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Lord Mackay of Ardbrecknish moved Amendment No. 55:

Page 5, line 25, at end insert:
("(3) In this section—
"anniversary" means the anniversary of the coming into force of this section; and
"review" means a review of the effect of this section.
(4) Where, before the fourth anniversary, the Secretary of State proposes to make an order under subsection (2), he shall, before doing so, conduct a review.
(5) Unless he has already begun or completed a review under subsection (4), the Secretary of State shall begin to conduct a review immediately after the fourth anniversary.
(6) Any review shall be completed within nine months.
(7) In conducting any review, the Secretary of State shall consult—
(a) such organisations representing the interests of employers as he considers appropriate; and
(b) such organisations representing the interests of disabled persons in employment or seeking employment as he considers appropriate.
(8) If, on completing a review, the Secretary of State decides to make an order under subsection (2), he shall make such an order to come into force not later than one year after the commencement of the review.

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(9) If, on completing a review, the Secretary of State decides not to make such an order, he shall not later than one year after the commencement of the review lay before Parliament a report—
(a) summarising the results of the review; and
(b) giving the reasons for his decision.
(10) Any report made by the Secretary of State under subsection (9) shall include a summary of the views expressed to him in his consultations.").

The noble Lord said: After an hour or so on the previous amendment we may well be able to find ourselves in agreement about this amendment. We have listened carefully to the arguments—we have heard them again this afternoon—calling for changes in this clause. I have this afternoon, as my colleagues did in another place, rebutted many of the suggested amendments but I hope that we have not been totally inflexible. Indeed, Clause 7 was amended in another place and that amendment removed the power to raise the threshold from the exemption above 20. In reaching that decision we recognised it was very unlikely that there would ever be a need to raise the threshold above the initial starting number.

My honourable friend the Parliamentary Under-Secretary of State for Employment, when announcing the change, gave an undertaking to bring forward a further amendment. That amendment, which is before your Lordships today as government Amendment No. 55, would require the Secretary of State to review the operation of the clause within five years of it coming into force and give Parliament the opportunity to debate the issue. We will be considering what research may be necessary for that review.

Perhaps I may say to my noble friend Lord Swinfen, who seemed to wish to relieve me of some work in five years' time, that I would be more than happy to come to the Dispatch Box in five years' time and propose whatever changes are to be made in the Act.

Lord Carter: How can the noble Lord be so confident that he will be there in five years' time?

Lord Mackay of Ardbrecknish: My noble friend was clearly confident. I was just thanking him for his confidence. I am sure that the whole House, or at least half the House, will join me in hoping that the noble Lord, Lord Carter, will be speaking from the same Dispatch Box as he is today.

I have made all my points about why we do not think that we should move now from 20. But I understand the arguments. What the amendment does is to ensure that enshrined in legislation there will be an obligation on the Government, four years from the anniversary of the Bill coming into force, to set up a review and, at the five-year point, to come to Parliament one way or another. I am quite sure, having listened to noble Lords who would certainly like me to go a great deal further than this, that the Committee will welcome this small step. I beg to move.

Baroness Hollis of Heigham: In his last sentence the Minister anticipated with wonderful accuracy the position of the Opposition on this. Given the amendments that have so far been moved, we indeed wish that the Minister had gone further, but that takes nothing away from the fact

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that we welcome this amendment. We are grateful that the Minister in another place felt able to listen to the voices and representations that had been put to him.

Lord Monson: The Minister began introducing the amendment by saying that he hoped that all Members of the Committee would agree with it. I find myself 99 per cent. in agreement with it, but I have one small quibble. Subsection (7) provides that,

    "the Secretary of State shall consult—

    (a) such organisations representing the interests of employers as he considers appropriate".

I wonder why that is not further circumscribed by the insertion of the word "small" before the word "employers". As the Minister pointed out when speaking to a previous amendment, the membership of the CBI, and the interests of that membership, are not the same and do not always coincide with the membership of and the interests of the membership of the Federation of Small Businesses or the Institute of Directors. It seems appropriate that the Secretary of State should specifically consult organisations representing the interests of small employers—that is, those employing fewer than 20 people—rather than employers in general.

Lord Swinfen: I am sure that the noble Lord, Lord Monson, knows that a number of very large industries in the CBI are fed by very much smaller firms and would want to be happy that those smaller firms are operating efficiently and looking after disabled people properly. Having said that, I very much welcome the amendment although, in my view, my amendment would have been better—but perhaps I am just being my normal big-headed self.

Nevertheless, I am delighted that the amendment sets the Secretary of State a time limit within which the review must be completed. We so often see Bills provide for reviews to take place but without specifying a time limit, which means that the review drags on and on. I very much welcome that provision.

Lord Rix: I have just one question. If at the end of that period of time the Secretary of State (after his due consultation with both small and large firms, disability organisations and disabled people themselves) decides totally to do away with the embargo of 15, 12 or whatever in relation to small firms, could he so do?

Lord Mackay of Ardbrecknish: I am not entirely sure. I would need time to read both the clause and the amendment. I am advised that the answer is "no", but I shall check and may be able to return to this point later.

Perhaps I may advise the noble Lord, Lord Monson, that, by and large, we shall be talking to small employers. However, we shall also want to talk to those employers who are implementing the legislation because I imagine that decisions will have to be taken with a view to how the legislation is working and what difficulties have been encountered. We shall do that, as well as taking the views of small employers into account. As I said, I shall check the answer I gave to the noble Lord, Lord Rix, when I have had the opportunity to read both the amendment and the

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original provisions. I am not sure whether I am all that good at reading on my feet, but I think that I have succeeded.

Looking into the future, the legislation provides that the Secretary of State may make orders, but may only go as far as a reduction to firms with fewer than two employees. Perhaps I may describe that as the "irreducible minimum".

Lord Carter: Under Clause 7(2), the Secretary of State may substitute "a different number". Could he substitute zero?

Lord Mackay of Ardbrecknish: I think that the problem—

Lord Swinfen: On the same subject, I do not understand why the figure "two" has been suggested. I should have thought that it should be "one"—with one person employing one other, or employing himself.

Lord Mackay of Ardbrecknish: My noble friend has got in ahead of me. The "two" includes the employer. My noble friend correctly points out that if it were reduced to one—namely, the employer—there would no longer be an employee to come within the scope of the Bill.

Lord Rix: I am grateful to the Minister for that answer and for busking till ready. Perhaps I may make the position absolutely clear from my point of view. If by experience, by lobbying, consultations, and all the other things that will take place over the next five years from the date of the enactment of the Bill, this whole provision in relation to employers with fewer than 20 employees could disappear from the Act, that offers us definite hope for the future.

Lord Mackay of Ardbrecknish: That is exactly what my amendment would allow. I am delighted to give the noble Lord that hope.

On Question, amendment agreed to.

[Amendment No. 56 not moved.]

5.15 p.m.

Baroness Hollis of Heigham moved Amendment No. 56A:

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