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House of Lords

Thursday, 24th July 1997.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Liverpool): The LORD CHANCELLOR on the Woolsack.

Utility Regulation: Review

Lord Borrie asked Her Majesty's Government:

    Whether they propose to make binding the rulings of the Monopolies and Mergers Commission when the commission arbitrates in disputes on prices between a utility company and a specific industry regulator.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, my right honourable friend the President of the Board of Trade announced on 30th June an interdepartmental review of utility regulation. The review will look at the existing framework of regulation against guiding principles of transparency, accountability, consistency and predictability. The relationship between the Monopolies and Mergers Commission and regulators will be considered in that light.

Lord Borrie: My Lords, I thank the Minister for his Answer. I welcome the review of utility regulation. That is overdue and concerns a subject that the previous government sadly neglected. Does the Minister agree with me that the present position is most unsatisfactory? I refer to recent examples of Northern Ireland Electricity and British Gas, where the regulator asked the monopolies commission for a thorough examination taking a period of six months. Witnesses were examined and a report was published. However, the regulator then seemed to want to reject the verdict of the umpire. Would it not make more sense if the conclusions of the monopolies commission were fully binding and effective?

Lord Simon of Highbury: My Lords, I thank the noble Lord for that observation. While I am unwilling to enter the lists, as it were, with probably the most experienced umpire we have in the House on issues of this nature--I record my grateful thanks for the work the noble Lord has done in the area of competitiveness--this is precisely the issue that we think the utility review should look at; namely, the relationship between the commission and the regulator, and indeed the regulator and the licensee. I certainly would not want to invoke television replays of the umpire's decision, but we need to think carefully about where accountability lies.

Baroness Oppenheim-Barnes: My Lords, I of course defer with great respect to the noble Lord, Lord Borrie, as the great expert in these matters. Is it

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not a fact that, despite what the Minister has said, the Secretary of State could still overturn the monopolies commission ruling if he had a mind to do so?

Lord Simon of Highbury: My Lords, it is clear that the relationship between the commission and the regulator allows the regulator to apply the commission's decision in the way which is best fitted to ensure competition. As regards prices, some are already fixed, as in the case of the water industry, but others are free.

Lord Renton: My Lords, if and when there is devolution in Scotland of the kind which we understand is envisaged, what will happen if the utility company is situated in Scotland and the regulator is a nationally appointed official? In particular, which Secretary of State might have any responsibility for considering the outcome?

Lord Simon of Highbury: My Lords, we would prefer to leave the definitive answer to that question to the Statement when we shall hear about Scotland. Of course, we must all remember that we are always trying to define the relevant market here.

Lord Skelmersdale: My Lords, the Minister mentioned predictability as one of the parameters of this internal investigation of the DTI into the role of the regulator. Does predictability mean that there will be a single umpire, or is that not part of the department's thinking?

Lord Simon of Highbury: My Lords, that is another matter that should be decided by the review. However, I believe that it is clear in principle from what I have said that differentiated regulation is appropriate in differently dynamic markets. As we have freed up the system for the utilities, markets are developing in different ways and therefore different regulatory decisions and processes are necessary at this stage. That is a statement of principle and approach to regulation; let us wait until we have the review.

School Teachers: Dismissal

3.6 p.m.

Baroness Gardner of Parkes asked Her Majesty's Government:

    Whether their proposals whereby school teachers will be liable to dismissal with four weeks' notice on the ground of lack of capability have implications for employees in other sectors.

The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the Government have no plans to change the legal protections against unfair dismissal that are available to teachers and employees generally. The Government's aim is to put in place speedy but fair procedures to

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remove teachers who cannot do the job. Local authority employers will be setting up a working group to consider how that can be done.

Baroness Gardner of Parkes: My Lords, I thank the noble Baroness for that reply. I know nothing about education but I have sat for over 20 years on an industrial tribunal. I still cannot understand why there is to be no change in employment law, given that the Minister has said that people can be dismissed within four weeks. I tabled this Question because I am genuinely puzzled about this matter. Is the Minister saying that these people will continue in paid employment but will no longer teach children? What procedure is she suggesting? Many other sectors of the community may follow similar procedures if they wish to dispense with people they consider are not capable of doing their jobs.

Baroness Blackstone: My Lords, we are not proposing the removal of any statutory protections for teachers or indeed for anyone else. The working group will consider what can be done within the framework of the existing statutory employment protection. During the debate in another place on the White Paper, Excellence in Schools, my honourable friend the Minister for School Standards set a target of six months to remove an incompetent teacher. That does not seem an excessively short time. He also set a target of a matter of weeks to remove a grossly incompetent teacher. We shall see what the working group can do within the framework of statutory employment protection. It is, of course, always possible for someone to appear, after dismissal, before an industrial tribunal.

Lord Archer of Sandwell: My Lords, does my noble friend agree that if a teacher is dismissed, whatever procedures may exist for rectifying mistakes afterwards, the fact of the dismissal will be known to every member of staff, every parent and every pupil and it will not be practicable in the real world to put the clock back? Is not four weeks a little peremptory to take such an important decision?

Baroness Blackstone: My Lords, of course it may be difficult to put the clock back after an industrial tribunal. However, what the Government are concerned to do is to protect pupils, and indeed other teachers who are doing a good job, from those teachers who are clearly hopeless and utterly incompetent and are unable to control a class. Surely it is in the best interests of our education system that such teachers should be removed.

Baroness Blatch: My Lords, the Minister may be somewhat consoled by the fact that we agree that bad teachers should be removed from the classroom. I assume that the teacher would be dismissed within four weeks. That is what the Secretary of State said in another place. How can dismissing the teacher within four weeks be reconciled with giving appropriate notices, an opportunity to improve, putting in support systems, and so on, which is the system at present, without any change in the legislation?

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Is there any read across to other sector workers, or are teachers to be treated differently from all other workforces?

Baroness Blackstone: My Lords, no. Of course teachers will not be treated differently. I have already made it absolutely clear that the statutory requirements regarding employment law will stand. The noble Baroness shakes her head. Perhaps I could finish. No, we do not intend to change the statutory requirements in this respect. I think that the noble Baroness would agree that were a pilot to be found to be grossly incompetent we would wish to remove the pilot rather quickly. Similarly, were we to find that a brain surgeon was grossly incompetent we would wish to do the same.

The procedures laid down by ACAS must be adhered to. It is necessary to give, first, an oral warning, then a formal warning, before dismissal takes place. There would also be the right of appeal. But it is premature to jump to too many conclusions before the working group of local authority employers has had an opportunity to consider the matter.

Baroness Blatch: My Lords, I am grateful for the Minister's reply. There is no disagreement between us about removing a surgeon from a theatre or a teacher from a classroom who is grossly incompetent. But dismissing a teacher within four weeks and complying with all the legislation seems to me incompatible.

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