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Lord Lester of Herne Hill: My Lords, is the noble Lord aware that partnerships have been covered by anti-discrimination law for more than a quarter of a century; in the Sex Discrimination Act 1975 and in the Race Relations Act 1976 as well as in the Northern Ireland legislation?

Lord Monson: My Lords, yes, I am well aware of that and I shall turn to that in a moment. As far as I

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know, the EU directive refers only to employment laws. Therefore, why are these regulations being used as an excuse to extend the power to impose further restrictions upon partnerships? Do similar laws in other EU countries extend to partnerships, or is this another example of gold-plating by Her Majesty's Government?

It was, after all, a previous Labour government—and this answers the noble Lord, Lord Lester of Herne Hill—more Left-wing than the current Government, which deliberately excluded small partnerships of between two and five individuals in Section 10 of the Race Relations Act 1976. How sensible they were. After all, there are many all-Jewish partnerships. One often comes across firms of solicitors with names such as Goldman, Levy, Katz and Greenberg. Why on earth not? Why should they not form all-Jewish partnerships? I dare say that there are a number of all-Bengali or all-Gujarati partnerships. Why on earth not? But it looks as if they will now be outlawed.

I finish with a story I heard first-hand less than three weeks ago. I happened unexpectedly to meet at lunch a couple who said that they were thinking of emigrating. As they were in their late forties or early fifties, and I knew that they still had dependent families, I tentatively inquired why, upon which they revealed that they owned a small science-based firm which normally employed only graduates, such being the skilled technical nature of the work required. But having social consciences—they did not use that expression, but that is what I deduced from their general demeanour—they one day took on a young lady of Caribbean origin who had no degree, but who they thought was bright and might fit in and learn reasonably quickly.

Initially the young lady seemed to do very well, so they promoted her. It was a total disaster. She was simply not up to the job. So, not wanting to disappoint her or hurt her feelings, they created a somewhat invented job for her, at the same higher salary as she was receiving post-promotion. Notwithstanding that she suffered no financial loss, the girl, encouraged no doubt by grievance-fostering lawyers, claimed that her pride had been hurt by the sideways move and launched an action based on alleged racial discrimination.

Although the couple think they have a good chance of eventually winning, such has been the emotional and financial cost of fighting the case that they are thinking seriously of winding up their business in Britain and starting up somewhere abroad, to the great disbenefit of this country. Once the burden of proof has shifted, we may expect more of this sort of thing.

10.45 p.m.

Lord Ouseley: My Lords, for the best part of four decades we have led Europe in the way in which we have tackled race relations, with the introduction of legislation, and our enforcement machinery which is the envy of many states across Europe. It is a great tribute to the noble Lord, Lord Lester of Herne Hill, that he was an architect of that legislation, supporting Lord Jenkins of Hillhead when the latter was Home Secretary.

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Britain's role has been honourable in helping to support the development of the European directive, which is important in that it provides protection for residents right across Europe in a consistent way. In many cases our own citizens have the same level of protection in other parts of Europe, and the directive will help to give at least a greater degree of consistency of protection for those who may be the victims of discrimination.

Back in 1965 we ended colour discrimination. At that time signs were very evident all over Britain saying "Rooms to let"—or "Job vacancies"—"No blacks, no coloured, no Irish." It seems to me that in 2003, with these regulations, we are going backwards. Despite what the Minister said about the Government's widespread consultations on the regulations, it would appear that no one listened to what people were saying.

In bringing forward secondary legislation at this time of night, the Government cannot be forgiven for wasting the three years that they have had to prepare and introduce primary legislation to strengthen our existing legislation. It is very disappointing that they have chosen to submit weaker and confusing regulations.

The Government have known exactly what the negotiated provisions mean, but instead of meeting the spirit of the directive—the establishment of the principle of equal treatment for all—they now purport to follow the directive to the letter by adopting a minimal approach to implementation. Not only will this approach create an unworkable law, it also fails fully to comply with the directive provisions. Instead of adopting fully the wording and definitions of the directive, the regulations change phrases arbitrarily, leave out crucial bits and thus do not comply with the spirit as well as the letter of the directive.

Despite the Government's commitment to bringing forward legislation that is clear, concise, comprehensive, effective and simple to interpret and to enforce, these regulations will unnecessarily produce an increasingly complex and complicated framework which will be confusing, difficult to understand and therefore difficult to use. This means that they will achieve just the opposite of what the Equality Bill promoted by the noble Lord, Lord Lester, intended: a simplification of our equality laws which was welcomed by Members of this House.

The regulations will create a two-tier framework with two grounds of discrimination and key areas of material scope excluded from the revisions. With regard to the material scope and the omissions, the key areas of immigration and policing—that is, the enforcement and regulatory functions—are not included in the regulations, which means that in effect the Race Relations Act will be split into two.

The recently enacted Race Relations (Amendment) Act 2000 remedied the defect that existed for over 25 years by incorporating those functions within our existing legislation. But in so far as these regulations apply, they will now be excluded. That is bizarre and

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inexplicable. Are we to approve regulations that will permit immigration and police services to escape taking responsibility for the harassment of people simply because of their race? Surely this anomaly must be addressed.

That brings me to the grounds of discrimination. Race as well as ethnic origin are both included in the regulations, but colour and nationality are omitted. The exclusion of colour seems entirely arbitrary, as the directive's stated purpose of combating racism and xenophobia, along with its broad reference to race and ethnic origin, very likely encompasses colour. The Government did choose to include national origin as falling under the directive's definition of race and ethnic origin, so it is unclear on what basis colour can be deliberately excluded, especially when it forms an integral part of our own existing definitions. That is arbitrary, irrational, indefensible and—dare I say it?—racist.

The regulations will introduce an equality hierarchy if they remain in their present form. There is the distinct likelihood of increased litigation to clarify the law, with financial consequences for businesses, for the Commission for Racial Equality and for trade unions which provide legal assistance to victims. There is a lack of adequate sanctions. No attempt has been made to ensure that sanctions are effective, proportionate or dissuasive, as required by the directive. For example, tribunals could be given the power to order remedies to correct a wrong that has been perpetrated.

Then there is the possible non-compliance of the race regulations with the race directive. Taking the indirect discrimination provisions, the definition in the regulations departs from the wording of the directive at crucial points. One effect is that the anticipatory challenges to an indirectly discriminatory practice will not be possible. Rather, action can be taken only once an individual victim has already suffered a disadvantage. The regulations require a person to be an actual victim, whereas the directive permits cases to be brought even before someone experiences an individual disadvantage. In the absence of a directly affected victim, it will not be possible to challenge an indirectly discriminatory policy, criterion or practice.

The second point on indirect discrimination is that indirectly discriminatory practices will still be possible when deemed "appropriate" and "legitimate", whereas the directive requires additional tests of "objective justification" and "necessary" aims. Surely this cannot be acceptable and is contrary to the principle and the letter of the directive.

As regards the issue of genuine occupational requirements, the directive would replace the list of employment exemptions in the existing Race Relations Act with a strictly defined general exemption which must show evidence of being legitimate and proportionate. The regulations fail to adopt the full strict definition of the exemption by omitting that the objective of such an exemption must be "legitimate". Moreover, the regulations add "dismissal" to the scope of this exemption. That

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amounts to a violation of the directive's non-regression clause as there are currently no exemptions for discrimination in dismissal procedures in the Race Relations Act.

I move on to harassment. The regulations separate harassment from discrimination whereas the directive clearly says that harassment is a form of discrimination. This can have negative consequences for the victims who go through a continuum of harassment and discrimination and who encounter time limits when lodging complaints.

The provision on harassment introduces a "reasonable person" test. What is that? It is that harassment will be acknowledged as such only if it can "reasonably be considered" to have adverse effects. Such a test effectively perpetuates prejudice and indirect discrimination because a "reasonable perspective" is likely to refer to a spurious "average", the traditional standard which is characteristic of the dominant majority population, that of white middle-aged males whose presence, incidentally, still dominates our tribunals and courts. Inevitably, such perceptions differ from those of people who are often most affected by harassment.

These regulations defy belief when set alongside our track record of leading Europe in outlawing racial and other forms of unjustifiable discrimination. It is clearly incumbent on the Minister to explain what representations have been made during the extensive consultations. What representations have been made by the Commission for Racial Equality, for instance, and why have these been rejected?

These regulations are too deficient to be approved. The Government should look at them again before taking them any further.

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