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I was asked why we are not requiring parties to collect data on marital status and pregnancy. The exclusion of marriage and civil partnership is consistent with the fact that they are protected characteristics in respect of the employment provisions in the Bill only; the rationale for the exclusion of pregnancy and maternity is the relatively temporary nature of such characteristics.

As I say, I shall take back my amendments but bring them forward in some shape or form at the next stage of the Bill, having taken into consideration some of the points made in this debate.

The Archbishop of York: When the noble Baroness goes away to think about it, could she take seriously the last intervention of the noble Lord, Lord Lester? It is the principle; you gather all those data, so that-what? If you do not resolve that principal question, a time will come when the Labour Party will be accused of not having enough of this kind, the Conservative Party will always be seen as the Church of England at prayer, or whatever, and the Liberals will be accused of being totally Methodist and nothing else, so I am worried.

What would happen if Parliament suddenly showed that, after one particular election, it was 99 per cent made up of black people? What would we then say about the next election? I am worried about creating silos in which we are not going to be free, so the principle has to be established. It is not just about the collection of data but about eliminating indirect or direct discrimination within the parties themselves.

Baroness Royall of Blaisdon: My Lords, I take very seriously all points that have been made in this debate, including those on data collection and how those data are used. It is important also to note the point that the noble Lord, Lord Alton, made: that it would sometimes appear that our elected representatives are, indeed, unrepresentative of the people whom they represent. This is a means of trying to ensure, not by quotas, that our elected bodies in the United Kingdom really reflect the people that they represent. It is about finding a way to ensure that that happens.

Lord Lester of Herne Hill: I am not completely convinced about excluding,

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on the basis of what has been said. Had I not, completely negligently, failed to move the amendment on teenage pregnancy in schools, we would have had that already included. I quite appreciate the point about employment and the rest, but here we are concerned with the political parties. It seems odd to me that if they are doing this properly, we are not looking at, for example, marriage and civil partnership. I would have thought that we should, but as I do not understand the principle I simply repeat that I do not understand why it should be in or out.

Baroness Royall of Blaisdon: My Lords, I shall respond to those things in due course.

Lord Alton of Liverpool: My Lords, I should like to reinforce the point just made by the noble Lord, Lord Lester. If there are to be questions, people would be interested in how many people are bringing up children, for instance, with all the strain and stress which that can entail, or how many people are over retirement age, and so on. The questions will be endless once we start this process, if we are to start it at all. I hope that the noble Baroness will think really carefully about that; I know that she has the wisdom to do so.

Amendment 108KA withdrawn.

Clause 106 agreed.

7.15 pm

Schedule 15 : Associations: reasonable adjustments

Amendments 108L to 108P not moved.

Schedule 15 agreed.

Schedule 16 agreed.

Clauses 107 to 112 agreed.

Clause 113 : Jurisdiction

Amendment 108Q not moved.

Clause 113 agreed.

Clauses 114 and 115 agreed.

Schedule 17 agreed.

Clauses 116 to 118 agreed.

Clause 119 : Jurisdiction

Amendment 108R

Moved by Baroness Royall of Blaisdon

108R: Clause 119, page 75, line 28, at end insert-

"(8) In subsection (1), the references to Part 5 do not include a reference to section 60(1)."

Amendment 108R agreed.

Clause 119, as amended, agreed.

Clauses 120 to 122 agreed.

Clause 123 : Remedies: General

Debate on whether Clause 123 should stand part of the Bill.

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Lord Hunt of Wirral: My Lords, in considering whether Clause 123 should stand part of the Bill I referred to the Explanatory Notes. These explain that the clause,

As the law stands, tribunals can make recommendations to the respondent regarding the outcome of a particular case for the benefit of an individual claimant. As we are informed by the Government, the clause would extend this provision so that the recommendation would not have to be applicable only to an individual claimant but could be designed to impact on the wider workforce so as to benefit more people. We have tabled this clause stand part debate because we would like to hear the Government's thinking on a number of issues.

First, will the Chancellor inform the House whether there have been any other changes to the nature of the recommendations other than the scope of their application? It seems that there may be differences in the way that these recommendations are made, or in the way that they are operated and enforced, when the recommendation is expanded from being to benefit only one claimant to benefiting a much larger group, and perhaps even a whole workforce. It would be useful to hear the Government's thinking on this subject.

Secondly, the Explanatory Notes state that where a recommendation has been made for the benefit of an individual claimant only and it has not been complied with, the tribunal can award compensation or increase any that has already been given. What provision has been made for enforcement if a recommendation applying to the wider workforce has not been complied with?

Of course we believe that the provisions must be enforceable. If an organisation has been acting illegally and subverting the equality provisions, it should have to obey the recommendations. These recommendations are what will allow the company to fix itself and that is the outcome it is important to ensure.

Perhaps at this point we should underline the fact that we think that the outcome is the important part of this recommendation. The crucial element is that a company that has been acting illegally will implement the recommendations and as a result it will become a better employer. The tribunal will be fully aware of the desired outcome. But it may not be fully aware of the different ways in which different companies operate and how best to achieve that overarching aim. We on these Benches think that it is therefore important to ensure that sufficient flexibility is retained in the recommendations and I reiterate that they should concentrate more on the outcome and less on the process, allowing companies the freedom to adapt their operations to achieve the shared outcome.

In another place, the Solicitor-General stated that it would be difficult to mandate an outcome because a company may not be able to achieve it. That is a fair point, but does the Chancellor of the Duchy of Lancaster also acknowledge the need not to make recommendations that require rigid attention to processes but guarantee nothing in terms of the outcome? Will she confirm how detailed the specifications in these recommendations will be and how closely companies will be expected to

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conform to each detailed specification? Does she accept what I said about the outcome being the most relevant part-not the process-and that the process may necessarily vary from company to company in ways to which any tribunal would find it difficult to adjust? This is a complex area and it would be useful to hear the Minister's thoughts.

Baroness Royall of Blaisdon: My Lords, I certainly agree with the noble Lord, Lord Hunt, that the outcome not the process is important in respect of this particular clause as it is in most of the rest of the Bill. Outcomes affect the lives of people and the working conditions of employees.

Clause 123 is necessary because it sets out the remedies available to the tribunal in discrimination cases. These are a declaration regarding the rights of the complainant and/or the respondent, compensation, including damages for injury to feelings, and recommendations. All of those remedies are available under existing discrimination law, except for the power to make wider recommendations, which we are introducing through this Bill.

The noble Lord asked about enforcing wider recommendations. This power is not about penalising employers: it is about enabling them to comply with discrimination legislation in the future. In the case of recommendations that benefit an individual claimant, it is appropriate to order more compensation to be paid to the claimant for an employer's failure to comply with a recommendation. However, where the recommendation benefits the wider workforce rather than just the individual claimant, to award further compensation to the claimant for that failure would clearly amount to a windfall.

The noble Lord also asked whether there had been any other changes to the recommendation power other than the extension. The only difference is that the enforcement mechanism has been amended so as not to apply wider recommendations. Instead, they can be taken into account in any future cases involving the same employer. I hope that that makes sense. If it does not, I will write to the noble Lord.

We recognise that strong and effective enforcement is necessary to make a reality of legal rights. That is why we are extending the power of tribunals to make recommendations, so that recommendations can be made for the benefit of the wider workforce as well as the individual claimant. Allowing tribunals to make recommendations that benefit the wider workforce will help employers to understand what they need to do to comply with the law and reduce the risk of future discrimination against other employees. It should in consequence help to tackle systemic discrimination and therefore reduce the number of claims which individuals have to bring before a tribunal. That is a very important outcome.

Currently, in more than 70 per cent of cases brought before a tribunal a claimant is no longer working for the employer at the time of the hearing. Therefore, in a large majority of cases, tribunals cannot make a recommendation, because it would not benefit the claimant. This clause ensures that the wider workforce can benefit when an individual claimant brings a

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successful discrimination case, by allowing a recommendation to be made regardless of whether the individual claimant is still employed by that employer.

Employment tribunal chairs have significant expertise in discrimination law cases. Having heard the evidence in a case, they will be in a position to assess whether the discriminatory action was a one-off incident or evidence of systemic discrimination. This will enable them to recommend the type of action that it may be appropriate for the respondent to take.

When making a recommendation an employment tribunal chair will need to set out clearly the steps a company must take in order to comply with that recommendation as well as a timeframe in which those steps should reasonably be undertaken. This is made clear in subsection (3) of the clause.

Examples of recommendations which tribunals currently make include the following: to introduce an equal opportunities policy; to provide training to managers; or to introduce transparent and fair promotion criteria. We expect recommendations under the extended power to be broadly similar.

The extended recommendation power will be used in conjunction with the existing remedies available to the employment tribunal, such as damages. However, this clause makes it clear that in cases of unintentional indirect discrimination the tribunal may award damages only after considering whether any other order would dispose of the case. That is because damages may not be the most appropriate remedy in cases where an employer inadvertently operates a discriminatory procedure.

Lord Lester of Herne Hill: We strongly support this clause. The Minister has explained why. One of the problems about the existing order of things is that individual proceedings deal only with individual problems and yet often they relate to systemic problems which require systemic solutions. It is very important that the tribunal which has heard all the evidence is able to make recommendations on a wider basis. The Equality and Human Rights Commission will, of course, have strategic law enforcement as part of its functions. This ensures that in an individual case the tribunal does not order but recommends in ways that will obviate the problems that have arisen and, in my view, that will cut down litigation, cut down the excessive importance given to individuals and deal with the systemic problems. I hope that that reassures the noble Lord that this is an admirable clause.

Clause 123 agreed.

Clauses 124 to 127 agreed.

Clause 128 : Time limits

Amendments 108RA to 108RD not moved.

Clause 128 agreed.

Clauses 129 to 147 agreed.

House resumed. Committee to begin again not before 8.29 pm.

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Northern Rock plc Transfer Order 2009

Northern Rock plc Transfer Order 2009

Motion of Regret

7.29 pm

Moved By Baroness Noakes

Baroness Noakes: My Lords, the House is indebted to the Merits of Statutory Instruments Committee of your Lordships' House for the sterling work that it does on the huge quantities of secondary legislation that emerge from the Government. In the case of the Northern Rock plc Transfer Order 2009, which was made by the Government on 8 December 2009, the committee reported its findings in just one week, on 15 December. It is the committee's fourth report that provides the basis for the Motion that I have tabled. I apologise to the House in advance for the length of my remarks; the more that I looked at the order, the more I was troubled by loose ends and unanswered questions.

The split of Northern Rock into a good and a bad bank has been well flagged for some time, and there is no surprise that this has been done. In broad terms, we on these Benches support the restructuring of Northern Rock in the interests, in particular, of privatising an unwelcome addition to the stock of government assets. While we were not surprised by the fact of the order, the surprise has come in the manner of the underlying transaction and the apparent determination of the Government to keep Parliament and taxpayers almost completely in the dark about it. Indeed, it is not only Parliament and taxpayers that have been sidelined by the Government's obsessive secrecy; creditors and other interested parties in Northern Rock have been ignored as well.

There are several issues that I wish to raise with the Minister about the order. I will start with the general issue of providing information to Parliament about the split of Northern Rock into a good and a bad bank. The Explanatory Memorandum to the order provides the bare minimum of information about how the order works. Paragraph 10.2 merely notes, as foreshadowed in the ministerial statement that was made on the day that the order was made, that:

"The Government intends to provide Parliament with details of the financial support provided to support the restructuring of Northern Rock in January 2010".

That begs the question of why the Government could not have provided the information to Parliament at the time when the order was made. It is clear from the sentence that I have just quoted that the Government had already agreed to provide the financial support when the order was made and must have known what that entailed. Can the Minister offer any credible reason for keeping Parliament in the dark?

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The Merits Committee, in its measured way, observed at paragraph 7 of its report that:

"The House may feel that it would have been better placed to consider this Order if details of the financial package had been made available at the time the Order was made".

The House has not been given any chance at all to consider this order properly.

Two days ago the Treasury finally gave some information to Parliament by way of a Written Ministerial Statement some 25 days after the order came into effect. We learn that a further £3 billion of capital is being put into the good bank, now called Northern Rock plc, as well as £2.5 billion of loans into the bad bank, now called Northern Rock Asset Management plc. So behind the order is another £5.5 billion of taxpayers' money going into the Northern Rock black hole, and it took until Monday of this week for that fact to emerge.

Financial support, however, is only part of the picture. There is nothing in the document laid before Parliament that shows what the transaction actually involves. In order to get an inkling of what is involved, we have to go to the Treasury's website where various documents may be found. There is an 81-page Northern Rock plc transfer administration agreement, together with Appendix A of 21 pages and Appendix B of 96 pages. There are also two so-called "related documents", which together amount to 380 pages. If we work through all these documents, we can finally glean from page 68 of the transfer administration agreement that the interim figures for assets and liabilities transferred from the old Northern Rock to the new one are £11.7 billion and £20.3 billion respectively. The difference between the two-some £8.6 billion-is due to be paid from the old Northern Rock to the new Northern Rock. This is the figure of £8,581 million referred to in paragraph 3. These figures may give an idea of what is in the new Northern Rock-the good bank-but they tell us absolutely nothing about what is left behind in the bad bank. This lack of information about the way in which significant assets acquired with taxpayers' money are being scattered around is nothing short of shocking.

I now move to something equally shocking concerning the Banking (Special Provisions) Act 2008. Some noble Lords will recall that that Act was rammed through Parliament at huge speed in order to nationalise Northern Rock. This order is made under Section 8 of the Act, which allows the transfers covered by the order. That is not the issue. The issue is that, by virtue of Section 13 of the Act, orders made under Section 8 are generally to be carried out by the negative procedure unless the order makes provision for determining the amount of consideration payable by a transferee-under Section 8(6). If subsection (6) were involved then the order would be subject to the affirmative procedure. The Treasury has so constructed the transfers covered by this order that they have included no provision for determining consideration and have hence squeezed the order within the negative procedure, as was pointed out by the Merits Committee. That seems to be the Treasury at its most cynical: first, to draft the affirmative requirements of the Act in an obscure way and then to maximise its use to avoid parliamentary scrutiny.

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Unfortunately, I was out of the country nursing a broken arm when the Banking (Special Provisions) Act was passed but I know that the opportunity for scrutiny of the Bill was restricted. I could find no trace of the Government explaining that the implications of Sections 8 and 13 combined meant that parliamentary scrutiny of subsequent transactions would be easily sidestepped. An ordinary expectation would have been that any significant transfer, such as the one covered by this order, would have involved consideration being determined and hence would have been subject to the affirmative procedure.

This order says that ACo-the old Northern Rock company-is to pay the £8.6 billion I referred to earlier to BCo-the new Northern Rock company. An innocent reader of the order might conclude that that was the end of the story but that is far from the truth. The legal documents on the Treasury website, to which I have referred, show that this sum is only the preliminary estimate of the difference between the book values of the assets and liabilities being transferred. There is every intention and extensive legal provision for these preliminary figures being firmed up and changed before the final figure for the transfer is arrived at. The transfers took place under this order on 1 January 2010 but the transfer administration agreement was dated 7 December 2009. Hence the figures which netted out to £8.6 billion had to be illustrative figures, extracted from a balance sheet before that, or dreamt up by the lawyers solely for the purposes of the transfer administration agreement. The final figures will be as at 1 January 2010, presumably extracted from the audited accounts of 2009.

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