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Baroness O'Cathain: I am not convinced by the argument on costs. As I stated the night before last, the access to work scheme, which has been a great success and has helped 10,000 people, cost £14.6 million, which is an average of £1,460 per person employed. The figure of £200 has been batted about. If the figure were £200, I am sure that small firms would not have a problem on the cost side. However, it does not give me much comfort when we talk about reasonable costs for two reasons: the first is that "reasonable" is not defined—£1,500 could be a reasonable sum to one small firm whereas it could be absolutely crippling to another.

We are holding in our minds a picture of a company or a firm with 20 people. What about a group of perhaps seven or eight people who have got together to create a new business? If they were lumbered—I say "lumbered" advisedly—with a cost of £1,500, it could make the difference between either employing another person, or not going after a certain amount of business, or not succeeding. I would like some clarification from the noble Baroness, Lady Hollis of Heigham, about the figure of £200. How would she cope with the word "reasonable" because, as I say, what is reasonable to one firm may not be reasonable to another?

There is also, of course, a hidden point in that if one cannot decide what is constituted by "reasonable", it is—to use my phrase—a lawyer's charter. One will have to consult lawyers for them to decide what is reasonable and what is not reasonable.

I turn to the second point raised by the noble Baroness in relation to personnel issues. I have not seen the survey she mentioned. At Second Reading I spoke from my own personal experience. I reiterate that my experience of employing disabled people has been as I stated. It may be that I have been extremely unlucky. However, the organisation was big enough to be able to carry the costs. The disabled workers were good workers when they were present, but perhaps they were more disabled than the average disabled person questioned in the survey. I am still anxious about the

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matter. This is not a cheap point. I could give chapter and verse on individual cases, but this is obviously not the correct place to give names and addresses. I could instance specific cases of disablement, including a person who was HIV positive whose case involved an enormous amount of absence. I did not worry about that, and we had no difficulties about employing someone who was HIV positive.

However, if a small firm employing seven or eight people had to cope with an attendance record like that of the person I have in mind—which was 65 per cent. of the working year—while that was an appalling problem for the individual, it could be a crippling problem for the small firm employing him.

Therefore, on both of those points I should like further clarification from the noble Baroness.

4 p.m.

Lord Mackay of Ardbrecknish: This is an important clause. The noble Baroness explained its effect in the course of indicating what she seeks to achieve with her amendment. In this clause we seek to exempt small firms because we recognise that it is likely to be more difficult and burdensome for them to get to grips with the new right and have available the advice they need in particular cases. Generally they do not have the personnel or in-house specialists who would have the time and expertise to deal with issues such as considering the statutory duty to make reasonable adjustments at the different stages of recruitment, employment and development of a disabled person.

At the outset I should make it clear that cost is not the only burden on a small firm. There can also be the burden of attending to the legislation and bearing it in mind. Many people who run small firms work every bit as hard, if not harder, than the people they employ. They have to seek contracts, chase up money to pay the bills and check the ordering. In addition they have to deal with all the other aspects of running a small firm involving personnel. We ought to consider whether adding this additional provision will place an additional burden on those firms.

It is not simply a financial matter. It is a matter of the added burdens of knowing about the legislation and coming to grips with it and the concept of making the necessary adjustments and what might be reasonable in the circumstances. That is bound to be a much greater burden for a small firm without a personnel department than for a large or medium-sized firm where there is a personnel department.

I should not like an impression to go out from this Chamber that we are content to see small firms treat disabled people without fair consideration, and I hope that no one will say anything that might encourage such an impression. My honourable friend the Under-Secretary of State for Employment said in the other place that of course we do not want small firms to discriminate against disabled people any more than we want large firms to discriminate. Many small firms do employ disabled people. He assured the House, as he had before, that we would encourage them to follow the new code of practice. To that end we will consult them as well in drawing up the code.

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It is true that the Bill as it stands covers the great majority of employees in this country. Something like 80 per cent. of employees will be covered by the Bill. So there will be many opportunities for disabled people to seek employment covered by the legislation. In addition, many small firms already happily employ disabled people and I have no doubt will continue to do so.

We are trying to strike a fair balance between what it is reasonable to require on behalf of disabled people and the need to avoid constraining the growth, prosperity and operation of new and existing small firms, which are so essential not only to the creation of new job opportunities but to job opportunities which already exist in the economy.

The noble Baroness indicated that there was no evidence that small employers wished to be excluded. The Federation of Small Businesses supports the exclusion of small firms. I believe that the federation has a better understanding of the concerns of very small firms than the CBI or the Employers Forum on Disability which, although they may contain a few small firms, are dominated by the big corporate players in the United Kingdom. Therefore we should take account of what the Federation of Small Businesses says.

The amendment provides for the removal of the threshold after 1st April 1997. The noble Baroness indicated that that would give small businesses a year's grace after the enactment and coming into force of the Bill for larger firms, and allow them to get to know their way round the legislation before the clause was removed and businesses, regardless of size, fell within the legislation. However, as my noble friend Lord Inglewood said on Tuesday, we shall introduce the employment provisions towards the end of next year. Thus the amendment would give people only a few months. However, that is not the basis of my argument; I merely point that out to the Committee in case anyone is tempted to think that giving small businesses a year's grace sounds like great generosity on the part of the noble Baroness. In fact, it would be markedly less than a year. Even if it were a year, I believe that it would not be generous to small firms.

We believe that the Bill as drafted—with the amendment that I shall shortly propose to the clause—represents the proper way to move forward. We shall be obliged to review the position in five years time. At that stage, if the Government thought that the legislation was working well, problems had been resolved and the air was clearer, it might be possible to begin to reduce the threshold. That is the proper way to proceed.

I am sure that the noble Baroness is not surprised to hear me say that I cannot accept her amendment. I understand from all that went on in the other place and the debate that we had at Second Reading that this is a matter on which the noble Baroness and other Members of the Committee feel strongly. I feel equally strongly about the need to defend the position of small businesses and ensure that we do not place any more burdens on them, whether in terms of cost or administration, than we absolutely have to. I do not know whether there is any point in my inviting the noble Baroness to withdraw her amendment as I understand that she feels very

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strongly about the matter. If and when she puts it to the test of the Lobbies I trust that my noble friends will support me.

Lord Carter: Will the Minister be kind enough to comment on a false analogy drawn by his noble friend Lady O'Cathain when she referred to the average cost of £200 and the average cost of £1,500 of the access to work scheme? The figure of £200 per person is the government estimate in the cost compliance statement.

The best way I can explain the false analogy is by way of an example. Somebody I know extremely well, who is blind, under the access to work scheme has a computer which is specially adapted for blind people. That costs £9,000. In addition she has a reader's allowance of £3.50 an hour for 15 hours a week. No employer, large or small, would pay such costs in order to take on a disabled employee. That is why we have an access to work scheme. The Government feel, correctly, that that is the type of cost which should be borne so that that disabled person has a job which she would not have if there were no access to work scheme.

Therefore to compare the £200 per person which would be spread over the small and larger adaptions, with the expensive costs of specialised equipment regarding the access to work scheme is a false analogy.

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