports, companies will now have to say whether, and if so how, they have taken into account employees’ views on executive pay and policy. In addition, they will have to publish the percentage increase in pay of the chief executive officer and that of the workforce, as I mentioned earlier. These will be discussed in more detail when we debate the regulations.

Amendment 58BC would require companies to consult an employee representative if they propose to change their remuneration policy before the next AGM. The Government agree with the view that it can be useful for companies to engage with their employees when considering directors’ pay. It is important that remuneration committees make their decisions based on a broad range of reliable and robust information. We know that some companies are already doing this and we want to encourage more to do so. That is why we have proposed that, in their annual remuneration reports, companies disclose whether, and if so how, they have sought employee views. They must also say how they have taken employee pay into account.

We also encourage employees to take up existing mechanisms to air their views, such as information and consultation arrangements, employee representative committees and works councils. However, we do not believe that it is necessary to create a statutory duty to consult employees on this matter. It is up to companies and their shareholders to decide whether, and if so how, to go about it. I therefore ask the noble Lord to withdraw Amendment 58BC.

[Lord Young of Norwood Green]

I thank the Minister for his comments, some of which I found helpful. I will read the points he has made carefully in Hansard. Some of them were a step in the right direction and we will consider whether they have gone far enough. I beg leave to withdraw the amendment.