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Secondly, for those Members not familiar with the case, Mr David Butau is a ZANU-PF MP who has come to this country. It is alleged in the Zimbabwean media that he is guilty of corruption, but no charges have been pressed against him in Zimbabwe, so he is in no way a criminal hiding from justice. He came here on a tourist visa which dates from before he became an MP. If criminal charges were pressed we would have to look into the issue, but at this point it is just speculation in the Zimbabwean media.

Lord Hamilton of Epsom: My Lords, surely South Africa holds the key to the future of Zimbabwe. Let us face it, under a different sort of Government it actually brought down the Smith regime in Rhodesia. Do we not feel that President Mbeki has been a broken reed and really has not come up to expectations in terms of all the faith that the western powers have put in him?

Lord Malloch-Brown: My Lords, President Mbeki has been confronted with an enormously difficult situation with an obdurate President Mugabe and at times a somewhat divided opposition, and he has been unable to move his mediation forward as effectively as any of us—including him—would wish. The difficulties faced in South Africa in recent weeks have further complicated this and have perhaps been a distraction from getting to a point of closure, which he had intended to do by now.

Lord Hughes of Woodside: My Lords, has my noble friend reflected that the obvious absence of progress does not necessarily equate to failure? In those circumstances, instead of simply condemning President Mbeki in a very difficult situation—even the Question asked by the noble Lord, Lord Blaker, refers to ZANU-PF and the opposition—and because there is no coherent

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opposition, should we not encourage President Mbeki and those in SADC to act on their own account rather than simply carp?

Lord Malloch-Brown: My Lords, I welcome the opportunity that my noble friend has given me to confirm our support for President Mbeki’s initiative and thank him and his SADC colleagues for all the effort that they have put into this. However, the clock is ticking, and we are moving towards the March elections without reforms agreed, let alone implemented. We are rapidly passing the point of no return in terms of what would allow free and fair elections at that time.

Olympic Games 2012: Security

3.01 pm

Lord Rosser asked Her Majesty’s Government:

Lord Bassam of Brighton: My Lords, the British Transport Police are already contributing to the Olympic Security Directorate through Assistant Chief Constable Steve Thomas. The security programme for the London 2012 Olympic Games is currently being developed with the involvement of key stakeholders, including British Transport Police. Decisions about funding, including that of the British Transport Police, will be made as part of that process.

Lord Rosser: My Lords, I thank my noble friend for that response. It is planned that 80 per cent of people attending the London 2012 Games will do so by using the rail network, which will require a capacity to move and ensure the security at peak of 240,000 people an hour using rail services to and from the Olympic Park. Can my noble friend give an assurance that the Government are not contemplating that part or all of the additional British Transport Police security and other policing costs of nearly £30 million for the Olympics, which are already starting to be incurred, should be borne by the railway companies, which already provide the normal revenue funding for the British Transport Police, and that they should be provided out of central government funds for this unique national one-off event?

Lord Bassam of Brighton: My Lords, the noble Lord asks a valuable question on one of the issues under active consideration. He is right that the industry is normally expected to meet the revenue costs of policing matters relating to the railway network, and some of those discussions need to be continued. The development of the security programme is continuing and we are well advised by Assistant Chief Constable Steve Thomas of the BTP. No doubt that issue and other issues relating to governance and so on are still to be finally determined.

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Lord Hanningfield: My Lords, to follow up the noble Lord’s question, there are likely to be nearly a quarter of a million—240,000—people coming on to the Olympic site at Stratford every hour. Given the problems of national security and the problems that that line suffered last week with the number of people currently using it, when there were almost riots on the stations, I hope that the Government are taking the matter more seriously than is suggested by the answers that the Minister has given us.

Lord Bassam of Brighton: My Lords, we do take these issues seriously and the noble Lord should not consider anything that I have said this afternoon in your Lordships' House as doing anything other than that. These are very serious issues. However, there is a great deal of experience out there among the police forces that have to work with the train operating companies. Our security for major sporting events is often envied internationally, and our police service does a very good job in those very difficult circumstances.

Baroness Billingham: My Lords, my noble friend said that many of these issues were still under review. The question being put is perfectly acceptable and worth while and it ought to be looked at favourably. While he is reviewing it, perhaps he could tell us how the review of policing for football matches is progressing. Many of us were surprised to learn that policing for major football matches is not paid for in any way by the clubs themselves although they appear to be extremely profitable. Perhaps some of the funding that could be released from policing football matches could go to the project suggested by my noble friend.

Lord Bassam of Brighton: My Lords, I know that we have recently been through the Christmas period, and I can see that the noble Baroness is trying to extend the hand of generosity, certainly in one direction, but I have a strong suspicion that not everyone would necessarily agree with her premise. Although services provided by the police inside stadiums are to be funded by the football clubs, policing costs outside stadiums are met by the police service itself.

Lord Addington: My Lords, would I be right in assuming from the Minister’s answers so far that the Government do not envisage trying to hive off the extra security costs arising from an event that is supposedly of national prestige; that they will ensure that the costs are met by the Government themselves; and that the only points which have not been crossed and dotted are the exact financing and which department will provide the funding?

Lord Bassam of Brighton: My Lords, Tessa Jowell made clear last year when she announced the funding envelope for the Olympics that £838 million had at that stage been set aside for security and policing and that budget was confirmed on 10 December. The noble Lord is right to say that there are continuing discussions, as I am sure he would expect. The Olympics are four years away, the final details have to be put in place and the discussions continue.

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Lord Berkeley: My Lords—

Lord Imbert: My Lords—

Noble Lords: Cross Bench!

Lord Imbert: My Lords, does the Minister agree that transport security is a critical element in the preparation for the Olympic Games? Therefore, any further failure or delay in clarifying the funding provision will unnecessarily add risk to the preparation for the Games, particularly at a time when the threat level is at “severe”, the second highest threat level for terrorism in the threat-assessment barometer.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, with his great experience, for his contribution this afternoon, and I agree that it is important that these matters should be resolved. There is no argument that the funding has to be in place. There is no disagreement about that. The planning will continue as envisaged, and I am sure that behind that planning will be the necessary funds to ensure that we have the securest and safest Olympic Games ever.


Lord Grocott: My Lords, with the leave of the House, my noble friend Lord Malloch-Brown will repeat a Statement on Pakistan and Kenya following the three Front-Bench contributions in the Second Reading debate immediately following this statement.

Employment Bill [HL]

3.07 pm

The Minister of State, Foreign and Commonwealth Office & Department for Business, Enterprise and Regulatory Reform (Lord Jones of Birmingham): My Lords, I beg to move that this Bill be now read a second time.

The Government’s approach to the UK labour market is based on combining economic prosperity with social justice: enabling businesses to grow, employment to expand and delivering opportunity for all. Fundamental to this is the need for an effective and proportionate regulatory framework: one in which complying with the law is simple and straightforward for businesses and where individuals get the rights to which they are entitled, all supported by an effective, clear and speedy enforcement and penalties regime, while never losing sight of maintaining a flexible labour market that allows wealth creation to be at the core of our nation.

The Employment Bill extends this approach and makes changes to employment law with the aim of improving its effectiveness to the benefit of employers, individuals and other interested parties. The two key elements of the Bill increase protection for vulnerable workers while lightening regulatory burdens on businesses. Enforcement of employment law will be strengthened

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by the introduction of new penalties for businesses not paying the minimum wage and additional powers for employment agency inspectors to deal with disreputable agencies.

At the same time, the Bill will reduce burdens by repealing the workplace dispute resolution procedures. These legislative changes will be accompanied by a package of non-legislative measures to help employers and employees resolve disputes earlier, saving millions of pounds for businesses and individuals. The measures form an important part of the Department for Business, Enterprise and Regulatory Reform’s wider simplification plan, which is set to deliver net reductions in administrative burdens worth more than £1 billion per annum to the UK economy within the next three years. In addition, the Bill clarifies the position of cadet force adult volunteers in relation to the national minimum wage and amends trade union membership law to comply with the European Court of Human Rights judgment in ASLEF v UK.

I will now outline the measures in the Bill, beginning with those on workplace dispute resolution. On 21 March 2007, we published Michael Gibbons’ independent, Review of Employment Dispute Resolution in Great Britain, and an associated government consultation paper, Resolving Disputes in the Workplace. The review identified several key problems with the current dispute resolution system including that: the statutory dispute resolution procedures introduced in 2004, although right in principle, carry a high administrative burden for employers and employees and have had unintended consequences which outweigh their benefits; and around 75 per cent of claims made to an employment tribunal are resolved before reaching a hearing—a substantial portion with the involvement of ACAS. But a significant proportion of cases that reach a tribunal hearing really could be resolved beforehand between the parties, saving cost and time for employer and employee alike.

We will publish our full response to the consultation shortly. We have focused on the policy changes that require primary legislation. The responses to the government consultation were broadly supportive of the conclusions of the review. Clauses 1 and 2 provide for repeal of the procedures, and of the linked provisions on procedural unfairness.

Michael Gibbons also argued that there should be an incentive for employers and employees to take steps to resolve their disputes themselves. Clause 3 therefore gives tribunals the discretion to adjust awards upwards or downwards by a maximum of 25 per cent where they find that the parties have unreasonably failed to comply with ACAS’s statutory code on discipline and grievance. This will be a discretionary power for employment judges to apply in the circumstances of the case, without the rigidity of the existing link to the statutory procedures. ACAS will revise the code. The chair of ACAS has confirmed that the draft code will be concise and principles-based, and supported by fuller non-statutory guidance.

Gibbons also argued that the Government should make additional investments to improve the accessibility and quality of the advice services provided by ACAS, and to provide additional ACAS conciliation services

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for disputes that are likely to become the subject of an employment tribunal claim. We intend to do so. Two legislative changes intended to maximise the effectiveness of ACAS conciliation are contained in the Bill. First, Clause 5 changes ACAS’s existing duty to conciliate in cases which are not yet the subject of a tribunal claim, on request from the parties, to a power. This will underpin our investment in additional conciliation services, ensuring that ACAS is able to prioritise its caseload effectively without the risk of legal challenge. Secondly, Clause 6 removes time restrictions on ACAS’s duty to offer conciliation to parties already involved in employment tribunal claims.

Michael Gibbons recommended that some tribunal cases, which revolve around the determination of facts in cases of monetary disputes, could be dealt with more quickly and simply. The Government intend to enhance existing arrangements to deal with such cases by establishing a new “fast track” procedure. This will largely be achieved by changes to employment tribunal practice, but requires two legislative changes which are provided in the Bill.

Clause 4 creates additional safeguards where employment judges draw on their existing powers to propose to the parties that a fast track case should be determined in writing, without a hearing. Clause 7 will simplify the process for claimants who have suffered direct financial losses over and above the non-payment itself—for instance, as a result of charges for unauthorised overdrafts. The tribunal will be able to make an additional award against the employer to provide compensation for such losses, rather than leaving the claimant to bring a separate action in the small claims courts, requiring additional expense and time from employer and employee alike.

The Gibbons review and the consultation also addressed a number of issues concerning employment tribunals practice and, in particular, consistency across the regions. The Government do not propose primary legislative change but will be working closely with the Tribunals Service and judiciary to ensure a streamlined and consistent service, including in the treatment of weak or vexatious claims. A majority of consultees believed that tribunals had sufficient powers, but many commented that there was scope for those to be used more consistently across the country. We have asked the Employment Tribunals System Steering Board to lead work on establishing best practice and ensuring that it is consistently applied.

I now turn to the Bill’s provisions relating to the national minimum wage. Incidentally, I should point out that I never did oppose the introduction of the minimum wage. If I had been asked for my opinion at the time—and I was not because I was not at the CBI then—I would have supported its introduction with the caveat that its long-term success would depend on the rate at which it was set and to which it was subsequently increased, and the method of compliance. The minimum wage has been a success because it has not adversely affected inflation or employment, yet it has made a real difference to the lives of many people.

Last year’s increase in the minimum wage benefited around 1 million individuals. The vast majority of employers willingly comply with minimum wage legislation; but nearly a decade on from the National Minimum

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Wage Act some unscrupulous employers continue to underpay. That is unfair to those who are underpaid and to the vast majority of businesses that obey the law and are unfairly undercut in a local labour market. We are determined to crack down on the small minority of employers who fail to comply. Between 2003 and 2006, we completed 15,000 investigations and identified underpayments totalling £9.6 million. In the past year, the Government helped to restore more than £3 million in arrears to more than 14,000 workers. We now want to take that further.

The Government consulted during the summer on proposals for a new penalty for underpayment of the minimum wage and a fairer way of calculating arrears. As a result of this consultation, we have concluded that the enforcement regime for the national minimum wage should be strengthened in several respects.

Clause 8 amends the method of calculating arrears owed to those who have been underpaid. Currently, these are paid at the rate in force at the time the underpayment took place. The Bill will change that so that all arrears owed are paid at the current rate. That helps to compensate for the potential loss of purchasing power since the offence took place by taking into account the length of time that arrears have been owed.

Clause 9 introduces an enhanced penalty regime that reflects the serious view taken by the Government of employers who do not comply with the National Minimum Wage Act nearly 10 years after its introduction. Under the new regime, an employer will be liable to an automatic penalty if it is found to have underpaid. The penalty will be equal to 50 per cent of the total amount of underpayment—summed up for all those who have been underpaid by that employer—thereby ensuring that the penalty is proportionate. The minimum automatic penalty will be £100 and the maximum £5,000. We want to encourage employers to rectify any underpayment as quickly as possible, so we will reduce the penalty by one half if the employer complies with a notice of underpayment within 14 days.

Clause 10 ensures that officers enforcing the minimum wage can take records relating to it in order to make copies of those records. Clauses 11 and 12 enhance the way we are able to deal with the most serious offenders, by increasing criminal investigative powers and enabling offences to be tried in a Crown Court, with the prospect of an unlimited fine.

The minimum wage is a key right introduced by this Government to ensure fairness. We make every effort to ensure that those who are underpaid get what they are owed; but the best protection we can offer is to strive to ensure that arrears do not arise in the first place—and no business should be allowed to get away with unfairly undercutting legitimate business by this exploitation. Those changes will ensure that everyone who is caught not paying will be punished, with a potentially unlimited fine for the most serious cases. This is to send a very strong message with the aim of changing the behaviour of non-compliant employers. Coupled with an increase in the enforcement budget of £11.6 million over four years, the changes underline our commitment to securing the fairest outcome for employer and employee alike.

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When the minimum wage was introduced, Parliament ensured that the voluntary sector would be able to continue to operate successfully and with certainty within the law. At the same time, the National Minimum Wage Act has minimised the chances of low-paid jobs emerging which could be unfairly badged as “volunteering”. Our recent consultation has shown that, by and large, these rules are working well. However, it has also shown that cadet force adult volunteers occupy a unique role in our society.

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