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Lords Chamber

Volume 744: debated on Monday 22 April 2013

House of Lords

Monday, 22 April 2013.

Prayers—read by the Lord Bishop of Exeter.

Introduction: The Lord Bishop of Truro

Timothy Martin, Lord Bishop of Truro, was introduced and took the oath, supported by the Bishop of Exeter and the Bishop of Worcester, and signed an undertaking to abide by the Code of Conduct.

Iraq: Chilcot Inquiry


Asked by

To ask Her Majesty’s Government whether they will hold discussions with the administrators of the Chilcot inquiry into the Iraq war to ascertain a date for publication.

My Lords, the Government do not have any plans to hold such a discussion with the Iraq inquiry. Sir John Chilcot advised the Prime Minister last July that the inquiry would be in a position to begin the process of giving those subject to criticism in the report the opportunity to make representations by the middle of 2013, and that the inquiry would submit its report once that process had been completed.

With thanks for that Answer, can the Leader of the House reassure the House on a very important point—that high official circles in the UK and the US have not sought to interfere with the independent findings of the Chilcot inquiry, especially on the crucial decision to go to war together?

I can give that assurance. It is extremely important that this inquiry is independent; it was set up very deliberately to be independent and it must have that independence. It must consider the evidence that it has and reach its conclusions, which we will all be able to see in the fullness of time, but it must have a free hand to do that.

My Lords, having been involved in the setting up of some public inquiries, I have noticed a tendency for them to be longer and longer. I understand the need to collect all the material evidence, and for all due processes to take place. In future, if any public inquiry is set up, should not a time limit be imposed and, furthermore, an extension granted only in exceptional circumstances?

I understand that point. However, with some of these very big inquiries it is difficult to be absolutely clear at the outset about what a suitable length of time is. It is right that the Chilcot inquiry on Iraq has been able to follow the leads that it feels it needs to follow, and had the time to do that. On the more general point about inquiries, I am sure the noble and learned Lord will know that one of the post-legislative committees that this House will set up in the new Session will look at the operation of the Inquiries Act 2005 and ask exactly these kinds of questions about whether we can learn lessons about the conduct of these inquiries, whether they can be done more quickly, their cost and so on.

My Lords, I was one of those in this House who was perhaps most extensively and intensively involved in the whole of the Iraq issue—the invasion of Iraq and the situations that arose from the post-victory occasions, including the involvement of many contractors in the building up or otherwise of Iraq after the war. While I fully take the points made by the Leader of the House into careful account, it is also the case that the lessons to be learnt from an inquiry—and the lessons to be learnt from this are probably among the most important of all—depend a little on the passage of time between the findings of that inquiry and the use of those lessons to affect policy. I ask him to bear in mind, as he considers this, the gap between the necessary and right attempt to give people the right to respond, but also the importance of the conclusions for the future work of this Government’s policy as well as the policy of the Opposition.

I agree with the points my noble friend makes. To be clear, the timing of this inquiry is set by the inquiry itself. The Government have not set a timetable and we are not seeking to rush it. It must take the time. However, I take the point that we need to learn the lessons and that it has to be within a reasonable timeframe.

My Lords, could the Leader of the House tell the House how the Government will take account of the conclusions and recommendations of the Chilcot inquiry on Iraq in deciding their policy on Syria?

First, we need the report to be concluded. Then, as the Chilcot inquiry has made clear, there needs to be a process whereby those people who are mentioned in the report have the chance to comment on it. Then the report will be published. Then everyone in this House, as well as the Government, will be able to draw the conclusions from the Chilcot inquiry, wherever that takes us.

Could my noble friend inject a little urgency into this process? The furthest we got from him today was that we would have the benefit of the report in the fullness of time. In our experience, the fullness of time is fairly full.

We all know that certain formulations have a certain elasticity, and I take his point. The most recent pronouncement from the Chilcot inquiry itself is that it hopes to finish the report by the middle of this year. Then the process—the formal word is “Maxwellisation”—of giving individuals the chance to comment would follow. That is what the inquiry has said is its current expectation of the timetable to which it is working.

My Lords, does the Leader of the House agree that the terms of reference of the Chilcot inquiry are so wide as to be almost infinite, and that the timing of the report’s publication depends not just on the handling of the representations but on the Government’s own clearance of what is to be included in the report? Will he undertake that that process will be done as quickly as the Government can manage?

I take both those points. On the Government’s co-operation with the declassification of documents as the process goes on, the Chilcot inquiry has said on the record that that process is working well. I know that the Government will co-operate as closely as they can to expedite that process of declassification as rapidly as possible.

My Lords, can the Leader of the House tell the House what is the period within which the people mentioned in the report have to respond to the report?

I am not able to give a precise timescale for that because that will, by definition, depend on what the findings of the report are, what the criticisms of individuals are and how long that process will need to take. However, I am sure that Sir John is as keen to publish his report, so that we can all see it, as everyone in this House is to get it done.

Female Genital Mutilation


Asked by

To ask Her Majesty’s Government what information they have on the number of instances of female genital mutilation carried out in the United Kingdom in the past 10 years.

My Lords, the prevalence of female genital mutilation in the UK is difficult to establish because of the hidden nature of the crime. However, the Government are absolutely committed to tackling FGM and protecting the 20,000 girls who a 2007 study estimated were at high risk of being subjected to FGM in England and Wales each year.

My Lords, I thank the Minister for his sympathetic reply. Is he aware that in 1983 I supported a Bill outlawing female genital mutilation in this country, which was strengthened by further legislation in 2003, but that according to research currently as many as 65,000 women living in this country have suffered FGM? It is feared that some may have undergone the procedure here and others sent abroad for the practice, but there has not been a single prosecution. Therefore, what effective provisions are being undertaken urgently to protect the estimated 30,000 girls currently at risk in this country?

I congratulate and thank the noble Baroness for her support in tackling this abhorrent form of abuse. The law alone cannot eliminate this practice, as I think noble Lords will agree, but it needs to be properly enforced, of course. The Government welcome the CPS action plan to address barriers to securing a prosecution. They have also funded some front-line organisations to encourage communities to abandon the practice themselves, issued multi-agency guidelines to support front-line professionals and published a statement opposing FGM.

My Lords, is the Minister aware that in the 1980s, when I was president of the General Medical Council, that council decreed that any doctor registered with the GMC who was found to have carried out the operation of female genital mutilation would be subject to the full disciplinary procedures of the GMC and would be accused of serious professional misconduct? Just as there have been no convictions, as far as I am aware there have been no references to the GMC of doctors accused of carrying out this procedure. How can that be explained?

It is difficult to explain except in terms of the very secretive nature of this crime and the unwillingness of victims to come forward. The noble Lord has rightly pointed to the key role that health and social services can play in providing support for communities in seeking to rid this country of this abuse.

My Lords, some months ago the Director of Public Prosecutions undertook to appoint a committee to produce a report on female genital mutilation, in all its aspects, in the United Kingdom and to publish it in the summer. May we know when that report is likely to appear because, as has been mentioned, there has never been a prosecution and the practice continues as it has done for about 25 years? Is it not time that we had this report so that we could look forward to something being done to put an end to this horrible practice?

I am sure that I reflect the sentiment of the whole House in thanking the noble Baroness for her interest in this matter and her engagement with it. The Government are not happy with a situation in which there have been no prosecutions. We are pleased that the Director of Public Prosecutions is engaging with that. We are working closely with the Crown Prosecution Service and we hope that the report of which the noble Baroness speaks will be made public and that we can build our strategy on it.

My Lords, this was the first work that I had to do when I held the office that the Minister holds today. When I tried to talk about this subject to the people involved, they said, “If you try to stop us, we’ll do it on the kitchen table”. Am I right in thinking that this kind of thought still exists among the people who wish to continue this horrible practice?

We know that there are some strong feelings on this issue. Indeed, yesterday there was a report of a campaigner being abused by people who disagreed with her. This is not an easy subject. It is a hearts and minds issue, so we have to influence these communities and encourage them to recognise that there is no religious or medical basis for this abuse of young people and it should stop. I can assure the House that the Government take it very seriously.

I am pleased to hear how seriously the Government take this issue. How much funding are they initiating in order to train teachers, nurses, health workers and carers to recognise when there is a possibility of FGM happening and when it has taken place? Also, how is that funding being distributed across the country? I declare an interest as the president of FORWARD.

I am very grateful to the noble Baroness for her involvement with FORWARD, which presented a key report that identified the 66,000 possible victims of this abuse. The amount of money spent is within individual department budgets, but there is a specific £50,000 budget dedicated to ensuring that this matter is fed across departments and that leaflets are produced. The Government are spending £35 million in countries where this practice is prevalent, in seeking to change the cultural background against which the abuse occurs.

On that very point, my noble friend is possibly aware that, since 1997, DfID-supported anti-FGM education and empowerment programmes have led to some 5,500 communities in Senegal abandoning FGM. What discussions is the Minister’s department having with DfID to establish the impact of the success of those programmes on British African communities in the UK, particularly with regard to Somalia, where 98% of young girls are still mutilated, placing thousands of Somali girls in this country at risk?

My noble friend has identified Somalia as a particular area of concern. We are working very closely across all government departments. I think it is clear to noble Lords that the only way we can achieve progress is by using all the levers available to us: government departments; communities; and, through DfID, the overseas cultural base of this practice.

NHS: ECMO Machines


Asked by

To ask Her Majesty’s Government whether extra-corporal membrane oxygenation (ECMO) machines that are capable of restoring heart functions some hours after an apparently fatal heart attack are in use in any NHS hospitals; and, if not, what consideration is being given to their installation.

My Lords, the equipment and facilities to undertake cardiac ECMO support are available in all five NHS adult cardiothoracic transplant centres in England and in the five national respiratory ECMO centres, three of which share a location. Provision of cardiac ECMO support is a complex intervention with significant risks attached to it. A cardiac ECMO service requires a fully trained team to be available around the clock and does not consist of simply purchasing the medical equipment.

That is very good news and I thank the Minister for it. It is desirable to have these facilities available. Does he agree that the group which would benefit most of all from this would be young people who die suddenly and unexpectedly, often in the sporting field? This is a much greater tragedy for families than the more usual cardiac attack at a later age. Should not more publicity be given so that people involved in those activities know that such facilities are available? You could get a young person by helicopter to one of those centres within the number of hours that your life would be prolonged for.

My Lords, there is, I understand, no intervention capable of restoring heart function some hours after a heart attack. The only exception is not applicable to heart attacks but to people who have had circulatory arrest due to hypothermia—for example, people who have been buried in avalanches or immersed in very cold water. That area is currently being researched. It is only in a very limited number of circumstances that ECMO support can improve a patient’s chances of survival following cardiac arrest—usually in patients who suffer in-hospital cardiac arrest following surgery.

My Lords, as the noble Earl indicated in his opening remarks, a typical facility required in the provision of a service such as ECMO for adults who suffer acute myocardial infarction would include a perfusionist, intensive care facilities, an intervention cardiologist, a cardiologist expert in cardiac failure, a cardiac surgeon, together with specialist nurses. Preliminary results of studies suggest that the survival rate might be less than 30%. Does the noble Earl agree that more research is needed before such a treatment can be made available routinely?

I fully agree. The noble Lord is quite right. ECMO cannot be provided by just any ICU team. It is a highly specialised treatment with significant potential for serious complications, and considerable expertise is therefore required, including having a multidisciplinary team of the kind that he outlined. In general, capacity has much more to do with having suitably trained staff than with having the equipment itself.

My Lords, I refer noble Lords to my health interests. On the question raised by the noble Lord, Lord Patel, about evidence, would the noble Earl consider referring this to NICE for its expert advice?

I shall certainly take that idea away with me, but I think that there is broad consensus among the medical community that the key to success with ECMO is getting the patients connected to the equipment quickly. Although it is a moving scenario, all the evidence so far suggests that ECMO confers no benefit if some hours have elapsed since the cardiac arrest.

My Lords, services that need ECMO machines would currently, in the new world, be commissioned by NHS England. Will my noble friend explain to the House what role, if any, the department now has in commissioning such services?

My Lords, the department itself no longer has a role in commissioning highly specialised services. NHS England is implementing a single operating model for the commissioning of 143 specialised services. That replaces the previous arrangement whereby 10 regional organisations were responsible for commissioning specialised services and, to be frank, there were wide variations in the standard of those services. The new operating model represents a significant change to the previous system and should result in better outcomes.

My Lords, is the Minister aware that Glenfield Hospital in Leicester, which has ECMO, saved many lives in the swine flu epidemic last year and does more than just hearts?

I am fully aware of that. Glenfield has been leading the development of ECMO services. It is one of the biggest ECMO centres in Europe. It is currently the largest provider of children’s ECMO in the country, treating about 70 paediatric ECMO patients a year, and now provides an adult service.

My Lords, can my noble friend clear up a point of confusion that may have arisen about his first Answer to this Question? It was reported in the Times newspaper by the science editor that people could be brought back from the dead up to seven hours after their hearts had stopped. Is that a report on which we can lay much credence?

My Lords, my advice is that in most cases of cardiac arrest that is not possible. Where there has been circulatory arrest in the particular conditions that I described, such as immersion in very cold water, the heart can in some circumstances be restarted, but I would not wish to excite noble Lords’ interest in this technique without proper evidence. I am afraid that the article, which I did see, raises people’s hopes perhaps unfairly.

My Lords, can we take it from the answer that the Minister gave two questions ago and the praise that he rightly gave to Glenfield Hospital in Leicester that that ECMO unit will not be closed down?

My Lords, as the noble Lord knows, that decision is interdependent with the decision around the Safe and Sustainable review of children’s cardiac services. Until that issue is determined, it is not possible for me to say what will happen to the children’s ECMO service at Glenfield.

UK Industry: Competitiveness


Tabled by

To ask Her Majesty’s Government what steps they are taking to improve the competitiveness of United Kingdom industry.

My Lords, on behalf of my noble friend Lord Haskel, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

My Lords, the UK economy is recovering from the most damaging financial crisis in generations. The Government are putting in place the right policies to deliver balanced and sustainable growth in the UK. That will take time. We are already seeing some progress. Between 2010 and 2012 the UK climbed from 12th to 8th in the World Economic Forum’s global competitiveness index.

My Lords, noble Lords are stuck with me because my noble friend is in hospital and I hope that they will join me in wishing him a speedy recovery.

My Lords, given the massive size of the current account deficit—almost unprecedented—would it not be to the advantage of our country to improve the competitiveness of UK industry if the external value of sterling fell drastically?

My Lords, the external value of sterling fell from 2007 to 2009 and led to modest growth in exports. The impact may have been negated somewhat due to global demand weakness, especially in the European Union, which is our largest export market. Evidence suggests that export growth is driven more by changes in foreign demand than by price competitiveness or other factors.

My Lords, would the Minister agree that we are all very proud that a British university, Cambridge, has won more Nobel prizes than any other university in the world? However, would he also agree that that is in spite of this country underfunding research and development expenditure as a proportion of GDP? We spend less than both the EU and OECD averages. We spend half of what a country like South Korea spends. Do the Government not believe that we should be targeting to spend a proportion of GDP at least equivalent to the EU or OECD average to maintain our competitiveness? Otherwise, we are going to be penny wise and pound foolish.

My Lords, this issue has been raised by the noble Lord in the past. Education is our fourth largest export earning. I agree with the noble Lord that we need to spend more money both on research at universities and on further investment in training provided by businesses. I will take the noble Lord’s point into account and will be happy to ask my colleague in the office to write to him to see what investment we are making in research at our universities.

My Lords, could my noble friend explain why there has been a dramatic fall in the value of the pound and yet our export performance is pretty poor? What is the explanation for that and what can be done about it?

My Lords, the value of the pound is determined by the international market. The fall in exports is mainly due to the current economic crisis, not just in the UK but in Europe as a whole. Half our exports are to the European Union and there are real issues in the European Union. The currency changes that take place quite often have a limited impact due to the very high import content in our exports. Hence any depreciation or the value of the pound going down will not have real impact on our exports.

My Lords, as competitiveness is not going to be helped in any way by the Chancellor changing his fiscal policy, despite the strongest advice from people he depended on until recently, such as the IMF, can we take it that he will now be totally dependent for improving anything at all on help from the new Governor of the Bank of England through increasing monetary policy, even though it may hurt current inflation?

My Lords, the Chancellor has the right policies in place to reignite our economy, growth and competitiveness. We are supporting SME exports and have allocated a huge amount of money for infrastructure investment, including some for regional growth. We are encouraging the free flow of funds from the Bank and fiscal consolidation. With regard to the International Monetary Fund, we cannot recover or be competitive without addressing the huge debt that we have incurred over the past 10 years. Our most important priority is to see how we reduce our national debt.

Does my noble friend accept that the key to competitiveness is competition, and that this therefore makes it extremely difficult to improve competitiveness in large nationalised monopolies such as health and education?

My noble friend raises a very important issue. In both health and education, there is very much a monopoly. We use the private sector in areas where it can deliver real value for money for taxpayers.

Succession to the Crown Bill

Third Reading

Clause 2 : Removal of disqualification arising from marriage to a Roman Catholic

Amendment 1

Moved by

1: Clause 2, page 1, line 6, at beginning insert “Notwithstanding the continuing statutory requirement that no Roman Catholic can succeed to the throne,”

My Lords, this is the third time that I have raised this subject on the Floor of the House and I hope that my noble and learned friend will feel that this amendment is more modest and more acceptable than the two previous ones. The background is that the monarch in our country is also the Supreme Governor of the Church of England. Whether we use a modern or—as I personally prefer—a traditional liturgy on Sundays, and whenever we pray for the monarch, we pray for the Queen as the Supreme Governor. Because of the importance of this, and of establishment in our country, many of us feel that this Bill, to which we do not take exception in its main provisions, ought to have in it a recognition of this basic fact.

This modest amendment seeks to make explicit what is already implicit. When he replied to my amendment on Report, my noble and learned friend Lord Wallace of Tankerness—with whom I have had a number of discussions on this matter, for which I am extremely grateful—made quite plain that the monarch could not be a Roman Catholic, even though this Bill allows for successors to the Crown to marry Roman Catholics. This amendment does not in any sense cut across that and does not make any reference at all to the gender issue, which has been accepted throughout the House and in another place. What it very modestly seeks to do is to insert the following few words before Clause 2:

“Notwithstanding the continuing statutory requirement that no Roman Catholic can succeed to the throne”.

Then, of course, the clause continues, as in the Bill, stating that,

“a person is not disqualified from succeeding to the Crown or from possessing it as a result of marrying a person of the Roman Catholic faith”.

Therefore, there is absolutely no alteration to what is in the Bill. The amendment merely seeks to tackle what the right reverend Prelate the Bishop of Guildford said in his speech on Report about ambiguity. He gave an encouraging account of ecumenical relations and we were extremely grateful to him for that. Towards the conclusion of his speech, he also recognised that there was a continuing degree of ambiguity and expressed the hope that that could be tackled, either in the Bill, in an exchange of letters or in some other form.

This modest amendment before your Lordships’ House this afternoon seeks to take up the challenge of clearing up the ambiguity issued by the right reverend Prelate the Bishop of Guildford. It also seeks to meet the points raised by other colleagues in different parts of the House, that we have within the Bill something that recognises the facts as they are. Effectively, all it seeks to do is to translate into legislative form many of the sentiments voiced by my noble and learned friend the Minister in his wind-up to the previous debate. For instance, he said:

“The important point is that the sovereign be a Protestant ... That is the position. The Act of Settlement also requires the sovereign to be in communion with the Church of England”.—[Official Report, 13/3/13; col. 286.]

That is it. As I said earlier, this amendment makes explicit what is implicit, and I do not think that it is such a change as to necessitate consultations with the other realms over which Her Majesty reigns. It is a recognition of the sovereign’s particular and important role within the established church and it is in that spirit that I move this amendment and hope that the Minister will be able to accept it. I beg to move.

My Lords, the noble Lord, Lord Cormack, has made generous and kind reference to my contribution on Report and I do not intend to labour and repeat the detailed comments that I made to the House on my understanding both of Roman Catholic canon law and realistic pastoral practice in the case of mixed marriages. I thought afterwards that here was a Church of England bishop getting up with the temerity to talk about what the Roman Catholic Church teaches and does. Therefore, I thought that I had better write to Archbishop Vincent Nichols and ask whether my contribution, as recorded in Hansard, was the case.

I have a letter in my hand from Marcus Stock, general secretary of the Catholic Bishops’ Conference of England and Wales, on behalf of the Archbishop. Speaking in that capacity, as well as in a Westminster capacity, Marcus Stock gives me full permission to share this letter with the noble and learned Lord the Minister. I have indeed done that; he may wish to make reference to it himself, and to earlier conversations with the Cabinet Office. That will presumably come out a little later.

I simply say that the exposition of what I understand to be Roman Catholic official teaching in canon law, and the pastoral and flexible practice in terms of the Roman Catholic rules over the upbringing of children in mixed marriages is completely confirmed in the letter that I have received. It was also his clear indication that this should be passed on to the Minister, which I have done. So I will not take up more of your Lordships’ time but say simply that what I said on Report is indeed the case in terms of Roman Catholic law and practice. I believe that should give some assurance with regard to the important matter raised by the noble Lord, Lord Cormack.

Of course, the right reverend Prelate and I have discussed this privately and in the company of others. Does he accept that the incorporation of this amendment into the Bill would in no way cast any different doubts or cause any problems with what he has just referred to?

I do not believe that that would be the case. Of course, it is up to your Lordships’ House to reach a decision on the amendment should the noble Lord, Lord Cormack, press it.

My Lords, is it not the case that when the right reverend Prelate the Bishop of Guildford made his statement previously, one or two of us asked whether that could somehow be put on the record in a more secure form? Is this not exactly the sort of way in which it could be put on record? Surely that sort of gloss, understanding or undertaking—however one wants to express it—by the Roman Catholic Church is worth more than an amendment, and I hope that the noble Lord, Lord Cormack, will perhaps consider that to be the case.

My Lords, I hope that my noble friend Lord Cormack will think again about this amendment. It is a very difficult situation—we are where we are—but if you read the Act of Succession, you see words which none of us in this House would like to see applied today to Her Majesty’s Roman Catholic subjects, all of whom pray for Her Majesty every Sunday and every Mass. It is very difficult for us to take what is a piece of rampant discrimination. Frankly, for many of us, particularly the ex-Anglicans, the whole concept of a secular monarch being Supreme Governor of the Church of England is very odd, but we are where we are.

I merely ask my noble friend not to rub this in by adding yet more to it. Let us accept that both sides have come to what is an uneasy compromise in a world which thinks utterly differently. If you read the Act of Settlement, you have to wonder what the rest of the world must think about us tinkering with something that frankly ought not to be part of the constitution of the United Kingdom because it does not have anything to do with our view about equality and difference in a society such as ours. It is because of our history and we understand that and do not want to raise that, but please let us accept where the Government are.

I urge my noble friend not to press this. It is bad enough anyway. This merely makes it worse, and it would be helpful for my noble friend to recognise the degree of reticence on the Roman Catholic side on this issue, for many years and again now. Following the great wisdom that we have heard from the right reverend Prelate, this seems to be the moment to let it lie and to withdraw this amendment.

My Lords, I take a slightly different view from that of my noble friend Lord Deben and indeed have some sympathy with the amendment proposed by my noble friend Lord Cormack. As I see it, the Bill in its present form paves the way, possibly, for the heir to the Throne and hence the occupant of the Throne to be a Roman Catholic—although I know that there are other provisions that prevent that—and at the same time Supreme Governor of the Church of England. That seems to be an absurdity which has not been addressed by the Bill although it was pointed out in earlier stages.

I am happy to be told that I am entirely wrong in all this, that I have misunderstood that it will not happen and that there are ways and means of preventing it, in which case that is a good thing. That said, the position of the Roman Catholics as described by my noble friend is an important one, which likewise needs to be taken into account. I shall have a little bit more to say when we get to the Motion that the Bill do now pass, but for the mean time I address my remarks only to the amendment of my noble friend.

I declare an interest as a former member of the Royal Household and I pay tribute to the desire of the noble Lord, Lord Cormack, to see this important point discussed in this House. What has just been said about making explicit what is implicit is important, but this amendment is not absolutely necessary. There are three reasons for that.

First, as has just been stated, we are where we are, clearly, with the Act of Settlement and the law of the land that the monarch must be in communion with the Church of England. Secondly, we have heard on several occasions that whereas there is legal certainty about where we stand in terms of the Church of England, the Catholic position on mixed marriages is more flexible and nuanced in its term that it is a pastoral matter. That is important. Thirdly, there is a precedent. There is a mixed marriage in the Royal Family where the children have been brought up as members of the Church of England.

My concern is that if we in the United Kingdom start introducing amendments that are not absolutely necessary, there may be desires in other realms to do the same and to start unravelling what is a most important piece of legislation that will strengthen the monarchy. I hope that in considering whether to go ahead with this amendment we can bear in mind that we must not allow a compromise across the realms to be undermined for the sake of something that is nice to have but not absolutely necessary.

My Lords, in the light of the reassuring words of the right reverend Prelate the Bishop of Guildford, I wish to speak only for a moment on the subject of this amendment. I find very little fault with it. The fault that I do find is not in the amendment but in the effect it may have in reopening debate on others of the Queen’s realms. That may possibly give rise to other amendments that we would find less welcome. I have sympathy with the amendment and the motives behind it but I must say that I am not able to support it in this instance.

My Lords, I am sure that the Minister will have concluded that raising the legislation with the other realms would create considerable complications. If I understood the noble Lord, Lord Cormack, aright, he was making it plain that the purpose of this amendment was to try to remove any misunderstandings that may still exist about the position of the Roman Catholic Church in connection with the children in line of succession arising from a mixed marriage.

In the debates that we have had over past few weeks, not least on Report, there has been considerable clarification. The Minister has said a lot more since the Second Reading and above all the right reverend Prelate the Bishop of Guildford has set out very clearly what he perceives to be the position of the Roman Catholic Church. The only thing that is missing is a clear endorsement of its position, as expressed by the right reverend Prelate, by representatives of the Archbishop of Westminster, or by the Archbishop himself. Given the remarkable progress that has been made in relations between the Church of England and the Roman Catholic Church it would be helpful to have that endorsement. I hope that the Minister can help us in that regard.

My Lords, like several noble Lords who have just spoken, I take the view that this would insert into the Bill an unnecessary recital with no legal force. It would have the complication, as has been mentioned, of making it more complex and difficult to obtain agreement among all the 16 realms that need to agree to the proposals.

The intention of the noble Lord, Lord Cormack, is to seek further reassurance that despite the removal of the ban on Catholic marriages, no Catholic could ever succeed to the throne. He and others have made this point with some force throughout our debates. However, I wonder, as the noble Lord, Lord Deben, said, whether we are not pushing too hard on this point. Obviously the case has been made in an attempt to ensure that the Anglican supremacy is preserved. However, all that it serves to do is push our attention further toward the fact that the removal of the ban on Catholic marriages—obviously a welcome measure in itself—exposes the religious discriminations that remain. That is, no one who is a Catholic or who is not in communion with the Church of England can succeed to the throne.

It has been said that we are where we are, and I have some sympathy with that. However, we as a Parliament will need to return to some of these points in the not too distant future.

My Lords, I understand that in tabling the amendment my noble friend Lord Cormack sought to put beyond doubt the requirement that the sovereign be a Protestant and in communion with the Church of England. I readily recognise the concerns expressed by my noble friend; at every stage of the Bill, he has clearly sought to find a means of addressing them. I readily acknowledge that this amendment is, to use his words, more modest than those that he moved in Committee and on Report. However, as has been indicated in our short debate, the Government believe that it is unnecessary as both the Bill of Rights and the Act of Settlement are unambiguous with regard to the requirement that the sovereign be a Protestant and in communion with the Church of England.

The Bill does not pave the way to change that. No one who is not in communion with the Church of England may ascend the throne. That rules out Roman Catholics as well as many other people. I have concerns that by attempting to reiterate this, and to single out the peculiar and particular prohibition on Roman Catholics, one risks causing offence. I am sure that that was not intended, but one does risk causing offence to many of Her Majesty’s loyal subjects when there is no good reason in law to do so. I do not believe that we should put into a Bill words that could cause unnecessary offence and reopen wounds. It has also been said that the amendment is unnecessary in law and could therefore lead to other jurisdictions that have responsibilities in this regard putting forward amendments and unpicking an agreement that has been very carefully constructed across the realms over a considerable time.

As the Supreme Governor of the Church of England, the sovereign must be both Protestant and in communion with the Church of England. For this reason, we are not removing the bar on Roman Catholics acceding to the throne, as set out in the Act of Settlement and Bill of Rights. Of course, we have heard expressed in a number of our debates the perceived problem of the heir to the throne marrying a person of another faith. That problem exists under present law; it is not one created by the Bill. Clause 2 merely provides parity of treatment between Roman Catholics and people of all other non-Protestant faiths.

Nevertheless, I have recognised and understand the profound concerns that have been expressed. As the House knows, following a commitment made in Committee, I met Monsignor Stock on behalf of Archbishop Nichols and the Catholic Bishops’ Conference of England and Wales to discuss this matter. As the right reverend Prelate the Bishop of Guildford indicated, Archbishop Nichols indicated that the wording had been discussed with the Cabinet Office. I have the specific consent of Monsignor Stock to say that he was speaking on behalf of Archbishop Nichols as president of the Catholic Bishops’ Conference of England and Wales, and can inform the House that the view taken by the Catholic Church in England and Wales is that in the instance of mixed marriages the approach of the Catholic Church is pastoral. It will always look to provide guidance that supports and strengthens the unity and indissolubility of the marriage. In this context the Catholic Church expects Catholic spouses to sincerely undertake to do all that they can to raise children in the Catholic Church. Where it has not been possible for the child of a mixed marriage to be brought up as a Catholic, the Catholic parent does not fall subject to the censure of canon law.

My Lords, this was not a letter, it was a form of words that was agreed between Monsignor Stock and the Cabinet Office that I have placed on the record. There was a letter to me from the right reverend Prelate the Bishop of Guildford that enclosed a copy of a letter that indicated what I have just said. I do not believe that it is in my gift to say that it will be placed in the Library, but I reassure my noble friend that I have just used the words that were in that letter. I thank the right reverend Prelate the Bishop of Guildford for his contribution to our debates, both today and on Report, and for what he did following Report in engaging further with Monsignor Stock and the Catholic Bishops’ Conference of England and Wales. Indeed, on Report the right reverend Prelate, in a speech that I believe was very helpful to the House, concluded that the teaching of the Catholic Church on this matter,

“bears out the Government’s assurance that the Roman Catholic rules are not a block to the smooth functioning of the proposed succession rules”. —[Official Report, 13/3/13; col. 282.]

As I have stated both in Committee and on Report, we have a very clear signal that the overriding concern in Catholic pastoral guidance to couples in mixed marriages is the unity and indissolubility of the marriage. We have an equally clear signal from the Church of England, included in their briefing note to Members, that:

“The present prohibition … is not necessary to support the requirement that the Sovereign join in communion with the Church of England”.

Again, I recognise the concern with which my noble friend moved his amendment. I reiterate that the requirement that the sovereign be a Protestant remains as solidly placed in law as ever. In this context, I invite him to withdraw his amendment.

My Lords, I am grateful to those who have taken part in this brief but, I think, important debate. I listened with particular care to the speech of the right reverend Prelate and, of course, to what my noble and learned friend said. I believe that we have gone some distance in our three debates. We now have certain statements on the record that I believe are helpful to those of us who have concerns but are in no sense anti-Roman Catholic. My noble friend Lord Deben knows that when he left the Anglican Church to become a Roman Catholic, I honoured him for that decision. A similar decision was made by Miss Ann Widdecombe. I myself agonised at that time although in the end, instead of joining the Roman Catholic Church, I found myself elected to the General Synod to take the place that my noble friend had vacated.

I believe very much in the importance of our established church. However I may die, whether as an Anglican or as a Roman Catholic, I hope that the Church of England will continue as the established church of England. It is because of that, and because our constitution, as has often been said, is like a beautifully constructed watch, in that if you take one little piece out the whole thing will fall apart, that I have expressed my concern in three brief debates. The last thing I wish to do is to cause offence to anyone, particularly Roman Catholics, as I hold the Roman Catholic Church in high regard and always have. I very cheerfully pray, as we do frequently in Anglican churches, for the Pope. I would have liked to have seen something in the Bill that made explicit what is implicit, but I understand the points that have been made, particularly by the noble Lords, Lord Janvrin, Lord Fellowes and Lord Luce. Because I think that we have moved some distance, I will spare the House the exercise of going into the Division Lobbies.

On a final note, I hope that something can go into the Library of the House, as requested by my noble friend Lord Trefgarne. When I concluded my speech at the end of Report, I expressed the hope that at a fairly high level there could be an exchange of letters, and I hope that that is still possible.

I thank my noble and learned friend for the concern and sympathy with which he has listened to the arguments advanced. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2

Moved by

2: The Schedule, page 3, line 28, at end insert—

“Union with Scotland Act 17066 In Article XXV, Section 2 of the Union with Scotland Act 1706, for “preserve the foresaid Settlement of the true Protestant Religion with the Government Worship Discipline right and Privileges of this Church as above established by the Laws of this Kingdom in Prosecution of the Claim of Right” substitute “preserve the declaration, uphold and maintain the rights and subject specified therein”.

Accession Declaration Act 19107 In the Schedule to the Accession Declaration Act 1910, for “according to the true intent of the enactments which secure the Protestant succession to the Throne of my Realm, uphold and maintain the said enactments to the best of my powers according to law” substitute “according to the true intention to the declaration, uphold and maintain the rights and subject specified therein”.”

My Lords, this is in the nature of being a semi-probing amendment. I want to test the extent to which we have arrived collectively at answers to each of the four questions that I have developed through the currency of this Bill, and see whether my noble and learned friend the Minister can satisfy us, in his conclusions, that each of the tripwires and pitfalls that we have seen are now capable of being avoided. I come to this very much in the spirit of the finest executive I ever had the privilege of working with, who used to say, “Don’t give me people around me who know all the answers. I want the people who know all the questions”. It is in that spirit that I come, even though I stand here as somebody without any shred of qualification. I do not even have an 11-plus pass. Given that circumstance, it might be said that I have a right nerve to stand up here and ask these questions today in such an intensely legal affair but then, on the other hand, somebody has to.

In all this, I start by expressing my appreciation to my noble and learned friend the Minister for the considerable time, and the enormous patience and care, that he has given to answering each of the questions that I have raised directly with him. He has been absolutely splendid. My noble and learned friend will not be surprised to hear that while I have read every word he has written with great care, that is not the same as agreeing with every word I have read. It is clear that the principal point of difference between us is that he believes that I am relying on the entrenched status, as such, whereas it is the status and ordinary meaning of the statute law as it now stands, and as it relates to our duty and the Crown’s duty, that concerns me. I repeat: our duty and the Crown’s duty, which I do not believe are the same thing.

I was grateful to the Bill Office for agreeing to write to the Clerk of the House of Commons to ask what basis of interpretation it had placed on the use of a delegation of the royal prerogative in addressing its own debate on this subject. If I understand the very complicated answer correctly, it is along the following lines. The Crown cannot delegate something that it does not posses; it can delegate only the authority that it has, in which case it can delegate the power to us to give an opinion as to whether we want a Bill to pass and say “Content”, but it cannot delegate to us the authority to give it assent. That is retained by the Crown in all cases.

However, the Crown has to adhere to that in strict accordance with the coronation and proclamation oaths which precede it. Those oaths, passed through the Declaration of Rights in 1689, relate to all the powers that the Crown rightly held before the revolution. It ensured that the Crown could no longer deny that it was bound by the statute law with explicit changes to the coronation oath, made by enacting the Coronation Oath Act 1688. The settlement has been said by Her Majesty, on the occasion of the 300th anniversary of that great document, to be the sure foundation of our constitution. I am sure that Her Majesty would take that same view without any amendment today. It will be interesting to see, when and if the Bill passes to her for Royal Assent, how she will interpret that obligation in the context of those oaths.

The vulnerability here would arise if the passage of the Bill was deemed to represent a precedent by which to justify far more draconian changes than could be permitted to the established laws of this land under the Bill of Rights and to the detriment of the rights and liberties of the subject. By relying on such a precedent, in theory it is possible to introduce arbitrary power with a Bill of no greater apparent significance than this, to reintroduce the use of judicial torture or repeal the principle of “no taxation without representation”. These are, clearly, highly undesirable outcomes.

If this Bill is enacted with the addition of the amendment that I have proposed, from the next accession and beyond we would have the satisfaction—albeit that there may be a vulnerability prior to that accession —of knowing that the fundamental rights and liberties of the subjects have been restored absolutely. As such, I commend my measure as an opportunity that we ought to take. It is like a deep third man, in cricketing terms, by sweeping up all the bits that might otherwise trickle through. I commend my measure as an opportunity that we ought to take to hope, and later ensure, that no precedent might arise from this to the detriment of the rights and liberties of the subject. If we pass the Bill we risk setting a precedent with the potential for the worst possible outcome in the fullness of time, not knowing what future Governments and future authorities might wish to be brought to bear.

The Minister and I do not disagree on everything; he has quoted some words with which I wholly agree. They are:

“Parliament has also, for the time being at least, limited its own powers… It is possible that other qualifications may emerge in due course”.

This was with reference to the Europeans Communities Act and the Human Rights Act. It was also noted in the Countryside Alliance case. Others took the view that supremacy was no longer absolute in Jackson v the Attorney-General, with reference to the sovereignty of Parliament. There is definitely scope for divergence of opinion as to the legitimacy of the measure. If the Human Rights Act can affect the power of the law in force, it certainly cannot be said to be less significant than the Bill of Rights. There are duties emanating from the Bill of Rights and the Act of Settlement which require all in office not to breach their provisions. That is us, the Crown and its advisers.

There is an issue here that none of us noticed previously. There is no precedent for any Parliament ever proposing to a monarch a breach of a coronation oath without that Parliament resigning within the week. Is that seriously a risk this House would wish to take at present? I can see the looks of keen anticipation on the Benches opposite at that prospect but you cannot have governance and Parliament by accident, carelessness and oversight, which would be the case. We need to know what would happen.

The two instances in which Governments have been forced to resign in this case involved, first and most notably, a not insignificant Prime Minister called William Pitt the Younger in 1801. He had been in receipt of that enormous reorganisation document on the future order of battle and conduct of the British Army compiled by Sir John Moore, whose “corse to the ramparts” we bore in the poem. Sir John had written this far-reaching plan for the future of the British Army but had said, “This is ridiculous; we are wasting half the potential officer talent because we do not allow Catholics to be officers. Let them in”. Pitt said, “Great idea, let’s do it”. He went off to see the Crown, the Crown said, “Resign immediately”, and he did, despite the fact that there were 650,000 French troops on the shores at Calais waiting to invade under Napoleon.

Six years later, in 1807, almost the same thing happened again. This time it was a certain Sir Arthur Wellesley, the future Duke of Wellington, who with his usual forthright style had gone off to take the expeditionary force into Portugal. He had written to the Ministry of Defence and the War Office and said, “I am trying to fight a war against a Catholic army in a Catholic country and I have nothing but English schoolboys who are all well educated and stupid and all Protestants. I need some Catholic officers, please”. Lord Grenville, Prime Minister of the ministry of all the talents at the time, agreed, went back to the King and three days later he was out of power along with the whole Government. Are this Government going to last the week? Do we want them to? Yes, we do; we want the orderly continuity. Has anybody considered this implication and what will happen?

Passing this Bill in its present form will represent a denial by this House of the words and intentions of the Bill of Rights and the Act of Settlement. This legal point is not reliant, in the words of my noble friend; the argument must therefore be that some statutes are of such constitutional significance that they cannot be amended or appealed. The solution I have proposed in this amendment was the Duke of Wellington’s eventual solution, by which he got Catholic officers, of which there are now a very large number, into the British Army. This was achieved as a means of providing a sort of stopgap whereby you could suspend the oath for a period and then re-establish it, and hope that nobody did anything to alter the law against the interests of the subject in the mean time.

I am deeply grateful to the Bill Office for helping me to write that. It has also added the excellent extra clause, which addresses a separate Scottish oath of allegiance at the Coronation, thereby removing the threat, of which I have previously talked, that the Bill in its present form shreds chapter 25 of the Act of Union and renders the referendum in Scotland unnecessary; they have gone already.

My concern is that the law commands us directly not to do these things, but entirely to uphold the Bill of Rights. That duty has not been and is not being repealed. If we set a precedent, and this is simply set aside and ridden over roughshod, we appear to be placing ourselves above and outside the scope of the present law. This is far and away beyond the intended scope of this simple and otherwise desirable Bill. If, however, your Lordships now resolve to be content with the Bill, I first ask noble Lords either to consider passing the amendment, which would be a solution to all four points, or to take their chances in passing it to the Crown and hoping that the Crown can do more correctly what we will have failed to do ourselves.

There can be no doubt as to the requirements and priority of the future protection of the rights and liberties of the people of this country. The alternative is that we get an answer from the Minister which writes into the record something to which future generations can look back with satisfaction and recognise as an absolute assurance that, in Her Majesty’s words, the Bill of Rights will remain “a sure thing”, and we can all benefit from it.

My Lords, this is a bit of a minefield, so I tread with care and trepidation. I will make a very brief intervention, primarily to say to my noble friend how much I recognise the concerns he has expressed and the care with which he has followed these matters through. I know that he is extremely anxious, not only on his own behalf but on our collective behalf, that the legislation now going through the House is correct in so far as it seeks to affect the role and rights of the sovereign and sovereign succession and that it in no way undermines the position of any Member of your Lordships’ House, let alone that of any citizen outside the House.

I believe that the main answer to the questions that my noble friend raises rests in the sovereignty of Parliament. It is, as I perceive it, the right of Parliament to make alterations to legislation, even including the Bill of Rights. As I interpret it, the primary purpose of the Bill of Rights was to protect the interests and the rights of the people. The rights of the people are currently preserved in the powers and obligations of the Houses of Parliament and of the Government of the day. It is for us to make such amendments as we feel are necessary or desirable. In this particular case, a narrow amendment is being suggested which in a way underlines what was required of the sovereign at the time of the Bill of Rights; namely, that the heir to the Throne shall be a Protestant. There is nothing more to it than that. It therefore seems to me that we are exercising a traditional and constitutional right of Parliament to make amendments and alternations as we think proper. We are not in any way going against the obligations or commitments of the Crown. In carrying these matters forward, we shall be preserving the constitutional requirement in this country that the future monarch shall be a Protestant and a practising communicant member of the Church of England.

I do not think that the worries and anxieties my noble friend has expressed so profoundly are justified and, as he himself said, my noble and learned friend the Minister has given a great deal of care and attention to these issues and has written a letter of some considerable length to him that certainly satisfied me in the arguments put forward.

My Lords, I certainly understand that my noble friend Lord James of Blackheath has had serious, profound concerns about this Bill which he expressed even before Second Reading. I recognise the persistence and diligence with which he has continued to raise these issues. I am grateful for his kind comments and I think he would recognise that the comments and concerns he has raised have been given proper consideration.

It appears to me that my noble friend is concerned that, in allowing an heir to the Throne to marry a Catholic, this Bill would contravene the promises that each sovereign is required to make to maintain the established Protestant religion and in some way subvert the Bill of Rights or the Act of Settlement. It will come as no surprise to my noble friend that I disagree with his view, as I have made clear on a number of occasions in your Lordships’ House. Again, I want to make it quite clear that we are not amending the provisions of the Bill of Rights or the Act of Settlement which say that the sovereign has to be a Protestant.

My noble friend Lord Eden of Winton put his finger on the point. Indeed, I wrote at some length in my letter to my noble friend Lord James about the sovereignty of Parliament in the case of Jackson v Attorney-General in which the House of Lords considered the Parliament Act 1911. The late Lord Bingham said:

“The bedrock of the British constitution is, and in 1911 was, the supremacy of the Crown in Parliament … Then, as now, the Crown in Parliament was unconstrained by any entrenched or codified constitution. It could make or unmake any law it wished”.

With a former Lord Advocate, the noble and learned Lord, Lord Hardie, present, I had better say that there has been some question about that in some respects in Scotland following the dicta of Lord President Cooper in MacCormick v Lord Advocate. Nevertheless, Lord Bingham expressed that view very clearly in the Jackson case.

Given that the prohibition on the sovereign being a Catholic remains, we do not believe that there is any conflict between the Bill and the Accession Declaration or the promise made by the sovereign to preserve the Presbyterian Church in Scotland. I do not think I can really elaborate on it. My noble friend and I are going to have to agree to disagree because we believe that there is nothing in this Bill which subverts the Bill of Rights, the Act of Settlement or the oath which Her Majesty made on her accession. In the circumstances, I invite my noble friend to withdraw his amendment.

I thank the Minister for his reply. I reassure him immediately that my concern here is not about the religion of the monarch. I gave up religion at the age of 19 when I was studying for ordination to the Church of England. I discovered that while the Catholics burnt people because they thought it released the soul to go to heaven quicker in order to plead for mercy, the Protestant church was allowing hanging, drawing and quartering on the forecourt of St Paul’s Cathedral—where we all walked last week—to be able to discharge the secular crime of treason under the guise of being a religious crime against the church. At that point my faith crumbled very rapidly and was never restored.

My concern here is not primarily those factors. It is that we are putting Her Majesty in a position where we are asking her to breach the coronation oath, which I would not do under any circumstances. I have provided a suggestion as to how we may circumvent that by borrowing an initiative of the Duke of Wellington from 120 years ago, but none the less we need to be sure that it would work and that is my concern. If the noble Lord will answer that, I will be happy to withdraw my amendment.

Amendment 2 withdrawn.

My Lords, I indicated on Report that I would report to the House once the necessary steps in each realm had been completed and we were in a position to commence the legislation simultaneously. I reiterate that commitment. As it may be of interest to your Lordships, I can inform the House that since our debate on Report, Royal Assent was given to the Canadian Succession to the Throne Act on 27 March. We received confirmation from the Government of Antigua and Barbuda that, based on the nature of their constitution, they will not need to legislate to give the changes effect, and that the Council of Australian Governments agreed on 19 April, last Friday, to a process to change their laws.

As I have indicated on a number of occasions, the provisions in this Bill have been carefully worked out in agreement with the realms, and it is important that we now proceed to pass this Bill and show that we have been able to fulfil the task asked of us by the realm Prime Ministers in Perth in 2001. It is an important piece of legislation that has its roots in securing better equality, and certainly we await with great expectation the birth of a child to their Royal Highnesses the Duke and Duchess of Cambridge. We wish them every health, in particular the Duchess as she proceeds towards the birth of her child. In doing so, we know that if this Bill passes, and if the required processes take place in the other realms, that child, irrespective of whether it is a boy or a girl, will take its place in line to the throne ahead of any subsequent siblings. Therefore, I beg to move that this Bill do now pass.

My Lords, I do not intend to delay the passage of this Bill for more than a few moments. It is sad that this Bill has been driven through with such speed. Many of us would have preferred a Joint Select Committee, for example, to consider some of the important constitutional implications that it raises, and indeed changes. However, that has not been the case, and therefore that, for now at least, must be that. This Bill has also set running the hare of what happens to the hereditary peerage with regard to the succession arrangements for hereditary peers. I must tell your Lordships that those arrangements are, as I understand it, a great deal more complicated even than they are for the Crown. I dare say that if Bills come forward for that purpose they will delay the noble and learned Lord very much longer than this Bill has.

Bill passed.

Growth and Infrastructure Bill

Commons Reasons

Lords Amendment 7: After Clause 4 insert the following new Clause—

“Development orders: development within the curtilage of a dwelling house

(1) Section 61 of the Town and Country Planning Act 1990 (development orders: supplementary provisions) is amended as follows.

(2) After subsection (3) insert—

“(4) Any development order or amendment to an existing development order made after 1 January 2013 that grants planning permission for development within the curtilage of a dwelling house shall not apply within the jurisdiction of a local planning authority if that authority has resolved that it shall not.””

Commons disagreement and reason

The Commons disagree to Lords Amendment No. 7 for the following Reason—

7A: Because it is not appropriate to give local authorities further powers to disapply planning permission granted by a development order.

Motion A

Moved by

That this House do not insist on its Amendment 7, to which the Commons have disagreed for their Reason 7A, but do propose the following amendments in lieu—

7B: Page 5, line 29, at end insert—

“(2B) Without prejudice to the generality of subsection (1), a development order may include provision for ensuring—

(a) that, before a person in reliance on planning permission granted by the order carries out development of land in England that is a dwelling house or is within the curtilage of a dwelling house—

(i) a written description, and a plan, of the proposed development are given to the local planning authority,

(ii) notice of the proposed development, and of the period during which representations about it may be made to the local planning authority, is served by the local planning authority on the owner or occupier of any adjoining premises, and

(iii) that period has ended, and

(b) that, where within that period an owner or occupier of any adjoining premises objects to the proposed development, it may be carried out in reliance on the permission only if the local planning authority consider that it would not have an unacceptable impact on the amenity of adjoining premises.

(2C) In subsection (2B) “adjoining premises” includes any land adjoining—

(c) the dwelling house concerned, or

(d) the boundary of its curtilage.””

7C: Page 5, line 31, leave out ““or (2A)”” and insert ““, (2A) or (2B)””

My Lords, at Third Reading this House made an amendment to provide local authorities with further powers to disapply planning permission granted by a development order. As the House will be aware, the Commons noted the commitment made by the Secretary of State when discussing these issues to give further consideration to the concerns of both Houses, and it disagreed with this amendment.

Members of both Houses will have received from the Secretary of State a letter, which I forwarded to them, giving the result of his review of the situation, which has resulted in the amendment that we laid on Friday, and which we will now discuss. It may be helpful if I briefly outline again the thinking behind our proposal on extending the existing permitted development rights for homeowners wishing to extend their property. As I said at an earlier stage of the Bill’s consideration, these changes will make it easier for thousands of families to undertake improvements to their homes. In bringing forward these changes, we have looked across England and recognised that many people want to enlarge their homes. They want to do so not by much but sufficiently to create more living space, perhaps to care for elderly relatives or because of a growing family, and without the cost of having to relocate.

However, we have been clear from the outset that it is important to ensure that any impact on neighbours is acceptable. Concerns on this issue have been set out in this House by noble Lords in previous statements, by Members in the other place and in responses to our consultation. As I have said, the Secretary of State made a commitment in the other place that we would respond to these by bringing forward a revised approach.

I have tabled an amendment that delivers that commitment. This amendment makes it possible for the Government to put in place protections for neighbours where adjoining homeowners seek to use our proposed extension to their permitted development rights. We have reflected on the concerns raised by noble Lords. The noble Lord, Lord True, raised the issue of the rights of neighbours to protect the amenity of their homes eloquently on Report; the noble Lord, Lord Tope, expressed concerns that our proposals would set neighbour against neighbour; and, as the noble Lord, Lord McKenzie, put it, neighbours can impact dramatically on their neighbours’ quality of life. The amendment that we are proposing responds directly to this important issue.

In drafting our amendment, we have drawn on the principles outlined in the 2007 report Blueprint for a Green Economy from the Quality of Life Policy Group, which was chaired by the noble Lord, Lord Deben, in his previous life and Zac Goldsmith MP. Indeed, the noble Lord referred to this very report when arguing against the amendment that was made to the Bill at Third Reading. The Quality of Life report states that:

“Too much planning has become development control”.

It goes on to say that,

“the time and trouble that has been spent on dealing with planning applications for extensions and additions, porches and garages … cannot be seriously said to have been cost-effective”.

We agree with that, and with the report’s message that protecting neighbours’ amenity is important.

We are therefore introducing a light-touch neighbourhood consultation scheme. This recognises concerns that larger extensions could be built without offering neighbours any opportunity to express their views. Adjoining neighbours—not just the ones on either side but those who adjoin the rear of the property as well—will now be consulted where a homeowner wishes to use the new extended permitted development rights to build a good-sized extension. If neighbours think that the proposed extension will have an unacceptable impact on their amenity, they can ask the local planning authority to consider this—for example, if they think that it would totally overshadow their living space or that they would lose their privacy due to overlooking windows. Where neighbours raise concerns with the local authority, it will then consider the impact of the proposals on the amenity of those neighbours. It will make an objective decision on whether the development is acceptable or if the impact on neighbours’ amenity is such that it should not go ahead under permitted development rights.

We recognise that neighbours will have very different views on whether an extension impacts on their amenity, and that similar proposals on the same street may therefore have different outcomes. If a local authority is asked to consider the impacts of a proposal it will look at this on a case-specific basis. The outcome will not necessarily be the same as for other extensions in the street.

As the Secretary of State has made clear, local ward councillors will, in the usual way, have the opportunity to put forward their views on the desirability or otherwise of a proposed extension. The process for dealing with an indication that an extension is proposed will be that a homeowner wishing to build an extension will notify the local planning authority and provide plans and a written description of the proposal. The local authority will notify the adjoining neighbours—that is, the owners or occupiers of properties that share a boundary, including those at the rear. We will set out the details in secondary legislation but the intention is that neighbours will have 21 days in which to make an objection. If no neighbours object, the local authority will notify the home owner that they are able to proceed with the development. If any neighbour raises an objection, the local authority will then consider the case on the single issue of whether the impact of the proposed extension on the amenity of neighbours is acceptable.

It will be up to individual councils to decide how they handle the consideration of these proposals. We would expect it to work in the same way as for planning decisions: that is, for the council to decide whether the decisions are delegated to officers or made by a planning committee. If approval is not given, the home owner will be able to appeal against a refusal or may wish to submit a full planning application. The home owner will be able to appeal against a refusal of consent but, as with normal planning consents, neighbours will not be able to appeal against a grant of permission. This approval process will not be onerous and we do not expect that it will impose significant costs on local authorities, but we will discuss this and other implementation issues with the Local Government Association.

These proposals should remove the need for local authorities to feel that they have to resort to using Article 4 directions to remove the new permitted development rights. I assure noble Lords that we have listened very carefully to the concerns raised about the operation of Article 4, and we will work with the Local Government Association to update our Article 4 guidance as part of the review by the noble Lord, Lord Taylor of Goss Moor. This will make sure that the process is as clear and straightforward as possible.

The noble Lord, Lord True, clearly set out that he was concerned that our proposals took away,

“a neighbour’s right to have a say on a big and potentially overbearing extension shoved up outside their back door”.—[Official Report, 26/3/13; col. 982.]

As the Secretary of State made clear, we have listened to Parliament and responded directly to these concerns. The amendment gives local authorities a role where neighbours ask them to make a judgment while allowing home owners across the country equal opportunity to make use of the new permitted development rights. I look forward to hearing the views of the House. I hope that I have explained as clearly as I can how our amendment addresses the concerns raised about the impact of our proposals on neighbours and why, therefore, the House should agree with the other place that the amendment made here at Third Reading should not become part of the Bill. I beg to move.

Motion A1

Moved by

As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 7”.

My Lords, I should explain that we tabled this Motion, which insists on the position originally taken by your Lordships, as the clock was ticking on Friday without our then having sight of the government amendment. The Secretary of State, in announcing an uncharacteristic conversion to the spirit of consensus, gave neither us nor the Commons a clue as to what this revised approach to permitted development rights for home extensions might be. We have to continue to deliberate on these matters without the benefit of the results of the consultation on extended permitted development rights that concluded some four months ago. It is difficult to believe that they would not have some relevance to the matter in hand, yet still the information is withheld from us. However, I hope that the Minister might at least confirm one point for us this afternoon. The consultation included the proposal that changes to permitted development rights, including those relating to the curtilage of a dwelling house, should be in place only for three years and that developments would have to be completed within that three-year period. Does the consultation support that proposition?

We now have sight of the government amendment, and the benefit of correspondence from Ministers, and have to assess how far it addresses the concerns prompted by the amendment moved so comprehensively by the noble Lord, Lord True, an amendment that found favour around your Lordships’ House and that clearly had considerable support in the House of Commons. I do not propose to restate in depth the points made by the noble Lord, Lord True, and others with which we agreed, other than to say that the amendment reflects a demonstrably localist approach, scepticism that the extension of these particular permitted development rights would make a meaningful contribution to kick-starting growth, concerns that an unamended Article 4 direction process was not inevitably a secure or speedy route for local councils to override inappropriate centrally set permitted development rights, an acknowledgement that individuals can pursue planning permission in the absence of permitted development rights and, in the words of the noble Lord, Lord True, that the Government’s proposal,

“takes away a neighbour's right to have a say on a big and potentially overbearing extension shoved up outside their back door. What is more, it removes that vital process of moderation and conciliation that the local planning system provides in these matters”.—[Official Report, 26/3/13; col. 982.]

We look to the Minister today to convince us that the government amendment addresses these points. The Government have clearly been forced to back away from their original position, and this is to be welcomed. Without quite a lot more detail, however, it is difficult to judge whether they have moved far enough. Giving neighbours an opportunity to object to proposals so that the local planning authority becomes engaged would address one of the concerns, but we need to understand how meaningful this would be.

What is the nature of the information to be provided to the local planning authority, and to what extent might it differ from that to be submitted for formal planning permission? How extensive would the local planning authority’s notice obligation be? Would it be only to properties that actually adjoin? I accept that this would include those at the rear of premises, but what about those that are not immediately adjacent but within line of sight of the extension? Will objections be entertained from those who have not been formally notified? Is there a broader question of the amenity of an area that should be taken into account?

Can we be provided with some examples of what “an unacceptable impact” actually means? How would the process work when the adjoining property is currently empty, empty for a three-week period, or currently owned by the same people as those who are seeking a development next door? What are the appeal rights? In her introduction, the noble Baroness said that there would be appeal rights where the home owner has been refused the opportunity to develop. Will it be 50% of the garden or 50% of the curtilage of the property on which development can occur? What is the process by which local planning authorities will take a view on the impact of the amenity of properties, and how will it encompass what the noble Lord, Lord True, referred to as,

“that vital process of moderation and conciliation”? —[Official Report, 26/3/13; col. 982]

Will it be ward councillors or the planning committee who will take the decision? What will the enforcement arrangements be if someone develops within permitted development rights but outwith the plan notified to the local planning authority? If the local planning authority considers that a proposal would have an unacceptable impact on amenity, this would presumably not preclude an application for planning consent. I think the noble Baroness confirmed that, although it might, of course, invite a negative response.

Will the process be applied to development undertaken by existing permitted development rights or just such future rights contemplated by the consultation documents? Will these rights change the Secretary of State’s approach to Article 4 directions? The proposed process imposes obligations on local planning authorities for which they will receive no fee income. Is it true, as reported, that No. 10 has said that local authorities will have to find the funding for this themselves? What are the estimated costs that are likely to arise across England?

How does the Minister respond to the briefing we received from the RTPI, which states:

“The Government’s proposal relies on a rigorous flow of information. If a house is not occupied for three weeks (perhaps during a long summer holiday), or the house is let and the tenant is not assiduous in forwarding notification, or if the post office makes errors, owners will miss out on an opportunity to object … No system is perfect, and when applications are made through the planning system, it is possible that an owner may miss an opportunity to object. Planning officers offer a second line of defence against what might be a serious loss of amenity to a property owner when then objectively assess applications against neighbour objections”?

The briefing goes on to say:

“There are currently two regimes: development that is permitted and development that needs planning permission. This division is reasonably well understood and has stood the test of time. The Government’s proposal adds a third regime, one reliant on prior notification. The RTPI believes that the Government should be seeking to make planning more effective, not more complicated”.

How does the Minister respond to that?

If we are not to remain committed to the amendment of the noble Lord, Lord True, we will need much reassurance and clarity on these points. I hope that the Minister can help us. I beg to move.

My Lords, I noticed that many of the views expressed by the spokesman for the Opposition agreed with points that I think are important and on which I therefore wish briefly to comment. The most important thing of all—from my own experience I found this very unsatisfactory—is that you cannot rely on getting notification. In cases in the past 12 months where I have been the immediate neighbour, I have twice not received notification. Secondly, clever people always put in their applications on Christmas Eve or at some time when they know that no one is around. It is important in those circumstances that extra time is allowed for the consultation based on the number of working days, not just days. The unprincipled policy is used regularly by clever people, even under normal planning regulations. Those two matters are important.

On other issues, I have been satisfied by discussions with the Minister that the Government really are thinking about these matters. The sunset clause is good but, for notification, the system that has been in use for years should be continued whereby a notice is posted on a lamp post, a hedge or something like that, so that some friend or neighbour passing by would say, “Did you see that they are building something next door to you?”. Even if you are away on holiday, you can ask your friend to let you know. However, if you come back from a three-week holiday, which is not unusually long—particularly if you go to Australia; it is hardly worth going if it is any less than that—it is important to be sure that nothing underhand is going to be slipped through in your absence.

My Lords, I should declare my interest as a vice-president of the Local Government Association. I have had many concerns in recent months over the proposals on permitted development. However, I am grateful to the Minister for these proposals, albeit that they were revised at the last moment. They go a long way towards improving the proposals on permitted development.

It would have been wrong to deny neighbours the right to object to an extension that might impact on the amenity of their property, particularly given the significant increase proposed in the scope of permitted development. While I am conscious that some 90 % of current planning applications are approved and only 10% are turned down, clearly the increase in the proposed permitted development level will produce a higher proportion of applications that are going to be challenged by neighbours. I agree with quite a number of the points made by the noble Lord, Lord McKenzie, who has asked a set of questions about precisely what detail the Government propose.

The Minister wrote to Members of Parliament explaining what the Government were proposing to do. It would help our understanding of the Government’s amendment if the Minister could clarify some of these details. First, it is stated that home owners wishing to build extensions under the new powers would notify their local council with the details. It is spelt out in some detail in the amendment, but I hope it will be absolutely clear that there should be a covering letter that explains all the detail that a third party might be interested in reading, that there should be a copy of the plan of the architect’s design, and that all details of design and materials should be submitted at that stage. Because of costs, this is not just a matter of planning permissions: it also impacts on building control.

The council is then to inform the adjoining neighbours that a letter and application have been received by a home owner. What does the word “inform” mean? That information should include every single detail that is known about the application so that neighbours who might be affected can make a rational contribution to the application and their views can be properly considered.

The question of who is an adjoining neighbour is defined in this amendment as someone who abuts the curtilage of the property. I suggest that that does not go quite far enough. I think it should be anybody who can see the proposed development site from any point on their property, because it will impact on their amenity if they can see it. But if they are at the diagonal point—in other words, not immediately adjacent to the side or to the bottom of someone’s garden—they may well be able to see the proposed development. Those people should have a right to object as well.

I agree entirely with the suggestion that three weeks is not adequate, partly because there is a tendency for the three weeks to start at the date on which the letter is sent. It seems to me that 28 days would be a better period by which a neighbour should be able to respond.

On the question of objections being received from neighbours, I heard on a news broadcast at the weekend, but perhaps I misinterpreted it, that ward councillors would have a role in making the decision, in arbitrating. I understand that that is not what is being proposed, but I would appreciate the Minister’s confirmation of that fact, because in my view it should go to the council’s planning committee.

Statutory consultees should also have a right to be consulted. I am thinking particularly of parish councils, because they have an existing role and it is important that that role is clearly identified.

On the issue of the fee, I had thought that the planning system was supposed to be financially self-sufficient: that is, that the expenditure on the planning system and planning officers was to be funded from fees received. I am not certain that it is right that someone who has applied for planning permission should not pay a fee. There is a case for saying that if there are no objections to what is a very simple matter, and with the council operating as a post box only, it would be legitimate for there to be no fee. But if it is more complex than that and takes up significantly more of the planning officer’s time, this ought to be looked at again.

On balance, I feel that the Government have gone far enough for the amendment to be supported today. However, I hope the Minister will confirm that, first, it is the development that should have happened within three years, as opposed to a notification having been received; and, secondly, that the period will be reviewed not at three years but prior to that, so that should any future Government seek to renew the extension of permitted development, the decision is made on a rational evidence base.

I welcome my noble friend’s confirmation that, in terms of devising the regulations, there will be significant discussions with councils and the Local Government Association as to how this new system will actually work. I hope very much to hear the assurances from the Minister and, assuming they are forthcoming, I shall be very happy to support the Government in the Lobbies this afternoon.

I rise only because my noble friend, like my right honourable friend, has drawn into consultation the Quality of Life report, which I chaired. I declare an interest as a vice-president of the Royal Town Planning Institute and an honorary fellow of the Royal Institute of British Architects. I think it important to rise simply because I would not like the House to believe that what is here in the amendment was what the Quality of Life report actually recommended. The reason for saying that is not because I wish to undermine what the Government have done but because the Government have been less radical than we suggested they should be. We said that in most of these cases it is not a matter of planning but of neighbours. It is a matter of sorting out what is fair dos, based on the principle that we believe in the rights of property. I ought to be able to do whatever I like with my property but I cannot do that in a world as closely knit as we are without taking into account what my neighbours feel about it. We said that it was ridiculous to tie up the planning system of the local authority to do this.

What should happen is that you would have a duty to tell your neighbours what you intended to do, with a plan and the rest of it. They would then have a month—28 days—to tell the local authority that they did not like it. The local authority would then have the right to do three things. First, it would have the right to say, “Well, this is a load of old rubbish and we’re not going to take any notice of it”. That seems perfectly reasonable, as you have to have a judgment in the first instance as to whether people are merely being difficult. We all know there are some people who can be difficult in any circumstances about anything, and anybody on a local authority knows that better than I do. The second thing that the local authority could do would be to say, “We think that this is a serious planning matter”—in other words, it was not a matter of neighbours, but something very fundamental, and it would therefore call it in, in effect, for a planning decision.

However, it would most likely say that this was a matter of neighbours and that they were going to appoint an arbitrator. Local authorities would have a panel of arbitrators, who would be very ordinary people, whose only job would be to go and see what the fair deal or reasonable thing would be in the case. Having decided that perhaps a slightly smaller extension would be fairer as far as the neighbour was concerned, they would say, “We will agree to this, if this change is made”. Alternatively, they would say, “We agree to it entirely”. They would start from the assumption that they would want to agree to the development; in other words, there would be an assumption in favour of development, because that seems to be reasonable given the nature of property.

The Government have taken this up. It is a huge improvement on the previous suggestion and a generous way of moving forward. I think my noble friend Lord True will probably feel that it is not quite what he wanted but we have gone a long way. However, there are three bits to it which I hope that my noble friend will think again about. In no spirit am I complaining about what she is doing—I am very pleased about this—but there are three things. First, I think that 28 days was probably a better period, simply for the reason that it is helpful for people over holidays and the like. Secondly, I wonder whether she could look again at enabling the local authority, even if it were not in the statute, to decide that this kind of thing was done by an arbitrator, not through the planning committee. I wanted to remove from the planning department questions such as, “Can I have a car port? Can I build a room in the already present roof of my garage? Can I put up a bit of an extension which seems quite sensible as my neighbour has exactly the same?”. All those things are really neighbours’ issues, and, frankly, when you consider the time spent and the shortage of planning officers, it is much more sensibly done by having a sensible man or woman looking and saying, “That seems perfectly reasonable”.

Thirdly, I hope that my noble friend will look at the one series of protections that we specifically put in, which is that this would not apply in an area which had been designated as a conservation area. In that area there should be a wider consultation than merely with one’s neighbours. I say to the Minister that I entirely support that it should be one’s contiguous neighbours because frankly, if we are going to go out to everybody who could possibly see the house, we are in real trouble. The idea that I could say that I ought to be able to complain because if I stood on the top of my house with a telescope I could see this house is just nonsensical.

We are trying to have a proper balance, and I think this amendment achieves that. I hope that the Minister will look at those three things, not least because I believe that our original proposition was an easier, simpler and ultimately more radical concept. However, I am pleased that we have had not merely half but three quarters of the cake and thank her very much for that.

My Lords, I agree entirely with what my noble friend Lord Deben says about conservation areas. I would like to make one point and ask one question of my noble friend the Minister. Like others, I thank her for the movement that has been made. I enthusiastically supported the amendment of the noble Lord, Lord True, either on Report or Third Reading. It seems that the Government have moved between half and three-quarters of the way.

Does the Government’s movement, which we welcome, take into account the time that it takes to build an extension? We have talked about loss of views and all that sort of thing, which are the obvious points, but some extensions seem to take an unconscionable time to build and the disruption of neighbours’ lives during the building can be not just an aggravation, but in some cases a real health hazard. I would like my noble friend’s assurance that permission to extend does not extend indefinitely.

My Lords, I join others in welcoming the Government’s partial, if deathbed, conversion to doing something about these proposals. I certainly endorse many of the comments that have been made about the problems that remain apparently unresolved. I particularly join the noble Lord, Lord Deben, in strongly urging the Government to look again at the issue of conservation areas, unless it is capable of being clarified that the proposals will not apply to conservation areas.

I draw particular attention to the wording of Amendment 7B, where in the preamble it says to insert:

“Without prejudice to the generality of subsection (1), a development order may include provision for ensuring”,

the safeguards to which the Minister referred. Why is that “may”? Why is it not the case that the development order will include these provisions rather than there being an option? It seems to me that it would be all too easy to evade the consequences of the partial progress that the amendment produces if it remains an option simply not to provide that in the subsequent development order.

My Lords, very briefly, in my 26 years as legal eagle on the “Jimmy Young Show” on Radio 2, there was no issue more sensitive and more repeatedly brought up than neighbour disputes relating to the extension of premises. It causes immense angst among our fellow citizens. People have mentioned rights of view and rights of light; there is no right of view, of course, and rights of light are notoriously difficult to judge and adjudicate on. I am entirely in favour of my noble friend the Minister trying to ensure that what comes out in the wash—I am thinking particularly of the subsidiary legislation—leaves minimum room for aggravation and disagreement.

For example, can anything be done about defining,

“the curtilage of a dwelling house”,

and the boundary of this? Those sorts of details may not seem important to us here because, I suspect, most of us live in rather spacious houses with gardens, but in terraced accommodation par excellence these issues are of huge importance. I am delighted to hear that the notice period is going to be 28 days but, to be honest, it needs to be 56 because these things can move very slowly and it takes less sophisticated mortals a long time to find out how to deal with some of these matters.

My Lords, in rising, I feel rather like the ancient prophetess who went to see King Tarquin with the Sibylline Books and saw six of them promptly burned, only to have them accepted at the last minute. Like her, I am grateful for that. I thank my noble friend Lord Tope, the noble Earl, Lord Lytton, and the noble Lord, Lord McKenzie, for their support for this proposal at an earlier stage.

Of course, I thank my noble friend the Minister for her amendment. Unlike some in this debate, she has always understood the practical, human issues that are involved in seeking to end the rights of objection to developments which, as some have pointed out in this debate, may take more than half of a neighbouring back garden. Crucially, these may also create precedents in local planning in relation to character and new lines of building, which may well affect the person next door but one, who, under the proposal before us, still has no right to a say.

Parliament has secured some movement and I think many householders will thank goodness for your Lordships’ House for the role it has played in securing that. My view has always been—and remains—that faced with potentially overbearing developments, neighbours should have the right to defend the value and amenity of a home. For most of our population, that home represents the focus of all their lifelong work and aspiration and the bulk of their family’s wealth. That is the fundamental point. With the help of colleagues in another place and many of your Lordships, people in the Local Government Association and the local government world, and so many other people—ordinary people—this has finally been vindicated. I am very grateful to the Government for laying an amendment to protect these rights.

The question is: what do we do now? The noble Lord, Lord McKenzie of Luton, to whom I pay tribute for his role in not only this but all our local government debates, says that we should insist on the amendment for which I secured your Lordships’ support at an earlier stage. It is true that the Government’s amendment was laid before the House at the last possible moment last Friday. I might agree with him that it would have been better if it had come sooner. I myself suggested a way forward in which both sides would withdraw their amendments so that more timely discussion might take place on an agreed draft regulation specific to this issue, which could be debated later in both Houses after proper consultation. I actually think that would have been a better and more orderly course in Whitehall terms, but that is not where we are.

When I said last Friday that I would like time to reflect, seek clarification, consult others involved and consider the course of action that I might take today, I found that the Labour Party had decided, within no more than five minutes, to take over the amendment and put down a Motion to insist. I found that a little surprising and disappointing after all these months.

The localist approach in my amendment had much to commend it, but ultimately it was a device to bring this issue before Parliament and the nation. Thanks to the intransigence of others, your Lordships have ironically succeeded in doing that in a highly public way. Nothing is perfect, and my amendment certainly was and is not, and crucially it was not agreed to by Members of another place. We have to let it rest.

Like others, I greatly welcome the intervention of my right honourable friend Mr Pickles. His proposal unequivocally protects the rights of immediate neighbours, which is a good thing; I thank my noble friend for that. I must express some puzzlement that it was not left to that department to settle this question. It might have happened much sooner had it been. So I welcome this and hope that it can be considered in another place.

As others have said, if it does go to another place there remain serious issues to resolve. Here, like other noble friends, I will look to my noble friend on the Front Bench for the clearest possible assurances to this House and indeed through it to the other place that there will be full, meaningful and specific consultations on the details behind this proposal before final regulations are laid. After all, despite many requests made by your Lordships, Parliament has yet to see the results of the consultation on the original plan.

Not to add to the list too many things of which others have spoken, I agree with all the points that have been made. But will we be told how local authorities, parish councils or neighbourhood forums will be able to protect the character of local areas if the immediate neighbour or neighbours to a development do not object to a particular, ugly development for whatever reason—perhaps infirmity, absence or even complicity? While I take the point that nobody standing on a seat with a telescope should be involved, are there not others overlooking, whether in town or country or in the wider community, who in some instances also have an interest? Does building quality not matter?

I agreed with what Mr Boles said about building quality. Surely a local authority and a community have the right to have a say on that. Does flood risk matter? Is there to be no backstop procedure for local authorities to consider these issues? The wording of the amendment appears to allow for the amenity of neighbouring premises only. Will the Minister and her colleagues consult on how, as others have said, neighbours will be notified and how they will be protected if they do not hear of the development in what the briefing said would be 21 days? There has to be movement from that. For personal reasons I have been away from my house for 21 days in the last few weeks.

In the case of permitted development, as I understand this proposal, building could start immediately on conclusion of the notification period. Someone could come back and find that the builders have already moved in. Under the present system, construction has to await planning approval. We hear that local authorities will not be able to charge fees for these procedures. Does that apply only in cases that have no objection? Even then who, if not the applicant, is to bear the cost of considering drawings, giving notice and ensuring that notice is given with sufficient details as to the nature of construction in a proper way? Who will ensure that these things are done in a proper way if not a local authority?

These detailed matters cannot be resolved in primary legislation, and I and other noble Lords who have spoken are not asking that they should be. I thank my noble friends for the significant and considerable change that has been made, and ask them to engage with the local government associations, local councils and many other bodies that already making strong representations on the details behind these proposals since they were published. There is much work still to be done. Perhaps it is best done away from the glare of publicity, and after 15 minutes of fame I am happy to withdraw to the wings. However, this work must be done. Will my noble friend explain how and on what timescale consultation will take place before regulations are published?

I conclude by saying that I will always think that this episode represents a textbook case of how not to make policy. However, the Government’s agreement to protect neighbour rights is highly welcome and demonstrates the continuing important role of Parliament and of your Lordships’ House in holding the Executive to account, and the willingness of my noble friend on the Front Bench and colleagues in her department to listen to Parliament. In the light of this movement, I say to the noble Lord, Lord McKenzie, that I would not have pressed my amendment today, and I will not support him in the Lobbies if he presses his.

The Government’s amendment, however belatedly tabled, is a significant change that should be welcomed by noble Lords, even if the ecstasy with which they greet it will be measured by the seriousness of the commitments given to consultation on the details. Parliament has an unfettered right to express its view on secondary legislation. Like others in both Houses, I will reserve that right until the final details emerge. How much easier that will be if we talk to each other, consult with each other and listen to each other. I thank my noble friend for this concession and will not trouble your Lordships further.

My Lords, I will not detain the House for long. My interest as a practising chartered surveyor in matters to do with planning is well known. The concern about this area of the Bill is not to prevent development from taking place but to ensure that the community should have some input. There is a serious and objectively important issue here. It is that the density of development is a construct, particularly in urban and suburban areas, that needs constant review and monitoring. Filling up open space with development—perhaps “filling up” is a rather pejorative term, but noble Lords will get my drift—touches on and concerns that issue, and produces long-term, quantifiable effects on value, amenity and the general sense of space. That affects not only the public perception but individual neighbours. It is very easy for someone with a very short-term agenda who simply wishes to have further space for whatever reason to try to construct something that is less than worthy in the context of the locality. I pay tribute, as I have before, to the way in which local planning authorities have protected this construct, this facet, of our built environment. It is important that there should be oversight. Policies to protect amenity space, light and air should none the less still have house-room here.

There are a couple of issues that I hope the Minister will be able to clarify. Another qualitative consideration that risks being lost is to do with materials—things like colour, finish and texture. They risk being lost under the process of prior notification where the principle of development is enshrined in a permitted development context. I appreciate that design guidance in supplementary planning documents may overcome this if it is sufficiently up-to-date and all-encompassing, but it is not always.

It has been mentioned already that the local planning authority will receive no fee, whatever the length and breadth of its administrative role may be in dealing with something under a prior notification regime. I think that that is probably an injustice, other than in circumstances where, as the noble Lord, Lord True, and others have said, it is a straightforward in-and-out issue.

We have heard about the issue of too much planning and overconcentration. I believe that I made a comment earlier in the course of the Bill about the colour of people’s front doors or the design of their windows. We need to try to distinguish between removing the overconcentration on the particular and the wholesale removal of scrutiny, because the two are not the same.

Comment has been made on how the service of notice would work. That must wait for another day, but I would instinctively prefer 28 days rather than 21.

A further area, that has already been pointed out by the noble Lords, Lord McKenzie and Lord Shipley, is the question of definitions—back garden as opposed to side garden, curtilage as opposed to plot area, setting as opposed to something else—and the basis of identifying the proportion of the plot actually built upon if you want to get some sort of absolute measure. I remember a situation where I made an application for a tenant’s garage. It was turned down because, although it was in a rural road, the planning officer decided that it was offensive to the “streetscene”. Anyone walking up the “streetscene”, where they saw one house every half-mile, will realise what I mean when I say that I did not think that “streetscene” was a concept that applied to something that was stuck behind a hedge up above a high bank. This occurred because, needless to say, the building was not built with a frontage onto a highway, as you might normally expect, but was built end-on to the highway, so front and back gardens had a boundary with the highway. It is this sort of muddle that needs to be sorted out, because for every plot that is governed by the standard criteria of an urban street, there are other ones that are not so governed because they are corner plots or otherwise different and individual. We need to somehow disentangle that.

The noble Baroness, Lady Gardner of Parkes, asked what the sanction will be for not complying with a scheme as prior notified. Indeed, that is something that we need to be very careful about.

On the whole, though, I believe that the Minister and her honourable friend have gone some way to try to deal with this business through this halfway house of prior notification. Prior notification is not an unusual construct, despite what the RTPI may wish to say; it is commonplace in agricultural permitted development, so I do not have any particular worries with it as such. If the Minister is prepared to give some sort of undertaking that the detail of this will be subject to consultation, not least consultation via the processes through this House, then I will be inclined to take the side of the noble Lord, Lord True, and be prepared to draw a line under this—to take half a bun or two-thirds of a bun, even if it is not the whole bun that we wanted to start with.

My Lords, I thank the noble Lords who have spoken, particularly my noble friend Lord True, for the tenor of this debate. I accept that there is not everything that everyone would want here, judging by the questions, but the House seems to accept that we have moved a long way since we started on the Bill.

I want to reiterate that the revised approach that we are taking responds in a targeted and direct way to the concerns that have been raised. As noble Lords have said, there are already existing permitted development rights that have operated effectively for a number of years. The change is that those permitted development rights are extended with regard to the size of buildings. This is not new, although I well understand the concerns that noble Lords have raised. Our revised approach will now ensure that under the new rights, in the case of larger extensions, any objection from immediate neighbours will be fully taken into account before permission is granted. I will come back to “immediate neighbours”.

There has been a raft of questions and I will do my best to answer as many of them as I can. If I am deficient, noble Lords whose questions I have missed will let me know. First, I was asked how the decision is to be made by the local authority. Unlike permitted development at the moment, where they can just carry on, the process will be that somebody who wishes to build an extension will have to notify the local authority. Not only that, they will have to produce some plans and details of what that extension is going to do. That picks up the point about materials and design as well. Local authorities will know what they have, even if it is in outline. Where neighbours object, the decision will be made by councillors or by delegated responsibility. Local authorities will decide themselves whether this is appropriate for delegated power or whether they would want to hang onto it.

I was asked about ward councillors. I want to dispel any suggestion that local ward councillors will be taking a decision where an objection has been made—that would be way outside the normal procedures that any of us are accustomed to—but councillors will be notified when the council is notified of a development, so that they are aware that they may need to knock on someone’s door and say. “Are you going to object to this? Do you realise that there is such a proposal?”. The noble Lord, Lord Deben, suggested that this should be done by arbitration. As his report has clearly been closely studied by others and that proposal has not been put forward, I come to the inevitable conclusion that the decision has been that this stays within the planning system.

As I said, the person wishing to develop will have to notify the local authority but the objections can come only from an adjoining property. They must come from people who are on either side of the fence or at the bottom of the garden. There is no room within these proposals to take account of anyone else who is adjacent, diagonal, overlooking or whatever. This is confined to people who are adjoining. With that, it is clearly important that local councillors are involved and know what is going on. With regard to those who can object, it is from the adjoining properties, as I have said, but other people may put their comments in. They will not have the same impact but the local authority might need to take them into account.

On amenity and what should be included, amenity is a pretty well understood concept in planning and local authorities have a great deal of experience in applying it. It covers such things as light and privacy. This is going to be a light-touch process but will include a lot of the things that planning would deal with anyway. It might, for example, take into account the overbearing appearance of the property to the neighbours next door. There might be a significant loss of daylight to the garden or to the principal windows and habitable rooms or kitchens of neighbouring properties, or indeed a significant reduction in privacy for neighbours. These are all the sort of areas that would normally come within a planning process for their effect on the amenity of people nearby.

Why only adjoining neighbours? As I suggested, we need to protect the amenity of neighbours immediately affected and we think that the most significant impact of single-storey extensions—and these can only be single storeys—will be on adjoining properties. Neighbours further away are unlikely to suffer a loss of light or privacy and it is not a question, as noble Lords have suggested, of whether or not they can see it or like the look of it or whether, if they have a pair of binoculars, they could see into the garden. It is absolutely the people next door who are likely to be affected.

On the question of whether this impacts upon conservation areas, I say at once that it does not. These are outside conservation areas. I said at previous stages that none of this excludes the ability of local authorities to do Article 4 directions in advance, or indeed emergency Article 4 directions if they are really concerned about the proposal; that is still there. This is confined, particularly in urban areas, to quite small areas.

On the process of how this will be dealt with, the neighbours will be given a period of 21 days. I was asked by the noble Lord, Lord Deben, whether that could be extended to 28 days and by the noble Baroness, Lady Gardner, whether it could be 21 working days. We want to keep these processes as close to the current planning situation as we can, and noble Lords who have dealt with planning in their lives will know that it is a normal practice for 21 days to be given for any objections to be raised.

Another point that has been raised, which is germane because we have been asked so many detailed questions about this, is the consultation. I reassure noble Lords that all the matters raised here are important; it is our intention to discuss this matter very closely with the Local Government Association before we get to secondary legislation. Many of the points raised by noble Lords will be taken into account and ironed out there. I am looking forward to secondary legislation because I am sure we will have another go at this when we get there. The noble Lord, Lord Shipley, who made a number of pertinent points, asked whether local authorities would be required to put up a notice outside properties. Those of us who are familiar with planning know that this is always done. That point was well made; I accept it, and hope that it will be considered.

The length of this provision is three years; within three years the developments can be approved or take place. It is in effect a sunset clause but, as with all sunset clauses, could be extended if that were considered important.

It is important to try to deal with as many questions as I can. If the application is rejected by either the delegated authority or by a planning committee then the property owner making the application will be able to go to planning appeal, or they will be able to put in a full planning application to have all of the issues taken into consideration. As with other applications, any neighbours whose objection was unsuccessful will not be able to appeal.

The extent of these extensions is 50% of the curtilage of the property. The restriction is that no more than 50% of the property’s curtilage can be developed. For example, in the case of a terraced property in city areas, this would usually be broadly equivalent to 50% of the back garden but in larger houses it would clearly not be to that extent.

The noble Lord, Lord Shipley, asked me about the sort of information that will have to be given. I think that I have dealt with that. The householder will have to submit a plan of the development. The description of it will have to include the materials that are going to be used so that they can be taken into account, and the design.

My noble friend has not yet reached this point, but will this also include the time that will be taken to build the extension? The disruption factor is very real in people’s lives.

The noble Lord has jumped in ahead of me: no. Planning permission currently has no timescale of how long it should take people to do a development once they start. Indeed, I am sure that many noble Lords have torn their hair out at something that seems to be going on for a very long time indeed. Of course, the district surveyor or building regulation enforcers might begin to get worried about why progress was not being made, but I do not think that we can expect to put details of that in legislation. That also goes for the question raised by my noble friend Lady Gardner about enforcement. There will be the normal enforcement procedures of local authorities, which they are able to implement when they have concerns that something is being or has been built outside what has been approved. The problems with enforcement are much the same with any planning development as with our new, light-touch proposals.

I hope that I have covered most of the points on which I wanted to pick up. The noble Lord, Lord McKenzie, in particular, gave us a very long list of things that he was concerned about. If I have not addressed something that anyone has a burning question about and they want to ask me quickly now, then I am happy to pick it up, but I think I have covered everything that time allows me to. I am grateful to all those who have spoken. I look forward to hearing, as I think that I have, that this has moved a long way, which has helped with this aspect of the Bill.

My Lords, I start by thanking the Minister for dealing extensively with the queries that were raised and all other noble Lords who have spoken in this debate. There are two strands to it. Most noble Lords believe that sufficient progress has been made by the amendment to be able not to stick with the amendment of the noble Lord, Lord True, if that is where they originally were. The noble Lord, Lord Shipley, said that it had gone far enough to be supported. The noble Lord, Lord Deben, said that it was a huge improvement, even if it was not as radical as he would have wanted, based on the Quality of Life report. The noble Lord, Lord Cormack, was thankful for the movement. The noble Earl, Lord Lytton, believed that it had gone some way. The noble Lord, Lord True, himself, believed that there had been real progress. The other strand is how much still needs to be consulted on, and some of the details still need to be fleshed out, notwithstanding what we have heard today. The noble Lord, Lord Phillips of Sudbury, the “legal eagle”, said that there should be minimum room for discretion, effectively, because this generates a lot of angst among people.

The key issue seemed to be about the period. We heard 21 days but the noble Baroness, Lady Gardner, and several other noble Lords, did not believe that was sufficient. On fees, bearing in mind the state of local government finance, the lack of support from central government, given the imposition, is a real issue. I also believe there should be further discussion and movement on the limitation of these arrangements to the immediately adjoining properties.

As I hope I said at the start, we tabled our amendment because we had not seen what the Government were then proposing and wanted something against which to benchmark what did come forward. However, on the basis of what we have heard and this debate, I beg leave to withdraw the amendment.

Motion A1 withdrawn.

Motion A agreed.

Lords Amendment 25: leave out Clause 27

Commons disagreement and reason

The Commons disagree to Lords Amendment No. 25 for the following Reason—

25A: Because the new status of employee shareholder should be made available.

Motion B

Moved by

That this House do not insist on its Amendment 25, to which the Commons have disagreed for their Reason 25A.

My Lords, I am grateful for the full and wide-ranging debate that has taken place during our consideration of the Growth and Infrastructure Bill. Last week the other place disagreed with the amendment to remove the employee shareholder clause from this Bill. In today’s debate I will explain why the Government support the position of the other place to retain it in the Bill.

I intend to focus my initial remarks on the announcement made by my right honourable friend the Minister for Business and Enterprise who gave an important assurance about jobseeker’s allowance claims. I will also explain to the House why I believe it is important to support greater choice for companies and individuals with the creation of a new employment status.

Last week, my right honourable friend the Minister for Business and Enterprise announced in the other place that jobseeker’s allowance claimants will not be mandated to apply for employee shareholder jobs. This means that individuals receiving jobseeker’s allowance do not need to worry about their benefits being affected if they do not wish to apply for, or accept, an employee shareholder job. This is an important point. The Government will not compel jobseekers to apply for these jobs even if the job fits within their job search specification and we will leave it up to jobseekers themselves to choose whether to apply or not.

During the Third Reading debate on the Bill we discussed the guidance that will be made available for jobcentre staff to help them understand the new employment status. We have now updated the draft guidance for DWP jobcentre advisers. It now states explicitly that a jobseeker cannot be mandated to apply for an employee shareholder job. A copy of the draft guidance was placed in the Libraries of both Houses on 16 April.

We are debating a wholly voluntary new employment status. As I have said throughout the debates, we do not want people to be coerced into accepting these new contracts and it is worth us considering other protections that this clause provides. On Report in the other place the Government amended the clause to give strong protections for existing employees, enabling them to turn down an offer of an employee shareholder contract by their employer. First, we created a new unfair dismissal right that applies from day one of an employee’s contract. This means that if an employee turns down an offer to change their contract to an employee shareholder one and they are dismissed because they said no, this would be considered an unfair dismissal. Secondly, we created a new right not to be subjected to a detriment from day one of an employee’s contract. This means that if an employee turns down an offer to move to an employee shareholder contract and they then suffer a detriment, such as being passed over for promotion or for a pay rise for no good reason, they may be able to make a successful claim at an employment tribunal. These two protections allow employees to turn down an offer of an employee shareholder contract if it does not suit them and they can do this with the knowledge that the law protects their decision.

The clause has further protections. The shares, which must be worth at least £2,000 when given to the employee shareholder, must be fully paid up by the employer. This is an important point because if the company became insolvent and the shares were not fully paid up, the employee shareholder would otherwise be liable to pay any outstanding amount against the value of the share. It is important that we consider the context in which the new employment status fits. Employment law offers a choice of different employment contracts.

I am most grateful to the Minister for giving way at this stage. However, he has rattled through the circumstances in which someone could apply for a job: he says there is no compulsion and that there are options. I want to put a question absolutely clearly and directly. It arises from the guidance, which post-dates where we were last time in this House; in fact, it post-dates where the Commons were a week ago. The guidance refers to the circumstances where the vacancy is an “employee shareholder job vacancy”. Where, therefore, is the option for the jobseeker who does not want to be an employee shareholder? There is none. Is it not disingenuous to suggest that there is an option?

I thank the noble Lord for his intervention. This currently remains an entirely voluntary procedure and jobseekers will not face a detriment if they are due to apply for a position.

I am sorry; it is very unusual to intervene twice. However, where is the option? The Minister has said that there is no coercion. Of course there is none in the sense of having a whip, but where is the option to get a job if it is solely an “employee shareholder job vacancy”?

I am not sure I entirely understand where the noble Lord is coming from. If a jobseeker is seeking a job there are various options for him or her to look at in terms of roles, and the employee shareholder role will be treated equally alongside any other option. The only difference is that there will be absolutely no detriment to that individual if they apply for an employee shareholder role, and if they decide to turn it down. On the matter of guidance, I clarify that it remains in draft form. If this is an issue concerning the way that the guidance is written up, I am more than happy to listen to the noble Lord if he has any comments to make.

My Lords, I am grateful to the Minister for giving way. Is he therefore confirming in that reply that it will be possible for an employer to advertise employee shareholder contracts only? Is that what the Minister is confirming?

The answer is that if an employer wants to recruit an employee shareholder, he or she will decide how to advertise for that. They may decide not to advertise. They have a range of options which include advertising nationally. They may choose to send the advertisement into a jobcentre locally or to spread it nationally. That remains open just as it is if they want to recruit for any other position.

My apologies for coming in again. What is voluntary about that for the jobseeker in those circumstances—the applicant for the job in an area of the country where there may not be many jobs and that is the only status available?

It remains the case that an employee looking for a position can decide for himself or herself whether to accept an employee shareholder role. It is a separate status compared to other statuses. There is no difference in terms of them deciding themselves whether they want to accept or turn down that particular role.

Employers and individuals are free to agree to the type of contract that is suitable for the job. We are not moving away from this principle; rather, we are enhancing it by offering a further option which will be right for some, but as I have made clear in previous debates, not right for all. There are already three established employment statuses in the labour market, all of which have different rights associated with them. The employee status has wide-ranging rights, including unfair dismissal, statutory redundancy pay, TUPE, maternity leave and pay, and adoption leave and pay, to name a few. The worker status has none of these rights. However, both employees and workers have a right to the national minimum wage, paid annual leave, a right not to be discriminated against, and rest breaks.

There is a further option for people seeking work. They may wish to become self-employed. If someone chooses to be self-employed, they must accept that they have very limited employment rights, such as the right not to be discriminated against. This clause offers both employers and individuals a further option: employee shareholder. This is likely to be a long-term relationship. I would not expect anyone to enter into an employee shareholder contract without carefully considering the implications. This new employment status, with share ownership and favourable tax treatment, will provide small growing companies with a new option to attract high-calibre candidates.

The Minister says that he does not expect employees to enter into such contracts without careful consideration, and he thinks that this will be a long-term commitment. However, the articles of association of most companies place restrictions on the sale of shares. Will the Government require that there be no restriction on the employee’s ability to sell their shares for the highest price they can achieve, as opposed to having to sell the shares back to the employer at whatever price the employer might justify as being fair in those circumstances? Otherwise I do not see how the employee can form a view on the value of the consideration that they are being offered in exchange for giving up valuable employment rights. Will the Minister give us a clear answer on that question? I feel that he did not offer an entirely clear answer to the previous question from my noble friend.

The noble Lord makes a good point. The matter of what types of shares and what shares are offered is very much left to the employee and the employer. That is a negotiation between the employer and the employee. The Government will not prescribe how that will come about because there are different types of shares, as the noble Lord will know only too well from his experience. It will very much depend on the type of company, the wishes of the individual who may be looking at an employee shareholder role, and the employer.

I am most grateful to my noble friend. When he says that the valuation and the convertibility of the shares will be a matter of negotiation between the employer and the employee, it is hard to see what the employee’s negotiating position would be. At the very least, should not the employee be given independent legal advice as to the valuation and the nature of the transaction he is entering into, which, after all, applies under existing employment law for compromise agreements and things of that kind? If it is to be a negotiation, surely the employee has to be informed, and not all employees will be particularly financially literate or employment experts.

The matter of advice is very much applicable to settlement or compromise agreements, as my noble friend has pointed out. This concerns entering into an employment agreement, and therefore we do not see this as being appropriate. On the issue my noble friend has raised concerning share valuation, as he well knows, there are established means through actuaries whereby shares are valued. That is done all the time and it is a straightforward process. Again, that is very much a matter between the employer and the employee.

I think the Minister has confirmed—but perhaps he could avoid any doubt about this—that it would be possible for the employer simply to say, “You can sell these shares only to me and only at the valuation that I judge appropriate, and without any reference to arbitration or a third party”. If that truthfully is the case, this policy is shambolic.

I disagree entirely with the noble Lord because the employee shareholder will decide for himself. If he does not like the terms of the shares being offered, he does not have to enter into this particular agreement. It is wholly voluntary. He may be well advised to get some advice. He may decide himself to get some advice. That is not an issue.

My Lords, could the noble Viscount explain to us how jobseekers, who may have no resources whatever, will be able to get the advice that he has just told the House they would be well advised to get because of the very complex nature of the agreements and shareholding options into which they will be obliged to enter?

Yes, I can answer that. However, the issues may not be that complex. It depends entirely on the agreement between the employer and the employee shareholder who is considering the new job. As the noble Lord well knows, a variety of sources such as lawyers and accountants can give this sort of advice to a prospective employee shareholder.

How do these jobseekers pay for this advice? Does the noble Viscount have a special fund which will be available to them? I know that plenty of people offer this advice but I am not aware that many of them offer it for free.

To clarify what I said to my noble friend Lord Forsyth a minute ago, legal advice is clearly available for settlement agreements and compromise agreements. However, we have made it clear that it is not available at this time for those entering into a new employment contract.

I wonder whether I can help my noble friend. When my companies give shares to our employees, not in return for anything but because they have worked for us for some time and we want them to be involved in the companies, we still find it difficult to explain the terms of those things, even though the terms, whatever they are, are a plus rather than a minus. I wonder whether it is right to suggest that this would not be a difficult thing for people to understand. That worries me considerably. I am very pleased that the Government have moved on the big thing for me, which concerned making it impossible to continue to have jobseeker’s allowance. That for me is a crucial matter. However, I wonder whether my noble friend does not underestimate the difficulty of explaining to somebody even the simplest of share options and share sales.

I very much note my noble friend’s point. He has experience in this field. I say again that some negotiations may become complicated, but the employer and the employee shareholder will go into this with their eyes open. On the other hand, it may be a very straightforward and simple process. Indeed, the employee shareholder who is looking at this new role may decide that he is entirely comfortable with what he has seen, heard and, indeed, read. I clarify again that this is very much a matter between the employer and the employee shareholder.

The Minister has just said that legal advice is available for settlement and compromise agreements but that it will not be available to an employee considering one of these contracts. Will he explain why legal advice would not be available? Will he then answer the question from my noble friend on the Front Bench on how a jobseeker seeking employment on the national minimum wage will be able to cope with the complexity of law and the articles of association and afford to take separate legal advice, which at a minimum would probably cost in the case of most lawyers the equivalent of close to a month’s wages on the national minimum wage?

I can only reiterate that it entirely depends on the role on offer, the type of company and the type of employer as to how the discussions will go. An individual taking on a normal role, if I may put it that way—an employee role or a worker role—may find that sort of contract complicated, in which case they may have obtained their own advice and are still free to do so. This is a wholly different—

I am most grateful to my noble friend for giving way and I shall try not to interrupt him again. However, can he explain to me why employment law as it stands requires employers entering into a compromise agreement to provide legal advice in order to make that agreement stand? They usually provide a reasonable amount of the cost of independent legal advice. If that is appropriate for a compromise agreement where people are surrendering certain of their rights, why should it not be appropriate where people are giving up their employment rights and entering into what may be a complicated and major financial decision, given the proposed levels of tax relief with capital gains relief of up to £50,000? What is the Government’s logic in saying that advice should be paid for by the employer in one case but not in this case?

I know of many employee contracts—not those for an employee shareholder—where serious advice is required. However, the status of being an employee shareholder is wholly new. The individual concerned may well require advice but noble Lords are talking about the circumstances of entering the employment phase and the proposal we are discussing would set a new precedent. As we know, often very difficult discussions take place towards the end of the employment contract. That is where it has become the custom and practice for companies to pay fees. That is the difference. I hope that I may be allowed to move on.

The recruitment of skilled personnel is normally taken very seriously. It takes time and commitment and involves searching for suitable candidates, sifting applications and interviewing. This will be no different with the new employment status. In fact, companies will need to take time to consider whether this type of contract is right for them. The owner of a company offering the status should think about the impact of giving up equity in the company. This is a decision that is not easily reversed, as once you have given away your shares it may not be easy to get them back. We must remember that the owner is giving away a stake in the company. Companies will need to be sure that the person to whom they offer the contract is right for the company. An employee shareholder may be able to influence the decision-making of the company and take a share of the profits. This is not something a company would do without being sure that it was the right move for them.

The new status will not be applicable or suitable for all companies or all individuals but it might be right for some. This new employment status represents more choice for individuals and companies. I have been clear throughout our debates that the status is voluntary. Indeed, it may well be used only by a minority of companies, but what is important is that we allow them to choose what is right for their own personal and commercial circumstances.

I hope that I may be allowed to finish. I urge the House to keep this innovative proposal as part of the Bill. We should not deprive individuals or companies of choice that may lead to more jobs and better company performance. Above all, it is good for growth in the UK. I beg to move.

Motion B1

Moved by

As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 25”

My Lords, on 20 March, your Lordships’ House voted by a majority of 54 to exclude Clause 27 from the Bill. The reasons of principle and practicality as to why your Lordships’ House so voted remain valid. They were not altered by the vote of the House of Commons last week. Indeed, the debate in the House of Commons, which was limited by a timetable Motion to 45 minutes, barely addressed, let alone answered, the concerns which were expressed on all sides of this House on Report.

I remind your Lordships why your Lordships’ House voted to exclude Clause 27. I want to do so because the noble Viscount’s speech conspicuously avoided, if I may respectfully say so, all the concerns which the House expressed on Report. I commiserate with him because he has been asked to defend the indefensible.

The first point is that Clause 27 frustrates the very purpose of employment rights. We can, and do, disagree around this House and in the other place as to what the content of employment rights should be. That is entirely proper. They are debated and amended from time to time as we see the balance between employer and employee and as we perceive the public interest. However, over the past 50 years all Conservative and Labour Governments have recognised that an employer and an employee cannot be allowed to contract out of those employment rights which Parliament has seen fit to guarantee. That is because it would defeat the very purpose of conferring those employment rights. They are conferred precisely because freedom of contract—a voluntary agreement, as the Minister describes it—does not protect the worker or the job applicant who lacks basic bargaining power. To allow basic employment rights to become a commodity to be traded in the way that Clause 27 proposes would frustrate their very purpose. We would not envisage for a moment allowing a manufacturer of goods to contract out of his, her or its obligation to the consumer simply because the latter chooses, voluntarily, to pay a lower purchase price.

The need for protection in the employment context is most obvious in the case of the person who is seeking employment. The Minister in the House of Commons, Mr Michael Fallon, emphasised last week that a Clause 27 agreement is voluntary. The Minister repeated that statement today but, as he accepts, the employer may under Clause 27 advertise the vacancy on the basis that it will be filled only on Clause 27 terms. In the real world, outside the House of Commons, a person who is offered employment on Clause 27 conditions only is not voluntarily accepting such conditions. In the current economic climate, he or she will have no practical choice. I welcome the fact that the Government have removed one aspect of the unfairness of Clause 27—that is that a person refusing work on Clause 27 terms would have lost jobseeker’s allowance; a quite extraordinary position—but the fact that the Government have removed the most outrageous aspect of this proposal does not mean that what remains is acceptable.

The first objection is that the clause proceeds on a theory of voluntary agreement that frustrates the very purpose of conferring employment rights and is wholly unrealistic. The second objection is the damage that this clause will cause. A number of noble Lords from the government Benches—I repeat, from the government Benches—made this point on Report and in Committee far more powerfully than I could hope to do. The noble Lords, Lord Forsyth of Drumlean and Lord King of Bridgwater, both of whom served as employment Ministers, the noble Baroness, Lady Wheatcroft, the noble Lord, Lord Deben—all of whom I am very pleased to see in their places—and other noble Lords on the government Benches explained, from their extensive business and political experience, just how damaging it would be to industrial harmony to allow employers to buy off basic employment rights, how no sensible employer would consider this to be beneficial and how Clause 27 would do enormous damage to the cause of promoting employee share ownership. I am very sorry indeed that the Government have chosen not only not to listen to this House but not to listen to the wisdom and experience on their own Benches. The Minister must know that there is not just a lack of enthusiasm for this measure on his own Benches, there is a positive hostility to it that makes the Government’s insistence on pursuing this cause and this clause, in the word used by the noble Lord, Lord Deben, in Committee, “mystifying”.

The third objection to Clause 27 is that even the case which was advanced by the Government in the House of Commons last week does not begin to justify the broad scope of the clause. The Government’s case, as expressed last week by Mr Fallon, is that Clause 27 will encourage new and small high-tech companies which will be more willing to employ people with special skills. Even if noble Lords were to accept that assumption—and it begs a large number of questions —it would justify only a specific and narrowly drawn statutory provision tailored to the specific circumstances which are said to justify its enactment. The generality of Clause 27 inevitably means that it will be used and it will inevitably be abused by the Gradgrinds of this world. This concern was expressed on Report by the noble Lord, Lord Forsyth of Drumlean, in his powerful speech against Clause 27.

My fourth and final objection to Clause 27 has already been raised this afternoon and is that the clause contains no provision for independent advice. The Government have refused to accept that statutory rights should be lost only if the employee has received advice from an independent adviser on the legal and financial consequences of the agreement. These consequences are inevitably complex and the suggestion that jobseekers can simply go off to lawyers or accountants and get advice on these matters, as the Minister suggested this afternoon, is quite unrealistic. As the noble Lord, Lord Forsyth, has already mentioned, Parliament has, in Section 288 of the Trade Union and Labour Relations (Amendment) Act 1992, required independent advice in the context of compromise agreements to settle employment disputes in individual cases in employment tribunals.

The Minister simply has no answer as to why independent advice is a statutory requirement before a compromise agreement is reached in a tribunal but no independent advice will be required before the employee signs away these employment rights altogether. This is a major decision for any employee, especially when there is, of course, no guarantee that the shares will increase, or even hold, their value. Indeed, if the company is making employees redundant, which is the context of this clause, it is highly likely that the shares will be worth less than £2,000 or nothing at all when the individual is made redundant. This concern was expressed by the noble Lord, Lord Myners, earlier in this debate.

For all these reasons, Clause 27 frustrates the purpose of employment rights and is damaging to industry. The Government’s own case does not explain why we need so broad a provision and there is no requirement for independent legal or financial advice. I invite your Lordships’ House to stand by its principled objection to Clause 27. The Government and the House of Commons have simply failed to address the concerns about this clause on all sides of the House. They should be asked to think again about this important matter. I beg to move.

My Lords, I hesitate to follow the noble Lord, Lord Pannick, who has set out very clearly and persuasively the points that we discussed before and which are causing concern to the House. I share his concern about the Commons debate, which, as he indicated, was guillotined. All the serious points that were raised in this House have not really been addressed by my noble friend. I exonerate him from any blame in that respect but they are important points. Many of them may be slightly peripheral to the substance that we are discussing here, which is about employment rights, but, for example, I remain concerned as to whether the estimate made that this could result in more than £1 billion disappearing in tax-avoidance schemes is correct. It is not clear to me whether the Treasury has found ways of ring-fencing this scheme, which provides for up to £50,000 of capital gains tax to be relieved, and whether this could not be used as a great tax-avoidance scheme.

I got a call this afternoon from a Mr Mark Florman of the British Venture Capital Association, who wanted me to know that all his members were absolutely behind this scheme and very much supported it. I said to him, “Why are they concerned about a scheme that enables people to give up, in effect, only their rights against unfair dismissal if they have been employed for more than two years and can have £2,000 worth of shares, tax-free? What conceivable interest can that be to the membership of the British Venture Capital Association?”. He said that it was keen to encourage share ownership and for employees to be involved in share ownership. I am sure that people on all sides of this House are keen on that concept. That is why I would strongly support any schemes that encouraged share ownership. However, this proposal mixes up two things—one is employment rights and the other is share ownership. It is not at all clear to me how it would be beneficial to either employers or employees to embark on this scheme.

Being a reasonable, moderate sort of fellow, I looked at where we had got to in this debate, and I looked at the vote in the House of Commons, where the majority was actually somewhat less than the Government’s majority. I looked at the short-term nature of this matter and thought, “Is it possible to find a way of making this look not more sensible but more practical?”. It seemed to me that the Government could have done two things. One was, as the noble Lord, Lord Pannick, pointed out, to ensure that people who were embarking on an employee shareholder contract were given independent legal advice that the shares were worth what the employer was telling them, on what the arrangements in respect of the valuation of the shares would be at the end of the period, and on what employment rights they were giving up and the consequences of that. That seems to be an entirely reasonable suggestion. Regarding the idea that people on low incomes can go and get legal advice on these matters or that issuing and putting values on shares in private companies is straightforward, I have to say to my noble friend that the entire investment banking industry is based on the premise that the valuation of shares is not straightforward.

There is also the idea that by giving people shares in return for employment rights the employee is in a negotiating position. However, they want a job and are not in a position to say no. Even if the provision was that the employer may provide legal advice at the request of the employee, that would not be enough because the thought would be, “It’s going to cost the employer £1,000 and if I say I don’t need the advice, I might have a better chance of getting the job”. The fundamental point was made by the noble Lord, Lord Pannick: the reason that we have employment rights—while I think they go too far in some respects—is that they even up the position between the employer and the employee. I am not particularly persuaded on this.

However, I thank the Government for at least taking up one point, which is to alter the guidance in respect of the jobseeker’s allowance. I was grateful to my noble friend for the letter that he sent us, but I have to say that amending the guidance to say that people who refuse to take up this voluntary agreement would not be found to be intentionally refusing employment is not a concession; that was just a mistake by the Government that they have now corrected. It is not right to present this as a concession. The concession that is needed is to protect the position of the employee against the unscrupulous employer, and independent advice is part of that.

My other thought was that the Government say that this proposal will be of interest to small firms. Some people suggested to me that there could be an exemption stating that the measure would apply only to small firms. However, on reflection, I do not think that that is the issue at all. This is a general provision for employees, and whether it is a big firm or a small one is not the key issue here.

I am also worried that my noble friend said in his opening remarks that it will not be easy for employers to get the shares back, but in his own guidance he makes it clear that these schemes can include a provision that requires the employees to give the shares back. What is the deal here? It is: “You give up your right to be protected against unfair dismissal. We will give you some shares that we tell you are worth a certain value, but you have no idea whether or not we are right, and when you get those shares you have to pay tax and national insurance on them if their value is more than £2,000. Then at the end, I, as your employer, if I decide to sack you, can take them back at a valuation that may be less”. That does not seem to be a scheme that will set the nation alight with people wishing to participate in it.

I have to say to my noble friend that this thing is not thought through. Not only that, but to those of us who have tried to be constructive—I was prepared to go along with this today if the Government showed some sensitivity to the concerns that have been so elegantly expressed by the noble Lord, Lord Pannick, and others—the Government seem determined just to railroad this through and not deal with the arguments. I, as a Conservative, perhaps a Thatcherite Conservative, am not identified particularly with employment rights, but I am proud that it was a Conservative Government that first introduced them because we recognise that there has to be a fair balance in the labour market.

I therefore say to my noble friend, can he not think again and at least offer us a concession in respect of the right to have independent legal advice paid for by the employer whose initiative this is, so that the employee is in a position to know exactly what they are being asked to sign up to?

My Lords, I cannot match the advocacy of either the noble Lord, Lord Forsyth, or the noble Lord, Lord Pannick, but I feel that there is a saddening negativity towards these proposals. I am glad that everyone agrees.

A lot of the issues raised in this House have been addressed—in particular, the concern, which I completely supported, that it would be a nonsense if people were forced to give up the ability to claim their jobseeker’s allowances if they turned down the offer of an employee shareholder job. That is the most important issue of the lot. But there are other important issues where the proposals have been improved. I see the situation in the context of a half-way house between self-employment and standard, typical, large-corporation employment.

An interesting survey has been published by the RSA which finds that more than 30% of people in their 20s now want to be entrepreneurs, self-employed individuals who will have no protection rights whatever. In terms of giving up rights, there are three important areas, including unfair dismissal rights—which are not given up as regards improper grounds such as discrimination—rights to statutory redundancy pay, and certain rights to request flexible working hours and time to train. People retain a whole lot of other employment rights and the issue is not, by a long chalk, about giving up all your employment rights.

Of the concessions that have come from the Commons, the most important is that the Secretary of State will have power to regulate the buy back of shares. That does not amount to legal advice, which would be nice, but it does afford a protection there. I suggest that, in practice, what will happen if any businesses embrace these schemes is that there will be the usual sort of standard formula. If there is a buy back by the company, then there will be a prescribed price earnings multiple, or such like, on which to value them. That will unfold as time passes.

A new right has also been introduced for employees not to suffer detriment if they refuse to agree to an employee shareholder contract. This means that if an employee has been overlooked for promotion or disadvantaged in any other way because of that refusal, they can present a claim to an employment tribunal. If this happens to a self-employed individual they have absolutely no protection. A new unfair dismissal right was created to ensure that if an employee was sacked because they had refused to accept an employee shareholder contract, this would be regarded as automatically unfair and they could present a claim for unfair dismissal to an employment tribunal.

Other practical issues came up in this House concerning whether shares would be fully paid. It is quite important that shares awarded to employee shareholders now must be fully paid, so that a situation could not arise where, if the shares were not fully paid, an employee shareholder would be liable for a balance relating to the value of the shares.

Employee shareholders cannot be asked to provide any other form of consideration apart from agreeing to become an employee shareholder for the shares issued to them under the scheme. The upper limit has been effectively increased, although I repeat the point I made twice before, which is that I think the limit of only £2,000 at which the shares granted become a taxable benefit is too low. To return to my reference to the RSA survey, this scheme typically is for people who are high risk-takers working for smaller companies and who do not feel the need for the protection.

I am most grateful to my noble friend. I agree with his point about the tax allowance. If someone is awarded shares in the way that he has described and the value of the shares is, say, £20,000, will they then be liable to pay the tax and national insurance on that? Where will they find the money from?

That is the very point that I made when we last debated the issue in this House. That is why I think the £2,000 limit is too low. The response to that is that it obviously depends on their tax rate. If people are accepting £10,000 worth of shares they may be able to find the tax which might be of the order of £2,000 to £2,500 on that award. It entirely depends. I also make the point that in more traditional entrepreneurial circumstances, which was my own experience, I had to put up the money myself and I had to remortgage my house to raise the money to start a business. I would like to see the limit raised, and I think for the scheme to work it will need to be raised, but we should not overstate the tax burden.

I am most grateful to my noble friend. Does that not then mean that the value of the employment rights you are giving up depends on how much money you are able to find in order to buy the shares?

First of all, it depends on what is on offer. It is broadly for the company to decide the amount of employee shares that it is going to offer under this scheme. To repeat the point, the employment rights which are being surrendered, particularly as viewed by ambitious entrepreneurial types, are not perceived as of particular value. The grant of free shares is of value and, to the extent there is a tax bill, I wish it were lower, but the tax bill is not entirely outrageous. I suspect that the tax limit will be raised in due course.

It is easy to be negative and to pick holes in what has not yet been fully addressed. I would like to see some of the improvements that noble Lords have suggested. But I think to take a rather superior view of, “Oh, no, we really don’t want this”, is wrong. I think it should be given a try and the issues that need sorting out will be sorted out. There are substantial numbers of ambitious young people for whom the objective is not to work for the Civil Service or to work for Shell or Unilever and to have a secure job with a generous pension, but to have equity in the businesses they work for, to make that business work and to make their equity worth a considerable amount of money.

My Lords, unfortunately, I was unable to be present at Report stage, but I was struck when I read in Hansard that the House of Lords was doing its job like it perhaps does not do enough in an admirable and exemplary non-partisan way, looking at the practicalities of this proposal, not looking for negativity but simply giving it some forensic examination, which has clearly not been done by many in the Government and many who supported it in the other place.

This proposal about shares for rights is implausible. It is difficult to see too many people showing any significant interest in it. If we want to abolish red tape, well, just look at this proposal. It is full of red tape. I believe it is also objectionable—the idea that somehow you can sell your rights or trade in your rights. It is very clear which rights you will lose. It is a lot less clear, for all the reasons that have been stated, what employees will get and how those shares will be valued.

The proposal is also perverse. In the Report stage debate the noble Baroness, Lady Wheatcroft, set out one example. If matters do come to redundancy, will the employer decide to get rid of those with shares who have given up their redundancy pay or those to whom the employer will have to pay redundancy pay? It could well be the employee shareholder who is first out of the door.

The advice that the House of Lords gave to the Government has been treated with contempt. It has just been brushed aside. That includes the advice given by distinguished former Conservative Employment Ministers who are loyal on nearly all occasions, but not on this one. That is not being negative. That is not looking for negativity. It was good advice that was given, it is good advice that is being given now and I hope that this time, if the vote goes the right way from the point of view of those of us who are critics, it will be listened to with a little more concern and consideration than it got last time.

The noble Lords, Lord Pannick and Lord Forsyth, have ably pointed out the fallacies and flaws in the proposal and I will not repeat those. However, I do not think that many employers will give it much of a second look unless there is some tax advantage which will no doubt come to light in due course. Some unscrupulous employers will do so and that is where the individual worker would need some source of independent advice about what they agree to and what they do not.

I find the position of the Business Secretary in this matter intriguing. He fought a battle against the Beecroft proposals, but let us remember—I am no fan of the Beecroft proposals—that he did not propose taking away rights to compensation for redundancy. He was talking about a single payment. It seems to me very strange and disappointing that the Liberal Democrats and the Business Secretary have let this clause slither through the processes of government in the interests no doubt of a deal with the Chancellor of the Exchequer. I hope for the Liberal Democrats’ sake that it is a good deal which compensates for their disgraceful agreement on this matter. I hope they will think again in the time that we have available and put this clause where it really belongs, which I believe is in the nearest recycling bin.

My Lords, noble Lords may be somewhat surprised that I speak on this issue, but it so happens that I have spent a great deal of the past few months looking into employee shareholding and employee ownership and have had long discussions with Charlie Mayfield, who, as noble Lords know, is chairman of the John Lewis Partnership. He was consulted about this proposal and simply regarded it as laughable.

What kind of firms did the Government really have in mind when they invented this farrago—it seems to me—of nonsense? I believe that they had in mind the smallish high-tech firms that set up outside Cambridge, Oxford, Bristol and so on. They thought that all the people employed by this kind of firm were going to be high-tech experts and graduates of their local universities and that the company would be inventive and innovative and, when it got bigger, would probably sell itself off, having made a profit. I do not think, when this was invented, that the Government had in mind that large companies would really have any interest. In fact, I remember that on Report the Minister was reduced to saying, “Well, the good thing about this is that not very many people will take it up”. That seemed to be an extraordinary argument in favour of it. Does the Minister really think that this will be an option open universally to businesses, including retail and manufacturing ones, or is he still thinking, as I am sure the Government were at first, of these very small businesses where everyone starts off more or less equal—equally well educated, intelligent and able to get legal advice—and is anyway probably in it for the interest of the thing and its short-term life? Can the Minister answer that question?

My Lords, the noble Lord, Lord Pannick, very kindly reminded the House of my words at an earlier stage, in which I used the expression “mystification”. My concern is that I start from rather a different position. I think that a kind of package could be put together that would represent that midway point between someone who was self-employed and someone who was fully employed, particularly in dealing with the kind of company that the noble Baroness, Lady Warnock, has just pointed to; indeed, I thought that was the intention. I am dismayed because I do not want to remove the possibility of a sensible experiment that would enable small firms, in return for shares, to recognise that, to use a phrase, “We are all in it together”. That seems perfectly respectable.

I could not go along with what was being proposed, as a matter of principle, until the change that has now taken place. I thought it unacceptable that someone should lose their jobseeker’s allowance because they had not entered into what ought, right from the beginning, to be a different kind of arrangement, which would have to be voluntary. I do not agree with the noble Lord, Lord Pannick, that, because the job would be advertised in this way, somehow or other it was not voluntary. There are lots of jobs that people decide they are not going to take because of the terms under which they are presented. I do not find that objectionable.

What I find so difficult with the Government’s proposition is that it seems that it will not work. Frankly, it does not matter much what we decide on this because I do not think anyone is going to take it up and I do not think it is going to happen. That makes me sad—not for the reasons of the noble Lord, Lord Monks, but because I actually think that there is a place for a system that would enable a partial involvement in the beginning of a small company, which would of course mean that you took some cognisance of the fact that it was a pretty rocky position and in return you got some sort of special advance. However, at every turn, we find that it does not quite work like that. All along the line, the sort of things that we might have liked do not seem to work out—not least, as my noble friend Lord Flight described, when it comes to the problem of how you pay for things and how you organise that. You begin to realise that this does not have the enlivening, enlightening and opening effect that the creators of this idea obviously thought it would have. I am not driven to the extremes of feeling that this is ghastly and awful thing, because I just do not think it is going to be taken up.

I am very saddened by the fact that this is not the package that I think the Government intended to produce, which puts me in a very difficult position. If I vote in favour of the amendment, then we do not have anything at all. If I vote in favour of the Government, we have something that I do not think will be taken up. I find myself in an awful position, which is rather close to being a Liberal Democrat. I have spent my whole life avoiding that position so it is an extremely difficult one for me to take, and I have not yet decided precisely how I am going to emerge from this. I say to my noble friend, first, that he has worked valiantly with the material that he has—talking about bricks and straw would demean the triumph that he has established. We have the removal of the thing that made this absolutely unacceptable and some improvements on the margins that my noble friend Lord Flight has put forward.

I make a last-minute plea to the Minister. As long as you get rid of the extremists on both sides—those who would have nothing and those who do not really like employment rights at all, who I think cancel each other out fairly satisfactorily—a position could be created here which would be about share ownership in the circumstances of a joint contribution to the sort of risky endeavour that every new company is and every new high-tech company certainly is. That is the position that I think the Government were seeking to place, but I do not think that they have done it. I do not want to say to the Government that we do not want any of it, but I would have hoped that the Government could have gone a lot further in listening to the advice of people who did not wish them ill but wanted to find a better way through this. Although they have removed a thing that made it, in my view, impossible to support, I am not sure we have gone far enough along the lines that we ought to have in order to make this—

I apologise for interrupting and thank the noble Lord for giving way. However, does not everything he has just said, which I have listened to with great care, indicate that this is one of those situations where legal or financial advice from somebody competent is critical?

The noble and learned Lord, Lord Woolf, puts me in the most difficult of positions. I have spent my whole life congratulating myself on being the only politician from Cambridge of my time who was not a lawyer, and therefore complimenting lawyers, or suggesting the need for legal advice, goes against the grain in a big way—but I have to say that he is right. However, that is not the only thing. The issue is how we make this a creative contribution to the development of small businesses rather than something that has become an argument not about that at all but about giving up employment rights, the need for legal advice and all those things. We did not start from the basis that we ought to have, which is what puts me into this huge position. I apologise therefore for not being enormously supportive. I still have to listen very carefully to decide quite how unsupportive I am going to be, but I say to my noble friend that I wish we could have turned this good idea into a good idea instead of turning this good idea into what seems to me to be largely not an idea at all.

My Lords, there are already in existence what I suppose you could call partnership schemes, where people can of course have shares and a partnership with a company without the necessity for the abandonment of employment rights. As this legislation stands at the moment, one cannot help feeling that this is a way in which the Government want to get rid of employment rights without appearing to do so by introducing a scheme under which the employee can be persuaded to voluntarily give up an employment right where they normally would not consider doing so because that would not be required.

I do not think that we can judge this on the basis that “We ought to have a scheme where people do participate”. Schemes like that are available. What is difficult about this is that the basis seems to be the abandonment of employment rights before the employee can get involved in any sort of share or partnership scheme. I think that that is what we object to very strongly; I, at least, have done so from the very beginning. It has always seemed to me that the Government themselves are not keen on employment rights. This is a way of getting rid of those rights without appearing to do so, simply by offering an employee something that really does not compensate for the loss of the very important employment rights that we have been discussing today. It is that sort of basis which is why I oppose this clause and why I fully support what the noble Lord, Lord Pannick, has said with great clarity. This is the situation that I take now, and I hope that the Government will be disposed to accept what we have said on this side of the House—indeed, on every side of the House—which is: do not proceed with this scheme. Not only will it not work, but it is not right and it does no good at all to employment and employment rights.

My Lords, I want to start by thanking the Government for the concession on jobseeker’s allowance candidates and the fact that they will be not penalised, but I have to also agree with other colleagues on both sides of the House who have admitted that this is really the rectification of a mistake rather than a major concession. However, it is essential. It is critical because before it, any of the guidance to the DWP and Jobcentre Plus offices would have been unusable and unworkable for this system, and would have put candidates for such jobs at complete peril.

I am also pleased—I will not go into detail about this, but want to refer to it—that throughout the passage of this Bill we have consistently talked about the necessity of independent legal advice. That is not just for those who are currently unemployed and are being sent to interviews by Jobcentre Plus; it actually applies to anyone. I think of a young 23 year-old that I know who has just joined a high-tech company in Cambridge where I think hardly any of the employees do not have at least one degree and most have at least two. However, if you asked that 23 year-old about the way shares work, he would not understand them at all and would clearly need advice as well. Helpfully, the firm that he has joined has made sure that any new employee who gets access to the share scheme gets that advice, so there are some good examples around.

However, if this scheme does not offer that advice where there is an element of two tiers of employment, that means that such advice must be made available. Frankly, I agree with the noble Lord, Lord Pannick, and others who say that it is on a par with the formal legal advice required for compromise agreements.

Following the debate in the Commons last week, I shall focus on the Minister’s referral yet again to this being suitable for small high-tech companies, particularly in university areas and high-tech areas. Confession time: in the 1980s I was a venture capitalist, spinning ideas mainly out of universities, although not only Cambridge University, and that is one of the reasons why I have quite a lot of experience and knowledge of what is happening in those companies now.

It is quite clear that good, small high-tech companies already use employment share schemes, or share schemes for all their employees who come in right at the start. The reason why they do this is that they know it is going to be a very hard road to make the product successful, particularly if it has not even been developed yet. They know that as time goes on further rounds of money will be coming into the company, and that they will be diluted not just once or twice but to a very minimal amount. Therefore, £2,000-worth of shares on day one, which for argument’s sake might represent 10% of a brand new company, might actually end up being a tiny percentage once you have had three, four, or five rounds of venture capital and hedge fund money going in. As a result, an employee will have to wait a very long time before they see any benefit.

Again, having to pay for those shares up front is not just an issue for those who come from unemployment; it is an issue for those coming in at a very low starting salary who, in addition, have to give up their employment rights and are being told, quite frankly—in Cambridge, which I know quite well, everyone freely admits this—that it is extremely unlikely that you will see any return on any investment in the first 10 years of a high-tech company. If you do, then it is a real star and is to be applauded. However, the vast majority, 95% of firms, do not do that, and 90-plus% of the firms do not actually provide a return to shareholders because they are often sold at the point at which the shares are virtually worthless. So please can we stop deluding ourselves that small high-tech companies are perfectly suited to this? The good ones do it already, but why on earth would they then want to give up employment rights in return for an extra part of this very risky journey? It just does not add up.

I was slightly concerned when the Minister referred to self-employment for these sorts of firms. I understood from the chart that we have received with the Minister’s letter, for which I thank him, that they are outside employment law, and I think that the House would accept that. The references being made implied that self-employment might be an option for those working for the firm, and I think that would definitely be against HMRC guidance; if somebody is working principally for a firm then they should not be self-employed. I am concerned that we are perhaps beginning to develop a dialogue of a third tier of employment, and I hope that the Minister will be able to make it absolutely clear that self-employment is only for those who actually have a range of clients and customers and do not work for just one firm.

The noble Lord, Lord Deben, talked about how this might be a point for experimentation, but I think the experiment is already happening and has been happening through the examples that I have been giving, without the need to give up employment rights. In summary, I believe that this legislation is unloved, unnecessary, unwanted and, frankly, likely to be unused. I am concerned that this is not the best use of Parliament’s time. I am in the same position as the noble Lord, Lord Deben; I do not like voting against my own Government, but I just feel that there are too many flaws in this. It is not a hopeful scheme for the future; they are there working at the moment. Please, let us not compromise employment rights in return for shares that are very unlikely, for the vast majority of employees, to be worth anything at all.

Before the noble Baroness sits down, I wonder if she could help us with the question that the noble Lord, Lord Monks asked: what exactly is the nature of the deal that has meant that the Liberals have taken a position that is well beyond Beecroft and which they were previously opposed to?

My Lords, when I first heard about this scheme, my initial reaction was to give the Government the benefit of the doubt because it encourages share ownership and enterprise—all good intentions. However, I have listened to the arguments of the noble Lords, Lord Pannick and Lord Forsyth of Drumlean, and to the noble Lord, Lord Deben, who has great relations with his coalition partners, summing it up by saying, “It won’t work”. The noble Baroness, Lady Brinton, has said the same.

I cannot understand this. I have started businesses and run businesses at different levels and I have given shares to my employees, so all this about £2,000-worth of shares—even the figure itself is baffling. Who on earth is going to go through all this for something as incentivising as £2,000-worth of a share incentive, although I know that that is a minimum figure, and then to have to get legal advice? Do people understand the practicalities of offering legal advice if every time someone applies for a job they have to get legal advice to go for the share scheme? Then the question was asked: what if these jobs are offered and the Government say that they are voluntary only? If a job is offered as an employee share job only, though, that is not voluntary. As an employee you either take that job on those terms or you do not. I think that the Government have the best of intentions, and they say that there will be no compulsion, but I cannot see this being taken up.

What research did the Government do before they came up with this scheme? We have heard from the noble Lord, Lord Forsyth, that Mark Florman says his members think that this is a great scheme. Did the Government check with Mark Florman before they proposed this scheme? Now the noble Baroness, Lady Warnock, tells us that Charlie Mayfield, who I respect greatly as one of the most successful chief executives in this country, running the John Lewis Partnership, says that this is laughable. That is the reaction of serious business to this.

Have the Government thought through the practicalities of valuing private companies’ shares? Have they thought about the liquidity of shares and how difficult it is to sell them? In a private company you have no option. I have been a director of an AIM company. In AIM companies we have very little liquidity of shares and it is difficult to sell them—let alone for a FTSE 350, FTSE 250 or FTSE 100 company. The Government have not thought through the liquidity aspect.

What about the many wonderful share option schemes that are already in existence, which we all have used and are using today? I would not dream of giving share options to any of my employees and asking them to give up any of their employment rights. That is wrong. Asking them to give up rights is not a good way of giving an incentive to an employee. You ask them to take it on because they believe in you, in your business and in the future and that is why they want those shares, and they will benefit from them if they contribute to the success of that company—not by giving up some rights, which is fundamentally wrong in principle.

The Minister said that this is good for growth. The noble Lord, Lord Pannick, referred to the real world. I thought that there was a ban on ivory in this country. Whoever came up with this idea is living in a giant ivory tower, and has never run a business or had any interaction with a business in the real world. Can the Minister reveal the genius in Government who has come up with this amazing dog’s breakfast of a scheme?

My Lords, I think I am not the only Member on this side of the House who feels some embarrassment at finding ourselves in this situation. As has been said, particularly by the noble Lords, Lord Pannick and Lord Monks, this House passed a pretty categorical vote to suggest the omission of Clause 27. It included, among others, a previous Chancellor of the Exchequer—his name has not been mentioned here but he voted against it—and a former Cabinet Secretary. It was not the usual suspects causing trouble in the back reaches of the parliamentary process.

I thought that there was not much new to be said but I credit the noble Lord, Lord Bilimoria, for bringing a few additional points into this debate that I think are very relevant. I join in the recognition of what has been described, rightly, as a correction of a previous mistake; none the less, the Government have corrected the position over the jobseeker’s allowance. However, some of us were waiting to see the Government’s serious response to the very major criticisms that were made a month ago on Report. This House’s duty of revising, amending and inviting the other place to think again was carried out, and the Government were given time to consider how best to respond.

My good friend Mr Michael Fallon, who had the responsibility of introducing this determination to disagree with the Lords in their amendment, said that it really was entrepreneurs on one side and employment lawyers on the other—not just the noble Lord, Lord Bilimoria, but a few others of us have had some small involvement in industry, employment and entrepreneurial activity over the years. I was interested that the noble Lord, Lord Forsyth, referred to the director of the British Venture Capital Association. I was the director of a leading venture capital investment trust for a number of years and I do not think that a single person I knew in that industry would support it or think that it might be a good idea.

I understand entirely why the noble Lord, Lord Flight, made the comments that he did because they bore out and illustrated the point made by the noble Baroness, Lady Warnock: who is this really intended for? The noble Lord, Lord Flight, will recognise that he has a background in and vast experience of a world where people do not think first when they go into employment, “What are my rights?”. They are thinking, “What are the opportunities for me here to really earn a substantial reward?”—as we know, a number of them earn very substantial rewards indeed. I have to say to him that it is quite difficult to stand up, in the ping of a ping-pong, when we are meant to have finished our revision and amendments, and say there are a number of things that now need to be sorted out. That is not acceptable.

I disagree with one point made by the noble Lord, Lord Pannick, that this will do great damage to industrial relations. I do not think it will at all, on the grounds that the noble Lord, Lord Deben, mentioned. I do not think that a single major company will touch it and it seems absolutely inconceivable that you could try to introduce this status into any major company. If some of your employees are entitled to redundancy pay and some are not, and then you get a downturn in trade and you are determining who should be kept, and if one of those people who does not get redundancy pay then gets dismissed and is told that he does not have a claim for unfair dismissal—as I understand it; like my noble friend, I am not a lawyer—he would immediately have a claim under discrimination. The idea that you ease the employer’s burden and prevent it being drawn into the courts is of course not so.

I certainly support the Government’s ambition to see what we can do to reduce unnecessary and undue burdens on employers, which certainly on occasions prevent the growth of employment. There is no higher objective at the present time, in our very difficult economic situation in the world when jobs everywhere are in very short supply, than doing everything we possibly can to encourage employment. However, that does not mean that we must lose our good sense and go for a scheme that someone has dreamt up if we see that at the end of the day problems will arise.

I had hoped that we would see some new approach to the issue. If the Government are absolutely committed to this idea and trying out this new approach to employment and the creation of jobs, it seems without question that people will be asked to address questions that would test quite sophisticated advisers in this field—the noble Baroness, Lady Brinton, was absolutely right about small start-up companies full of incredibly clever young men and women who have particular technical or other skills but no financial experience. Has my noble friend got nothing to say about whether independent advice, which would be paid for by the employer, should be available to people who find themselves in that situation? If the Government are not prepared to move in that direction, I will find it impossible to support their position.

My Lords, my noble friend Lord King mentioned a degree of embarrassment at finding himself in this situation, which I certainly share. At least those of us who are opposed to this legislation are not alone. The Financial Times, that great bastion of employee rights, ran a leader the day after the last debate in this House in which it said that this legislation contained,

“little to like and a lot to fear”,

and it advised strongly against progressing with it, saying that if this clause went ahead,

“employee share ownership may begin to be perceived as a shortcut to strip workers of their rights”.

That is not what any of us in this House want to see. We know that employee share ownership is a good thing. We want to support the Government in everything they can do to spread it, but this clause is not the way. The number of ways in which this clause could backfire has been enumerated this afternoon. Not much attention has been paid to the potential tax avoidance involved. It has been mentioned, but the Office for Budget Responsibility itself put a label of around £1 billion on the costs that might be in there. Is that really what the Government want to see happen? How is that compatible with the current agenda of trying to cut back, quite rightly, on tax avoidance?

It is the way in which this clause could detrimentally affect the idea of share ownership that causes me the biggest problem. It might not be big companies that will use it, and it is a very strange defence of a piece of legislation to say that hardly anybody is going to use it. I have heard that rather often and it seems an odd way to go about government business. There will be unscrupulous companies below the FTSE 250 that see this as a way of getting the labour force that they want on the least good terms. That is not going to encourage good employee relations. We want to do what my noble friend Lord Deben referred to and encourage the feeling that we are all in this together. If we are to go for growth, getting that sort of motivation will be important. Depriving people of basic rights is not the way to do that.

There is a potential exception for start-ups, where everybody starts off in the same boat and you do not risk this idea of a two-tier scheme of employees. Small companies probably need a bit more flexibility. They already have two years in which they do not need to worry about tribunals or redundancy, but they might need a little longer than that. In that case, perhaps we might ask my noble friend the Minister once more to see whether he can persuade the other place and the Government that this clause should be very narrowly restricted in its implications and application. As a clause that creates something open to any business it is potentially very dangerous.

We have also heard about the problems of valuing the shares. In his valiant attempt to defend this proposal, my noble friend Lord Flight said that we might well reach a stage where the Government have to stipulate the price-earnings ratio on which these shares would be sold. This is not the role that I wish to see my Government undertake. It is fraught with problems. This entire clause needs another rethink, even at this late stage.

My Lords, the noble Viscount has been a Minister for a short time only, but I think I speak for the whole House in recommending that he be promoted to an earldom for services to masochism. We have now debated this proposal for twice as long as the House of Commons saw fit to devote to it last week. In the hours of debate in this House, there has been one Member only, besides the Minister, who has wholeheartedly supported this proposal, and we pay great tribute to him: the noble Lord, Lord Flight. Even he sounded a note of equivocation today, saying that he hoped that the many problems that there were still with the scheme could be “ironed out” while it was being implemented. This is not good advice to legislators on how we should conduct our business.

However, I am grateful to, or perhaps sorry for, the noble Lord, Lord Flight—because it weakened his case—that he did not repeat the argument that he used last time, which was that we did not need worry about the £1 billion of potentially lost tax revenue, to which the noble Baroness referred. He said:

“The Treasury will therefore not lose tax revenue as a result of the tax arrangements; it will merely not get as much as it might otherwise get”.—[Official Report, 20/3/13; col. 622.]

I am sure that is hugely reassuring to HMRC and to those of us who are loyal taxpayers and who do not need to worry about the fact that there is no money to pay for anything, because it is simply revenue that the Treasury might otherwise not have got.

When we debated this proposal on Report, the noble Lord, Lord Forsyth, said:

“I am surprised that this clause has survived so long. The scheme is ill thought through, confused and muddled”.—[Official Report, 20/3/13; col. 597.]

If the House of Lords exists for any purpose, it is surely to see that legislative schemes that are ill thought through, confused and muddled are improved and preferably removed. We have done neither in respect of this proposal so far. There is the issue with which we all grapple when legislation returns from the House of Commons as to what our position is in respect of it.

I need to make clear, particularly to noble Lords who have not been following the labyrinthine course of this legislation over recent months, that this proposal was not in any party’s manifesto. It was not in the Tory or Lib Dem manifestos. It was not in the coalition agreement. It was not in any report on wider share ownership or employment rights in any recent period. The Nutall report, which was exhaustive on the extension of employment rights and was published six months before this proposal saw the light of day, did not even so much as discuss it, so frivolous would it have been regarded by the eminent advisers to the Nutall review.

Where does this report come from? We all know: it is on the rebound from the Beecroft proposal to do away with certain employment rights in respect of unfair dismissal and instead to substitute a single payment that would have resulted from it. The Business Secretary was not prepared to go along with that. Then, as we have heard from various parts of the House, some kind of deal was apparently done between the Chancellor and the Business Secretary to resurrect a version of the Beecroft proposal in return for shares.

There should be an independent, judge-led inquiry into the terms of the deal between the Chancellor and the Business Secretary. The House needs to know and evidence should be taken in public as to precisely what was said and why our good friends on the Lib Dem Benches are so loyally supporting a proposal that appears to stand against everything that all of them came into politics to achieve. I look at them from here. I do not think that any of them came into politics to remove basic, fundamental employment rights in return for a mess of potage, which is what this proposal before the House is. When we last debated this, to my great surprise the Lib Dems almost entirely went into the Lobby with Government, apart from the noble Baroness who spoke earlier and who came into the Lobby with us. I hope that this time they may have the courage of their convictions and come into the Lobby with us.

The Minister for Employment in the House of Commons used three arguments to support this plan that have all disintegrated in the course of the debate this afternoon. First, he said that the new employment status would be “absolutely voluntary”. There is no “absolute voluntarism” when the power relationship is so unequal and there is no right to independent advice either on the nature of the contract on the table or on the rights that are being forgone. I hear overwhelming support for the idea that there should be independent, legal and financial advice available to anybody who might be faced with signing a contract of this kind, before they are obliged to enter into it. I hope that the noble Viscount will take this support back to his colleagues in the Cabinet. In all parts of the House, there has been no movement on that issue in the course of our deliberations.

When we last debated this, the noble Lord, Lord King, said:

“The power is with the employer at a time when many young people are finding it hard to get jobs. In no way is it a fair balance to say, ‘You have an impartial opportunity to decide’. I just wonder what will happen to the poor job applicant who, when he is told what the terms are, says, ‘I will now go and consult my adviser’ … I know exactly what the employer will say—‘Well, do you want the job or don’t you?’”—[Official Report, 20/3/13; col. 611.]

That is precisely the situation.

Secondly, we have been told that this is mainly an incentive for small start-up companies, particularly in the high-tech sector. In the House of Commons last week, Michael Fallon said that it would apply in particular to younger companies at the beginning of their lives that,

“will be able to use this status at a time when they might not be able to pay their staff more than competitor companies, or those already established in the marketplace”.—[Official Report, Commons, 16/4/13; col. 176.]

The Bill does not say anything about that. It does not have any such restriction. It is of general application. If the intention is that it should apply only to a very limited extent, surely it is our duty to see that the legislation states that. It does not state that, and part of the reason—I latch on to the remark of the noble Lord, Lord Forsyth—is that it would be quite difficult in law to specify how it could apply to only a certain category of companies to which the Government intended that it should apply, and not to others. They need to take that back and consider it further.

The third argument is that the business community wants to see this change. Having read the Office for Budget Responsibility’s report, I have no doubt that quite a number of company employees might find the tax status of these shares attractive. We should remember that shares up to a valuation of £50,000 will be free of capital gains tax. If the legislation is passed, I can well understand that this will prove highly attractive to tax planners. Many people may quickly transfer their employment status in order to take advantage of it. However, the idea that there are large numbers of companies or putative companies that want to take advantage of this status in order to engage in more entrepreneurial activity, which is the justification for the scheme, is not borne out by any of the consultation. There were 184 responses to the original consultation. Three supported the scheme: only two more than the number of supporters in your Lordships’ House. One supporter was apparently the Institute of Directors. When we last debated this, the noble Baroness, Lady Wheatcroft, said that when she asked whether it had consulted its members, the answer was no. So there is not much support there.

Justin King, the chief executive of Sainsbury’s, who is on the Prime Minister’s business advisory group, said that trading basic employment rights for shares was not what we should be doing. He said:

“What do you think the population at large will think of businesses that want to trade employment rights for money? … Our agenda … should be making employing people easier and less costly”.

Lastly, I come to the point that is so important and that was raised by the noble Baroness at the end of her remarks: the issue of efficient tax planning. The Office for Budget Responsibility estimates that this proposal could cost up to £1 billion a year in lost income to the Treasury. It states:

“It is hard to predict how quickly the increased scope for tax planning will be exploited; again this could be quantitatively significant as a quarter of the costing already arises from tax planning”.

In this time of austerity, is this an appropriate, let alone a moral, thing for your Lordships to be doing: to hand out potentially £1 billion a year in pursuit of a policy that the Minister, and Ministers in another House, have not declared as being in support of more efficient tax planning but which they have stated is in order to achieve entrepreneurial gains? One of the biggest impacts of the policy could be one that is completely opposite to the intentions of its founders.

I will leave the last word to the chief executive of the Employee Ownership Association. We all want to see wider employee ownership and engagement in our companies. In a statement put out this afternoon to inform the debate, Iain Hasdell said:

“There is absolutely no need to dilute the rights of workers in order to grow employee ownership and no data to suggest that doing so would significantly boost employee ownership … all of the evidence is that employee ownership in the UK is growing and the businesses concerned thriving, because they enhance not dilute the working conditions and entitlements of the workforce”.

Our duty this afternoon is not to dilute the entitlements of the workforce, without which there will be no growth and no recovery in this country.

I thank noble Lords for their contributions to this debate. I reiterate that the Government would like to give individuals and companies more choice in how they discuss and agree employment contracts. The employee shareholder status provides this additional choice. I will start by addressing the issue raised by the noble Baroness, Lady Warnock, about who the policy is aimed at. She asked, in effect, whether anybody would want this employment status, and who would want to employ an employee shareholder. These themes were raised also by my noble friends Lord Forsyth and Lady Brinton.

I clarify again that we understand that the new employment status will not be appropriate for all companies and will not be taken up across the board. It will simply add to the options and flexibility available to companies and individuals in determining their employment relationships in the same way that workers or employees, part-time or permanent staff, are not suitable for all companies. We expect that the new status will probably appeal mainly to fast-growing, small, start-up companies and individuals, as this is the level where employment rights are seen to impact the most. We have never said that the take-up will be widespread. We have always said that it would apply to a small number of companies, should they wish to take it up.

My noble friend Lady Brinton again raised the issue of who this might apply to. She cited the Cambridge example. She is quite right that companies that are likely to take this up are those that are new. They are likely to be making products that they want to be successful in the long term. She is right to say that this can be an extremely long road. However, she is taking a particularly negative view of the opportunity for employee shareholders. If I heard her correctly, she said that employee shareholders would have to pay for the shares up front. That is not the case. They will be given the shares, which will be free, even though, clearly, they will have to pay tax on them.

My noble friend Lord Forsyth raised the issue of tax, and the cost of the new status. The Office for Budget Responsibility has stated that in the long term the policy may cost up to £1 billion, but that relates to periods beyond the 2020s. It is simply not possible to be certain about costs so far in the future. The noble Lord, Lord Adonis, also raised this issue. Moreover, the tax rules will contain protections to prevent abuse—again, this issue was raised by several noble Lords—such as serial use of the scheme, and rules to ensure that those who have a material interest in the company and who thereafter can influence decision-making will not be eligible for the tax advantages. The Government will keep the rules on tax under review. I hope that provides a measure of reassurance.

The noble Lord, Lord Monks, who is in his place, raised the issue of Beecroft. This familiar story was raised in Committee and on Report. A number of noble Lords suggested that this was Beecroft by the back door. It is not. The new employee shareholder status is different from the no-fault dismissal proposal. Individuals will become shareholders of the company at the start of the employment relationship. This is an important benefit conferred by employee shareholder status. Unlike in the case of no-fault dismissal, the employee shareholder status will be agreed between employers and individuals in contractual negotiations. Employers will also be free to offer improved contractual terms such as contractual redundancy payments in an employee shareholder contract.

The noble Lord, Lord Myners, raised the issue of share buyback. He asked whether in effect a company could force an employee shareholder to sell back their shares. A company may require an individual to sell back their shares as a condition of the shares. However, this type of restriction will affect the value of the shares, which the company must assess when granting the shares and attaching restrictions. This comes back to what I said earlier about negotiations needing to take place in advance of the contract being signed by both the employee shareholder and the employer.

The noble Lord, Lord Pannick, raised the issue of independent advice, as did a number of other noble Lords, including my noble friend Lady Brinton. We do not require a person who is moving from employee status to worker status to be given legal advice before becoming a worker. Therefore, it is not clear why we should require legal advice to be given when an individual moves from employee to employee shareholder status—a status that carries far more employment rights than that of the worker. Companies are not required to provide independent financial advice to people who are thinking of becoming employees or workers, and employee shareholder jobs are just like worker and employee jobs.

The Government will provide guidance on about the new status in the same way that they provide guidance about employee and worker employment statuses. Using this information will help individuals to determine whether the employee shareholder status is right for them. I say again to my noble friend Lord Forsyth that the situation of individuals taking up employment with employee shareholder status is distinctly different from the often challenging and difficult discussions that can take place, and sometimes need to take place, to determine settlement agreements at the end of an employment.

The noble Lord, Lord Myners, raised the issue of general advice on complex articles of association. Our guidance will make clear to both employers and employees the sorts of issues to consider before making a decision. The guidance, as I mentioned earlier, is in draft form and we continue to welcome views to improve it.

My noble friend Lord Forsyth raised the issue of share valuation at the beginning and again in his comments later on. He will know that there is already a market for the valuation of private company shares that is normally carried out by accountants or actuaries, to which I alluded earlier. This clause is all about flexibility, and it is not for the Government to be prescriptive in terms of who should value the shares. As I mentioned, practitioners have established ways for valuing shares, including examining the company’s performance and financial status as shown in its accounts for a period up to the date of the valuation, considering the plans of the company by looking at order books and analysing future commitments, and comparing with similar companies or sectors the value of companies, in particular the appropriate yields and price-earnings ratios, and accounting for the commercial and economic background at the date of valuation. I was grateful for the supportive comments made by my noble friend Lord Flight in this respect. Although I said at the beginning that this is straightforward and I stand by that, it may be the case that, given certain negotiations, it becomes more complicated. However that depends, again, on the discussions that are undertaken between the employer and the potential employee shareholder.

On this point of the valuation of shares, could my noble friend deal with the point that was made by the noble Lord, Lord Bilimoria, about liquidity? It is all very well to reach a theoretical value of shares, but the value is actually in what people are prepared to pay for them. In small private companies where there is no liquidity, how will you deal with that?

It remains the case that these are discussions that must take place between the employer and the employee. Again, it is not for the Government to prescribe or give advice in this respect. That is a consistent theme that I have taken.

On the same theme of shares, as raised by my noble friend Lord Forsyth, we recognise that there may not be a market for private company shares and therefore it is important that, where appropriate, a buyback clause will be useful to both the employee and the employer. This is an issue that the noble Lord, Lord Myners, raised as well. We introduced in the other place a power to bring forward the regulations that would govern these buyback clauses in the event that employers were behaving unscrupulously. This would prevent employee shareholders being forced to sell back their shares at an unnaturally low price.

The noble Baroness, Lady Turner of Camden, made an assertion, or perhaps it was an accusation, that the Government want to remove employment status. I reiterate what I mentioned both in Committee and on Report, that this is not about removing rights, it is about creating a new employment status that offers a different set of rights and a mandatory share ownership. The status, I say again, is not compulsory for companies to use, and it will only be suitable for those companies that want to share ownership with their workforce. We must remember that employee shareholders will retain the majority of employment rights, including, for example, automatic unfair dismissal rights and the right to be paid the national minimum wage. We have consistently said that the new status will not suit all people or all companies. This is very much a common theme. However, for those who choose to use it, the employee shareholder status offers more flexibility and allows greater risk- and reward-sharing between people and companies.

My noble friend Lady Wheatcroft and others raised the issue of whether the employee shareholder scheme is open to tax avoidance, an issue that I touched on slightly earlier. It is a key aspect of the policy to allow employee shareholders to share in the success of their employers without paying capital gains tax on at least some of their gains. However, to guard against abuse of the tax exemption, there are several rules that limit the number of shares that can be exempt. For example, the rules will prevent repeated consecutive use or multiple simultaneous use of employee shareholder status to get around the limit. In addition, anybody who controls, alone or with other connected persons, 25% or more of the voting power in the company, will not be able to receive exempt shares. We will not allow people such as spouses or children who are connected to individuals who control 25% or more of the company to benefit from the exemption.

We have listened to the concerns and, as was mentioned earlier, we have acted to ensure that jobseeker’s allowance claimants will not be penalised if they decide not to apply for or accept an employee shareholder job. Together with protections for employees, our announcement about jobseeker’s allowance policy means that no claimant or employee can be forced to accept this status. I thank many noble Lords for their support in this particular respect.

The new employment status gives ambitious, talented individuals with entrepreneurial spirit an opportunity to share in the risks and rewards of being part of their employing company. I want to say something important in these closing stages. I have clearly listened this afternoon and I have heard the strength of feeling in the House towards this particular clause. I ask the House to support the Motion to agree with the Commons’ position that Clause 27 be retained. If the House does not support that Motion, I will ensure that the strength of feeling in the House today is conveyed to my ministerial colleagues.

Can the Minister confirm that the Government have not felt able to move towards a clause on the issue of availability of independent advice?

That is correct. I did not make any movement in that direction. I reiterate again to my noble friend that I am not immune to the strength of feeling in the House this afternoon. I have clearly listened and I will be conveying all comments back to the other place and to my ministerial colleagues.

My Lords, I am grateful to the noble Lord for the skill and courtesy with which he has presented the Government’s case. I am also very grateful to him for his frank acknowledgment of the strength of feeling on all sides of the House in relation to Clause 27. Of course he will appreciate that only if this House stands by its previous decision and asks the Commons to think again will the Government and the Commons do so.

Your Lordships can rarely have heard a debate in which so many noble Lords with business experience and political experience on all sides of the House have carefully and eloquently explained why a Government proposal is either wrong in principle, or damaging in practice, or unworkable, or misses its target, or unbalanced, or all of the above. Noble Lords clearly have a variety of reasons for criticising Clause 27. It is striking indeed that no speaker this afternoon apart from the Minister was supportive of Clause 27 in its current form. Even the noble Lord, Lord Flight, who complained of what he described as “negativity”, said that the clause could not work if the shares were worth only £2,000 at the date of issue and accepted that other problems needed to be addressed.

The noble Lord, Lord Deben, asked rhetorically for advice on what the noble Lord should do, given his belief that a positive proposal in this context could be brought forward. It is not for me to advise the noble Lord, Lord Deben, but if I were doing so I would suggest to him and to other noble Lords who may be in the same position that the answer is clearly to reject the half-baked scheme currently before the House in the hope that the Government take this idea back to the drawing board—or perhaps, to use the expression of the noble Lord, Lord Forsyth, on Report, back to the bath in which he suggested that this idea was dreamt up—so that they can reconsider whether in this Bill, or in some future Bill, a more thoughtful and workable scheme could be brought forward.

The concern about Clause 27 is not politically partisan. The noble Lord, Lord King of Bridgwater, and the noble Baroness, Lady Wheatcroft, referred to a measure of embarrassment in their position. They should not be embarrassed. It is to the great credit of their Benches that so many noble Lords have spoken out and voted in favour of deleting Clause 27 or abstained on Report. I of course appreciate that it is not easy to do so, but it is in no one’s interest for this proposal to be enacted in its current form.

The Government and the House of Commons have so far given the most cursory consideration to the concerns expressed on all sides of this House. They should be asked to think again. I wish to test the opinion of the House.

Enterprise and Regulatory Reform Bill

Commons Reasons and Amendments

Lords Amendment 35: Clause 56, page 54, line 40, leave out paragraph (a)

Commons disagreement and reason

The Commons disagree to Lords Amendment No. 35 for the following Reason—

35A: Because it is appropriate for section 3 of the Equality Act 2006 to be repealed.

Motion A

Moved by

That this House do not insist on its Amendment 35, to which the Commons have disagreed for their Reason 35A.

My Lords, in moving Motion A I will speak also to Motion B. We are now discussing the provisions in the Enterprise and Regulatory Reform Bill, which seek to reform the remit of the Equality and Human Rights Commission. I will turn in a moment to the specifics of the Motion and the amendments before us. First, let me remind the House why we are discussing the EHRC, or what we often more commonly refer to as the commission, Britain’s designated equality body and “A-rated” national human rights institution.

In May last year, we set out our plans to support the commission to become the valued and respected national institution that we all want it to be. Even the commission’s many supporters in this House have acknowledged that the first few years of its existence were anything but trouble free. I am not going to go into the detail of these problems again today, but I do want to be clear that the Government’s motive in making changes was and is to secure a successful future for the commission so it is in the strongest position possible to do its vital work.

We are already making progress. In the past three months alone we have agreed with the commission a new governance framework document and budget, both of which ensure that the commission is able properly to fulfil its important duties and protect its operational independence. The new chair, the noble Baroness, Lady O’Neill, and other members of the new board have now been in post for several months and are building on the work of their predecessors. We believe that the commission is going from strength to strength. Indeed, the working relationship between this Government and the commission is marked by a mutual respect and clear understanding of the distinct roles that each is there to fulfil and how we can work together towards a fairer society. I believe that this will be evident when we come to the next debate on caste discrimination.

Having given that introduction, let me move to the Motions in front of us. In the ERR Bill, the Government originally put forward two legislative changes that we believe will underpin the positive changes which our non-legislative reforms have already helped to bring about. This House rejected the Government’s amendments on Report, but the other place has disagreed.

First, we are asking noble Lords not to insist on their Amendment 35, which would remove from the Bill the repeal of Section 3 of the Equality Act 2006, what is otherwise known as the commission’s general duty. Section 3 imposes a general duty on the commission to perform its functions with a view to “encouraging and supporting the development” of a fairer society and it sets out five ways in which it should do this. As I have made clear during all of our debates, the statement included in that general duty is one we can all support because we all want a fairer and more equal society. However, it is this Government’s view that making this a statutory duty for the Equality and Human Rights Commission, in addition to its specific responsibilities to promote and to protect equality, diversity and human rights, dilutes the clarity of purpose necessary for it to be effective and successful.

The Government are clear that the commission’s core purpose is what I have just said—to promote and protect equality, diversity and human rights. That purpose is underpinned by the detailed duties contained in Sections 8 and 9 of the Equality Act 2006. The repeal of the general duty does nothing to affect the commission’s ability to fulfil these duties. It is our view that its focus on them will enhance its performance.

As much as I understand many noble Lords’ wish for Section 3 to remain, during the debates in both Houses we have not heard any example of how its repeal would prevent the commission carrying out the kind of work which has had real impact. Indeed, in its most recent briefing paper, circulated to all Peers, the commission explains that its programme of work is guided by the specific powers and duties in the Act. The work for which it is respected and which has had great effect, such as its inquiry into disability-related harassment—and there are many others—would not be affected by the removal of the general duty at Section 3. Again, the commission itself has confirmed this in its own briefing note.

In many ways, the general duty could be argued as nothing more than symbolic and should therefore be left in place, but that is not the case. The commission is required to monitor progress against the general duty and to provide a comprehensive report to Parliament. This brings me to Lords Amendment 36, in relation to the commission’s monitoring duty at Section 12.

Section 12 sets out the commission’s duty to monitor progress against the aims set out in Section 3. We are asking noble Lords not to insist on their Amendment 36 so that the commission reports instead on progress against its equality and human rights duties, those at Sections 8 and 9. This is a consequence of the repeal we are seeking of Section 3 but it also reflects our aim to focus the work of the commission. The present monitoring requirement is burdensome. Can we reasonably expect the commission to report meaningfully against the changes in society in relation to the aims in the general duty?

Enabling the commission to report against its equality, diversity and human rights duties will still allow it to monitor and report widely on changes in society relating to these duties, and thus hold a mirror up to society in these respects. It will also allow it to monitor and report on its own impact on the areas that it is uniquely placed to influence and change. However, to go further and ask it to assess how “fair” society is gives rise to ill-targeted and costly work. Having clearly focused monitoring and reporting will ensure that evidence directly feeds into the commission’s plans, and enable Parliament and the Government to hold the commission to account as the reports will be able to show where the commission is having impact, and where work still needs to be done.

We have debated the Equality and Human Rights Commission in great depth on several occasions over the past few months. I thank again all noble Lords who have given up their precious time to do so with me in private as well as on the Floor of the House. One thing we all agree on is that we want the commission to be an effective national human rights institution and equality body, trusted and respected to promote and protect equality and human rights. It is because we care that we are making these reforms. We are confident that, with these changes, the commission will continue to go from strength to strength with new leadership, an agreed budget, and a new framework document that recognises the commission’s continuing independence.

The other place has made clear its views. We therefore ask that noble Lords do not insist on their amendments. I beg to move.

Motion A1

Moved by

As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 35”.

My Lords, it is with great sorrow that I find myself here at ping pong, seeking to reinstate Section 3 of the Equality Act 2006. I really do not do this lightly. I know that a challenge to the Government at this stage should be made only when it is absolutely necessary and all other routes have been exhausted. I had hoped that the Government would listen to the many and exceptionally well considered arguments made by all but two noble Lords on Report. I expected something more than a blanket no. That is why, having explained my reasons to the Minister last week, I have retabled the amendments that were overturned in the other place.

We have yet to hear of a single example of how the commission’s capacity to act as the guardian of equality and human rights in Britain will be improved by repealing the general duty in Section 3, a duty which gives a holistic direction to the commission based on principles of dignity, respect and fairness, and takes it to, but not beyond, legal enforcement in helping society change for the better. The Equality and Human Rights Commission itself has said that it now has sufficient focus and, in the absence of robust reasons for removing it, Section 3 should remain.

I ask your Lordships to recall where the duty came from and to consider where its repeal may take us in the future. Twenty years ago today, Stephen Lawrence was murdered by a group of young men for no reason other than the colour of his skin. The Metropolitan Police made a catalogue of errors in the investigation into his murder. Our criminal justice system failed Stephen Lawrence, and it failed his family in their quest for justice. It is a sad truth that it took this tragedy to create a moment of enlightenment. The inquiry, led by Sir William Macpherson, identified that racial discrimination could not be seen as the lone action of a few bad apples. It was part of the institutional culture of the Metropolitan Police.

That insight led to the sea-change in our approach to equality law and the structural support to promote and enforce it. The general duty embodies this shift in thinking. The role of the commission is not simply to seek compensation for those who experience discrimination. As Age UK has noted, it is to pursue cultural change to prevent such discrimination from occurring in the first place. This is not only about racial discrimination. It is about institutional discrimination and violations of human rights in all their guises and across society—for example, in parts of the NHS and our care system, as the EHRC demonstrated in its inquiry into older people’s treatment at home. It is also widespread in the criminal justice system and local authority practice, as the disability hate crime inquiry revealed. It is rife in the exploitation of migrant workers, exposed by the inquiry into the meat processing industry.

Ministers have argued that the general duty is symbolic and aspirational, as if this were enough to dismiss it out of hand. The general duty symbolises our commitment to preventing the kind of injustice faced by the Lawrence family, or the routine abuse of disabled young people in institutions because of indifference and cruelty. It aspires to a society founded on dignity, respect and equality—notoriously absent in these cases. However, contrary to what Ministers claim, the general duty is not, in fact, merely symbolic. Its repeal could have major implications for the commission’s role in monitoring equality and human rights. In the other place last week, the Minister told MPs:

“We are also changing the commission’s monitoring duty to ensure that it reports on its core functions, rather than on the state of society generally”.—[Official Report, Commons, 16/4/13; col. 217.]

At present the commission is required to monitor Britain’s progress towards the aims of the general duty. In so doing it holds up a mirror to society, as it did in its seminal report, How fair is Britain?. As the Minister indicated, if the general duty is repealed, the monitoring duty will be fundamentally changed—it will be limited to holding up a mirror to itself and asking only, “How effective is the commission?”. This is why Amendment 35 relating to Section 3 and Amendment 36 relating to Section 12 of the Equality Act 2006 are inseparable and must be considered as one.

The Minister went on to say that changing the monitoring duty,

“will also enable the EHRC to gain the respect hon. Members want it to have as our equality body and national human rights institution”.—[Official Report, 16/4/13; Commons, col. 217.]

This suggests a dangerous misunderstanding by the Government of the requirements of European Union law and the United Nations standards on the status and mandate of national human rights institutions. The likely effect of these proposals would be to prevent the commission, and therefore the UK, from complying with the requirement for equality and human rights bodies independently to monitor the national situation.

This could have very serious consequences. In the light of the Government’s package of reforms the international accreditation committee for national human rights institutions has announced that it will re-examine the commission’s status next month. I do not need to spell out to my noble friends the impact on the UK’s moral authority abroad if, as a direct consequence of these reforms, the commission were to lose its present A-accredited status. Such a development would no doubt be seized on by countries such as Zimbabwe and Iran. At a time when the UK is seeking a seat on the Human Rights Council that is not a risk we should be taking. I am sure noble Lords would agree that we must practise what we preach and lead by example.

The commission’s role as an agent of change matters to millions of people in this country, whether they are an elderly person in hospital, a woman fleeing a violent partner or a black teenager and his friend waiting for a bus. In a civilised society such as ours people in these vulnerable situations should feel confident that our institutions will accord them dignified and fair treatment as equal citizens. Justice is poorly served if our commitment to equality and human rights extends only to offering compensation after an event. For many, it is simply too late.

Today, of all days, we should remember why we put these measures in place and not be so foolish as to believe that it could never happen again. That is why, for the second time, I feel we must send these urgent messages to the other place that the general duty and the duty to monitor its aims must be taken very seriously and must stay. I beg to move.

My Lords, I was sorry not to be here for Report stage of the Bill but I have read the debate carefully. It left no room for doubt as to the strength of support right across your Lordships’ House for retaining Section 3. In addition to the powerful and principled advocacy of the noble Baroness, Lady Campbell, and others, I attach particular importance to the comprehensive demolition of the Government’s case in legal terms by my noble and learned friend Lord Lloyd of Berwick.

Your Lordships will be pleased to hear that I do not propose to go over again all the substantive arguments again, which have been so comprehensively crawled over in Committee and on Report, about the value of duties that cannot be enforced in a court, for example, whether there is a place for the declaratory in legislation, the value of a unifying link between equality and other fundamental human rights—I was rather surprised that the Minister sought to deny that one in her wind-up—the fact that there is nothing in Section 3 that suggests or implies that the commission is to be solely or uniquely responsible for encouraging and supporting the goal of an equal society, the negative message sent by removing the general duty and so on. I think that these arguments have been comprehensively won.

However, I want to repeat one point I made in Committee that I do not think has been properly answered, or indeed answered at all. The Government argue that Section 3 does not add anything to the EHRC’s core equality and human rights duties in Sections 8 and 9 but, as I explained in Committee, there are reasons for thinking that the repeal of Section 3 could make the commission’s duties at Sections 8 and 9 more vulnerable to judicial review on the ground of challenges based on the proper statutory remit of the commission.

In the absence of Section 3 there is little by which to judge whether the duties at Sections 8 and 9 are sufficient, as they become freestanding and detached from any specified outcomes or overarching purpose. The Minister said that no examples have been given of how the removal of Section 3 could undermine the commission’s ability to carry out its functions. I submit that it is a clear example if the removal of Section 3 would mean that the commission was more vulnerable to judicial review in carrying out its functions. I would be grateful if the Minister could deal with this point before she asks your Lordships to accept the Commons disagreement with your Lordships’ amendment.

What we have to decide today is not on these substantive arguments but whether to ask the Commons to think again about this matter. I think we should do this for four reasons, which I will briefly state. First, the public have shown in their response to the Government’s consultation that they are against repealing the commission’s general duty by six to one. Secondly, a large number of civil society organisations including Age UK, the Equality Trust, the Fawcett Society, Justice, Mind and the Refugee Council have expressed their opposition to repeal, indicating that it would leave the EHRC a weaker body if Section 3 were no longer in place. Thirdly, there is the cursory nature of the Commons rejection of our amendment. It was rejected in the briefest of exchanges, which scarcely sought to answer the arguments advanced but simply reiterated the arguments that had already been answered. Fourthly, and this is perhaps the most important, the Minister said on Report,

“I shall be absolutely clear about what this Government seek to achieve via this Bill. We want a strong and independent Equality and Human Rights Commission which promotes and protects equality and human rights”.—[Official Report, 4/3/13; col. 1289.]

This was echoed by the Minister in another place when she said,

“we want a strong, independent Equality and Human Rights Commission”.—[Official Report, Commons, 16/4/13; col. 217.]

The Government’s credibility is on the line here. If they want a strong and independent Equality and Human Rights Commission that promotes and protects equality and human rights, why should they not agree to this amendment? I know that they think that the general duty adds nothing to what is there in other sections of the Act, and they have an argument, even if one disagrees with it. The Minister in the other place reeled off a string of about 10 duties that would still be present in the Act even if one removed Section 3, albeit in a fragmentary and unintegrated fashion. However, if the general duty adds nothing, equally it does no harm. It is perhaps a question of balance.

I put it to the Minister that, even from the Government’s point of view, it might be preferable, on balance, to accept the amendment. It is symbolic, and this has become a touchstone of the Government’s commitment. I therefore put it to the Minister that they would be much better advised just to accept the amendment and spare themselves a lot of aggro and ill feeling on the part of that considerable body of opinion that regards the general duty as intrinsic to an Equality and Human Rights Commission worthy of the name.

My Lords, I will make some very short remarks because the noble Baroness, Lady Campbell, and the noble Lord, Lord Low, have more than adequately explained why we find ourselves in this rather unfortunate position—I agree with the noble Baroness, Lady Campbell—of asking the Government to look again and asking another place to take this back.

It is important also to say that one thing has changed since we discussed this in Committee and on Report. That is that the EHRC has given this matter some further reflection. I congratulate the noble Baroness, Lady O’Neill, because it is a sign of the maturity of the organisation that it has changed its view on this matter at least a small amount. I will read out a statement that was issued, and that is about the only thing I will say. The statement about the repeal of Section 3 on its website says:

“However, the debate in the Lords and commentary by parties have underlined the importance which is attached to the general duty. Many people clearly believe that, both in terms of the perceived mission and role of the Commission, and the coherence of the legislation, it is valuable to retain the general duty. Unless the government can provide additional robust reasons for removing the general duty in the current situation, our analysis suggests the case for removing the Lords’ amendment in the Commons has not been made. The Commission therefore continues to support retention of the general duty and maintaining the position established by the Lords”.

We know from the previous debates and from listening very carefully to what the Ministers in this place and in the other place have said that there is actually no robust case for the repeal of the general duty. Your Lordships’ House took that view by a majority of over 50 when this was discussed on Report. I put it to your Lordships’ House that the one thing that has changed is in favour of the retention of the general duty, and I hope that the Minister will now weigh this issue in the balance and agree to leave Section 3 in place. Indeed, if the Government wish to review Section 3 or any other part of the equalities legislation then that should be done with prior consultation and the involvement of the Joint Committee on Human Rights. We on these Benches do not believe that that is desirable or necessary, but if it were to be done it should be done in a proper way, not as part of a Bill that addresses regulatory burdens on business and enterprise.

My Lords, the Minister has not advanced this evening any of the arguments that she advanced at the beginning of January for repealing Section 3 of the 2006 Act. I will therefore leave those arguments on one side.

Instead I will turn to the arguments advanced by the Minister in the other place. He asserted boldly that Section 3 of the 2006 Act should be repealed because it was not a core purpose of that Act. With great respect, that is exactly what it was. Section 3 was in a sense the core purpose of the 2006 Act, that purpose being to bring together for the first time in legislation equality rights with other fundamental human rights. The specific duties under Sections 8 and 9 were to be the means of bringing about that core purpose. That was the very point made by Professor Sir Bob Hepple in his report. He said that Section 3 is important because it states for the first time what he called the “unifying principle”. It is most unfortunate that the Minister in the other place, when he came to his reply, did not reply to that argument or to any of the arguments advanced in the other place; sound arguments and convincing arguments, they were all, unfortunately, left aside because there was no time to deal with them.

There is a hint, elsewhere in what the Minister said, that Section 3 is undesirable because it would, as it were, take the commission’s eye off the ball to the exclusion of the important duties under Sections 8 and 9. There was never much danger of that. In any event, the commission has now made it clear, if I am right, that it would now welcome the retention of Section 3. If that be so, surely we should leave it at that.

It is not often on these occasions that we should resist the view of the House of Commons at this stage of ping-pong. However, the Government have not given one single solid reason why we should repeal a provision that both Houses were in agreement on as recently as 2006. As I have said, the Minister did not deal with any of these arguments in his reply. We should give him another opportunity of doing so, and another opportunity to the other place to see if they agree with those arguments or not. For that reason, I will vote for the amendment in the name of the noble Baroness, Lady Campbell.

My Lords, I pay tribute to the work and the steely determination of the noble Baroness, Lady Campbell. She has been inspirational in her continuing support for what she believes to be an important principle and issue. Many of us share her passion and determination.

It is very poignant that today we are again debating the general duty of the Equality and Human Rights Commission and its principle on the 20th anniversary of the terrible racist murder of 18 year-old Stephen Lawrence, and on the day of the memorial service that was held this afternoon in his memory, which I understand was attended by the Prime Minister and others.

Last month at an event to launch a book about the Macpherson inquiry, Doreen Lawrence said that, as a mother, for 20 years she had not been able to grieve and find closure because she had been forced to fight for justice, year after year. There are still individuals out there today who were involved in this murder and who have not been brought to justice. She wrote to the Prime Minister last November asking that he does not row back or seek to water down hard fought equalities legislation that all political parties came together to put on the statute book so recently to protect those who need protecting.

Huge progress has been made over many decades, particularly since, for example, my own family came to the United Kingdom, when racism and discrimination was rife. However, there is still much to do to ensure that our society becomes more equal, and that we maintain and build on such positive work, particularly since the Macpherson inquiry and its findings. It is irrefutable that more than a decade later, the Macpherson inquiry can rightly claim to have led to an overhaul of Britain's race relations legislation which created much stronger anti-discrimination powers that can be found anywhere in western Europe. Attitudes towards racism and policing have now changed as a result. However, there are still very many people and communities who need to be protected and encouraged to achieve their potential and not be limited by prejudice or discrimination. We need the commission to have the tools, the ability and the duty to monitor the progress in our society.

For these reasons I profoundly disagree with the Government’s reasoning that they wish to repeal the general duty that originated as part of their Red Tape Challenge. That is why it has been included in this Bill, on the basis that it is a,

“vague, unnecessary and obsolete provision from the Equality Act 2006”.—[Official Report, Commons, 16/4/13; col. 225.]

This is not red tape, and it costs business nothing. Where is the evidence of that? It is about vision and about the mission, principles that matter and are important. We cannot risk sliding back if we become complacent on these defining principles.

We have also been told that the commission’s duties are too broad and wide-ranging and therefore cannot focus on its work. The Minister repeated that today, and I am sure that she will say it again in the summing up. Is the Minister aware that the general duty has considerable symbolic importance and, like any major organisation, it encapsulates what it is there for and what it is meant to do and its responsibilities? Do we really want to dilute the work and the remit of the EHRC after it has already faced cuts of around 60%?

The Minister has said that the general duty dilutes its purpose; there is no evidence of this. I argue that we should not remove it, as others have done. We must still do all we can to ensure that there is respect and protection for each individual's rights and dignity, as well as an equal opportunity to participate in society. There is no evidence, and none has been forthcoming, that by abolishing the general duty the commission will somehow be able to work more efficiently. It would risk the commission losing all credibility as the well respected and trusted human rights organisation that we have repeatedly heard the Government want it to become.

As has already been said in the arguments on this matter in both Houses and outside Parliament, the commission itself has now concluded that unless the Government can provide additional robust reasons for removing the general duty, which so far they have not done, the case for removing it has not been made. Surely we should be promoting good relations and mutual respect between able and disabled people, and between people of differing races and faiths. It is therefore appropriate and welcome that the board has now come to a collective view on this matter.

Campaigning for greater equality is at the heart of my own political beliefs and is why I became engaged in politics and in public life. I strongly believe that it would be extremely damaging for us as a country and society if we are seen to be rolling back on equality. Transparency, scrutiny and accountability remain the watchwords. Retaining the general duty is one key element of these, where we strive to become a society that values social justice and promotes greater equality. I therefore ask noble Lords to support the amendment in the name of the noble Baroness, Lady Campbell, and send a strong message to the other place that the general duty does matter.

My Lords, whether it is a runner wearing a black ribbon in a marathon or a coffin draped in the Union flag, there is a real and proper place for symbolism. If this is all that we are debating, why on earth are we removing this particular symbol? In our last debate at Report, I abstained, feeling slightly guilty, I have to admit. One reason I abstained was that the commission had not come out with a clear, unequivocal statement such as has been quoted by the noble Baroness from the opposition Front Bench this evening. If the commission believes that having this symbolic duty does not retard its work or its progress, and if it believes that it is a declaration—and there is room for the declaratory as well as the symbolic—and that this is helpful to its work, with all the respect that I have for the noble Baroness, Lady O’Neill, and all the belief that I have in her capacity and competence, I can think only that she and her colleagues can be helped.

I wish we had no need for such a commission; I am sure we all wish that. It is one body that we would like to see work itself out of a job. Unfortunately, society as it is means that there is a need. If there is a need, there is a need to define. If there is a need to define, there is a need to say, in broad and simple terms, what the commission should be for and what it should be doing.

I admire greatly the noble Baroness, Lady Campbell. We know it is not easy for her to address this House. She does so with courage and most articulately. The case that she made this evening and that was so ably backed by the noble Lord, Lord Low of Dalston—we are pleased to see him back from his recent operation—was frankly an unanswerable case. I have to say to my noble friend who will respond to this debate: why? What is the point? What is the purpose? There are occasions when a Government have to fight for something that may be unpopular. I have gone into the Lobbies supporting Governments fighting for things that have been unpopular for over 40 years. Nevertheless, this is asked for by those bodies with which the commission has regular dealings. It is not going to add to the sum from the public purse. It is not going to obstruct the commission in the specific duties which it has to follow. So what is the point and what is the purpose of doing this?

In following up a point made by the noble Lord, Lord Low of Dalston, I have also to say that the other place, of which I was proud to be a Member for 40 years, has not exactly examined this matter with critical care and scrutiny. It has given it a quick turnover and sent it back. Well, at the end of the day, the view of the Commons, as the elected House, prevails; that is my constitutional view. However, I think we have to say to it again, “Look, you have got this wrong. Including this section is not going to impede the Government in their work. It is not going to do any damage to your economic strategy. It is not going to do any damage to your social strategy. What it is going to do is to give the commission what it believes to be helpful and necessary on what those bodies which deal with the commission believe the commission should have”.

I did abstain last time; I shall not abstain tonight. I hope that we can send a clear signal to the other place that it should back down, come off it and do something sensible.

My Lords, I am grateful for all contributions to this debate, and I mean that quite sincerely. As I respond, I am very conscious of the strength of opinion that has been expressed in your Lordships’ House this evening.

I will start by responding to a point raised by the noble Baroness, Lady Campbell of Surbiton, in response to my remark about us all wanting the commission to be as effective as it can be so that it is respected by everyone. I want to clarify what I mean by that because I think there are two separate issues here. One concerns the ICC’s status, or the commission’s A status being conferred on it by the ICC, and any suggestion that that is at risk. I reassure the House that the Government have had ongoing discussions with the ICC. I know that the chairman of the commission—the noble Baroness, Lady O’Neill—is continuing her dialogue with the ICC. The non-legislative changes that we have made around the budget and the framework document all strengthen the situation with regard to its status. I do not think that that is at risk. In talking about respect, I was trying to get at a slightly different point in that I want the Equality and Human Rights Commission to be respected not just by those of us who automatically take very seriously equality and human rights but also by those who do not. In order for us to create the kind of society that we are talking about in this context, we need the commission to be supported by everyone.

That takes me to another point that the noble Baroness, Lady Campbell, raised, and was echoed by my noble friend Lady Hussein-Ece, on the origins of Section 3 and the general duty. Today marks 20 years since the tragic murder of Stephen Lawrence. I cannot express to the House how much respect I have for Doreen Lawrence, who had to suffer the murder of her son for progress to be made in this country on some equality issues. That is beyond words. I pay tribute to everything that she has achieved and wish that she had not had to suffer in the way that she did in order to achieve what she has. However, I say with the greatest respect to the noble Baroness, Lady Campbell, and others who referred to the death of Stephen Lawrence in the context of the general duty, that that tragedy resulted in the introduction of the public sector equality duties in the Equality Act 2010. That terrible event did not result specifically in Section 3 and it is important to be clear on that point.

The noble Baroness, Lady Campbell, referred to reporting and monitoring. It is clear that the general duty then becomes a practical issue because the Act states that the commission is required to monitor that general duty and report on it. The noble Baroness suggested that by changing the monitoring requirements the commission would no longer be able to hold up a mirror to society and would be able only to hold up a mirror to itself in terms of what was happening when it produced its reports. I absolutely disagree with that. In my opening remarks, I made it clear that the new monitoring requirements would allow the commission to continue to hold up a mirror to society. It is our view that the new monitoring requirements will lead to a much more focused report, which we hope will have greater value for Parliament and other bodies that may want to refer to it.

The noble Lord, Lord Low, asked whether, in the absence of Section 3, the commission might be more open to judicial review as regards its work under Sections 8 and 9. The commission has never raised this concern in its briefings on the duty. We have no reason to think that the detailed and clear duties in Sections 8 and 9 would be made any more vulnerable by the removal of the general duty.

The noble and learned Lord, Lord Lloyd of Berwick, mentioned the advice given by Sir Bob Hepple and the Government’s response to his view. I say two things to the noble and learned Lord. First, at earlier stages of the Bill, we heard from the noble Lord, Lord Lester, a contrary view to that expressed by Sir Bob Hepple about the role of Section 3. Further, in our view, there is no indication that Section 3 has any interpretative value in relation to any other legislation, including the Equality Act 2010 and the Human Rights Act 1998.

The noble Baroness, Lady Thornton, and others pointed to the commission’s recent briefing and its statement that it supports maintaining the position established by the Lords for retaining its general duty. In response, I acknowledge that that is what the commission has said publicly and I understand and respect that view. However, in the same briefing paper it has also made it clear that removing the general duty would not affect the commission’s ability to do its work. On those matters, it is worth making it clear again that by removing the general duty we are not preventing the commission doing any of its very important and good work. It will not lose any of its vital powers of promoting equality, tackling discrimination and promoting human rights. As I have already said, when it comes to monitoring, producing quinquennial reviews in future should lead to it providing something more analytical and of greater value to those who want to use it as reference.

As I said when I first stood up, I am very aware of the strength of views expressed around this House. This is an issue where the noble Baroness, Lady Campbell, supported by all those who spoke tonight, feels differently from the Government. I have tried to set out again why the Government feel that this change will lead to a stronger Equality and Human Rights Commission, which is what we really want. When we come on to the next discussion about caste discrimination I will be able to reflect how important the role of the Equality and Human Rights Commission is. I ask your Lordships to agree with the Commons in their disagreement of the Lords amendment and the noble Baroness to withdraw her Motion

My Lords, I would like to thank the Minister for her reply and to thank noble Lords who have contributed to this debate, the last debate, the one before it and the one before that. I have never worked so hard to protect a piece of legislation which the majority of people want and about which so many noble Lords from all sides of the House have spoken in favour. I find it quite incredible that something so symbolic and so important to the proper functioning of the Equality and Human Rights Commission has been such hard work.

I do understand that there has been improved mutual respect between the Government and the commission and the quality of the work has been enhanced. That is to be celebrated, but I still believe it is critical to retain the general duty and the monitoring duty for all the reasons that we have given in these debates since last year. I would like to thank the noble Lord, Lord Low, and the noble and learned Lord, Lord Lloyd, for helping me tonight to expand the arguments for the general duty. It would be wrong to rehearse them again now: we have exhausted them. I was particularly pleased to hear the noble Lord, Lord Cormack, express his passion and his very clear understanding of why the general duty is necessary to the work of the Equality and Human Rights Commission and also to the messages that we send out to the Lawrence family, to disabled people who are undergoing considerable difficulties in situations where, without a culture change, they will continue to be abused in institutions, and to others that we have mentioned throughout these debates. For them, I ask your Lordships to agree with my amendment tonight and to send it back to the Commons saying, “Please consider these arguments”, because they were only looked at in a very cursory way during the Commons debate. In fact, I believe the debate suffered a guillotine in the winding-up speech only three minutes after the Minister stood up. I ask the House to send this amendment back so that a proper debate can be had and the arguments examined properly. I ask your Lordships to agree to this Motion. I wish to test the opinion of the House.

Lords Amendment 36: Clause 56, page 55, line 8, leave out subsection (6).

Commons disagreement and reason

The Commons disagree to Lords Amendment No. 36 for the following Reason—

36A: Because it is more appropriate for the Commission for Equality and Human Rights to monitor progress by reference to its duties under sections 8 and 9 of the Equality Act 2006.

Motion B

Moved by

That this House do not insist on its Amendment 36, to which the Commons have disagreed for their Reason 36A.

Motion B1

Moved by

As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 36”.

Motion B1 agreed.

Lords Amendment 37: After Clause 56, insert the following new Clause—

“Equality Act 2010: caste discrimination

(1) The Equality Act 2010 is amended as follows.

(2) After section 9(1)(c) (race) insert—

“(d) caste;”.”

Commons disagreement and reason

The Commons disagree to Lords Amendment No. 37 for the following Reason—

37A: Because it is inappropriate to provide for caste to be an aspect of race for the purposes of the Equality Act 2010 without further consultation.

Motion C

Moved by

That this House do not insist on its Amendment 37, to which the Commons have disagreed for their Reason 37A.

My Lords, we come now to the issue of caste and whether it should be made an aspect of race and thus a protected characteristic under equality law.

The whole House agrees that prejudice and discrimination based on caste is wrong. It is unfair and unacceptable in a modern