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Exclusions Of Rights

Volume 983: debated on Wednesday 23 April 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I beg to move amendment No. 60 in page 8, line 31, leave out from beginning to end of line 13 on page 9.

With this we may discuss the following amendments:

No. 61, in page 8, line 38 leave out ' two years' and insert' six months'.

No. 62, in page 8, leave out lines 40 to 45.

No. 63, in page 8, line 44, leave out ' twenty ' and insert' four'.

No. 111, in page 9, leave out lines 1 to 3.

No. 64, in page 9, line 9, at end insert ' or was redundancy '.

This is one of the neglected but vicious parts of the Bill. The Government have created the impression that the Bill is concerned with containing robust picketing, the closed shop and Government assistance for ballots. We have repeatedly expressed our anxiety about the parts of the Bill which strike at hard-won individual workers' rights.

This part of the Bill needlessly and provocatively strikes at individual rights because it deprives many workers of their right to complain about being unfairly dismissed. The amendments are aimed at removing that offensive provision or, if that is not successful, mitigating the damage.

I shall not rehearse again all the arguments about the many other much more serious causes of concern for small employers—the impact of the increase in value added tax brought in by the present Government, the enormously increased cost of borrowing money, the impact of price and wage inflation on small employers, the impact of the increase in gas and electricity charges and the increase in rents—but one thing is clear from the mass of evidence available to us.

I am glad to see the hon. Member for Basingstoke (Mr. Mitchell) in his place, with his responsibility for small firms, because I am sure that he will confirm that the Conservative Party's small businesses bureau places employment protection legislation very low on its list of the matters which are of great concern to small firms and are causing the growing number of bankruptcies among them. I have yet to meet an employer running a small firm who has been driven into bankruptcy, receivership or liquidation who complains that it was the product of employment protection legislation.

The hard fact is that many employees, on the other hand, will be deprived of basic fundamental rights which Parliament has conferred upon them in recent years. The clause strips from employees who have been employed for less than two years in a firm employing 20 or fewer people the right to complain not when they have been dismissed but when they have been unfairly dismissed. This is what is so iniquitous. It seems to confer on the small employer the right to dismiss whether fairly or unfairly, and I fear that that is how some employers will react to it. They will consider that they have a right to dismiss anyone on whatever grounds they like—whether the colour of people's eyes, whether they were drunk at work, or whatever it may be.

That is wholly unacceptable, and for that reason we have tabled these amendments and intend to press them against the Government.

The Question is, That the amendment be made. As many as are of that opinion say " Aye ".

I am sorry. I did not notice that the hon. Gentleman wished to speak. Mr. Townend.

On a point of order, Mr. Deputy Speaker. As I understood it, you put the Question and a response has been given from both sides of the House.

I was in fact collecting the voices, but I appreciate that the hon. Member for Bridlington (Mr. Townend) has an amendment in this group, and I think it only fair that he should be allowed to speak to it.

My amendment No. 111 would delete paragraph (c) from the new subsection (1). Clause 7 was originally intended to apply only to new firms with fewer than 20 employees, but it was extended by the Government as a concession to all firms with fewer than 20 employees. I believe that to be an excellent move, and I congratulate my right hon. Friend on his wisdom in accepting the arguments of the small business sector.

All of us on these Government Benches accept the need to encourage small firms, as it is to this sector of our business community that we have to look for the majority of the new jobs which must be created. There are two ways by which we can encourage small firms. One is through taxation. We started on that in the Budget last year, and we did much more in the Budget this year. But the second and, I submit, most important way to help small firms is to reduce the burden of legislation and bureaucracy.

Anyone who has any knowledge of the small business sector will know that the one piece of legislation which has caused more criticism and aggravation than any other is the unfair dismissal part of the Employment Protection Act. It has resulted in small firms being exceedingly wary of taking on new staff. I suspect that many hon. Members, when visiting their constituencies and talking to small business men, have been told " I could do with an extra one or two chaps, but I shall not take anybody else on because if I get the wrong fellow I shall end up before the industrial tribunal ".

I keep hearing that argument, and it is not an argument to which, as a small business man, I subscribe. If a small business man refuses to employ people as a consequence of the Act, the corollary is that he is turning down orders which he otherwise could obtain. He employs people in order to produce goods, in order to meet orders. Does the hon. Gentleman know of any company that refuses orders as a consequence of the Employment Protection Act?

I do not wish to detain the House at this time of night with a lot of examples, but I know of companies that are not prepared to expand for two main reasons—taxation and legislation. They are making an adequate living, and they do not want the aggravation.

Therefore, clause 7 is welcome, because it reduces the burden on small firms and it aligns the two-year qualifying period for redundancy with the two-year qualifying period for unfair dismissal. However, there is one problem. When one looks at the clause in detail, it is clear that whoever drafted it—I am sure that it was not one of my right hon. or hon. Friends, but perhaps it was someone in the Department—had no experience of small businesses or small business men. If he had, he would never have included para-graphp (c), which states:
" The dismissed employee was on being engaged informed in writing of the effect of this section.
That undermines the purpose of the clause—which is to relieve small business men of bureaucracy. Small business men neither understand it, nor do they want to undertake the administration. The last thing that a small business man wants is to get involved in paperwork. Many will never have read the regulations, and in practice they will not give their employees notice of this part of the law in writing when they are first employed. Many never get round to giving contracts of employment until they are challenged. I suggest that Members of Parliament should consider their position as small employers. How many hon. Members give their secretaries contracts of employment? I trust that any hon. Member who has not done so will be prepared to vote for this amendment tonight.

Paragraph (c) refers to the dismissed employee being informed when he was engaged. Does that mean that when a small business man engages a man on a Friday, to start work the following Monday, he will have to give the man a copy of clause 7 of the Employment Act? If he forgets to do so until the following Wednesday, will the man lose the protection of the clause? I suggest that he will.

I have two further specific objections to the clause. It is unusual, if not unique, to place on the employer the responsibility of notifying the employees of the law in this way. The normal practice is that the citizen is expected to know the law. Worse, if the clause is not amended, many small business men will assume that there is a two-year qualifying period, and, because they have not read the small print and given notice in writing, somewhere along the line someone will be dismissed and will take the small business man to the tribunal, with the possibility that the tribunal will find him guilty of unfair dismissal. That will produce disillusionment among small business men, and they will rightly feel that we have given a concession with one hand and taken it away with the other and that we have not lived up to the spirit of the commitment.

I have been a small business man for over 25 years, and I represent a constituency where the vast majority of jobs are provided in farms, fishing and small businesses. This is a matter of common sense. I ask my right hon. Friend the Secretary of State to take the advice of those who know and understand small business men. I am sure that the hon. Member for Rochdale (Mr. Smith) agrees that they need understanding. I hope that the Secretary of State will accept my amendment, which I am sure he will agree is both practical and necessary.

Paragraph (c), if let in, will destroy the purpose of the clause. I am convinced that that is not my right hon. Friend's purpose. If he agrees to the amendment, clause 7 will be a boon to small business men. It will show that we are not just paying lip service to our support for their cause but are implementing our policy in a meaningful way.

12.45 am

I apologise for detaining the House for so long tonight.

A number of important amendments have been tabled to clause 7. Amendment No. 60, moved by the right hon. Member for Doncaster (Mr. Walker), would have the effect of deleting the whole clause. Amedment No. 61 would delete " two years " and insert "six months ". Amendment No. 62 would delete the reference to " twenty ", Amendment No. 63 would allow four only instead of 20. Amendment No. 64 would add " or was redundancy " at the end of subsection (2).

Amendment No. 111, in the name of my hon. Friend the Member for Bridlington (Mr. Townend), seeks to delete subsection (1)( c).

My view on the clause is that we need to have absolute regard to doing everything that we can not only to help small businesses which are in existence but to remove any psychological barriers and any impediment in people's minds towards the setting up of new businesses. I say that because so often one hears of people saying " I would set up a business and employ a few people, but I do not want to be bothered with all the labour problems that we have nowadays." That is a usual reaction. It may be that many of those people subsequently set up businesses, but there is a great deal of evidence that we are falling behind many other countries in the numbers of small businesses that we have in this country.

The greatest growth of small businesses in the last few years has been in Germany and Japan and, above all, in the United States. The small businesses will provide the employment of tomorrow. In many instances, the small businesses will provide the large businesses of tomorrow as well. It is a great mistake to think that America is the country of big business. America is a country of small businesses, some of which have become big.

Over the years we have had a fetish about size. I am not against large businesses. I believe that small businesses not only have an enormous amount to contribute, but that, on the whole, their industrial relations are much better than in big businesses.

I do not believe that in 1980, given the independence of the British working man, he will feel that the provisions that we are putting forward in the clause, which do not give him protection for unfair dismissal for two years as opposed to one year, are an imposition on his employee rights. Large numbers of men and women now prefer to work for small businesses because they do not wish to get involved in all the bureaucracy that seems to accompany large business. They are prepared to accept that the relationship between their employers and themselves is generally very friendly but that it may not always be conducted within the strict administrative requirements of the law.

I suspect that, looking at the Benches on both sides of the Chamber, I may find the odd small employer who does not always stick rigidly to the rules—he probably does not have the contracts of em- ployment that he knows he should have because he has not got round to issuing them to his employees—but who has a good and satisfactory relationship with those employees.

During the Committee stage of the Employment Protection Act 1975, we discussed many of the problems faced by small businesses, with which we are now dealing in the Bill. We tried to move an amendment which would have excluded small businesses from the unfair dismissal proceedings for two years. What we were seeking to do then is even more justified today. The right hon. Member for Don-caster said that other measures which have taken place in the past few months, such as high interest rates and so on—none of which is agreeable to the Government—have had a big impact on the problems of small businesses and their ability to employ labour. That, if anything, makes out the case even more for trying to help small business men. It underlies the principle that we have tried to adopt in the Bill—namely, to help small businesses in any way we can.

We felt that to choose a number of 20 employees and say that in a firm with fewer than 20 employees unfair dismissal should not operate for two years was not an unreasonable state of affairs. I ask my hon. Friends to reject the Opposition amendment as it would lead us in the contrary direction to that in which we are seeking to go.

The Secretary of State will remember that in Committee we discussed the figure of 20, to which he attaches so much significance. He did not answer successfully in Committee the question that I shall now ask and which I hope he will answer. The Secretary of State, like many of his hon. Friends, pontificates at length about assistance to small businesses. Will he say what will happen when a small firm reaches the figure of 20, is expanding and so moves on to 21 or 22? When it goes beyond the magical mark of 20, it becomes embroiled in all the provisions of the Employment Protection Act 1975, which the right hon. Gentleman and his hon. Friends tell us constantly is such a handicap to business and industry. Will he say tie intends to solve that problem?

Twenty was an arbitrary number. There must be an arbitrary figure in these circumstances.

It appeared that 20 was a reasonable number for a small business man to manage and to do his own book-work. When he goes beyond 20, it is not unreasonable to expect that he will employ an office manager or someone of that nature to do that work for him. When a firm is building up to 20, that would not be justified. That was the logic behind taking the number of 20. If a business is expanding and going well beyond 20, I do not think that it will stop at 19 and not go to 20. When it reaches that size, it will be in a position to employ the necessary office management, which will enable it to carry out the administrative details which are attendant upon running a business today.

We felt that it was an improvement which would have a marked effect on the freedom of small business men to take on labour and help up with our employment and unemployment problems.

Amendment No. 111 seeks to remove paragraph ( c)—namely,

" the dismissed employee was on being engaged informed in writing of the effect of this section ".

My hon. Friend the Member for Bridlington made a powerful case for his amendment. We discussed the matter in detail in Committee when my hon. and learned Friend said of retention of the notification:

" This is controversial, and we have been pressed strongly that this would be a further administrative burden, or, indeed, stumbling block".—[Official Report, Standing Committee A, 6 March 1980; c. 953]

At that time we still maintained that, on balance, it was probably right to keep the notification. We have thought about it a great deal since then, and I have been aided by my hon. Friend the Member for Basingstoke (Mr. Mitchell), who is the Under-Secretary of State for Industry. I have never met anyone who is more persistent over a point. If he serves small businesses as well as he has badgered me over the past few weeks, there will not be much wrong with small businesses.

We have looked at the point again and concluded that we should relieve small firms of some of the burdens of the unfair dismissal procedures, including the noti- fication requirement. We are worried that if we do not take that step much of the good that we believe will result from allowing two years' grace to firms employing fewer than 20 employees will be undone by the notification requirement. We therefore recommend my hon. Friend's amendment to the House.

I still think that we should do all that we can to see that when small firms are issuing contracts of employment they ensure that employees know that there is a two-year requirement. It would be wrong to give the impression to small firms that they had the two-year requirement only to find that, by our keeping in the notification requirement, when someone was dismissed after 18 months he sued for unfair dismissal because he had not been given notification. That would undo all the confidence that would be built up by the two-year commitment.

I have considered the matter carefully and come down on the side of doing all that we can to help small businesses. The case made out by my hon. Friend the Member for Bridlington is a good one.

On a point of order, Mr. Deputy Speaker. I genuinely seek clarification. The amendment of the hon. Member for Bridlington (Mr. Townend) is down for discussion only and is not to be the subject of a separate vote. How can the right hon. Gentleman accept the amendment? Will it not have to be moved in another place?

Any amendment grouped with an amendment that is moved may, if an indication is given and accepted by the Chair, be moved for a separate vote when we reach it on the Amendment Paper.

I have said all that I need need to say, except that I commend my hon. Friend's amendment warmly to the House. It has been tabled in the interests of trying to help small businesses. I do not believe that it will be an impediment to those who work for small businesses. I hope that it will result in greater employment.

I also ask my hon. Friends to reject the Opposition amendments, which would wreck the clause and the initiative that we are taking.

1 am

I am sorry that the Government have accepted that amendment. I do not subscribe to the view that all small businesses are desperately searching for more employees but are frightened to take them on because of the Employment Protection Act. Of course, I have seen questionnaires. I have received them in my company. If I am asked whether I would like to be relieved of sections of the law which are not entirely to my benefit, I say " Yes ". That does not mean that small businesses are being prevented from taking people on. I just do not believe it.

The hon. Member for Knutsford (Mr. Bruce-Gardyne) said that he knew of small businesses which were deliberately not expanding and were refusing orders. If the people running businesses turn down orders when labour is available, as it is at present, and are not prepared to expand because they have to give their workers a piece of paper telling them of their rights, I am glad that my money is not in those businesses.

Although, of course, I should like to be relieved of all the form-filling connected with the Employment Protection Act, that does not prevent my expanding my business and taking people on. Even if the argument that this prevents firms from taking people on is conceded, why have the Government gone so far as to take away employees' rights to be told in writing?

I agree with the Secretary of State. I want the Act to be accepted. What is gained by clause 7, having regard to the propaganda value of taking away employees' rights for the sake of avoiding the filling in of a piece of paper? All these forms are printed. There is not a separate letter for each employee. The forms can be bought at the Stationery Office or the printers. All that has to be done is to fill in the detail, giving the hours of work and so on, which takes only five minutes. This procedure applies only to companies which employ up to 20 people, so that at the most it is necessary to fill in 20 forms. Even with a 100 per cent. turnover of labour, it would be necessary to fill in only 20 a year.

This is the sort of propaganda that the workers understand. Much of the propaganda that will be used against the Bill by the TUC will be blindly followed by people although they will not understand what it is about, but they will understand this. If a worker works for a firm employing fewer than 20 people, that firm will not be required to give him a piece of paper telling him what his rights are. He will understand that. The Government may think that they have taken a great step forward in the interests of small businesses, but my belief is that they have taken a major step backwards in relation to getting the Bill accepted by working people.

I often enjoy the robust common sense of the hon. Member for Rochdale (Mr. Smith). He is totally correct in saying that no firm rejects orders. The extended delivery period of British firms over the last 10 years of increased bureaucracy, as they take the orders but do not expand staff, machinery or capacity, has made us the laughing stock of the world. That is because once many successful firms have reached a certain size they have said " We are big enough ". They take the orders but do not keep the delivery dates, as a result of which they lose future orders.

Many British industries are today falling and failing because people overseas no longer even ask them for quotations because their delivery dates are so awful.

Happily, I come from one of the few areas of the country where unemployment has fallen for the third successive month. But all too often small business, which can comprise three, four, 10, 15 or 20 people, says " We are big enough. We shall not expand.", and the first reason given is always bureaucracy. We cannot abolish bureaucracy at a stroke, but every form which is taken away makes someone that much more available to work, to obtain orders, to control and to produce. I therefore support my hon. Friend the Member for Bridlington (Mr. Townend) and I thank my right hon. Friend for accepting amendment No. 111.

During our long deliberations on this Bill, both in Committee and on Report, we have used various epithets to describe different clauses. This clause can only be described as probably the nastiest clause in the Bill.

I hope that the Secretary of State is ashamed of himself for accepting the verminous little amendment of his hon. Friend the Member for Bridlington (Mr. Townend). The right hon. Gentleman should recognise by now that he has enough strength within his party not to need to make any concessions to its Right wing. In this context, he did not have to make this nasty concession, which as the hon. Member for Rochdale (Mr. Smith) has made perfectly clear, is utterly and totally unnecessary.

Probably for the first time we are creating two classes of workers—those who work for firms with fewer than 20 employees and those who work for firms with more than 20 employees. Lord only knows why we are doing so in this day and age. The right hon. Gentleman suggested that if a firm had 19 workers it could not afford to carry out the procedure of informing its employees of their rights, whereas a firm with 21 employees had the necessary office staff to do so. I hope that he will think again about the nonsense of that statement.

We all know that, generally speaking, small businesses are better run than big businesses. Indeed, some of us have tried to make that point on many occasions. Generally speaking, the major reason why small firms disappear is that they are taken over by bigger firms. All hon. Members should be concerned about the number of small and medium firms which have disappeared in takeovers. It is the bureaucracy which has been created in large, multinational firms which has meant the death of so much of British industry.

Indeed, the private sector of the British economy has probably the most centralised bureaucracy of any Western country. In that context, the Lord only knows how small firms will be helped as a result of this miserable little clause. Every honest citizen in the country knows that the real problems of small firms relate to things such as the high cost of borrowing money, VAT, high rates, high rents and difficulties associated with planning arrangements, when small firms are swept out of business because of slum clearance orders. We have gone through all that, both in our discussions on this Bill and in our debates on the Industry Bill.

The Secretary of State praised the Under-Secretary of State for Industry, the hon. Member for Basingstoke (Mr. Mitchell), for his work with small firms. I am bound to point out that the Under-Secretary built up a career as the leading brain behind the Tory-based Small Firms Bureau. The hon. Gentleman sent out questionnaires planting the idea in the minds of small business men that the Employment Protection Act was creating all their problems.

I do not suggest for a moment that the occasional problem might not have been created by that Act. I accept that. If we pass legislation offering protection to workers it is common sense that we will probably create difficulties. But the whole thrust of the employment protection legislation was to set up a new deal in British industry.

While I recognise that the vast majority of small employers are good employers, nobody can deny that some of them are crooks, rogues and vagabonds. If anyone disputes that I suggest that they listen to the " Checkpoint " programme on BBC every week. They will hear there of the crooks and the scoundrels. However, the overwhelming majority of small firms are well run and enjoy good industrial relations. However, no Conservative Member can deny that. There is a tiny minority of crooks, villains, rogues and vagabonds in this sector and they are the people who will benefit from this legislation.

Any decent employer will honour the terms of the Employment Protection Act. He will notify his workers of their rights. I think that the better employers in the small firms sector will maintain the existing position and will not accept what is suggested in clause 7.

I cannot understand why, at so late a stage, the Secretary of State has to give way on this miserable little amendment. I suggest that he should start talking in Cabinet about the appalling policies of the Government which are creating a nightmare for small, medium and large firms at a time when jobs are disappearing by the thousand. Yet here we are messing about with a clause like this.

In my constituency a firm which employs more than 400 textile workers is due to close. I have asked the management whether its workers can produce one extra ounce of yarn. The management has assured me that its workers are already giving over 100 per cent. effort and cannot do more to increase the prosperity and productivity of the firm, which is due to close in nine weeks.

That is the kind of issue we should be discussing, yet here we are messing about with despicable little clauses such as this and with despicable little amendments from Conservative Members. It is a disgrace and a shambles, and the Government should be ashamed of themselves for trying to put such a clause on the statute book.

I support the hon. Member for Rochdale (Mr. Smith) in his stand on behalf of the individual. He has been honest and consistent on this issue and he put forward his view during the debate on the previous clause. We shall now see whether Conservative Members are as honest and consistent in their support for the individual. Perhaps we shall see that their support for the individual was hypocritical. The hon. Member for Rochdale has said that the rights of the individual should be equal and should apply equally in small firms as well as in large firms. That is not a bad principle. The hon. Member is speaking up for the rights of the individual.

I have heard a lot from Conservative Members about the rights of the individual. We shall now see whether their views were honest or hypocritical because under this clause workers in small firms, for the first two years, will have no rights. Is that something that we shall write into English law? Are there to be two classes of worker, those with some rights and those with no rights? If Conservative Members think that that is a bad principle, they should be blushing. Certain firms will set up subsidiary companies when their work forces increase to 19 or 20 members so that their workers will have no rights.

1.15 am

There is an idea that small is beautiful, and often it is. The hon. Member for Grantham (Mr. Hogg) seems to find that funny. Conservative Members may laugh and think that this is not important. We see hypocrisy written all over their faces when they talk about the rights of the individual. I tell the hon. Member for Grantham that in many small businesses small is not beautiful—for example, small shops, small launderettes and small restaurants whose staff are without trade unions and without proper rights. Those who work for such firms are the weakest in our society. If Conservative Members are concerned about looking after the interests of the individual, they should reject the clause instead of smirking and laughing unless they want to be branded as hypocrites.

I support the hon. Member for Rochdale. The hon. Gentleman is consistent in looking after the interests of the individual. Either a dismissal is fair or it is unfair. It is fair or unfair whether the firm is large or small. We shall see whether Conservative Members are honest when they speak about supporting the rights of the individual. I support the attitude of the hon. Member for Rochdale.

Not long ago the qualifying period for lodging a complaint of unfair dismissal was six months continuous employment. That was the qualification when I was a Minister in the Department of Employment. From time to time I received letters from Conservative Members enclosing complaints from constituents who had been dismissed and who did not come within the six months' qualification. They complained that they had been unfairly dismissed but were denied the right to seek legal redress. Instead of Conservative Members writing honestly to their constituents to tell them that they did not believe that they should have that right, they sent their constituents' letters to me and left me to explain their position.

The Government changed the period of qualification to 12 months. They are now increasing it to two years for many workers. Many of those who wrote to their Members of Parliament when I was a Minister did not know what their employment rights were in this important respect. They had a right to know. One saving grace was the obligation on the employer to tell his employees one basic right. The clause has been described rightly as a nasty little provision. People who wish to complain of unfair dismissal within the first two years of their employment are now to have that right snatched away from them.

I have known the hon. Member for Rochdale (Mr. Smith) for more years than any other hon. Member. I do not often agree with him, but I agree with everything that he has said on this occasion. All that was needed was a simple note to tell new employees that they would not have the right of complaint if they were dismissed within two years of starting their employment.

When the Bill was presented for Second Reading, we denounced it as a nasty measure that deprived workers of many hard-won elementary rights. It provided that those who started with new firms employing fewer than 20 persons would be denied their right to claim unfair dismissal during the first two years of their employment. In Committee it was extended to all firms—old and new—employing 20 people or less. The measure is worse than the original provision. This is a nasty Bill.

I can assume only that the Secretary of State is trying to placate one of his more offensive and rebellious Back Benchers. He is grovelling to gain a little support from some of the extremist and irresponsible bully-boys on his Back Benches. He is depriving decent working folk of their elementary rights. No hon. Member has denied that small businesses can make a contribution to the economy. However, I hope that the right hon. Gentleman will recognise that some of his hon. Friends are incapable of recognising that employees of small firms also have rights.

During the past few years a powerful lobby has come into being that favours small employers. It is time that some of its supporters recognised that there are some employees who cannot defend themselves. They need support and help. Conservative Members should dredge the bottoms of their consciences and hearts. I can see sneers and sniggers on their faces. Unfortunately, Hansard—unlike the television camera—cannot show the expressions on hon. Gentlemen's faces. I wish it to be put on record that Conservative Members sneer, smirk, and snigger when an Opposition Member speaks on behalf of those employees who stand alone. They need some help and protection. Conservative Members should dredge their spirits—if they have any—and consider whether they can find some encouragement for the small employee.

As my right hon. Friend has rightly pointed out, Conserva-time Members smirk, snigger and sneer when Opposition Members discuss the plight of the hundreds and thousands of individuals who work in small firms. Libertarian barristers and lawyers earlier spoke about the rights of the individual. Is it not significant that we hear a deafening silence from those hon. Members when we discuss real, not theoretical, freedom?

My hon. Friend is right. The small employee stands alone. He or she needs encouragement, yet has received no crumb of consolation or support from Conservative Members. They have consistently been against the employee of a small firm when a confrontation between the rights of the employer and employee has occurred.

We share in the common concern to support the small business man and to help small employers. However, it is foolish to believe that depriving the employee of his basic rights will encourage small employers to prosper. In the Financial Times of 21 April there was a report of a survey that had been produced by the London Chamber of Commerce and Industry. It discussed manufacturing trends in London and the South-East. The report states:
" An alarming rise in the number of small companies suffering from decreasing domestic orders is reported today by the London Chamber of Commerce and Industry. In its 15th survey of manufacturing trends in London and the South-East, the Chamber predicts that by about June 35 per cent. of companies will face falling domestic orders, almost double the figure reported last October. Mr. Gabriel Irwin, who compiled the survey, says it indicates that the erosion of the economy's capital base 'is gathering momentum at a frightening rate'."
That has nothing to do with the provisions of the Employment Protection Act or any such legislation.

That which is so damaging to small firms and the economy is entirely attributable to either the policy or the neglect of the Government. If they really want to help small firms, that is where they should turn their attention rather than snatching from employees their basic human rights.

Amendment negatived.

Amendment made: No. Ill, in page 9, leave out lines 1 to 3.—[ Mr. John Town-end.]