in the second session of the fifty-second parliament of the united kingdom of great britain and northern ireland commencing on the seventh day of may in the forty-sixth year of the reign of





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House of Lords

Monday, 8th March 1999.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Oxford.

Mergers: Protection of Employees' Rights

Baroness Turner of Camden asked Her Majesty's Government:

    Whether it is possible for companies intent upon merging to avoid the obligations in the Transfers of Undertakings (Protection of Employment) Regulations by conducting a "merger" by way of share transfer, and, if so, what further steps should be taken to protect employees' interests.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, the regulations are designed to safeguard employees' interests when the business in which they work is transferred to a new employer. They do not apply in cases of takeover by share transfer as these involve no change in the employer's legal identity or contractual relationship with the employees. The employees' rights are unaffected and the employing company, if it wishes to seek changes to terms and conditions or to make redundancies, is in exactly the same position after the takeover as it was before.

Baroness Turner of Camden: My Lords, I thank my noble friend for that Answer. Is he aware of the situation in which employees have been affected by a merger as a result of share transfer and the superior rights which exist under the regulations referred to in my Question have not applied? As a result, their union is pursuing the matter in the courts. It appears that a loophole exists

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which should be closed; otherwise the union is likely to pursue the matter beyond the courts in this country, possibly to Europe, involving a great deal of time, energy and money. Would it not be better if the regulations were suitably amended?

Lord Simon of Highbury: My Lords, I am aware of situations in which share transfer has led to redundancies. However, I would make it clear that there are two separate circumstances. In the first, the legal ownership changes; in the second, it does not. In the latter case of share transfer, there is the collective redundancies directive under which recourse could be taken for unsatisfactory dismissal. That remains the most effective recourse to justice.

Baroness Gardner of Parkes: My Lords, will the Minister confirm that when two companies merge in this way the redundancy provisions favour the employees to the extent that considerable consultation must take place and the larger the firm the more extensive the degree of consultation? Will he also confirm that the Government do not support the view currently expressed by London Underground, as opposed to every other employer, that employees should be guaranteed their jobs for 15 years?

Lord Simon of Highbury: My Lords, I confirm the noble Baroness's contention that under normal circumstances there is extensive consultation by companies, as is required under merger conditions. That is well protected by the existing law and frequently takes place. However, there are circumstances in which it does not, which is why a sound and effective law must stay in place. I make no statement about London Underground because I am not aware of the circumstances.

Lord Tebbit: My Lords, is it the case that such regulations and laws do not exist in the United States? Is not that part of the reason why, as the Prime Minister explained, the United States is far more effective in creating jobs and expanding the economy than our sclerotic economies in Europe? If there is a loophole,

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would it not be correct for the Prime Minister to ask Ministers to expand it so that we can become more like America? After all, that is his policy.

Lord Simon of Highbury: My Lords, I point out again that there is no loophole. There are two different legal circumstances; change of ownership, which is a takeover circumstance, and share transfer, which is a merger circumstance. They are differently treated in law and that is successful. Although we are consulting, at this time we see no reason to change the basic legal principle which applies. As regards differences between Europe and the United States, I know that the noble Lord, Lord Tebbit, is fully aware of the different circumstances which apply in the markets.

Lord Brookman: My Lords, does the Minister agree that the 1980s was a most unfortunate period for working people in the United Kingdom, being unregulated and unfair? Are not the Government trying to be fair to employers and employees?

Lord Simon of Highbury: My Lords, I thank my noble friend for that question. It is exactly the spirit which lies behind our new Bill which will soon come to this House. I hope that it is received in exactly the spirit which I then detected in the air.

Lord Razzall: My Lords, without going into the hyperbole of the previous question, does the Minister agree that there is no evidence whatever that the Transfer of Undertakings (Protection of Employment) Regulations have had the remotest influence on unemployment, as was suggested by the noble Lord, Lord Tebbit?

Lord Simon of Highbury: My Lords, we agree.

Public Roads: Prevention of Accidents

2.40 p.m.

Lord Campbell of Croy asked Her Majesty's Government:

    What action they are taking to improve arrangements for applying salt and grit to public roads in the United Kingdom, including those for which local authorities have responsibilities, in order to reduce accidents in winter conditions.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, arrangements for applying salt on trunk and national roads in the United Kingdom are reviewed on a regular basis in the light of changed circumstances, usage and technological developments. We encourage local highway or roads authorities to do the same.

Lord Campbell of Croy: My Lords, I am grateful to the noble Lord for his reply. Are the Government concerned about reports that some local authorities have

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been reducing the resources needed to keep roads safe? Does he agree that our climate produces sudden changes in temperature to below freezing in different parts of the country and that that often happens, most unfortunately, at holiday periods and at weekends?

Lord Ampthill: My Lords, it is all the last government's fault!

Lord Whitty: My Lords, the situation under the last government, as under this Government, is dealt with through their operation of the Highways Agency in England and the Secretaries of State for Scotland and Wales in relation to their roads. There is a fairly firm code of practice as to what is required in terms of salt application in that it should be undertaken before the ice forms or snow settles on the roads. We give similar advice to local authorities. However, it is not part of our interpretation of the law or that advice that it is the responsibility of the highways authorities to keep open all roads at all times.

Lord Campbell of Croy: My Lords, if the Government were to ignore the back-slidings of such local authorities, would they not find themselves on a slippery slope? Moreover, in trying to defend them, would not the noble Lord find himself on very thin ice?

Lord Dixon-Smith: My Lords, the House will sympathise with anyone who must try to predict the vagaries of the wonderful climate which we enjoy in the United Kingdom. Is the Minister satisfied that the arrangements for distributing funds to local authorities in the United Kingdom are satisfactory to meet the needs of that particular variable in their responsibilities?

Lord Whitty: My Lords, I thank the noble Lord for intervening before I had to conjure up a meterological riposte to the noble Lord, Lord Campbell of Croy. In normal circumstances, the allocations which we give to local authorities to cover maintenance of the highway and the removal of obstructions to the highway, which include snow and ice, are adequate. Clearly, there are other means whereby the national government may assist in emergency situations.

Genetically Modified Food

2.46 p.m.

Baroness Ludford asked Her Majesty's Government:

    Whether they will impose a five-year moratorium on commercial growing of genetically modified food until adequate independent research and testing of its health and environmental consequences has been carried out, and whether they will seek a similar moratorium throughout the European Union.

Lord Whitty: My Lords, no genetically modified crops are grown in the United Kingdom commercially. Therefore, there is no need to introduce a moratorium on commercial growing either in the UK or in the EU. There are some carefully controlled, limited-scale trials

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taking place. The Government believe that there is no evidence to justify demands for those to be stopped on environmental grounds.

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