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Lords Chamber

Volume 716: debated on Wednesday 27 January 2010

House of Lords

Wednesday, 27 January 2010.

Prayers—read by the Lord Bishop of Liverpool.



Asked By

To ask Her Majesty’s Government whether they will require details of all non-British passports held by British passport holders to be registered with the Identity and Passport Service.

My Lords, British citizens who hold passports issued by other countries are not required to register those details with the Identity and Passport Service, as being a dual national has no bearing on the eligibility for a passport. While British passport applicants are asked to submit with their application any uncancelled passport, including foreign passports, this is simply to assist with identity verification.

My Lords, I thank the Minister. Is it not absurd, at a moment when we are asking people to lose their lives in Afghanistan, in the words of the Prime Minister, to keep terrorism off the streets of Britain, that we are not doing everything that we possibly can in this country to protect ourselves here? Is it not dangerous, now we have this expensive e-borders system—belatedly, but it is now in place—that immigration officers are not able to know, when a British passport is swiped, that the holder may have switched, or may be about to switch, to a different passport for other trips while abroad? That is a real security risk, and I cannot see why the Government do not urgently make it mandatory for the Passport Office to know when passport-holders hold other passports as well.

My Lords, I know that the noble Lord has had a particular interest in this area. It seems at face value that there is a definite point to what he says, so I have looked into it. It is clear that, because of e-borders and because we are getting biometrics on all these things, that loophole is being closed.

Since the beginning of 2007 we have ensured that someone cannot have a certificate of entitlement for them to be in this country, which would be registered in their foreign passport, if they have decided that they wish to have a British passport; they can have either one or the other. So that has been done as well.

In the past there was the possibility of using different names to try to fool the authorities, but if the name, date of birth and so on are the same then there is no possibility of getting through. Once we have biometrics, which are coming in very fast, we can bowl these things out easily, and that is the way of getting around the problem. Trying to stop people getting another passport and trying to register it—on the day of registration they might not have a foreign passport, but the next day they might have one—is too complex. We are closing all the loopholes, and I believe that this has gone away. I hope that that satisfies the noble Lord, although I am willing to talk with him at greater length about this as I am aware of his concern and I have specifically looked into it.

My Lords, in March 2008 the European Union Committee of your Lordships’ House published a report on e-borders, in which it declared itself astonished that there was then no way in which the UK Borders and Immigration Agency could know who was in the country, since there was then no routine recording of entries into the UK or departures from it. One of the most basic requirements of a border control is the ability to count people in and out of the country. Was the Government’s undertaking met—namely, that by December 2009 screening systems would be in place to deal with 60 per cent of all passenger and crew movements into the UK? Will their target of 95 per cent by December this year be met?

My Lords, I could not have put the initial part of that question better myself. This is something that we decided we would do; in the past, we did not check people out. This was done with the previous Administration, for whatever reasons. It is absolutely right that we check people in and out, so we know exactly who is here. On those precise figures, I shall have to come back in writing, because I am not sure exactly where we have got to on that. We are still aiming for 100 per cent in time for the Olympics, and we will be a lot more safe and secure.

With the pilot schemes that we have run, we have already bowled out an awful lot of people when there have been lost or stolen passports. Again, the noble Lord who spoke previously is very interested in that issue. We have been able to arrest those people who have been using them falsely.

About 18 months ago, I asked a question of the noble Lord considering the smaller, private airports and the fact that there was no official passport control in those situations. Will they be covered by the 100 per cent target?

My Lords, the intention is that they will be covered. Indeed, there are issues about boats going backwards and forwards across the Channel, and that sort of thing. There are some real complexities. Clearly, those will be the areas that are hit last; I have flown a number of times in a private jet and at Farnborough, in the private jet area, one is checked very admirably. The only difficulty is with making sure that the chaps are in uniform.

My Lords, last week we were told of the introduction of no-fly lists and other enhanced screening measures, including enhancing the watch list. Will the Minister confirm that the details of passport holders who have dual nationality are there to be cross-referenced against these new lists when they are set up? Could he also give us an estimate of how long it will take before all British citizens have biometric passports?

My Lords, I shall answer that in reverse order of sequence, starting with the fully biometric passport. Passports are slightly biometric obviously, through facial recognition, but they will have fingerprints as well by 2012. That will be a process from the beginning of that year—people will start getting fingerprints on their passports, and that is how that will be done. As for matching passports, people who come into this country through e-borders and getting their visas will have to give biometrics. There will be biometrics on our passports, so it will be impossible to have two names. You might have a passport under a different name, but it will immediately flag up, and that will be a reason to ask straightaway what is going on and to move forward and do something about it.

Can the Minister tell the House what progress has been made in dealing with the land border with the Republic of Ireland, where we have a distinctive set of problems?

My Lords, the position there is that there are no controls for passports going across there. This is intelligence-based, and we have been doing more operations there on an intelligence basis, but there is nothing further on that. There was some debate in this House about the common travel area, and I think that that will have to move forward in a further Session.

Will the Minister say whether the Government have implemented the provision in the Identity Card Act 2006 which requires those applying for or renewing passports to be registered with the national identity register? If they have not done so, what is their intention?

My Lords, I am afraid that I do not have the answer at my fingertips. I shall come back in writing on that point, if I may. What is interesting with the identity card is that 3,500 people have them already and another 25,000 have applied for them. They are proving a huge success—there is a big rollout happening in London. I have one myself, and it is actually quite useful, I have to say.

Finance: Alternative Investment Market


Asked By

To ask Her Majesty’s Government whether they will consider allowing shares listed on the Alternative Investment Market to be eligible for ISAs.

One of the qualifying conditions for the inclusion of a share in an individual saving account is that the share must be officially listed on a recognised stock exchange. Shares traded on AIM do not meet this definition. The wider UK tax system distinguishes between listed and unlisted shares for tax purposes, and not just in the area of ISAs. AIM shares are unlisted and have been ever since the market was established. AIM shares benefit from other tax advantages, including the enterprise investment scheme, the possibility of inclusion in venture capital trusts and advantageous inheritance tax treatment.

First, I declare an interest as the holder of a number of shares in AIM-quoted companies. I am rather disappointed with the noble Lord’s reply. Surely, an ISA investor should be allowed to choose whether they invest in main-market companies or in AIM companies? Is it not nonsense that an ISA investor can buy an overseas stock, such as Kraft, to include in their ISA, or can invest in shares quoted on the Channel Islands Stock Exchange, yet be barred from the 1000-plus smaller-growth UK companies on AIM, which would appreciate ISA eligibility from a capital-raising point of view?

Those with whom we regularly consult on the ISA rules and the treatment of the AIM market are very clear that if AIM shares were to be included in ISAs, and AIM shares were therefore to lose the advantages that they currently have under inheritance tax procedures and inclusion in venture capital trusts, they would prefer to remain with the existing arrangement. Nineteen million people have ISA accounts; that is a considerable achievement in terms of increasing investment and tax-protected savings.

Why are AIM stocks not allowed in ISAs when they are allowed in self-invested personal pension schemes?

My Lords, the Minister may feel that he has answered the question, but I suspect that the majority of the House either did not hear his answer or did not understand it. It seems to some of us that there is an inconsistency in allowing these AIM shares to be eligible for SIPPs but not for ISAs. Can he explain why that is such a matter of principle?

I apologise if my earlier answer was not clear. The distinction is between whether the shares are on a listed and regulated stock exchange or not. AIM is not judged to be a listed and regulated exchange. Therefore, companies listed on AIM do not qualify for ISAs. The rules for self-invested pension schemes include the ability to invest in one’s own company, which is clearly a very different regime for an entirely different requirement.

Will the Minister not accept that, in the country at large, his remarks this afternoon will sound extraordinarily complacent? His Government’s economic policies have brought this country to the edge of ruin, and small and medium-sized companies are finding it difficult and expensive to find bank borrowings to fund their expansion. The only way for them to fill that gap now is equities, and for small and medium-sized companies to have this extremely valuable source of equity shut off must surely be a mistake. It must be right for us to encourage investment and savings as a way of getting ourselves out of the hole we are in. Why cannot the Minister see this?

I hope that I am never guilty of complacency over something as important as the performance of the economy, and the criticality of smaller businesses which are the lifeblood of a successful economy. That is why we have focused so much, through various schemes, on ensuring the flow of credit and finance to smaller companies. The noble Lord should recognise that AIM is a market for listed companies. At the time of listing, it is not in itself a source of new capital for investment. That takes place before, so buying a share of an existing company does not represent the flow of new funds into a business. There is a very clear distinction between the primary market and the secondary market.

My Lords, the Minister said that shares could be treated as eligible either for ISAs or for the others reliefs that he described. In practice, the other reliefs have on the whole become less valuable, in particular the venture capital trust reliefs. It is important to ensure that there is a lively market providing finance to small and medium-sized enterprises. Will the Minister look at this again?

My Lords, I am surprised that the noble Baroness says that venture capital trust tax incentives are in some way less attractive. It is possible for an individual to invest £200,000 per annum in a VCT for an up front income tax relief on investment of 30 per cent. I hope that in the Minister’s—

I am sorry, I am referring to myself. I hope that in the Minister’s self-direction he both avoids complacency and at the same time remains open to ways in which we can further improve the system. One of the first things I did when I became a Minister was to ask officials to produce a report on the issue raised by the noble Lord’s question. Without wishing to fall into the trap of appearing complacent, I was persuaded by the answers I was given.

My Lords, how is it that figures from the Stock Exchange show that the amount raised by AIM-based VCTs has declined from £196 million in 2005-06 to only £6 million in 2008-09?

My Lords, is the Minister not using a circular argument? Who decides what is a recognised exchange? Both AIM and the main Stock Exchange deal in listed shares. The Minister can change the rules quite easily. Why should one lot of quoted shares be treated differently from another?

My Lords, the decision on whether an exchange is recognised will fall within the question of whether it meets the definitions set out in the European directive on prospectuses.

Northern Ireland: Cross-border Police Co-operation


Asked By

To ask Her Majesty’s Government what progress has been made in implementing the recommendations of the British-Irish Parliamentary Assembly of March 2009 about improving the ability of the Police Service of Northern Ireland and the Garda Síochána to investigate and prosecute crimes across the border.

My Lords, work is at an advanced stage in the implementation of the recommendations relating to cross-border policing powers. Officials, police officers and public prosecutors from both sides of the border are meeting again tomorrow to consider the outstanding issues, including the draft procedural manuals.

My Lords, I am grateful to the noble Baroness for that Answer and particularly to know that the procedural manual which was originally promised for last April is getting near production. We all agree that the policing relationships and the co-operation between the two police forces are absolutely excellent at all levels, but these legal and jurisdictional problems continue to make it much more difficult than it need be to investigate and prosecute crimes near the border. Can we expect progress tomorrow over, for example, the extension of the criminal jurisdiction Acts, so that money laundering, as well as murder and the other things on the list, can be tried in either jurisdiction?

My Lords, first, I pay tribute to the noble Lord for his persistent questioning in the specific area of cross-border policing. Thanks to that questioning, the Government are making progress on those matters and in Northern Ireland. I am not entirely sure whether the criminal jurisdiction Acts are on the agenda for tomorrow. Work continues to establish which offences are not covered by the Criminal Jurisdiction Act 1975 and how best to fill the gaps. The Irish Attorney-General has confirmed that he is content that their own Act should be amended to include additional offences.

My Lords, both the Garda Siochana and the PSNI would certainly agree with a five-mile buffer zone either side of the border to enable cross-jurisdictional handover during hot pursuits. Will the noble Baroness ensure that this is put on the agenda?

My Lords, it is not for me to suggest what should be on the agenda, but for the parties participating; that is, the prosecutors and the police from Northern Ireland and the Republic. I will seek to find out whether it is on the agenda and inform the noble Baroness accordingly.

My Lords, does the Minister really believe that the people of the Republic of Ireland would support the involvement of a United Kingdom police force five miles inside the Republic of Ireland?

My Lords, it is not a question of what I believe but of whether this is on the table for the talks. It is up to the people in the talks, who best know the people of the Irish Republic and of Northern Ireland, to decide whether to pursue this further.

My Lords, I know that the Attorney-General recently visited the Province to try to sort out a lot of the bureaucracy in the prosecutor’s office, and she assured me privately that she believed she was making progress. Is the noble Baroness able to tell me, when policing and justice are devolved—we hope they soon will be—where the authority, or responsibility, will reside for sorting out the problem of the collection of prisoners and criminals from either side and prosecution? Will it be devolved? Will it reside here or with a devolved Government in Stormont?

My Lords, I, too, hope that there will be devolution of policing and justice in the very near future. In response to the noble Lord’s question about responsibility for the transfer of prisoners, I do not wish to mislead him in any way. I do not have a definitive answer and I will respond to him in writing.

My Lords, can the Minister clarify whether there is any legal difficulty in joint PSNI/Garda Siochana teams operating on either side of the border, with the relevant police officers sustaining their capacity to arrest and interrogate and being accompanied by a police officer from the other side of the border? Is there any legal difficulty about such joint teams operating?

My Lords, there are limitations to the extent to which the police can operate outside their own jurisdiction. This is a consequence of the PSNI and AGS operating in different sovereign states under separate legislative provisions. The cross-border working group is currently examining this issue and will be looking at it at the meeting tomorrow. If there were a legal impediment to this happening, I cannot imagine that it would be on the agenda for that meeting.

I think the noble Baroness misunderstood the last question. The noble Lord was asking about police officers acting in their own jurisdiction, accompanied by officers from the neighbouring state, so that each acts in its own jurisdiction. Could she enlarge on what she said?

My Lords, I confess that I am totally confused now. As I said in answer to the earlier question, there are limitations to the extent to which the police can operate outside their own jurisdiction. Of course, the police can operate within their own jurisdiction accompanied by police officers from the other jurisdiction. There is absolutely no impediment to that.

Banking: Bonuses


Moved By

To ask Her Majesty’s Government what steps they will take to ensure British and foreign-owned banks in the United Kingdom follow their guidance on curbing excessive bonuses.

Both domestically and internationally, the Government have led the field in reforming remuneration practices in the banking sector and have a structured reform agenda underway that will ensure bonuses are consistent with effective risk management.

My Lords, I thank the Minister and HMG for their commendable efforts to try to get a much more civilised regime here. We are now armed with a much more robust and alert FSA. We have the Walker proposals. We have the EU getting stuck in with its wider framework. We have Stephen Green of the HSBC and BBA with his interesting revelations on dodgy practices to have artificially structured bonuses. Then along comes Goldman Sachs with around 300 £1 million snouts in the trough—that is just the leading partners and leaves aside the traders and what they will get—completely undermining the official effort to get civilisation in this whole regime, and other bankers now, privately and with their cronies, the traders, once again quietly preparing to unleash excessive bonuses when the time comes—

This is a very important matter. I know the Tories have different views. It is a complete free-for-all. They do not mind at all. Can the Government at long last persuade the big institutions in this country really to insist on proper behaviour?

I am grateful to the noble Lord, Lord Dykes, for his pertinent and correct observations about many aspects of the culture of bonus payments in banks. I, too, was very struck by the comments of Stephen Green, the chairman of HSBC and the British Bankers’ Association. He described inflated and distorted structures of bonuses and argued for lower and more rationally calculated figures in the future. The Government’s perspective is that bonuses must, first, be a matter for the shareholders, subject to the banks being adequately capitalised. Secondly, the bonus system should not contribute to unmanageable risk. Then it falls to the shareholders. I am afraid that the shareholders, notwithstanding the comments from their trade associations, appear to have been less than fully engaged with that matter.

I intend to write to the chief investment officers of the major UK institutions in the next few days, asking them to share with me the actions they have taken to ensure that boards of directors are aware of their position on the payment of bonuses. It seems extraordinary that, over 10 years, an investor in UK banks will not have had a positive return at all. Clearly, the traders and senior executives of these banks have earned huge amounts. This is a distortion of the consequences of trade to the employees, away from the owners. The owners need to be more concerned and the pension funds need to ask their fund managers, “What are you doing to stop this process?”

My Lords, the Government propose a co-ordinated global solution to the banking crisis. Recently, President Obama announced his reforms in the United States. It is reported that the Shadow Chancellor, George Osborne, agrees with President Obama’s proposals for reform. Do the Government also agree with President Obama’s reforms and do they intend to implement them?

I always welcome the comments of the noble Lord, Lord Bilimoria, from the Cross Benches. I hesitate to correct him but last Thursday evening Mr George Osborne welcomed President Obama’s statement and by Friday morning he had decided that he no longer welcomed it. We must tune in regularly to our wirelesses to ensure that we are up to date with the Tory thinking on this and so many other matters.

There are aspects of the Obama proposals which clearly make a considerable degree of sense for the American situation with large investment banks. There are also concepts around the levy which are commendable and on which we and other G7 countries are working to ensure that in the future the banking system is more resilient and, if there is failure, that failure is borne by the shareholders, the subordinated creditors and the management of the banks. However, the Obama proposal is not necessary in this country; we have already taken the appropriate actions.

What discussions have taken place between the Obama Administration and the Government to ensure that there is an international response to the banking crisis?

Banking resilience, regulation and capitalisation are high on the agenda for the G20. We are in regular contact with G20 countries. I met officials from the Obama Administration on Monday to talk about this and other matters.

Does the noble Lord agree that some of the banks have their priorities totally wrong? They give management top priority, deal last with the customer and God help the shareholder in between.

The noble Lord says something very perceptive and correct. Last week I suggested in the House that banks which follow policies on bonuses that were perceived to be reckless would risk alienating their customers, who would choose to move their business. I urge UK banks, in particular, to be able to evidence that they have exercised real restraint and that bonuses reward smart decisions made by good people, with the overall prosperity of the franchise in mind, rather than rewarding reckless gambling or entirely fortuitous external circumstances.

My Lords, is the Minister confident that those banks in which the Government have a very large shareholding have entirely complied in their own decisions with what he has said to us?

The decisions about bonuses at Lloyds Banking Group and RBS have not been made but we have already been very clear that UK Financial Investments on behalf of the taxpayer will take a very active interest in this area. I am much encouraged by the comments of Mr Stephen Hester, who I think is doing a very good job at Royal Bank of Scotland, that he will not recommend or seek any bonus payments beyond those which he believes are absolutely necessary to protect the bank, and in so doing protect the value of the taxpayer’s investment in his bank.

The Minister has just said that the Government have already taken appropriate action in respect of the banks but yesterday, speaking to the Treasury Select Committee, the Governor of the Bank of England said:

“We cannot allow ourselves to be kept hostage to institutions that are so big”,

and he appeared to support the Obama proposals. Why do the Government think the governor is wrong?

The governor said many things yesterday with which we are in complete agreement and he is supporting the moves we are taking to improve the strengths of the banking system. There is no evidence that size in itself was the source of individual bank failures. Large banks failed, but so did small banks. We need to ensure that the totality of the banking system is strong and that will be addressed by higher capital, requirements for much higher levels of liquidity and the concept of living wills, which will require banks to put in place arrangements that will allow the failing part of a bank to be isolated and separated from the remainder of the bank without imposing consequential claim on the taxpayer. The taxpayer should never, ever again be expected to bail out the folly and mischief of bad decisions made by bankers.

Equality Bill

Committee (5th Day)

Schedule 9 : Work: exceptions

Amendment 102

Moved by

102: Schedule 9, page 167, line 2, leave out paragraph 8

My Lords, may I begin by declaring a professional interest and dealing with one or two other matters? I was counsel for the Equality and Human Rights Commission, intervening on its behalf in the case in which Age UK sought to challenge the default retirement age of 65. I need to declare that interest since I will refer to this judgment very briefly.

Secondly, I do not think I have to declare an interest about my age because my amendments would benefit only those below the age of 65 and, since the average age of this House is probably a bit above that, I doubt whether I need to declare any collective interest.

Thirdly, in order to curry favour with the Committee, I should say that I had one success that will appeal to every man here with a Freedom Pass. I did a case in Strasbourg where I established that it was discrimination against men to require them to wait till the age of 65 before they could get a Freedom Pass whereas women could get it at 60.

I am very glad that there are some who were young enough to benefit; I was not.

The purpose of my amendments is to remove the provisions that make it lawful to dismiss an employee on grounds of retirement and not to offer employment to a person where, at the time of the person’s application, he is over the employer’s normal retirement age, or over 65 if the employer does not have a normal retirement age. If my amendments were accepted, they would abolish the current default retirement age and related provisions from the time the Bill is brought into effect.

This matter has a longish history. As we want to get the Bill through and waste as little speaking time as possible, I will take this as quickly as I can. The object of my amendments is supported by the report on the Bill of the Joint Committee on Human Rights—noble Lords can see paragraphs 183-185, which I do not need to read—and by the Equality and Human Rights Commission. Many of your Lordships may not know that the matter was carefully considered by a committee of this House, chaired by the noble Lord, Lord Burns. The Select Committee on Economic Affairs report, Aspects of the Economics of an Ageing Population, wrote as far back as 2003, at paragraph 6.42:

“We also recognise the legitimacy of arguments for retention of a normal retirement age, but on balance we believe that any such retirement age may impose restrictions on the efficient functioning of the labour market in our ageing society. We believe it is for firms and their employees to devise their own retirement systems, and we further believe that these systems should be based on performance criteria rather than chronological age. … We therefore recommend that the Government should not permit the continued use of a normal retirement age by employers, whether at age 65 or 70 or 75, unless the employer can provide a reasoned and objective justification for the use of age rather than performance criteria in the determination of employability. We further recommend that the Government set an example of good practice by explicitly removing upper age limits in all public-sector employment in advance of the implementation of the forthcoming legislation on age discrimination”.

In the case of Heyday in 2009, which I have just mentioned, objections were taken—on behalf of, I think, the Crown—to referring to that report on the grounds that it would breach parliamentary privilege for judges ever to read the reports of a Select Committee for the purpose of making choices about how to construe Community law. That objection, I am glad to say, was overruled and the High Court, in the form of Mr Justice Blake, looked at all the evidence before that Select Committee, some of which was relevant because it concerned what Ministers had told the committee. The court felt that it could not strike down the default age of retirement of 65 under Community law for reasons to do with what had happened when it came into force under the directive. However, at the end of his long judgment, Mr Blake said that if the relevant provision; that is, the default age of retirement,

“had been adopted for the first time in 2009, or there had been no indication of an imminent review, I would have concluded for all the above reasons that the selection of age 65 would not have been proportionate. It creates greater discriminatory effect than is necessary on a class of people who both are able to and want to continue in their employment. A higher age would not have any general detrimental labour market consequences or block access to high level jobs by future generations.

He continued:

“If the selection of age 65 is not necessary it cannot therefore be justified. I would, accordingly, have granted relief requiring it to be reconsidered as a disproportionate measure and not capable of objective and reasonable justification in the light of all the information available to government”.

In other words, the learned judge was saying that, because there was an imminent review, he would not go any further but he regarded the present default retirement age of 65 as disproportionate and essentially against the public interest.

I have already quoted what happened with regard to the Select Committee on Economic Affairs but it might interest the Committee to know that the matter went further. Both officials and Ministers from the Department for Work and Pensions gave evidence to the Select Committee on behalf of the Treasury and the Department for Work and Pensions, all of which indicated that the direction in which they were heading was to abolish the compulsory retirement age of 65. The right honourable Andrew Smith MP, for example, as Secretary of State for Work and Pensions, and the official supporting him gave such evidence. The noble Lord, Lord Burns, asked whether it was expected that when we had the legislation against discrimination it would not be possible for companies to have a normal retirement age, even if they wished to have one, as that was going to become illegal. He asked whether he had understood that correctly. Mr Smith replied:

“There is an option in the consultation that you could retain an age limit of 70, but the basic answer to your question is yes, we would not be expecting to allow firms to operate at a lower mandatory age limit than that. There could be other perfectly good reasons for terminating a contract but age would not be one of them”.

Other interesting advice was then given by employers, trade unions and the Chartered Institute of Personnel and Development, which suggested that the idea that you needed a rigid age discrimination provision of that kind was old-fashioned.

Then, what used to be called the Department for Trade and Industry, led at the time, I think, by the right honourable Patricia Hewitt, won the argument against the Department for Work and Pensions, as a result of which it was decided that such a provision would be retained, as some of the employers had asked. So the predecessor but one or two of the noble Lord, Lord Mandelson, came to a conclusion, which no doubt still prevails among business Ministers, reflecting the views of some of the employers. That is the background, and I perfectly appreciate that there has been a consultation which will come to an end on, I think, 1 February.

With these amendments, I am not seeking to have freedom now. I appreciate that it is impractical to say that as soon as the Bill becomes law that is an end of the matter; there must be some breathing space to allow that to happen. At this stage, I am probing in the hope that the Minister will be able to say something positive other than that the matter is being looked at. I beg to move.

My Lords, these amendments, which I support, have been grouped with my own Amendment 104, to which I should also like to speak. As the noble Lord, Lord Lester, has indicated, this is a discussion about the default retirement age. This matter has been raised in the House on a number of occasions and the Government have indicated that it will be reviewed in, I think, 2011. However, the Bill gives an opportunity for the review to take place now, and there is no doubt that there is considerable pressure for that to happen.

Interestingly, Saga Magazine, which is devoted to the interests of older people, has produced a manifesto for older people which it says is based on considerable research. It calls for the end of the default retirement age. It says that this is in line with the demands of older people. Nine out of 10 people polled thought that it was unfair and said that they would have liked to continue working if they had had the chance to do so.

Forced retirement is seen as an anachronism from the past when life was shorter and rigid working patterns were the norm. The demand now is that flexible working arrangements should be available so that older people can continue in appropriate forms of work, which would be to their advantage. The employer will benefit from having older people with experience, skills and more commitment in the workforce. I emphasise that this should be a matter of choice for older people and should not be imposed on them as a result of poverty or because there are inadequate pension arrangements. However, the Government have an opportunity in this Bill to deal with the review in the way that has been suggested.

As regards Amendment 104, your Lordships may recall that some time ago we had a debate in this House about the employment rights of older workers, which was prompted by a number of issues. Obviously, we are all living longer, which is a cause for celebration, although it causes governments and private providers to reconsider pension arrangements. There was some evidence that when older workers became redundant they found it much more difficult to secure other employment. There were increasing concerns about the social care of older people, which caused everyone to consider their situation.

As I have said, there is a fair amount of agreement that we may all have to consider working beyond what is considered to be the normal retirement age. I and others feel that it could probably be dealt with now through the review that we have indicated. The Government clearly want a longer time before the state pension is paid. Of course, there are always likely to be occupations where it is advisable to have an early retirement arrangement; for example, on safety grounds, as in the construction industry. But many jobs could quite well be done by older people, perhaps with the benefit of their experience and their skill. However, there is not much point in extending the time in which people are expected to continue in work and therefore do not receive the state pension if no work is available for them and they simply switch to jobseekers’ allowance instead of receiving the pension. Work of an appropriate kind must be available.

We are seeking a more flexible approach from many employers. Age discrimination should be firmly outlawed. Things have to change. My amendment seeks the introduction of what could be called “age auditing”. Something similar is provided in the Bill in regard to gender. Why not do it for age? Demographic changes will make it necessary for us to reconsider many of our attitudes. I therefore urge the Government, even if they do not accept our wording, at least to consider the introduction of something along these lines. There are benefits in taking steps to encourage people who wish to continue in work to enable them to do so. There are health benefits—older people with a continuing involvement in an appropriate work environment are healthier and feel less isolated. Employers benefit from having an older, experienced and often very committed number of older people in their workforce. The profiling suggested in my amendment will generally assist towards that outcome. I commend the amendment to the Minister.

My Lords, given the opening remarks made by the noble Lord, Lord Lester, I feel that I must declare that I am under 65, so if this proposal came in it would apply to me.

I listened with great interest to the noble Lord’s speech, which has raised the important issue of the default retirement age. We are all aware that the state retirement age is 65. However, an ever-ageing population is calling this into question for a number of reasons, which are partly concerned with money. It costs the state a large amount of money to fund pensions from the age of 65 when many people are still willing and capable of working, and are likely to live for another two or, hopefully, three decades. The reasons are also tied into the different wants and needs of an ageing population. The increase in life expectancy means that someone aged 65 can still be at the top of their game and be an effective, able, competent, experienced and valuable worker. They may not want to retire this early. Your Lordships’ House is a very good example.

Therefore, we on these Benches feel that we could support the removal of the default retirement age in principle. We have long believed that retirement should be a process and not an event. However, we believe that there are a great many complications with removing the default retirement age, especially in this time of very bad recession. We are worried that moves to remove the default retirement age might have a further detrimental impact on the large numbers of young people who are out of work at present. Also, under current law, if the default retirement age is removed it could be difficult for employers to ask older employees, who may not be as proficient at their jobs as they used to be, to leave, as the noble Baroness said, for reasons of safety. Under the current rules it is realistic to suppose that if an employer were to ask an employee to leave, that could result in disciplinary action or claims of wrongful dismissal, and that concerns us. That would also not be good for the employer or the employee. Perhaps some kind of mutual discussion regarding retirement would need to be instigated.

Many options need to be considered carefully and I know that the Government are reviewing this at the moment. In her winding—up speech at Second Reading, the Minister made it clear that the Government would not consider it,

“tenable to have a situation where the default retirement age was lower than the state pension age”.—[Official Report, 15/12/09; col. 1510.]

Changes to the state pension age are not to be made by this Government until 2026. In contrast, we on these Benches have said that we will hold a review into bringing the increase in the state pension age forward but starting no earlier than 2016 for men and 2020 for women. I wonder whether the Government’s policy regarding the state pension age changes also reflects their intention that there should not be any changes to a default retirement age until 2026 at the earliest. Perhaps the Minister will clarify that, although I see her shaking her head vigorously.

The point raised by the noble Baroness, Lady Turner, is valid. She has floated the possibility of raising the retirement age but, in so doing, it would also be worthwhile assessing what manner of work remained available for older people to do and what could be done to assist them. She has mentioned the possibilities of extra support directed towards the older worker or perhaps flexible working to allow them to remain comfortable in their jobs for a longer time. These are all interesting ideas and should be taken into consideration very seriously.

The noble Baroness, Lady Turner, has further suggested, with her amendment, that perhaps instead of a general review, it would be better for the Secretary of State to pass regulations which would allow a general audit of all companies employing more than 250 employees. I agree that there is a need for some form of assessment to be made but is this the way best way to go about it? The Government are already proposing to pass regulations to burden companies with gender pay audits and to add age to that could serve to make that load even heavier. I imagine that audits would be far more complex than just writing down the ages of all those in the company. To do a proper audit, which would aid assessment of what support older workers need, what changes would be needed to address their concerns and perhaps how to attract more older and experienced people to stay, would involve complex metrics and different questions. That might risk overburdening companies at a time when they most need support. I look forward to hearing the opinion of the Minister on this issue.

I would like to make two points. The first has been made by the noble Baroness, Lady Morris, that the rights of older people have to be balanced against the rights of younger people in our society. It may be entirely proper to look at the way in which that is codified. One has to take a view of the whole of society and not just the individuals within it. I made that point strongly at Second Reading and it illustrates the point in this other area. I shall say no more about that.

Secondly, I suggest that this is an area which the church has already visited. Until 1975, there was no mandatory retirement age for clergy, and so we can bring experience to the debate. Clergy who were appointed to their posts before 1975 could stay in post until they died—and in one or two cases perhaps even beyond that. We introduced a retirement age of 70 in the Ecclesiastical Offices (Age Limit) Measure 1975. Prior to that measure, there was a problem with people staying in post too long without a proper review structure. People’s performance in office does not deteriorate overnight: it deteriorates gradually, as was said. It is difficult to raise these issues with people unless there is a clear structure for doing so. Introducing a capability process would be a sledgehammer in these circumstances. Careful consideration is needed.

At the moment, the church has a default retirement age of 70, which society is moving towards. We have just reviewed our processes, as noble Lords will know, and while clergy are officeholders and not employees, we try to shadow the provisions in employment law. Under the new common tenure arrangements that will come into force in a year's time, the default retirement age of 70 will remain in place, but it will be open to a Bishop to license somebody on an annual basis thereafter—with strict limitations on rights beyond 70, but with the possibility of working beyond that age.

In going along with the spirit of what the noble Lord, Lord Lester, is proposing in his probing amendment, I ask whether he accepts that there would need to be a structure that prevented the rights of older people being individually exercised to the detriment of society as a whole, and whether that would take into account any gradual deterioration of performance, which would need to be done sensitively.

My Lords, I support the noble Lord’s amendment, having campaigned for this since the 1970s, as does the Equality and Human Rights Commission of which I am a member. We cannot put everyone of the age of 65 and over into one pot and say that they are all the same. We know that there are numerous people who are “over the hill” at the age of 35 and many others who are well over the default retirement age and who are active and capable of doing extraordinarily good work in whatever field they work. It is ridiculous now to assume that everyone is the same.

For many years, retirement age was seen as a form of kindness. It was part of the introduction of pensions and retirement as a concept, which was humane. It gave people a chance to have a little bit of leisure—not often very long—before they died. But longevity increasing all the time has made a big difference to that. We now have a new cycle of life and we must think again about what that means. It is terribly important that we stop patronising older people. That does not mean that everyone should be allowed to go on working whether they are good at their job or not: it means that much better management is necessary. Middle managers in this country are not always as talented as they might be. They must learn how to appraise people throughout their working careers, change people’s jobs to suit their changing aptitudes and help them to move around within an organisation or in different organisations throughout their working lives. We cannot go on thinking the way we used to do about a lifetime's career.

I would hate to see any young person waiting for what is commonly called dead men's shoes. That would be appalling. In our anti-age-discrimination legislation, it is not possible for that to happen because we have a duty to look after young adults as well as old adults. It also assumes a pool of labour that is precise and does not change. Of course, that is not true. The labour market is not like that: it is much more flexible. Jobs appear where there is a need for a job and circumstances change all the time, as we heard on the radio and TV this morning, with employment beginning to pick up a little. This is not a fixed thing in our agenda: it changes and people change.

The EHRC supports the amendment because we believe that removing the default retirement age would put age discrimination legislation on an equal footing with the other equality strands. It would also make the law simpler and clearer both for employees and employers. It is a blatant form of age discrimination to say, “Yesterday, you could do your job, but it is your birthday today, so now you cannot”. In this day and age, it is quite unacceptable to do that.

I understand that employers have grave worries about this. Many think that it will mean a lot more bureaucracy, red tape and legal claims. The guidance that the commission and other bodies, such as CIPD, will produce will make this easier for managers and employers and should help to make that adjustment easier to come to terms with. I learnt a lot about this from the United States, which has had legislation banning age discrimination since the 1960s. I have spent a lot of time with American employers, employees, future employees and trades unions. They have not found that the number of age discrimination cases rose; on the contrary, they fell when the mandatory retirement age was banned. They look after the older age group only in terms of age discrimination, but we look at both ends of the age scale. As we know, there are positive business and economic benefits if we can scrap the mandatory retirement age. It is not just the demographic situation that makes it essential that we do so, but that is something to think about. By 2021, there will be a further 4 million older people and 1 million fewer adults under 50, so it is inevitable that employers will have to rely on a more age-diverse workforce.

We must do something about this. We must remember that these amendments would not prevent forced retirement altogether. Employers could continue to operate mandatory retirement ages for certain jobs if they could be objectively justified. We could produce examples where it would be common sense to assume that at a certain stage in life the risk was greater than the benefit of staying in a job; for example, Boeing pilots aged 94. That would continue, as that is an objective reason for keeping a retirement age.

If these amendments are accepted, an employee who faced dismissal could bring an employment tribunal claim arguing that a mandatory retirement age was an unjustifiable exception to the general rule against age discrimination. I hope that noble Lords will support this amendment.

My Lords, I support this amendment. At Second Reading, I said that there is no reason for not getting rid of the default retirement age right now. I stick to that view. A mix of younger and older people is thoroughly desirable because you have experience and background and youth and vigour. In the past, executive company directors used to retire gradually. Their experience was available for their company to call on over a period of time. I see no reason why that sort of flexible working arrangement should not be made more available depending on what the individual and the company need as it progresses its jobs and vacancies.

We also need to remember that women have had less opportunity to earn a decent retirement. It would be a great pity if they were cut off from the period when they were looking after grandchildren or helping in other social work and voluntary activity for part of their time. I am entirely in favour of both amendments.

The amendment of the noble Baroness, Lady Turner, is very interesting and may provide an insight. I would not wish for that requirement for an age profile to be made mandatory at this stage. However, as a voluntary activity, it might set a good example of why one might want to join a particular company. I back that amendment also. I hope that the Minister will provide some encouragement. If we do not take this opportunity, when will the next one be?

We should pay more attention—I remember fighting on this issue with Lord Dearing, who, sadly, is deceased—to ensuring that there are more facilities to allow older people to re-train or to take up interests that they have wanted to do for most of their lives but have not had time. That would keep them young and flexible and they would not have been an additional cost to the NHS. I fully support the amendments.

My Lords, I, too, support these amendments, not just for all the reasons of policy and practice that have been so ably deployed on all sides of the Committee, but for reasons of principle. Paragraphs 8 and 9 of Schedule 9 offend the very basic principle of equality law and of the Bill, which is that people should be judged by reference to their individual characteristics, abilities, conduct and potential, not by reference to something over which they have no control and which has no necessary relevance to their ability to perform the job or other function. That is what is so objectionable about the present law.

These provisions will have the inevitable consequence of causing unfairness to tens of thousands of employees who have worked to very high standards and are being dismissed for a reason over which they have no control. I recognise the practical difficulties to which the noble Baroness, Lady Morris, referred. I hope that the Minister in her reply will tell the Committee that a sunset clause will be added to paragraph 8 whereby experienced and competent employees are no longer able to be consigned by their employers to a sunset home.

My Lords, I oppose the amendment, which I regard more as a probing amendment at this stage, and support the review. While I would not wish to appear reactionary, I wish to comment on the practical difficulties that should be firmly considered in the review. I recall debates on these issues in the early 1980s. I remember in the House of Commons that, repeatedly over a number of years, many speeches were made by Labour Members and others asking for early mandatory retirement as a way of resolving problems in the jobs market. Indeed, I remember that at that time the Conservative Government introduced the job release scheme. Its objectives were—if my recollection is correct—to take older people out of the jobs market and replace them with younger people. A Department of Employment survey at that time showed that only a quarter of the jobs released under the JRS went to young people.

Three-quarters of them went to workers in the middle range of age in conditions of high unemployment, particularly in the industrial regions of the United Kingdom. My former constituency, Workington, was an industrial seat. The attitude of industry was therefore very important in the consideration that I made at the time about the extent to which it ought to be taken into account.

Secondly, before going into Parliament in the 1970s, I built up, ran and subsequently sold out a manufacturing company. I remember my own experience at the time in this area with a couple of employees; we are going back over 30 years.

I am not completely opposed to the idea of removal. However, I hope that the review considers fully where in the jobs market a greater flexibility might be more suitable. I notice that the brief sent by Age Concern claims that:

“Business leaders sometimes claim that it is impossible to carry out succession planning without using a mandatory retirement age”,

but it goes on to talk about the United States, Australia and Canada. It says:

“In the UK, many large business groups (including several members of the CBI) operate without recourse to a mandatory retirement age, including the following members of the Employers Forum on Age”.

It goes on to list Asda Stores, Nationwide Building Society, B&Q, Centrica, Barclays plc, Marks & Spencer, Sainsbury’s plc, the Co-operative Group, JD Wetherspoon and BT. What struck me about that list is that they are primarily high street names. I accept that there are certain parts of economic activity in the United Kingdom where the mandatory retirement age is not relevant and where it may well be that employees over the age of 65 can work quite safely in conditions where they can manage the strain or the taxing nature of employment—but what about shipbuilding? What about construction, the steel industry and heavy engineering? What about areas of maintenance or widespread areas of British manufacturing industry? What about vehicle manufacturing?

I would argue that when people are over the age of 65, working has all kinds of implications for health. When the review takes place, it might be that in certain sections of industry it could be considered impractical to give people the right to say, “I wish to stay”, and stay. There are existing appeal procedures whereby you go to your employer at the age of 65—I would apply this to those sections of industry—and say, “I would like to keep my job. Will you consider me? I am still capable of working in that particular sector”. The issue of capability is critical here. In those circumstances they should stay, but employers in parts of heavy manufacturing and certain other areas of industry should not be required to retain labour in the event that they feel that it is not in their interests to do so.

There are legal implications. If people say, “I want to work” but the employer then appeals because they still have a right to dismiss, the employer might find themselves in a difficult position legally and find it difficult to afford legal action so might, in those circumstances, simply concede and be required to hold that labour.

I am also worried, as I say, about the question of job-blocking for young people. In the debates that took place in the 1980s, it was argued all the time that retaining labour over a certain age meant that young people were not given opportunities in the labour market. That must inevitably be the case. Whereas then they were arguing that job-blocking was a problem, today we are arguing that job-blocking is not a problem, although the evidence must essentially be the same. Will that be considered in the review?

Finally, why 65? I understand that with the raising of the pension age an argument might arise, but why 65 and not 66 or 67? Is there some other consideration in mind that prevents us moving at this stage, perhaps as a proposal from the review, to lift the age by a year or two? We should not leave it open-ended, whereby industry, and the sectors that I have referred to in particular, is required to hold labour which it feels in the circumstances unable to do.

My Lords, I shall pick up the point made by the noble Baroness, Lady Morris, from the Conservative Front Bench. I ask the noble Lord, Lord Lester, whether, if his amendment were to be adopted, it would be entirely illegal for employers to require older employees, over the age of 65, to undergo periodic aptitude tests so as to determine objectively whether they are still fully up to the job. Some people in their late 60s or 70s, and even in their 80s, believe that they are just as efficient and on the ball as they were 20, 30 or 40 years earlier. In some fortunate cases, that may be so, as my noble friend has just pointed out—and good for them. Other people in their late 60s and early 70s also believe that they are just as good as they used to be but unfortunately are not; without realising it, they are slower, more forgetful, less able to lift heavy things, to drive in conditions of poor visibility, and so on. Unless some objective test is allowed to determine whether they are in fact fully up to it, I see endless scope for conflict and litigation, as the noble Lord, Lord Campbell-Savours, has just pointed out. If such tests were allowed, it would solve many problems.

The noble Baroness, Lady Morris, also mentioned flexible working. I can see that it might be possible for larger firms, but for a business employing one or two people it might be extremely difficult.

I should also like to ask the noble Lord, Lord Lester, about the Foreign Office, which requires diplomats to retire at 60, when they are at the height of their powers and experience and so on. What about the Armed Forces and the police? What about airline pilots? Surely there must be some occupations for which there has to be an age cut-off.

I was not going to intervene in this debate but I should just like to ask for a couple of points of clarification when the Minister replies and to add to the debate about the meaning of retirement and skills and ongoing appraisal. I should say to the noble Lord, Lord Campbell-Savours, that there is a real mismatch in this country between the skills required for jobs and the people available for jobs, so job-blocking is not about where people are sitting. Many of them are very young people who need to be in at the start and to have opportunities, which I believe that the Government are working hard to give. There are literally thousands of young people waiting for places on those programmes. I have been looking at that for an inquiry that I am undertaking for the EU Committee on the European Social Fund. There is an issue about job-blocking.

On whether people are fit for work and the kind of work that they do, the noble Baroness, Lady Greengross, made it absolutely clear that if employers undertook proper, ongoing appraisals, which all good employers should do throughout their employees’ working career, at any stage they would discover whether they should move him to a different area of work, whether he was safe in what could become unsafe work, or whether he had the aptitude to undertake it. In another organisation for which I work, we have set up a new appraisal programme. We have some very good people working at age 70, but we find that some of the younger people are unable to carry out that task.

We know that the Government are engaged in Europe in discussing the proposed Council directive on implementing the principle of equal treatment, including in the area of age as well as in the areas of religion, belief, disability and sexual orientation. It is clear in the directive that different treatment connected with age may be permitted under certain circumstances if it is objectively justified. Do the directive and objective justification meet the requirement that you can be removed from your job and retired simply because you have reached 65? On that issue, I agree with the noble Lord, Lord Lester. As the Government are negotiating on this directive and I understand that the Equality Bill will be commensurate with it, will the amendment of the noble Lord, Lord Lester, meet the directive?

Does the noble Baroness agree that while it may be possible for a large employer to move an older employee to a less demanding job, it will not be possible for a small firm which has only one, two or three employees.

I agree, and I know both small and large organisations. The issue is the same in that you have to treat an employee equally. Clearly, if an employee is in difficulties, in danger or has an aptitude that prevents him carrying out the job, one of the provisions under the directive is that they should be retired if there are not alternative jobs. That is an option at the end of the day.

Does the noble Baroness accept that it is extremely difficult to prove that a person is not capable in many circumstances?

In response to the query of the noble Lord, Lord Monson, about smaller firms and flexible working, smaller firms are the original flexible employers; unless they were flexible with their workforces they simply could not exist. I speak as the daughter of a small shopkeeper.

My Lords, I appreciate the general problem that these amendments raise. It is important to have regard to many different types of circumstances. As I understand it, these amendments apply only to employment in the ordinary sense. However, they have implications for other situations, as the right reverend Prelate the Bishop of Chester has pointed out. The other day, Sir Sigmund Sternberg suggested that one of the difficulties of the banks had been that they did not have older and wiser people on their boards. I am not sure that everyone will agree that that experience was absent from the boards of the banks, but that was his comment. So there are situations in which age and experience may be of importance.

A relevant consideration is the age structure for the judiciary, which, in a sense, is based on principles not very different from those referred to by the right reverend Prelate the Bishop of Chester in connection with the clergy. My recollection—I may be wrong about this—is that when the noble Lord, Lord Pannick, raised a question about age in the judiciary, the noble Lord, Lord Lester of Herne Hill was against having older judges in the Supreme Court. For all I know, these principles may be reconcilable, but it escapes me as to what that reconciliation would be.

That is not quite right. It was the noble and learned Lord, Lord Mackay, who brought down the age of retirement for judges and then the noble Lord, Lord Pannick, wished it to be abolished or raised again because of a particular problem that had arisen. I made it clear that for special reasons, which I can explain, connected with the judiciary—and, I dare say, with the clergy and other command organisations of that kind—a fixed retirement age was a desirable feature. In the case of the judiciary, it was desirable to get diversity so that it did not become a gerontocracy of white men.

I thought I was giving way to the noble Lord, Lord Lester; I had not quite finished what I wanted to say. The fact that the noble Lord, Lord Lester, explains it in this way shows that this is not a particularly easy problem. As he said, this is a probing amendment. The point is that the Bill contains a commencement provision, so that even if the amendment was agreed, it would be possible to postpone the date at which it became law. It does not necessarily mean that it must be brought in immediately because it is approved. However, this is a probing amendment and I look forward with great interest to hearing what the Government have to say about it.

My Lords, I think there is agreement in this debate on one broad point: the world is changing fast. I quote one paragraph from a very good report, Working Better: The Over 50s, the New Work Generation, published on Tuesday by the Equality and Human Rights Commission:

“A large number of older people would like to carry on working; this requires more supportive policies and practices from employers. Employers with experience of employing mature workers say they offer knowledge and experience as well as loyalty, maturity, productivity, reliability and empathy with the growing population of mature customers. Yet approaches to retaining older employees, where they exist at all, often tend to be piecemeal rather than comprehensive”.

That has been coupled with another point that goes in a slightly different direction: comprehensive can mean “one size fits all”. Several speakers—notably my noble friend Lord Campbell-Savours, but many others—have given some of the industrial reasons for saying that, but there is still a huge dilemma.

As a former employee of the TUC, I find it interesting that the TUC has two trains of thought at present. On balance, I think it is saying that it supports the approach of the amendment. I am sitting on the fence, which is a comfortable place to sit for a short time, but I strongly support the review. I do not think I am being chicken, but it is a question that we cannot decide finally today. Perhaps my noble friend the Leader of the House will be able to say that today’s debate will be reflected and taken into account in the review. It is last knockings, but there has always been something of a difficulty in meshing together Parliament and reviews. However, this is a golden opportunity.

The noble Lord, Lord Lester, made it sound as though there was not much of a problem in deleting from the top of page 167 of the Bill the point about unfair dismissal. However, his problem is different from mine in that I do not think there is a magic solution in his approach or in the words of paragraph 8(1), as it stands. Does it mean that a default retirement age applies to everyone in a company; or is an individual able to say that he or she personally would do something different from the company arrangements? Is that what is being said?

In the present construction, the new concept of a tailor-made retirement age—the age after which you cannot go to a tribunal—takes us back to square one. It leaves us in a position where the employer can dismiss you without any reason other than that you have suddenly reached retirement age. I presume that the employer says, “Good afternoon, sit down; you are dismissed because you are now retired”. The person might say, “You what?”—in the vernacular—but they are dismissed in line with the Bill. It defies the common-sense use of English to say, “You are dismissed because you are retired”. What happens if I do not want to retire? I am dismissed, full stop. That will not go away and it is difficult to solve.

Perhaps the most reverend Primate the Archbishop of York would ask the Archangel Gabriel to have a go at this but I doubt whether he would succeed. We are all still left in a difficulty. The Equality and Human Rights Commission has a couple of paragraphs on this point but it does not solve the problem any more easily. It supports the amendment but states:

“It should be noted that these amendments would not prevent forced retirement altogether. In exceptional cases, particular employers might continue operating mandatory retirement ages for certain jobs, provided their practice could be objectively justified. However, individual employees facing dismissal would be able to bring an Employment Tribunal claim arguing that the mandatory retirement age was an unjustifiable exception to the general rule against age discrimination”.

That does not totally solve the problem but it is an interesting line of thought.

I must not go on any further; it has been a long debate. To end, I add a totally different point about what is stated on line 24, page 167 of the Bill. I have met this before on other Bills. Halfway down the page, it says that the,

“reference to the normal retirement age is to be construed in accordance with section 98ZH of the Employment Rights Act 1996”.

I thought I ought to read that, so I went to the Printed Paper Office to get hold of the Employment Rights Act 1996 but could not find it. I went to the Public Bill Office but the staff there could not find it immediately. After about 20 minutes, they realised that something like Butterworths online tells you that it was in a statutory instrument, passed by both Houses in 2006. I will not read that out but have a suggestion for my noble friend to consider with colleagues. Perhaps she could write to me about it and put a copy in the Library. When Acts such as this have statutory instruments attached one after the other, the Printed Paper Office ought to staple into the front cover a list of things which are now changing. Otherwise, we sometimes have no reason to know that there is something additional being added.

My Lords, the intention of Amendments 102 and 103 is to abolish the default retirement age. Many noble Lords have, this afternoon, made a compelling case for doing this, but I am grateful to the noble Baroness, Lady Morris, and to my noble friend Lord Campbell-Savours for rightly alerting us to the practicalities. I was interested to hear the noble Lord, Lord Monson, talking about aptitude tests; I have worried fearfully about Members of this House and aptitude tests, I have to say.

Through the 2006 Employment Equality (Age) Regulations, this Government implemented, for the first time, a ban on age discrimination for the workforce. The ban covers recruitment, training and promotion. In addition, all employees were given a new right to ask to continue working beyond their employers’ retirement age. The regulations also extended protection from unfair dismissal to over-65s, except in the case of a genuine retirement. Prior to 2006, employees had no protection from age discrimination, employers were free to set an earlier retirement age and over-65s had absolutely no protection from unfair dismissal. The regulations have therefore improved the legal position of older workers.

The default retirement age was introduced as one part of this overall package, and in response to significant concerns expressed by stakeholders during the consultation. A default retirement age is very different from a forced retirement age, as I am sure all noble Lords realise. The principal aims of the default retirement age were to facilitate workforce planning practices that businesses told us were essential, and to avoid an adverse impact on the provision of occupational pensions and other work-related benefits, such as group health insurance. We considered that it would help fulfil other policy objectives, including: protecting the dignity of workers at the end of their working lives; improving the participation of workers in the 50-64 age group, and encouraging culture change. We will need to reconsider those issues through the review of the default retirement age.

The Government, of course, welcome the fact that more people want, and are able, to remain in the workplace for longer, and that many employers are already adopting more flexible approaches to retirement. We are seeking to encourage that through initiatives such as Age Positive, linking with influential stakeholders, key business leaders and directly with employers to encourage the recruitment, training and retention of older workers, and flexible approaches to work and phased retirement. As the noble Baroness, Lady Morris, said, retirement should be a process rather than an event. We should indeed take into account better appraisal, management and training.

In addition, we have announced a new national guidance initiative to provide help for employers to plan and implement flexible retirement and flexible working practices. Through the review of the default retirement age, we will consider what further can be done to provide support for flexible retirement; there is much potential for win-wins here. Last July, we announced that we would bring forward the review of the default retirement age from 2011 to 2010. Moving swiftly after the High Court’s judgment on 25 September, we announced on 15 October last year a call for evidence to be submitted by 1 February to inform the review.

In his introduction the noble Lord, Lord Lester, said that the High Court had said that 65 was unjustified. We believe that much is being made, understandably, of the comments by Mr Justice Blake at paragraph 128 of the judgment. The judge expressed some reservations about whether a default retirement age of 65 was justifiable in 2009; he did not advocate abolition of the DRA altogether, yet I well recognise that his comments carry weight. While I am on legal issues, but on quite a different subject, the noble Baroness, Lady Howarth, asked whether the draft directive being negotiated now would allow removal from a job at 65. The new draft directive relates to goods and services only, and the existing framework directive allows an employer to objectively justify a retirement age.

I return to the review, which will consider not only whether the default retirement age is still appropriate and necessary, but these questions. How has the default retirement age operated in practice? What might the costs or unintended consequences of different policy options be, and how can they be mitigated? What more can be done to facilitate retirement planning and flexible retirement options? It is only through a proper review that these issues can be addressed. We believe it is right that policy decisions are based on evidence that is as robust, wide-ranging and detailed as possible. Of course, all the points raised by my noble friend will have to be taken into consideration.

We need to include the Government’s own survey of employers, policies, practices and preferences, which is about to begin its analytical phase and involves a sample of over 2,000 employers. We have always said that we would review the need for the default retirement age and that our aim is to encourage a culture change away from set retirement ages. If, having considered the evidence, our review shows that the default retirement age is no longer necessary, we will abolish it. Equally, there may be other policy options that would better achieve the aim of encouraging participation in the workforce and the widest possible opportunities for all age groups, and I pay heed to the point made by the right reverend Prelate about younger people.

I recognise that most noble Lords in the Chamber today wish us to act very swiftly. The review will need to analyse a considerable volume of evidence but I assure the House that the Government are not dragging their heels on the issue. We will need to reach a conclusion based on the evidence and consult on any proposals that flow from this. It is right that businesses are given time to prepare for potentially significant changes. We would, therefore, expect any changes resulting from the review to be implemented in 2011—not 2026 because that is quite a different issue. For that reason, while I understand why the noble Lord, Lord Pannick, mentioned the need for a sunset clause, I believe that would be rather a blunt instrument. It will be important to implement the findings of the review expediently but to have some sort of flexibility, and that is the best way forward rather than having a sunset clause.

Whatever the way forward, we do not need to make changes or take a power in the Equality Bill; we can rely on Section 2(2) powers. A review based on all the available evidence is a better way forward than summary abolition and we should be wary of unintended consequences caused by abrupt changes to the law with no opportunity to consider them.

Before the noble Baroness leaves the review, might I ask her one more question about it? Will the review consider statutory retirement ages for bodies like tribunals? On 1 December, I asked the noble Lord, Lord McKenzie, this question and he was not able to answer it at that time. He said he would write to me. I declared an interest in that my wife had recently been obliged to stand down as a member of the Care Standards Tribunal on reaching the age of 70. It was explained to her that, notwithstanding regulations on age discrimination, this was as a result of statutory retirement ages which applied to bodies like tribunals. Is this a point that the review of the default retirement age will look at?

It would seem a sensible way forward. I cannot give any commitment today but I will certainly communicate with the noble Lord in another letter. In answer to my noble friend Lord Lea, I will draw the attention of those undertaking the review to today’s debate. In relation to statutory instruments, et cetera, the statute law database is being continually developed with the aim of providing access to up-to-date Acts of Parliament, showing amendments which have subsequently been made. I will now finish on the amendments tabled by the noble Lord, Lord Lester, and ask him to withdraw his amendment in the light of today’s debate.

Amendment 104 tabled by my noble friend inserts a power into the Bill for the Secretary of State to require employers with more than 250 employees to provide an age profile of their workforce.

I am very sorry to intervene, but would my noble friend register the huge dilemma that exists given that an employer can say, “Goodbye, this is your retirement day. You are dismissed because you are retired”. This is the first time the employee has heard of it and asks, “Who told me I was retired? Who says what the retirement age is? What about collective bargaining?”. I am not asking my noble friend to solve this Catch-22 situation this afternoon, but I would be very grateful if she could register that this point above all can be quickly brought within the review. It is the key point in this whole debate.

My Lords, I hear what my noble friend has said and the best thing for me to do would be to respond to him in writing.

I return to the amendment from my noble friend. I would agree with her aim of encouraging further increases in employment among the over-50s, but I am not convinced the proposal would achieve this. First, we must remember that age discrimination does not only affect older people. The Fair Treatment at Work Survey 2008, which gathered comprehensive data on perceived unfair treatment in the workplace, showed that 17 per cent of 16 to 24 year-olds believed that they had been treated unfairly at work compared with 11 per cent of those aged 50 and over. Requiring businesses to have particular regard to the number of over-50s they employ could risk unfairly disadvantaging the young.

Secondly, particular firms or industries may have different age profiles, not because employers are acting in a discriminatory fashion, but because the work involved is more attractive to older or younger workers or perhaps because of the nature of the work itself. We must of course challenge outmoded stereotypes, but businesses are themselves diverse, and there may well be legitimate reasons for them to have varying age profiles.

Thirdly, a reporting requirement on businesses will inevitably create additional costs. One could draw an analogy here with gender pay reporting, but the rationale for that policy rests on a very long-standing piece of law, the Equal Pay Act 1970. The EHRC has been working closely with business representative groups to develop voluntary reporting measures as outlined last week and we have said that we will consider introducing a statutory reporting requirement only if this does not happen voluntarily. The clear rationale, engagement with stakeholders and fully mapped-out process which exist for gender pay reporting do not exist for my noble friend’s proposal and I am, therefore, unable to support it. I ask my noble friend not to move her amendment.

My Lords, I am extremely grateful to everyone who has taken part in the debate, although I am not going to reply to all the points. We on these Benches have been pressing for many years for the abolition of the default retirement age of 65, and it is core policy for us. However, we also have another overriding requirement, which is to get this Bill through, so we are trying—I may fail—to exercise great self-discipline in not speaking for longer than is absolutely necessary. I will reply extremely briefly, which will not do justice to all the points that have been raised.

First, I would like to say that the High Court which heard the case had the benefit of a vast amount of evidence. It was, of course, heard by an independent and impartial judge on the basis of the European directive and English law. What he said, in paragraph 130, was:

“I cannot presently see how 65 could remain as a default retirement age after the review”.

That statement by the judge, which was not appealed against, is of great force.

Secondly, there was another body that was independent and impartial; the committee of the noble Lord, Lord Burns. I commend to the House, and to those who have been asking interesting questions, the report of that committee in HL Paper 179. Noble Lords should read that report and the evidence that was given, all of which was read by the judge. The fact that that committee, presided over by no less than the noble Lord, Lord Burns, should unanimously have come to the conclusion all those years ago, that one could replace a rigid retirement age by flexibility and choice, partly for the reasons given by the noble Lord, Lord Pannick, must surely carry some force. All the practical issues that are being raised were considered then.

If, before Report, noble Lords decide to look at that paper, I also commend the memorandum put in by the Chartered Institute of Personnel and Development and its oral evidence, which distinguished between what it called command-type organisations, of which I respectfully regard the church as one and the judiciary as another, and different kinds of managerial style. The way in which it goes into it in paragraphs 258 to 260 and paragraphs 269 to 270 I suspect ought to give people further pause for thought.

On the issue of old versus young, of course, one does not want old, arthritic, hardening of the arteries at the expense of young blood. The European Court of Justice decided, only on 19 January, in a case with the unpronounceable name of Kücükdeveci v Swedex GmbH & Co, that German law, which provided that employment before the age of 25 is to be disregarded when calculating service-related notice periods, breached the directive which governs us as well. That was an example of discrimination against the young which did not pass muster. The only reason why the UK succeeded in this issue in Luxembourg is because the Court decided that there was a wide margin of discretion open to the legislature to give effect to it.

I suspect the fundamental problem is that we do not take age discrimination as seriously as race discrimination or sex discrimination. Suppose the law said that a black person on reaching the age of 65 is automatically dismissed, no one in the House would say that that could conceivably be justifiable. The reason would be not only that colour and race are irrelevant but also that it violates the principle about which the noble Lord, Lord Pannick, spoke of individual merit on the basis of individual capacity. These days the same applies to gender. Few people would say that a retirement age of 65 for women but not for men could no longer pass muster because it was rigid and disproportionate and gender was not an automatic disqualification from employment. When one comes to age, unconsciously many people think that it is somehow more permissible because of the conflict between the old and the young. The Luxembourg court has made it quite clear that age discrimination is to be taken as seriously as the other forms of discrimination.

I have heard all the arguments and I am very impressed by the fact that in 2003 the Department for Work and Pensions and its Cabinet Minister thought that there was no problem at all in getting rid of the default retirement age of 65. That was six years ago and I am very heartened by what the Minister has said today; that the Government intend to get rid of it after further consultation, and no doubt other matters, by some time in 2011. That is a very important concession. I fully appreciate the need for a breathing space while that happens. All that divides me from the Government now are the words of Archbishop William Temple: “Whenever I travel on the Underground, I always intend to buy a ticket, but the fact there is a ticket collector at the other end just clinches it”.

Although today I shall withdraw my amendment, on Report I shall return and, having listened to the noble and learned Lord, Lord Mackay of Clashfern, I shall seek to amend Clause 208, the commencement clause, to ensure that the Government’s intentions will be carried out by the end of 2011. I thank the Government and the Minister—

Perhaps the noble Lord would quickly answer my question about whether objective aptitude tests would be allowed. That would solve a lot of problems.

An employer is fully entitled to employ only those who are capable of doing the job. Of course, no one suggests that someone should be employed if they are not capable of doing the job. The point is that reaching the age of 65 is not by itself a measure of capacity or incapacity. I beg leave to withdraw the amendment.

Amendment 102 withdrawn.

Amendments 103 and 104 not moved.

Schedule 9 agreed.

Clause 84 : Application of this Chapter

Amendment 105 not moved.

Clause 84 agreed.

Clause 85 : Pupils: admission and treatment, etc.

Amendments 106 to 106ZB not moved.

Clause 85 agreed.

Clauses 86 to 88 agreed.

Schedule 10 agreed.

Clause 89 agreed.

Amendment 106A

Moved by

106A: After Clause 89, insert the following new Clause—

“Reserved teachers at schools with a religious character

(1) The School Standards and Framework Act 1998 is amended as follows.

(2) In section 58, after subsection (3) insert—

“(3A) The head teacher of such a school shall not, while holding the post of head teacher of the school, be a reserved teacher.””

I shall speak also to the other amendments in this group. Amendment 106A reinstates an important protection in the Schools Standards and Framework Act 1998 that was removed by the Education and Inspections Act 2006. Under the protection in the earlier Act, it was not lawful for voluntary controlled schools, of which there are some 3,000, to require a head teacher to be a reserved teacher. Such teachers need to be able to teach religious education, must hold the requisite belief and attend religious worship and their conduct needs to be compatible with the precepts of the religion.

The removal of this protection in 2006 represented an adverse change in employment affecting thousands of head teachers and teachers with hopes of promotion later in their career. Attempts to secure transitional provisions for them have failed. Indeed, the Church of England’s National Society for Promoting Religious Education has made it clear that all VC head teacher posts under its control will automatically become reserved teacher posts, regardless of the injustice, and even hardship, that that may cause. I am advised that the removal of the protection afforded represented a regression in employment equality law that is in breach of EU Directive 2000/78/EC.

The other amendments in this group deal with a similar issue: the religious requirement that can be imposed on all teachers in voluntary aided faith schools. Why should such requirements be imposed on, for example, physical education or maths teachers when the same rules do not apply to charities or businesses with a religious ethos? I believe that this is also not in line with EU Council Directive 2000/78/EC. The directive seems to require that permitted discrimination can take place only when there is a genuine occupational requirement. The Bill, if unamended, allows discrimination against a large category of employees; namely, all teachers in most faith schools. I hope that the Government will agree that this is not acceptable and that steps should be taken to ensure that the Bill is fully in line with the EU directive.

We had some discussion about the EU directive earlier in this Committee, and I understand that the Government have already been told that they are in breach. I have a copy of the reasoned opinion from the EU Commission, and it is quite clear that the ruling is that this country is in breach. It is an important document, and I hope it can be left in the Library for noble Lords to read. It is important for the legislation we are introducing to be in line with the directive. If it is not, it means that people who feel that their rights have not been applied to them may seek to have them enforced by the courts. It would be better if, from the beginning, we have legislation that is fully compliant with the EU directive. I beg to move.

My Lords, Amendment 106A is yet another attempt to limit the powers of governors and goes specifically against what was agreed in the Education Inspections Act 2006, when this House removed that prohibition. We on these Benches see no reason to limit the power of governors and the rights of faith-based schools to maintain the ethos they are pledged to deliver by their own terms of endowment. Amendments 124, 125 and 137 pursue this same line by attempting to undermine the ability of governors to maintain that ethos through appointments and dismissals.

I apologise to the noble Baroness, Lady Tuner, but we do not find these amendments helpful. We feel that they could well impair the excellent work done by so many faith schools, often in deprived areas. Yet again, these Benches wish to maintain the status quo in this area in order to support the excellent work of faith schools and to preserve that delicate balance between the right to hold differing religious beliefs and mutual tolerance.

My Lords, the noble Baroness, Lady Turner, will not be surprised to learn that these Benches do not support her amendment. The diocese of Liverpool has more than 120 schools and three city academies. I declare an interest in that I have been personally involved in interviewing for the principals of each of the three academies. Those candidates were, indeed, required to share the Christian faith.

The Government welcome the role of the churches in education. I was very glad to hear the noble Baroness, Lady Morris, refer to the work done by the churches, especially in deprived areas. The work that we have done with our city academies has, indeed, improved the aspirations and achievements of young people in deprived areas. We are aware that not only do the Government welcome the Christian ethos in education in our church schools but that parents welcome it, given the number of parents who apply for their children to be admitted. The young people themselves—the pupils—make a significant contribution to the whole character of the school community by sharing that ethos.

The character of any institution and, indeed, of any school, flows directly from the character of its leadership. It would be very difficult indeed to fulfil the Government’s endorsement of faith and church schools if the Bill removed the requirement that the principal or head teacher should embrace the ethos which they are called to promote. Therefore, we oppose this amendment.

My Lords, I join my voice with those of the right reverend Prelate the Bishop of Liverpool and the noble Baroness, Lady Morris of Bolton, in opposing this amendment. I understand the position that the noble Baroness, Lady Turner of Camden, has put to the Committee. It is not a new position, it has been expressed before, and she has certainly been admirably consistent in voicing that opinion, but many of us in your Lordships' House feel that anything which is done to dilute the character and ethos of church schools would be a regrettable mistake. They contribute an enormous amount to the life of this country but also to specific communities of the sort that the right reverend Prelate has just described.

I am a governor of a church school and I send my children to church schools. In the distant past I worked in the voluntary-aided as well as the maintained sector of education, so I have seen these schools at first hand and know the contribution that they make. If you were to hold up a mirror to contemporary Britain today, you would probably see its diversity more clearly in church schools than anywhere else. In the schools that I visit regularly, I see a range of children from many backgrounds; immigrant backgrounds, almost by definition. In an average Catholic school you will see children from African, Asian, Filipino and Polish backgrounds as well as from indigenous British backgrounds, but often with Irish antecedents in them. These are places we should be proud of because here we are living out integration and tolerance. Indeed, the faith schools that the right reverend Prelate has done so much to promote in the city of Liverpool, and which have been such a remarkable achievement, also have an interdenominational character. In a city with a sectarian past one must see that as a remarkable achievement, of which we should be very proud.

Instead of celebrating the extraordinary contribution of schools with a religious ethos, over the years we seem to have had a sustained attempt to dilute their character. I remember the debate in which I took part in your Lordships' House where attempts were made to impose quotas on church schools. I am glad that the Government have resisted any attempt in this legislation to change the admissions’ procedures in church schools. The Government should be commended for that. The Education Acts of 1944 and 1988 are the Acts on which this builds in that respect. To alter the character of the church schools in this other respect by changing the regulations in regard to the employment of staff is inadmissible and we should not do it.

The noble Baroness cited regulations from Europe as justification for her amendments. But it is probably worth reminding the Committee of Protocol 1 of Article 2 of the European Convention on Human Rights. It provides that the state shall in exercising its functions in relation to education and teaching,

“respect the right of parents to ensure such education and teaching in conformity with their own religion and philosophical convictions”.

It is impossible to see how they will be able to do that if the character of these schools is to be changed in the way in which the noble Baroness would wish.

In 1944, a historic bargain was made between the churches and the state. The Education Act 1944 still stands as testimony of one of the great pieces of legislation of the 20th century. It opened the door to people from the kind of background that I came from to have the opportunity of higher education. But it also provided the opportunity for the churches to give educational opportunities to children who were often from deprived and poor neighbourhoods.

As part of that historic bargain, the churches had to spend in those days three-quarters of the costs involved in the capital costs of building such schools. Even today it amounts to 10 per cent. The churches give the state this huge piece of collateral in order to help it in the education of children. That these schools are popular cannot be in dispute. Most neighbourhoods have waiting lists for such schools. It surely is not a coincidence that the former Prime Minister and the Leader of the Official Opposition both chose such an option. Indeed, it was recently reported that so has the Foreign Secretary. There is nothing to criticise about that. We should be asking why people make those choices. This is something from which we should learn and uphold. We should be proud of diversity in education.

The 1944 Act was part of the legislative programme of the national Government. RA Butler was Secretary of State for Education and Chuter Ede, Labour Member of Parliament, was his PPS. Consensus was reached before that legislation passed through both Houses of Parliament, which is probably why it has stood the test of time. Archbishop Griffin, the then Archbishop of Westminster, was in the Strangers’ Gallery in the other place on the day the legislation achieved its Third Reading. He sent RA Butler a copy of Butler’s Lives of the Saints. There are many parents in this country who would agree that the legislation has given their children many blessings. Anything we did to change the character of such schools would be an error.

Another reason why we should resist this amendment concerns the trust deeds of these schools and the responsibilities that they place, through charity laws, on the governors of such schools. We would be placing them in a position where they could not fulfil the obligations laid on them in those trust deeds if we were to accept these amendments. For those reasons, I hope that they will be resisted.

My Lords, we on these Benches, especially in the other place, strongly supported this range of amendments. I know that my colleagues in the other place would wish me to say that now and to pursue the matter. Frankly, I am not going to in the interests of the Bill as a whole. I have warned from the beginning that if we are not careful religion will ruin the Bill. Again and again religious questions will come up. They will take hours and will dwarf the overriding requirement, which is to get the Bill through. So I am not going to do what I should, which is to speak fully in support of the amendments of the noble Baroness, Lady Turner.

I just give one cautionary word about faith schools: when the original legislation on this matter was passed, I warned the noble Lord, Lord Adonis, who was then the Minister, that there were serious problems about admission to faith schools—which are not the subject of these amendments—because of a case I successfully argued in Privy Council, the Tengur case, involving the Bishop of Port Louis, Mauritius. A unanimous Privy Council held unanimously that you could have religious quotas but had to admit pupils on merit. That is not what this amendment is about. Therefore, I fully support the amendment but I shall not go into any of the arguments.

Secondly, I have done something completely idiotic—I failed to move Amendment 105, which had been fully debated and accepted by the Government and dealt with teenage pregnancy in schools. I apologise to the Committee for that. I cannot believe that the procedures of the House are so inflexible that it is not possible for me now to seek to rectify this. If it were not possible—

Provided we get a Report stage. If I can be guaranteed that we will, we can deal with my foolish mistake, but I thought that I ought to state it now, and I wear sackcloth and ashes.

I apologise to the noble Lord in return. I can confirm that his amendment had been accepted by the Government. We made a bit of a boob by not inviting him to move it at the correct time. We shall ensure that it is included on Report.

I thank my noble friend Lady Turner of Camden for tabling the amendments, which allow me to clarify the situation. I hesitate to use “clarify” in the presence of the Lords spiritual who are out in force again, but I hope that, this time, harmony will prevail.

Faith schools are an important part of our education landscape and part of the educational choice open to parents. To maintain their religious character, they must be able, where appropriate, to appoint teachers of the same faith. The provisions in the School Standards and Framework Act that we are debating preserve a situation which has existed for virtually as long as we have had publicly funded schools in this country.

My noble friend’s first amendment in the group, Amendment 106A, is distinct from the others, as she said, and deals with the situation in foundation and voluntary controlled schools with regard to reserved teachers. Where there are more than two teachers in these schools, at least one of them must be reserved; that is, they must be appointed taking account of their ability to teach religious education in accordance with the tenets of the religion of the school and with the intention that they should do so. I think that it is accepted that a school with a religious ethos would wish to maintain the traditions of that ethos, especially in the way that it teaches religious education.

When the Education and Inspections Act amended the School Standards and Framework Act in 2006 to allow head teachers to be reserved teachers, it was done not to extend this exception but to help small and mainly rural schools. These schools often have to appoint head teachers who not only fulfil that role but also take on a variety of teaching roles. It was put to us that small schools were experiencing difficulties because their head teacher could not also be appointed to teach religious education, as the law did not allow this before 2006, so we amended the law to make life easier for those schools. We have no evidence that teachers’ prospects were reduced by the Government’s helpful amendment, but I invite my noble friend, if she needs to, to write to me if she has such examples.

The amendment was compatible with EC Directive 2000/78 because it simply applied an existing regime, which was applicable only to those specifically appointed to teach religious education, to those who were also head teachers. 

The other three amendments mirror amendments laid in the other place during previous rounds of this Bill’s scrutiny. The issue here is certain freedoms given to schools with a religious character and how they recruit and discharge their teaching staff. Nothing in the Bill will change the position of faith schools or diminish their ability to deliver an education in line with their religious character. However, I understand that there are concerns about the SSFA and what it may potentially allow faith schools—in particular, voluntary-aided faith schools—to do with regard to their teachers.

Sexual orientation, in particular, has been debated in this context. Let me be clear: discrimination because of a person’s sexual orientation is unlawful and nothing in the School Standards and Framework Act would allow it; nor do the faith bodies which run most of our faith schools seek to discriminate on these grounds.

My noble friend Lady Turner asked about the compatibility of the Schools Standards and Framework Act provisions with the European directive. Article 4.2 of that directive provides that member states may maintain national legislation in force at the date of adoption of the directive. It also provides for future legislation to allow differential treatment on religious grounds where it reflects national practices and where there is a,

“genuine, legitimate and justified occupational requirement”.

The wording of the directive was negotiated and agreed by the UK with precisely the circumstances covered by the SSFA in mind. In order for schools to maintain an ethos based on their faith, the Government think it is reasonable for them to be able to ensure that they have a strong and dedicated teaching staff who understand and identify with the religious ethos of the school. That is what these exceptions provide. The Government have done a great deal to enable faith-based schools to maintain their religious ethos. The quid pro quo is that we expect them to be scrupulous in their compliance with the relevant employment legislation.

Anxieties have also been expressed about how the School Standards and Framework Act may apply to the dismissal of teachers. We need to be clear about what the Act allows. Section 60(5) says that regard may be had, in connection to termination of employment, to a teacher’s behaviour which is incompatible with the tenets of the relevant faith. It does not say that such behaviour can necessarily be taken as grounds for dismissal. Having had regard to whatever the conduct in question might be, it may be proper for a school to take disciplinary action but it may also be entirely improper. In those circumstances, nothing in the Act would prejudice a claim for unfair or constructive dismissal. The SSFA provisions must also, as I have already said, be read alongside other relevant employment legislation.

I assure my noble friend that, if the Government thought that a problem was caused by the provisions of the School Standards and Framework Act, we would do something to remedy it. At present, we are not convinced that there is any reason to do so, and I therefore ask my noble friend to withdraw her amendment.

My Lords, I thank my noble friend for that response and I also thank other noble Lords who have spoken in this debate. I say to my noble friend that I am completely and utterly in agreement with the Bill and its aim. It seeks to help groups of disadvantaged people who, without the Equality Bill, would continue to have discrimination practised against them. I agree with the noble Lord, Lord Lester, that it is very important to get this Bill on to the statute book as soon as possible.

However, during discussion on the Bill, the Government have made a large number of concessions to religious groups, which I do not think are always justified. People with no belief also have some rights. The EU directive simply says that respect should be shown to the religious ethos of religious employers by the employees. I agree, although in my view that does not include the necessity to become a member of the religion involved. I still believe that that is not a requirement—it is certainly not a requirement of the EU directive. Nor is it true that people who send their children to these schools always want to see that requirement, but I have been given evidence that parents are very concerned that teachers have these requirements imposed on them.

Furthermore, so far as I am concerned, teaching unions support the line of my amendment. However, I do not believe that there is any point in pursuing it at this stage. I shall read very carefully what my noble friend has said in relation to the Government’s stance on the amendment and, in the mean time, I beg leave to withdraw it.

Amendment 106A withdrawn.

Schedule 11 agreed.

Clause 90 agreed.

Clause 91 : Students: admission and treatment, etc.

Amendment 106AZA

Moved by

106AZA: Clause 91, page 58, line 10, at end insert—

“(2A) The responsible body of such an institution must not discriminate against a disabled person—

(a) in the arrangements it makes for deciding upon whom to confer a qualification;(b) as to the terms on which it is prepared to confer a qualification on the person;(c) by not conferring a qualification on the person;(d) by withdrawing a qualification from the person or varying the terms on which the person holds it.(2B) Subsection (2A) applies only to disability discrimination.

My Lords, I will also speak to government Amendments 106AZB and 106AZC. These are purely technical amendments aimed at replicating existing provisions in the DDA, which were inadvertently omitted from the Bill. These provisions ensure that disabled people who are having qualifications conferred on them by a higher or further education institution and are not students of that institution are protected against discrimination, harassment and victimisation because of their disability.

I sincerely apologise for the omission in the Bill and the late arrival of these amendments. I am sure that noble Lords would agree that such protection that already exists needs to be maintained and on that basis I hope that the amendments are accepted. The noble Lord, Lord Low, will now speak to his amendments and I will respond at the end of the debate.

My Lords, I had thought that the Minister would speak to her Amendment 106B, but perhaps she will come to that later. In the mean time, I will speak to Amendments 106AA, 106AB and 106C. They relate to a concern that I raised at Second Reading. The amendments are to Clause 96, which provides that qualifications bodies must make reasonable adjustments for disabled candidates such as a large-print exam paper for partially sighted candidates, extra time for dyslexic candidates or lip-speakers for deaf candidates in oral exams. It also provides that Ofqual or the Scottish or Welsh regulators can specify matters that are not subject to the reasonable adjustment duty and decide whether certain reasonable adjustments should not be made. Disabled people’s organisations are concerned that the Bill permits the regulators to take these decisions too lightly and with the wrong factors in mind. I declare an interest as president of SKILL, the National Bureau for Students with Disabilities.

Qualifications are vital for disabled people no less than for non-disabled people. Having a qualification opens the door for disabled students to go on to further study or employment. It is therefore vital that the examination system is fully accessible to them. From that point of view, disabled people and their organisations have not had a happy experience. In 2005, the qualifications regulators withdrew much of the support available to disabled students in examinations on the basis that reasonable adjustments were unfair to those who did not need them. That led to cases where, for example, deaf students were forced to undertake oral components of exams without any support.

Disability charities successfully campaigned to reinstate the support and have since been working with the Government, qualifications bodies and regulators to encourage them to go further and make sure that all qualifications are fully accessible to disabled students. However, improvements are still needed to ensure access. In particular, the legal framework governing the powers and duties of qualifications bodies and regulators needs clarifying and strengthening to ensure that they fully implement the principles of disability equality with a view to ensuring that the mistakes made in 2005 are not repeated.

As stated, that legal framework is set out in Clause 96. Subsection (8) provides:

“For the purposes of subsection (7)”—

which disapplies the duty to make reasonable adjustments—

“the appropriate regulator must have regard to”,

three factors. These are: the desirability of minimising the disadvantage to disabled students; the need to secure the reliability of qualifications; and the need to maintain public confidence in qualifications. These have caused concern on the ground, broadly, that they subordinate the needs of disabled students to the goal of maintaining public confidence in qualifications. The amendments seek to address that concern.

Let me say straight away that I am grateful to the Government for tabling Amendment 106B, which changes in paragraph (a) the “desirability of minimising” the disadvantage to disabled students to the “need to minimise” that disadvantage. Concern had been expressed that the language of the Bill gave rise to the impression that, whereas it was “necessary” to secure the reliability of qualifications and to maintain public confidence in them, it was only “desirable” to minimise the disadvantage to disabled students.

I have had constructive discussions with the Bill team, Ofqual and Iain Wright MP, the Minister in the other place with responsibility for this area of policy. I am grateful that they have responded so positively to my suggestion that they should put the three factors in Clause 96(8) on an equal footing whereby it is necessary for the regulator to have regard to them. In particular, I have had positive discussions with Kathleen Tattersall, the chair of Ofqual, who made it clear that Ofqual sees ensuring that the need for disabled students’ qualifications to be fully accessible as being at the heart of its concern—more or less irrespective of the precise wording of the statute. However, that is no reason not to get the wording as right as we can. At the risk of appearing to look a gift horse in the mouth, which I certainly do not want to do, I am afraid that disability organisations, particularly SKILL and the National Deaf Children’s Society, have told me that they are still very unhappy that the wording of the paragraph, even with the government amendment, does not give disabled students the assurance or the protection they need. The problem is that they feel that their fingers were badly burnt by the experience of 2005. A lot of work will be necessary to rebuild trust. For that reason, I very much hope that the Government will give serious consideration to the further changes that those organisations seek.

Before I mention the charities’ specific concerns, I shall explain Amendment 106AA. It would change the obligation in Clause 96(8) for the regulator to “have regard” to the three factors to an obligation for the regulator to “have due regard” to them. That would align this provision with the wording of the integrated public sector equality duty, which incorporates the current disability equality duty. The EHRC believes that this would strengthen and clarify the regulator’s duty under Clause 96(8), not least because case law already supports and interprets the meaning of “due regard”.

Beyond that, the charities’ concerns are twofold. First, they are concerned that the need to which the regulator should have due regard in paragraph (a), even with the Government’s amendment, will only minimise the disadvantage to disabled students. That seems to accept that disabled students must suffer some disadvantage. The aim should surely be to avoid any disadvantage altogether. Hence, I have tabled Amendment 106AB, which proposes the need to,

“avoid any substantial disadvantage to disabled students”,

and follows the language of “substantial disadvantage” used throughout the Bill in relation to reasonable adjustments.

Secondly, and most importantly, the organisations are worried about the reiteration of the public confidence objective in paragraph (c)—hence, I have tabled Amendment 106C, which would delete that paragraph. Why reiterate the objective of maintaining public confidence in qualifications specifically in the context of making reasonable adjustments for disabled students? Does this not have the negative implication that making reasonable adjustments for disabled students may somehow undermine public confidence in the qualifications conferred on them and on students generally? Does it not smack of the very mindset which was betrayed in 2005 when the regulator withdrew support on the ground that providing extra time for students who had physical difficulty with reading the exam paper or writing their answers, or an interpreter for a deaf student in oral exams, would be unfair to people who did not need this kind of support? At the very least, does it not appear to collude with such ill-informed assumptions? This is what organisations such as NDCS are worried about, and you can see their point.

You can especially see their point when it is not even necessary. What does the objective of maintaining public confidence in a qualification add to the objective of securing its reliability? If, in the language of the Bill—this is paragraph (b)—you have secured that a qualification gives a reliable indication of the knowledge, skills and understanding of the person upon whom it is conferred, what more do you need to do to maintain public confidence in the qualification—unless, of course, it is to make sure that it is not undermined by making reasonable adjustments for disabled students?

Ofqual already has the objective of maintaining public confidence in qualifications as one of its governing objectives in the legal framework establishing it—the Apprenticeships, Skills, Children and Learning Act, passed last year. It is hard to see why it should be reiterated here in the context of making reasonable adjustments for disabled students unless it is to counter the suggestion that making such adjustments is somehow incompatible with the objective of ensuring public confidence in qualifications. It would be better and would cause less anxiety and heart-searching all round if it was simply removed from the Bill at this point. After all, the Bill is about ensuring equality and not about the governing objectives of a body such as Ofqual. I understand that Ofqual would not have any difficulties with the amendments.

My Lords, I strongly support government Amendment 106B and the amendments in the name of the noble Lord, Lord Low. As he said, qualifications are vital to disabled people; they are the major gateway to gaining employment. Of those disabled people without qualifications, only 23 per cent are employed—which compares starkly with 60 per cent for non-disabled people—and yet disabled people are twice as likely as non-disabled people to have no qualifications at all.

Looking at the figures for educational achievement of deaf young people, I am struck by how many are failing to achieve their potential. Government figures show that in 2008, 72 per cent of deaf students failed to achieve the Government’s benchmark of five GCSEs at grades A* to C, including English and maths. It is vital that we do everything we can to break down the barriers facing deaf and disabled young people, including those which exist in the examination system.

The Government have taken action in this area in the past few years to clarify the law, but there continue to be concerns and there are still reports of problems over exams. For instance, deaf students are not being provided with transcripts for video or radio tapes, or being given extra time to lip-read instructions. A particular example involved a deaf student being asked in an English exam to describe how it felt to be a fan of a music group. The question completely threw him and lowered his confidence for the rest of the exam. When a complaint was made that the question was inappropriate and unfair, the examining bodies refused to accept that the question would disadvantage a student who had no experience of listening to music.

It is clear that disabled students are still being let down by the examining bodies and I hope that the Government will accept the amendments.

My Lords, I will return to the important points made by the noble Lord, Lord Low of Dalston, and the noble Baroness, Lady Wilkins, but I will first respond to the Chancellor of the Duchy of Lancaster. I am very worried by what has happened here. I hope the noble Baroness will accept that, from these Benches, we have long wanted to see on the statute book an Equality Bill that codifies, consolidates and simplifies the law. We have said that on many occasions.

I recall that it is more than a year since I had the opportunity of speaking from this Dispatch Box on the Equal Pay and Flexible Working Bill when we had not seen it. I pressed the noble Baroness, Lady Vadera, who said, “It’s still in draft but we’re going to publish it as soon as possible”. We had to wait several more weeks. It was published in March and on 24 April 2009 had its First Reading. We are now at a point, eight months later, when the Bill has reached the Committee stage in your Lordships’ House, having been through all the stages in the other place.

In her Second Reading speech the Chancellor of the Duchy of Lancaster informed us that she would have to disagree with all the concerns that we raised—there were many—about the lack of sufficient time for scrutiny in another place. The worry was that there would not be enough time here. I recall her saying that the Bill had had considerable scrutiny. It was therefore very worrying when we found, last night, that the Government had to table amendments the day before a Committee stage, when we were quite some way through that stage, and give notice of them late in the evening. This is not a surprise; it has happened before. I am further astonished when these amendments claim that they were,

“inadvertently omitted from the original draft of the Bill”.

I am going to make several suggestions, but all I ask now is that the Minister will, in the light of these amendments, revise her position that the Bill has had more than enough scrutiny. I do not believe that it has.

We are, however, delighted that the omission being rectified has now at least been dealt with. We have made it clear throughout these debates that we support the need for every effort to ensure that inequalities between people with disabilities and non-disabled people are minimised as far as possible. For this reason, I declare firmly that we support the Government’s Amendment 106B, which would strengthen the provisions already contained in the Bill so that disabled people are not put at a disadvantage.

To return to the inadvertent omission, I should like to hear a little more about how on earth this happened. It has been my experience that when such omissions occur, they are like an amber light on the Minister’s radar. I used to have the privilege of scrutinising draft Bills. I understand that there were a number of drafts of this Bill and, no doubt, a number of instructions to parliamentary counsel. I am very worried that there may be other provisions in this absolutely critical Bill that have, sadly, been omitted. There is only one way that we can resolve this now. I am prepared to make this offer to the noble Baroness: if all the original drafts could be placed in the Library of the House, with the instructions to parliamentary counsel that were submitted, I will personally go through all those drafts to ensure that another mistake has not been made somewhere. We do not have much more time to get the Bill right. The one thing we can be sure of is that we will not get another opportunity in the immediate future, because it has taken so long for the Bill to reach us. I think it was first in the party opposite’s manifesto in 2005, and we have had to wait so long. The Minister seems unashamed. Surely we can rely on Ministers carefully to scrutinise drafts to make sure that nothing has gone wrong. I do not want to say any more but I make that offer. I care so deeply, having wanted a Bill such as this for some considerable time, that I will do everything I can to make sure it is right.

As I have said all along, I want above all to see a simple, easy-to-understand Bill so that everybody knows where they stand. One of the problems I share with the noble Lord, Lord Lester of Herne Hill, is that we are both practising—he at the Bar and me as a solicitor. We know that this whole area is slightly uncertain at the moment. People have to see a lawyer to know exactly where they stand. Although I suppose that this is in my interest—

Can my noble friend help me? As he well knows, I am neither a barrister nor a solicitor; I am a simple Back-Bench Peer. If the noble Baroness does not accept his generous and modestly put offer, how I can be assured that the Bill is in a fit state to be passed through the House?

There are only two points on which I disagree with my noble friend. First, he could never be described as a, “simple Back-Bench Peer”, in view of his distinguished record in the Cabinet and elsewhere. That is another matter. Secondly, it is for the noble Baroness, the Chancellor of the Duchy of Lancaster, to respond to the point that he makes. I merely express worries and concerns. I know that the noble Baroness will do everything she can to reassure me. As the First Secretary of State said to me at Questions in the Chamber the other day, “Calm down, it is all going to be okay”. That is all the reassurance I seek.

Going back to the key points raised by the noble Lord, Lord Low of Dalston, and strengthened by the remarkably important speech of the noble Baroness, Lady Wilkins, I agree that asymmetric treatment may be required to ensure that people with disabilities are not put at a disadvantage. To treat someone with disability in exactly the same way as a non-disabled person will not ensure equalities of outcome. As we have discussed throughout the debate, there may need to be extra, reasonable adjustments made to help counter the disadvantages posed to people as a result of their disability and so aid the progress of equality.

The noble Lord, Lord Low, made it clear that charities remain concerned that the needs of students with disability will not be given sufficient weight in the clause. They are particularly concerned that Clause 96(8)(c), which specifies that one of the regulator’s main roles is,

“to maintain public confidence in the qualification”,

may outweigh the needs of people with disabilities. I hope the noble Baroness will be able to inform us of the legal status of these subsections. As the noble Lord, Lord Low, argued, could paragraphs (b) and (c) outweigh the amended paragraph (a)? The Explanatory Notes to this clause state that,

“the appropriate regulator must have regard to the need to ensure disabled candidates are not disadvantaged, and the need to maintain the integrity and public confidence in the qualification”.

Does the noble Baroness agree that while every effort must be made to take the needs of disabled people into account, this clause goes sufficiently far to address the issue?

I support the intentions of the noble Lord, Lord Low of Dalston. We have also consistently called for a regulator to restore public confidence in the examination system. It is vital that standards of education are maintained, strengthened and improved. Of course this should not come at the expense of disabled people—indeed, it is very important to take their needs into account. For this reason, we support the amendment tabled by the noble Lord, Lord Low, which would mean that due regard must be taken.

We also support, as I have already said, Amendment 106B tabled by the Government, which would minimise the extent to which disabled people are disadvantaged from obtaining the qualification because of their disabilities. However, we cannot support the removal of paragraph (c). It is vital to ensure that a regulator has due regard to the absolute need to ensure that standards rise and to maintain public confidence in the examination system. We feel, therefore, that with Amendment 106B the clause will go far enough to ensuring that the needs of disabled people are met.

Does the noble Lord accept that Ofqual already has the public confidence objective given to it as one of its governing objectives in the Apprenticeships, Skills, Children and Learning Act so that there is not really any necessity to reiterate it here in this context?

I do not think we can reiterate it too often. It is vital that public confidence is maintained. I concede the truth of what the noble Lord has just said but I think there is an additional necessity to keep stressing that fact.

I apologise for not being here to hear the speech by the noble Baroness, Lady Wilkins. We support the object of the amendment and look forward to what the Minister will say. We closely ally with what the noble Lord, Lord Hunt of Wirral, has said.

First, I will deal with the issue of the inadvertent omission from the Bill and the way in which the Government have dealt with this. I apologised in the first instance and I share the concern expressed by the noble Lord that it is only at this stage that those omissions have become obvious. Am I embarrassed? Yes. Am I angry? Yes. Am I frustrated? Yes. That does not mean that I do not think that the Bill was scrutinised in the other place. Clearly, there is something lacking in the scrutiny of the other place. That is not to say that they did not have enough time. I believe that quality rather than quantity is of importance. I am very proud in this House of the fact that we give qualitative appraisal and scrutiny of Bills. I apologise to all noble Lords. The noble Lord will not be surprised to hear that I will not be taking him up on his kind offer. However, I have asked the Bill team to toothcomb the rest of the Bill to ensure that we are not in a similar situation during later stages.

General qualifications, such as GCSEs and A-levels, are a core part of our education system. They recognise and reflect what young people have achieved and they help promote the skills and knowledge that are essential for future prosperity. It is vital that all young people are able to access qualifications to allow them to progress to further opportunities in learning and work. Therefore, the qualification regulators, which are given functions under Clause 96, must have equality as a priority and they will, of course, be covered by the public sector equality duty.

As the noble Lord, Lord Low, said in his, as usual, eloquent speech, of all aspects of equality it is access to qualifications for disabled people which can be a particular challenge. We need a system which will design qualifications and assessments which are as accessible as possible to those with disabilities. The statistics given by my noble friend Lady Wilkins were indeed shocking.

I am grateful to all noble Lords for their support on Amendment 106AZA, which was laid as a result of discussions with the noble Lord, Lord Low. My ministerial colleague, Iain Wright of DCSF, recently met the noble Lord, along with the EHRC and Ofqual, to discuss his concerns. At that discussion, the noble Lord made a compelling case that the Bill appeared not to give sufficient weight to the importance of access. That was certainly not the intention, so the Government accepted that this amendment should be made. It requires the regulators to have regard to the need to minimise the extent to which disabled people are disadvantaged.

We hoped that this amendment would satisfy the noble Lord, but he has tabled three further amendments, so he clearly still has concerns. His first amendment requires the regulators to have due regard to the three factors listed. Legally, there is no substantive difference between “regard” and “due regard”. It is clear that the regulators have to take account of the three factors listed. The phrase “have regard” is the same as that used in the Act establishing Ofqual, so it seems appropriate that the same phrase should be used here.

His second amendment changes subsection 8(a) to refer to avoiding,

“substantial disadvantage to disabled persons”.

We believe that the wording in the Bill is appropriate. It sends a clear and powerful signal about the importance of access. If the regulator could not demonstrate that it had minimised disadvantage, it could be challenged in the courts, so I am not convinced that this amendment makes any substantive difference.

His final amendment leaves out subsection 8(c), which refers to confidence. Confidence is the currency of qualifications. Of course, it must be informed confidence. No regulator would or should be guided by prejudice or whim. If it was, it would risk breaching its general equality duty. I heard what the noble Lord said about Ofqual’s duty in respect of confidence, but I agree with the noble Lord, Lord Hunt. In the Government’s view, the damage to disabled people if their qualifications were no longer trusted would be incalculable. If we accepted this amendment, we would be doing a disservice to many disabled people. Consideration of public confidence is unlikely to affect whether a regulator decides to specify areas where the duty to make reasonable adjustments does not apply, but it might affect which adjustments the regulator concluded were appropriate.

The noble Lord, Lord Hunt, asked whether subsections 8(b) and 8(c) outweigh subsection 8(a). The regulator would need to take all three factors into account and show that it had done so. The subsections need to be balanced against each other. No one factor is more important than the others. With that explanation, I hope that the noble Lord, Lord Low, will not move his amendments.

Amendment 106AZA agreed.

Amendments 106AZB and 106AZC

Moved by

106AZB: Clause 91, page 58, line 13, at end insert—

“( ) a disabled person who holds or has applied for a qualification conferred by the institution.”

106AZC: Clause 91, page 58, line 25, at end insert—

“( ) The responsible body of such an institution must not victimise a disabled person—

(a) in the arrangements it makes for deciding upon whom to confer a qualification;(b) as to the terms on which it is prepared to confer a qualification on the person;(c) by not conferring a qualification on the person;(d) by withdrawing a qualification from the person or varying the terms on which the person holds it.”

Amendments 106AZB and 106AZC agreed.

Clause 91, as amended, agreed.

Clauses 92 to 94 agreed.

Schedule 12 agreed.

Clause 95 agreed.

Clause 96 : Qualifications bodies

Amendments 106AA and 106AB not moved.

Amendment 106B

Moved by

106B: Clause 96, page 62, line 36, leave out “desirability of minimising” and insert “need to minimise”

Amendment 106B agreed.

Amendment 106C not moved.

Clause 96, as amended, agreed.

Clauses 97 and 98 agreed.

Schedule 13 : Education: reasonable adjustments

Amendment 107

Moved by

107: Schedule 13, page 182, line 36, leave out “requirement” and insert “and third requirements”

Amendment 107 agreed.

Amendment 107A not moved.

Amendment 107B

Moved by

107B: Schedule 13, page 182, line 36, at end insert—

“( ) For the purposes of this paragraph, the reference in section 20(3), (4) or (5) to a disabled person is to disabled persons generally.”

There is a lot I could say about this but I think we are all anxious to make more rapid progress with the Bill and so I shall truncate my remarks to the bare minimum.

In Committee on 19 January, the noble Baroness, Lady Wilkins, expressed concern that the reasonable adjustment duty in relation to education was not anticipatory; that is, owed to disabled people generally, not just to an individual disabled person. The Minister replied that the Government fully intended it to be anticipatory and that the Act as drafted made it anticipatory. She promised to write, setting out the legal analysis which would make that clear. The Minister has fulfilled her promise. She replied to the noble Baroness, Lady Wilkins, the following day and circulated copies of the letter to all the rest of us who took part in the debate, so the noble Baroness and I have had a flourishing correspondence in the past few days.

However, notwithstanding the Minister’s letter, concerns still remain. The Act uses language in relation to services, transport and clubs or associations which makes it clear beyond any shadow of a doubt that the duty in respect of those things is anticipatory, but uses different language in relation to education, which, inevitably, to put it at its lowest, puts the matter in doubt. I have a detailed brief from the Disability Charities Consortium substantiating that point, but I do not want to trouble the Committee with all of that because, as I say, I am anxious, as we all are—I am sure the Minister is—to make progress. However, beside that brief, it seems to me that the Minister’s letter looks more like ex post facto rationalisation than an open and shut case. In addition, the approach which the courts have recently taken to codes of practice, guidance and ministerial assurances in disability cases makes it plain that these can prove all too flimsy as a basis on which to found a legal duty.

I believe that at this point the best course would be if the Government could see their way to accept my amendments for the avoidance of doubt. That would mean that the reasonable adjustment duty in relation to education was anticipatory—the Government fully acknowledge that is their intention—and would greatly reassure disabled people. If the Government could undertake to look at this matter further, I would be happy to withdraw my amendments. I beg to move.

We have just heard a brief but very important speech from the noble Lord, Lord Low of Dalston. As he explained, these amendments underline the fact that the duty to make reasonable adjustments in relation to education must be an anticipatory duty and not just a reaction to the particular circumstances of an individual person with disability. In other words, I suppose the governing body of a school and the body in charge of the recreational or training facility should have to ensure, as a matter of practice, that the school, certain further or higher education courses and its recreational or training facilities should be created and maintained bearing in mind the need for accessibility for students with disability.

On these Benches, we would very much agree with the principle behind these amendments. We are concerned that as much as possible should be done to ensure that the disadvantages which disabled students may suffer as a result of their disability are minimised as far as possible. Every effort should be made to give disabled students an education that is equal to that of non-disabled students. That may require asymmetric treatment of a disabled pupil or student. Perhaps in some cases that does not happen to the extent that it should. In May last year, the Department for Business, Innovation and the Skills released a report which showed that inequalities in secondary education resulted in disabled 16 year-olds having lower GCSE attainment than those who are not disabled. Clearly, there are problems to be addressed.

Nevertheless, on these Benches we feel that the Bill as it stands already contains sufficient provision to ensure that education authorities anticipate the needs of disabled students and make reasonable adjustments in accordance with that. I saw in the Explanatory Notes constant reference to the duty to ensure that certain matters,

“do not place disabled pupils at a substantial disadvantage in comparison to non-disabled pupils”.

That theme has been running through a number of our debates. Therefore, that duty is strong: it both allows and actively encourages education authorities to ensure that reasonable adjustments are made for people with disabilities. Of course, there are places where improvements could be made but, on the whole, we believe that the Bill contains sufficient provision in these areas. I now look to the Minister to reassure me that I am right.

I shall speak to Amendments 107B, 108EB and 108GA in the name of the noble Lord, Lord Low. As the noble Lord explained, these amendments would make explicit the anticipatory nature of the reasonable adjustment duty; that is, when considering a particular reasonable adjustment, education providers need to consider the needs of disabled people more generally. I agree that the consideration of such duties needs to be anticipatory and they are already framed differently from the DDA.

In her letter of 20 January, my noble friend the Leader of the House has already explained that in detail to my noble friend Lady Wilkins in response to the matter raised in Committee on 19 January. The noble Lord, Lord Low, has received a copy of that, as he said, and it is available in the Library.

This is not a fundamental disagreement of policy or principle, as we and the noble Lord, Lord Hunt, agree that the reasonable adjustment duty should be anticipatory. There is simply a disagreement on drafting. The noble Lord, Lord Low, and my noble friend Lady Wilkins want it to be drafted differently in the Bill. I understand their desire to make that clearer and, therefore, we shall go away and consider whether anything further can be done to this part of the Bill. On that basis, I hope the noble Lord will withdraw his amendment.

Will the Minister say a little more about when she anticipates being able to return to the House or reply in writing to noble Lords who have expressed these doubts? What sort of timescale are we talking about, now that she has very kindly agreed to go away and have a further look?

I suspect that we will start discussing drafting probably within the next few days, so we can be ready for Report and reach some agreement either that the current wording works for everyone or that we need to do something to it. We will, of course, consult noble Lords about that in advance of Report.

The noble Lord, Lord Low, explained very clearly that we have discussed these issues with a range of stakeholders and noble Lords who are interested in these issues, such as my noble friend Lady Wilkins and other colleagues on other Benches. We shall continue to have that discussion.

To follow up the issue raised by the noble Lord, Lord Hunt of Wirral, it is extremely important that we have a Report stage, because many of the concessions or differences can be crystallised only at Report. The longer that we go on in Committee, the more difficult it becomes. One answer to the noble Lord, Lord Hunt, is that this will be done before Report, otherwise we will have been scrutinising carefully and with high quality but it will be a waste of time in the outcome, because the Bill will then leave this House without a Report stage and we will have that dreadful thing called “wash-up”. We are very concerned that there will be a Report stage, where all this can be dealt with.

I absolutely agree with the noble Lord, and we intend that this Bill should reach the statute books. However, it is not entirely—not even mostly—in the Government’s hands. We are very appreciative of the co-operation that we are receiving across the House to expedite this Committee stage.

The Minister has asked me to withdraw my amendments, and I am happy to do that—all the more so since she has agreed to take the matter away and look further at it. I, too, shall be more than happy to do that, to participate in the discussions and to be of whatever help I can be towards reaching a solution with which we are all happy. I beg leave to withdraw the amendment.

Amendment 107B withdrawn.

Amendment 108

Moved by

108: Schedule 13, page 183, line 4, leave out first “the” and insert “each”

Amendment 108 agreed.

Amendments 108A to 108E not moved.

Amendment 108EA

Moved by

108EA: Schedule 13, page 184, line 6, leave out “or third”

Amendment 108EA agreed.

Amendments 108EB to 108K not moved.

Schedule 13, as amended, agreed.

Clause 99 agreed.

Schedule 14 agreed.

Clause 100 agreed.

Clause 101 : Members and associates

Amendment 108KZA

Moved by

108KZA: Clause 101, page 65, line 13, at end insert—

“( ) This section does not apply to financial charges imposed for different categories of membership within an association.”

My Lords, I have not previously intervened in the passage of the Bill but I have come across issues that I feel must be addressed at this time. I realise that a number of similar issues were considered when your Lordships’ Committee was discussing the provision of goods and services under Part 3 of the Bill. We now come to Part 7 and the question of associations. I have tabled the amendment at this stage because the Bill has seen fit to introduce a category in Part 7 which would mean that membership of an association cannot be regarded as quite the same thing as the supply of goods and services.

My concern focuses on sports clubs, especially golf clubs. I declare an interest as the owner and managing director of a golf club. It was in that capacity that the concerns of the Scottish Golf Union, the governing body of the sport in Scotland, were raised with me. My amendment addresses those concerns.

The exceptions provided in the Bill to the offence of discrimination, as they were discussed on the second day in Committee, focus on allowing businesses to provide distinctly different services to specified groups of people. My concern is to determine from the Minister whether the fact that in clubs, particularly in golf clubs, the same goods or services are offered to all but at a different price may entitle some members to feel that they are suffering discrimination and to call for a remedy under the Bill.

A particular focus is placed on the definition of the protective category of age. In golf clubs, there can be at least four distinct groups: the juniors, who are under 18, pay little in terms of subscription and are exempted under the scope of the Bill; those in tertiary education or who are just starting their careers—people aged between 18 and about 30—are estimated to have financial constraints, and so clubs can offer them up to a 70 per cent reduction in their subscription; those between the ages of 28 and 65 are in the group to which the full subscription applies; and those who have long membership—a similar point was made by my noble friend Lord Elton—and are over the age of 65 gain huge reductions, often of 50 per cent or more. The unusual thing about those in the latter group in a golf club is not that they will benefit less than others but that nowadays they obtain far more use of the course and its facilities because they have time. It would be easy for those in the middle group to feel that they are being discriminated against because there is such a big concession to those in the older group and they have less chance to benefit. This is an accepted part of golf club culture and my amendment would leave it clearly in the hands of the clubs to take whatever measures on pricing they prefer.

Can the Minister clarify whether the powers in the Bill as it stands will allow this situation to continue freely, or will the implementation of the Bill constitute some kind of regulation of these differentials? The situation would have been clearer if the Government had felt able to accept Amendment 57ZA to Clause 29, moved by my noble friend Lady Warsi on the second day in Committee, which sought to allow that a differential in the provision of services was permitted if,

“the difference was because of a material factor which is a proportionate means of achieving a legitimate aim”.

The Government felt that this was unnecessary and so my amendment seeks to clarify the situation.

For golf clubs, this still leaves the issue contained in the other half of my noble friend’s amendment—the ability to allow some differentiation for the characteristic of sex. In sports involving strength as well as skill, such as athletics and tennis—lo and behold, the Olympics will be here in another year and a half—there is not only the question of having separate changing rooms but it is felt proper to have designated times or separate competitions for women and men. It must be clear that there is no provision in the Bill for some brave young blade to insist that he is going to compete in the ladies’ section, or that equality means that no separate provision can be made for a ladies’ day at a golf club. The pace of progress around a golf course is different on a ladies’ day than it is on any occasion reserved for gentlemen and, given the chance, this provides a benefit for each in turn. Members would regard it as detrimental if the provisions of the Bill were to interfere in these arrangements. I beg to move.

My Lords, I do not want to hold up the debate by explaining why I am against this amendment; suffice to say the background to this is set out extremely clearly on page 90 of the Explanatory Notes. When we were legislating on race discrimination, in the prehistoric times of the 1970s, we ruled out colour bars in clubs, including golf clubs. At that stage we did not deal with sex discrimination and for the subsequent period many golf clubs practised systemic discrimination against women by admitting them as members, taking their money and then treating them less favourably. This House has debated that again and again and it is wholly beneficial that we should deal with this in the way that Clause 101 does. One of the examples given on page 90 is where,

“A private members’ golf club, which has members of both sexes, requires its female members to play only on certain days while allowing male members to play at all times”.

This is an example of direct discrimination. The amendment would drive a coach and horses through Clause 101 and we would oppose it.

I think the noble Lord, Lord Lester, has demonstrated why my noble friend the Duke of Montrose was quite right to raise these issues. There is widespread misunderstanding. I very much hope that the Minister can throw some light on this and reassure my noble friend.

We have debated the different approaches that can be made by groups of particular ages, Saga for example, and it would be very helpful if the Minister could explain these differences.

My Lords, I am very happy to reassure the noble Duke, the Duke of Montrose, and explain what is meant by this clause. This Bill will not prevent private clubs from setting differential membership rates as long as each category of membership is open to all regardless of their protected characteristics. Clubs will still be able to offer different types of membership at different prices or on different terms, such as peak or off-peak, playing membership of a golf club, or full and associate membership. Indeed, age-based concessions and benefits are an important means of ensuring that all people can participate more fully in society, in the economy and in clubs which play such an important part of many people’s lives, as long as they will be permitted to continue when the provisions prohibiting age discrimination by clubs are brought into force in 2012, along with the services provisions relating to age. This will allow us to ensure that appropriate exceptions are in place to allow age-based concessions to continue. Those regulations will do precisely that. I hope the noble Duke will accept that.

The issue of women was also raised. I would like to reassure noble Lords that Clause 193 of the Bill provides an exemption which allows men and women to be treated differently in any sport or game, or other activity of a competitive nature where the physical strength, stamina or physique of the average woman puts her at a disadvantage compared to the average man. This exception will be maintained.

Clause 101 simply requires that private clubs apply the same terms and conditions for membership equally to people regardless of their protected characteristics. This would mean, for example, that men and women who are charged the same price for each category of membership to a golf club will have the same access to club facilities, such as the bar.

Private clubs hold an important place in our society and we do not think it is right for them to treat some of their members or associates as second-class citizens. That is why we have taken the opportunity, through this Bill, to extend the existing prohibitions on private clubs to stop them from discriminating against their current and potential members, associates and guests. Protection will be provided for the first time in relation to sex, religion or belief, age and gender reassignment. Existing law already provides protection because of a person’s race, sexual orientation and disability.

In the past, we encouraged private clubs to address the issue of discrimination, particularly against women, voluntarily, but people continue to complain that they are experiencing discrimination. For example, some female members of golf clubs state that they are still not able to vote as full members of the club, they are only able to play on certain days and their access to certain facilities, such as the club bar, is restricted. I attended a golf club annual dinner not long ago with my brother-in-law and some of the women members explained that they were very proud that their club no longer did those things. It made the club a much healthier place to be. We believe that such restrictions are unacceptable and that is why we decided to legislate.

I hope that my explanations about how freedoms are already protected within the provision will reassure the noble Duke and that he will withdraw his amendment.

I apologise to the Committee for being late and arriving after my noble friend had already started. The question is not so much about women and men having equal rights. This applies to golf clubs much more than tennis clubs. There are certain days and certain times within the day that are set aside for ladies or men. I want to make sure that that is not jeopardised in this section of the Bill.

I think that the explanation that I gave about the competitive nature of sport and the recognition of the different strength and stamina required covers the point about ladies’ days. The point is to ensure that nobody is being discriminated against in terms of their participation.

Would the Minister please revisit that point because I am not sure that she has dealt with it as fully as she might? It may be that we shall return to it at a later stage, but it would be helpful if the Minister could clarify the position for us.

Is this the right position? The Sex Discrimination Act always contained an exception whereby women or men on average in a particular sport were not equal in their abilities. That leads to discrimination against me when I try to play golf because women are allowed to have a golf tee about 100 yards nearer the hole than me, even though any woman I know can drive further than I can. That discrimination is allowed under the Bill on the assumption that women, poor things, are not able to drive as far as me. It is completely wrong but that is the assumption. It means that you are then allowed to have all these separate ladies’ days, gentlemen’s days and so forth. Of course, as women advance, they become equally as good as men and one day the difference will disappear, but meanwhile we work on the assumption that men are better, physically, at golf than women and therefore differences of treatment are still permitted. I think that that is the basic assumption.

I think that that is right, but women are just more elegant at it. I think that I was correct in saying that so long as there is also a men’s day, there is no reason why there should not be a ladies’ day.

My Lords, I thank the Minister for stating so clearly the answers to some of my questions. I also thank the noble Lord, Lord Lester, for recounting so much of the history of golf to us and the battles that have been fought. They may not be entirely won at the present time. My amendment did not in any way presuppose that there would be any discrimination against anyone: it was to do with the application of equal opportunities for all at all stages—that those who requested different treatment might be allowed to do so at a different price. In the light of all that we have heard, I beg leave to withdraw the amendment.

Amendment 108KZA withdrawn.

Clause 101 agreed.

Clauses 102 to 105 agreed.

Amendment 108KA

Moved by

108KA: After Clause 105, insert the following new Clause—

“Information about diversity in range of candidates etc.

(1) This section applies to an association which is a registered political party.

(2) If the party had candidates at a relevant election, the party must, in accordance with regulations made by a Minister of the Crown, publish information relating to protected characteristics of persons who come within a description prescribed in the regulations in accordance with subsection (3).

(3) One or more of the following descriptions may be prescribed for the purposes of subsection (2)—

(a) successful applicants for nomination as a candidate at the relevant election;(b) unsuccessful applicants for nomination as a candidate at that election;(c) candidates elected at that election;(d) candidates who are not elected at that election.(4) The duty imposed by subsection (2) applies only in so far as it is possible to publish information in a manner that ensures that no person to whom the information relates can be identified from that information.

(5) The following elections are relevant elections—

(a) Parliamentary Elections;(b) elections to the European Parliament;(c) elections to the Scottish Parliament;(d) elections to the National Assembly for Wales.(6) This section does not apply to the following protected characteristics—

(a) marriage and civil partnership;(b) pregnancy and maternity.(7) The regulations may provide that the information to be published—

(a) must (subject to subsection (6)) relate to all protected characteristics or only to such as are prescribed; (b) must include a statement, in respect of each protected characteristic to which the information relates, of the proportion that the number of persons asked to give the information to the party bears to the number of persons who provided it.(8) Regulations under this section may prescribe—

(a) descriptions of information;(b) descriptions of political party to which the duty is to apply;(c) the time at which information is to be published;(d) the form and manner in which information is to be published;(e) the period for which information is to be published.(9) Provision by virtue of subsection (8)(b) may, in particular, provide that the duty imposed by subsection (2) does not apply to a party which had candidates in fewer constituencies in the election concerned than a prescribed number.

(10) Regulations under this section—

(a) may provide that the duty imposed by subsection (2) applies only to such relevant elections as are prescribed;(b) may provide that a by-election or other election to fill a vacancy is not to be treated as relevant election or is to be so treated only to a prescribed extent;(c) may amend this section so as to provide for the duty imposed by subsection (2) to apply in the case of additional descriptions of election.(11) Nothing in this section authorises a political party to require a person to provide information to it.”

My Lords, I shall speak also to government Amendment 108Q, government Amendment 134A, government Amendment 135B, and government Amendment 136ZE.

The aim of Amendment 108KA is to increase public accountability and act as an incentive for political parties to identify and remove barriers which cause or contribute to the under-representation of certain groups in the political life of this country. It will require registered political parties to publish information on the diversity of their candidate selections at particular elections, in accordance with regulations made under the power contained in this provision. The amendment responds to a recommendation by the Speaker’s Conference, which over the past year has considered the issue of underrepresentation in the other place. It is intended to encourage broader representation and increased involvement of all groups in the democratic process.

It also responds to an amendment tabled on Report in the other place and supported by honourable Members from all three main parties. In their evidence to the Speaker’s Conference, the leaders of all three main political parties expressed their openness to the principle of publishing diversity data in relation to candidate selections. This is an important indication of their commitment to the promotion of fairer representation in Parliament and to the gathering and publication of information about candidates and potential candidates as a means of achieving this.

The Solicitor-General wrote to the vice-chairman of the Speaker’s Conference, copied to Liberal and Conservative party leaders, on the Equality Bill in advance of tabling this amendment. Ministers are writing to the leaders of the main parties, and also to the Scottish National Party and Plaid Cymru, seeking further views and reassuring them that political parties will be fully involved as the scope and detail of the regulations to be made under this provision are developed.

Amendment 108KA applies to registered political parties. It and the regulations made under it will require those that field candidates at relevant elections, which may include parliamentary elections and elections to the European Parliament, the Scottish Parliament and National Assembly for Wales, to publish certain information about the protected characteristics of their candidates and prospective candidates. The regulations will specify the protected characteristics on which parties must publish information. These may include age, disability, gender reassignment, race, sex, sexual orientation, religion or belief. Those are all the protected characteristics covered in Clause 4, with the exception of marriage, civil partnership and pregnancy.

Nothing in this provision will require or oblige political parties to require individuals to disclose any personal information that they do not wish to, nor does it require parties to publish personal information about individuals from which they can be identified. It is important to stress that point. The regulations will set out which elections are relevant elections for the purposes of this provision. They will also establish who is required to publish the information. For example, it may be that only those parties which field candidates for a certain number of seats will be required to do so. They will set out when and for how long the information is to be published, and the form and manner in which it must be published. For example, that might be on the internet with the data broken down in particular ways.

Amendment 135B ensures that the regulations will be subject to affirmative procedure and that the Government will consult about the detail of what they require before laying them before Parliament. We are particularly keen to involve the Equality and Human Rights Commission, the Electoral Commission and the parties themselves in ensuring that the scope of the requirements are both proportionate and effective. We want them to result in the collection and publication of meaningful and useful data that will help people identify more clearly where the gaps are and what barriers some individuals may face throughout the selection process.

Amendment 108Q prevents requirements imposed under Amendment 108KA from being enforced through the courts. Instead, the Equality and Human Rights Commission will ensure compliance under its existing powers. Amendment 136ZE amends Schedule 26 to establish this.

There is clear statistical evidence that women and people from minority-ethnic communities are underrepresented as Members of Parliament and of other elected institutions. There is also likely to be underrepresentation of disabled, lesbian, gay and transgender people, but we do not know that because the information is not available. There is a strong argument that increasing participation by all groups in civic and political life will lead to a stronger and more cohesive society, and to the strengthening of our democracy. We see transparency and openness by political parties in relation to their candidates as an important way of achieving that aim.

Amendment 134A amends Schedule 24 to insert a reference to Amendment 108KA. Schedule 24 lists all the exceptions to the harmonisation provisions in Clause 196. Clause 196 applies to provisions which may need amending to reflect changes in European law. Amendment 134A makes it clear that the diversity reporting duty contained in Amendment 108KA would not be subject to any regulations under the harmonisation power, since the provision is not within the scope of European jurisdiction. I beg to move.

My Lords, in his evidence session to the Speaker’s Conference, my right honourable friend David Cameron accepted the principle of reporting candidate data and explained that our determination to make progress on the diversity of our candidates means that we monitor closely their gender, ethnicity and any declared disability. However, my right honourable friend made it explicit that we do not ask our candidates about their sexual orientation.

When I was vice-chair of the Conservative Party with special responsibility for candidates, I had a number of highly emotional discussions with candidates on whether they should disclose their sexual orientation. Often, their own families did not know, which caused real anguish. I know that the new clause makes it clear that no individual is required to provide information and that the data will be anonymised. That is fine for large categories such as gender and ethnicity, but the more one goes down the list of required data, one sees the numbers becoming smaller. Our fear, particularly with gender reassignment and sexual orientation, is that some candidates may not wish to disclose it, leaving a small number of candidates who are happy to answer. I can well imagine the media and certain other people then going out to find who those candidates may be. Something that is designed to help might have a negative outcome.

I understand that many companies collect these data. However, that is for internal use, whereas these data will be in the public domain. We are also concerned about asking such direct and sensitive questions. My right honourable friend Theresa May had a useful meeting this week with Ben Summerskill at Stonewall, who said that considerable work has been done to ensure that questions are asked sensitively. I would welcome assurance from the Minister that the regulations will respect these personal issues, call for sensitivity and, above all, preserve privacy.

I have two questions. Why was it decided to make only marriage and civil partnerships and pregnancy and maternity protected characteristics? Will new subsection (5)(a) apply to candidates for parliamentary elections in Northern Ireland?

While we agree in principle with the amendments, we think that the collection of data is useless unless there is a culture and ethos to promote diversity. My own party has been innovative and determined in this area. Whatever the outcome of the next general election, we hope that our efforts will be there for all to see.

My Lords, in speaking on this delicate matter, I should make it clear that I have no clue as to what my party said at the Speaker's Conference, so what I am about to say may be politically incorrect, in which case I shall probably be corrected by my noble friend Lady Northover, who knows much more about these things than I do. I agree with what has been said by the noble Baroness, Lady Morris of Bolton, and the Minister. This is a very sensitive issue, because we are concerned with personal privacy. When I did my own Private Member’s Bill, I treated sexuality and religion differently from the other strands, because anything that involves monitoring and asking people about their sexuality, religion or lack of it may invade personal privacy. For that reason, we try to deal with it in a different way.

I am all in favour of positive action, especially to ensure that both halves of the human race are properly reflected in our elected parliamentary and other bodies. As a short or medium-term measure, I support positive action to achieve that, including, for example, women- only shortlists. One reservation that I have about treating this subject across the board is not only personal privacy but also that we do not want our elected Parliament to become like the United Nations. In other words, we do not want to start having quotas in which each interest group, whether ethnic or religious or not religious, gay or straight, or old or young are able to clamour for equal representation—quite apart from what Edmund Burke would have said about that to the electors of Bristol about the duties of a Member of Parliament to all her or his constituents. It is undesirable and divisive to divide people up into herds or groups and then start saying that this is about group rights, and so on.

I am not saying in any way that I am opposed to these amendments. I am simply saying that the matter is very sensitive and I would hope that the kind of remarks that the noble Baroness, Lady Morris, has made and I have made reflect also the views of the Government in their approach to these amendments.

My Lords, I align myself with the sentiments expressed by the noble Baroness, Lady Morris, and the noble Lord, Lord Lester. What puzzles me in the drafting of this amendment is what is almost a duty in subsection (2). It says “must” and refers to,

“regulations made by a Minister of the Crown”,

and says that the party must,

“publish information relating to protected characteristics of persons who come”,

and so on. Subsection (11) of the new clause then says:

“Nothing in this section authorises a political party to require a person to provide information to it”.

How is it going to do it? On one hand it must and on the other it cannot. For me, the drafting does not help.

Secondly, human rights accrue to humans because they are human beings; they do not accrue to groups. It would worry me if a particular party seemed to have information that showed that it had a particular group of a protected category in large numbers so that you could then say that the party that did not have the same number was a party that did not welcome anybody. This is a charter for those who always want to cause grief. Some people actually want to remain private in their particular ways of saying things. It would be difficult to ask someone what their religion was, because the person might say, “It’s none of your business—why are you asking me?” Must we really reduce our individual persons to declaring always who they are, where they come from and where they belong, their ethnicity and agenda and sexual orientation? Some of those things may matter in terms of discrimination, if you want to tackle it; but if this kind of information becomes available, like it or not, some people will misuse it. For the sake of all our candidates, I think that this is ill conceived.

My Lords, I have one further thing to ask. Does the Minister agree that what is really important is to eliminate direct and indirect discrimination in all the political parties with regard to the selection of candidates? If that is properly followed through, these provisions will become less important.

My Lords, I shall be quick; I appreciate the time factor. I think the Minister will understand that this is a major advance in a range of fields, not least regarding transparency, which the electorate understands. We all know the rumours, allegations and snide and derogatory remarks about the general make-up of candidates in a party, so I congratulate the opposition Front Bench for having so clearly told us that the principle that is enshrined in this amendment, if not the detail, is endorsed by their party leader. That is based on his sensitivity to the charge that may be made, as it may to any party, that within that party there is an element that is undesirable.

The most reverend Primate has indicated that this could be a charter for causing grief. That is always possible; at the moment, without any aspect of legislation, grief can already be created.

Other than the nitpicking that might occur regarding one aspect or another, the principle that the public are entitled to have as much information as possible about the make-up of candidates—not individually, no names to be published, no ability for people to be identified—the general principle is sound. The Government ought to be congratulated on bringing forward the amendment.

My Lords, like the most reverend Primate and the noble Lord, Lord Lester of Herne Hill, I enter a cautionary note before the amendments are incorporated into the Bill. I am pleased to see the noble Lord, Lord Wallace of Tankerness, in his place; when we served in the other place, I served as Chief Whip of the old Liberal Party and the noble Lord was the Deputy Chief Whip. In that capacity I was chairman of the party’s candidates committee.

Like the noble Lord, Lord Lester, I had anxieties about the failure to provide sufficient candidates of a variety to show the make-up of society as a whole, but unlike him I did not come to the conclusion that we therefore needed all-women shortlists, any more than I believe in all-men shortlists. I was able to change the rules at that time so that candidate lists of three would always include one person of the opposite sex, whatever that might be. I felt that that moved towards the idea of a more representative balance of candidates while avoiding some of the problems of quotas. Ultimately, merit should surely be high on the agenda, and we should be choosing people who will serve in both Houses of Parliament.

I have enormous admiration for the noble Lord, Lord Graham of Edmonton—we served together in another place—and I know that it was as a result of his experience on the ground that he was such a tremendous voice for people from difficult backgrounds because he himself understood those backgrounds very well. I sense that we have created in Parliament a class of people who may represent the Westminster village but often do not represent life in the world outside. Maybe that is one of the reasons why organisations like the BNP have been attracting support. We must be careful that we do not so organise ourselves as to tick so many boxes that Parliament itself becomes unrepresentative of the nation. People should be chosen on the basis of merit.

I argued in your Lordships’ House, in a short debate that I initiated a couple of weeks ago, in favour of the single transferable voting system. The reason why I did so was that when you draw up lists of candidates under STV, it is impossible for a political party to put forward a list that is entirely drawn from one particular background. Sometimes we do not go for the more fundamental solutions, but look for the cosmetic answers to issues.

I hope that we will look more deeply at that question, rather than rely on something that in itself may distort the picture. As the noble Baroness, Lady Morris, rightly said, people will be free not to give information if they do not wish to do so. The noble Lord, Lord Lester, referred to that when he said that privacy is an important issue. If they do not give such information—someone may have a religious affiliation and may change later—it makes a mockery of the data that have been collected. The data would not then be accurate and would make all sorts of judgments on the basis of things that are not necessarily true.

The most reverend Primate also spoke about the balance that has to be struck between privacy and openness. It is strange that things which one would imagine should be open in society often are kept secret and things to which people should have access often are concealed. Many times these concern grave issues of public policy. However, issues that are legitimately private are trawled across the front pages of national newspapers. Sometimes, rather than peering into people’s souls or under their bed-clothes, it would be better to look at the type of matters in which Parliament should be involved, which affect the lives of people every day.

As I have suggested, religion is particularly difficult to assess. Not only do people sometimes change their religion by converting from one to another, there are so many religions and denominations within religions that it would be very difficult to measure. Do the Government need to make sure that 0.7 per cent of Labour candidates, for instance, are Jedi in line with the results of the 2001 census? What about local concentrations? In Brighton and Hove, the Jedi make up 2.7 per cent of the population according to the census, whereas the population of Easington has just 0.2 per cent. Is Brighton more likely therefore to get a Jedi MP? I make the point for obvious risible reasons. We are in grave danger sometimes when we go down this route of constantly looking to try to make sure that every group is represented in a particular way, but we end up with something that is not representative at all. At a time when there is great cynicism about Parliament and people feel very disillusioned about the political process, I hope that we will do nothing to reinforce that.

My Lords, following the noble Baroness, Lady Morris, not only are there no doubt a number of candidates who would much rather not reveal their sexual preferences to anyone, even if the answers are anonymous, there are surely a number of candidates who are disabled in some way which is not visible to third parties who also want to keep quiet about it. In view of proposed new subsection (11) under Amendment 108KA, which would permit candidates to refuse to reply to a question, does the noble Baroness agree that the statistics which will eventually be published, will not be entirely accurate?

My Lords, I turn to something which the noble Lord, Lord Alton, said when he was talking about the Jedi and candidates. I am accepting of this in principle, but the raw data are often not enough to change things. For example, I often had candidates who did not want to be categorised. They fiercely wanted to be Conservatives, which was all that they wanted to be. They did not want to be pigeon-holed anywhere.

One could say that each party should have so many minority ethnic candidates, but quite often whether we are changing mainstream society and getting our candidates into mainstream seats is as important. To have candidates who are elected where there is a large minority ethnic community is not the same as getting minority ethnic candidates elected where there is a small minority ethnic community. These things are important as well. I am not sure that the raw data will give the whole picture. The Minister is right. Each party has to work on this unceasingly.

My Lords, I think that I concur with what many have said in terms of the sensitivity relating to sexuality. However, there is a difference in terms of public representation between those people who are gay and those who are openly gay. There is a real differentiation to make when monitoring those people in public life who stand up and say, “I am gay”, and those who have to hide their sexuality. I am not sure that people who are hiding their sexuality, for whatever reason, wherever they sit in terms of their parties, particularly represent me, as a gay man, in their party if they cannot bring themselves to say that they are gay. An issue that I would like the Minister to reflect on is that when we look at the categories that we are monitoring, there is a difference between being openly gay and being gay, for the purposes of candidates.

My Lords, as noble Lords know, I have never been keen on women-only shortlists, but I have gradually changed my position, and I suspect that that has been the case for quite a number of your Lordships. This is a step in the right direction. We are gradually changing and it would be good to have some facts and figures, however much they may be distorted, inaccurate and so on. We change our position on religion or whatever it happens to be several times in our lifetime. It is the thrust of the movement that is important.

I applaud the approach of the noble Baroness, Lady Morris, which she put very well indeed. These are sensitive areas, and it is right that people should not be forced to say what they are not prepared to say. However, if we have facts and figures, it will, as the noble Lord, Lord Alli, said, encourage people to be more open about their gayness and the other issues that we are talking about. I want a more representative Parliament and more representative local authorities. Like the noble Baroness, Lady Morris, I think it will be splendid when we get to the time where we do not blink when a minority candidate is elected in an almost totally white constituency. I think this is right, and I hope we do it.

My Lords, the most reverend Primate the Archbishop of York contrasted subsection (2), which is a “must do” requirement to publish, with subsection (11), which is “cannot do” provision that states that a political party cannot require a person to give it the information. How is the duty to be enforced? I am sure noble Lords on all sides would admit that the strength of our respective parties varies in different parts of the country. In my own party, the seat of Edinburgh West has recently gone through a selection process to replace my honourable friend John Barrett, who is standing down. There were numerous applications. It is a well run local party, and I am sure it is quite capable of giving the information to party headquarters to meet this obligation, so far as the candidates provide the information.

I can also think of constituencies that, in party parlance, we call “black hole seats” where, when an election comes along, we are only too pleased to find enough people to sign the nomination paper and where, far from there being enough applications for nomination for a selection, we are delighted to find one person who might want to stand there. At the end of the election, there is a sigh of relief if we have managed to save the deposit, and the local people disappear again. Given some of the financial requirements in legislation, local parties are required to submit returns, but will they be required to submit returns to their national party for onward transmission? Is pressure going to be brought to bear on people who do their bit at election time and are quite happy to retreat into the background at other times? Will the Minister give some indication of where this duty will land and how it is intended to enforce it?

My Lords, what a lot of lovely questions and quite rightly, too, as this is a rather important debate. As I mentioned in my introduction, this amendment is being brought forward—yes, it is a government amendment and it is a government Bill—as a consequence of the deliberations and agreements which were made in the Speaker’s Conference. It comes from all parties working together under the aegis of the Speaker, who established the conference to consider and make recommendations on how to improve the representation of women, the disabled and minority ethnic people in the House of Commons so that it better reflects society. The conference could also agree to consider other associated matters. It is a government amendment but it comes with the authority—if I may put it like that—of the other political parties, although I accept the comments of the noble Baroness about the views of the right honourable David Cameron about sexual orientation and so on.

This is not to do with quotas. We do not want the sort of quotas referred to by the noble Lord, Lord Alton. What we are attempting to do, as was said by the noble Baroness, Lady Howe, is to have a better view of the people who are representing us. All parties involved in the Speaker’s Conference believe that to have a healthy democracy we need healthy representation, which involves representation from all sections of our society. In many ways we do not know, at present, who our representatives are because we do not have the data. This is a means of collecting that data. We do not have all the fine details; they have to be worked out with the political parties, the Electoral Commission and the Equality and Human Rights Commission. It is very early days but I can assure noble Lords that we will involve all these individuals and bodies when bringing forward the regulations. The collected raw data are not enough to change things, of course. I accept entirely that we have to change the culture. However, we need these data to be catalysts for change.

Noble Lords have spoken about the statistical accuracy of the data, and I draw their attention to the provision in subsection (7)(b) which is designed to ensure that the statistics published are not distorted by the number of people who decline to provide information. I stress this point—individuals do not have to provide the information; it is purely voluntary. This responds to the very important points about sensitivity made by the noble Baroness, Lady Morris. We must be sensitive toward those individuals who do not wish to provide the information, but we must also be sensitive in the way in which we use the information. The experience that the noble Baroness has in these issues is valuable and we could use it to our benefit. I hope that we can have a dialogue and the noble Baroness will work on this issue, so that we can use her experience when drawing up the regulations.

I am very grateful to the Minister. I am not making trouble—I promise—but what worries me is the principle not of collecting the data but of what they are used for. Let us assume that the House of Lords were reduced to 400 Peers—not a bad idea—and let us assume we then had to decide, on an appointed or elected basis, who should be here. Let us think, for example, about my own ethnicity. I am a Jew, but not a religious Jew. Would we then count that there are 300,000 Jews in the population—which there are—and there are six times as many Muslims—which there are? Would we then decide how many Jews and how many Muslims would be representative in this place? That is not a great idea, and it is that principle which I am trying to understand. God forbid that I should ever question anything that has been agreed by the Speaker’s Conference, which includes members of my own party. I would like us, however, to reflect on that principle, or lack of it.

Noble Lords are right to reflect on the use of data but I cannot imagine that they would be used as the basis for any quotas, as the noble Lord suggests. It would be up to us all, as participants in our political parties, religious organisations or whatever, to be vigilant and ensure that the regulations are drawn up in such as a way that they could not be used for that purpose.

Was there any discussion about a lighter-touch approach to this? These data surely could be collected anyway. Dod’s Parliamentary Companion is already available to answer many of the questions that many of us know the answers to anyway through the use of our own eyes when we look at this place, another place and other elected chambers throughout the United Kingdom. Was there no discussion between the political parties about simply doing this anyway without the need for legislation, which seems to be a very dirigiste approach?

I cannot, in all honesty, answer the noble Lord’s question. I know that the basis for the Government’s amendment was discussions, not just within the Speaker’s Conference but around the amendment tabled by one of my honourable friends in the other place, which had the support of many other parties.

I am going to answer as best I can some of the points made this evening. I am then going to take back the Government’s amendment and reflect on various aspects of it. It will not necessarily be changed a great deal when I bring it back but I will reflect on it further.

I wish to make one or two other points. We have talked about whether prospective candidates should have to declare their sexuality. My noble friend Lord Alli made an interesting and important point about whether there should be a category of those who are gay and openly gay. All these things need to be reflected on. I concur with the noble Baroness, Lady Morris, about the discussions that have taken place with Stonewall, which is very sensitive to these issues. Stonewall agrees with the Government and the right honourable Theresa May that the non-mandatory monitoring of sexual orientation in Parliament is important. With careful safeguards in place to protect people’s identity, Stonewall believes it is the right step, and it is the body that is most sensitive to these issues.

Does the noble Baroness agree that it is worth bearing in mind what the noble Baroness, Lady Howe, said about the importance of information and the need for transparency, and about ensuring that, when this information is available, pressure is put on all the relevant political parties to make sure that they are producing diverse people for election?

Both noble Baronesses are right to make the points that they do. I also agree with the noble Lord, Lord Lester, that the primary task of political parties at the moment must be to ensure that there is no direct or indirect discrimination in their selection processes.

Let me answer a couple more questions. I was asked about ensuring the anonymity of data. Any data provided voluntarily would be aggregated nationally and there would be a requirement for data to be reported in such a way that individuals cannot be identified. On whether political parties will be breaching the Data Protection Act by publishing diversity data, the answer is no. While the data in question amount to sensitive personal data under the Data Protection Act, it is envisaged that parties will obtain explicit consent from candidates for the data to be collected and published in an anonymised form. The Data Protection Act already places that obligation on the party collecting data. I am sensitive to the points made by the noble Lord, Lord Wallace, and I can imagine some local parties finding it difficult to provide the information. I am not sure what is envisaged, but we will come back to that at a later stage in our proceedings. Northern Ireland is not governed by this provision, because equality is a devolved matter under the Northern Ireland Act.

I was asked why we are not requiring parties to collect data on marital status and pregnancy. The exclusion of marriage and civil partnership is consistent with the fact that they are protected characteristics in respect of the employment provisions in the Bill only; the rationale for the exclusion of pregnancy and maternity is the relatively temporary nature of such characteristics.

As I say, I shall take back my amendments but bring them forward in some shape or form at the next stage of the Bill, having taken into consideration some of the points made in this debate.

When the noble Baroness goes away to think about it, could she take seriously the last intervention of the noble Lord, Lord Lester? It is the principle; you gather all those data, so that—what? If you do not resolve that principal question, a time will come when the Labour Party will be accused of not having enough of this kind, the Conservative Party will always be seen as the Church of England at prayer, or whatever, and the Liberals will be accused of being totally Methodist and nothing else, so I am worried.

What would happen if Parliament suddenly showed that, after one particular election, it was 99 per cent made up of black people? What would we then say about the next election? I am worried about creating silos in which we are not going to be free, so the principle has to be established. It is not just about the collection of data but about eliminating indirect or direct discrimination within the parties themselves.

My Lords, I take very seriously all points that have been made in this debate, including those on data collection and how those data are used. It is important also to note the point that the noble Lord, Lord Alton, made: that it would sometimes appear that our elected representatives are, indeed, unrepresentative of the people whom they represent. This is a means of trying to ensure, not by quotas, that our elected bodies in the United Kingdom really reflect the people that they represent. It is about finding a way to ensure that that happens.

I am not completely convinced about excluding,

“marriage and civil partnership … pregnancy and maternity”,

on the basis of what has been said. Had I not, completely negligently, failed to move the amendment on teenage pregnancy in schools, we would have had that already included. I quite appreciate the point about employment and the rest, but here we are concerned with the political parties. It seems odd to me that if they are doing this properly, we are not looking at, for example, marriage and civil partnership. I would have thought that we should, but as I do not understand the principle I simply repeat that I do not understand why it should be in or out.

My Lords, I should like to reinforce the point just made by the noble Lord, Lord Lester. If there are to be questions, people would be interested in how many people are bringing up children, for instance, with all the strain and stress which that can entail, or how many people are over retirement age, and so on. The questions will be endless once we start this process, if we are to start it at all. I hope that the noble Baroness will think really carefully about that; I know that she has the wisdom to do so.

Amendment 108KA withdrawn.

Clause 106 agreed.

Schedule 15 : Associations: reasonable adjustments

Amendments 108L to 108P not moved.

Schedule 15 agreed.

Schedule 16 agreed.

Clauses 107 to 112 agreed.

Clause 113 : Jurisdiction

Amendment 108Q not moved.

Clause 113 agreed.

Clauses 114 and 115 agreed.

Schedule 17 agreed.

Clauses 116 to 118 agreed.

Clause 119 : Jurisdiction

Amendment 108R

Moved by

108R: Clause 119, page 75, line 28, at end insert—

“(8) In subsection (1), the references to Part 5 do not include a reference to section 60(1).”

Amendment 108R agreed.

Clause 119, as amended, agreed.

Clauses 120 to 122 agreed.

Clause 123 : Remedies: General

Debate on whether Clause 123 should stand part of the Bill.

My Lords, in considering whether Clause 123 should stand part of the Bill I referred to the Explanatory Notes. These explain that the clause,

“sets out the remedies available to employment tribunals hearing cases under the Bill”.

As the law stands, tribunals can make recommendations to the respondent regarding the outcome of a particular case for the benefit of an individual claimant. As we are informed by the Government, the clause would extend this provision so that the recommendation would not have to be applicable only to an individual claimant but could be designed to impact on the wider workforce so as to benefit more people. We have tabled this clause stand part debate because we would like to hear the Government’s thinking on a number of issues.

First, will the Chancellor inform the House whether there have been any other changes to the nature of the recommendations other than the scope of their application? It seems that there may be differences in the way that these recommendations are made, or in the way that they are operated and enforced, when the recommendation is expanded from being to benefit only one claimant to benefiting a much larger group, and perhaps even a whole workforce. It would be useful to hear the Government’s thinking on this subject.

Secondly, the Explanatory Notes state that where a recommendation has been made for the benefit of an individual claimant only and it has not been complied with, the tribunal can award compensation or increase any that has already been given. What provision has been made for enforcement if a recommendation applying to the wider workforce has not been complied with?

Of course we believe that the provisions must be enforceable. If an organisation has been acting illegally and subverting the equality provisions, it should have to obey the recommendations. These recommendations are what will allow the company to fix itself and that is the outcome it is important to ensure.

Perhaps at this point we should underline the fact that we think that the outcome is the important part of this recommendation. The crucial element is that a company that has been acting illegally will implement the recommendations and as a result it will become a better employer. The tribunal will be fully aware of the desired outcome. But it may not be fully aware of the different ways in which different companies operate and how best to achieve that overarching aim. We on these Benches think that it is therefore important to ensure that sufficient flexibility is retained in the recommendations and I reiterate that they should concentrate more on the outcome and less on the process, allowing companies the freedom to adapt their operations to achieve the shared outcome.

In another place, the Solicitor-General stated that it would be difficult to mandate an outcome because a company may not be able to achieve it. That is a fair point, but does the Chancellor of the Duchy of Lancaster also acknowledge the need not to make recommendations that require rigid attention to processes but guarantee nothing in terms of the outcome? Will she confirm how detailed the specifications in these recommendations will be and how closely companies will be expected to conform to each detailed specification? Does she accept what I said about the outcome being the most relevant part—not the process—and that the process may necessarily vary from company to company in ways to which any tribunal would find it difficult to adjust? This is a complex area and it would be useful to hear the Minister’s thoughts.

My Lords, I certainly agree with the noble Lord, Lord Hunt, that the outcome not the process is important in respect of this particular clause as it is in most of the rest of the Bill. Outcomes affect the lives of people and the working conditions of employees.

Clause 123 is necessary because it sets out the remedies available to the tribunal in discrimination cases. These are a declaration regarding the rights of the complainant and/or the respondent, compensation, including damages for injury to feelings, and recommendations. All of those remedies are available under existing discrimination law, except for the power to make wider recommendations, which we are introducing through this Bill.

The noble Lord asked about enforcing wider recommendations. This power is not about penalising employers: it is about enabling them to comply with discrimination legislation in the future. In the case of recommendations that benefit an individual claimant, it is appropriate to order more compensation to be paid to the claimant for an employer’s failure to comply with a recommendation. However, where the recommendation benefits the wider workforce rather than just the individual claimant, to award further compensation to the claimant for that failure would clearly amount to a windfall.

The noble Lord also asked whether there had been any other changes to the recommendation power other than the extension. The only difference is that the enforcement mechanism has been amended so as not to apply wider recommendations. Instead, they can be taken into account in any future cases involving the same employer. I hope that that makes sense. If it does not, I will write to the noble Lord.

We recognise that strong and effective enforcement is necessary to make a reality of legal rights. That is why we are extending the power of tribunals to make recommendations, so that recommendations can be made for the benefit of the wider workforce as well as the individual claimant. Allowing tribunals to make recommendations that benefit the wider workforce will help employers to understand what they need to do to comply with the law and reduce the risk of future discrimination against other employees. It should in consequence help to tackle systemic discrimination and therefore reduce the number of claims which individuals have to bring before a tribunal. That is a very important outcome.

Currently, in more than 70 per cent of cases brought before a tribunal a claimant is no longer working for the employer at the time of the hearing. Therefore, in a large majority of cases, tribunals cannot make a recommendation, because it would not benefit the claimant. This clause ensures that the wider workforce can benefit when an individual claimant brings a successful discrimination case, by allowing a recommendation to be made regardless of whether the individual claimant is still employed by that employer.

Employment tribunal chairs have significant expertise in discrimination law cases. Having heard the evidence in a case, they will be in a position to assess whether the discriminatory action was a one-off incident or evidence of systemic discrimination. This will enable them to recommend the type of action that it may be appropriate for the respondent to take.

When making a recommendation an employment tribunal chair will need to set out clearly the steps a company must take in order to comply with that recommendation as well as a timeframe in which those steps should reasonably be undertaken. This is made clear in subsection (3) of the clause.

Examples of recommendations which tribunals currently make include the following: to introduce an equal opportunities policy; to provide training to managers; or to introduce transparent and fair promotion criteria. We expect recommendations under the extended power to be broadly similar.

The extended recommendation power will be used in conjunction with the existing remedies available to the employment tribunal, such as damages. However, this clause makes it clear that in cases of unintentional indirect discrimination the tribunal may award damages only after considering whether any other order would dispose of the case. That is because damages may not be the most appropriate remedy in cases where an employer inadvertently operates a discriminatory procedure.

We strongly support this clause. The Minister has explained why. One of the problems about the existing order of things is that individual proceedings deal only with individual problems and yet often they relate to systemic problems which require systemic solutions. It is very important that the tribunal which has heard all the evidence is able to make recommendations on a wider basis. The Equality and Human Rights Commission will, of course, have strategic law enforcement as part of its functions. This ensures that in an individual case the tribunal does not order but recommends in ways that will obviate the problems that have arisen and, in my view, that will cut down litigation, cut down the excessive importance given to individuals and deal with the systemic problems. I hope that that reassures the noble Lord that this is an admirable clause.

Clause 123 agreed.

Clauses 124 to 127 agreed.

Clause 128 : Time limits

Amendments 108RA to 108RD not moved.

Clause 128 agreed.

Clauses 129 to 147 agreed.

House resumed. Committee to begin again not before 8.29 pm.

Northern Rock plc Transfer Order 2009

Motion of Regret

Moved By

That this House regrets that Her Majesty’s Government have not provided Parliament with financial details relating to the Northern Rock companies affected by the Northern Rock plc Transfer Order 2009 (SI 2009/3226) and have so arranged the restructuring that the negative procedure has been used, thereby avoiding the scrutiny of an affirmative instrument.

Relevant Document: 4th Report from the Merits Committee.

My Lords, the House is indebted to the Merits of Statutory Instruments Committee of your Lordships’ House for the sterling work that it does on the huge quantities of secondary legislation that emerge from the Government. In the case of the Northern Rock plc Transfer Order 2009, which was made by the Government on 8 December 2009, the committee reported its findings in just one week, on 15 December. It is the committee’s fourth report that provides the basis for the Motion that I have tabled. I apologise to the House in advance for the length of my remarks; the more that I looked at the order, the more I was troubled by loose ends and unanswered questions.

The split of Northern Rock into a good and a bad bank has been well flagged for some time, and there is no surprise that this has been done. In broad terms, we on these Benches support the restructuring of Northern Rock in the interests, in particular, of privatising an unwelcome addition to the stock of government assets. While we were not surprised by the fact of the order, the surprise has come in the manner of the underlying transaction and the apparent determination of the Government to keep Parliament and taxpayers almost completely in the dark about it. Indeed, it is not only Parliament and taxpayers that have been sidelined by the Government’s obsessive secrecy; creditors and other interested parties in Northern Rock have been ignored as well.

There are several issues that I wish to raise with the Minister about the order. I will start with the general issue of providing information to Parliament about the split of Northern Rock into a good and a bad bank. The Explanatory Memorandum to the order provides the bare minimum of information about how the order works. Paragraph 10.2 merely notes, as foreshadowed in the ministerial statement that was made on the day that the order was made, that:

“The Government intends to provide Parliament with details of the financial support provided to support the restructuring of Northern Rock in January 2010”.

That begs the question of why the Government could not have provided the information to Parliament at the time when the order was made. It is clear from the sentence that I have just quoted that the Government had already agreed to provide the financial support when the order was made and must have known what that entailed. Can the Minister offer any credible reason for keeping Parliament in the dark?

The Merits Committee, in its measured way, observed at paragraph 7 of its report that:

“The House may feel that it would have been better placed to consider this Order if details of the financial package had been made available at the time the Order was made”.

The House has not been given any chance at all to consider this order properly.

Two days ago the Treasury finally gave some information to Parliament by way of a Written Ministerial Statement some 25 days after the order came into effect. We learn that a further £3 billion of capital is being put into the good bank, now called Northern Rock plc, as well as £2.5 billion of loans into the bad bank, now called Northern Rock Asset Management plc. So behind the order is another £5.5 billion of taxpayers’ money going into the Northern Rock black hole, and it took until Monday of this week for that fact to emerge.

Financial support, however, is only part of the picture. There is nothing in the document laid before Parliament that shows what the transaction actually involves. In order to get an inkling of what is involved, we have to go to the Treasury’s website where various documents may be found. There is an 81-page Northern Rock plc transfer administration agreement, together with Appendix A of 21 pages and Appendix B of 96 pages. There are also two so-called “related documents”, which together amount to 380 pages. If we work through all these documents, we can finally glean from page 68 of the transfer administration agreement that the interim figures for assets and liabilities transferred from the old Northern Rock to the new one are £11.7 billion and £20.3 billion respectively. The difference between the two—some £8.6 billion—is due to be paid from the old Northern Rock to the new Northern Rock. This is the figure of £8,581 million referred to in paragraph 3. These figures may give an idea of what is in the new Northern Rock—the good bank—but they tell us absolutely nothing about what is left behind in the bad bank. This lack of information about the way in which significant assets acquired with taxpayers’ money are being scattered around is nothing short of shocking.

I now move to something equally shocking concerning the Banking (Special Provisions) Act 2008. Some noble Lords will recall that that Act was rammed through Parliament at huge speed in order to nationalise Northern Rock. This order is made under Section 8 of the Act, which allows the transfers covered by the order. That is not the issue. The issue is that, by virtue of Section 13 of the Act, orders made under Section 8 are generally to be carried out by the negative procedure unless the order makes provision for determining the amount of consideration payable by a transferee—under Section 8(6). If subsection (6) were involved then the order would be subject to the affirmative procedure. The Treasury has so constructed the transfers covered by this order that they have included no provision for determining consideration and have hence squeezed the order within the negative procedure, as was pointed out by the Merits Committee. That seems to be the Treasury at its most cynical: first, to draft the affirmative requirements of the Act in an obscure way and then to maximise its use to avoid parliamentary scrutiny.

Unfortunately, I was out of the country nursing a broken arm when the Banking (Special Provisions) Act was passed but I know that the opportunity for scrutiny of the Bill was restricted. I could find no trace of the Government explaining that the implications of Sections 8 and 13 combined meant that parliamentary scrutiny of subsequent transactions would be easily sidestepped. An ordinary expectation would have been that any significant transfer, such as the one covered by this order, would have involved consideration being determined and hence would have been subject to the affirmative procedure.

This order says that ACo—the old Northern Rock company—is to pay the £8.6 billion I referred to earlier to BCo—the new Northern Rock company. An innocent reader of the order might conclude that that was the end of the story but that is far from the truth. The legal documents on the Treasury website, to which I have referred, show that this sum is only the preliminary estimate of the difference between the book values of the assets and liabilities being transferred. There is every intention and extensive legal provision for these preliminary figures being firmed up and changed before the final figure for the transfer is arrived at. The transfers took place under this order on 1 January 2010 but the transfer administration agreement was dated 7 December 2009. Hence the figures which netted out to £8.6 billion had to be illustrative figures, extracted from a balance sheet before that, or dreamt up by the lawyers solely for the purposes of the transfer administration agreement. The final figures will be as at 1 January 2010, presumably extracted from the audited accounts of 2009.

It was fully in contemplation at the time of the order and the transfer administration agreement that adjustments to the £8.6 billion would be needed. Yet, the only reference to this is in a small-print footnote in the Explanatory Memorandum, which is at pains to say that such adjustments, which could be considerable, are not “consideration”, and the order does not say how the adjustments are to be determined. This is all convenient for avoiding the affirmative procedure. Can the Minister say how the adjustments will be effected? The order is clear as to the payment of £8.6 billion but unclear as to any adjustments. Can the Minister say whether the Treasury intends to use the power of modification in paragraph 22 of the order to achieve the final effect, as foreshadowed by the transfer administration agreement?

That brings me to the modification power in paragraph 22 of the order. This was also covered by the Merits Committee in its fourth report. Paragraph 22 allows the two Northern Rock companies to make a modification instrument. This is subject to Treasury consent. The Merits Committee said in paragraph 5 of its report that,

“as both companies are wholly owned by the Treasury, the House may have a view on how much of a safeguard this would provide”.

I suggest that the House should have a very dim view of the safeguard involved. Furthermore, the Treasury’s relentless desire to marginalise Parliament is also evidenced in paragraph 22. This provides for publication of the modification instrument in newspapers and online, but there is no mention of laying it before Parliament or any other mechanism for ensuring that Parliament is kept up to date.

I turn now to the impact of the transfer order on certain creditors of Northern Rock. I want to explore with the Minister whether the Government have behaved properly in relation to all those who were creditors of Northern Rock before the transfer order came into effect. The Merits Committee, in paragraph 6 of its report, drew the attention of the House to the lack of consultation on the order. Consultation was undertaken only with Northern Rock, the Financial Services Authority and the Bank of England, which is, I submit, so inward as to amount to no genuine attempt to carry out consultation at all. The Explanatory Memorandum notes merely:

“It was not considered appropriate”,

to consult beyond that, but no reasons were given. I hope that the Minister will be more forthcoming this evening in the light of the comments that I am about to make.

The Merits Committee said in paragraph 6 of its report that,

“the House may wish to satisfy itself that the restructuring is in the public interest”.

It pointed out that some former Northern Rock shareholders are unhappy that they have received no compensation for their shares. I do not wish to revisit the issue of compensation to shareholders, but I will concentrate on creditors, who have to be paid before there could be any question of return to shareholders. The Explanatory Memorandum to the order in paragraph 3.4(i) says that because of the way that the transfers were made,

“ACo will be no worse off than it is currently”.

That is an arguable statement but, more importantly, it does not address the question of the creditors of ACo and whether they are worse off.

Some creditors of Northern Rock did not benefit from government guarantees given to Northern Rock when it ran into difficulty. Broadly, the Government guaranteed the retail depositors of Northern Rock, but not all of its wholesale liabilities. These guarantees have been rolled over into the two new companies by guarantees issued at the same time as the transfer order. Before the transfers, the creditors were creditors of the old Northern Rock company, which was a mixture of good and bad assets. After the transfers, some creditors will be creditors only of the company now known as Northern Rock Asset Management—that is, the bad bank.

I wish to raise with the Minister whether the Government have disadvantaged those creditors by isolating them in a vehicle which has only undesirable assets. How can it be reasonable to isolate the creditors in this way, especially as they have not been consulted? Can the Minister explain how the Government see the end game of the bad bank? What is the prognosis for the creditors of the bad bank? Do the Government believe that the creditors of the bad bank will have any losses to bear at the end of the day? In the light of that, can the Minister explain why the transfer order makes no provision for any good-will value to be attributed to the value of the business which is transferred to the new Northern Rock company by this order?

I assume that the ongoing business which was owned by the old Northern Rock company has a value. If it had no value, there would have been no reason for the Northern Rock name to be kept in the new Northern Rock company. If the business had no value, it would have been wholly improper for the directors of the Northern Rock company to have agreed to pay £10 million to its local, but not particularly successful, football team in order to promote the Northern Rock name.

As neither the transfer order nor the transfer administration agreement deals with a value or good will, the old Northern Rock company has, in effect, given the Northern Rock business to the new Northern Rock company for nothing. Will the Minister say whether it is fair to the creditors left behind in the bad bank? I cannot see that it is. Will the Minister explain why this transaction, effected by the transfer order, does not amount to a preference either for the creditors transferred to the new Northern Rock company, which will include the Government, or to the shareholders of Northern Rock, who are also the Government? The Minister will be aware of the duties which apply to directors of insolvent companies. Can he say how it is that the transfers avoid the dangers of undue preference, which would almost certainly have arisen had we been dealing with transactions which arise in the private sector?

My last area of concern also relates to a creditor, although a rather different one, from the bondholders and similar, which might have been prejudiced by the transfer order. This concerns the pension scheme. I understand and look to the Minister to confirm that Northern Rock’s pension scheme has been left in the bad bank. The pension scheme has a significant defined benefit section, which now appears to have been stranded in a company which may not pay all its creditors. I understand that there is a deficit in the scheme on an actuarial basis of some £60 billion. My source for this figure is the Minister’s honourable friend Mr Frank Field who knows a thing or two about pensions. Mr Field has raised questions of whether this transfer to the good bank should have recognised the liability being left in the bad bank. He has concerns that the Government plan to dump any residual liability in the bad bank into the Pension Protection Fund, which is funded by employers generally and not the Government. Hence, there is a real issue of public policy at stake. I hope that the Minister can explain the position.

I have taken a long time to explain my concerns with this order. I have big concerns about the way in which the Treasury has treated Parliament, so that we are unable to scrutinise what is an important transaction properly. I have substantive concerns about whether the Government and Northern Rock have treated creditors fairly in the process.

We should seek to welcome the fact that the Government are trying to maximise the value of Northern Rock, so that some or even all the taxpayers’ money can be recouped in due course. I hope that the Minister will agree that the principle of taxpayer value should not be used to ride roughshod over the interests of other parties. I beg to move.

My Lords, I congratulate the noble Baroness on raising this issue and on having penetrated the depths of the Treasury website and read and understood the voluminous documents there. There is sometimes a view in Government that simply putting something on a website is informing the world about it. Unless one has the tenacity and the forensic skills of the noble Baroness, the fact that those documents are on the Treasury website is of very little relevance to most people because they simply have neither the time nor the facility to spend the effort, which she has clearly spent, in making sense of them.

Like her, we do not necessarily object to the principles under which the Government are operating. They are clearly trying to get a return from their investment in Northern Rock. Splitting it into a good bank and a bad bank is a perfectly reasonable way of doing it. However, as the noble Baroness said, it is unacceptable that the Government injected £5.5 billion, which, until 18 months ago, was a reasonable amount of money, into Northern Rock in such a way that, but for her interest, I doubt whether anyone would know that it had happened. Unless I am mistaken and I have not read every newspaper assiduously in the past 48 hours, the fact that £5.5 billion has been injected into the two Northern Rock banks has hardly been reported. Through negligence, or simply because of the methods that have been used, this huge further commitment of government funds has happened without notice or comment.

The noble Baroness reminded us of the passage in the Banking (Special Provisions) Act under which Northern Rock was nationalised. She said that there was very little time for scrutiny, and I was very surprised that the Minister shook his head slightly as she said that. My recollection is that the whole scrutiny process in Committee took place in one long and intensive parliamentary day. There certainly was not a chance to go into huge detail. There simply was not time to have thought through the issue that the noble Baroness raised. However, where I think she is wrong—although I may be underestimating them—is in the way that Sections 8 and 13 combined operate. To the extent that they were thought through by the Treasury, it almost certainly did not consider that 18 months later they could be to put together enabling something to be slipped through under the negative resolution procedure. My recollection is that that was not the air in which the Bill was brought forward and certainly was not the air in which it was considered. It was a panic measure. In our view, the Government waited far too long before nationalising Northern Rock, and when they did, they had to do it in a greater rush than would otherwise have been the case.

Somewhat typical of the way the Government are treating this business is their plan that, when the instrument is modified, it will appear on the website of the bank and in two newspapers. As we know, depending on the newspapers and when you put something in them, it creates public interest or does not. The fact that this order was laid just before Christmas, within a few days of the House rising for the Christmas Recess, is an example of how timing really matters in terms of the extent to which there is public understanding of what the Government are up to.

The Merits Committee is again to be congratulated on pointing out the issues raised by this instrument. One area where I cannot agree with the committee is in its suggestion, in raising the interests of the shareholders, that just because some shareholders are still dissatisfied, that is at all relevant. The truth is that from the moment the Bill became an Act, because of the phraseology of the Act and the subsequent secondary legislation, it was clear that the shareholders were not going to get a penny. My concern is that the procedure that was followed—having valuations theoretically done—merely gave false hope to shareholders who were never going to get a penny. I am afraid nothing can be done about that.

The issue that interests me, which is raised only obliquely by this order, is what happens next. For example, is it the case, as was reported at the weekend, that the Government intend to merge the bad bank remainder of Bradford & Bingley with the bad bank of Northern Rock to make a very bad bank? If so, what is the timetable and strategy behind that? Secondly, in terms of the new good bank, the Government say they intend to start seeking a private sector purchaser. Can the Minister say something about the timetable that he has in mind? Our concern about seeking private sector purchasers has been that, partly in order to maximise their short-term revenue, the Government would, if not effect a fire sale of that part of the bank, do it on a shorter timescale than would maximise the return to the taxpayer. We would be most grateful if the Minister could give us some indication of what the Government’s plans are for the good bank as well as the bad.

I support my colleague on the Front Bench, my noble friend Lady Noakes, who has done the House a great service by tabling this Motion and moving it so ably and in such forensic detail. However, the events to which the order refers have already occurred on 1 January for the reasons that the noble Lord, Lord Newby, referred to. The Government should have learnt their lesson about acting in haste and avoiding consultation on this issue. The telephone numbers dealt with in this banking rescue package behove a greater level of parliamentary scrutiny. I associate myself with the concerns of my noble friend Lady Noakes about the treatment of creditors and the concerns of members of the pension scheme—both current and future beneficiaries. There will be quite a bit of anxiety about where this fund will end up. There will also be a great deal of concern among shareholders who are currently undergoing the independent assessment for compensation.

I am torn between two distinct emotions when I see this order before us this evening. The first is real excitement and enthusiasm. The prospect of a phoenix of a great north-eastern institution rising from the ashes of the great recession enthuses me greatly. One of the reasons why I believe we can have a degree of confidence in the new venture is that it has some outstanding leaders. There is a lot of talk, often ill informed, about bankers being the villains of the piece and about there being no such thing as a good banker. I want to inform the House that there is. One of them, Gary Hoffman, happens to be running both parts of Northern Rock—the plc and the asset management. He, his senior management team and the entire 4,500 strong workforce have done an outstanding job over the past 12 months in incredibly difficult circumstances to turn the bank around, to identify the true level of risk and to start rebuilding a tarnished reputation. During that time we have seen some of the original loan repaid to the Government at a faster rate than was anticipated. We have seen depositors returning to Northern Rock, with deposits doubling. We have also seen the very welcome prospect of Northern Rock re-entering the mortgage market at a time when that was greatly needed, doubling the amount made available for lending.

At the other end of the spectrum, I am reminded of my deep sense of anger and injustice at the way Northern Rock was handled in the period between August 2007 and September 2007. Indeed, it continued through the period while the Government dithered over whether to nationalise the bank, which led right up to February. Between Friday 14 September and Monday 17 September 2007, we saw the first run on the deposits of a UK bank for 140 years. Centre stage, we now know, were three elements which conspired to create a perfect storm and signal the onset of the recession for the UK economy. These failures were highlighted in the Treasury Select Committee report in another place which found that the directors of the Northern Rock, especially senior management, were the principal authors of the difficulties that the company faced. It went on to say that the failure of Northern Rock, while being a failure of the board was also a failure of the regulator. In the case of Northern Rock, the FSA appears to have systematically failed in its duty as regulator. However, it was not just the FSA that failed; according the Select Committee, the entire tripartite arrangements seemed to have failed between the FSA, the Bank of England and the Treasury for the financial supervision of the City, which had been put in place with considerable hubris by Gordon Brown as his first act in government. The Select Committee said that,

“for a run on a bank to have occurred in the United Kingdom is unacceptable, and represents a significant failure of the Tripartite system”.

Then there was the publicising—the leak, by accident or design, of 13 September that Northern Rock had been granted emergency financial support, which led directly to the queues of investors around Northern Rock branches on the morning of 14 September. Those pictures were sent around the world in a matter of seconds and did immense damage to the reputation of UK financial services and of north-east England, with which Northern Rock is so closely associated. Just to be clear, it was this Government who set the regulatory environment; it was the regulatory environment, along with management, which failed; and the disclosure of sensitive market operations between the Bank of England which destroyed depositor confidence and shareholder value. We now know that there were potential buyers for Northern Rock in July and August 2007, but mixed signals, founded on a fear of competition rules set out by the Government, discouraged people from taking part and pursuing those interests further. We also know that emergency funds from the Government were considered, but it was felt that this too might have fallen foul of EU rules concerning state aid. Mervyn King, governor of the Bank of England, told the Treasury Select Committee investigation that:

“I had still hoped and indeed pressed strongly for the ability to conduct a covert operation, but in the end strong legal advice amongst the tripartite authorities was that this could not be done”.

That was September 2007; but one year later, in September 2008, of course they discovered that it could be done, and when HBOS got into difficulties, an emergency acquisition by Lloyds TSB was allowed. Bradford & Bingley had its retail operations sold to Grupo Santander, and the remaining part of the business was nationalised. The Government took a controlling stake in Royal Bank of Scotland and it was only a year later that they revealed that the Bank of England had made loans of £61.5 billion to these institutions. They had delayed that information from coming out for a year; if only they had done that with Northern Rock, there would have been a very different picture. The pain that was felt by the 2,000 employees who lost their jobs, the concern and anxiety felt by the depositors, and the loss of value for so many individual shareholders will be indelibly placed on the record of this Government.

Given this track record, the Minister will understand why there is scepticism bordering on cynicism on this side of the House that again we see a new approach presented for Northern Rock in this setting. It is a new way that has not been tried before. Of course, we do not know whether it will or will not work, but neither do the Government—yet it is Northern Rock that is again the institution being experimented on in this respect.

The Government, the Chancellor of the Exchequer who announced the tripartite regime, and now the Prime Minister are centre stage. Now, the same bodies—the Treasury, the regulator and the Bank of England—who failed in 2007 are the ones to come forward to tell us that we can trust them—it will be all right and they will get it right this time. The people of the north-east will wait and see.