My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, the Office of the United Nations Disaster Relief Co-ordinator is the focal point for international disaster relief co-ordination. In addition to our direct humanitarian help, the Government are working closely with this organisation, as are many other Governments, the European Community and the relief agencies, to relieve the suffering of the Lebanese people.

My Lords, I thank the Minister for that encouraging reply, which will give some hope to many in that part of the world, where the carnage is now terrible and which I feel will be condemned by nearly every civilised human being. I am proud to hear that our Government are playing their part in endeavouring to get relief quickly to the Lebanese people.

I am grateful to the noble Lord for that supplementary, my Lords. Nearly £¼million in unilateral aid has been given in the Lebanese situation and we are contributing about £1 million to the proposed European Community contribution. The noble Lord mentioned the Lebanese people, but I would point out that the aid is for people, not for nationalities; the aid goes directly to suffering people, no matter what ethnic origin they may have.

My Lords, may I ask my noble friend whether the aid is being given in financial terms or in actual goods which they can use?

Both, my Lords. The initial response by the Government was for £10,000, which was a cash grant to the Lebanon Red Cross, which was telegraphed on 12th June—only six days after the incident—to our embassy there. The rest has been paying for such things as blankets and tents and air freight for other people's blankets.

My Lords, while the alleviation of the immediate needs of the 600,000 displaced people is obviously very urgent indeed, may I ask the Minister if he is aware that what the Lebanon needs more than anything else is secure and respected frontiers? May I therefore ask him what steps the Government are taking to ensure that any peace-keeping forces are given adequate international authority?

Although that is rather a different question, my Lords, I would say that until the situation becomes clearer and the constant military action de-escalates, it will be impossible for the Government to come to a decision on the matter.

Arising out of that, my Lords, may I ask if it is not possible for the Government to use their influence to increase the United Nations peacekeeping force to prevent a deterioration of the situation? Did not Greece yesterday offer to send a contingent, and could the Minister give any report on what happened at the UN Security Council yesterday when they discussed this subject?

Not in answer to this Question, my Lords. If the noble Lord would like to put down a Question on the subject, I should of course be delighted to answer it.

My Lords, is the Minister able to say whether there is now any difficulty in getting aid in, or has that problem been resolved? Is the aid therefore now getting to those who need it?

Indeed I am able to say, my Lords. There has previously been some reference in the House to the problems of the access of the International Red Cross to the area. I am glad to say that those have now been resolved and that there are now teams on the ground in the Lebanon.

My Lords, is the Minister aware that I fully take his point, and accept immediately, that the aid being provided will not be limited merely to the Lebanese people, although they no doubt are the greatest sufferers, but that it is for other people who are suffering as well? Would he be prepared to give me an assurance that, if there is any interference by the aggressors and invaders in the area with humanitarian aid being taken to people who are suffering so drastically, this Government will give a world lead in condemning such action?

Yes, my Lords, without the faintest shadow of doubt.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, the United Kingdom representatives at the World Bank supported an 8 million dollar loan in 1980 for a study of possible hydro-electric schemes in the region. This is currently taking place and is expected to be completed by the end of October this year. No other proposals have come before the bank's board. Any proposals arising from the study will be carefully considered.

My Lords, I am much obliged for that reply. Since the Venezulan Government are in this case denouncing frontier treaties which we have signed, are claiming over half the territory of Guyana and are being bellicose in order to whip up support for themselves at home, may I ask whether the noble Lord agrees that potentially at least we have something like a Falklands crisis situation brewing here unless every- body is very firm about it? Moreover, since the attempt by Venezuela at vetoing the development in the disputed areas is part of the war of nerves against Guyana, which we do not want to see escalated into something worse, do we not have to be very resolute in supporting Guyana in getting help for the area if the World Bank study shows that the project is feasible?

My Lords, I can see absolutely no parallel between the Falklands situation and the Venezuelan-Guyanan situation. The Venezuelan Government have made it clear, both in public statements and to British Ministers, that they intend to follow the provisions of the 1966 Geneva Agreement in order to reach a peaceful settlement of the controversy. Since the Argentine invasion of the Falklands there has been no evidence that the Venezuelan Government have changed their resolve to settle the dispute by peaceful negotiation. With regard to the reference made by the noble Lord, Lord Northfield, to a war of nerves, I should like to say that the Venezuelan Government and the Venezuelan representative at the World Bank have absolutely no power to veto. The decision is taken by a majority of the bank's directors.

My Lords, while I partially accept the noble Lord's remarks about the Falklands situation, may I ask whether he is aware that this country feels a real debt of gratitude to Guyana for being, with Trinidad, almost the only country in central America to support us over the Falklands issue? Will not the noble Lord assure the House that we shall give every possible assistance to Guyana if there is a dispute over the World Bank loan?

My Lords, with regard to the first part of the noble Baroness's supplementary question, yes, I would agree most certainly that the Guyanan Government, and of course the Secretary-General of the Commonwealth, Mr. Ramphal, who is Guyanan, were among the first to give their support to us in our endeavour over the Falklands. Regarding the second part of the supplementary question, we shall of course have to await the results of the study. So may I say to the noble Baroness that her question is, first, hypothetical, and, secondly, a little premature.

My Lords, can my noble friend indicate whether or not the United Kingdom have guaranteed the territorial integrity of Guyana?

My Lords, I am not precisely sure as to that, but I can say that there is no garrison in Guyana.

My Lords, granted that the Venezuelans have no right to veto the application to the World Bank, do the Government regard it as significant that they should have attempted to defeat the proposal?

No, my Lords. I would agree with the noble Lord, Lord Northfield, when he talks about a war of nerves. This was a political act, and it has failed to come off.

My Lords, will the Government make it plain to Guyana that it would be easier for us to support applications for international financing of this kind if the Government in Guyana ceased to violate human rights?—as, for example, exemplified by the murder of the distinguished scholar, Dr. Walter Rodney, and the continued persecution of his brother, Mr. Donald Rodney.

My Lords, aid is never specifically tied to human rights.

My Lords, will the Government note that Venezuela also claims that Trinidad is draining off Venezuelan oil under the seas?

My Lords, I rather think that that is another question. I am not prepared at this time to get into arguments about the state of oil fields in that part of the world.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, in recent months the index of manufacturing production has recovered the ground lost as a result of bad weather at the turn of the year. The underlying level of output has been broadly flat since last autumn, at a level about 2 per cent. above its low point in the spring of last year, but all the leading forecasters expect growth to be resumed in the second half of this year.

My Lords, I thank my noble friend for the good news that in a period of world recession our manufacturing output has increased by 2 per cent. Can he perhaps tell the House how productivity compares with that, as measured by output per man-year in manufacturing industry?

Yes, my Lords; indeed that is perhaps one of the most encouraging pieces of news. In the first quarter of 1982 output per head in manufacturing was 12 per cent. higher than at the end of 1980, and a record for all time, by quite some considerable margin.

My Lords, is the noble Viscount aware that the Question posed by his noble friend related to recent months, and that, excluding of course oil production, there has in fact been no increase in manufacturing production? Is he further aware that most reputable forecasts do not predict any increase at all, however insignificant, until next year? Is he also aware that during the past year promises of increased production and forecasts have always been predicated in relation to a period some three months forward, so far without result?

Furthermore, is the noble Viscount aware that this disastrous performance has at the same time been accompanied by a massive increase in unemployment? When will he and his noble friends face the fact that their economic and financial policies are completely disastrous and have devastated British industry, and does he realise that that is reflected by a further increase in bankruptcies?

My Lords, within both my Answer and the definition of manufacturing production, only oil refining is included. That does not alter the trends of the figures that I gave in my Answer, which no doubt the noble Lord will look at in the official record. So I have nothing to change in respect of that. We have had a flat period after a 2 per cent. growth. As far as most forecasts are concerned, I have seen and will continue to see, I believe, variable forecasts; but with the kind of return to competitiveness that we have started to see with these productivity figures there is little doubt in the minds of most forecasters that the upturn which started last year will be resumed. The question is timing.

The noble Lord gives me a feeling sometimes that he is overjoyed if there is any slight lull in recovery and rather distressed if recovery is taking place. Far from disastrous results, this Government have, for the first time, tackled the root causes of inflation, our industry is becoming steadily more competitive and it can only be a matter of time before the results are realised.

My Lords, the noble Viscount, in displaying the lull to which he refers, stretched "recent months" back to January and made that his datum. Would it not be a bit odd if in midsummer there was not some increase in performance on one of the worst winters this century has seen? We do not want to be depressed about a lull in the depression; we want to see one.

My Lords, I made clear that by the autumn of last year we had seen a 2 per cent. increase from the low point at the beginning of the year. I also made clear that since that period the output has been flat. Certainly the flat since that period includes a particularly low December result and a recovery from it in month-by-month figures since that time. The noble Lord will of course also recollect that we have had two rail strikes, which did not improve the figures in March (I think it was) and will not be improving them at the current time.

My Lords, is my noble friend aware that, while everyone will welcome the slow improvement that he has been able to announce, people in industry are conscious of the fact that they are still burdened with the restrictions arising from the various Employment Acts which remain in existence and the high rate of interest? Is there any way in which the Government are able to influence an improvement in both those spheres?

My Lords, I think those supplementaries, though I understand my noble friend's feelings on this subject, are wide of the Question. The employment legislation—the Act that we have enacted and the Bill that we intend to enact—will help to improve our competitive position.

My Lords, is the noble Viscount aware that British manufacturers can make some efforts to overcome inclement weather? Their great difficulty, and their almost impossible task, is to overcome the policy of the present Government, where we have seen a rise in unemployment to 3 million people and the highest rate of bankruptcies that this country has seen since the war. Does the noble Viscount not think that he is exhibiting only a degree of petulance, while we on this side are just as much concerned about those who have lost their jobs as we are about those who, under this Government, have lost their businesses as well?

My Lords, I would not agree with any of that. The share of world markets held by British manufacturing goods was, as I have so often said, halved between 1960 and 1975, and it was still in a very had shape when we came to power. The results of this were hidden from the British people because world growth during the 'sixties and 'seventies was unique, and we shall probably never have a period like it again. We are now beginning to recover the competitiveness which was lost over all those years, one has to say under all Governments.

My Lords, is my noble friend aware that in the private sector, in real terms, there has been considerable investment in improved machinery, improved lay-outs and improved productivity schemes, and that this has been a healthy reaction and has resulted in high productivity? Is it not sad that in the public sector, in such places as the railways, where there has been massive investment in electrification of the line between Bedford and St. Pancras and where the rolling stock sits in the sidings, all that investment comes to no avail because ASLEF refuse to drive the trains?

My Lords, there is evidence that the productivity increases which I mentioned stem from the better use of existing investment, which is the really important thing. Investment is continuing, and there is indeed a slight upturn in investment intentions. As far as the public sector is concerned, yes, there has been a great deal of investment in that area, also. While there is some evidence of much better use of that investment in some of our nationalised industries, there is certainly not enough evidence of that investment being properly used.

My Lords, will the noble Viscount take steps to ensure that his noble friend Lord Cockfield receives a copy of the reply he has given this afternoon, since it is in complete contradiction to the predictions which were given by his noble friend some three months ago? Will the noble Viscount accept as a matter of principle that we on this side of the House shall be truly pleased, and indeed delighted, when output in this country achieves one half of the rate of increase it achieved under Labour Governments?

My Lords, I should like to point out, as I said very clearly in my first Answer, that output per man has reached an all-time high, well above any of the levels that were reached under the previous Government.

No, my Lords.

I am sorry; that is correct. Output per man in manufacturing industry is well above any previous year. I would ask the noble Lord to look up the position—and perhaps he will let me know if he can find any other facts, because they do not exist.

I shall be delighted, my Lords.

My Lords, is this not the position; that any small improvement that the Government achieve in productivity will be offset by the eager support given by the Opposition to damaging national strikes?

My Lords, I would rather not be drawn on to that one, but, yes, I very much agree that current industrial disputes are never helped by public statements.

My Lords, is it not the case that if, by their policies, the Government were to achieve an increase in the number of unemployed to 10 million, the productivity of those remaining in employment would be quite phenomenal but total production would continue to fall?

My Lords, until British industry is fully competitive and starts to regain the share of world markets which we lost under previous Administrations, the future levels of employment will never be secure. Once that competitiveness has been regained, and once we start to regain that share of world markets, employment will follow.

My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Elton will, with the leave of the House, repeat a Statement which is to be made in another place on the Buckingham Palace incident.

It may be to the convenience of the House if I aslo announce that dinner will be available this evening at the usual time. The Committee stage of the Employment Bill will be adjourned at approximately 7 p.m. for a short period. During this adjournment the Excise Duties (Deferred Payment) Regulations 1982 and the Building Societies (Special Advances) Order 1982 will be taken.

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

I should point out that if Amendment No. 48 is agreed to, I cannot call Amendment No. 49.

moved Amendment No. 48:

Page 5, line 37, leave out ("by virtue of section 58 or 59(a)").

May I ask what would now be the maximum rate for unfair dismissal if the figure that was paid in the Conservative Government's 1971 Act, which first introduced the unfair dismissal award, had been indexed to keep up with inflation? What would now be being paid?

I have asked for information to be given to me on the question raised by the noble Baroness. It may be too much for our pocket calculators this afternoon, but we shall try and get her a satisfactory answer on that matter as soon as we can. We are now squarely in the territory of compensation, as the noble Lord, Lord McCarthy, pointed out to us. The purpose of Clause 3 is to provide a minimum basic award of £2,000 to employees unfairly dismissed for reasons relating to trade union membership, including non-membership in a closed shop. This together with a special award introduced by Clause 4 is intended to provide employees dismissed in such circumstances with a total award of compensation that will not only adequately compensate them, but also deter employers from carrying out such dismissals in the future.

At a previous stage of this Committee I said that I made no apology whatsoever for the desire of the Government to try to create an effective deterrent in this field. It is our view that unfair dismissals, because of non-membership of a union in a closed shop or because of trade union membership or activities, call for substantially greater compensation than is the case in regard to the generality of unfair dismissals. This is the difference, the differential, to which objection is made by the noble Lord, Lord McCarthy, and which he seeks to correct in his amendment.

The major impetus for increases in closed shop compensation has in fact arisen out of deep public concern that unfair closed shop dismissals have continued to occur in spite of and in defiance of the protection against such unfair dismissals in the 1980 Employment Act. It is clear that further such dismissals are only likely to be deterred by substantial increases in the sums of compensation payable in such cases. The circumstances of the dismissed employees in the Walsall and Sandwell cases illustrate the point well. In the Walsall case, the four dinner ladies who were sacked were part-timers, some of whom had been employed in their jobs for only a few years. Their employer obviously thought that they would receive only small awards of compensation—particularly if their reinstatement was not ordered. Fortunately, the fact that reinstatement was ordered meant that compensation was higher than it would otherwise have been. In the Sandwell case, Miss Harris chose not to take her case to a tribunal as was of course absolutely her right. Even if she had or if an employee finding his or herself in comparable circumstances had, such an employee might have received no more that a derisory few hundred pounds.

In these cases, therefore, the councils concerned—the employers concerned—were risking only relatively small sums of money in dismissing unfairly while those dismissed were unlikely to be adequately compensated. That is why the Bill provides for substantial increases in compensation, including the minimum basic award of £2,000. The justification for placing a minimum on the basic award, as well as introducing special awards, is of course that if the dismissed employee does not ask for reinstatement, he will only be entitled to the basic compensatory award. It is right in these circumstances that the total award should still be at a deterrent level and should not normally fall below a minimum level, which the Government judges should be at least £2,000.

Reference has been made to the fact—the noble Lord, Lord McCarthy, made play with this—that the sums of compensation now to be payable in unfair closed shop dismissal cases are well in excess of the current median awards for unfair dismissal generally. The noble Lord argued that all unfair dismissals are equally to be condemned and indeed, in fairness to him, might equally receive higher levels of compensation. I have made the point already about the element of deterrent. If I may underline it, these enhanced awards arise out of the cases that I have mentioned. The crucial aspect about those cases is that the closed shop dismissals were carried out in the full knowledge that they were unfair. In this connection, it is perhaps worth quoting briefly from the decision of the tribunal in the Walsall dinner ladies' case. At paragraph 3 of their judgment given on 28th January the tribunal said:

"At the very outset of the proceedings the respondent authority [i.e. Walsall Metropolitan Borough Council], no doubt upon advice, and if we may say so with respect sound advice, conceded that it had unfairly dismissed each applicant within the meaning of section 58(3B)."

There seems only one logical interpretation of this statement in the judgment. It is that Walsall Metropolitan Borough Council knew at the point at which they dismissed Mrs. Todd and her colleagues that their dismissal was unfair; that they were being dismissed in defiance of their rights not to be unfairly dismissed and that therefore compensation would almost certainly have to be paid; and yet in spite of this, the employers went ahead with the dismissals nonetheless, which seems to me to be a quite disgraceful exercise by a supposedly responsible publicly-elected body.

That was not a situation where an employer dismissed an employee as he thought fairly, but then later the tribunal subsequently finding this unfair; this was a clear situation of outright defiance by the employer of statutory rights provided in law by Parliament. It is against a repetition of that kind of behaviour that it is necessary in the Government's view to provide a deterrent. I hope that when the tumult and the shouting had died this kind of dismissal, and this kind of activity, will become simply a horrid memory in the past. This provision in the Bill is designed to see that it soon becomes a horrid memory of the past.

If I may make one more point, there is another reason why it seems to me wholly justifiable to pay substantially higher compensation in cases of unfair closed shop dismissals. This is in order properly to compensate the people who suffer the dismissals. It is self-evident that persons dismissed for non- membership of a union in a closed shop may find it very difficult indeed to get another job in the same industry or locality, particularly where pre-entry closed shop arrangements are widespread. That would therefore be another reason for "upping" the amount that should be paid in this particular set of cases.

I hope, having explained the Government's policy, which was in response to widespread public anxiety on this score—certain anxiety which was far from restricted from supporters of the Government—that the Committee will not pass the noble Lord's amendment should he seek to press it.

I am afraid that I cannot accept any of that reply. The question that I asked the noble Earl—and he has not answered it—is: what is different? What is the difference between a dismissal for trade union membership and other types of dismissal? That is what our amendment is saying. It is saying that there is no difference, and he does not say that there is. For example, he tells me that he has to have a deterrent because he says that unfair dismissals continue to occur. Of course they do, but they just do not continue to occur in the very narrow area of membership of a trade union. They continue to occur all the time and indeed this Government, as a result of their order, have made it absolutely certain that a far larger number of unfair dismissals will occur than have occurred in the past, because they have put up the minimum period to 12 months and therefore hundreds and hundreds of unfair dismissals will occur which might not have occurred before because of what the Government have done. There is no deterrence about that. A million workers have been taken outside the scope of the unfair dismissal provisions and the Government do not propose to provide any deterrence.

He says that there is widespread concern. We know why there is widespread concern about the Walsall dinner ladies. It is because—and I am not attacking the ladies nor defending the council—for a very long time you could not pick up a newspaper without reading about the Walsall dinner ladies; and if, say, one-thousandth of the publicity had been directed at certain other kinds of unfair dismissals which are far more numerous and just as hard and tough to put up with, maybe we would have had rather more public concern about them too. So on nothing that the noble Earl has said here is he really suggesting that there is any real difference—a dismissal is a dismissal is a dismissal. And when he talks about the Walsall dinner ladies, I warn him that if we get much more talk about the Walsall dinner ladies we shall disinter Gennard.

He says that the Walsall dinner ladies did not get very much of a compensation award. That is perfectly true and it was because they were not entitled to it, bless their hearts. They were part-time workers; they did not work for very long; and they got a job very soon after. Therefore, bless their hearts, they got compensation which varied from £98 to £324—and quite right and proper too. Therefore the Walsall dinner ladies were nowhere near the £7,000 maximum. But in addition to compensating the Walsall dinner ladies, they were reinstated, and the reinstatement was refused so that they got a compensation award of something in the region of between £2,000 and £3,000.

Therefore the Walsall dinner ladies do not justify changing the Act at all. The only justification for changing the Act is either that you want to deal with a whole range of people, as I have said—for example, middle managers whose annual salary is considerably in excess of the present maximum. That is a decent, respectable reason. Alternatively, you are just involved in anti-trade union legislation. That is what this Bill is, that is what this amendment is seeking to correct, and that is why we shall press it to a Division.

moved Amendment No. 50:

Not a Conservative.

The noble Earl says that he was not a Conservative. I thought he might take some comfort from the fact that there might be some militant trade unionists among the Conservative trade unionists. But I can believe he was wrong. But this man was dismissed after a couple of days. The tribunal considered the case on the basis of whether he was dismissed for his trade union activities. The answer, of course, was, no. He had not had time to have any trade union activities. He had been got rid of before. That has happened in other cases. What happened elsewhere is known. The second problem—and this is central to the noble Earl's reply on the last amendment—is that he said that the need is to create an effective deterrent for dismissals on union grounds, as against the vast generality of cases; that the closed shop dismissals had continued to occur—he concentrated on them, so it is clearly about non-unionists—and continued to be deliberate, despite the 1980 Act.

He talked about those cases that I have mentioned. He mentioned two—I am going to give up this convention of not referring to the facts, because it is time we went back to them—the Walsall dinner ladies and Sandwell. Where are the others? We have asked for them again and again. The answer, as my noble friend suggested, is that they are in the Gennard Report, and I say that that report shows that cases of this sort—and I choose the word with care—are atypical of the situation. Furthermore, the Birmingham Chamber of Industry and Commerce agree, because they said in their statements on the Bill:

"In reality, there are only a relatively small number of people who are genuine victims of such circumstances. The attraction of higher compensatory awards may tempt others to assert that this was the principal reason for their dismissal".

I hope that we can be given any further evidence, because, at the moment, after going through the Walsall and Sandwell steps, all the proponents of trade union intimidation and the vast number of unfair cases go into their act of putting on an anti-disposition—"Well, we know", or "We would if we could" and such ambiguous phrases. That is where they leave it.

We need to be shown that this is a special case beyond the proof offered, and we need to be shown that it is a special case for another reason. It is to this point to which the Government's attention must be directed in the light of this amendment. These special cases in existing legislation arise when an order for reinstatement has not been complied with.

Under the Bill, they arise for this special group where it is merely asked for. Then there is a parallel with the existing legislation. But in the existing legislation, discrimination does not extend only to the trade union grounds. It protects at the moment also discrimination on grounds of sex or race, with the additional compensation. If there are to be categories, why should we be given only the example of trade unionism instead of grounds of trade unionism and grounds of sex or racial discrimination?

If the Government think that this compensation of a special award will be a deterrent, why do they think so lowly of racial or sexual discrimination as not to put those dismissals into the category? It is not I who ask the Government that question. The Government have been asked it many times by employers. The employers' group who put it best are the General Council of British Shipping who say:

"It seems paradoxical to suggest that a special award for dismissal for non-compliance with a closed shop agreement could be three times that for dismissal on grounds of sex or race".

I beg to move.

I think that the House would probably like to take the Statement as soon as possible. I therefore beg to move that the House do now resume.

My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:

"With permission, Mr. Speaker, I should like to make a Statement.

"I have to report to the House that a man was arrested in Buckingham Palace on Friday morning after entering the bedroom of Her Majesty the Queen. The House will admire the calm way in which Her Majesty responded to what occurred. It will also share my grave concern, and that of the Commissioner of Police of the Metropolis, at this most serious failure in security arrangements. A man appeared in court on Saturday, having been charged in connection with an earlier incident at the Palace. I understand that the facts have been reported to the Director of Public Prosecutions, who is considering the possibility of charges arising out of the latest incident.

"In recent years a number of additional security measures have been introduced at Buckingham Palace; but this latest incident shows that the position is still not satisfactory and that more needs to be done. I have, of course, fully discussed the incident with the Commissioner, who is operationally responsible for Royal protection matters. On Friday he appointed Assistant Commissioner Dellow to carry out an urgent inquiry into what went wrong and what lessons are to be drawn for the future. Immediate steps were also taken by the Commissioner on Friday to strengthen security arrangements at the Palace.

"Mr. Dellow has today submitted to the Commissioner and myself an interim report on this incident; we shall see a further report later this week. I am determined, as is the Commissioner, that the arrangements for safeguarding the security of the Queen should be as comprehensive and effective as possible. The rapid implementation of the measures resulting from his inquiry will require the closest consultation between the Palace authorities and the police, and will be pursued with the utmost urgency.

"I shall make a further Statement to the House as soon as I can."

That concludes the Statement.

My Lords, the House will be grateful to the noble Lord, Lord Elton, for repeating the Statement of the Home Secretary. Does the Minister agree that it has disclosed a deeply disturbing state of affairs which I believe has shocked the whole nation? That it should fall to a Home Secretary to begin a Statement with the words:

"I have to report to the House that a man was arrested in Buckingham Palace on Friday morning after entering the bedroom of Her Majesty the Queen".

is indeed staggering and startling. First, may I express the relief of my right honourable and honourable friends and, I am sure, of the whole House that Her Majesty suffered no injury as a result of this appalling intrusion. We admire yet another example that Her Majesty has shown of her courage and coolness in the face of danger or potential danger.

The Statement, I believe, calls for further clarification. It contains one sentence which seems to me to be highly ambiguous:

"A man appeared in court on Saturday, having been charged in connection with an earlier incident at the Palace".

Was it the same man? What was the earlier incident? What precautions by way of safeguarding and improving security followed that earlier intrusion? Have there not been other intrusions into the Palace or its grounds in recent months? Has this matter been taken sufficiently seriously? What steps have been taken? We shall expect a searching and full inquiry into this incident and we are relieved that in due course a report will be made upon it to the House. This is a matter which has shaken the country. The whole of the population will need reassurance that something is being done to avoid any recurrence of this appalling peril.

My Lords, may I echo the expression of the noble and learned Lord, Lord Elwyn-Jones: that the nation has been deeply shocked by this incident and the enormous potential for danger to Her Majesty involved in it. The facts will be revealed later, but I should like to ask about one or two matters arising from the Statement. What time of morning was it when this incident took place? There is merely a reference to Friday morning. Was it in the hours of darkness? Was the other person mentioned in the Statement—if, in fact, he was not actually the same person—involved in any way with the man in this incident? One notices that the Statement says the man was arrested on Friday morning. Presumably he is still in custody. If so, have any charges been brought against him? Has he been brought before a court? These matters are obviously of the gravest concern to the country as a whole. One can only echo the admiration which has already been expressed about the way in which Her Majesty dealt with the situation.

My Lords, in responding to the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Hooson, I must emphasise that the Government, as well as all on the Benches behind them are no less deeply concerned than they are with the gravity of this issue, nor any less admiring of Her Majesty's calm in the face of this difficult and very worrying situation. The earlier incident involved a man on 7th June. The man is now in custody, and that is the man we are speaking of. I would rather not be drawn into details of this event for two reasons. One is the aspects of security which detailed discussion can reveal to others who are not aware of the situation. The other is that with prosecution under consideration the matter is, I am advised, sub judice and I should be ill-advised to discuss what it is alleged was done.

My Lords, in applauding the calmness of Her Majesty during this extremely distressing occasion, may I ask the noble Lord whether he is aware that this is a Statement which the whole country would have preferred never to have had to hear? On the inquiry which is to take place—one appreciates that a great deal of it will be sub judice—would the noble Lord be prepared at this stage to say (a) whether the police division responsible is up to strength and (b) whether either the first man, the second man or, in fact, the two boys who were found camping in the Palace gardens some months ago, have any knowledge whatever of the inside of the Palace?

My Lords, I think it proper that I should respond to detailed matters at a later stage, although the noble Lord, Lord Aylestone, will be aware of the fact that for the first time in many years, the Metropolitan Police are now approaching their establishment figure. I am not aware that any of the people in question had knowledge from outside of the inside of the Palace, but I cannot make reference to the particular circumstances of this occasion, for the reasons I have already given.

My Lords, is the noble Lord, Lord Elton, aware that questions on security arrangements do not, in my view, impinge upon the sub judice rule? Therefore I believe that the noble Lord, Lord Hooson, and I cannot be criticised—although there was probably no intention to do so. We are still left in a certain amount of confusion, although perhaps it is my own confusion of mind. Are we talking about two men, or are we talking about one man—the same man—who is concerned? As I understand it, there were two men. I believe the public will be anxious to know whether that is so or not, because it is by no means anywhere near clear. The most important thing, of course, is that there should be a thorough, immediate and urgent investigation of what went wrong and into what steps are now going to be taken to see that it does not happen again.

My Lords, the man about whom allegations are now being made is the man who was charged for the original offence.

Oh!

I have to emphasise again that the urgency with which this will be pursued is something that depends on the absolute conviction of my right honourable friend that it is a matter of the first importance—not only out of his loyalty to Her Majesty, as a loyal subject, but in knowledge of the deep love and regard in which she is held by every Member of this House and by the nation. It will be pursued with ineluctable determination.

My Lords, may I ask my noble friend why this man was not remanded in custody rather than being granted bail for the first offence? In addition, will he be good enough to let me know which regiment of Guards was on duty on the morning in question?

My Lords, it is a question of the timing of the charge, which did not in fact allow the custody to take place in time to prevent the offence. As to the second question, I shall have to let my noble friend know in writing.

My Lords, may I ask the noble Lord the Minister whether—quite apart from the question of the man—it does not seem that Her Majesty's quarters are left so that anybody can get inside? That is the thing that astonishes one. Her Majesty uses various rooms. How is it that someone can get to them?

My Lords, I entirely understand the concern felt by the noble Baroness, which is shared by Her Majesty's Government, but, for reasons I have given—of security—it really is not proper to discuss what those arrangements are or how, to great surprise, they were defeated.

My Lords, the noble Lord, Lord Elton, is no doubt aware that the nation is appalled at what has happened, but may I point out to him that there is another dimension? Security already being tightened, no doubt, at Buckingham Palace, but there are other residences which Her Majesty the Queen has to visit from time to time. Will the Minister say, quite categorically, that they too—Sandringham and other places—will be subject to complete examination from a security angle, and also that other important places and offices of state where security might be at risk as much as at Buckingham Palace will be thoroughly examined so that nothing like this can ever happen again?

My Lords, I can confirm that the security arrangements at the other Royal residences are also being reviewed. In the process, the general security of the Royal Family will be considered.

My Lords, the noble Lord, Lord Elton, said that the first offence was on 7th June and that, as a result of the second offence, the question of security is going to be pursued with "ineluctable determination". Can the noble Lord tell us, with what determination and with what results the question of improving security was given consideration between 7th June—the first offence—and the recent second offence?

My Lords, I am extremely anxious not to commit myself to making a statement that can be used in court about the first occasion. As I understand it, the identity of the first intruder was not clear. I have already misled your Lordships; the identity of the intruder was not clear until the second occasion. But I do not want to go any further than that, because I am trespassing on ground that might be covered by courts and it would be improper for me to say anything which could prejudice the outcome of a trial.

My Lords, with regard to the court appearance on Saturday, was the man charged with an offence committed on 7th June or was he before the court as a result of the incident which took place on Friday morning?

As a result of the incident which took place on Friday morning, my Lords.

My Lords, may I suggest that we consult Her Majesty's Mistress for the Robes, the Duchess of Grafton, who is herself a justice of the peace and a magistrate of very wide experience at every level? She has been with Her Majesty for many years, and I believe that she could be most useful with suggestions.

My Lords, I will bring that idea to the notice of my right honourable friend.

I did not want to detain or indeed bore the Committee by rehearsing the arguments I made in trying to answer the noble Lord, Lord McCarthy, on Amendment No. 48, because these are very substantially the same arguments. The noble Lord, Lord Wedderburn of Charlton, said that he wanted to test the Government on this same issue of why there should be greater levels of compensation for unfair dismissal in a closed shop situation than in connection with unfair dismissal generally. In fact, the noble Lord, Lord McCarthy, divided on the last amendment—and I congratulate him on his exposition, and I am not complaining about that—before I was able to get up and say that I had, in my view, tried to answer the central issue of what the difference is. The difference, in our judgment, is that in the cases we have mentioned—Sandwell and Walsall particularly—the dismissals were in open defiance of rights provided from Parliament and involved particularly severe consequences for individuals, because if one is sacked as a result of a closed shop dismissal one may have difficulty in getting a job later. That seemed to us to be an absolutely clear instance of why unfair dismissal in this sort of case should be compensated at a higher rate, apart from the issue of deterrents which I also mentioned.

The noble Lord, Lord Wedderburn of Charlton, was quite exercised that in some way this position by the Government downgraded dismissals because of sex or race discrimination. Until I was translated to Northern Ireland, I was the Minister at the Department of Employment concerned with discrimination in employment on sexual grounds or on grounds of race. I share very strongly the noble Lord's distaste. Perhaps "distaste" is too weak a word—I share the noble Lord's condemnation of any such unfair dismissals, but there is no evidence of recent dismissals of this sort carried out in blatant defiance of employees' statutory rights. The noble Lord, Lord Wedderburn, going back to that famous report which has caused us quite a lot of interest in this Committee, said: "Well, the cases of Walsall and Sandwell are atypical". So indeed they are, and we are quite determined to see that they remain atypical. That is exactly why there has been rather special attention paid to them, not least in Clauses 3 and 4 of this Bill.

We have not in the sex and race fields had the unsavoury sight of public sector employers engaging in politically motivated defiance of statutory rights provided by Parliament. If we found some notionally extreme Right-wing council sacking somebody as a result of the colour of their skin, and if we did not feel that the compensation was adequate to deter other such notional councils in this regard, no doubt we would bring in legislation accordingly. But one cannot legislate for every notional case; and there is no evidence that this has been done. It seems to us, therefore, that there is no obvious need to increase the current deterrent against these sorts of dismissal. There seems to us also to be a clear distinction between attempting to protect employees from the ordinary run of unfair dismissals, and unfair dismissal legislation is now part of the industrial landscape—and these very unique and, I am glad to say, rare cases of employers openly defying Parliament.

The last point I would make is that, though we have now disposed of Clause 3 for the purposes of this Committee stage, I would refer the noble Lord back to the fact that Clause 3 affects not only closed shop unfair dismissals but unfair dismissals of people who are union members or who want to become union members. Therefore, the rogue employer, or the employer who is seeking to deter people from becoming union members, is actually covered by the Bill as well. With that reassurance of evenhandedness, and with that reiteration of the extreme circumstances with which we found ourselves having to deal, I hope the noble Lord will have the good sense not to press this amendment.

Baroness Seear; I think the noble Earl will not be surprised if I say that I find his reason for not including the other statutory obligations, the obligations in relation to race and sex, on the same terms as those for closed shop dismissals, very unconvincing. If the argument is that when the Bill is passed there is a special statutory obligation in relation to the closed shop, there is already a statutory obligation in connection with both race and sex. If the noble Earl were prepared to say that wherever there is a special statutory obligation the higher rate should apply, I for my part would be a great deal happier with this Bill.

I venture to suggest that both the noble Baroness and the noble Lord, Lord Wedderburn, have overlooked one very important fundamental matter, which is that the ordinary case of unfair dismissal is that of a dispute merely between the employer and the employee. But here the Government are attempting to deal with the special situation where a third party, that is to say, a trade union, is involved. For reasons which have already been deployed, it has been found necessary to strengthen the law in those cases where there is the third party. For that simple reason of, to my mind, principle, I feel that the Government are right in this matter.

; The noble Earl, Lord Gowrie, will remember that he and I participated in a debate on precisely this issue some time ago when he was Minister of State at the Department of Employment, when I raised the question of the dismissal of Miss Joanna Harris by the local authority in Sandwell, and subsequently in the course of that debate referred to the wholly outrageous behaviour of the Walsall Labour-controlled local authority which was persecuting part-time dinner ladies who were earning £9 and £10 a week. I find what the Government are doing here right. I think it would have been wholly wrong for the Government to ignore the deliberate defiance of the law by two local authorities who knew precisely their legal obligations and decided, quite coldly and deliberately, to defy and ignore those obligations. It seems to me that Parliament has an absolute obligation to defend the interests of people who were treated in this shameful fashion. I very much agree, therefore, with the general thrust of the Government's argument.

I would like to add one point. I think we sometimes mislead ourselves by counting up the number of people who have been dismissed. That is only half of it, is it not? There are also the countless number of people who live in fear of dismissal lest they do something which offends what one must in many cases describe as their lawful masters. So it is not a quantifiable thing by any manner of means.

I was a little puzzled by what the noble Earl said when he was dealing with the question of why we are now dealing with unfair dismissal in respect of union membership, but not in respect of sex discrimination and race discrimination. He said, if I recall his words correctly, that it is not possible to deal with everything at once.

I am most grateful to the noble Lord for allowing me to intervene. The point I was making is that dismissal under racial or sexual grounds is already covered by unfair dismissal procedures. The point we are making is: why should the new maximum level of deterrent only apply in the case of closed shop unfair dismissals? It was the special cases which the noble Lord, Lord Harris, has just outlined; the need for the Government to make a response to a deliberate act of defiance in the case of employees whose rights had been sought to be protected by the 1980 Act, and the special difficulties of re-employment should one's membershop card be withdrawn. Those were the reasons I was giving for this differential in the levels of compensation. It does not mean that unfair dismissal oil grounds of sex or race does not still obtain; and should there be evidence of employers defying legislation in respect of race or sex, I would, of course, be wholly prepared to look at this issue, but I have no such evidence and I am responding to a particular set of circumstances in the industrial economy.

I feel that many of your Lordships will feel rather disturbed by the Government's response. May I take a small point to begin with. The noble Earl tried to deal with my illustration of the difficulty of trade union members proving that their activity or membership of the union was the cause of their dismissal by reference to the Beyer case, by pointing out the words of the section, including the words "to be or to become" a member of the union; and in that of course he is absolutely right. But I point out to him that it did absolutely no good for the plaintiff in that case, nor indeed in many other cases like it. The second and more grave area is that the Minister is pursuing the point that non-unionists are in a special position in that they cannot get work again because they are discriminated against in a special way as against and above all others. I say in general terms that there are many, many workers who are dismissed unfairly who are in an equal position in terms of finding other employment. Especially today it ill lies in the mouth of this Government to take up that particular point.

However, there is a matter that is even more important than that. Before I make the point I wish to say that I for one was very sad to see that the noble Earl left or was moved from his place in the Department of Employment where he had a special interest and some of us thought a very effective interest in matters relating to racial problems in employment and problems of sexual discrimination. Indeed, I pondered as he spoke whether the Bill would be in quite this form if he had been there to fight an earlier corner.

Although I do not attribute it to the noble Earl, I do say that this Bill as it stands says that the dismissal of a non-unionist is worth £10,000 more than the dismissal of someone by racial or sexual discrimination. That is what the Bill says and there is no way round it. All that the Government can do to justify that is constantly to pray in aid the Sandwell and Walsall dinner ladies.

However, the noble Earl will forgive me if I repeat what I said on Second Reading. The Walsall dinner ladies may well have been very unfairly treated and no doubt compensation should be paid to them. But in looking at that one should look at the compensation paid for unfair dismissal generally—that is what we say—and see what types of case should be looked at. To place, on the basis of three or four isolated cases, this £10,000 difference—or £12,000 difference if we take it with the basic minimum—really will not do. I am not surprised that the noble Baroness, Lady Seear, was extremely disturbed by this, although I must admit that I was extraordinarily surprised, perhaps I should not have been, that the Social Democratic Party, through the noble Lord, Lord Harris of Greenwich, appeared to think that the Government were absolutely right in the position that they had taken up.

The noble Earl, Lord De La Warr, said that the number of people dismissed should not simply be counted but must be weighed. I appreciate that point. But let us think about that for a moment. In weighing the position of a young black worker who is dismissed on racial grounds in certain areas of the country, one could hardly say automatically and obviously that he is worth £10,000 less than a non-unionist, of whom so few can be produced anyway, but whose case, let us assume, is as unjust as one can imagine.

Finally, there was another very disturbing point in the noble Earl's reply. Defiance of the law is a matter that we might debate. There are ways of defying the law and if the law is defied there is a ground for putting an extra penalty. Of course, if the Government come forward and say, "Those who defy the unfair dismissal law deliberately must pay another £5,000, and that is a bonus to the claimant", then that would be a matter that we could debate. However, that is not what the clause says: You have to pay it to non-unionists whether you defy the law or not. The noble Earl said—and I hope I do not misquote him—that it is politically motivated defiance of the law. I find that extremely disturbing. It is a matter that we should look at in the context of the clause as a whole and not in the context of this amendment. I wish to think about the matter until we come to the clause as a whole.

But the main point here is of course the inability of the Government as a whole to understand that the words on the paper, by making the amendments they make, downgrade as a matter of fact, in terms of cash. There is £10,000 difference if you are black compared to if you are a black non-unionist and are lucky. If that is meant to get the confidence of the racial ethnic minorities of this country, I fail to see where the Government think they are going with their policy.

I should like to take up that last argument because the noble Lord is a very experienced and persuasive advocate and I know that he would not wish to mislead the Committee. I think that the noble Lord was kind enough to throw me a bouquet. I am perhaps a little suspicious of Greeks throwing me bouquets but he was kind enough—and I accept it in good part—to throw me a bouquet for my time at the Department of Employment. I must also refer the Committee to the work of the noble Lord who has played an important and distinguished part in the formulation of the previous Government's labour legislation. It is really disingenuous of the noble Lord to pretend that those people who were dismissed because of union membership or because of union activity, were not given a special position and a special privilege under the 1974 and 1978 Acts. I have a note about the many instances of this kind of privilege. It is not a question of racial or sexual discrimination being in any degree better—in many ways I think that it is worse. What we are trying to do is to approach a position where a feature of the industrial history and industrial landscape of this country—which we regret but which we recognise has gone very deep into the texture of our industrial life—can create unique and extraordinary abuses for individuals who are caught up in it. The whole thrust of our legislation is to try to protect individuals who are unfairly treated as a result of a practice which is very difficult to defend in principle but which men of goodwill and men of reasonability have to recognise exists as part of our industrial landscape and where, I should have thought, we could gain support from the supposed party of the underdog opposite, in trying to help us ensure protections.

It does not mean that protections for other kinds of abuse do not exist or should not exist or are not important; they are. But the noble Lord has got to show us the kind of wilful abuse in the race or sex fields that we have seen in the closed shop field, in order for the same kind of deterrence to be necessary. There is no evidence whatever of such abuse, and all credit to, I think it was, originally a Labour Government and it was reinforced by Conservative Governments, who brought in the necessary legislation to protect people in the race and sex fields. I am very much in favour of such legislation and all credit to those who brought it on to the statute book. But it really is a red herring, or certainly a pale pink herring on the part of the noble Lord, Lord Wedderburn, to try and confuse this closed shop issue with the race or sex issue.

The noble Earl, Lord Gowrie, is much too experienced a Minister to know that if he distrusts my gifts or bouquets then I do not take easily to his pink herring. What he says is true. I hope that I did not mislead the Committee and if I did so I apologise. I shall put the following point in two or three sentences because what the noble Earl is now saying leads my noble friends and Ito even greater concern.

Briefly, it is true that the previous Administration provided for what was called additional awards of compensation of a fairly modest amount—52 weeks' pay being the absolute maximum—in, broadly, three cases: trade union membership and activity, sex discrimination and race discrimination. Look at it as simply as you may, what the Government are doing is bringing in a fourth category: dismissal for non-unionism, which as the Minister rightly says, is not just confined to the closed shop. The noble Earl's intervention just now was rather a Second Reading intervention on the closed shop which I would like to debate with him on another occasion. Of course it is not just in the closed shop. So there are four categories sex, race, trade union membership and activity and non-unionism. Then you say that the last two will be worth £12,000 more, without any proof of anything else. Of course there is the reduction in the individual case and we are coming to that and I am trying to stay clear of that ground for the moment. But if the noble Earl tempts me on this amendment, then I will deal with it. However, we shall be dealing with it later in the clause. I do not understand how the Government can say that they are doing anything other than saying to the community that the deterrent required, which will be an effective deterrent for a non-unionist and trade union dismissal, is £12,000 more than for race and sex discrimination. I do not agree with the noble Earl that there is little evidence of racial discrimination in employment practices, and if we both looked at the reports of recent years we would see that there is certainly some evidence of that.

I did not say that; I said evidence of unfair dismissals. I very much regret that some discrimination still exists, and I hope that it is rapidly disappearing. However, my point was about unfair dismissals.

The noble Earl will know very well that one of the matters that most disturbs some workers in ethnic groups is the question of constructive dismissal, where the worker is treated so badly at work that he feels he has to leave, and whether he can prove a constructive dismissal in those circumstances. That may sound rather an arcane and mystifying point, but I am sure that the noble Earl knows very well what I mean. If one takes account of that, there is a very worrying area of unfair possible dismissal.

Given that, and given the fact that we all know perfectly well that women workers are treated rather badly at work and dismissed from time to time—there are figures to show that—and as there are no figures at all on this case (except two: the five Walsall workers; the Government cannot include the railwaymen because that was in 1976), the Government are matching up such evidence as there is of racial discrimination and sex discrimination to the case of a handful of workers, and saying that this must be dealt with by £12,000 more. I do not think that that is satisfactory. I think that the debate has shown that it is not satisfying. My noble friends and I will press this amendment.

Before the noble Lord sits down, perhaps I could make a few remarks in view of his brief but gracious remarks addressed to me at an earlier stage. Of course one objects deeply to racial discrimination in employment and to sexual discrimination in employment. Both are offensive. Of course, discrimination exists in both respects; the noble Baroness, Lady Seear, is entirely right. It may be that at some stage it will be right to look at the levels of compensation. But the question that we are looking at here is a different matter altogether. The issue that we are looking at is a deliberate defiance of the law by public authorities.

I am not impressed by the argument put forward by the noble Lord, Lord Wedderburn, that there have been only a handful of such cases. The fact that two large local authorities publicly indicated that they had no intention whatever of abiding by the law of this country seems to me to be a serious matter, and it is one to which Parliament should direct its attention. That is what we are being invited to do as regards this particular matter, and, with great respect to the noble Lord, Lord Wedderburn—and I say this as a former Minister responsible for putting both the sex and the racial discrimination Bills through this House—it does not lie in his mouth to imply, delicately, that those of us who take the view that we do, do not have as strong feelings in these particular areas as he does.

I did not wish to imply anything. I would say two things to the noble Lord, Lord Harris of Greenwich. When he says that the question is different from the one to which I addressed myself—namely, that the question is of public authorities who dismiss workers—I say that that is not so. The noble Lord must allow my noble friends and me to pick our own amendments and draft them for ourselves. If we wanted to put down an amendment about dismissals by public authorities we would have tabled one, and we have not done so. I quite understand that the noble Lord, Lord Harris, would wish to vote for that. On the other hand, he is being asked whether he will or whether he will not vote for an amendment which would end the distinction of £12,000 between race and sex discrimination in dismissal and unionism and non-unionism dismissals. That is what he has to decide. No doubt his name will appear somewhere in the list. I beg to move.

moved Amendment No. 53:

Page 6, line 40, after ("make") insert (", and the tribunal made,").

The Committee may find it helpful if I first explain why the Government have introduced the special award in the form that they have. Currently, in a case where an employee who has been unfairly dismissed asks a tribunal to order his reinstatement or re-engagement but the tribunal declines to do so, his compensation for unfair dismissal will consist only of a basic award and a compensatory award. In practice, that usually amounts in total to a relatively low sum. In 1980, it was in terms of a median of under £600. The compensation in such a case is exactly the same as the employee would have obtained had he not sought reinstatement or re-engatement.

The additional award payable when an order for reinstatement or re-engagement is not complied with can be a larger amount (26 to 52 weeks' pay in the case of dismissals relating to trade union membership and activities or non-membership); but as orders for reinstatement or re-engagement are rarely made—the Walsall case was an exception—the existing ad-existing additional award is rarely payable, and in 1980—to use that year again; it is the latest one for which I have information—reinstatement or re-engagement was ordered in only 3 per cent. of cases where dismissal was found unfair.

Our introduction of the special award in cases relating to union membership or activities or non-memberhsip in Clause 4 means that employers will not in future be able to avoid liability for a large amount of compensation if an order for reinstatement or re-engagement is not made. The special award will be payable in these cases where the employee requests reinstatement or re-engagement but where this does not occur, whether or not a tribunal finds it practicable to make such an order. All employers will therefore think long and hard about carrying out such unfair dismissals in the future, and in the Government's view very few such dismissals will ever take place should the Bill become law.

If an employer nevertheless unfairly dismisses employees for non-membership and a tribunal, as in the Walsall case, weighs all the pros and cons of reinstatement and then makes a reinstatement order, there will also be a considerable greater incentive to comply with the order. This is because non-compliance will result in a minimum special award of £15,000 being made. Thus, Walsall Council, instead of being faced with a "trivial" bill for the dismissals of all four dinner ladies of just under £10,000, would have faced a bill of just over £70,000 if the Bill's provisions had been in effect. That might make even a council like Walsall, as it then was, think twice before it defied an industrial tribunal order. I am glad to be able to say as the council "then was" because Labour lost control of Walsall at the recent local elections and the council is now controlled by what is described as an "anti-Socialist coalition".

That, in short, is why the special award is constructed in the way it is, and this goes back to our previous debate. We have sought to have draconian levels of deterrence for a public authority which abused its position in that way. The amendment would restore the position broadly to what it is at present; that is, a special award would be payable only where a reinstatement or re-engagement order was not complied with. Employers would not in practice, therefore, be deterred from carrying out unfair dismissals in these cases because they would know that the chances of their having to pay a special award would be minimal since, as said, reinstatement or re-engagement is very rarely ordered. The amendment undermines the principle of the caluse and I therefore ask the Committee to reject Amendment No. 53.

Amendment No. 54 is, if anything, even more unacceptable to us. It would make the special award dependent not only on the tribunal making a reinstatement or re-engagement order, but on the employer agreeing to comply with it. A moment's thought will show the absurdity of that proposition. To avoid liability for a special award, an employer would simply have to say that he was not willing to comply with a reinstatement or re-engagement order. Such a provision would drive a coach and horses through this clause and I ask noble Lords to reject it.

The last anxiety outlined by the noble Lord, Lord Wedderburn, I think referred to the avaricious or rogue employee who might request a reinstatement or re-engagement order in order to receive compensation. There would be nothing to enable such an avaricious employee to get compensation so long as the employer did not sack him, and therefore I do not think the noble Lord's point is well-founded.

The noble Earl made a number of points, and I shall refer to only a few of them. He said reinstatement was ordered in only a very small percentage of cases, and that is so; it seems still to be running at about 3 per cent. Why not go to the root of the trouble and make reinstatement an effective remedy? Reinstatement and re-employment at the moment are generally called among those who look at the situation, in the words of a recent article, "the lost remedy". It can be done because in Italy, under the Workers' Statute 1970, reinstatement is effective for unfair dismissal.

The Minister then said that the new draconian remedies would make all employers think long and hard about such dismissals, although he later picked out public authorities, a point to which we shall have to return on later amendments. He said there would be an incentive to comply with the law. If that is thought to be the case, and it may be true, then it reflects on our whole debate so far—that is, if the Government are serious about unfair dismissal—because if the result is that you do not dismiss because you will have to pay us a possible £12,000, then let us all have £12,000 and none of us will be dismissed unfairly. The noble Earl cannot have it both ways. If it will be an effective deterrent and will stop the dismissals, and if you can show that to be the case, then the deterrent will be so big as to be that effective that nobody would be happier than I to see such a law, one which nobody would ever have to use.

So far as unscrupulous individuals are concerned, in the words of the Institute of Personnel Management, or the similar people discussed with the Government by the CBI and the Engineering Employers' Federation (referred to often as "the bounty hunter" in Committee in another place) or, to use the phrase of the British Council of Shipping—a phrase I should never have thought of—"the rapacious seafarer", as they wrote to the Government, who might take undue advantage, the point is that with these sums of money around—not for everyone, but for those in a special category—why should the Government be surprised at the argument that some people may try improperly to get themselves into that category, when that is likely to be the case?

The tribunals will try to stop that happening, as will the defendants and their lawyers—and the Bill will result in even greater formality and legalism in the industrial tribunals. So everyone will try to stop it happening except the claimant, and occasionally he may get away with it. The question is whether the deterrent is likely to be such as to balance against that the sort of problems for the tribunals and everything that goes with the procedure. This is an important and difficult matter. The linkage point, made primarily by Amendment No. 53, is an issue to which we shall return on Report, or perhaps the Government will think about it in the interim. We still think that the mere request makes it too easy for someone to get the tribunal into that area where you have to argue a great deal in regard to a much higher sum, so there should be a different kind of threshold. I beg leave to withdraw the amendment.

moved Amendment No. 55:

Page 7, line 5, leave out ("104") and insert ("52").

Notwithstanding the succinct and modest way in which the amendment was moved by the noble Lord, Lord Aylestone, I find it a very extraordinary one. Those of us interested in political life at the moment are of course all SDP-watchers to some extent. We are trying to tease out policy from the noble Lords on the SDP Benches. The amendment moved by the noble Lord, and the way in which he moved it, seemed to me to be wholly at variance with the quite trenchant support given to the Government on a previous amendment by the noble Lord, Lord Harris of Greenwich.

I have already argued that in the light of continuing public concern over the operation of the closed shop, and its abuses—and we share this view with the Social Democrats—higher compensation is obviously necessary. Therefore, it seems to me to be very curious that the noble Lord is trying to diffuse it and reduce it by half. I do not think that the idea of coming to the rescue of the small business man in this respect holds up, because all that the small business employer has to do is not unfairly to dismiss his employee—and that should not be too difficult to avoid.

I recognise that the amendments go a certain way with the Government, in that they do not remove the special awards in closed shop dismissal cases; nevertheless they reduce their value by half. Of course, we could argue about what should be the exact size of the special awards. I must point out that the Government had fairly extensive consultations on this matter before we published the Bill, and as my right honourable friend the Secretary of State pointed out in a debate on similar amendments during the Committee stage in another place, the higher the amount of the special award, the greater its deterrent value and the greater the incentive to reinstate. We are at one with the Social Democratic Party, and at one, I understand, with the Liberal Party, in believing that there should be deterrence, but equally in believing that there should be incentives to reinstate.

I want to repeat something that I said to the noble Lord, Lord Wedderburn of Charlton, on a previous amendment. The higher compensation is also available for unfair dismissal for trade union membership and activities because the Government believe that dismissal for non-membership of a union is equally wrong. The right to join a union must be protected, just as must be the right not to join. Throughout the Bill there is an evenhanded approach. The enhanced compensation in Clause 3 and the present Clause 4 applies equally to people who are unfairly sacked for being union members and to people who are unfairly sacked for not being union members.

Since the noble Lords—how can I put it?—not immediately opposite, but behind the noble Lords immediately opposite, of the new party, have agreed with us on the principles of deterrence and of incentives for reinstatement, it seems to me most extraordinary that they are seeking to undermine their own good sense by this amendment. I can only conclude that the Social Democratic Party has not yet dotted every "i" and crossed every "t" of its industrial relations policy, and no doubt when it has done so it will return to the debate.

I should like to take up the noble Earl's point about the earlier intervention of my noble friend Lord Harris of Greenwich. I do not think that there is here any inconsistency at all. I came to your Lordships Chamber this afternoon thinking that there might be something in the comparative levels of award proposed under the Bill and those awards usually made in regard to racial or sexual discrimination. I had that in my mind. However, during the course of the debate I was convinced by both the noble Earl opposite and by my noble friend Lord Harris that these issues were not strictly related; and in that debate the noble Earl and my noble friend Lord Harris carried me against the arguments advanced by the noble Lord, Lord Wedderburn of Charlton.

Therefore, I think it worth stating for the record that the reasons why my noble friend Lord Aylestone has moved the amendment are strictly those that he has given. There is no inconsistency at all here. My noble friend talked about the possible plight of the small business man and the possible implications for the small union in regard to the awards of damages, which we shall come to later in the Bill. Those are the reasons why we on this Bench set down this series of amendments, and I do not think that the noble Earl can succeed in striving to drive a wedge between ourselves and our noble friends on that count.

I hope that the noble Lord, Lord Aylestone, will forgive me for not having been present as soon as he opened the debate on the amendment. I should like to say, very briefly, that the award proposed in the Bill reflects a very special situation, in which a man may lose his livelihood in a closed shop situation—and in these days of unemployment it may take a considerable time before he finds a suitable livelihood again. There are also problems with the union which, although it is not strictly within a disciplinary procedure, may nonetheless persist and affect the man's right. At the Bar, I know of several cases during the last five years in which a man who has been dismissed in a closed shop situation has not been able to find employment for years and years. Therefore, this is a rather special situation. I would for these reasons support the Front Bench in resisting this amendment, and I hope I have given a reasoned objection in support of doing so.

if I venture to speak briefly in favour of these amendments, I hope the noble Earl, Lord Gowrie (diligent SDP-watcher and Alliance-watcher that he is) will not suspect that here is the appearance of an extension of the Alliance. I speak merely to the merits of the amendment on the Marshalled List, as is my habit, and I will leave the finesse of political bargaining to the noble Earl.

I thought it appropriate earlier in our proceedings not to move Amendment No. 51 but, instead, to support this current series of amendments, so as to avoid two debates on amendments which have a certain amount in common. What the noble Lord, Lord Aylestone, and I have in common is our dislike of the over-generous terms of compensation which a man, unfairly dismissed because of his refusal to join a union, can claim. It is a matter of judgment, of course, as to where the line should be drawn; the intermediate point between what the Government propose in the Bill and the total elimination of the special award.

The noble Lord, Lord Aylestone, says he is in favour of the special award in principle. I am not. Therefore, in coming together as we do on this particular series of amendments, we seem to be literally meeting one another half way in that respect. I merely wish to give one illustration of how, as I see it, this proposed compensation is excessive; and I wish to make the point that such excessive compensation makes an employer vulnerable to dishonest practices by dishonest employees.

The example that I will briefly give is hypothetical, but I believe it to be realistic—and my noble friend Lord Jacques and I have had it checked by an expert in these matters. I would take a man of 45 years of age with 10 years' service in his job, earning, shall we say, the average wage of £120 a week in a job where he is not getting on very well with his workmates. He is perhaps unhappy in his work, not through any fault of his employer but because of his personality and the way in which he fails to get on with his work- mates. Suppose, then, that the business in which he is employed is declining, and he thinks, perhaps with justification, that redundancies are in the offing and that he may well be one who is vulnerable in that respect. That is not, I suggest, a very unrealistic scenario.

If such a man waits for redundancy in the ordinary way, he will get £1,440; but if he engineers his dismissal by giving up membership of his trade union he can get considerably more, even under the present law, in respect of the basic and the compensatory awards. The figures that I have total £5,000 if reinstatement is applied for and not ordered. Under the Bill, he has only to say that he wants reinstatement and he can qualify for as much as £17,500 if reinstatement is not ordered; and, of course, the figures are still higher if reinstatement is ordered and defied by the employer.

My main point in this. What a temptation those figures represent for a man to aviod normal redundancy and to seek, by spurious but perhaps not easily detectable means, to arrange to be dismissed on grounds of non-unionism! That I believe to be a real danger, and it is because these amendments moved by Lord Aylestone go a considerable way towards mitigating this danger which I have tried to describe that I am speaking in suport of them.

While it is fresh in the Committee's mind, I wonder whether I could answer the points made by the noble Lord, Lord Oram. I have already tried to show that it is simply not really necessary for employers to dismiss people unfairly. If employers can show that pressure has been put on them—disruption of their business, its continued decline or whatever—to dismiss a man, the tribunal would of course take that into account and that might not be considered to be unfair dismissal. Or there are the joinder provisions, to join the union and for pressurising the employer. We are talking a little as if these large sums of money could gratuitously be imposed on small businesses which could ill-afford them. All the small businesses have to do is to avoid unfair dismissal of the people concerned.

The other point would seem to me to be that the whole habits of mind of industrial relations tribunals would take into account any deliberate disruption by the employee of his or her employers' industrial relations. It is relatively easy to spot a rogue employee. In fact, most of these provisions are designed against the the rogue employer, as I said earlier; and I therefore hope that the noble Lord can be slightly more confident in the existing work of industrial tribunals—which, after all, the Government of which he was a distinguished member did a lot to set up.

The Minister explains himself further and further, and I am bound to say makes his case weaker and weaker. It is perfectly true, as he says, that this is in some ways an extraordinary amendment. But, then, this is an extraordinary Bill. It is somewhat strange to see these figures coming out of the air—and, of course, they do come out of the air, and the noble Lord, Lord Aylestone, cannot really suggest that they do not come out of the air. But, then, the figures in the Bill come out of the air. These figures are arbitrary, but they are no more arbitrary than the figures in the Bill. In the phrase that I think the noble Baroness, Lady Seear, used the other day, this is a small baby, but at least it is a small mercy. This amendment slightly cuts the compensation, and for that reason it is welcome. At least, it is welcome to us, even if we do not necessarily agree with and follow the arguments which are being put forward in respect of it.

But when the noble Earl seeks to argue that there is no problem with this because you do not have to dismiss people and, therefore, small employers cannot go bankrupt because they do not have to dismiss people, he must face the fact that there are, in effect, four choices open to an employer as a result of this Bill. There would still be the same set of choices open to an employer as a result of these amendments, but at least the consequences would be less. Faced with one of the bounty hunters, he can dismiss him and pay the costs. That could be as much as £31,000 or, under the amendment, half that sum—and that could be serious for the small employer. Or he could decide to join the union in the action and perhaps halve the loss or more than halve the loss, but at the consequence, very likely, of deteriorating industrial relations and worse relations with his union than he has had in the past. Not a nice choice for the small employer. Or he could refuse to do anything: not dismiss—in which case he might get strike action, disruption of services against him as the workers in the firm are not prepared to put up with the fact that this man has dropped out of the union. Each one of these three options is not nice for the employer.

But the noble Earl says that he could fail to dismiss the man and nothing could happen, and that if only the employer would stand up to it, then nothing untoward would occur at all. This is not the way we see it, because in that eventuality—and I am bound to say that probably is the most common eventuality at this stage of the economic situation—the union membership agreement will be a dead letter, a dead loss. Once again, we shall see that the Government are legislating to break up union membership agreements.

It is significant, I suggest, that two of the most respected organisations in the country dealing with industrial relations, namely, the Institute of Personnel Management and the Industrial Society, both have expressed disquiet about the effects of these high levels of compensation available through the special award. The Institute of Personnel Management feels that they will offer too much scope for exploitation by unscrupulous individuals who may be attracted by the money; the Industrial Society has expressed similar views, and the same point was exposed very clearly in the discussion initiated by the noble Lord, Lord Mottistone, last week when he referred to the special difficulties that could arise within the shipping industry in that connection.

My fear is that in circumstances where so many British companies are having to reduce their work force in order to remain internationally competitive—an objective with which we all agree—individuals whose jobs are at risk may be tempted to engineer their own dismissal in order to gain financial benefits in excess of those to which they would be entitled on grounds of redundancy, and claims may arise which are vexatious. I know it can be claimed (and it just has been claimed) by the noble Earl that amounts can be reduced, for example, if the complainant has contributed by his own behaviour to his dismissal. I acknowledge that, but still feel that the amounts at present set are too high.

Last week, the noble Earl made it plain—and, I think, again it was in discussion of the amendment put forward by the noble Lord, Lord Mottistone, concerning the shipping industry, that the intention of the Government here was not to undermine the closed shop. The noble Earl is, among other things, an honourable man and I can only accept the assurance that he then gave. But for my part I cannot escape the feeling that the effect of these awards, if not their intention, is not so much to give fair recompense to employees who are unfairly dismissed as excessively to penalise employers and trade unions who continue to operate the closed shop.

On these Benches we have made plain on one or two occasions already on discussions on this Bill at this stage that we are in principle opposed to the closed shop: but here we are concerned with the practical effect of the Government's proposals. I am troubled about their consequences for industrial relations and I hope that even now the Government, on those grounds, will be prepared to reconsider this point.

I acknowledge one more point to which the noble Earl has already drawn our attention: the grounds on which acceptance of this amendment are being argued are different, as the noble Lord, Lord Kilmarnock, has already said, from those on which his noble friends argued against an earlier amendment. But the effect, I think it must be conceded, of accepting this amendment would not be markedly different from acceptance of the amendment earlier put forward by the noble Lord, Lord Wedderburn. I noted, however, that the noble Earl made the point that there was room for argument about the extent or the precise amount of these awards—and it is with the principle that I am concerned.

If the noble Earl were to say, for instance, that the amount by which we are here seeking to reduce these sums of compensation is rather too great, and that he would be willing to have another look at it to see if some figure between that now in the Bill and that suggested in the amendment might be more appropriate, then that is one thing. But to argue against the principle that we are here seeking to enunciate would not be acceptable to us. It is for that reason, in principle, that we have put down and wish for our part to pursue—I cannot speak for the noble Lord, Lord Aylestone—this amendment.

May I answer the points of the noble Lord, Lord Rochester? As he knows from many occasions, I always like to carry him along with me. Certainly, again—and I do not want to repeat the little tease that I made about the Social Democrats—what he said seemed to be somewhat at variance with some of the positions taken by the I iberal Party in another place on closed shop issues. The very fact that these levels of special awards compensations are being set high seems to me to act as a deterrent not only to the employer not unfairly to dismiss the employee but also for the union as well; because the employer can join the union should the union misbehave, and the high levels of deterrence would surely stop the employer and the union from perhaps colluding against the individual. That seems to me to be a clear issue where the threat of being joined in an action would, in itself, deter the unions from putting pressure on the employer to dismiss the employee.

I go back to the point that we are not trying to load additional costs on to employers. Employers—rather than myself, who was accused of this earlier—must not have it both ways. They have asked for some protection against unfair pressures from trade unions and the Government, but, equally, they must not give way to unfair pressures from unions. Those employers who are showing signs of not so giving way are doing well in this field.

Another point made by the noble Lord, Lord Rochester, was that this is rather high in absolute terms. Whatever the arguments about any given Administration's economic policy, we all know that unemployment is at exceptionally high levels over all the Western world. We are in a different, changed and unpleasant situation where the levels of employment are concerned. That covers countries like France, where President Mitterand is still wrestling with more traditional demands for management manipulation and the rest of it. All of us are suffering from very high levels of unemployment. It seems to me that it is really fearsome to lose a job these days. If you do, you need as much compensation as you can conceivably get particularly if you lose it through no fault of your own but because you have been unfairly dismissed by your employer. Therefore, it seems to me rather strange in the light of that situation for the noble Lord to pursue the line which he has.

The best way of avoiding the special awards, which are designed to deal with the kind of exceptional cases that we have been debating earlier, is to hold a ballot. That is if it results in the closed shop being proved. The greater the compensation levels, the greater the incentive to hold ballots. Surely the Liberals and the Social Democratic Party want ballots. These amendments would reduce very substantially the likelihood of ballots being held. Therefore, I find it a deeply inconsistent point of view and I hope that rather than the Government thinking again, the Alliance will think again.

May I say a few friendly words to the noble Earl, Lord Gowrie. I do not in any way mind the teasing of the SDP or the Alliance. I am quite sure that the Liberal Party approach it in an equally robust fashion.

However, I found the closing remarks that he made remarkable. We are all looking forward to coming to a discussion on secret ballots at a later stage in the Bill. He will then find our enthusiasm for what we understand to be the policy of the right honourable lady the Prime Minister to be undimmed on these Benches and we are looking forward with a high degree of expectation to finding out whether the Government are prepared to adopt what we now understand to be the Prime Minister's position in ballots or whether they are clinging to the policy—the rather outmoded policy—of the Secretary of State for Employment who has taken a rather more cautious approach to the understanding of these questions.

On the actual substance of what the noble Earl, Lord Gowrie, has said in the past few moments, I put to him that he underestimates the problem facing many businessmen in small companies. There is no doubt so far as we are concerned about the need for the new special award. The only difference between us is on the question of what should be the level of compensation. Of course, the noble Earl is quite right, in a number of cases it is right that there should be a deterrent level so far as compensation is concerned. In my view, speaking as I did on a previous amendment, I certainly think that compensation of around the level set out in Lord Aylestone's amendment is just about right. My noble friend indicated—as did the noble Lord, Lord Rochester—that we are perfectly prepared to listen to any other proposal with which the Government may come forward. If the Government were to indicate that they were prepared to reconsider this matter, speaking for ourselves and our colleagues in the Liberal Party, I am quite sure that we would be more than happy to withdraw this amendment. But the noble Earl cannot, with great respect, underestimate the problem that faces the small businessman. Of course, a small businessman can behave in an arbitrary, intolerant and sometimes capricious manner. No doubt sometimes he could behave unfairly against an individual employee. Certainly, it would be wrong to say that the employee in such a situation should not be adequately safeguarded.

The problem facing many small businessmen—and this, with great respect, the noble Earl did not appear to appreciate—is that he does not have this amount of expert advice available to large-scale employers to avoid getting into exactly the situation which we are now discussing. That is why it seems to me not at all unreasonable for the Government to consider seriously what has been said. After all, most of those who have spoken in this debate, other than those from the Labour Party, have agreed with this special award. What we are concerned about is the level of compensation. It seems to me not unreasonable in the light of what has been said for the noble Earl simply to indicate that he is prepared to look at the matter before Report stage. We are asking for no more than that. I cannot see why he is being so inflexible.

Following what the noble Lord, Lord Harris, has said, would the noble Earl look at his approach again? There are a number of issues. There is the question of the deterrent. There has to be a degree of deterrence. We accept that. There is the question of the absolute amount to be paid. This is in relation to the small business, in particular, as the noble Lord, Lord Harris, has said. There is the question of the level in so far as it encourages people to suddenly discover a conscience. I do not suppose that there will be a lot of them but I am sure there will be some. With a large sum of money, if one is Just wavering on the brink, it encourages one to discover suddenly that one has never thought much of being in a trade union.

Then there is the difference, coming back to previous amendments, in the levels that can be obtained for the different reasons for dismissal. Will the noble Earl, when he has his computer to do the sums, see whether there is any way of narrowing this difference by raising at least somewhat what is payable to people who are unfairly dismissed for other reasons? My computer is not working completely fully but it has a fairly useful indication. When the maximum award was first introduced by the Conservative Government in 1971, the figure was £4,160. In the period 1974 to 1978—a period which I just happen to have in my head—prices doubled. That would bring the figure to at least £8,320. The present maximum is £7,000.

Then there are the other years which would bring it up higher still if it was to be in line with what the Conservative Government originally thought to be appropriate. If there could be some raising, it would go quite a way to get rid of some of the feelings that have been aroused in the discussions that we have had today. It would seem to me entirely logical that one should look to what one thought was the appropriate compensation originally and see why it should now be so different, for different it most certainly is.

I tried to deal with the point of why we sought a differential compensation at an earlier stage of the debate. I shall of course bring to the attention of my right honourable friend the fact that it is the view of the noble Baroness that levels of compensation for ordinary cases of unfair dismissal are insufficiently indexed. The noble Baroness is well aware of the Government's position on that, that the way to get them fairer is to reduce the inflation that is going on. This is what we are trying to achieve. I shall bring that point to his attention. With respect, it is a slightly different point. Various people in the Committee have been, as it were, appealing to me to think again, hoping that they will not have to divide and hoping that in some way the Government may be able to meet them or that an amendment of this kind will have better treatment from the Government at Report stage.

I am afraid that I think that would be misleading. Here we are dealing with questions of unfair dismissal. I do not agree that small employers need expert advice here. All they need to do is not unfairly sack individuals. If they do not sack unfairly, they will not have to pay compensation. If they are subject to unfair pressures from unions or other employees, then the employer can join them in any action which the individual takes.

I must say to the notional employers being represented by the Social Democrats and the Liberals on this occasion, though not the Labour Party on this occasion, that it is wrong to ask the Government to stick up for the rights of individuals and to try and ameliorate the effects of too much in the way of employee protection if they are not also prepared to do their bit in resisting the bullying of unions and in resisting any temptations to treat employees unfairly. I have no evidence whatsoever that employers, of large or small businesses, are doing anything other than resisting this kind of bullying and pressure. I think they should continue to do so. I honestly do not think that there is any reason to reduce these levels of special award, which can so easily be avoided by avoiding the unfair treatment of employees. All parties in this House—perhaps the parties opposite particularly have made a thing of this—are in favour of trying to protect the rights of employees. The Government are doing so in this Bill, and in this part of the Bill, and I must say it surprises me that we are being criticised for doing so.

In his earlier remarks, the noble Earl mentioned—he has done so subsequently—that the figures are set at this scale because they are a deterrent. One could argue that if they were set at double the figures they would represent a much greater deterrent. The noble Earl also mentioned the fact that there is no great interest in industry in the scale of the compensation awards. May I remind him that the British Institute of Management, the Confederation of British Industry, the Institute of Directors and the Institute of Personnel Management are all of the opinion that these compensation awards under the special award are much too high. If he really feels that he cannot accept our amendment, may I remind him that if he does accept it and we are proved to be wrong, then under the terms of the Bill the Secretary of State could restore some other figure with the approval of both Houses? That would be an absolutely democratic way of doing it. If he cannot accept the amendment, I am afraid I must divide the House.

We have now investigated at any rate most of the extraordinary areas of an extraordinary clause. It is said, as the noble Earl has mentioned more than once, that there are those who ask for protection; but the examples are few. Indeed they can be matched by far more examples of other types of discrimination that might be thought to be as bad. The figures have been discussed and while I, and indeed the party for which I speak, do not think this is the primary issue, nevertheless the Govern- ment's intransigence in the face of unknown calculations in regard to the figures seems to be very odd.

The clause itself where what is required is a mere request, will amount, if one looks back over the clause as a whole, to what was called, "the bounty-hunting charter", in another place or, as I would prefer to call it, "the non-unionist's charter "—because of course it has been clear from our debates that it is primarily a question of non-unionists and indeed it is as a remedy to help them that it is being added to the Bill. The reason it is a charter is that you can create your own situation—a situation which the Government's answer will be inadequate to relieve. The situation is one where you can create your own prize and your own rules, and can afford yourself a free kick at the goal by sending off the goalkeeper before you take it. You can do that by throwing in your union card. There is no equivalent for the trade unionist to throwing in your union card.

The noble Earl is quite right; this extends over a far wider area than the closed shop. In any situation where there is tension, where someone throws in his union card, and then there is pressure or discussion and the employer dismisses him by reference to his position as a non-unionist, there is a risk of a special award arising for the employer—but not just for the employer. I refrain from speaking about the joinder procedure under Clause 6, because we shall be coming to that. But before we leave this clause, one must keep in mind that the defendant against the £10,000, £12,000, £30,000 or £40,000 may be the union or, much more seriously, the shop steward or another group of workers. That is the scenario which the Government are presenting via the industrial tribunals.

Often in another place—and it becomes relevant to put the point now, in view of what has been said on this clause—the Government's response has been that not very much of any evil kind will happen, because the tribunals are sensible and will reduce the compensation under the section. The new Section 75A allows the tribunal, where it considers that the conduct of the complainant before the dismissal makes it just and equitable to reduce his compensation, so to do. But the question arises: What do the Government suggest should be the attitude of the tribunals to someone throwing in his union card? On what basis is that to be regarded, in what is now known in employment law, as contributory industrial fault? When is getting out of a union contributory industrial fault?

I suspect that there will be noble Lords who would say, very sincerely "Never", because you should always be able to do so. There would be others who say "sometimes, perhaps". But if that were so, the Government would have measured this clause by reference to some conscientious or other deeply held conviction. It cannot, surely, be a conviction that you are worth £10,000 more than the next man, just because you want to throw in your card.

So the reductionism philosophy, which the Government adhere to so often in debates, and did in the other place, is merely to shift the buck of the problem from the legislator to the tribunal. But it is never good legislation which says "Yes, there is a problem. But leave it to the courts, because we cannot think of anything better to do." There are other features of the clause which have arisen and which are most unsatisfactory; not only the unrealities of the so-called even-handedness between unionists and non-unionists. This is a non-union measure. Noble Lords who support it felt passionately. In terms of non-unionism, none of them is going to get up and make the same sort of speech about trade unionists, although the noble Earl put it in an even-handed way.

But he also made reference to another feature, which should be squarely, and quite sensibly, faced. Walsall council has been mentioned; public authorities have been mentioned; in particular, Labour-controlled public authorities. Why beat about the bush? That is what it is about. The noble Earl talks of politically motivated action and, at one point, said something to the effect that only a small sum—I believe, something like £10,000—was awarded in total to the Walsall dinner ladies. But under the present proposals it would be something like £70,000, which would be enough to get this council to think again or not to do the act.

Of course, the matter goes further, because what happens to this large sum when it is awarded against a Labour council? It is something which the district auditor will have a look at and the Government know very well that that is so; it is what they want. Time and time again in another place, and it is beginning to be mentioned here—so let us get it out—it was said that the district auditor would not surcharge the Labour councillors on £2,000, but, if we are lucky—think the Government—might do so on £10,000, £20,000 or £30,000. The district auditor is being used, in the arguments for this clause, as a political instrument against Labour councils effecting policies upon which they were elected.

It is no good noble Lords looking surprised, because if they look at the reports of the debates in another place they will find that the Minister of State once, and the Under-Secretary four or five times, referred to the need to stop these politically motivated councils, like Walsall, from carrying on in the way that they do. I know that the noble Earl does not want to misrepresent me and I must make sure that he does not misunderstand me. It is not a case of justifying anyone who breaks the law. That is not the issue. The issue is whether legislation, which is ostensibly labour law legislation, is ostensibly employment law legislation, has behind it the ambition to catch with a different penalty individuals who serve on local authorities and similar bodies.

That is a most unfortunate aim in using labour law legislation of this kind, because it will all come back on the shop floor—let us get back to the industrial relations context—and will come back to the relationship between the employer and his workers. If the Government think that, by making Labour councillors bankrupt by £30,000 appearing in the annual audit of the council, they will contribute anything to politics or to industrial relations, they are very mistaken indeed. That is also why some of these bodies that have been mentioned are not happy about the proposal.

The CBI is not unaware of the local authority context and dimensions of the problem, because the Government have made it plain, again and again, in debates in another place that that is the basic reason in that area where, to quote the Under-Secretary, speaking on 1st April at col. 900 of the Official Report:

"The district auditor will step in and say 'Enough is enough. You knew what you were doing, Councillor So-and-so, and you were trampling on this woman's rights. You made up your mind from the beginning not to reinstate her, and you will pay and not the ratepayer'."—

Hear, hear!

The Social Democratic Party give loud cheers. Of course, because that is what they want. They cannot see a way of solving the industrial relations problem, which is a very real problem of workers who feel very strongly that they want to work with trade unionists. Workers are few who have to be heard with justice, and who want not to be in the position of being pushed out. The SDP has no answer to many things and it has no answer to this. They say, "Let us support the Government's legislation", which means punishing the people they do not like. And those people are Labour councillors. All parties, other than my own in your Lordships' Committee, will unite around that. That is why they will unite around this clause.

This clause is based upon ambitions which should not enter into labour law. There is muddle and lack of reason in terms of the division of categories of workers. I refer again to the categories of race and sex as against the categories of unionism and non-unionism. Their policy rests, as it does in the whole of this part of the Bill, on total ignorance of the position of employment law in this country. Time and again the right honourable gentleman the Secretary of State has justified this clause, along with Clauses 2 and 3 which go with it, on the basis that from time immemorial there were rights for British workers, of which they were deprived in 1974; that the legislation from 1974 to 1976 robbed British employees of their right not to be dismissed unfairly. There was no such right before 1971. The case which the Government themselves put to the Court of Human Rights in 1981 in its memorial said:

"Prior to 1971, the termination of the contract of employment of an employee on grounds of refusal to join a union was subject to no special rules. Provided that due period of notice was given to the employee concerned, the termination of his contract of employment on the ground of his refusal to join a union was lawful and gave him no rights of any kind".

That is an accurate statement of the law at that period. Why do the Government have to pretend that some rights, from time immemorial, were lost in 1974?

The 1971 Act introduced unfair dismissal. A problem arose in respect of any kind of union security arrangement and unfair dismissal. That was a problem which the Government faced in 1971. It was a problem which the Labour Government faced in 1974. It is a problem which all Governments will have to face unless they abolish the law of unfair dismissal. That is why Clause 4 sums up the philosophy of the first part of the Bill so much. Clause 4 is objectionable because it tries to divert attention from the real problem. The real problem is that of the employer, the workers and the union on the shop floor reaching an accommodation. Research, both published and unpublished, shows this. Article after article shows that 99 per cent. of union membership arrangements provide for existing employees and for a wide range of people who are exempted. That has been so for many years, whatever the law says. There lies the real nub of the problem. To play with figures of special awards for non-unionists, especially when they are not given to those who are dismissed because they are black, smacks of not being able to face the real problems of our industrial society.

The noble Lord, Lord Wedderburn of Charlton, spent a certain amount of his extremely vigorous speech upon referring to the difficulties which this clause might involve for local authorities in certain circumstances. The noble Lord can reassure himself. No local authority need put itself in this position. No local authority need use its position as employer to dismiss people because they will not join a union or will not join a particular union. Any local authority can protect itself from the dangers to which the noble Lord referred by refraining from that kind of conduct. The noble Lord did not seem to appreciate the particular indelicacy of Labour-controlled authorities doing just that. It is one of the well known facts of political life that the trade union movement is the major support of the Labour Party. It provides the greater part of the funds, the greater part of the support. For Labour in control of a local authority to use its power to further the interests of the unions who support it at the expense of those people who do not want to join a union is, in my view, an outrageous abuse of power. If a local authority does that, it deserves what it gets, because it has brought it upon itself.

The only other aspect of the noble Lord's speech to which I would invite your Lordships' attention is the complete lack of any indication of sympathy whatever for a worker who, for one reason or another, does not wish to join a trade union. The noble Lord simply brushed these people aside as being insignificant and of no account. But whether the noble Lord likes it or not, there are quite a number of people who do not want to join. Does the noble Lord wish to intervene?

If I may.

Of course.

I am sure that the noble Lord will remember that I said that those who are non-unionists may well be unjustly treated and that each case must be looked at on its merits.

That is a somewhat chilling reference. It is not an indication of a realisation of what it means to somebody, particularly—as the noble Lord said on an earlier amendment—in the present employment situation in this country, to be dismissed and what an enormously serious thing it is. Therefore when it is done in circumstances which the noble Lord now says may be unjustifiable, the award that he should receive should be very substantial indeed. And the substantiality of that award is the very gravamen of the noble Lord's attack.

The noble Lord went on—very pointedly, he may recall—to brush aside the position of a man who, as he put it, throws in his union card. I believe that trade unionism is a major and very valuable part of our national organisation but that members, workers, individuals, should join it and remain in it or not as they please. The person who turns in his union card is just as much entitled to protection as the person who did not have it when a closed shop was introduced. There are people in this country who have joined a union and been a member of it for years but who have turned in their union card because they are disgusted about the way in which their union is being conducted and do not wish to remain members of a body so doing.

It may well be—I hope and believe that there are—people who feel that about the way in which NUPE are treating the hospitals and the sick. Surely it is at least comprehensible to the noble Lord that there may be members of the unions concerned who feel, however, strongly they may wish to increase their remuneration this year, that they are not prepared to take part in putting pressure on the sick for the purpose of getting more money. That seems to be a perfectly reasonable, human, perhaps even an admirable attitude. Therefore, people who feel like that may well wish to turn in their union cards. They should be entitled so to do if they want, otherwise the union is proceeding on the basis, which could be contrary to all that trade unionism used to stand for, of industrial conscription, compulsion. In order to keep your job you must retain your membership of the union.

Your Lordships should not underrate the difficulty and the unpleasantness for the individual who decides that he has to do this. If somebody decides, because he cannot bear to be associated with what his union is doing at the moment, that he is going to leave that union, it will be difficult enough. There will no doubt be personal unpleasantness. Surely such an individual who loses his job as a result should be very fully and adequately compensated, either by the employer or, anticipating Clause 6, by the union, or by both of them.

So I am bound to say that I found the noble Lord's speech—passionate, quick-fired, well-informed as it was—immensely depressing, particularly for two reasons. First he seeks to justify and to protect the position of local authorities which abuse their political power in order to impose conditions not desired by some trade unions which support them, with the consequence that other people find themselves losing their jobs. Secondly, because of his manifest lack of sympathy with those people who decide that, even though they may have been at one time trade unionists, they do not wish to continue. I say this to the noble Lord: that no one could be a worse threat to trade unionism in this country than one who seeks to build it up on the basis of conscription.

When one hears some of the speeches in your Lordships' Committee, one feels that one has been here before, because the same arguments seem to occur on almost every clause of the Bill: the rights and wrongs of trade unionism. I was not going to speak to this clause, but when one listens to speeches, one wants to hear sympathy for the trade unionst. I want to see sympathy for well-organised trade unions with large memberships; but when one reads the Committee stage in another place, one has a feeling that what some persons on the Government side want is to see trade unionism weakened. What I should like to hear are some speeches of sympathy for strong, virile trade unionism.

One has to remember the point made by my noble friend Lord Wedderburn of Charlton—a point that some of us made in our Second Reading speeches: where does all this fit in with sound, effective industrial relations? One has to speak not only to noble Lords in this House but also to men and women on the shop floor, as to where this will land us at the end of the day. We may not like it, and some noble Lords may not like it; but if one has a person who continually vilifies trade unionism and who goes out of his way to loudly attack trade unions, and then the men say, "We will not work with this man unless he joins", it is a matter of industrial relations. We do have such individuals. Some are very genuine people and others, frankly, are anti-social in their outlook; "I am all right, Jack." The men on the shop floor resent this and want to do something about it.

To conduct this debate as if it is going to deal only with local authorities is just nonsense. It does not deal only with local authorities, it deals with everybody. I have not heard anyone talk about Foyle's dismissals. Perhaps we could have a few words about Foyle's dismissals and about what compensation those people may get and ought to get, where a firm is even saying that it would be better to close down rather than have trade unionism coming into the firm.

I hope that noble Lords opposite will realise that passion can be on both sides and that conscience can be on both sides. I do not want to see honest individuals badly treated, but at the same time I want to think of the great mass of organised workers who believe in their trade union and who do not want to see it weakened. A few speeches by noble Lords opposite in that respect might be helpful. In this instance one must recognise that there will be genuine cases, but that there will also be individuals who will seek, if they can, to get £20,000 compensation. It will be absolutely foolish if noble Lords believe that can never happen. If there is a chance of £20,000 compensation, there will be some people with an anti-social outlook—and that is what some people who do not want to join a trade union have—who do anything do try to achieve it.

I would agree with the noble Lord, Lord Underhill, as one who longs to see established—I believe one would say re-establish—a strong, virile trade union movement, which was responsible and had effective control. But perhaps I would part company with him on this aspect: I would submit that the liberty for non-trade unionists which we are seeking to provide in this Bill will strengthen the trades union movement rather than weaken it. One cannot be dogmatic because, who can tell? All one can do is to have regard to the problem without passion and in a constructive way—the approach which the noble Lord, Lord Underhill, always adopts.

I agree again with the noble Lord, Lord Underhill, when he says that the emphasis on local authorities is nonsense. Indeed it is. And how, I ask the noble Lord, Lord Wedderburn of Charlton, can he indulge in this fantastic conceit that there is some trap to ensnare district auditors or Labour councillors? This is, as stated by the noble Lord, Lord Underhill, a nonsense.

If the noble Lord, Lord Campbell of Alloway, will allow me to intervene, I was saying that it is nonsense to suggest that the whole purpose of this clause is to deal with the position of local authorities. One has to consider speeches made in the other place, by Ministers in particular, dealing with district auditors.

I am obliged to the noble Lord. I am not pretending that there is not an aspect of this—the spin-off—which could affect district auditors and Labour councillors in certain circumstances. But that is to distort the whole concept and turn it on its head. So many of the propositions of the noble Lord, Lord Wedderburn of Charlton—and I say this with respect—have just been turned on their head. It is a fantastic conceit, and a fantastic conception, that this clause is some kind of trap to ensnare district auditors or to disadvantage Labour councillors. It is a ridiculous concept because the issue is plainly a simple political issue. It is much broader than district auditors or Labour councillors. The issue is simply, are we to adopt the concept of individual freedom that recognises the rights of a non-trades unionist, or are we not? This Government, I believe with the support of the vast majority of the electorate, intend to recognise it. That is the point. If the process those who would oppose the will, if it be the will, of the Government and Parliament, find themselves in difficulties, I for one shall not grieve for them.

I believe that this debate has been of great value to the Committee. The more we go on, the clearer it becomes that there is a fundamental gulf which lies between those who are in favour of this clause, as we are on these Benches, and those in the Labour Party who are most passionately opposed to it.

The noble Lord, Lord Wedderburn of Charlton, who, as the noble Lord, Lord Boyd-Carpenter, said, made a most vigorous speech, will presumably be dividing the Committee on this clause. Therefore, I believe that we should address ourselves to the substantial issues which he raised in his speech and which have been raised in a number of speeches subsequently.

First, there is the position of local authorities, to which the noble Lord, Lord Campbell of Alloway, has just referred. There is no problem whatever for local authorities, so far as this clause is concerned. A local authority only has to do one thing; it has to obey the law of this country. That is what the local authority has to do and nothing else. The problem, unfortunately, is that a number of Labour-controlled local authorities believe that they can defy the law of England and can get away with it. We had the example some years ago of the Clay Cross local authority. The Government, of which I was a Member, and so therefore I must accept some measure of responsibility, when they were returned to office, took certain action in relation to the members of that particular local authority which was profoundly mistaken.

But we have subsequently had the cases of the local authorities in Sandwell and Walsall, and I make no apology for returning to these two cases because they are in my view fundamental to this clause and fundamental to this Bill. In both cases, I have not the slightest doubt, the local authority was advised by its legal advisers that the course of action they were adopting was unlawful. I have no doubt whatever that every member who then decided, notwithstanding that advice, to take that course of action knew precisely what he was doing.

The noble Lord, Lord Wedderburn of Charlton says that one of the most disgraceful features of this whole clause is that apparently in discussion in another place there were references to the district auditor. I very much hope there will be references to the district auditor if local authorities choose quite deliberately to flout the law of this country. That is why we have district auditors. They have an obligation to protect the ratepayers of that local authority from the consequences of the acts of members of those authorities who deliberately decide to break the law.

One of the difficulties we have in this country is that in the last few years it has become fashionable to break laws which people do not like; there is a view that if a law is disliked, what more reasonable course of action should be adopted than deliberately to ignore it? I do not happen to share that view. I believe that laws passed by both Houses of Parliament should be observed by all our fellow citizens, and particularly by public authorities, who have an even clearer responsibility so far as this is concerned.

The noble Lord, Lord Underhill, said that he very much hoped that in the course of this debate there would be some speeches in favour of the individual rights of trade unionists. I do not see any difficulty about that at all. I am surprised that the noble Lord necessarily believes that to be in favour of this particular clause means that one is passionately opposed to the existence of a free trade union movement. Quite the reverse. What we are trying to do is to safeguard the individual citizen from the oppressive behaviour of some employers, both in the public and, conceivably in certain circumstances, the private sector. There is nothing deeply antipathetic to a free trade union movement in this clause. I have been a member of a trade union since the age of 17 and I am still, I am glad to say, in good standing. I see no conceivable conflict between that position and support for the general purposes of this Bill.

The problem about the whole range of issues we have been discussing in this Bill and discussing in this country in the last 18 months to two years is that the Labour Party has become increasingly incapable of ever taking an independent position against pressure from the trade union movement. That is in fact reality, and we all know it to be reality. We have seen this conduct—and the noble Lord, Lord Boyd-Carpenter, reminded us a moment ago—from NUPE shop stewards in recent weeks. I speak as someone who is strongly in favour of a more generous settlement as far as the nurses are concerned, but I see no case for this intolerable abuse of power by individual members of trade unions. The trouble is, I repeat, that the Labour Party is now quite incapable and quite unprepared ever to take an independent position against pressure from the trade union movement. That is why we are having this debate, and I very much hope that when the Committee divides this clause will be carried by a substantial majority.

May I say one sentence? I have not taken part in this debate. I simply want to say that to speak about individual freedom in that wild way is simply not realistic in a country where there is as much inequality as there is now.

I wanted to follow the extremely important statement the noble Lord, Lord Harris of Greenwich, made when he said that it behoves every trade unionist to obey the law of this country. I think it behoves every Briton to obey and support the law of this country. What I find despicable and disdainful is when people like Lord Harris pick just on one sector. That is the failure of this debate both in the other place and here. We take a number of our British citizens, and in one aspect they are trade unionists. I hope Lord Harris with his tiny knowledge of trade unions will listen, because his knowledge will be increased by what I have to say. They are not only trade unionists.

I was in Wales when I started my life in the mines, and I discovered that when a branch of the NUM in Wales commences its business everything is preceded by prayers, as in this House. I do not believe, therefore, that it is right for us to look at these 12 million of our fellow citizens as in a special category. There are bad characters among them. When the noble Lord, Lord Harris, talks about people who break the law of this country, I will tell him, and ask him to deny that what I am saying is true, that there are people who are much more venomous to the prosperity of Great Britain than all the trade unionists, and those are the crooks and the cheats that thieve us of £9 billion a year on the black market. If Lord Harris wants to deny that, I will give him 10 seconds to get up and say Yes or No.

A number of my noble friends are trying to encourage me not to reply to the noble Lord, because I might take marginally more than 10 seconds to do so.

There is an exhibition of courage the Committee will note. Let me go on to say further that what the Government ought to be aware of is this: that people who are coalminers, who are steelworkers, working in shops, who serve behind counters, people who drive lorries, people who make a massive contribution to the wealth of our nation—I do not think anyone would deny that; the point was made very ably earlier in the debate—in addition belong to their voluntary organisations, to their churches and chapels and synagogues; they belong to all the voluntary endeavour and sporting endeavour of this nation. Therefore, to put them in a tight little category because they are trade unionists I find entirely despicable, which is about the correct description of the speech we have heard from Lord Harris. I do not know which way he voted in 1980 on this particular issue; perhaps he will tell us. He used to be a Minister and he would not have been one of Her Majesty's Ministers if it were not for the endeavours and the money of the British trade union movement. When people behave like that we have a special name for them.

I should be most grateful to the noble Lord if I may intervene to say that we are straying rather far from the amendment, which is incidentally not mainly about trade unions but about employers.

What amendment are we on?

I stand corrected. We are straying rather far from the clause. Nevertheless, in spite of my mistake, for which I apologise to the noble Lord and the Committee, we are straying very far from Clause 4, which is not about trade unionism generally but about unfair dismissal by employers.

I accept the noble Earl's apology to me, but I am not prepared to accept his advice as to how to proceed. He should have been listening and he should listen very carefully in the future. What I was going on to say was that the noble Lord, Lord Boyd-Carpenter, in my judgment, made a very strone point in his speech. If it is wrong for me to comment on what Lord Boyd-Carpenter said a moment ago, it must be wrong for him to say what I am now going to comment on. I think that is very sensible, and with half an hour's thought I think it will sink into the noble Minister's mind. What Lord Boyd-Carpenter says often attracts me. He was not making a speech which was pathologically anti-trade union. Indeed, both he and the noble Lord, Lord Campbell, said that at times they would like to see a strong British trade union movement. I find it most encouraging to hear that remark from the Benches opposite.

But what I want to point out and ask your Lordships to consider is that this Bill was born out of a period of despicable trade union activity. It was born out of the winter of discontent in 1979, when the general unofficial activity was described by Mr. Michael Foot as a form of trade unionism that he could never recognise or he could never support, and I said similar words in another place. Out of that has come this Bill which is venomous. Out of that has come a completely irresponsible and heinous piece of legislation. Less than 1 per cent. of the entire British trade union movement was involved in that despicable behaviour in the winter of 1979. Is it the normal procedure of the Parliament of this country to make very certain that if 1 per cent. of a specific part of our community misbehaves, irrespective of how despicably, we punish the other 99 per cent. as well?