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Mr. Byers: My approach is that if good ideas that can improve the Bill are put forward in Committee--from whichever party they come--we should try to incorporate them on Report. This may well be an example of that happening. It is good practice and one which I intend to follow so that we end up with better legislation.

I hope that Government amendment No. 59 and new schedule 2 strike a careful balance between the needs of regulation and the regulated. I am sure that the majority of bureaux will welcome the modernisation of record- keeping and inspection powers and the up-to-date safeguards that we are putting in place while ensuring that we, as a Department, exercise our inspection powers.

This is a good opportunity to pay tribute to the majority of private recruitment agencies. They play a key role in meeting the demand for flexible and multi-skilled staff. They provide hirers with the means of coping with fluctuating demand, as well as providing specialist skills in recruitment. They also help find work for many people who might otherwise be unable to participate in the labour market. Employment agencies can play a valuable role. Indeed, the industry is one of the economy's success stories. It has grown continuously in recent years. Most measures show that it has more than tripled in size since 1992, and provisional figures for the third quarter of 1998 show growth of more than 20 per cent. over the previous year.

We believe that the existing framework of regulation no longer meets the needs of the industry or of its clients and therefore needs to be changed. There is much good practice and much that the industry should be commended for. We are wholly committed to maintaining flexibilities in the labour market, but underpinned by minimum standards for those in work. However, its role can continue to expand only if it is based on fair and non-restrictive terms applying to both hirers and workers.

I am pleased that, when we introduce new regulations to underpin this measure, we shall be removing three sets of regulations and replacing them with one set. We shall see a number of regulations fall by the wayside. There will be an overall reduction in the amount of regulation as a result of the proposals that we are bringing before the House.

Mr. Bercow: The Secretary of State's last point is of particular interest. In the light of the prospective reduction in regulation that he envisages, will he be a little more specific and tell us precisely what impact it will have on the net figure of 2,380 additional regulations that have spewed forth from the Government since 1 May 1997? What is the new figure? Will the right hon. Gentleman open Pandora's box and tell us?

Mr. Byers: Not in the precise terms in which the hon. Gentleman invites me to respond. However, in the final three years of the Conservative Government--I will

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remind him of the figures because they should be placed on the record--we saw more than 10,000 regulations introduced.

Mr. Bercow: That was Hezza's fault.

Mr. Byers: It may have been the fault of the right hon. Member for Henley (Mr. Heseltine) as President of the Board of Trade.

We shall see a significant reduction in regulation. We shall see three sets of regulations with seven schedules reduced to one set with four schedules. There will be a relatively significant reduction in the number of pages of regulations, from 22 to 18. We are moving in the right direction. Instead of regulation escalating all the time--this applies to Governments of our persuasion and also to those of Conservative persuasion--at least with this measure we are beginning to see a reduction at long last. I hope that this is the beginning of a substantial reduction in the pages of regulations, the sets of regulations and the schedules that implement regulations.

Mr. Phil Woolas (Oldham, East and Saddleworth): It may be worth while to point out, for the record, that it was not only the right hon. Member for Henley (Mr. Heseltine) who oversaw the deregulation unit. Also involved were the right hon. Member for Horsham (Mr. Maude) and the then hon. Member for Tatton, Mr. Hamilton. I wondered whether the hon. Member for Buckingham (Mr. Bercow) would shake his head so vigorously given that information.

Mr. Byers: When the hon. Member for Daventry (Mr. Boswell), who leads for the Opposition on these matters, was a Minister with responsibility for corporate affairs in the Department of Trade and Industry, he had a pretty bad record on regulation. We will reveal the figures in due course. Conservative Members will have to wait a while before we can open that particular Pandora's Box. I am sure that we will look forward to that with equal pleasure.

As I have said, the Bill begins the reduction of regulation. We want to do so in a way that modernises the approach to employment agencies. We do not want to create a revolution in the way in which the recruitment industry operates. The draft consultation document shows that we are seeking, in the main, to clarify existing standards and to eliminate those that are outdated.

Mr. Ian Bruce: I am extremely surprised that the Secretary of State should say that there will be onlya slight amendment to the regulations. Surely he understands the principle that interfering with a contract between an employment agency and the person doing the hiring of either permanents or temps, and banning temp to permanent fees, wholly undermines an industry which has 200,000 permanent employees and ensures that 900,000 people are in temporary work. We are seeing a fundamental change which could lead to the abolition of employment agencies.

5 pm

Mr. Byers: I think that I mentioned in my introductory remarks that I am leaving my detailed comments on those matters to when I reply to specific amendments. That seems to be appropriate. I shall respond when I have heard the arguments of Conservative Members.

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We have produced draft regulations--and, indeed, are consulting upon them--because we have no doubt that improvements can be made. The consultation is genuine and if people can show me evidence of difficulties along the lines of those to which the hon. Member for South Dorset (Mr. Bruce) referred, I will be prepared to look again at our approach to this matter. I do not have a closed mind and we have an opportunity to create a framework within which employment agencies, which have a crucial role to play, can work well and honestly in the future. I believe that we can achieve that and I want to achieve it together, rather than seek divisions on what is a genuine approach to the way in which we can move forward.

I know that the recruitment sector has a number of concerns. I hope that I will be able to offer some reassurance that our proposals are sound and will provide a basis for a strong and confident industry, which can look forward to a prosperous future. Many people will see opportunity in our proposals and I look forward to hearing their views, as well as those of Conservative Members and of hon. Members generally. I am sure that, based on those views, we will be able to introduce regulations that support the industry. I await with interest comments from Conservative Members on their amendments.

Mr. Boswell: I thank the Secretary of State for moving his amendment and I agree with the way in which he proposes to handle this rather complex group of amendments, which consists of a Government amendment, a Government new schedule and six amendments tabled by Conservative Members. If he has undertaken any detailed textual criticism of those amendments, he will know that they all have slightly different provenances. Nevertheless, all refer to an issue of considerable concern.

For reasons that may become apparent, I am becoming increasingly familiar with the ways of lawyers. It was perhaps a tribute to the Secretary of State's skills in that respect that he was able to move his amendment to what is undoubtedly the most contentious clause of the Bill in tones of such sweet reasonableness. We will probably have to take him at his word and answer him in his own terms.

I should record my considerable concern about the proposed means of proceeding. The Government are bent on consulting on new regulations. It would be welcome if, as a result, they turned out to be simpler, briefer and less intrusive on the activities of employment agencies, but on Tuesday of last week we had the remarkable experience on opening our post of being invited to consider 60 pages of a pre-consultation document, which was evidently delivered to us in circumstances of great secrecy and privilege. There was no realistic possibility of our studying the document before our proceedings began.

I should say at this point that the whole House will be waiting for the contribution of my hon. Friend the Member for South Dorset (Mr. Bruce), who knows about these things and will no doubt have a great deal to say on the details--indeed, I defer to his knowledge of the matter.

Be that as it may, the infelicity about consultation--it would have been nice if we had had it in time for us to think about the results before we debated them--has been compounded by the Government's introduction of new

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schedule 2. There may be other occasions on which we would want to discuss the general handling of the Bill, but the new schedule runs to three pages of fairly closely typed print and it had been introduced without explanation, although the Secretary of State has now provided that. We are pleased to have had his explanation and I am even more gratified that it was coincident with my feeble understanding of what was intended.

We think that we know what we are about; as the Secretary of State said, it has to do with inspection and evidence. It is worth flagging up the point that it is becoming a habit for the Government to take the meat out of clauses, use them as paving measures and put all the meat into new schedules. New schedule 2 includes the meat of what we have been debating plus the new inspection provisions.

Perhaps we need not debate that method of drafting now, but there are concerns of substance and procedure relating to the new schedule. I was a little concerned when the Secretary of State said that it would make matters easier for agencies. When one hears that, one is always a little suspicious.

An example that might be congenial to the Secretary of State--and to his predecessor, the right hon. Member for Hartlepool (Mr. Mandelson)--is a chilling description I once heard of a visit late at night by the then nationalist South African police, which was described as the "friendly knock" of the police. I am sure that the Secretary of State will want to reassure the House that his inspectors do not work on that basis.

The schedule embodies and extends new powers. Even if the Secretary of State has the greatest of good will, the powers may cause difficulties, particularly where agencies may not be sympathetic to the conduct of the legislation or anxious to be entirely compliant with it or the wishes of inspectors.

The Secretary of State is a lawyer, and I am not, and he has access to advice that I do not have. On Second Reading, he issued a certificate to the House that the provisions of the Bill were compliant with the European convention on human rights. He referred to convention cases that informed Government decisions. He has now tabled a new schedule, with direct implications for human rights.

I did not participate in the debates on the Human Rights Act 1998, and I am not clear whether the new schedule is automatically certificated as compliant with the convention, whether it is deemed to be compliant or whether it has not been considered. Clearly, the Secretary of State would like it to be compliant, as would the Opposition. However, the matter should be explained to the House.

Government amendment No. 59 has some superficial similarity to some of the amendments that we have tabled to delete subsections of clause 28. However, the Secretary of State proposes the insertion of an even bigger schedule. That schedule has arrived at the last minute, and the gap between the conclusion of the Committee and Report has been sadly compressed. We have not had enough time to table probing amendments to the schedule; nor have we had the opportunity to consider fully the matter with our advisers, who might wish to reconsider and make suggestions for another place. The Bill passes from our control shortly, but that does not mean that the issues should not be addressed.

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Paragraph 3 of the proposed schedule refers to classes of cases that the Secretary of State may prescribe as exceptions. However, no reference is made to any criteria by which the Secretary of State should decide the cases. It will be important--if only because he will wish to avoid judicial review--for him to do so on a proper, procedural and principled basis. He might wish to explain to the House the kind of criteria that would be appropriate.

Paragraph 3(c) could abolish what is known in the trade as temp to perm fees, and would drive a coach and horses through the custom and practice of the operation of employment agencies and businesses in this country. I shall return to that when I deal with the amendments that my right hon. and hon. Friends and I have tabled.

The Secretary of State referred to inspection and new powers. It is characteristic of the drafting of this legislation that paragraph 4 of new schedule 2 inserts new subsections in the Employment Agencies Act 1973, one of which provides a power to

No restrictions are prescribed. There is no reference to entry at any reasonable time--not necessarily on notice--or entry with any reasonable force that might be appropriate to secure access. I think that there ought to be such restrictions. Nor is there any requirement for an inspector who has had to force an entry to make good any damage that he may have caused.

Paragraph 4(3), interestingly, states that an officer

That is a reasonable requirement if the person knows, but it is not very reasonable if the person does not know. I feel that there should be a safeguard to cover those who, in good faith, may not have such knowledge. At present, the requirement applies to

    "any person on the premises",

not any person who is likely to have the information in question. That could be a cleaning lady, a tea lady or some other member of staff. Indeed, in some cases data protection legislation might make it impossible for a person to release the information.

The proposed subsection (1B)(c) of section 9 refers to an officer having "reasonable cause to believe" that premises are being used

The Secretary of State mentioned that extension of powers, and I understand it. I know that, as a term of art, officers are expected to act reasonably at all times, but I am not sure whether an officer should be required to make a formal declaration to that effect, or whether it should be assumed, if he goes on to look at other premises, that he has reached such a conclusion. I suspect that, as a safeguard in terms of human rights, he ought to be required to make a formal statement.

Let me make two more points about the new schedule. Both have been made in earlier debates, but I think they are important. Paragraph 4(6) refers to a restriction on the

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disclosure of information. That is a widening provision, in that the release of information would no longer be tied to matters

    "pursuant to or arising out of the Act".

I am not sure that that is very safe. In Committee, the proposal coincided with press reports suggesting that, for example, the Child Support Agency and the Inland Revenue would be able to work more closely together.

There are some important safeguards, in terms of civil liberties, relating to the release of information by one Department to another. I think that, as a lawyer, the Secretary of State will want to ensure that those provisions are considered properly, and are proportionate only to any particular need.

My final point about the new schedule relates to the offences provisions, which have also been referred to in earlier debates. The Government want to increase the qualifying time from within six months following the offence in question to either


    "within 6 months after the date on which evidence sufficient in the opinion of the Secretary of State to justify the proceeding came to his knowledge."

I shall not repeat the arguments that have already been presented, but I feel that three years would be a bit long in some cases. Evidence might be destroyed, and difficulties might be caused even for parties acting with good will.

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