Orders of the Day — Employment Relations Bill

House of Commons, 30 March 1999.

COMPENSATORY AWARD ETC: REMOVAL OF LIMIT IN CERTAIN CASES

Stephen Byers (Labour, North Tyneside)

I beg to move, That the clause be read a Second time.

Betty Boothroyd (Speaker, West Bromwich West)

With this, it will be convenient to discuss Government amendments Nos. 166 and 65.

Stephen Byers (Labour, North Tyneside)

Most Members will be aware that one of the proposals contained in the Bill is to raise to £50,000 the level of compensation for unfair dismissal. The Government have given careful consideration to the level of compensation for those people who are covered by the provisions of the Public Interest Disclosure Act 1998. At present, no compensation levels have been laid down in respect of that Act. We believe that the time is right to protect whistleblowers by announcing the level of compensation to which they will be entitled and by indicating when we intend to introduce and make effective the provisions in the Act. New clause 11 provides that the compensation for people covered by the Public Interest Disclosure Act will be unlimited. We believe that the £50,000 limit that will apply in other cases of unfair dismissal will be inappropriate for those individuals coming within the remit of the Public Interest Disclosure Act. The Act was broadly welcomed on both sides of the House. I am delighted that the hon. Member for Aldridge-Brownhills (Mr. Shepherd), who was responsible for introducing an earlier measure on that subject, is in the Chamber. It is appropriate to delimit the level of compensation to which an individual is entitled. However, we believe that we can go further than that. Another group of individuals can be subject to victimisation and discrimination in the workplace: those who have responsibility for health and safety matters. We have been giving detailed consideration to the level of compensation that should be awarded to individuals who take action on health and safety grounds and, as a result, are unfairly dismissed by their employer. Such individuals should not be restricted to the £50,000 limit on compensation that would normally apply. I am therefore pleased to inform the House that new clause 11 will ensure that those individuals will also be entitled to unlimited compensation should they be unfairly dismissed.

John Bercow (Conservative, Buckingham)

I understand the rationale behind the proposed new clause. However, given that it could affect businesses operating in the private sector, including small businesses, what account will be taken of the circumstances of those businesses? Such businesses could be forced under, if the new clause is rigorously enforced without regard to their circumstances.

Stephen Byers (Labour, North Tyneside)

The hon. Gentleman leads me to the next group of amendments, when we shall discuss the position of small businesses. It is important that the House sends out a clear message to those who are employed in a responsible position and who make a disclosure in the public interest, and to those who ensure that organisations comply with health and safety requirements. There is a common interest and I hope that the House will agree that our approach, whereby unfair dismissal compensation is increased to £50,000 other than in two exceptional sets of circumstances—those individuals covered by the Public Interest Disclosure Act and those who deal with health and safety matters—in which compensation will be unlimited, is the right one. The real objective must be to create the climate in which health and safety issues are addressed properly in the workplace and individuals can ensure that there is proper disclosure where that is appropriate.

Ian Stewart (Labour, Eccles)

Does my right hon. Friend agree that the new provision will deter employers who should know better from paying less attention than they should to serious issues of health and safety at work?

Stephen Byers (Labour, North Tyneside)

My hon. Friend is absolutely right. There is a litany of cases in which people were unable to expose wrongdoing at their place of work with tragic consequences. I have examples of cases that would have been covered both by the Public Interest Disclosure Act and the unlimited compensation that we intend to offer. Let us take the case of Bristol Royal infirmary, in which a responsible whistleblower, Stephen Bolsin, raised concerns about the deaths of babies at that hospital. Those concerns were not properly addressed and we know the tragic consequences. There is now a Government inquiry looking into the details of that case. In the case of the Clapham rail crash, it was known that loose wiring was a risk to the travelling public, but staff were reluctant to speak out, resulting in tragic and unnecessary loss of human life. Health and safety issues arose in the Piper Alpha oil rig disaster. The Cullen inquiry reported that: workers did not want to put their continued employment in jeopardy through raising a safety issue which might embarrass management.

Richard Shepherd (Conservative, Aldridge-Brownhills)

I hesitate to say this, because it is slightly ungenerous, but all those cases were cited by hon. Members on both sides of the House to push the Government towards the principle of uncapped compensation; at the time, the Government were not having any of it. Although I welcome the introduction of these provisions, the Secretary of State should not attempt to claim credit by giving examples that were previously advanced and rejected by the Government.

Stephen Byers (Labour, North Tyneside)

I am trying to make the point that we recognise that. In response to the intervention my hon. Friend the Member for Eccles (Mr. Stewart), I am describing events that occurred because the provisions that are now being introduced were not in place. That is why I am pleased to be introducing a measure that will ensure that compensation is uncapped—a measure for which the hon. Member for Aldridge-Brownhills has argued for many years. I compliment the hon. Gentleman on his efforts to ensure that the Public Interest Disclosure Act reached the statute book. He campaigned strongly for that legislation for many years, often in opposition to the view of the previous Conservative Government. He stuck to his principles and the Act reflects his endeavours, and the provisions being passed this afternoon are the final element in establishing an effective and proper compensation regime. There are many cases in which public interest was important, and the House must send out a clear message underlining how seriously we regard that issue. To say that compensation will be unlimited is the best possible demonstration of the importance we attach to that matter. An even better outcome would be that we succeed in fostering a climate of openness and transparency in which individuals in the workplace do not feel that they will be victimised if they draw attention to wrongdoing or to a work practice that might compromise health and safety. That is what we should aim for, and I hope that businesses, including small business, will adopt best practice to ensure that the measures we are introducing today will never need to be used, because the climate has been created that precludes the occurrence of such wrongdoing.

John Bercow (Conservative, Buckingham)

I am sorry to trouble the Secretary of State again, but an important principle is at stake. In other Government legislation emanating from his Department, Ministers have recognised the difference between small and large companies—for example, the Competition Act 1998 makes provision for fines that depend upon turnover. Therefore, will the right hon. Gentleman at least concede the argument for taking specific account of the circumstances of small businesses in implementing the new clause? That is not an unreasonable proposition, and it certainly does not seek to detract from the force or the logic of his argument.

Stephen Byers (Labour, North Tyneside)

I assumed that the hon. Gentleman was more knowledgable than he actually is about the method of dealing with such matters. I hope that my response will be informative and helpful. Any tribunal can take account of the size of an organisation or company in deciding whether an approach has been fair and reasonable in particular circumstances. I am pleased to put that on the record. If a small business does not have the amount of back-up that is available to a larger company, the tribunal can take that factor into account in deciding the appropriate level of compensation to apply. I hope that I have assisted the hon. Gentleman. I believe that extending this provision to those involved in health and safety matters sends an important message. The Health and Safety Executive produced clear evidence to show that, when a proper consultation mechanism was in place to address health and safety matters, the number of accidents in the workplace decreased by 50 per cent. A real benefit can materialise for effective health and safety measures. I do not believe that many cases will reach the tribunal stage—at least, I hope not—but it is appropriate that the House gives clear notice today of its priorities. Amendment No. 166 would limit the amount of compensation to be paid. Hon. Members will know that clause 12 provides that an individual may complain to a tribunal that his or her employer has failed to comply with the provisions of clause 11, which entitles an individual to be accompanied at a grievance or disciplinary hearing. There is no limit on the award that can be made, and it is right to take this opportunity to clarify the position. We intend to link the amount with the upper limit on a week's pay, which is currently specified in section 227(1) of the Employment Rights Act 1996. At present, it decrees the maximum amount as £220 a week, which will be index linked in the future. We propose that there should be two weeks at £220 a week, providing a maximum amount of compensation of £440—I hope that my mathematics have not let me down on this occasion. That is the maximum amount provided under the amendment. We feel that it is right to clarify the position, and we believe that that strikes a just and reasonable balance. I hope that the House can agree to new clause 11 and amendments Nos. 65 and 166.

Tim Boswell (Conservative, Daventry)

I welcome the Secretary of State to the Dispatch Box for the Report stage. We understand that other obligations make it difficult for him to appear before Committees, although it is not unknown for Secretaries of State to do so. His presence in the Chamber gives me an opportunity to say on behalf of the official Opposition that we are sorry that the Minister of State, the right hon. Member for Makerfield (Mr. McCartney), is still unwell. We understand the circumstances and we do not wish to press him to return. We simply record that we are missing him and his lively contributions to our discussions. While I am handing out the bouquets, I must say that I am pleased to see the Minister for Small Firms, Trade and Industry in the Chamber. He did very well in Committee in trying to respond at short notice to at least some of our concerns. Bearing in mind that we have much business ahead of us, I now address new clause 11. I shall not advise my hon. Friends to oppose the new clause, but we remain gravely concerned about circumstances relating to the Bill's formulation and presentation. The new clause has been thrown at us, and if I may be at all critical, I point out that given that it alludes to previous legislation and that its words do not leap off the page coherently, it would have been helpful if the Secretary of State had had the time, which he clearly did not, to share with Opposition spokesmen the import of the proposals that he was intending to put to the House. However, he has explained the new clause and we do not find it objectionable in principle. I shall deal first with amendment No. 166, because amendment No. 65 is merely a repealing amendment. Amendment No. 166 relates to the maximum level of compensation. I chose not to move an amendment on that in Committee to facilitate proceedings. I was concerned, however, about the other end of the compensation scale and whether it is necessary to pay compensation at all if no loss has occurred. The Government have acknowledged that there should be a reasonable limit on compensation in proceedings relating to clause 12. We accept that. On the more important issue of public interest relating to the new clause, the Secretary of State made a persuasive case, but I have a question and a couple of comments. As I understand the Secretary of State, the circumstances under that new clause are confined to matters of public disclosure or health and safety disclosure and do not apply to other compensation or special awards relating to, for example, trade union participation or otherwise. We had an interesting debate in Committee, in which I made the point that one of the possible side effects of the Government's proposals for special awards would be to reduce the level of compensation in particular cases. That remains the case under these proposals, apart from the two specific provisions. On the substance of the matter, the Secretary of State responded, second time around, to the concerns about small businesses expressed by my hon. Friend the Member for Buckingham (Mr. Bercow), which I intended to voice myself. It is, perhaps, significant that the examples that the Secretary of State cited to the House were disasters which should never have happened involving large corporations. Although such companies might not welcome an unlimited claim for damages, they certainly would not find it difficult to pay a damages claim limited to £40,000 or £50,000 and they might be able to stand the rap for a fairly substantial fine. That would be much more difficult for a small concern. The Secretary of State has confirmed that it will be within the power and competence of a tribunal to take into account all the circumstances of the case, including the degree of culpability and the resources of the firm—in other words, whether it will be bust by an unlimited award. I imagine, as the Secretary of State hopes, that that is not likely to happen frequently. Another point that needs to be clarified is proportionality. In any case, the tribunal will consider the proportionality of the circumstances and will not automatically be required to set a compensatory award above, for example, what would be the limit for other cases of unfair dismissal. It would have regard to the circumstances, how bad the offence was and how much the metaphorical whistle had to be blown. Will the Secretary of State confirm that in his response to the debate? This matter has concerned many hon. Members and some of us have personal concerns on health and safety. Given the context in which the public interest legislation has been proposed and accepted, we accept the Secretary of State's presentation, and look forward to any further comments by hon. Members.

John Healey (Labour, Wentworth)

I begin by declaring an interest—an active though not registerable one. I was a trustee—I am still a member of the council of management—of the charity Public Concern at Work, which, along with the hon. Member for Aldridge-Brownhills (Mr. Shepherd), did so much to get the Public Interest Disclosure Act 1998 on the statute book. I welcome the new clause very strongly, as I know does Public Concern at Work. The proposal to remove the limit on compensation payments for whistleblowers was widely and strongly welcomed and backed by a range of consultees, including the CBI, the Trades Union Congress and a number of key professional groups. It takes special courage and a special person to blow the whistle on malpractice in the workplace. They often suffer loss of a job, an income and career prospects—not to mention isolation, pressure and sometimes intimidation, especially in the early stages of making such a move. The cases of Maxwell, Barlow Clowes, the Bank of Credit and Commerce International and a host of lower profile and smaller examples of whistleblowing underline the need for people to be able to report malpractice with confidence. Any cap on compensation would have limited the effectiveness of the Public Interest Disclosure Act to do the job that we need it to do. The new clause means that middle managers in industry, doctors in the national health service and even civil servants in Whitehall will be properly protected if they raise and pursue their concerns responsibly. To that extent, the new clause sends out strong encouragement to those who might be considering blowing the whistle on malpractice where they work. I welcome the same provision for health and safety representatives, which simply underlines the importance of health and safety in the workplace. I had thought that my right hon. Friend the Secretary of State was poised to make an announcement on the commencement of the Public Interest Disclosure Act. It is important that an announcement be made in good time—at least a couple of months before we propose that the PIDA comes into force—not least to give diligent employers time to put in place proper internal procedures. I hope that my right hon. Friend might later today be able to announce in the House when the Act will commence. I leave him with this thought: the Act was enacted on 2 July 1998. Would it not be fitting if we marked its first anniversary with commencement?

Richard Shepherd (Conservative, Aldridge-Brownhills)

My thunder has been stolen by the hon. Member for Wentworth (Mr. Healey), because he made the points that I would also make. I pay great tribute to the Minister of State, Department of Trade and Industry, the right hon. Member for Makerfield (Mr. McCartney), who throughout discussions on the Public Interest Disclosure Bill was a Trojan worker for a sense of justice in this very important area. As the hon. Member for Wentworth said, it is extremely difficult for honourable people to surrender what might be their family's income by disclosing something for which the Act offers protection: a disclosure that is in the public interest. The public interest is the wider interest of us all, as a society. It is right that the Government were very nervous about extending compensation along the lines of that available for race or sexual incidents. I am very pleased that, on reflection, they have taken on board the work of the charity behind much of the campaign. The Solicitor-General was also a trustee of that charity. A wide body of opinion had formed behind the campaign. At any time, my Front-Bench team could have stopped the Public Interest Disclosure Bill becoming law. I therefore pay tribute to them, too. We are seized of the notion that certain wrongs have happened about which people knew. Barlow Clowes is a very good example; we know of Maxwell, too. Many such instances may be going on even now, concerning which highly paid people in the City or elsewhere will not surrender their jobs for fear that they will never be employed again. The measure will therefore give the tribunal the opportunity to judge what is appropriate when an employer has so wilfully disregarded the law in terms of compliance with that Act. I give a cheer for that and I welcome what the Government and the Secretary of State are doing. On the commencement date, it is nearly a year since the PIDA was enacted. The hon. Member for Wentworth made a valiant point: companies must be in a position to prepare themselves and to ensure that their systems for coping with such circumstances are set up properly. We are into a new world, I hope, where our country will be the better, for when individuals know of wrongdoing that has implications, they will know that our law will support them in the quest for justice.

Michael Fabricant (Conservative, Lichfield)

I raise this point as a point of order, because it is not strictly connected with the Bill. Will the Secretary of State make a statement, given the announcement by Professor Joachim Milberg, the chairman and chief executive of BMW, on the slow pace of negotiations with the UK Government over"—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I really cannot see that that has any place in the proceedings at present. It is certainly not a point of order for the Chair. There has been no notification of a request for a Government statement on that matter. We are dealing with the Employment Relations Bill.

Michael Fabricant (Conservative, Lichfield)

The Secretary of State might like to comment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I hope that the Secretary of State will resist the temptation. We are discussing the Employment Relations Bill.

Stephen Byers (Labour, North Tyneside)

I shall, as always, try to keep in order, Mr. Deputy Speaker, and thank you for your clear guidance. A number of issues were raised during the debate and I welcome the tenor of the remarks that have been made. As several hon. Members have said, the PIDA had all-party support in the House, which is why we were able to get it on the statute book last year. Hon. Members have asked about commencement. The Government's objective is for the Act to commence in the very near future. I want to work towards the Act being in operation, with appropriate notification to employers, to meet the anniversary of its enactment. That is a good target to set ourselves. Now that I have said that, hon. Members will want to keep me to it; I shall be pleased to be kept to my task of achieving that particular objective. The hon. Member for Daventry (Mr. Boswell) is absolutely right that the proposals in new clause 11 are restricted to examples covered by the PIDA and to issues related to health and safety matters, and do not go beyond that. I hope that that reassurance is helpful. On the point made by the hon. Member for Buckingham (Mr. Bercow) and reinforced from his Front Bench, tribunals will be able to take into account the circumstances of a particular employer, including its size, in deciding whether it has acted reasonably or unreasonably, and thus whether the dismissal is fair or not. The important aspect is that compensation must be suitable to the particular circumstances, a point that was raised from the Opposition Front Bench. Whistleblowers must have unlimited compensation because they are often in positions of great responsibility and at the higher end of the salary range. So going beyond the cap of £50,000 would be appropriate. I confirm for the hon. Member for Daventry that there is no question of exemplary damages being applicable. The measure will give the tribunal the opportunity to award beyond £50,000, if that is appropriate in the particular circumstances of the case before it. I hope that I have been able to address hon. Members' concerns and that we can agree to new clause 11 and the consequential amendments.

SMALL EMPLOYERS' EXEMPTION

John Redwood (Conservative, Wokingham)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this, it will be convenient to discuss the following: New clause 2—Microbusiness exemption— '.—(1) Subject to subsection (2) below, the Secretary of State may by Order disapply or modify such rights of individual workers under the Employment Rights Act 1996 (but excluding any rights conferred under that Act by the provisions of this Act) as he deems appropriate in the interests of businesses employing 10 or fewer workers (or such lesser or greater number as he may by Order specify from time to time). (2) An Order under subsection (1) shall not apply to rights already enjoyed by individual workers at the time at the passing of this Act. (3) No Order under subsection (1) shall be made unless a draft of it has been laid before, and approved by a Resolution of, each House of Parliament.'. Amendment No. 5, in schedule 1, page 19, line 39, leave out '21' and insert '51'. Amendment No. 6, in page 19, line 40, leave out '21' and insert '51'. Government amendments Nos. 66 to 68.

John Redwood (Conservative, Wokingham)

Amendments Nos. 5 and 6 are consequential on new clause 1, should the House agree to that, and I have no objection to Government amendments Nos. 66 to 68, subject to anything that the Secretary of State or the Under-Secretary may wish to say by explanation. I remind the House that I have declared an interest in certain companies in the Register of Members' Interests. I am not speaking on their behalf or at their request today, but all companies are obviously affected by these new clauses and amendments, so it is right that I should remind the House of those interests. I thought it curious that the Secretary of State was so generous to whistleblowers but not others until I remembered that it is to a whistleblower that he owes his job. We were grateful to the whistleblower who exposed the goings-on at the Department under the right hon. Gentleman's predecessor. It was good that we were able to find common cause on the issue of whistleblowers in the first exchanges. I hope that we can make similar progress by tempting the Secretary of State to live up to the fine rhetoric that he has placed in the newspapers in recent weeks about the need to deregulate. Some of the words which have been planted in the press, perhaps at his request, allegedly on his behalf, could have been uttered by me. They were fine deregulatory statements, saying that the costs of business must be cut, that the burdens on business must be reduced, that the Government have at last got the deregulatory message coming loud and clear from businesses, small, medium and large.

Michael Fabricant (Conservative, Lichfield)

Does my right hon. Friend think that, with regard to deregulation, that is just rhetoric, not actual delivery? Could that be why Joachim Milberg today said that BMW is thinking of moving the Longbridge operation to Hungary, where there is not only little regulation but low pay and no excessive charges on top of employment?

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. Perhaps the right hon. Member for Wokingham (Mr. Redwood) will take a gentle reminder from me that that can hardly be answered in the context of small employers.

John Redwood (Conservative, Wokingham)

I take your warning, Mr. Deputy Speaker. My hon. Friend is noted for his persistence and I know that he has the interests of all British business at heart. With your permission, I shall answer within order by saying that I fear that, on the issue of deregulation in general, and deregulation for small businesses in particular, there will be many more words than actions from the Secretary of State. The right hon. Gentleman has a marvellous opportunity tonight to prove me wrong. if he would like to intervene at this moment and welcome the new clause, I would forgo the advantage of the rest of my speech, congratulate him warmly and say that he has at last understood some of our message on deregulation. However, I see the right hon. Gentleman is not about to leap to his feet, so I fear that we must tease him a little further about the big gap that is growing between the rhetoric, the spin, in the unattributable briefings in the press and the reality of a Government who put cost upon cost, burden upon burden, regulatory requirement upon regulatory requirement upon small and big businesses alike.

John Bercow (Conservative, Buckingham)

My right hon. Friend, as the House knows, is renowned for his generosity of spirit, but on this occasion, I hope that he will not over-egg the rhetorical pudding. To that end, does my right hon. Friend recall that, in the course of 46 minutes of speech from the Secretary of State during the Budget debate—a 36-minute opening speech and a 10-minute statement on enterprise and competition—the word "deregulation" did not come forth from his lips once?

John Redwood (Conservative, Wokingham)

My hon. Friend has a better memory than I do, but I am sure that he is right. It would be a notable omission to go through such a speech with no reference to deregulation. But that is symptomatic. There has been no such reference in the House of Commons because my hon. Friends or I might cross-examine the right hon. Gentleman and discover that there is no back-up to the rhetoric that he wishes business chiefs outside to believe. This is a regulatory Government who are presiding over an industrial crisis. We propose this modest measure of relief for small business because we are worried by the climate now confronting small industrial companies in particular. 5 pm Let us consider today's news. The pound hit a new high against the euro this morning: there has been a 7 per cent. or more devaluation of the euro in three months. BMW says that it still has not settled its future at Longbridge despite long and protracted negotiations, and that threatens many firms that depend on the jobs at that most important plant. Four hundred jobs have disappeared at Marks and Spencer, and there is a strike at National Power. What is the Government's answer to all that? Yet more regulations, which interfere with the rather good employee relations we left the Government when we were removed from office, and yet more costs to be placed on small and big business at a time when it is already too dear to make certain products in Britain. The Government have gone out of their way to make it too dear to make goods in Britain by having a high exchange rate, high interest rate, high tax and high regulatory cost policies, which they have pursued come hell or high water over the whole of their two years in office. In the lifetime of this Parliament, small and big firms face £8 billion of extra charges from the national minimum wage bureaucracy and policy; £6.65 billion extra costs for the working time directive; £85 million for European works councils; £110 million extra for parental leave; and £90 million extra for the Food Standards Agency. That is on top of the massive stealth taxes, wealth taxes and company income taxes that have been imposed through the back door in three successive Budgets. It is no wonder that small business now finds it extremely difficult to prosper, and we see factory closure after factory closure day after day, and redundancy after redundancy as the full impact of these taxes and extra costs is felt. Worse still, from the Secretary of State's point of view, is the fact that the big impact is in his constituency and in the constituencies of his right hon. and hon. Friends in the northern and midlands manufacturing heartlands. I am glad to say that it is not being felt in my constituency.

Stephen Byers (Labour, North Tyneside)

The right hon. Gentleman should stand against me.

John Redwood (Conservative, Wokingham)

The Secretary of State rather foolishly says that I should stand against him in his constituency. Why should I let my constituents down? Why should I throw away all that hard work for them, and why should I have to apologise to him for the fact that, despite Labour Government policies, they are prosperous and succeeding and do not have an unemployment problem? I have every right, as a member of the shadow Cabinet, to speak out for his constituents if he fails to do so. The industrialists and the industrial employees in his constituency and in neighbouring areas are getting tired of the Government, who are long on promises and short on delivery. They are unable to understand that their policies are doing enormous damage to industry and companies in that part of the world. The Secretary of State, in his rhetoric, says that this legislation is about a new culture of partnership. How can he believe that, when the Bill is about compelling people and companies to do things that they otherwise would not voluntarily agree among themselves to do? His idea of partnership is like the idea of partnership entered into between the chicken and the pig for the breakfast business: it might be all right for the chicken, but not very good for the pig. The Government have such a partnership in mind in this legislation. Our proposal would exempt all small firms with 50 employees or fewer from the impact of the Bill. It would not prevent them from going ahead by voluntary agreement with best or better practice than is recommended in the legislation. It would not prevent them from offering even better terms and conditions of employment to their staff. Many of them already do, and I hope that many of them will be able to do so in the future. Does the Secretary of State realise that if a firm has fewer than 50 employees it is possible for the boss to know them all, to like them all, to have individual business relationships with every one of them, to understand their requirements and needs and to negotiate with each of them on what is best in their circumstances? He can negotiate individually on hours, pay, conditions and family circumstances. There can be give and take between employees and the employer: employees understand that in a small firm there has to be more give and take on their part as well. If there is not, the life of the small firm may be jeopardised.

Geraint Davies (Labour, Croydon Central)

Why did the right hon. Gentleman not opt for a limit of 100, 150 or 200 rather than 50, given what he has said? If he were sincere, he would admit that he does not want any of this legislation: he does not want any additional rights for any workers, or the partnership and prosperity in industry that it envisages. Why does he not come clean and say that we should get rid of the 50 limit and abolish the lot?

John Redwood (Conservative, Wokingham)

If the hon. Gentleman reads the new clause, he will see that it gives power for the number to be varied. My right hon. and hon. Friends and I discussed the matter, and decided to go for a modest proposal. We are offering it seriously, because we hoped that the Government might accept it. We had read all the rhetoric suggesting that they were now very worried about small firms. As I have just explained, in a company employing 50 people or fewer, it is normal for the employer to know all those individuals, to have hired them personally and to be able to negotiate with them separately. That might be a little more difficult with 100 or more employees. Personally, I favour the 100 figure, and some small business organisations have made representations to us suggesting that we opt for it, but we chose the more modest figure, because it can be convincingly argued that, in a firm employing 50 people or fewer, the problems resulting from the introduction of a statutory framework applying to much bigger companies will be greater. In a company with 50 or fewer employees, employer and employee will obviously know each other, and will be able to work things out on an individual basis. The hon. Member for Croydon, Central (Mr. Davies) and his right hon. and hon. Friends may be interested to hear some of the views of the business community, if they are not sure about my powers of persuasion. The London chamber of commerce and industry is very worried by the alarming increase in costs. In one of its recent press releases, it says that the Government's measures will result in added costs and bureaucracy for firms when they are already having to comply with the Working Time regulations and preparing for the minimum wage legislation… Furthermore, measures such as the introduction of parental leave will be a greater burden on small firms than on large ones. We want the Government to lighten these burdens on small firms". Surely the Government want London to prosper. Do they not understand that jobs are more likely to be created in the difficult areas of London by small firms than by large ones? That is the historical experience, and it is the likelihood for the future. Jobs are created much more in the United States of America, where there is a larger population of small firms, than on the continent of Europe, which relies on large firms and ends up with mass unemployment.

John Wilkinson (Conservative, Ruislip - Northwood)

My right hon. Friend is making an particularly important point about London following the representations that he has received from the London chamber of commerce and industry, which—as I know from my former professional capacity—does an excellent job. The LCCI has further cause for concern. Not only will these measures hit small businesses in the capital; there will also be road user charges and parking charges. Let us at least get these measures right, so that small businesses can survive to face the other imposts that the Government have in mind.

John Redwood (Conservative, Wokingham)

My hon. Friend has considerable knowledge of London. As he knows, there is high unemployment in parts of the capital, which will be particularly badly hit by yet more costs of the kind that he describes, in addition to those that we are discussing. They will have a bigger impact on many businesses that would otherwise be able to create some of the jobs that we all want to see. The Government love quoting the Confederation of British Industry, with which they seem to think they have a special relationship. I do not think that they can have been reading the CBI policy statements of recent months; if they had, they would have noted that on most issues the CBI is now more in line with the Opposition than with the Government, because of the damage that the Government have been doing to the interests of larger as well as smaller companies. According to the most recent statement by the CBI's director general, published in the Financial Times this month: Good employee relations should be built on trust and this is not best fostered if collective bargaining has been imposed on an employer by a trade union. Collective bargaining can work where it has two willing partners, but not where there is only one. No real improvements in industrial relations occurred the last time we had compulsion in the 1970s and indeed the legislation proved to be unworkable. Exactly. I am worried that the Bill will prove to be most unworkable in the sector that is most at risk: the smaller firms sector.

Michael Fabricant (Conservative, Lichfield)

My right hon. Friend will be aware that I used to run a broadcast electronics company: one might say, an engineering company. Is he aware that the Engineering Employers Federation says that small engineering companies will be stifled by the Bill? Is he further aware that the CBI is also saying that the Department of Trade and Industry has over-egged the directives from Brussels and that there can be no future for engineering if such small firms are stifled at birth?

John Redwood (Conservative, Wokingham)

My hon. Friend is ahead of me because I was going to refer to the plight of engineering firms. He is right to say that the Engineering Employers Federation is worried by the changes. It stated in January: The proposed changes to the law on industrial action will inevitably change the industrial relations climate and may make industrial action more common. It said elsewhere that it was against the measures because it feared that they would be yet another blow to the independence and success of small and large engineering companies alike. The Institute of Directors has been even tougher in its opposition to the Bill. That may come as no surprise to the Secretary of State, but the IOD may be right; he should bear that in mind as a possibility. It has stated: The Bill is entirely inconsistent with its"— the Government's— objective of creating a competitive economy. The legislation imposes a raft of new costs and burdens on firms, including compulsory trade union recognition, higher compensation for unfair dismissal and the Parental Leave Directive. These measures will sap the competitiveness of British Firms. The Institute of Personnel Directors is against the proposals. The Chemical Industries Association has also said that it is worried about the measures. It says that it does not welcome the Bill and thinks that there are alternative ways in which to promote partnership which fall short of the compulsion in the Bill. On the specific matter of small firm exemption, the CBI proposed that the threshold should be raised to 50—another part of our case in going for the lower number, rather than 100. The CBI says: Members believe that direct relations between management and employees is the norm in businesses with far more than 20 employees. It proposes 50 as a reasonable, prudent guess of a sensible limit. The British Chambers of Commerce has also said that 50 is a reasonable limit, rather than the 20 in the Bill. The Federation of Small Businesses has proposed a threshold of 100 and would obviously prefer 50 to the threshold in the legislation. It is worth dwelling on its quotes because it speaks for many small businesses. Its voice should be heard in our important debate. In a press release in February, the federation stated: Small firms are now being over-regulated to such a degree that it is too costly and too risky to employ staff … The provisions of the Employment Relations Bill will place them under further pressure and the introduction of the Working Families Tax Credit will mean the onus of administering more benefits falling on to employers. In an earlier submission, it made it clear that it was against the union measures in the White Paper and draft legislation. Firms across the spectrum—the CBI, the IOD, small firms and chambers of commerce—are saying that they do not want the legislation and that, if we have to have it, small firms must be exempted because they behave differently and would be particularly vulnerable to its measures. Will not the Government listen? The Government came to office saying that they were going to be different, that they would listen and understand, that they cared about companies. We now have the united voice of business. We have the united voice of the Opposition. We are all telling the Secretary of State the same thing. We are telling him that his rhetoric in the newspapers on deregulation is promising, but that the actions in the Bill show that he does not mean a word of it. We are giving him a simple way out of the conundrum by asking for a modest improvement: an exemption of small firms with up to 50 employees. 5.15 pm We have just heard from the Minister for the Cabinet Office something about "joined-up government". That is an extraordinary idea from this Government, who have nothing joined up about them at all and who make disjointed statements from day to day, based on their idea of media management and what might make a good headline or news story the following day. We are told that there is to be a regulatory impact assessment for every new measure that is proposed. Whoopee, Mr. Deputy Speaker; but that is not new. There have been cost assessments of regulations for many years. We want the Government to produce honest assessments, rather than fiddled ones, and then to understand what the assessments are telling them. The regulatory cost assessments of these and other measures that the Government have introduced should be telling them that they are taking too much money out of British business, and that the reason why factories are closing and people are being sacked day by day in the industrial sector has something to do with the Government's policy. If the Government take out too much in tax and regulation and push sterling too high, it will become difficult to compete and jobs will be lost. We do not want more regulatory impact assessments. We want the Government to come up with some honest figures, to understand the voice of business, to understand what business is saying and to do something about it. The Secretary of State's usual defence is to say that the previous Government introduced regulations. That is quite true; they did, and those regulations also increased costs. However, the Secretary of State is proposing far more expensive and damaging regulations than did the previous Government, on top of the regulations introduced by that Government. If the Secretary of State wished to identify regulations introduced by the previous Government that he thought we could do without, nobody would be more delighted than I. I am sure that I could persuade my right hon. and hon. Friends to see the wisdom of repealing those regulations, as well as those that he is proposing. We would be delighted. Rather the sinner repenteth before it is too late than that the sinner should go on to his inevitable doom. We are giving the Secretary of State a chance to repent with new clause 2. As we are prepared to trust him in this respect, we are offering him the power to choose those items in the Employment Rights Act 1996 that he thinks should no longer apply to very small firms: those employing 10 people or fewer. We are leaving it to his judgment. He will be in a good position to consult and to find out from business which parts of the legislation are most damaging and which could be removed without doing overwhelming damage—something that he and I would not want. We are being true to our word. We are happy to look at past as well as future legislation. The main burden of the Opposition's charge is simple. There are already too many regulations. The Government have introduced some big and expensive ones already which business is having to digest, the minimum wage and the working time directive being two of the most obvious and expensive. We say to the Government, "Please do not put on top of that all the additional requirements of the Bill. Please exempt small firms. Please do something for very small firms." If the Secretary of State does nothing for those categories, it will reveal that he is not interested in deregulation or British business, that he does not understand the catastrophe in modern British industry and that he will do absolutely nothing to stop those job losses and factory closures.

John Bercow (Conservative, Buckingham)

I support new clauses 1 and 2, which offer a lifeline to the small businesses of this country. What my right hon. Friend the Member for Wokingham (Mr. Redwood) had to say in support of the clauses demonstrated beyond doubt that, in the context of this Bill—as in other aspects of Government legislation and public debate—the official Opposition are on the side of small business and the Government are working against it. Six reasons occur to me why the new clauses should be accepted. The first is the background to them. The circumstances in which we find ourselves are serious indeed for the small business sector of our economy. In 1998, 38,000 small businesses in this country closed. That represented a 6 per cent. increase on the figure for 1997. I hope that the House will be interested to know, and disturbed to learn, that in the first quarter of this year, no fewer than 11,000 small companies have ceased to trade. There are a variety of reasons for closures and cessation of trade, but two reasons are paramount. [Interruption.] Before the hon. Member for Eccles (Mr. Stewart) chunters on any further, for all the world as if his main ambition this afternoon were to resemble the village idiot, let me favour him with the facts—[Interruption.] I shall continue to be as polite as I ordinarily am. Let me favour the hon. Gentleman with the evidence of the Federation of Small Businesses. As he was a doughty contributor to the proceedings of the Standing Committee, I hope that he will be interested to know the verdict of that organisation, which is the authentic voice of small and medium-sized enterprises in the United Kingdom. The federation says—not anecdotally, but on the basis of all the evidence of its members—that there are two main problems. One is cash flow; the other is the burden of regulation on enterprises. In the context of the first reason, to prove that I am being scrupulously fair, I say at the outset that although far too many of the companies that have ceased to trade have gone bust, several of them have not. Some of those companies—especially micro-businesses, although larger businesses are also involved—have made the decision to cease to trade while still relatively profitable, because they think that the odds are stacked against them, and that the Government seek to thwart rather than to assist them. Some relatively successful business people, suffering the avalanche of additional regulation that the Government have produced in their first 22 months, have said to themselves—or rather to their employees—"I am sorry, but this is no longer a culture in which I feel comfortable to continue. I no longer want to get up and face the problems, surmount the challenges, market and sell products, make profits, keep you in work as my employees, and say to others, 'Come and work for me.'" I hope that the Secretary of State will realise that if we believe that small businesses will be the engine of employment growth and commercial advance for the United Kingdom in the 21st century, the anxiety of those business people should be uppermost in his mind. Many of them are saying, "We don't want to face that burden any longer. We'll sell the company; we'll retire; we'll go and play an extra round of golf or buy an apartment in Marbella—but we don't want to operate small and medium-sized enterprises in the United Kingdom when Ministers don't seem to want us to do so."

John Wilkinson (Conservative, Ruislip - Northwood)

My hon. Friend is making an important point. It is in the micro and small business sector, among the family businesses, that personal sentiment is most prevalent. Our constituents who have been in that sector, and who have come to tell us that the game is not worth the candle, are absolutely right. They are sick to death of the hassle, and they do not see why they and their families should be subjected to health risks and protracted aggravation for so little benefit.

John Bercow (Conservative, Buckingham)

My hon. Friend, as usual, is right. I can testify to the truth of what he says not only on the basis of the comments and evidence of the Federation of Small Businesses, but from personal experience in my constituency. The small business sector is well developed in my constituency, in Milton Keynes and in the rest of north Buckinghamshire. Time and again, people say to me, "We don't think Ministers are on our side. They utter soothing words, but they do not will the means to help us." What my hon. Friend said reflects what people in business at the grass roots are really saying.

Ian Bruce (Conservative, South Dorset)

I am worried that we have already persuaded Ministers on this point and that my hon. Friend may therefore be over-egging the pudding. Does he not remember the excellent speech made by the Minister for Small Firms, Trade and Industry—an unpaid Under-Secretary—who said, when he was asked by the Liberal Democrats for further regulations on discrimination against people on age grounds, that they would not be appropriate? That statement came during the last part of the Standing Committee's deliberations. Does my hon. Friend think that the Government have at long last realised the damaging effect of all their regulations and may accept the new clause?

John Bercow (Conservative, Buckingham)

I should like to think so, and hope springs eternal, but although I pay tribute to my hon. Friend's truly elephantine memory, I cannot in all candour pay similar tribute to his judgment or his generosity of spirit. I should be delighted to be disabused of my suspicion, but I fear that Ministers will not be willing to accept our new clause. If I am wrong, I shall happily donate £100 to my hon. Friend's favourite charity, but I do not think that I am likely to be so impoverished. The second reason why new clauses 1 and 2 should be accepted lies in the pronouncements of senior Labour Members before and since the election. Before the election, the Chancellor of the Exchequer said, in the foreword to Labour's business manifesto: We will not impose burdensome regulations upon business because we understand that successful businesses must keep costs down. That statement was supposed to betoken a light-touch regulatory approach which has not been reflected in practice. As my right hon. Friend the Member for Wokingham pointed out, the Government have imposed 2,400 additional regulations on business during their first 22 months in office. They have discarded only 20 regulations, which makes a net increase of 2,380. If the Government want to honour their pre-election commitment, they should be prepared to accept the new clause as it would remove burdens otherwise imposed on small companies. I am particularly sorry that the right hon. Member for Hartlepool (Mr. Mandelson) has wafted out of the Chamber. I thought that he might be good enough to stay for the exchanges on new clause 1, because, as he does on other matters, the right hon. Gentleman has form on this subject. Under the protection of parliamentary privilege, I can even go so far as to say without fear of a writ for defamation that the right hon. Gentleman has previous convictions on the subject of regulation. If the right hon. Gentleman were here, I am sure that he would not mind my reminding him that when he was Secretary of State, he said that: we have no intention of introducing any legislation that presents a burden on business and reduces the competitiveness of British firms."—[Official Report, 25 November 1998; Vol. 321, c. 214.]

Tim Collins (Conservative, Westmorland and Lonsdale)

My hon. Friend may wish to know, as a point of information, that the right hon. Member for Hartlepool (Mr. Mandelson) is sitting in the No Lobby, where he is, perhaps, preparing to vote no on Third Reading for the reasons outlined by my hon. Friend.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. Comments should relate entirely to what is taking place in the Chamber.

John Bercow (Conservative, Buckingham)

I shall confine myself, Mr. Deputy Speaker, to the hope that the right hon. Member for Hartlepool will prove to be a sinner who repenteth, and that he will join us in the Division Lobby. He need be in no fear of being traduced or attacked if he does so. If it would be helpful for him, I shall, on this one occasion, make the very dangerous commitment to hold his hand as we walk through the Lobby in support of new clause 1, at the risk of considerable damage to my own reputation. I should be happy to do that for the benefit of having the right hon. Gentleman on side. It is entirely characteristic of my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins), as a member of the Opposition Whips Office, that he should be the source of such invaluable information. The information of the Whips is always the most up-to-date of all. The commitment made by the right hon. Member for Hartlepool on 25 November has not been followed. What I find most extraordinary about the Government is the wholly laid-back way in which they make commitments, do not honour them and then think that there is something curious about our pointing out the contradictions between rhetoric and reality. In days gone by, there was at least some assumption that people would follow their commitments with action, but that does not happen under this Administration.

Graham Brady (Conservative, Altrincham and Sale West)

It is not only Conservative Members who have noted the Government's practice. The director-general of the Engineering Employers Federation said in February that the Government appeared to be doing one thing and saying another on the Bill.

John Bercow (Conservative, Buckingham)

My hon. Friend reinforces my point. He is right and he would have been right also to allude to the evidence of the president of the Confederation of British Industry. Exactly 22 days before the right hon. Member for Hartlepool, the former Secretary of State, made his declaratory statement about not introducing burdensome regulation, the president of the CBI, Sir Clive Thompson, said that there was a creeping paralysis of regulation on British industry and commerce, and that unless the Government took action to arrest and reverse that trend, regulation would be the only growth marker in the British economy in 1999. I challenged the Secretary of State on that point following his statement on enterprise and competition on the day after the Budget. With respect, his response on that occasion—for a rising star of the Blairite faction—was limp in the extreme. He told me that his statement was not about the Budget and, therefore, he did not propose directly to respond to my challenge. If the Government want to reverse the tide of regulation and the creeping paralysis from which business is suffering, they should accept the new clauses and free small and medium-sized enterprises from their impact. The third reason why the Government should accept new clauses 1 and 2 was given by my right hon. Friend the Member for Wokingham and reflects the opinion of the business organisations. I understand that Governments have to take account of a variety of representations about the content of Bills. Some will be for a proposal and others against. The task of Government is to exercise judgment. They have to make the decisions, defend them in Parliament and seek approval for them, and I do not cavil at that. If business opinion were mixed on the subject, the Government could opt for their own preferences in the Bill. However, business opinion on family friendly policies is not mixed. The business organisations are against the thrust of the Government's policies and are supportive of the thrust of the proposed improvements to the Bill contained in new clauses 1 and 2. My right hon. Friend the Member for Wokingham referred to the opinions of some of the business organisations. For example, the Institute of Directors has said that the Government's proposals would sap the competitiveness of United Kingdom firms. Ministers have not offered a response to that. They have not justified their position or shown why the Institute of Directors, one of the foremost business organisations in this country, is wrong. If the Government have an answer, we would be fascinated to hear it. They have not offered an answer to the British Chambers of Commerce, which has predicted that the proposals, if not withdrawn or amended, will slow or stop growth in the small business sector. The Government have not provided an answer to the observation by the Federation of Small Businesses that, as a result of these proposals, it will become too costly and too risky to employ staff. The Government have offered no rebuttal of the view of the Forum of Private Business, which is that the proposals could be "disastrous" for small firms. What answer has the Secretary of State or his hon. Friend the Minister for Small Firms, Trade and Industry to the London chamber of commerce and industry, which fears the impact of the proposals and has said that they will be more damaging and burdensome to small firms than to their larger counterparts, and that action is needed now to help those small firms? We do not get answers from Ministers. They merely blithely assure us that the injurious effects that we predict will result from the legislation will not occur. That is not good enough, and that is why it is necessary to have the new clauses. The fourth reason why the new clauses are necessary is that the Government are guilty of gold-plating the parental leave directive, which will be burdensome to British firms. I say without apology that Ministers were naive in the extreme to sign up to the European social chapter, which has obliged them to accept in toto the content of the parental leave directive, because the chapter is subject to qualified majority voting. A Conservative Government would not have signed up to the social chapter in this Parliament any more than we did in the last. We would not have been subject to the directive's damaging effects. It was the Government's choice to sign up to the chapter and the directive that flowed from it. It is unfortunate that instead of interpreting the directive in its least damaging form for British micro, small and medium-sized enterprises, the Government have overzealously interpreted it, especially in relation to time off for domestic incidents.

Michael Fabricant (Conservative, Lichfield)

I would not like to accuse my hon. Friend of plagiarism, but the House should know that it was not he who said that the directive was being gold-plated, but the CBI.

John Bercow (Conservative, Buckingham)

I am grateful to my hon. Friend. I, too, have had the benefit of the excellent, copious CBI brief, which speaks for itself. It is particularly lamentable that the Minister for Small Firms, Trade and Industry sits on the Front Bench without offering any answer. With no disrespect to the Secretary of State, I hope that the Minister will reply to the new clauses, or at least make his views known at some point in our exchanges. It is a matter of great importance because he is responsible for small firms. We need to know why he rejects the view of the authentic representatives of British business that small companies will be damaged by the proposals. Gold-plating is unhelpful and unnecessary. It probably results from Ministers' lack of control of their officials. A good Minister guides officials. One has to assume from Ministers' rhetoric since 1 May 1997 that they do not want to gold-plate. If they do not want to, they should keep control of the process. If they wish to gold-plate, and I have underestimated their zeal in these matters, the logical corollary is that they have no right to claim to be small business-friendly. They cannot have it both ways. Whichever way they have it, they are the losers.

Julie Kirkbride (Conservative, Bromsgrove)

My hon. Friend is perhaps a little unfair to officials. The Government do not understand what they signed up to with the European social chapter. The right hon. Member for Hartlepool (Mr. Mandelson), having signed it on behalf of the British Government, said that he would not accept any regulations that he did not like the look of. He clearly did not understand what he was talking about.

John Bercow (Conservative, Buckingham)

I am grateful to my hon. Friend. The right hon. Member for Hartlepool is a man of the broad brush. Far be it from me to accuse him of excessive preoccupation with detail or to suggest that beads of sweat appeared on his brow late at night as he ploughed through his red boxes, attending in the greatest detail to every feature of the legislation that he would subsequently have to defend in the House. He is a man of the general principle—the grand, high-falutin' declaration. Others have to pick up the debris from the ill-informed, misguided judgments that he habitually made as a Minister. My hon. Friend the Member for Bromsgrove (Miss Kirkbride), who accused me of being a little ungenerous—perhaps I was—to officials, should not understate her case. Not only the former Secretary of State for Trade and Industry was naive and ill-informed on these matters. The Prime Minister himself is and has long been singularly under-briefed on the contents of the proposals and treaties to which he has given his signature. It is precisely because the Prime Minister frequently imagined that he did not have to sign up to or accept things that he did have to accept that it has been necessary for the Conservative Opposition to table the new clauses. The Prime Minister sometimes fondly imagines that if he goes to a summit or conference and says that he is against something, it will not happen in this country. That simply is not the case. We all know that there is an agenda in the European Union. The Foreign Secretary certainly knows it. It is called the European social model. EU countries want to impose it on us and export to Britain the high costs, slothful growth and increasing unemployment that they have long suffered. We are in favour of lower costs, better growth and higher employment, not unemployment. That is why we are against the Government's proposals and in favour of the sensible new clauses tabled by the Opposition.

John Redwood (Conservative, Wokingham)

While my hon. Friend is speculating on Secretaries of State of the broad brush and what they may have read in their red boxes, will he answer this question? Does he think that in recent days, when the Secretary of State received a copy of the oral statement that the Minister for the Cabinet Office was to give on modernising government, he read it, saw that it was a strong statement of the need to remove unnecessary regulation and fired off a letter to the Minister saying that the statement would embarrass him greatly today as he was unable to accept sensible deregulation proposals in new clauses tabled to the Bill? Or does my hon. Friend think that the Secretary of State just did not bother to read it?

John Bercow (Conservative, Buckingham)

I do not know what accounts for this extraordinary state of affairs, but my right hon. Friend, as usual, makes a highly pertinent point. The Minister for the Cabinet Office made a statement only a couple of hours ago on the modernisation of government and said, in response to questions, that regulations should be proportionate. That was the word that he used. It is a good word, and one that I commend to the House—proportionate—

John Redwood (Conservative, Wokingham)

And necessary.

John Bercow (Conservative, Buckingham)

And necessary, as my right hon. Friend helpfully points out from a sedentary position. I commend it to the House. The Secretary of State was no doubt genning up on his remarks for the afternoon at that point so whether he had the benefit of hearing from the Minister for the Cabinet Office, I know not, but he should have seen in exchanges of letters between Cabinet colleagues what the Minister proposed to say. In the light of that, it is extraordinary that the Secretary of State has not put his hands up this afternoon and said to my right hon. Friend, "You are absolutely right. We agree to the new clauses. We can proceed to make further progress on the Report stage of the Bill."

Tim Boswell (Conservative, Daventry)

Is not one of the difficulties that the Secretary of State faces the fact that some of his other clients or friends take a different view. For example, the TUC explicitly acknowledges: The arrival of the full Social Chapter procedure is both timely and crucial for the creation of a European system of industrial relations. It goes on at length in exactly the same vein.

John Bercow (Conservative, Buckingham)

I am not surprised to hear what my hon. Friend says because we have always known that the cloth-capped colonels of the TUC are enthusiasts for greater regulation. As they could not get it through the front door because of the admirable stewardship of this country's affairs by my noble Friend Baroness Thatcher of Kesteven, they decided some time ago that if they could usher it in through the back Delors, they would happily do so. They have made strenuous efforts to see that they are on the winning side as often as possible. Now that they have a Government in office who are sympathetic to their general viewpoint, they are determined to extract the maximum in return for the enormous donations that they made to that party when it was in opposition for 18 years. What my hon. Friend says is highly relevant to our proceedings. I referred a moment ago to the statement by the Minister for the Cabinet Office about the proportionality of regulations. That is relevant to what I have to say about my fifth reason why the new clauses should be accepted by the House this afternoon. My fifth reason is the regulations that flow from the Bill. It is important that the public outside this place should be aware that the Bill is substantially a skeleton Bill. The devil is in the detail, and it is a lamentable abdication of responsibility on the part of the Government that there will be no opportunity to debate on the Floor of the House the detail of the regulations that will implement the Government's intentions as set out in the Bill. I am extremely anxious about the burden that the regulations will impose and that is a further reason why the new clauses should be accepted. The regulations will be burdensome in terms of time. Companies will have to devote much time to familiarising themselves —

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I have been extremely generous in allowing the hon. Gentleman to make certain general points in relation to the new clause, but I have reached the limit of my patience. The hon. Gentleman is now moving away from the kernel of this particular group of new clauses; the new clauses relate to exemptions for small businesses rather than to general matters in the Bill.

John Bercow (Conservative, Buckingham)

As you would expect, Mr. Deputy Speaker, I shall immediately comply with your helpful guidance. That is why I say that we should support the new clauses. If they are passed, they will give small businesses an exemption from the regulations that will accompany the Bill. That seems to be at the heart of the debate. In Committee, we explored the whole subject and discussed the possibility of exemptions for small firms. One of the reasons we did so was that, as Ministers are aware, the regulations flowing from the working time directive, which will have an impact on small and medium-sized enterprises in Britain, currently stretch to 72 pages of A4 paper. If people outside this place are surprised to learn that, they will be even more surprised to learn that the regulations that flow from the requirement to impose a national minimum wage—a requirement that is as applicable to small and medium-sized enterprises as it is to others—stretch to no fewer than 112 pages of A4 paper. Part of the rationale behind the introduction of the new clauses is that the Opposition are the friends of small and medium-sized enterprises and do not think that they should have to face that burden. Quite apart from the work that those in such enterprises do to keep their companies afloat, to make them profitable, to sell products, to keep and, if possible, increase their staff, why should they have to devote a great deal of time to studying the regulations to see that their companies conform to them? That is a key weakness of the Bill as it stands and a good reason why the new clauses are required to improve it. The cost of compliance—and the cost of discovering whether one is complying—will be a further burden on micro, small and medium-sized companies. Although business organisations have been almost uniformly critical of those aspects of the Bill, little attention has been paid to the comments of our old friends the lawyers. I am not a lawyer—I say that with pride—but I am aware that many make their living from the practice of the legal profession. A leading member of Bevan Ashford said recently that the passage of the Bill would result in a great deal more work for him unless certain provisions were removed or amended. The reason why that greater work will result is that companies will not know whether or not they are in conformity with the regulations, they will naturally consult and pay lawyers, time will be taken, and references to the courts will be required—none of which activity is remotely relevant to the overriding task of a small business, which is to stay afloat, make a profit and keep its staff. It is precisely because of that damage that we need to act. The sixth and final reason why we should embrace the new clauses with enthusiasm is that, if we do so, we emulate the spirit and the practice of the United States of America. In an important recent speech, the Secretary of State said that the creation of wealth was now more important than its redistribution. I welcomed that statement and congratulate the right hon. Gentleman on having made it, but I want it to be reflected in practice. If we are to adopt a policy under the Bill that is helpful to SMEs, we have to free them from the burden I have described. The reason why I refer to it in the context of the new clauses is that, when my right hon. and hon. Friends discussed this matter before coming to the House today, we became conscious of a pattern of which the Secretary of State is one part, and the former Secretary of State, the right hon. Member for Hartlepool and the Prime Minister are two other important parts. I see that the former Secretary of State has been jolted from his private conversation with the deputy Chief Whip. The right hon. Gentleman will know that as Secretary of State, when talking about business growth, he made frequent references to the importance of learning from the United States—indeed, in the course of one speech, he referred several times to visits he had paid to the United States. He will recall that I raised the matter with him, because I thought it important, in the Select Committee on Trade and Industry on 4 November last year. I politely challenged him about what appeared to me to be the conflict between the commitment to American practice and the reality of Government policies—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. The hon. Gentleman is spinning wide of the scope of this group of new clauses and amendments. I suggest that he gets back to the main subject very quickly.

John Bercow (Conservative, Buckingham)

I shall come back to it immediately, Mr. Deputy Speaker. I had not thought that I had strayed, but I accept your judgment in these matters. We need light-touch regulation and, in some cases, businesses to be free of regulation altogether, in line with the American model. The direct relevance of that, if I may say so, Mr. Deputy Speaker, will now be blindingly obvious to every right hon. and hon. Member present. The relevance of my invocation of the example of the United States is that there, a directly comparable provision on parental leave is applied very differently from the way it is to be applied in this country. That is the relevance, Mr. Deputy Speaker, and I hope that you will accept that it is within the scope of the new clauses. In the United States, as I have reminded the Minister for Small Firms and the Minister of State, Department of Trade and Industry, the right hon. Member for Makerfield (Mr. McCartney), there is legislation on family and medical leave—the Family and Medical Leave Act 1993. Moreover, that legislation does indeed provide for 12 weeks unpaid leave for parents and guardians in certain circumstances. However, it does not apply to firms with fewer than 50 employees, which is one good reason why we adopted the figure of 50 as the basis of our new clauses. I ask a simple question of the Secretary of State: why talk about American practice unless he is prepared to emulate it? It is not good enough for the Minister for Small Firms to tell me in his letter of 25 March that, in incorporating American ideas in the British context, one has to take account of British traditions and institutions, as an excuse for not doing in this country that which works extremely well in that country. Mr. Deputy Speaker, as ever, you have been a model of tolerance and I am grateful to you for that, as it has enabled me to give six reasons—of the no doubt 666 reasons—why the new clauses should be accepted by the Government.

John Wilkinson (Conservative, Ruislip - Northwood)

The previous speech was a tour de force and I shall not attempt to emulate it. Nor could I emulate the authority with which my right hon. Friend the Member for Wokingham (Mr. Redwood) spoke. Suffice it to say, if I can be forgiven for being subjective, that my impressions of the merits of the new clauses stem less from long hours in Standing Committee—I applaud my right hon. Friend and his colleagues for their persistence in trying to amend the Bill in Committee, and regret that we have had to return to these issues on Report—than from my experience of running a small company of my own for 12 years. I cannot believe that, in the current climate, it will be easy to induce people to enter the small business sector, because everything is stacked against them. The background is grim. Given that we have an overvalued currency, following the plunge of the euro, and given the imposts and directives under which a small business has to labour, those who run such businesses face an exceptionally difficult task. However, the Government should show willing and at least recognise that it is time to match their rhetoric with action. The new clauses contain proposals that are exactly in line with best practice, to use the current jargon, in the United States, as my hon. Friend the Member for Buckingham (Mr. Bercow) clearly explained. I cannot see any reason other than bigotry and dogma why the Government should not wholeheartedly embrace the new clauses. I cannot see what they would lose by so doing. Speaking as a London Member, I am grieved that the Bill will have an especially hard impact on family businesses, which in my constituency in the north-west of the capital are often run by members of the ethnic community. We hear time and again from the Government protestations that they are on the side of the ethnic community and that their legislation is drafted to demonstrate that commitment. However, members of the ethnic community who start up small businesses will be extremely vulnerable to the complications of the plethora of burdens that are inherent in the Bill. Those who run a family business do not need explicit provisions on parental leave, because they know what is appropriate in their family's circumstances and in the interests of the business. I find the Government's prescriptive, dogmatic attitude objectionable. Likewise, there is a huge divergence between the Government's protestations and rhetoric and their actions in respect of women, who will suffer especially from the Bill as it stands. Part-time workers, a large proportion of whom are women, are less likely to be taken on by small businesses because of the provisions of the Bill. This is exceptionally sad. It is the experience of every economy that, time and again, small businesses prove to be the engine for growth. If they are to be fundamentally inhibited, the chances of our getting out of the proto-recession into which we have slumped under the current Administration will be fatally compromised. The process of emerging from the proto-recession will be protracted, more difficult and more painful. Many people would lose their jobs unnecessarily. I do not understand why the Government refuse to listen to the wise counsel of my right hon. Friend and those who support the new clause. The Government should accept it wholeheartedly and demonstrate thereby that they are genuinely on the side of business. They should not use small business simply as a slogan in an attempt to beguile the electorate into acquiescing to their policies. My constituents in the small business sector tell me that the Government's rhetoric is all very well, but the prescriptive nature of their regulations is a disincentive. It is about time that that disincentive was removed.

Christopher Gill (Conservative, Ludlow)

My family has run a business in Wolverhampton for five generations, but I am somewhat diffident about taking part in this debate when I see so many experts aligned on the other side of the Chamber. However, the Government and I have different perspectives. I have run a business and converted a small enterprise into a bigger one, facing many trials and tribulations in the process. My son continues that business—he is the sixth generation family member to do so—and we have a joke in our family that I am here running the country while he is at home running the business. [HON. MEMBERS: "Hear, hear."] I must admit that my son is having much more success than I—but not because of this Government. The Labour Government have continued to put obstacles in his way, as they are doing tonight. There is a huge gulf between those who come from the public sector and big business and those who come from a small business background. Small business operators recognise that employment relations problems exist and that the Government wish to tackle them. However, as my right hon. Friend the Member for Wokingham (Mr. Redwood) has been at pains to point out tonight, many of those problems either do not affect small business or cannot be solved by legislative means. Legislation is singularly inappropriate in many cases, given that so many small businesses are struggling to keep their heads above water because of the existing legislative burden. In my earlier days, I ran my own business when there were industrial training boards. I had served in the Royal Navy—the finest training organisation in the world—and, when I returned from sea, I was intent upon training my employees. The industrial training boards killed my enthusiasm and destroyed my involvement in training by imposing a huge bureaucracy upon that vital work. As a consequence, I had to employ a training officer and training personnel to assume those duties. The situation led eventually to an industrial tribunal hearing, which I won. I could tell you much about that case, Mr. Deputy Speaker, but I must not digress. The consequence of the Bill will be a downsizing of private businesses. Private businesses have no incentive to employ a lot of labour. The burden of employment laws—which are being added to tonight—leads many entrepreneurs to seek constantly to diversify into areas where they do not have to employ so many workers. The unemployment that results from such practices affects almost exclusively the least qualified section of society: those employees with fewer skills and qualifications. For the benefit of the Secretary of State, I point out that the only practical difference between a successful business and an unsuccessful business is the people we employ. Many of us in the marketplace buy the same raw materials to which we do the same things and then sell them to the same customers, often at the same price. The difference between success and failure is our people. I do not need the Secretary of State or a Labour Government to tell me about the importance of personnel: any small business man knows that his success depends upon his employees. For that reason, my right hon. Friend is absolutely right to make an impassioned plea that businesses employing fewer than 51 people be excluded from the legislation. The reality of running a small business—this may be entirely alien to the Secretary of State's life experience—is that the owner is the production manager, the sales manager, the administrator and the personnel manager. He must also perform a raft of other functions. The more legislation of this sort that we impose upon the owner, the more difficult it is for him to attend to his most important function: creating a product to sell on the market at a profit, thereby generating wealth for the nation and employment in our constituencies. My hon. Friend the Member for Buckingham (Mr. Bercow) was absolutely correct to refer to the difference between this Government's rhetoric and the reality. That difference was summed up for me on Budget day. The Chancellor of the Exchequer stood at the Dispatch Box and told us that he was keen to encourage small business and to do his best to keep overheads down. However, he went on to say that he was reducing employers national insurance by 0.5 per cent. I do not know how the Government do their arithmetic, but employers national insurance presently stands at 10 per cent. and will be 11.7 per cent. as a result of the Budget. That does not help small businesses.

John Bercow (Conservative, Buckingham)

Does my hon. Friend recall that, shortly after the Chancellor's Budget speech, the Secretary of State said, in what should have been a joke but apparently was not: I am reviewing arrangements for business rescues"?—[Official Report, 10 March 1999; Vol. 327, c. 367.] Was that not a good idea, given the likely exponential increase in the number of candidates requiring rescue as a result of the Government's policies?

Christopher Gill (Conservative, Ludlow)

I understand my hon. Friend's very good point. Most business people do not want help from the Government, but neither do they want hindrance of the sort represented by the legislation before the House today. The Secretary of State may say, with some justification, that he receives relatively few complaints from the small business sector. I understand that, and I shall explain why that is so. The small business man is employed every waking hour trying to keep his business afloat and successful. They do not want to waste time appealing to politicians—particularly those from the Government party—because they know that their appeals will fall on deaf ears. I am conscious of the fact that my hon. Friends wish to speak in the debate, so I shall conclude by informing the Secretary of State that I and my family have survived in business not because of Government, but in spite of them.

Michael Fabricant (Conservative, Lichfield)

Does my hon. Friend the Member for Ludlow (Mr. Gill) think that his comments have fallen on deaf ears? Although the Secretary of State and his Ministers are quite charming, they have had no experience in business. A few years spent working as a polytechnic lecturer or working for a large public corporation does not equate with building a business for oneself. When I rose on Second Reading, I spoke about Abraham Lincoln, and there was talk earlier about the American message for us, which is often seized on by the Labour party in its bid not only to gain power, but to hold on to power. Abraham Lincoln said, "You cannot make a poor man rich by making a rich man poor." That applies not only to large corporations, but to small businesses, which the Bill will strangle at birth. The legislation owes much to the tenet that he who pays the piper calls the tune. Where does most of the Labour party's money come from? It comes from the trade union movement. My hon. Friend the Member for Buckingham (Mr. Bercow) pointed out that, in this quarter alone, 11,000 small businesses have gone bust. They needed to be rescued from the Secretary of State for Trade and Industry. I anticipate that, when he winds up the debate, he will say, "Ah, but many new small businesses have been formed." Let me pre-empt him. Information from Dun and Bradstreet reveals that the net losses in that quarter are the greatest for the first quarter of the year since the depths of the world recession—I emphasise the word "world"—of six or seven years ago. It is no use the Secretary of State saying that small businesses are being formed to compensate for the 11,000 that have gone bust—that is not so.

Stephen Byers (Labour, North Tyneside)

The hon. Gentleman rightly says that the Dun and Bradstreet report reveals that 11,000 businesses have gone bust in the first quarter and that the last time the figure was considerably higher was back in 1992, when the right hon. Member for Wokingham, the Conservative Front-Bench spokesman, was Under-Secretary of State for Corporate Affairs. The fact that records were far worse then than they are now owes much to his legacy.

Michael Fabricant (Conservative, Lichfield)

The Secretary of State points out that the figures were worse in 1992, but I repeat that we were in the middle of a world recession, and that was at the time of the exchange rate mechanism. Does the Secretary of State not take Cabinet responsibility for his Prime Minister, who, far from gearing up for the ERM, which at least allowed us some latitude, wants to gear up for a common currency, which will make pressures on small businesses far worse? I shall return to the new clause. The CBI, as hon. Members have already pointed out, says that the directives on parental leave that will apply to small businesses are gold-plating the EU directive. I shall let the House into a little secret. I recall that, soon after I entered the House in 1992, early in the Parliament, the Secretary of State's predecessor and then President of the Board of Trade, my right hon. Friend the Member for Henley (Mr. Heseltine), faced a similar situation with an EU directive that was not desirable for small businesses. He was advised by his officials that he had no choice in the matter—the directive had to be introduced. A few months later, the draft legislation appeared, and, like this Bill, it was gold-plated. I therefore give the Secretary of State advice about gold-plating, which he could take from the former President of the Board of Trade. My right hon. Friend asked his civil servants, "Why is the document so thick? Why have we gold-plated the legislation?" They answered, "If we did not gold-plate it, it would be unenforceable. There would be too many loopholes." As I understand it, my right hon. Friend said, "Great! We do not want the legislation. Let us put it through Parliament without gold-plating it." It was passed and it was unenforceable. Far be it from me to suggest that Parliament should occasionally pass laws that are unenforceable and contain loopholes; but, when they are forced on our nation by unreasonable, ill-thought-out diktats from Brussels which will result in not only small, but large businesses going under, let us pass such legislation for the sake of businesses at home. That is exactly what France, Italy and Spain do. They have to do that because they want to keep their businesses solvent. 6.15 pm Earlier in the debate, the hon. Member for Croydon, Central (Mr. Davies), who has now left the Chamber, asked a perfectly reasonable question of my right hon. Friend the Member for Wokingham (Mr. Redwood), the shadow Secretary of State. He asked, "Why is the threshold in the new clause set at 50? Why not 20 or 100?" One of the reasons is that many of the states in the US use the threshold of 50. The Secretary of State's view is that 20 is a reasonable figure, and that is backed up by all those who are concerned with the welfare of small businesses. However, let me tell the Secretary of State, if he does not already know, that a survey conducted by the members of the Institute of Directors said that 28 per cent. of respondents believed that firms employing up to 50 people should be exempted and only 13 per cent. were happy with the Government's definition of a small firm.

John Bercow (Conservative, Buckingham)

Does my hon. Friend agree that the Government are inconsistent in their approach? Is he aware that, although the Government have opted, in this context, for the definition of a small firm as one that employs no more than 20 employees, Ministers have chosen the threshold of 50 employees for the purposes of the Late Payment of Commercial Debts (Interest) Act 1998? Why can they not make up their minds?

Michael Fabricant (Conservative, Lichfield)

My hon. Friend is right. I could talk about the National Minimum Wage Act 1998. I shall not say much about that because I know that you will rule me out of order, Mr. Deputy Speaker, if I talk about it at length.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Or, indeed, almost at all.

Tim Boswell (Conservative, Daventry)

While my hon. Friend is getting his angle straight, I remind him that in the United States, to which he has referred, the minimum wage is comparatively acceptable precisely because it is set at a reasonable rate and not applied to small businesses.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend anticipated my next point, and I am delighted that you did not rule him out of order, Mr. Deputy Speaker. The Institute of Directors "Fairness at Work" research paper of September 1998 quoted a company that said: We employ less than 20 people at present and with the Government's current attitude we're likely to stay that way". That echoes the words of my hon. Friend the Member for Ludlow, who asked what incentive there was for a small business to expand. The Bill is absolutely symptomatic of the Government: they are full of bright ideas that are never thought through. They do not empathise with business, because their paymasters are the trade unions and because they do not come from a business background. As I said on Second Reading, one can read about and study business as much as one likes, but, if one has not immersed oneself in it, one cannot understand the pressures that small businesses are under. I shall quote a business man—I anticipate that I will be receiving a brown envelope from Hansard—whose name I shall try to pronounce correctly. Mr. Darsghan Thiara, a clothes factory owner from Birmingham who has a staff of 85, was reported in the Financial Times in January as saying: "Overall it"—this legislation— puts a big pressure on employment; we are seriously considering cutting the number of people we employ. We must ask ourselves what the company will do. Will it cut staff to 20 or 19 to try to avoid the provisions of this legislation? Ministers, who are used to teams of civil servants, believe that understanding and implementing legislation are easy. They think that civil servants have all the time in the world. I know—this is certainly the experience in the Treasury—that civil servants work all the hours that God gives them. Ministers arrogantly take such an attitude, but small firms simply do not have such teams of people. As has been pointed out, the managing director is often the finance director, and often also the personnel director—or the director of human resources, as they now call it. The Government Front-Bench team will like that term because they like modern jargon and slogans.

Lindsay Hoyle (Labour, Chorley)

Like joined-up thinking.

Michael Fabricant (Conservative, Lichfield)

We have joined-up running of companies simply because one poor guy has to do it all. On top of that, such people will have to try to implement the Bill's provisions.

Ian Bruce (Conservative, South Dorset)

Is my hon. Friend not being too generous about the Government Front-Bench team? Ministers completely ignore the regulations that they introduce. They do not seem to worry about the working time directive. We even have a Minister—the Minister for Small Firms, Trade and Industry—who is working for nothing, despite the minimum wage regulations which are coming into force on 1 April.

Michael Fabricant (Conservative, Lichfield)

The Minister is to be complimented on working for nothing. Under minimum wage legislation, one can be paid nothing, such as when one works for a charity. Of course, when people are paid under £3.60, it does not exactly help other charities—but I will not go into that, because it would be out of order. The legislation will put people in a very difficult position. The whole situation was summed up by Mel Lambert, who is head of human resources at IVEC/Fiat, when he said—I do not have the memory of my hon. Friend the Member for Buckingham, who can quote from a marvellous mind without referring to paperwork, so I shall use my notes for accuracy: It puts these (small) companies in a very difficult position. They are minnows compared to union professionals. In the short term, trade unions will fight for the so-called rights of their employees; in many ways, that is laudable, but it will be at the expense of their long-term security and long-term employment. The House should mark my words: these provisions will be a long way from fostering the growth of small business. Let us remember that it is the small business that becomes the large business. ICI did not suddenly appear out of the blue. It was originally a small company which was set up in the 19th century. Even BT was once a very small corporation.

Ian Bruce (Conservative, South Dorset)

And Sainsbury.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend reminds me that Sainsbury plc started as a small corner shop.

Stephen Day (Conservative, Cheadle)

And Marks and Spencer.

Michael Fabricant (Conservative, Lichfield)

Indeed.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. That is quite enough of historical tales.

Michael Fabricant (Conservative, Lichfield)

All large businesses start as small businesses. If small businesses are strangled at birth, there will not be large businesses. Without large businesses, unemployment will grow. That is, of course, what we have been experiencing over the past two years. This Government are fond of using clichés; I shall use one that is accurate. They inherited a golden economic legacy, they have started to ruin it, and it will be destroyed still further by this thoughtless, pernicious, vindictive legislation.

Julie Kirkbride (Conservative, Bromsgrove)

I rise to continue the plea from the Opposition Benches for the Government finally to listen to our concerns and adopt our amendments, so that some of the most onerous restrictions on business will not be placed on those that employ 50 or fewer employees. We on these Benches feel so passionately because we cannot understand why the Government, having learned many lessons from the previous Conservative Government—we should bear in mind some of the programmes that they have instituted and some of the messages that they gave the electorate during the general election campaign—cannot learn one of the most serious ones from our period in government and our record on employment. When the Labour party was elected in May 1997, it inherited rapidly falling unemployment. In 1995, it had a programme to put 250,000 young people back to work. By the time it came to office, half those young people were already in work. We must ask ourselves why that happened. Unlike countries on the continent, we in the United Kingdom have a relatively unregulated economy. Obviously, we have provisions on health and safety at work and the right conditions for people at work, but we do not have the onerous regulation that has resulted in unemployment of about 12 per cent. in comparable countries on the continent. Over here in the UK, unemployment is 6 per cent. Indeed, due to our inheritance, there has been some further success in reducing unemployment and increasing employment. Some of us on the Opposition Benches, who, sadly, have been considering these regulations in great detail over the past few months, see the Government's complete failure to understand why they inherited such a fantastically performing economy. We fear that we are seeing the trade unions' payback after years of a Labour Opposition.

John Hayes (Conservative, South Holland and The Deepings)

My hon. Friend talks about the Government failing to learn such an important lesson. Perhaps our hon. Friend the Member for Lichfield (Mr. Fabricant) was right in saying that such a lesson cannot be learned academically, but must be learned through experience and gathered wisdom. Does my hon. Friend the Member for Bromsgrove (Miss Kirkbride) agree that, as not a member of the Cabinet has ever bought or sold anything for a living in business, they are very unlikely to have that necessary experience and wisdom?

Julie Kirkbride (Conservative, Bromsgrove)

My hon. Friend is entirely accurate. One would have thought that the Government might be capable of learning from our experience in power and from our record on employment when we started getting things right—sadly, that is not so.

Ian Bruce (Conservative, South Dorset)

Has my hon. Friend seen the long-term unemployment and youth unemployment statistics? After six months of the new deal, youth unemployment rose by 9,000—for the first time for almost four years. After nine months of the new deal, it went up by another 22,000. That surely demonstrates that the Government have not a clue when it comes to creating jobs.

Julie Kirkbride (Conservative, Bromsgrove)

I pay tribute to my hon. Friend, who has been very assiduous in studying the real statistics on the new deal and youth unemployment. Despite Government statistics, which are deliberately intended to confuse the picture, the record on youth unemployment is not anything like the Government pretend it to be in public pronouncements. In considering the new clause, and bearing in mind all the debates in Committee on the new regulations, I think of all the people in my constituency whom I meet in the Conservative club, on the street or in my surgery, or who write to me. They, like my hon. Friend the Member for Ludlow (Mr. Gill), are the unsung heroes of our community. They make our communities tick. They provide employment for the people we represent and the wealth that the Government redistribute. They are the people who make this country work. When I think of them and what is about to be imposed on them, I feel desperately sad and desperately frustrated that we clearly are unable to make the Government understand what they are doing. 6.30 pm I shall provide some elucidation. A couple of weeks ago, I spoke at a business breakfast club, and I was pleased at the attendance for a speech by a Conservative Member of Parliament. Indeed, the number of people turning up to listen to a speech by a politician at 8.30 am was much greater than normal. I wonder whether that was because the message about how unfriendly the Government are to business is finally getting through. I told the people there many things that the Government propose to do and gave them a copy of the 76-page working time directive, to which my hon. Friend the Member for Buckingham (Mr. Bercow) referred. I suggested that they might want to go home and read it, because they would certainly have to know of its provisions. Sadly, I was not able to give the people present a copy of the 112-page minimum wage regulations. They had not been published, despite the fact that the minimum wage is being introduced on Thursday, and were not even available two weeks ago for my constituents to read so that they might be aware of the conditions. Then I began to tell my constituents what else was coming down the track, which was unfair: it was Friday morning and they were looking forward to the weekend, but I was busy telling them that, if all that was not enough, they had to consider other measures, such as three months paternity leave for staff: a small business may have secured a big contract, but the production manager may want his three months paternity leave. One can think of legioned examples where dislocation and huge upset would be caused for small businesses, denting their production and wealth-creating capacity.

John Bercow (Conservative, Buckingham)

My hon. Friend is developing an extremely powerful argument. Given that the Secretary of State did not dispute in the debate on Second Reading on 9 February that America's job creation record is superior to that of the European Union, can she fathom why he wants to incorporate the EU method for family friendly policies, rather than that of America?

Julie Kirkbride (Conservative, Bromsgrove)

My hon. Friend again makes an excellent point that goes to the heart of our concerns about the Bill. We hear one thing from the Government, but we get another. We hear that they are against regulation, but the regulations that they are introducing are so fantastically complicated and expensive that they are sufficient to make our eyes water. We hear that they think that America has some really good ideas about how to do things, but they suggest that the American model is not the one that they are introducing to the United Kingdom. Labour Members often said that America has a minimum wage, but we were never told that it does not apply to small firms or that it was considerably less than the minimum wage that the Government intend to set in the United Kingdom. Although some of the provisions that the Government intend to introduce through the Bill are in force in America, others achieve precisely what we hope to achieve through the new clause: they exempt from regulations small firms employing fewer than 50 people. The impact is obvious for us all to see. Over the past 20 years, there has been no net creation of private sector jobs in the EU. Some companies have gone to the wall and others have been created, but the private sector has not created any extra jobs. America's record on net job creation runs into millions. If we are to have a successful and prosperous future—not only in the United Kingdom, but throughout the whole EU—we have to get real. We must understand that the world is changing and that many other countries seek a standard of living similar to ours. We are being caught up, rapidly. The Secretary of State will be only too well aware of the situation that we face in respect of Rover. Serious threats are being made by BMW about taking to Hungary the car-making capacity that we all want to go to Longbridge. Why is BMW making those threats? Because Hungary does not have anything like the number of employment regulations that we have, and it certainly does not have the restrictions and regulations that the Government will introduce through the Bill. I ask the Secretary of State to hear the pleas of Conservative Members, which are earnest and honest. This is not the right way forward. The Government will impoverish our constituents by introducing the Bill. We do not necessarily dispute the point that the Government are seeking to help our constituents, but they are misguided in seeking to help them in this way.

John Bercow (Conservative, Buckingham)

Well-meaning fools.

Julie Kirkbride (Conservative, Bromsgrove)

Sadly, I cannot disagree. What the Government are seeking to do will have such an impact and import. I hope that they will listen to Conservative Members. I hope that, if they must go ahead on this basis, firms with fewer than 50 employees will not be affected by these provisions.

Graham Brady (Conservative, Altrincham and Sale West)

It is a great pleasure to speak after my hon. Friend the Member for Bromsgrove (Miss Kirkbride), as it must have been a great pleasure for the many business people in her constituency to attend her business breakfast and see her smiling face at 8.30 am—until, of course, she embarked on telling them the most devastating news about what the Government are seeking to do to damage the businesses on which her constituents and, indeed, people throughout the country depend for their well-being. I shall be brief, not only because my right hon. Friend the Member for Fylde (Mr. Jack) is keen to speak, but because as many as four Labour Back Benchers of the dozen or so who were members of the Standing Committee have managed to come to the Chamber to see the Bill through. I am pleased that they are here, although a little disappointed—

John Bercow (Conservative, Buckingham)

As my hon. Friend knows, I always seek to be fair to Government Back Benchers, so it is only right to point out that five Labour Back Benchers who were members of the Standing Committee are present.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. The presence of hon. Members has nothing to do with the new clause; we must come to a discussion of it.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to you, Mr. Deputy Speaker. I am also grateful to my hon. Friend. I wish to pay tribute to one or two Labour Members who made worthwhile comments in Committee, and I hope that they will make further helpful and intelligent contributions to our debates tonight. I am keen to contribute, albeit briefly, because new clauses 1 and 2 are central to the question of the Government's belief in enterprise and whether their protestations about that are to be taken seriously. I have witnessed the repeated onslaught of new regulatory burdens, particularly on smaller businesses. As many of my hon. Friends have said, the burden being placed on people who run businesses—particularly smaller businesses with no recourse to professional advice, no human resources manager and no means to afford the best advice from employment lawyers—is enormous. In turn, that has enormous implications for employment in the small business sector. I hope that Ministers will start to understand the damage that their proposals will do to that sector, which is critically important in the current economic climate. Those burdens are relevant to the road haulage industry, which has many small businesses. The contrast between what Ministers say about that industry and what they are doing to cause problems for it is quite staggering. It is also instructive in the context of the Bill. In response to complaints that road fuel duty is driving people out of business, or forcing them to reflag their businesses on the continent, the Government say that other costs here are lower than those on the continent. The Bill, however, contains precisely the measures that will remove any current competitive advantage that those small businesses enjoy over their European competitors. That will therefore compound the difficulties that the Government are already causing for that industry. I suspect that the apparent absurdity of the Government's position is due to a fundamental misunderstanding of what we are dealing with here and its implications for businesses in what many hon. Members may choose to call the real world. That was illustrated by the Under-Secretary, in response to an amendment which I tabled in Committee seeking to limit the practice of gold-plating, when he said: I would like to give some examples of the benefits that businesses with a positive attitude to family-friendly work can gain from the regulations. They gain a competitive edge, as we have said many times during the progress of the Bill. They gain improved returns on investments, because by offering good working practices they can attract the right people".—[Official Report, Standing Committee E, 23 March 1999; c. 551.] I shall not quote at length because the point is made. Ministers labour under the delusion that, far from the Bill costing jobs and being a burden and additional cost on businesses, particularly small businesses, it will do the small business sector a favour, improving returns and reducing costs by increasing regulation. That is palpable nonsense, but Ministers appear to be wedded to it.

Nicholas Soames (Conservative, Mid Sussex)

Does my hon. Friend also understand the further ludicrous nature of the Government's position in that almost all the bodies that represent small and medium businesses in Britain have repeatedly pointed out to the Government the ridiculous error of what they are doing and how damaging it will be to the competitiveness of the sector of our economy that has the greatest capacity to create jobs? How will that help the British economy?

Graham Brady (Conservative, Altrincham and Sale West)

My hon. Friend makes an important point in his usual magnificent style. The important point that has been made during the debate is that small businesses, business generally, business organisations and Conservative Members understand the damage that the Government will do by refusing to accept our commonsense new clauses and amendments. But Labour Members and Ministers refuse to accept what is simple logic and common sense. As other hon. Members wish to speak, I shall bring my remarks to a close, but I hope that Ministers will think again before causing irreparable damage to the small business sector.

Michael Jack (Conservative, Fylde)

I am deeply surprised that the Government do not welcome the new clauses and the consequential amendments. The Secretary of State recently addressed the Federation of Small Businesses conference in Blackpool, where he was heckled, booed and hissed because small businesses felt that that was the only way tangibly to demonstrate their revulsion of yet more regulations. I recently met representatives of the Lancashire branch of the Engineering Employers Federation, and they told me that their main worry at present was overburdensome regulations. They said, "We are relatively small-scale enterprises and we have enough problems as it is dealing with the strength of the pound. Please, no more regulation." They said that, to deal with the working time directive alone, the federation had had to issue a 200-page guidance document. They are struggling so much that the Minister for the Cabinet Office has agreed to see a delegation from the federation to try to sort out the mess. The federation would, to use common parlance, freak out if it saw schedule 3, to which the new clause relates. That is what the Government will impose on small businesses with fewer than 50 employees if the new clause is not agreed to. I always worry when Ministers smile at Opposition Members as though we had a screw loose. On this occasion, we do not. Many Conservative Members, such as myself, were involved in modest enterprises before we entered the House. We understand that if a key member of staff is sick, or absent for maternity purposes, someone else must do the job or be brought in. Ministers do not seem to understand the impact that schedule 3 will have on such businesses. The Government are fond of talking about the rights of individuals, but it is no good individual employees being affected by these proposals if they are not working because their former company has said that enough is enough in terms of the burden of these regulations. It is at that level that the Government have failed to put forward coherent, well-argued points to support their reasons for placing these additional cost burdens on this sector of industry. If the Secretary of State wants to avoid being booed again next year in Blackpool, he should adopt our proposals.

Stephen Byers (Labour, North Tyneside)

I enjoyed my morning in Blackpool speaking to the Federation of Small Businesses. I was told by an official there that the reaction to my speech was one of the most positive ever given to a Minister. As the hon. Member for Ludlow (Mr. Gill) said, the very nature of small businesses means that they do not care too much for Governments of any political persuasion. Apparently, when the right hon. Member for Henley (Mr. Heseltine) addressed the conference as President of the Board of Trade, the reaction was far more hostile than anything I had to suffer. The federation made me feel very much at home. Government amendments Nos. 66, 67 and 68 simply mean that workers who ordinarily work in the United Kingdom will count towards the minimum of 21 workers required for the purposes of statutory recognition. At present, the Bill does not clarify that point and these three rather technical amendments seek to do precisely that. I hope that the House will agree to them. With regard to new clauses 1 and 2, Conservative Members failed to reflect on issues to do with interest rates, inflation and sound public finances. Small, medium and large businesses want economic stability and an economic climate in which they can plan ahead with certainty.

Michael Fabricant (Conservative, Lichfield)

Will the right hon. Gentleman give way?

Stephen Byers (Labour, North Tyneside)

In a minute. Those are the issues that concern business, but there was not one reference to them this evening.

John Bercow (Conservative, Buckingham)

Will the right hon. Gentleman give way?

Stephen Byers (Labour, North Tyneside)

I want to make some progress. We have had a long debate and I know that the House wishes to divide. That is why it is important to create the right economic climate so that businesses can plan ahead with certainty. Particularly noticeable was the reference to the Dun and Bradstreet survey, which showed that there was some 11,000 business failures in the first quarter of this year. I shall take that on board and reflect on it. However, it is worth noting that one quarter of the world is in recession and Japan, the world's second largest economy, is in the depths of a deep depression. That is bound to have consequences for the United Kingdom. But 11,000 business failures in the first quarter of this year pales into insignificance compared with the 62,000 business failures in 1992 when the right hon. Member for Wokingham (Mr. Redwood) was the Under-Secretary of State for Corporate Affairs. That is the right hon. Gentleman's golden legacy.

Michael Fabricant (Conservative, Lichfield)

The right hon. Gentleman made that point earlier, but surely, when my right hon. Friend the Member for Wokingham (Mr. Redwood) was Minister there was a world recession. If people lose their jobs now, it will not be because of a world recession but because of this Secretary of State's legislation.

Stephen Byers (Labour, North Tyneside)

The problem was that we were going through a Tory boom and bust. Interest rates were at 15 per cent., inflation at 10 per cent. and we had lost more than 1 million manufacturing jobs. That was the right hon. Gentleman's legacy as a Minister in the Department of Trade and Industry, and I shall not let him forget it. He has form: he has a record, and people need to be reminded of it.

John Redwood (Conservative, Wokingham)

That is a tired old erroneous charge. Does the Secretary of State agree that the problem was caused by our membership of the exchange rate mechanism? The Labour party supported that policy. Will he now apologise, as the Conservative party has done, for the fact that that policy went wrong?

Stephen Byers (Labour, North Tyneside)

The right hon. Gentleman fails to acknowledge the fact that he was a Minister who signed up to the ERM. He could have stood by his principles and resigned office, but he failed to do so. We do not judge people by the apologies that they make five years too late: we judge them by their actions at the time. The right hon. Gentleman could have resigned from his ministerial position and stood by his principles. He failed to do so, and he put his personal position before a principled approach. In 1992, he did not resign: he held on to his ministerial position. That is his record, and he will be reminded of it.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. We are straying from the subject of small businesses.

Stephen Byers (Labour, North Tyneside)

Yes, we must come back to the debate, Mr. Deputy Speaker, and I shall do so. When the right hon. Gentleman moved new clause 1, which would exempt companies employing 50 or fewer people, he admitted that that was not his personal option—he would favour an exemption for firms employing 100 or fewer. I am bound to ask whose policy it is that we are debating. Is it the right hon. Gentleman's policy, although he personally favours exemption for companies employing 100 or fewer, or is it the policy of the Conservative party? We need to know whose policy it is. I shall give way to the right hon. Gentleman to allow him to clarify the position.

John Redwood (Conservative, Wokingham)

I have said that the Opposition would welcome an exemption for companies employing fewer than 50. We moved the new clause because we thought that we were more likely to get an exemption for those companies than we were to get an exemption for companies employing fewer than 100 people. If the Secretary of State were to offer an exemption for companies employing fewer than 100, I would be very grateful.

Stephen Byers (Labour, North Tyneside)

So the official spokesman for the Opposition favours one position—that is worth noting—but moves an amendment that takes another. The figure of 100 is relevant because such an exemption would cover well over half the working population. Those people would be denied the basic entitlements provided by the Bill. What are these basic entitlements that are apparently so dangerous to the future of small business in the United Kingdom? One entitlement is time off for a parent whose child is sick. Is the right hon. Gentleman saying that parents should not be able to have time off if they happen to work in an organisation that employs 50 or fewer? That is the implication of the new clause moved by the right hon. Gentleman. A mother with concerns about the welfare of her child would not be able to have emergency leave to look after that child. We are providing the right for part-timers no longer to be discriminated against, but Opposition Members are seeking to take that right away from millions of employees. The provision of unpaid parental leave to carry out the responsibilities of bringing up a child would be denied if the Opposition succeeded with their new clause. Millions of people would be denied those basic entitlements. We shall resist the new clause, because it would discriminate against millions of people in the most gross and unfair way.

John Bercow (Conservative, Buckingham)

Will the right hon. Gentleman give way?

Stephen Byers (Labour, North Tyneside)

No, I shall not. Opposition Members raised the genuine issue of the burden of regulation. The Government must address that issue, and we intend to do so. During questions last week, I said that the Department of Trade and Industry is reviewing every regulation to see whether it is worth while and, in the words of my right hon. Friend the Minister for the Cabinet Office this afternoon, to ensure that it is proportionate and necessary. That is the Government's policy, and it applies across all Departments.

John Bercow (Conservative, Buckingham)

Will the right hon. Gentleman give way?

Stephen Byers (Labour, North Tyneside)

No, I want to make this point, because it is important. That is why, just 10 days ago, I met representatives of business to identify an agenda on which we can jointly make progress on regulation and the steps that need to be taken. What we have heard tonight from Conservative Members reminded me of the debates that were held when the House debated the Equal Pay Bill, which became the Equal Pay Act 1970. Conservative Members said that that legislation would destroy jobs for women: that was their constant refrain. It has not done so, and women in the workplace have gone from strength to strength.

John Bercow (Conservative, Buckingham)

rose—

Ian Bruce (Conservative, South Dorset)

rose—

Stephen Byers (Labour, North Tyneside)

No, I shall not give way. Conservative Members sought to talk down small business. They spoke about small businesses being in a desperate situation because of measures introduced by the Government. They spoke of business failures. This year, 400,000 new businesses will be established because of the framework that we have created in government. Barclays bank says that the small business population has risen by 58,000 in the past two years. More importantly, survival rates are now improving. More than 80 per cent. of new businesses now survive their first year of trading compared with 75 per cent. in 1994. That is because we are creating the right climate and the right framework for businesses to prosper. There will be support for innovation, and we shall work to increase finance for small businesses. We introduced legislation to tackle late payment of commercial debts. The Conservative party in government did nothing to address those issues. If the new clause were to be introduced, millions of workers would lose basic entitlements. Part-timers would be denied minimum rights. Parents would denied the security of knowing that they could take time off to look after their children. Ours is a balanced approach that recognises the needs of small, medium and large businesses. We also recognise the responsibility that we have to ensure that all workers, whatever the size of the firm for which they work, have decent minimum standards of employment. The new clause seeks to deny that, which is why we shall resist it and vote against it in the Lobby.

John Redwood (Conservative, Wokingham)

I pay tribute to my hon. Friend the Member for Daventry (Mr. Boswell) for the leadership that he has shown on this and other issues in Committee. I also pay tribute to my hon. Friends who not only worked hard in Committee in the interests of all businesses, but have been present in this debate, unlike some of the Labour Members who were on the Committee. They either did not come to the Chamber for the debate or came but said absolutely nothing either in defence of the Government's policy, which is indefensible, or in support of our new clauses, which would make life a lot better.

Ian Stewart (Labour, Eccles)

The right hon. Gentleman is not aware that at times in Committee not one Conservative Back Bencher was present behind his hon. Friends on the Front Bench.

John Redwood (Conservative, Wokingham)

I am well aware from the evidence of those Committee sittings that my hon. Friends made all the running. They had all the good ideas, took the debate to the Government, and Labour Members were remarkably silent on most of the important issues, as they have been today. My hon. Friend the Member for Buckingham (Mr. Bercow) produced a tour de force and gave six very important reasons why these new clauses should be accepted. I shall not repeat them, but I remind the House of the strong case he made. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) set out why it mattered to London that small businesses should be exempted so that they had more chance of flourishing and creating the jobs that parts of London still desperately need. My hon. Friend the Member for Ludlow (Mr. Gill) made a passionate case on behalf of small business, drawing on his own experience and that of his son, who now runs their successful family business despite the many burdens and costs imposed on it by the Government's policies. 7 pm My hon. Friend the Member for Lichfield (Mr. Fabricant) put up a robust performance in support of the new clause and amendments, explaining why it was important for us to emulate the American model. We hear from Labour Members that they have been converted to parts of American enterprise capitalism, but they still do not seem to understand that small businesses are flourishing in the United States of America because they are exempt from most of the regulation that Labour proposes to inflict on British business in this and related legislation. My hon. Friend the Member for Bromsgrove (Miss Kirkbride) made a strong case for businesses in her area, drawing on her constituency experience. My hon. Friend always puts the case for her local people with passion and skill. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) explained how absurd it was for the Government to claim that they believed in deregulation, while introducing measure after measure that imposes cost after cost on business—which in turn creates job loss after job loss, as we see every day. My right hon. Friend the Member for Fylde (Mr. Jack) said that the Secretary of State had been heckled at a recent small business conference. I am not surprised that he was heckled; it was entirely predictable. If he had listened to small businesses, as we have in recent months, he would know how angry they are about this legislation, and about all the legislation that has already been foisted on them by a Government who do not understand their requirements. The Secretary of State tells us that he now knows that small business wants more deregulation. He has promised small firms a pow-wow—a conference with him, enabling them to explain the ways in which they want more deregulation. We have been telling the right hon. Gentleman for months that they want more deregulation, and tonight, we have offered him a chance to show how that can be done. We have tabled two new clauses. If he accepts them after this short debate—he can do so, even at the eleventh hour—he will show not only that he has begun to understand that business is cross, but that he wants to do something about it. He should be saying sorry for the regulations that he has introduced, and for those introduced by his two predecessors, the two previous Presidents of the Board of Trade—as they liked to be known. Instead, we see a Secretary of State who has learned nothing, and who wants to do nothing to help the business cause that he should be furthering.

John Bercow (Conservative, Buckingham)

Will my right hon. Friend reflect on the fact that, despite the Secretary of State's honeyed words in the Chamber tonight, his hon. Friend the Minister for Small Firms, Trade and Industry has refused to give any undertaking that the regulations resulting from the Bill will be shorter than those relating to the working time directive and the national minimum wage, which fill 72 and 112 pages respectively?

John Redwood (Conservative, Wokingham)

They will doubtless be as long or longer. The Secretary of State clearly finds that amusing. He should try responding to that degree of regulation while running a small enterprise with only a few staff, and trying to make ends meet under Labour's economic policies. The Secretary of State does not seem to understand that the problems caused by high interest rates, high exchange rates and high taxes—all of which I mentioned in my opening remarks—are being greatly compounded by legislation such as this, which leaves business chronically short of the cash that it needs to employ people, to invest in the future and to modernise—something of which the present Government might be expected to approve. We have heard a series of cheap, juvenile debating points from the right hon. Gentleman, which we have heard many times before and to which we have responded adequately in the past. Yes, there were job losses and closures in 1992; but when will the Labour party apologise for supporting the policies that were being pursued then, and when will it learn from them? When will it understand that it is beginning to replicate exactly the conditions that obtained at that time? We have listened; we have learned; we know that the present position is wrong. Why cannot the Secretary of State appreciate the damage that his rerun is doing to industry in this country?

Ian Stewart (Labour, Eccles)

It is a bit rich for the right hon. Gentleman to say that, given the inheritance left by his Government. One family in five in this country contains not one working person, and that does not include pensioners.

John Redwood (Conservative, Wokingham)

We left a golden economic legacy of falling unemployment, low inflation, growth and prosperity, and a flourishing small business enterprise culture. That is being destroyed by this Government—by their wanton economic policies, and by the regulation and laws that they are introducing. The Secretary of State says that I should show a little less passion, but I will not. This matters. The Secretary of State should try listening. He should understand that many livelihoods are being destroyed by this Government's policies, and he should wake up and do something about it. The Minister for Small Firms, Trade and Industry dared to smile when it was suggested that he should be worried about the shrinking of the small business sector as small businesses went under. He smiles again, in a rather lacklustre way. I assume that he is giggling now because he realises that the small business sector will not shrink. For every firm that goes under while this Government are in office, another medium-sized firm will shrink and replace it, becoming a new small firm. That is the Minister's small firms policy: if the medium-sized firms are damaged, he will have more candidates to preside over in his inimitable way. The overwhelming weight of evidence from business organisations, Members of Parliament and constituents in businesses who lobby us points in the same direction. It suggests that small business must be exempted from these and any other regulations introduced by the Government. Does the Secretary of State understand that, if a firm with 21 employees which will be caught by the legislation in its present form needs one extra person to handle all the regulation and bureaucracy, that will constitute a 5 per cent. increase in its costs? For a firm with 1,000 employees, which may need only three extra people to handle the bureaucracy, the increase in costs will amount to only 0.3 per cent.—not welcome, but much less serious than the impact on the small firm. Is that fair? Does the Secretary of State wish to encumber small firms in such a way, allowing big firms a competitive advantage? That is one of our main reasons for proposing this important exemption. An entrepreneur in a business with 20 or 30 employees may be the leader of a sales team. He may supervise production. He may be involved in design. He cannot take on more; yet the Secretary of State expects him to implement these measures, and supervise the company's response to a new range of statutory requirements. The right hon. Gentleman asks whether my hon. Friends and I want people to be denied leave when their children are ill. Of course we do not—that is an outrageous suggestion—but in a small business, in which employer and employee have an individual relationship, such matters can be sorted out without the law intruding. The law is far too clumsy. Resort to lawyers will not help relationships in small firms; it will hinder them. It will generate another unnecessary cost for a small firm that may go under as a result, because the burdens will be far too great. It is not good enough for the Secretary of State to promise some new review of the regulatory burdens that he and his predecessors have introduced. It is not good enough for him to blame past Governments. The burden is much greater now, the protest is much stronger now, and the small business community is much angrier now, because of the huge burdens imposed by taxes and regulations under the present Government. They are throwing away our golden economic legacy. They are making it too dear to make things in Britain. Labour is undoubtedly bad for business. If this Secretary of State wants to do some deregulating, he should start now by instructing his team of Members to back our new clauses.

CODES OF GOOD EMPLOYMENT PRACTICE

Tim Boswell (Conservative, Daventry)

I beg to move, That the clause be read a Second time.

Tim Boswell (Conservative, Daventry)

I declare an interest in respect of a number of amendments and new clauses that I have tabled. I do so as the employer of one full-time employee, and the occasional employer of others. I do so as a purely precautionary measure, because it is clear that almost any of the new clauses and amendments could bear on my position as an employer. I hasten to say that I have not been commissioned or encouraged by outside interests to table any amendments or initiate any debates. It is wise that everyone should know where we stand, and I may be able to draw briefly on my experience. The new clause and Government amendment No. 57 clearly have a certain affinity, in that they relate to codes of practice for employment. My right hon. Friend the Member for Wokingham (Mr. Redwood) has said that there were no extensive Government contributions to the Committee. That is true in relation to Government Back Benchers; although, to be fair, some—including some present in the Chamber—made interesting and constructive, albeit brief, contributions. Some effort was made by Ministers to answer the points that we made, although that was a little uneven, depending on the complexity of the points. I am awaiting some answers, including a definitive answer to the 13 points that I raised on a Government amendment. I feel myself to be in the position of the lamp to which the moth is attached. Every time I table an amendment or new clause, lo and behold, a Government amendment attaches itself by a process of osmosis or suggestion. I can see nothing difficult about Government amendment No. 57. Unless the Secretary of State succeeds in putting me off my stroke in his explanation of it, it seems to me that it has two great and welcome merits. First, it is shorter than the text that it proposes to replace. Secondly, it appears to introduce an affirmative rather than a negative procedure. The idea in the code may have been instrumental to the idea that came to me in relation to the new clause. The code of practice that is set out in clause 19—with supplementary material in clause 20—concerns part-time work. This subject will repay further study before it comes into force, as I can see problems ahead. Just as in the debates on the minimum wage proposals on the subject of au pairs, we keep finding additional problems of one kind or another that must be resolved. In terms of part-time work, a clear agenda is afoot. The TUC document on preparations for the euro states: European collective bargaining is already under way. Two framework agreements have been signed on parental leave and part-time work. Clause 19 suggests that one of the materials to appear in the code should be any matter dealt with in the framework agreement on part-time work". What might be termed the euro-industrial relations agenda is buzzing away merrily. Such documents are not my usual nightly reading, but the other day I was reading representations from the Fire Brigades Union which analysed the position of retained firepersons. They are treated differently in a number of ways—in Committee, we referred to the training requirements of part-time work as additional costs of recruitment or retention—but they are paid a great deal less. If the Secretary of State persists with his equalisation in relation to part-time work, he may find that his right hon. Friend the Home Secretary comes back to him to ask what he is doing to fire service finances. New clause 3 is complementary to the approach set out with such eloquence by my right hon. Friend the Member for Wokingham, and other hon. Friends, in the previous debate. It rehearses some of the problems that affect real-world employers, such as me. New Labour might take comfort from the fact that the new clause is grounded in the drive towards the statement that all parties are in favour of consensus and partnership. I thought that my right hon. Friend the Member for Wokingham rather brilliantly exposed some of the equivocations in that statement. I do not find it easy to understand the concept of compulsory partnership. I believe that a partnership is one freely made by persons for their mutual advantage, rather than one imposed by an external force—the Government, or regulation—which seems to make people, as my late father always used to say, "good by Act of Parliament". It is much better, where possible, to seek agreement. In fairness, some Government Back Benchers have made those points also. As a result of the progressive changes in trade union legislation and the change in culture effected by my noble Friend Baroness Thatcher and my right hon. Friend the Member for Huntingdon (Mr. Major), there has been a significant shift in attitude or, more fairly, a confirmation of the more positive attitudes in the trade union side of industry. There are many on all sides who want partnership, consensus and constructive working together. I am prepared to concede, as I have readily done in Committee, that there are from time to time bad employers and bad employment practices, which I would not condone. In all such matters, the issue is how much legislative intervention is appropriate to deal with the ills from which we may or may not suffer—and, as my right hon. Friend the Member for Wokingham eloquently said, whether the cure is worse than the perceived disease. 7.30 pm It is no good our seeking to iron out every last infelicity in industrial relations by imposing yet another tissue of regulation, which increases businesses' costs and destroys their ability to run themselves effectively and to employ labour. In his telling interventions at the beginning of the Bill's Committee stage, before he was taken ill, the Minister of State, the right hon. Member for Makerfield (Mr. McCartney), agreed with me when I made the fairly blunt point that if there is no job there will be no employment rights either. One comes logically before the other. It is in that context that we offer the idea of codes of good employment practice. The suggestion—the Secretary of State may take this either as a compliment or as an attempt to wheedle—is grounded in what the right hon. Gentleman proposes in clause 19 in connection with part-time work. After consultation with the representatives of employers and employees, a code or codes of practice should be prepared with the assistance of the Advisory, Conciliation and Arbitration Service, which I hold in considerable regard. The code or codes should embrace matters of good employment practice. They could be freestanding; there may be no need to legislate for them or to tie them to other legislative requirements. We had constructive debates in Committee about the fact that ACAS and both sides of industry, through the TUC, the CBI and others, such as the Engineering Employers Federation, can seek to achieve good standards of employment practice, and to improve those standards where possible. I hope that that is not an issue between the parties. The distinctive feature of the codes that I propose is the way in which they may bite in connection with other employment rights, or with the way in which matters are dispatched at an employment tribunal. We had a dry run for this debate in the exchanges at the beginning of our debate on new clause 11, relating to the removal of the limit on special damages. In response to my hon. Friend the Member for Buckingham (Mr. Bercow), the Secretary of State rightly said that an employment tribunal would be able to take into account many circumstances. By definition—I am sure that if I did not say this, the hon. Member for Eccles (Mr. Stewart) would remind me of it—a tribunal seeks to deal with matters involving failure or delinquency. If an employer behaves reasonably and in accordance with agreements he is not, in principle, likely to end up before a tribunal. I understand that, and it is a fair point to make, but there are still some concerns, which can be illustrated in several ways and which underlay many of the contributions made by my hon. Friends in the debate on clause 1. Their experience, which I share, enables them to see the practical problems that small employers face. In the nature of things—at least until the Bill takes effect—small employers are unlikely to be able to employ human relations specialists, or specialists of any kind. Small employers are multi-functional. They may be sole proprietors with one or two employees, but they still have to understand the law. There can be few people who are such paragons that they combine the ability to run a farm or small engineering or service business properly with the ability to be fully conversant with the provisions of the working time directive, the minimum wage regulations and the new regulations that will follow when the Bill becomes an Act. The Secretary of State may rightly say that small businesses have access to employers' organisations and trade associations that may be able to steer them through. In my experience, for example, the National Farmers Union issues guidance to its members. I see the Secretary of State nodding; no doubt that response was in his mind. The question is whether that guidance is sufficient to enable employers to comply with the regulations. In principle, they should be able to comply, but concerns arise in two respects. The first affects "genuine" employers. The House will know what I mean when I use that term—people who try to behave respectably and treat their employees decently, and to comply with the law as precisely as they can. Even with such people, difficulties can occur. The Government's track record of having to amend their legislation, and their advice on the working time directive and the minimum wage regulations, as they go along, shows us that it would be a paragon indeed who did not occasionally slip up. The general conduct of a business, and the bona fides with which it is carried on, must be—at least, should be—a relevant factor in any deliberations that take place before a tribunal hearing a claim for, say, unfair dismissal. In principle, a tribunal ought already to be able to take that into account. However, the fear remains in employers' minds that they may slip up on a technicality—that something may go slightly wrong and trigger a course of action leading to undesirable and expensive consequences. The second concern is connected with the first. Even if a business is conducted to the highest possible standards, it may from time to time have a difficult employee who does not always behave reasonably—although I am not saying that simply because someone is unreasonable he has no employment rights. Even an employer who wishes to conduct his business to the highest possible standards may fall foul of a tribunal—not necessarily in substance, because he may win his case eventually, but because of the sheer hassle of having to engage lawyers and explain actions that were probably not written down formally, because they never had been before. For small businesses that may have a seasonal turnover or other complications, life is too short for all that. The employer may lose or win, but whatever happens, the costs will have been incurred and the hassle endured. Those considerations operate as a considerable disincentive to people in small businesses who are considering whether to make the "step change" decision to move from self-employment to taking on one or two people and becoming an employer. That is a shame, because so many small businesses have been fruitful in creating employment when larger businesses have been shedding labour. Small business people may say, "It isn't worth the candle; I'm not going to become an employer and risk all that." That is the context in which we propose our new clause, the operative part of which is subsection (2): Adherence to such a Code or Codes may be relied on as a defence to any proceedings before an employment tribunal by any employer who can demonstrate that his actions and procedures in connection with employment were reasonable in relation to the circumstances of his business, including its scale, turnover and labour force. We do not expect to impose significant changes of practice on Sainsbury's, ICI or other major household names, yet those businesses may not be creating the employment opportunities that they created in the past when they grew from small to very large businesses. However, the codes are primarily related to new businesses, or those struggling to keep going which have one or two employees. There is no reason why good practice should not be codified for all businesses, but there may be cases in which an employer can say, "I did my best under the circumstances. You can look back at my track record to see that I tried to do a good and honest job, which I hoped conformed to the code. Clearly, a lot of flesh remains to be put on the bones, but the Secretary of State laid down the skeleton with his code of good practice for part-time employment, and he would do well to consider our idea. We all want good practice and good relations in the workplace, but they may be better secured by our approach than by a narrow, regulation-driven philosophy. Essentially, good industrial relations should be forged in the workplace, not brought out by contentious litigation.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

My hon. Friend the Member for Daventry (Mr. Boswell) presented his proposals with characteristic modesty. As one who has worked in companies that varied from having 19,000 employees down to 25, I can assure the Secretary of State that one sometimes comes across an awkward employee. One tries to reason with him or to help him, but if he continues to be awkward, one must get rid of him. Some employees have milked the system—particularly the employment tribunals—time and again, and it sometimes takes time to find that out. No sensible employer wants bad working practices. A good product requires a contented work force. Legislation is an extremely crude instrument. It cannot deal with all the different types of companies, whether they are services or industrial firms. It cannot deal with companies of different size and ethos. It can, however, impose onerous regulations and rules on companies that cost money and, consequently, jobs. In law in general, acting in a reasonable manner is a satisfactory defence, and it would be sensible to translate that principle into employment law. First, that would overcome the crudity of exercising the law alone. Secondly, it would provide flexibility to deal with different types and sizes of company. Thirdly, it would provide a defence against a bloody-minded or awkward employee who has to be got rid of. I can tell the House how much it costs to get rid of an awkward employee. The minimum is likely to be between £12,000 and £15,000. Preparing the case will take at least two days of senior management time. For two more days—often longer—senior managers will have to leave the workplace to present the case.

Tim Boswell (Conservative, Daventry)

Does my hon. Friend agree that the normal and rational reaction of a management faced with that kind of cost is to settle out of court for almost any lower sum?

Jonathan Sayeed (Conservative, Mid Bedfordshire)

My hon. Friend has shot my fox. In addition to preparation time, the business may require to hire legal counsel. An appearance in person is also required. I have asked the Secretary of State whether it would be possible for small businesses to put their cases to tribunals in writing, but he said no. I have seen the problems from the employers' side. With a minimum cost of £12,000 to £15,000, one realises that one has a better job to do—actually running the company. Often, therefore, the employer gives in and pays up. That encourages the awkward employee. I have come across multiple-claim employees who make a nice little living by doing just enough to ensure that they are entitled to take an employer to tribunal for unfair dismissal or whatever, whereupon they rake it in.

Ian Stewart (Labour, Eccles)

The hon. Gentleman paints a picture of an aberrant worker who puts in multiple claims. Is he aware, from all his experience, that there is a two-year time limit on making a claim for unfair dismissal to an industrial tribunal? Is he aware that the average award amounts to hundreds of pounds, not thousands?

Jonathan Sayeed (Conservative, Mid Bedfordshire)

I agree. I do not say that the problem I have outlined is common or normal. Most employees work hard, want their companies to do well and want themselves to do well as a result. The Bill seeks to reduce the time limit referred to by the hon. Gentleman from two years to one. I recall the case of an employee who had had maternity leave and sick leave and a whole variety of other things, in a very small company in which her job was so critical that another person had to be hired to do it. The employee could not physically manage a return to the specific job and would not do any other job. She claimed unfair dismissal. I do not say that that case is normal. The point is that there are sometimes abuses of the system. Companies should have a defence of acting reasonably.

Ian Stewart (Labour, Eccles)

The hon. Gentleman makes a case for a new provision, but, under existing provisions, an industrial tribunal may hold a pre-hearing assessment to consider several criteria, one of which is whether there is any merit in the case or whether it is frivolous or vexatious.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

The hon. Gentleman makes a perfectly fair point. However, before an employer gets that far, he must have done all the preparation and spent a considerable amount of management time gathering the documents and evidence together. The smaller the company, the more important the manager is to it. I do not suggest that abuse is widespread. I do not suggest that most employees are on the fiddle: they are not. However, two things are required. First, a defence must be provided, and that can be done by creating a code of practice acceptable to and understood by employees and management. The second point, on which I am on all fours with my hon. Friend the Member for Daventry, is that there should be a code or codes. We will need codes, because they will have to cover different types and sizes of companies that operate in different ways. Once those codes are agreed, they can be adapted over time. New clause 3 would be a valuable addition to the Bill. The House should not make unnecessary laws, because they are held in contempt and constitute a legislative and financial burden on companies that have to implement them. I endorse the points made by my hon. Friend the Member for Daventry and I hope that the Secretary of State will implement them.

Ian Bruce (Conservative, South Dorset)

It is always nice to support the Government in some small way, and I welcome the fact that Government amendment No. 57 will introduce the positive resolution procedure for the regulations proposed under the Bill. However, my understanding is that a single regulation or number of regulations made under the Bill would be discussed for only an hour and a half, and that is not enough for regulations of such complexity. I appreciate that that is not necessarily a point for the Minister, but perhaps the House authorities could address the time that is allowed to consider detailed regulations. I am concerned that the Government cannot properly do their job if they produce an unamendable regulation with only an hour and a half for discussion. Colleagues sometimes want to get away as quickly as possible and the House often does not scrutinise such regulations properly. The Opposition would prefer not to have the regulations, because we would not wish to be so prescriptive. I pray in aid of new clause 3 the excellent speech in Committee by the Minister for Small Firms, Trade and Industry, in which he rightly pointed to the good sense of adopting codes of practice, as opposed to the letter of the law. The problem that arises when tribunals are asked to judge issues against the strict law is that the situation becomes legalistic, not one in which both sides address what is reasonable. Both the employer and employee have to be reasonable. The Opposition do not condone bad business practice or bad practices by employees: we simply say that the best solution is often to use a code of practice, so that if a small business is taken to a tribunal, it can claim that it acted reasonably and be judged on that basis. The Minister for Small Firms—who is unpaid and likes me to remind the House of that, so that someone will hear and ensure that he is eventually paid for his excellent work—made a very good speech about age discrimination and the difficulty that one has in nailing down any discrimination in a strict law. I shall paraphrase parts of his speech. He said that the Government were taking a measured approach and intended to use the lessons learned from the initiatives to form future plans. He said that we needed to change the attitudes of employers and that the results of consultation published last year pointed to a non-statutory code of practice as the best way to encourage this process of change. He added that if we did not change the culture, we would not solve the problems. What good common sense from the Minister! It was almost his last speech in Committee and he was beginning to understand what the Conservatives were saying. Unfortunately, the Liberal Democrats were not saying the same things, because they wanted even more regulation. The Minister continued by saying that the code would bring real benefits in promoting good recruitment and employment practices. That is a sensible approach. The Government went further and said that they would monitor this code's effectiveness, but that they would not evaluate it until February 2001. It will be too late for them to legislate by then and they have, therefore, made it certain that legislation on age discrimination has been kicked into the long grass. New clause 3 reminds the Government that codes of practice and reasonableness are the way forward. The Conservative party has a proud record. For years, Governments of all colours tried to solve the problem of strikes. I remember the wonderful document, "In Place of Strife" produced by Barbara Castle, now Lady Castle. That became a reality under Conservative legislation. We are proud of that record and willing to pass it on, as part of our golden legacy, to the Labour Government. They have said the right things when talking to business audiences, but unfortunately, the Bill does not deliver. New clause 3 would give the Government a chance to add reasonableness to the Bill and it would be better for it.

Stephen Byers (Labour, North Tyneside)

As Opposition Members have pointed out, Government amendment No. 57 requires the Government to subject the code of practice on part-time work to the affirmative resolution procedure. I understand that it fulfils a commitment given in Committee and I am pleased to honour it this evening. I shall, however, ask the House to resist new clause 3. In so doing, I should add that there is not much that divides the comments made by the hon. Member for Daventry (Mr. Boswell) and the approach that the Government intend to take to the issue. The debate about regulation versus codes of good practice reflects the points made in discussion of new clauses 1 and 2. The Government are considering carefully in which areas a code would be more appropriate than the introduction of a raft of regulations. Many of the comments by Opposition Members were well made and, when we talk about reducing the burden of regulation on business, it may be that the adoption of codes will be a better approach, especially if those codes are discussed and the business community—and employee representatives—are consulted. We can then bring the proposals before the House and discuss them, even if only for an hour and a half—I understand the reservations that have been expressed on that point. That would represent a new approach and an attempt to create a consensus on these important issues.

Ian Bruce (Conservative, South Dorset)

I have tried to demonstrate the Conservative Government's experience of such legislation and I urge the Secretary of State to be very careful. Two of his colleagues have already fallen foul of the employment law, although I am sure that they have dealt with the situation honourably. The hon. Member for Corby (Mr. Hope) will have to appear in front of a tribunal and the Lord Chancellor has lost before a tribunal. I am sure that both of them have a reasonable case, but they have had to go to the trouble and expense of trying to defend themselves, their honour and their political reputations.

Stephen Byers (Labour, North Tyneside)

The hon. Gentleman makes a case for the issues to be dealt with by codes rather than by detailed regulation. Our difficulty with new clause 3 is that it would give an umbrella right to the Secretary of State to introduce codes wherever he or she felt that that was appropriate. The Government prefer a more targeted approach. We acknowledge that codes will be more appropriate in some cases, but a power already exists, under sections 199 and 203 of the Trade Union and Labour Relations (Consolidation) Act 1992, that enables the Advisory, Conciliation and Arbitration Service or the Secretary of State to issue codes of practice containing practical guidance for the purpose of promoting the improvement of industrial relations, much as the hon. Member for Daventry suggested. Such codes must first be published in draft for consultation, after which they may be modified before being submitted to Parliament for approval by affirmative resolution of both Houses. Where we consider it necessary, we will use the powers to issue codes of practice on certain aspects of this Bill. I have already said that we intend to do so in relation to part-time work. We feel that that would be welcome. 8 pm We also intend to draw up a code on grievance and disciplinary procedures to complement the Bill's provisions, especially in relation to the right to be accompanied at grievance and disciplinary proceedings. Some hon. Members may have thought that we would introduce a raft of regulations to do that. We feel that a code would be more appropriate. We will also produce a code of practice on access to the work force in relation to our proposals on statutory trade union recognition. Again, we feel that that area is far better dealt with by code than detailed regulation. The important thing to remember, as with all statutory industrial relations codes, is that the new codes will make recommendations on good practice and prescribe the law to which they relate. Most importantly, they can be taken into account by tribunals and courts, particularly when they have to decide whether the behaviour of either party, the employer or the employee, is reasonable in the circumstances.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

The Secretary of State has said that the codes "can" be taken into account. Could he be more robust and say "should"? When a company has demonstrated that it acted reasonably, the ability to take that into account is important.

Stephen Byers (Labour, North Tyneside)

Tribunals generally take codes into account. That is why the codes are there. I hope that the hon. Member for Daventry will seek leave to withdraw new clause 3, but, if the measure is pushed to a Division, I ask the House to resist it because it could make all tribunal rights subject to a code of practice as it would introduce an overriding power. I have reservations about that which reflect our previous debate. The new clause could introduce a raft of quasi-regulation in the form of codes. It could be very wide-ranging. There is a strong argument for being focused about the areas that we subject to code of practice procedures. I fear that if there are minor transgressions by either party, the code of practice under the new clause could be used against their interests. An employee or employer who failed to comply with the code's details could be in some difficulty. The better approach is to have a focused code of good practice which will come before the House to be debated and consulted upon. We can then move forward and hon. Members will know exactly which codes we intend to introduce, rather than going down the route of prescriptive regulation. As we look forward to creating a climate in which regulation is not automatically the first option for Ministers, I hope that they will consider codes of practice as a better avenue down which to go. We shall then be able to make progress using the powers that we already have under the Trade Union and Labour Relations (Consolidation) Act 1992 rather than the wider-ranging powers that new clause 3 would give the Secretary of State. For those reasons, I hope that the House will accept Government amendment No. 57 and that the hon. Member for Daventry will seek leave to withdraw his new clause in the light of my comments.

Tim Boswell (Conservative, Daventry)

This has been an unusually thoughtful and fruitful debate. I am grateful to my hon. Friend the Member for Mid-Bedfordshire (Mr. Sayeed), who did well to remind the House of the practical problems of employers in compiling and defending cases at employment tribunals. The considerable costs may lead them to make decisions that are not in their best interests, or that they might have chosen not to make, but found to be the least bad alternative in the circumstances. It is important to put that on record to give the lie to the assumption that things are always all right under the umbrella of reasonableness at employment tribunals. As the Secretary of State intuited, the difficulty is that once regulation is in place, it can be something of an unguided missile. It is not always possible to produce a result that is felt to be just while being legally coherent. I am grateful to my hon. Friend the Member for South Dorset (Mr. Bruce) for his remarks and for reminding us of the comments of the Minister for Small Firms, Trade and Industry in Committee on what is rapidly becoming in this respect—perhaps we should pass on hastily—something of a consensus about the approach. That characterised the Secretary of State's response to my suggestions. He might even have mentioned that the Trade Union and Labour Relations (Consolidation) Act dates from 1992 and reflects the wisdom of his Conservative predecessors and, in fairness, the considerable custom and practice that has built up around ACAS and its ability to advise on such matters. It was refreshing to hear a widening in the Secretary of State's remarks of the concept, in clause 19, of the part-time work code to other areas, including grievance and disciplinary procedures and access to the work force. I had not wholly anticipated those points, not least because they are not set out in the Bill, whereas the code in clause 19 is explicit. Those announcements were welcome, as was his general approach. I understand what he was driving at. Targeting is interesting, and we might debate it in the context of social security legislation, but not tonight. The exact balance of rights and responsibilities that can be carried by codes or by other means is difficult to follow. I see the hon. Member for Wentworth (Mr. Healey) across the Chamber. We are all striving to find ways, as he did with his Employment Rights (Dispute Resolution) Bill last year, of alternative dispute resolution. We do not want disputes to go to the wall if it is possible to avoid that by good practice and common sense. I recognise the interest of all parties, including the trade unions, in that matter. Let us work on the presumption that the Secretary of State is driving in the right direction. We need to see more; we will need to see the codes. It would help him if, instead of having them thrown at us in the confrontational atmosphere of a 90-minute debate, we could have a pre-draft hearing, or a look at a draft, so that we could talk about it and see whether we could contribute ideas, as I am sure that my hon. Friends would wish. I do not ask him to respond to that now. On that note of qualified consensus, I beg to ask leave to withdraw the motion.

DISCRIMINATION IN THE WORK—PLACE ON GROUNDS OF AGE

David Chidgey (Liberal Democrat, Eastleigh)

I beg to move, That the clause be read a Second time.

David Chidgey (Liberal Democrat, Eastleigh)

The new clauses deal primarily with discrimination in employment. New clause 4 would prohibit discrimination on the ground of age, new clause 5 on the ground of sexual orientation, and new clause 6 on any grounds that the Secretary of State may from his experience see fit to specify. The new clauses expose a glaring omission in the Bill. The Government failed to grasp the opportunity to end discrimination in the workplace. They also expose a basic breach of a pledge made by the Government during the general election. Having made such a blatant remark, if Labour Members doubt me I refer them to their manifesto, which I happen to have in my hand. I am sure that we all remember it. Page 35 talks in glowing terms of equal rights for the citizen. It says: We will seek to end unjustifiable discrimination wherever it exists. That is a sound sentiment, and it is one that I am happy to endorse.

Michael Fabricant (Conservative, Lichfield)

Will the hon. Gentleman give way?

David Chidgey (Liberal Democrat, Eastleigh)

I shall make a little progress and then I shall be happy to give way. It should be a fundamental right that no person should suffer discrimination on the grounds of race, creed, gender, age or sexual orientation. I hope that that is a view shared by every hon. Member, regardless of party. I give way to the hon. Member for Lichfield (Mr. Fabricant).

Michael Fabricant (Conservative, Lichfield)

I wished to make a comment that was appropriate to the point that the hon. Gentleman was making, but he has moved on and I do not want to break his flow.

David Chidgey (Liberal Democrat, Eastleigh)

The hon. Gentleman is so kind. Sadly, the moment comes and then it goes. It surely must be the view of each and every Labour Member who campaigned throughout the general election on the basis of new Labour's manifesto pledges that no person should suffer discrimination. Discrimination on the grounds of age and sexual orientation is not prohibited by law, yet it is just as prevalent and pernicious in the workplace as any other form of discrimination. New clause 4 would prohibit discrimination on the ground of age. I want to take a few salient examples of areas in which such discrimination is rife. The teaching profession is one. We are told that there is a crisis in teacher supply, but it could be that schools are guilty of ageism. Whenever we have reports of shortages of teachers, a few days later there is a flurry of letters in the broadsheets from older teachers who complain that they cannot get jobs even in maths and science, which are areas of scarcity. I raised this matter in Committee, and it is worth emphasising the work of Alan Smithers, a professor of education at Liverpool university. He cites many examples of discrimination on the ground of age. A gentleman referred to as Bob has a degree in chemistry and 22 years of experience in industry. He trained as a teacher in 1997 as a second career. He applied for more than 50 jobs and received just six interviews, but each time the post went to a younger person. All that he can get is part-time supply work. The second case is a woman called Melissa, a teacher of secondary maths—another area of shortage. She broke off to do educational research and she has come back with a PhD in education, but she is unable to get a post as a teacher. A gentleman called John happens to live, and previously worked, in my constituency in Eastleigh. He has a 2.1 honours degree and a PhD in modern languages—supposedly very much a shortage subject. He qualified as a teacher 27 years ago and at that time had no problem getting a job. Since then, he has worked for many years as a teacher, three as a head of a modern languages department. He then spent eight years training teachers as a senior lecturer in a local college of higher education, but following a change in the college's curriculum his post was declared redundant when the language teaching area was closed down. That was three years ago. In the past three years, John has applied for more than 160 teaching posts. Not one has resulted in a job offer, even though he has kept his teaching experience up to date and modern by working continually as a supply teacher. On the rare occasions on which he has reached the shortlist for a job, he has been told, "You were the best candidate, but we chose someone less well qualified because we thought they would fit in better with a younger team." Or he was told, "We are under a lot of pressure these days to appoint bright young people." John is an extremely successful teacher. His referees confirm that he delivers considerable value for money, but his problem is that he is 47.

Graham Brady (Conservative, Altrincham and Sale West)

Many of the cases that the hon. Gentleman cites are worthy. Will he comment on the situation that I know frequently to be the case in the employment of teachers? The reason why an older teacher is not engaged is not simply age but the fact that he would be more expensive to recruit because he is more experienced. I wonder how the hon. Gentleman's new clause would apply in those circumstances.

David Chidgey (Liberal Democrat, Eastleigh)

The hon. Gentleman makes a good point. If he will allow me, I will come to that and explain the position. Interestingly enough, John has gone through just those hoops. If the hon. Gentleman will be patient for a moment, I will come to the point that he makes. John is told by the Association of Teachers Against Ageism that his case is typical. The statistics show that teachers of 45 or over are twice as likely to be unemployed six months after completing their training as new teachers in their 20s. Ageism is by no means confined to teaching. John wrote to me in August last year and to the Department for Education and Employment at the same time. The DFEE replied sympathetically. It said: Ministers believe that schools recognise that more experienced teachers have much to offer … They are also aware that experienced teachers entitled to a higher salary felt they could be at a disadvantage. They have, therefore, introduced"— not are taking, but have introduced— a measure to assist schools who employ teachers with an entitlement to a higher salary. That was last September. I went to see John in Eastleigh at the weekend. His job applications tally has now risen to 185 and he still has no offer of a post. Ageism is by no means confined to teaching; it can be found in many professions. It is certainly present in the mercantile marine—an area of employment that is, or at least used to be, prevalent in Southampton, with its shipping interests. I know of many examples of ageism. One is of a chief engineer with 30 years of experience, 10 years as chief officer. He applied for a job on an oil tanker, but was told that the company did not employ chief engineers over 45. A deck officer qualified as a pilot and went on deep sea duties to acquire the experience that he needed at sea to apply for the senior positions for which he was qualified, but by the time that he had acquired a suitable certificate, he was 39. He was refused the post as a pilot because he was too old. He had to go to sea to get the experience, and that took time, but by the time he got back he was too old to get to the job. There is a wealth of experience to show that age discrimination is prevalent. The over-40s find themselves bypassed for promotion. The over-45s have less opportunity for job-related training—a matter that we should look into. The over-50s find it difficult even to get an interview—John is in that situation, although he is younger. The over-55s are more likely to be long-term unemployed. Age discrimination in the workplace curtails individual opportunity. It wastes resources by forcing many older people into early retirement. Negative and inaccurate assumptions about the capabilities and abilities of older people are reinforced in many organisations. The Secretary of State talked a few months ago about changing the culture. Well, here is where he could start. Many organisations have pay and conditions structures that make it financially more attractive to replace older people with younger people. The experience and skills of older workers are often undervalued and unrecognised by employers and older workers can be regarded as less capable and adaptable than younger people. Studies show that older workers may give better service, have lower rates of absenteeism and stay in the post longer than younger people. Older people have staying power, and I say that from the heart.

Graham Brady (Conservative, Altrincham and Sale West)

I confess that I am guilty of the age discrimination that the hon. Gentleman highlights, in that I tend to favour employing older people because I find that they have greater staying power and more commitment to their job. Surely, under the proposed new clause that practice would be illegal.

David Chidgey (Liberal Democrat, Eastleigh)

The hon. Gentleman usually looks through Bills with forensic skill, so I am surprised at his comment. Perhaps he was half asleep, because if he had read the new clause carefully he would know that it refers to "age", not to a particular age. The clause covers age discrimination, whether the person is young or old; it applies—although not perhaps equally—to many age groups.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to the hon. Gentleman for giving way again, because I want to clear up this point. I fear that I have been the subject of an unjust calumny. I do not necessarily claim to be forensic, but I think that the hon. Gentleman is making my point. The fact that the new clause would outlaw discrimination on the ground of age, whether old or young, is precisely my point; there may be extremely good reasons for choosing to employ an older person, but that would be outlawed under the new clause.

David Chidgey (Liberal Democrat, Eastleigh)

I thank the hon. Gentleman for making the point a little clearer. My point is that people's employment should be based on their ability; the only discrimination that should exist in the workplace is over a person's competence to do the job. That is what the new clause is about. I readily accept that anti-age discrimination legislation would not in itself change the underlying negative attitudes that exist, but it would be an important step towards ensuring that employers change their practices. There is strong support from industry.

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

My hon. Friend refers to the possibility that legislation might not change attitudes. That was also true of the Late Payment of Commercial Debts (Interest) Bill 1998, which was adopted by the Government on the understanding that we needed a stick, but that we also needed to change the culture.

David Chidgey (Liberal Democrat, Eastleigh)

I am grateful to my hon. Friend for that intervention. Time and again, the Government have told us that the legislation that they wanted to have the power to enact through enabling Bills was merely a background to the problems that they hoped to solve through discussion and consultation. I accept that, but I do not see why we should not have the necessary sticks to back up the consultation that the Government hope will be successful. There is strong support for legislation to tackle age discrimination. In a recent survey, the Institute of Management found that about 60 per cent. of managers favoured legislation to restrict the use of age limits in job advertisements and about 65 per cent. favour comprehensive employment protection legislation. Some organisations will argue that a voluntary code and the promotion of the advantages of older workers is enough and that legislation is not necessary. From its briefing notes, the Confederation of British Industry appears to be a case in point. The CBI argues that age discrimination is extremely difficult to define; so are many elements of the Bill, but that has not prevented the Government from introducing legislation. The CBI asks: What should be the comparator age? I dealt with that point earlier. The CBI argues that not all differential treatment on the ground of age is unreasonable, giving the example that older workers do not have comparable training needs to younger workers—what an admission. Throughout industry and commerce, firms are suffering from severe skills shortages, yet according to the CBI it is okay to discriminate against older workers in investment and training. No wonder the highest levels of unemployment are among those aged 45 or older, whose skills have not been kept up to date and who find themselves with obsolete techniques in industries that also deserve to be obsolete.

Tim Boswell (Conservative, Daventry)

I hold no particular brief for the CBI, but I think that the point its members were making is that older workers might not need training because they were already fully trained. Although some of them might need training, their entitlement to training might be somewhat different from that of other workers.

David Chidgey (Liberal Democrat, Eastleigh)

I should very much like to agree with the sentiments expressed by the hon. Gentleman, but the CBI briefing refers to older members nearing retirement age". The CBI completely missed the point of the clause; its briefing refers only to older workers. As I have pointed out, younger workers are often stifled and prevented from getting promotion on their ability because they happen to be too young according to the practices of the firm for which they work. I disagree with the CBI. Apparently, the Government disagree with the CBI too—or at least they did disagree. In 1996, the Minister of State, the right hon. Member for Makerfield (Mr. McCartney), spoke in a debate on the Employment (Upper Age Limits in Advertisements) Bill. Incidentally, I am sad that the right hon. Gentleman is not able to be in the Chamber today; I know that he has been unwell and I wish him a speedy recovery. I mean no disrespect to the Minister on the Treasury Bench when I say that I would have been pleased to see the Minister of State at the Dispatch Box; I know that he would have wanted to be here to defend what he said when he was in opposition. He stated: The Labour party's position is quite clear … an incoming Labour Government will introduce comprehensive legislation to make age discrimination in employment illegal. We shall consult on the legislation. We want to ensure that not only will workers have a remedy in law against discrimination, but the appropriate legal framework will be put in place to enable employers to change their workplace practices, with co-operation between management and workplace representatives. —[Official Report, 9 February 1996; Vol. 271, c. 618.] A well-made speech. I can hear the right hon. Gentleman saying those words in ringing tones. I agree; those are my sentiments exactly. The CBI has made a range of "what if" objections to the clause; they are not dissimilar to the probing amendments to the Bill introduced in Committee. However, in each case the Government responded to those amendments by saying—more or less—that the carrot of voluntary codes is not sufficient, and that that carrot needs to backed up by a legislative stick, as my hon. Friend the Member for Weston-super-Mare (Mr. Cotter) pointed out. In every case, the Government made the point that the Bill provides for the Secretary of State to make regulations should he see the need to do so and only after consultation. However, the power to make such regulations will be in force in law. With new clause 4, I am not asking for any more than that. If the Government accept the new clause, they will have grasped the opportunity to ensure that, in employment relations, discrimination in the work force on the basis of age will be prohibited, with the force of law to back up that prohibition. New clause 5 would, in relation to employment, prohibit discrimination by an employer against another person on the ground of sexual orientation. The issue first came to my notice when I was first elected in 1994, because in my Eastleigh constituency a case involving such discrimination came to light and subsequently became internationally known. The case involved two women—Lisa Grant and her partner Jill Pearcey—who happened to live not far from my offices in Eastleigh. Lisa told me that, as an employee of South West Trains, she was entitled to privileged rail travel; and that, if she had been married, that privilege would have extended to her husband, or, in these enlightened times, to her common law spouse if she had had one. However, because her partner is the same sex as her, she has been denied those travel rights, even though the policy document issued by the previous employer and kept in place—British Rail's employment policy document—stated that such discrimination is unacceptable. Many hon. Members will recall the case because Lisa and Jill took their case to an industrial tribunal, which in due course referred it to the European Court of Justice. Their case was presented for them by an eminent and, I believe, very able Queen's Counsel—none other than Cherie Booth, QC. The outcome was that although the European Parliament has declared that it deplores all forms of discrimination based on an individual's sexual orientation, the European Union itself has not yet adopted rules to provide for such equality. In most member states, a stable relationship between two people of the same sex is treated as equivalent to a stable relationship between a heterosexual couple who do not happen to be married. It is important, because that is not true in Britain. As a consequence, the European Court of Justice found that although in principle the European Parliament and the European Union deplore discrimination on the grounds of sexual orientation, no EC law currently exists to cover such circumstances; and, as no such law exists in the UK either, the court had no option but to find against Lisa and Jill. However, at the same time, the court called on the British Parliament to close the loophole that allowed the discrimination to continue.

John Wilkinson (Conservative, Ruislip - Northwood)

Although I have no truck with the European Union arrogating to itself a function that rightly appertains to member states—namely, to decide social policy within them—is it not true that, had that action been successful, it might have opened the floodgates to all sorts of spurious claims, with people purporting to be partners when they were only friends and individuals and thereby gaining rights and entitlements that were not rightfully theirs?

David Chidgey (Liberal Democrat, Eastleigh)

I can respond only by saying that the ECJ's point was that no such law or regulation exists in the UK, although it does in many other European countries; and that because of that, the ECJ was not able to try or come to a conclusion on the case—it was outside the court's jurisdiction.

Michael Fabricant (Conservative, Lichfield)

Is the hon. Gentleman aware that some companies have overcome the problem of determining what is or is not a spurious claim? For example, the John Lewis Partnership offers discounts to partners and to the partners of partners, entitlement being based on the number of years the partners have lived together. There are ways of getting around the problem.

David Chidgey (Liberal Democrat, Eastleigh)

The hon. Gentleman makes an important point. The key word in the description is that it is a "stable" relationship—a phrase which could apply equally to a heterosexual couple who do not happen to be married and to a same-sex couple, the key test being whether the relationship is long term and stable. Many of Britain's top 100 companies have policies ensuring that they do not discriminate against people on the ground of their sexual orientation. The new clause provides an opportunity for the UK to introduce laws that match those of our neighbouring European countries—an opportunity to end that type of discrimination. The case of Lisa and Jill is by no means unique: recent surveys among gay men and lesbians show that 16 per cent. have faced discrimination at work and another 21 per cent. suspect that they have suffered discrimination on the ground of their sexuality; and 48 per cent. have faced harassment, including ostracism, threats and even physical violence. In 1995, Social and Community Planning Research undertook an independent survey of employees of all sexual orientations. It found that one in three heterosexuals is less likely to hire an applicant if they know the applicant to be gay or lesbian—a telling fact. In 1998, the Equal Opportunities Commission, in its publication "Equality in the 21st Century", included a recommendation that: There should be legal protection against discrimination for lesbians and gay men. In another place, the Sexual Orientation Discrimination Bill was passed, but there was insufficient parliamentary time for it to become law by passing through this House. As the law stands, it is not unlawful to refuse to appoint someone because of their sexuality. Treating someone less favourably because of their sexuality is not unlawful; harassing someone because of their sexuality is not unlawful; and dismissing someone because of their sexuality is not generally unlawful. New clause 5 would give the Secretary of State the power to extend protection.

John Healey (Labour, Wentworth)

This is a useful rehearsal of the problems of discrimination on the basis of sexual orientation and age and reinforces the argument for some action in that area. However, does the hon. Gentleman concede that the Department for Education and Employment is currently receiving representations from various agencies, including the Equal Opportunities Commission, about the need to consolidate and update discrimination legislation across the board? Might it not be better to deal with those issues in consolidated discrimination legislation rather than in this Bill?

David Chidgey (Liberal Democrat, Eastleigh)

I am grateful for that intervention. I am aware that the Department for Education and Employment is panicking about the problem as it affects teachers. However, I imagine that its legislation will cover only the teaching profession. I contend that the problem of discrimination is endemic in all of industry and commerce.

John Healey (Labour, Wentworth)

rose—

David Chidgey (Liberal Democrat, Eastleigh)

The hon. Gentleman is eager to contribute—he must have been briefed about this issue. I have followed the Bill through the Committee stage, and I do not accept the Government's "wait and see" approach. During consideration of the Bill, the Government said time and again that they wanted the power to make regulations in case they were needed. What is so different about my proposed new clause? I shall give way for the last time.

John Healey (Labour, Wentworth)

I have also followed the Bill through every stage, I have attended every Committee sitting so far, and I have not been briefed by the Government. The hon. Gentleman misunderstands me. I am talking not about teachers but about responsibility. The Department for Education and Employment is responsible for anti-discrimination legislation. It holds that brief, not the Department of Trade and Industry.

David Chidgey (Liberal Democrat, Eastleigh)

I am grateful to the hon. Gentleman for that clarification. However, I do not foresee any problems if such legislation were to be on the statute book. I do not think there would necessarily be a clash of responsibilities. I do not profess to be a legal or a parliamentary clerk, but that is the sort of excuse we tend to hear when Governments do not want to do what most people think they should. New clause 5 would give the Secretary of State the power to extend protection from discrimination in employment to lesbians and gay men. Like so many others in the Bill, it is an enabling clause. It would give the Government the opportunity at last to prohibit discrimination against sexual orientation in the workplace. The Government are on record in another place as expressing reservations about only the scope and timing of the Sexual Orientation Discrimination Bill, not its good intentions. This new clause is specific in its scope. Its intentions are clear and precise, and I urge the Minister to grasp this opportunity to convert the Government's rhetoric into law. In Standing Committee, the Minister acknowledged: a gap exists in the protection that we offer some individuals. The Government deplore discrimination on the basis of sexual orientation. The Minister then admitted that the Government had no clear plans to deal with the issue in the foreseeable future, and said: it is too early to be clear whether a legislative measure would be the appropriate way to proceed."—[Official Report, Standing Committee E, 23 March 1999; c. 580.] That is not good enough. The Government have made much of codes of practice on ageism and have commissioned research to test their effectiveness. However, they are silent about discrimination on the ground of sexual orientation. At the very least, they should make a commitment tonight to draw up a code of practice on sexual orientation rather than simply promising to consult. New clause 4 refers to the general prohibition of discrimination in employment, as the Secretary of State may specify from time to time in the regulations. Time and again, the Bill gives the Secretary of State powers to make regulations as he thinks fit—and when we probe the Government on the detailed applications of the Bill, they reply that it is an enabling Bill and that detailed regulations will be introduced after consultation and as appropriate. If the Secretary of State finds new clauses 4 and 5 too specific and rigid, perhaps he will accept new clause 6, which would provide a general power following precisely the line that the Government have taken throughout our debates on the Bill. New clause 6 would, in the words of the right hon. Member for Makerfield—now the Minister of State, Department of Trade and Industry—enable the Government to ensure that not only will workers have a remedy in law against discrimination, but the appropriate legal framework will be put in place".—[Official Report, 9 February 1996; Vol. 271, c. 618.] It would also allow the Government to keep their election manifesto promise to seek to end unjustifiable discrimination wherever it exists". I look forward to the Minister accepting new clause 6 and demonstrating that that is one promise that the Government will keep.

Gordon Marsden (Labour, Blackpool South)

I have great sympathy with the hon. Member for Eastleigh (Mr. Chidgey) about new clauses 4 and 5. I pay tribute to him for bringing this important issue to the attention of the House. As he said, it is nonsense that the rulings that have been made in our courts—although they must abide by existing legislation—clearly discriminate against lesbians and gay men in partnership arrangements. I sympathise with the hon. Gentleman's objectives in tabling new clause 4 because, like other hon. Members, I have had constituency cases involving people who were clearly victims of age discrimination. Teachers, in particular, experience such problems. It is absurd that, as the Court of Appeal held in Smith v Gardner Merchant in 1998, the proper comparison for a claim under the Sex Discrimination Act 1975 is between a male and female homosexual, and where an employer can show that a lesbian and a gay man are treated equally badly, there is no case for sex discrimination. What we have, according to the present law of the land, is equality of misery or injustice, and clearly a Government who are intent on equality of opportunity and equal rights should not be prepared to countenance that for longer than is necessary. I therefore have enormous sympathy with the aims of the new clauses tabled by the hon. Member for Eastleigh. The question is: what is the appropriate mechanism within government for remedying that problem? It is well known—we should be cheerful about this fact—that increasing numbers of employers in the private and public sectors have introduced equal opportunity policies that include anti-discrimination terms for lesbians and gay men. That is to be applauded, but there will always be those who fall through the gaps. The survey to which the hon. Member for Eastleigh referred underlines the need for us to introduce legislation to deal with that problem. My hon. Friend the Member for Wentworth (Mr. Healey) referred to the Department for Education and Employment. In certain circumstances, it would be most appropriate for that Department to introduce legislation on this matter. Equally, it is important that, whatever the House decides, we send out a very strong message that hon. Members and the Government will not tolerate discrimination in employment on the ground of sexual orientation for longer than necessary. I shall therefore be looking to the Minister to comment in his reply on what he believes is appropriate. In Committee, he said that it was too early to be clear whether a legislative measure would he the appropriate way to proceed. I am in no doubt that the time for some legislative measure to proceed is well past. It is extremely important that this injustice is remedied. If we are to remedy an injustice, it is important that we have evidence on which to proceed. I shall look to the Minister to comment on what can be done in his Department to produce evidence that shows an awareness of this problem and therefore underlines the need for legislative activity.

Gerry Bermingham (Labour, St Helens South)

Does my hon. Friend agree that we must consider this matter not just in the employed sector, but in the professional sectors—whether it be in medicine or dentistry, at the Bar or in the Law Society—where discrimination on the ground of gender, as well as on other grounds, often occurs?

Gordon Marsden (Labour, Blackpool South)

I thank my hon. Friend for that intervention. I am particularly grateful to him for highlighting that point. That was precisely why I particularly approved of the intention behind new clauses 4 and 5. A range of issues in this area—not least ageism—should be addressed. I do not wish this debate to be seen as taking place in a ghetto. I agree absolutely that the professions have a particular responsibility in this area, which, in some respects, has been indifferently discharged. It is important that we ventilate this issue. I shall be looking for some assurances from the Minister on it.

Michael Fabricant (Conservative, Lichfield)

I align myself with the comments of the hon. Member for Blackpool, South (Mr. Marsden), although I shall mainly address my remarks to new clause 4, which concerns ageism. I suppose that I ought to declare an interest. My ex-bank manager, Ken Stevens of Lloyds bank in Brighton, said when I was 33 years old that I was a young whiz kid. Now, at the age of 48, I am just an old has-been. Nevertheless, this matter needs to be taken seriously; things cannot continue as at present, for three reasons. First, ageism is fundamentally unfair and immoral. It is the very issue that the House is here—and has been here for hundreds of years—to address. Ageism is quite simply wrong. The second reason is that older people have a lot to offer new companies—companies with fewer than 50 employees, about which we heard earlier, and large corporations, too. Mature people have not only staying power, but experience and solidity. I shall say more about that later. The real reason why I say that the present situation cannot be sustained is that we are facing a demographic time bomb. I shall cite a couple of statistics. It is estimated that, by 2000, one person in three in employment will be over 40 years of age. More worryingly, by 2025, if present trends continue, less than 20 per cent. of the population will be working. All the rest will be unemployed, enjoying leisure or students, so 20 per cent. of the population will be paying the tax and the benefits for themselves and 80 per cent. of the population. That is unsustainable, and we should think twice before we reject the new clause. In opposition, Labour Members also took the view that the position was unsustainable. I, too, am sorry that the Minister of State, Department of Trade and Industry, the right hon. Member for Makerfield (Mr. McCartney), is not here today, and I hope that he will soon recover; but, back in 1995, when he was Labour's employment spokesman, he promised to introduce legislation, when a Labour Government were elected, to make age discrimination illegal. That has not happened.

Gerry Bermingham (Labour, St Helens South)

rose—

Michael Fabricant (Conservative, Lichfield)

I will give way in a moment, but, in case the hon. Gentleman—my good friend in the corner— thinks that that remark was a fluke, I shall quote the Minister of State again. Before the 1997 general election, the Conservative Government blocked a private Member's Bill to make ageism illegal. The right hon. Gentleman said that the Government had made a serious miscalculation in opposing that Bill and that a generation that either had lost its jobs or feared unemployment expected Parliament to act. So here we are, two years on. The right hon. Gentleman is a member of the Government, but what do we see? Unless there is a change of heart, the Minister will oppose the new clause tabled by the hon. Member for Eastleigh (Mr. Chidgey).

Gerry Bermingham (Labour, St Helens South)

I agree that all those comments were made in the previous Parliament; I was there. Does the hon. Gentleman agree that any society that says that people who reach 50, 55 or 60—I notice some of my hon. Friends nodding sagely—are therefore barred from applying for jobs is a society that loses and wastes talent?

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman is absolutely right, and he does not speak only for people aged 50 or 55; he speaks for the nation. It is in the nation's interest to make ageism a thing of the past. Sally Greengross, the director general of Age Concern, said, Age discrimination"— this echoes what the hon. Member for St. Helens, South (Mr. Bermingham) said— is a national shame and should be outlawed. Action to eliminate it is essential. The Government must introduce legislation and not hide behind rhetoric. I hope that the Minister will do just that and not hide behind rhetoric. Earlier in the debate, I talked about my own experience, in which I, too, have found that older people offer not only maturity, but a calming influence. When my mother wants to irritate me, she comes up with German proverbs. I do not know why, because she was born in south Wales. When I went into business with a friend of mine, whom I have known since I was 16, she said, "Freundschaft und Brüderschaft machen keine Handelschaft." I think that that means, "Friendship and brotherhood make no businesshood." I do not think that there is a translation for "Handelschaft", but colleagues will know what I mean. Friendship and brotherhood do not necessarily make for a good business partnership.

John Bercow (Conservative, Buckingham)

My hon. Friend is developing a powerful case. Does he agree that it would be helpful if businesses followed the example of our institutions of further and higher education, which, on the whole, practise sound policies in relation to this matter? They do not discriminate against, for example, older people—a fact to which, I hope my hon. Friend recognises, I can testify by virtue of my own experience. My mother, who is a lady of mature years, graduated last summer with an honours degree in English.

Michael Fabricant (Conservative, Lichfield)

I am delighted to hear that. It was the previous Government's policy to ensure that people could be educated throughout all the ages of their lives. I thought that I was going to have to disagree with my hon. Friend because I thought, as other hon. Members might have done, that he was about to say that institutions of primary, secondary and higher education did not discriminate when employing teachers. My hon. Friend did not say that, but they do. The new clause would stop that. To carry on with my story of Freundschaft and Brüderschaft, my fellow director, a friend whom I had known since the age of 16, and I squabbled like two cats in a bag. Our small company expanded into a much larger company, employing several hundred people, and indirectly more than 1,000—if this Bill had been in place, we would have been strangled at birth and gone bust, never growing at all. I realised that some members of the company felt a little uneasy when, on one occasion only, my fellow director and I had fisticuffs in a corridor. We brought in John Ball—with whom I went out last night for a drink—then aged 64, who brought calmness, stability, wisdom, insight and maturity to the company. Had I been ageist, my company probably would not have survived. Certainly my partner, Mel, and I would not have survived, because we would have beaten hell out of each other, and most of our employees would probably have left. Older people have a lot to offer. In principle, the new clause is good. However, two matters bother me. I am not exactly sure how the new clause would be implemented. I note that it would require secondary legislation. I am not convinced that secondary legislation is a good thing. More and more legislation goes Upstairs and is passed almost on the nod. Journalists say that the House is being supplanted by Whitehall, and I believe that the Chamber is being supplanted by secondary legislation. I am a little concerned that, if the new clause were passed, it might leave a number of options open. My other concern relates simply to promotion and promotion prospects. If the new clause were law, could an employee who could not obtain promotion claim that that was due to ageism? That needs clarification. I must tell my Whip that, in the event of a Division, because of my concerns I will not vote for the new clause, but I shall abstain. I hope that the Minister for Small Firms, Trade and Industry, who has listened carefully, recognises that there is demographic time bomb, that the status quo is not an option and that, as the right hon. Member for Makerfield made promises two, three or four times immediately before the general election, the Minister has a moral obligation to support the new clause. He also has an obligation to support the new clause for the sake of British industry and the greater benefit of the nation.

David Borrow (Labour, South Ribble)

The issues raised by the hon. Member for Eastleigh (Mr. Chidgey), particularly on new clauses 4 and 5, fit fully into the Government's policy. They are, and should be, the Government's objectives. It is unfortunate that these areas of discrimination are not the responsibility of the Department of Trade and Industry, which sponsors the Bill. I shall be seeking some undertakings from Ministers. I want to deal particularly with discrimination in employment on the ground of sexual orientation. There have been major changes in the past 10 or 15 years. My judgment is that, if members of the public were asked whether people should be discriminated against in employment on the basis of sexual orientation, the overwhelming majority would say that it was wrong to discriminate. I remember the arguments that were advanced when organisations introduced equal opportunity policies. For a number of years, I was a member of Preston borough council, and, as chair of the equal opportunities committee, I was involved in the introduction of equal opportunities employment policy, which included provisions against discrimination on the ground of sexual orientation. When we discussed that issue 10 years ago, it caused a major row, and there was a big fuss about it. A few years later, when I was the chief officer of a tribunal, I drew up an equal opportunities policy, which included provisions on sexual orientation. It went through the annual meeting of the tribunal on the nod, and was accepted as what a good employer should do. We must recognise the fact that, in the past 10 or 15 years, many organisations in the public and private sectors have introduced policies to outlaw discrimination on the ground of sexual orientation. In that area, therefore, we are clearly moving with the grain. The hon. Member for Eastleigh mentioned the case of the two women who worked for the railways and the discrimination in that organisation. I am sure that he is aware that similar discrimination exists in the House. We cannot say that we have good employment policies in those respects. If it is not possible to use the Bill as the vehicle for the Government's policy objectives, I shall seek from Ministers an undertaking to use their powers to influence the public sector. It is wrong for any employee in the public sector to face discrimination on the ground of age or sexual orientation. They are employed and paid to do a job for the public, and they should not face any discrimination. I realise that legislation may be required to introduce regulations for the private sector, but I would look to the Government to introduce a code of best practice before doing so.

Gerry Bermingham (Labour, St Helens South)

Does my hon. Friend agree that the Government should set an example? In their employment practices, they must ensure that there is no discrimination on the ground of age or sexual orientation, and that no one in a profession is, by the nature of his or her employment, precluded from applying for promotion or advancement within that profession because of such discrimination.

David Borrow (Labour, South Ribble)

I agree with my hon. Friend that the Government should set an example. If there is a message that I want to convey to the House, it is with respect to new clause 5. The majority of homosexual men and women in employment do not need to bring their sexuality to the notice of their employers when they are taken on as employees. It gives some comfort to homosexual men and women to know that the organisation that employs them has a policy that will not discriminate against them, and that will give them some safeguards against bullying and discrimination in their employment. That is the most important aspect of new clause 5. I realise that Ministers have a problem with this, but I hope that the Minister's winding-up speech will be positive, and that, if the Government are not able to incorporate the new clauses at this stage, they will undertake to tackle the issues seriously between now and the next general election.

Graham Brady (Conservative, Altrincham and Sale West)

This has been an interesting debate, to which I shall contribute briefly, concentrating on new clause 4. I congratulate the hon. Member for Eastleigh (Mr. Chidgey) on the way in which he has presented his arguments, tonight and in Committee. I especially congratulate him on his avoidance tonight of one of the great traps, into which I fear my hon. Friend the Member for Lichfield (Mr. Fabricant) fell. I refer to the "demographic time bomb" argument. There is no danger of a falling out between my hon. Friend and me in that regard, although I did rather lose track of the German proverbs.

Michael Fabricant (Conservative, Lichfield)

So did Hansard.

Graham Brady (Conservative, Altrincham and Sale West)

No doubt, but I am sure that my hon. Friend's mother will provide any guidance that is necessary. I think that arguments based on demographic time bombs, skill shortages and the supposed need to tackle the issues because of perceived constraints on the labour market are entirely spurious. If companies cannot find employees, from whatever age group, they will naturally look elsewhere. That is one of the reasons why it is unnecessary to legislate in this regard. As the constraints on the labour market increase, along with shortages of labour and of skills among certain groups that may currently be benefiting in employment terms, companies will have no option but to look to older workers.

Michael Fabricant (Conservative, Lichfield)

I thank my hon. Friend—I say "hon. Friend" advisedly—for giving way to me. I, too, am a great believer in market forces, and I hate to intervene, not on my hon. Friend but in the free market. I fear, however, that the position is simply not as my hon. Friend has described it. Shortages occur from time to time, in connection with not just age but skill, and, for all sorts of reasons—illogically—companies do not take up the opportunities that are available. There is a lag. Although I think that by 2035 or 2040 the situation may be forced to rectify itself, I do not entirely share my hon. Friend's belief in the free market: I think that it will need a gentle nudge to overcome human prejudice.

Graham Brady (Conservative, Altrincham and Sale West)

My hon. Friend makes his point well. I could agree with a gentle nudge, but I fear that the new clause may constitute rather more than that. I fear that it may cause significant problems for employers and, potentially, for employees. Let me return briefly to a point that I tried to make in an intervention on the hon. Member for Eastleigh, which I think is also relevant to what has been said by my hon. Friend the Member for Lichfield. I admitted to ageism in my practice of choosing to employ older workers, and the hon. Gentleman admitted to having done the same. According to my reading of the new clause, his conduct would be prohibited, because the new clause seeks not only to make it impossible to discriminate on the grounds of someone's being older, but to make it impossible to discriminate on grounds of age. A good example is the policy of B and Q, which for many years has voluntarily exercised a policy of employing older workers because it regards them as loyal, steadfast and reliable. That policy in itself would be prohibited if the new clause were adopted. I strongly believe that employers should take an enlightened view. I think that they should employ people on the basis of merit, regardless of whether they consider them to be too young or too old. It is important that employers move in that direction. A gentle nudge may be required, perhaps through a code of practice—indeed, some exhortation may be appropriate—but some problems could arise from the legislative approach of the hon. Member for Eastleigh, and he needs to deal with them. I have mentioned companies that choose to employ older workers, sometimes for good reasons in particular circumstances. There may also be instances where the age of an employee is relevant. One could imagine instances where particular physical work needed particular physical strength or resilience, which may favour younger employees. In the acting profession, it may be appropriate to employ a young actress rather than an old, although glamorous actress in a particular role. In the modelling profession—I do not wish to dwell on the issue because the hon. Member for Eastleigh will become over-excited—

David Chidgey (Liberal Democrat, Eastleigh)

I am not getting over-excited. It is just that I suddenly got a flash of the possible history of the acting profession. Perhaps if we had followed the views of the hon. Gentleman, women would still be prohibited by law from appearing on the stage in this country.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to the hon. Gentleman. I think that he is leading me more into the territory of new clause 5, which I am not speaking to, and new clause 6, but he did not deal with those issues in his remarks on new clause 4. Perhaps he will return to the matter later in our proceedings.

John Bercow (Conservative, Buckingham)

Does my hon. Friend agree that, if a proprietor of a fitness or health club opted for a younger rather than an older candidate when choosing between different candidates of otherwise equal merits, he should not be chastised in law for so doing?

Graham Brady (Conservative, Altrincham and Sale West)

I have not given great thought to the merits of that case. As a matter of principle, the difficulties that are thrown up by the legislative approach in new clause 4 would intrude into many areas, and that may be one of them. Equally, in retail sectors—perhaps fashion—where products are being sold to younger people, it is clearly the practice to employ younger people; frequently, people working in that sector are younger. Employers choose to take on young people in shops that seek to sell goods to young people.

Michael Fabricant (Conservative, Lichfield)

There is a bit of stereotyping going on about not only age and sexuality, but the type of jobs that older people can do. In my speech earlier, I mentioned my partner, Mel. He subsequently left the company that I founded and collected his money. He then decided that he was getting bored and became a tennis coach; he is the same age as me: 48. He went through a course with the Lawn Tennis Association. I hope that my hon. Friend the Member for Buckingham (Mr. Bercow) is not implying that Mel could not do something physical at the age of 48.

Graham Brady (Conservative, Altrincham and Sale West)

I am sure that there are many physical things that one could do at the age of 48; I had not sought to imply that there were not. I do not know whether my hon. Friend the Member for Buckingham (Mr. Bercow) sought to imply that, but the fact that a man of 48 can work as a tennis coach suggests that such discrimination is not happening and that legislation is unnecessary.

John Bercow (Conservative, Buckingham)

My hon. Friend the Member for Lichfield (Mr. Fabricant) is probably not aware that I am a qualified tennis coach and that I received worthwhile instruction in the playing of tennis from a relatively elderly man, who was an exceptionally good coach, so I do not suggest that an older person cannot be a good coach. My point, which is a serious one, is simply that someone who runs such a club, or conducts a course in relation to which qualified people are needed, should be entitled to exercise his judgment as to what factors are material in the choice.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful to my hon. Friend for clarifying his views, and I suspect that there is not that much distance between him and my hon. Friend the Member for Lichfield on the point. It is important to deal with situations where someone might be a good candidate—apart from the fact that he or she is approaching retirement age and there would be insufficient time for training. I have no difficulty with the spirit of the new clause, but the hon. Member for Eastleigh has not addressed those factors. In the City, certain types of employment are appropriate to younger, rather than older, people. In such situations, I would be regarded as too old for many jobs.

Julie Kirkbride (Conservative, Bromsgrove)

Surely not.

Graham Brady (Conservative, Altrincham and Sale West)

I am grateful for my hon. Friend's expression of disbelief, but in some City occupations it is considered that someone aged 30 is too old and ought to move on to other occupations in the financial sector. In addition, there may be difficulties with military and police recruitment, where age limits are regularly imposed. Even the Government's own minimum wage regulations accept the principle of different pay according to different ages. I can understand the embarrassment of Ministers at the possibility that they will be invited to agree to new clause 4, which may be in accordance with their manifesto pledge but which will directly contradict earlier legislation implemented by the Department. With good will on both sides, some arrangement could be made to remove the Government from a difficult situation of their own making. I endorse the spirit behind the new clause introduced by the hon. Member for Eastleigh, but I fear that the direct approach that he is advocating is not entirely appropriate and will cause difficulties. However, I commend him for his efforts.

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

I support the new clause moved by my hon. Friend the Member for Eastleigh (Mr. Chidgey). Discrimination must be outlawed firmly; surely no one could disagree with that contention. In Committee, it became clear that many accepted that unfairness was intolerable. However, on age discrimination—as my hon. Friend the Member for Eastleigh has mentioned—we have had an about-turn from the Government. Instead of having legislation—as they promised before the election—the Government have backed away with the weaker alternative of a code of practice; something that many, including John Monks, the general secretary of the Trades Union Congress, believe will not be effective. Legislative difficulty is no excuse in such a matter. On that premise, we would still have slavery in this country. Equally, we would not have passed race and sex discrimination legislation. These matters are difficult to address, but we have proved that they can be addressed. In this case, they must be addressed. The issue will not go away, and action will have to be taken sooner or later. I do not wish to be accused of supporting the hon. Member for Lichfield (Mr. Fabricant); it would damage my reputation with the Liberal Democrats. However, reference has been made to the demographic time bomb. By 2000, 35 per cent. of the labour force will be 45 or over. By 2010, it will be 40 per cent. A recent survey in The Sunday Telegraph found that, 20 years ago, the employment rate among 55 to 64-year-olds was 84 per cent; it is now down to 58 per cent. The situation is scandalous, and in general people accept that there is a problem. It is the qualifications and suitability for a job that matter, whether a person is young or old. There have been two recent examples of attempts to legislate on the subject, the first of which was the Employment (Age Discrimination in Advertisements) Bill, introduced by the hon. Member for Ilford, North (Ms Perham). It was not adopted. More recently, last week, my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) promoted a short Bill entitled the Age (Prevention of Discrimination) Bill. In presenting it, my right hon. Friend said: Costly training, acquired skills and valuable experience are all being wasted. He was talking about older people who have been trained and yet are still not employed. There is an Act in place in the United States. As my right hon. Friend said: job losses in the United States from the delayering of businesses"— in factories that would be called redundancy—

Gerry Bermingham (Labour, St Helens South)

Downsizing.

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

I thank the hon. Gentleman. My right hon. Friend said that job losses in the United States from the delayering of businesses—as it was called in the 1980s—were more evenly spread across age groups than in this country". —[Official Report, 23 March 1999; Vol. 328, c. 175–76] In Britain, however, downsizing usually involved older people. Age discrimination gives rise to tremendous costs. The Employers Forum on Age estimates that it costs this country £26 billion a year. In The Guardian of 18 March, Barbara Nemeth described what happened last year when she was put out to grass by a social work organisation that prided itself on its human resources. She had been involved in child protection, in which accumulated experience is surely of value; yet, despite being an experienced occupational therapist and family therapist, she was turned out of work. Barbara Nemeth wrote that her manager had wanted to keep her, but higher management insisted she had to go on the grounds of her age. Canada provides another example, which covers all the—

Gerry Bermingham (Labour, St Helens South)

It is estimated that, in 40 or 50 years, people will live to 130. Indeed, my son told me the other day that he was looking forward to his 140th birthday, which gave me a heart attack on the spot. Does the hon. Gentleman agree that with such projected longevity, it is time that we rethought all our employment policies so as not to waste the experience and knowledge that comes with age?

Brian Cotter (Liberal Democrat, Weston-Super-Mare)

I more than agree. In some Canadian provinces, one's date of birth is classed as personal and private information. Similarly, one's religion, ethnicity and sexual orientation are not considered relevant to employability. In the interests of brevity, I shall say no more about that aspect, but I must tell the Government that the issue will not be lost, but will be brought up more and more. The Liberal Democrats will certainly want to draw attention to it. New clause 5 is about sexual orientation. This is not the first time that such a clause has come before Parliament. In June 1998, Baroness Turner introduced a Bill in the other place, and Baroness Blackstone, on behalf of the Government, said that they supported the principle but were waiting for a report from the Equal Opportunities Commission. The EOC reported more than four months ago, recommending that there should be legal protection against discrimination for lesbians and gay men. The Government were waiting for that report; it is now in front of them. The Government have clarified the position. In Standing Committee, the Minister for Small Firms, Trade and Industry said that they were committed to considering the report's recommendations, and added that it was too early to be clear whether legislation would be appropriate. Several other statements made in Committee would support my case. Let me turn to sexual orientation. A recent Stonewall survey found that 48 per cent. of respondents had experienced harassment at work from which they had no legal protection. That is a sorry tale. A survey in 1995 found that one employer in three was less likely to employ an individual whom he knew to be lesbian or gay. Official tolerance of such discrimination is an affront to civilised values. I was shocked when, in preparing for debate on this issue, I learned for the first time that such discrimination existed. The Government must not tiptoe around the sensibilities of bigoted employers. They must recognise that hard working and talented individuals are open to discrimination. They should not have to wait further for long-overdue employment protection. The legal situation is a ludicrous mess which should be cleared up. The Government have ratified the International Labour Organisation's convention 111 on discrimination. They have therefore undertaken to declare and pursue a national policy designed to promote … equality of opportunity and treatment … with a view to eliminating discrimination. The Government commendably included provisions on this matter in the Scotland Act 1998 and the Northern Ireland Act 1998. However, they have done nothing to create employment rights for lesbians and gay men in England. I could say much more and give many more examples, but as it is late, I simply urge the Government to accept our new clause. There is absolutely no reason why they should not.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

The new clause would outlaw discrimination on the grounds of sexual orientation. I was proud to sponsor Baroness Turner's Bill when it came to the House of Commons during the previous session of Parliament, although the pressure on private Members' time meant that it was not afforded a Second Reading. I pay tribute to my hon. Friend the Member for Eastleigh (Mr. Chidgey) for the way in which he introduced the new clause, and to others who have spoken tonight and in Committee, including Labour Members. A lot of work has been done by Lesbian and Gay Employment Rights—LAGER—to battle against the vacuum of legal protection for lesbians and gays. In addition, Stonewall has been active, and I pay tribute to that organisation and thank it for its briefing on this matter. People's lives are being destroyed all the time. I read recently of the teacher, Shirley Pearce, who took her case to an employment tribunal. Having taught for 20 years in a school, she was outed as a lesbian and was harassed by her pupils. She was not given adequate protection by the school, but the employment tribunal was unable to rule because it was deemed that a lack of protection against harassment on the grounds of sexual orientation did not constitute sexual discrimination. Time and again there is a problem when people seek to use sex discrimination laws for protection but find that the courts cannot provide it. There is a legal argument for plugging the gap. The cases that come to court require courage from those concerned, as their cases are dealt with very publicly. I am sure that the cases that we know about are only the tip of the iceberg. I see no difference in terms of human rights, and little practical difference, between discrimination against someone on the grounds of sexual orientation and discrimination against someone on the grounds of gender or race. We see things happening in employment every week that would be deemed intolerant if they were directed against people who were Jewish or black. This Government and previous Governments have acted in such cases, and I can see no reason why they cannot act now. 9.30 pm Stonewall has launched an Equality 2000 campaign. It requires various campaign objectives to be met in order that lesbians and gay men enter the new millennium as free and equal citizens. One of those objectives was equal protection from discrimination in the work place. In December 1997 I was privileged to attend a Stonewall lecture given by the eminent human rights barrister, Peter Duffy QC, who tragically died some weeks ago. He pioneered the promotion of lesbian and gay rights in the European courts. In a superb lecture, he was optimistic that the European courts would find a way to provide equal rights for lesbians and gay men in employment law in this country, with especial regard to the Grant case and the Perkins case. He lived to see those hopes dashed, but there was cause for optimism at the time of his death that this Parliament will provide employment rights for lesbians and gay men. It is incumbent on the Government to ensure that such rights are available in this Parliament, because in that way they could deliver their manifesto commitment to end unjustifiable discrimination wherever it exists. That should happen before the next general election. In Committee, the Minister rightly said that the Government have consulted on the issue of age discrimination and that they have made proposals for codes of practice. However, it is hard to see that any progress has been made in the first two years of this Government on the possibly more significant case—it is difficult to rank such things—of discrimination against people on the grounds of sexual orientation. I have seen nothing from the Department for Education and Employment, which could take the lead in such matters, and the outside world is moving ahead of the Government. Before I was elected to Parliament, I steered through the council of the British Medical Association a wide-ranging equality provision that would outlaw discrimination in the medical profession on the grounds of sexual orientation. It is a model for others. The public and private sectors are now waiting for the Government to act; they have an excellent opportunity to do so tonight. During consideration of the Sexual Orientation Discrimination Bill in June 1998, Baroness Blackstone reminded the other place that the White Paper "Fairness at Work" proposed reducing to one year the length of time which an employee must be in work before gaining protection from unfair dismissal. It is hard to imagine circumstances in which an industrial tribunal would find sexual orientation fair grounds for dismissal". That is not the case. People are still being sacked on the basis of their sexual orientation in cases in which, if the dismissal was based on grounds of gender, it would clearly be sexual discrimination; and if the dismissal was on grounds other than sexual orientation, there would be a case for unfair dismissal. Baroness Blackstone added that the Government were committed to giving serious consideration to the issues raised by the Bill. Consideration is all very well, but people are anxious to see action and the new clause provides an opportunity for the Government to act. Baroness Blackstone added that she looked forward—as my hon. Friend the Member for Weston-super-Mare (Mr. Cotter) said—to the report of the Equal Opportunities Commission, and that she hoped that Baroness Turner would accept that it was reasonable to await the final views of the specialist equal opportunities body. It reported four months ago that there is a need for protection in the law—which could be achieved if the Government were to accept new clause 5. She also said: the Government are committed to looking seriously at the issues raised in the context of the wider review of equality legislation."—[Official Report, House of Lords, 5 June 1998; Vol. 590, c. 655–57.] Nearly a year later, we have still to find out what those sentiments mean. We hear much about thinking seriously and consideration but there is no legislative action. It is not only a question of unfair dismissal. Under the Bill, if one has been employed for more than a year, one can claim that dismissal is unlawful, but there is also discrimination in recruitment and promotion. That is not illegal if based on the grounds of sexual orientation and difficult to bring to court because it is difficult to prove why one has not been employed. There is also the problem of harassment on the ground of sexual orientation and the failure to deal with it. The Minister may know the case of Burman v. Trevor Page, in which the employer dismissed the victim of the harassment, not the perpetrators. That was thought fair. He will know of other cases that I do not have time to expound. I hope that he recognises that the Government's record leaves a lot to be desired. In passing another Act that dealt with equal rights, the Human Rights Act 1998, the Government rejected an amendment to put sexual orientation specifically into the provision relating to article 14 for British courts to use. No action has been taken on discrimination in the armed forces, other than an open-ended review. The time is now right. I hope that the Government will accept the amendment and deliver equal rights tonight.

The rest of the debate is in Hansard.