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The report suggests that such discrimination is most prevalent in small and medium-sized businesses, and it offers two possible reasons for that: first, that such businesses may not use standardised application forms; and secondly, because SMEs tend not to have separate human resources departments with distinct staff whose job it is to ensure that application forms are anonymous. In a business where only two or three people work, for example, it is not at all likely that that would be practical. Although the hon. Lady's amendment is a genuine attempt to deal with this issue, it does not contemplate the possibility that in certain circumstances it may be necessary, and indeed beneficial, to take protected
characteristics into account-for instance, for positive action. We will therefore all have to consider what the appropriate policy response is.
The hon. Lady talked about work being done to combat subliminal discrimination-which caused a good deal of amusement to the hon. Member for Shipley, as I am sure she can imagine. We know about that, too. The current edition of the Incomes Data Services Diversity at Work publication says that Ernst and Young has found a learning tool that demonstrates its decision makers' unconscious bias, and how that works. The training that it has piloted has led to a reduction in the gender and ethnicity disparity in the firm's performance rating. Thus good practice of that kind can play a role. Although we have looked for, and found, race discrimination in a new place, that does not necessarily mean that we need a new law to match it. We have not looked for it in order to do nothing about it when we have found it, however, and I invite the hon. Lady to withdraw her amendment on the basis that the taskforce is the best mechanism to drive forward whatever we need to do to get rid of that completely unacceptable discrimination.
Like our new clause 40, new clauses 21 and 22 would prohibit the use of pre-employment questionnaires in specific circumstances, but we have discussed the essence of this, and the Opposition new clauses do not go as far as our new clause, and do not give the protection that disabled people need, because they make no provision to bring employers to account. There would have to be a tribunal hearing, but just declaring something unlawful does not take the matter very far. Our proposal backs that up by reversing the burden of proof at the tribunal. We therefore think that our new clause is better and stronger; we do not think there is much between our proposals, but if the Opposition were to see fit not to press their proposals to a Division, we would be very content.
Amendment 70, tabled by the hon. Member for Shipley, is intended to test the reasoning behind the pay secrecy clauses. Clause 74 is intended to ensure protection against victimisation for employees who discuss their pay with colleagues when they are not generally contemplating a claim as such, but want to find out if differences exist that are related to a protected characteristic necessary to help get better gender pay transparency, and also to protect people when they try to find out whether they are being discriminated against in pay terms.
Rival amendments have been tabled, because the hon. Member for Shipley wants this clause in the bin whereas the hon. Member for Hornsey and Wood Green wants to make it wider. Her proposal gives us a few causes for concern, because she would like to ensure secrecy in discussions with third parties as well as with fellow employees, and that could include a direct competitor. There could be very sound reasons, quite unrelated to discrimination, why employers would not want their levels of pay to be disclosed to a competitor, who might undercut them, undercut their margins or offer the employee more. Protecting a person who takes such an approach would go well away from the aims of the legislation, which are about allowing everyone to know what they are being paid. We do not think it is necessary, as she does, to include a provision to protect someone who seeks advice from a third party. If that third party
is a trade union, section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 protects that kind of conversation, and if it is a lawyer, the conversation will be protected by privilege. We think that the hon. Lady's proposal goes too far, and we ask her not to press it to a Division.
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My hon. Friend the Member for Hayes and Harlington (John McDonnell) proposed putting equality reps on a statutory basis. We are very sympathetic to that, because they need facility time, which learning reps and health and safety reps have. As he acknowledged, we have supported trade union equality reps. Unions such as Unison, Unite, the Public and Commercial Services Union and the National Union of Teachers have piloted 15 schemes to demonstrate the value to employers of the work of equality reps in workplaces where there are trade unions. As my hon. Friend said, we acted on the recommendations of the Women and Work Commission. We spent £1.5 million from the union modernisation fund and Government Equalities Office cash to build capacity and to support the evaluation of the effectiveness of the reps. That is where we are now. The funding comes to an end this year, but we hope that by then we will have received an evaluation. That is what we are waiting for from the TUC.
John McDonnell: Will the evaluation be received in time for the consideration of this Bill in the Lords, so that the Government will be able to amend it accordingly?
The Solicitor-General: I do not know. We have been asking for the evaluation for some time. I was anxious to receive it before this stage if that was practicable, but we have not received it: that is the situation. In readiness to receive this evaluation, we have conducted a round of discussions with employers and others, and the opinions we heard were a bit divided. Therefore, we also want to use the evaluation to persuade employers about the benefits, but the long and short of it is that that is what we are waiting for.
I shall move on to the different issue that my hon. Friends the Members for Hayes and Harlington and for Dover (Gwyn Prosser) have brought before us. Their amendment 34 seeks to remove the power for Ministers to introduce affirmative regulations specifying how part 5 of the Bill, which deals with the "work" provisions, would apply to seafarers and those who work on hovercraft. Without any such regulations, the application of part 5 would be a matter for tribunals and the courts to decide on a case-by-case basis. I cannot imagine that anybody would want that, because it would cause confusion and uncertainty.
The context in which seafarers undertake their work is different from that of other workers. Many issues relating to ships and their crew are governed by the law of the state where the ship is registered, but others may be governed by the law of the state in whose waters the ship is located. A ship can be constantly moving between waters under the jurisdiction of different states, and might not be operating in the waters of its own flag state. Given that context, we definitely do not want the facts about to whom this part applies and to whom it does not apply to be determined on a case-by-case basis. That is why we need regulations, and why, in due course, we will urge my hon. Friends not to press their amendment, which would stop those regulations being made.
The UK is entitled to apply its law to vessels registered in the UK, but international law and custom limit the extent to which the provisions can be applied to non-UK registered vessels even while they are in UK waters. The Equality Bill is completely silent on how part 5 applies generally and regulations must be made to apply it to ships and seafarers in all those locations and circumstances to ensure that seafarers are protected from discrimination at work as and where appropriate. Without the regulations, it would be completely unclear. Everybody wants to see seafarers protected from discrimination, but we must tailor the way in which this is achieved.
Let me move on to the concern that drives my two hon. Friends to try to remove the regulation-making powers when they clearly appreciate as well as we do that it is important to have certainty in application. I think that the regulation-making power is wide enough to address the issue of differential pay among seafarers.
It is common practice in the shipping industry for seafarers' pay to reflect the country where they are based and therefore where they are likely to spend their wages. Historically, that has been lawful by reference to nationality in the UK through section 9 of the Race Relations Act 1976, which is repealed by the Equality Bill. I understand that my colleagues who are seeking this amendment would like to see differential pay outlawed totally in the UK and are concerned that, by allowing the regulation-making power in the Bill, the Government will replace section 9 or put in pay differentiation in some way.
It is right to say that the Government must carefully consider the implications of disallowing the practice, including the economic impact, and weigh up the possibility of putting UK employers at a significant commercial disadvantage. That said, the Government are acutely aware of the opposite case and of the strength of feeling against reintroducing even a more narrowly drawn replacement for section 9, or anything like it. So, the Under-Secretary of State for Transport, my hon. Friend the Member for Gillingham (Paul Clark), published draft regulations earlier this week. They offer an insight into how the Government think the provisions in part 5 will apply to seafarers and remain silent-we will return to this-on the issue of differential pay.
The final regulations will determine the extent to which part 5 applies to seafarers. As published, the work protection would be given to a seafarer working wholly or partly in Great Britain on a UK-registered ship or a seafarer working wholly or partly in Great Britain on a ship flagged to an EEA state other than the UK while it is in UK waters if the seafarer is British, an EEA national or a citizen of a state with corresponding EU law rights, provided that the seafarer has a legal relationship located in Great Britain or has a sufficiently close link with Great Britain. My hon. Friend the Member for Hayes and Harlington asked for some explanation of what a sufficiently close link would be, and I shall try to help with that in a minute.
The third category to which part 5 would apply under the current regulations is to a seafarer working wholly outside Great Britain on a UK-registered ship if the seafarer is a British citizen or a national of an EEA state or a state with corresponding EU rights, provided that their employment relationship is in Great Britain
or, again, has a sufficiently close link. The non-UK and non-EEA states are those that have an associative agreement with the EU. They include, for instance, Nigeria and Guyana, from which, I understand, some seafarers are drawn.
What counts as a sufficiently close link to bring those second kinds of seafarer under the protection of the Bill depends on an overall balance of a range of factors. However, factors that may be relevant are: whether a person is employed on board a ship where the ship is registered-its flag state; the law under which the employer company is incorporated; where the employer's business is established; where an employee is recruited or hired, or where the contract for employment is concluded; under which territory's law the employment relationship is entered into; which territory's law applies to the whole employment relationship; the jurisdiction under which disputes about employment relationships should be brought; the legal systems to which the two individuals are subject; to which territory's social security system the employee is affiliated; the territory where the employee pays income tax; the nationality and ordinary residence of the employee; and whether the employment involves the performance of sovereign functions, which I do not suppose happens very much.
My hon. Friends the Member for Hayes and Harlington and for Dover, with whom I had the pleasure of meeting last night with my hon. Friend the Parliamentary Under-Secretary of State for Transport, gave me a set of examples about people working on ships between Aberdeen and Lerwick, and asked whether they would be covered by the regulations as currently drafted and hence protected against that unequal pay. The answer is that one would have to consider all those characteristics.
John McDonnell: From a brief examination of my hon. and learned Friend's words, I suggest that the Filipinos working on those ships would not be covered because they are non-EEA and non-EC employees.
The Solicitor-General: So far as I have got, that looks to be correct. My hon. Friend asked for guidance and I have done my limited best to give it. So, that is where we are with differential pay. For the avoidance of doubt, in the draft regulations published by the Under-Secretary there is no reference to pay differentiation, which means that if they were approved by Parliament as they are now, the practice would not be lawful at all. As I understand it, that is a very clear position. My hon. Friend the Member for Hayes and Harlington is aware that in the ordinary course of consulting on these regulations, letters have gone out to ask all stakeholders what they think would be the implications of removing that kind of differential pay. I fear that we must await the outcome of that consultation before going forward. I hope that I have given him some comfort, if no more.
John McDonnell: Before my hon. and learned Friend moves on, may I ask something else about differential pay? It would be helpful to get it on the record that the existing regulations do not apply to pay, although others might interpret the measures differently. However, they do apply to this part of the Bill more generally, in terms of equalities. As the consultation is taking place promptly, and as we believe that it will take place over a restricted period of time, may I ask her about the potential to address the issue of differential pay after that consultation and to put it in the Bill when it goes to the Lords?
The Solicitor-General: I heard my hon. Friend suggest that, and we have discussed it briefly here, but I do not think that the right way forward is to put what are essentially regulations in the Bill. Indeed, I am not sure whether we can do that. It might be possible and it might help to finalise the consultation process as early as possible and to publish the proposed regulations, so that everyone can see what is coming and can start to adjust to what will happen. In terms of a timetable, the final regulations will be introduced after Royal Assent, because they will need to be in place to come into force at the same time as part 5. Royal Assent will probably be in April and the commencement of part 5 will probably be in October, so there would be a significant amount of time to wait. My hon. Friend has made his points on this issue, but the publication of the proposed regulations might go at least some way towards flagging up what is coming and towards obliging people to start to comply.
John McDonnell: I should like to express my gratitude that the Minister has at least taken on board the spirit of what we are intending. A prompt publication of the regulations would help, but there is no impediment whatsoever to making them part of the Bill. Will she look at that again, and take advice?
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The Solicitor-General: The obvious objection is that putting the regulations in primary legislation means that they cannot be changed without more primary legislation. That is a very laborious process, and the whole point of double-decker legislation is that things can be changed as and when necessary. The judgment is that these matters ought to be set out in regulation. I shall not take the point any further, but my hon. Friend can press it with the Department for Transport. Officials there have accepted the proposal that they should meet to discuss the different legal opinions, and we expect a Minister in the Foreign and Commonwealth Office to consider the matter later on. My hon. Friend the Under-Secretary of State for Transport and I will also be able to help so, on that basis, I hope that the amendments will not be pressed.
The hon. Member for Shipley would like to strip away all protection for businesses with fewer than 250 employees. [ Interruption. ] I am being pressed about the time, but I have a lot of questions to answer. I shall just say to the hon. Gentleman that we are not going to accept his proposal. Most employers are covered already by discrimination law: we intend them to remain that way, and I hope he will not press his new clause 36.
I also hope that the hon. Gentleman will not press his new clause 38, which proposes restricting the use of positive action by public authorities. He said that his purpose was to put an end to new burdens but he is barking up the wrong tree, as positive action has been available for a very long time. It is 30 years since the sex and race discrimination Acts were passed: both of them have been very well used, as have the later Acts banning discrimination on grounds of religion or belief, sexual orientation or age. Many public bodies, including the police and fire services and the NHS, use them, and they would not be able to meet their legal obligations to promote equality in race, gender and disability so easily if they could not use positive action. They would not be able to fulfil their responsibilities in respect of all the protected characteristics if they were not able to use positive action.
It would be very strange to prevent public sector bodies from using positive action when those in the private sector would still be able to use it. Where would that leave a private company delivering a service on behalf of a public authority? I therefore ask the hon. Gentleman not to press his new clause 38, on the basis that he has made his point.
Philip Davies: May I make it clear that I did not table my amendments with the intention of pressing any to a Division? I tabled them as probing amendments, so that we could discuss some of the issues that I believe are of great concern to many people in this country.
The Solicitor-General: Then I hope that the hon. Gentleman is satisfied with the discussion that he has managed to provoke. If that is his approach to all the new clauses and amendments that he has tabled, I can probably make somewhat quicker progress.
I take it that the hon. Gentleman was just having a laugh as well with his proposal about levelling down pay. Similarly, I assume that his new clause on maternity was tabled just to see how we all reacted and how many times we said, "Ah, no, that really can't be right."
I said that I would return to the question of reporting of gender pay gaps and give an update on the progress made by the Equality and Human Rights Commission. It is happy for me to share with the House that its proposals will include a range of measures on the gender pay gap. The measures will enable comparability, although employers will be encouraged to select from them in the way that best suits their circumstances. There will not be a one-measurement-fits-all approach, and I can confirm that the commission will produce its proposals as quickly as it can.
Amendments 76 and 78 were also tabled by the hon. Member for Shipley. He used amendment 77 to probe clause 125, which deals with the purpose of time limits on equality clauses-quite a techie issue-and I wonder whether I can commend the debates that we had in Committee on those subjects. We cannot accept the points made about members of the armed forces not being able to initiate tribunal cases. We have given a longer period for the armed forces, because they must go through their own process first, and we think that is the right balance.
Miss Ann Widdecombe (Maidstone and The Weald) (Con): On a point of order, Mr. Deputy Speaker. In a situation in which we have limited time to debate a large number of amendments, is it really within the spirit of our proceedings that the Minister should take almost an hour and still not finish?
Mr. Deputy Speaker (Sir Michael Lord): That is not a matter for the occupant of the Chair. As the right hon. Lady will know, how long Ministers take is entirely a matter for them, but I would observe to the House that the whole of the Bill's consideration on Report must be completed by 6 o'clock.
The Solicitor-General: I have to answer on the whole of a vast range of proposals, and I have done so with what dispatch I can. I am sorry if I have not pleased the right hon. Member for Maidstone and The Weald (Miss Widdecombe). [ Interruption. ] No one asked for another day.
Amendment 18 deals with the difference between the terms "as qualified as" and "equally qualified to". We are concerned that that is about positive action. The phrase "equally qualified to" may have unintended consequences. Let me say, in the interests of dispatch, that we will maintain the positions that we kept in Committee, but we hope that that distinction probably without a difference is not something that the Opposition will want to press to a vote.
Amendments 125, on equal pay exceptions, and 126 were also tabled by the hon. Member for Shipley. He has done us all a great service by raising those issues and then withdrawing them very quickly.
Amendment 24-last, sadly-deals with the ability of employers to use different national minimum wage rates for younger people. The Government want people to be paid a decent wage, but we rely on the independent Low Pay Commission, which makes clear the higher vulnerability of young people in the labour market to the economic cycle. They have high unemployment rates, and their employment rates are lower. In 2009, the commission's report stated:
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