asked Her Majesty's Government:

Why taxi drivers seeking to renew their licences now have to fill in an extra form costing £12, on top of the three-year licence fee of £120.

My Lords, taxi-licensing authorities now rely on the newly established Criminal Records Bureau rather than on local police forces to supply criminal record and related information about applicants for taxi-driver licences. Licence applicants must complete a special form requesting this information and the bureau imposes a fee of £12 in order to carry out the necessary checks.

My Lords, I thank the Minister for that Answer. Before asking my supplementary question, perhaps I may congratulate the noble Lord, Lord Grocott, on his new position as Chief Whip. He will have a particularly hard act to follow in the noble Lord, Lord Carter.

Hear, hear!

My Lords, having been a very kind and thoughtful leader to us in Kazakhstan, I am sure that the noble Lord will be a very kind and thoughtful Chief Whip.

Does the Minister realise that there are some peculiarly intrusive questions in the form that taxi drivers have to fill in? Is he aware, and does he think, that it has anything to do with their ability to drive taxis that they should give their bank account number, with the sort code; that they should explain their marital status; and that they should give the maiden name of their mother?

My Lords, I am not sure about the maiden name of their mother but I am sure that the information requested on the form is essential for the proper operation of the Criminal Record Bureau in exercising its responsibilities and duties. There is a long history to the introduction of this request for information; it goes back some 10 or 15 years. It is to ensure that we have proper levels of public safety and that people can be confident that when they get into a taxi cab the person is not only a competent driver but a safe person with whom to share a taxi cab. The public have benefited greatly from the use of information held on national registers and it is most important that high levels of public safety are maintained if the taxi business is successfully to sustain itself.

My Lords, is the Minister aware that London cabs, which are run by the Public Carriage Office, are considered the best in the world? On the whole, people are very pleased that additional checks are made. But these checks on criminal records are even more necessary for minicabs. Can the Minister tell the House when the minicab licensing process will operate as efficiently as we hoped it would when the legislation, which I steered through the House, was introduced?

My Lords, there is no doubt that London hackney carriages are among the best in the world. I am sure that those Members of your Lordships' House who use them will give testament to that. The process for ensuring that minicabs are brought within the CRB regime is on track. The legislation was introduced in 1997–98, and my understanding is that the deadline for implementation of criminal record checks on drivers is 2005. That is the direct responsibility of the Transport for London board and the Mayor. A start has begun and operators now have to go through the CRB process. So the first phase of implementation is now in place. I understand that there have been detailed consultations with the organisations involved in minicabs and taxis across London in regard to the implementation date.

My Lords, further' o the question of the noble Baroness, whose part in the passage of the legislation is well known and much admired, does not my noble friend agree that progress in London is depressingly slow and that the Mayor of London should be asked to get a move on, bearing in mind press reports that achievement of an all-licensing situation by 2006 is way behind schedule? The problem with minicab drivers is enormous. Attending a dinner in the West End last week, for example, I was propositioned six times in Park Lane—sadly, only by minicab drivers. Every one of those drivers was committing an offence. Bearing in mind that the number of reported attacks on passengers in minicabs is going up year by year, it is important that this matter is addressed. Westminster Council, for example, has applied for temporary licences.

My Lords, I am well aware of Westminster Council's concern. It is quite right. Illegal touting is wrong and we should not give it any encouragement. We should continue to press to ensure that the target deadline for bringing minicab drivers within the regime is met. I am sure that all Members of your Lordships' House support that. I hope that the noble Lord is not propositioned too often.

My Lords, is the Minister aware that, in addition to the fact that the licensing of minicabs has not been carried out, the cost of taking a taxi in London in the evening has risen? That results from a deliberate effort on the part of the Mayor to bring more taxi cabs into London. The adverse effect is that people who should be taking taxis at that time—such as young girls out alone—are unable to do so because the cost is prohibitive. Are the Government minded to look at this action by the Mayor of London?

My Lords, as the noble Baroness well knows, that is a question not for us but for the proper authorities; namely, Transport for London and the Mayor. It is obviously of concern that access is perhaps limited by the fare structure. However, the objective of making sure that there are more taxi cabs in central London late at night is a laudable one which we all support. More than that cannot be said at this point.

My Lords, the noble Lord referred to the fact that this has been an ongoing question for 10 to 15 years. Is he aware that that conjures up an awful picture of some official weevil boring away for years to get this particular burden agreed by a higher authority? The noble Lord seems to think that this is a laughing matter. What justification is there for imposing an extra burden on the drivers of black cabs, one of the very few totally efficient links in our transport system?

My Lords, this was no doubt an issue that vexed the noble Lord when he was the Minister for Transport. It is a serious and proper question. My taxi driver this morning expressed the belief that the charge for the checks was right and proper. He felt that the public were reaping the benefit as they could be confident and assured that a proper and full check had been carried out on drivers. As a consequence, the public rightly support, appreciate and have great sympathy for the taxi cab business.

asked Her Majesty's Government:

What they are doing to help alleviate the effects of famine in southern Africa this year.

My Lords, before I answer the Question, perhaps the House will allow me 10 seconds' indulgence, as this is the first opportunity that I have had from this Dispatch Box to pay tribute to my very good and close friend, my noble friend Lord Carter. He has been an outstanding Chief Whip. I owe him an enormous amount—I speak on behalf of the Whips' Office. He has taught me no end of the arts, not just in the past year but previously. Any errors that I shall undoubtedly make will be due to my inadequacy as my noble friend's pupil rather than to his inadequacy as a teacher. If I may be totally unparliamentary: Denis, you are a tough act to follow; you really are!

On the famine in southern Africa, we have been monitoring the deteriorating prospects for food supplies in southern Africa since September 2001. Six countries in the region will need exceptional support for food imports and for distribution to the poorest people up to April next year. We have so far provided£13 million for feeding programmes being delivered by non-governmental organisations, and will do more. A co-ordinating meeting of southern African countries and donors will be held in Johannesburg on 6th and 7th June. It is essential that the meeting comes up with realistic plans for early action.

My Lords, we on these Benches support what the noble Lord the Chief Whip has said about the noble Lord, Lord Carter. If I may speak on behalf of the Opposition Whips' Office, we have always found the noble Lord as helpful as he could be in arriving at sensible decisions on the business of this House. We wish him all the very best for the future.

Hear, hear.

My Lords, on behalf of these Benches, I congratulate the noble Lord. Lord Grocott, on his promotion and I look forward very much to working constructively with him in future.

Turning to the Question, is the Minister aware of the stark warnings of the UN and the World Food Programme that at least 10 million southern Africans are on the brink of starvation? Does he accept that averting a humanitarian disaster requires an international response? I urge the Government to give this, and Mugabe's continuing violence and repression in Zimbabwe, a high priority at the G8 meeting in Canada next month.

My Lords, the situation in southern Africa is indeed extremely serious. The figures that I have on cereals requirements for the six countries—Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe—indicate a shortfall in production this year of some 3,577,000 tonnes. So there is no doubt whatever about the seriousness of the situation. As I have said, work has been done by the department; this is not a new problem. Africa will be very high on the agenda at the G8 summit. So far as concerns Zimbabwe, it is always difficult to be certain about the estimates, but there is no doubt that at least half of the shortfall in food production there is attributable to the activities of the regime.

My Lords, from these Benches we endorse the tributes that have been paid to the noble Lord, Lord Carter, who has always discharged his duties with skill and good humou—which has made him a friend to everyone on the Opposition Benches as well as within his own party. We shall miss him very much from now on; but we welcome the noble Lord, Lord Grocott, to his new post and we look forward to working with him.

As regards the Question on the Order Paper, is the noble Lord satisfied that the arrangements for distribution of foodstuffs in Zimbabwe in particular will take into consideration the stories that we have been reading about the diversion of aid into irregular channels and the use by the Mugabe regime of aid as a weapon in the political struggle? Will he—or the international community—make sure that aid is distributed solely through NGO channels? Has consideration been given to the possible use of the Churches in Zimbabwe in that regard?

My Lords, the reports about the situation in Zimbabwe and the allegations about food distribution being dependent on political factors are disturbing. We are very aware of that. However, I emphasise that the bilateral food and aid from the United Kingdom is distributed through nongovernmental organisations that are well known and well respected throughout this country and are expert at monitoring and evaluating the way in which the food is distributed. I am not in any way minimising the fact that it will continue to be difficult, but that is an important safeguard.

My Lords, does the Minister agree that one reason for the starvation is that the Mugabe regime forbade the planting of maize and wheat? I understand that wheat is now being planted. Is there any guarantee that it will not be burned, as the maize crops were? Is pressure going to be brought to bear on the SADC countries at the meeting in Johannesburg, which the Minister mentioned, to ensure that they bring pressure to bear on Mugabe? Otherwise, if the wheat crop also fails, the situation next year will be even more disastrous. Finally, will the Minister urge those countries to suggest that when Zimbabwe sells its tobacco—which will probably be the last crop that it sells for a long time—the foreign exchange money that the government propose to sequester is devoted to buying food for the country, not to buying tank arrangements designed to bring the population under control?

My Lords, we need to keep central in our minds the need to make sure that the aid gets to the people who need it in Zimbabwe. We must not put them in a double jeopardy of living under a government none of us would wish to live under and being short of food as well. That is at the centre of our objectives. The meeting in Johannesburg this time next week will he principally concerned with dealing with the immediate shortfalls. There is an immediate problem and a long-term one. The immediate one is obviously to make sure that the food gets to those who need it. That is why next week's meeting with all the countries of the region, plus donor countries and the UN, is so important. We must examine the need precisely and make sure that the supplies are there when they are needed. It is anticipated that the situation will be at its worst after September.

asked Her Majesty's Government:

Whether the results of the postal ballot experiment in the recent local government elections will encourage them to promote the use of online voting in all elections.

My Lords, the Electoral Commission's evaluation of the electoral pilot schemes will provide a detailed assessment of the impact of new voting methods, including all-postal ballots and e-voting, to the Lord Chancellor by 2nd August. Early indications are that all-postal ballots can increase turnout and the various electronic means of voting were positively received. We will consider the commission's evaluation carefully before making decisions on the future use of postal voting and e-voting in elections.

My Lords, I thank my noble friend for that reply. Voter turnout in all elections, particularly among the under-35s, is still depressingly low, even though the use of postal voting in the recent local elections was a qualified success. Does the Minister agree that online voting using the telephone, the Internet and interactive television offers an attractive and convenient alternative—I stress that it is an alternative, not a substitute—to the local polling station and that its adoption will encourage many more people to come out and vote?

My Lords, without anticipating the report of the Electoral Commission, the immediate good news is that the electronic voting methods worked—in other words, there were no mechanical or electronic breakdowns. We very much hope that the Electoral Commission will find that they increased voter participation.

My Lords, is it not now clear that, in the London boroughs at least—I declare an interest as a joint president of the Association of London Government—the range of voting experiments offered across the city resulted in lower average turnouts than in 1998? Is the noble Lord also aware that in authorities that offered postal voting only there were very mixed results—some up, some down? In Newham, which pioneered e-voting online, turnout was also down. When are Ministers going to recognise that tinkering with the voting system will not reverse the widespread disillusionment with politics engendered by this Government's use of spin and evasion?

My Lords, that was rather predictable. Of course we do not think that changing the voting system will deal with the very real problems of low voter turnout. These are fundamentally political problems rather than mechanical ones. If that is what the noble Lord is saying, he is entirely right.

However, it would be foolish of us not to see what we can do to make voting easier. That is what the pilots are intended to do. As to the noble Lord's analysis of the London results, let us see what the Electoral Commission says.

My Lords, does the introduction of e-voting make it easier for one elector to cheat by voting in the place of another elector?

My Lords, there have been allegations that widespread postal voting makes it easier to cheat. Those allegations were made in this House last week. I understand that the issue that the noble Lord, Lord Greaves, raised then has been reported to the police, who are investigating. I cannot see how e-voting methods would increase the possibility of personation.

My Lords, following on from the Minster's replies, will the House have an opportunity to discuss the Electoral Commission's report? I noticed him say that "we" will, by which I assume he meant the Government. May we have a firm assurance that the report can be debated in this House and that we can consider the various recommendations from the Electoral Commission?

My Lords, as the noble Baroness knows, the Government do not command the time of this House. There will be many opportunities, in the form of Starred or Unstarred Questions or debates, for these matters to be raised by the Opposition or by anybody else. I personally would welcome an opportunity to debate these matters in the House.

My Lords, does the Minister agree that the introduction of the secret ballot in 1872 was the most important democratic reform in the history of this country? Is he concerned that some of the experimental methods of voting mean that we can no longer be sure that ballot papers are completed in proper conditions of privacy—or even completed by the right person? Does he agree that proper safeguards need to be introduced to prevent the abuses that have been reported from the recent local elections before any consideration is given to rolling these methods out for further use?

My Lords, the possibility of voting other than in a voting booth in a polling station has existed since 1918, when postal voting was introduced. The noble Lord's comments presumably apply to that as well as to the various forms of electronic voting. These are serious matters, which the Electoral Commission will have to consider in producing its report and any recommendations it wishes to make.

My Lords, will my noble friend remind us whether the possibility of moving polling day from a Thursday to a Sunday is one of the options before the Electoral Commission? Do the Government have any view on a change that many of us believe would be a significant way of improving turnout?

My Lords, some of us have been arguing that point all our political lives. I do not know whether it is a matter before the Electoral Commission, but I hope that it is. If it is not, there is no reason why, as it is an independent body, it should not put the matter on the agenda itself.

asked Her Majesty's Government:

What action is being taken and within what timescale to implement the recommendations of HM Chief Inspector of Prisons regarding HM Prison Eastwood Park for women and young girls, for proper mental healthcare and the prevention of suicides and self-harm.

My Lords, all reports from the Chief Inspector of Prisons result in an action plan produced about 30 working days after publication. The plan will respond to all 91 recommendations, including those on mental health, suicide and self-harm. The problems facing Eastwood Park at the time of the inspection are already being dealt with, but longer-term issues such as the extent of mental illness will take some time to overcome.

My Lords, I thank the Minister for that reply. He did not mention that the inreach programme already established by the Government at Eastwood is now being extended to other prisons. I believe that the Government lay stock by that for some reason. Does the Minister agree that that inreach programme has to be accompanied by better training of prison staff to enable them to recognise and deal with psychiatric disorder? Given the long-standing awareness of the problems of psychiatric disorders among prisoners, particularly women prisoners, and especially at Eastwood Park, can he tell us what measures are being taken to rectify what I consider to be the most serious of the criticisms levelled by the chief inspector—namely, the lack of insight and leadership shown both within the prison and beyond it in dealing with the prison's very real problem?

My Lords, the noble Baroness is right on the inreach programme. The Government have a strong commitment to sending NHS multidisciplinary health teams into prisons to try to ensure proper treatment of the very large numbers of prisoners, particularly women prisoners, with mental health problems. I am certain that training prison staff in psychiatric disorders is on the department's training agenda. Given the prevalence of mental health problems, the issue needs to be a continuing high priority. As for the measures spelled out in the chief inspector's report on Eastwood Park, there were, as has been said, concerns about leadership and the speed shown in dealing with some serious problems. Conversely, the chief inspector also praised the commitment of the staff. It was not a universally gloomy picture. However, my honourable friend the Minister has already raised with the Chief Inspector of Prisons and with the governor and the director general the issue of when action will be taken to remedy the defects identified.

My Lords, in welcoming the Minister to this new bed of nails and wishing him the best of fortune in what will be a hard act to follow, may I ask him whether, when he has time to read the report, he will note how it undermines one's confidence in the general statistics with which one is presented? In particular, paragraph 1·10 says that the inspectors,

"were made aware that self reporting of regime monitoring information by staff indicated that exercise was being given, when in actual fact it was not".

Therefore, when we are told how many hours a prisoner spends out of cell, we are being misled.

Secondly, in paragraph 2·47, at the end of a flattering account of the efforts of outside staff delivering education, we read,

"There was not evidence to suggest that the establishment valued or understood the role of education. The lax approach to attendance and punctuality, the cuts in budget, the failure of officers to get student work to the tutors, transferring a woman prisoner elsewhere at critical times in her sentence and course were symptomatic illustrations".

Students were not able to do the work in the time that they were supposed to be out of cell doing it.

My Lords, I thank the noble Lord, Lord Elton, for his generous welcome. I think that both my noble and learned friend Lord Falconer and I recognise that, in the wit and wisdom of my noble friend Lord Rooker, the two of us have a hard act to follow.

I note the data inaccuracies which are a cause for concern. Organisations that feel under crisis pressure do not always treat filling in forms or putting in data as one of their highest priorities. Yet, as the noble Lord points out, such data are crucial if the Government or anyone else are to know what is truly happening in those establishments. I have read the paragraphs, including paragraph 2.47, drawing attention to deficiencies in education and the attitude to education. The Government are concerned about those matters and the Minister has it on the list of issues he is discussing with the director general.

My Lords, I add my congratulations to the noble Lord on his new responsibilities. Will he give urgent consideration to the Lord Chief Justice's proposal for a special board, analogous to the Youth Justice Board, dealing with women in the criminal justice system? Will he look and see whether he can speed up government consideration of these proposals, which may well give great help on a matter of justifiably widespread concern?

My Lords, yes, I am indeed aware of the Lord Chief Justice's comments and views on a criminal justice board for women. The issue is receiving attention in the department. I cannot say offhand how quickly matters are progressing, but I shall look into the situation. There are no current or immediate plans to introduce such a board, but the department has announced the establishment of the correctional services board, which will look at 16 to 20-year-olds, initially including women, and then move on to more specific groups.

My Lords. I endorse the welcome to the world of home affairs and the congratulations extended to the Parliamentary Under-Secretary of State at the Home Office. He started by telling us about this action plan. Is he aware that an earlier inspection report made 112 recommendations, 76 of which have not yet been achieved? Indeed, 55 of the recommendations have not been even partially achieved.

My Lords, yes, I was aware of that; I read it in the preface to the report with some concern. I am in no sense trying to belittle the importance of or to mitigate those failings, but one should note that the women's prison population, including that of Eastwood Park, has accelerated enormously—by 20 per cent—in recent years. The establishment is therefore under considerable volume pressure. Of course that is not an excuse for not implementing previous reports of the chief inspector.

My Lords, with the leave of the House, my noble friend Lady Symons of Vernham Dean will make a Statement on the situation in India and Pakistan at a convenient time after 12.30 p.m.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the amendments for the Report stage be marshalled and considered in the following order:

• Clauses 1 to 18,
• Schedule 1,
• Clauses 19 to 35,
• Schedule 2,
• Clauses 36 to 38,
• Schedule 3,
• Clauses 39 to 48,
• Schedule 4,

• Clauses 49 to 53,
• Schedule 5
• Clauses 54 to 56,
• Schedule 6,
• Clauses 57 to 62,
• Schedule 7,
• Clauses 63 to 66,
• Schedule 8,
• Clauses 67 and 68,
• Schedule 9,
• Clauses 69 to 71,
• Schedule 10,
• Clauses 72 to 115,
• Schedule 11,
• Clauses 116 to 144,
• Schedule 12,
• Clauses 145 to 148,
• Schedule 13,
• Clauses 149 to 151,
• Schedule 14,
• Clauses 152 to 181,
• Schedule 15,
• Clause 182, Schedule 16,
• Clause 183,
• Schedule 17,
• Clauses 184 to 189,
• Schedule 18,
• Clauses 190 to 193,
• Schedule 19,
• Clauses 194 to 200,
• Schedule 20,
• Clauses 201 to 211,
• Schedules 21 and 22.—(Baroness Ashton of Upholland.)

moved Amendment No. 1:

Page 2, leave out lines 12 and 13.

The noble Lord said: My Lords, in moving the amendment, I shall also speak to Amendments Nos. 2 and 3, which are grouped with it, and—if I may, on reflection, for the convenience of the House—to Amendment No. 4. The issues I wish to address are raised in those four amendments.

It seems a very long time since we started the Bill's Committee stage; I think it was in early March. Sadly, I rather lost touch with the Bill as it proceeded through a rather lengthy consideration in Grand Committee, ably assisted by the noble Lords, Lord McCarthy and Lord Wedderburn, and the noble Baroness, Lady Turner, all of whom played a great part in Committee. I dare say that they will be playing an even greater part as the Bill proceeds through Report stage. I note that we have been offered three days for Report, and I am very interested to see whether we can achieve completion of Report in that time.

My concerns centre around Clause 1, which deals with paternity leave, and Clause 2, which deals with statutory paternity pay. I set out my concerns about those two matters in Grand Committee but for the convenience of the House I hope that I may repeat some of the questions that I put and some of the arguments that I raised as the Committee stage was taken off the Floor of the House and therefore the Bill did not receive the due attention of the House that Bills of this kind ought to receive. I spelt out my concerns about a Bill of this size and complexity being taken in Grand Committee. I mention that again now for the sake of the record as I know that others similarly doubted the wisdom of hiving-off a Bill of this size and complexity to a Committee Room upstairs rather than discussing it on the Floor of the House. However, obviously, that is a matter for the usual channels to consider in relation to other Bills in due course.

I turn to the amendments that I have tabled. I tabled Amendments Nos. 1 and 2, along with others, in Grand Committee simply to probe the Government's intentions in introducing paternity leave and statutory paternity pay and to ask why those two provisions were being introduced and where the demand for statutory paternity pay arose—was it coming from employers or from disgruntled employees? Having mentioned disgruntled employees, I suspect—to quote from P G Wodehouse—that a measure of this kind will not exactly make them "gruntled". However, that is no doubt a matter for the Government to argue in due course.

I also said that I thought that such matters were probably best left to informal arrangements between the employer and the employee rather than being a matter for the law. Furthermore, I asked what would be the effect of the measures on employers. As always, we know—the noble Lord, Lord Sainsbury, speaks on the matter with great expertise as his family is a large employer—that large employers can cope with such measures but they pose much greater problems for small employers, particularly the small employer who loses a key worker at what might be a crucial time of the year or a crucial time in his business cycle when demand is particularly high and he cannot afford to lose that worker.

I asked what research the Government had carried out or commissioned into the effectiveness of such measures and whether they thought that there would be massive take-up. I also asked how many fathers would want to take time off and receive greatly reduced earnings at a time when household expenses were likely—as some of us know from experience—to increase massively. I was also concerned—this is what lies behind Amendment No. 2—about the Government's future intentions. The Bill as drafted permits two weeks' paternity leave but allows the Government to increase that from time to time without new primary legislation, merely by order. I speculated whether we would see continuous pressure for further gradual increases—all no doubt made in the name of sex equality—to bring fathers in line with mothers.

Those were a number of the questions that I posed. I was also concerned about the cost of the measures to employers. I appreciate that there is reimbursement, but for most employers there is only 92 per cent rather than 100 per cent reimbursement. In Committee I suggested that it might be better to reimburse employers at 105 per cent to allow for some of the administrative costs of dealing with such a measure and for some of the inconvenience that it caused.

Those were my original concerns behind Amendments Nos. 1 and 2 and some of the other amendments that I tabled in Grand Committee. As I said earlier, it seems a long time since the Committee stage occurred. Since then we have had the Budget and all the extra costs that have been imposed on employment particularly in regard to national insurance contributions. I think that we can all now see clearly that the increased national insurance contributions will constitute both an income tax and a tax on employment. We have heard the resulting cries from employers about the difficulties that are being heaped upon them. Only recently we have realised that the state of our economy is not quite so rosy as the Government would have us believe. Figures show that we have had virtually no growth, or no growth at all, for the past two quarters. The economy is in a serious situation particularly in the light of the greater burden that the Chancellor will impose on it through taxation. The economy is not in as good a condition as it ought to be.

That is what inspired me to table two further amendments to leave out Clauses 1 and 2 in their entirety. I tabled those amendments in a spirit of being helpful to the Government. As they wish to be business friendly and to assist business, they might be minded at this time—when, as I said, businesses are facing extra burdens due to the state of the economy and the Budget—to accept my amendments in that spirit and to remove the potential extra burdens on business contained in those clauses to show that they are a business-friendly government. I offer those amendments to the Government in that friendly spirit. I hope that they will accept them and remove the burdens that I mentioned. I am not saying that that will immediately and suddenly transform the state of the economy, but it would show that the Government are prepared on occasion to prove that their actions are business friendly rather than merely saying that they are business friendly while at the same time adding yet further burdens on employers. I beg to move.

My Lords, before the Minister replies to the noble Lord, Lord Henley, will he say whether an employer with only one male employee is obliged to grant paternity leave?

My Lords, I say to the noble Lord, Lord Monson, that as I understand the position the provision applies to all businesses.

I wish to speak to Amendments Nos. 1, 2, 3 and 4, as did the noble Lord, Lord Henley. Clause 1 of the Bill establishes the new right to paternity leave. This is part of a package of measures that we are introducing, together with improvements to maternity leave provisions and the introduction of paid adoption leave, aimed at improving choice for working pa rents and enhancing competitiveness for business. I thank noble Lords for the generally warm welcome that they have given to these new measures. I know that many noble Lords share our view that the introduction of paternity leave is a key step towards recognising that fathers increasingly want to play more of a role when a new child arrives—a crucial time in their family's life.

The right to paternity leave will give fathers more time to care for and build a relationship with their new child and to support their partner in the important first weeks following the birth. Clause 2, which I shall mention shortly, will help fathers to rake advantage of the new right to leave by offering a measure of earnings replacement.

As noble Lords will know, Clause 1 provides the fundamental framework of how we envisage the new scheme for paternity leave will look. It will be inserted into the Employment Rights Act 1996 and is similar in construction to existing provisions relating to parental leave.

I say to the noble Lord, Lord Henley, in case he is unaware of this, that we have consulted widely on our proposals for the introduction of paternity leave from a formal 12-week consultation on the Green Paper, Work and Parents,through to a further 12-week consultation specifically on the detailed framework of paternity leave. I believe that on this matter the noble Lord, Lord Henley, is out of touch with public opinion. Our proposals for new paternity rights have been supported by employees and employers alike. Indeed, paternity leave was the second most popular option in the Green Paper. Many employers—possibly covering up to half of employed fathers—already offer some paternity leave; and most fathers able to take time off choose to do so. But decent minimum standards also work to support employers who already offer good working conditions to their employees by enabling them to compete on a level playing field. This clause will ensure that new fathers—around 450,000 each year—have a basic right to time off in the important first few weeks following their baby's birth.

I also say to the noble Lord, Lord Henley, that it is a mistake to say that something will have a very harmful impact and to say at the same time, as another argument against it, that very few people will take it up.

Amendments Nos. 1 and 2 impact on parts of the clause that give us the power to make regulations dealing with these issues. The noble Lord tabled the same amendments in Grand Committee and we discussed them in some detail.

As I said then, the amendments would have the effect of taking the period of paternity leave out of regulations, with a view to stating on the face of the Bill that the period would be of exactly two weeks. As things stand, the Bill makes it clear that regulations will provide that leave will be a minimum of two weeks. I am happy to offer further reassurance to the noble Lord that it is our current intention that the maximum period of paternity leave will be two weeks. We know, following extensive and exhaustive consultation, that that period represents a reasonable consensus. However, as I said in Grand Committee, I cannot rule out the possibility, over time, that the Government might want to look again at the issue of the length of leave. It could happen. But, I repeat, it is not our current intention.

I therefore believe that it is right that the architecture of these provisions follows that of maternity leave, where the length of pay is a matter for primary legislation but where the length of leave is a matter for regulations. I therefore ask the noble Lord to withdraw those amendments.

I turn to Amendments Nos. 3 and 4, which seek to delete Clauses 1 and 2, and would therefore stop the introduction by the Government of paternity pay. I shall begin with the question of the cost to business. Those costs will not be great. As the noble Lord said, businesses will be able to recover most of the money that they pay out in statutory paternity pay in the same way that they can currently recover statutory maternity pay. All employers will be entitled to recover at least 92 per cent of what they pay out and small employers are able to recover 100 per cent plus an additional amount—currently 4.5 per cent—to compensate for employers' national insurance contributions that they may have paid in respect of statutory payments. As from April this year, we have doubled the threshold, so that a further 10,000 small employers are able to benefit from that special help.

I consider those costs across British business to be justified, particularly because I believe that helping fathers to balance their work and family life will be good for business, encouraging employee commitment, motivation and productivity.

The only other point that I should like to make on Amendments Nos. 3 and 4 is that we in government totally believe in paternity pay. We believe that it would be totally wrong not to have it. I draw the attention of the House—and, indeed, all voters—to the fact that the new caring Conservative Party apparently does not believe in paternity pay and would presumably get rid of it if it was ever returned to power.

I doubt whether the noble Lord is interested in any advice from me on the amendment. I suggest that he withdraws the amendment before anyone notices.

My Lords, I should make it clear that I was not speaking for my party in this regard. The Minister will have noticed distinct silence from the Opposition Front Bench. I suspect that my Front Bench is somewhat in support of the noble Lord rather than of me. The Minister said that I was out of touch with public opinion. I have been told that on a number of occasions previously. I do not mind being out of touch with public opinion. However, I am not sure whether I am on this occasion. Those members of the public to whom I have mentioned this seem to think that it is a rather silly little measure that is of no purport whatever. There is very little point in bringing it in.

I was seeking to raise the matter before a slightly wider audience than that in the Grand Committee. Obviously, the Thursday morning before we break up for the Whit Recess is not a time when a large number of our colleagues deign to stay in the Chamber to discuss important matters, such as the Employment Bill.

I have raised this issue, which was my intention, and I am grateful for the fact that the noble Lord has yet again repeated the fact that the Government's current intention is that the arrangement will be limited to two weeks. Long may it remain so. I hope that they will think long and hard before giving in to any pressure to increase it. He also repeated the fact that there is some easement in terms of costs to small employers, in that they will be reimbursed at a higher rate than that which applies to others through the 92 per cent rate.

Finally, I give the assurance that I have no intention of pressing the amendment to a Division at this stage; nor am I likely to bring it back at Third Reading. I was merely offering it in the spirit of being helpful and hoping that the Government might wish to agree to Amendments Nos. 3 and 4. Obviously, they have not seen fit to do so but they might want to think again about the matter. Perhaps they might table such amendments at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 5:

Page 25, line 32, leave out "£300" and insert "£3,000"

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 6 and 7. They all cover the same point; namely, the rate of penalty that is applicable in cases of fraudulently or negligently making any incorrect statement or declaration or providing incorrect information or documents in relation to a claim for either statutory paternity pay or statutory adoption pay. There is also a similar penalty in the case of an employer fraudulently or negligently making incorrect payments of statutory paternity pay or statutory adoption pay.

I beg your Lordships' indulgence; my voice is absolutely horrendous. It sounds terrible to me and I cannot imagine what it sounds like to noble Lords opposite.

My Lords, it is like music to my ears.

Like music to your ears, my Lords? Most certainly not!

There is an anomalous discrepancy between the penalties that are payable in the case of such offences relating to statutory adoption pay, where the penalty is up to £3,000, and to paternity pay, where the penalty is up to £300. At the previous stage of the Bill, I proposed that the two penalties should be identical and should be reduced to a uniform £300 penalty in both cases.

Dealing first with the amount of the penalty, the Minister pointed out that in the case of statutory adoption pay, a penalty of only £300 was inadequate in cases where the amount paid over a 26-week period could amount to £2,600 and that small employers' relief would increase it further. In the case of statutory paternity pay, the Minister pointed out that the maximum receivable by a father would be £200 plus S per cent in relation to small employers' relief.

That discrepancy between the two penalties is apparently justified by the Government on the basis that the smaller the amount that the fraud could net, the smaller should be the penalty. That, in my view, is a perverse application of letting the punishment fit the crime. The crime is the fraud, not the amount that it involves. If someone burgles a house or commits a mugging in the street, the crime attracts a prescribed maximum penalty, irrespective of the sum that is stolen. That is the point.

In Committee, the Minister said,

"the £3,000 figure is a maximum".—[Official Report, 13/3/02: col. CWH 37.]

I accept the argument that the Minister put to the Committee—that the figure of £300 that I had previously proposed in the interest of consistency for both types of case—is inadequate; that is certainly so in the case of adoption pay. However, I believe that the need for consistency still remains. There is, I agree, a difference between the total benefit that could be fraudulently or negligently obtained by an employee or underpaid by an employer in the two types of case, but the actual offence is, in principle, essentially the same. Since we are agreed that the smaller sum is inadequate in the one case, the penalty should be increased to one that fits the other; both maximum penalties should be the same.

The question of fixing an adequate penalty, taking into account the size of the fraud and all other relevant circumstances, including any mitigating factors, would continue to be left to the person exercising the judicial function of imposing the fine. It is incongruous to have two widely different and inconsistent maximum penalties for what I have described as essentially the same offence. I beg to move.

My Lords, this is an example of what, in the artillery, we used to call "bracketing". You shoot to the right and shoot to the left and hope that, somewhere in the middle, you hit the target. I am afraid that the right off-shooting is just as bad as the left off-shooting because the target is where the Government have drafted the Bill. The answer is in the word "proportionality". It is right and proper that the civil penalties that can be awarded for offences in relation to the new schemes should be in proportion to the amounts that may be at risk.

The noble Baroness, Lady Miller, anticipated correctly what I was going to say about the matter. Where the offence involves statutory adoption pay, the maximum amount at risk is £2,600—that is, 26 weeks at the maximum rate of pay. A penalty of £3,000 is in proportion to that risk. Where the same offence involves statutory paternity pay, the maximum risk is only £200—that is, two weeks at the maximum rate of pay. Therefore, a penalty of £300 is proportionate to the amount at risk.

The noble Baroness, Lady Miller, raised another issue—that of fraud and a number of false payments. I can reassure her on that point. There may be cases in which an employer manipulates the system and creates a number of false payments of statutory paternity pay. In those circumstances, the maximum penalty could apply for each separate offence. Therefore, if there were 10 false payments, the maximum penalty would rise correspondingly to £3,000. I believe that that preserves the principle of proportionality which, I hope the noble Baroness will agree, is the correct position after the bracketing process.

My Lords, I am not altogether sure about the bracketing process of shooting to the right and shooting to the left and hoping to hit the target in the middle. I believed that the point that I was making was correct. It had nothing to do with where I hit the Minister, but I assure him that I have no intention of hitting anyone in the middle.

I was interested to hear the Minister repeat what I said and to hear the way he expressed it. I anticipated what he was going to say. I did so only because, when we were in Grand Committee, I listened, and read Hansard, very carefully so that I knew exactly what I could say when we reached the Report stage. I still believe that the difference is not quite right. However, I accept totally what the noble Lord said about proportionality in this sense. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 8:

Page 32, line 20, at end insert—

"(c) for a discretion enabling a tribunal, where the tribunal considers it to be just and equitable, to take reasonable steps to ascertain the ability of a party against whom it is proposed to make an order to pay costs to comply with such an order and to take account of any information so ascertained in determining the amount to be paid."

The noble Lord said: My Lords, the amendment seeks to restore a discretion to employment tribunals which they thought they had for some 30 years. It is not parallel to a number of subsequent amendments in the names of my noble friends and myself which come within the proposition in your Lordships' Companion to Standing Orders:

"If there is opposition to an amendment, it should be withdrawn in Grand Committee, to enable the House to decide the matter on report".

This amendment was not moved in Grand Committee because only in March did the Court of Appeal hand down its decision in the case of Kovacs v.Queen Mary and Westfield College. We move the amendment now in order to encourage the Government to give consideration to the serious change in practice which that decision in the Court of Appeal entails.

The amendment concerns the unusual event of awarding costs against a party, or expenses in Scotland—something which is done only rarely in the practice of tribunals when a party has brought or conducted a case vexatiously, unreasonably, frivolously or as a misconceived case. In those circumstances, under the amendment, employment tribunals would, in the award of the amount of costs, be able to take account of the party's poverty or limited resources with regard to ability to pay. That is a rare event. Of the 93,000 tribunal cases decided last year, costs were awarded only in 247. But, in a number of those, the ability to pay was a factor.

Employment tribunals all over Europe do not operate with the same technical rules as ordinary courts. It has been—at any rate, until now—a bipartisan policy in Britain that, since their introduction in the late 1960s, such tribunals should be, as the Donovan commission report suggested, easy of access, informal and expeditious. In particular:

"Costs should be awarded only against a party who has acted frivolously or vexatiously".

For some years, employment tribunals took the view, and were supported by the Employment Appeal Tribunal, that they were entitled in their wide discretion, differently from ordinary courts, when fixing the amount of costs in rare or special cases of awarding costs, to take into account the lack of resources of an applicant, even if he had acted improperly. The tribunals considered that to be a useful instrument of justice in their jurisdiction.

In 1980, Mr Justice Waterhouse supported that view. In 1981, Mr Justice Browne-Wilkinson, as he then was, added in a case where the claimant had been in prison and was without means:

"In our view the inability of the applicant to meet any order for costs is a matter which is properly to be taken into consideration ֵ it is no consequence of our decision that the mere fact that for the time being the applicant is penniless is in every case a sufficient ground for refusing an order for costs. Each case depends upon its own circumstances and lies within the discretion of the Tribunal".

In 1993, new regulations permitted ability to pay to be considered by the tribunal when fixing a deposit in relation to proceeding with a weak case in a pre-hearing review. But the Secretary of State at the time failed expressly to confirm that practice in regard to the award of costs generally. What happened in those regulations may have been an oversight in drawing up the amendments of 1993 when the power to assess deposits in the light of the ability to pay was not extended expressly to the parallel case of costs.

In the Court of Appeal in the Kovacs case in March this year, Lord Justice Chadwick accepted that,

"an employee should have recourse to a tribunal without being deterred by the potential liability for the other party's costs",

as being Parliament's policy since 1974. On the other hand—this is the point in the judgment which gives rise to the amendment—he held, as did the Court of Appeal generally, that:

"Ability to pay is not a factor which an employment tribunal is required or entitled to take into account".

One factor which swayed the court was that the Secretary of State had given that power in regard to deposits but not to costs in 1993.

The requirement to take into account ability to pay is not an issue in this amendment. The issue is to restore the discretion of the tribunals. Nor does the amendment say anything about the decision in the Kovacs case. If one looks carefully at the facts of that case, it is clear that the claimant had acted in a scandalous and outrageous fashion. Any rules on costs would have to allow full costs—that is, an amount of up to £10,000—to be permissible in that case.

But the more general principle of the Court of Appeal—removing the discretion of the tribunals—seems unduly technical in regard to the spirit of tribunal practice and the social function of tribunals, as understood by a number of judges, by many chairs and by the lay members of the tribunals and of the Employment Appeal Tribunal. Their experienced views are rejected by the Court of Appeal in pursuit of ordinary court practice, which is not always applicable to tribunals, as the Donovan report and subsequent inquiries have made clear.

In our submission, the discretion of the tribunals that has been in place for many decades in assessing the award of a deposit and of a cost should be restored in the unusual case of an award of costs. The new wave idea that the practice of tribunals should be compressed into the rules applicable in the ordinary courts should not only be rejected, but also should not be introduced by a side wind, eroding the discretions to do justice which have long been in the hands of the tribunals. If that happens, confidence in the tribunals, certainly on the part of working people, will be seriously affected. That decision is a matter that has already caused widespread comment among those with long experience and practice in the tribunals.

Two years ago the Leggatt report concluded, after careful inquiry, that there should be no move towards the ordinary courts' rules on costs in employment tribunals, and certainly not without much greater consideration and research. Without resorting to quotation, I understood that in Committee in another place and in Grand Committee in this House the Government generally were sympathetic and supported that proposition in the Leggatt report.

There is no question, as some people have said, of "allowing very poor litigants to behave with impunity". That formulation misunderstands and under-rates the wisdom shown by tribunals and the appeal tribunal in exercising that discretion. That is the result of having the invaluable presence of lay members alongside the legal judges which has given rise to that discretion being sensibly exercised.

This is an important and a sensitive moment for tribunals. One experienced chair has called it a "moment of crisis". There is great concern in the world of those who have the difficult job of administering industrial justice in what were once described as "industrial juries" that in the Bill the task may become more arduous and the confidence of working people may be reduced. In our submission, the Government would contribute positively to that situation if they were to take away for favourable consideration the amendment that I now beg to move.

My Lords, as a former member of an employment tribunal and of the Employment Appeal Tribunal I support the amendment. I recall few cases at the employment tribunal—or the Industrial Tribunal as it was—in which there was a discussion as to whether costs should be awarded against an employee who had brought a case that was quite unreasonable. There were few cases, but the matter of means always arose. I am aware that it was discretionary, but in the minds of the members of the tribunal it seemed to be a mandatory requirement. That was supported by a case that I recall in the Employment Appeal Tribunal. One of the grounds of the appeal was that in the court below investigation had not been made by the tribunal into the means of one of the parties, the employee. On those grounds the case was sent back for a re-hearing at the employment tribunal. The issue is important. I hope that the Government recognise that and bring forward an amendment of their own.

My Lords, I am grateful to my noble friend for bringing our attention to the ruling in the Kovacs case which means that a tribunal cannot take into account a party's ability to pay when considering an award of costs. I agree with my noble friend Lord Wedderburn that this is an unhappy position and I am sympathetic to his amendment. We do not believe that it is right that a tribunal should be prevented from taking into account a party's means when awarding costs. On the face of it, the Kovacs judgment is a perfectly logical one.

Costs recovery operates in other courts, and if a party has overstepped the boundary of reasonable behaviour why should it not face costs? But as we have said on many occasions, we regard employment tribunals differently from other courts. We acknowledge that the body of tribunal users, in particular applicants, may be in a vulnerable position and may be severely financially disadvantaged as a result of the very circumstances that have led them to pursue a tribunal case.

That is not to say that we believe that parties should be able to act with impunity simply because they might be hard-up. It may be that a party has behaved so unreasonably or abused the system to such an extent that the tribunal considers it just and equitable to award full or partial costs without consideration of the party's financial circumstances. My noble friend's description of the Kovacs case leads me to believe that that may be the position there.

We would like to take away this amendment. and consider it fully. We agree in principle that a tribunal should have a discretion to take into account a party's ability to pay costs and we will bring forward an amendment at Third Reading specifically enabling the tribunal regulations to provide for that.

My Lords, I thank the Minister for his remarks and my noble friend for his practical support. We are happy to have reached the stage of one run for no wicket. We hope that that precedent will continue for the rest of the innings. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 9:

Page 32, line 20, at end insert—

"() The regulations as to cost and expenses made hereunder shall include provision so as to ensure that—

(a) at the conclusion of a case before an employment tribunal—

(i) an applicant (if the tribunal has granted no part of that person's application) shall he required to demonstrate to the satisfaction of the tribunal that he has received advice from a person whom the tribunal considers competent to give such advice to the effect that the applicant's case has a reasonable prospect of success; and

(ii) a respondent (if the tribunal has refused no part of the applicant's application) shall be required to demonstrate to the satisfaction of the tribunal that he has received advice from a person whom the tribunal considers to be competent to give such advice to the effect that no part of the application has any reasonable prospect of success;

(b) if a tribunal is not satisfied that the conditions set out in paragraph (a)(i) and (ii), as the case may be, have been complied with, it shall award costs against the applicant or respondent respectively."

The noble Baroness said: My Lords, with the leave of the House I shall speak to Amendments Nos. 9 to 13 and 18 to 20. They all relate to the subject of costs and expenses before employment tribunals and appeal tribunals that are dealt with in Clauses 22 and 23. They all have a common theme and a common safeguard for litigants before a tribunal. I shall deal with them separately. The common theme is to discourage frivolous and vexatious litigation before a tribunal and to discourage nuisance claims and blackmailing claims brought in the hope of a payment, taking into account the nuisance value, and claims brought maliciously with the object of embarrassing or inconveniencing the employer.

In case it should be thought that that theme is a one-sided piece of employee bashing—I hope I said enough in Committee to show that I would never dream of doing that as I try to be fair—I point out that the theme is also intended to inhibit bullying, or delaying tactics before a tribunal by a powerful and financially well-heeled employer, designed to discourage or to wear down an employee with an arguable claim.

From an employer's point of view, the problem is that often the case of defending an unjustified claim can be out of all proportion to the amount that the tribunal may reasonably be likely to award. Costs also involve the expenditure of management time and the clerical cost of investigating the claim. There is also the risk that an employer has to take into account of the swingeing punitive damages that tribunals can, and sometimes do, award, again, sometimes out of all proportion to the loss or detriment suffered by the employee.

In summary, the common theme is to discourage frivolous or malicious or purely speculative claims and the raising of untenable defences by putting the litigant at the risk of having to pay at least some of the adverse costs to which their conduct has given rise. That is the usual consequence to an unsuccessful litigant in ordinary civil litigation. However, conversely, the safeguard that I mentioned also has to be taken into account. The safeguard is to ensure that the financially weaker party, who will usually be the employee, is not deterred from launching in good faith a genuine claim because of the fear of having to pay costs. Usually the employee will be the financially weaker party, but it could be the employer when the employee is backed by his or her union.

I now invite your Lordships to consider the amendments in the light of that theme and that safeguard. Amendment No. 9 is designed to allow a tribunal to award costs against an unsuccessful claimant who has not been awarded any part of his application, or against an unsuccessful respondent who has not succeeded in any part of his defence. A partially successful claimant or respondent will not suffer this detriment because partial success will be proof that the claim or defence had some reasonable basis. Similarly, I have inserted a further safeguard—if the totally unsuccessful litigant can demonstrate to the tribunal that he was acting on the advice of someone who was competent to give such advice. That does not necessarily mean from a qualified lawyer, a legal executive or a citizens advice bureau or some similar person. It could include, for example, a trade union representative experienced in dealing with such matters.

The description in the proposed clause of,

"a person whom the tribunal considers competent to give such advice"

is deliberately unspecific so as not to be over-prescriptive and to enable the tribunal to adopt a wholly flexible approach that I would think that the Government and the unions would welcome.

At this point I should like to refer to the intervention of the noble Baroness, Lady Turner of Camden, when this same amendment came before the Grand Committee. She said.

"How on earth the tribunal is expected to demonstrate competence, I have no idea".—[Official Report, 14/3/02; col. CWH 70.]

I have the greatest personal respect for the noble Baroness, but I believe that she may have misunderstood the point. It is not for the tribunal to demonstrate the competence of the adviser; it is for the litigant whose claim or defence, as the case may be, has wholly failed.

I stress "wholly failed" not partially, because a partial success precludes the clause from coming into effect. The noble Baroness said that she had never sat on tribunals although she said that she had appeared before them as a trade union representative. If she had, she might appreciate that those appointed to sit on all sorts of tribunals as well, for example, as magistrates, are trained to adjudicate on all the facts before them. I agree with the noble Baroness when she said,

"It is not an indication of competence or otherwise if you have one or two cases that you have lost". [Official Report, 14/3/02: col. CWH 70.]

I should like to reassure the noble Baroness that the adviser's track record, even if were known, would not be one of the criteria that a tribunal would apply in deciding the competence of the adviser. There is a saying among lawyers that "You can't win them all". I am sure that the many members of the legal professions who are also Members of your Lordships' House would say "Amen" to that.

Amendments Nos. 10 and 20 propose a modification of the new Clause I A to be introduced into the Employment Tribunals Act 1996. This new clause allows the tribunal to penalise the representative of the party by disallowing part of his costs and expenses or to require him to pay all or part of the costs of the other party or of the tribunal itself. I believe that we can all agree that there could be circumstances where such a sanction was both necessary and appropriate. However, the use of that sanction should be sparing and limited to a serious malpractice by the representatives.

There already exists a system allowing for this type of penalty. It is found in rule 48.7 of the Civil Procedure Rules 1998. It is used very sparingly by judges and only in the most flagrant cases of abuse of the procedures of the court, or of time wasting or of sheer incompetence. It is not used by judges to mark their disapproval of one of the litigants or his lawyer or even of the nature of the case or other personal factors such as that.

These amendments accept the power of the tribunal to inflict a penalty on a party's representative in appropriate cases, but defines such an appropriate case as being one in which in similar cases the civil courts would have inflicted a penalty in the form of a wasted costs order. In other words, the amendments secure uniformity in the administration of justice as between the civil courts and the tribunals, which in cases under this Act will be performing similar judicial functions.

Amendments Nos. 11, 12 and 13 are identical. The new Clause 1A, as I have just pointed out, enables the tribunal to impose financial sanctions on the representatives of the party coming before it. Apart from the qualification of that power that I am proposing in the previous amendment, I believe that it is necessary to make it clear that it should make no difference whether the representative is making any charge for his services. It would be incongruous if a representative could escape well-deserved sanctions for some sort of misconduct merely because he was not being paid for his services by his "client".

In fact, the clause does not say or imply that he cannot he sanctioned in that way even if he is not being paid. The purpose of this amendment is to make it clear beyond any possibility of argument whatever, both to representatives and to tribunals, that there is no escape from sanctions due to that particular situation.

Lastly, I turn to Amendment No. 18. It provides that where an employment tribunal has power to make an order for payment of costs and expenses by one of the parties, but decides not to do so, it should simply include in its written decision why it was declining to make that order.

I believe that the reason for the amendment is fairly self-explanatory. If the tribunal is going to deprive a successful party of what could amount to a substantial sum of money, then it should explain itself both so that the successful party should know the reason why and so that there can be no question of some arbitrary and capricious reason.

In the ordinary civil courts, up to and including your Lordships' House acting in its judicial capacity, judgments are always accompanied by detailed reasons. I do not believe that there is a reason why the tribunal should escape from that responsibility in this kind of matter. Giving reasons for judgment is one of the ways in which justice is seen to be done.

Amendment No. 19 deals, like the others, with the question of the award of costs, in this case to the successful party to an appeal. It is different in tenor to my Amendment No. 9 where I propose that a wholly unsuccessful party must pay the other party's coats unless it could be demonstrated that he or she had received competent advice that his or her case was a viable one and should be brought. In other words, as I said when I spoke to the earlier amendment, the loser had to convince the tribunal that the claim or defence was not a time waster.

When we come to an appeal, different considerations apply. One of the parties has already lost in the employment tribunal and that should give them reason to pause to consider whether possibly they may have been wrong. The other party, the respondent to the appeal, has already won once. That should encourage him to believe that he was probably right. Therefore, there can be no grounds for ruling that the winner, who is dragged willy-nilly before the appeal tribunal, is simply acting contumaciously even if in the event he loses the appeal. On the other hand, justice demands that both sides, including the former loser, should be treated equally by the appeal tribunal as regards cost.

The wording of the Bill on this matter is extremely weak. It simply provides that the appeal tribunal's rules may make provision for the payment of costs and expenses. On the other hand, it may not. The contents of the rules are extremely vague. They could provide an unequal liability for costs as between an unsuccessful employer appellant and an unsuccessful employee appellant. I am certainly not going to take up your Lordships' time by giving other examples, but what I am proposing in this amendment is that the loser of the appeal should automatically be liable for the costs and expenses except—this exception is important—where the tribunal considers it would be unjust for that to occur.

I believe that that is a very wide exception and a very wide discretion for the appeal tribunal. For example, it could exercise it for a variety of reasons because, after all, somebody does have to lose in these circumstances. The tribunal could decide because the unsuccessful party had a very arguable case—I stress that and that is fine. It may also be because a novel point of law and procedure was involved, or because the winning party's case, although successful, really did not have any moral merit, or because the winning party conducted the case in some unsatisfactory way or other, including adding to the cost or time that the case took.

Once again, I acknowledge that this amendment may act as a deterrent to one or other party to appeal or to oppose an appeal. But again I remind your Lordships that costs almost inevitably follow the event in litigation before civil courts. Cases brought to employment or appeals tribunals are also just a form of civil litigation. There is no justification for different principles to apply, merely because to assist parties the procedure is less formal and, it is to be hoped, much speedier.

In the United States of America, an unsuccessful party does not pay costs. That is one of the main reasons there is so much purely speculative litigation there. The number of cases before our tribunals is increasing rapidly. It cannot be because there is more injustice to employees around. It is because, with the vast amounts that tribunals are now able to award—and sometimes do award in what many think are over-the-top rulings—there is the temptation to launch speculative proceedings in the hope of the equivalent perhaps of a small lottery win.

I certainly do not believe that we should deprive anyone of the right to have his day in court or publicly to air a grievance, or even to expose an injustice. I believe that a person should be able to do that. There is a maxim used in bookmaking circles that you cannot make a bet that you cannot lose. Especially before an appellate court, both parties, not just the appellant, should consider the implications of pursuing or defending an appeal.

Finally, in support of this entire group of amendments—I know that I have taken some time, but I have grouped them together in one lump—I quote from the remarks of the Minister for Employment and the Regions to the other place in relation to the procedures of employment tribunals. I think that this is quite important as regards the reason why I thought it necessary to table these amendments today. He said that,

"I know that that is how the civil courts operate, and that is the proper benchmark for us to use".—[Official Report, Commons Standing Committee F; 6/12/01; col. 26.]

Five days later he told the same committee:

"We wished to mirror the civil courts, it would be strange to introduce a system for employment tribunals that was different from that in the civil courts".—[Official Report, Standing Committee F; 11/12/01; col. 77.]

So, my purpose in introducing this group of amendments is to achieve exactly those objectives that the Minister in the other place mentioned. I trust that on reflection the Minister will agree that my amendments are constructive improvements in the Bill. I beg to move.

My Lords, I shall deal with each amendment in turn. I am grateful to the noble Baroness, Lady Miller, for grouping them together, even though it means that I shall make a rather longer speech than I would have wanted. Amendment No. 9 provides for cost recovery where competent advice has not been sought by an applicant or a respondent. The noble Baroness, Lady Miller, made clear that that is in circumstances when no part of the application has been found meritorious. I do not believe that the amendment is right in principle and neither do I think that it can be made to work. It appears to move the employment tribunals nearer to a system of costs recovery. Indeed, the noble Baroness explicitly said that that was her intention. It would mean that in every case a losing applicant or respondent may face costs if he could not convince a tribunal that he has been advised by a competent adviser that the case had a reasonable prospect of success.

When the noble Baroness tabled the amendment in committee we said that it is a fundamental principle in employment tribunals that parties are free to choose how to conduct their cases, who to seek advice from, whether they use a representative or choose to conduct their case in person. That principle should be preserved. It recognises that applicants in particular may not be able to afford the services of a solicitor or a consultant. It takes account of the fact that some complaints to employment tribunals may be straightforward and parties may not require advice before making an application or lodging a defence.

My noble friend Lord Wedderburn made the point that the amendment would lean more heavily on the applicant. I agree. An applicant has more limited resources on the whole and may find it more difficult to seek out sources of competent advice. If we insist that every potential application to a tribunal must first be vetted by a competent adviser—and that would be the implication if we went for costs recovery on this basis—we are in danger of putting a strain on those services which provide advice for applicants and forcing more applicants into the hands of legal advisers whom they can ill afford.

Again, it may not be possible in every case for a party to obtain advice. Applicants rely heavily on free sources of advice. Are they to be penalised if they cannot get an appointment before the time limit has expired for lodging a complaint? I do not think that the idea would find favour with employers either. Small businesses may not have access to voluntary advice sources. They may not be members of a business organisation. Are we to expect them to pay out for legal advice without any choice, even if the complaint they are dealing with is not complex?

The noble Baroness, Lady Miller, has made clear her wide interpretation of -competent advice". She said that it could include not just a legal adviser but a lay adviser from a recognised source such as a CAB or a trade union representative. Despite her comment on what my noble friend Lady Turner said in Committee, it still must be the tribunal that decides whether the adviser is competent because it is the tribunal which has to make the decision in terms of costs. How will the tribunal determine which advisory bodies and their individual employees or volunteers are competent or not?

Finally, I do not think that the provision is needed. When I spoke against the amendment in Committee, I said that tribunals already have powers to deal with hopeless cases and the powers are strengthened by the Bill. They have a duty to consider whether a costs award should be made and whether the grounds for costs have been made out. In doing so, the tribunal may consider whether a party sought advice or ignored advice not to proceed with a case. But there is no need to add further deterrents or penalties to hopeless cases.

I can deal with Amendments Nos. 10 and 20 together because Amendment No. 20 refers to the appointment of appeal tribunals. They are about the role of tribunals as between tribunals and the civil courts. The noble Baroness, Lady Miller, quoted the Minister in another place. It is certainly true that we have looked at civil courts when drawing up the provisions for costs awards against representatives. It is also true that tribunals have become more complex with the growth in employment law, case law and European derived rights. But they still have their essential features. I am not inclined to import the language and procedures of the civil courts into employment tribunals.

It is not sensible to bind the tribunals to legislation which has been drawn up for another court. Changes could be made in future to the Civil Procedure Rules which would then automatically apply to tribunals without any consideration of whether those changes are appropriate for tribunals.

The tribunal regulations currently state that a party may be liable for costs where it or its representative has conducted proceedings in a way which is vexatious, abusive, disruptive or otherwise unreasonable. Although I would not be happy to introduce "contumacious"—that wonderful word of the noble Baroness--into the regulations, I just want to express my appreciation of the word. The new provision for wasted costs will enable the tribunal to awards costs directly against the representative when he or she has conducted proceedings in such a way. Costs awards would he limited to conduct. A representative would not attract a costs award because he or she had acted as a representative in a case which had no reasonable prospect of success. That is because we do not want to take away the right of parties to representation, even when the case may be without merit.

Most definitions of unacceptable behaviour used in employment tribunals have been there from the beginning. They are working perfectly well. Why have a different set of behaviours for wasted costs awards directly against representatives, which are used in the civil courts, alongside the existing criteria for costs awards against parties on their own account?

Tribunals have their own body of case law on which to rely, and I believe that chairmen are just as capable of exercising their powers wisely and reaching sensible decisions on costs as judges in the civil courts. Therefore, I am not clear what the amendment adds or why it is desirable to require tribunals to ape the civil courts.

I am also concerned that incorporating the court provisions into employment tribunals could limit the way that the wasted costs provisions would work in employment tribunals, because rule 48·7, which the noble Baroness, Lady Miller, mentioned, refers to legal representatives. Employment consultants are not legal representatives but we would want them to be captured by the wasted costs provisions. The same arguments apply to employment appeal tribunals.

Amendments Nos. 11 to 13 would establish that all representatives could face costs awards, regardless of whether or not the representative charges for his services.

We do not intend the provisions on wasted costs to apply to representatives who are not acting in pursuit of profit, such as trade union representatives or those working for voluntary or not-for-profit organisations. That is the basis on which we consulted and on which we are committed to implementing the provisions on wasted costs. The amendments would prevent the provisions on wasted costs from distinguishing between, for example, a large multi-national legal firm and a small voluntary advice centre or a local trade union official. We should not adopt such a blanket approach to all of those.

Of course, anyone can behave badly, but we must consider the nature of employment tribunals, their users and their representatives and adopt an approach that reflects this. The resources of organisations that gain financially from the provision of their services and those that do not are simply not comparable. Applying wasted costs to the not-for-profit sector could discourage voluntary advisers from offering their services or mean that an order against an individual impacted on an organisation's ability to provide its services. For the sake of accessibility, which is an essential feature of the employment tribunal system, we ought to make the distinction provided in the Bill and we oppose the amendments, which would remove it.

Amendment No. 18 requires that where a tribunal does not make an award of costs it should always give in writing its reasons why an award was not made. I must start by saying that, as awards of costs are made in fewer than 1 per cent of cases, we would he giving reasons in writing for 99 per cent of cases before tribunals. The regulations cover the matter. They set out the circumstances in which costs can be awarded. Either party can request a costs order or the tribunal can consider costs of its own volition. Where a party has requested costs, the tribunal is required to consider them.

If, in the opinion of a tribunal, a party or its representative has acted unreasonably or, in the case of the defence, had no reasonable prospect of success, the tribunal has a duty to consider making an award of costs. We introduced that change last year. It means that even where one of the parties has not requested costs, the tribunal will have to consider whether costs should be awarded if a party or its representative has acted in a particular way. In practice, costs will be considered in appropriate cases at the hearing or at a separate costs hearing where parties and their representatives are present. The tribunal is obliged to record its decisions which are then sent to the parties, so that is not a problem and the amendment is unnecessary.

I turn to the final amendment, Amendment No. 19, which concerns the Employment Appeal Tribunal. It was tabled in Committee and I am sorry to see it appear again. I had hoped that I had been clear enough—I do not know how I can be clearer. Despite what the noble Baroness, Lady Miller, said, we do not believe that a "general costs follow the event" rule is right for the employment tribunals or for the Employment Appeal Tribunal. I acknowledge that the amendment leaves room for discretion, but essentially it proposes costs recovery being the norm. In reality, that would mean that all parties could face costs and that would of course fall particularly hard on those of limited means.

I do not accept the argument that because a party has lost in the tribunal—after all, someone must lose because it is a zero sum game—he should face costs if he chooses to appeal. It would be a serious restriction of people's right to appeal procedures if we introduced general cost recovery. It does not operate for tribunals or appeal tribunals, except for misconduct or hopeless cases. That is because tribunal users are by nature likely to be more vulnerable because they have been dismissed, made redundant or suffered an unlawful deduction from their wages, or, on the other side, because they are small businesses which would find the costs of a case hard to meet on top of any award. Perhaps I should have made that point in our debate last night about small businesses.

In the vast majority of cases, appeals are launched in the genuine belief that there has been an injustice. I agree that there is no place for claims that are unfounded or vexatious, but there are powers to deal with that. An appeal to the Employment Appeal Tribunal must disclose an arguable point of law. If it does not, the tribunal has discretion to hold a preliminary hearing to determine whether there is a reasonably arguable point of law, so a vetting process exists before the appeal tribunal. Appeals are not common—last year, there were fewer than 2,000 out of 27,000 tribunal sittings. On the whole, parties who lose pause to think before launching an appeal.

I am sorry to be so negative about all the amendments in the group.

My Lords, I am sad that the Minister was disappointed that I tabled an amendment that I tabled in Committee. Like me, he should get used to it. I get used to him always turning down my amendments—although I am disappointed, I am used to it.

My Lords, I did not say that. I said that I was sad that the noble Baroness was not convinced by my excellent arguments.

My Lords, that is a different matter. I am not surprised that the Minister does not accept any of my amendments this time, although I was disappointed when he talked about the fact that I used the word "contumacious" only because I thought that at long last he was going to accept something that I said and include the word somewhere. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

My Lords, with the leave of the House, I shall now make a Statement on the dispute between India and Pakistan.

Together with the rest of the international community, we remain deeply concerned about Pakistani and Indian military mobilisation. The prospect of military conflict between two nuclear states is very disturbing. The risk of war between India and Pakistan is very real, but it is not inevitable. If they choose to, the parties can avoid conflict.

This is a bilateral dispute, but one in which the whole international community has an interest. We are friends with both sides. We are working with both sides to find ways of lowering the tension. We still hope that we can achieve this, but responsibility for resolving the dispute lies squarely with India and Pakistan.

We do not believe that either side wants war. But we know from history that parties can sometimes end up in conflict no matter how much they do not wish or seek it. So we are urging both sides to realise that whatever their legitimate grievances, war cannot make the situation better. War is not the answer. Once wars start, they tend not to follow any plan. They are not easily controlled.

We are playing our part, therefore, in a concerted international effort to lower the tension between the two countries. My right honourable friend the Prime Minister has spoken personally in the past few days to President Musharraf and Prime Minister Vajpayee, as have President Bush and President Putin. We are in constant contact at the highest level with our United States, European Union, G8 and other partners. Several leaders have visited or are planning to visit the region, including EU Commissioner Patten last week, US Deputy Secretary of State Armitage next week, and, we hope, soon the EU High Representative Solana.

The international community is united in urging an end to Pakistani support for terrorism, on the need for de-escalation on both sides and for a resumption of dialogue. As part of that international effort, the Foreign Secretary returned this morning from two days of talks in Islamabad and New Delhi. During his trip, the Foreign Secretary made plain to both sides the huge human cost of any war and the steps that the international community looks to them to take to defuse the current crisis and to resolve their differences by peaceful means. We will continue to do everything we can to help the parties prevent conflict.

On Tuesday, the Foreign Secretary had a constructive and forthright meeting with President Musharraf, which lasted for 75 minutes. He explained the importance of the entire international community, including Pakistan, clamping down on terrorism, including cross-border terrorism. As a result of the Foreign Secretary's visit, the international community and Pakistan understand each other better.

The United Kingdom and the rest of the international community look to President Musharraf to ensure that the undertakings that he has given, particularly in his speech of 12th January, are fully followed through. It is now actions, not words, that will resolve the dispute. The Foreign Secretary delivered a frank message: President Musharraf must stop support for terrorism in Kashmir, including bringing an end to cross-border infiltration and taking action to dismantle training camps in Pakistani-controlled territory.

Yesterday, the Foreign Secretary met Indian Home Affairs Minister Advani, Defence Minister Fernandes, Foreign Minister Singh and Prime Minister Vajpayee. The discussions were thorough. The Foreign Secretary stressed that war was not inevitable and that persistent diplomacy had to continue. He reiterated what he said to President Musharraf in Islamabad, that the United Kingdom Government stand four-square with civilised governments around the world, including the Government of India, in our approach to terrorism. He made clear that the dispute had to be resolved not by military action but by dialogue. India had to play its part in helping to step back from the current heightened tension.

Throughout all of this, we are, of course, monitoring risk to British nationals in the region very closely. Our ultimate responsibility is to ensure their safety and security. We also have to consider the safety of our diplomats and their families. We are keeping our travel advice under close review. If the situation requires it, we have in place contingency arrangements. As your Lordships are aware, we have already withdrawn nonessential staff from Pakistan in response to the separate threat to British interests there from terrorists. In all this, we are of course mindful of the difficult balance we have to strike between providing the levels of service expected of us and our duty of care to our staff. I will, of course, ensure that your Lordships are kept updated as the situation develops.

We will not give up the search for peace. The situation is grave. The cost of war could be immense, but peace can succeed, if the parties wish it. My Lords, that concludes the Statement.

My Lords, I am grateful to the Minister for making the Statement today. It is important that we should know the Government's views on the situation before your Lordships' House goes into recess.

We fully share the concerns of Ministers about what is happening, and we recognise that the danger of conflict is acute and was made more acute by incidents this morning, including terrorist infiltration and the murder of Indian policemen. We also see it as, in a broader sense, a tragedy that two great nations, both of which are burdened with enormous poverty, should put their energies into enmity with each other, rather than into helping each other and raising living standards.

There is, of course, nothing new about many aspects of the situation; there have been three wars between the two states since independence. However, there are two new, grim features that we must recognise. First, following the horrific events of 11th September, Pakistan is at the heart of the global terrorist labyrinth. Indeed, it could be seen as the birthplace of the dreadful Taliban, with all their destructive doctrines and activities. Secondly, both countries have nuclear weapons. That means that the dispute over Kashmir is not a distant dispute that we can put at the back of our mind but a central issue of global stability that directly affects the security of our own country.

What can we do? Given Britain's original actions and responsibilities—I am speaking about the independence period over 50 years ago —we are not really in a position to sermonise. I am sure that all of us, including the Foreign Secretary and the Minister here, recognise that it is essential to maintain a balance in any assistance that we bring to the situation. It is a delicate matter. I know that the Foreign Secretary has been trying hard, but, even so, the New Delhi papers this morning are running headlines to the effect that Britain backs India. That is not a helpful headline and demonstrates how difficult it is to maintain a balance.

There are two positive points. The first is that we have excellent and friendly relations with both nations; we ought to be able to build on those. Secondly, although we cannot—as the Foreign Secretary said— act as go-between in any sense, we have considerable experience of living and surviving in a situation of nuclear tension, as we did in the Cold War. Throughout that period, we sought to build up an infrastructure of dialogue, safety valves and other means of communication that underpinned the structure of mutual deterrence, which seemed to work at that time.

My questions to the Minister follow from what I have just said. India and Pakistan have nuclear weapons, and that fact cannot be undone. What steps are we taking to help them to develop arrangements for contact and dialogue and an infrastructure to see that they do not find themselves pushed—even by accident—from tactical nuclear weapons into the ghastly destruction of a nuclear war? What steps are we taking to embrace India and Pakistan realistically into the non-proliferation system? We must cease pretending that they are not involved. That will lead us nowhere. What steps are we taking to help lay the foundations of some kind of peace process architecture, something of which we have some experience nearer home?

Those are my questions to the Minister, but I reiterate the fact that we fully share her concerns and those of other Ministers. Like her, we want to see a peace system triumph over the horrific threats and dangers about which we have heard this week.

My Lords, on these Benches, we welcome the Statement and the effort that the Foreign Secretary has put in to reduce the tension in an extremely dangerous and fraught situation. We also welcome the extent to which the Foreign Secretary has stressed that he is in Pakistan and India on behalf of the international community, the European Union, the G8 and the other major countries properly concerned with the dispute. We ought to mention the constructive contribution that the Russian Government are making to attempts to alleviate the tension between the two countries.

We recognise how dangerous the situation is. It has implications for this country, too. We have substantial communities of Kashmiri origin, as well as substantial Pakistani and Indian—Hindu and Muslim—communities. On the whole, those communities get on well, but we must be conscious that, in the event of fighting breaking out in Kashmir, there might be tensions in this country. What attention have the Government given to that question?

There is also the question of the British nationals. There are British nationals in the region whose grandparents come from the region, and that makes it particularly difficult to look after the interests of British nationals there. Do the Government have any further information about the threat to British nationals, particularly those in Pakistan?

As the noble Lord, Lord Howell of Guildford, said, we are conscious that the situation is caught up with the global war on terrorism; that the Pakistani intelligence services learnt through the war against the Soviet-sponsored regime in Afghanistan how to train militants from within and outside the country; and that those militants have moved on to cross-border terrorism in Kashmir. I therefore found it odd last week when the United States produced its list of states sponsoring terrorism that the Pakistani intelligence services were not on the list.

I again want to ask the Minister about arms sales and supplies to the two participants. In the event of war, the question of Britain supplying spares for the various weapons we have sold to those countries—in particular to India—will arise. Have the Government anything to add on that matter? We in this country are most conscious that the Kashmir dispute prevents good relations between two countries, which have much shared history and culture. It stokes the fires of Hindu nationalism in India, when we all value India's tradition as a secular democracy with a substantial Muslim minority. It increases the influence of fundamentalist Muslims in Pakistan and makes it more difficult for Pakistan to move back towards democratic rule.

Finally, what is the international community planning to do to push for a longer-term resolution of the Kashmir dispute either on the basis of autonomy and shared sovereignty or other forms of negotiation between those two states?

My Lords, I thank the noble Lords, Lord Howell of Guildford and Lord Wallace of Saltaire, for their comments about the Statement. They both understand that this is an unfolding situation and that of necessity, as each day dawns, the situation can change. Indeed, as the noble Lord, Lord Howell, indicted, there was a further deplorable incident this morning. We must therefore continue to monitor the situation closely in terms of several issues raised by both noble Lords.

I agree with the noble Lord, Lord Howell, that both nations have a grave responsibility in avoiding the possibility of a terrible conflict in the region. He was right to draw our attention to the new features of international terrorism, which is why my right honourable friend made a forceful statement to President Musharraf when he was in Islamabad. Our concerns are heightened all the more because of the nuclear capability of both countries.

The noble Lord, Lord Howell, asked about the role of the United Kingdom in these events. The role is the one that we have tried to fulfil; that is, a friend of both countries. We have the ability and urgent and passionate desire to talk to both countries and to do whatever we can to try to create a line of communication—to take messages—and to be of value in stepping back from the possibility of conflict.

I recognise that newspapers in New Delhi, as well as in other parts of the world, carry headlines which may not be accurate or helpful. In answer to those who comment that the New Delhi newspapers report that a particular country is backed by the United Kingdom, I would say that the United Kingdom backs peace. I hope that that message has been given most forcefully in New Delhi and Islamabad. The United Kingdom will never back terrorism. Indeed, we made a point of applauding the help given by President Musharraf to the coalition following the dreadful events of September 11th.

The noble Lord asked what further steps we can take to help India and Pakistan. Unfortunately, they have little means of direct communication. They do not have the means to conduct the kind of conversations which we believe to be necessary in trying to resolve the issue. Therefore, together with others in the international community, we are trying to assist such a dialogue. It is only through dialogue that the issue can be properly resolved.

As I indicated in the Statement, my right honourable friends the Prime Minister and the Foreign Secretary are in almost daily communication with leaders all around the world; with the EU, the United States and the G8. I agree with the noble Lord, Lord Wallace of Saltaire, about the important role of our friends in Russia in trying to gain a clearer understanding.

We have made it clear that we in the United Kingdom will do everything we can to try to further that end, but it must be furthered by consent in both countries. The noble Lord was kind and generous in making it clear that he did not believe that we had been lecturing or had tried to dictate what should happen next. That is the last thing we need to do in the circumstances. We have put ourselves forward—as have others detailed in the Statement, including the Americans, our friends in the EU and soon, we hope, Mr Solana—as those who will continue to try to persuade both countries to lower the temperature in this difficult position.

The noble Lord, Lord Wallace of Saltaire, made the extraordinarily important point about our contacts within the south-east Asian community in this country. The recent rise in tension between India and Pakistan is of particular concern to those communities in the United Kingdom. We are committed to keeping in close touch with the communities concerned. Yesterday, the Home Secretary met leaders from each of the Hindu, Sikh and Muslim communities and the Foreign Secretary will be doing so today in a meeting with community leaders when he will apprise them of his impressions from his recent visits. We therefore hope that with such outreach into those communities we will clearly demonstrate not only the importance we attach to keeping them in touch with what is happening but also the importance we attach to the continuing exchanges between the two countries.

The position of British nationals, raised by the noble Lord, Lord Wallace of Saltaire, is under constant review. It may change even today. I was able to give your Lordships the position as it stood when I came into the Chamber, but I am greatly aware that as the situation develops so may our advice to our nationals in the area. It may be that different advice will be given while your Lordships' House is in Recess.

The noble Lord was right in what he said about the terrorist training camps. As the Statement indicated, my right honourable friend raised that particular issue when he was in Islamabad.

The noble Lord also asked about arms sales. There has been no change of policy since my noble friend Lord Sainsbury answered a Question on the:issue posed by the Liberal Democrat Benches earlier this week. There is no decision to impose an arms embargo on India or Pakistan, but I remind all noble Lords that the consolidated criteria used include a specific reference to the preservation of regional peace, security and stability. Those absolutely clear criteria are used in trying to decide any export licences, but I also remind your Lordships that no export licences are being considered in relation to some of the bigger items which have been in recent news headlines; for instance, Hawk or other aircraft. As I stand at the Dispatch Box, no licence requests have been made.

Both noble Lords rightly expressed concern for what happens in the longer term. We must now do everything in the power of the international community to try to lower the temperature between the two countries to ensure that, through dialogue rather than armed conflict, they resolve what both noble Lords have acknowledged has been a long and bitter dispute. The United Kingdom stands ready to do everything it can to that end.

My Lords, I congratulate the Government on making it unequivocally clear that this is a bilateral matter. Is the Minister aware that one of the conflict-exacerbating factors is the confusion caused by the 1947 UN resolution which gave a right of self-determination to the people of the valley? 'Will she consider using her good offices to ensure that all parties to the conflict are left in no doubt that this is a bilateral issue, including possibly returning to New York to determine what mechanism can be used either to scratch the original UN resolution or to draft a new one to reflect that sentiment?

My Lords, I hope that I have made absolutely clear to noble Lords the view of Her Majesty's Government that this a bilateral matter. At the moment, all our energies are concentrated on trying to do everything possible, along with other key players in the international community, to lower the temperature.

I am sure that the noble Viscount knows that there are differences between the two countries as regards the terms on which they would wish in any sense to "internationalise"; that is, to approach other parties with a view to resolving this conflict. We would be treading on very sensitive ground were we to declare that a particular way would lead to a resolution, let alone that we know the ultimate answer. I do not think that we are in a position to do that.

While I acknowledge the comments made by the noble Viscount, I would urge him to agree that we have to be extraordinarily sensitive to the very firmly held views in both countries with regard to the best means of resolving the dispute.

My Lords, I wonder if my noble friend can help me with one or two queries. What is the Secretary-General of the United Nations doing at the moment? If ever there was a situation in which the doves ought to be encouraged on both sides, it is this one. Defining the bilateral issue does not strike me as capable of taking the matter forward in any way. This is a bilateral issue with profound global implications.

The UN system, and the Security Council in particular, was designed to try to deal with this kind of situation. The Secretary-General has the power to call a meeting of the Security Council on his own initiative. I know that that power is rarely used, but are the Government urging the Secretary-General to take the initiative? Furthermore, are other members of the Security Council pushing him in that direction?

I find it difficult to believe that, were the Secretary-General to call a meeting of the Security Council, India and Pakistan would fail to turn up. We all know that in this kind of situation, buying time is in some ways the most essential move, otherwise we shall see an inevitable and inexorable drift which no one seems able to control. We have to buy some breathing space. One of the places where that might be done is in the Security Council. I hope that the Government are giving serious consideration to this proposal.

My Lords, I agree with the wisdom expressed by my noble friend; one of the most important ways of trying to lower the temperature in this dispute is to buy time. However, I should also say to my noble friend that the way that is done has to be handled extremely carefully.

I shall make again a point that I sought to make clear to the noble Viscount, Lord Waverley. The way in which the temperature is lowered could have the potential for inflaming the dispute. That fact is that not both sides wish to have the dispute resolved through some of the international mechanisms to which my noble friend referred. That is why we have sought to use the mechanism of individuals visiting the countries concerned. I have indicated that our friends in the United States and the EU have also been trying to use their good offices in this respect.

In other circumstances, I would be able to agree with the remarks made by my noble friend. However, on this occasion the sensitivities of the views of both sides in the dispute are such that it is not easy for us to declare that it is a matter that could be resolved through the United Nations. I am sure that all of us want to find the best means of securing a resolution, but if the UN represents a means that is not acceptable to one of the sides, then we must handle the matter with great sensitivity.

My Lords, I am sure that the Minister is not aware that I visited Islamabad during the Easter Recess and that I had quite a long discussion with General Musharraf. During our conversation he made it plain that he was doing his utmost to crack down on those terrorists launching attacks on India.

First, has the noble Baroness seen the article printed in today's Independent, in which it states that,

"a spokesman for Jaish-e-Mohammed, one of the prominent groups of Islamic radicals fighting in Kashmir, told a news agency in Pakistan: 'We have been stabbed in the back and abandoned by Pakistan in the same way in which it has disassociated itself from the Taliban'"?

Does not that comment indicate that General Musharraf is doing his utmost to pursue a crackdown on terrorism?

Secondly, a comment made in the same article on the words of the Foreign Secretary during his time in Pakistan points out that the,

"international community would be able to help Pakistan to end cross-border terrorism through what he described as 'precise assistance—.

General Musharraf made it plain to me that it was virtually impossible for his troops to patrol the whole of the India-Pakistan border. After all, we were unable to do that in Northern Ireland. The border between India and Pakistan is infinitely longer.

Surely the answer lies in a political solution, as was the case in Northern Ireland. I believe that the only way in which that can be achieved is by pursuing what has just been suggested by the noble Lord, Lord Richard; namely, we must try to involve the international community.

My Lords, I am pleased to learn that the noble Lord, Lord Weatherill, had an opportunity to hold the discussion that he has described to noble Lords during the Easter Recess in Islamabad. I am sure that he, along with others in the international community, took the opportunity to urge General Musharraf to acknowledge the importance of dealing with the problems of terrorism and cross-border infiltration.

I was also interested to hear the quotation cited by the noble Lord. Yes, I believe that it does indicate that President Musharraf is trying to stem the growth of terrorism. However, the problem remains that that terrorism has not been stemmed. There are still training camps for terrorists in Pakistan-controlled territories which really must be dismantled. In essence, that was the purport of the discussions held by my right honourable friend in Islamabad.

My right honourable friend stressed three issues above all else: first, stopping support for terrorism in Kashmir; secondly, stopping cross-border infiltration; and, thirdly, dismantling terrorist training camps. I acknowledge that President Musharraf has made some efforts to do that, but those efforts will have to be concentrated and, if I may so say, they will have to be effective.

Of course I agree with the noble Lord that a political solution to this conflict is most important. The Statement has made it clear that armed conflict and war are simply not going to provide the solution that both sides so desperately need. However, the central issue is that we must listen carefully to what both sides have been telling us are what they believe to be the means of resolving the dispute. We cannot impose those means on them. Only if both sides want to use particular means, will they work. If we try to impose a resolution on one side or the other, I fear that we shall sink even deeper into the mire.

My Lords, I welcome the Statement and in particular the efforts made by the Foreign Secretary to do something about the urgent situation.

First, one of the dangers which has been repeatedly highlighted is that not only is there no dialogue between the two countries, but there is not even basic telephonic equipment such as a hotline in place between them. Neither country has a fully implemented command and control system which the other can understand. Is there not something that could be done to help both sides to establish that kind of infrastructure in order to ensure that war could not break out by accident? At the very least, we should be able to ensure that both countries are given the appropriate equipment.

Secondly, in the Statement my noble friend mentioned the helpful meetings with the leaders of local communities held by the Home Secretary and the Foreign Secretary. Does my noble friend agree that it would be an advantage to sponsor, as it were, a Kashmir forum in which all the different elements of the diaspora—the British, the Indians and the Kashmiris—could be given an opportunity to discuss these questions? Such a forum should not he an official gathering, but rather it should bring together all the different factions so that a dialogue on Kashmir is promoted across the communities. Perhaps a solution would emerge out of that.

Such a forum may convince the two governments in India and Pakistan that, not the international community in the abstract, but the diaspora is interested in solving the problem. Such a forum may help matters.

My Lords, I thank my noble friend for pointing out the difficulties as regards simply having the means for the two sides to communicate properly with each other. When a bus route was established between the two countries some two or three years ago, I remember the relief felt by many of us that some form of communication would be possible. I agree with my noble friend that the basic infrastructure that most of us have in order to try to resolve some of these conflicts is just not available between India and Pakistan at present. That is what has made the role of international figures, such as my right honourable friend, so very important: they have actually visited the two capitals in order to try to establish the fundamental issues involved and—yes—to be a means of communication between those who do not speak directly. I am not saying that they never speak directly, but they do not do so quite as much as they might were the means of communication more readily available.

I thank my noble friend for the very helpful suggestions that he made about what he described as a "Kashmir forum". Perhaps I may correct something that I said a short while ago. I referred to the "south-east Asian" community, when I should have referred to the south Asian community. I beg your Lordships' pardon for that slip of the tongue.

As regards the community in this country who are bound to follow this issue most keenly and closely, we must do everything that we can to keep them in touch with what is happening. I shall certainly take my noble friend's suggestion to my right honourable friend and put it to him as a helpful thought.

My Lords, I thank my noble friend the Minister for the Statement. Is she aware—I am sure she is—of the fact that the leaders of the Asian community in this country, especially those who sit in this House, have been remarkably helpful in keeping the community informed as to what the British Government are doing? I believe that a compliment ought to be paid to them for the way in which they are working to this end with the British Government and their communities.

Yes, my Lords; that is a most helpful and important suggestion. It cannot be easy for many colleagues in public life when such issues arise. We can all applaud them for the way in which they handle such situations, and for the sensitive way in which they deal with the different communities. I, too, thank those in your Lordships' House who have been part of that sort of leadership.

My Lords, can the Minister confirm that President Musharraf and Prime Minister Vajpayee have accepted the invitation of President Putin to go to Kazakhstan, even though they have said that they will not meet each other directly? Is this not an opportunity for the civil servants on both sides to get together and consider mechanisms, such as those suggested by the noble Lord, Lord Desai? Those civil servants could at least talk about what possible mechanisms could be established—a hotline, and so on—and also what means of communication might be developed to enable them to communicate indirectly with one another at this very critical time.

My Lords, I understand that both sides have accepted the invitation of President Putin. This brings us back to the points raised earlier by the noble Lord, Lord Wallace of Saltaire, about the helpful role that President Putin is playing. Yes, I agree with the noble Lord, Lord Avebury, that every opportunity must be taken in order to bring together those who are able to engage in some dialogue. Even if the leaders themselves will not be able to meet, those in their respective entourages ought to be able to get together on this occasion; and, we hope, seek to find at least an agreed means of trying to solve this problem, if not a solution to it. In taking some of these questions on the role of some of our international institutions, I have been made acutely aware of the fact that we do not even have a means of trying to solve this issue. Like the noble Lord, Lord Avebury, I hope that those opportunities will be taken in Kazakhstan.

My Lords, we know that the Pakistani Government—and, perhaps, the Indian Government—have been involved in the testing of missiles. Can my noble friend the Minister say whether we are making representations to the two governments to ensure that international observers are on site to monitor such testing, and the precise nature of the weaponry that is being tested?

My Lords, representations are matte to both governments on these issues. However, as my noble friend will be aware, those governments are not party to some of the international treaties. There is a very complicated background to the status of both governments in trying to ensure that they become party to such treaties, and as regards acknowledging them as nuclear states. We would, of course, wish to see proper verification of the ways in which those governments are handling such issues.

On site?

Indeed, my Lords; the ways in which we would want to do so would be ways that maximised confidence in such a procedure.

moved Amendment No. 14:

Page 32, line 38, leave out subsection (2) and insert—

"(2) In section I(1)(b) of the Litigants in Person (Costs and Expenses) Act 1975 (c. 47), after "Northern Ireland,". there is inserted—

"(bb) employment tribunals,"."

The noble Baroness said: My Lords, this amendment relates to Clause 22(2), which makes provision for regulations to include payment to another party for the time spent preparing the case. It is a very surprising provision; it may even be unique. It has occasioned opposition not only from unions—my own union Amicus has written to me arguing strongly that the clause should disappear from the Bill—but also from NACAB, and other organisations, which have been concerned in assisting claimants. The Law Society believes that it will impact disproportionately on applicants. It is seen as a further disincentive, aimed as another obstacle to be overcome by employees wishing to put their case to a tribunal.

If one thinks about it for a moment, it will be seen to be basically unfair. A claimant may have very little on which to base a claim for time spent on preparation. If unrepresented, he may very well prepare his case in the evenings on his kitchen table. However, if this clause continues to exist unamended, a company could claim for the cost of its personnel department, the salaries of senior executives, and overtime pay for staff involved in case preparation. Indeed, the amount involved could be really very substantial.

NACAB has told us that firms already use the possibility of costs against claimants as a means of intimidation. Solicitors acting for the employer—and we have been given examples—write to the claimant and say, "We intend to fight this case all the way. It is fairly certain you will lose, and then we shall be able to claim costs. These could run into hundreds of pounds. Do you really want to run this risk? Much better not to do so—drop the case", and so on. This already happens. If preparation payments were added, we can just imagine how this could be used for further intimidation.

We made a number of attempts to amend this clause in Committee. None of this attracted government support. We were told it would all be dealt with by regulation. So we are back again on Report, discussing what I believe to be an unsatisfactory clause. The Government have tabled amendments, which will be debated later. However, I believe that our amendment is more suitable.

As I said earlier, we are not alone in our opposition. Judge John Prophet, President of the Employment Tribunals, also opposes the clause. He has gone further, and suggested a way in which it might be dealt with. He says simply this:

"Take out clause 22(2) and instead have an order made by the Lord Chancellor under Section 1(1)(c) of the Litigants in Person (Costs and Expenses) Act 1975 specifying Employment Tribunals. This has been done for Employment Appeal Tribunals in the Litigants in Person (Costs and Expenses) order 1980".

Judge Prophet has also said that this will bring preparation time for unrepresented parties within the normal costs procedure operated by employment tribunals, and that it can be used to cover situations where the party is not legally represented. Our amendment seeks to do precisely that without having to have an order made by the Lord Chancellor.

Our amendment seeks to add employment tribunals to the list of courts and tribunals to which the 1975 Act applies. The relevant part of the Litigants in Person (Costs and Expenses) Act 1975 reads as follows:

"Where, in any proceedings to which this subsection applies, any costs of a litigant in person are ordered to be paid by another party to the proceedings or in any other way, there may, subject to the rules of court, be allowed on the taxation or other determination of those costs sums in respect of any work done, and any expenses and losses incurred, by the litigant in or in connection with the proceedings to which the order relates".

It continues:

"This subsection applies to civil proceedings"—

and it lists the courts to which the Act applies. We are seeking simply to add to that list the employment tribunals. This is a simple and, it seems to me, a rather elegant way of putting Judge Prophet's suggestion into operation.

In Committee, the Minister gave the impression that the Government were concerned about unrepresented employees. My noble friend Lord McIntosh said that preparation for such individuals could be arduous. But the Litigants in Person Act was designed precisely to help such people. I believe that the Government were not altogether happy about this clause when we discussed it in Committee. Certainly they have put down their own amendments to it. I hope that they will agree that we do not need an all-embracing clause providing for payments for preparation. The law that we have suggested will do perfectly well if only the Government will agree to the amendment. I beg to move.

My Lords, I have to tell the House that if this amendment is agreed to I shall be unable to call Amendments Nos. 15 and 16.

My Lords, I am unhappy about the amendment but from very much the opposite point of view to that put forward by the noble Baroness, Lady Turner. I recognise the origin of the amendment and respect Judge Prophet's position. But the amendment will make matters worse for applicants, in particular for unemployed applicants. It would have the reverse effect to that which has been suggested.

Tribunals were established with particular principles in mind and with their rules and procedures framed in a particular way. We have debated already, both in Committee and today, the extent to which there are legitimate and proper differences between tribunals and the civil courts— and one particular difference is in the costs regime.

In the civil courts it is the general rule that the loser pays the winner's costs, whereas in the tribunals costs are limited and are awarded in less than 1 per cent of cases. When I debated this issue with the noble Baroness, Lady Miller, I rather took the silence of my noble friend Lady Turner to indicate that she agreed with what I was saying—that is, that we believe costs should be awarded only in a very small minority of cases. What the noble Baroness, Lady Miller, said about costs following the issue is not the proper provision. We need different rules and procedures.

Tribunal rules on costs are simpler and less detailed because, in general, parties do not expect to claim costs or to pay them and because it is far more common for parties to represent themselves. That is part of the wider access to tribunals which is provided, which has always existed and which is continued in the Bill.

The reason why we have not gone down the litigants-in-person path is that we do not want to require parties to keep detailed records of time spent, expenditure and financial loss in the same way as they might if they could generally expect to recoup their losses. This would be disproportionate. It makes sense in a system whereby a party can always expect to face costs, but in a system like this, where costs are not a common occurrence, the question of costs is likely to be retrospective—in other words, people will not have thought about it from the start and they will not have kept detailed records of time spent and expenditure such as phone calls and postage.

The litigants-in-person provision provides that litigants in person may claim for payments reasonably made by them for legal services relating to the conduct of the proceedings, as well as an hourly sum in respect of costs which would have been allowed if the work had been done by a legal representative. I understand the concerns to which my noble friend referred. They have been raised by employee representatives, advisers, trade unions and the legal profession—although not by the Law Society, which is now supporting us on this matter.

The level of costs awards would rise if tribunals were able to award both legal costs and preparation time. That was the issue which occupied a great deal of time, quite legitimately, in Committee. But we have dealt with that. Amendment No. 17 specifically states that you cannot have awards of both costs and preparation time; it has to be one or the other. I believe that that deals with the substance of the major concerns expressed in Committee.

In the civil courts and in the Employment Appeal Tribunal most people have legal representation, whereas in employment tribunals parties are frequently represented by other sources. Applicants who have legal representation from a voluntary source would not be litigants in person and so they would not be eligible to claim their preparation time, despite the fact that they may have still undertaken the bulk of the preparation work and have been subject to vexatious behaviour or forced to pursue a case through a tribunal when the employer has no reasonable defence to the claim. Such a party would, under the proposed government amendment, be eligible to receive either costs or a preparation time award, whichever was the more appropriate. Let us take the case of an unemployed applicant. Such a person cannot use the litigant in person provision, but he or she can use the provision for preparation time provided for here.

Concerns have been expressed about the hourly rate. We intend to work out in the consultation on the regulations how the preparation time award will be assessed—what the hourly rate will be. We have said that we will lay down guidelines for the tribunals and will consider a ceiling on case preparation awards; ranges of amounts by reference to different jurisdictions—that is, for different issues coming before the tribunal—to ensure that claims are proportionate; linking assessment to the applicant's rate of pay or former rate of pay; and the remuneration of the employee of the respondent who dealt with the matter; or, indeed, a standard rate. We want to ensure that only reasonable levels of preparation time are compensated which are proportionate to the complexity of the case.

The amendment would impose burdensome record-keeping requirements when, in the vast majority of cases, they will not be needed. We cannot accept the amendment because we have brought forward Amendments Nos. 16 and 17 which meet the concerns about potentially higher costs awards if parties could claim legal costs in addition to preparation time.

My Lords, before my noble friend sits down, perhaps I may ask him two questions. First, of course the Litigants in Person Act applies to litigants in person, but are we to understand that the Government intend Clause 22(2) to apply to respondent companies which are represented as well as to respondent companies with all their managers, secretaries and so on represented?

Secondly, does not my noble friend agree that nothing in the Litigants in Person Act would extend the range of costs awardable in the tribunal? Section 1 of the Litigants in Person Act—ancl I shall read the whole of it if my noble friend wishes, but perhaps I may summarise—states that where costs are ordered to be paid a claim can be made for work done or other expenses. "Where costs are ordered to be paid" would depend on the discretion of the tribunal under its regulations. It has nothing whatever to do with extending the range of costs in the tribunal; it provides the possibility, which the Government wish for, to add what we may for convenience call "preparation time" to the range of costs. These are costs, why not say so?

My Lords, those are two specific questions. The first is: do our provisions apply to companies which are represented? Clearly, companies which are represented have incurred costs. Therefore, they will make any claim under "costs" rather than "preparation time". They cannot do both.

The second question was whether the application to this Bill of the Litigation in Persons Act would extend the range. I never claimed that it would extend the range of applications for costs. What I said was that the use of the Litigants in Person Act would be more complicated and bureaucratic; it would also discriminate unfairly against applicants, and particularly against unemployed applicants and those using voluntary advice—who, strictly speaking therefore, would not he litigants in person.

I understood from a gesture that there was some disagreement about my claim that the Law Society supported the Government on this matter. Perhaps I may quote from the Law Society briefing:

"Given the nature of employment tribunals, it may be legitimate to allow tribunals to include awards for non-legal costs. Current arrangements are not ideal in this respect, as they can only assist those who have chosen to pay for legal assistance".

My Lords, before the noble Lord sits down, will he look at two later paragraphs in the Law Society's submission setting out its present position. It goes on to say:

"The government amendment"—

that is, Amendment No. 16—

"does not address this point directly, but it does make the structure fairer as between the parties. It allows the parties to claim non-legal costs but only as an alternative".

That is fine. It then continues:

"The amendment remains a rough and ready solution, but it is in our view fairer than the existing provisions in the Bill".

In other words, the Law Society believes that the Government have improved the situation but not solved it.

That is right.

My Lords, I was claiming Law Society support for our provisions here as against the litigants in person provision. We can debate Amendment No. 16 when we come to it.

Hear, hear!

My Lords, I am not very happy, as I am sure my noble friend the Minister will appreciate, with the response to the amendment.

As my noble friend Lord Wedderburn has pointed out, the employment tribunals would still have discretion under the provisions of our amendment. I am very surprised that the views of Judge Prophet should have been dismissed in such a casual way by the Minister. He is a well-known expert in his field and has been president of the employment tribunals for a very long time. His advice should be listened to and treated with a great deal more respect.

Hear, hear!

My Lords, I still feel that my union was right to press for the provision in Clause 22(2) to be removed from the Bill altogether. Our main concern—which was the concern of NACAB and others—was that the mere existence of a payment for preparation costs was extra intimidation and could be utilised as such against claimants who might otherwise want to pursue cases. NACAB has provided examples of cases where that has been done simply because costs can be awarded. Solicitors acting for companies will often try to intimidate employees so that they do not proceed with cases which they have attempted to start in tribunals.

There is little point in pressing the amendment to a Division now. However, I feel strongly about the matter, as do external organisations. We shall have to re-examine this provision before the Bill leaves this House. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

of Charlton moved Amendment No. 15:

Page 33, line 1, leave out "payment" and insert "special payment by way of costs or expenses"

The noble Lord said: My Lords, in a sense, this amendment is partly an exercise in practicality and partly an exercise in logic. In Grand Committee, the noble Lord, Lord McIntosh confirmed that the new award for preparation time would be made only in circumstances in which a costs award may be made at present. On 18th March (at col. CWH 134), his answer to my noble friend Lord McCarthy was as follows:

"The noble Lord answered his own question in quoting the Explanatory Notes".

He went on to quote from the Explanatory Notes:

"It is also intended that the new awards could be made only in the circumstances in which a costs award may be made at present; that is, where the party has behaved unreasonably in some way".

The amendment suggests that if the new awards are to be made only in cases where costs can be awarded, the Bill should state what they are. They are a different form—a new form—of costs. Underlying the amendment is a doubt—expressed often enough in Grand Committee—as to whether this wholly new animal in the zoo of awards in employment tribunals is really necessary. I call Clause 22(2) the "siren clause". I am thinking of Mr Pecksniff, who could not remember the name of,

"those fabulous animals (pagan I regret to say) who used to sing in the water".

His first attempt was "oysters". That was not right. His second attempt was "swans". Then he said: wait a minute, I know—"sirens". The new preparation awards are sirens. They are not costs; they are not oysters; they are not swans; they are not compensation; they are some new kind of award. Yet they are to be awarded only when costs can be awarded.

It is true that a later amendment attempts to sort out the matter by stipulating either the one or the other. We shall debate that when we come to it. There are other problems with that amendment. I am sorry that my noble friend moved on to it, but, as he said, we shall discuss it when we come to it.

The Law Society pointed out in its original briefing—and repeats in this briefing—a fundamental point about Clause 22(2). The provision is no threat—any more than was our amendment to it, moved by my noble friend—to the unemployed or to any other applicant. Clause 22(2) is a threat to applicants by reason of what employers may threaten. I do not say "will threaten", but unscrupulous employers, as the Law Society states, may well apply this subsection in a way that is "disproportionately unfair" to applicants. It sets out the reason:

"In most cases the applicant's claim for costs will be limited to the value of his or her time, whereas a respondent's claim could in many cases include compensation for the time of several people".

In Grand Committee, we discussed who those people were. The list included: managers; personnel managers—who are employed to do the work anyway; in-house lawyers—cases have arisen under the Litigants in Person Act involving in-house lawyers; and secretaries. In other words, the claims made for preparation time for a case may be very expensive indeed. Even as costs, they could rise to several thousands pounds.

What is the real reason why the Government will not call these oysters "oysters", but insist on calling them what in effect are sirens leading employment tribunal practice on to the rocks? Do they want people not to claim for the real preparation time in a case—because that would be too onerous in terms of record-keeping? I must say, it is an astonishing argument. Are they saying: you do not have to keep any records; you simply claim for preparation time—and we will tell you, on the Government's scale, how much you can get?

Is that their reason for not accepting the amendment—as I suspect they will not, because they have tabled an amendment of their own? Let us have that out on the face of the argument. Is the real reason why they will not state that this special form of costs are costs—or "expenses" in Scotland—so that employers can claim, not their real costs, because record-keeping would be too onerous, but costs only on the scale set out by the Government? Although some employers' organisations have expressed pleasure at the provision, I am slightly surprised that they have not asked the Government what the scale is likely to be. Is it likely to be the £9.25 an hour maximum that is awardable under the Litigants in Person (Costs and Expenses) Act 1975? Is that the kind of charge that the Government envisage? If so, some employers will get a rude shock.

There is another question and another reason why it is vital to identify these costs as costs in the Bill. They are oysters and they should be known as oysters, not as some other new animal or fish. Although my noble friend generously accepted in Grand Committee that they would be awardable only in situations in which costs are awardable, neither he nor anyone else can answer the fact that in Routes to Resolution and in their response to consultation, from which I quote, the Government said:

"The Government believes it is right that those affected by weak and vexatious cases, applicants or respondents, are compensated for the time spent preparing their case".

A weak case is very different from a vexatious case. We shall come back to that when we discuss striking out. A weak case is quite different, even on the definitions offered by the surveys, which have been a most unsatisfactory feature of the whole debate. On any definition, a weak case is nowhere near a vexatious, misconceived, unreasonable, frivolous or even contumacious case, which has come into the discussion.

I assume that weak cases will not attract an order of preparation time. That is my third question for the Minister. By saying that they will be awarded only where costs are awardable, the Government have retracted from the position in Routes to Resolution and the response to consultation.

Lastly, the citizens advice bureaux have expressed a strong fear about the clause. Their document says:

"We fear that the potential for a party's preparation time to be reflected in costs awards will simply strengthen the ability of employers' legal representatives to so intimidate tribunal applicants with threats of action for costs quoting the maximum that may be available".

These are new awards. The civil courts seem not to know of such awards—at least there are no records to show so. My noble and learned friend the Lord Chancellor said in a recent Written Answer to me that no records were kept of such awards and it is not known on what principles they would be made, even if some have been made, which some people get at but nobody knows about. If they are to be added, let them be added for what they are. Oysters are oysters and costs are costs. Let us have it stated that preparation time is a form of cost.

My noble friend the Minister has referred to the coming amendments. This amendment is not inimical to the government amendments. It is particularly phrased so that this will be a special award of costs. The government amendments could follow and apply to Clause 22(2) without any problem if the Minister insists. The aim of the amendment is to make it clear that costs are costs. If these are to be awarded, let us say so and then we will know that they are limited to vexatious, unreasonable and misconceived applications. I beg to move.

My Lords, again I oppose the amendment, but for the opposite reason to the motivation implicit in the arguments of the noble Lord, Lord Wedderburn. I oppose the amendment because I think it is inimical to the interest of applicants, and in particular of unemployed applicants.

The amendment would limit compensation for case preparation to the costs and expenses that a party has actually incurred. Its effect would be that preparation time could compensate a party only for the actual financial loss it had incurred as result of the other party's unreasonable behaviour.

We have used "payment" rather than "costs or expenses" to enable preparation time to cover the situation in which a party has worked on his or her case without incurring financial loss. To return to an example that I used in response to the previous amendment, if the applicant is unemployed, it would not be appropriate to award preparation time for the actual expenditure that the applicant suffered as a result of preparing the case because there may not be any actual expenditure. If the unemployed applicant is doing the work himself, there are no outgoings, if I may use a new word—I do not know whether that is an oyster or a swan. However, it would be appropriate to order the respondent to make a payment to the applicant in recognition of the time spent by the applicant preparing for the case as a result of the respondent's unreasonable actions.

The noble Lord's fourth point seems to come in here. He challenges me that the civil procedures rules do not cover the cases in which no records are kept. I hope that I have understood him correctly. The principle is recognised in the civil procedures rules, which provide that where a litigant in person cannot provide evidence of financial loss, he or she may claim for the time spent working on the case, which in the civil courts is paid at a set hourly rate. Our proposals are comparable but preferable in the tribunal situation to that which is already provided in the civil rules.

On the calculation of the hourly rate, tribunals will have discretion as to whether to award preparation time and what that award should be, but it is helpful to have guidelines, which we shall provide, to ensure consistency across tribunals so that the parties understand the basis on which the award has been made.

The noble Lord referred to the concerns expressed by NACAB—whose views I very much respect, as it is deeply involved in such cases—about the threat of costs to intimidate applicants regardless of whether the case is hopeless. I must come back to the situation in employment tribunals, where costs are very rare. Fewer than 1 per cent of cases involve cost awards. We intend to make it clear through guidance that costs are awarded in only very limited circumstances. That is reinforced by our Amendment No. 17, to which I have already referred.

The noble Lord came back to the use of the term "weak cases" in Routes to Resolution last year and in the response to the consultation. The provisions do not use the word "weak", which was intended as a shorthand description of the terms used there—that is, vexatious, abusive, disruptive or unreasonable. There is no extension intended or provided in the Bill in the terms in which costs might be awarded.

I apologise for going over the same ground to some extent, but I have to refer again to the nature of the concerns expressed in Grand Committee. The concerns were that there would be excessive use of the preparation time provisions to intimidate applicants. Although I respect the motivation behind those concerns, I believe that our Amendments Nos. 16 and 17 go some way to answering them. I believe that this particular amendment, providing for preparation time to be defined as part of costs and expenses, would make matters worse for applicants, particularly unemployed applicants who therefore have no costs in preparing their case. I hope that the amendment will not be pressed.

My Lords, I am grateful to the Minister for his explanation, which covered roughly the same ground covered in Grand Committee. I do not think that he should apologise for saying what he said in Grand Committee. We certainly have no intention of apologising for what we said in Grand Committee in view of the guidance in your Lordships' Companion to the Standing Orders which I quoted in speaking to our first amendment.

The Government, with great respect, are in a frightful old muddle about this. In Grand Committee, we moved an amendment saying that preparation time awards could be awarded only in cases where there was vexatious, frivolous, misconceived or unreasonable proceedings, but the amendment was rejected. Now we are again being told that regulations will make it clear that costs can be awarded only in very limited circumstances. Although I am grateful for the assurance that "weak cases" was just a generalisation in the preparatory documents, the term was used rather too often without much explanation. Nevertheless, I am very grateful for the explanation that "weak cases" means cases in which the case is vexatious, frivolous, misconceived or conducted unreasonably. Those are the cases in which costs can be awarded. Those are the cases in which we are now being told that preparation time awards are to be awarded.

If that is so, why cannot the Bill say so? This is one of so many cases in which the nub of the issue is to be concealed or explained in regulations, the exact nature of which we do not know. In moving Amendment No. 33, my noble friend Lord McCarthy will raise the issue of our ability to see the drafts of these regulations. Everything in the Bill points to that.

The most important point is that no one has expressed worries about the application of this general concept of preparation time in relation to applicants who—as Ministers so often say, and as has been said in another place—are "sitting at their breakfast room table". The idea that regulations could not provide for compensation for loss of time by such people is bizarre. Of course regulations could say that people should be compensated for loss of time. The worry has been the sums that respondent employers will claim from applicant workers. There was not a word about that in the reply of my noble friend the Minister. If there was any mention of it, I shall read it with interest. I did not hear a word about that.

It is true that costs are rare. However, preparation time awards will not be threatened rarely; they will be threatened often, as the Law Society made absolutely clear in both of its briefs. In resisting all efforts for the Bill to tie down to a narrow ambit these new sorts of animals in the zoo of money to be paid by applicants to respondents, my noble friend the Minister is doing a disservice to the practice of employment tribunals in this country, and it will be seen as a most serious departure by the Government. The move has been supported only by employers' organisations. It has been resisted by the Law Society, by citizens advice bureaux and by various unions, and yet the Government persist in it. I hope that some further thought can be given to it by Third Reading; but in view of the amendments we are coming to I rather doubt it.

This is definitely a wicket down for no runs at all. It is a most sorry moment in the history of employment tribunals. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 16:

Page 33. line I, leave out from "of" to end of line 2 and insert "time spent in preparing that other party's case."

The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 17.

Going back to basics, I do not think that anyone disagrees that there should be provision for compensating parties who have been on the receiving end of unfounded or vexatious cases. Of course there should be minimal checks in the system to ensure that the tribunal service is used responsibly by those who need it, and that parties and their representatives conduct cases in a way which does not disadvantage the other party or disrupt the proceedings.

The new provision for preparation time payments will address the gap in current legislation that there is no recompense for self-represented parties who have suffered unreasonable behaviour, despite the fact that self-representation is commonplace in employment tribunals. I have listened very carefully to what my noble friend Lord Wedderburn said in his closing speech on the previous amendment, and I believe that his comments were profoundly misconceived. I believe that the provision for preparation time, being addressed as it is to self-represented parties who have suffered unreasonable behaviour, is particularly helpful to applicants going to employment tribunals.

We do not believe that, in practice, the provision for preparation time would lead to a big rise in the level of costs awards. Evidence shows that tribunals are very moderate in awarding costs, both in the number of awards made and in the level of the awards. However, we have heard from a number of highly respected organisations which work with applicants that the threat of costs is being used to intimidate applicants into withdrawing their complaints—a point legitimately made by my noble friends Lord Wedderburn and Lady Turner—regardless of whether the case is without merit or whether the applicant's behaviour has been unreasonable. My noble friends are concerned that awards could potentially be higher as a result of the new provision for preparation time, and that this would add to the arsenal of heavy-handed tactics which are being used to warn off applicants genuinely seeking redress for an infringement of their rights.

We want costs and preparation time to be a deterrent against those few cases or defences which have no reasonable prospect of success, and we want to deter unreasonable behaviour. We want to ensure that where parties have to endure such behaviour they should not lose out just because they choose not to, or cannot afford to engage a legal representative. But access to justice must be preserved, and at the same time we do not want fear of excessive costs awards to deter vulnerable parties from seeking to enforce their rights.

This is why we are bringing forward an amendment which provides that when the regulations on costs and preparation time are drawn up they must include provision that a tribunal cannot award both costs and preparation time.

Before I turn to the detail of the substantial amendment—I believe that in talking about an earlier amendment I allowed myself to talk about Amendment No. 16, whereas the substantial amendment is Amendment No. 17. I apologise for that—let me first address a couple of other minor changes.

Noble Lords will observe that on the next printing of the Bill the title of the subsection on preparation time is changed from "compensation for preparation time" and will instead refer to,

"payments in respect of preparation time".

It is a side heading and therefore does not appear as part of the Bill. That addresses the issue which was raised in Amendment No. 14.

The title "compensation for preparation time" is not an entirely accurate reflection of the subsection because "compensation" implies that the payments relate to actual loss. A preparation time payment is for the time the party has spent preparing for the case and is not necessarily limited to actual loss. For example, we intend that an unemployed person who acts in person may claim preparation time. This is a technical change which does not form part of the amendment and does not in any way affect the intention behind the provision for preparation time, but I wanted to take this opportunity to mention it so that it does not cause confusion at a later stage.

The first government amendment to Clause 22—Amendment No. 16—is the replacement of the line,

"the time spent by that other party in preparing his case",

with,

"time spent in preparing that other party's ease".

This is because we intend that awards of preparation time which are made to respondents who employ staff should be able to take account of time spent by those staff on the case. Although the current wording of the clause would allow this in the case of a corporate respondent, since it can act only through its employees, the position of a sole trader is more doubtful. We propose removing this doubt by taking out the words,

"time spent by that other party".

There is no change to the intention behind preparation time where it is the respondent who is claiming preparation time. It should apply regardless of whether the employer is a corporate body or a sole trader. The principle is that where we are talking about an employer who has had to defend a hopeless or vexatious case the preparation time award should cover any time which the employer has had to spend working on the case. The clause as drafted might not allow a sole trader to take account of his employees' time because of the words "by that other party". We want to remove that doubt.

The new wording also refers to "time spent" rather than "the time spent". This is a minor change to reflect that although parties will have to show that they have spent time on the case in order to be eligible for an award, they will not be required to produce detailed evidence of the actual time spent.

The substantive amendment to Clause 22—Amendment No. 17—provides that where regulations are made on costs and preparation time they must include a provision that the tribunal may not award both costs and preparation time to the same person in the same proceedings.

There are a number of ways of achieving the effect that both awards should not be payable; for example, by replacing the current provision with provisions similar to those in the civil courts for litigants in person, or by saying that only unrepresented parties may claim preparation time. However, we believe that the amendment we have proposed is the simplest solution. We do not want to open up arguments about whether a party is represented since many parties engage a representative part way through a case, or seek legal consultations throughout the case. Furthermore, litigants in person in the civil courts can claim for legal consultations so a provision for litigants in person in the tribunal along the lines of the civil courts would not meet concerns about higher costs awards.

The amendment will address fears that the new provision for preparation time may be used to intimidate applicants, but will still enable tribunals adequately to compensate self-represented parties who have had to fight or defend cases which have little hope of success or who have been subjected to vexatious behaviour. I beg to move.

My Lords, I do not apologise for the fact that we are debating this issue again and that we have to debate the issue taking into account the general case for preparation compensation because that is what the Minister has just done. He has once again traversed the general ground. He made much of the fact that we are not totally opposed to the notion of preparation compensation if it is introduced in the proper way and if, for example, it were to be clearly confined to self-represented parties. But that is not what the Bill says.

So the Minister has made a general case but he does not take into account our qualifications. This is remarkably reminiscent of Clause 39, and the objections we raised to the form of the measure, its precise way of being done and the consequences of that. That is why I am afraid I must return to what the Law Society says. The noble Lord quotes from the Law Society in a very selective way. The Law Society is saying not that employers will necessarily misuse the system—perhaps they will do so—but that whether or not they do so, the system, the structure and the words of the Bill are designed in such a way, whether intentionally or unintentionally, as to prefer and benefit the employer. That is what the Law Society says. The Minister quoted one part of the document from the Law Society and I shall quote another part. It said:

"The Law Society welcome this Government amendment to the Bill".

Okay. It continues:

"We considered that the existing provision in the Bill risked creating a calculation mechanism"—

that is the point; it involves not abuse but a calculation mechanism—

"that was structurally unfair to applicants".

That is what we want to address. It continues:

"In our view, applicants would have been exposed to the risk of a greater costs award than the respondent in almost every case. That is because in most cases, an applicant's claim for costs will be limited to the value of his or her time, whereas a respondent's claim could, in many cases, include compensation for the time of several people".

That involves something structural being added to the Bill; it does not involve abuse. I submit that Amendment No. 16 makes—or could make—the situation worse.

The Bill currently says that tribunals could order a party,

"to make a payment to any other party in respect of the time spent by that other party"—

so far we are in the singular—

"in preparing his"—

at that point we are personal—"case". That might help the worker at the kitchen table.

However, the amendment will alter that. The Bill will state that the tribunal may allow,

"time spent in preparing that other party's case".

Time spent by whom? By anyone. The Minister told us just now that he had several people in mind. He said that employers had suggested a number of people and that small employers had suggested still more people. That is precisely what we do not like about the arrangement. It is structurally biased towards the employer. That is why I ask the Government, even at Third Reading, to introduce further modifications. I oppose the amendment.

My Lords, I have not heard opposition to the amendment. I have heard criticism about the motivation for the original formulation of the clause and the reserved way in which the Law Society welcomed the amendment— and I acknowledge its reservations. However, I have heard no comments suggesting that the amendment should not be included in the Bill.

My Lords, my noble friend said—Hansard will reveal this—that the objection is that the Bill, which states,

"time spent by that other party",

will be changed to,

"time spent in preparing that other party's case".

The phrase, "by that other party", will be dropped. We have completely at large the phrase, "time spent"; by whom? That is the specific objection to the amendment. It extends the possible range of those for whose time the charge and award could be made.

Indeed, I understood, as did my noble friend, that the Minister agreed that time spent by managers, in-house lawyers, personnel directors and secretaries could all be charged under the amendment as,

"time spent in preparing that other party's case".

That is the objection to the words in the amendment.

My Lords, the Minister will discover that what he said—

My Lords, as I understand it—

My Lords, the Minister referred to staff on the case; "staff" is plural.

My Lords, perhaps the noble Lord, Lord Bassam, should make the point.

My Lords, it is only right that I remind your Lordships' House that on Report there should not be an intervention after the Minister has risen to speak.

My Lords, it is my amendment and I am perfectly happy. I am responding to the comments that were made. I took an intervention but I really do not think that it was well founded. I set out in some detail what the rather minor Amendment No. 16 meant and how it should be interpreted.

If I repeat the exact words that I used, it will be clear that I have already answered the concerns that have just been raised. We intend that awards of preparation time which are made to respondents who employ staff— yes, that is what I said—should be able to take account of time spent by those staff on the case. I also said that although the current wording of the clause would allow this in the case of a corporate respondent, since it can only act through its employees—in other words, there is no other way in which a corporate respondent could incur preparation time—there was a doubt about the position of a sole trader. That is why the amendment was tabled and that is the only effect that it will have. I hope that the amendment will be agreed to.

moved Amendment No. 17:

Page 33, line 2, at end insert—

"(2) If employment tribunal procedure regulations include—

(a) provision of the kind mentioned in subsection (1), and

(b) provision of the kind mentioned in section 13(1)(a), they shall also include provision to prevent an employment tribunal exercising its powers under both kinds of provision in favour of the same person in the same proceedings.""

My Lords, if Amendment No. 21 is agreed to, I cannot call Amendments Nos. 22 to 24.

moved Amendment No. 21:

Page 33, line 34, leave out subsections (2) to (4).

The noble Lord said: My Lords, under this clause we turn to the matter of conciliation. 'The ACAS provision of conciliation is one of the most valuable parts of the present administration of industrial justice. The number of conciliated cases has increased regularly and they are one of the answers to the so-called "compensation culture". Employees have played their part in an increasing number of conciliated settlements.

Subsections (2) and (4) of Clause 24 contain a problem which suggested to us that they should be omitted from the Bill. We argued that in Grand Committee but, as the companion suggests, we now bring back that argument on Report. The subsections remove the duty on ACAS to continue conciliating after a certain time, although they leave ACAS with the power to do so. It would be extraordinary if they removed the power of ACAS to conciliate. But, of course, a duty to conciliate prompts in the minds of those who are most expert at this process that they had better keep an eye on things and listen carefully to see whether anything more can be done.

We do not understand why that sensitivity of ACAS—the duty to conciliate—should be reduced to a mere power. I want to be fair to the Government's case in relation to this matter, partly because I am not sure that I understand it. Perhaps I may make my point by way of quotations. In Grand Committee my noble friend Lord McIntosh said that the Government were,

"trying to diminish what is called settlement on the steps of the tribunal".—[Official Report, 18/3/02; col. CWH 140.]

I understand that that is their aim, although I say immediately that a settlement on the steps of the tribunal in terms of reducing the number of hearings is helpful. I believe that that was also one of the subsidiary objectives in regard to settlements outside the tribunal.

My noble friend added to that when he said:

"I am very modest in my expectations … of this clause—

that is, Clause 24. He continued:

"By focusing attention on a period in which conciliation is the first priority, there is a possibility that there may he some reduction in last-minute settlements".—[Official Report, 18/3/02; col. CWH 144.]

That accords with the Explanatory Notes and all the previous government documents. Perhaps I may quote a sentence from the Explanatory Notes:

"The clause provides that ACAS's duty to conciliate cases reverts to a power to conciliate … The effect will be that once the conciliation period is over, the conciliation officer can judge whether to continue to conciliate the case, or to pass it hack to the Employment Tribunal Service … so that a time and place can be fixed for a hearing".

However, the conciliation period will have gone. In Routes to Resolution, the case was put as follows in paragraph 4.9:

"A clear period for conciliation with limited scope for extension might focus the parties' minds within that period on whether they were interested in reaching an amicable settlement or not. When the period ended if no settlement was reached, ACAS could extend it if … there was still a reasonable prospect of an early settlement being reached".

Of course, it has the power, but it has no duty to continue to be interested in the case. It may increase the number of settlements.

On that and on other occasions in Grand Committee, we asked the Government what work they have carried out to decide whether that new limitation on ACAS would increase the number of settlements. They did not appear to have done any, but perhaps they have now. If so, perhaps the Minister can produce the results.

As I understand it, there is no document from ACAS asking for this provision. It is not based on any research. There is simply a notion that it may increase the number of settlements. We do not believe that that is likely. We believe that late settlement is a feature of many systems of justice. Perhaps I may quote the Legal Action Group brief on Clause 24:

"Late settlement often happens because of late disclosure of documents or other evidence allowing the strengths and/or weaknesses of the applicant's claim to be clarified. A fixed period for conciliation is inappropriate unless tribunals manage cases so as to ensure that early disclosure of evidence takes place. Putting pressure on parties to settle without full knowledge of the facts of the case is not conducive to justice".

That is a most important point.

Leaving the tribunals for a moment, recently a case in the High Court was settled as the judge began his judgment. That is a late settlement but it was a settlement of the case and was valuable in itself. I and my noble friends do not understand why the Government have introduced a clause limiting the duty of ACAS to conciliate simply on the prospect that it may produce more settlements, when there is no evidence whatever that it will; there is no research and no suggestion from all the bodies concerned. Right, left and centre, bodies like the Legal Action Group and others, who are experienced in the administration of the tribunals, suggest that that would not contribute. The Legal Action Group says that it would be most inappropriate to introduce such a provision into the tribunals' practice.

I have re-read everything that was said in Grand Committee on this subject. I ask the Minister to add to it. I ask him not simply to read the same brief as was read in Grand Committee but to tell the House the basis on which they believe that the number of settled cases will increase. I beg to move.

My Lords, perhaps I may leave out that part of my speech which duplicates what was said in Grand Committee. I went into some detail about the extent to which my noble friend Lord Wedderburn and I were in agreement on these matters. He said—he will not mind me quoting what he said in Grand Committee—that it is,

"common ground that nothing is more important than that we should have as many cases as possible settled by conciliation or other means before they go to the tribunal".—[0fficial Report, 18/3/02; col. CWH 138.]

We agree entirely with that. However, we do not agree for the reasons that my noble friend has just given. In Committee I said, rather tentatively and modestly—my noble friend quoted me which I do not mind—that we are trying to diminish settlements on the steps of the tribunal. He thought that was odd because settlements on the steps of the tribunal reduce the number of hearings before a tribunal. He understood our objective to be, as set out in Routes to Resolution, to reduce the number of hearings before a tribunal.

After many sessions in Grand Committee, I hope that we have made it clear that we would like to reduce the number of hearings before a tribunal but that we would like to do so by means of a carrot. In other words, we want to make it easier and more likely that cases will be settled before the necessity of going to a tribunal arises, rather than using a stick that would provide obstacles to appearing before a tribunal. Our view is that this Bill provides the carrot rather than the stick.

Our objection to settlement on the steps of the tribunal is not on the issue of whether it reduces the number of hearings or not, but because of the proposition, and it is no more than that, that if there were to be a fixed period the parties concerned might be encouraged to go to ACAS for conciliation earlier rather than at the last possible minute.

We do not, and cannot, have evidence for that because there is no fixed period to research. If there were, we would have carried out an evaluation. What we can do is to tell noble Lords what is the view of ACAS and what our intentions are. ACAS has said publicly that setting a deadline for the end of the conciliation process could be an important factor in influencing the parties to settle a case in a timely manner. It could be an important factor. It believes that it is important that the period is followed by a timely hearing. It would prefer to see more research into the effect of a fixed period on different jurisdictions before it is implemented. We understand that concern. We intend to ensure that the effect of introducing a fixed period is fully evaluated. We will fully evaluate it. If it is proved that it does not work we shall remove the provision. We can do so by regulation.

I am a researcher, like my noble friend. I would always prefer to make policy decisions on the basis of prior research, but if one is trying something which cannot be introduced on a pilot basis, then surely under these circumstances the way to do it is to make the provision to carry out the evaluation. If it works then our decision has been justified; if not, it can be changed without regard to primary legislation.

In the absence of conclusive evidence, surely it is not unreasonable to ask parties to focus early in the process on the important reconciliation which is available to them. Focusing the minds of parties on dialogue facilitated by ACAS conciliators could lead to earlier settlement. We have not said that we believe that it will increase the number of settlements, but bring them forward in the process. That is the basis on which we propose to work and the reason why have proposed our Amendment No. 22 to remove subsection (3)(a) which attracted some criticism, rather than to do what is proposed in the amendment, which is to remove subsections (2) to (4).

My Lords, before the noble Lord sits down, will he therefore confirm that there is published or unpublished testimony from ACAS and that it desires this provision? If it does, I would like to see it published. As I understand it, ACAS telephones people as soon as it receives the ET1. Then, rather sooner than later, it decides that nothing more can be done. In effect ACAS withdraws. It does not require legislation or a regulation to do what is required.

My Lords, I have read out what I understand is the position of ACAS and I am unable to comment any further on it.

My Lords, I appreciate what my noble friend has said. It would be nice to see the material published. My understanding is that ACAS can go along with it, but it is still based on the proposition that it might do something. As I understood the Minister, he said that one cannot prove the effect without doing something. If that proposition were generally established, all kinds of things would be on the statute book. They could be revoked and another section passed saying that Clause 24 is revoked. It was sad to hear the Minister rely on the fact that it is possible to take out Clause 24 by regulation. That is not the nature of research. If one said that one could not prove that a change in the law would have this or any effect at all—although it might—without actually making that change, one would never do any research at all to show that it might be likely to have a particular effect. There is plenty of research that one could do to be able to come to the House to say, which he is not, that Clause 24 would be likely to have an effect. He has not said that. It might. There is a possibility. I do not understand—

My Lords—

My Lords, perhaps I may say before my noble friend intervenes that when Ministers intervene early on Report, it has a quite different effect from the effect it has in Committee. In Committee, we had a long discussion on this clause. We ought to have a longer discussion than perhaps is possible if my noble friend is of the view that he has said what he wants to say. But he wants to say something else, so of course I shall respectfully give way to him.

My Lords, in a legitimate intervention my noble friend Lord McCarthy asked a specific question. I did not intervene earlier. As I always do on Report, I looked around to see whether anyone else wanted to come in. If ever I fail to do that, I shall be subject to legitimate criticism. But my noble friend Lord McCarthy in what I thought was a legitimate intervention asked me where the ACAS quote came from. It is paragraph 35 of the Government's response. It states:

"ACAS considered that the proposal"—

that is, the proposal for a fixed period—

"had merit but that more evaluation of the impact of a fixed conciliation period was needed. They considered it could help to encourage timely settlement, especially in those jurisdictions where early contact with the parties has a positive effect".

I think that that is very close to what I have said.

My Lords, my noble friend has now replied to my noble friend Lord McCarthy. I thought that he was going to put points to me. But, as a matter of fact his intervention is most helpful because that is exactly what I thought that ACAS said: that more evaluation was necessary before making this change, or that more evaluation would be a good idea. All we have said is that more evaluation by research would be a good idea. I cannot understand why this clause is pursued in the way that it is; albeit—I acknowledge this freely—that the Government will take out paragraph (a). I cannot understand it. Is it because, I ask myself, that this is a genuflexion in the direction of costs to those who do not want to go on conciliating?

That is a much discussed explanation. In Grand Committee we used the notion that the Bill is perhaps set in stone. We now see that one can take chips off it because they are going to take off paragraph (a). But my noble friend's chipped stone response leaves me with no alternative but to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 22:

Page 33, line 42, leave out paragraph (a).

The noble Lord said: My Lords, in moving Amendment No. 22, I shall speak also to Amendments Nos. 23, 24, 125, 127 and 139. In Committee, I outlined the Government's intentions in introducing the measures in Clause 24. The clause will provide, through regulations, for a fixed period of conciliation, after which a hearing date will be fixed, subject to ACAS advising that the period should be extended as a settlement is imminent.

I explained that it was our intention, through the introduction of a fixed period, to focus parties' minds on the conciliation process and to reduce the number of last-minute settlements, known variously as settlements in the side room or settlements on the steps. They can result in wasted judicial and administrative time in preparing for the hearing only to find that parties withdraw in the last few days or that no one appears on the day, or a more extreme case, as my noble friend cited. They also cause undue stress to the parties involved and both sides incur costs in preparing for a tribunal that never takes place. So it is best for everyone—here we are all agreed—if agreement is reached early in the process wherever possible.

It is not our intention in any way to diminish the role of conciliation in dispute resolution. Following interventions from my noble friends, I looked again at Clause 24(3)(a), which was intended to be a minor and operational provision, to see whether it was wholly in line with the Government's intentions.

It is not our wish to create circumstances under which the employment tribunal service would not automatically forward the originating application to a conciliation officer. Our intention through subsection (3)(a) was to provide through regulations that uncontested applications would not be passed to ACAS, so that its resources could be better focused on applications where both parties acknowledged the dispute.

But as a result of our debate in Committee, it became clear that valuable reconciliation time could be lost if, rather than sending an application to ACAS immediately, we waited to find out whether the respondent would contest it. We drafted Amendment No. 22 to delete Clause 24(3)(a), which is unnecessary because we agree that all originating applications for jurisdictions that fall within its ACAS's duty to conciliate should be sent to ACAS.

The further amendments, Amendments Nos. 23, 24, 125, 127 and 139, are technical amendments consequential to the changes made in Clause 24 of the Employment Tribunals Act 1996. I commend the amendments to the House.

moved Amendments Nos. 23 and 24:

Page 34. line 4, leave out first "such" and insert "employment tribunal procedure"

Page 34, line 4, leave out second "such" and insert "conciliation"

moved Amendment No. 25:

Page 34, line 15, at end insert—

"() The Secretary of State shall, within 180 days of this section coming into force, prepare and publish an assessment of the additional resources required by the Advisory, Conciliation and Arbitration Service to facilitate the conciliation process as provided for in this section."

The noble Baroness said: My Lords, I return to this amendment which, persuaded by the Minister, I withdrew in Committee, but which I have now amended to take into account what was said in the previous short debate. It requires the Government to publish an assessment of the additional resources required by ACAS to facilitate all of the extra duties that it will have to undertake to fulfil the additional work that the Bill will impose on it.

I have, however, altered the time frame for that report from 120 days from the coming into force of the Act—four months—to 180 days, which is six months. I did so in response to what the noble Lord, Lord McCarthy, said in Committee. He said:

"I am absolutely certain that the Government have no idea about that, but how could they have? How could they have in 120 days?".—[Official Report, 18/3/02; col. CWH 1461

I have proposed an extra two months, which should be plenty of time for ACAS to work out what extra staff and facilities it will need, especially as it does not have to wait for the Bill to passed before it starts its forward planning. It could have begun work on contingency plans on the day that the Bill was published last February. I cannot believe that it will wait for applications to start flooding in before it begins to think how to handle them.

I was surprised that the noble Lord, Lord McCarthy, spoke against my amendment in Committee because only five days previously in the same Committee, he said:

"I support a subsequent amendment tabled by the noble Baroness, Lady Miller, which relates to ACAS because at least it is relatively precise. I am not against attempts to try to work out the cost of Bills".—[Official Report, 13/3/02; col. CWH 57.]

Of course, it is the noble Lord's privilege to change his mind, but since I do not know why he did so, I hope that he will change it back again as I have now increased the time to six months—a period that he himself mentioned in his speech.

In his reply, the Minister, the noble Lord, Lord McIntosh of Haringey, regaled us with figures for the funding of ACAS, which he said had risen from £26.2 million in 1998–99 to £36.6 million in 2001–02. According to my pocket calculator, that is an increase of more than 28 per cent. I am impressed because during that time, due largely to the wise trade union legislation introduced by the previous government, the number of strikes decreased. To give ACAS credit, perhaps its increased budget also had something to do with that. But the Minister was being too defensive. I was not complaining about the probable cost of ACAS's new responsibilities. I wanted only to be told what it was likely to be.

The Minister also told the Committee that the Government had set up yet another task force: the Employment Tribunal System Taskforce. He said that one of the duties of that task force will be to advise the Government on the need for new investment. So the Government will not really need the six months that I am offering them because the Minister told the Committee that he believed that the task force was to report "in the spring". It is now 30th May, and spring has definitely sprung. When will the task force's report be published? If the Minister is still unable to commit himself, will he either undertake to table an amendment at Third Reading or, at the least, give us an undertaking as to when he can tell us how much of our money ACAS will need to spend? I beg to move.

My Lords, I owe the noble Baroness an explanation. In general terms, I am in favour of research; it is, after all, how I get my living. However, the more I thought about the matter, the more it appeared that there were so many variables. It is virtually impossible for anybody to calculate the impact on ACAS, and that worries me considerably. However, we will not be able to do it by research.

If the Government were right in what they said in Routes to Resolutionthey do not say it so much now—they would expect a considerable reduction in the number of hearings. They do not like us to keep on about that, and they say, "Well, if we said that, we said it, but don't keep on about it. We haven't the slightest idea whether it is going up, down or sideways-. They are right: they do not have the slightest idea.

I shall not bore the House about the new liabilities, but there will be a considerable number of them over the next two or three years. God knows what that will do to the workload of the tribunal. So, I have reached a position of glorious agnosticism: good luck to ACAS. It should be given a large cheque and be allowed to sign it itself. I do not have the slightest idea what it will mean.

My Lords, is my noble friend Lord McCarthy aware that the Minister of State, my honourable friend Mr Alan Johnson, said on the BBC's "Nice Work" programme on 23rd April that, in the first year, there would be a reduction of 34.000 cases?

My Lords, I knew that he had said that, but I did not think that it was fair to repeal it.

My Lords, I am happy not to intervene in that part of the debate. I shall address the amendment.

The noble Baroness, Lady Miller of Hendon, is being generous in allowing 60 days. If we had a Third, Fourth or Fifth Reading, she might add another 60 clays each time. However, the length of time is not the reason why we cannot accept the amendment. ACAS is an independent public body, and the manner in which it chooses to allocate its resources is a question for it. It is open to question whether we should go as far as allowing ACAS to sign its own cheque, as my noble friend Lord McCarthy suggested. However, I am happy to address the substance of the amendment, which is that the Government should publish an assessment of the extra resources needed because of the policy.

We neither intend nor expect that a fixed period of consultation should lead to an increase in resource requirements for ACAS. We expect that the fixed period will lead to a change in the point on the timeline of cases at which conciliation will take place at ACAS, not to a change to the number of cases or the level of resources to be expended on them. The point at which conciliation occurs in the timeline of the work of ACAS should not have an impact on the cost involved in providing the conciliation. Any changes to the number of cases coming to ACAS as a result of other measures in the Bill that are not covered by the amendment are unlikely to have effects within six months of the legislation coming into force. To that extent, I am unhappy about the 180 days.

There will be an assessment of the impact of the Bill on the Employment Tribunals Service and on ACAS, once the provisions have been implemented and have had time to settle in. The regulatory impact assessment, which is available in the Library, gives estimates of the impact on ETS and ACAS resources. Early on in the bedding-down process of the new provisions, it will be hard to improve on the estimates in the regulatory impact assessment because of difficulties in distinguishing the effects of the individual changes from other factors which influence resources.

We are very conscious of the important role that ACAS plays in preventing and resolving workplace disputes. I am nervous about returning to Routes to Resolution, but responses to that document confirm the regard which many people and organisations have for ACAS. It is not our intention to request ACAS to take on new responsibilities without the resources to do them justice. That would be nonsense. As I explained in Committee, and as the noble Baroness, Lady Miller, quoted, the increase from 1998–99 to 2000–01 was from £22.6 million to £32.4 million, an increase of 23 per cent. I hope that her calculations are the same as mine.

That shows the Government's recognition of the importance of ACAS's role. We will discuss with ACAS any expected changes to its workload resulting from facilitating the conciliation process as provided for in the clause as part of the consideration of its hid for the 2002 spending round.

Reference has been made to the Employment Tribunal System Taskforce which is considering the resources of the employment tribunal system as a whole. The taskforce is due to report in July and will take account of all its recommendations when considering the funding needs of ACAS. I hope that on that basis the noble Baroness, Lady Miller, will not press her amendment.

My Lords, I am grateful to the noble Lord, Lord McCarthy, for giving me an explanation of his chain of thought which came about after reflection of the matter. Before that reflection, he obviously thought my idea was a good one, but upon reflection he did not. Perhaps there is a lesson to be learnt in that.

I intend to withdraw the amendment but perhaps I may point out one matter to the Minister for the sake of clarity and accuracy. He said that I repeated the figure which he gave. I gave the figure of £26.2 million but he gave one of £22.6 million. He did not correct me, so I am not sure whether I was wrong or he was.

My Lords, it was a slip of the tongue. The figure was £26.2 million.

My Lords, I am pleased about that. The noble Lord knows that I was listening carefully to what he said and I picked it up immediately. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 26:

Page 34, line 21, leave out "required by" and insert "issued under"

The noble Lord said: My Lords, it has been agreed that I should speak to Amendments Nos. 26 and 27. Amendment No. 27 is the substantive amendment. It takes us back to Clause 25 and the power to delegate the prescription of forms which will now replace our old friend ET3.

We are inserting two new paragraphs which significantly limit the scope of a Secretary of State to prescribe additional conditions and requirements on the form which will replace the existing arrangements. We do that because to a considerable extent in industrial relations on the floor and among trade unionists and employers, the clause was and still is the one which they worry about and fear. It is certainly feared by the unions and by the CAB, with their considerable experience, and by the Law Society and Judge Prophet. All those who have worried about the Bill have made a point of saying that they are worried about what one might call the "gateway clause". They believe, and have believed for some time, that taken together with the statutory procedure provisions this is one of the critical swinging elements. They believe that if there is to be a significant reduction in the number of hearings and applications, this is the way things will go.

The Government deny that. They do not tell us how the change will come about but they say that it will not come about through this legislation. Mr Johnson, on 11th December at col. 102 of the Official Report, Commons, said that the aim was a simplification. He even told us that there would be boxes which people could tick. He told us that he wanted the clause to be user-friendly; that he wanted it to facilitate easy access; and that we should not worry about it.

On the other hand, in Committee my noble friend Lord McIntosh gave rather more credence to our fears by admitting that it was,

"extremely wide-ranging. It seems that, under the terms of the clause, one could make quite dramatic changes".—[Official Report, 18/3/02: col. CWH 154.]

But those changes were not intended. My noble friend went on to make a few helpful suggestions at col. 157 explaining how the clause might work and how it would be constructed. The form might contain a series of simple questions along the lines of, "Did you write a letter? Have you had a meeting?". When my noble friend Lord Wedderburn asked my noble friend whether it mattered if someone did not know the answer, my noble friend said that, no, it would not matter. If the answer is not known, it is not known.

That sounded rather reassuring. Yet at the time the Government would not accept what we thought were a series of modest amendments aimed at limiting the application and the freedom of the Secretary of State. So we have tabled new amendments at this stage. They arise out of what we have been told. The Government have said that applicants shall not be required to demonstrate a knowledge of the law. In Committee we asked for that assurance to be put on to the face of the Bill, but the Government would not agree to do that. It has now been included in the amendment.

The Government said that they would not go beyond the direct experience of the applicant. Applicants would not be asked whether they know what is the law and they would not be expected to know what practices their employer operates that are not necessarily within the applicants' direct experience. Again, that has been included in the amendment.

After some interchange, we received a clear statement that there would be no breach in the present practice of making the forms voluntary. You do not have to have a form. However, it was said—it is quite reasonable—that if you write a postcard or a short letter, the form will be sent, because that will be the easiest way to fill in the background that the parties have to provide if there is to be conciliation. We accept that.

In the amendment we have tried to collect together statements which we think that the Government will accept in order to make this gateway clear, precise and easy. Perhaps the Government will say that the provision is all right as it is and that it will all be made clear in the regulations. I would ask my noble friend not to respond with such a simple answer. If he looks to the right, the left or a long way ahead, he will see that his view that everything can be decided in regulations and that everyone will in some way be aware of what is in the regulations is being undermined.

I take it that my noble friend has taken to bed with him the report of the Better Regulation Task Force, Employment Regulation: striking a balance. I am sure that he knows it by heart. In some ways the task force is a strange body. It is composed almost entirely of employers. Only one trade union general secretary is included. The entire terms of reference of the task force are designed to view the position from the point of view of the depressed employer. There is nothing about trade unions and how regulations might hurt them. The task force is concerned only with how the provisions in various employment protection Acts might affect employers.

Despite that, employers say that they find the provisions blindingly complicated. They have made various suggestions, to which I shall return later in our discussions on Report, for making things easier. However, all those suggestions suit the employers. Reading the report, I am bound say, "What about the workers?". Surely it would be a good thing for the Government to point to a simple gateway that includes the explanations we have proposed in our amendment, rather than bury them in a set of regulations. It would be better if they were set out on the face of the Bill. The tick-sheets should be circulated with the explanations set out, stressing that there is no desire whatever to make this part of the Bill blindingly complicated. I beg to move.

My Lords, I am afraid that I am unable to direct the attention of my noble friend the Minister to the column in Hansard that reports our debate in Grand Committee. However, perhaps I may remind him that we were told that the draft of the new IT1 form would be available for us to see before—I hoped—we reached Third Reading. Concern has been expressed about the demise of IT1; indeed, the kind of matters described by my noble friend Lord McCarthy are causing concern. My answer has been to reassure myself that we would see the draft beforehand; that is, before we reach the end of this stage of the Bill. I asked for an assurance, and I received an affirmative answer. When we were told that the parties would see it, I asked whether we would also see it. I was told, "yes". Can my noble friend tell the House when we shall see the draft?

My Lords, I should like to raise two simple points in support of my noble friend's amendment. First, if only the prescribed form in some new shape is permissible to begin an application to an employment tribunal, there is a fear that the process will drift into complexity. That is not my fear alone; it is the fear of many chairs of tribunals. It was also the fear of Judge John Prophet, who wrote a long memorandum on the subject about which my noble friend the Minister will be aware. He will know the way in which the judge put that fear in the memorandum. The prescribed form must not become something that is required of the worker in the form of a letter before action.

Secondly, Clause 25 is centrally important to the Bill, because it is the hinge upon which it seems other parts of the legislation will be brought into effect. When we turn to Clauses 29 and 32 and Schedule 2, we see that there are limitations upon the ability of workers to present claims to employment tribunals, unless they have satisfied certain conditions. It is our contention that those conditions are unfair, but we shall debate those issues at a later point.

Quite apart from that, it has often been suggested that the evidence as to whether workers have complied with those conditions will be found in their answers to the new ET1. If that is the case, they will be asked to state all sorts of things of the new ET1 that will lead them into questions that this amendment would lean against—not least questions of law. Therefore, this is an important amendment, not only because of its effect on Clause 25 but also because of its effect on the entire structure of the Bill.

My Lords, I shall try to deal with the many issues that arise under this amendment. Perhaps I may, first, deal with the issue of what is to be required. We shall be making transitional arrangements so that, for a period to be decided, applications not on the prescribed form will be accepted. After that, the use of the form will be compulsory and applicants who submit claims that are not on the new form will be asked to complete it. If they apply by letter, by postcard, or whatever, applicants are already sent a form.

Standardised application and response forms are designed to encourage parties to convey at the outset the information that is needed to understand and evaluate their case. Around 99 per cent of people already use the existing form, and the new form will be widely available. The guidance on completion of the form will be closely tied to the form itself and made available with it, so that anyone using any other document would, in any case, be at a disadvantage.

I must say that that is in contrast to the existing form, a copy of which I have in front of me. It seems to me to break many of the rules of questionnaire design from which I spent most of life earning my living. Noble Lords may like to imagine Question One, which reads:

"Please give the type of complaint that you want the tribunal to decide—for example, unfair dismissal, equal pay … a full list is available from the Tribunal Office . If you have more than one complaint, list them all".

To insist on people answering something and then expect it to conform with a list that is not supplied, with the form, seems to me to be a breach of one of the most basic principles of questionnaire design. However, we believe that a better designed form which is capable of being electronically read will do away with a lot of otherwise wasted effort at tribunals. It will also be beneficial for ACAS, which uses the information.

I said that on the expiry of the transitional period the form will be compulsory, but it will be mandatory to answer only a small number of key questions. There will be other questions which it will not be mandatory to answer. The mandatory questions will include details of the parties and details of the claim. These are already set down in the current rules. They may also possibly include dates of employment and pay—both of which are already on IT1—and, if the case is one of unfair dismissal, whether the applicant has found other work.

In addition—this is where the concerns arise—there will be two or three simple questions on whether the required steps under statutory grievance procedure have been taken. For example—I am not using the exact words—"Have you written to your employer about your grievance?", which could be answered by means of a tick box; and., "When was this done?" There is nothing technical involved in these questions. They are necessary if tribunals are to be able to draw the attention of applicants to a possible omission and to give them a chance to rectify it.

The amendment seeks that the form should not cover questions of law or questions outside the direct experience of the applicant. Clearly the two or three simple questions on the required step do not fall into the categories set out in Amendment No. 27. However, it is important to stress that only a tribunal will be able to decide whether to admit a claim where it is doubtful that the admissibility criteria have been met. This is an issue for judicial determination. Where possible, tick boxes will be used. I do not see anything wrong with that.

The aim of all this is to improve form IT1. I know about Judge Prophet's views but perhaps I may cite Colin Milne, the president of the Employment Tribunals in Scotland. In his response to the consultation paper he said that the current forms—that is, IT1 and IT3—produce inadequate information. They should give more information from the parties so that the issues are clearly focused before the hearing. At the moment, it is all too common for an applicant merely to put down something such as, "I was unfairly selected for redundancy", without stating whether this was because the criteria were unfair or applied wrongly, or because there was no consultation.

If tribunals get this information sooner, they can process cases more quickly. At the moment they need to send the parties orders for further and better particulars of their case. It is estimated that the total number of interlocutory orders would be reduced by some 25 to 30 per cent. a very significant reduction, which would free resources for other work.

The new application form should help people, not deter claims. All it will seek is key information which will come into play during proceedings in any case. It would be helpful for everyone if this were set down at the outset.

A key aspect will be the supply of comprehensive guidance on how to complete the form. At the moment, for all practical purposes, people are given a blank sheet of paper when it comes to the highly important point of setting down the details of their claim. That is what the reverse of the form is for. It is the most unhelpful form of form, if I may put it that way, that I can possibly imagine.

Respondents will be obliged to address fully the more detailed claim provided by applicants. As a result of doing this, the issues raised by the case will be immediately identifiable—far sooner than they are at the moment. Chairmen would have some information upon which to work to case-manage the issues. It would also provide more information to ACAS and thus could lead to more effective conciliation.

I was asked by the noble Lord, Lord Gladwin, about a commitment that a copy of the new form would be available. I am not aware that I gave any commitment on that point. Officials can find no reference to it in Hansard. If I am wrong, of course, I am very sorry.

It is the case that there will be full consultation on the form. It is, among other things, in the remit of the Employment Tribunal System Task Force to which I have referred. In my experience it is not normal for forms of this kind to be the subject of parliamentary scrutiny. If by any chance anything is available that can be shown to the House before Third Reading, it will be. However, I am not conscious that it can be or will be.

The application form will be simple to complete. It will require only information that the applicant will have to supply anyway during the course of the proceedings. It will, I hope, be better designed, to make it easier to complete than the present form. It will enable the applicant to give a better account of his case. There is certainly no intention of deterring applicants by asking numerous questions or complicated questions about the use of procedure or any other matter. Indeed, if we were to try to do so, I suspect that we should fall foul of human rights considerations. I hope that these amendments will not be pressed.

My Lords, before my noble friend sits down, did I hear him aright? It is difficult to discuss the new form without seeing at least a skeleton of it. Is he saying that the new form will provide sufficient information for the number of interlocutory order hearings to be reduced by an estimated 25 to 30 per cent? If that is the case, the amount of information provided by the form will surely be quite extensive.

My Lords, I did not say interlocutory hearings; I said interlocutory orders—which is a very different thing. An interlocutory order is sending the parties orders for further and better particulars of their case. In other words, it is an inquiry. It is very different from a hearing.

My Lords, before my noble friend sits down, do I understand him to say that the new ET1 and ET3 forms will be the subject of consultation? I assume that that means consultation with the parties. When will the parties have access to the draft new ET1 and ET3?

My Lords, I can answer the first question. Yes, of course, there will be consultation with interested parties. That will include the CBI, the TUC, the Law Society and the tribunal judiciary. As to when that will occur, I do not have the information now. If I can get hold of it, as soon as I do so I will write to the noble Lord and others who have taken part in this debate.

My Lords, I must be very careful what I say. I find the noble Lord's speech alarmist—it alarms me. In the first place, he says that at some time in the future the application forms will become compulsory. Shall I tell him why we do not want them to be compulsory? It puts people off.

At the moment, you can send a postcard or a letter. I know that the process goes on and the applicant is sent a form; and may be sent another form, and another. Of course that is the case. But if you want to encourage people to come into the system, if the idea is one of "catchee monkey"—to encourage people who may be getting fed up with their employers giving them the same old answer—they should not be discouraged. That is why we do not like the 28-day provision. In a way, it is the most discouraging aspect of the Bill. When you are told that you have to fill in the form and the whole process becomes compulsory, people are discouraged. Employers may say to people: "Of course, you know you will have to fill a form in. God knows how many forms you will have to fill in. They will all be compulsory". These are the things that we do not like. A few weeks ago we received the answer that this would not be compulsory. We are now told that, after a time, it will be. That is slightly alarmist.

Nobody would ever say that the dear old ET1 was perfect, but nobody complained about it. People found a way of working it. It went on for many years and it seemed to work. I do not suppose that the Minister or I would disagree that it is not the kind of thing that WIRS would put out, because they are professional and have tick-off sheets and all kinds of damned things. It takes 45 minutes to fill in a WIRS form. ET1 is not perfect, but it seems to work. If the Government want to change it, they ought to do some research before introducing their form on whether it works and whether people understand it. Nothing like that is suggested here. I find that alarmist.

Then the Minister says that there are the steps relating to the new statutory procedures, some of which are outside the restrictions that we will put into our amendment. I shall do some research, but I am certain that everything in our amendment was said or agreed to by Ministers, yet now they tell us that they want to put in something that is outside our amendment. They have not told us what it is, but it is outside our amendment. I find that alarmist.

Then the Minister says that we are going to get more information. That is important. It is possible to ask for so much information that everybody gets fed up. The idea may be to get so much information that we never need to have a hearing because the tribunal can get together and make a pre-hearing assessment. Everything would already be down on paper. The hearing would become a mere formality, because we would have got so much information out of the parties. Employers are better able to fill in the information because they have their organisation. On the other side there is just a man at his kitchen table. The idea of using the application form as a way of getting enough information to take a decision—that seems to be what was being said—is particularly alarmist.

Finally, and most alarmist of all, the noble Lord, Lord Gladwin, may have misremembered or I may have misremembered. I thought that the Government had said that they would give us a sight of the form. I do not give a damn if they did not say that, because they ought to give us a sight of the form anyway. I do not give a damn if they say that they have never done it before. What about the resources of the Parliamentary Question? We have used the resources of the Parliamentary Question quite effectively on the Bill. We ask the Government what they are going to put on the form. Suppose we were to ask them tomorrow. They would say that they had not decided yet. Suppose we kept on asking and used not just Oral Questions, when Ministers are up for only a minute or two, but Written Questions. Could not Ministers reply to a Written Question by giving us the words on the form? That is a good idea. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 28:

Page 34, line 33, at end "if it is agreed by the parties to the proceedings"

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 29 and 32. Clauses 26 and 28 deal with two aspects of tribunal procedure—the determination of a case without a hearing in Clause 26 and pre-hearing reviews in Clause 28. I do not often comment on purely drafting matters, but. I find it somewhat surprising that these two closely connected clauses are not juxtaposed, but are instead separated by Clause 27.

Amendment No. 28 would amplify the power of the tribunal to determine proceedings without a hearing. There is ample precedent for such a procedure in planning appeals, for example. We certainly do not dissent from the use of such procedure to save time, trouble and expense in employment tribunals cases, in which the amounts involved are frequently comparatively small or the issues involved are often very simple. However, no one should be deprived by the stroke of a tribunal chairman's pen of his day in court and the elementary human right to face his opponent. Hence, I have proposed that a hearing shall be dispensed with only with the consent of both parties.

When this matter was discussed in Grand Committee, the Minister pointed out that the Explanatory Notes dealt with the matter at least to his satisfaction. The notes state:

"It is intended that the circumstances in which a case may be determined in this way would be where both parties have given their consent by signing a form … following independent advice".

I agree that this will be a very satisfactory procedure. However, having given the Minister's response some thought, as I said I would at the time, I have come to the conclusion that the Government's good intentions, which I certainly do not doubt, do not really go far enough.

I do not think it is sufficient for this important provision limiting a party's right to an oral hearing to be defined simply in a piece of secondary legislation. There is nothing to prevent a less benign Secretary of State from later modifying that regulation by restricting oral hearings to cases above a certain monetary value or within some other criterion. It is true that any modification of the regulation which the Government say they now propose would be subject to parliamentary scrutiny, but, as we all know, secondary legislation receives only a perfunctory examination and cannot be amended. It can be either accepted or rejected, but that is all. I do not believe that the Minister should insist that this safeguard should not be written into the Bill but left to regulation. After all, the amendment simply includes in the Act the Government's stated intention.

I turn to Amendment No. 29, which gives the tribunal power to adjudicate on a case in which one party has failed without reasonable excuse to attend the hearing. I ask your Lordships to note the words "without reasonable excuse". In Grand Committee, in reply to the same amendment, the Minister devoted a great part of his reply to a situation in which a party has, in his words,

"failed to engage in the process in any way".—[Official Report, 18/3/02; col. CWH 168.]

The Minister rightly pointed out that that situation is covered by the Employment Tribunal Rules of Procedure. However, that is not the situation that I am concerned about and am trying to talk about. I am talking about cases in which a party files a claim or notifies an intention to defend a claim and does whatever is required right up to the date of the hearing but then simply fails to turn up to the hearing.

In appropriate circumstances—namely, in the absence of a reasonable excuse—the tribunal should have the power to determine the case in favour of the party who has taken the trouble to turn up. It is all too easy for a party either to launch a claim or to file a defence with the single malicious motive of inconveniencing the other party, or a party who has been involved in a case may simply think better of it and fail to attend the hearing. The point is that if the tribunal cannot arrive at the obvious conclusion that the absence of the defaulting party is an admission of the other side's case, then the party who has attended will be put to the further trouble and expense of going through his whole case before the tribunal. What is to be the conclusion of such a pantomime? Is the tribunal, having listened to the outline of the case and perhaps to the evidence, going to act as the absent party's representative and dismiss the claim or defence? Of course that is not going to happen.

In arguing against this amendment, the Minister acknowledged that illness or absence abroad might be "a reasonable excuse". But then he said that strong business reasons on the part of the employer, especially in a small business, were unlikely to be accepted as a reasonable excuse. With all due respect to the Minister, I believe that the reasonableness of an excuse should be a matter for the tribunal to decide on a case-by-case basis. I do not think that it should be for the Minister to pre-empt what the decision should be in every case.

The Act and the regulation do not indicate what the tribunal is to do if one party fails to turn up, perhaps after several adjournments causing trouble, expense and waste of time or delay to the other side. The Minister said:

"There is no precedent for the determination of a case without the consideration of any evidence whatever.—[Official Report, 18/3/02; col. CWH 168.]

I believe that he is mistaken. When sitting as a magistrate I found that on several occasions cases were dismissed when the prosecution simply failed to turn up, and certainly when they failed to turn up on more than one or two occasions. Of course, I accept that dealing with defendants in criminal cases is a different matter. Judges and magistrates have power to order the arrest of an absent defendant and to have him physically brought before the court!

Judges in civil cases can and do determine a case in the absence of one of the parties and are assisted by the written documents, as will be the tribunal as a result of the documents that have to be provided to it. There is no reason why a party who has respected the tribunal by arriving at the hearing with his witnesses and perhaps with lawyers or trade union advisers should have to go through the whole procedure of proving a case that the other party's absence implies is no longer disputed.

I turn to Amendment No. 32. Clause 28 provides for a pre-hearing review of cases. That is an excellent procedure adopted from the civil courts. It can save a great deal of time and trouble by ensuring that the issues are all clarified and that each party is under no misunderstanding as to what evidence he is expected to produce, what disclosure he is required to make to the other side in advance of the hearing and, not least of all, so that a judgment can be made as to the probable length of the hearing.

But there is another power which it is desirable that the tribunal should have at this relatively early stage and when the costs, time and effort that go into preparing a case have not yet been incurred; that is, when it is apparent to the tribunal, on looking at the papers before it, that the case of one or other party is absolutely untenable. I agree with what the Minister told the Committee when he said that,

"we do not want tribunals … to hear evidence at pre-hearing reviews".—[Official Report, 18/3/02; col. CWH 169.]

But applying this power in rare cases would not involve making some decision on the facts as that is obviously a matter for a full hearing when the evidence can be properly tested.

The analogy is the Civil Practice Rule 24 when the court has power to give summary judgment for a plaintiff when the defence offered by the defendant, even assuming that all the facts alleged by him are true, is not a defence in law. Noble Lords will recall that what we are discussing here is not merely an amendment to this present Employment Bill with its limited application to paternity leave and pay and adoption leave and pay. Clause 28 is an amendment to the whole of the Employment Tribunals Act 1996 which affects the procedure of every employment tribunal in every kind of case, not merely those brought under this Bill.

I shall mention a couple of exaggerated situations to try to show what I have in mind. Let us imagine a disgruntled employee who shoots the managing director of the firm which employs him, sets its premises on fire, and drives off in one of its vehicles which he then for some reason deliberately crashes, for all of which actions he is sent to prison. Is it seriously suggested that an employer should have to go through the whole rigmarole of defending proceedings for wrongful dismissal? To be even-handed, let us imagine that an employer's defence to a claim is that he has diplomatic immunity and is exempt from the jurisdiction of the tribunal.

Of course, I accept that those are totally exaggerated situations but they illustrate the fact that in some rare cases there may be valid and reasonable grounds to dismiss a claim or defence out of hand. The civil courts occasionally dismiss claims on the grounds that they show no reasonable cause of action, and dismiss them as obviously invalid. Only this morning, I reminded noble Lords that the Minister told the other place that tribunals should follow civil procedure wherever possible. I urge the Minister to accept the amendment or at least to consider it. It would make matters much easier and cheaper in these very rare cases. I beg to move.

My Lords, I shall take each of the amendments in turn because they deal with slightly different issues.

I start with Amendment No. 28. We return to this question once more. I had hoped that my explanations in Committee had satisfied the noble Baroness as to our intentions with regard to the clause, but I am happy to offer further reassurance. It is the Government's intention, as has already been stated both in this House and in another place, that both parties should consent in writing before the tribunal can proceed with a determination without a hearing. That is clearly laid out in the Explanatory Notes accompanying the Bill.

If we were to accept the amendment, however, there would be no flexibility in the system whatever for one party to withdraw his or her consent and for a hearing still to go ahead. It might seem to the noble Baroness that there are no such circumstances that might be desirable but I would like to explain the situation. If the clause were to be implemented with the amendment, the tribunal would be unable to deal with cases where one party withdrew his or her consent at the last moment for tactical reasons. If that were to happen, under the amendment tribunals would be unable to proceed with the determination as planned and would have to schedule a full hearing, which, given the pressures on the system, could be some weeks away. All the while, the other party, who is genuinely seeking a determination, incurs costs and suffers stress. If we were to accept the amendment, no reasons for withdrawal of consent would have to be given—a party could simply use the provision as a delaying tactic, perhaps hoping that the other party would give up his claim or defence in the face of such a delay.

It is important that parties should consent to a determination without a hearing—on that we are agreed. Neither party should be able to force the other into such a determination if that is not desirable. However, the parties' right to a fair trial must he protected. If a party gives his or her consent and subsequently—in good time before the determination—decides that a full hearing would be preferable because, for example, circumstances surrounding the case had changed, it is reasonable for a full hearing to be scheduled. However, if the consent is withdrawn at the last moment and without good reason, we believe that the tribunal should have the discretion to decide whether or not to continue with the determination as planned. That does not, by any means, indicate that the regulations will be drawn up to allow for the withdrawal of consent to become a regular occurrence, but there should be sufficient flexibility within the regulations to ensure that the right to a fair trial is protected but also that parties cannot readily abuse the system by withdrawing their consent late in the day. Such detail is, in our opinion, better placed in the regulations than on the face of the Bill.

I now turn to Amendment No. 29. Again, I am sorry that I was not able to persuade the noble Baroness in Committee that she should withdraw that amendment. I think that we would all agree that it is undesirable to have hearings that one party fails to attend with little or no notice and no reasonable excuse. The amendment seeks to have the tribunal automatically find against a party, without the hearing of any evidence or the consideration of any submissions, where the tribunal does not judge a party's non-attendance to be because of a reasonable excuse. That goes even further than the current procedure for handling uncontested cases, where the applicant must still appear before the tribunal and have the evidence considered although the would-be respondent has never engaged in the defence of the claim.

Moreover, once the provisions in the clause have been implemented, the applicant will also be able to ask that the claim be determined without a hearing through paper submissions. There will, crucially, always be some consideration of the merits of the case before a determination is made.

It would be unprecedented for an employment tribunal to determine a claim without any consideration of its merits. I stress that there is no precedent in employment tribunals for that. I do not believe that any comparison with a civil court, where a case is dismissed because there is no legal justification for it, can be made with the matter that we are discussing here.

As I said, it would be unprecedented for an employment tribunal to determine a claim without any consideration of the merits. It is, at best, a strange concept that a party should be deemed guilty in his absence without any consideration of the facts of the claim which he either submitted or had submitted against him.

Let us take, for example, the small-business owner who, for what he considers to be good business reasons, fails to attend a hearing. Under this amendment, if a tribunal were not to agree that his reasons were reasonable, it would find for the applicant without looking into his case at all. I hope that noble Lords will agree that the determination of a claim without any consideration of the merits of the case is undesirable.

I now turn to Amendment No. 32. Again, a similar amendment was tabled in Grand Committee. The amendment requires tribunals to dismiss proceedings unless they have a reasonable prospect of success. As I said in Grand Committee, that goes too far. It would allow no room for use of the existing deposit procedure, which is still intended to be the main weapon against cases that appear to have no reasonable prospect of success. Striking out cases is intended to be used only in relation to hopeless cases. Again, to take the somewhat Byzantine example given by the noble Baroness, I believe that such a case could be seen to come under the category of "unreasonable" or "vexatious", and so on. Therefore, I do not believe that a change is required here.

Nor do we want tribunals to have the power to hear evidence at pre-hearing reviews. Such reviews are intended to be relatively speedy, based on consideration of the contents of the originating application and notice of appearance, any representations in writing and any oral argument advanced by the party. The review would take longer if evidence had to be heard, thereby making it more like an ordinary hearing. On the basis of the arguments that I have given, I hope that the noble Baroness will withdraw the amendment.

My Lords, I accept the explanations given by the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 30:

Page 35, line 8, at end insert—

"(4) No direction or practice direction made under this section shall be made until the President has consulted, so far as is practical, with employers' and employees' organisations and persons who have evinced an interest either in the operation of employment tribunals generally or the issue being regulated specifically.

(5) No inadvertent failure to consult, nor any omission of any potential consultee, under subsection (4) shall invalidate any directions made under this section.""

The noble Baroness said: My Lords, I am concerned about consistency in the practice of different tribunals. Since the late 1940s or 1950s, when tribunals were introduced extensively into the judicial system— although, of course, they existed before that time—the numbers and powers of tribunals have increased considerably. Today, they cover a wide range of subjects from rent control to employment matters, equal opportunities and so on.

I believe it is important that, like the regular civil and criminal courts, they all operate to the same, consistent procedure. That is my view not only in relation to tribunals which adjudicate on the same subjects but also in relation to those which adjudicate on differing topics. The ideal situation would be for a common set of rules and procedures to be laid down by statute and secondary legislation, as is the case, for example, with the Civil Procedure Rules, which regulate the civil courts.

I realise that parliamentary time is not readily available to lay down a common set of rules and practice directions. However, until that ideal time arrives, it is important that, so far as possible, procedures are consistent between tribunals which operate under the Bill. I want to point out to the Minister that it has been the practice of his noble and learned friend the Lord Chancellor and the noble and learned Lord the Master of the Rolls and their respective predecessors to consult the legal profession or their representatives before introducing major changes in practice and procedure.

That was particularly the case when the noble and learned Lord, Lord Woolf, carried through his major overhaul of the Civil Practice Rules a few years ago. It is important that the president, in setting the tribunal rules, consults interested parties so far as possible. That is the purpose of subsection (4).

Subsection (5) is a saving provision. No one should be able to attack the procedures on the basis that a person who considered that he should have been consulted was not, for whatever reason. I shall be most interested to hear from the Minister what steps will be taken to ensure that new practice directions, as distinct from those which are already in use under earlier legislation, will be the subject of appropriate consultation.

I should also be glad to hear from the Minister whether in the future—however distant—the Government will consider providing the drafting resources from all the departments concerned to produce a common set of tribunal practice rules. I beg to move.

My Lords, consultation is extremely important in these matters. I hope I can persuade the noble Baroness that we are taking a commonsense and pragmatic approach to this issue. Like its predecessors in the other place, this amendment seeks to force the tribunal presidents to consult in all circumstances rather than to rely on their common sense.

There may, for example, be a large number of applications, running into thousands—Perhaps even tens of thousands—arising out of a judgment of the European Court of Justice. Those affected may be spread over a number of different workplaces involving different employers. They may, and indeed almost certainly will, involve major problems for the tribunals in terms of handling the cases in a way that is most efficient and also meets the needs of the parties concerned. There will he a need to ensure that the cases are handled consistently. There may be an argument for hearing the cases in one location.

Accordingly, the president may decide to issue a practice direction about such cases. He may very well wish to consult, but it may he more sensible to consult just the parties concerned and their representatives rather than to embark on a more general consultation. It would seem more sensible in this situation to consult the parties and their representatives direct without involving other organisations.

Sometimes the president may wish to issue a practice direction in order to ensure a best practice approach. There will be occasions when he may feel it desirable to consult to ensure that it is indeed best practice. On other occasions it may be plain what constitutes best practice, not least because there may have been complaints about the practice in some regions which the practice direction is eliminating. Where that is so, there really is no point in consulting. Indeed, if a practice direction is required to deal with a problem as a matter of urgency, a statutory requirement to consult could diminish its effectiveness.

The different situations that may arise mean that it is inadvisable to constrain the presidents by requiring them to consult widely on every practice direction. I am sure that they will recognise that there will be times when employer and employee organisations and others will have a useful contribution to make and they will consult them. But it should be left to them to make up their own minds, as is already the case with the president of the Employment Appeal Tribunal. Further, it is worth noting that there was overwhelming support in consultation for this proposal and in particular that the Council on Tribunals in its favourable response did not suggest the need for the presidents to consult.

I can see no reason why anyone else would draft the directions. That should be done by the presidents themselves. For the reasons that I have given we cannot accept the amendment.

My Lords, I was not suggesting that the presidents would not use good common sense. I am sure that presidents of all tribunals would use good common sense. My point was that I believe that there should be consistency between the whole array of tribunals so that when people appear before a tribunal they know what is likely to happen. Clearly, the Minister does not agree. If he did, he would suggest that at some time in the distant future we may get people together who will come up with a set of rules to which everyone can agree. However, I do not want to burden the Minister with thoughts of the distant future when he is certain that he is right at the present time. I beg leave to withdraw the amendment.

moved Amendment No. 31:

Page 35, line 14, at end insert "but in such review proceedings the tribunal shall not strike out an originating application or notice of appearance save in the circumstances set out in paragraphs 4, 7 and 15 of the Employment Tribunal Rules of Procedure (Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (S.I. 2001/1171))"

The noble Lord said: My Lords, striking out has been mentioned in recent discussions on previous amendments, so Amendment No. 31 appears more important than we previously thought. The easiest way to explain quickly why we have tabled the amendment again in a slightly abbreviated form is because in our view pre-hearing reviews are peculiarly not suited to striking out, which is a nuclear weapon as far as an applicant is concerned and destroys his cause of action altogether.

On 13th December 2001, the Minister of State, my honourable friend Mr Alan Johnson, said,

"We intend to amend the employment tribunal regulations to include a strike-out power at the pre-hearing stage".

That point worried us very much. Our anxiety was slightly assuaged by his counterpoint in the case he put forward when he added that the Government do not envisage the power being used to a huge degree:

"We do not envisage it being used other than in extreme cases". [Official Report, Commons, Standing Committee F, 13/12/01; co1.113.]

But when we looked again at the Explanatory Notes, which were repeated when the Bill came to this House, we found that there was constant reference to striking out of very weak or weak cases. For example, they state,

"Although rule 15 of the main Employment Tribunal Rules of Procedure permits the strike out of certain cases, including weak cases"—

I interpose that it does not include weak cases—

"it is arguable that the current rules do not allow the strike out of weak cases at pre-hearing review".

It is necessary to say immediately—and this is a matter of very great importance if pre-hearing reviews are to have power, even in extreme cases, to strike out—that Rule 15 regulations give to the tribunal the power to strike out in cases where the application is vexatious, unreasonable, or misconceived which may be generally described as disclosing no cause of action.

When the Explanatory Notes insist three times that it would include weak or very weak cases and refer to a party to a case which was judged to be wrong in its interpretation of the cause of action, our anxiety returned. No pre-hearing review can judge that the applicant is wrong in his interpretation of his case as opposed to disclosing no cause of action, which is a fundamental distinction, without hearing evidence.

The Minister has just repeated that the tribunal does not want to hear evidence. It was therefore with very great interest that we heard the reply of my noble friend Lord Sainsbury on 18th March. I cannot move this amendment without quoting what he said, which was,

"Rule 15, to which the amendment refers, provides power to strike out an originating application or notice of appearance at any stage of the proceedings on the grounds that it is scandalous, misconceived or vexatious, or that the proceedings are being conducted in a scandalous, unreasonable or vexatious manner. As I have already said, we expect proceedings to be struck out only when cases are hopeless; that is to say, those at the extreme end of the spectrum covered by the terms 'vexatious', 'misconceived' and so on. I stress here the word 'misconceived' because it is those cases to which the Explanatory Notes refer". [Official Report, 18/3/02; col. CWH 173.]

I immediately interpose to say that it is not only those cases to which the Explanatory Notes refer, nor indeed the other documents which preceded this Bill such as Routes to Resolution. There is constant reference to weak cases. Unless the Government make it absolutely clear that strike out is not to apply to weak cases, but will only apply to the cases which are already in rule 15, namely, scandalous, misconceived and totally unreasonable and not disclosing a cause of action, there will be constant worry. We all hope to see a draft of the regulations any day before Third Reading. In that event we shall see whether it is so or not. But there is a great worry. The Government began by saying that there were going to be wide powers for strike in the regulations. They then say that it applies only to extreme cases. And then on 18th March my noble friend Lord Sainsbury said that it referred to the cases at the extreme end of the spectrum covered by the terms "vexatious" or "misconceived".

I add that he also said:

"In the light of Clause 28, it will in due course be necessary to amend Rule 7 of the main employment tribunal rules of procedure to allow for strike out".

I should like him to tell us what that Rule 7 amendment will be. I do not understand what that implies. He continued:

"The new rule will need to specify when the strike out power may be exercised".—[Official Report, 18/3/02; col. CWH 174.]

Why? Why not say that it will be exercised when Rule 15 says that it will be exercised; that is, to the cases at the "extreme end of the spectrum"—his words not mine—which are vexatious, misconceived and so on? Therefore, what is the objection to our amendment? He may say that it will all be clear in the regulations. This is such an important point that any hint that the power to strike out could be extended should not be left to our understanding of the regulations. It should be made clear on the face of the Bill.

We would welcome the Government bringing forward another amendment that makes that clear. I tabled the amendment in view of what was said in Grand Committee. I have not yet had a reply, which makes me totally reassured that the power to strike out is not to be extended. If it is not to be extended, why use Clause 28 in order to introduce new regulations? I beg to move.

My Lords, this amendment is concerned with the scope of striking out a claim or defence at a pre-hearing review. That is an issue we had intended to address in regulations. The clause paves the way for that.

There was concern expressed in Grand Committee, which has today again been expressed by my noble friend Lord Wedderburn, that cases should not be subject to striking out merely because they are weak. His concern arises because the Explanatory Notes uses the term "weak cases" in relation to the strike out powers in Rule 15 before saying that the Rule 15 powers arguably do not apply to pre-hearing reviews. Of course Rule 15 does not actually use the word "weak", which was merely intended to be a shorthand description of the actual terms used—"scandalous", "misconceived" or "vexatious".

I think that in practice we are in broad agreement with the spirit of the amendment as we envisage that striking out will occur only rarely and that the current deposit procedure will remain the main sanction. We have no intention to widen the grounds in the regulations on which tribunals may currently strike claims out, nor do we intend that the grounds for strike out at a pre-hearing review should be any wider than the existing grounds. Since evidence is not generally heard at a pre-hearing review, it would be absurd if tribunals had greater scope for strike out at that stage than they currently have to strike out at other stages of the proceedings.

As I say, we intend to achieve the intended effect of the amendment through regulations. However, I am prepared to consider whether it is possible to return at Third Reading with an amendment which encapsulates the spirit of this one, if not its exact wording. Our Parliamentary draughtsman will of course have his own views on how to give effect to that spirit. I hope that, in view of this undertaking, the amendment will be withdrawn.

My Lords, I am most grateful to the Minister for his remarks. We may not have scored any runs on the amendment, but at least we have not been run out. We look forward to his further suggestions at Third Reading. I meant to say in my remarks that, in the interests of the wider understanding of the public—who are agog with interest at our exciting debates—we were very grateful to him for all the details on deposits and the few deposits which have occurred in recent years that he gave us in Grand Committee. Those statistics were most useful in other respects. What he has said today is most encouraging. We look forward to something on the face of the Bill at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 33:

After Clause 28, insert the following new clause—

"DRAFT OF REGULATIONS

Not less than 84 days before—

(a) making regulations, or

(b) prescribing requirements in relation to any form or matter,

under this Part, the Secretary of State shall publish a draft of his proposals."

The noble Lord said: My Lords, in moving Amendment No. 33, I shall speak also to Amendment No. 110. We have agreed that we should take them together because they say the same thing in different parts of the Bill. They commit the Government to publishing in draft all regulations and requirements 84 days before they are made, decided and presented to Parliament. That would give us ample time for the widest possible consultation before Parliament decides.

It may be asked: how we did we decide on that demand? Why do we ask for that in the Bill? There are several reasons, which I shall quickly skate over. We have complained, as people complained under the previous Government, about the long history of the use of regulation. I remember the noble Lord, Lord McIntosh, and I complaining about what the Conservative Party did with its mania for regulation. So there is a long history of people complaining about regulation. There are controversial parts of the Bill that almost all depend on regulation. So the regulations are critical to what the Bill means.

Secondly, we feared in advance of Committee that we would not be able to change much in Committee—perhaps we were rather cynical—so we tabled a version of the two amendments in Committee so that the Government could say whether they agreed with us about the need for advance regulations. The Government were not prepared to accept the amendments, but we were glad that we tabled them, especially when the noble Lord, Lord Sainsbury, rose to speak on 18th March. I apologise that I must read extensively from what he said—indeed, the greater part of my speech consists of reading extensively from what he said. He said, first:

"The Government … intend to conduct a wide public consultation on drafts of the regulations to … ensure that the regulations achieve clarity and are comprehensive without being over-prescriptive. In particular, there will be pre-consultation with such people as the tribunal judiciary, ACAS, employer and employee organisations and employment lawyers.

"Therefore"—

this was critical from our point of view—

"those most affected by the regulations will be made aware of what we have in mind and will have ample opportunity"—

I repeat, ample opportunity—

"to comment before the regulations take effect".—[Official Report, 18/3/02; CWH 182–3.]

We were pleased about that.

My noble friend Lord Wedderburn stressed the need to go beyond the usual channels in this case because of the number of workers and employers affected and the need to publish a draft as well as to place documents on the Internet. He remarked that he had searched around on the Internet to see what he could find. The Minister said with evident pride:

"perhaps I may say that I am disappointed in the exploration of the Internet by the noble Lord, Lord Wedderburn. If he had been exploring it thoroughly, the noble Lord"—

here it comes—

"would now know that it is established DTI policy to place all consultative documents on the department's website. In fact, it is DTI policy to paste practically everything on the website".

I hope that noble Lords will have noticed that we are not quite there yet; we are moving, but we are not quite there.

So we asked about publication in what I may call off-net form for those millions of people who cannot make head nor tail of the net. We also asked about the length of time for which they would appear, which was not yet clear, and the status of the draft—so that the draft would not be a fait accompli. That produced the following, final exchange. I said:

"I want to ask the Minister a direct question. What he said previously and what he says now will appear in Hansard. Is he telling me that in not less than 30 days"—

that is what it seemed to be—

"he will publish a draft of his proposals for the regulations in Part 2 and Part 3 of this Bill on the web?"

The Minister, Lord Sainsbury of Turville, replied:

"The noble Lord could amend that; within 30 days, we will publish it.

I asked: "Before?" The Minister replied:

"What I can say is that all draft regulations are published, or put on the website"—

that is not an alternative, that is additional, I take it —

"for everyone to see. I cannot give an assurance on the timing of that at this point. There is a minimum of six weeks for doing that".

Later, he corrected himself—twice:

"I believe it is 12 weeks, but I can certainly give the assurance on six".—[Official Report, 18/3/02; col. CWH 186–7.]

We tabled our amendment on that basis. Naturally, we put in 12 weeks, because that is what the Minister said—12 weeks in which to publish a draft. Cannot the amendment be accepted?

We think that we are doing no more than saying what the Minister said: are we right? Will it be 12 weeks or six weeks? Will it be on the web and the non-web? Will it all be done before Parliament makes a decision? That is what the Minister said, and we are asking him to honour that. I beg to move.

My Lords, I apologise to the House and to my noble friend Lord McIntosh of Haringey. As my noble friend Lord McCarthy would say, I misremembered the debate in Grind Committee. My memory was that it was about the draft publication of the new ET1 and ET3: in fact, it was about the publication of the regulations to which my noble friend Lord McCarthy has just referred.

Hansard reports a discussion between the Minister, the noble Lord, Lord McCarthy, and me. I said:

"There is some discussion about the way in which that document"—

Routes to Resolution—

"was published. Many people do not have access to the Web. My understanding was that the draft regulations would be published in the way that I understand the phrase, 'being published'. That does not involve sitting at a computer; I want it in my hand. Am I going to get it at least six weeks—maybe more—before they become law? I think I am getting a yes".

The Minister replied:

"The answer is yes".—[Official Report, 18/3/02; col. CWH 187.]

My Lords, I am sometimes amazed at the consistency of the statements that I make. If there are cases of DTI consultation documents not being put on the net, I would be glad to hear of them. I know of no such cases, and none has been raised. It is our policy to do so, and it is an important part of the consultation, albeit that it is no substitute for the written document.

Amendments similar to this were tabled in Grand Committee. They had a 30-day period, rather than an 84-day period. In Grand Committee, I mentioned a 12-week period. I can now confirm that the code of practice on written consultation, which is binding on all departments, says that 12 weeks should be the standard minimum period for a consultation.

We intend to carry out a formal consultation on amendments to the employment tribunal procedure regulations and on other regulations that arise from Part 3 of the Bill. We intend the consultation document or documents to include at least a partial draft of the regulations concerned. I say "partial" because, in the document, we may want to consult on possible options. In those circumstances, it would not be sensible to draft the regulation or part of a regulation concerned until we had considered the consultation response. The consultation documents will be published on the DTI website and in hard copy form. Twelve weeks will be allowed for the consultation, in line with the code of practice that I have just mentioned.

With regard to the prescribed forms for entering an application or notice of appearance to an employment tribunal, the Employment Tribunals Service has already had informal consultation with a number of bodies such as the Equal Opportunities Commission, the Commission for Racial Equality, the Disability Rights Commission, the CBI, the TUC, the Law Society, the National Association of Citizens Advice Bureaux, the Small Business Council and so on. They will conduct further consultation in due course, and that will last at least 12 weeks. The proposed new forms will be available on the web and in hard copy form.

The amendments are, therefore, unnecessary, and I hope that, in view of what I have said, they will be withdrawn.

My Lords, I am not alarmed by the answer but just a little concerned. The word "partial" was used. That may mean "not complete; only half there". I would not be happy with that because one might say, "It's partial so I am sorry you got nothing on Clauses 25, 31 and 33. It's partial, you see." I would not be happy with that.

The word "interim" would be all right. One might say, "We are writing things in in pencil because we have a consultation process and you may persuade us to do things a little differently.". However, the Minister did not say—

My Lords, I explained what I meant by "partial". I hope that I made it clear that there will be cases in which a number of options exist. Rather than drafting exact regulations to cover each option, which we believe would be a waste of time, we will consult on those limited cases by putting forward the options. When we have consulted and heard what people have to say, we will draft a particular regulation. In that limited sense, the measure would be "partial".

My Lords, my noble friend Lord Wedderburn is growling a little so I shall pass by that. The Minister seemed to say that the consultation documents would appear on the website only. At least, I did not hear that there would be a sixpenny edition that even my noble friend Lord Gladwin could understand.

My Lords, I have said that in all cases the consultation documents will be published on the DTI website and in hard-copy form.

My Lords, I did not hear that. I am going deaf! In that case, although the Minister will not accept our amendment, I am pleased to beg leave to withdraw it.

Amendment, by leave, withdrawn.

My Lords, I beg to move that further consideration on Report be now adjourned.

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

rose to ask Her Majesty's Government what is the state of the United Kingdom's relations with Kazakhstan.

The noble Viscount said: My Lords, I want to thank all noble Lords for delaying their Recess departure to speak on this important Question.

Mystery and a heightened realisation of its impending post-independence importance first drew me to central Asia. Later, the Foreign Affairs Select Committee report commented in its regional assessment:

"The countries covered by our report have been facing traumatic change, which has amounted to nothing less than a revolution in their civil, political and economic structures".

It went on to state that,

"there are opportunities we would be foolish to spurn",

but it concluded that,

"more could and should be done to promote Britain's interests, good governance and stability in a region that will be of increasing significance in the years ahead".

Certainly the West's dependence on energy, and so by extension regional stability and security, makes Kazakhstan an important, if not essential, relationship for the United Kingdom. Improving long-term investment opportunities and laying solid foundations for its enhanced role in regional security is mutually beneficial. Yet key figures in Kazakhstan remain to be convinced of the priority the United Kingdom attaches to this bilateral relationship. Please allow me to set the stage.

Central Asia is a crucial competitive energy alternative to Middle Eastern supplies, with Kazakhstan boasting three "super-giant" fields, including the Kashagan field, itself estimated to contain 50 billion barrels, which together suggests that Kazakhstan holds 88 per cent of central Asia's oil wealth. Policy makers beholden to Riyadh and elsewhere can now secure additional energy supply guarantees from Astana.

Restrictions to increased exports do exist, however; inadequate pipelines and port facilities on the one hand and problems of Caspian Sea demarcation on the other. More intractable is Kazakhstan's challenge to the United States to consider the strategic role of Iran as a direct and cost-effective transport route; in other words, to substantiate its claim to support multiple pipeline use.

What of trade potential? Britain is currently the second-largest—but slipping—investor in Kazakhstan. However, difficulties prevail. It is the protection of those investments that exercises business leaders. A balance must be found which safeguards Kazakh interests while creating the necessary climate for participation by foreign investors.

I shall cite three examples: the weakening of the stability clause which protects investors from changes in other legislation; the weakening of the right to seek international arbitration and subsequent enforcement; and the weakening of the protection from nationalisation and consequent valuation of assets. I should have thought that these issues could jeopardise a long-awaited Kazakh application for WTO membership, but I sense that the United States might be pressing DG Moore to fast-track any such application for political and commercial expediency. Such a move would militate against UK interests. Will the Minister stand firm?

Although a problem for many countries in transition, havoc is constantly wreaked by corruption. It is nevertheless an issue which must be tackled comprehensively if the right conditions for essential long-term investment are to be met. Kazakhstan cannot be proud of its current poor ranking in Transparency International's latest index.

It must be said, however, that much has been done of late to develop the Kazakh legal system, but there remains the problem of lack of uniformity in the interpretation and application of laws. With that in mind, the proposed investment law needs to be clear and unequivocal if targets and objectives are to be achieved.

Conversely, foreign companies have a role to play; they must listen at both government and local level, respect and understand the need for local content and local employment, support education and training and the transfer of technology. In addition, the minimum footprint must be ensured and environmental protection and social development addressed. All these are legitimate aspirations, enhancing prosperity.

Bilateral mechanisms do exist to address many of these issues—for example, the Kazakh British Trade and Industry Council. But that endeavour, alas, is moribund. Perhaps we might be advised of steps being taken by British officials to restart the process.

Regionally, several points arise. It is important not to underestimate the major influx of heroin from post-Taliban Afghanistan. Kazakh co-operation is therefore essential. Can we be brought up to date with developments in the Central Asia drugs initiative? We must take the war against drugs to the front line, not rely solely on consumption control.

Although the security situation has improved, if ever there were a large-scale Islamist upheaval in central Asia, it would require United States and Russian co-operation to maintain stability. My assessment is that the United States is preparing for a long-term presence. Certain reports suggest that Kazakhstan is not entirely free of international terrorist networks, so the US military build-up in the region on the back of the Afghan situation, and prior to a possible Iraq incursion, should ensure a degree of' stability. Kazakhstan can help itself, though, by ensuring against internal disquiet that invites terrorism, and by minimising border disputes.

Kazakhstan could play a crucial role in regional security and co-operation to enhance the stability and prosperity of the whole region, and to fight the problems of drugs, extremism, illegal migration and organised crime. There are also a number of major environmental problems with diverse and serious implications for the region's future. An important area for co-operation and conflict avoidance is water sharing. In addition, a constructive Kazkh-Uzbek cooperation would also be helpful. Would the Minister consider adding such matters to her in-tray?

Running on down the list, we find that social and health problems rank high. The growth of HIV and TB is alarming. They must be tackled systematically, and soon. Kazakhstan needs to be in the forefront of this fight, with effective public health and education programmes.

Notably, and old friend of Britain's, Mr Adil Akemetov, the recently-departed ambassador to London, has happily surfaced as the Dean of the new Kazakh-British Technical University. The university will have three faculties: Oil and Gas, IT, and Business. This is a prime example of Kazakh good will requiring support. I am advised that a high priority is to encourage British corporate sponsorship.

A political read-out is difficult. The past months have seen upheavals in Astana, changes from those close to the President, and talented people marginalised for adopting opposition postures. Some commentators report that the political one-man machine has worked against the development of properly functioning political institutions, and against the growth of civil society—that repressesion is widely prevalent. Kazakhs may soon recognise that they have never benefited, for example, from oil wealth and create instability. None of this should diminish, however, the advances made in stability, nuclear disarmament, human rights and freedom of speech, particularly when compared with neighbouring states. The challenge is to sustain and enhance. In addition, Kazakhstan has become a responsible world community member, facilitating dialogue, as President Putin's initiative next week with India and Pakistan shows.

A transformation to immediate democracy was never going to happen immediately as the Soviet legacy of authoritarian leadership was too entrenched. I sense, however, a stirring in the bulrushes—opposition endeavours gaining in effectiveness; and, if left unfettered, could conceivably surprise in the currently earmarked 2006 presidential elections. Dynastic politics may yet prevail, however, either through further constitutional change or the passing of the mantle.

Whoever does prevail, I believe that the message should be that the world post 9/11 will never again marginalise regional issues, and that the new era of leaders will have to adopt qualities that foster a pragmatic strategic partnership. Surely the litmus test must be the extent to which state affairs are governed by self-interest or excessive expediency. What levels of accountability exist? And are the interests of the state and the majority of its citizens best served by current arrangements? But it is never as easy as one might wish to apply Western standards.

Time dictates that I wind up. I must just mention though the harsh way that the independent media are increasingly falling victim to pressure from the authorities; and that a healthy degree of press freedom and political debate would win Kazakhstan many points in the international arena; but that the recently held Eurasia Media Forum was a successful first for the region.

I make two observations on our bilateral endeavours—the duty of our representative on the ground is in great part to impact decision-makers, and those such as parliamentary committee chairmen who are closer to the process than we are; in other words, knocking on doors. We are not doing that effectively. Our efforts have been wanton and need to be reconsidered. In that spirit, the United Kingdom must ensure greater high-level political attention to Kazakhstan. The Minister, I know, certainly does her bit, but the record of the Government generally is not good in this area. There is no place for complacency in bilaterals and we are simply not matching French, German and American Cabinet Ministers visiting the Caspian. Even DfID's country programme is comparatively weak given the high percentage of poverty that regrettably exists.

It will be of interest that I have recently accepted, on behalf of the Kazakh-British Parliamentary Group, an invitation to travel to the Kazakh Parliament in Astana. That will present a welcome opportunity to interact with parliamentary colleagues.

I will end on this note. Kazakhstan's economic, civil and political well-being is an imperative. An economically stable Kazakhstan, in a region of increasing strategic significance, is of the utmost importance to us and to the world at large. We must play our part in helping to achieve those vital goals. I believe that the United Kingdom, with its experience and expertise, is well qualified to assist.

My Lords, I congratulate the noble Viscount, Lord Waverley, on securing the debate. Central Asia is a critically important region whose strategic significance western policy has not always fully appreciated. Within this region Kazakhstan is a key ally, particularly since the terrible events of September 11th.

The five newly independent states of central Asia are still relatively unknown to us in the west. We have had a mere 10 years to adapt to the emergence of these states following the collapse of the Soviet Union in 1991. Prior to that, Moscow's iron grip on its territory had ensured that few westerners were familiar with this region, which had effectively been closed to the world for decades. Suddenly, in 1991, major reserves of natural resources and vital strategic assets were no longer controlled by Moscow but by unknown and unfamiliar new governments thousands of miles away, albeit tied by the inherited invisible threads of control by the Muscovite economic, security and political apparatus. Over the past decade, Kazakhstan and its central Asian neighbours have sought to establish themselves as independent states while at the same time coping with revolutionary changes to their civil, political, social and economic structures.

In my remarks today, I should like to focus on September 11th, both in terms of the effect that it has had on Kazakhstan and its neighbours and in terms of the shift in international geopolitics and strategic considerations which it has necessitated, not only for the stability of the region but for international security as a whole.

Far from a remote backwater, the states of central Asia have global strategic significance. Geopolitically, the region is positioned as a natural crossroads between East and West. Economically, the rich hydrocarbon and mineral reserves mean that the states of central Asia have the potential to become a significant supplier of energy to the global economy and to diversify the supply of vital raw materials. There is thus a strong interest in the promotion of peace and regional stability and in the resolution of long-standing conflicts, without which commercial engagement and investment in the region will always be limited.

Kazakhstan has perhaps achieved more in this respect than its neighbours in the region, but progress has been slow and hesitant. Kazakhstan is struggling to overcome its past as a central Asian "empty quarter". Bear in mind that we are talking about a country that is territorially two- thirds the size of the United States but with a population of only 16 million people. As well as being the former Soviet Union's "mine", Kazakhstan produced 95 per cent of the FSU's phosphorous, 90 per cent of its chrome, 70 per cent of its lead and zinc and 50 per cent of its silver.

Kazakhstan faces daunting challenges on all fronts. It faces social and environmental challenges as well as political and economic ones. Economically, it faces a dilapidated infrastructure, rising unemployment and high inflation. Socially, it faces total upheaval from Soviet society, when Russians exercised influence and control and Kazakhs were more commonly found in the lower social, political and economic strata. The converse applies today. Moreover, the country faces entrenched poverty, prostitution, drug addiction and increasingly high infection rates of TB and HIV/AIDS. Environmentally, it faces the legacy of the contamination caused by Soviet era nuclear tests and the water mismanagement which has resulted in the shrinking of the Aral Sea. Politically, although no means the worst offender in central Asia, Kazakhstan's performance on human rights, political freedom and free speech since independence, has been patchy at best, and the situation is worsening.

Despite denials of the return of the "Great Game", in which external powers compete for influence in the region for the sole purpose of furthering their own ends, the politics and economics of the region remain disproportionately affected by outside powers: Russia, Turkey, Iran, China, the European Union, the UK and the US. It remains to be seen whether the shifts in the power balance seen since September 11th will be beneficial to the region or not.

The geopolitics of central Asia must now be seen through the prism of September 11th. We have realised belatedly that issues such as who governs in Afghanistan, bordering as it does Iran, Pakistan, Tajikistan, Turkmenistan and Uzbekistan, are not matters of mere local politics. Two years ago, the journal Foreign Affairs published an article by Ahmed Rashid. He argued that civil war in Afghanistan between the Northern Alliance and the Taliban was polarising the whole central Asian and middle eastern region, causing enormous disruption in the region. When the Cold War ended, the West did not develop a new strategic framework for the area. Instead, into the political vacuum left by 20 years of war and the collapse of stable government, marched,

"a new generation of violent fundamentalists, nurtured and inspired by the Taliban's unique Islamist model".

The same could happen in other countries in the region.

The biggest change is the extension of US influence in the region and its military presence in central Asia. Washington is now viewing with increasing interest the emergence of new regional forces, such as the Shanghai Co-operation Organisation, dubbed the "Shanghai Six"—a union of China. Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, formed to safeguard regional security and to tight Islamic terrorism. The development of a relationship between the West and this new political entity is a major undertaking. We in the UK will need to be engaged in this task too. The Minister will no doubt comment on the progress being made in this respect.

There is no doubt that US-Russian relations will be the key to the long-term dynamic that established itself in the aftermath of September 11th. A tremendous surface-warming has taken place in relations between the two administrations since September 11th.

Nevertheless, the Kremlin is uneasy about future US objectives in a region that Russia has long regarded as its own backyard. For centuries, Russia has dominated central Asia and the Caucasus, all the While warning Western powers to keep their distance. But the picture since September 1lth has changed out of all recognition and the configurations of the geopolitical landscape have seen dramatic shifts. The United States now views these remote republics as important allies in the war against terrorism. That is even more astonishing when it is remembered that, just a decade ago, the five states of the region were part of the USSR's economic and military might.

There is hope that this rapprochement will be the last requiem to the Cold War. This is an opportunity to make post-Cold War Russia, with its psychological need to be accepted as a fully European country, feel as though it is part of the West's family of nations, not threatened by them. President Putin continues to encounter opposition from the military and others in the Russian élite, but to date, his commanding political power has enabled him to prevail.

I believe that Kazakhstan's size, its position between Russia and its less stable southern neighbours, and its potential economic wealth—despite its reputation for corruption—makes it the key to stability in central Asia. This is a view which President Nazarbayev seemed to share. He has said that Kazakhstan, given its geographical position and ethnic composition, should be oriented to both East and West. He has floated the idea of a Eurasian union, and is keen to cultivate a good relationship with the West, particularly in view of its interest in Kazhakh energy resources. He has made it clear that he wants a relationship with the West which is helpful both to Kazakhstan and to regional security, but which balances Russian interests. In turn, we have looked to President Nazarbayev as an asset and a bulwark of stability in the region. There is no doubt that he has many achievements in this respect.

Sadly, the Government have cracked down on all opposition so hard that, in spite of Kazakhstan's pivotal role in the US counter-terrorist strategy in the region. Washington has been forced to take issue with the Kazakh Government. The president's reception in Washington last December was far more lukewarm than he had expected.

What action have our Government taken to make it clear to President Nazarbayev that Kazakhstan cannot join the West while it intimidates even the mildest of its critics and seeks total control, as the noble Viscount mentioned, over the country's already inhibited newspapers and broadcast media? While the situation is worse in many of Kazakhstan's neighbours, President Nazarbayev has a fickle record on upholding human rights and democratic principles. The 1999 election was a case in point. The OSCE concluded that the election was,

"severely marred by widespread, pervasive and illegal interference by executive authorities and by a lack of transparency".

Since then, President Nazarbayev has progressively gathered ever more executive power into his own hands and has gradually curtailed the freedoms that the post-independence constitution seemed to guarantee.

While September 11th gave President Nazarbayev the opportunity he so desired to establish Kazakhstan as an indispensable regional player and Western ally, Kazakhstan's heightened international profile likewise gives reformers the opportunity to make public attacks on endemic political corruption and to draw international attention to the abuses resulting from the monopoly of political power held by President Nazarbayev, his family and a closed and immensely wealthy élite.

In recent months, President Nazarbayev seems to have abandoned democratic reforms altogether and his decision-making process has become erratic. The so-called Zhakiyanov affair has been completely mishandled.

The situation is grave. There are many forces outside the country who, using the popular discontent inside Kazakhstan, could easily thwart all endeavours to maintain stability. I truly believe that we must use our powers of persuasion on President Nazarbayev to act in the interests of the entire country. I hope that the Minister will tell us what pressure the Government are exerting to persuade him to return to the path of reform and progress. I am all too well aware that it is easy to demand improvements in human rights and democratisation in a high-handed and moralising manner, but it is important to know what areas the Government have identified in which they can take effective action to assist in the development of good governance. For example, what action are they taking to fund and assist all organisations in Kazakhstan seeking to promote a properly functioning civil society where there is freedom of expression and freedom of the media?

As I have argued, for a number of compelling reasons it is in our shared interests to help realise the full potential of Kazakhstan as a major regional player and as a bridge between East and West. There is a wish in Kazakhstan to develop stronger bilateral relations with the UK, not least because of our reputation as a country with global influence and prestige. While commercial relationships are in many ways the most dynamic feature of the UK's bilateral relationship with Kazakhstan, we cannot treat trade with Kazakhstan in isolation from the wider strategic and geopolitical picture. Real progress towards democracy and full respect for human rights are as important as the sound economic development of the region. Political freedom walks hand in hand with economic freedom. Both are required to attract the international trade and prosperity that will unlock Kazakhstan's economic potential. The mere possession of energy resources alone is not enough to guarantee prosperity. That is why the rule of law is important to companies doing business in these markets. It is difficult to achieve sustainable economic development in the absence of democratic principles and respect for human rights and the rule of law. We need long-term investment in Kazakhstan's future, with tangible benefits for all the people in Kazakhstan, not just for a small, wealthy élite.

As the second largest investor in Kazakhstan, and the largest European investor, the UK has a key role to play in that respect, to the mutual benefit of both Britain and Kazakhstan.

Kazakhstan has a pivotal role to play. For the reasons that I have put forward, we have an interest in helping Kazakhstan to develop its full potential and to build economic prosperity, stability and regional security. It is incumbent on us to help Kazakhstan to establish true democracy on many levels, not least because of its geopolitical significance. However, there is also a more pragmatic reason. Let us not forget that Kazakhstan could be a major provider of fossil fuels for our children and our grandchildren. On every level then, by helping Kazakhstan towards a better future, we are securing a better future for ourselves.

My Lords, it is difficult not to feel some sympathy with Her Majesty's Government on the proliferation of new countries and demands that more ministerial visits should be made. In 1990, when I had just moved to the University of Oxford, I went to talk to some of the Foreign Office planners, but before I could ask my questions, they asked me whether there was anyone at Oxford who knew anything about central Asia. All of us have had to learn a lot since then. I also remember the Foreign Office's discussions, after years of cutting overseas posts and personnel, about where to find the additional staff and money to staff new embassies in these central Asian countries. Clearly there are strains on British attention and resources. That is one of the reasons why it makes sense to ensure the closest possible co-operation between Britain and other EU members states in our approach to the region.

We should use the EU as far as we can—we have co-operated particularly closely with the Germans and the French—and co-operate as far as we can with the Americans, with whom we sadly differ in various approaches to the region and particularly to Kazakhstan. We should be investing in training and educating the next generation. I was glad to see in my briefing the numbers of Kazakhs on Chevening scholarships coming to this country. The Chevening programme is extremely valuable, and we should be promoting such programmes within the country and the region as far as possible.

We all realise that Kazakhstan is a difficult country to deal with. The level of corruption among the president's family circle and the authoritarian nature of President Nazarbayev's rule pose very real problems for us. Kazakhstan's oil has increased its importance in terms of American geopolitical strategy. I have very considerable doubts, however, about the current geopolitical fashion for central Asia in Washington. Various articles suggest that the United States believes that it can switch from dependence on Middle Eastern oil imports to central Asian oil imports, exported in pipelines which somehow avoid both Russia and Iran. The articles suggest that the United States will therefore be able to forget about the Kyoto Protocol and continue importing more oil. As allies of the United States, the British should be telling the Americans that central Asian oil supplies do not allow them to forget about oil energy conservation. There is not a quick fix in this respect.

For Kazakhstan, oil is clearly both a blessing and a curse. We see that it has all sorts of problems in terms of domestic corruption, not to mention reports of substantial sums diverted to offshore financial centres. As I read the rhetoric in the American press and its criticism of Saudi Arabia for failing to promote democracy—although without paying similar attention to the promotion of democracy in Kazakhstan and the central Asian region—I am concerned about the need to ensure that our approach to Kazakhstan is both careful and conditional.

The Kazakh Government themselves clearly wish to build on the anti-terrorist campaign, to become as close as possible an ally of the West albeit in an unconditional fashion. We are all aware that Kazakhstan has to be seen as part of the central Asian region and as linked to the continuing problems in Afghanistan. I remember some time ago hearing someone from Europol talk about the heroin route from Afghanistan to Western Europe which passes across Kazakhstan. We were assured by Russians present that neither the Russians nor the Kazakhs managed to control the border between Kazakhstan and Russia. It is a large empty region, as has already been said, with a range of problems such as people-smuggling. Chinese are smuggled across Kazakhstan which now has a substantial drugs problem of its own, and increasing HIV and AIDS resulting from that. It also suffers from nuclear contamination.

The noble Viscount, Lord Waverley, suggested that the volume of British foreign direct investment had declined. However, I note that a number of British companies feel that it is not an attractive country in which to invest. As we have already learned in Russia, unless you have a clear domestic, legal and financial framework, you will not attract foreign direct investment. The kind of tragedy that has already happened in Angola and in some other oil-rich countries must not be allowed to happen in Kazakhstan as far as we can avoid it.

What should our interests be in Kazakhstan? I suggest to the Minister that we should have as active an interest as possible without killing off our Foreign Office team by insisting that they travel three times a week round the world; that British interests should clearly be rooted in a European framework and a European strategy; that it has to be a strategy directed towards the region as a whole; and that it has as far as possible to be co-ordinated with the United States. That requires us to be critical of the current thrust of US policy towards the region which is dominated by the Pentagon and by the oil interest and has downgraded questions about the solidarity of the legal framework in the country and the strength of the social and political fabric. In our approach to the Government of Kazakhstan, we clearly therefore should offer critical support and should pursue conditional relations—a close relationship but not an uncritical one.

My Lords, this is indeed a good moment to focus on the former component parts of the Soviet Union. I congratulate the noble Viscount on focusing our minds on these matters.

In a week when Russia has signed up to new organisational arrangements with NATO of' a very positive kind, this is the time to remember—that is fairly hard for people of my generation to grasp—that those aspects of the Cold War are over, even if new threats are developing, and that we have reached a totally historic moment in which some of the darker dreams of the 20th century begin to disappear. The Russian leadership shows genuine signs of wanting to co-operate at every level with the world community. Indeed, Mr Putin's intervention only in the past few days in suggesting he brings together the Indian and Pakistani leaders in Kazakhstan is another example of that.

We are looking at a new map. I am sure that my noble friend Lord Moynihan is right that the events of 11th September last changed everything or changed perceptions throughout world politics. It can, of course, be argued that long before 9/11 it was perfectly obvious that the terrorist and fundamentalist organisations, often based in Afghanistan and in related areas, were brewing up for a major attack on the United States. With hindsight, a good many people have claimed that they could see that coming. Nevertheless, when it came it was so awful and so visible that everyone's views have been refocused.

Before 9/11 there was a pattern building up in central Asia—a line up—which was full of potential danger. The United States, the Saudis and Pakistan were, on the whole, on the side of the Taliban. Up to about two years ago there was strong support for the Taliban on the part of various American lobbies. That of course evaporated mainly, I believe, when America perceived what a viciously cruel, anti-feminist and narrow medieval organisation the Taliban was.

On the whole, that was the line-up on one side. On the other side the line-up consisted of Russia, Iran, Kazakhstan, Kyrgyzstan, Tajikistan and other related countries. That was the pattern that was emerging before 9/11 changed all the pieces on the board.

Also emerging at that time—these factors are still in place—were the new dictates of oil politics and the question of who would benefit from the colossal reserves of the Caspian Sea basin, which the noble Viscount, Lord Waverley, rightly mentioned. All along, Russia has been anxious—this aspect may not have changed so much—that oil that is brought to the surface, either offshore in the Caspian or onshore in the colossal reserves of the fields in Kazakhstan, should be moved through friendly states: through Russia and parts of the former Soviet Union or the existing Russian Federation. It wanted oil to be moved through Chechnya—that leads us into another issue, which we have not discussed today. That explains some of the agonies, difficulties and obsessions surrounding the question of the Chechnya rebellion and the Chechnya war.

On the other hand, the US was all along very uneasy about too much oil moving through those regions. It wanted the line that has now been built from Baku to Ceyhan in Turkey to be the main source. Before 9/11, the US-backed oil companies were seriously considering the development of lines through Afghanistan. That project, needless to say, has fallen by the wayside, at least for the moment.

That was all before 9/11. We saw the role of Kazakhstan in that context rather differently. Then came the horrors of that morning. As it happens, this very day the last bits of rubble and steel girders are being cleared from the site of the World Trade Centre in New York. The global rubble, as it were—the global consequences, dereliction and dangers—remains scattered all around the globe. The picture is different: now we have a new line-up. We are, in a sense, all against A1'Qaeda and all determined to crush the final pockets of the Taliban. We are not quite sure whether that will be done successfully; many of those pockets may persist.

Kazakhstan is a colossal country, as my noble friend Lord Moynihan reminded us. He said that it was two-thirds the size of America; my figure is that it is five times the size of France. Either way, the country is pretty large. It is even more central in the new pattern. It becomes essential for that new pattern of alliances to try to glue itself together. There are still some very odd alignments. For example, Iran is still against the Taliban or A1'Qaeda and is supporting the forces that it supported before 9/11, but it is still being denounced as part of the axis of evil by the United States. In an odd sort of way, they have been pushed by events on to the same side.

In Kazakhstan, there is the continuing question of the colossal oil reserves. The noble Viscount, Lord Waverley, trailed the idea of the Caspian Sea basin and the vast oil fields, such as the Tengiz field in Kazakhstan, providing an alternative to cheap Middle Eastern oil. That is, for the moment, no more than a gleam in the eye. The truth is that Middle Eastern oil is very cheap and is still flowing. Of course, one can build up nightmares and dramas of extremism taking over throughout the Gulf, but that is not the immediate prospect. The cost of central Asian oil is on average much higher—my figure is that it is as much as 18 dollars a barrel, which is nearly prohibitively high in present market conditions, compared with 66 cents for the oil that squirts out of the ground in Kuwait or Saudi Arabia.

Therefore, while it is possible that in changed circumstances the world will rely far more on the oil and gas reserves of central Asia, and while some countries, including Russia, already rely on them, the prospect of developing the Caspian Sea basin and the Tengiz fuel line in Kazakhstan as real alternative sources of energy is, I believe, remote.

However, that does not get in the way of the fact that oil politics is now being played with great vigour in all these regions. The problem for Kazakhstan has been in getting the oil out. The pipeline that goes through Russia to Novorossiysk will obviously help. As noble Lords have observed, it is bringing considerable prosperity to some parts of Kazakhstan society and making some people extremely rich.

But all that has to be set beside the continuing and worrying picture of weakness and—to use the word of my noble friend Lord Moynihan—dilapidation in parts of Kazakh society. There is high unemployment, and, as the noble Lord, Lord Wallace, mentioned, there is a drugs problem. Another point, which perhaps I view too strongly, is the shrinking of the Aral Sea. The disappearance of a gigantic feature of nature thanks to hideous man-made incompetence is one of the most awful burdens that Kazakhstan must shoulder. That is one of its many difficulties.

There is also unease about the enormous accumulation of power in the hands of President Nazarbayev and his family. There is a feeling that, at the very moment he is supposed to be lining up Kazakhstan with western interests and the global campaign against terrorism, he is apparently using methods which do not accord with the core values and standards which the West believes it is trying to defend and protect.

Nevertheless, there are successes. The economy, which is market-based, has been liberalised, and that must be on the plus side. Of course, not only a free economy but a free political system are needed to make the whole pattern develop in a balanced and successful way. We are not there yet. But these could be the prospects for the future. The excellent relations which Britain has had with Kazakhstan can be developed further provided that we use our influence in the right way.

I believe that we shall hear very much more about this colossal nation and its neighbours. We shall probably hear most about them in debates in your Lordships' House. The newspapers and the media have only a passing interest in these issues until they spring into the front line. Afghanistan did not receive much mention but then was suddenly on every front page all day, every day.

In the meantime, I believe that it is valuable that your Lordships' House, prompted in this case by the noble Viscount, Lord Waverley, should focus its attention on these matters. Perhaps when the next crisis arises in central Asia, demanding full attention by the media, your Lordships' justified slogan will be, "You heard it here first".

My Lords, I, too, thank the noble Viscount, Lord Waverley, for providing the opportunity to discuss the United Kingdom's relationship with Kazakhstan. Of course, as the noble Viscount indicated, it is an important country. For the benefit of both sides, it is vital that we get that relationship right. I believe that we are working very hard in doing just that.

As the noble Lord, Lord Moynihan, reminded us, it is some 10 years since we established diplomatic relations with Kazakhstan. That country's achievements since independence have, indeed, been considerable, and we should not set them in any other context. It has established and maintained internal cohesion and stability. That is no mean feat in a country which is as large as your Lordships have described and which has a diverse ethnic composition. It has disposed of nuclear weapons—a substantial legacy to global security—and forged constructive relationships with its big neighbours, China and Russia.

Kazakhstan has proved a serious and reliable United Nations partner and has consistently taken a responsible and creative stand on matters of international importance such as Afghanistan, as the noble Lord, Lord Howell, indicated. Internally, it is developing institutional structures including an ambitious legislative programme. It is creating a young, well educated and technocratic administration.

However, the successes of the past 10 years inevitably highlight the areas where more needs to be done. The noble Lord, Lord Howell, is right to remind the House about the enormity of the oil reserves in Kazakhstan, but the economy is still too highly reliant on the energy sector and there have been inadequate macro-economic reforms. There is too much corruption and there is too little transparency. Kazakhstan has yet to strike the right balance on attracting foreign investments. That was a point made strongly and cogently by the noble Lord, Lord Moynihan. It has yet to develop a modern political structure that meets adequately the aspirations of the people of Kazakhastan and to respect the fundamental rights of its own citizens.

Of course, we would like to see a Kazakhstan that is prosperous and secure. As the noble Lord, Lord Moynihan, indicated, with its great size and vast resources, Kazakhstan has the potential to be a real engine of growth for the entire region, benefiting not just central Asia, but southern Russia and western China too.

I agree with a great deal of what the noble Lord, Lord Wallace of Saltaire, said about Kazakhstan's efforts on security. The transformation of Kazakhstan will also underpin regional security and help to counter the tide of instability that has emanated from Afghanistan, on which many noble Lords have concentrated. That tide of insecurity has brought with it drugs, terrorism and illegal migration. The United Kingdom can be directly affected by what I may call the backwash from that kind of tide. That is why it is enormously important for us to develop a strategic relationship with Kazakhstan.

One characteristic of the contributions that we have heard from your Lordships is a recognition that Kazakhstan is at a crossroads. There is a strong sense that it needs to take some bold decisions. If it gets those decisions wrong, Kazakhstan runs a real risk of not fulfilling the enormous potential to which so many noble Lords have referred.

One of the key decisions concerns the foreign investment climate. The noble Viscount, Lord Waverley, concentrated somewhat on the issues concerning trade and investment. Kazakhstan has already had significant foreign investment, mostly concentrated in the energy sector. But the really big money for really big projects is yet to be committed. Although Kazahstan energy opportunities are, as has been said, enormous, they are very expensive to carry out, as the noble Lord, Lord Howell, told us and they carry a substantial risk. Against that background, Kazakhstan competes with other countries in the global market for limited capital. It simply has to make itself as attractive as possible if it is to receive a large-scale investment commitment, a point stressed by the noble Lord, Lord Wallace of Saltaire. Without such a commitment Kazakhstan will not achieve the critical mass that it requires to take off and its economic potential will risk remaining unrealised for generations.

That take-off equally depends on Kazakhstan ensuring that it internalises the benefit of foreign investment as much as possible through the transfer of skills, through building local capacity and infrastructure, and through generating real local jobs. If it is to work at all, foreign investment needs to take place, as does all successful foreign investment, on a win-win basis. That is good for the investor and good for Kazakhstan.

However, currently Kazakhstan runs a real risk of getting that balance wrong. Perhaps that is because the country is bolstered by a sense of false security, built on strong oil prices. It has been sending the wrong signals to the investment community, including through a proposed investment law that curtails the rights of foreign investors through ambiguity over the sanctity of contracts and through lack of progress on transparency. As the noble Viscount, Lord Waverley, and the noble Lord, Lord Moynihan, pointed out, corruption, lack of clarity on rules and procedures and an opaque and often obstructive bureaucracy also seriously inhibit investors, particularly smaller businesses, whose engagement is also vital to Kazakhstan.

We and other partners will continue to pursue vigorously an honest dialogue on these issues with Kazakhstan. As the noble Viscount urged us to do, we shall keep listening in a spirit of partnership. We also welcome the efforts of the Kazakh-British Trade and Industrial Council to address these problems jointly. But the Kazakh Government have yet to show real commitment to this process by nominating a permanent co-chairman. That is an important point which the noble Viscount may wish to note.

British companies like British Gas, Shell and BAe Systems can make a major contribution to Kazakhstan's development and security, but only if the conditions are right for the companies to do so.

As regards joining the WTO, we would wish to see Kazakhstan go forward, but it must be compliant with WTO issues and measures otherwise it will not get the support of other WTO members to join. We are anxious that Kazakhstan does more to diversify the economy and to avoid over-reliance on the energy sector. I agree with much of what the noble Lord, Lord Moynihan, said on this. The key will be wide and transparent use of oil revenues, which bring benefits, without causing economic distortion.

The domestic banking sector also needs development if it is adequately to underpin the kind of economic transformation which many of your Lordships have indicated they would like to see. Although Kazakhstan currently believes that it does not need the IMF, having paid off its loans, we believe that it should be developing a dialogue. The IMF is a valuable potential partner in economic reform and not just an agency for lending money. Addressing poverty and health issues is obviously also crucially important.

As many of your Lordships have indicated, the poor must not be left behind. Although the levels of HIV/ AIDS and TB are low compared with many developing countries, they could rise very sharply. Many noble Lords have looked at the issue of drugs in Kazakhstan and may wish to note that Her Majesty's Government contribute £250,000 at the moment towards equipment and training to the central Asian governments to help fight in the war against drug trafficking. That is obviously a very well worthwhile initiative. It is time for the Kazakh Government to take these very important social issues seriously if they are to move forward.

Perhaps I may make one or two other points on the domestic scene in Kazakhstan. To succeed as a modern state it needs to have a modern, inclusive political system which derives its legitimacy from the people, which responds to their needs and aspirations and which respects and protects their fundamental rights in exactly the way that the noble Lord, Lord Moynihan, indicated. It is only from such a base that the right long-term decisions on government and reforms can be made.

It is time now for the Kazakh Government to move forward positively in this respect. Key indicators of their desire to do what is best for Kazakhstan will include how they develop the political pluralism of which the noble Lord, Lord Moynihan, spoke; how they handle future parliamentary and presidential elections and how they allow the development of a free and responsible media. We and our European colleagues are concerned about the most recent attacks on the independent media in Kazakhstan.

The noble Lord, Lord Moynihan, asked how the United Kingdom can try to strengthen and develop the reform process. We have put substantial resources into strengthening the bilateral relationship. Our embassy in Almaty has been strengthened with a defence attaché and will get additional UK-based staff very shortly. The British Council has been helping to establish a new Kazakh-British technical university in Almaty to which the noble Viscount referred, and there is an active programme there, too. We use every opportunity to stress to the Kazakh Government the importance of democratic, political reform and respect for human rights. We encourage the development of a legitimate opposition as part of the democratic process. I hope that noble Lords will note that we have contact with a wide range of political views in the country. The MoD's Outreach programme is focused on the English language teaching for officers and through new learning and access to the English-speaking world of ideas we are developing a new capacity for reform.

I assure your Lordships that the Government realise the importance of maintaining high-level bilateral contacts. I hope that the noble Viscount will be pleased to know that I myself look forward to visiting Kazakhstan at an early opportunity, as does the Foreign Secretary whose planned visit to the region in November had to be postponed in the wake of September 11th.

Obviously, the Government would welcome more inter-parliamentary contact. I was very pleased to learn of the noble Viscount's plans to visit the country shortly and look forward to his reporting back.

On the issue of increased activity in central Asia, the European Union is pursuing enhanced political dialogue with all central Asian states, including Kazakhstan, primarily through its partnership and cooperation agreement, as I am sure that the noble Lord, Lord Wallace of Saltaire, is aware. The EU has decided to increase assistance to the region and to target poverty reduction, conflict prevention and border management—all enormously important issues.

This has been a very worthwhile discussion about our future relationship. There is much to build on. There is much that has been achieved in Kazakhstan, but there is still a great deal of work to be put into the internal mechanisms in that country and in creating the right climate for the investment and prosperity which is so vital to move the country forward.

The United Kingdom will continue to work with Kazakhstan to get what I described as the "win-win" relationship right. We shall work with our partners in the European Union, the EBRD, the international financial institutions and the OSCE, because, if it can get it right, Kazakhstan has a great future.

House adjourned at seven minutes past five o'clock until Monday 10th June at half-past two o'clock.