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Lord Roberts of Conwy: Amendment No. 83 relating to Wales is grouped with these amendments. It is an indication of general public concern in Wales that there should be equitable distribution of funds between local health boards in different parts of the country. That is a very sensitive issue in Wales. Ministers may have noted in Committee last Thursday that the noble Baroness, Lady Finlay of Llandaff, in her proposed new clause, ascribed to the national

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agency that she proposed, the function of overseeing "the equitable distribution of funds" to local health services. It is a very important issue.

We are all familiar with the fact that, for example, similar operations do not cost the same in different parts of Wales. There are tremendous variations in cost for fairly standard operations. I am sure that the Assembly will do its best to reduce those differences. There are similar variations in England.

We also have postcode prescribing in Wales. Certain drugs are available in certain areas and not in others. There are also variations in waiting times for hospital treatment. In these circumstances, there is a strong temptation to concentrate resources on the worse affected areas at the expense of the best served. The result is often to reduce the level of service overall.

Of course it is certainly not easy to define, and even more difficult to provide equity where funding is concerned. All sorts of factors have to be taken into account. There is the nature of the population, levels of morbidity, the NHS inheritance and so on. Nevertheless, in a country like Wales, some regard must be paid to the equity principle; otherwise people soon sense that one area is being unduly favoured at the expense of another and discord ensues.

I am bound to tell the Minister that I am not reassured by the fact that there are going to be different formulas operating in England and Wales. I do not see why we should not have the same formula operating in both countries if there is any objective criterion which that formula must meet.

Lord Hunt of Kings Heath: I have noted with interest the suggestion of the noble Lord, Lord Roberts, that we operate the same formula. I suspect that many of the broad principles will be the same, but I think that there is some advantage in looking at how different approaches work out in practice. Obviously, it will be interesting to compare how this works through over the next number of years.

The effect of Amendment No. 74 would be that the Secretary of State could not impose any conditions on any of the allocations to a primary care trust. As we devolve power to the local level we clearly want to get as much resource as we possibly can to primary care trusts. But we also want to be able to set the general course for the NHS and to set national priorities. On occasion—I stress "on occasion"—we might want to ring-fence part of the allocation to ensure that funds are spent on the purpose for which they are allocated. We do that at present for out-of-hours development funds for GPs, and we must retain that facility.

On Amendment No. 75, under existing provisions for funding health authorities and primary care trusts, it has always been for the Secretary of State to decide what records each health authority and primary trust may keep, subject to the usual constraints of parliamentary accountability. So far as reasonableness

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is concerned, power must be exercised rationally. It cannot be exercised in a way in which no reasonable Secretary of State would act. On that basis, the wording of the amendment is superfluous. Obviously, the Secretary of State would always act in a reasonable way.

On Amendment No. 83, I listened with great interest to the comments of the noble Lord, Lord Roberts, about the issue of equity in Wales. That is a matter for the National Assembly, but I understand that the Assembly is committed to ensuring more equitable access for the entire population in Wales. As I said earlier, the Assembly is currently considering the outcome of a major resource allocation review, which is an attempt to close the gap between the worse off and better off in health terms.

The problem with Amendment No. 83 is that if it were accepted, the Assembly would be prevented from pacing the introduction of a new formula. Pacing is important. In any move to a new formula that could lead to large differences in the new allocation compared to the old one, we must ensure that the rate of introduction is paced. The problem with Amendment No. 83 is that it would inhibit the National Assembly's ability to pace that introduction. The National Assembly for Wales is exercised by the production of a fair formula. On that basis, I hope that the noble Lord will not press that amendment.

Baroness Noakes: I thank the Minister for that reply on both my amendments and that of my noble friend Lord Roberts. I cannot say that I am surprised by the Minister's views on Amendment No. 74. Of course, the power allows the Secretary of State to direct the smallest amount of activity in a primary care trust, because he is allowed to attach a power of direction to any tiny amount paid to a primary care trust. The Minister said that he may want to use that for ring-fencing to set direction for the NHS.

Of course, if it were simply a question of direction and balance, that would be much easier to understand. Perhaps at present we are lacking the words to give that sense in the Bill. In the light of the Minister's comments, I shall reflect further and see whether we can include in a direction-giving power something of a higher level to give sufficient freedom for primary care trusts. However, at this late hour, I shall not labour the point further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 75 not moved.]

Clause 8 agreed to.

Lord Filkin: It is nearly 11 o'clock and I am aware that the House is sitting early tomorrow. I therefore beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

        House adjourned at eleven o'clock.

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Official Report of the Grand Committee on the

Employment Bill Monday, 18th March 2002.

The Committee met at half-past three of the clock.

[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]

Clause 22 [Employment tribunals]:

Baroness Turner of Camden moved Amendment No. 75:

    Page 32, line 35, at end insert—

"( ) No award shall be made under subsection (1) to a party which is a body corporate where the relevant time was spent by a director, executive, consultant or employee of the company in the ordinary course of duties for which he is engaged or remunerated, whether or not those duties were executed in overtime, or to a party which is a partnership where it was spent by a partner, consultant or employee in the ordinary course of his duties or of the partnership."

The noble Baroness said: We debated this clause at some length at our last Committee sitting and my noble friend Lord Wedderburn demonstrated conclusively why Clause 22(2) should not be in the Bill at all. My noble friends and I are not alone in that view. My own union Amicus, formerly MSF, has written to me to say that it thinks it should come out. My noble friend Lord Wedderburn has quoted the Law Society's brief, which of course I have seen, and there are others as well. The National Association of Citizens Advice Bureaux, which has unrivalled experience of representing people who otherwise would have no one else to support them, believes that the possibility of incurring costs is already a deterrent to potential claimants. In fact, it says that CABs are already reporting an increase in cases where applicants are intimidated by threats of costs. It concludes:

    "We fear that the potential for a party's preparation time to be reflected in costs awards will simply strengthen the ability of employers' legal representatives to intimidate tribunal applicants with threats of an action for costs quoting the maximum that may be available."

It seems that the Government have not been willing to accept our earlier amendments on this issue.

So we come to our amendment, which at least seeks some measure of fairness in the matter of preparation compensation—an unprecedented provision, as my noble friend Lord Wedderburn has demonstrated. It seems unjust that an employer should be able to claim the cost of preparing for a case when the people involved in such preparation would have to do this kind of work anyway as part of normal duties. An employer, unless this clause is amended, would be able to claim the cost of the time of people working in his personnel department, or of people holding managerial positions (or their support staff) where staff matters are a part of their normal remit. Therefore, preparation compensation could be quite substantial, with legal costs presumably in addition.

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An employee, however, particularly if not represented, would not be able to claim so much by way of preparation compensation. He might do his preparation on his kitchen table in the evenings. It is difficult to see how employment tribunals could be expected to handle the arrangements set out in this clause equitably.

Of course, NACAB is right. One can very well see that unscrupulous employers, or their lawyers, would be prepared to use the mere existence of a provision of this kind to intimidate potential claimants. They could tell them, "You realise that you may lose and, if you do, you will not only face costs but you will also have to compensate the employer for the time his staff have to spend preparing for the ET case. That could run into a great deal of money, so think hard. The employer intends to fight this case hard. Is it worth the risk"?

I have already had examples of what happens now. There is the case of a Mr H who claimed unfair dismissal and was acting for himself. The employer's representative wrote to him, threatening him with costs as follows:

    "It is clear from the facts that your claim is wholly without merit and is bound to fail. Therefore, we hereby place you upon notice of costs as we are of the view that this claim is frivolous and vexatious and is bound to fail. For the avoidance of doubt, if you withdraw your claim, we shall not pursue you for costs".

This case was handled by a local law centre. When it went to an ET, the tribunal decided that the individual had been unfairly dismissed and awarded him the maximum compensation of £50,000.

I have a case here, too, of alleged sexual harassment. The two women concerned were threatened that,

    "[there] are likely now to be awarded substantial sums against people who bring claims on the spurious grounds of discrimination, such as we are sure you will alert your client can be up to £50,000".

The two women concerned were, of course, very worried when they received that letter. If preparation costs are also added, that is even more cause for attempting to intimidate people into not taking cases.

I hope that the Minister will see that we are trying to introduce an element of fairness into this clause. We are trying to ensure that heavy preparation costs do not include the costs of people whose job it is normally within a firm to handle staff matters with the result that a heavy preparation award could be expected to be made and could be threatened. It is the deterrent effect which bothers many of us. I hope that the Government will look favourably on the amendment. I beg to move.

3.45 p.m.

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