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Lord Taylor of Warwick: I support the noble Baroness, Lady Miller, especially in relation to Amendments Nos. 4 and 5. It was Groucho Marx who complained,

The Confederation of British Industry, the British Chambers of Commerce, the Federation of Small Businesses and the Institute of Directors have all asked the Government to raise the threshold. They suggest that an exemption for small companies with fewer than 50 employees is more realistic. It is a great concern that the Bill uses the arbitrary number of 20 workers, ignoring all the advice and submissions from those expert organisations.

The figure 20 has no real significance. My first fee as a lawyer many years ago was a four-figure sum. That sounds impressive until I tell your Lordships that it was £12.95. I should like to know what impact analysis the Department of Trade and Industry or any other government department have carried out. What will be

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the percentage cost increase of compliance for firms employing 20 people? If that research has not been done, why not?

It would not be unusual for a firm with fewer than 50 workers to have just one personnel manager and one accounts manager, or even just a bookkeeper. A letter from a firm's trade union requesting collective bargaining at a time when some key people are away, on sick leave or on holiday could make it difficult for the employer to respond within the statutory timetable. One could argue that a union is likely to take advantage of such an employer, but the very existence of such provisions makes smaller firms more vulnerable.

The future of small companies is vital to our economy and I do not believe that anyone here would disagree with that. They are the majority of businesses in this country, contributing 40 per cent of turnover and employing 50 per cent of the private sector workforce. Since this Government came into power in May 1997, they have imposed 2,400 new regulations. The Institute of Chartered Accountants estimates that the extra cost of these regulations for small businesses is £5,000 a year. As a vice-president of a small business bureau, I know that many small firms have struggled to survive this onslaught. Now, just as they see a light at the end of the tunnel, it is the light of an oncoming train called the Employment Relations Bill.

Lord Davies of Coity: I am wondering whether the point of the legislation is being missed by the spokespeople on the Benches opposite. It is about fairness at work. It is about ensuring that workers in this country are treated fairly by their employers and by this society. It is a bit rich for Members on the Benches opposite to describe fairness when for more than a decade, beginning in the 1980s, they introduced anti-trade union legislation which damaged the interests of workers who were represented by trade unions and workers who were not. By that I refer to the emasculation and eventual abolishment of the wages councils which were intended to produce minimum standards for working people in this country.

I notice that the noble Lord, Lord Tebbit, is smiling. I recall that a couple of weeks ago he described the extent to which he consulted before he introduced his legislation. I was at the sharp end of his legislation and I do not recall him once taking on board any representations made by trade unions on behalf of their members and workers generally.

The noble Baroness, Lady Miller, says that in America the figure is 50 workers. If the industrial environment, the structure, determines that 50 is the appropriate figure, that is fine, but we are saying that this Government have consulted widely with representatives of employers and trade unions. To a large extent, they have forced representatives of the CBI and the TUC to come together to try to thrash out as many points as possible so that legislation could be made easier and fairer for those people.

Where that was not possible the Government had to take a decision. However, they did so based on the evidence before them and on the structure of industry in

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this country. As the legislation is about fairness at work, perhaps I may remind the Committee that every worker is entitled to that fairness. We have mentioned the figures of 50 and 21. The noble Baroness, Lady Miller, said that the Government picked the number 21 out of the air. I suggest that perhaps she picked the number 50 out of the air as an alternative. Perhaps there is evidence from America which does not apply here.

4.30 p.m.

Baroness Miller of Hendon: The figure of 50 that I picked out was the amount used in the late payments Bill. That was the number used to define a small business. The American experience was another matter.

Lord Davies of Coity: I take that point. However, an enormous number of people in this country, working throughout industry, will be denied the opportunity to have a trade union to represent their interests in terms of collective bargaining and representation if this amendment is agreed to. We understand that industry is changing and larger companies are employing fewer people and small firms are enlarging to more than 50 workers. I believe that the Government have got this right and I hope that the amendment will be withdrawn.

Lord Cavendish of Furness: Perhaps I may declare an interest, as I did on Second Reading. Rather than going through the lengthy description of the interest that I declared then, suffice it to say that I employ some 300 people and this Bill would impact on my affairs and those of my workforce.

I rise to speak in support of my noble friend's amendment. There has been talk of consultation and partnership in relation to this Bill. I believe that consultation was dealt with, although there still remains the question of who is to be consulted and who will listen to the consultation.

On partnership, again and again on Second Reading the question was raised as to whether partnership favoured the employer at all. In the reply there was no mention of it, and I can find nothing whatever to support the suggestion that partnership favours employers.

The debate on "smallness" is important. There is a level at which it is acknowledged, almost universally, that trade union activity is not appropriate. I believe that "smallness" relates to functions rather than to the numbers on the payroll. The number of people on a payroll can be misleading in a huge number of ways. My slate quarry operation opened an office in London--a huge investment with high risk--involving three people. It was crucial to the business's success that that little unit functioned properly, and it was completely discrete from the workforce in Cumbria.

All businesses have a minimum number of functions for which management is always looking for cover, just as Ministers look for cover when one of their number falls ill and someone else has to do their business. I would have thought that the question of functions would show a typical profile which would include an accounts department, a marketing department, a sales

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force, a human resources department, a production department which, in turn, can be sub-divided into several utterly different activities, packaging, transport, and so on. A minimum number of functions would perhaps be six to 10, so to say that you are talking about 20 people would be wrong as you may be talking about cover for only one person in a very small business.

I believe that a business with 50 employees is still a small business. I would not go to the barricades over it, but I suggest that this is a genuine attempt to achieve a sensible number. I suggest that we are looking more towards the number of 50 than towards the number of 21, for the reasons that I have outlined.

Lord Gladwin of Clee: When speaking to sub-paragraph (a) of Amendment No. 6 the noble Baroness referred to officers of a company, directors, company secretary and other officers of a limited company, but she made no reference to managers. I know a lot of managers and there are many in my trade union who would resent the fact that they are not described as workers. I find that curious. Officers of a limited company are identified, but managers are not.

In sub-paragraph (c) the noble Baroness talked about a partnership and described the kind of partnership that she had in mind. Should I assume that she would exclude companies like the John Lewis Partnership?

Baroness Miller of Hendon: I did not mention managers. In relation to small businesses, in many respects the husbands and wives who run the businesses are the managers of such businesses. We are not talking about large businesses. However, so far as managers are concerned--

Lord Gladwin of Clee: There must be managers if there are 50 employees.

Baroness Miller of Hendon: Amendment No. 6 refers to excluding such people from the number of 21 employees and not 50. That was the point that I was making. If the Government do not feel it is possible to alter the number from 21 to 50--although I hope they will be able to--at the very least I included in the same grouping an amendment which recognises that if you include all the other people in the figure of 21 you are in trouble. The reason that I did not add managers was for the reason that I gave in the first instance, not because of an implied insult to managers, but if I excluded managers as well there would be only one person left in the business.

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