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We believe that it is important that a private company or voluntary organisation is not made subject to the higher demands of the public sector equality duty across the whole gamut of the company simply because it has been contracted to perform a service for a public authority. We should not forget that these companies are already subject to the anti-discrimination legislation as well as equality provisions in the private sector. We are not at all arguing that private companies should be excluded from equality legislation, merely that in their everyday functions, which are over and beyond those that public bodies are contracted to, they should not be made subject to a duty that is designed to apply only to public bodies. I hope that the Minister will be able to reassure us on that.

9.15 pm

We have tabled Amendment 109, which would leave out subsection (2) and insert a requirement that the public sector equality duty should apply to someone who exercises public functions except as regards employment. This amendment has been tabled to probe the Minister further on the extent to which the public sector equality duty applies in these circumstances to these organisations. We do not wish to remove subsection (2); we agree with it. This is a probing amendment about the duty that will apply in practice to organisations-I think specifically of small organisations-or, indeed, to individuals who have duties contracted to them. We are concerned that small organisations which are performing subcontractor

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services should not have to obey the provisions of the public sector equality duty in respect of its employment law. Will the Minister confirm whether that would be the case? We hope to ensure that these companies are subject to the same provisions of employment law as their non-public counterparts. We very much hope to minimise onerous burdens on potentially very small organisations.

I hope that the Minister will lay out for the Committee the detail of how the application of a single duty only to certain parts of the organisation might work. In other words, how do the Government envisage the mechanics of applying this public sector equality duty only to subcontracted functions, which is what I have been talking about all the way through? That is what we all think is going to happen, and what we desire, but we would be interested to see how that division is designed to work in practice, although, of course, companies already work on behalf of public bodies and have some responsibilities in that regard under the law, but I think this measure widens them substantially. I beg to move.

The Lord Speaker (Baroness Hayman): I have to tell the Committee that, if this amendment is agreed to, I cannot call Amendment 109A by reason of pre-emption.

Lord Harries of Pentregarth: I wonder whether the noble Baroness, Lady Hanham, could give one or two examples of what she means by this very important exception,

because it seems to me that this Bill focuses more sharply on employment issues than on almost any other. That phrase,

seems to me a key phrase which might provide an opt-out for anybody who wished to avoid the impact of this Bill altogether. Can she spell out in examples what she is getting at here?

Baroness Hanham: My Lords, I was speaking very much off the cuff, but I think that all these organisations and companies are already covered by employment law. They already have to conform with that. However, we are not talking about employment law but all these other aspects that have been brought in under subsection (1).

Lord Lester of Herne Hill: My Lords, I do not want to prolong the debate and I am anxious to hear the Minister's explanation. However, it is vital that Clause 148(2) remains as it is and that it covers more than employment. It should cover the whole range of public functions performed by a body that is private in form but exercises functions of a public nature. Exactly the same problem arises under the Human Rights Act which covers public authorities in the strict sense but also covers bodies that are private, as I say, but act in place of the state.

As I understand it, this measure ensures that bodies which are genuinely exercising a public function of a particular kind must have regard to the matters in Clause 148(1). If that were not the case, there would be a most regrettable gap because, apart from employment,

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it would mean that in all the other provision of public services the duty to have regard to the need to eliminate discrimination and to advance equality of opportunity would not apply. That would be regressive and would certainly drive a coach and horses through this part of the duty. Therefore, we hope that the Minister will be able to explain better than I have done why the measure is needed.

Baroness Howe of Idlicote: My Lords, I wonder if I might press the indulgence of the House a little. At an earlier stage of the Bill I probably missed an opportunity to raise this point, but it is one which the Young Equals organisation is very concerned about. It asks the Government to confirm how public service providers will be supported in implementing the age element of the public sector equality duty, as it relates to children. It also asks that guidance should set out how public services can implement the age element of the duty in relation to children; and offer practical information on how to identify age equality issues for children, relevant case studies and other such things. Also, what information will be provided to children and young people on the age provisions of the Bill? Young Equals feels that it is essential that guidance on the Equality Bill is fully accessible to children and young people-of the right age, obviously-and relevant to those who work with them. Young Equals thinks it would be useful to produce a document that sets out the age provisions of the Bill for children and young people within this public service duty.

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, Amendment 109, tabled by the noble Baronesses, Lady Warsi and Lady Morris of Bolton, would represent a major extension of the duty into the private and voluntary sectors, where bodies in those sectors exercise public functions, and require them to comply with the equality duty in the exercise of all their functions except employment functions, regardless of whether they are discharging a public function.

I reassure noble Lords that Clause 148(2), as drafted, would require bodies that exercise public functions, other than the public authorities listed in Schedule 19, to comply with the equality duty whenever they exercise such public functions. The provisions in the Bill would not require such bodies to comply with the duty when they exercise any of their functions that are not connected to the exercise of a public function. Amendment 109 would require such bodies to comply with the duty whenever they exercise their other functions, such as the performance of any activities that are unrelated to the performance of their public functions-for example, conduct of their core business; any activities on their purchasing functions; and, in short, everything, apart from employment.

The amendment would affect many organisations, and do so in a very arbitrary way. Some organisations would be covered simply because they happened to be carrying out a public function, such as the running of a private prison, perhaps for a short time, while others would not. It might even deter some private or voluntary organisations from taking on public functions if, as a result, the duty would then extend to all their other

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functions and activities bar employment. Given that employment is singled out by these amendments as a function which should not be subject to the duty, I will address this specific point.

Employment functions have not been explicitly excluded under the existing equality duties, and this has not created any problems. A private body carrying out public functions will not be subject to the duty in respect of any of its functions of a private nature, such as the employment of staff whose duties are not connected to the exercise of the public function. A private body should retain the right to decide who to employ. However, such a body will need to consider the technical abilities of the people deployed to discharge its public functions and the training that they require to perform their duties. For example, an organisation contracted to manage a prison would need to consider whether the skills of the staff charged with delivering the service or the training that they receive satisfactorily address its requirement to promote equality of opportunity.

Several specific questions were asked. The noble Baroness, Lady Hanham, asked: who is the person referred to in Clause 148(2)? This will apply, as she suggested, to a natural person as well as legal entities, such as companies and statutory bodies. The noble Baroness also asked if the duty applied to internal functions. As I said, the duty will apply only to the activities of the organisation concerned with the delivery of the public function. The noble Baroness was concerned about small and medium-sized enterprises. The Government recognise the real concerns of SMEs interested in competing for public sector work. In accepting the recommendations of the Glover review, we have committed to increasing the access of all government contracts to SMEs. The development of a best-practice approach to promoting equality through procurement and a national equality standard may assist in the process. We look forward to hearing the views of stakeholders and industry on this subject.

The noble Baroness asked about public/private functions and internal/external activities. In simple terms, employment will be caught where integral to the performance of a public function. For example, where a contractor runs a prison it will need to comply with the duty in relation to its employees working in the prison but not those involved in other work such as collecting cash from a bank.

The noble Baroness, Lady Howe of Idlicote, asked what the duties meant for children. Although under-18s are excluded from age discrimination protection in services and public functions, children will, as the noble Baroness recognised, benefit from the age aspects of the public sector equality duty. Guidance on the duty will give practical assistance to public service providers on how they can implement the age provisions for children. The Equality and Human Rights Commission's code of practice and guidance will cover this and will be easily accessible to those organisations concerned. Following that explanation, I trust the noble Baroness will consider withdrawing her amendment.

Baroness Hanham: I thank the noble Baroness for her response. I made it clear from the outset that we were not opposing Clause 2; we were looking for

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explanations. Those have been clear tonight and having them in Hansard will make things much easier. I beg leave to withdraw the amendment.

Amendment 109 withdrawn.

Amendments 109A to 109C not moved.

Amendments 109CA and 109CB

Moved by Baroness Campbell of Surbiton

109CA: Clause 148, page 94, line 25, at beginning insert "take steps to"

109CB: Clause 148, page 94, line 29, at end insert-

"( ) The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities."

Amendments 109CA and 109CB agreed.

Amendments 109D and 109E not moved.

Amendment 110

Moved by Lord Hunt of Wirral

110: Clause 148, page 94, line 37, at end insert-

"( ) A public authority must collect and publish annually data showing, in the exercise of its functions, the extent to which it has succeeded in meeting the requirements of subsection (1)."

Lord Hunt of Wirral: While we have discussed some of the issues related to the mechanics and functions of the public sector equality duty, we have not discussed the importance of the effect of what we are seeking to do. The measure of this clause will lie not in the high ideals which it invokes but the effectiveness of the results it produces on the ground.

For this reason, Amendment 110 would require a public authority to collect and publish data on an annual basis that would demonstrate how the authority had met the requirements of the public sector equality duty in the exercise of its functions. Within this group, we are to debate Amendment 114A and we look forward to hearing the noble Baroness, Lady Young of Hornsey, who I understand will be speaking to it. Her amendment addresses the same issue but from a different perspective and would mean that an outside agency would assess the extent to which the requirements under Clause 148(1) had been met.

We on these Benches are in favour of doing everything we can to ensure that the public sector equality duty lives up to the ideals contained in the clause. I suppose that, as has happened in the past with the policies of this Government, we see a legislative approach which calls for high ideals but lacks the mechanics within the Bill to make that happen.

9.30 pm

The importance of this clause will, I contend, stem not from its lofty aspirations but from real and measurable outcomes on the ground. If there is one message that I want to get across today, it is to keep stressing outcomes because we believe that the measure of the target is in its success. For this reason, we would argue that there ought to be some form of systematic reporting which spans the sector and shows where and how successful outcomes are occurring, and what should be changed in order to make the duty even more effective. As the

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legislation stands, the public sector equality duty is very vague; we would welcome some more clarity here. Indeed, I hope that the noble Baroness the Chancellor of the Duchy of Lancaster will be able to provide some when she responds to this debate.

Each business is, however, different and each will have its own way of doing things as it believes works best in the particular circumstances relevant to that organisation. The public sector equality duty therefore has to be sufficiently flexible to adjust to each specific need. Here, just for a moment, I give the Government the benefit of the doubt. I am sure that they must have a system in place here, but it would be very useful to hear what that is because it is not laid out in the Bill. One hopes that the Government accept this key point: that the outcomes and not simply the aim, however commendable, will be the important result of this legislation. I beg to move.

Baroness Young of Hornsey: My Lords, I shall once again speak to an amendment tabled by my noble friend Lord Ouseley, who is unable to be here this evening. Amendment 114A seeks to ensure appropriate and meaningful assessment of public authorities' performance with regard to the public sector equality duty, and I am grateful to the noble Lord, Lord Hunt of Wirral, for having laid out some of the questions -he has saved me from having to do that-and for providing a context. Once again, the two amendments are somewhat complementary. A number of bodies are perfectly well equipped to carry out such reporting within the system of assessing local authorities, but I would guess that there is a sense that many of those bodies and agencies, when they undertake performance and inspections, are not necessarily reporting adequately or consistently on a public authority's equality duties.

This amendment would require those agencies to undertake appropriate assessments to determine and report on how a public authority is advancing equality and good relations as part of its programme of assessment, inspections and performance reviews. This is about consistency; the issue of how good and bad practice is recognised and dealt with, in one way or another, is an important part of that. However, the bodies and agencies which currently exist can carry out that assessment of performance.

Baroness Royall of Blaisdon: My Lords, I shall speak first to Amendment 110. The new equality duty will follow the same structure as the current race, disability and gender duties, with specific duties sitting underneath the general duty to help public bodies to better perform the equality duty. Those specific duties will be introduced through secondary legislation and will include the steps outlined in the policy statement published earlier this week, on 25 January. Copies of that have been placed in the House Libraries; they may well also be in the Public Bill Office.

Noble Lords will see from the document that we want the public bodies that will be subject to the specific duties to report annually on their progress against their equality objectives. We also want public bodies to publish their gender pay gaps and BME and disabled employment rates in such a manner that citizens can track progress and compare public bodies.

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The noble Lord, Lord Hunt, mentioned the need for flexibility. We believe that secondary legislation is the right place to set out these detailed procedures, since it gives us greater flexibility to change specific requirements if necessary. For example, we may need to make small changes to reporting timescales or the format of the data that we have required public bodies to report.

Amendment 110 would set out in primary legislation process requirements that are better suited to secondary legislation. Further, the amendment would impose data reporting requirements on all public authorities listed in Schedule 19. It would include, for instance, small organisations such as parish councils, on which the reporting requirements could impose disproportionate additional burdens. When we prepare the regulations that contain the specific duties, we intend to consult closely bodies that are likely to be affected.

One of the main drivers behind the design of the new suite of specific duties was a move away from processes and towards outcomes. Our proposals for reporting requirements achieve this aim. Just like the noble Lord, we want the outcomes to live up to the ideals to which we all aspire in this Equality Bill.

The noble Lord asked whether the process would achieve equality outcomes. The answer is yes. The specific duties will require the setting of equality objectives in the light of evidence, the taking of action towards achieving them and reporting on progress. By these means, we will ensure that the process that we prescribe in the regulations will deliver the outcomes.

Lord Hunt of Wirral: Perhaps I may ask about timing. Given the document published earlier this week, are the regulations yet in draft and when are we likely to see them? What is the timescale? There is a momentum behind the Bill which we all greatly welcome, as I welcome what the noble Baroness has just said about outcomes. However, in order to deliver the right outcomes, we must know what the process will be and what timescale is envisaged to bring about the results that she referred to.

Baroness Royall of Blaisdon: My Lords, much of this is a consultative process. We have put out our policy statement. I understand that we will publish draft regulations, on which I hope that we will be able to consult well before the summer. However, we are convinced of the need to consult along the way, so all noble Lords will be able to have an input as well as other organisations. I therefore ask the noble Lord to withdraw the amendment in the name of his colleagues.

On Amendment 114A, tabled by the noble Lord, Lord Ouseley, and moved by the noble Baroness, Lady Young of Hornsey, I make it clear that regulators and public sector inspectorates are subject to the existing duties and will be to the new one. It may be helpful for me to explain to the Committee how the equality duty will apply to these bodies. We are not suggesting any changes to the regulators and expect the extent to which they have due regard to the existing duties will continue to apply to the new equality duty. The equality duty will apply to the inspection functions of the public sector inspectorates, which means that equality

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and action taken to advance it should form one of the indicators of performance which inspectorates develop and assess against. If there is insufficient evidence of action being taken to tackle inequality, it can be highlighted. We are clear that inspectorates should not take on the role of enforcing compliance with the duty because they are not resourced or trained to do so. That is the sole responsibility of the Equality and Human Rights Commission. Furthermore, it would be unworkable and confusing to allow two sets of organisations with potentially conflicting views to enforce the duty. However, it is clear that the roles of the inspectorates and the Equality and Human Rights Commission with regard to equality performance by public bodies are complementary. We encourage their work on developing close working relationships; for example, through Memoranda of Understanding. I ask the noble Baroness not to press the amendment.

Lord Harries of Pentregarth: From the standpoint of the Cross Benches, perhaps I may say how delighted I am and how wonderful it is that there should be such unanimity and consensus on this issue. I cannot help noting how far we have moved since 1789, when egalité seemed to be championed by only one section of society, and that the noble Lord, Lord Hunt, is pressing so hard for tangible outcomes from this, whereby it is not simply window dressing. That is very encouraging.

Lord Hunt of Wirral: I greatly welcome what the noble and right reverend Lord has said and I thank him. It is important that we make progress in this area. Although he had a different historical vista, when I look back over the 34 years during which I have been in Parliament, we have not made the progress that I had always hoped for. We still have a long way to go. That was said to me by the noble Baroness, Lady Howe of Idlicote, 15 years ago. I am not sure that we have made rapid progress since then. It is good that we are establishing this consensus. I thank the Chancellor of the Duchy of Lancaster very much indeed for the positive response that I have received, and I beg leave to withdraw the amendment.

Amendment 110 withdrawn.

Amendment 110A not moved.

Amendment 111

Moved by Lord Lester of Herne Hill

111: Clause 148, page 95, line 3, at end insert-

"but subsection (1)(b) does not apply to the protected characteristic of religion or belief."

Lord Lester of Herne Hill: My Lords, I spoke much about this issue at Second Reading at col. 1416 when I explained my great concerns about the way in which religion and belief are treated in the same way as the other characteristics protected in Clause 148(1)(b). I have been warning about this for a long time. For those who live the kind of sad life that involves reading a lot of stuff, I wrote an article in 2008, Extending the Equality Duty to Religion, Conscience and Belief: Proceed with Caution. In that article I explained my concerns.

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