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The Earl of Erroll: My Lords, I would like to interject briefly, as this issue has been worrying me a lot because I knew it was buried somewhere in the Bill. If I have understood the amendment correctly, it is

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about procurement and where it is in the supply chain. Already small and medium-sized businesses have a huge problem in getting business and contracts from government bodies. There are a lot of barriers in their way, and a lot of contractual obstacles are put in their path. SMEs employ about half the non-public sector workforce in this country. They are very large employers. Most are tiny companies employing five people or fewer, but some are larger companies. Innovation and growth in the economy come from the SME sector: they do not come from large companies, which tend to rationalise and downsize. Therefore, future pensions will be paid by these companies. In some areas, the local authority is almost the only employer. Therefore, there is a huge problem if people cannot do business with the local authority.

5 pm

I have seen one of these forms. It was sent to my wife, who employs only three or four people, in order that a small sum could be procured from her. It is impossible. There are questions like, "Can we see your special diversity policy?" and "Can you prove that X number of your workforce are this, that and the other?". Small companies cannot handle it. Therefore it is very sensible that there should be an exemption at some level-although I do not know what the figure should be-to allow government authorities to procure from small businesses. Because this applies down the supply chain, it may not apply to the first contractor, which may be a large organisation. However, when that organisation wants to contract further down the supply chain, the same thing will apply. The Government should show mercy to small companies, because the burden of bureaucracy is already enormous on them. This could be the straw that breaks the camel's back.

Baroness Howe of Idlicote: My Lords, I will say briefly that I, too, strongly agree with the noble Lord, Lord Lester, and with my noble friend. If I am picking up the vibes correctly, the Minister may be able to answer the query. It may be thought that small charitable bodies that might be asked to undertake work via a public authority would run into a problem because of this. From reading the Bill, I cannot see that. However, I will leave it to those who have more detailed knowledge. I am not in favour of this amendment.

Baroness Turner of Camden: My Lords, I will say briefly from these Benches that I strongly support what the noble Lord, Lord Lester, said in opposition to the amendment. Many people in this country are employed in small companies, as has already been indicated. The Bill is about individual rights as much as anything. If an amendment of this kind, with this sort of arrangement, were to be on the statute book, a large number of people would not have the benefit of employment rights of any kind. That would be totally unacceptable. I understand that in some instances it may be felt that very small companies may have problems, but one cannot have a situation in which 250 people-quite a high number-do not have access to the employment rights that other people have.

Lord Lester of Herne Hill: Perhaps I may respectfully correct one matter. This does not limit the scope of the non-discrimination provision, from which there are no

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small-employer exemptions, thank goodness. It limits the scope of the public sector duty, which is very serious for reasons that are clear. It would not be fair to the Opposition to say that they are seeking to emasculate individual discrimination provisions. They are seeking to weaken the public sector duty.

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, Amendment 114ZA, tabled by the noble Baronesses, Lady Warsi and Lady Morris of Bolton, would exclude from the equality duty public authorities with fewer than 250 employees, or organisations discharging public functions but not listed in Schedule 19 that have fewer than 250 employees.

Despite the progress that we have made, inequality persists in our society. The equality duty is an innovative approach to tackling discrimination. It requires public authorities to show leadership in proactively rooting out entrenched systems of discrimination and in promoting equality of opportunity. The roles of the public sector and of the bodies that provide public services are central to our equality goals, as public services are used by all, with many of the most vulnerable citizens dependent on them.

The noble Earl, Lord Erroll, probably wished to speak to Amendment 115B, which concerns procurement. The noble Baroness, Lady Morris, asked about the impact on SMEs and what further research had been done. I do not know, but I will come back to her in writing.

The equality duty requires public bodies and other organisations which provide public services to have due regard to the need to eliminate discrimination, to advance equality of opportunity and to foster good relations. It is difficult to understand why the size of an organisation should matter in considering the need to eliminate discrimination and promote equality. I think I am at one with the most reverend Primate on this. A number of small organisations provide services that could impact the lives of many in the community. For instance, at times, some of the health service bodies will have fewer than 50 employees but the service that they provide could have an impact on hundreds of people in the area. The same could be said for many schools.

I understand that in the current fiscal climate some people think that compliance with the new integrated equality duty could lead to extra administrative burdens and bureaucracy. I do not think that is the case because, as the noble Lord, Lord Lester, informed us, at the moment we have three different duties, each with different requirements and reporting timescales. Bringing them together into one duty should decrease bureaucracy, and our emphasis on specific duties on proportionality-outcomes rather than processes-should lead to less form-filling and increased results.

The exclusion of public authorities, listed in Schedule 19, which have fewer than 250 staff, or of private organisations that are discharging public functions but have fewer than 250 staff, would seriously limit the coverage of the equality duty. For instance, the amendment would exclude around 70 per cent of all central and local government bodies from the equality duty and that is plainly wrong.

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I accept that the amendment is probing but, should it be passed, it would seriously damage the good progress made by the current duties, as it would exempt from the new duty hundreds of public bodies which are subject to the current duties, and would result in serious regression.

The noble Baroness, Lady Morris, asked whether the charity foundation document or the equality duty would take precedence where a public body contracts out some of its functions to a charity. The charity would have to comply with its foundation document but, in performing public functions, it would also need to have due regard to the need to eliminate discrimination and promote equality in accordance with the duty, so it would have to look at both things.

The noble Baroness asked whether the equality duty would apply to a single person performing a public function. Yes, it is important to remember that public functions are vital services which impact on the well-being of the public and, therefore, it is irrelevant whether it is delivered by a large organisation or a single person-a GP or a Secretary of State. She asked whether, if a public function were outsourced to a religious organisation, the exemption in paragraph 3 of Schedule 9 would still apply. Yes, it would. The equality duty operates alongside provisions prohibiting discrimination in the rest of the Bill.

I can answer the question which the noble Baroness asked about whether small authorities were consulted on the extension of the new duty to new strands. Yes, in June 2007, we launched a three-month public consultation on the proposal to extend the equality duty. Around 4,000 organisations and individuals responded, including small organisations and representatives of small organisations, such as schools and health service providers. I ask the noble Baroness to withdraw her amendment.

Baroness Morris of Bolton: I am most grateful to all noble Lords who have joined in this short debate. I am also grateful that the Minister pointed out, as I did at the beginning, that this is simply a probing amendment. We do not seek to be regressive in any way, although I very much enjoyed the brief history of equality law given by the noble Lord, Lord Lester, and I look forward to reading that again. The point raised by the noble Earl, Lord Erroll, shows that there is confusion in this area about what applies where. I am most grateful to the Minister for answering some of those concerns on the record. I beg leave to withdraw the amendment.

Amendment 114ZA withdrawn.

Amendment 114ZB

Moved by Baroness Morris of Bolton

114ZB: Schedule 18, page 196, line 41, at end insert ", but no such order may vary or omit the exceptions in paragraph 3 or 4(1), (2)(a) to (e) and (3)"

Baroness Morris of Bolton: My Lords, in moving Amendment 114ZB, I will also speak to the other amendments in our name. These amendments are in

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line with recommendations from the Delegated Powers and Regulatory Reform Committee. I welcome the fact that the Minister tabled amendments on Friday which would meet with some of these recommendations and address most of the concerns raised by our amendments.

Amendment 114ZB is tied into Schedule 18, which is about the public sector equality duty exceptions. Our amendment, following a recommendation by the DPRRC, would ensure that only primary legislation could amend the list of exemptions in this schedule with reference to judicial and parliamentary functions. We are very pleased that the Government have now accepted that there is no need to retain flexibility in this instance.

Furthermore, perhaps there is a case for suggesting that it might be inappropriate for a Minister to be able to alter the exceptions relating to other organisations. Can the Minister clarify, for example, when there might be a case for removing the exemptions relating to the Security Service, the Secret Intelligence Service, the Government Communications Headquarters and part of the Armed Forces? Is there a specific need to retain the flexibility that regulations would allow, or does she agree that this sort of decision should be subject to primary legislation?

Our second set of amendments in this group, Amendments 115A and 135AA, add a similar power which is awarded to Clause 150(1). This subsection would allow the Minister to update Schedule 19 to include or exclude different bodies. In accordance with the recommendations from the DPRRC we tabled Amendment 115A. It would exclude judicial and parliamentary bodies from the regulation by which amendments can be made to the schedule and so make them subject to the public sector equality duty. Amendment 135AA would mean that the reduced power would also be subject to affirmative resolution for greater scrutiny. We welcome the Government's amendments which, like ours, are designed to meet this recommendation. I apologise; I have been editing my notes as a result of today's events and I think that I have probably edited them too much.

However, the government amendments retain the negative power for the changes that occur when an entry is removed just because it has ceased to exist, or because it has changed its name. That seems sensible. Have the Government had any response from the DPRRC about whether this would meet its concerns? It seems a critical factor in knowing what their response is. Furthermore, what consultation has occurred with the devolved Ministries about the changes to their powers here? I beg to move.

Baroness Thornton: My Lords, we too have edited our notes down. I am just reading through them and cannot see any reference to one of the noble Baroness's amendments. I am hoping that somebody will send me a note about it.

I am going to speak to government Amendments 114ZC, 115ZA, 135AB, 136ZZD, 136ZZE, 136ZAA, 136ZAB, 136ZAD, 136ZAE, 136ZAF, 136ZCA, 136ZCB and 136ZCD, which reflect the recommendations made

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in paragraphs 11 and 13 of the Delegated Powers and Regulatory Reform Committee's third report of Session 2009-10.

I shall speak first to government Amendment 114ZC. This seeks to achieve the same aim as the noble Baroness's Amendment 114ZB, in response to the committee's question whether it would be appropriate for the exceptions to the equality duty relating to judicial functions or those relating to parliamentary bodies to be removed or limited by statutory instrument. This amendment limits the power in paragraph 5 of Schedule 18 so that it cannot be used to remove these exceptions from Schedule 18. Primary legislation would therefore be required to remove or limit these exceptions. While there is no difference between the intentions of the noble Baroness's amendment and this one, we think that the wording of our amendment provides more precise clarification.

Government Amendment 115ZA reflects the committee's recommendation that the power in Clause 150 to amend the list of public bodies subject to the duty, as referred to by the noble Baroness, should not be capable of listing the judicial and parliamentary bodies that are currently excluded from the scope of the duty by Schedule 18. The intention behind this amendment is the same as that behind Amendment 115A, which the noble Baroness spoke to. Again, however, we think that our wording provides greater clarity on this important matter.

I turn now to Amendment 135AB,which reflects the recommendation made in paragraph 11 that the power in Clause 150 should be subject to the affirmative procedure. The amendment is seeking the affirmative procedure to apply to the power to make changes to the list of bodies subject to the equality duty, except where we simply want to amend the entry for a body whose name may have changed or where a body is removed because it ceases to exist. We think that it will be more appropriate for the negative procedure to apply in these particular cases. To have to use the affirmative procedure for such minor issues is likely to be a waste of valuable parliamentary time. Of course, if Parliament wishes to debate any use of this power, it can still choose to do so by praying against a negative resolution order. The noble Baroness asked about removing exemptions on organisations such as security services, Armed Forces and so on. We are retaining a measure of flexibility because those organisations are susceptible to change and because they could change their names or merge.

Amendment 135AA-this was missing from my notes-would delete what the Government have proposed and our Amendment 135AB would amend it. Amendments 136ZZD, 136ZZE, 136ZAA, 136ZAB, 136ZAD, 136ZAE, 136ZAF, 136ZCA, 136ZCB and 136ZCD ensure consistency with the Welsh and Scottish Ministers. I therefore invite the noble Baroness not to move Amendment 135AA.

Baroness Morris of Bolton: I thank the Minister for that comprehensive reply and it gives me great pleasure to withdraw my amendment.

Amendment 114ZB withdrawn.

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5.15 pm

Amendment 114ZC

Moved by Baroness Royall of Blaisdon

114ZC: Schedule 18, page 196, line 41, at end insert-

"(2) But provision by virtue of sub-paragraph (1) may not amend this Schedule-

(a) so as to omit an exception in paragraph 3;

(b) so as to omit an exception in paragraph 4(1) so far as applying for the purposes of paragraph 4(2)(a) to (e) or (3);

(c) so as to reduce the extent to which an exception referred to in paragraph (a) or (b) applies."

Amendment 114ZC agreed.

Schedule 18, as amended, agreed.

Clause 149 : Public authorities and public functions

Amendment 114A not moved.

Clause 149 agreed.

Schedule 19 : Public authorities

Amendment 115

Moved by Lord Hunt of Wirral

115: Schedule 19, page 198, line 37, at end insert-

"The relevant qualifications regulator (The Office of the Qualifications and Examinations Regulator-Ofqual)."

Lord Hunt of Wirral: My Lords, this is a simple, probing amendment and I will make some brief remarks. The debate about whether Ofqual should be included under the public sector equality duty was covered concisely and effectively in another place. I recall that in relation to this the Solicitor-General said:

"I completely agree that Ofqual should be subject to the equality duty".-[Official Report, Commons, 30/6/09; col. 594.]

She said that that would be done after the Apprenticeship, Skills, Children and Learning Bill had passed through your Lordships' House and become an Act, thus giving Ofqual statutory status.

Of course, we now have the Apprenticeship, Skills, Children and Learning Act, but I cannot see an amendment here to bring Ofqual into Schedule 19 and make it subject to the public sector equality duty. It may well be that there is a simple answer to this. Perhaps I have missed something that would explain this entirely. However, I have not seen an explanation, and it would be marvellous if the Chancellor of the Duchy of Lancaster could enlighten me. I beg to move.

Lord Low of Dalston:My Lords, I very much welcome this amendment, moved by the noble Lord, Lord Hunt, to clarify the application of the public sector equality duty, for Ofqual is just the start. On further examination, the schedule proves to be full of holes. I am very concerned to observe that it contains

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numerous omissions-if an omission can be said to be "contained". I hope that that is just the result of the sort of unfortunate oversight that the noble Lord, Lord Hunt, was so exercised about the other day. On the assumption that it is, I hope that the Government will commit to remedying the deficiencies in the schedule before it leaves this House.

The Government have given numerous commitments that all organisations covered by the current duties will be covered by the integrated duty. Exclusions that I have noticed include the Electoral Commission, which is surprising when one considers that only recently we were debating political diversity. The NHS is included, but none of its regulators are. The omission of regulators in general is concerning, as is the omission of a number of educational bodies. The General Teaching Council is just one example. As an avid supporter of the arts, I was particularly concerned not to see the Arts Council in the schedule. I could go on, but I shall not. It just remains for the Government to fulfil their commitments and put the schedule to rights. Of course they have the power to change the list by regulation, but they should not expect the Committee to buy a pig in a poke like that. They should populate the schedule comprehensively and reserve their order-making power for amending the list when bodies are created or wound-up. I therefore very much support the amendment.

Baroness Royall of Blaisdon: Amendment 115 would insert the Office of the Qualifications and Examinations Regulator-Ofqual-into Schedule 19, which is the list of public authorities subject to the equality duty. Ofqual, which will be formally established in April and will be the new independent regulator of qualifications and tests in England, must of course be subject to the equality duty. The Government would not contest that. I recognise what the noble Lord, Lord Hunt, said about the comments in the other place by my right honourable friend the Solicitor-General. However, we have since established that we do not need to add Ofqual to Schedule 19 to deliver the desired outcome. The Bill will achieve that without the noble Lord's amendment. The Apprenticeships, Skills, Children and Learning Act, which received Royal Assent this autumn, establishes Ofqual as a non-ministerial government department, and government departments, including non-ministerial ones, are already covered in Part 1 of Schedule 19. This means that there is no need to include it as a separate entity within Schedule 19.

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