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Lords Chamber

Volume 591: debated on Monday 22 June 1998

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House Of Lords

Monday, 22nd June 1998.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Leicester.

Millennium Exhibition: Access By Public Transport

Whether they are confident that adequate transport arrangements to and from Greenwich will be in place in good time for the opening of the dome and the start of the millennium exhibitions.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions
(Baroness Hayman)

My Lords, the delivery of a package of key transport infrastructure projects to improve access to North Greenwich before the start of the millennium exhibition is currently on target. My right honourable friend the Deputy Prime Minister has asked the Minister for Transport in London to chair a co-ordination group taking an overview of access to the millennium exhibition, and the noble Lord, Lord Levene of Portsoken, has kindly agreed to monitor and advise the Government on progress to ensure the integration of key links and that specific projects are on time.

My Lords, I thank the Minister for that Answer, but is it not the case that the expectation that a huge number of visitors will be able to visit the dome in trouble-free fashion depends crucially on the completion of the Jubilee line extension? Is it not the case that the opening of that line has already been delayed twice by signalling failures and that there is widespread concern that it will not be open on time? Can the Government give a firm assurance that it will be ready on time, and tell us the basis for that confidence?

My Lords, the noble Lord is absolutely right that the Jubilee line extension will be a key public transport infrastructure for visitors to the millennium dome exhibition. We expect that some 60 per cent. of visitors will use the Jubilee line for at least part of their journey. The project is on time to open in spring 1999. It is well advanced. We believe that the timetable will be met. The tunnels have all been constructed; all the station buildings are completed; all the track has been laid and the new trains are already in service on existing lines. With regard to signalling, because of the concerns about the moving block system, the decision was taken to install fixed block signalling. Although no one can be absolutely certain about anything in life, I confirm that the project is on time and on target—very much like the dome itself.

My Lords, may I ask the Minister how many passengers she expects to travel to the millennium dome by river on the new river-bus service that is being planned and whether the service will continue to operate after the end of the millennium exhibition in order to provide general public transport assistance for London?

My Lords, about 10 per cent. of visitors are expected to arrive by river. One of the most important and exciting aspects of this is that the river transport arrangements made for access to the exhibition will have a legacy value both in terms of the new piers that are being provided—

My Lords, the phrase "the new piers" gets a laugh every time. There will be a legacy value not only in terms of the new piers, but also in terms of the services that are expected to remain in place once the exhibition has finished.

My Lords, the appointment of the group headed by the noble Lord, Lord Levene, suggests that there could be some serious problems. I am sure that appointing such a group was a sensible move—presumably it will be able quickly to give the Government its assessment of the situation. Will the Minister share that assessment with the House as soon as she gets it?

My Lords, I know that the noble Lord, Lord Levene, is not in his place this afternoon because he is visiting the Jubilee line extension project. He is active in that role. The group meets regularly and I know that both the noble Lord and my honourable friend the Minister for Transport in London last week gave evidence about progress to the Select Committee on Culture, Media and Sport in another place. There is no desire not to be open about progress.

The noble Lord, Lord Marlesford, suggested that the formation of the group indicates great problems. I think that there are great challenges. We are talking not only about the Jubilee line extension because it is a challenge to produce such an event as a mainly car-free event. There must be co-ordination between the different forms of transport involved, which include river transport, the Jubilee line extension, the millennium transit, the bus transport that will be provided from a refurbished Charlton station, and the cable car. There are all sorts of different ways of gaining access to the exhibition. It is important that they are well co-ordinated and that there is good communication between the New Millennium Experience Company (NMEC) and the Government on those issues.

My Lords, does the Minister recollect the visit of Sir Anthony Eden to Moscow in 1935 when it was proposed that the terminal of one of the new underground railways should be named after him, and an old Communist—if I can use this parallel—much objected to honouring a capitalist statesman, but the commissar for transport said, "Don't worry; the trains will never get there"?

My Lords, I admit that I have no personal recollection of it. I believe that the best approach is to wait and see whether those who are determined to regard the glass as half-empty are proved right or whether the Government are right in believing that there will be good, modern, public transport accessible to the disabled and available for travelling to an extremely successful event.

My Lords, now that sponsorship money exceeds £100 million and that today the Prime Minister has said that building will go on well into the next century, does my noble friend agree that the transport group should be asked to consider whether the estimate of the numbers to be moved is sufficient? Clearly, the event will be a great success and there may be a greater number. I am sure that everyone will want to get to "Mandelson station".

My Lords, the maximum number of visitors to the exhibition at any one time to allow everyone to enjoy the experience properly is 35,000. I understand that on some occasions there will be two sessions so that there may be 60,000 people per day at the event. The exact number of visitors in any one year or, as the noble Lord has suggested, beyond that time is perhaps a matter that goes wider than transport considerations. Some of the transport challenges can be overestimated. For example, 35,000 people manage to get to Highbury and three other football grounds in London without too much effort on most Saturday afternoons when premier games are played.

My Lords, people reach Highbury via well known and well-documented links. The noble Baroness referred to the need to co-ordinate different forms of transport. Has the Minister considered the problem that many people who go to the millennium dome will not be Londoners and will not necessarily frequently travel to London? Has she given any thought to what steps may be taken to ensure that all of the different companies which are involved in transporting people in and around London produce co-ordinated publicity material so that visitors can find their way around?

My Lords, the noble Baroness makes an important point about information. I point out that away supporters also attend London football grounds and they do not necessarily know their way round the transport system. It is extremely important that the different arrangements and possibilities of travel to the millennium exhibition are well publicised at the time people buy tickets. People will not be able simply to turn up at the event. It is important that they understand the possibilities. For example, when coach tours are involved it is important that coach operators understand that because of the limited number of spaces available they must have a coach permit. These issues are taken very seriously by all of the transport operators, the companies themselves and my department. I believe that good progress is being made in co-ordinating efforts so that people are well advised as to how to make the smoothest journey.

Sex Discrimination At Private Events

2.46 p.m.

Whether they will seek to amend the Sex Discrimination Act 1975 to extend protection to visitors to events organised by trade unions and professional organisations.

My Lords, Section 29 of the Sex Discrimination Act 1975 already provides protection to visitors on access to all public events, whether organised by trade unions or professional associations, as with other public events. However, that Act does not extend to private events. It is for the organisations concerned to decide their policy regarding visitors. At present the Government have no plans to extend the scope of the Act in this way.

My Lords, I thank the Minister for his Answer, but does he accept that the Equal Opportunities Commission is calling for an overall review of the operation of the sex discrimination legislation? Does he also accept that the Answer he has given does not go far enough? Surely, a registered trade union has responsibilities that go further than those of a members' club? He will accept that members' clubs are entitled to discriminate on sexual grounds against any of their members or members' guests. Bearing in mind the publicity being generated by the World Cup, will the Minister address the particular issue of whether it was right for the Professional Footballers Association to discriminate on grounds of sex against a guest who happened to be the only woman who was a registered FIFA football agent? Does the Minister agree that the Minister should provide legislative protection for her?

My Lords, I am glad that the noble Lord eventually got round to explaining to other noble Lords what his Question was really about. The Government's view of this event is quite clear. My honourable friend the Minister for Sport refused to attend this event in view of the attitude adopted by the Professional Footballers Association. The noble Lord is correct that the EOC is looking at the operation of the Sex Discrimination Act, and the Government will take seriously any recommendations in this as in other areas. But trade unions and professional associations are required in relation to membership, access to benefits etc. to operate on an equal access basis. However, dealing with private events is a complex matter and one in which the sex discrimination legislation has so far not intruded. Serious issues would have to be dealt with before legislation could be drafted to attack that.

My Lords, can my noble friend go a little further? Surely, the Government support the EOC in its desire to have a simple statement of the limits of sex discrimination legislation. The Government are committed under the fairness at work proposals to do something about maternity benefits, parental leave and so on. Does my noble friend agree that this is a unique opportunity for the Government in the coming legislation to do what the EOC asks for and set out in clear terms the overall limits of sex equality legislation in this country? Can my noble friend go a little further in that regard?

My Lords, I am sure that we all want simplicity in this area. As I have said, we shall take seriously the EOC's proposals on the working of the Sex Discrimination Act. Clarity in drafting legislation in relation to private events is not easily achievable. That is what is raised by this issue. The Government's general attitude is clear: we deplore any such discrimination.

My Lords, is the noble Lord aware of any man or woman who, because they were a man or a woman, has been excluded from an event organised by a trade union or a professional organisation? If not, what on earth is this all about?

My Lords, the noble Lord, Lord Razzall, made clear the occasion. It is the only one in recent years to my knowledge, and relates to the Professional Footballers Association and the exclusion of this lady.

My Lords, does the Minister agree that as it is now 23 years since the Sex Discrimination Act was introduced, it is about time that it was reviewed? It is important that the Government take action in this matter rather than wait for the EOC. In the meantime, will he actively discourage Members of your Lordships' House from attending functions at which women are actively discriminated against?

My Lords, I am prepared to discourage any noble Lord or noble Baroness from attending any function at which members of either sex are excluded merely on the grounds of their sex. Noble Lords may have other events in mind, but I shall not go too far down that road. I am sure that the noble Lord will accept that it is sensible to consider the EOC's recommendations in the round before we start legislating. It is time that we reviewed the workings of the Act, and we should do so in this respect and others.

My Lords, with regard to the EOC, which deals with matters relating to equality between the sexes, will my noble friend tell us how many men and how many women constitute the EOC itself? If there is not now equality will he ensure that there is?

My Lords, I am not sure that I am up to date with the exact numbers. The EOC consists of men and women in roughly equal proportions. That will continue to be the case.

Nato Strategic Concept

2.57 p.m.

What information they intend to provide to Parliament about progress in formulating NATO's new strategic concept before its adoption by the alliance in the spring of 1999.

My Lords, decisions on the revision of NATO's strategic concept will be a matter for collective agreement by NATO heads of state and government at the Washington Summit in April 1999. The United Kingdom will play a full part in this process. Members of both Houses will have the opportunity to debate NATO matters during the enlargement debates in both Houses. The Government also expect to contribute to a future inquiry into NATO summit issues which, I understand, the Defence Select Committee in another place intends to conduct.

My Lords, I understand that those consultations are well under way. Will the noble Lord confirm that representatives of the Czech, Hungarian and Polish Governments, who are not yet members of NATO, are being consulted and taking part in the consultations? Given that NATO is the key to British defence strategy, does he think it desirable that this House and the other place should be informed and consulted as consultations proceed rather than being presented with a fait accompli next April?

My Lords, I, and my right honourable friend the Prime Minister have said that before any ratification of enlargement both Houses will have an opportunity to discuss the issues. Of course your Lordships had a debate last Friday on the nature of NATO in relation to enlargement. We shall no doubt have further such debates.

My Lords, will the noble Lord assure the House that in those discussions the UK will support full respect for national sovereignty of all UN members?

My Lords, the sovereignty of UN members is protected under the UN Charter. The UN Charter also includes the commitment to observe certain basic principles of human rights. On occasions, intervention is required within the boundaries of member states of the UN.

My Lords, will my noble friend bear in mind that the US Senate, in giving its assent to American ratification of the expansion of NATO, made it a condition that the new strategic concept should be brought before the US Senate twice during the course of its re-negotiation; that is, before any text is adopted? Will he consider whether that might conceivably be a precedent for our Parliament? If not, in what way can we be content to be less democratic in this matter than the US?

My Lords, I have already indicated that this House and this Parliament will have an opportunity to discuss these matters. As the debate on Friday initiated by my noble friend Lord Kennet indicated, the US Senate was putting different conditions on the various developments within NATO. That is a matter primarily for the US. It is important to remember that if cost is its main concern, its share in proportion to GDP is less compared with that of the other allies. In no sense do we intend to be any less democratic when considering these issues than our allies.

My Lords, bearing in mind the manifesto commitment to seek the abolition of nuclear weapons world-wide, can we be assured that, in discussions on the new strategic concept for NATO, Her Majesty's Government will ensure that the elimination of nuclear weapons as part of NATO's strategy is on the table?

My Lords, the Government's position on nuclear disarmament has been made clear by my noble friend Lady Symons on many occasions in answer to my noble friend Lord Jenkins. We are committed to early discussions on multilateral nuclear disarmament. NATO's role in that is clearly a significant element. However, nuclear weapons are not NATO weapons; they are the weapons of the US, France, Britain and the other nuclear powers.

My Lords, bearing in mind the terms of the Question, which was about progress in formulating NATO'S new strategic concept before its adoption, is that not different from ratification? Can we have an assurance that there will be consultation during this period and not purely ratification after it has happened?

My Lords, the commitment that I have already given will ensure that this House will have adequate time to discuss the matter before the process is complete. There will obviously need to be a ratification debate in this House and another place.

My Lords, My noble friend properly raised the issue of nuclear weapons in this connection. Does my noble friend agree that, although the Government have been commendably clear about their own position in the matter, they have shown no signs of wishing to spread the word among other NATO members? On some suitable occasions would it not be appropriate for NATO or, conceivably, some other UN organisation to tackle this matter so that the Government's ideas may be spread more widely than is the case at present?

My Lords, we are in close contact with all our allies on these issues in NATO and in other contexts. The Government cannot be criticised for failing to make it clear to our allies and other countries where we stand on the issue of nuclear disarmament.

My Lords, will the strategic concept embody the principle of equitable contribution from each of the European member states of the alliance? Will it also establish mechanisms for monitoring the achievement of that equitability?

My Lords, cost contributions will be considered in formulating the future strategic concept. However, the burden sharing has already been set for a number of years ahead. It will no doubt be reviewed from time to time. This exercise will not affect those proportions.

My Lords, will the Minister assure us that these important defence debates, not least the SDR debate, will not occur on a Friday or the last day before the Summer Recess?

My Lords, as the noble Earl will realise there are many things which are within my power to promise, but I cannot however promise time. That is a matter for the usual channels.

My Lords, can the Government confirm that in these discussions the United States evinces more enthusiasm for the European pillar of NATO than do the British Government?

My Lords, the British Government, the United States Government and our European allies all recognise and agree that there has to be a strong European identity within NATO.

My Lords, is the noble Lord satisfied that Her Majesty's Government have done enough to assist those nations not in the first wave to meet the criteria which NATO will set so that they can join NATO as quickly as possible?

My Lords, the House knows that considerable measures have ensured that all those eastern central European countries which have expressed a wish to join NATO have received military co-operation in various forms from us. The decision on further enlargement of NATO will depend on the success of the enlargement to be finalised in March of next year.

Millennium Dome: Award Of Contracts

3 p.m.

What is their policy, when awarding contracts for the Millennium Dome project, for ensuring that British companies have the same opportunities as those from other countries.

My Lords, the procedures adopted by the New Millennium Experience Company for procuring goods, services and equipment meet UK domestic and European Union requirements for fair and open competition among potential suppliers. My noble friend will be especially pleased to hear that UK companies have done exceptionally well in winning contracts for the Millennium Dome project with 29 of the 30 main trade contracts having been let to companies based in the UK.

My Lords, is my noble friend aware that much of British industry will be pleased to hear the Answer he has given me? Although there has been much bad publicity about the millennium project, it is regarded as prestigious, in particular by overseas companies which wish to win contracts. Am I correct in interpreting my noble friend's Answer to mean that there will be a level playing field for British companies, and that the political lobbying, in particular from overseas governments, will not take precedence over commercial excellence?

My Lords, perhaps I may congratulate my noble friend on his birthday and express regret that our unfair sex discrimination laws mean that unlike a woman he will have to wait another five years for his bus pass.

My noble friend is right that the Millennium Dome contracts are prestigious. He can be assured that there is and will be a level playing field. Indeed, I should have thought that political lobbying by other governments would be a disadvantage rather than an advantage.

My Lords, I speak as a member of the Millennium Commission. Is the noble Lord aware that the Millennium Commission has funded a considerable part of the project; that it has the spotlight of the Treasury and all others upon it; and that all procedures for procurement are under a microscope at all times on such a project?

My Lords, the noble Lord had the advantage of being invited to the topping-out of the dome this morning which I did not. In that sense, his information may be more up-to-date than mine. I can confirm what the noble Lord says.

My Lords, the construction of the dome has apparently been conducted within the time limits and the budget set. It is therefore a great success in that regard; and that distinguishes it from many other major projects recently undertaken. Will the procedures adopted to achieve that desirable result be fully documented and passed on to those who may be concerned with further major projects?

My Lords, the Prime Minister made the same point this morning. I am sure he will be grateful to the noble Lord for his comments about what has been achieved so far. I think that the noble Lord's suggestion about documentation will be well received.

My Lords, would the Minister like to express a view about the rather unusual figure that appears on top of the dome?

My Lords, I am not sure that I understand the noble Viscount's reference to "on top of the dome". He may be referring to the large human figure which is to appear in one of the zones of the dome. I understand that discussions about the configuration of that figure (if that is the right word) continue.

Petition: Sex Discrimination Act 1975

3.4 p.m.

My Lords, in conformity with the procedure of the House, I beg to present a Petition from Ms. Rachel Anderson, which prays that this House will call upon Her Majesty's Government to review the Sex Discrimination Act 1975 with the intention of enhancing the powers of the Act, so that discrimination such as that practised by the PFA against Ms Rachel Anderson at the PFA Awards Dinner be clearly against the law. The Petition is already on the Table of the House.

Business

My Lords, it may be for the convenience of the House if I make a short business Statement concerning this evening's Unstarred Question in the name of the noble Baroness, Lady Byford. A revised speakers' list has been issued to correct an error in the time allocated to speakers in the debate. With the exception of the noble Baroness, Lady Byford, and my noble friend Lord Williams of Mostyn, who have 10 minutes and 12 minutes respectively, all other speeches should be limited to six minutes and not to nine minutes as stated in the original speakers' list.

Registered Establishments (Scotland) Bill

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects. I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—( Lord Hogg of Cumbernauld.)

On Question, Motion agreed to.

Police (Northern Ireland) Bill

3.6 p.m.

Report received.

Clause 24 [ Attestation of constables]:

Leave out Clause 24.

The noble Lord said: My Lords with the leave of the House, perhaps I may speak at the same time to Amendment No. 5 which is consequential. If agreed to, the effect of this pair of amendments would be to retain the existing loyal oath for recruits to the RUC for the time being. Perhaps I may take a moment to set the scene. As the explanatory and financial memorandum reminds us, the Bill was conceived by the Labour Party in opposition. But no opposition party, however thorough its researches, can have access to all the facts as they evolve in the way that a government do. More importantly, events have developed at an astonishing pace.

Eighteen months ago no one could have foreseen the Good Friday deal or the appointment of the Patten Commission. What might have seemed desirable then may look very different today. Much of the Bill is fairly non-controversial. Few could seriously object to the idea of a police ombudsman, for example. But no matter what the police authority may say, altering the oath is a very different matter and not strictly integral to the Bill.

The senior ranks of the RUC appear to feel that publicly they must go along with the establishment view, whatever their private feelings may be. My information is that the far more numerous junior ranks are most unhappy about the position, as indeed they are with prisoner release and many other aspects of the "peace process". In the Financial Times of 2nd June—by no means a pro-unionist newspaper; if anything somewhat the reverse—its correspondent Jimmy Burns reported that the Royal Ulster Constabulary faced an uncertain future following the Good Friday peace agreement. He highlighted the Ulster Police Federation's's deep distrust of the Government's stance on police reform, and added:

"To many RUC officers, the very word reform smacks of ungratefulness if not betrayal. 'We are the cement that held the province together in the Troubles' [the federation spokesman said] 'and suddenly we're told that we are the problem'".

It is in that context that Clause 24 and Schedule 2 must be viewed.

A number of dishonest commentators claim that the reason for the disproportionately small percentage of Catholics in the RUC is an anti-Catholic bias in the force. That claim is all too readily swallowed by a gullible mainland public. The real reason, as most of us in this House know and as the noble Baroness, Lady Park of Monmouth, pointed out so forcefully and tellingly on Second Reading, is that Catholic officers are even more vulnerable to assassination by the IRA or the INLA than are their Protestant fellow officers. Remove that threat and Catholic enlistments will rise, perhaps quite sharply.

There is no inherent incompatibility between Irish Roman Catholicism and loyalty to the Crown. I knew a distinguished officer in the Royal Air Force, a charming, interesting and very able man, who happened to be a Catholic from Dungannon. The one thing which marred enjoyment of his career was that he could not visit his elderly and infirm mother in Dungannon because the IRA had threatened to try to kill him if he set foot in the town. How insulting to such a man, and there are many thousands like him, to suggest that Roman Catholics cannot reasonably be expected to be loyal to the Crown.

Perhaps it will be claimed that the revised oath is necessary to attract nationalists as distinct from Roman Catholics. Yet members of the SDLP, such as John Hume and Seamus Mallon, who after all represent the majority of nationalists, are content to take the oath upon entering the House of Commons. It may also be an attempt to justify the proposed change on the ground that the police in Scotland make a broadly similar attestation, yet the Scots form only about 8½ per cent. of the population of the United Kingdom.

A comparison with the Republic of Ireland is far more relevant given the push towards cross-border harmonisation and the fact that "parity of esteem" is the buzz phrase of the moment. Presumably, parity of esteem means the unionists in the south being treated with the same respect and consideration as nationalists in the north. Is the oath taken by those joining the Garda in the south purged of patriotic sentiment so as to avoid offending the tiny handful of unionists still living there who may wish to join? Not a bit of it. I shall read a condensed version of the rather long oath taken in the Republic:

"I … do solemnly and sincerely before God declare and affirm, and my word and honour pledge … that I will render good and true service and obedience to Ireland and its constitution and government as by law established … and that I will prevent to the best of my power all the offences against the same".

That is stirring patriotic stuff. And why on earth not? Unionists in the south accept it.

Questions relating to recruitment and to the culture, ethos and symbols of the RUC are matters for the Patten Commission to advise upon. The commission could recommend maintenance of the status quo. Or it could recommend that the oath should be altered, possibly in the form suggested in Schedule 2. If that were to happen it would be sad—but far better and far less demoralising to the rank and file of the RUC that it should come about as part and parcel of one final comprehensive package deal rather than as yet one more capitulation in the seemingly never-ending war of attrition: death by a thousand cuts.

Perhaps I may suggest a possible compromise. If the Minister will agree to an amendment on Third Reading to postpone the coming into operation of Clause 24 and Schedule 2 for 12 months, or until the Patten Commission has reported—whichever may be the sooner—I shall be glad to withdraw the amendment. The commission may recommend the status quo, in which case Schedule 2 could remain in limbo indefinitely. It may recommend a third, middle way for which there could be swift legislation. Alternatively, it may recommend acceptance of the wording proposed in Schedule 2, in which case it could be brought into operation immediately and without delay. With that offer, I beg to move.

3.15 p.m.

My Lords, I am happy to support the amendment moved by my noble friend Lord Monson. The thrust of the Good Friday agreement was harmonisation between Northern Ireland on the one hand and the Irish Republic on the other. For understandable reasons, the wordsmiths were anxious to avoid specifics in many key areas and this is one. One would not have expected the two governments to reveal to the innocent the formula of November 1997 at which the wordsmiths were required to work—and I quote as I have in your Lordships' House many times:

"While it would not be possible to grant the demands of Mr. Adams, we shall provide the mechanism to deliver them".
That provides us all with food for thought.

The undertaking was established in full in the Good Friday agreement. The 71 per cent. endorsement was obtained in the referendum by a mixture of crude threats from some quarters and naked pressure from others. There was also a degree of manipulation of the news industry on a scale which sometimes made Dr. Goebbels look like a blundering amateur.

The torture is being repeated in advance of Thursday's assembly elections to ensure that the above-mentioned mechanism—namely, the promised conveyor belt—is set in motion as soon as possible thereafter. To some extent, the Police (Northern Ireland) Bill preceded formal approval of the agreement. It was then presented as a "confidence building measure"—wonderful words—not specifying whose confidence. Being interpreted, it means "increasing the confidence of terrorists and eroding the confidence of the law-abiding citizens of Northern Ireland and the United Kingdom in general".

As the text of the Bill stands, it is outdated by the Good Friday agreement which, by means of the conveyor belt, seeks to press forward measures to secure harmonisation over many areas. But the Bill before your Lordships, in Clause 24 and Schedule 2, creates a yawning gap between the declaration required of the police in the Irish Republic, quoted by my noble friend Lord Monson, and, in the case of the Royal Ulster Constabulary, a mere affirmation to "discharge duties", which is not very different from the promise made by the Sainsbury recruit when interviewed for a job on the check-out.

The Garda recruit will not be enlisted unless and until he has declared before God that he will render good and true service and obedience to Ireland, and to its constitution, and to its government. The noble Lord, Lord Monson, asked what is wrong with that. I am not certain that many Members on the Benches to my left would in former times have pledged allegiance to the government which existed for some 18 years. Not only is the constitution by law established, but also the government. That is an intolerable demand to make of any policeman in any nation anywhere.

I find it curious that nowhere in the negotiations leading up to the so-called Good Friday agreement did any Dublin police federation draw attention to the inferior position in which the Irish police now find themselves. We are told that the convoluted text of the Good Friday agreement is sacred, even more so than the Dead Sea Scrolls, and that not even a word can be changed by either Prime Minister. I acknowledge that your Lordships' House cannot legislate to relieve such an imposition on the Irish police as our jurisdiction does not extend that far. However, Clause 75 of the Bill provides for implementation on different days for different purposes. Would it be possible to obtain an undertaking that Clause 24 shall not be implemented until the Government of the Irish Republic have had a reasonable opportunity to modernise their laws, and thus build confidence within the Irish police security forces?

My Lords, I strongly support the amendment. The notes to the Bill made it clear, as I pointed out on Second Reading (at col. 1362 of Hansard), that the amended form of the oath was put forward for no other reason than that it goes some way to "meeting nationalist concerns". That is not the same as addressing a perceived problem for Catholics wishing to join the RUC. Those few brave men and women who have done so—few because to do so means putting at risk their lives and those of their families, not only during their service but for ever—had no problem with swearing allegiance to the Crown any more than Catholics did in the Armed Forces or in the UK Parliament, because this is above party.

The only people with a problem are Sinn Fein/IRA. Once again, the Government are putting the perceived wish of a militant minority above that of the majority. The majority of people in Northern Ireland do not vote Sinn Fein/IRA and wish to remain part of the UK. I should dare to guess that if a poll were taken in the RUC, an overwhelming number would wish to keep the present form of affirmation and that they would have the support of the vast majority of ordinary people, Catholic and Protestant.

To put this change through, tucked away in Schedule 2 is one more signal that the Government are more interested in, at worst, pleasing the IRA and, at best, in pandering to a general media view that the Queen, the National Anthem and the sinister word "Royal" are not part of Cool Britannia and can easily be discarded. But I do not believe that that is the view of most ordinary people in Northern Ireland. That is not what they think of the Crown. They value the connection and it means a great deal to them. It is arguable that the RUC's commitment to the Crown and all it stands for, above party, has been a decisive factor in their will to continue to serve.

Do the Government really wish to make a move which is likely to demoralise and anger so many serving officers, let alone those who are in retirement because of injuries sustained in the line of duty? They all have families and the families have votes. This is a time to reassure the majority who want peace but who also want their point of view to be listened to and respected.

I hope that the Government will recognise that to retain the existing oath will send an important message to the majority and will not discourage anyone but Sinn Fein/IRA. No one will grieve for the new formula and I hope very much that the Minister will feel able to accept the proposal made by the noble Lord, Lord Monson; namely, that at least a decision might be deferred until the Patten Commission has reported and until it has been possible to see this matter in a proper light, away from the pressures of the coming election.

My Lords, I am so often in agreement with the noble Baroness that it is disorienting for me to disagree with her, as I must do this afternoon. However, I do not support the amendment and I should like to explain briefly why that is so.

It is extremely difficult for us to be discussing the Bill at this particular juncture. The Patten Commission has only just been established and it is obviously crucial that the morale of the RUC, which has borne so much of the heat of the day in Northern Ireland, should be sustained. Nevertheless, this new oath, as contemplated, is not difficult for new members, new constables, to make. It is straightforward.

By contrast, the amendment seeks to say that there is something special about the form of the present oath. That dates back a long way, in fact to the Constabulary (Ireland) Act 1836. Although I can see that in this House we may be particularly watchful of tradition, it is worth noting that the oath which is made on the mainland by MPs, justices of the peace and constables has been revised during the past 160 years. Therefore, there does not seem to be any intrinsic reason why the equivalent oath in Northern Ireland should be immune to change.

However, the crucial reason for rejecting this amendment is, of course, the Good Friday agreement, which was mentioned by the noble Lords, Lord Monson, and Lord Molyneaux. That agreement states that the participants,
"believe that this agreement offers a unique opportunity to bring about a new political dispensation which will recognise the full and equal legitimacy and worth of the identities, sense of allegiance and ethos of all sections of the community in Northern Ireland".
It goes on:
"They consider that this opportunity should inform and underpin the development of a police service representative in terms of the make-up of the community as a whole".
Therefore, the Good Friday agreement makes it plain that the police service must be reformed to accommodate the allegiances, identities and ethoses which were not represented—it is no good pretending that they were—by the 1836 oath. The current drafting of the Bill is entirely in line with both the letter and sprit of the Good Friday agreement. That is why I trust that the amendment will be rejected by your Lordships' House.

My Lords, there is one point about which I am concerned. I notice that, under this Bill, the RUC will be covered by equal opportunities legislation which was not the case before.

I believe that the present oath is fairly inadequate. When you join a serious service, which the Royal Ulster Constabulary is, it should be a serious ceremony. The two lines which constitute the present oath are fairly weak. However, I should be concerned if a person could be found to do something illegal under equal opportunities legislation if that person were part of an organisation in Northern Ireland whose rules require that, to be a member of it, you must take an oath to the Queen, to our Kingdom.

My Lords, is there anything to prevent this Bill as it stands being examined by the Patten Commission when it is established? If the Patten Commission wishes to examine this Bill, or if anyone wishes to draw it to the attention of the commission, that can be done. The Bill had a tremendous number of changes and amendments made to it in another place.

My Lords, the noble Lord, Lord Blease, may have been looking forward to Amendment No. 4 in suggesting that the whole Bill should be left for consideration by the Patten Commission and not implemented until afterwards, but it is a shrewd point.

However, the purpose of this amendment is more limited. It is concerned solely with the change to the oath to be taken by the new members of the RUC. It seems to me that this is a particular example of pre-empting Patten in the name of modernisation, as far as I can detect. The terms of reference of the Patten Commission on policing for Northern Ireland include specifically the composition, recruitment, training, culture, ethos and symbols of the police in Northern Ireland. The commission is asked to look specifically at those aspects, and the oath is obviously a major part of that process.

Therefore, I believe that this pre-empts Patten in the name of modernisation. The present oath has survived since 1836, so it does not seem to me that there need be any particular hurry to change it when the Patten Commission is to report within 12 months or so. In any event, this Bill will not come into effect for quite a period within that year.

Every change these days is recommended with the single word "modernisation". We hear that all the time. The Government wish to modernise everything and sometimes no other argument is thought necessary. In the particular case of the RUC oath, the two Ministers in the different Houses used almost identical paragraphs on Second Reading to recommend the change. Both of them said that the new oath was "broadly similar" to that in use in Scotland. It is not precisely the same, but it is broadly similar. The Notes on Clauses state that it is copied from the Scottish oath and that ought to recommend it to the unionist community. It is true that the words used in both Houses were not precisely identical because the Minister changed the order of the words in one sentence, apparently to avoid ending the sentence with a preposition. It occurred to me this morning that the Lords Hansard writers may have tidied up the English so as not to record a Member of your Lordships' House speaking bad English, but perhaps that is an unworthy thought!

More significantly, the Minister omitted the last sentence used by Mr. Ingram, the Minister in another place. That was the sentence in which he implied—although he did not exactly say it—that the change of the oath would encourage nationalist members of the community to join the RUC. I do not believe that argument stands up to examination, as the noble Lord, Lord Monson, said in moving the amendment, and as the noble Baroness said a few minutes ago. I think the Minister was quite right not to pursue that argument in this House and to leave out that sentence on Second Reading.

The noble Lord, Lord Holme of Cheltenham, spoke of the importance of the morale of the RUC. I believe that morale is extremely important to the future of the agreement and to the future of Northern Ireland. Even if the agreement proceeds in the smoothest possible way, the high morale of the RUC will remain essential to future peace in the Province. This is, of course, a confidence-damaging measure as regards the RUC. I believe it is seen as such by many people who support the RUC, as well as by many members of the RUC itself.

The noble Lord, Lord Monson, drew a comparison with the Garda oath, which was expanded later by the noble Lord, Lord Molyneaux. It is interesting to consider the Garda oath, although I do not think we should consider that the practice in the Republic in that regard should be followed in the north. We all know that the Garda oath reflects the greater political control that is exerted over the police in the Republic of Ireland than is exerted, or should be exerted, in any part of the United Kingdom. There is a different philosophy as regards the policing of the two different countries.

Many noble Lords and others have emphasised my next point on numerous occasions. We prefer the philosophy of the independence of the chief constable and the independence of the police from the political process. However, the position is not the same in the Republic. I do not necessarily say that either approach is more or less valid. Each country must choose the approach which it thinks best for itself. However, there is no doubt about the approach of the United Kingdom. I, for one, believe that it is the correct approach.

3.30 p.m.

My Lords, the effect of Amendment No. 1 would be to remove the requirement that every member of the police force be attested as a constable on appointment. I am somewhat surprised that the noble Lords, Lord Monson and Lord Molyneaux, would wish to proceed in this way. It is the established practice, not only in the UK but in many parts of the world, that every member of the police force be attested as a constable on appointment.

The office of constable is of ancient origins. The hallmark of the present day constable remains, as in previous centuries, his attestation. Until he is so attested, by making the appropriate declaration, he or she cannot hold the office of constable. One of the effects of this would be, for example, that RUC officers would not have a constable's power of arrest while off duty. In view of this I invite the noble Lord to withdraw the amendment.

I turn to Amendment No. 5. I believe we are now getting to the core of the issue. All noble Lords who have taken part in this debate have referred to this amendment, implicitly or explicitly. As noble Lords will be aware, the Bill changes the declaration of office made by RUC constables to a form broadly similar to that used to affirm constables in office in Scotland. This measure is in line with other changes in recent years to oaths or declarations of office throughout the criminal justice system. As noble Lords will know, for example, modernising changes have been made to the oaths taken by jurors and QCs.

Outdated and overly-complex language has been eliminated and clear, simple wording used. The new declaration states,
"I hereby do solemnly and sincerely and truly declare and affirm that I will faithfully discharge the duties of the office of constable".
That is clear, simple wording. The role of the police in Northern Ireland—

My Lords, I hope the Minister will forgive me for interrupting. Does he agree that it could be just as simple and still contain the oath of allegiance to the Crown? That is the issue. We are perfectly happy with an amended and simpler statement; what is missing is the allegiance to the Crown. That is what we want to see put back in.

My Lords, I said that in Scotland—where I believe these arguments have not arisen—the oath is similar to the one that I have read out. I shall deal later with the point that the noble Baroness has mentioned.

The Government have considered this matter carefully and have taken into account the views of, among others, the Police Authority for Northern Ireland. Indeed change was recommended by the Police Authority, the body responsible for putting forward the views of the community in Northern Ireland. The Government believe that the new form of declaration represents a sensible change clarifying what a police officer is undertaking when he or she takes up office.

Before I ask noble Lords to reject the amendment, I shall deal with some of the specific points that were made in the course of the debate. The noble Lord, Lord Monson, suggested that implementing this provision might be postponed for 12 months to allow the Patten Commission to consider the matter. In a later amendment we shall discuss the question of an implementation date. I hope that we can deal with the matter then rather than at this point. I believe that the relevant amendment stands in the name of the noble Lord, Lord Molyneaux.

Reference has been made to the Sovereign. Other noble Lords have referred to the Garda declaration in the Republic which concerns loyalty to the constitution. I hope the noble Lord, Lord Molyneaux, will not mind my chiding him, but I was surprised when he said that the RUC should adopt the same practices as the Garda. I believe I have quoted him accurately.

My Lords, I am grateful to the Minister for giving way. However, I was saying exactly the opposite. We want to allow the Garda time to bring its requirements, affirmation and oath into the 20th century. That is all I am saying.

I am sorry if I misunderstood that. I apologise to the noble Lord. However, I understand that the constitutional relationship of the Garda to the Irish state is not the same as in the jurisdiction of the United Kingdom. The Government want to make the best arrangements for Northern Ireland. It is the interests of Northern Ireland which determine the nature of this provision, as indeed is the case with the whole Bill.

As regards the point made by the noble Lord, Lord Monson, I have already said that I shall discuss the commencement date when we discuss Amendment No. 4. The noble Lord, Lord Glentoran, asked about the police being subject to equal opportunities legislation. Currently the RUC is subject to fair employment legislation and equal opportunities legislation. I believe that the noble Lord, Lord Blease, asked, why not wait for the findings of the Patten Commission? The Government regard this Bill as a foundation or paving provision. It puts into statute a number of structural changes on which it expects the commission on policing will want to build. It shows that sensible evolutionary change is possible and will produce real benefits within a finite timescale, providing essential reassurance for the community as a whole. These provisions were arrived at after extensive consultation, and there is widespread support for many of them. They include objective-setting, planning processes and complaints. Indeed, the text of the Good Friday agreement and the terms of reference for the independent commission were predicated on the passage of the Bill and its early implementation.

I am checking to see whether any other questions were put to me.

My Lords, while the Minister checks, perhaps I may inquire whether he believes that the reference to Her Majesty the Queen will somehow make a policeman less acceptable to the population. Does the fact that the ombudsman is to be appointed by Her Majesty—a specific provision in the Bill—weaken the acceptability of the Ombudsman?

My Lords, I do not accept that argument at all. As a debating point it is interesting, but in terms of substance I do not for one moment accept it.

The noble Baroness, Lady Park, suggested that this provision would somehow appease the IRA. Emphatically, we are not seeking to appease the IRA. We are seeking to achieve good and proper policing in Northern Ireland and to make the changes necessary to bring that about. I hope very much that the noble Baroness exaggerated when she said that there was demoralisation among serving RUC officers. The Government have given RUC officers many assurances. I believe that the RUC understands the changes that are taking place, why they are taking place, and that they are in the interests of the service as a whole. I appreciate the support given by the noble Lord, Lord Holme, when he said that the new oath is straightforward. I believe it has the particular merit of being simple.

The noble Lord, Lord Cope, also talked about pre-empting the Patten Commission. I have dealt with the substance of that. Perhaps I may add to my remarks regarding the fact that the reference to Her Majesty in the oath is to be removed. We are seeking to ensure that all members of the community feel able to join the RUC provided that they qualify. The tests are quite stringent. The belief is that by making this change we shall make it easier for some Catholics to join the RUC.

I accept the point made by several noble Lords that the main deterrent to Catholics joining the RUC has been intimidation, threats to their families and their homes. That is deplorable. It must be removed if there is to be any progress in Northern Ireland. Nevertheless, it may still deter some to have the oath that presently exists. The Government believe that the change will make the oath that much more acceptable to people. What we want is an RUC in Northern Ireland which has among it people from all the communities it serves. The RUC has served all communities valiantly and courageously over many years. That is why we are making these proposals. I invite the Committee to reject the amendment.

My Lords, I am grateful to my noble friend, Lord Molyneaux and the noble Baroness, Lady Park, for their powerful support. I am also grateful to the noble Lord, Lord Cope, on the Conservative Front Bench. As he said, the clause and the schedule in question are an example of pre-empting Patten. Why on earth should we be doing that?

I thought that just for once the noble Lord, Lord Holme of Cheltenham, and myself might find ourselves in agreement, but no such luck. The noble Lord said that it was important for the morale of the RUC to be sustained. If you want further to erode the morale of the RUC, Schedule 2 does exactly that. The noble Lord also complained that the oath in Northern Ireland had not been changed since 1836, whereas it had been changed in England and Wales. Very well, why not update the Northern Irish oath to bring it into line with that in England and Wales—a halfway house, so to speak, or less than a halfway house. Why knock out any reference to the monarchy altogether?

The noble Lord also implied that to pass these amendments would be in conflict with the Good Friday agreement. But it is wrong to imply that the Good Friday agreement requires the insertion of these words in the Bill. That is a job for the Patten Commission.

Finally, the noble Lord said that it was very important—

3.45 p.m.

My Lords, I am grateful to the noble Lord for giving way. This is a difficult matter. However, will he concede that the essence of the Good Friday agreement is to find forms and institutions which have a legitimacy to which members of both communities can respond, rather than continuing to assert the primacy of the Protestant and unionist tradition?

My Lords, so far as the police are concerned, that is a matter for the Patten Commission. It may take a different view from that taken so far by the Government. It may decide on a different form of oath altogether. I am disappointed that both noble Lords, speaking for the Liberal Democrats and for the Government, seem so concerned to change everything so as to appeal to, and make life easier for, those with strong republican opinions, when there is no attempt south of the border to appeal to the few unionists who remain by making their life easier by changing oaths and so on. But so be it.

The Minister said that if we were to agree to Amendment No. 1, there would be no form of attestation whatever. That surprises me. The RUC is not being formed from scratch; it is already in existence. I should imagine that if Amendment No. 1 were agreed to, the oath would remain as part of the procedure. Perhaps I am wrong. The noble Lord has access to much greater expertise, so I shall have to study that point.

There are many noble Lords in the House but relatively few in the Chamber. Also, as the amendment seems to be defective, I shall to have look into it again. I shall therefore not press the amendment today. However, I reserve the right to return to the matter at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 64 [ Regulations]:

Page 34, line 3, leave out ("shall") and insert ("may").

The noble Lord said: My Lords, it is suggested that with this amendment we should also discuss Amendment No. 3. The rather interesting Clause 64 under which the Secretary of State may make certain regulations, and particularly subsection (2), under which the Secretary of State is required to make certain other regulations, brings into the debate the dreaded figure of Henry VIII to loom over us.

Amendment No. 2 suggests that the Secretary of State, instead of being obliged to make the regulations set out in subsection (2), should have the power to do so. It is a modest amendment; nevertheless, it seems worth bringing to your Lordships' attention. There are 14 parts to the regulations the Secretary of State is obliged to introduce under subsection (2). I am not sure that that amounts to 14 sets of regulations; certainly, however, there are 14 elements. I am not quite sure by when he would be obliged to bring them in; he is merely obliged to bring them in. Presumably that does not mean by the time of Royal Assent; perhaps the commencement Act will state when. That is odd when applied, for example, to paragraph (e) which states that the Secretary of State shall, by regulation, provide,

"for enabling the Ombudsman to dispense with any requirement",

of the Bill—not every requirement, but "any requirement". That seems to me to be an extraordinarily wide power.

My Lords, excuse me for interrupting, but the words are,

"any requirement of this Part",
of the Bill.

My Lords, I beg your pardon. Yes, it is "any Part" of the Bill. If that is not what I said, it is what I should have said, and I accept the correction.

If all these sets of regulations are to be required from the Secretary of State, it would have been a good idea if some of them had been put in the primary legislation.

Amendment No. 3 goes particularly to paragraph (1) in subsection (2), which requires the Secretary of State to make regulations so that,
"the Chief Constable shall have power to delegate any functions conferred on him by or by virtue of this Part"
of the Bill—that is, the part dealing with the ombudsman. It seems to me odd that the Secretary of State must make regulations giving the chief constable the power to delegate. There are earlier clauses in the Bill which allow the chief constable to appoint someone to act in his place in various other circumstances. I am interested to know why it is regarded as essential that the Secretary of State should make regulations of this kind at this point and why these powers have not been put into the primary legislation instead of being left to regulations, thus obliging your Lordships' House, apart from anybody else, to consider all these matters again when the various sets of regulations come before us. An enormous number of sets of regulations regarding Northern Ireland flow from the overall structure of legislation in the Province and this Bill provides for an enormous increase in the number of such regulations.

My Lords, I am happy to support the amendments of the noble Lord, Lord Cope. His final point referred to the chief constable having power to delegate any functions. With great respect to the chief constable and his immediate subordinates, I believe that that is a provision that we ought to look at very closely. There are circumstances in which such a power could be undesirable. I am not thinking in this regard of any given chief constable or any given subordinate, but my experience in dealing with chief constables over decades, more latterly as a Privy Counsellor, has given me an insight into functions which are not apparent to the general public. There is, for example, the relationship with the Secretary of State and the minister responsible for security in the Northern Ireland Office. I imagine that that would not be the kind of situation that one would expect in the case of the Metropolitan Police.

To some extent, when faced with a crisis—and I have been at least on the fringes of many of them—the chief constable, the Secretary of State and the minister for security work as a kind of trio. Given their overlapping powers, I do not see how it could be otherwise. The Chief Constable of the Royal Ulster Constabulary is in a real sense the chief security adviser to the Secretary of State. He has to a great extent—and the House may be a little alarmed by this news, although it should have been apparent—a degree of jurisdiction over the Army, which does not come under the Northern Ireland Office. Again, I am not thinking of personalities, but I take the view that it would be unwise to regard this situation as comparable to that of a fairly minor constabulary anywhere else in Great Britain. We are dealing with a key appointment. The chief constable rightly has access to state secrets and is in close co-operation with the elected Secretary of State and the elected minister for security. We should consider carefully whether we want those onerous duties to be shared with a subordinate of the chief constable.

My Lords, I have a great deal of sympathy for Amendment No. 2 moved by the noble Lord, Lord Cope of Berkeley, to substitute "shall" in line 3 on page 34 with "may". I shall listen closely to the Minister's response as to why the mandatory verb is essential here.

I think that the noble Lord, Lord Cope, and I part company as regards Amendment No. 3 to delete lines 46 and 47. I think I may agree with the noble Lord, Lord Molyneaux of Killead, on this point, although I am not sure that I am clear about the final line of his argument. These are onerous responsibilities, whether they are mandatory or conditional. I think that, as a matter of practical administrative procedure, it is unlikely that, should the Secretary of State need to make these regulations, he would not want the chief constable to have power to delegate some of the functions conferred on him.

My Lords, before I deal with Amendments Nos. 2 and 3, I should like to correct an error I made in dealing with Clause 64(2)(e) in Committee. Hansard was accurate and I was not.

Clause 64(2)(e) states that the Secretary of State shall by regulations provide,
"for enabling the Ombudsman to dispense with any requirement of this Part".
It replicates Article 19(2)(e) of the Police (Northern Ireland) Order 1987.

In Committee I said that it would enable the ombudsman to ask the Secretary of State to remove a provision if it was not working well or was particularly onerous. That is not, I am afraid, entirely accurate. The subsection is targeted at the Secretary of State regulating to enable dispensation by the ombudsman from the full rigours of the part of the Bill. It would not be used to remove a whole provision.

It may be helpful if I give your Lordships an example under the existing legislation. The example will undoubtedly be repeated in regulations under the Bill. Under Regulation 17 of the Royal Ulster Constabulary (Complaints etc) Regulations 1988 the commission may, if requested to do so by the appropriate authority (which means the chief constable or police authority),
"dispense with the requirements mentioned in paragraph (1)".
In other words, where a complaint is anonymous, repetitious or vexatious, or it is not reasonably practicable to complete the investigation of a complaint, then the commission, on application by the appropriate authority, can decide that the requirements of the order should be dispensed with. The investigation would be curtailed. Obviously this makes sense. The provision would apply, for example, if a complainant made the same allegation several times or failed to provide any evidence to back up the complaint. The ombudsman may conclude in these circumstances that there is no purpose in a full investigation. The regulation-making power is, therefore, necessary, and has been used in the past. I apologise to noble Lords for not describing its purpose accurately in Committee.

The noble Lord, Lord Cope, has tabled two amendments to Clause 64. First, he seeks to substitute "may" for "shall" in Clause 64(2). The effect of this would be to make it purely discretionary for the Secretary of State to make regulations for the procedures to be followed by the ombudsman when dealing with a complaint. However, the whole ombudsman system would not work unless regulations of the type listed in Clause 64(2) are made. It must be a duty on the Secretary of State to provide regulations for the handling of complaints, informal resolution, and so on. Indeed, the current formulation is the same as that in the Police (Northern Ireland) Order 1987 for the Independent Commission for Police Complaints and that in the Police Act 1996 for the Police Complaints Authority. I therefore ask the noble Lord to withdraw his amendment.

I now turn to the second amendment, which seeks to delete the provision in Clause 64(2)(1) allowing the chief constable to delegate his functions under this Part of the Bill to another senior officer. I mentioned this point in Committee. This provision is necessary, as otherwise the Chief Constable would have to do everything personally. It is not a new provision. It is seen in Article 19 of the Police (Northern Ireland) Order 1987 and Section 81 of the Police Act 1996.

The power has been used in regulations deriving from the 1987 Police (Northern Ireland) Order. The RUC (Complaints, etc) Regulations 1988 provide that the Chief Constable may delegate the provisions in Articles 4 to 14 of that order, which relate to the handling and investigation of complaints and disciplinary proceedings to the deputy chief constable or an assistant chief constable. The regulations also provide that the chief constable may delegate all or any of his functions or duties in relation to the informal resolution of complaints to a member of at least the rank of chief inspector.

Perhaps I may turn briefly to the specific points made by the noble Lord, Lord Cope. He asked whether we need 14 sets of regulations. We do not believe that we do. But it is envisaged that there will be a number of regulations covering the framework for dealing with complaints. That is a similar arrangement to the existing one found under the Police (Northern Ireland) Order 1987 for the Independent Commission for Police Complaints. The regulations will commence when that part of the Bill commences.

The noble Lord, Lord Molyneaux, suggested that it may be undesirable for a chief constable to delegate. But the power is for the Secretary of State to make regulations on complaints issues. The examples I mentioned show the limited extent of the delegation that we intend. I am sure your Lordships will agree that the regulation-making power serves an important purpose and I therefore ask the noble Lord to withdraw his amendment.

4 p.m.

My Lord, before my noble friend sits down, I apologise for not even whispering notice that I would make this point. However, the House did not know that he would give that explanation of the meaning of one of these provisions when he gave his explanation in Committee.

Am I not right in thinking that some consideration ought to be given to the wording of paragraph (e) of Clause 64, which states that the Secretary of State shall provide regulations,
"for enabling the Ombudsmen to dispense with any requirement of this Part"?
The argument that my noble friend worthily put forward relates to paragraph (1), which says that,
"the Chief Constable shall have power to delegate any functions conferred on him by or by virtue of this Part".
Would it not be perfectly proper for the ombudsman to say that he can dispense with that requirement because it is a "requirement of this Part" of the Bill? Perhaps the Minister will look at that point between now and Third Reading.

My Lords, I thank my noble friend for raising that matter. I shall look into it rather than give an answer today.

My Lords, the Minister was kind enough to correct one error that he made in the course of the Grand Committee proceedings. As a matter of fact, there was another to which I should perhaps draw his attention. It appears in Hansard of 8th June at col. 31 and relates to the fact that the Delegated Powers and Deregulation Committee considered the regulation-making powers in this Bill and reported that it was content, save for one small point in relation to Clause 64(2). In fact, it was in relation to Schedule l paragraph 2(2). That was the power which was criticised, though not very strongly. That is why I did not pursue it.

The Minister said a few minutes ago that he was referring to Clause 64(2)(1); I believe he meant Clause 64(2)(1). It is difficult to see in print the difference between a small "1" and a large "1". For the sake of those who might read our proceedings I should like to correct that.

Having said that, I am not entirely happy about the vast amount of matters which have been left to regulation in the Bill. That is part of an undesirable tendency which I endeavoured—not very successfully—to combat while a Minister in the other place. Nevertheless, I do not wish to press the amendments at this point and beg leave to withdraw Amendment No. 2.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Clause 75 [ Commencement]:

Leave out Clause 75.

The noble Lord said: My Lords, Amendment No. 4, which seeks to delete Clause 75, is a probing amendment. It provides an opportunity for your Lordships to examine the relationship between the provisions of the Bill and the Patten Commission.

In Committee, the noble Lord, Lord Cope of Berkeley, drew attention to what appeared to be a never-ending stream of reports. We would be doing much to stabilise the situation if we could guarantee a kind of closed season for some years, to allow already approved changes in legislation to become established before we pull up the plant yet again to see how the roots are getting on.

I take the view that there is adequate provision in the Bill to authorise reporting arrangements without overlaying them with yet another layer in the form of the Patten Commission. I sometimes wonder what would have been the reaction of Londoners in September 1940—the climax of the Battle of Britain—if Churchill had established a commission to examine the structures, methods and attitudes of Fighter Command and to take account of the sensitivities of the Luftwaffe bomber crews. Such a proposal may well have been regarded by residents of the South-East generally as ingratitude for the protection provided by the few in those critical months.

In Committee I expressed reservations about the two sets of inquiries proceeding in tandem. The present Police (Northern Ireland) Bill before us is to be implemented as and when the Secretary of State feels it desirable, without at this stage any apparent guidelines as to the timing. While I remain uneasy about the possibility of the Patten Commission producing proposals for measures which will conflict with this Bill, to some extent I was reassured by the reply of the Minister in Committee to my question as to which of the two—the Patten Commission or the Bill—would carry the greater weight. I welcomed the declaration by the Minister on that occasion that Patten is not empowered to override Parliament. I am grateful for that assurance, as I am sure are other noble Lords. That reply clarifies the relative positions and is therefore helpful to all concerned.

In Committee, the Minister was also good enough to explain that it would not be possible to delay Royal Assent given that Patten would not report for around another year. For the avoidance of uncertainty, perhaps it will be possible to reduce that timetable for Patten—a point which seemed to be misunderstood in the earlier debate. That would give the Irish Government time to modernise their rules, declarations and oaths regarding their security forces. In addition, it may be possible for

the Secretary of State, armed with Clause 75(2) terminology, to

"appoint different days for different purposes and for different provisions",

to ensure that there exists a degree of cross-reference between the mechanisms of this Bill (shortly to be approved by Parliament), and the thrust of the Patten Commission. That may be a useful safety device when the Secretary of State comes to drafting the "principles for policing" as provided for under Clause 37. I beg to move.

My Lords, though I realise that this is only a probing amendment, I fully understand my noble friend's reasons for moving it. As I said when moving Amendment No. 1, it is the steady drip, drip erosion of the ethos of the RUC which is so demoralising. New legislation seems to arise every few months. Something in the Minister's voice when he was replying to Amendment No. 1 suggested that he might look favourably on the idea of postponing the coming into operation of parts of the Bill, in particular, Schedule 2. I hope I am right in that assumption.

If the Government refuse to yield on anything, they will confirm the growing impression that 90 per cent. of the concessions made in Northern Ireland in recent months, together with those in train, are being made by the unionist community, using the term "unionist community" in its broadest sense. Such an imbalance is not a recipe for long-term peace.

My Lords, this Bill turns out to be badly timed. I do not think that is entirely the Government's fault. Indeed, the reasons why it has turned out that way are to some extent to the Government's credit because they flow from the successful agreement reached on Good Friday.

The Bill has been a long time in gestation and has now reached its final stages. But it will not come into effect until next year, and by next summer we shall have a report from the Patten Commission which will go over a great deal of this ground again, judging by the enormously long terms of reference given to the Patten Commission. Those terms of reference include the requirement that its proposals should be designed to ensure that the scope for structured co-operation with the Garda Siochana and other police forces is addressed. I am not sure exactly what "the scope for structured co-operation … is addressed" amounts to, but clearly that is one aspect of it.

At Second Reading in another place the Minister of State said that the Bill might be amended during the course of its passage to allow for any of the effects of the agreement, if an agreement were reached. It is difficult to see that that can be done now unless the coming into effect of the Bill is postponed for a time so as to make sure that we know what the Patten Commission recommends. The Minister seemed to be hinting slightly that the provisions would be brought into effect in different ways. Therefore, I look forward to hearing what he has to say in response to this interesting amendment.

4.15 p.m.

My Lords, the effect of the amendment would be to delete Clause 75 and thus bring the Bill into force immediately on Royal Assent. I think that is contrary to the noble Lord's intention, which is to ask why we are putting forward the Bill at this time. Technically, his amendment is likely to have the opposite result of the one intended.

I am aware of the noble Lord's concerns, which he articulated during our debate in Committee, about implementing the provisions of the Bill in advance of receipt of the findings of the independent commission. Indeed, I recall that he suggested that Royal Assent should be withheld until the Patten Commission had reported. In addressing this concern I cannot overemphasise the importance of the Bill as a clarifying measure. As I have said on a number of occasions in the House, the provisions in the Bill are designed to establish a more efficient, effective, accountable and acceptable police service in Northern Ireland. The Bill contains a number of significant provisions which I believe it would not be proper to delay until the Patten Commission had reported.

Let me remind your Lordships of one or two of those significant provisions. The Bill preserves the operational independence of the chief constable; it preserves and more clearly focuses the role of the police authority; and it introduces new police objective setting and planning mechanisms. In addition, it enables financial responsibility for the day-to-day management of policing to pass to the chief constable from the police authority; it provides for the establishment of a new independent system for investigating complaints against the police; and indeed there are many other important provisions.

I think it would be remiss of the Government not to proceed with the Bill and to give effect to it. After all, we do not know what the Patten Commission will propose and we are liable to delay any changes for a great deal of time because, as the noble Lord, Lord Molyneaux, said, the Patten Commission will make recommendations. It is likely that to give effect to those, if the Government agreed with the Patten Commission, there would have to be further legislation. That is a quite lengthy process so we would be delaying matters for a long time if we were to go down the path suggested by the noble Lord.

My right honourable friend the Secretary of State has said that the Bill will be implemented in April 1999. The Patten Commission is to report in the summer of 1999. To convert the Patten Commission's conclusions into legislation, if the Government were so minded to agree with them, means that we would be talking about another year and a half or longer. I believe that that would not be the right way forward. The Secretary of State is very anxious to make proper progress.

The noble Lord, Lord Monson, said that 90 per cent. of the Bill's concessions were to nationalists.

My Lords, I am sorry if I did not speak clearly enough for the noble Lord. I was not talking specifically about the Bill; I was talking about the concessions made generally in Northern Ireland over the past few months and those that are in train at the moment.

My Lords, I do not agree that the majority of the concessions have been made to nationalists. I think that concessions have been made fairly even-handedly across both communities. However, I think it would be trespassing on the time of the House this afternoon if I were to be tempted to go down that path and try to elaborate. I think we ought to leave that point for another day.

There was widespread support for the Bill's provisions as it left another place. Its aim is, after all, to provide effective and fair policing for all people in Northern Ireland. I believe that is the right way forward. I urge the noble Lord to withdraw his amendment, particularly as it will not have the effect which he intends it to have.

My Lords, the noble Lord will recollect that in my opening words I said that this was a probing amendment and that we wanted to discover the Government's thinking on this matter. It is very interesting and reassuring that the Secretary of State has given a target date for the implementation of nearly all of the provisions, because at earlier stages there was an implication that it would be a never-ending process and that parts would be introduced from time to time without any coherent plan.

I derived great reassurance from what the Minister appeared to be saying in his final words—I do not want to put words in his mouth—that the Government hope to bring the legislation into effect and have it in place. Then there was something he did not say but I would say. I hope that, that being the case—the will of Parliament having been expressed on these matters and the Bill having been carried through both Houses and receiving Royal Assent—the Patten Commission might respect the will of Parliament and would not lightly embark on changes which would be likely to cut clean across what your Lordships' House and the other place have put in place.

My Lords, before the noble Lord sits down, perhaps I may say, for the avoidance of doubt, that the Patten Commission has a free hand to decide the best way forward. I would not wish to say anything to, as it were, limit the freedom of the Patten Commission to deal with its terms of reference.

My Lords, I am grateful to the Minister for that clarification. However, I should have thought that, your Lordships' House having given the final seal of approval to this legislation, it would not entirely welcome a suggestion from the Patten Commission that it should overturn its previous conclusions just because the commission had produced proposals which ran counter to what we have put in place today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 [ Form of declaration]:

[ Amendment No. 5 not moved.]

National Lottery Bill Hl

4.19 p.m.

My Lords, I beg to move that the Commons amendments be now considered.

Moved, That the Commons amendments be now considered.—( Lord McIntosh of Haringey.)

On Question, Motion agreed to.

Commons Amendments

[The page and line refer to Bill (148) as first printed for the Commons.]

Commons Amendment

1 Clause 1, leave out Clause 1.

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In doing so I should like to speak also to Amendments Nos. 2, 4, 5, 6, 7, 8, 9 and 12. The Government are determined to ensure that the lottery is given the most effective regulation possible to provide the objectivity, independence and transparency that the public rightly demands. The Bill, when it left this House, recognised the importance of widening the experience and expertise brought to bear on the selection of the lottery operator. It made provision for an advisory panel to help the director general with that task. But we have looked at this again and, particularly in the light of recent events, the Secretary of State has concluded that there is more that we can do to ensure that the public can have confidence in the independence and objectivity of the regulator. In particular, a move away from a focus on a particular individual will help to remove any possible criticism as regards conflicts of interest, actual or perceived, which threaten effective regulation.

I should say at this point that none of what is proposed should be taken as any criticism of the acting director general or his staff, whose professionalism and commitment are not in question. These amendments therefore replace the post of director general and the advisory panel currently provided for in Clause 1 and Schedule 1 to the Bill with a new national lottery commission. That commission will consist of five members whom the Secretary of State will appoint. It will be a permanent body which will take on the same statutory functions and duties as the director general. Therefore, its role will be to ensure that the lottery is run and promoted with all due propriety and that the interests of all players are protected and, subject to those duties, to do its best to ensure the best possible return for the good causes.

The commission will be able to choose one of its members as a chair to run meetings and to act as spokesman for no more than a year at a time. No member will be reappointed immediately so the responsibility is rotated between members. I appreciate that noble Lords might find an analogy with the rotating presidency of the former Republic of Yugoslavia, but nevertheless, I hope that they will put such thoughts out of their mind and recognise the appropriateness of this solution.

This measure will avoid focusing attention and influence undesirably on any individual. The new commission will have in its armoury the power already contained within the Bill to fine licence holders. That fills a gap highlighted by the Select Committee on Public Accounts. Any fines levied will go to the good causes and not to the Treasury. The power to fine will apply in respect of existing licences as well as future awards. The commission will be supported in its work by the existing Oflot staff. The amendments will provide for their employment by the commission on the same terms and conditions as they currently hold, save that the commission will not be a Crown body and so its employees will not be civil servants. I believe that these provisions ensure a lottery which will inspire full public confidence. I commend these amendments to the House.

Moved, That this House do agree with the Commons in their Amendment No. 1.—(Lord McIntosh of Haringey.)

My Lords, I thank the Minister for his explanation of these changes, but I put on record my disquiet at the practice of legislating on the hoof. No hint of these amendments was given when the Bill passed through Committee nor when it was read a second time in the other place. The Government only introduced the necessary amendments in Committee in the other place, I believe, last month.

As the noble Lord stated, the intention was to restore public confidence in the regulatory system following events surrounding the resignation of Mr. Peter Davis, the previous director general. But it would be a great pity if governments felt that they had to legislate every time a regulator or regulatory system was criticised in the press. As everybody knows, public confidence in the regulator fluctuates with every newspaper headline. Who now remembers the events which gave rise to these amendments?

My present purpose is only to point out that the regulatory system for a natural monopoly should not be changed in response to passing events because any change in the regulatory structure in one sector is bound to have knock-on effects on the regulatory regime as a whole. The amendments introduced by the Government seem to pre-empt the consultation envisaged by the White Paper, A Fair Deal for Consumers: modernising the framework for utility regulations, published in March 1998. In that document the Government put forward three possible models for regulation as an alternative to an individual regulator. They were a statutory advisory committee to assist each regulator; the replacement of individual regulators by small executive boards and the replacement of individual regulators by small commissions. In these amendments the Government seem to have opted for the third model. Is this now the Government's preferred model for all monopoly regulation or will there be a different regime for each sector? What about the promised consultation? I hope that the noble Lord will answer these questions.

I am not particularly happy about the procedure for rotating the chairmanship of the commission around the five members every 12 months, quite apart from the example to which the noble Lord alluded. Is the rotation also intended to be a general model for the regulatory system applying to other monopolies? If so, I see some disadvantages, not least the danger that it will produce a weak regulator and not a robust one, with everyone shuffling off responsibility to another member of the commission. I should be grateful if the noble Lord would answer the questions that I have raised.

My Lords, I am grateful to the noble Lord, Lord Skidelsky, for his response to these amendments, although he will not be surprised to know that I do not agree with the criticisms that he has made. He began by criticising us for legislating on the hoof, as he put it, with amendments which were first introduced in Committee in another place. The Government's intention to substitute a commission for the director general was in fact announced by the Secretary of State at Second Reading and therefore another place had a full opportunity to consider the issues involved.

As I am sure the noble Lord will recognise, it is not unheard of for government amendments to appear in legislation as it reaches the second House for consideration. Indeed, if there were no such possibility there would not be much point in having a bicameral legislature. I do not apologise for the fact that the Government have had second thoughts. The only question in my mind is whether they are better than the first thoughts. I propose these amendments on their merits and not on any analogy with the Yugoslav presidency or anybody else.

I do not accept the criticism that the Government are committed to legislating every time there is criticism in the press. The noble Lord will recognise that the issue of the relationship between the director general of Oflot and Camelot was rightly taken pretty seriously in the press as the Bill was going through Parliament. It would have been irresponsible for us not to think about that relationship not just in terms of individuals, but also in terms of what better security there might be for the objectivity, independence and transparency that we Want.

The noble Lord referred to the Green Paper on utilities, quite rightly and quite legitimately, but he acknowledged that what the lottery commission proposed is in line with one of the three models in the Green Paper. He asked me then whether we were going to take this proposal as pre-empting consultation on other utilities: the answer quite clearly is no. The National Lottery is different from utilities such as water or electricity, and it does not establish a precedent. If the noble Lord is concerned about a precedent I can reassure him, I hope, that no precedent is intended. The Government are considering and will consider the responses to the Green Paper on utilities and will proceed with all due propriety in that respect.

The noble Lord was worried about the proposal for the rotation of chairmanship and whether this would lead to weak regulation. I can only say that it is not the Government's intention to establish a principle of weak regulation. Provided we have members of the commission who represent expertise in the running of lotteries, gambling more generally, and the interests of players, and who have the integrity which is necessary and which is indeed the essential pre-condition for membership of the commission, I see no reason to suppose that these ladies and gentlemen will not act very effectively as a commission to control the National Lottery.

There are other examples of commissions: for example, the Radio Authority and the Independent Television Commission. Admittedly the idea of a rotating chairmanship is more unusual, but the Government rest their case for these changes on the merits of the case rather than on any analogies with other bodies or indeed on any past history in the relationship between Oflot and the licence holder for the National Lottery. On that basis, I commend the amendment to the House.

On Question, Motion agreed to.

4.30 p.m.

Commons Amendment

2 After Clause 1, insert the following new clause—

(" The Director General and the National Lottery Commission

REPLACEMENT OF DIRECTOR GENERAL BY NATIONAL LOTTERY COMMISSION

.—(1) There shall cease to be an office of Director General of the National Lottery.

(2) In consequence of subsection (1) above, in the National Lottery etc. Act 1993 (in this Act referred to as "the 1993 Act") section 3 and Schedule 2 (which relate to the Director General of the National Lottery') shall cease to have effect.

(3) After section 3 of the 1993 Act there shall be inserted—

" The National Lottery Commission.

3A.—(1) There shall be a body corporate known as the National Lottery Commission.

(2) Schedule 2A makes provision in relation to the Commission."

(4) On the day on which this subsection comes into force under section 26(2A) below, the functions conferred or imposed on the Director General of the National Lottery by or under the 1993 Act (including any functions so conferred or imposed by virtue of this Act) shall, by virtue of this subsection, be transferred to the National Lottery Commission.

(5) Schedule ( Replacement of Director General by Commission: supplementary provisions) to this Act (which makes provision supplemental to, or consequential on, this section) shall have effect.").

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2.

Moved, That the House do agree with the Commons in their Amendment No. 2—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

Commons Amendment

3 After Clause 4, insert the following new clause—

ACCESS BY COMPTROLLER AND AUDITOR GENERAL TO DOCUMENTS ETC

(".—(1) Section 33 of the 1993 Act (accounts of Secretary of State and National Debt Commissioners) shall be amended as follows.

(2) After subsection (3) there shall be inserted—

"(4) For the purpose of exercising his examination function in relation to any accounts prepared under subsection (1), the Comptroller and Auditor General—

  • (a) shall have a right of access at all reasonable times to any documents which he reasonably requires which are in the custody or under the control of any section 5 licensee; and
  • (b) shall have a right to require from any officer or employee of any section 5 licensee, or from the auditors of any section 5 licensee, an explanation of, or information relating to, any such documents;
  • but a section 5 licensee shall not, by virtue only of this subsection, be a body to which section 6 of the National Audit Act 1983 applies.

    (5) For the purpose of—

  • (a) exercising his examination function in relation to any accounts prepared under subsection (1), or
  • (b) deciding whether, or to what extent, to exercise any right conferred by subsection (4),
  • the Comptroller and Auditor General shall have regard to any information which the Director General has obtained from any section 5 licensee and which is relevant to the exercise of that function.

    (6) Where, in exercising his examination function in relation to any accounts prepared under subsection (1), the Comptroller and Auditor General obtains any information which gives him grounds to believe that a section 5 licensee has, or may have, contravened any of the conditions of its licence under section 5, the Comptroller and Auditor General shall as soon as practicable disclose that information to the Director General.

    (7) A section 5 licensee shall be under a duty—

  • (a) to permit the Comptroller and Auditor General to exercise the right conferred by subsection (4)(a); and
  • (b) to do all that may be reasonably practicable to secure that any person who under subsection (4)(b) is required to provide an explanation of, or information relating to, any document complies with that requirement;
  • and any breach of that duty shall be actionable at the suit of the Comptroller and Auditor General.

    (8) The right of access to documents conferred by subsection (4)(a) includes a right to take copies of or make extracts from documents.

    (9) In this section any reference to documents includes a reference to information held by means of a computer or in any other electronic form; and in the case of information so held the right of access conferred by subsection (4)(a) includes a right of access to, and to take copies of, that information in a visible and legible form.

    (10) In this section—

    "examination function", in relation to the Comptroller and Auditor General, means his function under subsection (3);
    "section 5 licensee" means a body which holds or has held a licence under section 5."

    (3) This section has effect in relation to accounts prepared under section 33(1) of the 1993 Act so far as they relate to periods beginning on or after 1st April 1999.").

    My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3, which stands by itself. This amendment will allow the Comptroller and Auditor General access to the records of the lottery operator for the narrow purposes of auditing the National Lottery Distribution Fund but it will not set any general precedent for access to private bodies within regulated sectors.

    This amendment will allow the Comptroller and Auditor General to examine documents held by the section 5 licence holder—that is, at the present time Camelot—and require written and oral explanations of them when carrying out his functions of examining, certifying and reporting on the accounts of the National Lottery Distribution Fund. The amendment is intended to meet the concerns indicated by the Public Accounts Committee in its 20th Report in 1996–97. The Government accepted that necessary access sufficient to complete the audit of the National Lottery Distribution Fund was appropriate in their response to the Public Accounts Committee in July 1997. The change is being introduced now, after careful consideration between other government departments and the National Audit Office. Because of the need for wide consultation it was not possible to introduce this amendment earlier, and I apologise to noble Lords that it was not possible for them to review the clause in the Grand Committee.

    The work to be carried out by the Comptroller and Auditor General will be complementary to the regulatory work currently conducted by the Director General of the National Lottery. In drafting the amendment, we are mindful that the extra compliance costs it creates should be modest. As the Minister made clear in another place, it ensures that the Comptroller and Auditor General has a duty to take into account the work undertaken by the director general and the documents available to him through Oflot. We believe that this change, which has been welcomed by the chairman of the Public Accounts Committee of the other place, will reinforce transparency in the audit of the National Lottery Distribution Fund, will add to the public confidence in the lottery and ensure greater parliamentary accountability for the sums due to good causes. I beg to move.

    Moved, That the House do agree with the Commons in their Amendment No. 3—(Lord McIntosh of Haringey.)

    My Lords, this amendment extends the control of the public auditor, as the noble Lord has just explained, over a private company. We did not raise any objection to that in the other place and I do not propose to do so now, but I would like again to put on record a couple of disquieting thoughts.

    First of all, have the Government considered that this amendment may have some compliance costs and indeed may impose compliance costs on the licensee? Have they formed any estimate of what those costs might be? Such costs, of course, come out of the profits and ultimately out of the amount of money available for good causes.

    Secondly, we are worried about how the amendment will work in practice. Is it likely to lead to litigation as to which documents the Comptroller and Auditor General may require? We are all in favour of transparency but again I would point out that there are no parallel rights of access by the Comptroller and Auditor General to the documents of the privatised utilities. Why should there be extended access in this particular case? I shall be interested to hear what the noble Lord has to say.

    A very much smaller point arises in subsection (5) which says that,
    "the Comptroller and Auditor General shall have regard to any information which the Director General has obtained from any section 5 licensee".
    Is that correct? I would have thought that both here and in subsection (6) the reference should be to the commission, but I am not familiar with the exact drafting convention.

    My Lords, I thank the noble Lord for his general support for the amendment, and I acknowledge that it is entirely proper for him to raise these matters. First, as regards the issue of compliance costs, the present situation is that the Comptroller and Auditor General concentrates his audit efforts on the department and on Oflot. Subsection (5) of the amendment provides for him to take account of the work of the director general so as to reduce the scope for duplication of effort.

    Broadly speaking, I think it can be said that he will be auditing the same things, but if this amendment is agreed to he will be auditing them directly from the documents held by the licence holder rather than doing it at second hand through the figures from Oflot. But in total the audit procedure will not be significantly more complicated. Of course the noble Lord is right. There will be some additional costs, but we believe, as does the Comptroller and Auditor General, that they will be modest.

    The department has proposed that, together with the director general and Camelot, it should discuss with the National Audit Office the way in which this clause is going to be made to work in order to ensure that there is no duplication and also to ensure that there is no burden which has not been anticipated on anyone. I do not see why there should be any need to go to litigation. The Comptroller and Auditor General will have access to all that he needs to conduct his audit. All sorts of bodies are used to the idea of the Comptroller and Auditor General having access to their papers. The Government are confident that the various parties will work closely together.

    Subsection (5) of the proposed new clause, which is Amendment No. 3, specifically provides for the Comptroller and Auditor General to take account of the work of the director general. It minimises the extent to which Camelot, the licence-holder, will be bothered. I am referring to the director general and to Oflot, but when the amendments about the commission come into force, which will be in the early part of next year, the references that I have made will be updated accordingly.

    I acknowledge the appropriateness of the noble Lord's concerns but, for the reasons that I have given, I believe them to be minimal. I commend the amendment to the House.

    On Question, Motion agreed to.

    Commons Amendments

    4 Clause 26, page 22, line 21, at end insert—

    ("(2A) The following provisions of this Act, namely—

  • (a) section (Replacement of Director General by National Lottery Commission),
  • (b) Schedule (Replacement of Director General by Commission: supplementary provisions), and
  • (c) Part I of Schedule 5 and section 25 so far as relating to that Part of that Schedule,
  • shall come into force on such day as the Secretary of State may appoint by order made by statutory instrument; and different days may be so appointed for different purposes.").

    5 Page 22, line 26, after ("and") insert ("Part II of").

    6 Page 22, line 31, at end insert—

    ("(4A) The power conferred by subsection (2A) above to make an order includes power to make incidental, consequential, supplemental or transitional provision or savings (including power to amend enactments).").

    7 Page 22, leave out lines 33 to 36.

    8 Schedule 1, leave out Schedule 1.

    9 After Schedule 1, insert the following new schedule—

    ("Schedule

    REPLACEMENT OF DIRECTOR GENERAL BY COMMISSION: SUPPLEMENTARY PROVISIONS

    Part I

    Transfers Etc

    Interpretation

    1. In this Part of this Schedule—

    "the appointed day" means the day on which subsection (4) of the principal section comes into force under section 26(2A) of this Act;
    "the Commission" means the National Lottery Commission;
    "the Director General" means the Director General of the National Lottery;
    "instrument" includes orders, rules, regulations, schemes, licences, agreements and other documents;
    "the principal section" means section (Replacement of Director General by National Lottery Commission) of this Act.

    Transfer of property, rights and liabilities

    2. On the appointed day, there shall by virtue of this paragraph be transferred to the Commission any property, rights or liabilities to which, immediately before that day, the Director General was entitled or subject in connection with any functions transferred to the Commission by the principal section.

    Transfer of staff

    3.—(1) This paragraph applies to any person who, immediately before the appointed day, is employed by virtue of paragraph 3 of Schedule 2 to the 1993 Act.

    (2) Any contract of employment under which a person to whom this paragraph applies is so employed shall have effect as from the appointed day as if it had originally been made between him and the Commission.

    (3) Without prejudice to sub-paragraph (2) above—

  • (a) all the rights, powers, duties and liabilities of the employer under or in connection with a contract to which that sub-paragraph applies shall by virtue of that sub-paragraph be transferred to the Commission on the appointed day, and
  • (b) anything done before that day by or in relation to the employer in respect of that contract or the employee shall be deemed from that day to have been done by or in relation to the Commission.
  • (4) Sub-paragraphs (2) and (3) above are without prejudice to any right of an employee to terminate his contract of employment if his working conditions are changed substantially to his detriment; but such a change shall not be taken to have occurred by reason only of the change in employer effected by sub-paragraph (2) above.

    (5) In sub-paragraph (4) above, the reference to an employee's working conditions includes a reference to any rights (whether accrued or contingent) under any pension or superannuation scheme of which he was a member by virtue of his employment immediately before the appointed day.

    Construction of references to the Director General

    4. Any enactment or instrument passed or made before the appointed day shall have effect, so far as necessary for the purposes of, or in consequence of, the transfers effected by the principal section and paragraphs 2 and 3 above, as if any reference to the Director General were a reference to the Commission.

    Continuing validity of past acts

    5.—(1) Nothing in any other provision of the principal section or this Schedule shall affect the validity of anything done by or in relation to the Director General before the coming into force of that provision.

    (2) Anything (including legal proceedings) which immediately before the appointed day is in the process of being done by or in relation to the Director General may, if it relates to any of the functions, property, rights or liabilities transferred by the principal section or paragraph 2 or 3 above, be continued by or in relation to the Commission.

    (3) Any approval, authorisation, consent, delegation, direction, licence or appointment given, granted or made or other thing whatever done by the Director General for the purposes of any of the functions transferred by the principal section shall, if in force immediately before the appointed day, continue in force and have effect as if similarly given, granted, made or done by the Commission.

    Final report and accounts of the Director General

    6.—(1) As respects any time on or after the appointed day, the duties imposed on the Director General in relation to—

  • (a) accounts, and
  • (b) the making of a report under section 14 of the 1993 Act,
  • in respect of his last financial year, or any preceding financial year for which those duties have not been discharged, shall be discharged by the Commission.

    (2) Any reference in this paragraph to the Director General's last financial year is a reference to the financial year beginning with the 1st April last preceding the appointed day.

    (3) The duties imposed on the Commission by sub-paragraph (1) above shall be discharged by them as if the Director General's last financial year ended with the day preceding the appointed day (if it would not in fact do so).

    (4) The property transferred to the Commission by virtue of paragraph 2 above shall include the records of the Director General.

    (5) For the purposes of this paragraph, the amendments of section 14 of the 1993 Act made by paragraph 13 below shall be disregarded.

    (6) In this paragraph "financial year" means the twelve months beginning with 1st April in any year and ending with the 31st March next following.

    Part Ii

    Constitution Of The Commission

    7. After Schedule 2 to the 1993 Act there shall be inserted—

    Section 3A

    "Schedule 2A

    The National Lottery Commission

    Status and capacity

    1.—(1) The Commission shall not be regarded as the servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown.

    (2) The members and employees of the Commission shall not be regarded as civil servants and the Commission's property shall not be regarded as property of, or held on behalf of, the Crown.

    (3) The Commission may for the purpose of enabling them to exercise their functions acquire and dispose of land.

    (4) It shall be within the capacity of the Commission as a body corporate created by statute to do such things and enter into such transactions as are incidental or conducive to the discharge of their functions under this Act.

    Membership

    2.—(1) The Commission shall consist of five members, all of whom shall be appointed by the Secretary of State.

    (2) Before appointing a person to be a member, the Secretary of State shall satisfy himself that that person will have no such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as a member.

    (3) The Secretary of State shall also satisfy himself from time to time with respect to every member that he has no such interest as is mentioned in sub-paragraph (2).

    (4) Any person who is, or whom the Secretary of State proposes to appoint to be, a member shall, whenever requested by the Secretary of State to do so, furnish him with such information as the Secretary of State considers necessary for the performance by him of his duties under sub-paragraphs (2) and (3).

    Tenure of office

    3.—(1) Members shall hold and vacate office in accordance with their terms of appointment, subject to the following provisions.

    (2) Any appointment of a member shall be for a term no longer than five years.

    (3) A member may resign his membership by giving written notice to the Secretary of State.

    (4) A person who ceases to be a member shall be eligible for re-appointment.

    (5) The Secretary of State may by notice in writing to the member concerned remove from office a member who—

  • (a) has been absent from three or more consecutive meetings of the Commission without their prior approval,
  • (b) has become bankrupt, has made an arrangement with his creditors, has had his estate sequestrated, has granted a trust deed for his creditors or has made a composition contract with his creditors, or
  • (c) is, in the opinion of the Secretary of State, unable or unfit to perform his duties as a member.
  • Chairman

    4.—(1) The members of the Commission shall select one of their number to be the chairman of the Commission.

    (2) A person's term of office as chairman shall be no longer than twelve months.

    (3) A person may resign as chairman by giving written notice to the other members.

    (4) If the chairman ceases to be a member he shall also cease to be chairman.

    (5) A member who ceases to be the chairman shall again become eligible for selection as chairman after the expiration of a period equal to that for which he was last chairman.

    Remuneration and allowances

    5.—(1) The Commission may pay such remuneration, and such travelling and other allowances, to a member of the Commission as the Secretary of State may determine in the case of the member.

    (2) Where the Secretary of State so determines in the case of a member of the Commission, the Commission shall—

  • (a) pay to or in respect of him such pension, allowances or gratuities, or
  • (b) make such payments towards the provision of a pension, allowances or gratuities to or in respect of him,
  • as the Secretary of State may determine.

    (3) If the Secretary of State determines that there are special circumstances that make it right for a person ceasing to be a member of the Commission to receive compensation, the Commission may pay to him such compensation as the Secretary of State may determine.

    Staff

    6.—(1) There shall be a Chief Executive of the Commission, who shall be appointed by the Commission as an employee of theirs.

    (2) The Chief Executive shall be responsible to the Commission for the general exercise of the Commission's functions.

    (3) Subject to any directions given to them by the Secretary of State with respect to the number of persons who may be employed by the Commission, the Commission may appoint such other employees as they think fit.

    (4) Subject to any directions given to the Commission by the Secretary of State, the Chief Executive and any other employees shall be employed on such terms and conditions (including terms and conditions as to remuneration) as the Commission think fit.

    (5) Service as an employee of the Commission shall be included in the kinds of employment to which a scheme under section 1 of the Superannuation Act 1972 can apply.

    (6) Accordingly, in the Superannuation Act 1972, in Schedule 1 (kinds of employment etc referred to in section 1) the following entry shall be inserted at the appropriate place among the entries under the heading "Royal Commissions and other Commissions"

    "National Lottery Commission".

    (7) The Commission shall pay to the Minister for the Civil Service, at such times as that Minister may direct, such sums as that Minister may determine in respect of the increase attributable to sub-paragraphs (5) and (6) in the sums payable out of money provided by Parliament under the Superannuation Act 1972.

    Proceedings

    7.—(1) The Commission may regulate their own procedure and that of any of their committees (and in particular may specify a quorum for meetings).

    (2) The validity of any proceedings of the Commission shall not be affected—

  • (a) by any vacancy among the members or in the office of chairman, or
  • (b) by any defect in the appointment or selection of any person as a member or as chairman of the Commission.
  • Delegation

    8.—(1) Anything authorised or required by or under any enactment to be done by the Commission may be done—

  • (a) by any member or employee of the Commission who has been authorised for the purpose, whether generally or specially, by the Commission: or
  • (b) by any committee of the Commission which has been so authorised and whose membership consists of—
  • (i) members of the Commission; or
  • (ii) one or more members of the Commission and one or more employees of the Commission.
  • (2) In exercising their functions under sub-paragraph (1), the Commission shall comply with any directions given to them by the Secretary of State.

    Duty to give reasons for decisions

    9.—(1) It shall be the duty of the Commission to give to any person affected a written statement of their reasons for any decisions which they may make in the exercise of their functions under sections 5 to 10 or Schedule 3.

    (2) It shall be the duty of the Commission to arrange for the publication, in such manner as they think fit, of a written statement of their reasons—

  • (a) for any decision which they may make to grant, or not to grant, to any particular applicant a licence under section 5;
  • (b) for any decision which they may make to revoke a licence granted under section 5; and
  • (c) for any other decision which they may make in the exercise of their functions under sections 5 to 10A or Schedule 3 and which they consider likely to be of interest to the public.
  • (3) Sub-paragraphs (1) and (2) do not apply if or to the extent that the giving, or (as the case may be) the publication, of reasons would involve disclosure of information in breach of—

  • (a) a restriction imposed by or under any other enactment; or
  • (b) an obligation of confidence.
  • Finance

    10. There shall be paid out of money provided by Parliament such sums as are necessary to defray any expenditure of the Commission.

    Accounts

    11.—(1) The Commission shall—

  • (a) keep proper accounts and proper records in relation to the accounts, and
  • (b) prepare a statement of accounts in respect of each financial year.
  • (2) The statement shall comply with any directions that may be given by the Secretary of State as to the information to be contained in such a statement, the manner in which such information is to be presented or the methods and principles according to which such a statement is to be prepared.

    (3) Copies of the statement shall be sent to the Secretary of State and the Comptroller and Auditor General within such period after the end of the financial year to which the statement relates as the Secretary of State may direct.

    (4) The Comptroller and Auditor General shall examine, certify and report on the statement and shall lay copies of the statement and of his report before Parliament.

    (5) The Secretary of State shall not give a direction under this paragraph without the Treasury's approval.

    (6) In this paragraph "financial year" means—

  • (a) the period beginning with the coming into force of section 3A and ending with the next 31st March, and
  • (b) each successive period of twelve months ending with 31st March.
  • Application of seal and evidence

    12. The application of the seal of the Commission shall be authenticated by the signature—

  • (a) of any member of the Commission, or
  • (b) of any other person who has been authorised by the Commission (whether generally or specially) for that purpose.
  • 13. A document purporting to be duly executed under the seal of the Commission, or to be signed on behalf of the Commission, shall be received in evidence and, unless the contrary is proved, taken to be so executed or signed.

    14. Paragraphs 12 and 13 do not extend to Scotland."

    Part Iii

    Minor And Consequential Amendments

    The Public Records Act 1958

    8. In Schedule 1 to the Public Records Act 1958 (definition of public records) the following entry shall be inserted at the appropriate place in Part II of the Table at the end of paragraph 3—

    "National Lottery Commission."

    The Parliamentary Commissioner Act 1967

    9. In the Parliamentary Commissioner Act 1967, in Schedule 2 (departments and authorities subject to investigation)—

    (a) the following entry shall be inserted at the appropriate place—

    "National Lottery Commission."; and.

    (b) the entry relating to the Office of the Director General of the National Lottery shall be omitted.

    The House of Commons Disqualification Act 1975

    10. In the House of Commons Disqualification Act 1975—

    (a) in Part II of Schedule 1 (bodies of which all members are disqualified) the following entry shall be inserted at the appropriate place—

    "The National Lottery Commission;"; and.

    (b) in Part III of that Schedule (other disqualifying offices) the entry relating to the Director General of the National Lottery shall be omitted.

    The Northern Ireland Assembly Disqualification Act 1975

    11. In the Northern Ireland Assembly Disqualification Act 1975—

  • (a) the same entry as is set out in paragraph 10(a) above shall be inserted at the appropriate place in Part II of Schedule 1; and
  • (b) in Part III of that Schedule, the entry relating to the Director General of the National Lottery shall be omitted.
  • The Tribunals and Inquiries Act 1992

    12.—(1) The Tribunals and Inquiries Act 1992 shall be amended as follows.

    (2) In section 7 (which restricts Ministers' powers to remove members of tribunals listed in Schedule 1 to that Act) in subsection (2) (tribunals to which that section does not apply)—

  • (a) after "33(a)," there shall be inserted "33AA,"; and
  • (b) the words "33A," shall be omitted.
  • (3) In Schedule 1 (tribunals under the supervision of the Council on Tribunals) paragraph 33A (which relates to the Director General) shall be omitted and after paragraph 33 there shall be inserted—

    "National Lottery33AA. The National Lottery Commission in respect of their functions under sections 10 and 10A of, and Schedule 3 to, the National Lottery etc. Act 1993 (c. 39), and any member, employee or committee of that Commission authorised under paragraph 8 of Schedule 2A to that Act to exercise any of those functions."

    The 1993 Act

    13. In section 14 of the 1993 Act (annual report) in subsection (2)—

  • (a) paragraph (a) (which relates to the first report of the Director General) shall be omitted; and
  • (b) after that paragraph there shall be inserted—
  • "(aa) the period beginning with the date on which section 3A comes into force and ending with the next 31st March, and".

    14. In section 20 of the 1993 Act (interpretation of Part I)—

  • (a) before the definition of "contravention" there shall be inserted—
    • ""the Commission" means the National Lottery Commission;"; and.
  • (b) the definition of "the Director General" shall be omitted.
  • 15.—(1) Section 31 of the 1993 Act (payments from Distribution Fund in respect of expenses) shall be amended as follows.

    (2) In subsection (2)—

  • (a) paragraph (a) (meeting payments made or to be made under paragraph 5 of Schedule 2) shall cease to have effect; and
  • (b) after that paragraph there shall be inserted—
  • "(aa) meeting payments made or to be made under paragraph 10 of Schedule 2A,".

    (3) Subsection (3) (which relates to subsection (2)(a)) shall be omitted.

    (4) At the end of the section there shall be added—

    "(4) In determining what amounts are appropriate for meeting the payments referred to in subsection (2)(aa), the Secretary of State shall take into account sums paid or to be paid into the Consolidated Fund under section 7(6)."").

    My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 4 to 9.

    Moved, That the House do agree with the Commons in their Amendments Nos. 4 to 9.—(Lord McIntosh of Haringey.)

    On Question, Motion agreed to.

    Commons Amendment

    10 Schedule 2, page 26, line 37, at end insert—

    ("Application to Scotland

    11. Paragraphs 7 and 8 do not extend to Scotland.").

    My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10. In moving this amendment, I should like to speak also to Amendment No. 11. These are purely technical amendments to the provisions in Schedules 2 and 4 which deal with the execution of documents on behalf of the New Opportunities Fund and the National Endowment for Science, Technology and the Arts. Paragraphs (7) and (8) of both schedules stipulate how documents should be executed on behalf of both of those bodies. In Scotland there is no need to make it an express provision because this matter is already dealt with by the Requirements of Writing (Scotland) Act 1995, which is intended to govern execution of documents in all circumstances.

    The 1995 Act provides for documents to be executed on behalf of bodies corporate if signed by a member, the secretary or an authorised signatory and if signed either by one witness or sealed with the common seal of the body. I commend the amendment to the House.

    Moved, That the House do agree with the Commons in their Amendment No. 10.—(Lord McIntosh of Haringey.)

    My Lords, as the noble Lord says, these are technical amendments and we have no special observations to make about them. However, as we are being so very expeditious this afternoon, I should like to take the opportunity, first, to thank the noble Lord for his good humour in piloting the Bill through the House—

    My Lords, here is the sting. I only wish that the noble Lord's convictions or instructions—I do not know which have been more important—had not prevented him from accepting the very reasonable suggestions that we put forward which, in our view, would have produced a better, fairer and constitutionally more sound piece of legislation.

    The Government have rejected all amendments which would have enshrined in the Bill the principle of additionality. Although there was no danger that the additionality principle would be breached under the 1993 Act, it is clear that the main purpose of the Bill is to use lottery money to help finance the Government's own social programmes. The Government have refused all the amendments designed to protect the money going to the existing good causes—the arts, heritage, sport and charities—from capture by the New Opportunities Fund. The Government have rejected amendments which would have limited the power under the 1993 Act for the Secretary of State to reduce the share of each of the original good causes to below 13⅓ per cent.

    In the other place, the Government rejected amendments to hold them to their manifesto commitment not to set up the New Opportunities Fund until after the Millennium Commission was wound up. They rejected amendments before your Lordships' Committee which were designed to remove from the Bill the retrospective provision which backdated the apportionment of National Lottery money to 14th October, and which has cost the original good causes £141 million. We have tallied it up over the past six months. The Government rejected our attempts to prevent NESTA becoming a venture capital or new development agency. Finally, they rejected amendments which were designed to ensure that the arm's-length principle applied to the New Opportunities Fund.

    We believe that the Bill passes into law with weaknesses, injustices and broken promises which could have been avoided and which will cause problems in the years ahead.

    My Lords, I am grateful to the noble Lord for those kind personal comments. However, he will not be surprised if I resist the opportunity to treat this as another debate on Bill do now pass and if I defend, silently but not without conviction, the Bill against the strictures which the noble Lord has just made. I commend the amendment to the House.

    On Question, Motion agreed to.

    Commons Amendment

    11 Schedule 4, page 32, line 24, at end insert—

    ("Application to Scotland

    13. Paragraphs 7 and 8 above do not extend to Scotland.").

    My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.

    Moved, That the House do agree with the Commons in their Amendment No. 11.—(Lord McIntosh of Haringey.)

    On Question, Motion agreed to.

    Commons Amendment

    12 Schedule 5, page 32, line 26, at end insert—

    ("Part I

    Enactments Relating To Replacement Of Director General By Commission

    ChapterShort titleExtent of repeal
    1967 c. 13.The Parliamentary Commissioner Act 1967.In Schedule 2, the entry relating to the Office of the Director General of the National Lottery.
    1975 c. 24.The House of Commons Disqualification Act 1975.In Schedule 1, in Part III, the entry relating to the Director General of the National Lottery.
    1975 c. 25.The Northern Ireland Assembly Disqualification Act 1975.In Schedule 1, in Part III, the entry relating to the Director General of the National Lottery.
    1992 c. 53.The Tribunals and Inquiries Act 1992.In section 7(2), the words "33A,". In Schedule 1, paragraph 33A.
    1993 c. 39.The National Lottery etc. Act 1993.Section 3. Section 14(2)(a). In section 20, the definition of "the Director General". Section 31(2)(a) and (3).
    Schedule 2.
    1998 c. 00.The National Lottery Act 1998.Section 1(4).

    Part Ii

    Other Enactments")

    My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12.

    Moved, That the House do agree with the Commons in their Amendment No. 12.—(Lord McIntosh of Haringey.)

    On Question, Motion agreed to.

    National Minimum Wage Bill

    4.45 p.m.

    My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

    Moved, That the House do now again resolve itself into Committee.—(Lord Falconer of Thoroton.)

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The DEPUTY CHAIRMAN OF COMMITTEES (Lord Tordoff) in the Chair.]

    Clause 41 [ Power to apply Act to individuals who are not otherwise "workers"]:

    Page 25, line 37, at beginning insert ("After a process of consultation with persons representative of industry and small business,").

    The noble Baroness said: In moving Amendment No. 116, I should like to speak also to Amendment No. 117 and, in doing so, to ask the Committee: why is a self-employed person like an elephant? Because they are both impossible to describe, but you can certainly recognise one when you see it.

    Let us consider a few examples. A taxi driver who owns his taxi is clearly self-employed, but a non-owner-driver who uses the same radio service, which also handles his credit bookings, and who works on some sort of commission arrangement with the vehicle owner, may very well either be self-employed or not. A jockey, even one exclusively contracted to an owner or a trainer for a season, is probably self-employed.

    If a man qualifies as a solicitor, sets up in practice and acquires some partners, he is clearly self-employed. If, after some years, he decides to spend more time with his golf clubs and goes into semi-retirement, becoming a consultant in the firm that he founded, dealing with just a few special clients and continuing to provide expertise in his specialty, he ceases at a stroke to be self-employed and becomes an employee, despite the fact that he is working in the same office, sitting at the same desk and doing the same job.

    Under paragraph (a) of Clause 41, which is covered by Amendment No. 116, the Secretary of State seeks to apply the provisions of this Act to

    "any individual … who would not otherwise he a worker".

    That is a pretty sweeping power. I repeat that the clause refers to "any individual". The Secretary of State does not even offer to exercise that power reasonably—if I may remind the Committee of earlier discussions on other aspects of the Bill. The Bill does not give the slightest clue as to the criteria which the Secretary of State will apply when deciding whether to invoke this very wide power—yet it is a power that may very well turn the entire concept of self-employment on its head or make a mockery of the English language.

    Before the Secretary of State makes regulations which, at a stroke of her pen, turn my window cleaner into my employee, we believe that she must submit to some very minor restrictions. That is precisely what Amendment No. 116 seeks to achieve. Instead of merely acting on her own preconceptions, misconceptions or, indeed, a mere whim, we ask the Secretary of State to consult employers' representatives. The Government have repeatedly told us during this stage of the Bill that the Minister will consult widely before making any regulations. This clause as drawn does not oblige her to do so. All that Amendment No. 116 seeks is that she should be obliged to do so.

    I turn to Amendment No. 117. In the Notes on Clauses the DTI informs the Committee that the object of this clause is

    "to prevent avoidance of the national minimum wage".

    Once again, as when this aspect has been raised in other parts of the Bill, we entirely support that objective. However, I am puzzled that in drafting this and other provisions of the Bill the left hand (the DTI) does not seem to know what the right hand (the Treasury, in the form of the Inland Revenue) is doing and has been doing successfully and efficiently over generations. Does the DTI consult the Treasury? Does the DTI even speak to the Treasury? Does the Secretary of State speak to the Chancellor of the Exchequer? According to recent reports in the press, that is a wholly different question. It is as if the DTI has arrived from another planet unaware of the existing facilities and tried and tested definitions that cover matters which this Bill attempts to address.

    In Clause 2(4) the Secretary of State seeks power to define by regulations remuneration, benefits in kind and allowable deductions from pay and to change those definitions when she decides to do so. That power is sought despite the fact that the Inland Revenue has an adequate set of rules and volumes of case law to deal with all of those. I argued that point in relation to Amendments Nos. 19 and 22. I then suggested that anything that was taxable should be regarded as wages for the purposes of this Bill. The Minister rejected my argument on grounds that I found far from convincing. He said that the regimes for income tax and the national minimum wage were different. I do not agree. If they are different it is only because the Government choose to say so.

    In the present clause the Secretary of State wants to rush in and define "self-employed". Bearing in mind the allegorical elephant that I mentioned in my opening remarks, frankly, that will not do. The Inland Revenue has a perfectly adequate definition and a comprehensive series of tests to decide whether or not a person is self-employed. Those regulations and tests are designed specifically to prevent tax avoidance by a person who pretends to be self-employed when he is not. That is exactly the objective of this clause. We cannot have two parallel systems so that a person who is self-employed for taxation purposes is arbitrarily expelled from that status by a contradictory order of the Minister. The fact that such an order will need to be debated is of no real help given the Government's steamroller of a majority in another place.

    We also cannot have a state of affairs in which the Inland Revenue is able to decide in its own interests to rule that a person who is not recognised as self-employed by the DTI is not such for taxation purposes. Is it possible to envisage the Treasury giving up ally of its power and authority? Indeed it is, in just two words: interest rates.

    I read with interest the debate in Committee in the other place. I searched hard to find an explanation of the DTI declining to accept a ready made, tried and tested definition. The Minister for Small Businesses found the following unconvincing reasons on 3rd February at col. 749. First, she said that the Government wanted

    "to cover any loopholes which unscrupulous employers may find and exploit".

    We certainly support that. But it is difficult to understand how setting up a new definition and structure that will undoubtedly have to be tested in the courts item by item will help to avoid loopholes, especially in the short term. The Minister also said:

    "The Inland Revenue has no strict definition of self-employment, but it does use certain criteria. As a result, cases are decided individually".

    Fancy that, my Lords! To pay attention to the individual circumstances of each case rather than try to cram them into a rigid, inapplicable and inappropriate category is what a reasonably judicial, or quasi-judicial, system demands. The "certain criteria" that the Inland Revenue use are those that we want the DTI to use in the interests of consistency.

    I revert to my window cleaner. Suppose that he falls off a ladder outside my house. I say that he is self-employed and the Inland Revenue backs me up. The Secretary of State can make him my employee and possibly make me subject to a greater liability, including criminal prosecution, because of the definition that she chooses to impose. I do not know what the Government are frightened of. In the short Clause 41 they take powers to include within the definition of the Bill persons who are not workers. All we ask is that the exercise of these powers does not override a person's established status as a self-employed person.

    We do not propose to inhibit the power of the Secretary of State to close loopholes and therefore we support the principles of this clause. But we want the Government to be able to construct effective anti-avoidance devices without having to return to Parliament for fresh primary legislation. We must not allow a judgment to be made by the Secretary of State or her advisers who, with no disrespect, may have no great practical experience of the real world of self-employment and may hastily overreact to an emerging problem or make a decision that is inconsistent with a person's tax status.

    To sum up, Amendment No. 116 simply obliges the Secretary of State to consult the representatives of industry, particularly small businesses for they are the ones who are likely to be most affected, before she makes a decision. We want the Secretary of State to be sure of the facts and the consequences before she makes her decision. She will still be entitled to make up her mind based on her own opinion having given due consideration to the advice that she receives, unless that decision proves to be wholly irrational. Amendment No. 116 does not inhibit the powers of the Secretary of State but simply requires her to pause to consider the matter before acting. I am sure that there can be no objection to that. All that we ask in Amendment No. 117 is that logic, consistency and continuity with the Inland Revenue's tried and tested rules are applied. I beg to move.

    5 p.m.

    I apologise to the noble Baroness for missing the first few moments of her contribution this afternoon. I have been informed of her remarks by my noble friends on the Front Bench.

    The noble Baroness asked a number of very pertinent questions. Does the DTI consult the Treasury? Yes. Do we speak to each other? Yes, quite a lot. Does the DTI come from another planet? I believe that the noble Baroness is a little confused and is perhaps referring to the shadow Secretary of State. It certainly does not, and that is widely recognised.

    Clause 41 represents a very important part of this Bill. Its purpose is to provide the Secretary of State with a measure of flexibility. We want to be able to close any loopholes that may be opened at a future time by some employers who wish to dodge their responsibilities. We also want to be able to adjust the coverage of the Bill as necessary to deal with changing labour market practices and working arrangements. We have drafted the Bill sufficiently tightly to cover all of those who as far as we can tell should be covered at this stage. But who knows? In the light of experience, we might find it necessary to extend the Bill further. Some employers may go to great lengths to avoid their responsibilities. I hope that that is not the case. We are convinced that most employers will want to do the opposite; they will want to comply with the legislation. I put forward the reason for that to the Committee on the previous occasion. They do not want to establish bad practices in this regard. It is important that we have a level playing field and that the cowboys do not succeed.

    Amendment No. 116 would require the Secretary of State to consult representatives of industry and small business before extending the Bill to further descriptions of individuals. I believe in consultation. I urged it on many occasions when I was sitting on the Benches opposite. It is right that the Opposition should probe the Government's intentions. I hope that that is what they are seeking to do.

    Long before the election, and since, we have engaged in wide consultation. We did it with regard to the minimum wage policy. One of the reasons for setting up the Low Pay Commission was to ensure that we maximised the possibilities for consultation. My colleague, the Minister of State in another place, has confirmed that we will consult on the regulations under the Bill. I have said it many times in this place. It is normal and proper to consult. That is what I was told frequently by Ministers when I sat on that side of the Chamber. They said that it was not necessary to have such requirements within the framework of a Bill itself.

    My problem with the amendment is that it would be over-prescriptive to require consultation to be established on the face of the Bill. The Secretary of State would of course consult before extending the Bill by using the power in the clause. Consultation will take place in normal circumstances, but there may be circumstances where consultation could make action less effective.

    One of the aims of Clause 41, as I said, is to ensure that the Secretary of State can close any loopholes that might emerge. One cannot rule out the possibility that some employers, and some of their advisers, might find a loophole and seek to frustrate the legislature's intention. That might include reclassifying their entire workforce or revising all their working arrangements. If that were to happen, we would want to act rapidly to ensure that the workers concerned were not deprived of their rights. That might preclude consultation before action were taken.

    There would not be much purpose in engaging in consultation in those circumstances, which may be extreme. Who knows? The amendment would also require the Secretary of State to consult one part of the social partnership only. That is not desirable. The point of consultation is to achieve an all-round perspective. We know that the previous government eschewed that possibility. They did not like consulting the social partners as a whole. Theirs was a one-sided operation. That is not my idea of consultation. I am not in the business of turning a deaf ear to important parties in consultations of this kind. We want to work together. It is a dynamic process. Both sides of industry and the Low Pay Commission provide a good example of what can be achieved by that process. The amendment is unnecessary and potentially harmful. I hope that the noble Baroness will not press it.

    I turn now to Amendment No. 117. I repeat the point about covering any loopholes which unscrupulous employers might try to exploit. Self-employment is a potential area of concern. It is one of great complexity, as the noble Baroness recognised. In most cases there is no problem in distinguishing the self-employed from employees and workers, but there is a degree of uncertainty at the margins. The noble Baroness is worried about how we shall draw the distinction in such cases. The amendment seeks to tie the Bill to the definition of "self-employment" used in tax law.

    There is no necessary correlation between the two. It would not be right to tie ourselves on the face of the Bill to criteria which are used in tax law as distinct from employment law. There are distinctions to be drawn. We are following an approach used in the Employment Rights Protection Act 1996 by the government of the noble Baroness. If it was right to do it then, why should we not do it in these circumstances? The noble Baroness did not seek to address that point.

    In another place the Opposition pressed hard on the issue. Mr. Green, a Conservative Member, when a similar amendment was being discussed in Committee—I cannot quote him verbatim because I am not allowed to—in effect said that people who were self-employed in the assessment of one branch of government should not be regarded as employees in another. The noble Baroness must address the point raised by her honourable friend in another place. Self-employment for tax reasons is based on a number of tests designed to establish status on a case-by-case basis. In most cases it is clear whether someone is or is not self-employed for tax and minimum wage purposes. I concede that. There will be cases where the issue becomes questionable. It is not sensible to tie employment law to criteria drawn up for tax purposes where there is, in any case, no certainty.

    The arguments adduced by the noble Baroness's honourable friend in another place, which I adopt, represent important answers to the case which the noble Baroness has put persuasively, but it would be wrong to take her advice. I hope that she will withdraw the amendment. If not, she will seek the opinion of the Committee, and we shall do whatever we can to reject it.

    I listened to the persuasive arguments on both sides, especially with regard to Amendment No. 116. If the Secretary of State will consult, why does not the Minister consider it wise to put it on the face of the Bill? The Minister described a hypothetical situation. He said that it would be crazy to consult the employers because they would be the people avoiding the payment of the minimum wage. The amendment does not refer to the employers. The amendment provides:

    "After a process of consultation with persons representative of industry and small business".
    I agree with the Minister that if someone is openly flaunting the application of this law, one would want a process whereby one could stop that immediately and not consult. That is not what is stated in the amendment.

    We hope that when the Bill becomes an Act it will last for a number of years. Events move on and none of us can forecast the different situations which will pertain in six months' or six years' time. In order to keep abreast of events and the changing pattern of process in industry and business, it would help the Secretary of State to have the power of consultation written on the face of the Bill.

    I am ignorant as to whether the Low Pay Commission has an ongoing role which would enable the Secretary of State to consult with the commission in three or four years' time. I suspect that it has not. If it had such a role, that might be an answer. I believe that there is a risk—it may not be huge—and that in some situations it might be better if the Secretary of State were involved in the consultation process. I hope that I have made the point clearly. I would not go to the stake on it, but I believe that there is merit in putting the provision on the face of the Bill.

    There is a misunderstanding about the way in which we have consulted through the Low Pay Commission. As I said when we were last in Committee, the Low Pay Commission is not drawn from representatives of industry and small business. It ensures that people of sufficient expertise in the various fields to be covered can join together in offering expertise to the work of the commission. That is very different. So the amendment is fatally flawed.

    The significance of what the noble Baroness says is recognised by the Government. We say that we have already consulted widely. In the overwhelming majority of cases we would do so. But I have drawn attention to an urgent situation where the Government have to take immediate action and would not have the opportunity to consult with the Low Pay Commission, or anyone else.

    I made a Statement in the House on the national minimum wage recently. I was bombarded with a large number of questions from the noble Baroness, Lady Miller, which I did not have time to answer. But we said then that the Government will be using the Low Pay Commission in order to engage in the development of proposals for, and to take forward work on, monitoring and evaluating the introduction of the national minimum wage over the next year. Clause 6 of the Bill enables the Secretary of State to refer matters to the Low Pay Commission at any future time.

    I thank the Minister for giving way. I am not worried about the first year. I am worried about years three, four, five, six and onwards. I believe that there will be an automatic reaction: everyone will want to behave perfectly properly under the terms of the Act. I am worried about the situation beyond the euphoria which will attach to the first 12 months' operation of the Act.

    I am delighted to hear that there will be a state of euphoria after we have enacted the Bill. That is in marked contrast to the position adopted by the noble Baroness, Lady Miller. I am euphoric now even thinking about it!

    The principle applies equally to a situation now or three or five years ahead. It would be unnecessarily inflexible and too rigid for the Government to tie themselves in all circumstances to the consultation that the noble Baroness wants as a matter of legislative requirement.

    5.15 p.m.

    I thank the Minister for what he said. He may not be surprised to hear that I am disappointed. The point I sought to make was that Clause 41 provides the power to apply the Act to individuals who are not otherwise "workers". Clause 41(a) refers to "any individual". We sought in the amendment to ensure that the genuinely self-employed worker would not fall into that category. Amendment No. 117 deals with exactly the same point. I was not asking the Minister for a long, detailed explanation. The Secretary of State is taking sweeping powers upon herself in extending the definition of "worker". I referred to the allegorical riddle: why is a self-employed person like an elephant? The Minister was not then present. The answer is that we know what we are talking about, but it is difficult to recognise.

    In discussing Clause 2(4), I sought to make the point that I have put again in Amendment No. 117 on the different regimes for income tax. The Minister commented on the numerous questions I asked when he made a Statement. I accept that this is a convenient time to mention it. I accept that the Minister could not answer all those questions. However, I hope that he and his officials will ensure that I receive written replies.

    The Minister asks me not to press the amendment. I did something which I understand politicians do not do—perhaps I am not a politician. I made clear to the noble Lord, Lord Haskel, that we had no intention of dividing on any of the amendments. First, I understand from the Labour Chief Whip that there is the tug-of-war this evening; and, secondly, many noble Lords will wish to watch England play Romania. Therefore because I am a reasonable Opposition spokesman, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 117 not moved.]

    Clause 41 agreed to.

    Clauses 42 to 44 agreed to.

    After Clause 44, insert the following new clause—

    FAMILY BUSINESSES

    (". A person who is employed by his spouse, parent or child, or by a private limited company of which his spouse, parent or child is a substantial (but not necessarily a controlling) shareholder, does not qualify for the national minimum wage in respect of that employment").

    The noble Baroness said: Although Amendment No. 118 is not grouped with Amendment No. 119, I indicated to the noble Lord, Lord Haskel, that I would speak to the amendments together.

    Clause 44 recognises the need to exempt voluntary workers and hence the organisations for which they work from the requirements of the national minimum wage. That is entirely right and proper. I declare an interest as chairman of the National Association of Leagues of Hospital Friends, an organisation which would collapse if we were required to pay our volunteers for the invaluable service that they freely give. However, there are two other categories of employees whom it is essential to exempt from the operation of the Bill. The first, referred to in Amendment No. 118, is spouses, parents and children of the owners of a business.

    I used the word "owners" because some small businesses, even the corner grocery shop or newsagent, may be incorporated as a limited company. A limited company was once described as having no soul to damn and no body to kick. Neither does it have a spouse, parent or child. We are talking about the family business where sometimes, or frequently, the spouse, child or parent of the owner comes in to help at a particularly busy period, at a time of staff shortage, or even as a regular means of keeping overheads down and avoiding the need for extra paid staff. The family concerned derives its living from the business, so whether a wage is paid to the spouse, parent or child is the concern of the family and no one else. The Government have no business involving themselves in people's ordinary domestic affairs.

    Are the Government really saying that if a shopkeeper's spouse comes in to help out on a Saturday afternoon or during the Christmas period some wretched greengrocer will be liable to be served with an enforcement notice under Clause 19, sued by an official under Clause 20, suffer a penalty notice under Clause 21 and, last by no means least, be prosecuted under the criminal law and be fined at the maximum rate normally reserved for the most heinous offences under Clause 31?

    During the passage of the Bill, I was approached by a smallholder who told me that he had a farm shop on his land. His 70 year-old mother ran it purely to give herself something to do. She wanted no wages from her son. He said that if he were forced to pay her he would have to close his shop, damaging his business, and his mother would have to stay at home all day. Rendering a parent liable for not paying a child the minimum wage when the child is assisting in the family business would be as ludicrous as complaining that the child was not being paid for mowing the lawn or washing the car.

    Does not the noble Baroness realise that that would not apply because children of the age she is contemplating are not within the provisions of the Bill?

    I thank the noble Lord for his interruption, but I do not accept what he says. There are plenty of teenagers of 18 or 19 who help their parents in a local shop on a Saturday and who would be covered by the Bill. I use the word "child" in the relationship of parent and child. I am well aware of the age because I have studied the Bill thoroughly, as I am sure the Minister knows.

    We cannot rely on the possibility that the officials who are to enforce the provisions of the Bill will do so with discretion and in a reasonable manner. I regret to say that experience shows us that that is not something we can rely on. The over-enthusiastic enforcement of EC directives is a case in point. In any event, why should we have to depend on the good will of some official or risk inconsistent treatment in different parts of the country? The amendment is a common sense provision which neither damages the Bill nor the general principle of a national minimum wage.

    I turn to Amendment No. 119 in respect of which I believe exactly the same principles apply. The vast majority of limited companies are family owned. Even when the directors are unrelated they are, in essence, business partners trading under what is called "the corporate veil." Such companies are often described as quasi partnerships and the directors of most companies of that kind are usually the only or the main shareholder. Once again, it is not for the Government to interfere in private arrangements freely entered into by directors and shareholders who enjoy equal bargaining power.

    In connection with Amendment No. 2, the Minister claimed—indeed, he insisted—that a partnership was the same as an individual employer and not X number of separate employers, a topic to which I shall return in a later amendment to Clause 54. Before we get into another legal argument, perhaps I may draw his attention to the recent case of the Secretary of State for Trade and Industry v. Bottrill. That case involved the Minister's own department, so I am sure that he is perfectly familiar with it. The ruling was that a person who was the managing director and the holder of the sole issue share in a company was nevertheless an employee.

    Perhaps I may give the Committee two examples from my own experience of the anomalies which can arise unless directors are exempt. I began my own business early in 1972 with a partner. In order to help it through its first two shaky years, we drew no salary until 1974. I was fortunate in having other sources of income, but my partner, my co-director, did not. He survived by using other assets and bank and other loans. It would have been wrong to force us to increase the company's overdraft or imperil our ability to meet our bills immediately they fell due by making us take an unwanted salary, however small—or, in our case, considering the number of hours we worked, quite substantial—and having to pay tax and national insurance on unwanted income, too.

    In giving my second example, I must again declare an interest in some small family investment companies of which I am a director. We do not pay directors' salaries simply because we prefer to pay all surplus income as dividends to our shareholders who are our family members. Once again, the purpose of the amendment is to avoid an anomalous situation where the state would be interfering in private internal arrangements which are none of its concern. In both cases, why should the Government exclude members of the Armed Forces and prisoners from the operation of the Bill simply because the Treasury would have to foot the bill and not exclude the owners of private businesses in relation to what they pay themselves and their immediate family out of their own pockets? I do not suggest that either of the two omissions—family members and directors—from the exclusions contained in Clauses 43, 44 and 45 is caused by any desire to over-regulate or to indulge in "nannyism". I believe that there are incongruities caused by a drafting oversight arising from the Government's desire to achieve universality. I trust that the Government will accept that there is no breach of the principles of the national minimum wage which they are pursuing by the legislation if they accede to the moderate exclusions we are seeking. I beg to move.

    I am happy to support the noble Baroness's amendments. They are common sense amendments and, I imagine, would be regarded as such by the great majority of people. Can the Minister tell us what is the position of those aged, say, 18 or 19 who work part-time for their parents in return for board and lodging and perhaps other benefits in kind, with no money changing hands? Presumably there would be no contract of employment in such a case. Are they excluded from the provisions of the Bill as it stands?

    Perhaps I may ask a supplementary question in relation to Amendment No. 119 which raises some interesting issues. It relates to companies limited by guarantee. I have served as a director of a number of such companies, usually associated with charities, or quasi-charity or voluntary organisations. A considerable amount of work is carried out by the directors of such companies and no remuneration is expected. In those circumstances and under the proposed legislation, would it be appropriate for those directors to remain unremunerated?

    5.30 p.m.

    I thank the noble Baroness, the noble Lord, Lord Monson, and the noble Viscount, Lord Thurso, for the interesting points which they raised. I shall do my best to reply. Before I do so, I should say that I appreciate the indulgence of the noble Baroness as regards the tug-of-war because it is being held for a very worthwhile charity—the Macmillan Nurses. It is a bit late to invite other people. However, it is an important charity and Members of both Houses have before played a significant role in helping it. Secondly, I know that the noble Baroness wants to watch the football, so her remarks were rather self-serving.

    Before I deal with the specific points raised by the noble Baroness and other noble Lords, I should say, again, that Amendment No. 118 deals with exclusions. This time it excludes family members from entitlement to the minimum wage.

    In another place, there was a lot of discussion about the employment of spouses. Amendment No. 118 goes rather further than that because in effect it seeks to exclude anyone employed by spouse, parent or child or by a business in which the spouse, parent or child is a substantial shareholder. The noble Lord, Lord Monson, said that that is quite reasonable and will be accepted by the wide majority of the public. I am not sure how he measures that but that is a matter for him to answer. I am not in the business of trying to go about excluding as many people as possible from the operation of this Bill. But that is what the Opposition are about. What is being proposed here would go against the whole principle of the Bill.

    Amendment No. 118, which was revised something like two weeks after it was first tabled, seems also to indicate a desire to over-complicate. I do not wish to become involved in a debate about the nature of shareholding control and whether a person is a substantial or controlling shareholder. Here we are talking about a Bill which is designed to deal with workers. It is founded on the basis of whether or not a person is a worker. The status of shareholders has nothing whatever to do with it.

    It is a very simple principle even though the Opposition seem to be in the business of making the matter as complicated as humanly possible. A worker should be entitled to a minimum wage whoever he has as his employer. I see no reason why a person should be disenfranchised from the procedure which we are seeking to invoke for the first time just because the employer is his spouse, father or child. We are dealing with extremes all the time in this regard. An employer may quickly marry his employee in order not to pay the national minimum wage.

    I do not wish to interrupt the Minister's flow but we are not talking about ridiculous instances. We are talking about the basic small family shop, which would not survive if the wife who came in to help had to receive the national minimum wage. Such people give their services virtually free. That is what we are talking about. We are not talking about eccentric examples. The Minister should give some credence to the sensitivity of the issue. There are many small businesses in this country which will undoubtedly go out of business if there is a blanket coverage for the national minimum wage.

    With respect, I believe that the noble Baroness has in the past dealt with some extreme situations. I am entitled to an occasional riposte.

    I do not wish to pick holes in the amendment because my objection is fundamental. I do not question the noble Baroness's integrity for one moment and she does her duty by probing these matters. Our approach is to make the Bill inclusive and not exclusive. It is part of the whole integrity of the concept of a national minimum wage. That is the basic reason why I shall ask the Committee to reject the amendment unless the noble Baroness withdraws it.

    The whole essence of this matter is whether there is an employee relationship. I listened very patiently to what the noble Baroness said and she seemed to suggest that she was talking about small children. Perhaps I misunderstood her. Of course, that would not apply. The provisions apply only where there is an employment relationship. For example, in the case of a greengrocer's wife, one must ask whether she is working under a contract for money.

    The noble Baroness then sought to pray in aid an insolvency case, the details of which I am not familiar with. The answer is that, in some cases, a director would be an employee; in other cases, he would not. It depends entirely on the contractual relationship which exists. In those circumstances, each case must be decided on its own merits.

    I turn now to Amendment No. 119. Again, this amendment was discussed extensively on Report in another place. Under the Bill, a person who is a director of a company, limited or otherwise, would not normally be entitled to receive a national minimum wage because the legal status of a director, whether of a small or multi-million pound business, is that of an office holder. That is the distinction which must be drawn.

    There may be cases where, in addition, a director has a contract of employment with the business and that contract may be explicit or implicit. In such circumstances, he would be an employee of the company and therefore entitled to the national minimum wage. That would apply to managing directors or directors who are one-man bands in charge of their own business.

    The Bill makes it very clear that directors who are simply office holders will not be entitled to the minimum wage; directors who are employees will be. That is the very simple proposition. That distinction is derived from existing employment law. Therefore, we do not need the amendment because it would add nothing useful to the Bill. The definitions in Clause 54 make it quite clear who is covered by the Bill. Directors who are not workers will not be covered, whereas directors who are workers will be so covered.

    In her references to director-employees, the noble Baroness raised various points which I shall try to answer. A director who is an employee of his own company could claim the minimum wage from that company in just the same way as such a director may claim other employment protection rights as an employee. The practical reality must surely be that nothing would be gained by pursuing such a course.

    I cannot envisage that that situation will arise. That is why I said it is rather fanciful. Even if it did, can one really envisage enforcement officers being inclined to take action in such circumstances? I hope that the noble Baroness will withdraw the amendment.

    I am even more disappointed with the Minister's reply to these two moderate and reasonable amendments. I believe the death knell will be sounded for many small businesses up and down the country if they realise that if they are given any assistance by a member of the family they will have to pay that person the national minimum wage. The noble Lord, Lord Haskel, shakes his head. I can tell him that I have already been approached by numerous small family businesses from all over the country on this matter. It is a brave government who think those feelings can be disregarded and that all will be well.

    I do not seek to disregard the generality of the points that have been made by the noble Baroness. It is quite possible that we need to inform the public better on this matter as the noble Baroness herself misunderstood the position. Therefore it is perfectly possible that other people may misunderstand it. It is my job here to try to correct a mistaken impression. I hope that the noble Baroness will read carefully what I have said. I hope I have convinced the Committee that I have advanced a perfectly reasonable proposition. I hope that small businesses will not be misled by some of the statements which have been made tonight which need to be corrected.

    Before the noble Baroness decides what to do with this amendment, I hope the Minister will answer my query about 19 year-olds who, for example, work for an hour and a half each evening in their parents' shop in return for board and lodging. Will they be excluded from the provisions of this Bill?

    I thought I had embraced that situation in the remarks that I made. The matter depends on whether there is a contract of employment and whether there is a consideration in money or in kind in relation to that.

    I would never pretend that the Minister is anything less than courteous when he corrects what he says is my mistaken view of the matter. However. I do not believe that I made a mistake. I believe that my interpretation of the situation is correct. However, I shall read carefully what the Minister has said. At this stage I shall withdraw the amendment but I shall probably return to it on Report. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 119 not moved.]

    5.45 p.m.

    After Clause 44, insert the following new clause—

    EXCLUSION OF INCAPACITATED PERSONS AND EMPLOYMENT FOR THERAPEUTIC PURPOSES

    (" .—(1) The Secretary of State may, after consultation with the Low Pay Commission, make an order exempting incapacitated persons from the provisions of this Act.

    (2) An order under subsection (1) above shall provide for the issue of permits by the Secretary of State to those persons whom he believes to be incapacitated and may make provision for—

  • (a) the procedure for applying for and issuing such permits;
  • (b) the procedure for establishing the minimum wage to which each permit holder shall be entitled (being less than the single hourly rate prescribed under section 1(3) of this Act);
  • (c) the appointment by the Secretary of State of suitably qualified persons to assess such applications; and
  • (d) the procedure for appealing against a refusal to issue such a permit.
  • (3) No person shall be guilty of an offence under this Act in respect of an employee who holds a permit issued in accordance with an order made under this section.

    (4) For the purposes of this section, a person is incapacitated if he is so affected by physical injury or mental deficiency or infirmity due to age or any other cause as to be incapable of earning the national minimum wage.

    (5) A person whose employment is primarily undertaken for the purpose of therapy and whose employer is a non-profit-making organisation does not qualify for the national minimum wage in respect of that employment.").

    The noble Baroness said: Clause 44 of this Bill, which deals with voluntary workers, was numbered Clause 41 when it was discussed in Committee in another place. It was a bare 10 lines long. After debate in Committee the Minister of State properly said,

    "It is important that the Government reflect … and that we ensure that our proposals take into account the complexities of the issue".

    The result of that further reflection was the present Clause 44, which is now some 47 lines long and deals more fully with voluntary workers and those persons

    and organisations they help. In the light of the reasonable way that the Government have dealt with this kind of problem, it seems churlish to point out that there are still two serious omissions which must he dealt with.

    First, I refer to severely incapacitated persons and, secondly, to persons carrying out therapeutic work while in the employment of a non-profit-making organisation. I shall deal with the proposed exemption of severely incapacitated persons in the proposed new subsections (1) to (4) of my amendment. I believe these provisions speak for themselves and need no explanation. I should like to think they are acceptable to the Government without argument because the party opposite claims to be the party that cares, particularly for the sick and for the infirm.

    These four proposed new subsections have been carefully drafted so as not to constitute a licence to unscrupulous employers to exploit vulnerable persons by paying them too little. The Committee will notice that the proposed new subsection (2) provides for the Secretary of State to lay down procedures for the exemptions that I seek. I stress that there will be no blanket exemptions. Each case will be decided on its merits after an individual application has been made and will be granted only after the approval of a suitably qualified assessor. I assume this would normally be a doctor, as is the case with regard to claims for disability allowances. But, again, the Secretary of State will have discretion here.

    I have already suggested that I should have thought this part of my amendment would be acceptable to the Government without argument. However, I have been given no indication that the Government will accept it. Therefore I point out what I believe to be the implications of a refusal. We all realise that unfortunately and regrettably there are many persons whose disabilities make it difficult for them to obtain employment. These people want to work as best they are able. They do not merely wish to earn money or to have some occupation. It is even more important to them to enjoy some measure of independence and a feeling of self-reliance and self-respect.

    I quote from a paper published a few weeks ago by the Joseph Rowntree Foundation, an organisation whose views the Government usually approve. The paper states,

    "Disabled people may have been affected by a much wider and systematic shift in employment patterns. As the supply of labour has expanded faster than demand, employers have become more selective in their choice of staff. Marginal workers such as disabled people have been excluded … Preliminary evidence suggests that very few found a job".

    I believe this refers to those who lost incapacity benefit after the rules were tightened up.

    The Low Pay Commission in table 3.1 of its report states that,

    "16 per cent. of the long-term disabled currently earn less than £3.50 an hour".

    In its evidence to the Low Pay Commission the Royal National Institute for the Blind stated, on page 39,

    "Blind and partially sighted persons face bleak prospects in employment … Significantly, blind and partially sighted people are concentrated in lower paying, semi-skilled and routine manual occupations … Many blind and partially sighted people are therefore caught in poverty even when they are in work".

    I do not doubt that the same difficulties in obtaining work, discrimination in the workplace and low pay affect persons with other disabilities. It is simplistic to suggest that the solution to their problems will be to increase their pay entitlement. On the contrary, we believe that such action would increase their problems. It would make employers even less inclined to employ disabled people so long as they can employ able-bodied persons to do the same work for the same pay, possibly at a higher rate of productivity.

    What are the implications of a refusal by the Government to allow such persons the opportunity to go to work and to earn their own money after the most stringent inquiry into their individual circumstances as set out in the proposed new subsection (2)(c) of my amendment? The implications are that the Government, in pursuit of their policy of universality, will tell those people, "You may not work. You must simply live on government hand-outs in the form of disability allowances". Convicts will be allowed to work for less than the national minimum wage but not honest people who have committed the crime of being disabled. I cannot believe that the Government could reject an amendment with such important social implications.

    I now turn to the part of the amendment which deals with work carried out for therapeutic purposes. We are all familiar with the British Legion's poppy factory and with various forms of work carried out in workshops of the Royal National Institute for the Blind. I have no idea what these and similar organisations pay their workers but I am sure that they are as generous as they are able to be and may well already pay more than the wildest estimates of what the national minimum wage will be. The principal purpose of this kind of work is not to earn money for the organisation or necessarily to pay a living wage to the employee. It is to help the employee—who is suffering from some form of disability, including, for example, the loss of sight or of a limb, or some mental incapacity—to enjoy the dignity of following some useful occupation or simply to enable the employee gradually to recover a lost faculty.

    I recently paid a visit to community housing for people of a whole range of ages with learning disabilities. They run a pottery shop producing the most amazing range of vases, bowls and so on. I was presented with a beautiful vase as a souvenir of my visit. The person who made the vase had the benefit of passing time doing a practical job while at the same time having the satisfaction of knowing that he was doing something worth while. The person concerned receives full board and lodging, nursing and training, and receives a small personal allowance. He would receive the same even if he were capable of doing only very little, or indeed nothing. It cannot be right that such work should be treated as employment for the purposes of this Bill, or that a charity, which has to scramble for every penny, should be forced to make a commercial payment for providing what is, after all, treatment for someone who is a long-term or probably permanent patient.

    There are enough problems with this Bill, because the Government have a rigid, unbending desire to achieve universality. However, the Government have to make the concession that we seek simply to prevent what they see as an injustice to low-paid workers being replaced with another injustice to persons whose needs are no less important. I beg to move.

    In supporting my noble friend's amendment, I must apologise for not being able to be in my place at the beginning of the debate. I understand the desire of the Government to have as great a degree of universality as possible in the Bill. However, there have been exceptions. My noble friend referred to prisoners and share fishermen, and there are other special pleas. Surely this is a worthwhile exception.

    My noble friend reminded the Committee that under Clause 2 there are safeguards for disabled people. Employers, however lofty their motives, will in some cases be discouraged from taking on people from whom, through no fault of theirs, they cannot achieve the same degree of profitability as from fit people. I very much hope that the Minister will give careful consideration to this very reasonable amendment.

    I, too, wish to thank my noble friend for her amendment. I also apologise for not having been in my place earlier. This amendment is possibly one of the most important. Let us take, for instance, an institution such as that at Enham Alamein near Andover, which deals with people who have cerebral palsy. They are totally incapable of profitable work except as a minimal base. The object of the institution is to encourage them, particularly for therapeutic purposes. Those people are given a small sum of money each week to make sure that they turn up. It is not a profitable organisation in the sense that its books show a profit. It exists as a total charity. There should be some consideration for that type of institution.

    I thank the noble Baroness for moving, in a perfectly reasonable way, a point of very great interest. In that, she was joined by the noble Viscounts, Lord Bridgeman and Lord Oxfuird.

    This is certainly a difficult issue. The Government have given it a great deal of thought. The fundamental point is that disabled people should in no way be discriminated against in the workplace. I accept immediately the intention of the amendment. In effect, the noble Baroness wants a permit system to operate allowing partial exemptions on the basis of incapacity, and to exempt those who work for therapeutic reasons.

    The words in question are in subsection (1) of the amendment:
    "exempting incapacitated persons from the provisions of this Act".
    That is a dangerous route to follow, as I shall seek to argue. If it were to be followed, there is a risk of discrimination. I acquit the noble Baroness of any intention in that regard; however, that would be the effect. The amendment asks us to distinguish between the able-bodied and those who are,
    "incapable of earning the national minimum wage".
    It is a loose and difficult concept. In practice, it could easily lead to a totally unacceptable situation whereby some people were denied the national minimum wage when they had just as much right to it as anyone else. It could become the thin end of a very large wedge. It could deny the minimum wage to the very people who are most in need of its protection.

    The Low Pay Commission gave profound consideration to this issue. The commission's report includes the views of a number of groups representing disabled workers. Nowhere in the report is any of those groups quoted as favouring an exemption of the kind proposed for disabled workers in this amendment.

    What the Low Pay Commission had to say in its report is an important piece of evidence. There is no question of evading the issue. Perhaps I may ask the Committee to address paragraph 1.6 of the report, which deals with these matters. It states:
    "A small minority who gave evidence to us suggested exempting or having a lower level of the National Minimum Wage for people with disabilities. But the vast majority, including the Government, saw no justification for this. We believe"—
    these are the most important words—
    "that there are compelling arguments for treating disabled workers in the same way as other workers. To do so recognises the value of disabled workers to employers and supports a culture of social inclusion. Moreover, for those people with severe disabilities that limit their productivity, the Government funds the Supported Employment Programme which helps employers recruit and maintain these workers in jobs".
    That is essentially a right and proper riposte to the points made by the noble Baroness and other noble Lords who spoke on this matter. Why did the commission arrive at that conclusion? I submit that it recognised the overwhelming correctness of the case. The vast majority of people from whom it took evidence saw no justification for embarking upon the programme that the noble Baroness supports—and supports with total integrity.

    That brings me to a particular point of the amendment dealing with therapeutic earnings. The commission's report points out that the Government make provision for those with severe disabilities which limit their productivity. That helps employers in recruiting and maintaining in jobs workers of the kind that we are considering. Why should we disagree with the conclusion reached by the commission after such profound consideration?

    The noble Baroness seeks to dissociate her thinking from those conclusions. I think that that would be mistake. I am not saying that there is a compulsion for anyone to say that everything the commission has done is right; and, of course, the Government have chosen in one particular respect not to agree with the conclusions of the commission. However, where the commission has given such profound consideration to a matter of such sensitivity as this I believe that we should listen carefully to what it has to say. I hope that the noble Baroness will withdraw the amendment, although I have no doubt that I am right in anticipating that she will say once again, perhaps in different words, that she is disappointed. It has been an evening of disappointment for her, but I hope that she will recognise that these issues are not idly dealt with. They were dealt with, as I indicated, in the most cogent and profound way by the Low Pay Commission, and I ask the noble Baroness to accept that reasoning.

    6 p.m.

    The Minister tempts me to come up with a word other than "disappointed". It is hard, when standing on one's feet, to think of a variety of words without taking too long over it or testing one's powers too much. Between 1992 and 1995 only 2 per cent. of recipients of disability benefit moved from benefit into full-time work and only 200 of those receiving the present disabled workers' allowance have been encouraged into work by the benefit. I therefore have to say to the Minister that I am disappointed because I believe that what will happen is that very severely disabled people will simply not get work.

    Sometimes disabled workers will require extra facilities, such as specially adapted equipment and access and transport facilities, the cost of compliance with the Disability Discrimination Act 1995. If to that employers have to add the national minimum wage I fear that they will not do so because it will be too expensive for them. I hope that I am wrong and that the Minister is correct, but I fear that that will not be the case. At this stage, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clauses 45 to 47 agreed to.

    [ Amendment No. 121 had been withdrawn from the Marshalled List.]

    After Clause 47, insert the following new clause—

    AGRICULTURAL WAGES: REPORTS

    ("—(1) Within one year of the laying of the first regulations under section 1 or 2 of this Act—

  • (a) the Low Pay Commission shall make an evaluation of the impact of the national minimum wage established by regulations made under section 2 above as it affects workers covered by the relevant Agricultural Wages Order for each territory of the United Kingdom, and shall make a report thereon to the Secretary of State; and
  • (b) the Low Pay Commission and the Agricultural Wages Boards acting jointly shall make a report to the Secretary of State and the Minister for Agriculture, Fisheries and Food on the operation of section 46 of this Act and the enactments mentioned in section 47(1) and (2) of this Act, and may make recommendations for such amendment of that section and those enactments as, in the opinion of the Commission, may ensure the more effective application of this act to agricultural workers.
  • (2) The Secretary of State shall lay the report referred to in subsection (1)(a), and the Secretary of State and the Minister for Agriculture, Fisheries and Food shall jointly lay the report referred to in subsection (1)(b), before Parliament within 28 days of their respective receipt.").

    The noble Baroness said: Amendment No. 122 is placed after Clauses 46 and 47, which deal specifically with the agricultural industry. I can deal with it briefly. The only reason why agriculture is singled out for special treatment is that Clause 16 and the whole of Schedule 2 to the Bill deal specifically with agriculture as a separate industry, as indeed it is since it is the only one still to have a wages council.

    Clause 16 allows for the use of information gathered pursuant to agricultural wages legislation for some purposes of the Bill but imposes restrictions of secrecy in other directions. I would not wish any reasonable requirements of confidentiality to be breached. However, we believe that, in the interests of open government, any information in the possession of the Secretary of State for use in connection with this Bill, and any information which she has on which she may base any decision she makes in exercise of her powers under the Bill should be in the public domain, at least in general terms.

    I make no prediction as to how Clause 16 will have to be amended or whether it will need to be repealed altogether if the Government eventually produce their freedom of information Bill. The new clause simply requires reports to be made to the Secretary of State and to the Minister of Agriculture, Fisheries and Food on the workings of the Bill as regards this important and special industry after the first year of effective operation. Members of the Committee will have noted that it is just one pair of reports and that neither Minister is to be burdened with annual reports. One year should be enough to give a reasonable idea of how the industry is being, and is likely to be, affected.

    The Secretary of State is confident that the effects of the Bill can only be beneficial. We are sure that she will welcome an independent appraisal as regards the agricultural industry and the opportunity, if she is right, to share those excellent findings with Parliament. I beg to move.

    The noble Baroness referred to the matter of secrecy. Perhaps I may respond by saying that one person's secrecy is another person's commercial confidentiality.

    With regard to the amendment, it may be helpful if I explain briefly the three principles behind the Government's proposals as far as agriculture is concerned. The noble Baroness referred to the operation of the agricultural wages boards. The three principles are, first, that the minimum wage should apply in the agricultural sector as elsewhere; secondly, that we should not, through the Bill, seek to make wholesale changes to the existing agricultural wages regimes in England and Wales, Scotland and Northern Ireland, and that the agricultural wages boards will continue with their work; and, thirdly, that the same rules will apply across the board, both in agriculture and elsewhere.

    The amendment would require the Low Pay Commission and the agricultural wages boards to report to the Secretary of State and the Minister of Agriculture on the operation of the clauses in the Bill which govern this kind of interface between the national minimum wage regime and the agricultural wages regimes. The main effect of the amendment would be to require the Secretary of State to set up a statutory Low Pay Commission to report on these agricultural matters, whether or not in conjunction with the agricultural wages boards, and to that extent remove the discretion of the Secretary of State with regard to what matters to refer to the Low Pay Commission, and indeed to pre-empt and supplant the planned 1999 review of the agricultural wages regimes.

    I should point out that the review of the agricultural wages boards was planned for 1998 but has been postponed until 1999 to give a year to see how the two regimes—the minimum wage regime and the agricultural wages boards regimes—bed down together.

    Perhaps I may assure Members of the Committee that the matters referred to in the proposed new clause will be looked at, one way or the other, as part of the review of the agricultural wages regimes. However, I believe that it is too early to speculate on what role a statutory commission might have in the process. Certainly, it is unnecessary to prescribe details of coverage, timing and procedure, as the amendment seeks to do. Therefore, while appreciating the thinking behind the amendment, I do not believe that it is necessary. I hope that the noble Baroness will accept that and withdraw her amendment.

    I said that I could be very brief; I was very brief, as was the Minister. I shall read what he said. At this stage, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 48 [ Application of Act to superior employers]:

    Page 30, line 9, at end insert ("provided that in the circumstances it seems just and fair for him to be so deemed.").

    The noble Baroness said: Amendment No. 123 may seem at first sight to be a minor drafting amendment. In fact, it is not. The Government's approach to this clause is somewhat curious. I shall explain what I mean shortly. First, I should point out that deeming is a legal draftsman's device—trick is too strong a word—to make something exist when that is not actually the case. The Oxford English Dictionary defines the word as meaning to "think of as existing". Lawyers drafting contracts, or Parliament, in its wisdom, can deem almost anything. If Parliament says, "For the purposes of this Act, Monday shall be deemed to occur after Friday", then that will be the case.

    In this clause, the employee of an employee is also "deemed" to be the employee of the head employer. Why should a sub-employee be deemed to be the employee of a person who did not engage him; who may not even know him? Surely common sense tells us that the employer is the person who pays the worker's wages. However, I decided not to wrestle with that riddle because a much more important and serious issue arises from the clause.

    I said that the Government's approach seemed to be somewhat curious. That is something of an understatement. In the DTI Notes on Clauses, it states,

    "This clause closely follows the approach of Section 22 of the former Wages Act 1986".

    In fact, it does not; far from it. The clause follows word for word Section 22(1) of the 1986 Act. However, subsections (2) and (3) provided a defence for the head employer so that,

    "Where the commission … of an offence … is due to the act or default of some other person, that other person shall be guilty of the offence".

    In subsection (3) it states,

    "In any proceedings for an offence … it shall be a defence for the person charged to prove that he exercised all due diligence and took all reasonable precautions to secure that the provisions … were complied with".

    Why were those reasonable exceptions to this identical provision omitted from the present Bill? Why did the notes claim that the clause follows "closely"— I stress the word "closely"—the precedent of the Act introduced by the previous government when it clearly and manifestly does not?

    That is not all. Section 22 of the Wages Act 1986 was itself derived from Section 21 of the Wages Councils Act 1979. That contained the same provision as that proposed in Clause 48 of the present Bill, but with the same defences as are contained in the 1986 Act—defences not in the same words as in the 1986 Act, but entirely to the same effect. Those are the defences which the Government, for some reason, have seen fit to exclude from this Bill.

    The Wages Councils Act 1979 was derived from the Wages Councils Act 1959 and that too, in Section 18, contained the same provisions as appear in Clause 48 of this Bill, but with the same defences as were later incorporated into the 1979 and 1986 Acts. Nineteen-fifty-nine was 39 years ago, but I am not finished yet. I can go back even further. The identical provision with an identically worded defence to that in the 1959 and 1979 Acts was contained in Section 19 of the Wages Councils Act 1945. We have a history of the proposed Section 48 going back no fewer than 53 years, but always with the two defences which the Government are surreptitiously trying to drop.

    Clause 48 is a tried and tested clause, complete with two entirely proper defences going back through no fewer than five Acts of Parliament and two of those Acts were introduced under old Labour governments. When the present new Labour Government again introduce this tried and tested provision in the present Bill, they quietly deleted those long-standing defences which are intended to protect a wholly innocent person who is able to prove that any offence was not his fault but the fault of a third party.

    Why have the Government sought to create an absolute offence when, for over half a century, there has been a defence in certain circumstances? We want to know who gave the instructions for the removal of those

    two defences. Which Minister was it? No less important a question is this: why, in the notes to the Bill, did the DTI incorrectly claim that the present clause "closely"—again I emphasise that word—follows Section 22 of the Wages Act 1986? Which Minister, after deleting the two defences, gave instructions for the word "closely" to be inserted in the notes, which clearly and obviously originally read,

    "this clause follows the approach of section 22 of the former Wages Act 1986"?

    It does not remotely do so because of the omission of those two important subsections containing defences which were included in all the five Acts which directly preceded the present Bill. I should like to know the reason not only for the proposed exclusion of defences but also for the deceptive way in which the Government dealt in the notes with that major change—notes which stand the facts completely on their head—by saying that Clause 48 closely follows Section 21 of the 1986 Act when it does not.

    I realise that the Minister cannot be expected to answer those questions immediately. However, they are not rhetorical questions. I trust therefore that the Minister will agree to give me a detailed written reply to both those questions before the next stage of the Bill. The noble and learned Lord, Lord Falconer, and the noble Lords, Lord Clinton-Davis and Lord Haskel, are all persons of the highest integrity and we can rely on them to give a full answer to these serious questions.

    My amendment adds a simple, uncomplicated, easily understood and reasonable defence. However, the Minister need not spend too much time in commenting on the amendment because I do not intend to press it tonight. The reason for that is that I expect the Government to introduce at a later stage an amendment incorporating into the present clause the tried and tested wording of the 1986 Act and its four predecessors.

    I realise that the Minister cannot give me such an undertaking today. As the noble Lord, Lord Clinton-Davis, pointed out at the beginning of the debate last Monday, at col. 1380, he is not in charge of the Bill; it is the Minister of State in the other place who is in charge. Perhaps it is to him the Minister should first direct our questions as to who altered the original section and ordered the incorrect insertion of the word "closely". I beg to move.

    Before the noble and learned Lord responds to the interesting and incredibly well-researched speech of my noble friend, perhaps he can respond to my question, which is much more fundamental.

    I ask the noble and learned Lord to put his mind to the concept of small businesses. A small business will have an employer, could well have a foreman or supervisor and of course will have an employee. In relation to this Bill, and ultimately the Act, surely it is the employer who is responsible for paying not less than the minimum wage; the foreman or the supervisor has nothing to do with that. Therefore, if the supervisor or the foreman is "deemed" under this clause—and assuredly they would be—surely the Bill is striking at the wrong target. It is the employer who decides on the wages, not the foreman or the supervisor.

    Perhaps I may deal first with the point made so effectively by the noble Baroness, Lady Miller of Hendon, in relation to the wording of Clause 48. The point she made with great vigour was that the Government had said through the Notes on Clauses that this is the same as Section 22 of the Wages Act 1986. She said that it is the same as Section 22(1) but that it is not the same as the remainder of that section because the remainder of that section has provision whereby, if the commission of an offence is due to the act or default of some other person, that other person is not guilty of an offence. It also says that in any proceedings for an offence under subsection (1) or (2) above it shall be a defence for the person to prove that he exercised all due diligence and took all reasonable precautions to secure that the provisions of this Act, and of any relevant regulations made under it, were complied with by himself and by any person under his control.

    The structure of the Bill is that where there is a superior employer—someone above the immediate employer—he is made jointly liable as the employer with the immediate employer where certain specified circumstances are satisfied. If one then goes back to Clause 31 of the Bill, certain defences are included, including the defences which were formerly in Section 22 of the Wages Act 1986.I have not had a chance to compare precisely the defences under Section 22 of the Wages Act 1986 with the defences in Clause 31 because I did not know that this point would be raised. However, by the way the noble Baroness read them, they seem to be precisely the same defences as are included in Clause 31 of the National Minimum Wage Bill. The one that can be seen most obviously as being the same is in subsection (8) of Clause 31, which is the "I did everything I could" defence—the due diligence defence.

    The noble Baroness's point would be a good one if it was good on the facts. However, fortunately from the point of view of the structure of the Bill, I think it is wrong because these defences apply to anyone, whether he be a superior employer or not. Of course I shall check that that is the position, but I think it is. So, with respect to the noble Baroness, I think that her speech was based on a fundamental misconception. In those circumstances, I think it would be inappropriate for her to persist in the allegation that there was any deception on the part of the Government in saying that Section 22 has been followed, because I think it has been. Obviously, she will need to check what I have said but I think it was a misconception.

    She said in her speech that I should not bother too much with her actual amendment because this, as she saw it, better point became the fundament of her speech. If I may, I shall accept her invitation. It was accepted in another place that we had introduced this because there would have been considerable scope for abuse if we had not done so. Her amendment proposes that we should introduce a caveat to the application of the superior employer rule where the tribunal thought it was not fair and just to apply it. That is simply impracticable as a means of providing protection for people who are employed in this way in, for example, the agricultural industry, the construction industry or the textile industry.

    Perhaps I may deal with the point made by the noble Lord, Lord Skelmersdale. We are doing precisely what he suggested we are doing. If one does not have this amendment, the target—and the only target—would be, in his parlance, the foreman. One would not have the man who is actually paying the wages. Without Clause 48, the employer would be the foreman. What one needs to do is to bring in the real employer, who is the one above him, in order to make sure that the person who is in reality the employer—the person who is providing the wages—is caught by the Bill. Therefore, with the greatest respect to the noble Lord, I think we are doing precisely the reverse of what he suggests we are doing. We are bringing in the person who pays so that there is the real employer before the tribunal or the court.

    Before the noble and learned Lord sits down, perhaps he will consider subsections (6) and (7) of Clause 31. I am not convinced that his explanation in response to my noble friend's amendment stands up. Subsection (6) states:

    "Where the commission by any person of an offence under subsection (1) or (2) above is due to the act or default of some other person, that other person is also guilty of the offence".
    That may be fine, but subsection (7) states:
    "A person may be charged with and convicted of an offence by virtue of subsection (6) above whether or not proceedings are taken against any other person".
    It looks as though it does not necessarily provide a defence because one could gun for both parties whereas there might be only one guilty party.

    I think the noble Lord is right to say that subsections (6) and (7) are not defences. I was particularly referring to subsection (8), which states:

    "In any proceedings for an offence under subsection (1) or (2) above it shall be a defence for the person charged to prove that he exercised all due diligence and took all reasonable precautions to secure that the provisions of this Act, and of any relevant regulations made under it, were complied with by himself and by any person under his control".

    The noble and learned Lord has given an interesting reply. We shall certainly want to look carefully at subsection (8) of Clause 31. However, as with all splendid answers, it tends to raise more questions than it resolves. If the head employer is to be deemed for the purposes of this Act to be the employer of the person jointly with the immediate employer, there is in subsection (2) of Clause 31 a requirement about the keeping or preservation of records in accordance with regulations to be made under Clause 9. I am not clear that I have understood the structure of this provision correctly. Does that head employer just have to make sure that the other employer with whom he is deemed to be an equal keeps records, or does he have to keep a separate set of records himself in order to comply with the provisions into which, through from that clause and into Clause 31 and Clause 9, he is drawn?

    The effect of Clause 48 is that the head employer—the superior employer—and the immediate employer are to be treated jointly. They are both regarded as employers of the worker jointly. The effect of that is that they are both employers and both have all the obligations of the Bill placed on them. Precisely how they comply with those obligations will depend on the facts in every case. It would be wrong for me to indicate that in a particular case it would or would not be sufficient if the records were kept by one of the two but both had access to them. It would be a question of fact in every case.

    I think the noble and learned Lord will want to return to this point because he will appreciate that, if the outcome of the interplay of these provisions is that a head employer cannot compel the employer who is closer to the employee to keep the records and if he has to keep his own separate set of records, some quite interesting issues begin to be raised about the burdens that might be imposed on relatively small businesses. I am sure it is not the purpose of this Government, any more than it was the purpose of the previous government, to impose unnecessary burdens and red tape on small businesses.

    6.30 p.m.

    I fully accept that it is not the Government's intention to impose extra burdens on anyone. We have to remember that the immediate employer will be the employee of the superior employer. Between them one would have thought that they could make sensible arrangements for the keeping of records.

    I am grateful to the noble and learned Lord for his instant reaction to my perhaps inopportune question. How does the clause relate to Clause 31(1) to which the noble and learned Lord also referred in the course of his remarks? That clause speaks specifically about the employer. Therefore, does Clause 48 mean, in the noble and learned Lord's terminology, both employers; namely, the head employer and the intermediate employer?

    Before the Minister answers, perhaps I may say that I have become slightly confused between what is an employer and what is not. Is it not all defined in Clause 54 which sets out that there has to be a contract of employment and therefore a simple supervisor cannot be a subordinate? Is that not the answer?

    Perhaps I may first deal with the question of the noble Lord, Lord Skelmersdale. It is quite a simple and clear structure. Clause 48 makes both immediate and superior employers joint employers for the purposes of Clause 31. Both can be guilty of an offence in Clause 31 subject to the defences in the clause. That legislative technique is adopted to avoid abuse where the real employer is the superior but he is using the immediate employer as a means of trying to get round this or any other provision.

    As regards the question put by the noble Viscount, Lord Thurso, broadly it is as simple as he said, subject to Clause 48, except that in Clause 54 there are circumstances in which there could be a relationship which gives rise to the payment of the national minimum wage whereas in strict legal terms there was not a contract of employment. I do not believe that the attractively simple solution he suggests can quite be applied.

    I thank the noble and learned Lord for his explanation. I shall read it very carefully. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 48 agreed to.

    Clause 49 agreed to.

    After Clause 49, insert the following new clause—

    FINANCIAL STATEMENT AND BUDGET REPORT

    (". The Chancellor of the Exchequer, acting in consultation with the Secretary of State, shall include in the Financial Statement and Budget Report an assessment of the cost of the national minimum wage to Her Majesty's Government in respect of employment costs in the public sector.").

    The noble Baroness said: I made clear to the noble Lord, Lord Haskel, that in moving Amendment No. 124 I would also speak to Amendment No. 125.

    "Unnecessary secrecy in Government leads to arrogance in governance and defective decision making".

    Those are not my words, but the opening sentence of the Government's recent White Paper Your Right to Know: Freedom of Information.

    "The traditional culture of secrecy will only be broken down by giving the people of the United Kingdom a legal right to know".

    Those are not my words, but those of the Prime Minister in his personal introduction to the White Paper.

    In the spirit of those fine sounding words, Amendment No. 125 is a simple but democratically important addition to the Bill. It anticipates the legislation that the Government say they intend to introduce. It can be summarised in a few, short sentences. Subsection (1) requires the Secretary of State and the Chancellor of the Exchequer to lay an annual report before Parliament as to the workings and the effects of the national minimum wage. Subsection (2) entitles the Low Pay Commission to make a similar report to the Secretary of State. If it chooses to do so, she in turn must lay that report before Parliament unless its report is already covered by her own annual report. Subsection (3) sets out nine headings under which the Secretary of State and the Chancellor are required to report. The Low Pay Commission may report on all or any of those headings as it thinks fit. Subsection (4) makes it clear that the reports can contain any other material thought to be relevant.

    The purpose of the amendment is purely in the interests of open government—a cause which the present Administration wish to espouse. It ensures that the Secretary of State keeps Parliament fully informed of those consequences—good or bad. It is information that Parliament is entitled to have—good or bad.

    The Government claim that the Bill will have no adverse effect on employment; no adverse effect on industry; no adverse effect on exports; and no adverse effects on the economy generally. If their confidence is not misplaced, then no doubt they will want to trumpet to the entire population the benefits that they have secured for it.

    If our predictions, unhappily, prove to be correct—and it will give us no satisfaction if they are, because of the detrimental effects—then it is only right that the Government should come to Parliament and admit their errors and say what they are going to do about them.

    Apart from the fact that there is absolutely no reason why the Government should not supply the information, this is definitely one amendment that the Government cannot arbitrarily reject, as they have so many others.

    The arguments for the new clause proposed in Amendment No. 124 are precisely the same as those I have just mentioned. Indeed, at one time I contemplated putting both clauses together, but I was advised that there might be different implications between the two.

    Again in the interests of open government, there should be no objection to the Chancellor telling Parliament at the appropriate time of the year how much it is costing the public, both as taxpayers and as council tax payers, to implement the Government's policy. I shall be glad to discuss any constructive modifications which the Minister may wish to suggest about specific aspects of the new clauses.

    Subject to that, if the Government say they are unable to agree to this very reasonable request in the interests of open government, then the information we want them to make public may have to be extracted from them rather in the manner of pulling teeth in an annual series of oral and written Questions which they will not be able to evade. I say "may have to be extracted", because the Committee will understand that I am in no position to predict what will happen in the future. I certainly have no part in tactical decisions. I can only express what is a personal opinion as to what conceivably might happen.

    I do not know whether the Minister had it in mind to agree to these amendments all along. If not, and if he wants time to consider the theoretical consequences that I have suggested might—I stress "might"—follow, I would be willing to afford time for consultation and bring back an agreed amendment or amendments at another stage. I beg to move.

    Before the Minister responds, perhaps I may intervene. As he is aware, we on these Benches stand four square behind the Government in their determination to ensure that the National Minimum Wage Bill goes through. However, as he well knows, there is an area on which agreement has not been reached with the Government; namely, the area which the noble Baroness has touched on. I and my colleagues have pressed the Minister on a number of occasions and each time he has avoided answering us, with incredible legal and political felicity. As a result of the events of last week we realise why his forensic skills in this area have been put to the test so much.

    However, I would like to take the opportunity to press the Minister again. It is important that the report from the Low Pay Commission is permanently enshrined in our legislative and statutory structure. It is important not only for the reason which the noble Baroness gave as regards full disclosure to the public—we share that view—but, more particularly, because of the fear I expressed last week in response to the Statement. Unless the Low Pay Commission is given permanent status and clear criteria are set out in the Bill as to the form of the report we can expect regularly, then every year we shall have the kind of undignified political football passing that we witnessed last week in the Government's response to the initial report of the commission. Therefore that is why I ask the noble Lord the Minister again to confirm that the Government will give permanent status to the Low Pay Commission and will bring forward amendments at Report stage to make sure that happens.

    If I may, I will speak to Amendment No. 125 at the same time as I speak to Amendment No. 124. Amendment No. 125 is the one which encapsulates what the noble Baroness is after, but that amendment—

    I was of course referring in my remarks to the forensic skills of the noble Lord, Lord Clinton-Davis.

    I assumed that was the position! Amendment No. 125 would require in its first subsection that the Secretary of State and the Chancellor of the Exchequer would together report to Parliament annually on the operation of the national minimum wage. The amendment proposes that they would need to take account of a host of factors: the economy and competitiveness, regional factors, comparative pay, unemployment and benefit levels, training and labour markets, small business, the disabled and age variations.

    These are all factors which the Low Pay Commission has looked at in coming to its recommendations and the obligation in the new clause for Ministers to report annually on them would in effect create a permanent monitoring duty in the Bill. The Government have no argument with the need for monitoring. It is clearly important to monitor the effects of any new legislation, especially in an area as important as the minimum wage, when a country has never before had a universal statutory minimum.

    As with all government policies, we will wish to evaluate the effect of producing a minimum wage in full, which is likely to include most, if not all areas listed in the proposed new clause in the amendment put forward by the noble Baroness. The amendment—this is strongly supported by the noble Lord, Lord Razzall—also sees a permanent role for the Low Pay Commission in continuing to monitor the impact of the minimum wage. The Government have made clear in publishing the report of the Low Pay Commission that they wish the commission to continue to monitor and research the impact of the minimum wage following its introduction.

    The criteria listed by the new clause in the amendment look sensible enough, though perhaps not exhaustive. Doubtless, given time, we could all come up with more which could be added. That points to one of the reasons why I ask the Committee to oppose this amendment, if it is pressed, because it is unnecessary and over-rigid to prescribe in primary legislation who should monitor and report on the impact of the legislation, how they should do that and when.

    Furthermore, however important the matters involved may be, it is important to recognise that producing such a report would be an extremely time-consuming exercise and its content could also overlap with other government documents, notably the competitiveness White Paper and possibly, to some extent, Budget documentation. It is therefore preferable to leave this matter open. An annual report from the Secretary of State and the Chancellor specifically on the national minimum wage could easily become seen as part of the annual pay round and lead to expectations of annual increases.

    Turning now to the role of the Low Pay Commission, which was specifically referred to by the noble Lord, Lord Razzall, the amendment—and this is supported by the noble Lord—impliedly presumes that the Low Pay Commission will be a permanent body with the power to initiate its own work and make reports, rather than having to wait for matters to be referred to it by the Secretary of State.

    I should start by making it quite clear that the Government fully appreciate the value of the work that the commission has carried out in making its report. I have also already indicated that the Government wish the commission to continue to monitor and report on the impact of the minimum wage following its introduction. The position envisaged by the amendment goes somewhat beyond what the commission was asked to do for its first report. The commission envisaged by this amendment would have the power, it appears, to report on anything it wanted at its own initiative, including a whole range of matters raised and debated previously both in this Chamber and another place at various times during the passage of this Bill. I can imagine that life as a commissioner in such a body would be incredible fun. It would be a job for a very long period indeed and there would be the opportunity to indulge in any particular matter of interest—and all, of course, at the public expense.

    I find it strange that the noble Baroness should support such a powerful and unaccountable body. This runs counter to other amendments she has put forward which seek to constrain and limit the Low Pay Commission's powers. Your Lordships should have no fear. The Government envisage the commission as task orientated, and not unlimited. It is right that Ministers, as elected representatives accountable to Parliament, should be responsible for the setting of those tasks, and one of those tasks is that of monitoring, as I have indicated.

    It is in order to maintain the task-orientated focus that the commission must be essentially reactive and not proactive. The commission must, of course, be independent in reaching its views, but the commission's ongoing activity should be within the framework set by politicians. There are good administrative and accountability reasons for this arrangement. I believe that the proposed amendment, together with the views expressed by the noble Lord, Lord Razzall, would go beyond what the Government believe is a common-sense structure for the commission's activities and in relation to reporting to Parliament. I therefore ask the Committee to reject the amendment, if it is pressed.

    6.45 p.m.

    Before my noble friend determines whether or not to withdraw her amendment, can I say to the noble and learned Lord that I thought he glided through that answer extremely skilfully. There is one point, however, on which I should like a little further clarification. There has been some political speculation, doubtless false, in the media to the effect that the Prime Minister is not wholly enamoured of the idea of the permanent existence of this Low Pay Commission. While he certainly indicated in his answer that the Government thought it desirable that there should be a permanent evaluation of what is going on, I am not sure that I actually heard him say that indefinitely and on a permanent basis the Low Pay Commission is to be the body which will do that. I may have misunderstood the position, but if the noble and learned Lord is in a position to say that the Low Pay Commission is to be a body of permanent establishment, it would certainly help to clarify the doubtless wholly unjustified speculation there has been in the media.

    I thought—but I was wrong—that my answer was entirely clear. The answer is this: we believe that this sort of policy is one which does require monitoring and evaluation. Secondly, we consider that the Low Pay Commission is a body to whom particular tasks—I see the noble and learned Lord laughs—can be assigned. I think that is perfectly clear.

    I thank the noble and learned Lord the Minister for his reply. When he started I got very excited and thought that perhaps at long last I was going to have one of my amendments accepted just like that. Therefore he will understand why I was slightly disappointed when we came to the end of his reply. However, I will read very carefully what he has said, and at this stage I beg leave to withdraw my amendment.

    Amendment, by leave, withdrawn.

    Clause 50 agreed to.

    [ Amendment No. 125 not moved.]

    Clause 51 [ Regulations and orders]:

    Page 33, line 19, after ("power") insert—

  • ("(a) of the Department of Economic Development to make an order under section 26(6) above, or
  • (b)")
  • The noble Lord said: I beg to move Amendment No. 126 formally.

    On Question, amendment agreed to.

    Page 33, line 22, after ("such") insert ("order or").

    On Question, amendment agreed to.

    Clause 51, as amended, agreed to.

    Clauses 52 and 53 agreed to.

    Clause 54 [ Meaning of "worker", "employee" etc.]:

    Page 34, line 7, after ("person") insert ("(including a partnership)").

    The noble and learned Lord said: I believe that I can move this amendment briefly. The noble and learned Lord will recollect that earlier in this Committee stage we were concerned about whether or not partnerships are to be treated as employers, and, if so, about exactly what liability would be imposed on individual partners. I am very much aware that under the law of Scotland a partnership is regarded as having a separate legal persona. A brief tutorial from the noble and learned Lord might be helpful and enable me to be confident that such a partnership is a "person" in the context of Clause 54, by which I am a little baffled. I trust that the answer will be yes. If the answer is in the affirmative, I wonder whether the definition is necessary. I invite the noble and learned Lord to answer my question in one of two ways. I beg to move.

    In rising to support the amendment, perhaps I may say that I am a little intrigued because we are considering definitions at the moment and the clause states that an "employer" is "the person". An employer might be a person, but it might be a company or a charity. It might even be—heaven help us!—the Government because some people who are employed by the Government are occasionally vulnerable, depending on their employment. I wonder whether for the sake of clarity the clause should not refer to "the person or organisation".

    While I am on my feet, I should add that I am a little concerned by subsection (5). Perhaps I may impose on the noble and learned Lord for a moment and quote from the subsection which defines "employment" as follows:
  • "(a) in relation to an employee, means employment under a contract of employment: and
  • (b) in relation to a worker, means employment under his contract".
  • Apart from the tautology, is not that a totally indecent form of class distinction?

    Perhaps I may deal, first, with the amendment which stands in the name of the noble Baroness, Lady Miller of Hendon, and which was moved by the noble and learned Lord, Lord Fraser of Carmyllie. I am glad to have the opportunity to clarify the position and status of a partnership for the purposes of this Bill. My noble friend Lord Clinton-Davis gave an initial reaction when asked about this point on an earlier occasion in Committee. I am now in a position to give a fuller explanation and shall do so.

    The amendment affects Clause 54(4) as to the meaning of "employer". It makes explicit that the notion of "person"—and therefore "employer"—incorporates a partnership. I can assure the Committee that the amendment is not necessary. By virtue of the Interpretation Act 1978, the word "person", when used in statutes, includes a body of persons whether corporate or unincorporate. A partnership in England and Wales is an unincorporated body of persons that has no separate legal identity. Scottish partnerships are not corporate bodies, but they have a distinct legal personality separate from their partners. The word "person" in Clause 54(4) therefore includes partnerships in both England and Scotland. I believe that that was the fundamental point raised by the noble and learned Lord.

    Partners are jointly and severally liable for the partnership's debts. In England and Wales each partner, some partners or all partners can be sued. In Scotland, only the partnership can be sued although the partners can be sued if the partnership becomes insolvent. None of that means that a worker employed to work for a partnership can recover the minimum wage more than once. There is only one debt and it follows that he can recover it only once. I hope that that fully explains the point raised by the noble and learned Lord when moving the amendment.

    I turn now to the point raised by the noble Lord, Lord Dixon-Smith. Clause 54(3) states:
    "'worker' … means an individual who has entered into or works under …
  • (a) a contract of employment; or
  • (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services".
  • Subsection (5)(a) makes it clear that "employment" (in relation to an employee) relates to a contract of employment whereas, under paragraph (b) (in relation to a worker) it relates to a contract that can be wider than a contract of employment because of the provisions of Clause 54(3). It is not a class-based distinction; it is a perfectly sensible distinction based on the wording of this Bill. I could not expect anyone to pick that up, given the speed with which I gabbled through it, but I believe that that is the answer to the noble Lord's point.

    I am delighted that my amendment has given the noble and learned Lord an opportunity to display his learning of the law on both sides of the border. I am grateful to him. He has reassured me that partnerships are included in these provisions. I still have a small query about whether subsection (4) is necessary, but perhaps the noble and learned Lord would care to reflect on that and possibly discuss it before the next stage. In the meantime, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 54 agreed to.

    Clause 55 agreed to.

    Clause 56 [ Short title, commencement and extent]:

    Page 35, line 12, at end insert ("but not before one year has elapsed from the day on which the Low Pay Commission makes its report and it is laid before both Houses of Parliament, together with a report from the Secretary of State on the results of consultation undertaken by him with representatives of industry and of small business on the content of the Commission's report or, where these events take place on different days, from the latest such day.").

    The noble Baroness said: I shall not be moving the amendment in view of the fact that the Low Pay Commission recommended, in paragraph 7 of its report, that the national minimum wage should commence in April 1999—that is, in 10 months, compared with the 12 months that I propose in my amendment. I do not believe that that is a difference worth arguing about. However, perhaps I may mention that I would not have been put to the trouble of having to argue the amendment—neither would the Minister nor his officials—if we had had a copy of the commission's report previously.

    [ Amendment No. 128 not moved.]

    Amendment, by leave, withdrawn.

    Clause 56 agreed to.

    7 p.m.

    Schedule 1 [ The Low Pay Commission]:

    Page 36, line 6, after ("and") insert ("at least").

    The noble Baroness said: In moving Amendment No. 129, I should like to speak also to Amendments Nos. 130 and 131, which are all drafting amendments to the first schedule of the Bill. The first schedule is to be incorporated into the Act under Clause 8(9) to create a permanent Low Pay Commission to replace the so-called non-statutory one which operates at present, the non-legal functions of which—I do not mean "illegal"—will be retrospectively ratified when the Bill is passed. The schedule sets out the constitution of the Low Pay Commission, makes financial provisions and regulates its proceedings. I should like to take each of my amendments in turn and to explain their purpose.

    Amendment No. 129 seeks to provide for "at least" eight members of the commission. For all I know, eight members may be more than enough—in the minds of some noble Lords, any number might be too many—but there could conceivably be a need for additional members if the complexity of the commission's operations demanded the membership of more experts. I am the last person to encourage an expanded quango such as this but, as the provision is purely permissive, it will give the Secretary of State scope to act, if necessary, without coming back to Parliament with an amending Act.

    Schedule 1(2) leaves the Secretary of State with the power to construct the membership in such a way as she may consider "appropriate". What the Secretary of State may consider appropriate may seem far from appropriate to others. Amendment No. 130 requires the Secretary of State to appoint a commission with an equal balance of persons with the necessary qualifications, and not mere token members from one group while packing it with members more amenable to a particular point of view. After all, in employment tribunals consisting of three persons there is a statutory balance between employers and trade unions. Paragraph 1(2)(c), as it currently appears, calls for the inclusion of

    "members with other relevant knowledge or experience".

    but what is relevant? Is it service on other quangos or membership of some purely academic think tank with no practical experience of the real world or knowledge of how to juggle a bank account to meet the payroll on a Friday?

    Two of the qualifications to which the Government have committed themselves are either trade unions or employer organisations. The third qualification to which the Secretary of State has coyly refrained from committing herself is the most essential one: knowledge and experience of business.

    Despite the two earlier paragraphs that require trade union and employer experience, experience of business is the key qualification that the present paragraph omits. That means that it comes in only by interpreting "other relevant knowledge or experience". Why does the Secretary of State not spell it out? Perhaps she wants an escape hatch to avoid the involvement of people from the real world of business. If I am mistaken on the point I am certain that the Minister will explain the reason for this serious omission and perhaps agree to put it right by including representatives of small businesses in any future commission.

    It is as if the Secretary of State, while window dressing a balanced organisation, deliberately wishes to ignore or sideline the unrepresented small business community whose interests are not the same as those looked after by the mighty employer associations. What the CBI or the IoD think is of no interest to a business running a factory with 50 employees, much less the owner of a hairdressing salon.

    That is the explanation for the point that underlies Amendment No. 130. It provides for the inclusion of at least one person who has practical knowledge and experience of running a small business. I do not in any way disparage the qualifications of any of the present members of the commission, especially Mr. Dewar. I am referring simply to the constituent members of the commission on an ongoing basis if the Secretary of State decides that it has any future. It is the small businesses that will be most affected by the national minimum wage, not the giant supermarkets who can easily cover the cost by adding one penny to a loaf of bread or a packet of salt; nor will it affect the large industrialists who already pay premium rates for skilled workers. But it will affect the local cake shop or pizza parlour.

    No taxation without representation! The national minimum wage is not a tax but it is money that comes out of someone's pocket. It is only right and proper that the voice of small businesses should be heard, even if it is not to be listened to, as I fear it may not.

    Clause 8(9) of the Bill gives the Secretary of State yet another permissive power which she may exercise or not as she chooses without further reference to Parliament. The power seeks to make the low pay unit an ongoing body once its initial functions on which it is currently engaged have been performed. The Committee should note that that power may be exercised at any time, not within a reasonable time. It may be exercised in a year, two years, four years, some time, never. The point is that whenever the Secretary of State in her wisdom feels the urge to have a Low Pay Commission she is stuck with it, if for whatever reason she later decides that it is redundant.

    Since the Secretary of State is busily giving herself powers to legislate by statutory instrument and all kinds of optional powers while steadily refusing others, she most certainly should have the option, which once again she need never exercise, to close down the Low Pay Commission if it is no longer required without coming back to Parliament with an amending Act.

    I am in some technical difficulty over Amendment No. 131. It appears in the Marshalled List as intended for the end of line 30 on page 36. I believe that it should have gone on page 7 at the end of line 5 which is Clause 8(9) to which I have just referred. The Committee has already agreed Clause 8 stand part and I do not believe that I can go back to it. If the Government accept this very reasonable amendment I believe they will be able to agree where it can be inserted at a later stage of the Bill. For the moment, I apologise to the Committee for not noticing the error until I re-read my notes earlier today. I beg to move.

    The noble Baroness demonstrated once again her deep opposition to the Bill in her closing remarks. I respect her position but I cannot agree with it. She resorted to a number of shibboleths. She said that small businesses were not listened to. That is simply not correct. Small businesses were widely consulted by the Low Pay Commission. The noble Baroness said that no member of the LPC had run a small firm. That is not correct. The member to whom she referred specifically has done so and is currently chief executive of the Scottish Grocers' Federation. It is patently incorrect to say that the views of small firms have not been consulted or considered in these recommendations.

    The noble Baroness disparaged the role of the CBI. I believe that members of the CBI are very knowledgeable about the interests of 190,000 small businesses, and perhaps even medium-sized enterprises. I have said many times that it is wrong to refer in this context to representatives. If the noble Baroness wants someone who has experience but is not a representative of any particular interest that is fine, but because these amendments have been drafted in this extraordinary way she has constantly ignored the position of the Government that these people are not there as representatives. Those individuals have expertise. Surely, the correct criteria should be expertise and independence.

    I should like to deal briefly with the remainder of the membership of the LPC. They were appointed not only within the criteria to which I have just referred but in a way that complied fully with the Nolan procedures for public appointments. The Government have stood rigidly by those requirements. The Government stressed in their advertisement for members that they were looking for individuals with experience of a range of industries and services. They were required to display a record of high achievement in the chosen area of expertise.

    We sought to achieve a balance of representation, and I believe that we have succeeded. The commission is there to try to achieve a reasonable consensus among the social partners. The noble Baroness appears to dismiss the trade unions as having no interest and no expertise in this matter. That is patently absurd. I entirely reject that philosophy. It was one of the many things that went wrong with the previous government. The previous government were deaf to many views held widely in the community because of ideology. That is not the input that we wish to make in relation to this or any other policy.

    The commission is not there to act as a forum for different parts of industry to pursue their own interests. We want balance. We do not want advantage. That is the approach which the Bill reflects and which is rejected, of course, by the Opposition.

    Amendment No. 129 asserts that eight should be the minimum number of members rather than the fixed number as at present. There is some advantage in flexibility. That would enable additional members to be appointed, but there is also a disadvantage. I should have thought that it would be clear to most Members of the Committee that there would be a risk of open-endedness and unwieldiness. While the choice of any particular member is, to some extent, arbitrary, we were determined to provide a group—I believe that we succeeded—of a reasonable and manageable size, including the chairman, comprised of three, identifiable, mini groups. That is the right way to achieve balance.

    The fixed size of the commission would enable us to combine a core of expertise and experience with a degree of flexibility and ease of management. The commission is sufficiently comprehensive to ensure a wide spread of interests and a knowledge of the various sectors of our industrial and business life. The commission could draw on extra support from others—people who can provide advice without being appointed as full commission members. That is what the commission has done in going about its business. That is an entirely sensible approach.

    The strongest argument for a group of this size may be that it seems to have worked well for the present non-statutory commission. So is it not sensible to adopt the same criteria for the statutory body?

    Amendment No. 130 would lay down strict rules about the make-up of the commission requiring an equal number of members from the employers' and employees' side. It would leave open the number of members to be appointed as independent experts, but with the upper limit that the independent members could not outnumber the remainder. The effect would be that the commission could, but need not, have a membership of which half consists of independent experts. I am sure that the amendment is a probing one. However it seems to be inconsistent with the general thrust of the case made by members of the Opposition in another place when they discussed the commission's membership.

    It was suggested there that once the commission had made its first report, academics could be weeded out. I do not know what would happen to them after they had been weeded out, but that was the suggestion. They would be replaced by those with direct business experience. The noble Baroness did not go as far as that this evening. By contrast, the amendment would increase substantially the number of academics on the commission.

    All these are matters of judgment. It is a question of balance. I believe that we have struck the balance correctly. It has worked in practice. That surely is the essence of the matter.

    I turn now to Amendment No. 131, to which the noble Baroness alluded. It would require the statutory Low Pay Commission to continue to exist once appointed—by default, as it were—until the Secretary of State is satisfied that there is no purpose in the commission continuing. I thought that I heard the noble Baroness argue that she wanted the whole thing wound up; but, there it is, she wants it to go on indefinitely.

    I believe that the noble Baroness is saying that the commission should be wound up once it had no significant functions to undertake. My noble friend referred earlier to the way in which the commission would work. It would be task-oriented; it would be linked to need. That is the basis for any future appointment of a statutory commission. On completing its task, we intend that the commission be disbanded if there is nothing further for it to do. The amendment assumes that the commission will have continuing duties, beyond reporting to the Secretary of State on the matters referred to it.

    Once the commission has reported on all the matters referred to it, it will have nothing further to do. There will be no point in continuing its existence. To some extent we are in unknown territory, because it is the first time that we have had a national minimum wage. So it is right to see what the impact is, and what follow-up will be necessary. We envisage the commission having a part to play in all that. We want monitoring of and reporting on the impact of a minimum wage, following its introduction. The amendment is superfluous or uncertain in its effect. I ask the Committee to reject it.

    Perhaps I may mention at this stage, because I believe that it will be the last opportunity for me to do so, and it is appropriate for me to say this before we close the Committee proceedings, that there will be another small batch of government amendments on Report. I had already indicated to the noble Baroness, Lady Miller, and the noble Lord, Lord Razzall, that some further technical amendments would be coming. I can assure the Committee that the amendments are highly technical. They are nearly all linked to and relate to the bodies for which the Secretary of State may make arrangements under Clause 13 for their officers to act as minimum wage enforcement officers, and the position that could arise following devolution as a result of the Scotland Bill. There is also one purely drafting amendment.

    I hope that the Committee will forgive me if I do not go into detail at this stage. I can assure the Committee that we shall be tabling the amendments shortly. I shall be writing with a detailed explanation to the noble Baroness and the noble Lord, as I did earlier for the other government amendments. Disappointed though I am sure she is, I hope that the noble Baroness will withdraw the amendment.

    7.15 p.m.

    I once again thank the Minister for the courteous way in which he dealt with my amendment this afternoon. Having formerly been involved in a small business, I do not believe that small businesses are represented sufficiently. I regret that. I say that in view of the many amendments that I moved today about spouses and so forth. However, I understand what the Minister has said.

    The Minister referred to Amendment No. 131. I am merely asking for a little more flexibility. I am not saying that the commission should go on for ever. I am trying to ensure that the Secretary of State has the flexibility that she requires. This is the final amendment that I move at this stage of the Bill. I thank the noble Lord, Lord Clinton-Davis, and the noble and learned Lord, Lord Falconer, for the courteous and good humoured way they rejected all of my reasonable amendments, even though I argued them—in their words—so beguilingly. Nevertheless, at the next stage, I shall be returning to some of the amendments that I withdrew or did not move, by which time I hope that the Minister will have persuaded the Secretary of State to take a more positive attitude.

    Before the noble Baroness sits down, perhaps I may say that she has been most courteous and kind as she always is. I cannot call her my noble friend, although I can call her my friend, in other respects, as she knows. Both noble Baronesses and the noble and learned Lord, Lord Fraser, have been articulate—I cannot say helpful. This is not the appropriate time to thank everyone. I shall reserve that for another occasion.