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5.15 pm

Let me now deal with the Opposition amendments. We are not at all happy with the current drafting of clause 28. Amendment No. 1 proposes the omission of lines that redraft the Employment Agencies Act 1973, because we prefer the status quo. We do not think that the Government have yet made out a case for change. The 1973 Act was in itself a departure from the norm of non-partiality in business activities--the general principle that particular business sectors should not be subject to legislation unless there is a problem that must be dealt with.

The Government of the time were prepared to countenance legislation that imposed specific restrictions in relation to agencies, with which the Secretary of State is familiar. I shall not reopen that debate. Although some of his hon. Friends might have disagreed had they been present, the Secretary of State implied that employment agencies and businesses had conducted themselves well, that they were useful and that he wanted to help them; and I think that the legislative umbrella under which they operate has itself worked reasonably well. The Secretary of State owes it to the House to say a little more about why the Government consider this change necessary, especially as it will further restrict the activities of employment agencies.

The following three amendments are all designed to curtail what might be termed over-enthusiasm with regulations. Amendment No. 36 provides for

"regulating the conduct of hirers in paying appropriate fees to such agencies and businesses".

It is less about the fees themselves than about the way in which hirers go about their business. Is it "oppressive", as I think the lawyers would say? Is it unfair? Or is it the reasonable conduct that a well-founded, properly run agency should be undertaking?

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Amendment No. 2 takes a slightly different approach. It deals with the purpose of regulations, and suggests that they should be restricted to

"the purpose of protecting employees' rights and not otherwise to interfere with the commercial relationship".

The Bill provides for such interference. If the Secretary of State can make out a case for saying that, without such provision, it would be impossible to safeguard employees' rights, and that, in the circumstances, it is reasonable, we shall consider it; but subversion of the basic operation of the market is something which, given his rhetoric, the Secretary of State appears not to want. Certainly Conservative Members do not want it.

Amendment No. 35 stresses the importance of preventing regulations from prejudicing

"the ability of the private recruitment industry to continue to expand its role in the labour market."

It is a useful amendment. Indeed, those are useful agencies, and they should not be seen as being unduly restrictive. The Secretary of State says that he wants to help them; well, he should put his money, or his regulations, where his mouth is.

Amendment No. 3 deals with the main issue: an agency's ability to claw back recruitment fees if employer and employee conclude a private arrangement for permanent employment--the so-called temp to perm arrangement. Such fees are analogous to the fee that would have been levied had the employer taken on the employee from an agency on a permanent basis in the first place. My hon. Friend the Member for South Dorset is an expert; but I cannot see that it is wrong to secure that in principle. The two cases are virtually the same. It is not a restraint of trade. The Government may, even if they do not intend to, preclude that arrangement and they should not do so.

The thrust of our concerns is summarised in amendment No. 34, which, in effect, subjects any subsequent regulations to the affirmative resolution procedure. I have mentioned our considerable disquiet about the way in which the legislation was chucked atus. Now that there will be consultation, there are opportunities for the Government to redeem themselves.

In fairness to the Government, in other areas, they have shown a readiness to listen to proposals, either voluntarily, or as a result of proposals that we have put to them. For example, the affirmative resolution procedure will be invoked in relation to clause 3, which deals with black lists, on which we spent some time last night. The Government have also promised that the affirmative resolution procedure will be used in relation to clause 16.

Apparently, the Government are no longer set against the use of that procedure. I agree with that because these are important matters of principle to get right. We say modestly that, even if we are not the world's greatest experts on these matters, we have an important lay role in saying that legislation does not seem to be quite right and that, if the Government want to get it right, they should look at it again.

I have set out an initial response to the Government's new schedule and expressed some concerns about the powers that it sets out. The amendments set out several ways in which the danger, as we see it, of restricting and regulating the important employment agency sector out of sight and out of existence could be curtailed.

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We have noted the Secretary of State's rhetoric, but we remain deeply suspicious of it--the alleged intentions are not consistent with what is being delivered in the Bill. We await not only the contributions of other hon. Members, but the right hon. Gentleman's response on the amendments because, at the moment, we are far from satisfied and may have to put that dissatisfaction to the test.

Mr. Ian Bruce: I have seldom had a speech trailed so thoroughly. I hope that I will not disappoint colleagues, who have been told of my supposed expertise.

I repeat what I have said in all such debates: I have a declaration of non-interest, although people may believe that I have an interest. I should tell the House exactly the position. I ran an employment agency for 12 years. It is a limited company which, until the licensing of employment agencies was cut, had a licence. It is supposed to be an employment agency, but has not traded for the 11 years that I have been a Member of Parliament.

Although I advised the Federation of Recruitment and Employment Services until the general election, I am not an adviser to that organisation now. I think that I am right in saying that I do not have a single penny of income coming from any employment agency source. I hope that, in making that clear, I am also showing that I have some 12 years' experience of trying to make my living running an employment agency. That is important information.

We started consideration of clause 28 in the darkabout what the Government intended. They had had consultations with a number of organisations, including FRES. Indeed, FRES was quite calm about what was happening because it did not believe that the Government intended to implement the policy in the Labour 1983 manifesto, which was to abolish employment agencies as a matter of urgency. When one hears the rhetoric coming from Government, one is encouraged to believe that new Labour recognises that employment agencies and employment businesses are part of the flexible labour market that it is now supposedly signed up to.

Mr. Michael Fabricant (Lichfield): There has been talk about the history of the legislation. Does my hon. Friend recall that my pair--if we had pairs--the right hon. Member for Manchester, Gorton (Mr. Kaufman), referred to the 1983 Labour manifesto as the longest suicide note in history? Does my hon. Friend think that the Bill will turn out to be the same?

Mr. Bruce: Unfortunately, the Labour party has become adept at not telling people what its real intentions are. It is called spin; it is good at it. Many of us will learn from it when it comes to the next general election. It has been careful not to sign suicide notes, but that does not mean that there is no conspiracy. However--I hope that the Secretary of State is listening--I was pleased with what he said about genuinely consulting on the Government's document.

We did not know what the Government's intentions were. We had a clue. It was in a press notice that was dated 25 September 1998 and released by the right hon. Member for Hartlepool (Mr. Mandelson) when he was Secretary of State for Trade and Industry. It said that, in the modernisation--a wonderful word, but I always prefer

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"improvement"; we are always keen to see improvement and everything can be improved--of employment agencies, issues to be covered included the

"need to ensure proper standards on reference checking",

no one has any worries about that,

"rules requiring agencies to pay workers promptly and fully",

again, one has no arguments about that; it was already covered in the previous legislation,

"and an obligation on agencies holding clients' money to safeguard it properly."

Who could argue with those things? A few cowboys might have been worried about that, but, clearly, FRES and all employment agencies that were not cowboys and were running their businesses properly were not concerned at all.

The press release said that we would see a consultation document by the end of 1998. As my hon. Friend the Member for Daventry (Mr. Boswell) pointed out, that consultation document arrived on the Tuesday morning that I made my initial speech on clause 28. We did not have the opportunity--perhaps during one of the pauses for breath while I read the document--to see some of the things that were in the consultation document. In fact, it stood the Employment Agencies Act 1973 on it head.

The House should understand that that Act was a Conservative private Member's Bill, but that the regulations that came from the Act were enacted in 1976 by the then Labour Government. I have a little advice on that. The Minister at the time was Harold Walker, now Lord Walker of Doncaster, who served as a distinguished Deputy Speaker of the House. I understand that he put his reputation on the line because he had understood what the industry was saying and resisted old Labour's push to get him to interfere with the proper working relationships in the industry. Perhaps he was new Labour, even back then. He decided that it was not an industry which we should attack, but one that should flourish.

Amendment No. 35 includes the somewhat strange words:

"Provided that regulations under this section shall only be made in such a way as to avoid prejudice to the ability of the private recruitment industry to continue to expand its role in the labour market."

Those words come directly from the draft consultation document. That is confidential, but I hope that the Secretary of State will not object to its words being used in the amendment. That is what the Government say they want to do, but, under the regulations--certainly, the draft regulations seem to suggest it--they will close the industry, or at least damage it seriously.

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