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Lord Henley moved Amendments Nos. 13 and 14:

Page 9, line 19, leave out ("registered").
Page 9, line 34, at end insert—

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(""charity" has the same meaning as in the Charities Act 1993;").

The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 3. I beg to move.

On Question, amendments agreed to.

Lord Ashley of Stoke moved Amendment No. 15:

Page 9, line 46, at end insert—
("( ) Local authorities and parish and community councils in England and Wales and local authorities in Scotland which adopt positive measures to redress under-representation of disabled people within the workforce shall be held to be acting in compliance with section 7 of the Local Government and Housing Act 1989.").

The noble Lord said: My Lords, the purpose of the amendment is to allow local authorities to discriminate in favour of disabled people; to discriminate positively for disabled people as local authorities have done for many years through the quota system. There is nothing new about local authorities doing that.

However, as the Bill stands, it prevents local authorities from discriminating positively in favour of disabled people. I should have thought that any Bill which prevents local authorities from discriminating positively must be an absurdity, especially when we are supposed to be legislating against discrimination.

It is all too easy to speak of choosing people on "merit". But we all know that prejudice and false assessments of disability distort the concept of merit. Positive discrimination is the only possible way to combat that. I do not suggest that we should have positive discrimination for ever. However, we need positive discrimination at least in the short term so that disabled people can have an opportunity when they obtain jobs to show their capability—to show what they are able to do.

It is also absurd that private employers can discriminate positively in favour of disabled people but local authorities cannot. On the grounds of equity and fairness, private firms and local authorities should be in exactly the same position.

Local authorities are particularly important because of the number and wide range of jobs which they cover. Their example is important. They can set a lead to many organisations. They have an important role in showing what can be done with positive discrimination. The amendment allows local authorities to do that. I hope that it will win support from both sides of the House. I beg to move.

Lord Campbell of Croy: My Lords, as the House will know, for some years I have been pointing out that the quota system needed to be replaced. It had outlasted its usefulness, although in the first 25 years or so after 1944 it had served a very good purpose. The reason was that the registration of disabled people was less than 3 per cent. of the workforce. Therefore it became mathematically impossible for employers and organisations to reach a quota of 3 per cent. We have been through this issue before. I believe that most noble Lords are in agreement about the system being replaced and this Bill presenting the opportunity.

Local authorities were among those unable to meet the 3 per cent. Some of the figures with which the TUC has provided me indicate the very low percentages

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reached. But that is not the fault of the TUC any more than that of other employers. It is because of the registration system being defective and disabled people simply not registering.

I do not know whether the amendment will be acceptable to the Government; I suspect that probably it will not be. All I say at this stage is that with the quota system going and with parts of the Bill taking its place, we need something to replace the aim of the quota system, even though the way in which it developed became unsatisfactory in the last 25 years of its life.

I should remind noble Lords that Labour Government Ministers had to give answers 20 years ago or more to questions and criticisms about various establishments not being able to reach the 3 per cent. figure. This has been going on for a long time. I hope that the Government will be able to explain how the aim of the old quota system, which is now to disappear, can be replaced satisfactorily either in the terms of the Bill or through additional measures.

Lord McCarthy: My Lords, most of the points have already been made about the amendment. The main one to which I wish to draw the House's attention is that this is an amendment to Clause 10. That clause contains exemptions from the employment provisions allowing for positive action in some specified cases. So the Government envisage positive action which is not unlawful. Charities and persons who provided support and employment under the provisions of the 1944 Act are permitted, under Clause 10, to continue with positive discrimination and to take positive action.

All the amendment proposes is that if we are to put institutions in such a position, then why should we not do so with local authorities? As has been said, there is a particular reason to do that as the authorities are in an anomalous position because of the provisions of the local government Act relating to selection on merit. Unless there is a specific provision to exempt authorities from the consequences of the local government Act, they would be less able to deal with and avoid discrimination than any other institution, public or private.

Lord Rix: My Lords, noble Lords will know that in the past, during the passage of the Bill through the House, I have regretted the passing of the quota system as it applied to people with learning disabilities. Even though it perhaps did not apply effectively to the general working population over the past 20 years, it has applied in regard to people with learning disability, particularly in local councils. Many people who have a mental handicap or learning disability have been able to work in parks and gardens. I believe that in Edinburgh that has taken place over the past 20 years. The work has been satisfactory in nature and has met the quota requirement because people with a learning disability are, sine qua non, already registered disabled without any let or hindrance. Therefore I support the amendment. I realise that I am making a last dying plea for a return to the quota system in a lateral way, but even so I hope that the amendment will commend itself to your Lordships' House.

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Lord Henley: My Lords, Amendment No. 15 in the name of the noble Lord, Lord Ashley, would enable local authorities and parish and community councils in England and Wales to operate positive discrimination, as he put it, in favour of disabled people when employing staff, notwithstanding the principle in Section 7 of the Local Government and Housing Act 1989, to which the noble Lord referred, which requires such bodies to appoint staff on merit.

Perhaps I may briefly say a word about quota because it was mentioned by my noble friend Lord Campbell of Croy who welcomed its departure. It was also mentioned by the noble Lord, Lord Rix, who regretted that. The concern was expressed that local authorities will lose the ability to give preferential treatment to disabled people. I believe that the arguments for the abolition of the system are well rehearsed and I do not intend to repeat them. The simple fact is that the quota is not working, very much for the reasons which my noble friend mentioned. That applied to local authorities just as to other employers.

While I understand the concerns of the noble Lord, Lord Ashley, I do not believe that the approach he suggests is the best way to ensure that disabled people are able to take up and keep their jobs. That is certainly not the spirit behind the Bill. Disabled people want so far as possible to be treated on the basis of their abilities. That is the emphasis and the spirit behind the Bill which is about ensuring that that is exactly what happens. By the same token, employers should be free to appoint the people they consider best able to do the job. The Bill ensures that disabled people have a fair chance to get jobs, competing with other people. However, I believe that they do not wish to be patronised and I fear that, however well intentioned, the amendment which the noble Lord is proposing would have just that effect. Grouped with the two amendments—

Lord McCarthy: My Lords, if the Minister will allow me to intervene, perhaps I may ask him this. If that is his view, why have Clause 10 at all? It exempts registered charities and recognised bodies in pursuit of their charitable purposes, it says that they can positively discriminate and take positive action. If we took the noble Lord's view, we would not have Clause 10.

Lord Henley: My Lords, I believe that registered charities under Clause 10(1) are in a different position. With a registered charity for the blind, I see positive merits in it wishing to employ a large number of blind people. The same might be true of other organisations and I can think of one which I know quite well in my own home town, a charity for the deaf which employs a number of deaf people; it would wish positively to look for them.

As the noble Lord will recognise, the second part relates to supported employment which is completely and utterly different. It is funded by both local authorities and the Government. In the Department for Education and Employment, we spend of the order of £150 million to £160 million per annum on providing places for disabled people under the supported employment programme, whether through Remploy or another organisation. I do not believe that their inclusion

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in Clause 10(2) in any way negates the arguments that I was addressing in relation to concerns regarding local authorities.

Perhaps I may say a word or two about the two government amendments grouped with that of the noble Lord, Lord Ashley, if he will allow me, in order to save me speaking to them at a later stage. Section 7 of the 1989 Act enshrines the principle of "merit" in local authorities' employment practice. What we intend to do—and what government Amendments Nos. 79 and 80 clarify—is to ensure that there is no conflict between the requirement that appointments are made on merit and the duty of reasonable adjustment under the Bill. In other words, an authority will continue to have to appoint on merit but it will first have to consider whether a reasonable adjustment could help a disabled person achieve that state of merit.

At the moment, local authorities do not have to make any adjustments at all. Like other employers, they will have to consider a wider range of disabled people as applicants and to retain a wider range of disabled employees because they will have to consider whether a reasonable adjustment will make the disabled person the best person for the job. This seems to the Government to be a much more positive and effective way forward than the noble Lord's amendment. I hope, therefore, that the noble Lord will feel able on this occasion—as it is the final one—to withdraw his amendment and that in due course he will welcome the Government's Amendments Nos. 79 and 80 when we reach them.

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