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The noble Lord, Lord Low, suggested that Schedule 19 is practically empty and that the duty covers very few bodies. Schedule 19 as it stands is not the end of the story. At the moment it contains only core generic bodies, such as government departments, local authorities, NHS bodies, educational bodies and the police. We have been clear that we intend to update the schedule with more bodies. Now that we have publicly set out the requirements of the general duty, we want to talk further with other bodies that we think should be included in the schedule. Let me stress that, in broad terms, the duty will cover the same bodies as the current duties and there will be no reduction in coverage. I assure the noble Lord that we are not offering noble Lords a pig in a poke. The two-stage approach is the

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process that was used to build up the list of bodies subject to the race duty, and we are simply following that precedent. It has allowed us to have informed discussions with those who we propose to list, and we will include them via regulations. There are no inconsistencies, and I hope that this brief explanation will persuade the noble Lord to withdraw his amendment.

Lord Hunt of Wirral: Perhaps the Chancellor of the Duchy of Lancaster can clarify the position. I was following her in reading Part 1 of Schedule 19, which is entitled "Public Authorities: General". I saw under the heading "Ministers of the Crown and government departments": "A Minister of the Crown", and

"A government department other than the Security Service, the Secret Intelligence Service or the Government Communications Headquarters".

She was, however, referring to another type of body. Then, when I looked in the remaining part of Part 1, under the same heading, I did not see the words that she is now explaining appearing anywhere. I am simply seeking further clarification. Could she, please, give noble Lords a little more chapter and verse of exactly where this can be found?

Lord Low of Dalston: My Lords, before the Minister responds to the noble Lord, Lord Hunt, perhaps she can say whether she means that the regulation-making power will be used to update the schedule-I think that she used the words "update the schedule"-so that the additional bodies with whom she wishes to have discussions with a view to bringing them within the public sector equality duty will not just reside in regulations, but will be introduced into the schedule by the regulation-making power. Is that what she had in mind?

Lord Hunt of Wirral: While the noble Baroness is considering the important point made by the noble Lord, Lord Low of Dalston, can she give us an idea of the timescale within which she proposes to give noble Lords and others the clarification that we seek?

Baroness Royall of Blaisdon: Yes, my Lords. Non-ministerial departments are included in Part 1 of Schedule 19, because non-ministerial departments are considered to be government departments. That is what I am informed and that is how they are covered. In response to the questions from the noble Lord, Lord Low, our plan is to publish the list of organisations that we intend to be covered under Schedule 19 in the summer, at the same time as we consult on the draft regulations for specific duties. That is the timescale to which we are working. When we impose the specific duties, the regulations will be subject to the affirmative procedure, which means that government will have the opportunity to debate proposals fully. I think that that is correct. I am looking to the Box for assistance.

Lord Hunt of Wirral: Perhaps the noble Baroness can further clarify the point. I always tend, when looking at the interpretation side of any proposal before this Committee, to look at Clause 204, entitled "General interpretation". I could not see that a

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government department was defined there in the way that the noble Baroness is describing. It may well be that it is defined elsewhere in a generic way, but I could not see it in Clause 204. We have not yet reached Clause 204, but we may well a little later. It may be helpful if the noble Baroness could explain.

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Lord Lester of Herne Hill: May I have a go, although I will probably get this quite wrong? In Clause 149:

"A public authority is a person who is specified in Schedule 19".

The definition is extended in subsection (4) to "certain specified functions"-so it is broken down there. Subsection (5) then defines a public function as:

which has a flexible definition. The power to add to a list of who the public authorities are is the subordinate power, which will be subject to the affirmative procedure, which then gives the flexibility to apply the definition in Clause 149 to particular bodies. I hope that that is right.

Baroness Royall of Blaisdon: My Lords, I understand that that is correct. Does that answer the noble Lord's questions about a non-ministerial government body?

Lord Lester of Herne Hill: I think the Minister said that a non-ministerial body is a government department. Is it not better to say that it is a public authority?

Baroness Royall of Blaisdon: Yes, my Lords, just as the department of the Treasury Solicitor, for example, is a non-ministerial department. It is a similar sort of body.

Again, I will clarify for the noble Lord, Lord Low, that we will bring forward a consultative list in the summer at the same time as we consult on the draft regulations for the specific duties. The regulations that add the list to Schedule 19 will be subject to the affirmative procedure, so there will be proper scrutiny of the list.

Lord Mackay of Clashfern: My Lords, are the non-departmental public bodies in or out? "A government department" is not a good phrase to cover the non-departmental public bodies.

Lord Lester of Herne Hill: As I understand it, the Equality and Human Rights Commission is one such body and would be covered. My understanding is that such a body is a public authority, not a government department.

Baroness Royall of Blaisdon: My Lords, non-departmental public bodies will be listed in Schedule 19.

Lord Low of Dalston: My Lords, I reassure the Minister that she has one satisfied customer. I am grateful for her reassurance about the timescale and that the expanded list will be subject to parliamentary scrutiny.

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Lord Hunt of Wirral: My Lords, I am very grateful to the noble Lord, Lord Low of Dalston, for making some very important points, and I join him in thanking the Chancellor of the Duchy of Lancaster for clarifying the position and in particular for heeding and accepting the advice of the noble Lord, Lord Lester of Herne Hill. As he is a solicitor of the senior court-I think that I am no longer allowed to say the Supreme Court-I normally have to pay substantial sums to obtain that sort of advice. I do not want to debase the advice by saying that the noble Lord gives it completely free of charge, but he does that on so many occasions in this place and I am very grateful to him for clarifying "public authority", "government department" and "government authority". I share the slight confusion of my noble and learned friend Lord Mackay of Clashfern as to exactly where we are. I thank the noble Lord, Lord Lester of Herne Hill, for pointing us in the right direction, but I am not sure that I have yet reached the destination that he would advise me to reach.

Lord Lester of Herne Hill: I do not know whether the noble Lord can afford to go on like this, but he should remember the well known maxim, "No good deed goes unpunished".

Lord Mackay of Clashfern: My Lords, clarity has come from the fact that non-departmental public bodies will be listed. The definitions in Schedule 19 are only for those that are there already. A great number will be added in the course of our beautiful summer that is coming.

Lord Hunt of Wirral: I do think that we have got somewhere. That is the important thing. I was a little misled at first by the description of a non-departmental public body as a government department, but I have now reached an adequate pausing point for further consideration. I am very grateful to the noble Baroness for the clarity that she has introduced, and I beg leave to withdraw the amendment.

Amendment 115 withdrawn.

Schedule 19 agreed.

Clause 150 : Power to specify public authorities

Amendment 115ZA

Moved by Baroness Royall of Blaisdon

115ZA: Clause 150, page 96, line 6, at end insert-

"( ) An order may not be made under this section so as to extend the application of section 148 to-

(a) the exercise of a function referred to in paragraph 3 of Schedule 18 (judicial functions etc);

(b) a person listed in paragraph 4(2)(a) to (e) of that Schedule (Parliament, devolved legislatures and General Synod);

(c) the exercise of a function listed in paragraph 4(3) of that Schedule (proceedings in Parliament or devolved legislatures)."

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Amendment 115ZA agreed.

Amendment 115A not moved.

Clause 150, as amended, agreed.

Clauses 151 to 153 agreed.

Clause 154 : Power to impose specific duties: supplementary

Amendment 115B

Moved by Lord Hunt of Wirral

115B: Clause 154, page 99, line 4, at end insert-

"( ) Regulations made under sections 152 or 153 must comply with the Public Sector Equality Directive 2004/18/EC and Directive 2007/66/EC."

Lord Hunt of Wirral: My Lords, the purpose of the amendment is to invite the noble Baroness to explain what appears on the surface to be incompatibility between the Government's proposals on public procurement and one, or perhaps even two, directives in the European Union.

Clause 154 gives the power to a Minister of the Crown, or to a Scottish or a Welsh Minister, to impose specific duties on public authorities listed in Schedule 19 that are also contracting authorities for public procurement purposes. The Minister may correct me if I am wrong, but I assumed that the Government's intentions are for public procurement to be another area in which the goal of equality can be pursued.

We therefore tabled this probing amendment, which would make any order made under Clauses 152 or 153 subject to public sector directive 2004/18/EC and directive 2007/66/EC, merely to inquire as to the status of the European directives on public procurement that seem to undermine the Government's intentions in this area. I immediately apologise to the Committee for any confusion that may have been caused by the reference in the amendment to the "Public Sector Equality Directive". What was meant, of course, was "public sector directive".

The intention is that public sector authorities should be able to use procurement as an extra tool to secure equality. The amendment seeks to clarify the extent to which the Government have taken the EU directives into account on this issue. I am sure that they have; I merely seek reassurance, which I believe the Minister will give. However, the Committee may find it useful if I explain why this is a complicated area.

Public sector directive 2004/18/EC requires that public contracts are awarded on the basis of only two award criteria: "the most economically advantageous tender" or "the lowest price". In what way do the Government expect the public procurement provisions to work given these constraints?

Public sector directive 2007/66/EC has provisions within it that state that there must be review procedures, which would include the award of damages to any person who is harmed by an infringement of the specifications of the directive. We therefore have one European directive which states that public procurement can be based only on two very narrow criteria, and

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one which states that any infringement of this would result in the award of damages to the party that has lost out. Have these directives been taken into account? What is the solution for ensuring that the Government's objective of equality-based public sector procurement can also occur? I look forward to hearing the response of the Chancellor of the Duchy of Lancaster. I beg to move.

Baroness Royall of Blaisdon: My Lords, Amendment 115B, tabled by the noble Baronesses, Lady Warsi and Lady Morris of Bolton, seeks reassurance that any regulations that impose specific duties on public authorities listed in Schedule 19, which are also contracting authorities in relation to their public procurement activities, will comply with the European legislation that regulates public procurement. I can offer that reassurance.

Any regulations made under Clause 152 would have to be made with the EC directives in mind and any failure to comply with the directives, whether in the specific duties or any other legislation, could result in infraction proceedings. For this reason, it is superfluous to have an express provision in the Bill. Directive 2004/18/EC specifies the procedures that public bodies, known as contracting authorities, have to follow when awarding certain contracts for goods, services and works. Directive 2007/66/EC sets out the remedies that are available to economic operators who think that a contracting authority has breached the provisions of directive 2004/18/EC.

Both directives have been transposed into UK law by the Public Contracts Regulations 2006 and the Public Contracts (Scotland) Regulations 2006. I should like to make it clear that the Government do not propose to use the specific duties to alter either the procedures set out in directive 2004/18/EC or the remedies prescribed in directive 2007/66/EC and that any attempt to put this in the Bill is unnecessary.

The public sector spent approximately £220 billion last year on goods and services. That is a huge amount of money and much of it went to private providers following the public procurement procedures. The public sector has an important opportunity to use its purchasing power to promote equality wherever possible and it has legal obligations under the equality duty to do so. Achieving value for money and delivering wider and improved social outcomes, such as equality objectives, often go hand in hand. The procurement proposal in the Bill makes this relationship clear.

In June 2009, the Government consulted on policy proposals for the specific duties, including proposals relating to public procurement. Last month, the Government published a policy statement in response to the consultation. The policy statement includes proposals for specific duties requiring contracting authorities to consider the use of equality-related award criteria where they relate to the subject matter of the contract and are proportionate, and to consider incorporating equality-related contract conditions where they relate to the performance of the contract and are proportionate.

Both those proposals require any proposed action taken by a contracting authority to be proportionate and to relate to the subject matter of the contract in

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accordance with public procurement procedures. For example, as part of a major estate renovation scheme and in an attempt to redress the local and national under-representation of women in building trades, a local council could include a contract condition that requires 10 per cent of the person weeks required to complete the works to be delivered by women who have either an apprenticeship, traineeship or employment contract with the contractor or sub-contractor and are engaged in a training programme which is accepted by the employer. The current procurement regulations allow for this contract condition because 10 per cent would be considered proportionate and the proposals in the Bill will not change this.

5.45 pm

The Government policy statement also included the proposal that public authorities should, when setting their equality objectives and how they intend to achieve them, set out how they will use their public procurements to help meet their equality objectives. For instance, the evidence collected by an NHS trust might show that a particular section of the community within a diverse area is inadvertently excluded from accessing a service. An equality objective might be to redress this exclusion to ensure the service is offered, as it should be, to all sections of the community. The trust would need to consider how its procurements might help it to achieve this objective. These procurement proposals were subject to extensive consultation and views expressed were mixed. However, there was a general acceptance for the inclusion of equality-related measures that were relevant to the contract and proportionate.

The directives do not undermine the provisions in the Bill and we do not believe that there is a contradiction between award criteria that take into account the most economically advantageous tender and equality; for example, quality is a permitted criteria when deciding the most economically advantageous tender. Quality will be linked to many equality issues, such as whether a service meets the needs of users from all sections of the community.

I believe that the package of proposals that we intend to take forward in regulation is proportionate and appropriate. Again, I confirm that the new proposals comply with the European legislation that regulates public procurement.

Lord Lester of Herne Hill: Perhaps the Minister will be able to assure the noble Lord, Lord Hunt, that it was because of the brilliance of the noble and learned Lord, Lord Howe of Aberavon, in the European Communities Act 1972 that we made quite sure in this country that even if all of that were not the case, European law in this area would have to be given either direct effect or indirect effect because the Conservative Government at the time produced that admirable mechanism. I mention that only because I know that the noble Lord, Lord Hunt, would like that additional reassurance that his own party has helped, in its most European phase, to achieve the right result.

Baroness Royall of Blaisdon: My Lords, I would certainly endorse that and I pay very warm tribute to everything that the noble and learned Lord, Lord

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Howe of Aberavon, did in ensuring that we are such a strong partner in the European Community and that we can comply with these directives.

Lord Hunt of Wirral: My Lords, I am a little nervous about saying anything, except to point out that the Whip on the legislation was provided by Mr Kenneth Clarke. As I represent the party of Europe, I am particularly pleased that the noble Lord, Lord Lester of Herne Hill, should have singled out praise for my noble and learned friend in the way that he did. But I am not quite sure what relevance that has because I had already been persuaded by the Chancellor of the Duchy of Lancaster that these amendments were surplus to requirements, although I will now carefully study every word that she has spoken. My understanding of these provisions has been increased considerably and her reassurance is very welcome. In those circumstances, I beg leave to withdraw the amendment.

Amendment 115B withdrawn.

Clause 154 agreed.

Clauses 155 and 156 agreed.

Clause 157 : Positive action: general

Amendment 115C

Moved by Lord Lester of Herne Hill

115C: Clause 157, page 100, line 11, leave out "which" and insert "provided it"

Lord Lester of Herne Hill: My Lords, I shall speak also to Amendment 118A and to the group as a whole in a single speech. I should emphasise that we on these Benches strongly support both clauses and oppose any dilution of them, and that both clauses are permissive, not mandatory. My amendment to Clause 157 is probing in nature and not intended to hobble or curtail its scope or effect. The amendment to Clause 158 is intended to state in the Bill, in the interests of legal certainty, what is required by EU equality law; namely, compliance with the principle of proportionality. That would be in accordance with the recommendations made by the Joint Committee on Human Rights at paragraph 289 of its report on the Bill.

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