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Lords Chamber

Volume 701: debated on Monday 19 May 2008

House of Lords

Monday, 19 May 2008.

The House met at half-past two: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Chester.

Death of a Member

My Lords, I regret that I have to inform the House of the death of Lord Blease on 16 May. On behalf of the House, I extend our condolences to his family and friends.

Economy: Offshore Financial Centres

asked Her Majesty’s Government:

Whether they have recently reviewed the extent to which offshore financial centres under United Kingdom sovereignty provide more benefits than costs to the British economy.

My Lords, the Government have not conducted a review on the costs and benefits of offshore financial centres under United Kingdom sovereignty.

My Lords, I am sure the Minister will recall that when the Labour Government came into office in 1997 they conducted a review of the role of offshore centres under British sovereignty, particularly focusing on the three Crown dependencies in Europe: the Isle of Man, the Channel Islands and Gibraltar. In the 10 years which have passed since then the size of bank deposits held in Jersey alone has more than doubled and the whole question of tax evasion at the international level has become a much more acute issue, as we see with a number of issues in the European Union, in the OECD and elsewhere. Is it not time for the Government to revisit this issue?

My Lords, some progress has been made, particularly in the European savings directive which was concluded in 2006 and which we are using to bring as much pressure as we are able to bear on the Crown dependencies and overseas territories to comply. The issue is overwhelmingly to do with transparency. Although they are not as strong as we would like in terms of total compliance, there are signs that the Crown dependencies are making progress. We welcome that development.

My Lords, how many serious offshore financial centres are there? And if my noble friend were going to do anything, how would he propose to evaluate the costs and benefits?

My Lords, the latter question is very difficult—with the absence of information, it is actually impossible to answer at this stage. We look forward to the fact that the Channel Islands and the Isle of Man—the Crown dependencies—recognise the value of complying with the OECD requirements and that the Virgin Islands, the Turks and Caicos and others—the overseas territories—agree with the development of taxation information exchange agreements. Although the agreements are limited, there is some progress and some agreements are being signed, though not all of them with the United Kingdom. The OECD is a powerful assist in these terms and wants to see these tax havens sign international agreements on openness and transparency.

My Lords, I was going to ask my noble friend about the OECD. My understanding—he will correct me if I am wrong—is that the OECD entered into an agreement with the Channel Islands and the Isle of Man in about 2001 or 2002 and that that agreement placed certain requirements on the Channel Islands. Has my noble friend been in touch with the OECD to see whether the Channel Islands has been living up to that agreement? It is the combination of the OECD and the international agreements that will bring about change in the Channel Islands on this issue. Although the constitutional issues are quite delicate, that is not to say that we should not be applying pressure through the OECD and others. But the issue is constitutional as well as financial.

Indeed it is, my Lords; and the United Kingdom does not interfere with the internal affairs of the Crown dependencies, which are responsible for their own decisions. However, we are using the international structures to bring as much pressure to bear as we can in order that the Crown dependencies and, as I said, the overseas territories engage with openness on tax issues. Until we get to that stage, the kind of question that my noble friend Lord Barnett has addressed is a long way off in the future. However, we want to see openness and the information made available.

My Lords, last November the National Audit Office issued a report entitled Managing Risk in the Overseas Territories which made a number of recommendations for the Government to bolster those territories’ legislative capacity and enforcement capacity. Since then there has been silence. Why?

My Lords, there has been silence because effective pressure has been brought to bear which would not be advanced by much public declamation on what was going on in the relationship between Her Majesty’s Government and the Crown dependencies. As my noble friend Lord Soley indicated, we are in that delicate position where we observe the constitutional proprieties by not interfering with their internal matters while wanting them to shape up and respond to the necessary international agreements which are being developed. We are making progress. The progress is not as rapid as we would want—we would have liked earlier and total compliance, which we have not got—but we are making progress.

My Lords, what discussions have the Government had with the Government of France, which is in a not altogether dissimilar position so far as Monaco is concerned?

My Lords, just how similar France’s position on Monaco is to ours on the British Crown dependencies is a moot point; as the noble Lord will recognise, the French constitution has been somewhat different from the British one since probably 1789. The French are exercised about Monaco, but on the whole Monaco presents a problem that is overwhelmingly to do with individual rather than company and corporate taxation. Although the British Government are concerned about individuals’ obligations to meet proper taxation we also have anxieties about companies and corporations so far as some of our Crown dependencies and overseas territories are concerned.

My Lords, does the noble Lord accept that one of the major costs that ends up with the British Government is in tax forgone where British companies are evading tax by establishing activities in some of the territories over which we have effective control? Given the increasing pressure on the Government’s finances, should this not be a reason for the Government to inject a new sense of urgency into looking at how British companies and those tax havens are interacting to the disbenefit of the Exchequer?

My Lords, there is no shortage of urgency. The Treasury is always keen to ensure that the proper resources are directed to it from those who owe it tax.

Health: Polyclinics

My Lords, the Government are investing £250 million to support the NHS in expanding primary care services. Primary care trusts are carrying out open procurement during 2008-09 for over 150 new GP-led health centres and over 100 new GP practices. These new services will not replace existing family doctor services but give the public extra access to primary care into a range of other community-based health services.

My Lords, I thank the Minister for that helpful reply. Can he reassure me that people with chronic conditions will still have access to the specialist consultants who are normally available only in acute hospitals, and that the capacity of primary care trusts will be improved so that they can provide the diagnostic care that will be needed?

My Lords, this policy is in response to the changing demands in health services. As was alluded to by the noble Baroness, we see demand in the next 10 years to deal with an ageing population and long-term conditions, which are a result of the success of the NHS in the past decade. We need a health service that is responsive and has the expertise needed to treat patients nearer to home. The purpose is to provide the resources that a primary community service needs to tackle challenges in the future.

My Lords, does the Minister recognise that although there may be a place for polyclinics, especially in parts of east London, a lot of very genuine concern has been expressed by thousands of GPs and their patients that really good general practices may be replaced by polyclinics? I know that the Minister does not intend to do that, but will he reassure those who are worried?

My Lords, the health centre is very different from the polyclinic, which was a recommendation made through a review that I led with a hundred different practitioners in London—including general practitioners—to provide more integrated care around the needs of patients. The measure does not involve closures or shifting primary care; it builds on the excellence of primary care that this country has enjoyed for many decades. The purpose of the polyclinics is to provide more integrated and personalised care, and does not mean shifting GPs away from their patients. We have described the federated or networked model, which has been acknowledged by the Royal College of General Practitioners in its September report, by the NHS Confederation in its December report and by the NHS Alliance.

My Lords, is my noble friend aware that I spent part of my professional career working in a health centre with many of the features of a polyclinic? It was a success with both staff and patients because those who worked there were involved in its planning, construction and subsequent administration. Can he assure me that the proposed polyclinics will be built only after consulting and listening to representatives of the population they will serve and those who will work there, and that they will not be imposed, owned and run by a private sector healthcare company or consortium which may be partly outside public control?

My Lords, my noble friend has eloquently highlighted the fact that clinicians are practitioners, partners and leaders. We have made it clear to PCTs that they should involve local clinicians, and the patients who use their services, to plan not just the geographical location of clinics but the services that they provide. However, to avoid any conflict of interest that may destabilise the procurement process, we have suggested that there should be a clear distinction between those who design the services and those who bid for the contracts.

My Lords, if, after reading the excellent pamphlet NHS Next Stage Review: Leading Local Change, local people backed by local clinicians opted to improve their GP surgeries or perhaps enhance an existing community hospital, would the same financial assistance be available to that primary care trust as if it had opted for a polyclinic?

My Lords, this investment is to increase the capacity of primary and community services. Through this investment, we will see more than 2.6 million walk-in consultations throughout England. We will see more than 500,000 extra registration opportunities across the country. That is the scale of the investment. The decision about what happens locally will be based on consultation with clinicians and with users of the service. The purpose is to increase capacity and enhance choice at a local level.

My Lords, would the Minister agree that, for the people with chronic ailments that my noble friend Lady Greengross was talking about, continuity of GP is extremely important? I know that he recently spoke with a young lady from Great Yarmouth who has no GP. She cannot get any continuity of treatment and finds it extremely difficult to have to go to a new GP and explain her case every time. It is important that she has a GP who knows her. With these new polyclinics, is that continuity guaranteed?

My Lords, continuity of care is one of the most important principles of care in a primary and community setting. I made that clear in our interim report last October. I described it as personalised care, tailored round the needs of the patients. We need to build on that. It is important for a patient to see a clinician who is aware of their history, who has been involved in the management of that history and who will manage it in the future. That is one of the most important principles of this new investment.

Electric Personal Assistive Mobility Devices

asked Her Majesty’s Government:

Whether they will introduce measures to allow electric personal assistive mobility devices to be used on roads.

My Lords, I thank the Minister for that, although it is obviously a very disappointing Answer. Are the Government aware that most European countries, and most states in the United States, welcome the Segway, which is also called the Segway Personal Transporter? The police and emergency services in this country see it as having great advantages. It is no more dangerous than bicycling, and a lot more fun, I can tell you. It is technically innovative, self-balancing, carbon-free and ideal for travelling distances of two to five miles—journeys that people usually now take by car. Can the Ministry of Transport really not see the potential of the Segway? It could be a vital tool in helping to solve our transport problems, particularly in inner cities. Could the ministry not at least initiate trials, with a view to considering allowing it to travel in places where at least bicycles are now permitted?

My Lords, the noble Earl is obviously very keen on Segways. We have an open mind on these matters and keep such things under review, but there are difficulties.

My Lords, is my noble friend aware that many police forces in European capitals use the Segway for apprehending criminals because, as the noble Earl, Lord Glasgow, said, these machines can go on pavements, cycle routes and roads? Why are we out of tune with the rest of Europe in our policing? Would it not be a good idea to let the Metropolitan Police at least trial them?

My Lords, it is obviously open to police forces in the United Kingdom to investigate the potential of these machines, although my understanding is that their potential is limited. I am not entirely sure that electric personal assistive mobility devices will raise detectives’ performance levels; nor am I necessarily aware that they offer many of the benefits alluded to by the noble Earl, Lord Glasgow.

My Lords, there is a serious safety issue, which I do not think one can take lightly. One German police force undertook some research into this and, within a very short period, discovered that there had been seven major, serious incidents.

My Lords, the noble Lord said that he is keeping the issue under review. Has anyone with ministerial responsibility tried one of these excellent machines?

My Lords, my brief does not extend that far but, if it helps the noble Earl, perhaps I will have a go on one of them myself.

My Lords, the development that the noble Earl, Lord Glasgow, suggested would be of great help to people such as myself who tend to use pavements or sidewalks instead of roads. Sometimes in the countryside the sidewalks have a very bad camber and it is dangerous to use a personal assistive machine on them. Alternatively, there may be no sidewalks, in which case one is bound to use the highway. Can the Minister suggest something for people who, like me, cannot get around other than on the road?

My Lords, I suspect that for people who have serious difficulties with mobility these devices are not particularly practical. However, they may be very useful on private land and in areas where large landowners wish to use them. My noble friend Lord Davies of Oldham tells me that they are very handy on golf courses.

My Lords, the Minister is obviously not very well informed about these devices because he did not respond to my noble friend’s point that the majority of European countries and the overwhelming majority of states in the US have allowed these vehicles on to the roads and presumably have some regulations under which they operate. Why cannot the noble Lord at least undertake to have a look at the procedures in the United States and Europe to see whether any of them might be applicable here?

My Lords, perhaps I did sell the noble Earl a bit short in what I said, but we are reviewing the reports on Segway trials. I know that some 42 states in the US have given the machines limited scope for usage, as have a number of EU states. However, I am not aware that that is the case in the majority of EU states, as the noble Earl said. Of course, we keep these things under review and our officials are currently looking at a number of trials that have been reported on.

My Lords, did I understand the Minister to say that the police could trial these devices? I understood that the police had been told that they could not do so.

My Lords, I think that one UK police force decided that it would acquire these vehicles and then discovered that it would not be lawful to use them on the public highway.

My Lords, I tried one of these machines 20 minutes ago; it is in the car park if the Minister wishes to wander out there. It took me a few minutes to learn how to use it and I was very impressed with it. The vehicle’s safety mechanism was particularly good and was demonstrated by the fact that I drove straight at the noble Earl, Lord Attlee, with his consent, and failed to do him any damage at all—unfortunately! I am sure that if the Minister would like to wander down to the car park, he could try it out on the pavement and, as it is on private land, he could do so legally.

My Lords, I am always game to do these things but I am not sure that I will manage it this afternoon, as we have the Committee stage of the Housing and Regeneration Bill.

My Lords, I knew that that would not go down very well, but I commit to finding the opportunity to have a go on a Segway. I am sure that I will find it extremely interesting and no doubt a noble Lord will put down a Question to test me on how good it was.

My Lords, I apologise for coming in again, but does the Minister not understand that a major disincentive to using rail to get to a destination in the UK is the difficulty of getting from the railway station to the end destination, which may be a couple of miles? Does the Minister not see that the Segway could be very useful for that last part of a journey?

My Lords, I hear what a number of noble Lords say about Segways, but there are real, practical difficulties. We must always be mindful of safety issues—this Government have a good record on road safety—and there are serious concerns; no doubt other jurisdictions have made such discoveries. Yes, we keep this under review. I take the point that the noble Earl made, but we need to take these issues more seriously.

Education and Skills Survey

asked Her Majesty’s Government:

What their response is to the CBI/Edexcel education and skills survey 2008, Taking Stock, which reports employers’ concerns at deficiencies throughout the educational spectrum from basic literacy to science degrees and foreign languages.

My Lords, the Government welcome the CBI’s report, Taking Stock. We are making fundamental reforms to our skills system to create a demand-led, high-quality service delivering real economic value for employers and learners. We value the views of employers greatly. We have made significant progress, but are not complacent. To compete effectively in the global economy, we need a workforce with world-class skills from basic literacy and numeracy through to higher level qualifications.

My Lords, I thank the Minister for whatever palliative care she is able to offer. How long does she think it will take before we in this country can have the quality of education and training that is on offer in continental Europe? Does she agree with the CBI in its concern that 40 per cent of employers cannot find enough staff who can read and write properly, 60 per cent cannot find British science graduates and 36 per cent look to Asia for high-level recruits to their staff?

My Lords, the Government take very seriously the findings of the CBI’s report, and obviously are concerned. We are in constant dialogue with employers. We invest in a comprehensive survey that looks at 79,000 employers—the CBI’s survey was smaller—and find that employers are more optimistic about the skills gap that they see in basic literacy: 15 per cent of employers, as opposed to 22 per cent, are now concerned about basic literacy. The Government are hugely committed to increasing our skills level. That is why we had the Leitch report and have Train to Gain and a basic skills strategy. I am optimistic that if we continue working hard, we will attain a higher quality education service that is always improving.

My Lords, a feature of the survey was that a significant number of small and medium-sized enterprises say they have no plans to be involved in apprenticeships. What does the Minister think is the cause of that lack of enthusiasm?

My Lords, that is an interesting question. We have survey evidence that shows that employers are investing more in training and that they value the role of the further education college in providing high-quality service. For small to medium-sized employers, apprenticeships are a big commitment. As I said on the previous occasion when we discussed this, we are looking at piloting additional support for smaller employers so that they feel they can engage. We are establishing a national apprenticeship service to go out proactively and engage with employers, particularly small employers, so that we can continue our impressive role of doubling the number of people starting apprenticeships in recent years.

My Lords, does the Minister agree that a great deal more could be done to encourage women to take up careers in science and engineering? When I was a member of the EOC, we had the WISE policy—women into science and engineering—and had a campaign to try to encourage more women to take up those careers.

My Lords, I agree wholeheartedly with my noble friend. A great deal more could be done and there are some very ambitious plans set out by the Department for Innovation, Universities and Skills, as well as the Department for Children, Schools and Families—for example, encouraging more science clubs for girls, and encouraging a general increase in the standard of science teaching, making it more interesting and less risk averse and providing more practical work. The record of involving more women in science is something that we should particularly strive to improve.

My Lords, the CBI survey shows that half the employers that want to recruit people specifically for their language skills are looking for French or German speakers. Does the Minister agree that—in the case of German in particular—there is likely to be a very serious mismatch between the supply of qualified people and the needs of the economy, given that entries for German GCSE have fallen by 42 per cent over the past six years and that 25 per cent fewer universities are offering degrees in German compared to 10 years ago? Will she please say how the Government intend to encourage both schools and universities to reverse this decline?

My Lords, the most eminent noble Lord, Lord Dearing, undertook a review of languages and the provision of language education recently. When my right honourable friend Alan Johnson was Education Secretary, he accepted that we should make the provision of language education in primary schools statutory. There is recognition that much more needs to be done with languages. I will have to study the attack of the noble Baroness on the lack of German provision and write to her in some detail. We take it very seriously and are not complacent about it.

My Lords, does the Minister think it helpful—at a time when we are trying to encourage young people to study the STEM subjects—that the research council responsible for physics, the STFC, is cutting back on research grants and studentships for the study of physics at universities?

My Lords, this Government have doubled investment in science. We have debated the strategy of the STFC. It is extremely important that we look at the investment that the Government make across the board in science, and we see some very encouraging increases in the number of young people choosing to study science as a first degree.

My Lords, can the noble Baroness explain how, having doubled the expenditure in real terms on education in the last 10 years, the literacy rate in primary schools is still lower than that of the Prussian primary school system in the 1820s? I can assure her that that is true.

My Lords, I am terribly sorry; I cannot make that comparison. My comprehensive education did not look at that question in enough detail. However, I will take it back to my department and write to the noble Earl, in some detail I hope, answering it.

Special Educational Needs (Information) Bill

Brought from the Commons; read a first time, and ordered to be printed.

Statute Law (Repeals) Bill [HL]

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lords have 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 Bach.)

On Question, Motion agreed to.

Employment Bill [HL]

Report received.

Clause 3 [Non-compliance with statutory Codes of Practice]:

1: Clause 3, page 2, line 27, leave out from “Chapter” to “the” in line 28 and insert “which relates exclusively or primarily to procedure for”

The noble Lord said: My Lords, Clause 3 of the Bill provides for tribunals to be able to adjust awards up or down by 25 per cent where parties have unreasonably failed to comply with a relevant code of practice relating to the procedure to be followed in workplace disputes issued under Chapter 3 of the Trade Union and Labour Relations (Consolidation) Act 1992. We expect the relevant code to be the ACAS code of practice on disciplinary and grievance procedures in almost all cases, but we had originally drafted more widely to allow flexibility for other codes, present or future, to be taken into account where relevant to dispute resolution.

Clarifying a point raised by my noble friend Lady Turner in Committee, I should explain that there are currently six codes under the Trade Union and Labour Relations (Consolidation) Act, three issued by ACAS and three by the Secretary of State. Apart from the ACAS disciplinary and grievance code, only the ACAS code for time off for trade union duties has a small procedural element.

As was said in Committee, ACAS plays an important and valued role in the resolution of workplace disputes. The drafting of this clause to refer to codes issued by either ACAS or the Secretary of State is certainly not intended to belittle the role of ACAS in any way. However, we recognise that concerns have been raised that the current drafting might create uncertainty for the parties as to which codes were relevant.

Neither we nor ACAS would wish to lose the flexibility for ACAS to restructure its codes in the future, nor would we wish to exclude the possibility of a Secretary of State code issued in this area in the future being taken into account in adjusting awards, given that TULRCA allows the Secretary of State as well as ACAS to issue codes in employment relations generally, although I add that there is no such current intention.

We are proposing, therefore, an amended definition whereby “relevant Code of Practice” is more tightly defined as one issued under TULRCA that relates exclusively or primarily to procedure for the resolution of disputes. Of the existing six codes, such a definition would apply only to the ACAS code of practice on disciplinary and grievance procedures.

We believe that this amendment removes any potential uncertainty as to which codes might be considered relevant, confirms the importance of the ACAS code of practice on disciplinary and grievance procedures, as highlighted by my noble friend in Committee, and retains the underlying purpose of Clause 3, which is to encourage parties to follow good practice in resolving workplace disputes. I beg to move.

My Lords, I can be fairly brief. I congratulate the noble Lord on moving the amendment on behalf of his noble friend Lord Jones, whom we hope to see later—indeed, I am sure that he will be here. I thank the noble Lord for the letter that his noble friend sent on 2 May to all those who have been taking an interest in the Bill, setting out what the amendment would do. We are content with the amendment, for which we thank the Government.

On Question, amendment agreed to.

Clause 4 [Determination of proceedings without hearing]:

2: Clause 4, page 4, line 11, at end insert—

““(3AZA) Subsection (3A) does not apply to the determination of any proceedings brought in respect of the right not to be excluded or expelled from a trade union in relation to protected conduct under section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) (right not to be excluded or expelled from union).”

The noble Lord said: My Lords, this amendment, which stands in my name and that of my noble friend Lord Razzall, is a paving amendment for Amendment No. 33, as well as for Amendment No. 36 in the name of the noble Lord, Lord Morris of Handsworth. I shall, if I may, give just one explanation for the amendments in this group.

The amendments are all designed to give effect to the judgment made on 27 February 2007 by the European Court of Human Rights in a chamber of the court presided over by the British judge Sir Nicolas Bratza. I will not go into the detail of the judgment, which was explored thoroughly at Second Reading on 7 January and on the third day of Grand Committee on 13 March. The European Court of Human Rights decided that the existing legislative framework governing the right of trade unions to expel or exclude members or would-be members on the basis of membership of a political party did not strike the right balance between the rights of unions and freedom of association and the rights of individuals based on conscience and belief. Therefore, it became incumbent on the United Kingdom to give effect to the judgment by introducing legislation.

This debate, like the earlier debates to which I have referred will, in due course, be scrutinised by the Committee of Ministers of the Council of Europe, which is responsible for supervising the execution of judgments of the European Court. How this House and the other place deal with this will no doubt be looked at by the Committee of Ministers in due course, to ensure that the judgment has been properly executed. I am grateful to Ministers and their officials for meeting with me and the noble Lord, Lord Morris of Handsworth, at our request, to discuss this. I am also grateful to have had the benefit of meeting with TUC lawyers, who have discussed their concerns with me in great detail.

It is difficult to strike the right balance. Amendments Nos. 31 and 32 the name of the noble Lord, Lord Campbell of Alloway are about ensuring that a fair balance is struck. The problem is how to respect the vital autonomy of the trade unions on the one hand, and how to provide effective safeguards for individuals against the misuse of trade union powers on the other. Another problem is how to discourage bodies such as the BNP, which engage in vexatious and mischievous litigation, from harrying in an abusive way in order to further their political cause. Another factor is that to exclude or expel a trade union member or would-be member solely on the basis of their membership of a political party is a strong thing to do, especially if it leads to exceptional hardship.

The Joint Committee on Human Rights has looked at this question. The noble Lord, Lord Morris, might want to refer to that in speaking to his Amendment No. 36, which is the version of the Joint Committee on Human Rights. There is very little difference between that amendment and Amendment No. 33. Both are designed to introduce safeguards without violating union autonomy. I have always believed, in the course of these debates, that it is not in the interests of trade unions or their members to leave these matters to common law and the Queen’s courts, as used to be the case before there was any statutory framework. When I was rather younger I used to appear before the courts in trade union cases. I was always uneasy about the way in which we obliged judges to intervene and provide remedies in these cases.

I also think that legislation should do its best not only to spell out the safeguards but also to ensure that as much as possible mischievous and vexatious litigation is avoided. The way in which the Government have approached this historically is, after the judgment, to publish a consultation paper with two options. The first was to do away with all safeguards and, essentially, leave it to the common law. The second was to produce adequate safeguards in the legislation. Our argument was that we should go for the second option and not the first.

It is fair to say that the TUC and the trade unions which gave their views during the consultation wanted there to be no statutory safeguards. If I were to be frivolous, I would say that power is delightful and that absolute power is absolutely delightful, and that, therefore, it is understandable to say there should be no safeguards at all. But that would not be a fair way of putting it and I fully respect the trade union position on this.

The way in which the substantive amendments in my name and that of the noble Lord, Lord Morris of Handsworth, operate, essentially, is to provide for three safeguards in a case where a trade union wants to exclude or expel on the basis of membership of a political party. These come out of the judgment of the European Court of Human Rights rather than out of the air. The first safeguard is that the political party concerned, and membership of that party, should be in conflict with the values and ideals of the trade union itself. Obviously, if that is the case, that is the starting point to justify expelling or excluding.

Secondly, the decision should be taken in accordance with the rules of the trade union, including fairness, which, in any case, the common law courts would compel. The third safeguard is that the individual would not suffer exceptional hardship by reason of the expulsion, exclusion or related conduct by or on behalf of the union rather than anyone else in relation to his employment or employment benefits. Those are the safeguards to which all the amendments in the group seek to give effect. As far as we are concerned, everything depends on how the Minister responds. Perhaps, after we have heard his response, it will be possible to see where we are going. I beg to move.

My Lords, I agree with what the noble Lord has just said, but not, of course, with what led up to it. Everything depends now on the response of the Minister. Up to this stage, he has not accepted the case as put forward by the noble Lord. I am not being critical for the sake of it. I am merely stating a fact. Columns 314 to 316 of Hansard for 13 March 2008—the third day of Committee—show that the Minister does not accept what is proposed by the noble Lord, Lord Lester. In addition, he has had conversations and discussions—about which we do not know now, but about which we shall know eventually, and probably, in the light of what is said in this debate—about what the Minister proposes to do.

As I understand it from the bush telegraph, the Minister is considering whether he will introduce amendments which relate to safeguard amendments to Clause 18; that is, the amendments to which the noble Lord, Lord Lester, referred. According to my information, he is considering whether to do that and then, when he has done that, what he will do. This argument is somewhat sterile until we know what that is because we could divide on some things today, such as what happens to sailors not getting the right wages. However, we cannot divide on this today as we have no idea what the Government will put down on Third Reading.

The noble Lord was good enough to refer to my Amendments Nos. 31 and 32, which I know the Government are considering taking over in any event. They have not said that they will or that they will not, yet they acknowledge the intendment of the amendments, so if those are to be redrafted it will be up to the Government to do it. However, those are not safeguard amendments to Clause 18 but purely procedural ones, and there is a distinction—although, as we will see in a moment, the two overlap.

There is a fundamental issue not just between the noble Lord, Lord Lester, and myself but between the noble Lord and the Government. That is whether Clause 18 is wholly effective in affording conformability of our domestic employment law with the conventions in accordance with the Strasbourg court’s decision on ASLEF. I will not go into technicalities, but it referred to certain provisions of our domestic law as being incompatible. Those provisions have to be got rid of, as there is an obligation on the Government to seek conformity.

Clause 18, in the opinion of Government—and in my respectful opinion, which really does not matter as much as theirs—is wholly effective, requisite and sufficient for its purpose of seeking conformity. If that is right, then the Government’s view as expressed in the passage that I quoted from day three in Committee is, again, right; there is in fact no need at all for these safeguard amendments, as they are called. If that is so then the fundamental question raised, on which options should be implemented, flies out of the window. None of us knows what is really going on until we know what the Government will decide to do. The Government may wish to formulate their own concept of a safeguard amendment—I do not know—but their concept of Amendments Nos. 31 and 32 is fundamentally a question of drafting. As everyone knows, I am not a draftsman and I make that inevitable qualification.

Amendments Nos. 33 and 36 have to be considered with some care in another context: do they distort, as I suggest they do, the proper balance of the ordained ASLEF procedures in favour of the trade unions? If there is no need for the trade unions to be protected, as was once suggested at some passage—I do not have it in mind but the noble Lord, Lord Lester, will know where he referred to protection of the trade unions—and the Minister assured the Grand Committee that the trade unions were in no need of such protection, that is another matter which has to be taken into account in this context.

I shall not discuss the nature of the balance because it is related to Amendment No. 31, which is in the last group of amendments and it would be wrong of me to pre-empt it.

Another aspect of these safeguard amendments is the tightening-up of ordained procedures in a way which is wide of the substantial flexibility with which they are to be implemented on the facts and circumstances of each case and on a balance as between the respective convention rights of the trade unions to set their rules and choose their membership, as acknowledged in ASLEF, and the rights of the individual who wishes to join or remain in a trade union. A wide ambit of special, ordained procedures has to be followed. If they are not followed, back you all go to another court in Strasbourg. That is mandatory.

Professor Wedderburn, who has much more experience than I, gave a warning about tightening up what are supposed to be flexible procedures—I shall not go into the details today—but that warning appears to have been not heeded in the context of membership of a political party. You only have to look at the amendments passing through Grand Committee to see that, with every effort to amend, we are starting to move away from, or tighten up, what is a flexible procedure, and this will inevitably engender more litigation.

This is no time for a long speech. I have been too long already. I have tried to do justice, without adding my version to the speech of the noble Lord, Lord Lester. The truth of the matter is that until we know what the Government are going to do, there is no constructive purpose in saying any more. I would like to mention one problem; I am not being critical of my party but I seek clarification. Those on my Front Bench in Grand Committee said that they strongly favoured the safeguard amendment to Clause 18 tabled by the noble Lord, Lord Lester. I oppose it. I am not saying who is right or wrong again, but the party to which I adhere and I were not in agreement. If you look at the Marshalled List, with Amendments Nos. 34, 35 and 37, my party has actually supported in principle Amendments Nos. 33 and 36. Whether it meant to do so or not is neither here nor there. There is plenty of time between now and Third Reading for everybody to find out what everybody else really thinks or says. In a sense, it is a point against me that my own party does not agree, but on the other hand, one has to argue one’s case, even if there are a few warts on it.

My Lords, we had a long discussion on a similar amendment in Committee, as noble Lords will remember. At that stage I drew attention to one of my objections to the original amendment tabled by the noble Lord, Lord Lester. I am afraid, however, that I still have problems with the amendment. I see the noble Lord nods; he realises that I do. The problem that I have is with proposed new paragraph (b) which says,

“the individual would not suffer exceptional hardship by reason of the expulsion or exclusion or any related conduct by or on behalf of the union in relation to his employment”.

As I said in Committee, we do not have closed-shop agreements any more so we no longer have the power to take into consideration whether a decision of that kind will result in exceptional hardship. Generally speaking, unions now do not have the power that they once had to inflict exceptional hardship by means of withdrawal of employment and so on. This is made quite clear in the amendment, which says, “is permitted only if”. So the union would have to take account of this before it came to a decision to expel someone under the terms of the Bill. As I said, if I had to choose between the Bill and the amendment, I would choose the Bill as it stands. It is possible, as has been indicated by the noble Lord, Lord Campbell of Alloway, that the Government will be prepared to come up with a compromise, but my objection arises from imposing on the unions in proposed new paragraph (b)—

My Lords, I am sorry to interrupt the noble Baroness. The notion of exceptional hardship comes out of paragraph 52 of the judgment of the court. If there is no exceptional hardship, the union has no restriction under that heading. I accept that, without the closed shop, the situation where there may be exceptional hardship will be much rarer than otherwise. If exceptional hardship is not inflicted, it does not matter; if it is, it violates the spirit of paragraph 52 of the judgment, which is why it is there.

My Lords, in those circumstances, I hope that we get from the Government a compromise suggestion which might be acceptable to everybody. However, I still feel unhappy about that wording.

My Lords, this is not a question to be argued here any more. The question is: which argument will the Government accept? We do not know. My noble friend does not know—he probably argues better than me. At least the Government will form their own opinion. The noble Baroness is quite right—

My Lords, perhaps I should intervene at this stage, particularly as my noble friend Lord Campbell has invited me to do so. I make it clear that I do not think that I will be able to argue the case as well as him, but I shall set out our Front Bench’s view on this matter in due course so that my noble friend and the House can hear it. Like my noble friend, I look forward to hearing the Government’s response, so that we, the noble Lord, Lord Lester, and others know just what to do either now or at Third Reading.

I congratulate the noble Lord, Lord Lester, on his drafting and particularly on his putting this matter down quite so early in Bill with his paving amendment. I seem to remember it coming up on days three and four in Committee. To get us to a second amendment on Report shows some skill. As it is the most important amendment with which we have to deal, we are all grateful for it.

We are speaking to a rather complicated group of amendments in that it contains those from the noble Lord, Lord Lester, and my noble friend Lord Campbell. It has Amendments Nos. 34, 35 and 37 from me and my noble friend. I imagine that it includes also Amendment No. 34A of my noble friend Lady Perry of Southwark, which is not on the Marshalled List.

My Lords, I think that the noble Lord is wrong. None of the two amendments which the noble Lord, Lord Campbell of Alloway, will move in due course is in this group.

My Lords, I apologise. I am looking at the old draft groupings list. My noble friend will come back to his amendments later. Is that correct?

My Lords, it is not quite clear. I have tried to keep off Amendment No. 31, because it is right not to pre-empt it. I have said a bit about it so far as it concerns a safeguard amendment which tightens the drafting, but I have not said all that I wish to say about it.

My Lords, there will no doubt be much more that my noble friend will want to say later on and we look forward to hearing him on Amendments Nos. 31 and 32, whether today or on another day. We are covering the general principle of Amendments Nos. 2, 33 and those also in my name.

As we made clear in Committee, we on these Benches are not exactly happy with the ASLEF judgment. We are not happy that trade unions should be able to expel or exclude people solely on the basis of their membership of a legitimate political party. This sound principle was the reason for the protected status of political party membership in the first place. We all know that some so-called legitimate political parties have deeply unpleasant policies. The party whose member’s exclusion led to this judgment is a fine example of when a trade union might dislike a member signing up to it. However, trade unions already have sufficient powers to expel someone if their behaviour is so incompatible with trade union principles. This was the case even in the instance that led to the European Court of Human Rights judgment. However, we accept that the judgment has now been made and that we in the United Kingdom must now amend our laws in order to accommodate it. In order to mitigate the possible abuse of the power we are therefore now seeking to impose the tightest possible limitations and safeguards on when the power can be exercised.

As currently drafted, Clause 18 gives the trade unions far more power than is desirable and is more than the judgment necessitates. We would like to see the power drawn more tightly in order to protect against unfair or improper pressure being put on members of political parties other than the one that trade union officials prefer. We have a great deal of sympathy with the concerns behind the amendments tabled by the noble Lord, Lord Lester. The expulsion of a member should be allowable only if it is undertaken fairly under the trade union’s rules. Due concern should be given to the adverse consequences of such an expulsion. As the amendment in the name of my noble friend Lady Perry highlights, membership of a trade union can bring significant financial support in the form of health insurance, paid positions and so on.

Our Amendments Nos. 33, 35 and 37 highlight two concerns, the first of which is that only membership of registered political parties is considered excludable. There are many political organisations and pressure groups, membership of which should continue to be exempt. Secondly, we strongly object to the idea that former membership should be held against a trade union member; that smacks of retrospective punishment. Even if the resignation from an objectionable political party was recent, such a resignation shows that the membership of the trade union was more important to the person concerned than membership of the political party. Who is to decide whether a member’s resignation was fair?

My Lords, I apologise for intervening, but whatever the objections—my noble friend is speaking for our party—they have to be implemented within the framework of these ordained procedures. I hope that my noble friend will accept that we cannot by our own domestic law go outside the ordained procedures, or back we go to the Strasbourg court.

My Lords, I think I can agree with my noble friend but, as he would agree, at this stage we have to hear what the Government have to say before we can respond. We will see what the noble Lord, Lord Bach, or what the noble Lord, Lord Jones—when he comes back from Crewe or wherever he happens to be—have to say. We have been told that most of the Labour Government have gone to Crewe; the noble Lord, Lord Bach, has obviously been spared. We are waiting to hear from the Minister; no doubt the noble Lord, Lord Lester, will listen, as we will do. I believe that the noble Lord, Lord Morris, is rightly going to speak before the Minister, because we are on Report. After listening to him, and others, we will listen to what the Minister has to say.

My Lords, I speak to Amendment No. 36 and in support of Amendment No. 33. I also take the opportunity to thank the Minister and the noble Lord, Lord Lester of Herne Hill, for their unstinting efforts in seeking an accommodation in respect of the principles in the Bill.

I will seek not to rehearse the arguments and the history of how we got here, except to say that I do not take lightly, and I fully appreciate, the Government’s difficulties in seeking to strike the right balance between maintaining free democratic trade unions on the one hand and protecting and defending the rights of the individual on the other. Nevertheless, the amendments address some overall deficiencies in the Bill.

The proposals in the Bill are far-reaching. The most fundamental sanction that can be taken against a trade unionist—the ultimate sanction—is to deny that individual the right to belong to a trade union. Therefore, such action cannot and should not be taken lightly; it can and should only be taken with due regard for natural justice and, of course, the rights of the individual. Neither Amendment No. 33 nor Amendment No. 36 attacks the fundamental principles and substance of the Bill. As has rightly been said, if we were debating this without the background of what was said in the context of the European Court, we might have started at a different point. The amendments seek to ensure that we have proper procedures and safeguards built on the principles of natural justice. It is ironic that the Bill lays out a course of action that would automatically be in a tribunal if an employee was dismissed and lost his or her employment. Therefore, the amendments seek to argue that we should address the procedures and ensure natural justice, as well as that the rights of the individual must always be protected.

The Government argue that, because the closed shop no longer applies, a member who is expelled is therefore not subjected or exposed to any significant detriment. I disagree with that; I take a different view. I have here the schedule of benefits from my union, which runs to about 14 primary benefits, up to incapacity benefit for an accident at work. But the most important benefit that some sections of our membership would enjoy would be legal representation. If a lorry driver is charged under the Road Traffic Act and has to appear in court without proper representation, he or she could end up losing his or her licence—and if you lose your licence as a lorry driver, it follows that you lose your job. For me, that would be a significant detriment. I would go a step further by saying that it could represent substantial hardship. That should be taken into consideration. There are many other examples of benefits, such as two weeks’ convalescence in a convalescent home after a period of illness, but I will not detain the House further on the range of benefits that could by lost by individuals in my union. I will only say that my judgment is that some of these circumstances could be regarded as exceptional.

I recognise that, in terms of safeguards for the individual, the Bill is predicated on remedies. I am not against remedies in proven situations but, in circumstances such as these, the Government owe protection and not remedies to the citizen. Remedies are last resorts. It is said that it is open to an aggrieved individual to go to a certification officer or an industrial tribunal, or to go to the civil courts, but that is not the foundation on which we as a nation have historically built our industrial relations or the road to accessing justice. I therefore hope the Minister will clearly indicate a pathway for protection rather than a pathway to remedy.

In every industrial relations case where a worker’s job or livelihood is at risk he is entitled to a very basic and fair procedure. That is why we in your Lordships’ House believe it important to state clearly that a person who is to be excluded or, more importantly, expelled should be told the case to be answered. He should also be told the time and place of the hearing. Representation is an important facet of our form of civil justice, but I have read nothing in the Bill about individuals who may feel a deep sense of grievance. How do they put that right? I would like to hear about the appeals procedure. If that does not appear in the Bill, the relevant codes of practice through the certification officer or, preferably, ACAS should make it absolutely clear.

I believe that the denial of someone’s trade union membership should test those with the power and authority to take that decision. I see no test whatever attached to the trade unions. What test have they got to meet? It is important. My noble friend Lord Lester of Herne Hill referred to the consideration of the Joint Committee on Human Rights. The Joint Committee has considered the matter but has not gone beyond the report that it published. However, there are serious doubts whether there is a breach of the Human Rights Act. There are concerns that Articles 9, 10 and 11 may well be breached. Those articles cover freedom of conscience, expression and assembly. I ask the Minister to have another look at whether the human rights situation is adequately addressed.

In conclusion, I hope the Minister will say what criteria the decision to exclude or expel will be based on. How can a trade union be accountable for the decision? We must all be accountable for our actions. Finally, what procedures will be put in place to ensure that natural justice and legal redress are available to the individual?

My Lords, with respect, the noble Lord is saying—and he will correct me if I am wrong—that the procedures ordained by the Strasbourg court are “unfair”; he used that expression. He wants to introduce procedures which he thinks are fair, in substitution for the ordained procedures of that court. I am only trying to understand what the noble Lord is up to and what he is saying. Is that his case?

My Lords, in this instance the Brussels procedures are the Strasbourg court. It has spoken, and I respect its conclusions. I am arguing for the conventional and traditional route that we have always applied to our industrial relations procedure in this country. It is a principle of natural justice that if you are charged with, and are to answer, an offence, you have a right to know what the charge is. I stand by the principle that you are entitled to fair representation and to scrutinise the results by way of an appeal. I do not in any way, shape or form, cast any aspersions on what the Strasbourg court might or might not have said. The response of the British Government, your Lordships’ House and another place will resolve this issue. In these circumstances, the responsibility rests with us. In your Lordships’ House today, I argue for what we believe to be fair and just, measured against what Strasbourg might have said.

My Lords, I speak to my Amendment No. 34A, an amendment to subsection (b) in Amendment No. 33. It is on the supplementary list for the simple reason that I thought for a long time that the amendment of the noble Lord, Lord Lester, covered sufficiently my concerns about this issue. However, the more I thought about the phrase “exceptional hardship”, the more that I thought that it was a rather sterner requirement of proof than I would have wished. My amendment does not take anything from the noble Lord’s words, “exceptional hardship”, but adds the words, “any financial disadvantage”.

The noble Lord, Lord Morris, cited the example of the lorry driver who might lose his licence and, therefore, his livelihood. My examples are from the profession that I know well: teaching. It is little realised that, in the last year for which statistics were published, more than 1,800 teachers were accused of either sexual harassment or physical violence towards children, of which accusations less than 1 per cent were afterwards upheld. That is a huge number of people, whose lives were disrupted terribly. Often their marriages fell apart; they were denied access to their work for long periods while their case ground through the courts; and so on. It is a very serious matter. Now let us imagine the financial hardship of their having to pay for legal representation. As long as they were members of a recognised trades union, as the noble Lord said in his example of the lorry driver, they were entitled to free representation, which was paid for by their union. I remember being told when leaving university that I should join up to the teachers’ union fast. In those days we did not think of sexual harassment, but in case I was accused of hitting a child, the union would represent me and it would cost me nothing. These are important financial benefits, quite apart from health insurance and everything else. I quoted the statistics about teachers because that is the world I know. The financial benefit of free representation with the union’s financial help enabled people to survive. Let us remember that 99 per cent of cases proved to be blatantly unjust and only 1 per cent of cases were upheld.

As has been rightly pointed out by the noble Baroness, Lady Turner, the union would have to look ahead at the point of excluding someone to see whether such exclusion would cause “exceptional hardship”. I hope that my more modest words, “any financial disadvantage”, would be clearer. We are all at risk of sympathising too much with the trades union and not enough with the individual because the case to which the European Court judgment gave rise was against people with whom we have very little sympathy. They were not very nice people in their political views, but it can happen to others whose views might be less distasteful. The rights of individuals and those of trades unions, as the later amendments of my noble friend Lord Campbell emphasise, must be got right in this legislation. My modest additional amendment, which would point out the financial disadvantage that loss of union membership could bring, might help us in our debate.

My Lords, this is a large and important group of amendments that enables us to address the issues raised by Clause 18 at an early stage in our deliberations today. Clause 18—formerly Clause 17—has aroused much debate throughout the Bill’s passage to date. The amendments give me a welcome opportunity to explain how the Government intend to reconcile, as far as we can, the differing views that have been expressed. It has been well worth having such a debate at this stage.

I shall start with Amendment No, 33, in the name of the noble Lord, Lord Lester, and talk to the others in the group as well. All the amendments relate directly to Clause 18. A similar amendment was moved by the noble Lord in Committee, and this latest version certainly addresses one of the specific points that my noble friend Lord Jones raised in that debate—that the effect of the previous amendment was not restricted to exclusions or expulsions on grounds of political party membership alone, but included any decision to deny membership based on a person’s conduct. Although that was not the noble Lord’s intention, I am grateful to him for drafting a new amendment, which takes note of that point.

We also made it clear in Committee that we wished to engage further with the noble Lord and his advisers before Report to see whether we could agree the way ahead. I thank him for making himself available. We have had detailed discussions with him at both ministerial and official level. My noble friend Lord Morris of Handsworth has also attended these meetings, which included a meeting with the honourable Pat McFadden MP, the Minister responsible for employment relations, and I think that everyone understands the position better as a result. I believe that significant progress has been achieved. The noble Lord has already said that his Amendment No. 33 is informed by the detailed discussions that he and my officials have held in the weeks and months since Committee.

In a spirit of compromise—noble Lords have wanted to know the Government’s view on this since the start of the debate—we have offered to introduce an amendment to this Bill that would centre on the second of the two options presented in last year’s consultation document. Noble Lords will recall these two options. We know that this approach, option B, is preferred by the noble Lord, Lord Lester, and by many others who oppose the current version of Clause 18, which is based on what we describe as the deregulatory option A. We intend to present the government amendment at Third Reading.

The noble Lord, Lord Lester, made it known that he wanted three types of safeguard to be clearly reflected in any government amendment. These safeguards are expressed in proposed new paragraph (a) of his present amendment and in paragraphs (a) and (b) of the new subsection 4C that proposed new paragraph (b) of his amendment would insert. Let me assure the House and the noble Lord that the planned government amendment contains these three categories of safeguard. The second of these safeguards concerns the procedures that unions follow when excluding or expelling members on these grounds. I know that procedural fairness has been a concern of the noble Lord, Lord Campbell of Alloway. I am very grateful to him for having met my noble friend Lord Jones, the Minister and myself during these proceedings. I hope that our proposed amendment, when it appears, will satisfy him, too.

The Government need to assure themselves that each safeguard is appropriately expressed in terms that are neither too strong nor too weak. This takes time and is the reason why we could not table our amendment for consideration today. We want to ensure that our amendment is clear and provides the level of union autonomy that the ECHR judgment requires. It should also impose reasonable requirements on trade unions and reflect the principles of better regulation. In particular, we want to minimise the scope for politically inspired litigants to use imprecise wording as a basis for making vexatious complaints to the employment tribunal. I believe that the House shares this view.

I will not go into detail today. If the noble Lord were to press Amendment No. 33, we would be concerned that it does not fully meet these tests, although we think that it goes a long way in the right direction. We continue to work on alternative wording and we will continue to consult the noble Lord during that process. I hope that we will be able to share the amendment with other noble Lords, including the opposition Front Bench, the noble Lord, Lord Campbell of Alloway and other noble Lords—I am not discriminating between any of them—perhaps later this week, so that they can see our proposed amendment before it is tabled. If possible, we would like to see a compromise amendment, commanding the broad if not universal consent of this House, going to the other place, where the Bill has yet to be considered.

We have held discussions with the TUC about the same issues and we will continue to talk to it. The TUC has also made it clear that it opposes any move to legislate for option B but, when our compromise appears, we will have to see what attitudes are taken by all parties in this House and outside. I believe that there is every prospect of finding a satisfactory compromise in time for Third Reading. Therefore, when the noble Lord comes to decide what to do with his amendment, I urge him to be good enough to withdraw it so that further consultation can occur.

The other amendments in this group were spoken to and therefore I need to respond to them, but I shall do so as briefly as I can. Amendment No. 34 would ensure that trade unions could not exclude or expel a person in any circumstances on the basis of his or her former political party membership, the vital word being “former”. I am afraid we believe that this would limit still further a union’s autonomy in setting and applying its rules—the very point that the European Court of Human Rights was trying to uphold. There was no hint in the ECHR judgment that a limitation of union autonomy of this type was necessary or called for.

Of course, we understand the argument advanced by the noble Lord, Lord Henley, that individuals may change their views and should not be punished for once holding a particular set of political beliefs. I am sure that unions will be alive to that point and will not wish to deny membership to a person who, from their viewpoint, is a reformed character. However, there will be cases where that has not occurred. As we know, people frequently move into and out of party membership but their political outlook remains unchanged. In fact, their views can harden. Unions should therefore be capable of acting against such individuals, subject to the general safeguards provided by option B.

Amendment No. 34A was spoken to by the noble Baroness, Lady Perry, and I thank her, as I did in Committee, for her part in this. However, we fear that the amendment would widen too far the test in Amendment No. 33 relating to the scale of the detriment which must occur in order to make it unlawful to expel or exclude. Amendment No. 33 refers deliberately to “exceptional hardship”—a term used within the key judgments of the European Court of Human Rights. Amendment No. 34A would widen that to include “any financial disadvantage”. We absolutely understand where the noble Baroness is coming from on that. She echoes a point made by my noble friend Lord Morris: the fact that there is no longer a closed shop does not mean that there is no financial disadvantage in not being a member of a trade union.

Our problem with the noble Baroness’s amendment is that it would, in effect, prevent a union expelling or excluding on those grounds if even one penny of financial detriment resulted. I am afraid that from a practical point of view that goes too far. It would virtually reduce union autonomy in this area to zero and it might well mean—although I shall not be absolutely decisive about this—that we would fail to comply with the European Court’s judgment. Therefore, I am afraid that we cannot support her amendment.

Amendment No. 35 seeks to define what type of organisation qualifies as a political party. We have not had a definition of this kind since these provisions were first introduced in 1993. I have not been aware that any problems have arisen as a result, so I want to advance the case that we should be very cautious about adding wording of this kind to the text. We think that the amendment in the name of the noble Lord, Lord Henley, contains a specific and serious problem; namely, that political parties are defined as UK ones only. Many members of British trade unions are foreign nationals and their numbers, we are delighted to say, are increasing. Some of those individuals will be members of political parties in their own countries, and of course political extremism can be found in all countries. Trade unions must be free to take action against such individuals, subject, again, to the sort of general safeguards that option B provides. Therefore, we cannot support that amendment either.

Amendment No. 36 is in the name of my noble friend Lord Morris of Handsworth, and many of the arguments that I addressed in relation to Amendment No. 33, which I know he supports, apply to his amendment. I hope he will be satisfied with what I have said about the Government attempting to come up with a consensual compromise on this. Amendment No. 37 is, in effect, the same as Amendment No. 35, and relates to Amendment No. 36.

I shall deal with the amendment tabled by the noble Lord, Lord Morris of Handsworth. The report of the Joint Committee on Human Rights underscores our view that this complex issue requires careful drafting of a legislative solution, to ensure that we comply with the European Court’s judgment while avoiding the potential for unwelcome side effects. As I stated in response to the amendment tabled by the noble Lord, Lord Lester, we are actively engaging with him to find a suitable compromise, and I hope that approach satisfies not only my noble friend but the House.

My Lords, I thank all noble Lords who contributed to this important debate. I particularly thank the Minister for the detailed and careful way he replied to the various points that have been raised. I also thank the noble Lord, Lord Morris of Handsworth, who was kind enough to refer to me as his noble friend. I regard myself as his friend.

This is a matter that transcends parties. It is cross-party, and one of the great virtues of this House is that it is possible, on issues of this kind, to deal with matters beyond political tribalism. I also commend the noble Lord, Lord Henley, and the Official Opposition for the conspicuously fair and moderate way in which they approached this matter during our debates. I am grateful for that.

The noble Lord, Lord Morris, referred to a pathway for protection. As I understand what was said by the Minister, he has given an assurance to the House that the three general safeguards in my amendment and the amendment tabled in the name of the noble Lord, Lord Morris, will be translated into proper statutory language by parliamentary counsel before Third Reading. I fully appreciate the complexity of that task, and I entirely accept that the Government will give effect to that assurance by producing language before Third Reading that will incorporate those three safeguards. That will be a victory for Parliament, this House and common sense. I am reminded of what Isabella said in “Measure for Measure”—that,

“it is excellent

To have a giant’s strength! But it is tyrannous

To use it like a giant”.

There are situations where Governments, trade unions or other bodies may have a giant’s strength, but it is tyrannous to abuse those powers. These safeguards are designed, as the noble Lord, Lord Morris, indicated, to write protection into the Bill as well as remedies. I believe it is entirely probable, and maybe even certain, that we will reach a consensual compromise at Third Reading, having made good use of the procedures of this House in Grand Committee and now. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3: Clause 4, page 4, line 15, after “consent” insert “in writing”

The noble Lord said: My Lords, in moving Amendment No. 3 I shall speak also to Amendments Nos. 4, 5, 6, 7 and 8. These amendments cover various aspects of determinations without a hearing.

Amendments Nos. 3 and 5 ensure that determinations without a hearing in employment tribunals can be made only where there is express consent in writing from all the parties, save for those circumstances in which a default judgment can be issued without a hearing, as happens at present. Over 70 per cent of consultees in our dispute resolution consultation favoured the implementation of such a mechanism. These views are summarised in our response to this consultation, which we are publishing today. I am arranging for copies to be placed in the Libraries.

Powers have existed since 2002 to enable regulations to provide for determinations without a hearing in employment tribunals. At present, this only happens in circumstances where the respondent does not present a response—or a valid response—in the proceedings, where the case is not contested, or where the claim is withdrawn and the proceedings dismissed. These are known as default judgments.

Clause 4 seeks to circumscribe further this power to make such regulations, as my noble friend Lord Bach described in Grand Committee. In this context, it is important that the power is clearly described and limited. Clause 4, as originally drafted, would establish in law that determinations without a hearing could take place only where there is consent from the parties, but that consent could be either express or deemed. It would also—and this was not the intention—remove the tribunals’ ability to issue default judgments in circumstances where no response is submitted and where the case is uncontested.

We debated the consent issue in Grand Committee on 4 February and my noble friend Lord Bach undertook to consider further the case for requiring the expression of consent to be made in writing. He also undertook to reconsider the drafting of the second arm of Clause 4, which would permit determinations without a hearing to take place on the basis of deemed consent where parties had been given the opportunity to request a hearing of their cases but had not done so. My noble friend Lord Wedderburn firmly argued that deemed consent was not an appropriate mechanism in this situation. Other noble Lords expressed similar concerns. I subsequently met him and my noble friend Lady Turner to discuss their concerns on this point. The House will join me in wishing him a speedy recovery, as he cannot be here today.

On reflection, we are persuaded that it is appropriate that the law should limit the order-making power enabling determinations without a hearing to situations where express consent in writing has been secured from all the parties. This will give certainty that such an important decision—to waive the right to a hearing—has been made by all the parties. This amendment therefore removes from the Bill the provision that would have enabled regulations to establish deemed consent as a sufficient basis upon which to proceed with a written determination. It also carves out default judgments from the requirement for consent, since clearly consent could not be obtained from both parties in the circumstances I described earlier where default judgments are issued.

It is our intention to consult publicly, later this year, on regulations providing a legal framework for enabling determinations without a hearing in five jurisdictions— national minimum wage, holiday pay, breach of contract, redundancy pay and unlawful deductions from wages. Determinations without a hearing, in such cases, will only be possible where all parties consent, and an employment judge, considering the papers, considers that no hearing is required to make an informed determination in that particular case. I beg to move.

My Lords, I speak to the amendments in my name and that of the noble Lord, Lord Wedderburn—unfortunately, he cannot be here today because he is ill—and the amendment from the Government. We heard some discussion about Clause 4 in Committee. We were concerned at what appeared to be an increase in the number of cases of a judge sitting alone without lay members. We were concerned that this might indicate a desire to phase out the work of lay members on tribunals, but we accept the assurance given to us by the Minister that the Government recognise the valuable role of lay members and are fully committed to the continuation of the existing tripartite structure.

Therefore, we are not pursuing this issue further, but there remains concern about the circumstances in which cases can be determined without a hearing. It is important that vulnerable people understand what is involved and are able to make a decision in their own best interests. They have an entitlement to have their case heard by a tribunal that includes lay members and, if they waive such rights, they must know what they are doing.

My noble friend Lord Wedderburn has drawn attention to a recent European Court of Human Rights decision—DH v Czech Republic—which deals precisely with the waiver of a right. The judgment is so important that I shall quote it. It says that,

“under the Court’s case-law, the waiver of a right guaranteed by the Convention”—

the European Convention on Human Rights—

“in so far as such a waiver is permissible—must be established in an unequivocal manner, and be given in full knowledge of the facts, that is to say on the basis of informed consent … and without constraint”.

That is precisely what our Amendment No. 6 says. We say that,

“‘consent’ means agreement which is—

(a) unequivocal,

(b) in writing,

(c) given without constraint by any person, and

(d) given on the basis of informed consent”.

Furthermore, Article 6 of the European Convention on Human Rights makes it clear that everyone is entitled to a fair and public hearing and that judgment should be pronounced publicly. That is the purpose of another of our amendments in this group. We also believe that the parties concerned should have a right to know about the qualifications, background and career of the person who will be charged with hearing the case individually so that an informed opinion can be made. Again, that is the gist of one of our amendments in this group.

The government amendment agrees with us that consent should be in writing, as we heard from the Minister. Our amendment goes beyond that and, therefore, I prefer it. I have no objection to government Amendment No. 5, but I am rather puzzled by what the latter half means. Proposed new subsection (3AB) says that,

“if he presents a response … in accordance with the … regulations, it is not accepted”.

Who does not accept it? Does it mean the claimant? If so, I am quite happy about it. However, I wonder who else might not accept it. Perhaps that could be explained in the Bill.

Generally speaking, I commend our amendments to the House. We have attempted to deal with the problems that could face a vulnerable person and we want to make sure that he or she is in a position to make an informed decision. As a former trade union official, I think that it would be simpler if everyone belonged to a union, as that would mean that they were entitled to professional advice and to representation. Unfortunately, that is not the case everywhere, so I believe that we as Members of this House have to take action to try to protect the rights of vulnerable people. For these reasons, I commend our amendments to the Government, who I hope will consider what we have said. We want to add to their amendments, which we do not think go quite far enough.

My Lords, I shall briefly respond to the noble Lord, Lord Jones. I welcome him back to his Bill. I imagine that he has been held up hard at work in Crewe and Nantwich. We are grateful to see him here. I am also grateful to the Government for responding to the amendment that the noble Lord, Lord Wedderburn, moved on the first day, I think, in Committee. Let me say how sad we are that the noble Lord, Lord Wedderburn, cannot be here today. He wrote to me about this problem and the ECHR judgment in the case of DH v Czech Republic. The Government have been correct in responding to the noble Lord’s point in this, so all we can say is that we are grateful for that. I am sorry that we will not be seeing the noble Lord later, as I was hoping to have his support on an amendment of mine.

My Lords, I thank the noble Lord, Lord Henley. I was actually speaking at a businesswomen’s event in Leicester this lunchtime. I believe that, if people have agreed to a speaking engagement some months ago, they should do everything that they can to try to fulfil their promise.

Amendment No. 4 will be effected through our Amendment No. 5. Amendments Nos. 6, 7 and 8 would introduce additional legislative requirements for any written determination procedure. These are unnecessary and would in some cases add extra complication, complexity and cost. Amendment No. 6 proposes a list of criteria for establishing whether consent to a written determination is valid. Our amendment ensures that consent would have to be unequivocal and in writing. That is what is required by the case of DH and Others v the Czech Republic. “Without constraint” implies an assumption that parties could be subject to pressure to choose written determination. We do not believe that that will be an issue. Parties will have to consent expressly to the procedure. If they do not, they will proceed to a hearing, as is currently the case. This element of the amendment is not required.

This brings us to informed consent. We shall ensure that parties receive sufficient information to make an informed decision about whether to consent to a determination without a hearing. We do not agree, however, that “informed consent” should be defined as “subject to receipt of independent advice”. Independent advice is defined in Section 288 of the Trade Union and Labour Relations (Consolidation) Act 1992. That provision relates to a decision by parties to accept a compromise settlement, which would result in the parties forgoing their right to a determination of their case by an employment tribunal. The safeguard is appropriate in those circumstances. Consent to written determination is not analogous, since the case would be determined by an employment judge. Parties will have sufficient time to seek advice on consent—a minimum of three weeks, as we said in Grand Committee. It should be open to parties to decide not to seek advice, which may have time and cost consequences, if they so wish.

Amendment No. 7 would establish by regulation that the judge’s decision in cases determined without a hearing would be notified to the parties and the public within two days of the decision. That is unnecessary. Currently, when a hearing takes place, a judgment with reasons is usually given orally at the end of the hearing to the parties and any members of the public present in the hearing room. A written copy of the judgment is either sent to the parties after the hearing or given to them on the day. Written reasons are given, if requested by a party, either at the hearing or within 14 days. While the Tribunals Service has internal targets for sending out judgments after a hearing, these are not set out in regulations. I can, however, assure noble Lords that the Tribunals Service acts quickly to notify the parties of the outcome, regularly exceeding internal targets. The Government do not believe that it is necessary to specify a target within regulations. In cases determined without a hearing, the Tribunals Service would routinely send the judgment to parties as soon as it was made. Any further incursion of regulations would, I hope noble Lords will agree, increase, rather than decrease, the red tape that employers suffer.

Amendment No. 8 would restrict the determination of individual cases to a specific judge by imposing a legal requirement for the parties to be advised of the name of the judge who would determine their case, and for that information to be provided before the parties provide consent. This would create an unprecedented provision, not seen anywhere else across the judicial landscape, for the parties to have a right of approval of the judge who would determine their case. That, surely, cannot be right. We have full confidence in the ability of any judge to operate written determination procedures appropriately. Employment judges are appointed following a robust appointment process which ensures that they have the required experience and judicial capacity to judge in the complex jurisdictions that make up the canon of employment law.

This amendment would also effectively restrict the designation of single cases to single judges and stifle the Tribunals Service’s ability efficiently to organise and manage cases in the most effective, expeditious and, presumably, cost-effective way. For instance, if the designated judge were unavailable to proceed with the determination, through illness or incapacity, it would not be possible to transfer the case to an alternative judge without beginning the notification and consent process all over again. How is that for causing further delay, further cost, further confusion and further frustration? That could hardly be in the interests of the parties as it would simply introduce delay and unnecessary bureaucracy into the proceedings. The Government believe that their amendment to Clause 4, which we discussed previously, provides all the safeguards necessary to ensure access to justice for all parties concerned.

On Question, amendment agreed to.

[Amendment No. 4 not moved.]

5: Clause 4, page 4, leave out lines 17 and 18 and insert—

“(b) the person (or, where more than one, each of the persons) against whom the proceedings are brought—(i) has presented no response in the proceedings, or(ii) does not contest the case.(3AB) For the purposes of subsection (3AA)(b), a person does not present a response in the proceedings if he presents a response but, in accordance with provision made by the regulations, it is not accepted.””

On Question, amendment agreed to.

[Amendment No. 6 not moved.]

[Amendments Nos. 7 and 8 not moved.]

9: After Clause 4, insert the following new Clause—

“Proceedings in public interest disclosure cases

In the Employment Tribunals Act 1996 (c. 17), after section 8 (procedure), there is inserted—

“8A Publication of information

(1) Where proceedings include a claim under the Public Interest Disclosure Act 1998 (c. 23), the President shall, within 28 days of receipt of the claim, publish electronically and without charge the names of the parties and the relevant regional office.

(2) A person who is not a party to those proceedings may obtain from the tribunal a copy of such documents from the proceedings as he may obtain under the Civil Procedure Rules where proceedings are brought in a court.

(3) In this section, “President” has the same meaning as in section 7A(3).””

The noble Lord said: My Lords, I shall refer to proceedings brought under the Public Interest Disclosure Act, which, typically, are claims for wrongful dismissal after the employee has raised some concern of public interest relating to wrongdoing in the firm or company. It may involve fraud, health and safety matters or some other criminal or tortious complaint, after which the employee is dismissed. No doubt, I shall occasionally refer to that employee as a whistleblower.

In Grand Committee, I sought to amend the Bill with a new clause to the effect that when proceedings included a claim under the Public Interest Disclosure Act, all the employment tribunal papers—that is, the claim, the defence, the judgment, et cetera—would be publicly available after the conclusion of the proceedings, subject only to certain restrictions on publicity. My noble friend Lord Jones of Birmingham opposed that amendment on the ground, among other things, that it would involve the publication of unproven allegations made against an employer. I argued that no allegation would go on the public record without the employer having an equal opportunity for his full and considered response to be made available at the same time. Since Grand Committee, however, the charity which I shall refer to as the whistleblowers’ charity—formerly known as Public Concern at Work, of which I am patron—has been in touch with officials of the Minister’s department as well as with the CBI and the Engineering Employers’ Federation to see if a way could be found through the disagreements by an amendment conceived perhaps on a different basis.

I would strongly argue that the present position is extremely unsatisfactory, because it so happens that 70 per cent of claims brought under the Act are shrouded in secrecy owing to the fact that they are settled rather than determined after a tribunal hearing. At present, regulations emanating from my noble friend’s department—or under its old guise as the Department of Trade and Industry—prevent publication of any information about claims for wrongful dismissal based on an employee being dismissed for disclosing wrongdoing in the workplace unless the claim is disposed of after a tribunal hearing. But if it is disposed of in a settlement that has been reached in private, there is no way of getting access to the papers. Unscrupulous employers can therefore buy off a whistleblower rather than address and deal with the malpractice that he has brought to the employer’s attention. Nobody will know about the wrongdoing that has been brought to their attention. It also means that an unscrupulous employee is encouraged to bring spurious Public Interest Disclosure Act claims as a tactic, perhaps to secure a higher settlement than he would otherwise get.

The secrecy surrounding that great majority of 70 per cent of public interest disclosure claims also means that no one—no interested third party, no regulator, not even a Minister of the Crown—can find out from employment tribunal records what claims may have been brought relating to, in recent examples, mismanagement at Northern Rock or the problem of C. difficile at a particular hospital.

My approach in the present amendment, which is deliberately different from the one that I tabled in Committee, is to transplant the general Civil Procedure Rules of the High Court into the world of employment tribunals. In recent years the Government have sought more and more to emphasise that tribunal proceedings, whether on employment or otherwise, are part of the independent judicial system and not of the Administration. It therefore seems appropriate that the Civil Procedure Rules of the High Court should be adapted for Public Interest Disclosure Act claims in an employment tribunal.

Under those rules, and I speak only of particular relevant ones, the general rule would be that a member of the public could obtain a copy of the employee’s statement of case for wrongful dismissal. But—and this is most important bearing in mind the Minister’s objection in Grand Committee to which I referred—as the statement of case will contain unproven allegations, because it is the employee’s case only, the tribunal may determine that the statement of case should not be made available or should be made available only in an edited version, or only to certain persons or classes or persons, or on such other terms as the tribunal thinks fit. In other words, if there is any unfairness seen in publishing the statement of case but not the other side, then the tribunal will determine whether or not it is right.

In other words the tribunal can take into account any argument put to it on the lines of the Minister’s concern about unproven allegations being made public, though I might say to my noble friend that every criminal court, every civil court and every tribunal start every day with unproven allegations. Civil court cases and employment tribunal cases are sometimes settled and the other side is not necessarily known. Further, any other document relating to the case—for example, the defence—and any notice of settlement, which is particularly important, will be made public only if the tribunal permits. To put it another way, the secrecy that at present hides 70 per cent of claims under the Public Interest Disclosure Act will be lifted only in cases where neither party has objected to publicity or the tribunal has not upheld any objection made.

Those who advise me at Public Concern at Work have been in touch again with the Engineering Employers’ Federation, which opposes this amendment on the grounds that my proposal to apply the civil procedure open-justice rule to Public Interest Disclosure Act cases is,

“an abuse of the employment tribunal process”.

I find it impossible to agree that open justice, an inherent part of our general justice system, can be properly described as an abuse of process.

In Grand Committee I quoted the High Court decision of Mr Justice Jackson in 2000 which prevailed until the DTI introduced its no-publicity regulations. He said that,

“so far as possible, litigation should be conducted under the public gaze and under the critical scrutiny of all who wish to report legal proceedings”.

He continued:

“The principle of open justice applies to employment tribunals with just as much force as it applies to court proceedings”.

As we are at Report stage, I hope my noble friend the Minister will on this occasion see the advantage of adapting the scheme which has operated in the civil courts—the Civil Procedure Rules—to the employment tribunals. They are, after all, specialised courts and, in many cases, a significant part of the judicial system. I beg to move.

My Lords, I support my noble friend Lord Borrie, as I did in Committee. He has brought forward a slightly altered amendment to try to meet some of the objections that were raised at that time. Whistleblowing protection is terribly important. We supported the Public Interest Disclosure Act when it was introduced because we felt that it provided a protection for individuals who blew the whistle on unsafe practices. It was important from a health and safety aspect and generally that this should be provided to individuals who were prepared to blow the whistle on incorrect and unacceptable practices.

As my noble friend indicated, the amendment would discourage unscrupulous employers from trying to buy off whistleblowers as a cheaper option than dealing with the serious concern they may raise. Now that we have this slightly amended wording before the House, I hope the Minister will be prepared to accept the amendment this time round.

My Lords, in Committee I spoke in support of the noble Lord, Lord Borrie, for raising these issues. I repeat that support today and hope that he has some success in persuading the Government of the seriousness of his concerns since we last discussed whistle blowing at work. As the noble Lord said, the amendment has been redrafted to address the concerns of organisations such as the CBI. I understand that there have been further meetings with the Government on this issue and I look forward to the Minister’s response. I hope to hear more encouraging news of the Government’s opinion on this matter than we have so far heard. “In the spirit of compromise” has been the Government’s favourite phrase in this Bill. I look forward to hearing it again in regard to the amendment.

My Lords, I, too, support the amendment of the noble Lord, Lord Borrie. Clearly this is a delicate issue, with arguments finely balanced on both sides, and I welcome the fact that the noble Lord, Lord Borrie, has watered down the amendment that he originally proposed in Committee to try to meet some of the concerns coming from the CBI and the EEF in particular.

Two points are persuasive with me. First, as the noble Lord states, in principle it is strange that there should be any difference between the settlement of cases in employment tribunals and the settlement of cases in the High Court. We have reached the stage where, clearly, the employment tribunals provide just as significant a role in our judicial procedure as do the courts. Therefore it would seem odd that there should be any difference in the way these issues are treated.

Secondly, on the figures, as Public Concern at Work has demonstrated, in 2005-06 there were 1,000 PIDA cases, of which at least 600 or 700 were settled. The ones that went to the tribunal went to litigation, effectively; for those, we know the information that the noble Lord, Lord Borrie, is requesting but for the others we do not. That seems strange in the balance of life. I therefore support the noble Lord’s amendment.

My Lords, Amendment No. 9 seeks to import into the employment tribunal provisions similar to those in Rule 5.4C of the Civil Procedure Rules. This would provide for the release into the public domain of information and documents relating to employment tribunal claims which include a claim under the Public Interest Disclosure Act, or PIDA.

I recognise the genuine concern which has given rise to the amendment tabled by my noble friend Lord Borrie and the attempt which has been made to limit the negative effects which I referred to when we discussed his amendment on the same issue in Grand Committee. Although I acknowledge the spirit of compromise to which the noble Baroness, Lady Wilcox, just referred, I feel that similar difficulties to those that were aired in Grand Committee still arise from this changed amendment. The current amendment proposes—and this is not a provision of the Civil Procedure Rules—that basic details, including names of parties, would be placed on a register and published within 28 days of the claim being received. It also seeks to import Civil Procedure Rule 5.4C, which provides that persons who are not a party to the case may obtain from the court a copy of the statement of case, although the court must consider rejecting or restricting the application if a party named on the statement of case requests it. Rule 5.4C also allows persons who are not parties to apply for permission to obtain copies of other documents from the proceedings. That might include witness statements, financial records or accounts. It would include seriously confidential information.

I understand the genuine concern that has been expressed by Public Concern at Work, which campaigns on behalf of whistleblowers; that is, that the unlawful, fraudulent or dangerous behaviour that underlies genuine public interest disclosure claims should be tackled. I find that very encouraging, but I remain concerned, as do the Government, about the consequences that would follow if this amendment were implemented. We must look at the possible impact on parties whose details are published but against whom nothing has been proven. We cannot go down a road where material could be released on application which included unsubstantiated allegations. The fact that this material would be released only to non-parties who sought it does not remove the risk of unsubstantiated allegations being reported in the press, with serious consequences for the reputation of the firms concerned. As we know, the impression and perception created by the first publication in the press is always so much more effective than any retraction or statement to the contrary at a later date. That is true even when the party against whom the allegations are made has submitted a defence to the claim under the public interest disclosure legislation, because both the claim and the defence will relate to the alleged detriment to the claimant, not to the alleged underlying behaviour, be it fraud, unsafe working conditions or whatever.

My right honourable friend in another place, Pat McFadden, met representatives of PCaW in February, and officials from the Department for Business, Enterprise and Regulatory Reform held a further meeting with them and representatives of the CBI and the EEF in April. All efforts have been made to understand and discuss the issues, but the fundamental objections to releasing unproven allegations into the public domain remains. Both the CBI and the EEF, while not condoning abusive or fraudulent behaviour by companies, oppose this amendment.

I know my noble friend Lord Borrie was not seeking to be alarmist but he mentioned Northern Rock as one of the examples. We are all blessed with PhDs in hindsight. Given the current financial situation around the world, whether banks survive or not will depend largely on public confidence. One can just imagine some time ago there having been an enormous attack on the confidence of the whole financial system of the United Kingdom and beyond as a result of what this amendment proposes having taken root.

I am very pleased that my noble friend Lady Turner recited her involvement and that of many trade unions in ensuring that whistleblowers obtained protection in the past. They have to have protection; otherwise, why would they do it? However, I am sure that noble Lords will agree that that protection brings with it a sense of responsibility. Too often, that protection is not used responsibly. If this amendment were implemented, we would find that press allegations often appeared that were detrimental to business and the employer, and which were not substantiated at that point in time—if they have been substantiated, that is an entirely different issue. I suspect that we would enter a bureaucratic and nightmare of time-delay where every application for papers would be opposed on those grounds. It is surely not in the interests of anybody if all that we are going to do is bring in another tier of delay and expense. I trust that my noble friend Lord Borrie will be prepared on that basis alone to withdraw his amendment.

My Lords, I am most grateful to my noble friend Lady Turner—and, if he had been here, no doubt my noble friend Lord Wedderburn—for supporting my revised amendment. I am grateful, too, for the support of the noble Baroness, Lady Wilcox, on behalf of the Conservative Opposition, and of the noble Lord, Lord Razzall, for the Liberal Democrats.

Despite that widespread support from all sides, the response of my noble friend Lord Jones of Birmingham was extremely disappointing and to some extent rather astonishing. He knows, as I do, that there are published all sorts of allegations about individuals and firms, in terms of their being charged with fraud or accused of something, which are later disposed of in a negative way, with it all seeming in hindsight rather unfair that the allegations were made public. But that is part of the price we pay for open justice. It is astonishing that the noble Lord should say, by the pure chance that wrongful dismissal cases are brought in employment tribunals rather than in the ordinary High Court, that the civil procedure rules that I wanted to transplant into the employment tribunal field should not be allowed.

I remind the Minister that the purpose of the Public Interest Disclosure Act was not just to give a private remedy to a private individual who was wrongfully dismissed for blowing the whistle on some wrongdoing, or alleged wrongdoing, at his place of work; it was designed to support the public interest, to deter wrongdoing in future and to ensure that wrongdoing was not hidden from public sight. The DTI—it was long before, I accept, my noble friend’s time at the new department—introduced regulations to stop any publicity except in the circumstance of a final tribunal determination. That seemed to go completely against the purpose of the Public Interest Disclosure Act, which was to bring things out, preferably via the employer or a regulator rather than via the press, to ensure that the employer would do something about it.

Unfortunately, if things can be hushed up and a settlement made without any public understanding of what is going on, then the wrongdoing may continue; there is far less of a deterrent against wrongdoing being attacked, criticised and dealt with. Unfortunately the employer may not feel a need, because sometimes it is easier to shoot the messenger—the whistleblower—than to deal with those initiating the wrongdoing in the first place.

I have to say to my noble friend the Minister—he will forgive me, I hope, for putting it strongly; we have known one another for many years—that I am very disappointed with his answer. I shall have to discuss with my advisers what to do before Third Reading. Of course I beg leave to withdraw my amendment, but I do so with great reluctance.

Amendment, by leave, withdrawn.

10: Before Clause 5, insert the following new Clause—

“Disciplinary and grievance procedures: code of practice

(1) Any draft code of practice on disciplinary and grievance procedures issued by ACAS under section 199 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) shall encourage employers to ensure that third party facilitated dialogue is used, in appropriate cases, as a part of disciplinary and grievance procedures.

(2) Any such code of practice shall provide guidance as to what constitutes an “appropriate case” for the use of third party facilitated dialogue.

(3) In this section a reference to “third party facilitation dialogue” includes a reference to conciliation, mediation and independent investigation.”

The noble Lord said: My Lords, I shall speak also to Amendments Nos. 11 to 13. I am very grateful to my noble friend Lord Campbell of Alloway for his support in putting his name to the amendments.

We return here to the whole question of mediation and conciliation and to the generic subject of alternative dispute resolution. The proposed new clause in my amendment states clearly that the ACAS code of practice should refer to what is described as,

“conciliation, mediation and independent investigation”,

in appropriate cases. There will be guidance in the code of practice on what constitutes an appropriate case.

I am grateful for the support that I have received on this from many noble Lords. I feel so strongly about it not just because I am a Centre for Effective Dispute Resolution-accredited mediator but also because, as a partner in a national commercial firm of solicitors, Beachcroft LLP, I have become aware of the tendency in what some people describe as a damages or compensation culture, whether perceived or real, for lawyers to be involved at an early stage and to escalate a dispute, making it even more difficult to reach a proper resolution of the problems that have arisen. Although this did not really enter into employment tribunal cases historically, I am given to understand that there is now much more of a tendency for employment tribunals to become a battleground where disputes are taken that should have been settled at a much earlier stage and where the parties involved have not had an opportunity of talking through the situation in the way that this new clause stresses is so important.

Amendments Nos. 11, 12 and 13 proceed to refer to conciliation and mediation as well. Both are forms of alternative dispute resolution. I am seeking in these amendments to identify and facilitate ways in which employers and their employees can settle issues between them early on before any battle lines are drawn up and before, as all too often happens, irrevocable decisions and positions are taken.

There is a difference between conciliation and mediation. ACAS, with all its experience, identifies that on its website, where it describes conciliation as where an independent conciliator discusses the issues that have arisen in an employment tribunal claim,

“with both sides to find common ground on which the claim could be settled”.

The term conciliation is used when an employee,

“is making, or could make, a specific complaint against their employer to an employment tribunal”.

It is therefore different from mediation. Rightly, the ACAS website describes mediation as,

“the most common form of alternative dispute resolution. It’s completely voluntary and confidential. It involves an independent, impartial person helping two or more individuals or groups reach a solution that’s acceptable to everyone … Mediators do not make judgements or determine outcomes”.

They are there to facilitate the parties to reach their own agreement, which as a result is much longer lasting and satisfactory. The whole focus is on going forward to establish a continuing relationship between the parties, rather than on going back and being judgmental about what has or has not gone wrong.

In 80 per cent of mediations a settlement is reached, as is clearly laid out on the ACAS website. Agreements are not legally binding. In fact, as my noble friend Lord Henley, who is also a fully accredited mediator, will testify, often no settlement is reached. The mediation has not failed, however, because often a settlement will result in the weeks following, as the parties suddenly begin to realise its importance. Therefore, the mediator’s job is not to achieve a settlement but merely to enable both parties to try to reach accommodation themselves. Therefore, settlements are not legally binding, although they can be given legal force if an ACAS conciliator becomes involved—but not unless that occurs.

The other issue is equally important. With mediation being a private process, can ACAS under the existing legislation involve outside mediators? There is a whole range of expertise in the employment arena, with highly professional people who could assist ACAS. Of course, ACAS will need additional resources to enable it to fulfil all those functions. But if it is to fulfil them, I would hope that we would see the number of disputes diminish and an increasing number settled amicably. I beg to move.

My Lords, I support my noble friend, for all the reasons that he has given. I have a word of gratitude for the Minister for having taken note of this matter in Grand Committee. Because of his past experience, I hope that he will understand, inevitably, the tremendous importance and distinction of mediation, which keeps parties going on together, rather than a form of conciliation, which tends to lay them apart. If we can go forward, in principle, with these amendments, it will be a very good thing.

My Lords, I offer my support to my noble friend Lord Hunt for his amendment. I declare an interest as a CEDR-credited mediator, a route which I went down following the advice of my noble friend, who suggested that it was something that I might be interested in doing. Whether I am any good as a mediator is another matter—but certainly it is a very useful process and one that protects a large number of people from the potential later ravages of lawyers.

I support my noble friend’s amendment and hope that the Government can give it a sympathetic response.

My Lords, the amendments of the noble Lord, Lord Hunt, propose a range of measures to promote greater use of conciliation and mediation in the early stages of an employment dispute. I personally thank him for giving oxygen and an airing to the whole issue. The more people in all walks of life—people who might come before a tribunal—are aware of the facility available, the more efficient, quick, cheap and understandable the process will be. I am sure that we all agree with the sentiment behind the amendments even if we do not feel that it is appropriate in this case.

The Government firmly believe that more disputes could benefit from early mediation and conciliation because the problems will be resolved at the earliest opportunity. We announced on 6 February that we intend to invest significant additional resources in ACAS’s pre-claim activities to make this service more widely available. We are also investing significantly in improving the ACAS helpline so that more people are able to benefit from advice on the options available for resolving employment disputes. The noble Lord, Lord Hunt, asked whether it is possible for ACAS to draw on outside parties to facilitate and complement that. I will get back to him on that.

The noble Lords, Lord Hunt and Lord Henley, come from a profession where I spent 20 years. When I was an articled clerk, one of my first principals had a sign above his desk saying: “Settle out of court? Where’s the fun in that?”. I hope those days are over.

As I said in Grand Committee, we believe that the parties should choose the ways that make most sense to them in resolving their dispute. We believe that mediation by private providers can play a crucial role and intend to promote its benefits effectively and systematically. However, we believe that these amendments are unnecessary in the light of the measures that are already in place or that we are now proposing. Perhaps I may explain that. I shall consider each amendment in turn, starting with Amendment No. 11.

The first two elements of Amendment No. 11 would include mediation within the heading of the section specified of the Employment Tribunals Act 1996, and insert into subsection (2) that a conciliation officer may use mediation or conciliation when endeavouring to promote a settlement, before proceedings are instituted. Mediation and conciliation are both elastic terms with disagreement among practitioners about what each means in practice. ACAS uses a variety of techniques, including telephone discussion and face-to-face discussion, in seeking to resolve disputes at the early stage. I do not believe that including both these terms in the legislation would have any practical impact. The existing legislation already enables ACAS to use a variety of techniques to resolve disputes. The amendment changes nothing.

The third element of Amendment No. 11 seeks to insert a provision that ACAS conciliation officers may engage outside mediators to assist in the settlement of proceedings. Nothing now prevents conciliation officers suggesting to parties that the help of outside mediators could be worth while. That is done in individual cases every day. ACAS would not, however, pay the fees of such mediators; it has to be right that parties themselves should bear their cost if persuaded of the benefits. The noble Lord’s amendment could have the effect of requiring public funding for private mediation.

Clause 5 provides for ACAS’s existing duty to conciliate in cases where no claim has yet been presented to an employment tribunal to become a power. Amendment No. 12 would remove that change. We cannot support this. It may be helpful to explain the context of our proposed change. ACAS currently has a duty to offer conciliation in certain cases which are capable of becoming the subject of an employment tribunal claim where both potential parties request it, or, where one party makes a request, the conciliation officer judges that there is a good prospect of success. That duty has been on the statute books since the 1970s. During the 1980s, ACAS increasingly found employers asking ACAS to assist with cases which were never likely to become the subject of an employment tribunal claim, at the taxpayer’s expense. In response, the ACAS council decided to interpret the duty strictly in the spirit in which it was intended, so that the pre-claim conciliation service could be focused on cases which were otherwise more or less certain to become the subject of a tribunal claim. As a result, the numbers carried out have been small.

Following overwhelming support for more early ACAS conciliation from respondents to the consultation on the Gibbons review, the Government will invest up to £37 million in additional conciliation resource and in improving the ACAS advice service, which, among other things, will be able to explain to people what help is available to resolve disputes and offer the statutory ACAS conciliation service in cases which seem likely to benefit from it and where the parties wish it. There is a risk that demand for ACAS conciliation services will exceed supply once the service is actively made available as we now intend. We therefore wish to ensure that ACAS is able effectively to manage the new case load without having unduly to restrict the use of its services. That is why we wish to change the existing duty to conciliate to a power to enable it to do so without being exposed to legal jeopardy.

Amendment No. 13 would add to Section 18(6) of the Employment Tribunals Act words enabling the encouragement of the use of mediation as a first step in any conciliation process. The subsection already provides for this through a broad requirement that,

“a conciliation officer shall, where appropriate, have regard to the desirability of encouraging the use of other procedures available for the settlement of grievances”.

Finally, Amendment No. 10 also seeks to encourage employers to use conciliation and mediation. ACAS plays a key and valued role in the resolution of workplace disputes and the Government are supportive of codes of practice issued by ACAS. As your Lordships will be aware, ACAS is revising its code of practice on disciplinary and grievance procedures to be principles-based and concise, supported by fuller non-statutory guidance. Tribunals will then be able to consider the appropriateness of parties’ behaviour in the particular circumstances of a case against the principles set out in the code, in line with the conclusions of the Gibbons review and the public consultation. This is a sensible and balanced way of encouraging employers and employees to follow the principles of good practice in the early resolution of workplace disputes and overcomes the unforeseen and undesirable results experienced when detailed procedures were enshrined in primary legislation.

I circulated an early draft of the code in Committee. The draft has now been issued by ACAS for public consultation. All interested parties can comment on it to ACAS. It clearly says that employers and employees should do all that they can to resolve disciplinary and grievance issues in the workplace, and the foreword to the draft makes specific reference to third-party assistance. ACAS will also be considering including further guidance on obtaining outside help, such as mediation, in its accompanying detailed guidance booklet. That might give even more help and assistance on the issue raised by the noble Lord, Lord Hunt.

In conclusion, these amendments are unnecessary as there will be more than adequate measures to encourage conciliation and mediation where it is appropriate, whereas legislating would lead us back into being overly prescriptive and lacking flexibility. Please do not mistake the Government’s opposition to these amendments for a stance of not encouraging mediation and conciliation. That must be the way forward, but we must ensure that we do not remove flexibility or become overregulated and overly prescriptive, and ultimately fall foul of the law of unintended consequences.

My Lords, I am grateful to the Minister for a positive response to which I will return in just a minute. I first thank my noble friends Lord Campbell and Lord Henley for their support, drawn in both their cases from a substantial understanding of what is required. Despite the Minister’s reference to the sign on his desk saying, “Settle out of court? What is the fun in that?”, I sense that he was describing those as the bad old days to which we should not return. I could not agree with him more.

I found the Minister’s phrase that there would “effectively and systematically” be promotion of independent mediation remarkably helpful. That is a substantial move forward from our previous debate, although at that time I was erring down the road of compulsion. He and other noble Lords persuaded me that perhaps, as with Michael Gibbons’s findings, compulsion is not necessarily the right way forward.

I was particularly intrigued by the Minister’s comment that demand may exceed supply. I hoped that he might return to the point that I raised specifically, which was that when demand exceeds supply, does ACAS have the power to engage the private sector to bring its resources to assist ACAS in an independent mediation? I can well understand that if parties have decided to go down the mediation route, ACAS should not pay the bill, but it surely fits in with the Government’s attitude to public/private partnerships that there should be a close working relationship between those who provide mediation services and ACAS. When demand exceeds supply, there would then be an opportunity to press a lever marked “private-sector support” that ACAS can call in.

My Lords, I am pleased to reassure the noble Lord, Lord Hunt, on that point. I am a huge fan of public/private partnerships and the fusion of powers, facilities, opportunities, skill and expertise of both sectors to come to a better result. Indeed, what works matters and what matters works. It will come down to a question of cost, but I will investigate the issue and take a personal interest in it.

My Lords, I am grateful to the Minister who, I understand, has additional resources, to which he referred. I hope that they will be put to the best possible effect, giving real value for money for the taxpayer, which must involve some form of public/private partnership.

I am grateful to the Minister for what he said about the code. I have written to him suggesting an addition that might be made to it to ensure that conciliation, mediation or independent investigation should be included in the code. I know that some are a little worried that that would add to the expense, but the great advantage of mediation, as my noble friend Lord Henley knows, is that there is comparatively little preparatory cost. All the mediator requires to know is exactly what the parties want to achieve and a brief history of what has happened. The mediator then decides how best to resolve the dispute. It is all pretty easy, quick and simple.

My Lords, I am in receipt of the noble Lord’s letter, dated 15 May. I will revert back to him on all four points, especially the suggestions on the code, as quickly as possible.

My Lords, what can I say to the Minister except “thank you”? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Conciliation before bringing of proceedings]:

[Amendments Nos. 11 to 13 not moved.]

14: After Clause 6, insert the following new Clause—


(1) Section 7B of the Employment Tribunals Act 1996 (c. 17) (mediation) is amended as follows.

(2) In subsection (3), for “decide matters in the case only with the consent of the parties” substitute “not decide matters in the same case”.”

The noble Lord said: I move this amendment, which is in my name and that of my noble friend Lady Wilcox, at the suggestion of the noble Lord, Lord Wedderburn of Charlton, who sadly could not be here today. It is similar to one that he moved towards the end of our proceedings on the first day in Committee, as long ago as 4 February. I hoped that he would be here and that we could have the amendment down in both his name and mine. Both of us have been here for some 30 years and it would have been an unusual combination of names on an amendment. I make that point to illustrate that this amendment is not party-political; it merely makes a simple and basic point about mediation, as we discussed on the previous amendment.

The simple point is that one should always remember that mediation is not arbitration or conciliation; it is something different. The important thing about mediation is that the mediator makes it clear that everything that is said to him is off the record, without prejudice, and that he will forget all of it after the mediation is closed, whether or not that mediation has been successful. Therefore it is important that the mediator, more than anyone else and even with the consent of the parties, should be precluded from taking part in later proceedings. As both the noble Lord, Lord Wedderburn, and I understand it, it would be possible under the Industrial Tribunals Act 1996 for a mediator subsequently to be a member of an employment tribunal. As the noble Lord, Lord Wedderburn, made clear on 4 February—I hope that I, too, made it clear—we think that it would be wrong in principle for a mediator ever to act in a judicial or quasi-judicial role in the same case. Therefore it is important that we amend the Act in the way that is suggested by this amendment, to make it clear that a mediator can never act as a member of a tribunal, even with the agreement of the parties. That is why, in my proposed new subsection (2), we substitute the words,

“not decide matters in the same case”.

The noble Lord, Lord Wedderburn, felt very strongly about this. I feel very strongly about it and I cannot see why the Government on that occasion resisted the amendment. I hope that they will not resist this amendment and that, even if they cannot accept the wording, they will say that they will bring forward something suitable at Third Reading. It is important that it is made clear that a mediator should not act later as a member of an employment tribunal. I beg to move.

My Lords, I am grateful to the noble Lord, Lord Henley, for this amendment, which would preclude an employment judge from taking part in the determination of any case in all circumstances where he or she has been involved in mediation. The present legal position is that the express consent of all parties is required before a mediating judge can determine such a case.

I agree with the noble Lord that in general, and as a matter of course, it is desirable that mediating judges should play no part in the determination of cases. Parties need to have confidence in the impartial judgment of the tribunal. However, if they do, why should it be impossible for the mediating judge to be part of the employment tribunal? It is because the parties need to have confidence in the impartial judgment of the tribunal that, in the recent Tribunals Service trial of judicial mediation in employment tribunals, the rules of the scheme provided that a mediating judge could not take part in the judging of a case. It is right that this should be the general rule.

We should be mindful that “mediation” is, as I understand it—there are much greater experts in the House than me—a fairly elastic term that is undefined in law. It is a broad church that can stretch from activity that is close to conciliation, where the mediator seeks to establish common ground between parties but does not take a view on the substantive merits of the case, to a model more like arbitration, where the mediator proposes a solution having heard the arguments of the parties. Where it is more akin to conciliation, we think that there is an argument for using the law to prevent a judge’s involvement. We think that the argument for using the law to prevent a judge’s involvement in the determination of a case is less strong in the mediation model, which has been used in the recent pilot of judicial mediation in employment tribunal cases.

We sympathise with the arguments advanced in favour of the amendment, but is it right to prescribe in legislation that no mediating employment judge can ever subsequently be involved in determining a case? There could be circumstances in which such involvement would be in the interests of justice. In a complex case, a mediating judge would become familiar with the facts and, if mediation failed, there might be unnecessary delay if the parties had to set out their respective positions in detail to another judge. In such circumstances, ought we to say—this is the question that I pose to the House—that in law, even if the parties themselves desire it, the original judge cannot continue in any circumstances to determine the case? We are not sure that that is not going too far.

Parliament accepted the argument that I have just put forward in relation to other tribunals when it passed the Tribunals, Courts and Enforcement Act last year. That included a provision that a mediating judge could take part in the determination of a case where all parties agreed. We are not sure that the case has been made for treating mediation in the context of an employment tribunal differently from mediation in the context of other tribunals. Our view is that the existing legal position, whereby a mediating judge could be involved in subsequent determination, but only with the express consent of the parties, is the appropriate way for statute to deal with this matter. That is why, although sympathetic to much that the noble Lord, Lord Henley, has said, we think that it would be wrong to put this into legislation and I invite him to withdraw his amendment.

My Lords, I am afraid that I am not happy with that response. I am sad, again, that I do not have the noble Lord, Lord Wedderburn, here to argue the case better than I can. However, I quote from what he said in Committee:

“To act in a judicial capacity is totally different from acting as a mediator. Once you have acted as a mediator, you have taken positions on the arguments. It is incomprehensible to me to understand why the Government would resist, as I have suggested … an amendment to the Tribunals, Courts and Enforcement Act 2007”.

Earlier, on the subject of consent, he made his argument even clearer:

“Even with the consent of the parties, it should surely not be proper”.—[Official Report, 4/2/08; col. GC 491-92.]

This is a very small amendment. I appreciate that many of the noble Lord’s friends may be away in Crewe and Nantwich, but on this occasion I prefer to test the opinion of the House.

15: After Clause 7, insert the following new Clause—

“Unpaid award of compensation: recovery on behalf of claimant

The Secretary of State shall by order make regulations for the recovery on behalf of the claimant, of any Employment Tribunal monetary award not fully paid by the respondent within forty two days of the date on which judgement was sent to the parties, and for the recovery of all associated enforcement costs from the respondent.

The regulations shall identify—

(a) the organisation or organisations responsible for recovery on behalf of the claimant;(b) the powers of such organisations in enforcing the judgement;(c) the regulatory framework in which such organisations shall utilise their powers.”

The noble Baroness said: My Lords, this amendment has been suggested to me by Citizens Advice. Its aim is to deal with the problem of non-payment by rogue employers of employment tribunal awards and the resultant difficulty and hardship caused to the claimants concerned. At present, and even after the implementation from April 2009 of the welcome provisions in the Tribunals, Courts and Enforcement Act 2007, such claimants are faced with having to take legally complex, time-consuming and costly enforcement action in the civil courts. Many simply do not do so, while others try but then give up. Rogue employers are aware of this and calculate that non-compliance pays. The amendment would enable unpaid awards to be enforced by the state on behalf of the claimant using existing civil court enforcement mechanisms.

Just how widespread a problem is this? A recent survey conducted by Citizens Advice showed that in 2006-07 the 430 citizens advice bureaux in England and Wales dealt with an estimated 1,040 inquiries about enforcement of unpaid tribunal awards. In the first two quarters of this year, these bureaux dealt with an estimated 525 such inquiries. This would suggest that the total number of unpaid awards is in fact in the region of more than 1,000 a year.

There is no doubt at all that vulnerable people face real hardship as a result of these failures. As I have already indicated, the Government have sought to remedy the situation by the provisions included in the Tribunals, Courts and Enforcement Act 2007, but Citizens Advice has said that these do not go far enough. It is the common experience of CAB advisers that claimants’ registration of unpaid awards in the county court, which under the Act is to become automatic and free of charge, frequently fails to secure a payment of the award, as the consequences for the employer of continued non-compliance are negligible. Citizens Advice has provided details of a number of cases in support of this, but because of the lateness of the hour, I shall not refer to them, although there are a number of sad cases where people are facing real difficulty because of failure to secure money that is rightfully theirs. For an individual who has not received his award, the process of enforcement that must follow registration of the unpaid award is legalistic, time-consuming and expensive because of the need to pay court fees and, in some cases, to engage the services of a solicitor. Many people simply give up. Rogue employers are aware of that and calculate that non-compliance pays, hence the amendment providing for unpaid awards to be enforced by the state. It may be argued that that would cost a lot, but if claimants are unable to access money that is rightfully theirs, they become impoverished and then have recourse to the benefit system, which also costs the taxpayer money. Moreover, where such enforcement action is successful, costs could presumably be recovered from the defaulting employer. This amendment is based on a great deal of experience in this area, and I hope that the Government will be prepared to accept it. I beg to move.

My Lords, I rise to speak briefly in support of the amendment moved by my noble friend Lady Turner. I shall not take up the time of the House because I know we are up against it, but there are over 1,000 cases, often involving people who do not understand what they have to do to recover the money and, even if they do, cannot afford to follow it through. We are following the advice given to us by Citizens Advice, and all that is being asked is that the Government take over these cases to ensure that these people obtain justice. I hope that when the Minister replies he is sympathetic to what we are putting forward.

My Lords, I, too, support this amendment. As the noble Baroness rightly said, this has been a concern of Citizens Advice for a considerable number of months. I shall not repeat what the previous two speakers said, but it is apparent that those less well off in our society are often being exploited by rogue employers. They eventually get an award, often at the instigation of the local citizens advice bureau, and then they give up because they cannot face the procedure or afford the legal and court fees. Like the noble Baroness, this side has been arguing for this. We have both taken up the advice and research of Citizens Advice, and I hope that the Government will find a way of taking on board the points that have been made.

My Lords, I thank my noble friend for her amendment. We discussed this matter in Grand Committee on an amendment moved by my noble friend Lord Wedderburn. It addressed the same issue, although in different terms. I said then, and I maintain, that the Government recognise the need to address the recovery of awards, but we do not believe that direct enforcement, as proposed in this amendment, is the right way to tackle the issue.

As the law currently stands, employment tribunal awards may be enforced, after the statutory 42-day period for payment, in the same way as county court judgments, by means of a court order. Interest is payable after the 42-day period in most cases. We are aware of the need to address the enforcement of employment tribunal awards and, as was said in Committee, we are already taking action to make the enforcement of awards easier—my noble friend Lady Turner was kind enough to mention that.

I shall repeat briefly what we are doing. The Tribunal Courts and Enforcement Act 2007 provides for the enforcement of awards in all tribunals as if they were payable under a county court order, so the claimant does not have to go through the county court but can go straight to the bailiffs for enforcement after the 42 days. The same Act provides that a legally binding agreement brokered by ACAS will be enforceable in the same way and it provides for unpaid awards to be included on the Register of Judgments and Orders. That is likely to make it more difficult for respondents who have defaulted on payment of awards to obtain credit. It is currently intended to implement these measures in April 2009 at the same time as the statutory dispute procedures under the current Bill. We think that is the appropriate way to deal with those respondents who fail to pay awards due to claimants. We should allow time for these measures to bed down, but of course we need to assess their impact. It is a long-held principle of civil justice that the conduct of proceedings should rest largely in the hands of the parties concerned, and we do not believe that the establishment of a state mechanism for the enforcement of employment tribunal awards is justified when a simpler solution is to hand.

I should declare an interest as a long time ago I was chairman of a local citizens advice bureau for three years, and it follows that I have the greatest respect for Citizens Advice and the work it does in providing free advice to some of the most vulnerable in society. It argues that registration of the award in the county court is not enough and that state-led enforcement on behalf of the claimant is needed. It suggests that this might be undertaken either by directly employed lawyers or by the commercial firm, Sheriffs Lodgment Centre. We believe that we should first assess the impact of the changes due in April 2009, which I understand that Citizens Advice supports, as far as they go, although it does not think they go far enough.

Late last Thursday, we received the interim report on the research, mentioned by my noble friend Lady Turner, commissioned by Citizens Advice into the scale of the issue. We have not had time to assess it fully, but Ministers have asked officials to meet Citizens Advice when the final report is available to discuss the findings and the implications for enforcement. The Government are also commissioning their own research on the payment and enforcement of awards.

As was said in Committee, we are, in addition, providing help to vulnerable claimants in the Bill, by extending tribunals’ discretion to make additional awards against respondents to cover the full financial loss arising from money not paid or unlawfully withheld in certain simple monetary claims.

The Government share the concern that Citizens Advice has brought to our attention—through this amendment moved by my noble friend—that enforcement of awards is important. We want to give time to the measures that we have taken to bed down and see that they work in practice. It is on that basis that I invite my noble friend to withdraw her amendment.

My Lords, I thank the Minister for that very detailed response. I noted, particularly, that he referred to the possibility of an arrangement that involved going straight to the bailiffs, which I think Citizens Advice would have supported, judging by the briefing that it supplied to me. I am interested to learn that the Government are commissioning their own inquiry and that there is an intention to meet citizens advice bureaux to discuss the interim report. While I would like the amendment that has been suggested by the CABs to have been agreed to, it seems that the Government are aware of the problems and that some action will be taken. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Notices of underpayment]:

16: Clause 9, page 7, line 44, at end insert—

“(1A) The Secretary of State may by directions specify circumstances in which a notice of underpayment is not to impose a requirement to pay a financial penalty.

(1B) Directions under subsection (1A) may be amended or revoked by further such directions.”

The noble Lord said: My Lords, Clause 9 replaces the current enforcement and penalty notices with a single notice of underpayment. The new notice will require a non-compliant employer to repay arrears of the national minimum wage to the employees specified on the notice as having been underpaid, and to pay a financial penalty to the Secretary of State. The Government are committed to effective national minimum wage enforcement which supports employees and businesses by deterring non-compliant employers from underpaying their employees. We envisage that a penalty will be levied in almost all cases of non-compliance. However, we also realise that there may be circumstances where it would be inappropriate to penalise an employer for failing to pay the minimum wage.

Our response to last year’s consultation on national minimum wage enforcement, which was published on the introduction of the Bill to your Lordships’ House, stated that:

“The legislation will not require enforcement officers to issue penalties in all cases, although as a matter of policy they will be expected to do so in all but the most exceptional cases”.

At the time the Bill was introduced we considered that we had achieved this policy, as new Section 19(2) on page 7, at line 13, gives the enforcement officer a discretion whether to issue a notice of underpayment. However, we have considered this matter further and believe that there may be limited circumstances where we would wish to require an employer to repay arrears to employees, but where we would not wish to impose a penalty on that employer. Clause 9 does not allow for this.

Amendment No. 16 seeks to clarify the Government’s policy intention as set out in our response to consultation. It provides that the Secretary of State can make directions to set out circumstances in which a notice of underpayment should be issued, but without a financial penalty. This amendment will allow additional flexibility to respond to future circumstances by means of directions issued by the Secretary of State, rather than needing to make further legislative change. If directions are issued, they will be included in a policy statement to be published by the Department for Business, Enterprise and Regulatory Reform. This policy statement will be made available to the general public and will deal with how the national minimum wage enforcement regime will operate.

As I have said, the aim of this amendment is to allow the enforcement regime to respond to future circumstances where it would be unjust to issue a penalty and so ensure that our enforcement is effective but fair. We are not able to say at present exactly what all those future circumstances might be. I do not think it would be particularly helpful this afternoon to explore numerous hypothetical scenarios out of context. I am pleased to note that this amendment has the support of the CBI. As noble Lords will know, I was director-general of that organisation for six and a half years. I was in favour of the national minimum wage being implemented, but it all happened before my watch. I am very pleased it was so done.

However, to give a flavour of why we believe that this amendment is required, it may help to say that one circumstance we are considering is where, previously, another government agency has stated that the employer’s practice was compliant with national minimum wage requirements but that proved not to be the case in practice. I should emphasise at this point that that is a hypothetical example. We are not aware of any of those problems. Nevertheless, we believe that it would be manifestly unjust to issue a penalty for an employer and, in effect, penalise him for a mistake that was not of his making. Amendments Nos. 17 to 28 make necessary consequential changes. Amendment No. 26 provides an additional ground for appeal to cover cases where an enforcement officer has issued a notice of underpayment that includes a penalty in circumstances where the Secretary of State has directed that a penalty should not be issued. Amendments Nos. 27 and 28 provide that an enforcement officer may withdraw and reissue a notice of underpayment if that notice was incorrect—for example, if it wrongly included or omitted a penalty.

It is important that we create an easily understood deterrent which makes clear that underpayment of the national minimum wage is unacceptable, and what the consequences of underpayment will be. That will provide greater support to vulnerable employees and help ensure a level playing field for compliant businesses. That is the aim of Clause 9. This amendment is not a watering-down of the enforcement regime; rather, it will enable us to avoid the situation where a penalty has to be issued in circumstances where it would be unjust so to do. I beg to move.

My Lords, I am glad that with this amendment the Government have started to appreciate that the world of employment law regulation is an extremely complicated one for employers to navigate and that sometimes mistakes can happen. I have no doubt that it is with the help of the noble Lord, Lord Jones, who, as he said, was the director-general of the CBI for quite a long time. He has brought this new thinking into a Labour Government. However, I am concerned at how far this amendment will be implemented. In his letter of 13 May, for which I thank him, he said that he would consider waiving the penalty for underpayment only if the employer had been misadvised by another government agency. A government agency gives wrong advice to a small employer doing his best to keep up with the realms of regulation issued by DBERR, yet there is a possibility that the employer will be expected to pay for the mistake. Excuse me. Would my noble friend take over?

My Lords, I shall continue with what my noble friend was saying. The Government said in Committee that their intention behind imposing a penalty on underpayment of wages was to deter wilful underpayers. If this is the case, why are they not immediately providing an exemption for those solutions where the underpayment was clearly a mistake? This refusal on the part of the Government to appreciate the difficulty that even the most careful employers have in becoming fully compliant has led to such burdens being placed on small businesses.

My Lords, I assure the noble Baroness, Lady Wilcox—whom I hope will quickly recover—that the example I was using of one department in government giving advice to an employer, which turns out to have been wrong advice in the light of the judgment of another part of government, was just one example. Indeed, I have no evidence of the fact that it currently happens. I was merely trying to illuminate the point at issue.

On Question, amendment agreed to.

17: Clause 9, page 8, line 1, leave out second “the” and insert “any”

18: Clause 9, page 8, line 7, leave out “the” and insert “a”

19: Clause 9, page 8, line 10, leave out “the” and insert “a”

20: Clause 9, page 8, line 19, leave out “the” and insert “any”

21: Clause 9, page 8, line 20, leave out from beginning to “is ” and insert “In a case where a notice of underpayment imposes a requirement to pay a financial penalty, if the employer on whom the notice”

22: Clause 9, page 8, line 24, leave out “required under this section”

23: Clause 9, page 8, line 26, leave out “required under this section”

24: Clause 9, page 8, line 33, after “underpayment” insert “which imposes a requirement to pay a financial penalty”

25: Clause 9, page 9, line 24, leave out first “the” and insert “any”

26: Clause 9, page 9, line 42, leave out “the ground” and insert “either or both of the following grounds—

(a) that the notice was served in circumstances specified in a direction under section 19(1A) above, or(b) ”

27: Clause 9, page 10, line 43, leave out “an officer acting for the purposes of this Act” and insert “and it appears to an officer acting for the purposes of this Act that the notice incorrectly includes or omits any requirement or is incorrect in any particular, the officer”

28: Clause 9, page 11, line 20, leave out from “above” to “at” in line 21 and insert “and is of the opinion referred to in section 19(1) above in relation to any worker specified in the notice which is being withdrawn (“the original notice”), he may”

On Question, amendments agreed to.

29: After Clause 13, insert the following new Clause—

“Application of the national minimum wage to mariners

(1) The National Minimum Wage Act 1998 (c. 39), section 1 (workers to be paid at least the minimum wage) is amended as specified in subsection (2) and section 40 (application of the wage to mariners) is amended as specified in subsection (3).

(2) In section 1(2)(b) the words “or, in the case of mariners, is a person satisfying either of the provisions of section 40” are inserted after the words “under his contract”.

(3) For section 40 (mariners) there is substituted—

“40 Mariners

The provisions referred to in section 1(2)(b) are that the person is employed to work on board—

(a) a ship registered in the United Kingdom under Part II of the Merchant Shipping Act 1995; or(b) any other ship—(i) trading or operating solely between United Kingdom ports; or(ii) trading or operating solely between United Kingdom ports, anchorages, roadsteads or offshore installations; or(iii) trading or operating solely between the United Kingdom and the Isle of Man or the States of Jersey or the States of Guernsey; or(iv) trading or operating solely between United Kingdom ports, anchorages, roadsteads or offshore installations and EU (or EEA) ports, anchorages, roadsteads or offshore installations on regularly scheduled passenger or freight services at any time they are within United Kingdom territorial waters.””

The noble Baroness said: My Lords, in Committee I sought to get the Government to agree to an amendment designed to deal with the anomalies that exist in the payment of the national minimum wage to seafarers. The amendment that I moved urged that the national minimum wage be paid to seafarers on all UK-registered ships and on all vessels trading in UK territorial waters. Like the union, I was particularly concerned about the exploitation of foreign workers on British ships and the fact that they sometimes receive wages that are very much less than the national minimum wage, even though they work next to British workers who receive the national minimum wage. The union rightly thought that that was wrong in principle and the amendment sought to deal with it.

The Government opposed my amendment on a number of grounds. There were the expected arguments about the possibility that foreign ships would flag out; those arguments are usually made by shipping employers whenever any improvement in terms and conditions of employment are suggested. It was also argued that to try to enforce the national minimum wage on all ships in UK territorial waters would not be compatible with the UN Convention on the Law of the Sea and customary international law, primarily because it would infringe the right of international passage. Moreover, it was argued that the amendment would mean that the UK Government would have to pursue ships that might only occasionally call at UK ports.

However, the Minister agreed that there were anomalies that should be considered, notably that, because of the distinction made between UK internal waters and UK territorial waters, the national minimum wage became payable in respect of the sea between Scotland and the Inner and Outer Hebrides but not in respect of the sea between Scotland and Shetland. The Minister agreed that other, similar anomalies existed.

Following the debate in Committee, my noble friend Lord Wedderburn and I had a meeting with union representatives. The union concerned has had further discussions with its lawyers and the wording now before the House is the result of those discussions. The union believes that the ships that are of primary importance for national minimum wage coverage are ferries and cargo vessels trading regularly from UK ports. We believe that the revised wording deals with the main arguments against our original amendment, while attempting to deal with the anomalies that the Minister agreed existed as far as present practice is concerned.

It may be argued that the wording could still risk encouraging what is known as flagging out by foreign ship owners unwilling to accept the obligation to pay the minimum wage. We believe this to be a form of blackmail, which the Government should not accept. Shipping is an important industry; indeed, I understand that the Government have made certain tax advantages in acknowledgement of its importance. However, there are obligations as well, one of which should be to ensure that basic employment standards are met for seafarers working on these ships. The Government admit that anomalies exist and the Bill presents an opportunity to put at least some of them right. I urge the Government to accept our revised amendment and I beg to move.

My Lords, I support my noble friend on this amendment. We took away the earlier, all-embracing amendment and narrowed it down to ships such as ferries that operate regularly between the United Kingdom and EU ports or to the Isle of Man and Jersey. We think that the measure is capable of being enforced and that it is essential that it should be enforced; it is a matter of justice for the people who work on those ships. Once again, I hope that the Minister will look at the amendment and agree with us on the matter. As the Government admitted in Committee, there are anomalies, such as in relation to Shetland. However, let us go a little further and apply this on a broader scale to the ferries and other ships that operate regularly.

My Lords, I am grateful to my noble friend Lady Turner for moving the amendment, which, as she said, has been drawn more narrowly and specifically than the previous one. We are grateful to her for the work that she has done on it.

I am afraid that we still feel that the amendment, even as newly drafted, is unworkable. My noble friend Lord Jones wrote to Members of the Committee on the matter, but it is still useful to remind ourselves to which seafarers the minimum wage applies at present. Under present legislation, all resident and non-resident seafarers are entitled to the minimum wage while they are in the UK’s internal waters. A seafarer on a UK-registered ship anywhere in the world is entitled to the national minimum wage unless his employment is wholly outside the UK or he is not ordinarily resident in the UK. The position is that, at the moment, a wide range of people who work in the seafaring industry are due to receive the national minimum wage.

Our problems with the amendment are as follows. First, it would extend the minimum wage to all seafarers on UK-registered ships, including seafarers who do not ordinarily live in the UK or who work wholly outside it. It was never the intention of the minimum wage legislation to extend rights to workers who have no link with the UK. There is also the real possibility that the amendment might have damaging consequences for our own merchant fleet. Extending the minimum wage to all seafarers on all UK ships wherever in the world they trade carries with it the risk that, as my noble friend herself pointed out, companies could change the flag of their ships to that of another country to avoid paying the minimum wage. The seafarers would be no better off and the UK would suffer a considerable disadvantage in terms of the number of ships carrying the UK flag, which I understand to be a matter of great significance in the maritime world.

The amendment would also extend the right to the minimum wage not only to mariners on UK-registered ships but to those on foreign-flagged ships. Attempting to apply the right on foreign-flagged vessels would raise difficulties, of which we also spoke, about the right of foreign vessels to enjoy innocent passage in our territorial waters. Because of the existence of this right, which is indeed enshrined in the United Nations Convention on the Law of the Sea, UK-flagged ships will not be interfered with off the coasts of other states. We argue that it is dangerous to interfere with this diplomatic balance.

Some ships plying trade between two UK ports—for example, between Aberdeen and Lerwick in Shetland—will spend part of their journey outside internal and territorial waters on the high seas. The new amendment would apply the minimum wage to ships of any flag on these services, as well as to services to the Channel Islands. The UK certainly does not have jurisdiction on foreign ships while they are on the high seas, so this would not be possible; there is no way in which we could insist that it were done.

My Lords, my noble friend referred to innocent passage. Is that the basis of the Government’s objection to proposed new paragraph (b) in the amendment, or is he arguing that the national minimum wage could not apply on ships operating scheduled services between UK and EU ports and that that would be in breach of the United Nations Convention on the Law of the Sea?

My Lords, innocent passage is not to be disregarded entirely as an argument. The United Nations Convention on the Law of the Sea says that UK-flagged ships will not be interfered with off the coasts of other states. That is important for UK ships in some parts of the world. In practice, it means that they are not searched, looked at or stopped in the course of their business. That is a kind of mutual diplomatic balance. It is certainly one of the arguments, which is why I use it.

I come on, briefly, to the anomalies which, I concede, clearly exist here. I hope that that may satisfy my noble friend Lady Turner. We do not have jurisdiction over foreign ships; there is no point in pretending that we have. We have some sympathy with the reasons for tabling this amendment. We are not setting our face against considering the anomalies; I use the word used by my noble friend. This undoubtedly underlies the concerns. There are issues which concern the union and seafarers. My noble friend Lord Rosser referred to ferry routes in particular in his intervention. I invite the union and other interested parties to write to the Minister, who I am sure would be prepared to see them about this issue, so that it can be considered in detail. We do not think that the way of dealing with this difficulty—and there clearly are difficulties as far as particular ferry routes are concerned—is to pass an amendment such as this, which would also allow other inappropriate matters to occur. Innocent passage only applies on territorial seas. However, I am advised that it is even more difficult for us to affect what happens on the high seas.

I do not want my noble friend Lady Turner to think that we are completely unsympathetic to what underlies this amendment, but we cannot accept it for the reasons I have outlined. I recommend contact with my right honourable friend.

My Lords, I thank my noble friend for that response, although it is a bit disappointing; I had hoped for a more welcoming response to the efforts that the union has made to come to terms with the arguments made against the original amendment in Committee. I am glad to learn that, as far as the anomalies are concerned, arrangements will be made for a meeting with the Minister to discuss these issues if the union wishes, which I am sure it does. I agree that the issues are quite complex, but there is a case for all seafarers working on British ships to be awarded the minimum wage. It still seems unfair that if two people are working side by side, one should be earning about half of what the other earns for doing exactly the same work.

I am reminded of the Labour Party’s 1993 maritime strategy document Full Steam Ahead, which I believe was written by my right honourable friend John Prescott, then Shadow Secretary of State for Transport. On the issue that I have just been talking about, he said:

“This discrimination will not be tolerated in the egalitarian society to which the Labour Party aspires. Therefore we are pledged to the principle of pay parity and the harmonisation of working conditions for all seafarers on UK-flagged vessels, in accordance with the European Social Charter, and new employment standards will apply to seafarers, including Labour’s proposed statutory minimum wage”.

The union, quite rightly, regarded that as some sort of promise. I am sorry that we have got no further towards it than we have this afternoon. Nevertheless, I accept what the Minister has said, and will pass that on to the union. I am sure that the union will take up the possibility of a meeting about anomalies with the Minister. There are still issues about innocent passage, raised by my noble friend Lord Rosser, and the noble Lord, Lord Hoyle, which we are not happy about and need clarification. Although I am withdrawing the amendment, it is with a certain sadness, because I had hoped that there would have been more of a welcome to the union’s attempt to meet the objections that were raised last time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

30: After Clause 16, insert the following new Clause—

“Duty to protect welfare of temporary staff under the age of 18

In the Employment Agencies Act 1973 (c. 35), after section 6 (restrictions on charging persons seeking employment, etc.) there is inserted—

“6A Duty to protect welfare of temporary staff under the age of 18

(1) Any person carrying on an employment agency or an employment business that places over 30 temporary staff under the age of 18 in the fulfilment of a single contract shall have a duty to protect the welfare of those staff.

(2) In a case where subsection (1) applies, the agent must arrange for a responsible person to remain present at the place of work for the duration of the contract to ensure this duty is met.””

The noble Lord said: My Lords, your Lordships will be aware that I first expressed considerable anxiety about the implications of this Bill following the publication for approval within your Lordships’ House on 17 December of a statutory instrument. It sought to regulate and define the terms applicable to employment agencies dealing with the recruitment of short-term staff in large numbers and, in particular, staff in the theatrical and modelling industries. I expressed concerns on the first night of our debate on the grounds that there was, at the time, a major hole in the welfare provisions made for the staff involved, which I sincerely hoped would be amended and addressed in the Bill. Those amendments were not forthcoming. In Grand Committee, I introduced amendments that went a little further than the ones before your Lordships today. I have simplified them to be a request for a duty of care to be extended by all parties concerned on behalf of these groups of vulnerable young people.

Before addressing those, I will deal with the group that I have no longer included in the amendment. These were the clients of what are called the outplacement agencies. I am deeply grateful to the Minister for giving me access to members of his department, who have been very helpful in discussing this with me. I am satisfied by the assurances they have so far given me in that respect—that the law of 1973 is completely adequate to deal with any transgressions of the law by agencies acting in an outplacement function. I have pointed out to them that there has not been a single prosecution, in my understanding, since 1973, whereas I am absolutely certain that I could list a great many transgressions of the law. They have told me that there is therefore to be immediate recruitment of additional inspectors of agencies. They will be employed by the department particularly to address this point. I hope that is so and I welcome it, but I assure the Minister that he can look forward to a steady stream of questions from these Benches in the months to come as to how many transgressions have been found and which prosecutions have been brought. It is a matter of great concern that we should know the law is being enforced.

I turn to the issues in the amendment. I am concerned with three groups of vulnerable young people. I am talking here about people of either sex. First, I will talk about the actresses and models referred to in that instrument of 17 December, and the staff who are recruited principally on behalf of hospitality-providing services at various sporting events. Here is a real cause for concern that we should be better informed about. I shall deal first with the issue affecting actresses and models. They are pretty well interchangeable and are, in the main, young people desperate for attention and for recognition of the fact that they are available for auditions and catwalk assignments. These are wholly at the behest of the agencies that place them and take commission for securing them.

We are all aware of previous traditions in the theatrical industry. I have been chairman of a film production company. Though I never had control of a casting couch, I am aware of its function. We should all perhaps recognise that it is something which may sound, in retrospect, okay between consenting adults and can be looked upon with some jocularity. The present reality is much nastier and more sinister. We are no longer dealing with the career aspirations of an actress and a lecherous producer, and leaving them, as consenting adults, to get on with it. We are looking at the bulk recruitment of, say, 40 or 50 young women, all of whom will do a 10 or 15-minute audition, if they are lucky, with a view to getting a part which may be remunerative and an important career stage for them. As part of the process of that recruitment or audition, they will be expected to attend a promoter’s party, which, in the main, will be a drinks affair with various opportunities for meeting, mingling and drinking. I hope that no nasty white substances will be circulating, but you cannot be sure in this day and age. At the end of the evening, if these young women are not considered to have been good party girls and to have entered into the spirit of the process, by which you can form your own conclusions, they will not get an invitation to another audition. That is desperately immoral and inappropriate in the circumstances, and completely in contrast to the consenting-adult concept of what went before. A lot of these people may be very young and not know what they are going to when they arrive at these functions. I am asking for a total, absolute, up-front declaration of the nature of the party, what they will be expected to do and a duty of care to ensure that nothing beyond the strict limits on which they are recruited is allowed.

This leads us into the world of recruitment of large numbers of young people and support staff for the entertainment industry and for corporate hospitality. We are talking principally of horserace meetings, motor-race meetings and golf tournaments, which are big users of short-term employment. Large numbers of young people are very happy to be offered employment at these functions for up to a week in high summer, usually during their college vacations. Recruiting practice has been to recruit the whole of a year from a catering services training college.

These functions can take place anywhere up to 400 miles from London—for example, at an open golf tournament. Therefore, these youngsters are a long way from their original base, with no direct supervision of their welfare, apart from being given accommodation for the week that they are there. There is no intent on anyone’s part that they should be corrupted or undermined, or that they should be brought together for any ancillary purposes, but the circumstances dictate that this can happen not infrequently.

Racing—I should state my own past interest in having been responsible for the Grand National meetings at Aintree, the national hunt meetings at Cheltenham, all the racing at Newmarket and the Derby meetings for a number of years—is slightly more fortunate than the other sports because it takes place in the main part of the day. Employees are gathered together by about 8 am when they set up lunch, and then serve lunch and tea. After clearing up, they are finished for the day and are pretty well on their own devices for the rest of the time.

As I understand it from young people who work in that world, the difficulty arises when one or two out of a dormitory of perhaps 50 young people encourage the trading of drugs. Peer-group pressure becomes hugely difficult for the other young people to contend with and there is no one to whom they can turn for protection or defence in this situation. My noble friend Lady Gardner of Parkes has a wonderful Australian expression for this which goes to the core of the issue and, with such magnificent objectivity and brevity, I am not surprised that Australia keeps winning the Ashes. She says that we just need to give them a “go-to” person. It cannot be put more brilliantly simply than that. These young people need a “go-to” person in the night to help them when these troubles arise.

We are not talking about the problems of just the young women. After Royal Ascot four years ago, the body of a kitchen porter was washed to the surface during the subsequent September race meeting. He had been buried in the No. 2 car park because he had had the keys to the liquor store and would not give access to others. They had brought in a van to use in stealing the entire liquor store for the next few days of Royal Ascot. He was killed and then buried in the car park until his body was washed up by the rainstorms in September. The two people who did that are serving a life sentence and the kitchen porter is dead, so three lives have been ruined. We do not know how many ruined lives there have been because of peer pressure among young women on the campsites of race meetings where drugs have been circulated or their use encouraged.

The situation is worse at golf tournaments and motor-race meetings where there are a far higher proportion of young men, which multiplies the problems. There are more field stewards and more security staff at these tournaments and meetings, so there are also large numbers of young men, who are mostly under the age of 18. There is scope for inter-gender contact, which can be a problem and perhaps unwelcome in those circumstances. There is a real need for a “go-to” person to whom one can go when someone is trying to get the keys to the liquor locker, when someone is hawking drugs, or whatever, in the middle or the night. At the moment, there is no one—not even for someone who arrives at a site, finds the circumstances very uncongenial and wishes to go home. They may be 400 miles away without any money, because pay day has not come and they have not earned any wages yet, and they are unable to get home. There is no facility for any of this.

The worst instance of this—I believe it is no longer sub judice so we can talk about it—is the Manchester United Christmas party, which is a strange event indeed. Thirty-four young men, who comprise the first and second team squads, decided that they would each contribute £4,000, a total of £136,000, to fund a party—no definition given. Whether they go to an employment agency or to a party organiser to recruit the company for the evening is unclear. But, if they went to an employment agency, there has been a clear breach of the law. The media have given many accounts, and we have heard that the 34 young men decided that their party would be held in a hotel where they would book 34 bedrooms, in each of which there would be two high-quality bottles of champagne. They also wanted 100 of the “best-looking girls in Manchester” recruited as their company for the evening.

Why did they want only 100 girls when there were 34 men? On an average of three girls per room, two rooms would be short of a girl. Then someone pointed out to me that goalkeepers do not score hat tricks, so they did not need another two girls—two goalkeepers were involved. There is a real lack of definition. You and I might say, “What on earth did these young men have in mind when they organised this party?”, but I think we can have a fair guess. You might also say, “The girls are stupid if they did not realise it when they went”. No, they are not stupid. How do we know that they were not told it was not an ordinary party in one big room, as one would imagine a party to be, with the drink flowing, and people circulating and meeting each other? Instead of that, the girls arrived to find a situation where they were effectively being allocated to, or lots were being drawn for, which room they were sent to, and goodness knows what happened then.

Another mystery is the sum of £134,000 for the party. Assuming the rooms cost £600 each, the champagne cost £25 per bottle and the food cost £20 a head would be an outlay of £67,000. What did the other approximately £67,000 go on? Was it a performance-related bonus intended for the young women, in which case it is a total scandal? What was done about that? Why should these young women be deprived of a right of choice by being put in a situation where they are confronted with those circumstances and have no “go-to” person to rescue them and get them out if that is what they want?

There are issues here which are not addressed in the Bill. It is wrong that we have allowed such slack and slipshod methods of recruitment and control of the agencies to get through in that instrument of 17 December, which I suggest we would not have done four days later when we knew what had happened at the Manchester United party. A “go-to” person should be a mandatory requirement at all gatherings of 30 or more where people are recruited to be sent far from home to somewhere where they will have no opportunity to get parental help or be able to call on someone to collect them. You cannot just phone your dad and ask him to pop 400 miles up the motorway to collect you and bring you home. These young people are stuck there for the duration of the meeting. We have a major welfare issue here; the Bill does not address it, and that is a scandal. This Government have few opportunities to do something that is good and does not involve raising taxes or asking the Treasury to borrow more money, but this is one. I urge your Lordships to follow this course of action, which can only do good. We are looking at a scandal that needs correcting. The answer is in your Lordships’ hands and in this amendment. I beg to move.

My Lords, I first apologise to the House for my earlier coughing fit. I particularly thank my noble friend Lord Henley for taking over with my brief from the middle of nowhere, the Minister, who came outside to make sure that I was still alive, and the noble Baroness, Lady Cohen, who rushed forward with an antihistamine tablet and told me most firmly that it was tree pollen to which I was allergic. I have taken that pill and here I am, feeling much better, but I apologise to the House.

I support what my noble friend Lord James of Blackheath said about the need to ensure that agencies providing cheap, temporary and young staff in large numbers appreciate the youth and inexperience of many of them and take reasonable steps to protect them from undue potential pressure. In Committee, the Minister said that the Government supported the intention behind the amendments that were then tabled; he then gave a long list of reasons why none of my noble friend’s suggestions was suitable. The amendment has since been amended and now has only one suggestion in it, so perhaps the Minister will be able to spend a little less time explaining why my noble friend is wrong and, instead, a little more time on what the Government intend to do.

My Lords, this amendment seeks to give employment agencies a statutory duty to protect the welfare of temporary staff where 30 or more temporary workers under the age of 18 are engaged on the same assignment. The Government support the intention behind the amendment; the noble Baroness, Lady Wilcox, correctly referred to the sentiment coming from us as well as from the noble Lord, Lord James of Blackheath. It is essential to have appropriate protection for vulnerable agency workers, particularly where young workers are engaged on assignments away from home.

However, it is not clear that this amendment would provide significant additional protection in practice. Existing employment agency legislation already covers most of the amendment’s proposals and seeks to provide a proper balance between the interests of agency workers, the companies that hire them and the agencies themselves. Subsection (1) of the proposed new Section 6A states:

“Any person carrying on an employment agency or an employment business that places over 30 temporary staff under the age of 18 in the fulfilment of a single contract shall have a duty to protect the welfare of those staff”.

However, paragraph 20(1)(b) of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, otherwise known as the conduct regulations, already requires the employment agency to make all reasonable practical enquiries prior to the placement,

“to ensure that it would not be detrimental to the interests of the work-seeker”

to work in the position offered by the hirer. Indeed, that is the case for all placements—not just those covered by the noble Lord’s amendment.

In addition, under paragraphs 24(7) and 24(8) of the conduct regulations, parental consent is required for individuals under the age of 18 where an assignment requires them to live away from home. I understand that the amendment seeks to address, among other things, situations where assignments take young workers away from home for sporting or other events that involve overnight stays. Subsection (2) of the proposed new section requires that an agency or employment business must arrange for a “responsible person” to be present at the workplace for the duration of the assignment. In practice, any agency or employment business that supplies as many as 30 young people on an assignment would also ensure that appropriate arrangements were in place for their supervision and control. The supervision might be carried out by the agency or employment business, or by the business hiring the people. Those supervising would be responsible for ensuring that the protections for workers under health and safety legislation were in place.

There are specific provisions in paragraph 19 of the Management of Health and Safety at Work Regulations 1999 to cover the protection of young people. In broad terms, employers have a duty to protect young people at work,

“from any risks to their health or safety which are a consequence of their lack of experience, or absence of awareness of existing or potential risks or the fact that young persons have not yet … matured”.

That definition is in existing legislation. It does not prevent an employer employing a young person where necessary for his or her training, where the young person will be supervised by a competent person and where any risk will be reduced to the lowest reasonably practicable level.

We also need to consider enforcement. It would be relatively easy for unscrupulous agencies to get around the requirement in this amendment by ensuring that, where large groups of young workers were supplied, no more than 29 were under 18, by topping up the group with 18 year-olds, or by including in it at least one worker over the age of 18 to act as the “responsible person”. Those measures would seem to achieve the noble Lord’s intentions but they could, in practice, be swiftly ignored.

I am grateful to the noble Lord for drawing attention to the reference suggested by the noble Baroness, Lady Gardner, of that Australian phrase, “a go-to person”. The noble Lord referred to it having to be a succinct phrase, which is why the Australians won the Ashes. I remind the noble Lord that they are not as good at rugby. However, a go-to person would be impractical; if they were there and doing the job as best they could and an unfortunate situation arose, would they get sued? Who would get sued and who would get prosecuted? How would the facts arise, when most witnesses would have a vested interest in not co-operating? Who, ultimately, would employ the go-to person and would that mean such a person would actually turn up to do the job? Although this is an excellent idea, I am afraid that it would fail completely in practice and not achieve the successful prosecutions that the noble Lord properly requires.

The Government share the noble Lord’s concern that young people under the age of 18 may, when working away from home, come under all kinds of pressures. He recited those in graphic detail: I am grateful to him for that alarmism. There are pressures of a sexual nature; there are those who use illegal drugs or consume excessive quantities of alcohol. However, such matters go beyond the scope of employment legislation, which is what we are here to discuss. In fact, I believe that what the noble Lord, Lord James, suggested goes beyond the scope of the very amendment that he has put before us. No matter how reprehensible or disgusting we find all the situations to which he quite properly referred, and no matter how much we may read of them in the newspapers and thank heavens that it is not our child who is involved, this Bill is not the place to deal with them.

Indeed, it is difficult to see what place there would be in the framework to deal seamlessly with this issue. The line between moral conduct and the implication of the law has always been difficult to draw; this is no different. I understand his frustration regarding the Manchester United Christmas party; as he is mentioning them by name today, I am sure that we wish both Manchester United and Chelsea—and I say this with complete neutrality, because Aston Villa is the best football club in the world—the very best of luck on Wednesday.

I would like the facts of the case to come out before we pass judgment. As I understand it—and I, too, have only read newspaper reports—many of the young women who attended the party were not the employees of anyone involved with the party. They were the employees of shops and other businesses in Manchester who were invited to the party; they were told that there would be champagne and that there would be a room available, and they turned up. I am not for one moment suggesting that what happened after that is in any way acceptable—indeed, it is completely disgusting—but, nevertheless, it would be difficult to frame employment legislation, which is what we are here to do, to cover a situation where totally uninterested third parties turn up at a party. The consequence of their actions is dreadful to contemplate—nevertheless, it is not the basis of this proposed legislation.

The Government aim to ensure that serious sexual offences are treated as a priority in all local areas and that all local agencies use all the tools available to focus on tackling sexual exploitation, especially sexual exploitation of the young. Very tough penalties are currently in force. If these should be more rigorously implemented, that would be the subject for another debate. I thank the noble Lord, Lord James of Blackheath, for raising this important issue but, in the light of my response, I hope he feels that he can withdraw his amendment. This is not the place to deal with his justifiable observation.

My Lords, I thank the Minister for that response. I think he said twice that the Government recognise and support the principle but he said three times that it is too difficult to do anything about it. I used to have a boss at Ford Motor Company who had three files on his desk—“In”, “Out” and “Too Hard”. I wonder what the state of the Minister’s desk is if he thinks this issue is “too hard”.

As the Minister rightly said, the circumstances of this issue are almost too important to ignore. He has reasonable grounds for being concerned as to how he should deal with it but, equally, he said we can start with the law. Why does not the department start with the law as it stands and try to apply that to the principle of the case at Manchester United, about which we have been talking openly? In that situation, they were not professional girls employed by any of the agencies concerned but we do not know whether they were recruited by the personnel executives of the agency or by its younger staff. The story is that a fee of £100 was paid to each girl for attendance, some £50 of which had to be given back to the recruiting agent as a thank you for the ticket, which then became quite a saleable commodity in and around the clubs of Manchester that night. In those circumstances, that would be a clear breach of the law because the agents had accepted a fee from the parties seeking the job. That is outlawed by the law confirmed on 17 December.

The Minister could start with that and investigate the issue. If it turns out to be the case, he should start proceedings. He would then have some sympathy from us because he would be working on the law as it stands and trying to make it work. To do otherwise would bring it into disrepute. I accept that the Government are not going to do anything about it at this stage. But the circumstances are so important that the Minister should undertake to come back and tell us where and when it will be the right place to do something about it. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 [Exclusion or expulsion from trade union for membership of political party]:

31: Clause 18, page 16, line 16, at end insert—

“( ) On expulsion or exclusion from membership of a trade union on grounds of membership of a political party, a proper balance shall be struck on the facts and circumstances of the case as between the entitlement under the European Convention of Human Rights of the trade union of freedom of association and of the individual’s entitlement to seek or retain membership of the union; due account having been taken of any consequential adverse effect of employment.”

The noble Lord said: I shall speak also to Amendment No. 32. The amendment can be implemented at the discretion of the Government either in the Bill or by directions to the trade unions having legal effect. I have spoken to this procedural amendment to Clause 18 and to the ordained procedures with which it is concerned, the reasoning which it reflects, and the effect it would have on distorting the balance, if other safeguard amendments were to be carried, by a tight provision which, in effect, would destroy the substantial flexibility of these procedures.

At this hour of night I do not want to go into any further discussion. Little can be said until we know what the Minister is going to do—we are delighted to see him in his place—but I do not suppose he is going to tell us what he is going to do because I do not suppose he knows. In those circumstances, I leave the going to the Minister. I beg to move.

My Lords, I am grateful to the noble Lord, Lord Campbell of Alloway, for his suggestion and for his proposal. I can answer him succinctly—yes, yes and yes. The Government are seeking to develop an amendment which will cover the amendments of the noble Lords, Lord Lester and Lord Campbell of Alloway. We are working on it but it is not yet ready to bring before your Lordships and it will take some time. But, on the basis that I can assure the noble Lord, Lord Campbell of Alloway, that his suggestions will be taken into account and that I will stay in touch to ensure that that happens, I hope he will feel able to withdraw his amendments. I am grateful to the noble Lord for what he has said.

My Lords, with those kind assurances from the Minister, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 32 not moved.]

[Amendment No. 33 not moved.]

[Amendments Nos. 34, 34A and 35, as amendments to Amendment No. 33, not moved.]

[Amendment No. 36 not moved.]

[Amendment No. 37, as an amendment to Amendment No. 36, not moved.]

My Lords, I beg to move that the House do adjourn during pleasure until 7 pm.

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

[The Sitting was suspended from 6.58 to 7 pm.]

European Union (Amendment) Bill

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

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

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Simon) in the Chair.]

129: After Clause 2, insert the following new Clause—


Notwithstanding any provision of the European Communities Act 1972 (c. 68), nothing in this Act or in the Treaty of Lisbon shall create an offence of xenophobia under which United Kingdom citizens may be prosecuted in the United Kingdom or elsewhere.”

The noble Lord said: I shall also speak to Amendment No. 130. At the close of our last proceedings on 14 May the Government assured us that the new European Gendarmerie Force would not be used on British soil without the explicit consent of Parliament. The first of these two amendments attempts to make sure that after the EU acquires its own legal personality, and more generally as the EU project proceeds, British citizens will not fall foul of the EU crime of xenophobia for insulting it. We must remember the infamous EU arrest warrant which allows British citizens to be automatically extradited to any EU country purely on the say-so of a local magistrate, to stand trial under an alien system, perhaps after a long time on remand, and to face imprisonment for a list of some 32 crimes, one of which is xenophobia, which is not a crime here.

I fear that the EU’s new acquisition of legal personality confirms that it is well on its way to becoming a state. Indeed, it is hard to think of any attribute of a state which the EU does not already possess, or will not possess if the Lisbon treaty becomes law. It has its own flag and anthem, although they are without legal foundation. It has, or is acquiring, its own president, armed forces, foreign secretary, foreign policy, embassies, supreme court, judicial and criminal systems, police, border and asylum controls, not to mention its currency. If any noble Lord can tell me of an attribute of a state which the EU cannot, with the support of the court, acquire under this treaty, I would be very glad to hear from him.

Those of us who oppose the project of European integration are already often accused of being xenophobes, even in your Lordships’ House by otherwise perfectly civilised noble Lords, such as the noble Lord, Lord Wallace of Saltaire, and others whose blushes I will spare. Is it so far-fetched to think of such an accusation being made by our new masters in Brussels? I fear not.

The second amendment in this group, Amendment No. 130, seeks to prevent the EU levying or harmonising direct tax in the EU, so it also looks some way into the future, although the French are already saying they want to use their forthcoming EU presidency to harmonise corporation tax. The treaties are silent on direct tax, although they control VAT and indirect tax. That has not stopped the Commission and the Court imaginatively invading corporation tax based on other clauses in the treaty, particularly those covering the freedom of establishment of businesses throughout the EU. The Court has decided that UK companies, such as Marks & Spencer, Cadbury Schweppes and many others, are free to arrange their losses and tax in other EU countries in ways previously barred by the Treasury, which may mean the Treasury now owes a number of British companies quite a lot of money. It would be helpful if the Minister could bring your Lordships up to date with what the latest position is here. How much money have these decisions of the Luxembourg court cost Her Majesty’s Treasury?

There are also in the treaty all the provisions controlling the single market. I find it hard to see why, where the European Union wants to control direct tax, it could not use the single market provisions of the treaty to do so. Of course, if the Luxembourg court were to agree with that, there would not be anything we could do about it. I am advised that in Brussels they are thinking of using the social chapters of the treaty to introduce direct tax. Perhaps the Minister would like to comment on that, no doubt denying it strongly.

The longer-term necessity for the EU to harmonise and control national taxation lies deeper. The EU already has its own currency, as I mentioned, but it has no federal budget to speak of, and no currency zone in history has survived for long without the power to tax and distribute from its richer areas to poorer. One thinks here of the distributions from south to north in the United Kingdom and the federal budget in the United States. One remembers, too, the distributions from north to south in Italy and west to east in Germany, which the single currency with its single interest rate does not facilitate. We are already seeing strains in those and other euro economies. The euro was never an economic project. It was designed as the cement to hold the emerging megastate together, but it will probably need a substantial federal budget to do so as time goes on. This amendment seeks to warn your Lordships about this position and to prevent it happening. I beg to move.

I would like to make a small contribution on the amendments tabled by the noble Lord, Lord Pearson, who I still regard as my noble friend. As noble Lords will probably be aware, I have not yet spoken during the proceedings on this Bill. It has been in the very capable hands of my noble friends Lord Howell and Lord Hunt. I have, of course, been following the progress of the Bill, if that is the correct word, and I feel honoured to be part of the Front Bench for the purposes of this evening. I shall not be expressing any views on Amendment No. 129 on xenophobia. I could not, however, let Amendment No. 130 on taxation pass without a brief comment. I have in the past spoken in your Lordships' House about the role of the EU, in particular the European Court of Justice, in relation to taxation, and that will be the focus of my remarks.

The founding treaty and all subsequent amendments seem clear: direct taxation is not an EU competence and ought to be the sole responsibility of member states. However, it is a fact that the European Court of Justice has been slowly but surely building a common European tax law under the guise, as the noble Lord, Lord Pearson, has explained, of freedom of establishment. This is a relatively recent phenomenon. There was only one direct tax case decided by the ECJ in the 1960s, none in the 1970s, four in the 1980s, 40 in the 1990s, but well over 60 by halfway through this decade. There is also a big tail of cases still to be decided. This is thus a problem that has emerged on this Government’s watch, yet they seem set on ignoring it.

I shall not weary the Committee with the cases that have been decided by the ECJ. They do not all involve the UK’s taxation system, but they have involved some of the largest companies within the UK: Cadbury Schweppes, British American Tobacco, Marks & Spencer and ICI. For these companies, it makes sound commercial sense to challenge UK tax law if they perceive advantage in so doing. I do not blame them in any degree, because they must try to do the best for their shareholders. If that involves using an EU weapon to challenge the basis of taxation set by our Parliament, it is obvious that they must do so.

These cases have created great uncertainty about the UK’s tax code. That is harmful in the context of a tax code which is the longest in the world and among the most complex. From the perspective of the UK Treasury, these cases, often decided against the Government, have created uncertainty about future tax receipts and involved complex Finance Bill provisions to overcome ECJ objections. Many billions of pounds of tax revenues have been, and probably still are, at stake. The noble Lord, Lord Pearson, asked how much decisions have cost. I would add: how much is still at risk?

I have talked about the cases brought by companies, but the Commission, too, can attack member states’ tax regimes. It has expressed a willingness to be “proactive” in this, which is a chilling prospect.

I cannot begin to understand why the Government have not fought strongly against the concept of the ECJ’s ability to overturn what our Parliament decides on tax. It ought to be in the interests of the Government, as the guardian of the UK’s finances, to do so.

It ought also to be in the interests of the Government to preserve the competitiveness of the UK and our ability to differentiate ourselves from the rest of the world, in which I include the rest of the EU. A part of any country’s competitiveness includes tax competitiveness, which is well accepted by all those organisations which draw up international league tables of competitiveness. I hope that there would be no argument in this Chamber that tax competition is good for society as a whole, since it works with the grain of global free markets and against those who try to erect barriers to trade.

Tax competition also provides a healthy check on the Governments’ ability to raise taxes too high. We are seeing the salutary effect of tax competition at the moment, as major UK corporates signal loud and clear to the Government that the UK tax system has gone too far and made the UK an uncompetitive environment for companies which hold significant interests overseas. The Government have taken their eye off the ball of tax competitiveness for the UK. My party, when we return to government, will strive to restore our tax competitiveness. We will need maximum freedoms, including freedoms within the EU, to achieve that.

The noble Lord, Lord Pearson, will appreciate that the picture I have painted requires a more comprehensive set of statutory defences against the incursions of the EU into the tax affairs of the UK than are provided by his amendment. His Amendment No. 130 is useful in ruling out the harmonisation of rates of direct taxation and the imposition of direct taxes, and I support it to that extent. It does not, however, deal with the most damaging problem of the ECJ’s ability to strike down our tax laws and interfere in the structure of our taxes. The amendment does not reinforce our precious freedoms to achieve tax competitiveness in the UK. I wish that his amendment had gone further.

I accept with weary resignation that the pass was sold long ago on indirect taxation, but noble Lords should be under no illusion about the role of the ECJ in relation to VAT. It is far from benign. But that is a topic for another day.

Perhaps I may concentrate on Amendment No. 129. Xenophobia is a feeling, an emotion, like anger, anxiety and fear, to which it has some affiliation. Conversely, it is in the same league as joy, exhilaration and contentment. In other words, it is a thought, not a deed. Democracies have not hitherto had thought crimes on their statute books, nor have authoritarian regimes. Thought crimes are the preserve of totalitarian states. If by any chance some other EU states want, perhaps without realising the full enormity of what they are doing, to copy Stalin, Mao and Hitler in this regard, so be it, but we in this country should not contemplate it for one single moment.

I support both amendments. Before I came into the Chamber, I looked up in the Shorter Oxford English Dictionary the definition of “xenophobia”. Volume 2 defines it as follows:

“A deep antipathy to foreigners or to foreign things”.

That is all. Are we now to be told by the European Union that we must not have an antipathy to something or to some people? Are we not allowed to dislike other people, even if it is in a way that is perhaps a little extreme? This really is going too far.

The noble Lord, Lord Pearson, showed quite clearly in his opening remarks how such a policy could affect us if it were adopted under the rules of the Lisbon treaty. It could very easily enter our law, which would be against everything that this country has stood for over a long period—although, as a result of some of the legislation which has been enacted during the past couple of decades, people now say to themselves, “Oops, I should not have said that”, after saying something which is perhaps not politically correct. We should not tolerate that in a free society. One can understand why people on the Continent—in Germany, Austria, France and places such as that—might need legislation about holocaust denial and xenophobia: they have to assuage their consciences for the wars and murders that have taken place over a long period. We do not happen to have to assuage our consciences in that way. Therefore, we do not need to put people in this country at risk as a result of a law against xenophobia.

As far as taxation is concerned, the Government will of course reply, “We have no intention of imposing or allowing the EU to impose, or have any say in, direct taxation”. Well, ask the European Parliament about that, because it, as I understand it, believes that the institutions of the European Union should have the power to raise direct tax for the financing of the European Union. The matter is on the agenda already. Moreover, many policies now enacted by the European Union have implications for our direct taxation. I do not want to give a great list of them, but the one about which people are very concerned at the moment is the cost of the landfill directive, which directs the Government of this and all other member countries to reduce their amount of landfill by 2016. The result has been impositions by local authorities through bin taxes and so on, which are direct taxes on the people of this country.

I do not want to detain the Committee any longer. But I believe that we have to be on our guard that the taxation which is already dictated by the European Union should not extend any further at all. The noble Baroness from the Opposition Benches listed a number of ways in which, perhaps without our realising what is happening, there could be implications for direct tax. I therefore support these two amendments.

I recall that I made a declaration of interest at the beginning of the Committee stage. I intervene briefly on Amendment No. 129 on xenophobia. I think that I have always been very careful and courteous in my interventions during this long Committee stage, but I am inclined to say that this amendment verges a little on the bizarre. The suggestion here that an offence will be created does not seem to me among the more probable events which may result from the ratification of the treaty of Lisbon. If that is the case, as I believe it is, I think that we should abstain from inserting new clauses. We are in the period of discussion in the Committee where we insert new clauses, some of merit and some of less merit. This clause is certainly among the least probable results of the treaty process.

I was chair of the justice and home affairs sub-committee of the Lords EU Committee when the Amsterdam treaty was ratified. We conducted an inquiry on Article 13 of the Amsterdam treaty, which was the clause that introduced into the European Union much stricter rules against racism, xenophobia and a range of other activities. During that inquiry we discovered that the coalition that had got that on to the EU agenda and into the Amsterdam treaty had been substantially led by British non-governmental organisations. We took evidence from a range of bodies. I remember the CBI saying how strongly it supported this addition to the EU treaty on the grounds that British banks and companies, which increasingly employ bright young Asians, had discovered that in some other financial centres in the European Union, these bright young Asian employees were suffering various forms of discrimination.

Once again we have had a debate in which it has been assumed that it is those people over there who are imposing something on us when actually this was substantially a British initiative. Incidentally, we and the Irish—for solid and painful reasons concerned with a rather different history than the one which the noble Lord, Lord Stoddart, suggests—have some of the strongest anti-discrimination laws in the European Union. We have had to develop them because of Protestant discrimination against Catholics in Northern Ireland and elsewhere. It is not true that we have not discriminated at all in this country. The painful implications of the treaty of Amsterdam have been felt in countries such as Austria, Italy and Germany, where the rules against discrimination are much weaker. I just wish to set the record straight on that. This is not an attack by those wicked people in Brussels on pure Englishmen. It is something with which we, as in so many other areas, had a great deal to do.

I was interested in what the noble Baroness, Lady Noakes, said on taxation. Earlier today we were discussing another dimension of international tax law and the question of tax havens. In answering me the Minister praised the work of the OECD—the OECD, not the EU—on getting at the problem of offshore financial centres and tightening controls against the misuse of offshore financial centres. We are all familiar with the internationalisation of the economy and of companies, with the constant battle between clever accounting companies—the noble Baroness, Lady Noakes, will be familiar with those—advising companies and banks on how to avoid national taxation and Governments trying to maintain their tax base.

I hope there was no misunderstanding about what I was saying. I was making no case for tax evasion at all. It has nothing to do with tax havens. It is question of whether there is an EU ability to change UK tax law. It is a very narrow point but a very powerful point which I think is relevant to the Bill.

I fully understand that and I accept the distinction. Part of the problem is that as companies operate more across the single market, the opportunities for using the national laws of one country to get around the national laws of another become stronger. If one accepts that tax competition allows some Governments to undercut others beyond a certain degree then we will in time have some problems inside the European Union.

We must address the tax base. The integration of the European economy has certain implications not for the harmonisation of tax rates but for the agreement of rules of the tax base. I recall that the Leader of the Conservative Party, David Cameron, made a speech the other week in which he talked about formal regular contributions within NATO which would be taxation on member Governments of NATO to contribute to common NATO operations abroad. That is taking us down another road towards shared contributions within international organisations. That is partly because we are now doing more together. The world does not stand still and the idea that somehow problems of tax avoidance and tax evasion can be dealt with entirely at the national level in the global economy is an illusion.

I do not propose to deal with Amendment No. 129, because its inadequacies have already been adequately dealt with by the noble Lord, Lord Williamson, and another noble Lord—I have forgotten who. They are clear. I want to speak briefly to Amendment No. 130. The noble Baroness made an interesting speech in which she took us through a series of hypotheses of what might be the position if the powers of the European Court of Justice continue to be used in the way that they are, but those examples are not in any way relevant to the hypothesis put forward in Amendment No. 130, which deals exclusively with direct taxation. There is a real debate to be had about indirect taxation: in particular, as I have said before in your Lordships’ House, the indirect taxation that we have through the own-resources decision is increasingly budgetarily irrelevant. It is reducing less and less resource and it is increasingly fraud prone. There needs to be a serious taxation discussion about the role of the own-resources decision and how it needs to be replaced.

Amendment No.130 deals with direct taxation. When the Minister replies to this brief debate, I hope that he will confirm that any of the changes suggested in the amendment of the noble Lord, Lord Pearson, are not possible without harmonisation methods to bring them about, and that requires unanimous support in the Council of Ministers. We are all clear—

As I said last week, I am not in the habit of giving way in these debates. The noble Lord, Lord Pearson, has turned this far too often into an inquisition of the other Members of the Committee. I am making a brief speech and I will not interrupt him either.

As I was saying, my right honourable friend the Prime Minister has made it very clear that questions of direct taxation are issues on which the British Government will not give their assent. I look to the Minister to confirm that—that the harmonisation and acquisition in it would not be forthcoming from the British Government.

Although I respect the thinking behind the comments of my noble friend Lady Noakes, I do not agree with the amendment proposed. I am familiar with the line of cases to which she refers, which have impinged on the tax base. However, I think that she does less than justice to the European Court of Justice in failing to observe that the reason for that encroachment is to achieve an important European objective that we share—that is, the freedom of establishment and the freedom of movement of goods, persons and corporations across the European Union. Whether that balance is right or wrong can be argued about, but it is not just a wilful tax grab that is taking place; it has been an attempt to protect an important part of the European single market. Noble Lords may think that it goes too far or not far enough, but that is the motivation behind it, and to fail to refer to that seems to me to verge on the misleading.

Whether that is right or wrong, the relevant point is not whether that intrusion into the British tax base is sensible or desirable; it is whether the treaty of Lisbon does anything to further that process or could be distorted so to do. Nothing that has been said so far leads me to believe that anything in the treaty that we are currently debating could conceivably have that effect. If that effect arises as a result of the Court decisions, the Court decisions are based on other premises and not this treaty—because the treaty has not come into existence. I see nothing in the treaty that would enable the Court to go further in the direction that my noble friend deplores. For that reason, this proposal is at best otiose and at worst misleading.

This is Committee stage, and if the noble Lord, Lord Pearson, wants to speak again, he is perfectly entitled to do so.

I am afraid that that is correct. I have no doubt that I shall have to put the same question to the Minister, but perhaps I could do so by giving due warning on the comments of the noble Lords, Lord Tomlinson and Lord Brittan, both of whom said that direct tax could not be introduced under the Lisbon treaty or even under the provisions of the existing treaty. I have to mention again the provisions of the single market. If the Commission were to decide that direct tax could be introduced under single market provisions, that would be by qualified majority voting—that is how it could occur. No doubt the Minister will wish to deal with that in his reply. I thought that I would deal with the noble Lords, Lord Tomlinson and Lord Brittan, first.

The noble Lord is quite wrong about direct taxation—but let me come to that in due course. I thank him for moving his amendment and all other noble Lords who have spoken in this debate. I particularly welcome the noble Baroness, Lady Noakes, to her place on the Front Bench in this debate. Her remarks have already been subject to a number of comments, both favourable and not so favourable. But I think that she is used to that.

Amendment No. 129 would insert a clause stating that neither the Bill nor the treaty will create an offence of xenophobia for which a UK citizen could be prosecuted in the UK or elsewhere. The UK Government deplore racist and xenophobic behaviour and we already have tough national laws in this area. As such, we also support the fact that the prevention and combating of such conduct is one of the aims of the Union, as reflected in the general provisions of the JHA chapter of the treaty. We will continue to work with member states to prosecute those who break our laws in this area.

I shall give a short history lesson. The first EU measure on combating racism and xenophobia was adopted by the Council in 1996. That measure will be replaced by a new framework decision on combating racism and xenophobia, which, similarly, has been agreed by the Council on the basis of the existing treaties and is expected to be formally adopted this year. This new framework decision requires all member states to have in their laws basic offences and penalties for such conduct. We support this; it is important to make it clear that we will not tolerate such behaviour within Europe. In negotiating that instrument—and this is significant—we ensured that the UK’s domestic threshold for criminal liability in this field would apply. That means that for criminal liability to be triggered, any behaviour must be carried out in a manner likely to incite violence or hatred and must be threatening, abusive or insulting or likely to disturb the peace.

In terms of UK law, there are various relevant pieces of legislation: the Public Order Act 1986 contains a number of offences covering Acts intended or likely to start racial hatred. The Crime and Disorder Act 1998 introduced nine racially or religiously aggravated offences, which make available to courts higher penalties when there is evidence of racist or religious motivation or hostility in connection with an offence. Most recently, the Racial and Religious Hatred Act 2006 created an offence of incitement to racial hatred. That piece of legislation came into effect on 1 October 2007.

As for the extradition and prosecution of UK citizens in other member states under the framework decision on the European arrest warrant, to which the noble Lord referred in slightly disparaging terms, we will extradite to another member state individuals to be prosecuted in that member state for offences committed there. This could include an offence involving racism and xenophobia. Similarly, we would expect to be assisted by other member states in bringing to justice individuals who had committed offences under our rules in the UK—for instance, in this context, offences under the legislation that I mentioned a moment ago. Any new measures on racism and xenophobia proposed under the Lisbon treaty would be subject to the UK’s opt-in, which, as noble Lords are well aware, applies throughout the justice and home affairs chapter. We therefore have clear safeguards in this area, were a measure to be proposed that would not be in the UK’s national interest.

I did not hear the noble Lord, Lord Pearson of Rannoch, say this, but if he has a concern for himself or for any others who feel as he does that expressing opinions against the EU, even in fairly robust terms, might lead to either his extradition or prosecution in another member state, I can reassure him that that is not the case.

I finish by saying that the Lisbon treaty sets out a closed list of areas of crime for which the Union can set minimum offences and penalties. That list does not include racism and xenophobia. Were the Union to decide to legislate further to set minimum offences and penalties on racism and xenophobia, the Council would have to agree, unanimously, to add those two matters to that list. The opt-in would apply to that decision to add to the list, as well as to any measure subsequently proposed on the basis of the inclusion of racism and xenophobia on the list. This is a consequence of the welcome greater clarity in this treaty as to where the Union has competence to legislate in this field.

Amendment No. 130 relates to direct taxation by EU institutions and harmonisation of direct tax rates across the EU. This amendment is unnecessary. With regard to the first part, there is no suggestion in the Lisbon treaty or elsewhere in the EU treaties that EU institutions should be able to impose a tax directly on EU citizens. So far as concerns the second part of the amendment, government policy on tax harmonisation is crystal clear: harmonisation of direct taxes is unnecessary and undesirable. Since we have ensured that decisions on tax matters must be taken by unanimity, we will be able to prevent any proposals that attempt to bring about such harmonisation.

In a word, the Government have a clear position on EU tax matters: decisions should be taken by unanimity and open, flexible and competitive national tax systems allied with renewed international co-operation, not tax harmonisation, are the right response to the challenge of a global economy. We have no intention of changing that position. Since unanimity is needed for any taxation measure, we believe that we will be able to maintain the position with our EU partners.

I briefly mention the role of the European Court of Justice in taxation matters. I agree with the noble Lord, Lord Brittan, whose experience of the matter is so much greater than mine. The ECJ, in very simple terms, is responsible for giving definitive interpretations of the treaties. In the field of indirect tax its ruling clarifies the large body of EU law on VAT and indirect taxation. For direct tax where, as I have just emphasised, policy rests with individual governments, the Court’s role is to ensure that national rules remain within the parameters set by or under the treaty, either in the small number of directives concerning direct tax or in the general principles laid down in the treaty. I repeat: the Government will defend resolutely the UK’s tax laws against challenge before the ECJ. On that basis, I hope the noble Lord will not press his amendments.

Suppose an individual were publicly to set fire to the EU flag with a view to stirring up hatred against the European Union—not that I suggest for a moment that anybody should do so. Could he be prosecuted under existing laws in the United Kingdom for stirring up racial hatred or animosity? If not, might he be prosecuted as a consequence of some future EU directive?

He can certainly be prosecuted under UK criminal law for criminal damage, if for no other offence. I am not in a position to give a reply to the noble Lord, but my strong impression is, no, the individual could not be, but I will take away the noble Lord’s hypothetical case and write to him.

I am most grateful to all noble Lords who have spoken, and particularly to those who have supported the amendments. I will have to read Hansard, but I think that the Minister said there is no possibility of a British citizen being arrested under the charge of xenophobia for insulting the European Union, either here or in Europe, whether he is extradited and tried under the arrest warrant or in any other way. I think that that is what the noble Lord said about Amendment No. 129, in which case I am happy to withdraw that. As to Amendment No. 130—

Will the noble Lord give way? I am most obliged. Of course it is considered courteous in this House to give way if somebody challenges you, unlike in the House of Commons.

I am surprised that the noble Lord should be happy with the reply given by the Minister on xenophobia. Surely he would agree that xenophobia is quite different from racism. The question that the noble Lord, Lord Bach, really should answer is, if somebody expresses dislike of the French or perhaps even hatred of the Germans because of the war they caused in 1939, could they be extradited to another country where there is an offence of xenophobia?

I thought it was perfectly clear under the present arrest warrant that that person can be so extradited. I am doing the Minister’s job for him, but I feel sure that he agrees. If he does not, this is his moment to say so.

I was merely trying to draw these amendments to a close in the happy conclusion that the Government have said that it will not be possible to be prosecuted, extradited or anything for the crime of xenophobia when it entails speaking against or insulting the European Union, especially as the project proceeds. My noble friend Lord Stoddart may well be right. As I said, I think we need to look at Hansard and come back on Report if necessary.

On direct taxation, I think that the Minister said that this amendment was quite unnecessary. I fear that he will turn out to have given a hostage to fortune. I am reasonably sure that as this project proceeds, using the single-market provisions of the treaty which are under qualified majority voting or the social policy provisions of the treaty, the European Union will get its tentacles round more of our direct taxation than it has already done through the judicial activism of the Court. But I am delighted that the noble Lord said that. As I say, I hope he has not given a couple of hostages to fortune. In the mean time, I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 130 and 130A not moved.]

Clause 3 [Changes of terminology]:

131: Clause 3, page 2, line 12, leave out paragraph (c) and insert—

“(c) may be made only if a draft of the order has been—(i) laid before Parliament; and(ii) approved by a resolution of each House”

The noble Lord said: Clause 3 deals with changes in terminology and the necessary and consequent alterations in both terminology and numbering in UK legislation that the treaty of Lisbon makes necessary. Amendment No. 131 is in my name and that of my noble friend Lord Howell of Guildford. It is about parliamentary accountability. How should the procedure be dealt with to ensure that Parliament scrutinises any necessary changes which come forward? Our concerns with Clause 3 centre on the legal confusion and unintended consequences that might result from hasty and unscrutinised amendments to UK laws.

It has become a general principle that if the Government wish to take Henry VIII powers to amend primary legislation by order, then we as a House look at that very seriously indeed and want to scrutinise it very closely. In this case the sensitivity of the legal ramifications of the changes surely make the case that there should at least be affirmative parliamentary approval.

The changes are consequent on the collapse of the three pillars into the overarching term “the European Union”, the EU. The European Community will no longer have separate legal status; nor will the common foreign and security policy. Police and criminal justice co-operation will be handled separately. The Government have given various assurances about the efficacy of the CFSP exemption in Clause 2 and of the safeguards around the introduction of further police and judicial co-operation, about which many noble Lords have expressed deep concern. The differences of view expressed in the other place on the potential effects of these changes reinforce those concerns.

I do not want to go into all the ramifications of these changes. They were dealt with in extensive debate in the other place. I want to confine the debate about the amendment, if that is possible, to the procedural mechanics of how the changes should be effected.

Of course, the amendment in no way prevents necessary drafting changes being made. All it does is give an opportunity for Parliament to reassure itself that they are as innocuous as the Minister will no doubt claim. However, we need a little more than just assurances.

The amendment says that, under Clause 3(5), if there is to be an order under subsection (4), it shall be made by statutory instrument. Paragraph (c) says that it shall be subject to annulment—the negative resolution procedure. The amendment would insert a new paragraph (c) containing the words,

“may be made only if a draft of the order has been—

(i) laid before Parliament; and

(ii) approved by a resolution of each House."

I followed the debate in the other place very carefully indeed. I saw that this was a major issue, as it is—and should be—in this House. References to the European Community are to be replaced with references to the European Union. On the face of it, that seems a simple process, until one looks at the context in which all these changes are to be made. Looking at the speeches of many Members of the other place, one is concerned about how wide-ranging these changes might become and about the wonderful law of unintended consequences. There is therefore a good case for Parliament to be involved in scrutinising the changes.

I was impressed by the speech in the other place of Jo Swinson, the Liberal Democrat Member for East Dunbartonshire, who not only said how strongly she agreed with the spirit of the amendment, but clearly stated that the Liberal Democrat party would support the amendment, because it is,

“in favour of proper scrutiny in the House”.

She pointed out that all the amendment did was propose the sensible change of moving from the negative to the affirmative resolution procedure. She expressed herself well when she added that the amendment both proposes that we should keep:

“Ministers on their toes more and ensures proper scrutiny”.

What a wonderful objective, which I wholly endorse. She added how much she welcomed the opportunity to join forces with the Opposition:

“I therefore welcome the perhaps rare opportunity to support an amendment tabled by the right hon. Member for Wells, as it would enable us to have greater power to scrutinise various aspects of the Bill”. —[Official Report, Commons, 3/3/08; col. 1487.]

I say this because there is a rumour that the Liberal Democrats in this place have decided to support the Government not only on amendments with which they disagree, but on amendments with which they agree, with which their party agrees, and which their party moved in the other place. This is currently no more than a rumour, and we are about to put it to the test. I say, by way of warning to whoever is going to speak from the Liberal Democrat Benches, that such was the persuasive speech of Jo Swinson that it caused her party leader, Mr Clegg, accompanied by Dr Vincent Cable, Mr Edward Davey, Danny Alexander and Chris Huhne—the list is endless—to swarm into the Lobby with the Conservative Party in favour of the amendment. I therefore anticipate with profound optimism that we shall get support on the amendment.

It is important for parliamentary democracy that we should have proper scrutiny in this place. I therefore have much pleasure in begging to move.

My noble friend Lord Willoughby de Broke, the noble Lord, Lord Stoddart of Swindon, and I have a Question about whether the schedule should stand part of the Bill grouped with this amendment. We tabled this to draw your Lordships’ attention to how the stealthy but steady advance of the project of European integration has been reflected in its name over the years.

First it was called the European Common Market, which is what the people of this country thought that they were voting for in 1975. Then it became the European Economic Community; not much change there, you might think. Then it became the European Community; again, not a big difference, unless you were on the ball and not asleep at the switch. Finally, of course, it became the European Union, which is—

I think that the noble Lord is in error. It was never called the European Common Market. It began with three institutions: the European Economic Community, the European Coal and Steel Community and EURATOM. In the late 1950s, the three were merged into the European Economic Community. I think that he will find that, at the time of the referendum, the people of this country wisely decided to remain members of the European Economic Community.

I am grateful to the noble Lord, but I hope that he will concede that most people in this country still refer to the Common Market. That is what it was known as and what, in 1975, I thought that we were debating; it was called the Common Market. No doubt he is technically correct, but that is how it started and how it still is in the minds of most people. As I was saying, we have now progressed through all these stages towards the European Union, which is what we have today. Any use of earlier stalking horses has now been banned.

You have to hand it to the Eurocrats: they think long-term. No doubt they continue to do so with this constitutional treaty of Lisbon.

Briefly, I compliment the noble Lord, Lord Hunt of Wirral, on the massive amount of work that Conservative Party researchers have clearly been putting into this.

We all appreciate that we play games on this. I simply read the relevant report of the House of Lords Delegated Powers and Regulatory Reform Committee, which satisfies us on this point:

“This is a Henry VIII power, but its scope is narrowly confined to two specific kinds of consequential amendment. We consider neither the delegation nor the level of scrutiny to be inappropriate”.

We on these Benches accept that. We remain deeply committed to active parliamentary scrutiny on the whole process of European integration. That cannot only be done as we pass each institutional amendment to the treaty. We must work at it through our committees as well as in our Chamber on a continuing basis. That is the sort of scrutiny to which we are committed. We are rather less committed to playing games with the Conservative Opposition.

I should like to quote from Britain’s New Deal in Europe, the document issued by the then Labour Government prior to Britain’s entry into the Common Market. It says:

“Your right to choose … The Labour Party manifesto in the election made it clear that Labour rejected the terms under which Britain’s entry into the Common Market had been negotiated, and promised that, if returned to power, they would set out to get better terms.

The British people were promised the right to decide through the ballot box whether or not we should stay in the Common Market on the new terms”.

So the terminology “Common Market” is perfectly correct, and is set out in the new deal document.

According to this important amendment, an order made under Clause 3(4) would be subject to affirmative resolution. If it is not accepted it will mean that any terminology—terminology is important in my view—that is altered will be put into operation and under the acquis cannot then be repealed before a Motion for annulment can take place. That is why the amendment is so important. It asks that before any terminology that might adversely affect this country is put in place, Parliament should have a say that means something rather than just expressing an opinion. I support the amendment and urge every Member of the Committee to do the same if they want to protect parliamentary power and privilege.

Amendment No. 131 relates to the power in the Bill allowing the Government to make changes to terminology or numbering resulting from the Lisbon treaty in other pieces of UK law. The Bill provides for references in UK domestic legislation to the “Communities” to be treated as references to the “Union”. The schedule sets out other changes in terminology in the European Communities Act 1972 and the Interpretation Act 1978 needed to reflect the change from European Community to European Union.

Other consequential changes may be required in other pieces of legislation. That is why the Bill contains a power for the Government to update terminology and numbering in existing legislation by order, subject to annulment by resolution of either House of Parliament. That is a power to make purely technical changes. For example, the article numbers in the treaties will change on entry into force of the Lisbon treaty. The “co-decision procedure” is renamed the “ordinary legislative procedure”. These are not changes of substance, but may need to be updated in UK law to reflect the change of terminology. I repeat that this will not mean any change of substance in terms of existing UK legislation. It is a purely technical updating exercise. Clause 3(4) makes it clear that the power to update references in existing legislation is limited to changes,

“to reflect changes in terminology or numbering arising out of the Treaty of Lisbon”.

This order-making power is necessary to avoid any legal uncertainty as a result of changes to terminology. The negative resolution procedure is appropriate in this case. Otherwise each House would have to approve every single such consequential change. We believe that we have got it right. Clause 3 avoids that exhaustive—not to say exhausting—exercise. As a safeguard against the unlikely event that this or a future Government would try to exceed the very limited power to make orders set out in the clause, it is clearly provided that any orders are subject to annulment in pursuance of a resolution of either House of Parliament.

I have been following the Minister with great attention, particularly in view of the remarks of the noble Lord, Lord Hunt of Wirral, and those of my honourable friends in another place. There are precedents for this in previous legislation that has been introduced to amend the treaty, and I understand that the negative procedure has been used on every occasion to make comparable changes. I hope that the Minister will confirm that in due course.

I am not in a position to confirm that tonight but if the noble Lord, Lord Roper, knows it to be so, that is good enough for me. Of course it will not be good enough for the House so I shall find out. That is another powerful argument. Indeed, my most powerful argument has already been employed by the noble Lord, Lord Wallace. I am slightly disappointed that he mentioned the finding in the Delegated Powers and Regulatory Reform Committee. When it is against the Government, we hear about it so much—rightly, as it is a respected and independent Committee of this House. Having considered the matter, it came to the view that neither the delegation nor the level of scrutiny was inappropriate. That is good enough for me in this case; good enough for the Government; and it should be good enough for the noble Lord, Lord Hunt.

We heard a number of things about changes in terminology and the importance of us believing that everyone used to call it the “Common Market” and still thinks of it as a common market. My recollection of the question on the ballot paper for the referendum in 1975 was that it referred to whether we wished to stay in the European Communities, not in the Common Market. Is that the Minister’s recollection?

We have had a lot of unanswered questions, including the last one. It seems that no one can remember. I much prefer to concentrate on the present and the future. I thank the noble Lords, Lord Pearson and Lord Stoddart—

I think that I can answer the question posed by the noble Lord, Lord Wallace. In his introduction to the document, which unfortunately has gone to Hansard, Harold Wilson, the then Prime Minister, referred to the European Community and, in brackets, Common Market. You can take which one you like.

Obviously in this discussion between the noble Lords, Lord Wallace and Lord Stoddart, terminology is very important. It is important to me, too. My noble friend Lord Tugendhat reminded us how it all started, and in some ways his words are a caution to us all. When we joined the Common Market, as it was then called, there were three treaties: the European Coal and Steel Community treaty signed in 1951; the European Atomic Energy Community treaty, usually known as EURATOM; and the European Economic Community treaty, usually abbreviated to the EEC, set up by the Treaty of Rome in 1957. Collectively those treaties form what were known as the European Communities.

I am grateful to the Minister for explaining why he opposed this amendment. He did so because he said that we would be led into an exhausting procedure. He said it in such a tired way that there was a wave of sympathy, mainly because he is such a hard-working Minister. I then asked myself, what am I proposing that will exhaust him? It is merely that instead of putting the onus on those who wish to question something by putting down a Prayer to cause a debate, identical procedure would be followed in drawing up the changes that they be subject to affirmative resolution. I cannot see that that would cause the Minister a substantial period of exhaustion. Given his good track record in these matters, I do not think that it presents him with any problem at all.

We come back to whether our Delegated Powers and Regulatory Reform Committee is right in saying that this will be a strictly technical area. I would not have moved this amendment if I could agree with that 100 per cent and accept it as fact. I think that we are dealing with what could be a highly complicated area. The large number of changes that will be made as we move from one terminology to the other could have unintended consequences, which is why I proposed this amendment—and, presumably, is why the whole of the Liberal Democrat Party voted for an identical amendment in the other place. I am not aware of any Liberal Democrat in the other place who supported the Government. They all voted for this amendment—and I agree with them. However, what I do not agree with is the noble Lord, Lord Wallace of Saltaire, accusing me of playing games. He said that he was not interested in playing games with the Opposition. I tell him that this is not a game: it is a serious issue. It is all about parliamentary accountability. On many occasions, I have supported his noble friends who have proposed identical amendments on moving from the negative to the affirmative resolution procedure, and I will do so again. However, I do not regard it as a game. I regard it as serious parliamentary politics; holding the Government to account.

I know that the noble Lord is only following what the noble Lord, Lord McNally, said the other day when he accused me of setting elephant traps. Well, I have news for him. This is not so much an elephant trap as a mousetrap. I am in the presence of the noble Lord, Lord Willoughby de Broke, who owns St Martin’s Theatre, where “The Mousetrap” is the longest running show in town. So far as concerns this amendment, I will tell you whodunit—they done it! The Liberal Democrats did it in another place—they supported it and voted for it. I reckon that they are in danger of becoming the longest running farce in Westminster. We shall now see what they do and judge them accordingly. I wish to test the opinion of the House.

Clause 3 agreed to.

The Schedule [Changes of Terminology]:

[Amendments Nos. 132 to 135 had been withdrawn from the Marshalled List.]

The Schedule agreed to.

Clause 6 [Parliamentary control of decisions]:

136: Clause 6, page 2, line 39, leave out from “Crown” to “a” and insert “shall vote against or otherwise reject”

The noble Lord said: We now pass swiftly to Clause 6, which is a long clause, and in doing so I note that we are making good progress in a very complex area. Therefore, we need to focus on the most crucial issues which cause the most concern, and this is one of them.

The amendment should gain the support of most liberally minded people, but what I say next, I say more in hope than from experience. I hope that the Liberal Democrat Party will support the amendment, as it did with vigour in the other place. In the words of its spokesman, the eloquent Mr Davey:

“We intend to support the right hon. Gentleman’s amendment”—

that is, my colleague Mr William Hague—

“because we believe that parliamentary control should be retained in those areas”.—[Official Report, Commons, 4/3/08; col. 1681.]

No doubt we will learn later that something has changed, although we do not quite understand what. It seems to be pretty straightforward that parliamentary control is parliamentary control and belief in it is belief in it, but no doubt some contortions will be devised to tell us different. Even so, it is sad that we cannot rely on those of a liberal slant of mind to support what is clearly both liberal and democratic and in favour of the good parliamentarian’s cause.

These areas, as Mr Davey describes them—the so-called passerelle or ratchet provisions—are of widespread concern because they provide prominently and precisely for the treaty to be self-amending and therefore obviously, in the case of any such self-amendments, to reduce the powers of member states and national parliaments, perhaps not unilaterally but by methods which do not necessarily embrace parliaments sufficiently. They could do so on a substantial scale.

I note in passing that the words here are identical to the words in the rejected constitutional treaty, as are almost all the words in this treaty. When they first appeared, they were strongly opposed by Ministers, and it verges on the insulting to be told again and again that they are not the same words when they patently are. The Government have a lot more explaining to do to try to sustain their weak case that all this is somehow different from what went before. Jack Straw, the Secretary of State for Justice, when he was Secretary of State for Foreign and Commonwealth Affairs warned starkly how late at night at a European Council some concession could be easily traded for a concession on moving from unanimity to QMV and said that that was not acceptable. Mr Denis MacShane MP, as he passed colourfully through his Foreign and Commonwealth Office ministerial role, added:

“We think that a self-amending constitutional treaty does not make a lot of sense”.—[Official Report, Commons Standing Committee on the Intergovernmental Conference, 20/10/03; col. 20.]

Nor does it. Most noble Lords know that. It certainly invalidates the misleading claims by the Prime Minister that the Lisbon treaty marks the end of a period of EU institutional change. On the contrary, if passed, it would mark the beginning of a process of institutional change by the self-amending process and by the clear reading of comments being made throughout Europe that more institutional changes and integration are needed. Indeed, there is even some talk of the next round of treaty-making on top of this treaty, which will have its own internal momentum. Looking ahead, we could be in for a substantial volume of further change rather than a settled period without institutional change. It could change the position quite radically, even on common foreign and security policy, over and above the fact that there are 11 areas where QMV already intrudes in foreign-policy issues as proposed in the treaty, despite Ministers’ constant assurances to the contrary.

The Government were obviously worried about this and about safeguards. Their worry is reflected in Clause 6, which provides that a motion must be approved by both Houses before Ministers go along with the passerelle self-amending procedure—the new simplified revision process. Our contention behind the amendment is that that is not nearly enough. A treaty change which plainly transfers powers away from our Parliament requires not just a motion in the two Houses but an Act of Parliament. We are not the only ones who say that. The Commons Foreign Affairs Committee—an excellent committee I had some connection with in the past—recommended, in a very thorough review, that all treaty changes under passerelle procedure should be the subject of primary legislation. Is it to be pushed aside as just another committee—“never mind about it”? Incidentally, I notice that our own EU Committee in your Lordships’ House seemed rather more content with the proposal that there should be a mere motion in both Houses. But the Foreign Affairs Committee of the other place is a powerful and respected Committee and carries enormous weight. I do not think its very firm, unqualified proposition that primary legislation is needed in this area can just be disregarded.

The Foreign Affairs Committee is right and the present Minister of Justice—the former Foreign Secretary—is right. It is ridiculous that the powers of our nation and our Parliament should be curtailed further. They obviously would be curtailed one evening on a whipped vote, on a wide range of issues such as visas, family law, police co-operation, the right of police to operate in other countries, the EU financial framework—an enormous area—and a possibility of changing the rules involving CFSP as well. It cannot be right that all that should be done without Acts of Parliament. Everyone opposing the Government in the other place—all the opposition parties—knew that it could not be right, whatever the changed conditions and whatever some people may conclude.

This is just an amendment which seeks to correct that situation. It does not alter the treaty. No one can say this is wrecking the treaty. It does not touch the treaty; it is concerned with our own affairs. It does not alter what has been agreed in the Lisbon treaty, but it strengthens our democracy. This is a time when it needs strengthening and, for those reasons, I beg to move.

I have to inform your Lordships that if Amendment No. 136 is agreed, I cannot call Amendment No. 136A because they are alternatives.

I agree with the noble Lord, Lord Howell—this group of amendments is extremely important. The European Union Committee has considered these matters and in the absence of its chairman—the noble Lord, Lord Grenfell—has asked me to say that it did report on them in paragraphs 315 and 316. It is rather important to look at the position of your Lordships’ House as far as the present situation is concerned alongside the situation at an earlier stage and in the legislation which was prepared to be put forward for the constitutional treaty. On that occasion the powers of the House of Lords were extremely limited. When the Prime Minister returned from the discussions on this treaty, he initially suggested that it would be for only the House of Commons to agree or not agree the use of a passerelle. It was only following questioning within your Lordships’ committee that the Minister, Mr Murphy, responded. When the Bill appeared for the first time, the House of Lords was given an equivalent power in this matter. Therefore, I think that the first thing to say is that there is a significant increase in the position of the House of Lords as far as this is concerned, compared with earlier proposals.

The second thing that your Lordships need to consider is that any proposal to use the passerelle procedure to carry a small alteration to the treaty would be by means of a European Union instrument, which would necessarily have to go through the scrutiny process of your Lordships’ European Union Committee. I cannot say what the committee would do in those circumstances, but it is not implausible that it would wish to have an inquiry into any attempt to change the provisions of the treaty, and would wish to make a report to this House. The idea that the parliamentary procedure that would occur if the passerelle were to be used would be that of a normal statutory instrument, which under a convention goes through this House without opposition, is something of an exaggeration.

I would be grateful if the Minister, in replying to this debate, would let the Committee know how the Government see the role of the two Houses in their consideration of orders to implement the use of a passerelle. I do not believe that the normal conventions on the application of statutory instruments would apply. Before we come to make a decision on this amendment and before we have to face the challenge posed by the noble Lord, Lord Howell, about whether we accept some of the things that our colleagues have said in the House of Commons, I would like to discover how the Government envisage that such an instrument would be considered in this House.

I have a question for the noble Lord. Where do we find in paragraphs 3.15 and 3.16 the mind of that committee being focused on the alternatives? One is enactment by primary legislation in this House and the other is by approval, which can be through a motion before the Houses. However, I may be doing the committee an injustice, as I have had only a short time to look at the two passages that he cited.