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Baroness Miller of Hendon: My Lords, I thank the Minister for his explanation of the regulations. I also thank him for the positive history he gave of the consultation process. While we on this side of the House certainly accept the amended regulations, as did the other place, the history of how that arose is not as positive as that of the consultation. I shall try to relate the relevant events as that puts the matter in a proper perspective.

These regulations make three changes to the Maternity and Parental Leave Regulations 1999. Three is a significant number, as the explanatory note provided to your Lordships merely refers to two of them; namely, the retrospective inclusion of certain older children in paragraph 5(2) and increase of the length of leave in the case of disabled children under paragraph 4(b).

However, there is a further important and substantial amendment to the regulations; that is, the provision that employment by a previous employer qualifies an employee for leave from his new employer. I shall turn to the merits of that shortly, but for the moment I should like to be told the reason for the omission of that important provision from the explanatory notes. It seems rather extraordinary that the notes mention two of the provisions but not the third. This is not the first occasion that the DTI has been economical with the facts in the course of these new draft regulations passing through Parliament.

In April, the department issued a press release announcing the extensions to employees' rights covered by the regulations. That press release omitted to mention that the change to the qualifying age was brought about not by the Government suddenly discovering an anomaly in the original regulations or by a spontaneous desire to improve the benefits, but by an action by the TUC for a judicial review of the Government's interpretation of one aspect of the EC directive, which is the source of the original regulations.

The Government resisted the action and resisted it being decided by our own High Court. Instead, it was referred to the European Court of Justice and listed for hearing on 3rd May 2001—a date that your Lordships will recall had some significance, at least for the Government, because it was just a month before the general election.

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One week before the hearing date, the Government gave in. Not only that, in the new regulations they have, as is typical of them, gold-plated the directive in a way that I shall describe shortly.

I am sure that the Minister will assure us that that sudden change of heart by the Government had nothing to do with the TUC's possible contribution to the funding of the Labour Party's election campaign. I am sure that the real explanation is that the DTI suddenly realised that the legal advice that it had received previously was hopelessly wrong.

On 1st December 1999, the Minister for Employment and the Regions told the Fifth Standing Committee on Delegated Legislation in the other place:

    "All our legal advice tells us that our provision is in accordance with the directive".—[Official Report, Commons Fifth Standing Committee on Delegated Legislation, 1/12/99; col. 15.]

What a pity that, instead of listening to their own advisers, the Government did not listen to the advice of the highly skilled expert on employment law who had been retained by the TUC—Ms Cherie Booth QC—who proved to be right where the Government's lawyers proved to be wrong. What a pity that the Government did not follow the example of the Irish Government, who caved in as soon as the error was pointed out to them.

Last month, my honourable friend the Member for Runnymede and Weybridge asked the Minister in the other place how much this legal fiasco had cost the taxpayer, including, no doubt, the substantial fees justifiably charged by Ms Booth. Answer came there none. At first the Minister claimed:

    "The subject is still under negotiation. No settlement has yet been made".

Could the costs still have been under negotiation six months after the settlement of the action? I compliment the lawyers involved for their remarkable forbearance about getting paid for their work.

When pressed by my honourable friend to undertake to write to him when the matter was settled and to say how much money was paid to the TUC, the Minister replied:

    "No, I will not".—[Official Report, Commons Fifth Standing Committee on Delegated Legislation, 7/11/01; col. 20.]

I ask the noble Lord, Lord Sainsbury, the same question. I shall not be satisfied with the answer that the Minister in the other place gave, vaguely hinting at "an element of confidentiality". The payment of public money to a litigant with close political links to the Government is a matter of legitimate public concern and interest.

Only last week, I heard the parliamentary ombudsman complaining on the radio about the Government's refusal to comply with one of his rulings. He said that where public money is involved, the public have a right to know how it is being spent. The Government have had adequate time to consider the implications of my honourable friend's legitimate inquiry in the other place and to agree to answer it. If the Minister cannot now give me the information and will not undertake to provide it to me when it becomes

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available, I shall return to the matter at a later date. I hope that he will display the characteristic openness that he has always shown me over the Dispatch Box and will co-operate, making it unnecessary for me to consider the issue again later.

I have given the history of the situation because the Minister gave a long history of the consultation and I thought it proper to say something to put the whole matter into perspective. I shall now deal with the substance of the three prongs of the proposed new regulation. First, they will enable a person's employment with a previous employer to qualify him for benefits from his new employer. Secondly, there is a provision retrospectively providing for the start-up date for a child's parents to qualify for maternity and parental leave for children born on or after 19th December 1994. That produces the anomaly that the parents of children who are currently six, seven, eight, nine or 10 are entitled to leave, whereas the parents of those who are born on or after 15th December 1999 will be restricted to the original five years. If I am wrong about that, I am sure that the Minister will tell me.

That bizarre situation arises because the Government botched up the original regulations, fought a pointless action with the TUC when the matter was drawn to their attention and in the end had to find some way to placate the TUC—by gold-plating the directive.

Finally, the least controversial—or the most uncontroversial—aspect is to extend the length of leave to 18 weeks in the case of disabled children. The problems faced by parents of a newborn disabled child do not bear thinking about. In the compassionate society that I believe that we all live in, there has to be room for employers to assist such employees. The vast majority of employers, even small employers, would show great consideration to their employees without the need for the regulation, but I agree that, to cope with the recalcitrant minority, this extension of the regulations is reasonable and necessary.

I have referred to the plight of small businesses, on whom the burden of the regulations and similar legislation impinges. They are the least able to cope when an employee takes time off for parental leave. A small firm with just three or four employees cannot simply spread the work among the other few employees. On the other hand, the Government's new legislation that any employee is entitled to full rights, including on holiday pay, redundancy and unreasonable dismissal, militates against such firms taking on temporary staff. The cost to industry of the burdens imposed by the Government in the previous Parliament is £15.9 billion.

In response to a question from my honourable friend, the Minister in the other place tried to persuade the Committee that the cost was a mere 50p per employee per annum. Only this week, he wrote to my honourable friend admitting that he had inadvertently misled the Committee. He said that the figure of 50p per employee per annum,

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    "is the cost of the bureaucracy associated with this legislation",

but he did not offer any new estimate of the cost. I do not know whether the Minister is in a position to do so. There is no such thing as a free regulation. In the end, someone has to pay.

As I said at the start, we shall of course accept the regulations—we would not dream of opposing them. They have already been democratically accepted in the other place. We only hope that they will not have an adverse effect on small businesses. I note the Minister's comments that the consultation showed that they probably would not.

Lord Razzall: My Lords, I join the noble Baroness, Lady Miller, in supporting the regulations. I have two brief points to make. First, I hope that the Minister accepts our contention that the method of consultation used for these and many other employment regulations seems to produce answers that are well accepted by employers and employee groups. The Government should be commended on their conduct of such consultation exercises. When all the legislation was brought in there was a lot of criticism that far too much was being left to statutory instruments. The Minister and his predecessor said that one of the objectives was to have extensive consultation. It is important that such regulations are brought in after serious consultation. The Government should be commended on how they are conducting that.

Having said that—having given the olive branch with one hand, perhaps I may take it away with the other—I believe that the noble Baroness had a point. Having listened to it, and as we are nearing the end of our proceedings this week, perhaps I may say that, had the noble Lord, Lord Healey, or the noble and learned Lord, Lord Howe, been in their places, they might have considered that perhaps an opportunity had been missed to savage the Minister with a live sheep.

Nevertheless, the point is well made. Why was the TUC forced into the position of taking a case for judicial review against the Government on something that should have been dear to their hearts? I know that in the nine minutes that the noble Baroness spoke, the point became rather lost. However, I should like to hear from the Minister a simple explanation as to how the Government, with their well intentions, got into the position of being sued by the TUC.

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