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Local Government Bill

Volume 492: debated on Thursday 28 January 1988

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House again in Committee on Clause 17.

[ Amendment No. 91 not moved.]

moved Amendment No. 92:

Page 15 line 34, leave out paragraph (h).

The noble Earl said: I can only speak on the Building (Scotland) Act 1959, which was the introductory Act to the Building Standards (Scotland) Regulations which lay down the scantlings of any structure to be erected. Because of these very strict regulations in Scotland dealing with damp-proofing, daylighting, ventilation, construction, etc., the average house costs 10 per cent. more to build in Scotland than south of the Border. I should always advise anybody wishing to build a house in Scotland to make certain that the erection of the house complies with these regulations because that is in the house-owner's interest.

If any building contractor or direct labour organisation, for that matter, employs technical, professional services under Section 31 of that Act, I should have thought that would be in the interests of the client. As a final point, every proposed building has to have a building warrant from the local building authority. This is completely separate from any planning requirement. Before 1974 in any town this was obtained from the Dean of Guild Court. I do not think there was an English equivalent. I beg to move.

I am grateful to my noble friend for tabling this amendment. It may just help the Committee if I explain the background to Clause 17(5)(h). This subsection will have no effect on the standards with which builders have to comply under the building Acts and associated building regulations. We must continue to ensure that building work is carried out to an adequate standard, and nothing in this Bill will interfere with that.

I hope that is of some relief to my noble friend, because he mentioned the very real concern that there is to make sure that building standards are maintained. Traditionally local authorities have been charged with the job of inspecting building work to check that it complies. This has been done by building inspectors, whom they employ. In order to provide a degree of choice for builders and to encourage greater efficiency through competition, the Building Act 1984 enabled the Secretary of State to approve other bodies as competent to carry out this inspection work. One body has been approved to date—the National House Building Council.

In response to this, a few authorities have started to insist that contractors carrying out work for them must use their building inspection services. We regard this as an unacceptable abuse of the contractual process, and Clause 17(5)(h) will stop it. My noble friend's speech highlighted the differences in the building control system north and south of the Border. While the NHBC does not offer the same alternative to local authority building control north of the Border, its designation to assess the compliance of standard house designs with the building standards regulations on behalf of the Secretary of State for Scotland under a new class warrant scheme is under active consideration. Although there is no reason to believe that Scottish local authorities would act improperly, it seems both reasonable and prudent, therefore, that this clause should apply to Scotland. I trust that in the light of what I have said my noble friend will feel able to withdraw his amendment.

8.15 p.m.

We are concerned with standards in complying with building regulations. Perhaps as a layman I assessed wrongly what the noble Earl said, but I understood him to say that with the work that goes into it a building in Scotland has a 10 per cent. higher value than its counterpart in England. I do not know whether or not I heard him correctly.

It is obviously better to make a good investment in a house at the beginning than to try to make up the leeway afterwards. I have been involved in housing and the building industry over a great many years. There is a great deal of worry in the industry about slippages in quality control. Some of the professional organisations, which are totally independent of politics, express grave concern about the present push—although this point is not directly related to the amendment, there is a connection—for self-regulation, self-inspection and self-certification. The Institute of Clerks of Works is deeply concerned.

Only a few months ago, the institute issued a brochure expressing the fear that the role of those involved in maintaining standards would be diminished. I introduced the brochure for the institute and it received full support from Her Majesty's Government. It is completely non-political. I made the point that in other spheres of life higher standards of quality control are always being demanded. When I first went into engineering as a boy the fact that the job was done by a skilled engineer was almost sufficient. During the war, because serious risks could have been involved if the job was not done to a sufficient standard, quality control was greatly increased. If we are not careful this Bill could lead in certain respects to a lowering of standards. I am sure that the Minister and the Government would not wish to see that happen.

I have mentioned the Institute of Clerks of Works. I know that the institute will shortly meet Mr. Trippier to discuss the problem. I also know that the Chartered Institute of Building, which is 200 years old, shares the same concern. If we do not take action in this Bill some of us will come back to it as watchdogs to make sure that the client not only in the public sector but generally gets value for money. I can see nothing worse than allowing self-certification in giant contracts. I believe that there is a role for the public building inspector. I am putting a marker down for the people who, historically, have been the safeguard of our standards, organisations such as the Institute of Clerks of Works and the Chartered Institute of Building. It is essential that we listen to them when they put forward their point of view.

I agree with the noble Lord, Lord Dean, that quality control is vital. The clerks of works have an important role to play. I would remind the Committee that the NH BC and local authorities apply exactly the same standards and that therefore there will be no diminution in quality control as a result of this Bill. That is something the Government would not wish to see in any case.

I am grateful for what has been said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

had given notice of his intention to move Amendment No. 92A:

Page 15, line 36, at end insert—
("(5A) Nothing in subsection (5) above shall prevent a local authority from making reasonable inquiries of a contractor as to the record of relationships between management and workforce in the course of the previous five years.").

The noble Lord said: Although the Committee touched on the principle involved in the amendment earlier in the evening, I think it is as well to highlight what the amendment means to the local authorities. Clause 17(5)(d) suggests that the activities of contractors in trade and industrial disputes are a non-commercial matter. Local authorities feel that the industrial relations record of certain firms is relevant. We feel that this point should be taken into account.

The amendment would allow local authorities to make reasonable inquiries of a contractor about the record of relations between management and workforce in the course of the previous five years. There are organisations which in contracts with local authorities over the years have a poor record of industrial relations. One rarely comes across this with bona fide companies which service the public sector because they always have a high regard for good public relations on the basis of forward planning and ensuring that they have the workforce necessary for carrying out a programme.

I find it difficult to believe that virtue is all on the side of local authorities. The industrial relations between a local authority and its workforce are of course a prime responsibility of the local authority. I am not so sure that I agree that local authorities should use their precious time and resources in taking a detailed interest in the relationship between the management and workforce of either their potential contractors or even their actual contractors. Their responsibility is to ensure that they get the best possible service as prescribed by the local authority in the form of the specification for the contractor to see and that it is delivered to the standards that the local authority has predetermined.

I think that the way a company employs its staff and looks after them is a matter for the company. The private company, just like the local authority, is subject to all the laws of the land on industrial relations. It seems to me that we should not empower a local authority to become even more involved in a private company except in terms of getting the service that it has paid for, prescribed and wants delivered.

Perhaps I should intervene at this point. I understand that this group of amendments was decided and rejected on Amendment No. 83A.

No. With great respect, they were decoupled from Amendment No. 83A. Amendment No. 83A was the subject of the very first general debate of the day, and it is quite clear that these amendments were decoupled from that. They are now listed separately.

May I seek clarification on that? Amendment No. 83A states:

"except as otherwise provided under subsections (5A) to (5E) below".
We voted on that and overwhelmingly that amendment was rejected. It covered precisely the same ground as the amendments that we are discussing now.

If that is the case, why did the Minister's advisers agree to decouple the amendments and list them separately in the groupings? The Minister well knows what happens before a debate starts. His advisers make a suggestion as to which amendments should be grouped together. Those of us who are involved make our suggestions. Because we wanted to deal at length with each of the separate issues we indicated that we wished them to be separated so that we could deal with them separately. That is what we have done.

If there has been a mistake either by the Minister's advisers or by ourselves, it is not a matter of moment. But these issues are very important and we have something to say now which we did not say earlier. I started to broach a certain aspect on Amendment No. 83A and, quite rightly, there were noises to the effect that I should deal with the point later. That is what we are trying to do now.

I am very happy to take advice on this, because that is the right way of dealing with such matters. Of course it was said that we could deal with these points later because they can be raised later. But as I understand it, and I stand to be corrected, the fact that the amendment was then voted on altered the position completely. But I shall he happy to take advice on that.

I understand that what the Minister says is correct. I can only suggest, if I may, that perhaps the points which the noble Lord wishes to raise can be raised on the clause stand part debate.

Perhaps we are being invited to have the longest clause stand part debate in history. Let the Minister be quite clear. If there has been an error, then the way to deal with these matters in detail is to debate them with the general reasons why the clause should not stand part of the Bill.

There has not been an error at all. The noble Lord took his amendment to a Division and it was settled in the Division Lobbies. I cannot stop him discussing anything on clause stand part. But I think we should obey the Rules of the House, and the advice that I have now received is that it is not in order to speak to these amendments because they have been specifically voted on.

It is no good the Minister telling me that no error has been made if I have admitted making an error. When we asked for the amendments to be decoupled it was on the basis that we could deal with them separately later. That was our error. What I am saying to the Minister in the light of that error is that we still have a lot to say on the subject matter of these amendments and, as the Deputy Chairman has kindly pointed out, the opportunity will occur on clause stand part. I am not getting excited.

Then we move on slightly at this juncture. I think that Amendment No. 93 has already been discussed and therefore it is not moved.

[ Amendment No. 92A not moved.]

[ Amenthnents Nos. 92B, to 93 not moved.]

8.30 p.m.

moved Amendment No. 94.

Page 16, line 48, at end insert ("with the exception of bodies, associations or employers' associations of any sort which are designed to promote a particular standard of expertise").

The noble Lord said: The purpose of this amendment is to remove the prohibition placed on authorities by the Bill to ask contractors about their potential or actual membership of trade or employers' associations that are designed to promote standards of expertise in the contractor's trade. The first argument for this amendment is quality of work. Without the opportunity to ask contractors about actual or potential membership of employers' associations authorities will not be able to guarantee that work is undertaken by properly qualified and experienced contractors. As a result authorities will be unable to fulfil their legal duties in this respect.

Many employers' associations operate technical guarantee schemes based on the technical standards of contractors in membership. Membership of such associations is therefore an indicator of quality assurance to an authority. For example, West Lothian District Council, along with the gas and electricity boards, insists that central heating, gas and electricity contractors are approved by the Solid Fuel Advisory Service or the National Inspection Council for Electrical Installation Contractors. If the Bill is passed unamended, the council will no longer he able to guarantee this quality from its contractors.

I want to pause for a moment and remind Members of the Committee that a few years ago a tremendous number of home improvement and repair grants were applied for individually. In the main the properties concerned were older terraced houses and an appalling situation developed in the building industry. Local authorities had then to be brought in and they increased their standard of inspection so that ordinary people who were applying for these grants at the bottom end of the scale were not taken for a ride. But thousands of them had already been taken for a ride—I am talking about grants of between £3,000 and £7,000—by cowboy, do-it-yourself, odd-job men who called themselves builders.

In hundreds of cases all over the country work was left half-finished. Nobody could chase up those people, nobody could find where they went and, as I said, local authority building inspectors were eventually allowed a more robust role. We have to be very careful that we do not get into that situation again because of some of the proposals in this Bill.

There are further items covered by this amendment. For instance, there is public safety. If authorities are unable to secure properly qualified contractors, a clear threat is posed to public safety. A recent study of scaffolding contractors in London conducted by the Health and Safety Executive highlighted a deplorable lack of basic safety practice among many private contractors. Such neglect would spread throughout much of the public sector if the Bill were unamended.

I have first-hand experience of a housing contract in Manchester where some maisonettes were being built and the private builder went broke. We had to call in the building department because of the atrocious standard of scaffolding, which was the absolute minimum to do the job. Every time the men went up the scaffolding there must have been a risk to life and limb.

The building industry records some of the highest accident figures. The rate is far higher than for coal mining. Many of the accidents—I am not saying all—relate to contractors who have the safety of the person on the site as their lowest consideration. That is another matter that we have to be careful about. If contractors want to skimp on a contract, the safety of the building operatives goes by the board.

I spoke earlier about a cowboy's charter. The result of this Bill will be to undermine much of the painstaking work undertaken jointly by employers' organisations and local authorities to eliminate bad employment practices. The way will be open for cowboy operators who have no regard for decent employment standards to undercut good employers. That Mrs. Thatcher was aware of the danger of the bad driving out the good was clear from the remarks she made during last year's freezing winter. She wisely advised members of the public who were suffering from burst pipes to use only plumbers who were members of the Institute of Plumbing. Why, if the Government believe that that advice was good, arc they seeking to outlaw local authorities that are making serious attempts to employ only bona fide contractors?

I mentioned earlier, as the Committee knows, fair competition. If a builder has a low standard of site maintenance, including scaffolding, and does not have much regard for safety measures, he has a much better chance of winning a contract than most responsible builders who give these matters high priority. They start at a disadvantage. They arc prepared to write certain matters into their bills of quantities and contracts, and they cover them. If they are to be undercut by someone who will spend only about one-third as much on site maintenance, which means the safety of the building operatives, the competition is anything but fair. It cannot be fair competition.

The Government's main argument in support of the Bill is that it will increase competition in the provision of local government services. But with its prohibition on asking contractors about membership of trade associations, the Bill has the opposite effect. There have been briefs from the Electrical Contractors' Association of Scotland pointing out:

"Members of this Association who contribute the costs … to the regulation of their industry including training will be given no recognition … and will have to compete against firms who do not meet these obligations".

Last week there was an order before this place. I should have dealt with it, but I must plead guilty to the fact that I mixed up my dates, and therefore my noble friend Lord John-Mackie dealt with it. It was designed to increase the construction industry training board levy. There has been a dispute between the big builders and the small builders. The dispute was not on the principle of the training board, but on how it was funded.

However, let us put that argument to one side. Anyone who is a member of the Building Employers Confederation and the Federation of Master Builders, which caters for the smaller builders, pays substantial sums of money into the organisation. The money can come only from the prices in their contracts, but they accept the levy as an obligation in the interests of training younger builders. The last time the figure was given, I think that the CITB had £6 million in the kitty and the Government were trying to persuade it to plough back that money into the industry to train more builders in quality control, and so forth.

No one knows more about the subject than the noble Lord, Lord Broxbourne, because he has the reputation of being one of the country's experts on building law and all its implications. If those employers are prepared to accept that responsibility, they risk losing a contract by just a few per cent. to someone who is not a member of either organisation. That is what the Bill means. Is that an example of fair competition? I do not think it is. It is not an example of fair competition.

The Electrical Contractors' Association of Scotland observed that,

"technical standards and public safety levels are maintained … by the stringent entry requirements set by the Association and   the high standards which are set regarding the use of trained and graded labour which all firms arc required to use."

The ECA concluded:

"If Local Authorities are unable to select contractors using … membership of an Employers Association as a criterion they will be unable to establish that adequate self regulation of standards will he taking place and public safety will he put at risk."

The Building Equipment Contractors has also expressed its strong reservations over the proposal contained in the Bill. In the Contracts Journal of 16th July 1987, its director of manpower services, Stephen Moon, said:

"It is clear that there is a danger that national collective bargaining agreements will be weakened. That is not what we at the BEC are in business for."

He pointed out that the BEC was already dismayed by the Government's removal of the fair wages resolution. Mr. Moon expressed the BEC's concern about moves which enable some sections of the industry to undercut nationally agreed terms and conditions followed by responsible employers. Those views are supported by associations such as the National Federation of Demolition Contractors.

Cowboy operators with demolition contracts beg a thought. Demolition is probably the most dangerous and worst form of, I was going to say building, but perhaps it should be termed, debuilding. On a well-ordered site, such as the one in the centre of Leeds, where Schofields a large traditional store is being demolished no one can complain about the way it is being accomplished. It is being done with the minimum nuisance to people. One can walk past without fear of being interfered with or inconvenienced. Whoever is doing that is doing a superb job.

However, if a cowboy comes in and does that sort of work—I know that example is in the private sector but, nevertheless, the same applies—anyone walking past could be at risk. As I have said, they tend to use poor safety equipment. The Government must be careful therefore that the Bill does not lead to an increase in such practices. With some of the older and taller buildings that are now being pulled down, there is a high risk if they are not demolished in a proper manner. It is not like knocking down old terraced houses; it is a difficult and dangerous job.

The Opposition, local authorities, trade associations and the public believe that quality assurance underwritten by trade associations provides enormous benefits for the ratepayers and the authority concerned. It would be dangerous to disregard that point. We believe that local authorities should be permitted to continue to support the efforts of conscientious employers to preserve high quality work and good employment practice. We commend the amendment to the Committee. I beg to move.

I shall express a few short words of sympathy for the amendment. I should like to make it clear that that sympathy is not evoked by the characteristically over generous comments about myself made by the noble Lord who is himself such a great expert on all building and construction matters.

I think that Ministers should give careful consideration to this amendment because it proposes to modify the definition contained in Clause 17(5)(f) of the sort of associations which are prescribed under this provision. My interest is that I am the undistinguished vice-president and the previously still more undistinguished chairman of the National Housebuilding Council, which, as noble Lords may know, exists in order to prescribe and maintain high standards in building construction.

We look at this clause and see the definition which the amendment proposes to alter and perhaps improve, the words right at the end: "or other associations". That phrase conjures up all the complications and difficulties of what lawyers call ejusdlem generis rule. I had hoped that the noble and learned Lord, Lord Elwyn-Jones, who was in the Chamber earlier, would he here. I pointed out to him that this was an interesting matter and that I myself proposed to say a short word on it. Perhaps for that reason—and noble Lords may think it sufficient reason—the noble and learned Lord has decided that he has a better occupation elsewhere.

I hope that my noble friend the Minister will look very carefully at this and at the implications of "other associations" and bring his mind directly to bear on whether this may catch the National Housebuilding Council, which, in spite of its name, does not build anything. It prescribes and enforces good standards, and it would be quite wrong if it were caught by this statute.

I should also like to say a few more words on this point. I very much support what the noble Lord, Lord Dean, has said, that if a contractor's work is substandard the local authority has very little comeback, particularly if that contractor goes to the wall. However, if you employ contractors who belong to the electrical or central heating or plumbing institutes as a private individual or local authority, I should think the position is the same. You can come back on the association and complain that one of its members did not do the job properly, and in a way you have some sort of insurance.

I am all for putting things out to tender, but let us not place the local authority in a position where it has to accept the lowest tender from a substandard organisation or one from which, if the workmanship is not up to standard, it has no claim. I do not think the building regulations will specify the exact type of jointing you must have on a pipe. They will specify the size of pipe and perhaps the quality of the pipe. But particularly in electrical work, unless the work is done conscientiously and carefully, about the only way in which a buildings inspector might manage to find out that there was a fault is to find that the earth is not earthed or there is no proper neutral somewhere.

I think that is a very unsatisfactory fallback, and we must provide local authorities with the security of being able to employ firms of quality. If they have the back-up of some sort of insurance, that is a safeguard to the local authority or, may I say, to myself as an individual running a small estate. I like to pick men I know are really qualified to do the job.

8.45 p.m.

Perhaps I may assure the noble Lord, Lord Dean, and my noble friend Lord Balfour that the Government are as concerned as they are over standards. I accept that a contractor's membership of a reputable trade association is often used by authorities as an indication of certain professional standards or competence. But it is not the only method by which authorities should evaluate the merits of a company with whom they are considering doing business. It would indeed be foolish to use such membership as the sole yardstick against which to judge a contractor's suitability for inclusion in an approved list or for the award of a contract. Far more relevant, I suggest, is the contractor's previous work record and financial standing.

While I understand and sympathise with the rationale behind this amendment, I fear that it would provide a loophole which the unscrupulous would be quick to exploit. I hope that noble Lords will have their concerns eased when I say that Clause 17(5)(f) does not embrace regulatory bodies like CORGI who are concerned with the safe installation of gas equipment; or those inspection bodies in the electrical industry who test contractors' equipment; or indeed the concern of my noble friend Lord Broxbourne on the NHBC. Furthermore, the Bill does not prevent authorities insisting that electrical work or any other work is covered by the appropriate guarantees. Nor does it stop authorities specifying appropriate standards in contract documentation.

However, having been and still being a surveyor, I understand the point the noble Lord, Lord Dean, made about building work. It seems to me that it is by no means impossible—indeed, it is very easy—for a local authority to set down the standards, to say that these standards must be met and that when it comes to housebuilding it has to meet the standards required and laid down either under the guarantee scheme by the NHBC or the equivalent. But I believe that work can be done either by the DLO, who I am sure will win a lot of the contracts because they will prove themselves to be efficient, effective and competitive, or by a firm in the private sector.

Nevertheless, the firm in the private sector does not have to be a member of a trade association in order to get on to the local authority's list or to be awarded the tender, because that is what has been happening in certain circumstances, limited though they are. There are much more important matters to look at, such as the financial standing and the track record of that company.

I am a little sorry that the Minister was not somewhat more sympathetic towards what we were saying and did not give some gleam of hope that he may look at the situation.

Without joining a mutual admiration society, I am extremely grateful to the noble Lord, Lord Broxbourne, for his comments about myself, but I have never claimed to be a building expert because I am not one. My interest in building stems from being a local authority councillor, when I became interested in buildings; but I have no professional expertise to bring to the matter. I know that the noble Lord is recognised as an authority on the legalistic side of building. That is the way I put it.

I was glad that the noble Lord mentioned the National Housebuilding Council, because years and years ago, in my days as a young councillor in Manchester, as chairman of housing I was a member of the council's predecessor, the National Housebuilding Registration Council. It has developed as an organisation which is responsible for the private building sector. There is no question at all that owner-occupiers in this country should be extremely grateful for the way in which that organisation has developed and the people who have served on it, both the professional side who run the organisation and people like the noble Lord himself. They give their time to that sort of thing in order to keep standards high and improving if possible. It goes without saying that I do not think any new house which is built in this country, certainly not in the private sector to my knowledge, will attract a mortgage unless it is accompanied by the appropriate certification of the National Housebuilding Council. I know that from having been involved during the past four or five years in changing homes. I am currently about to move again.

One of the first things that one's solicitor asks one for now is a certificate from the National Housebuilding Council. Even with that organisation I think that there is a worry about overprotection. Some local authorities, after the NHBC has accepted houses as being of sufficient standard, then insist on the right to examine them as well under local authority law. I have never believed in duplication. When an organisation such as the NHBC states that a house is worth buying that is good enough for me. I have not known of a case where anybody has come back on that organisation and said that it has done a bad job or that they have been let down. I think that it does a splendid job.

Having said that let me come back to what the Minister said. This side of the Committee is not saying, and nor are the supporters of the amendment, that everyone must be a member of an association. But what we are saying is that we doubt whether a case can be found of malpractice by a member of a recognised association. The case was mentioned of electrical installations, because they are of course the most potentially dangerous part of any building. I have seen buildings finished and ready for use but awaiting certification from city architects for their electrical equipment. The city architect refused to accept those buildings or to allow his clerk of works to accept them on the basis of an electrical inspection unless he was 100 per cent. sure about the electrical installations. In the case of plumbing one can afford to be less than 100 per cent. sure as it can be repaired at a later date, but if electrical installations are not done properly they pose a high accident risk.

I believe, and I stand by this belief, that in the main people who are members of trade associations—that is the long-standing, bona fide associations—will certainly not be rogues. Those associations would not allow rogue people in their ranks; they would very soon get rid of them if they were found to be so. In some cases such associations are very quick to discipline members if they think that there is a slippage of standards.

I ask the Minister to consider whether this amendment is worth taking back for reconsideration. I am not asking him to promise anything more than that, but in view of comments from Members of the Minister's side of the Committee I think it would be worth that. I have no desire to divide the Committee but I think the amendment is worthy of another look.

Will the Minister please seek legal advice on whether the last words at the very bottom of page 16 "fraternity or other association", as mentioned by my noble friend Lord Broxbourne, should be left out of the Bill? I feel that the words are really weakening the position of those contractors who arc members of an association. It is too wide a provision and I should like real legal opinion on that.

Could the Minister tell me or ascertain for me how many local authorities that manage direct labour forces belong to professional associations?

Perhaps I could answer that for the Minister. I know that most of the officers who work for local authorities, whether they are city architects, planners, building managers or clerks of works, all belong to their respective professional associations. It is a condition of their employment.

With respect, that really was not my question. I understand that people who obtain professional qualifications belong to their professional associations. We have been talking all evening about plumbers, bricklayers, house builders and the workforce. I simply wish to know how many local authorities that employ people on that level of the workforce employ people who belong to the associations that have been mentioned throughout the debate. In othe words, if we were on the other side as contractors seeking the employment of local authority workers, would we be secure in the knowledge that all local authorities employed as members of their workforce at all levels, and not just the chief architects and the chief officers, people who belonged to associations? Therefore could we be secure in the knowledge that we could employ them because we knew that it was common practice for them to belong to professional associations? 1 doubt it.

With all due respect, I think that the noble Baroness has got completely the wrong end of the stick. In this amendment we are talking about companies that are contractors. The local authorities in some respect do contract work for themselves, but these trade associations are specifically for people in the private sector who are involved in a particular trade. I was referring to officers in local government who are members of their own professional classes. But it does not follow necessarily if one is talking about individuals in any organisation or with any professional expertise that they automatically join their professional association.

I know hundreds of chartered accountants, for instance, who are not members of any association but they still practise. I have never said for one moment that all the good builders are in the Building Employers Confederation or the Federation of Master Builders, but there is an indication that if they are a member of such an organisation they will have already been thoroughly vetted. Anyone who was below standard, I am sure, would not even be in such an association.

I hope that this is my last word on this issue but we have suddenly moved from plumbers, electricians and bricklayers to chief architects, surveyors and the rest. I am talking about people who do work on behalf of the people of this country. Whether that work is done in local authorities on behalf of the public or in private companies on behalf of the public I am simply questioning the present practice of local authorities and comparing that with what we are about to impose on private companies.

With due respect to the noble Baroness, she is not saying why she criticises local authority practice. I know this about local authorities. As regards the standards of the lower level of staff, it is an established and historical fact that local authorities offer the finest training ground for building employees at a young age. They then move into the private sector and progress upwards into the technical and managerial grades. That is an undisputed fact and everyone admits it.

I wish to answer a couple of points that have been raised particularly by the noble Lord, Lord Dean of Beswick, who was concerned about the NHBC's role in the private house building sector. With respect, I do not think that that is at question at the moment. We are talking about work for local authorities. The two should not be confused.

It is worth pointing out that membership of the ECA or whatever does not necessarily guarantee 100 per cent. certainty that electrical work is all right. It is perhaps a guide that those tradesmen are more reputable than others who are not in an association but it is not necessarily a guarantee that the work is all right.

I return to the point made by my noble friend Lady Blatch. She had a point in what she said and it is relevant to bring us back to the amendment. Are we seeking to impose more on potential private sector contractors than we are on direct labour organisations? To pick up a point that was mentioned earlier, we must be fair to both.

My noble friend Lord Balfour asked me to look again at the last few words at the bottom of page 16 and to seek legal advice on them. I do not think it would he right for me to seek legal advice. They were put in there for policy reasons to thwart unscrupulous local authorities which have abused the present situation and prevented perfectly reputable contractors from getting onto the tender list by insisting that they are members of associations when they might not want to be.

9 p.m.

It is quite commonplace for people to stand up in this Committee and in another place and abuse local authorities. It may well be that some authorities have behaved badly. However, the Government must have some specific cases in mind. If the Minister cannot mention them, I have to believe that he is on very doubtful ground indeed. If he says that such cases are the reason for the provision, we must have the evidence. We are arranging a hanging before we have had a trial.

I remind the noble Lord of what I said at the beginning of today's proceedings concerning using the same argument over and over again on all the amendments, because the argument is consistent throughout.

What we are saying is not just another attack on local authorities. I draw the noble Lord's attention to the requirements of, for instance, Sheffield City Council or the council of the London Borough of Greenwich, which have insisted that those that are to be on the tender list shall be members of trade associations.

Does the Minister have any evidence as to why they have done that? It may well he that they have had some unhappy experiences with the private sector such as those we had in Manchester. They have done nothing wrong. They have kept to particular standards and they thought that that was the best way of proceeding. The Minister has told the Committee that he is a surveyor. I ask him whether, if he was putting out some surveying work, he would go to a member of a reputable surveyors' association or to a cowboy if he wanted value for money. However, I know what he would do, with his professional expertise; the cowboy would get the job.

I am most grateful to the noble Lord for his question. I should go to the person who would do the best job and who I was certain would perform in the way that I wanted him to perform. Being a surveyor and a member of the RICS, I can say that when I recently sold my flat in London I did not go to somebody who was a member of the RICS. I went to somebody who could do the best job at the right price. That person did not happen to be a member of the RICS. Although he was perfectly well qualified to do the job, he did not want to be a member of the institution.

I am reluctant to divide the House at this hour. However, I think the Minister's case is very flimsy indeed when he says he hopes that the provision will improve the situation. I will come back to this at a later stage because I do not think that the Minister has produced any concrete evidence to support the case he puts. If he wishes to divide the House now, we can have Divisions all night. It is up to him.

I shall withdraw the amendment and come back to it later. I am not satisfied.

Amendment, by leave, withdrawn.

moved Amendment No. 95:

Page 17, line 9, leave out ("section 18'') and insert ("sections 18 and (Sex equality matters)").

The noble Baroness said: In the absence of the noble Baroness, Lady Platt of Writtle, I rise to move the amendment. Members of the Committee will recall that the noble Baroness is chairman of the Equal Opportunities Commission. Unfortunately she is engaged today on important committee business in Manchester where the commission is based and hence is absent. She has written to the Minister to give her apologies.

I move the amendment with the utmost conviction. The effect of Amendment No. 95 is to add to subsection (9) of Clause 17 sex equality matters in addition to the race relations matters which are already included in the Bill. This is a paving amendment for Amendment No. 98, which is designed to treat sex equality on a par with race relations matters, which are already provided for in the Bill. Subsequent amendments, Amendments Nos. 100 and 101 to Clause 19 and Amendment No. 196 to Clause 21, are consequential and I wish to speak to them all.

That series of amendments was indicated by the noble Baroness, Lady Platt, in her speech at Second Reading. The amendments have the full support of the Equal Opportunities Commission. As she indicated in her speech, the Government have accepted the principle of reasonable, properly directed contract compliance through the inclusion in this Bill of the clauses relating to race relations matters and also by similar policies in relation to religious discrimination in Northern Ireland.

The amendments are modest and seek to make in this Bill exactly the same provisions for sex equality matters as are made for race equality matters, using the Government's own terminology, even though that might be thought by some organisations to be too limited. The amendments stick strictly to the terminology used by the Government in the Bill.

It is because I believe it is right that the two issues of race and sex discrimination should be taken in parallel that I move the amendments. The 1975 Sex Discrimination Act was based on the experience of the 1968 Race Relations Act. The second Race Relations Act of 1976 was drafted in almost the same terms as the 1975 Sex Discrimination Act. There were some differences to take account of women's traditional and biological role on the one hand and on the other hand to take account of the need for community relations provisions to be provided in the area of race relations.

However, the positive action provisions and the law enforcement provisions were the same in both acts, with one exception. That is the provision embodied in Section 71 of the Race Relations Act placing a general statutory duty on local authorities to take due regard of the need to eliminate unlawful racial discrimination and to promote equality of opportunity and good race relations in carrying out their functions.

It was a great pity and illogical in my view—and I said so at the timev—that a similar provision was not included in the Sex Discrimination Act. It is that one difference on which the Government are now relying for not including sex discrimination matters in the present Bill. I suggest that It is unhelpful to use that particular clause to exclude sex discrimination matters from the Local Government Bill and thereby to compound the mistake that was made in 1975. In any case, the intervening 12 or 13 years have brought the two Acts together even more closely than they were at that time. Law enforcement, which is based on case law under either Act, is used by both commissions in relation both to individual cases before tribunals and the higher courts and to formal investigations.

Promotion of equality of opportunity in employment in the two spheres, although under separate codes of practice, is complementary. The growth in the number of companies and organisations following an equal opportunities policy is encouraging. Those bodies do not seek to have two policies; they have a single policy dealing with both sex and racial discrimination and increasingly too with matters relating to disability. It is for that reason that I shall also support the amendments that will shortly be moved.

This approach is actively supported and advocated by the CBI and by the IPM (Institute of Personnel Management). It is supported by those two bodies in the interests of good management practice. The effect of the Bill as it stands at present would impede that approach. It appears to treat sex discrimination as being of less importance, particularly in relation to those employers who are under contract to local authorities. The EOC is not so much concerned with the effects on local authorities but with the relationship between local authorities and the employers that they use. By the question process the minds of those employers will naturally be concentrated on race equality issues and the issues of sex equality will be overlooked and put on one side.

In his response to this matter at Second Reading in this Chamber the noble Lord the Leader of the House said that by virtue of Section 71 local authorities are:

"part of the enforcement process in respect of racial discrimination", —[Official Report, 11/1/88; col. 1031.]

Surely this is a sweeping assertion. I should have thought that local authorities have a general duty anyway to ensure that the bodies that are contracted to them are observing the law. Section 71 underlines that responsibility but it does not give to local authorities the same law enforcement role that the two commissions have, for instance, in relation to discrimination, nor the same power that the local authorities have in relation to consumer protection.

Section 71 seems to be directed to a wide range of discretionary decisions by local authorities about the provision of their services. In making a discretionary decision, local authorities have to take into account relevant factors and must not take into account irrelevant factors. Section 71 says that racial issues are always a relevant factor in every decision. But by saying that, there can be no implication that the elimination of sex discrimination is inevitably irrelevant. However, this would appear to be the effect of the present Bill by confining these provisions to race discrimination matters alone.

I hope that the Minister and his colleagues in government will think seriously of the implications of this for the Equal Opportunities Commission. That body has looked to local authorities for assistance in carrying out its statutory responsibilities, which are exactly the same as those of the Commission for Racial Equality.

The clause has wide support. It has the support of the Women's National Commission. which represents all the major women's voluntary organisations in the country. It has the support of the IPM and of many other bodies. I therefore hope that the Minister in his response this evening will be able to give a favourable wind to these amendments.

I shall not go into the case again because it has been put by the noble Baroness, Lady Lockwood, but I should like to support this amendment.

9.15 p.m.

I should like strongly to support this amendment. I think that it was an error that the clause was not included in the Sex Discrimination Act 1975. In fact it preceded the Race Relations Act 1976. The Race Relations Act was therefore able to improve on the Sex Discrimination Act.

There is no doubt that there is a need to take positive action—I am not talking about reverse discrimination—to give reality to the elimination of sex discrimination. This is undoubtedly a very useful way of doing so. Evidence in both this country and the United States undoubtedly shows that of all the available instruments contract compliance is by far the best—far better than further detailed changes in legislation. Not only is this a matter of improving the employment position of women and giving greater equality of opportunity to women, it is also a matter of encouraging organisations to make the best use of available resources. That includes making better use of women than at the present time.

There is no doubt that since the Sex Discrimination Act was passed the position of women in the professions has improved greatly. There is much evidence to that effect. But in many other spheres, in the industrial and commercial area, the same is not the case. Unless we are to make better use of women power and to use it at the level at which it is capable of being used, we shall find ourselves in very serious difficulties. We all know that the number of leavers from school is falling. We are very short of skilled people. It is only by encouraging organisations to recruit, train and promote women that we shall be able to fill the vacancies that are becoming more and more difficult to fill. Contract compliance is undoubtedly the most favourable way of doing this. I very much hope that the Government will accept this amendment.

The speech just delivered by the noble Baroness is the best argument that I have heard against the amendment now before us. She is saying that individual employers in parts of the country will increasingly need to make use of women in their employment. If that is so, the law does not need to intervene. Everyone is out to get the best possible employees. Everyone is out to give the maximum training to those who are insufficiently trained.

The Equal Opportunities Commission has put back the cause of women very considerably over the years by constantly making it clear that they are an element of the population which requires artificial backing. I find no reason to believe that. In my view, wherever I have had to compete with women in the academic world or in politics I have found them fully equal to the contest. I see no reason whatever to make employers do something by law which is already in their own interest.

I really must reply to that. The noble Lord has knowledge of history and the running of universities. But even universities are not exempt from the charge of occasional discrimination in regard to women. He is not close to what is happening in the labour market. I happen to be an area board chairman in Buckinghamshire. There is a very great shortage of skilled people. There is no evidence whatsoever that employers are taking action to train women to fill these vacancies. Again and again employers have shown that they do not recognise that steps of this kind are in their own interests; nor do they take action in time. The noble Lord is a believer that the pure operation of market forces always delivers the goods. The day will come when the Conservative Party realises that that is a myth.

I rise as a woman to oppose the amendment. I oppose it because I do not think it furthers the cause of women. I oppose it also on another count. It opens up mechanism for local authorities which I think will work against the best interests of all of us. I ask the Committee to witness this. Under this amendment a local authority would have the power to send to companies, in addition to a questionnaire on race, one asking a number of questions, which no doubt will be prescribed by the Secretary of State, on whether they are abiding by the law in relation to discrimination against women. It would be a strange company that came back with the answer "No, we are not complying with the law". So the answer would come back "Yes, we are doing all that we should under the law".

Then a local authority would decide, subjectively of course, with no objective basis for the suspicion, that it was not entirely happy about the answers and would suspect that a company might not be complying because it had a feeling that, although there might be enough women on the staff, they were not all in the right place and not enough of them were reaching the top of the tree. The authority would then write back to those companies, which at that stage would be potentially applying to get on the list, so there could be endless numbers, to ask for written submissions and evidence to justify their original answers.

The local authority would then go into session to consider the answer. It could quite objectively take a view that the companies were not complying with the Act. It could then decide not to put a company onto the list. If that company wanted to do anything about the decision—it could certainly ask for reasons why the local authority had not included it on the list or had not allocated a contract to it—it would have to challenge the local authority in the courts. Under the legislation the company would be reimbursed only for the costs that it has incurred in responding to the tender and not the costs of having to go to the courts. So the burden of having to prove that a local authority had judged it wrongly would be very much on the company.

Private sector companies will simply be unable to bear that financial burden. More than that, an Act is an Act. We are all bound by it whether we are in public authorities or private companies. If I am breaching the law, I prefer to be judged by the courts, not by local authorities based on subjective judgment. I want to be judged by the law of the land. Therefore I believe it is right that we should subject our private companies and our public authorities to the court's judgment. I do not believe that we should give licence to what will become laboured prevarication and I genuinely believe that it will not work in the interests of women and further their cause.

I speak as somebody who believes that women are making enormous strides in competing most favourably in the market place. There is a long way to go, but they are getting there. The one thing that will thwart their progress in an amendment such as this.

I very much hope that in listening to the general debate the Minister will hang on to the central theme. There is discrimination against women at work and in a range of other matters, just as there is discrimination against black people, ethnic minorities, the disadvantaged and the disabled. We shall come to the disabled later. It is all very well for the noble Baroness, Lady Blatch, to tell us that she would rather go to court if she transgressed than have to answer to a council. We are not talking about individuals; we are considering companies which would be in receipt of ratepayers' money after obtaining a contract.

It is interesting to find that the other side of the Committee led by the Government is running away from laying on companies any more than is necessary in order to get this part of the Bill off the ground. We are speaking about competitive tendering and privatisation. The Government are willing to allow such procedures as questionnaires because they recognise that there is a need to deal with aspects of race in our society. It is strange that they are prepared to do something about racial equality and equal opportunities, but we are not prepared to do that for women. I think that people outside the Committee will come to that conclusion.

The noble Baroness, Lady Blatch, concluded her remarks by saying that she was heartened by the progress that women had made and were making in gaining entry into the professions, unaided by such assistance. She will know that 4 per cent. of architects are women; that 7 per cent. of barristers are women; that 22 per cent. of doctors are women; and that 8 per cent. of scientists, engineers and technologists are women. That can be viewed by the noble Baroness and noble Lords as satisfactory progress.

It is now 10 years since major legislation was passed in this field in the 1970s—the equal pay and sex discrimination legislation. Women's earnings are still only 74 per cent. of those of men and that is with the backing of the law. Members opposite can say that it is not the law but attitudes which need to change. From my experience, it will take a long time to change attitudes and we need the backing of statutes. Members opposite may shrug their shoulders and say. "Good luck to you. Fight and agitate, but be careful because there are others willing to do the job you are fighting to improve for a lot less pay".

One of the groups most discriminated against is homeworkers. Most homeworkers are women who are working in difficult conditions, receiving low pay and having to accept it because they are unorganised and frightened to ask for more. The present chairman of the Equal Opportunities Commission and her colleagues speak with a depth of experience that cannot be touched by any other Member of the Committee. They are saying that those who finally find themselves in the eminent position of being chairman of the Equal Opportunities Commission have experience greater and deeper than other Members of the Committee. I do not think that that statement can he challenged. It is not a party issue; it is across the board.

I find strange the fact that the Government are digging in their toes as regards this issue. It is not merely a woman's issue. It is an issue of equality, dignity and civil liberties. When I look at the list of organisations which I am told are in favour of contract compliance procedures for equal opportunity purposes, I find it to be very impressive. It includes the Institute of Personnel Management (I declare an interest, in that I am a member); the Parliamentary All-Party Disablement Group; the Royal National Institute for the Blind; the Spastics Society; the National League for the Blind and Disabled; the Wesleyan Holiness Church. There are other groups but some may say, "He would say that, wouldn't he?", so I shall leave them out. What about the United States National Association of Manufacturers? In this context, this country is dragging its feet.

No one outside the Committee would believe that if this amendment were accepted there would be a transformation, because attitudes count as well as words in an Act. As Members of the Committee know, when it comes to a question of complying with rules, regulations and wages council orders, inspectors constantly find that the law has been ignored and ridden over roughshod by people who get away with it.

I am saddened, not by the remarks of the Minister because he has yet to respond, but by the remarks of his supporters behind who appear to consider that there is no need to provide women with the opportunity of having recourse in the event of their not being fairly treated. More importantly, a council which seeks to look after the interests of all its ratepayers and citizens wants to ensure that the companies that spend and receive the ratepayers' money are going to do it on the basis that they are operating policies which are to the benefit not only of women but of the whole community.

9.30 p.m.

I am well aware of the importance, potential and success of women in this world. My mother is still alive. I have one sister and four half-sisters; the leader of my party is a woman; I have a wife and a daughter, and a dog which is a bitch. My son and I are struggling nobly to support the male race!

Much has been made of the fact that the Bill does not deal with sex and racial discrimination on an equal basis, and while I commend the wording of these amendments. I must remind the Committee that the Bill has been deliberately drafted to reflect the present position regarding local authorities' statutory duties. There is, as the noble Baroness, Lady Lockwood, said a basic difference in that respect between the Sex Discrimination Act 1975 and the Race Relations Act 1976.

In preventing authorities setting themselves up as extra-statutory enforcement agencies, we have to recognise that, as the law stands at present, local authorities are—by virtue of Section 71 of the Race Relations Act—part of the enforcement process only in respect of racial discrimination.

Let me repeat what my noble friend the Leader of the House said on Second Reading. That was that in the event of the Equal Opportunities Commission deciding, as a result of consultations on its document Legislating for Change to press my right honourable friend the Home Secretary for changes to the Sex Discrimination Act which, among other things, would impose a Section 71-type duty on public authorities as part of a package of changes which the commission would wish to see made to the Sex Discrimination Act, the Government will give careful consideration to such a proposal. If that proves to be the case, and if the Government are persuaded of the need to make such changes, the position with regard to the contractual process would of course need to be reflected in the amending legislation. For the moment, I must emphasise that the provisions of this Bill in no way weaken the duty of contractors to observe the law on sex discrimination or indeed on any other matter.

I believe that my noble friend Lady Blatch has a point in saying that we must obey the laws and statutes as they are. There is no legal enforcement on the local authorities to take note and include in contracts part of the Sex Discrimination Act 1975; there is in the Race Relations Act 1976, which is why it is in the Bill. I can only repeat the assurance I have given this evening that should a change be made as a result of the work being undertaken at the moment by the Equal Opportunities Commission in its consultations, that will be reflected in amending legislation.

I have read the debates in the other place and I knew that the Government were taking this attitude. I had not expected that they would take it here tonight and I was hoping that the Minister would be willing to look at this matter again.

We are talking about social cohesion. What local authorities do is have a department which deals with equal opportunities, whether it be race, sex or disabilities. What the local authorities are being asked to do as a result of this Bill is to concentrate only on race and to ignore the other two aspects because the other two aspects are not part of the requirement. On the contrary. What I said on Second Reading still holds good—that Clause 17 should never have been introduced.

If we did not have that clause the situation could remain as it is now. However, the Government have included Clause 17 and have therefore limited the matters that local authorities can take into account. They are limiting it further by saying that in terms of looking at discrimination and trying to make society more cohesive, race relations is the only factor they are allowed to use to excuse them and allow them to do the things that the Bill says they should not do. That automatically separates the two.

My noble friend Lady Lockwood said that it would inevitably have the consequence that employers and contractors will be concerning themselves about the state of discrimination in terms of race within their workforces, but they will be less inclined to do it for women. They will he less inclined to push towards the level that they ought to achieve in employing people with disabilities. Therefore, I cannot see why the Government cannot accept these amendments and combine the two.

The Minister says that if the Sex Discrimination Act is changed, as is hoped, the Government will look at the position again, which means we will have yet another amendment. Why cannot we do it now? Why cannot we see the issue not in terms of law enforcement—because that is not the issue—but in terms of social cohesion and what one does to make local society become more as one and remove the discrimination which exists in local society in regard not only to race but also sex and disability? The Committee is being asked to accept that we do something about all of them. I cannot understand why the Minister will not agree to have another meeting with my superiors, my right honourable friend and my advisers, to see whether there is some way of allowing these three aspects to continue together.

I am very disappointed at the Minister's response. It is the same response that we had on Second Reading from his noble friend the Leader of the House. We know that the Equal Opportunities Commission has gone through the consultative process and is about to put forward recommendations to the Government for amending the Sex Discrimination Act. We know that one of those recommendations is likely to be that the Government should include the Sex Discrimination Act in a provision similar to Section 71 of the Race Relations Act.

Knowing that, I should have thought that the Minister could give more encouragement to the commission in the work that it is undertaking. Does the response to the amendment foreshadow the response that the commission is likely to get when it puts forward its amendments? Surely dealing with the Local Government Bill is an opportunity to take account of this difference. Incidentally, if I may say so, I did not say that it was a basic difference. I said that there is one difference between the Sex Discrimination Act and the Race Relations Act. When you take the similarities in other respects and the duty to eliminate unlawful discrimination, to promote equality of opportunity—the same wording in the two Acts—this one difference is, I believe, insignificant.

However, in the light of the Minister's response, the lateness of the hour, and the fact that the noble Baroness, Lady Platt, the chairman of the Equal Opportunities Commission, is not here to make a decision herself, I should like to withdraw the amendment in the hope that the noble Baroness, Lady Platt, will decide to bring her amendments back on Report. I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 95A:

Page 17, line 9, leave out ("section 18") and insert ("sections 18 and (Information required for discharge of obligations under Disabled Persons (Employment) Act 1944)").

The noble Lord said: I wish to move Amendment No. 95A as printed in the Marshalled List and to speak to Amendment No. 99.

The purpose of this amendment is to allow authorities awarding contracts for public works or public supplies to take account of the relevant legislation and codes of practice concerning the employment of people with disabilities. In other words, it is to assist and help that group which is most disadvantaged in our society; namely, people with disabilities. This amendment is intended not only to do that but to help the employers as well, as local authorities are doing, by advice and counsel.

Market forces will not enable more people with disabilities to work in industry or services. As I shall show shortly, the law is clearly failing to ensure that more people with disabilities are going to work. There is very clear evidence that the only aspect which is succeeding is contract compliance where local authorities advise, counsel and help employers to take into employment people with disabilities. The amendment is designed to ensure not that that state of affairs is created but that it continues.

People with disabilities seek three things. First, they seek to control their own lives; they seek independence and they seek to live their lives as ordinarily as possible. Central to doing that is the question of employment. This was recognised by the Snowdon Report some 10 years ago, which stated:

"The integration [into society] of those with disabilities must include the right to work."

That is not what is happening. The need to promote equality of employment opportunity for people with disabilities has been illustrated in a number of surveys. A report was made this year by the National Audit Office which estimated that, on the basis of the 1985 labour force survey, the rate of unemployment among disabled people is, at 23·4 per cent., over twice that for the rest of the population. The review of assistance to disabled people carried out by the Manpower Services Commission also found that for them the average duration of unemployment was double that of able-bodied people.

If one considers the small group of people with severe spinal injuries, before their injuries nine out of 10 of these people were in work whereas afterwards only half of them managed to find employment. There is discrimination, and the survey carried out by the Spastics Society showed that very clearly. The Disabled Persons (Employment) Act 1944 places a duty on employers to employ a minimum of 3 per cent. of disabled people. The proportion of companies meeting this requirement, however, has fallen dramatically from 35.3 per cent. in June 1979 to just 27.3 per cent. in June 1987. That law is not effective.

It is clear, therefore, that despite the legislation people with disabilities face substantial obstacles to securing their full employment rights. Local authorities have been active in recognition of this problem in attempting to encourage—and I emphasise "to encourage"—employers through contract compliance policies to provide greater opportunities for disabled people. Contract compliance units, working closely with employers, have helped them to develop employment policies and practices which will assist equal employment opportunities. For example, all employers who do not employ the 3 per cent. quota are encouraged to state in their job advertisements that they welcome applications from people with disabilities, and companies which are modernising their sites are encouraged to take into account the needs of disabled people.

The efforts of local authorities to promote equality of employment opportunity in this field have been praised by a Select Committee in another place. In its report Discrimination in Employment, the Select Committee on Employment expressed admiration of equal opportunities policies in some London boroughs, which have a conscious aim of achieving a 3 per cent. employment quota for disabled people.

The Government's response to criticisms of the Bill in respect of employment opportunities for people with disabilities has been confused and contradictory. Their failure to concede the need for positive action to promote these opportunities has drawn criticism even from their own ranks. However, the Government are doing exactly the opposite of what those critics suggest. They are undermining the careful and responsible work of local authorities in this area. To repeat myself, it is only through contract compliance that there has been any expansion of equal opportunities for those with disabilities. We cannot allow this Bill to destroy that hope for those people who are struggling with their disabilities and with the task of trying to find employment.

If this new clause is not included in the Bill a number of opportunities will have been lost. First, the Government will have missed the chance to help one of the most disadvantaged groups in the labour market—disabled people. Its omission will not help them to gain equality of opportunity. Secondly, the chance to supplement the work of the Department of Employment will also have been lost. There is a great deal of scope for allowing local authorities to work more closely with individual contractors and to relieve the pressure on overstretched disablement resettlement officers in the disablement advisory service. Finally, the opportunity will have been missed to put teeth into the Disabled Persons (Employment) Act and to remind employers of their legal obligations towards disabled people.

If the Government are committed to providing equal opportunities for disabled people they should support the amendment. If we pass the amendment, we offend no great principle. If we pass this amendment, we create no breach. There is one already. If we pass it, we incur no cost. What we do is to assist the group in our society which is most in need of our assistance. I beg to move.

9.45 p.m.

With the purpose of the amendment, which the noble Lord, Lord Basnett, has so clearly explained, I am sure we would all agree. But we have to consider whether this is a way of advancing the interests of disabled people, particularly severely disabled people, or of improving the present legislation. I suggest that we look carefully at what is proposed. The 1944 Act is referred to in the second amendment with the purpose, as the noble Lord has just explained, that it should be invoked in the Bill. The working of the 1944 Act has not proved as simple as we would all wish or as glib references to it suggest.

I should like to speak on the working of the 1944 Act which it is proposed should now be invoked. The Act was born in wartime with the war disabled in mind. I have kept pace with it because I was wounded and left with war disabilities at about the time the Act was made law.

As some of your Lordships know, I was one of a small number of Members of Parliament who 23 years ago started in another place the parliamentary campaign on behalf of disabled people of all kinds, not just war disabled. At that time, someone who was born severely disabled or who was disabled in early youth was not catered for at all in our system of benefits. And if the disability was too severe for that person to be available for work, he did not even enter into the national insurance scheme.

All that has greatly changed in the last 23 years, I am glad to say. The 1944 Act, with its subsequent subordinate legislation, still governs the quota scheme to which the noble Lord referred. That is, and has been, its main provision. An employer of 20 or more employees is required to employ at least 3 per cent. of disabled people in his workforce. There is a system of permits and bulk permits which give dispensation in certain circumstances. For the quota scheme, there are special area registers for the purpose of the Act. Those registers are voluntary. Many disabled people, unfortunately, have declined over the last 40-odd years to place their names on the registers for various reasons into which there is certainly not time to go this evening.

There is a definition of "disabled person" for the purposes of the Act. But you cannot force someone to register against his will if and when you have found that person. The result is that in many areas less than 3 per cent. of the working population in the area has been registered as disabled, making it almost impossible for employers of 20 or more people to comply with the Act. Reputable employers doing their best have found it difficult therefore to reach the 3 per cent. quota and that includes government departments in times of governments of both parties in recent years.

Separate schemes were encouraged by the 1944 Act for sheltered employment. Remploy and other bodies carry out an important and necessary task in employing disabled persons only. That is their purpose. They do not employ able-bodied people. But they have the effect of reducing the numbers of disabled people who can be on the registers. Remploy, for example, which I know well as I visit its factories, does an excellent job; indeed, as patron, I have been on three occasions to the disabled games, which it organises at Stoke Mandeville.

The kinds of work which different firms can offer vary according to the nature of their business. Safety at work is essential. It is a crucial matter. I am sure that every Member of this Committee would agree with that. Nonetheless some firms and industries—I give an example of which I know in the textile industry—are able to make special arrangements. There is a practice of employing deaf and dumb people in certain departments where no safety problems of machinery and other workers arise. So some firms can employ a higher percentage than others.

Another factor is the degree of disability. At this hour of the evening I shall not go into all the definitions involved. But a firm employing, say, 2 per cent. of very severely handicapped people, where a great deal of trouble has been taken, are probably making a better contribution than another firm employing 4 per cent. of very lightly disabled people.

The quota scheme was operated by the Ministry of Labour and then the Department of Employment until 1976. The Manpower Services Commission then took over the running of the quota scheme. Because of the imperfections and problems, some of which I have just outlined, a review was started in 1979 and a report was published and discussed during 1981, which was the International Year of Disabled People. I found my copy of that report today among my international year papers. I was its chairman for Scotland. The report of that review recommended that the quota system should be dropped. That recommendation came from the Manpower Services Commission, which was running the scheme. It said that it should be replaced by new legislation providing for a statutory general duty linked to a code of practice. So there was the MSC, the body responsible for administering the quota scheme, advocating that it should be brought to an end.

During 1981 and later there were wide discussions in the country on that recommendation. On the whole, most of the voluntary organisations were apprehensive about dropping the scheme. I attended their meetings and listened to their apprehension. However, they acknowledged the difficulties of achieving targets in some areas and in some circumstances. The major change recommended by the MSC has not been accepted or carried out by the Government.

As I understand it, the present position is that the Government have decided upon the following:
"Research should be carried out on the size of the disabled population and its characteristics; all interested parties should do what they can to promote the image of the Quota Scheme and registration among disabled people; and further consideration should not be given to any administrative changes to the Quota Scheme until the results of the research are available".
In that research work, the National Advisory Council on Employment of Disabled People is playing its part. The council was established by the 1944 Act. That is the story so far of the consideration of the MSC's report.

It must be remembered that when obligations under the 1944 Act are referred to, as in the second amendment, there are divided opinions about the quota scheme among those most concerned to promote the employment of handicapped people and the organisations representing handicapped people. I have an extract from the MSC report:
"It is one of the MSC's tasks to promote the employment of disabled people in the most effective way possible. The Quota Scheme as operating at present is clearly not helping the MSC to achieve this aim".
The noble Lord, Lord Basnett, referred to discrimination. That is a subject which three or four years ago we were discussing when my Bill passed through this place. My Bill was accepted in all quarters of this place, but of course in the usual way did not find time in the other place. However, I regard that as an important subject but not one that is relevant here. The kind of discrimination that we were trying to stop at that time was when a firm advertised jobs and then put in something like, "ability to drive a motor car required". Then, when someone takes the job it is found that there is no need to drive a motor car; the proviso is only put in to keep out a disabled person who would not have the ability to drive a car. It is that type of discrimination that my Bill would have caught. I do not think that that situation arises in what we are discussing now.

I shall end on a personal note which arises from the remarks made by my noble friend about his being outnumbered by the female members of his family. By a coincidence, while I was a patient for a year and a quarter in St. Bartholomew's Hospital, his aunt was a senior nurse there. She was immediately put in touch with me because, after I was flown back to this country, my noble friend's father, with whom I had served in the same brigade for the previous three years, sent messages to her. I can only say that I can testify that she and her colleagues in the hospital were extremely capable and expert in their profession.

Integration and employing as many disabled people as possible consistent with safety and efficiency are principles for which I have been pressing for nearly 30 years in both Houses of Parliament and outside. There is no difference, I believe, in the views held in different parts of this Committee. However, when it comes to the quota scheme and obligations under it, I think we should be aware of recent history and how the scheme has been operating.

10 p.m.

I was extremely pleased to have the chance to support the amendment so ably moved by my noble friend Lord Basnett and also to add my name in support of Amendment No. 99. In considering this amendment I think we should first remember the central fact that 2 million of the 3 million disabled people in this country are living on or near the margin of poverty. A number of us were trying to point out to the Government the problems which the disabled will face with the operation of the new Social Security Bill after April this year. I know that a number of noble Lords are active in organisations of and for the disabled. The number of disabled persons seeking employment or who are unemployed is twice the national average for able bodied people. The figure is highest among the disabled long-term unemployed.

I have been listening with interest to the remarks of the noble Lord, Lord Campbell of Croy. Obviously he understands this subject extremely well. He seemed almost to be implying that the weaknesses of the 1944 Act, which we all recognise, are responsible for the problems of the unemployed disabled. This is just not the case. The Act is not perfect but it is the only Act we have.

If some legislation is required—and obviously it is—this should be put in train by the Government, who ignored the report in 1981, the Year of the Disabled, to which the noble Lord referred. He mentioned research, the image of the quota. We are waiting for the research. But this Bill is in front of us now and it is the only legislation on which we can rely to improve the chances of the disabled. My God, it is hard enough for them to find jobs as it is and this is the only Bill, the only way in which we can improve the situation. If there is no will, there is never a way.

The intention of this amendment is to allow local authorities to encourage contractors, not to compel them but to encourage them, to meet their legal obligations under the 1944 Act. We know, and the noble Lord said this, that disabled people face great difficulties in the labour market. Discrimination is commonplace and unemployment among people with disabilities is double the rate for their able-bodied colleagues.

The situation is worsened by the lack of enforcement of the legislation designed to help disabled people secure work. The Disabled Persons (Employment) Act 1944 places a duty on employers to have a prescribed quota of disabled employees. We know the problems with the quota. Most employers fail to meet it not because of the problems but because they do not wish to and because they intend to discriminate against disabled people. They see compliance as discretionary and as a result, as we know, disabled people have missed out on their fair share of opportunities.

The situation has begun to improve as a result of contract compliance. It has allowed local authorities to provide positive advice to employers on the best way to promote equality of opportunity for disabled people. They have been able to draw attention to the positive skills of disabled people to help employers develop their recruitment procedures. This has led to an increase in the number of the disabled who are employed, even though the figure for the disabled long-term unemployed is still much too high. We know that the Government have argued that local authorities should not act as enforcement agencies for laws which are already the responsibility of specific departments. The Minister is nodding his head but I am sure that that point will be in his brief when he replies. The 1944 Act is currently in force and is the responsibility of the Department of Employment. We have said that its record is far from satisfactory, with almost one-fifth of companies failing to meet their legal obligations. The intention is that, far from replacing the role of the Department of Employment, the local authorities shall supplement its work and assist the department in encouraging contractors to comply with the 1944 Act.

The Government have also argued that this matter falls outside the jurisdiction of the current legislation. The local authorities will be able to ensure that the requirements of the Race Relations Act are adhered to. Those companies which are tendering for contracts will be asked to demonstrate that they do not discriminate in their personnel practices against different racial groups. In respect of the 1944 Act we say that companies should be expected to comply with the law and demonstrate that they are providing equal opportunities for disabled people as a requirement of the contracts which they have been awarded.

The local authorities could help a contractor develop a strategy which would allow it to fulfil its legal duties. The only circumstances under which a contract could be withheld would be if a contractor refused to be assisted in that regard. The action which has been taken by local authorities in implementing contract compliance is a positive, humane and caring way in which responsible bodies can ensure that companies who wish to provide services and goods to such authorities abide by and carry out a code of practice which is correct and just.

The CORAD Committee which was set up by a Conservative Government in 1981, which was the International Year of Disabled Persons, clearly showed in a report issued in 1982 that disabled people faced discrimination and restrictions in the search for employment. This amendment is designed to ensure that local authorities who wish to take positive action to bring about equal opportunities in employment for disabled persons can do so with the use of contract compliance. For the Government to forbid this by law will inflict an injustice upon disabled persons. I sincerely hope that when the Minister replies he will be able to tell us that he has taken the spirit of this amendment on board.

In rising to support this amendment, with which I am sure all Members of the Committee will be in sympathy in spirit, I should like to mention why I think this particular amendment is so important to disabled people. I spent quite a lot of time in the private sector of manufacturing engineering in a very big factory in Trafford Park, Manchester. In that factory there were quite a number of blind people. They worked machines very well indeed. They did not ask for very many concessions other than to leave five minutes early in order to get their transport home because it was a big factory and they did not want to get knocked about by people running for buses. However they competed very well on the machines and gainfully earned a living.

My other experience was in the public sector, where I happened to be the chairman of the direct works department in Manchester when it employed 4,500 people. I put my political hat on now. That department was in competition with the private sector. I had the privilege of being chairman of that organisation when what is known as the Alf Morris Bill became law.

Our director and his staff were extremely sympathetic to the cause of disabled people. As we gradually worked up to that number of 4,500 employees we took in disabled people. Sometimes we transferred people who had been injured and had become disabled into the sectors where they could be absorbed. We were well in excess of the 3 per cent. which the noble Lord, Lord Campbell, referred to.

It is not easy for all employers to talk of 3 per cent. or upwards. It is more difficult for small employers. However, we are talking about local government, which is one of the largest employers in the country. Perhaps it is a smaller employer than central government. However, if the armed forces figures are taken out, it may well be that the balance is tipped in favour of the local authorities. Therefore, even though many of those local authorities may not presently be at 3 per cent., some of them have done extremely well. I shall not mention names. However, some of them are more conscientious and have done better than the minimum.

We may now have a situation where that requirement will be disregarded in the letting of contracts. Make no mistake about it: the objective of the Bill is for the private sector to do much more work. There is no point in saying that we are concerned with good will towards ratepayers. The political consequence could well be that there will be much more work done by private contractors, good or bad. That means that that large pool of employment, which to varying degrees is conscious of disabled people, depending on the area and the opportunities for them, will start to dry up. Figures have been quoted by my noble friends Lord Basnett and Lord Carter to show that places will no longer be available in the same volume. It follows that if, say, 30 per cent. of contracts being taken up by the public sector are taken away or lost because of the Bill without any regard for the disabled people employed, there will be less opportunity for disabled people who are seeking employment and who are already employed.

The Committee will not want me to try to explain the demoralisation that would set in among handicapped people if they felt that the Government did not see them as worthy of consideration. I think that it would be one of the most devastating things that could occur if they were told, "You are doing well with the local authority or a particular contractor, but another contractor who has no regard at all for you and who cannot be compelled to consider you is taking over the contract for the next 12 months or two or three years. Your services will no longer be required". What we would be saying to an overwhelming number of disabled and handicapped people is, "That is it; you have finished for the rest of your working life". I do not think that any Members of the Committee, from whatever quarter of the Chamber, would be very keen to be held responsible for that consequence.

I do not think that I am simply warning of what could happen. I believe that it surely will happen. I do not think it is unreasonable to ask people who are going to be given an expanded market to shoulder their responsibilities. The fact of the matter is that there are bigger opportunities in the public sector for employment for the disabled. Even in the most mundane of jobs, there have been great technological changes. Some jobs are done quite differently from the way in which they used to be done a few years ago because of advancing technology and man's capacity to make work easier for himself. That is to the benefit of employing handicapped people, perhaps on an increasing scale. There is no question about it, for it has been proved, whatever type of handicap is involved. I am not talking about those people who have the terrible misfortune of being mentally retarded and who have to be guided into therapeutic work and work of that kind. In the main we are talking about people who have dignity, who know they can deliver the goods, are doing so, and, we believe, ought to be entitled to continue to do so.

It is with some regret that we have to say that, unless those conditions are extended to the people who are going to move into the public sector, this will be only one of the debilitating effects that this Bill will have on some of the worst-affected sufferers who are at the bottom of the scale. That is something that I am sure the Committee does not want. We are talking about disabled people, and on that basis I support the amendment with pleasure.

I ask the Minister when considering this amendment and indeed the other amendments connected with contract compliance, to remember that one of the greatest benefits of contract compliance as a method is that it is accompanied by skilled advisory services to help people to carry out those obligations. I would not support contract compliance unless it were accompanied by skilled advisory services because it is by the use of the advisory services that one gets it right when employing disabled people, for example, and also women and members of ethnic minorities. It means that the job will be done really well. Without the help that goes with the advisory service to companies under contract compliance, companies do not know the variety of ways in which, by quite simple changes and adjustments very often, it can be made perfectly possible to employ productively and economically people whom they think they could not employ productively and economically. That is a very strong argument. I repeat that I have seen it working very well indeed both in the United States and here.

10.15 p.m.

I am grateful to all noble Lords who have taken part in this very important debate. I could not agree more with the noble Lord, Lord Dean of Beswick, when he said that we all agree with the spirit of the amendment. Indeed, I have recently had the opportunity of looking at situations where great strides have been made in the provision of work for the disabled which show encouraging signs for the future. However, none of the situations at which I looked resulted from contract compliance.

The key to why we feel that the noble Lord's amendment is inappropriate is the fact that, as drafted, it would enable local authorities to take certain action, if reasonably necessary, for contractors to fulfil their obligations under the Disabled Persons (Employment) Act 1944. I was extremely grateful for the contribution of my noble friend Lord Campbell of Croy with his very great experience on this matter.

Why should any action by an authority in the course of the contractual process be necessary to ensure that a contractor obeys the law in relation to the employment of disabled people? Surely, an amendment which seeks to allow authorities to have regard to such matters is an attempt to usurp the powers which already rightfully belong to the employment service of the Department of Employment? What is at issue here is whether the Committee considers that those powers should remain with the employment service or whether local authorities should assume for themselves a role which they are not properly equipped to carry out.

We come back to this same theme, which was consistent with the last amendment that the noble Baroness moved and which I forewarned the Committee would occur regularly throughout the amendments that we would discuss on Part II.

The 1944 Disabled Persons (Employment) Act established a voluntary register of disabled people, and the Act obliges employers who are below the relevant quota—3 per cent. of their total workforce to be registered disabled people—to take steps to rectify the situation. But—and this is crucial—it is not an offence to be below quota. If he is, an employer must not engage anyone other than a registered disabled person—or discharge one from his workforce—without a permit from the Employment Service. The Employment Service, through the information available to it from Jobcentres, is best able to assess whether such a permit would be justified. It will know if there are suitable registered disabled people available or not. I should add that the Employment Service takes its role in this area very seriously indeed. Individual Jobcentres conduct a postal enquiry every year in which employers are asked to provide figures showing their total number of workers and the total number of registered disabled people they employ. That information enables quota inspectors to carry out follow-up work.

Acceptance of this new clause could result in local authorities withholding contracts from perfectly capable and efficient companies for no better reason than that they were below quota, ignoring the fact that registration by the disabled is voluntary and many eligible people choose not to be registered.

That was a point stressed by my noble friend Lord Campbell of Croy. He highlighted some of the difficulties that we were facing at the moment. He stressed that there are no longer enough registered people to enable the 3 per cent. quota to be achieved overall. As my noble friend has made very clear, the operation of legislation concerning the employment of disabled people is a central government responsibility. Questions about how that legislation should be changed or about its operation are for my right honourable friend the Secretary of State for Employment.

The research to which my noble friend referred should be completed later this year. We shall then be in a position to look at the matter again. However, we come back to the nub of the problem which we faced on the last amendment and will doubtless face again. This is an area where central government have the enforcement procedure and the guidance to which the noble Baroness, Lady Seear, referred through the Employment Service. This is not a contractual matter for local authorities.

Does the Minister think that the services that are available in the Department of Employment through the DRO service, and the numbers involved—we shall not raise any other issues—are adequate to give the kind of advice I am talking about? If he thinks that, I am bound to say that he has no idea what the problem is.

I am very well aware that the employment service takes its role in this area extremely seriousy. On numbers, I cannot give a figure to the noble Baroness at this moment but the matter having been raised I shall look into it.

Before the noble Earl sits down, can he explain this? If the local authorities are not the right people to do this job, as he is suggesting, why have all the organisations for the disabled supported this amendment as a step to ensure a few more jobs for disabled people?

On the same point, I am surprised that the Minister is saying that local authorities cannot handle this. Most local authorities of any size have personnel departments of their own that are perfectly aware of this type of problem and are capable of dealing with it. Many services in local government, such as housing, direct labour, and education, are departmental, but personnel departments—what used to be known as establishment departments—have great expertise on the availability and placing of people.

If the Minister is telling me that the personnel departments of local authorities cannot do this unless they are given guidelines on the work that disabled and handicapped people can do and on what to do about it in conjunction with the bodies that the noble Baroness, Lady Seear, spoke about, I do not believe him. There is enough expertise in personnel departments, coupled with the agencies I mentioned, to deal with the situation. It is not good enough to say that local authorities are not capable of dealing with this. I believe that they could deal with it if they were given the right guidelines and the opportunity.

Both the noble Lords, Lord Carter and Lord Dean of Beswick, have raised an extremely important point. I do not dispute the assertion of the noble Lord, Lord Dean, that should local government be given the resources and the extra manpower—

I did not say that. I hope the Minister does not put words into my mouth. I did not mention extra manpower. I said that there was expertise there now that I believe could do the work. I do not know of any legislation unfortunately that this Government have passed over the last few years to help me. An ex-Secretary of State who brought some of it in has just left the Chamber. One of the complaints of local government has been the additional responsibilities the Government have been giving it over the years, coupled with savage cuts in manpower. If personnel departments were able to consider this problem with the right guidelines and the right people from the other agencies, they could probably achieve a solution without increases in manpower. I am not basing my argument on substantial increases in manpower and I hope the Minister does not think so.

The Bill will stop them doing it; that is what the debate is about.

What I was going on to say was that there might be expertise in some areas of local government that has undertaken this work, but for a very great number of authorities there will undoubtedly be extra resource implications if they have to undertake it. However, that takes us back to the crucial point. Do we wish to set up the local authorities as extra-statutory enforcement agencies? Some have not taken on that role and some have, but that is the basic difference between Members on that side of the Committee and the Government. We believe that local authorities should not be setting themselves up as extra-statutory enforcement agencies.

That is not the issue. There is no talk about enforcement. The talk is about local authorities encouraging employers in their area to take on more people with disabilities. That is what is being done now and that they cannot do under the Bill because it says that they must not take the composition of a workforce into account. If those words were left out none of this would arise. When they could take account of the composition of a workforce they could deal with whether companies were discriminating against women, whether women were getting proper promotion, whether they were discriminating on grounds of race and whether there was a proper distribution of employment. That is done now. The Bill says that authorities must not take it into account. All we are asking so far is that they be allowed to take sex discrimination and discrimination against disability into account to encourage employers to take on more disabled people. I cannot see where the difficulties lie.

As a representative in local government I am finding this debate rather interesting. If the Government had built into the Bill the premise that local authorities on the grounds of race, of discrimination in favour of women and of the disabled would have to go through the process of sending out questionnaires, considering responses, asking for written submissions to substantiate evidence and then considering those, I believe that those people who say that local authorities can do all this, do not need the resources, have all the manpower they need and are doing it now would scream from the rooftops about more resources, more personnel and the fact that local authorities are already working to their capacity in all areas. We are talking about a whole new raft of duties and responsibilities.

Where local authorities are doing it now, they are doing it within the confines of their own authority. The Bill is about operating outside local authorities and having power and responsibility. The noble Lord, Lord Basnett, may shake his head, but we are now talking about empowering local authorities to meddle in the operational day-to-day management of the private sector. We are saying that we shall interfere with the management of private companies in respect of whether they are complying with the Act (and if not, why not?) and that we shall give them work only if they do comply. That is what the powers are specifically about.

10.30 p.m.

I am grateful to the noble Baroness for giving way. Is she suggesting that the 1944 Act should be repealed? That is interference in the private sector.

No, that is not what I am saying. I am saying that at the moment the case is being made that there is a great deal of capacity in local government to take on the extra work. I believe that Members opposite are the same Members who will argue strongly the other way to say that local government does not have the capacity for extra work.

The noble Baroness has it wrong. The Bill will deprive local authorities of doing something that they are already doing. We are not talking about a new raft of jobs upon which some disabled people can jump. We are talking about the raft that already exists but which will be removed. No other interpretation can be put on the matter.

It would help if the Minister and the noble Baroness, Lady Blatch, could respond to the points that we are making and not those which they expect us to make. We did not use the word "enforce"; we used the words "supplement" and "assist". I should like to repeat the phrase that I used earlier. I said that the only circumstance under which a contract could be withheld would be if a company refused to be assisted. We are asking to be left on the statute book only what local authorities are already doing. If that is removed from the statute book, it is discriminating against disabled people.

I should like to comment briefly on what my noble friend said in his reply to the amendment. From the debate that has taken place, it is clear that we are all agreed that the quota scheme of the 1944 Act sets up targets. The quotas are not attainable in most parts of the country for reasons which everyone has accepted. I do not propose to enter into them again. The noble Lord, Lord Carter, asked whether it was suggested that the quota scheme and the 1944 Act should be repealed. I should like to remind him that it was the Manpower Services Commission, which operates the scheme, which suggested in its 1980–81 report that it should be repealed and replaced by other legislation. Although I dealt with that matter in my speech, I want to remind the noble Lord that it was the commission, which operated the scheme, which suggested that it should be repealed and replaced by something better.

Many organisations—and I am an office bearer in some of them—understandably decided that they preferred to hang on to what they had, even though it was aiming at only rough and general targets. It is difficult to try to introduce that kind of scheme into the question of whether someone receives a contract. It is vague and it differs in various parts of the country. While the quota scheme continues, and until it is replaced by something better, it is not attainable in many circumstances. We hope that the MSC, previously the Department of Employment, but now under the aegis of that department, should make sure that all firms, whether tendering for contracts with local authorities or elsewhere, are subject to the same pressure to try to employ disabled people. To employ 1 per cent. may be exceedingly difficult in some areas of the country and in some industries. It is a very satisfactory target if attained. In another industry where it is easier you may achieve 6 per cent. Whether or not they are employed in work connected with local authorities, there should be one agency—the MSC—under one department which is responsible for making that quota system work as well as it possibly can. That, I hope, is what my noble friend proposes.

I am extremely grateful to my noble friends Lady Blatch and Lord Campbell of Croy because they have absolutely hit the nail on the head. The local authorities can do what they want to do within their own powers for their own workforce, but what we are talking about here is the outside contractual process. All we say is that they should not use that contractual process as an extra-statutory enforcement mechanism. The right people to be doing that, as my noble friend Lord Campbell of Croy said, are the employment service.

The Minister must recognise that those statutory forces he talks about have had this ability since 1944, and they have not done it. That is the point: they have not done it. The Minister cannot even tell me how many there are. If the Minister will look up the number of establishments there are in this country and the number of DROs, he will realise he is giving them a totally impossible task.

If I expressed disappointment at the replies I have heard from the Minister and other noble Lords, I should be understating my position. really think that the point is being missed. The noble Earl asked a question. He asked why we should seek local authorities to act for state agencies. In fact, we have not asked for that and I do not want that. However, there is a very good reason and that reason has been given; namely, that they are not working. I have given the figures. Contract compliance has come down from 35·3 per cent. in June 1979 to 27 per cent. in June 1987. The noble Baroness, Lady Seear, is quite right in that the department responsible is undermanned, which is well known, and any of the agencies associated with the Government can tell you that.

Let me put the point again very simply. Local authorities can at the moment advise, help and guide people into employing persons with disabilities. They do that already. We are not asking them to do it if they do not want to do it, though we should love them to do it. What this Government are doing is dousing the one light of hope that exists at the moment for employment of persons with disabilities, because everything else is declining. That exists and is improving, and is based, as the noble Baroness, Lady Seear, said, on advice, counselling and help from local authorities. That is all that my noble friend and myself have spoken about. The Government are going to douse that light for people with disabilities. When I say that I am disappointed, my emotions are understated. That is exactly how I feel. However, in the circumstances I withdraw the amendment and hope to come back to it later.

Amendment, by leave, withdrawn.

On Question, Whether Clause 17 shall stand part of the Bill?

Before the clause is allowed to pass I should like to say a few words. I believe that we have had, in defence of this clause, an exercise in complacency and arrogance by the Government such as I cannot recall having happened for a long time. We have not even had the grace of crocodile tears. There is not a word in this clause that the Government feel is either wrong or could be improved. Members on this side of the Committee have sought for five or six hours to inject a little bit of humanity, local knowledge and flexibility into the two intentions of the Government, which are to take work away from local authorities and give it to their friends in the private sector.

We on this side of the Committee are saying that it is grossly unfair to a great many people whose representatives have sought today, and will continue to seek, to persuade the Government that this clause can be improved.

I am not going to move that the clause shall not stand part of the Bill, but I am honestly saying to the Government that on a range of matters they have completely misjudged what we have been trying to do. We have sought, as have major organisations outside this place, to say to the Government that we can make this clause work better if they will accept easements and flexibility

For example, take the great cry about the state of training and education in the building industry. We have sought in our amendments to persuade the Government that there is a case for giving a little credit to responsible organisations and associations. The Government have failed to do that. I am extremely disappointed. One must consider the evidence given by such organisations as the Federation of Master Builders. Those organisations, when they have surveys of their members, are given the fact that the economy of the country could be improved with a drive in training, skills and education. It is a crying shame that the Minister, even with support for the case from his side of the Committee, has failed to take the opportunity we have promoted to give responsible organisations a greater role in these matters. I am afraid that the Government have lost the sympathy of a great many people outside this place (they never had the sympathy of many people on this side of the Committee) that existed before the Minister started to defend this clause.

In opposing clause stand part I too should like to refer to one or two matters which we have not been able fully to discuss this evening, in particular Amendment No. 92A, which states:

"Nothing in subsection (5) above shall prevent a local authority from making reasonable inquiries of a contractor as to the record of relationships between management and workforce in the course of the previous five years".
The noble Baroness, Lady Blatch, said that all organisations, public and private, have to observe the law of the land. Of course that is true. But relationships between employer and employee are by no means solely a matter of the law of the land. Any local authority which wanted to be sure that it was placing its contracts with a reliable contractor would be well advised to make inquiries about matters which are nothing to do with the law of the land; for example, the level of labour turnover. An organisation which has a high labour turnover is not likely to be a good contractor. The ability of that organisation to recruit and whether it is well regarded in the labour market should be considered. What sort of strike record does it have, official and unofficial? Those are all matters which a local authority in diligently laying out its contracts should be able to inquire into.

Of course the Minister and Members on his side of the Committee believe that this is an attempt to promote trade unionism and to exclude non-trade unionists. That may or may not be so, but if a local authority does that it is up to the people who elected it to take action against it.

Behind all this is the belief of the Government that when a local authority is handing out a contract it should consider absolutely nothing except the price and in the most shortsighted way what sort of value it can get for its money. However, in taking rather more than a shortsighted approach authorities will be looking at other aspects. I argue that a local authority in spending ratepayers' money is entitled to take into account the standards that are observed by the people to whom it is giving the contract. I see no reason why that should not be included in the Bill.

If the Government insist on saying that getting the best price immediately is the only consideration, they are denying local authorities and the people who put them into power the right to say how the ratepayers' money is to be used and the kind of employers to be encouraged with their contracts. That is the difference between us. It is probably a difference which will divide us permanently.

The noble Lord, Lord Graham of Edmonton, is probably absolutely right to say that I have missed a point that he has been trying to make. However, he knows that I will carefully read the Official Report and, if I find that I have missed a point, then I will apologise, because these things happen.

I take on board what the noble Lord is saying and will look at it very carefully and discuss it with my right honourable and honourable friends, because that is the right way to do it. I am sure that is the way that I will always continue to do it. But to say that, because there is a fundamental difference in philosophy between us, I have been complacent, I find very difficult to accept. I certainly have not been complacent. Both sides have argued their case strongly, but as I said right at the beginning I cannot do maths at this hour of the night, but many hours ago—this was likely to be a theme that would recur throughout our debates. It has recurred throughout our debates, but to call my response complacent is wrong.

I say to the noble Baroness that it is not price alone that interests us, because, as she with her knowledge of the Bill will know, if the local authority goes out to tender, it obtains a range of prices and it does not have to accept the lowest price. It can accept a price above that, but what it then has to do is to justify to the ratepayers accepting other than the lowest tender. Although it has set down in the contract and in the conditions of the tender the standard of service it wants with the specification it wants—which is normal commercial practice—over and above that it can say, "We have not accepted the contract from this company; we have kept it in house for the following reasons and the extra cost is so much." Surely that is not unreasonable.

Clause 17 agreed to.

Schedule 2 [ Public supply or works contracts: the public authorities]:

moved Amendment No. 95B:

Page 35, line 28, after ("in") insert ("section 3(1) of that Act, or established by").

The noble Earl said: It is a nice change to move an amendment. I beg to move Amendment No. 95B. This is simply a technical amendment to correct a printing error in Schedule 2 to the Bill, which lists those public bodies subjected to the provisions of Part II. I must pay tribute to my noble friend Lord Balfour for spotting this error and drawing it to my attention. The amendment merely restores the words descriptive of a police authority and brings the definition into line with the definition of a police authority in Clause 1 of the Bill. I beg to move.

On Question, amendment agreed to.

Schedule 2, as amended, agreed to.

10.45 p.m.

Clause 18 [ Race relations matters]:

[ Amendment No. 95C not moved.]

moved Amendment No. 95D:

Page 17, line 22, leave out second ("draft").

The noble Earl said: The draft contract inviting tenders should be so worded that there is no confusion to the individual contractor bidding for the contract. One of the main purposes of this Bill appears to me to prevent any authority from restricting or distorting competition. Therefore, there should not be a draft tender.

When I was a councillor in the old East Lothian County Council, our county clerk, Mr. Gibb, and his successor, Mr. Miller, ruled us councillors with a rod of iron. One of the things that he insisted upon specifying was the date when tenders had to be received and the date and time when the tenders would be opened. These tenders were always opened in his room with the county convenor, vice-convenor, the chairman and chief official of the department involved present. Then the contracts were studied and the lowest or the most appropriate tender was chosen. This was then put to the meeting at the next full council and the result was published in the local press. Within a month all the contractors knew who had been successful. I can find nothing in this Bill that lays down the procedure which before 1974 we councillors so much admired.

I apologise to the Committee if I have taken some time in explaining the amendment but I would ask that this point be noted by my noble friend. I beg to move.

As usual, my noble friend has raised an interesting drafting point with his Amendment No. 95D, which would delete the word "draft" from the term "draft tender" in Clause 18(2)(b). However, such an amendment would appear to have a consequential effect on Clause 19(10)(b), and I hope therefore that he will agree to withdraw his amendment while I have a further look at it.

Amendment, by leave, withdrawn.

[ Amendments Nos. 96 to 97F not moved.]

On Question, Whether Clause 18 shall stand part of the Bill?

I am reminded of something that was often said to me as a young girl: "Don't you people have homes to go to?" In the light of the hour I am going to be very brief.

A number of times this evening the noble Lord, Lord Pitt, has referred to the anomalous position between the requirements of Section 71 of the Race Relations Act 1976 and the position of women and the disabled. One of my difficulties in speaking to the Question that Clause 18 stand part of the Bill is that whatever I say will be misinterpreted almost inevitably as me being racist, anti-women and anti-disabled. I wish to put on record right now that the position is almost the opposite. Very often the mechanisms set up by the Act work the other way, and work not in people's interests but against their interests.

I was particularly moved by the noble Lord, Lord Campbell of Croy, when he spoke to the amendment on the disabled. He showed a personal and real interest in their welfare and I believe that what he said was right. In some ways these amendments are patronising and in some ways thwart the real advancement of these groups of people. I was disappointed by something said earlier by the noble Lord, Lord Gifford, and I wonder whether I am the only person who picked it up. He referred to paragraph (b) of Section 71, which refers to the promotion of,
"equality of opportunity, and good relations, between persons of different racial groups'".
He referred to the use of paragraph (b) when it came to local authorities' powers and duties under the Act in relation to companies' links with South Africa. In the way that the provisions of the Act are couched I believe that local authorities would be entirely free to do just that.

I want to make only one point and I rest my case on it. If I am in breach of the law as an individual, a member of a local authority or as a member of a private company, I want to be judged by the courts and not by a local authority. To make local authorities judge and jury of private companies, and for local authorities only to be required to conform with the legislation themselves, so that nobody judges a local authority other than the courts, is an unsatisfactory position.

I gave an example earlier of what it would allow. The legislation would allow complicated questionnaires to be sent out, detailed discussion of the responses, further requests to be sent out for written submissions, more detailed responses to those and then laborious and costly demands upon private companies to question the judgments of local authorities. This would work against the interests of the ethnic minorities and the same arguments apply in terms of the disabled and for making special allowances for women. I believe that we are all subject to the law, whether we are in private companies or in public authorities. I wish the Minister to allow me at least to question the powers of local authorities in relation to Section 71 and, if it were at all possible, to take us all back to being equal under the law and not give extra powers of judge and jury to local authorities.

As the Committee knows, I have had a fair amount to do with this subject. I was at the time deputy chairman of the Community Relations Commission. I am always amazed when I listen to speeches like that of the noble Baroness, Lady Blatch. We were always told—I remember 1964 and 1965—that the law would do more harm than good in terms of helping us. What we did, however, was to pass a law which made it illegal to discriminate in employment. Before that law was passed one did not see black people in any of the shops in Oxford Street, in the banks or anywhere like that. They were firmly discriminated against. They were, and I was involved in those days.

I remember having an interview with a shopkeeper who said "We are not in favour of discriminating against blacks in employment but we did not think that our customers would like it". That is what that firm said to us. The law was passed. People no longer discriminate against them in that form of employment and the customers have not complained.

But we found that we were not getting the integration at local level that was required. It was in order to get that integration at local level that local authorities were given responsibility to take into account the state of race relations in their area and to carry out their duties in a way which would enable the maximum amount of getting together in the area. I used the words "getting together" because I could not think of another word. That is all this is. What happened as a consequence is that local authorities have found, using examples of the United States, that by contract compliance they have been able to improve conditions very much in their area for ethnic minorities. That is the origin of the clause.

This Bill would have made it illegal for the authorities to do that for the simple reason that it states that they cannot inquire about the composition of the workforce. The clause would allow them to continue to do the work that they have been doing. Local authorities are not an enforcement agency. What they are doing is being enabled to bring together the people in their area so that instead of having segregation there is a greater degree of integration. That is what this is all about.

I am grateful to my noble friend Lady Blatch for her speech and I recognise the sincerity of her view that the provisions of Clause 18 should not form part of the Bill. However, I think it is right that I should point out that Clause 18, which is of course a clause added by the Government at Report stage of the Bill's consideration in the other place, has been included in recognition of various ministerial undertakings that nothing in the Bill shall prevent authorities carrying out their existing statutory duties. Under the terms of Section 71 of the Race Relations Act 1976 local authorities have a statutory duty to carry out their functions with due regard to the need to eliminate unlawful racial discrimination and the need to promote equality of opportunity and good relations between persons of different racial groups.

The Committee will notice that Clause 18 provides that authorities shall be allowed to ask written questions about race relations practices relating to non-commercial matters in Clause 17(5) (a) if it is reasonably necessary to do so in pursuance of their duty under Section 71 but only if those questions are in an approved form specified by the Secretary of State. By specifying the questions to be asked, I believe that we will enable authorities to fulfil their duties under Section 71 without imposing too excessive a burden on contractors, who until now have been faced with different questionnaires from each authority, some of excessive length.

We propose that the questions to be specified should be drawn up after consultations with the industry, the Commission for Racial Equality and the local authority associations. Consultations will take place as soon as possible, so that authorities can take account of the questions once the Bill is enacted. I believe that by drafting Clause 18 in this way we have achieved a sensible balance.

Clause 18 agreed to.

[ Amendment Nos. 98 and 99 not moved.]

Moved accordingly, and, on Question, Motion agreed to.

House resumed.