House of Lords
Tuesday, 26 February 2013.
2.30 pm
Prayers—read by the Lord Bishop of Liverpool.
Introduction: The Lord Archbishop of Canterbury
2.37 pm
Justin Portal, Lord Archbishop of Canterbury, was introduced and took the oath, supported by the Archbishop of York and the Bishop of London, and signed an undertaking to abide by the Code of Conduct.
Tibet
Question
2.41 pm
Asked By Lord Alton of Liverpool
To ask Her Majesty’s Government what discussions they have held with the Government of China about self-immolations in Tibet and China’s approach to human rights in that region.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, I am sure the whole House will join me in welcoming the most reverend Primate to the House in his new role. We all look forward to working with him on some extremely important issues, on which he has great expertise.
We are deeply concerned about the large number of self-immolations in Tibet. We regularly raise our concerns with the Chinese authorities. My right honourable friend Hugo Swire issued a statement on 17 December. Tibet was discussed at the last round of the annual UK-China human rights dialogue in January 2012. We encourage all parties to work for a resumption of substantive dialogue as a means to address Tibetan concerns and to relieve tensions. We believe that long-term solutions depend on respect for human rights and genuine autonomy for Tibetans within the framework of the Chinese constitution. Our position on Tibet is clear and long-standing. We regard Tibet as part of the People’s Republic of China.
Lord Alton of Liverpool: My Lords, with 105 self-immolations and 88 deaths, including three more in the past two days, many of them young people, the Dalai Lama has said that this futile waste of people’s lives brings tears to his eyes. As the noble Baroness considers how best to respond to these events, would she undertake to read the report Tibet: Breaking the Deadlock, which the noble Lord, Lord Steel, and I published following our visit to Tibet, and which focused on the need to create dialogue, to end attempts to discredit the Dalai Lama, to examine human rights
issues and constitutional arrangements, and to address the reasons why these extreme actions are occurring, leading to this heartbreaking and tragic waste of people’s lives?
Baroness Warsi: I know that the noble Lord has a long-standing interest in this matter. Indeed, I have had an opportunity to look at the recommendations of the report that he mentions. I am sure he will be heartened by the fact that we agree, at least in part, with some of its recommendations about the People’s Republic of China and the Dalai Lama returning to dialogue to take these matters forward bilaterally. Of course, I have real concern about the tragic cases of self-immolation. I have had an opportunity to read the casework on some of them. Tragically, those who die do so at great loss to their communities and families, but those who survive end up suffering for many years with very little treatment. It is a matter that we continue to raise.
Lord Anderson of Swansea: My Lords, China is building better rail and road links to Tibet, which help the Han Chinese colonise that region. Of course, in spite of all these bilateral and multilateral meetings, China ignores any pleas for human rights in China itself, internationally or in Tibet. Does the Minister have any evidence that China is altering its stance in response to human rights in Tibet or internationally, commensurate with its new economic power?
Baroness Warsi: My Lords, we are concerned about the lack of meaningful dialogue to address the underlying grievances against a clearly worsening situation. We continue to encourage all parties to work for a resumption of substantive dialogue as a means to address the Tibetan concerns and to relieve tensions. Of course, we continue to make the case to China that any economic progress can be sustained only if there is social progress as well.
Lord Steel of Aikwood: Does the Minister, having read the report to which she has kindly referred, recognise that in the three years since, two important things have happened? One is that there was a change of leadership in China; the second is that the Dalai Lama has given up his political role as head of the Tibetan Government in exile. Therefore, would she and her colleagues try to encourage the Chinese authorities to enter into dialogue with the Dalai Lama as a religious leader in order to stop these immolations and try to improve relations between the Tibetan people and the Chinese?
Baroness Warsi: Many of us around the world recognise the Dalai Lama as a spiritual leader, but my noble friend will be aware of the position of the Chinese Government. That is not the way he is seen within the People’s Republic of China. The noble Lord will also be aware of the UK-China annual human rights dialogue, and we continue to raise these concerns at that point.
The Archbishop of York: My Lords, I thank the Minister for her answer to the question asked by the noble Lord, Lord Steel. I still want to probe a bit further. He is certainly exiled, but the Dalai Lama is not only a spiritual and religious leader of the people of Tibet; he is also recognised throughout the world. Will the Government nevertheless impress upon the Chinese Government that they should recognise and respect the Dalai Lama as a religious leader and not as a political leader? If they did that, it is possible that they would then have a dialogue.
Baroness Warsi: The most reverend Primate raises an important wider issue: the freedom of religion within China and the recognition of religious groups and therefore of religious leaders. It is a matter that we raise in generic terms, although I cannot categorically say whether the specific issue of recognising the Dalai Lama as a spiritual leader has been raised.
Lord Wills: What representations have the Government made about the fate of Gedhun Choekyi Nyima, the young boy identified in 1995 by the Dalai Lama as the new Panchen Lama, the second highest office in Tibetan Buddhism? The Minister will recall that shortly after that identification, that young boy was taken into what the Chinese Government called “protective custody” and has never been seen since. What assurances have the Government sought about his fate and well-being, and if they have not made any representations, will they do so?
Baroness Warsi: Representations were made about the young boy. Indeed, I think his name appeared on a specific list that was handed over during one of the UK-China human rights dialogues. We have also put forward the idea of him being allowed access to an independent organisation that could assess his current health and whereabouts.
Lord Triesman: My Lords, I associate these Benches with the welcome that has been given to the most reverend Primate. We all wish him every success in the contribution he will make in this House. The last major dialogue that the Minister has reported to us was in January 2012. Obviously, there has been a change in the leadership of the Chinese state and Communist Party in the period since. I wonder whether other channels are available that might be used. I am thinking particularly of the business group, the 48 Group Club, which has managed to establish decent relationships with the Chinese Government and is not always associated with the past that this country has had with China, which has not been held in great esteem in many respects by the Chinese people historically. Is there a dialogue going on with those groups? Can we improve it and can we achieve the objectives to which the noble Lord, Lord Steel, referred just a few moments ago?
Baroness Warsi: The noble Lord makes an important point. I cannot answer it directly. I am not sure whether other groups are being used as alternative avenues to make our views clear. I can, however, inform him that
the annual dialogue is now overdue and that officials have been in contact with each other with a view to try to fix a date for further discussions.
Citizenship Test
Question
2.49 pm
Asked By Lord Roberts of Llandudno
To ask Her Majesty’s Government whether they have received representations about the new UK Citizenship test.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach): My Lords, the new Life in the UK Test, which is taken for settlement and citizenship purposes, will begin on Monday 25 March and will have British history and culture at its heart. We have not as yet received any direct representations, although public comment on the new handbook has been broadly positive.
Lord Roberts of Llandudno: I thank the Minister for his reply. However, does he not consider that the new handbook is impractical and irrelevant and does not deal with the problems that people need to tackle when they come to Britain? The book contains 3,000 hard facts to be mastered. For instance, does he think it appropriate that every person who sits this test should know when the Emperor Claudius invaded Britain?
Lord Roberts of Llandudno: I am sure that somebody will know. I can go back to Wales; other people can go back to other places. It was AD 43. However, given that there is some discontent regarding the questions asked, would the Minister be prepared to meet some of us who share that concern to discuss a more practical handbook on life in the United Kingdom?
Lord Taylor of Holbeach: My Lords, I am always very happy to learn and would be delighted to meet my noble friend. However, I do not agree with his summary of the new handbook. I think that it contains relevant British history and culture, which is the whole purpose of the exercise: that is, to provide facts on which people can base a life of settlement and, indeed, citizenship in this country. Therefore, I disagree with the premise of my noble friend’s supplementary question but I am very happy to meet him.
Lord Foulkes of Cumnock: My Lords, has the Minister tried to take the test himself and, if so, did he pass?
Lord Taylor of Holbeach: I have a sample test here and it is very fortunate that the correct answers are given in bold type.
Lord Elystan-Morgan: My Lords, does the handbook contain any reference to the invasion of these islands by the Anglo-Saxons?
Lord Taylor of Holbeach: I am sure that it does.
Baroness Smith of Basildon: My Lords, we introduced the citizenship test in 2005 and remain committed to it, but clearly a significant amount of time, effort and money has gone into these changes and the questions mentioned by the noble Lord, Lord Roberts. It has to be said that when the Prime Minister failed the test on live television in America, one has to doubt whether we have all the right questions. Given that 20% fewer foreign criminals have been deported and given the lengthy delays in the processing of visas, far exceeding what is reasonable or should be expected, as Her Majesty’s Inspector has pointed out, should the priority be changes to the citizenship test or should the key focus be on sorting out the problems connected with immigration and visas?
Lord Taylor of Holbeach: I do not think that it is necessary to tackle just one task at a time. Making this test relevant was an important task. Noble Lords will know that the current handbook has been in use for six years. It was time to have an update and to make it more relevant. The noble Baroness referred to serious issues on the part of UKBA, particularly its ability to cope with appeals. We are well aware of this and I am absolutely certain that the chairman of UKBA has this matter at the top of his agenda.
Lord Lloyd of Berwick: Is the noble Lord aware that those people who have been resident in this country for many years apparently cannot apply to take the new test if they are over 65? Is 65 really too old to become a citizen of the United Kingdom?
Lord Taylor of Holbeach: I was not aware of that fact and, being over 65 myself, I would like to think that I am still in command of all my facilities.
Lord Taylor of Holbeach:Perhaps I should rephrase that. More than 93,000 people have taken an online test, the sample test hosted by the Home Office, and the outcome was that the average score was 86%.
Baroness Trumpington: My Lords, may I just reassure the Minister that I was not the Emperor Claudius’s land girl?
Lord Taylor of Holbeach: I am sure that the House is very reassured by that.
Baroness Gardner of Parkes: My Lords, I have been in this country for almost 60 years. I could not possibly pass that test, although I thought I had assimilated a bit of Britishness while I have been here. My accent remains unchanged, of course. I am concerned about more serious situations in immigration, raised by the
Front Bench opposite. With the help of the noble and learned Lord, Lord Woolf, a former Lord Chief Justice, we have managed to obtain a right to be here for someone who has been here now for three years. She was here legally for five years, having come here as an au pair, then illegally for about 20 years. Now she has to wait, and after five years she can apply for citizenship. During that investigation, I discovered that the problem is that when you arrive, you are told that you have to have been here for six years. When you get to five and a half years, they change it to eight years. When you get to seven and a half years, they change it to add another two years. Is it not time that we looked at the prospect of relating the number of years you have to wait to what was in force at that time of your arrival?
Lord Taylor of Holbeach: My noble friend has illustrated that the rules on these matters are complex, but we do keep them under review. We really want to facilitate the opportunity for people who want to make a life in this country to settle and to achieve citizenship. That is the purpose of the test.
Death Penalty
Question
2.57 pm
To ask Her Majesty’s Government what steps they are taking to end the use of the death penalty worldwide.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, we continue to work towards global abolition in line with the FCO strategy for abolition of the death penalty. We regularly raise this issue in bilateral discussions with countries of concern and fund projects in support of abolition. In December last year we worked intensively to help ensure that the UN General Assembly resolution against the death penalty was supported by more countries than before.
Lord Sheldon: My Lords, we need to limit the death penalty, which is much used in China. It is more limited in other countries, and it still exists in parts of the United States. Generally, there has been a reduction in the death penalty, but further limitations must be pressed.
Baroness Warsi: I agree with the sentiments of the noble Lord. That is why we work with countries on a two-pronged approach—those countries which wish to retain the death penalty on their books but want, effectively, to impose a moratorium and then move towards abolition.
Baroness Hollins: My Lords, Mr Warren Hill, a man with intellectual disability, was due to be executed in Atlanta, Georgia just a week ago today. Due to the very welcome intervention of the Foreign and
Commonwealth Office and other advocates, there was a stay of execution. I understand that the state of Georgia is still hoping to execute Mr Hill before 1 March, when its licensed medication runs out. Could the Minister advise the House what other steps the Foreign and Commonwealth Office is taking to try to ensure that Mr Hill’s mental disability is properly assessed, that the method of execution is considered and that this man is granted a reprieve?
Baroness Warsi: I cannot answer the specific questions that the noble Baroness raises, but I will write to her with details of that very specific case. I can assure her that we have done casework on individual cases with individual states. Our consular section has intervened and expressed its interest in matters such as this, but we have also worked with organisations such as Reprieve, in which Clive Stafford Smith and his colleagues have worked quite closely with lawyers in assisting and supporting people on death row. However, I will write to the noble Baroness about the specific case she raised.
Lord Dholakia: My Lords, I declare an interest as a member of the All-Party Parliamentary Group for the Abolition of the Death Penalty. In that capacity last week, I visited South Sudan and Tanzania. What is being done, first, through the Commonwealth Secretariat and, secondly, through bodies such as CHOGM to impress upon Commonwealth countries to sign Resolution 44/128 of the 1989 United Nations resolution on abolition? More importantly, can we encourage more countries to have a moratorium on carrying out death sentences, as Tanzania has done?
Baroness Warsi: The Commonwealth is an important institution within which to have these discussions and, of course, the signing of the Commonwealth charter in December only last year is a way to further strengthen the underpinning of the values of the Commonwealth family. However, individual countries within the Commonwealth take different views in relation to the use of the death penalty. We continue to work with them on a bilateral level, as well as through multilateral organisations, to try and move them to a position of abolition.
Lord Faulkner of Worcester: Can the Minister give an assurance that no European state is exporting to the United States pentobarbital or any other drug that is used in execution?
Baroness Warsi: My Lords, I read about that somewhere in my brief, but I am not sure exactly where it was. Rather than give the noble Lord an answer that is not entirely correct, I will write to him with a very specific answer.
Lord Low of Dalston: My Lords, as the Minister will be aware, Afzal Guru was hanged in India on 9 February this year—the second execution in that country in three months—following an eight-year hiatus in executions. Reports suggest that four more prisoners, after their mercy petitions were rejected, are due to be
executed imminently. What efforts are the Government making to encourage the Indian Government to stop this regressive move? Was this one of the issues that the Prime Minister raised with the Indian Government when he recently visited India?
Baroness Warsi: The matter was raised during the recent visit. We made representations via my right honourable friend the Minister of State, Hugo Swire, who has responsibility for India. He raised that matter when he visited Delhi with a large delegation on 21 February. We have separately made representations through the EU, and will continue to raise through the EU-India human rights dialogue India’s use of the death penalty. Of course, the matter is extremely concerning, because there was effectively a moratorium, as the noble Lord said, between 2004 and 2012. We would like it to move back to that position, with a view to formal abolition.
Baroness O'Cathain: My Lords, the noble Baroness, Lady Hollins, told us about the dreadful situation facing Mr Hill, and my noble friend agreed that she would “write” about this issue. However, today is 26 February and the execution is, I understand, due to take place on 1 March. Can we do something a bit more than write? Can she not make a positive statement that she is going to do something about it today?
Baroness Warsi: I was intending to do exactly that. My noble friend makes an important point in terms of the timing. I can assure her and the noble Baroness, Lady Hollins, that I will deal with this matter when I return to my office in about half an hour’s time.
Lord Clarke of Hampstead: My Lords, would the Minister care to comment on the recent wave of executions in Iran, which have been stepped up to number many dozens in the past few months? Does she agree with me that the inhuman and barbaric treatment of the people of Iran underlines once again the fact that the people who decide on these executions are inhuman and disregard the wishes of their own people?
Baroness Warsi: The noble Lord is right. Tragically, Iran executes more people per capita than anywhere else in the world—at least 352 people in 2012 of whom we have records. Tragically again, the death penalty is regularly used for non-serious crimes. In doing so, Iran fails to meet even the most basic minimum standards under international law and, also tragically, consistently refuses to engage with the international community on this issue.
Energy: Electricity Generation
Question
3.04 pm
To ask Her Majesty’s Government whether they consider that there will be adequate reserves of electricity-generating capacity after the expected closures of a number of coal and nuclear plants.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma): My Lords, I begin by wishing my noble friend a very happy 94th birthday, which I know he celebrated a couple of days ago. The Government are taking decisive steps to secure our supplies. We are reforming the electricity market to drive the investment we need to ensure that we have a diverse range of energy supplies, and through the Green Deal and ECO, we are looking to reduce our usage of energy. I am also pleased to announce that we have had investment from Carrington gas, which will come on stream in 2016, and Hitachi’s investment of £700 million in purchasing Horizon demonstrates that the Government’s approach is right, and that the UK remains an attractive place to invest.
Lord Ezra: My Lords, I thank my noble friend for her kind remarks. In spite of advancing years, I continue to take a keen interest in energy matters. Does the Minister agree that, while in the medium and long term, shale gas, new nuclear and other installations may help to meet increased electricity demands, there is a serious short-term problem, to which she referred? In that connection, will she indicate what steps the Government will take, in addition to those that she mentioned, to avoid a possible shortage of electricity-generating capacity within the next two to three years, bearing in mind the early closure of existing coal and some nuclear plants, and the warning from Ofgem that, as a result, reserve electricity capacity will fall well below normal levels?
Baroness Verma: My Lords, the Government are taking action to ensure that the UK economy continues to enjoy high levels of electricity supply security in the short, medium and long term. Our proposals for electricity market reform will drive investment, ensuring that we have a diverse mix of energy sources. Those proposals also include legislating for a capacity market to ensure that we have sufficiently reliable capacity on the system in the long term. The legislation, which will come to your Lordships’ House for consideration shortly, will enable a capacity market. With regard to the short term, we expect to see some reduction in margins as we move towards the middle of the decade; we saw similar reductions in the previous decade.
Lord Tomlinson: Does the Minister agree that we are falling further and further behind the necessary timetable for getting new nuclear power on stream? Without that new nuclear power, we will see the proportion of our energy that is generated from nuclear rapidly declining as we close the existing stations, and we will become more and more dependent on imported energy. At the same time, we will of course fail to meet our Kyoto targets. In those circumstances of an increase in imported energy, will the Minister answer the question I asked her yesterday, and which she failed to answer: what is the effect on imported energy requirements of the devaluation of sterling, which is further exacerbated by the loss of our AAA status?
Baroness Verma: My Lords, new nuclear is one of the country’s options. As I have said many times at the Dispatch Box, it is part of an energy mix. However,
like all things, it goes through the proper procedures, as the noble Lord would expect. We have a lot of interest in investment in the UK from outside; I just mentioned Hitachi’s purchase of Horizon. The noble Lord needs to be reassured that we are going through processes that need to be properly done through planning and all the other necessary requirements of new nuclear. On yesterday’s question, if the noble Lord had been here, he would have heard my noble friend’s response.
Lord Lawson of Blaby: Following the very pertinent Question of the noble Lord, Lord Ezra, will my noble friend assure the House that if the need arises, our coal-fired power stations will be kept open for as long as necessary, regardless of the European large combustion plants directive? Looking further ahead, will she agree that the Government need to give every encouragement they can to the fastest possible development of our indigenous supplies of shale gas, which is clearly the fuel of choice for power stations in the foreseeable future?
Baroness Verma: My Lords, my noble friend raises a number of important and key points. Of course we are looking at ensuring that we do not have a dip in our secure energy supply. We are also making sure that our new energies will take over when the old gas and coal-powered stations come off stream. We cannot meet our carbon emission reduction targets if we have unabated coal continuing to come out of our power stations. However, we are looking at increasing our gas supplies as well as all our other alternative energy supplies.
Baroness Worthington: My Lords, as the Minister mentioned, the most effective way to combat potential insecurity of supply is to invest in demand management and reduction. I was very pleased to hear mention of the capacity mechanism that we expect to be part of the Energy Bill. I understand that officials have been working on proposals for this. Will the Minister confirm what state of readiness the proposals are in, and when we might expect to see them, since they are the best way of combating security of supply problems?
Baroness Verma: The noble Baroness is absolutely right. We need to ensure that we reduce our usage of electricity and of other energies. We have had a consultation. We are now looking at the responses to it. I hope to come back to the Dispatch Box with our response later in the year.
Parliamentary Commission on Banking Standards
Membership Motion
3.11 pm
Moved By The Chairman of Committees
That the Lord Archbishop of Canterbury be appointed a member of the committee to join with the Commons as the Parliamentary Commission on Banking Standards.
Motion agreed, and a message was sent to the Commons.
Presumption of Death Bill
Order of Commitment Discharged
3.11 pm
That the order of commitment be discharged.
Baroness Kramer: My Lords, I understand that no amendments to the Bill have been set down and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Mobile Homes Bill
Mobile Homes Bill14th Report from the Delegated Powers Committee
Order of Commitment Discharged
3.12 pm
That the order of commitment be discharged.
Lord Best: My Lords, I understand that no amendments to the Bill have been set down and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Public Service Pensions Bill
Third Reading
3.13 pm
Lord Newby: My Lords, this group contains a large number of technical amendments. Amendment 1 reflects the fact that some of the obligations in the Bill are set in the main clauses and not in scheme regulations. This means that the drafting of Clause 3, which allows only for consequential, supplementary, incidental or transitional changes as a result of provisions in scheme regulations, leaves a theoretical gap in powers that we would like to plug. If such changes were required solely as a result of provisions in the Bill rather than in scheme regulations, we might not be able to do so without making new primary legislation. We do not believe that that would be appropriate, so the amendments in this group seek to address the slight gap in the current drafting.
Of course, this extends the powers to cover only consequential, supplementary, incidental or transitional changes that result from clauses that have been debated
at length in both Houses. Parliament is already aware of the desired effects of the Bill. These powers ensure that the effects can be realised. As we discussed on Report, any use of these powers to amend primary legislation could only be for consequential purposes and to Acts that have already been passed. I therefore hope that noble Lords can support this small but sensible amendment.
Amendments 4 and 5 are minor technical amendments. They are simply to provide consistency throughout the Bill in the form of cross-references to Schedule 4 to the Pensions Act 1995. They ensure that the same format is used in Clauses 34 and 35 as is used in Clause 10.
Amendments 8 and 9 are again minor amendments intended to clarify the wording, in this case of amendments I brought forward on Report. Noble Lords will recall that those amendments give schemes flexibility to define pensionable earnings for the purpose of the final salary link, and also safeguard the value of members’ final salary benefits. The safeguard is that the amount of earnings in the new scheme that are pensionable earnings for the purpose of the final salary link must not be materially less than the amount that would have applied had the person been in the old scheme until the point they eventually left service. The amendments simply clarify the safeguard. They make it clear that it applies to what would have been the person’s pensionable earnings had that person been in active service in the old scheme or deemed transfer scheme, rather than the new scheme. They would, of course, not have been in actual active service in those schemes after 2015, since they would have been in active service in the new scheme instead. The amendments do not change the substance of the meaning of the previous amendments in any way, but are just clarificatory.
Amendment 10 is concerned with circumstances where a pension that is calculated in accordance with the final salary link has been put into payment and the person subsequently returns to public service employment. It is designed to allow flexibility for schemes to continue their current treatment of a final salary pension in payment in such circumstances. Our intention is for the final salary link to accord with the rules on final salary benefits in each scheme that are currently in force. Some schemes currently allow the final salary benefits to be recalculated after a period of re-employment. The provisions in Schedule 7 allow this approach to continue where there is continuity of service, as provided for in paragraph 3. However, many schemes currently treat final salary benefits that have already been put into payment as fully crystallised, and consequently unaffected by any future period of employment in scheme service. Our amendment would allow for scheme regulations to provide that this continues to be the case too, if desired. Rules of existing schemes can also continue to provide for some limited aggregation of periods of employment, as some do at the moment. This amendment assists schemes in the implementation of the recommendation of the noble Lord, Lord Hutton, to honour the benefits built up under the current final salary schemes.
Amendment 11 consists of a series of minor, consequential amendments to the Pensions (Increase) Act 1971. It clarifies how the uprating provisions of
that Act apply to those with service in both an existing scheme and a new one. The 1971 Act provides for the uprating of pension benefits for deferred and pensioner members of the public service schemes. The intention is that while a person is a member of a new scheme after 2015, and they have also old scheme benefits, those old scheme benefits should be treated for uprating purposes as though they remained an active member. This should remain the case until the member takes the old scheme pension or leaves the new scheme. This means that for those persons whose existing scheme is a final salary scheme, their benefits in that scheme will be uprated through the final salary link provisions in Schedule 7 to the Bill. For those persons whose existing scheme is a career average scheme, their benefits should continue to be revalued as if they remained an active member. This amendment clarifies how the provisions in the Pensions (Increase) Act apply in the circumstances I have just described.
Where people continue in service, the old scheme benefits should not be treated as deferred from 2015. To do so would mean that those benefits would be uprated in line with prices from 2015, which would run counter to the treatment of old scheme benefits recommended by the noble Lord, Lord Hutton.
The final amendment in this group relates to an amendment I introduced on Report to paragraph 30 of Schedule 8. This paragraph amends Schedule 4 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 to enable those active members of the Legal Services Commission pension schemes to transfer into the Civil Service scheme on 1 April 2014 to have full access to the transitional provisions contained in Clause 18. This subsequent amendment is a minor tweak to paragraph 30 to ensure that, in addition to those active members, deferred members of the LSC pension schemes who rejoin within a five-year period will also benefit from the transition provisions. This is entirely consistent with wider government policy on the treatment of deferred members of public service pension schemes. It will ensure that employees of the LSC are not unfairly disadvantaged by the changes to their pension provision. I beg to move.
Lord Eatwell: My Lords, I am grateful to the noble Lord for explaining the content of these essentially technical amendments. I particularly welcome the approach, which is in accord with the recommendation of my noble friend Lord Hutton.
I have but one question of the noble Lord, and that is why his remarks were not prefaced by an apology to the House for having put down these amendments as late as 5 pm yesterday afternoon.
Lord Newby: My Lords, I have my apology prepared and I will now give it. I thought it was the next group of amendments about which the noble Lord was particularly concerned.
I apologise to the House for the late tabling of these amendments. There is nothing sinister about it. As noble Lords will have understood, I hope, from my explanation of them, they were extremely minor technical amendments. The reason for the delay was simply to ensure that all legal issues had been adequately addressed
in the final drafting. I had hoped we could have done it sooner, but that was the sole reason for the delay in the amendments being submitted. I repeat, I am sorry that we did not do it earlier.
2: Clause 9, page 5, line 39, leave out “the negative Commons procedure” and insert “—
(a) the affirmative Commons procedure, if the order specifies a percentage decrease for the purposes of subsection (2), and
(b) the negative Commons procedure, in any other case.”
Lord Newby: My Lords, on Report, I asked the noble Lords, Lord Whitty and Lord Eatwell, to withdraw their amendments on the revaluation order because of my intention to return with an amendment of my own. I said that I would consider the parliamentary procedure for the revaluation order where it specifies a negative figure, and the amendments that I have tabled, albeit at the last minute, are in line with that commitment.
As I have made clear on several occasions before, it would be wrong to rule out revaluations that set out negative figures on the very rare occasions where either the CPI or earnings were in negative territory. This would be unfair to the taxpayer and represent an asymmetric sharing of risk, which was specifically referenced by the noble Lord, Lord Hutton, in his report.
The amendments that I have brought forward do not affect the ability to track growth directly. I do not wish to rehearse at length the strong arguments I have deployed in the past. However, these amendments increase the level of parliamentary scrutiny in the highly unlikely event that we see negative growth. Where the Treasury order sets a negative figure, which I remind the House it can determine only on reasonable and justifiable terms by reference to the general level of prices or earnings, the order will be subject to the affirmative procedure. This will ensure that Parliament has an opportunity to debate the measure. Given the uniqueness of a situation in which the revaluation of benefits could lead to a decrease in entitlement, the Government believe that this is an appropriate and sensible additional safeguard of members’ interests.
However, I should point out that the vast majority of the revaluations will involve run of the mill legislation that simply sets out the relevant increases in line with announced government policy. For example, if the new schemes are already in place, the order for this year would simply set out the positive change in prices in line with the CPI and the positive change in earnings in line with the average weekly earnings measure. Both of these have been in the public domain for quite some time.
When we are not experiencing something extraordinarily unusual such as negative growth, it would go too far to provide for the affirmative procedure for every order as provided for in the amendment of the noble Lord, Lord Eatwell. Therefore, I hope that
the noble Lord will understand why I am not able to accept his amendment. The Government’s amendments strike the appropriate balance between parliamentary scrutiny and sensible regulation-making. I hope they will provide some comfort and that noble Lords will be able to support them. I beg to move.
The Lord Speaker (Baroness D'Souza): I should advise your Lordships that if this amendment is agreed to I cannot call Amendment 3 for reason of pre-emption.
Lord Eatwell: My Lords, I am grateful to the noble Lord for introducing these amendments, and for reacting as he promised on Report to the issues raised there by me and my noble friend Lord Whitty. His speech was slightly imperfectly drafted as it referred on several occasions to the unlikelihood of negative growth. In fact under this coalition Government negative growth has become an all too common characteristic of our economy. He was, of course, referring to the negative growth of prices and earnings. In that dimension, he may hopefully be more accurate.
Our amendment was put down at 4.30 pm yesterday afternoon because of the absence of any government amendment at that time dealing with this issue. The government amendment appeared half an hour later. In the circumstances we are pleased that the Government have understood some of the important issues raised, particularly by my noble friend Lord Whitty, and have brought forward appropriate amendments to take into account the arguments that he made both in Committee and on Report. I will therefore not move Amendment 3, and will be quite happy to see government Amendment 2 nodded through.
Clause 34 : Parliamentary and other pension schemes: pension age
Clause 35 : Members of the European Parliament
Clause 36 : General interpretation
6: Clause 36, page 19, line 13, leave out “has the meaning” and insert “and “the affirmative Commons procedure” have the meanings”.
Clause 37 : Regulations, orders and directions
7: Clause 37, page 21, line 46, at end insert—
“( ) In this Act, the “affirmative Commons procedure”, in relation to a Treasury order, means that the order may not be made unless a draft of the instrument containing it has been laid before, and approved by resolution of, the House of Commons.”
Schedule 7 : Final salary link
8: Schedule 7, page 37, line 29, leave out from “service” to end and insert “had the new scheme service been old scheme service”
9: Schedule 7, page 38, line 16, leave out from “service” to end and insert “had the new scheme service been deemed transfer scheme service”
10: Schedule 7, page 38, line 38, at end insert—
“Final salary link not to apply again to a pension in payment5 (1) Scheme regulations may provide that where a pension in payment under a scheme to which section 18(1) or 31(2) applies has been calculated by reference to this Schedule, the pension cannot be recalculated by reference to this Schedule where there is a subsequent period of pensionable public service (within the meaning of paragraph 3).
(2) Provision made under sub-paragraph (1) may in particular be made by amending the scheme under which the pension is in payment.”
Schedule 8 : Consequential and minor amendments
11: Schedule 8, page 39, line 18, at end insert—
“3A After section 8 of the Pensions (Increase) Act 1971 there is inserted—
“8A Section 8(2): references to “service”
(a) paragraph 1 or 2 of Schedule 7 to the 2013 Act (final salary link for persons who remain in old scheme for past service) applies in relation to a person, and
(b) the person’s final salary falls to be determined by reference to that paragraph,
references in section 8(2) above to the service in respect of which a pension is payable include the person’s new scheme service (within the meaning of Schedule 7 to the 2013 Act).
(a) a person is a member of a relevant old scheme by virtue of pensionable service for that scheme (“the relevant old scheme service”),
(b) the person is also a member of a scheme under section 1 of the 2013 Act or a new public body pension scheme (“the new scheme”) by virtue of pensionable service for that scheme (“the new scheme service”),
(c) the relevant old scheme service and the new scheme service are continuous, and
(d) the person’s employer in relation to the relevant old scheme service is the person’s employer in relation to the new scheme service (or any other employer in relation to the new scheme),
references in section 8(2) above to the service in respect of which a pension is payable include the person’s new scheme service.
(a) “relevant old scheme” means a career average revalued earnings scheme (within the meaning of the 2013 Act) to which section 18(1) or 31(2) of that Act applies (restriction of benefits under existing schemes);
(b) “employer”, “new public body pension scheme” and “pensionable service” have the same meanings as in that Act.
(4) For the purposes of subsection (2)—
(a) paragraphs 3 and 4 of Schedule 7 to the 2013 Act (continuity of employment etc) apply as they apply for the purposes of paragraphs 1(2) and 2(2) of that Schedule;
(b) regulations under section 1 of the 2013 Act (in the case of a new scheme under that section) or rules (in the case of a new public body pension scheme) may provide that where a pension is in payment under a relevant old scheme, references in section 8(2) above to the service in respect of which a pension is payable do not include any subsequent period of pensionable service in relation to a scheme under section 1 of the 2013 Act or a new public body pension scheme.
(5) Provision made under subsection (4)(b) may in particular be made by amending the relevant old scheme.
(6) In this section, “the 2013 Act” means the Public Service Pensions Act 2013.””
12: Schedule 8, page 44, line 27, leave out from “after” to end of line 39 and insert “sub-paragraph (11) there is inserted—
(a) was a member of a relevant LSC scheme immediately before the transfer day,
(b) had been a member of that scheme immediately before 1 April 2012, and
(c) becomes, on or after the transfer day, a member of a civil service scheme by virtue of employment in the civil service of the State,
the individual is to be regarded, for the purposes of section 18(5) of the Public Service Pensions Act 2013, as having been a member of the civil service scheme immediately before 1 April 2012.
Bill passed and returned to the Commons with amendments.
Enterprise and Regulatory Reform Bill
Report (1st Day)
3.27 pm
Relevant documents: 9th, 10th, 11th, 12th and 14th Reports from the Delegated Powers Committee.
“Interpretation of the green purposes: duty to assess impact on the Climate Change Act 2008
(1) In interpreting the purposes set out in section 1(1), it is the duty of the Board of the UK Green Investment Bank to assess whether the implementation of its investment strategy, or similar document outlining or amending the proposed investment portfolio, will as a whole, increase the likelihood of achieving carbon budgets and greenhouse reduction targets under the Climate Change Act 2008.
(2) In subsection (1), whether or not an investment strategy will increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets shall be assessed compared to a scenario where the identified investments or investment categories did not proceed.
(3) In undertaking the assessment required under subsection (1), it is the duty of the Board of the UK Green Investment Bank to have regard to the advice and reports of the Committee on Climate Change as required under sections 34, 36 and 38 of the Climate Change Act 2008.
(4) The Board must not make a decision to adopt or amend its investment strategy or similar document as described in subsection (1), unless it is satisfied, as a result of the assessment conducted under that subsection, that the proposed investment portfolio will, as a whole, increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets under the Climate Change Act 2008.”
Lord Teverson: My Lords, the purpose of my amendment, which I tabled early in the process, before any government amendments, was really to make sure that the Green Investment Bank does what it says on the tin. It should invest not only in the individual areas that are listed so comprehensively in Clause 1, the first of which is,
“the reduction of greenhouse gas emissions”,
which I shall pursue in a moment. It goes on to list,
“efficiency in the use of natural resources … natural environment … biodiversity … environmental sustainability”.
We could not have a better list of good things for this bank to invest in.
However, the difficulty is, as the Bill goes on to say, that any investment has to meet only one of those excellent purposes, but there can be conflict environmentally in certain areas over certain actions. For instance, an important coastal reclamation project to ensure biodiversity might produce a negative carbon outcome over the medium to longer term. It is a possibility, although clearly it will not happen all the time. My amendment seeks to ensure that the bank, looking at the position overall rather than at individual investment decisions, has to make sure that we bring down carbon emissions overall and that this is put within the context of the Climate Change Act. I see that as being absolutely essential and I am delighted that the Government have put down their own amendments with a similar requirement, so I look forward to the Minister explaining them in more detail. At this point, I beg to move.
3.30 pm
Baroness Worthington: My Lords, we also welcome the fact that the Government have listened to our debate in Committee and have tabled amendments to make more explicit the green purposes of the Green Investment Bank. As has been said many times, with no ability to borrow, the bank can scarcely be described as a bank, and with unclear purposes it might also
cease to be green. We welcome the Government’s amendments, but there is a remaining concern. When we discussed this in Committee, we were looking for specific references to the meeting of the UK’s carbon budget under the Climate Change Act 2008. The amendments tabled for consideration today do not contain that explicit reference, which is a great shame, and we hope to reinstate it. References to “global greenhouse gas emissions” may be welcome, but which country, let alone which bank, can truly be expected to make a contribution to such an outcome? The factors influencing global emissions are complex and manifold, and where the UK could make a difference to global emissions is by showing leadership on policy and instruments to tackle climate change. The Climate Change Act was drafted not only with a view to contributing to solving the global problem but to demonstrating leadership at home. The Green Investment Bank has been created to contribute to the latter part as much as the former and therefore the legislation which shapes this decision should refer to our existing, world-leading climate change mitigation legislation. I hope that the Minister will accept these amendments, which seek to achieve this.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie): My Lords, I welcome the contributions from my noble friend Lord Teverson and the noble Baroness, Lady Worthington, to this debate, and indeed the cross-party support that there is for the UK Green Investment Bank. The bank will be a key driver of the transition to a green economy and is already making investments in green infrastructure projects. The bank has already committed more than £400 million to projects across a range of sectors, including waste, non-domestic energy efficiency and offshore wind. These investments are illustrative of the impact we expect the bank to have in the coming years.
In turning to the first amendment, I emphasise the large measure of agreement between the Government and noble Lords who have tabled this amendment. We agree that the reduction of greenhouse gas emissions is a key objective for the bank and accept that it would be right to give this objective statutory recognition. However, we want to do this in a way that best reflects the bank’s corporate governance framework and its position as a Companies Act company. Clause 1 sets out five statutory green purposes which, read together, set the parameters of the bank’s activity to ensure that it must always remain green. These green purposes provide an overarching framework for the bank’s green activity while preserving the necessary breadth to adapt to evolving green priorities over the long term. The Government consider that this breadth is essential as there are important activities which are clearly “green”, but may not reduce greenhouse gas emissions, including recycling and improving water quality. We would not want the Bill to be amended in such a way that put doubt on the bank’s ability to invest in these areas, and I welcome noble Lords’ support for this approach.
As I have said, the Government agree that the reduction of greenhouse gas emissions is an important objective for the bank. That is why we have included a
statutory green purpose explicitly to this effect, and why we have tabled our own amendments, to which I will turn shortly. However, it is important that we focus on the key objectives for the bank and do not introduce additional requirements that might complicate its decision-making process. We need to ensure that under its constitution, the Bank can operate as a commercial company. This is important because the bank’s impact may be diluted if the board is concerned that the Government or the courts may seek to second-guess its commercial judgments. That is why the Secretary of State has given an operational independence undertaking to the board.
It is equally important that the legislation provides sufficient clarity for the board and does not expose its investment decisions to increased risk of challenge by bringing a clear public element to the Bank’s functions. Furthermore, by adding another test on which the board will have to be satisfied when making investment decisions, this amendment raises the prospect of the legislative framework conflicting with the bank’s own constitution, something we believe is avoided through the Government’s proposed amendments to the Bill.
At the same time, we do not believe that our ambition in this area is any less than that of noble Lords. The Government’s amendments do not refer to a significant reduction in greenhouse gas emissions because we do not believe that it would be possible to give sufficient clarity to the bank’s directors if we were to introduce such imprecise wording. Indeed Amendment 1 would not require the board to make a significant reduction to greenhouse gas emissions. The Government’s preferred approach of making the new obligation part of the company’s objects would, however, give the bank’s directors strong encouragement to maximise the reduction of greenhouse gas emissions, as that would be the most likely way to maximise the success of the company.
The noble Lord, Lord Smith of Kelvin, who is chairman of the UK Green Investment Bank, has said that he supports this approach, and I welcome his letter, which I received a couple of days ago. The noble Lord has been very clear that he welcomes a statutory obligation on the bank in respect of the reduction of greenhouse gas emissions, but has said that it is important that this is achieved in a way that is consistent with the bank’s internal constitution and with the directors’ general duties to the company.
We also agree with noble Lords that it is important that the bank contributes to a reduction in UK greenhouse gas emissions. As this Bill must make provision for the long-term future of the bank, we believe that the best approach would be to achieve this through an amendment to the company’s objects and we intend to make such an amendment shortly. Amendment of the objects after designation will of course require the affirmative resolution of both Houses of Parliament.
Finally, I will comment on two further aspects of this amendment. Amendment 1 would require the board to have regard to the advice and reports of the Committee on Climate Change. I am happy to give a commitment on behalf of the noble Lord, Lord Smith of Kelvin, and the other members of the bank’s board that they will do so. We would, however, much prefer not to impose a specific statutory obligation on the
board which might cast doubt on the breadth of the general duty on all directors—under Section 172 of the Companies Act 2006—to have regard to the impact of the company’s operations on the environment.
Secondly this amendment, unlike the Government’s amendments, does not impose a corresponding disclosure requirement on the board. We believe it is important that there is a tailored disclosure obligation on the board in respect of this new requirement to ensure full transparency and accountability. This approach is of course in keeping with the best standards of corporate governance.
I will now turn in more detail to the Government’s own amendments in this area. Amendment 3 requires the Secretary of State to be satisfied that the bank’s objects are such that, in acting consistently with them, the bank’s investment activities—taken as a whole—would be such as the bank considers likely to contribute to a reduction of global greenhouse gas emissions. The new obligation on the board is therefore imposed through the company’s statement of objects in its articles of association. This reflects the approach we have taken in respect of the green purposes and ensures that the new obligation forms part of the directors’ general duties to the company, including the duty to promote the success of the company in line with its objects. We believe that this will be the most effective approach. It also eliminates the possibility of inconsistency with the company’s corporate governance framework and reduces the risk of legal challenge to the board’s investment decisions.
The new provision goes significantly beyond the assurances we have already given in this area and ensures that the bank will continue to focus its investments in areas that will deliver such reductions. As I have said, the noble Lord, Lord Smith of Kelvin, has indicated his support for the Government’s approach.
Amendment 8 would prevent any alteration to the bank’s objects which is not consistent with the requirement for the bank’s investment activities as a whole to deliver a reduction in greenhouse gas emissions. This will ensure that this new obligation will continue to apply even if there were to be a change in the company’s ownership.
The third substantive element is the imposition of a bespoke reporting requirement in respect of the new obligation on the directors to ensure that the bank’s overall investment portfolio reduces greenhouse gas emissions. Previous debates have touched on the bank’s commitment to transparency, and the bank’s board has already agreed that the bank will voluntarily report on the greenhouse gas impacts of its investments. This new reporting requirement will complement that commitment by requiring the bank’s directors to include in their directors’ report an explanation of the steps that they have taken to ensure that the bank’s investment activities would be likely to contribute to a reduction of global greenhouse gas emissions, together with a statement of their views on the likely effect of the bank’s activities on global greenhouse gas emissions. In addition, the bank will be required to report on the greenhouse gas emissions associated with its own activities under the forthcoming changes to the narrative reporting requirements on quoted companies.
Finally, turning to Amendments 4, 9 and 12, the Government strongly believe that any new obligations in this area should be imposed through the company’s constitution rather than through a separate public law requirement, which might not be wholly consistent with the directors’ duties under the company’s constitution. The amendments tabled by the noble Baroness, Lady Worthington, seek to combine the two approaches by imposing an obligation in respect of an Act of Parliament through the company’s constitution. The Government consider that this approach will not deliver the degree of clarity that is needed.
The Climate Change Act 2008 imposes obligations on the Government, not on the UK Green Investment Bank—there is a difference. Reference to this Act in the company’s constitution cannot therefore provide the clarity that the bank’s directors need for effective decision-making. At the same time, I do not believe that these amendments show greater ambition than the Government’s approach.
The Government are proposing that, under the bank’s constitution, the directors will have a general duty to ensure that the bank’s investment activities, taken as a whole, contribute to a reduction of greenhouse gas emissions, both globally and in the United Kingdom. This is not a stand-alone duty but must be read alongside the directors’ general duty to act in the way that they consider would be most likely to promote the success of the company, using the definition of success set out in the company’s objects. The directors would fail in this duty if they were to aim for a very small net reduction in greenhouse gas emissions even if, acting consistently with their other duties, they could achieve a much more significant reduction. We therefore do not believe that an additional obligation linked to Climate Change Act targets would in practice affect the board’s decision-making or the scope of its ambitions in this area.
In conclusion, we agree that the reduction of greenhouse gases will be a key objective for the bank but we wish to ensure that statutory intervention on this point reflects the bank’s position as a Companies Act company and its corporate governance framework. We believe that the Government’s amendments, which will create a requirement through the objects for the bank’s investment portfolio to deliver a carbon reduction and set out in statute the reporting mechanisms that sit behind this requirement, will address noble Lords’ concerns in the way that best reflects the bank’s corporate governance. I therefore ask my noble friend Lord Teverson to withdraw his amendment.
Lord Teverson: My Lords, I thank my noble friend the Minister for his explanation of the government amendments and how they relate to the others. I have to admit that bits of them are certainly better than my own amendment. I welcome very strongly the undertaking from the Dispatch Box that there will be regular reports from the board to the Committee on Climate Change. I also welcome the extra disclosures and the fact that alterations to the company’s objectives have to comply with reducing carbon emissions as well, which is an important point.
I have been trying to understand what difference would be made by the addition of the reference to the
Climate Change Act proposed by the noble Baroness, Lady Worthington. I like the reference to the Climate Change Act but it is difficult to see, if you are reducing carbon emissions—which is part of the overall objective of the Green Investment Bank—how you would then not be closer to complying with carbon budgets and those requirements.
I am happy with the Government’s response. I thank the Minister for having responded in that way and for making those commitments at the Dispatch Box. I beg leave to withdraw my amendment.
Clause 2 : Designation of the UK Green Investment Bank
Amendment 4 (to Amendment 3) not moved.
3: Clause 2, page 2, line 9, at end insert—
“(2A) The second condition is that the Secretary of State is satisfied that the Bank’s objects in its articles of association are such that, acting consistently with them, its activities in making, facilitating or encouraging investments in each relevant period would (taken as a whole) be such as the Bank considers likely to contribute to a reduction of global greenhouse gas emissions.
(2B) In subsection (2A), “relevant period” means each financial year of the Bank taken together with all of its preceding financial years.”
Clause 3 : Alteration of the objects of the UK Green Investment Bank
6: Clause 3, page 2, line 33, leave out “condition in subsection (3) is met” and insert “following two conditions are met”
Amendment 9 (to Amendment 8) not moved.
8: Clause 3, page 2, line 39, at end insert—
“( ) The second condition is that the Secretary of State is satisfied that, if the alteration were made, the Bank’s objects in its articles of association would remain such that, acting consistently with them, its activities in making, facilitating or encouraging investments in each relevant period (within the meaning of section 2) would (taken as a whole) be such as the Bank considers likely to contribute to a reduction of global greenhouse gas emissions.”
3.45 pm
Clause 4 : Financial Assistance
10: Clause 4, page 3, line 24, at end insert—
“(7) It is the duty of the Secretary of State to provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.
(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.
(9) In the event the European Commission approves the State aid notification concerning borrowing, it is the duty of the Treasury and of the Secretary of State to permit the Green Investment Bank to begin borrowing from the capital markets no later than 30 June 2015, or, if State aid approval has not been received by that date, no later than one month from the date of approval.”
Lord Teverson: My Lords, this is perhaps a weightier issue. When I was looking at the background to this amendment, which is really about the Green Investment Bank’s financial muscle, I was looking for some inspiration on climate change and carbon emissions, and I came across this statement:
“We need to cut our carbon emissions to tackle the challenge of climate change. But the low carbon economy also provides exciting opportunities for British businesses. We will encourage private sector investment to put Britain at the forefront of the green technology revolution, creating jobs and new businesses across the country”.
More important is the next sentence, which says,
“we will create Britain’s first Green Investment Bank—which will draw together money currently divided across existing government initiatives, leveraging private sector capital to finance new green technology start-ups”.
Hallelujah. These statements are from the 2010 Conservative Party manifesto, which is intriguingly entitled Invitation to Join the Government of Britain. As Liberal Democrats, we actually did, so in many ways it was a successful manifesto. The serious point that comes from this is exactly the one that is in those manifesto statements. For a Green Investment Bank to be able to do what it says that it will do, it must be able to lever, not just now but into the future, sufficient funds to meet the vast requirement for green investment that this country needs. As we know, in the energy sector alone that is some £200 billion in generating capacity and in networks over the next 10 years, though we will hope to reduce that through demand-side reduction. But there is a great task to do.
I fully welcome the Government’s commitment to £3 billion of real money at a time when the national accounts are finding it difficult to find spare cash. I strongly welcome, as I have in the past, the availability of this £3 billion. I agree with the chairman of the Green Investment Bank, who said in this Chamber at Second Reading that this was sufficient money for them to get on with, and to start to create a track record for, the bank. It is very important that the Green Investment Bank starts to build up this track record. For a major financial institution, that will take considerable time and very careful investment. I also probably agree that the £3 billion will last until 2015 in terms of commitments, if not actual investment that will go beyond that.
The Government have still not responded to the fact that money is starting to be invested now—and we will arrive at 2015, or maybe 2016, when these commitments are used up, with an investment track record created on the way—but you cannot build up a reputation of trust in a bank, which, as we all know, is essential, unless you know that the doors are going to remain open for business, apart from just collecting the money that has been lent or the investments that have been made on the dividends, beyond three years from now. For anybody who wants to take the Green Investment Bank seriously as a long-term instrument for green regeneration in this country, as was so eloquently described in the Conservative Party manifesto, surely we need to have some reassurance, some positive sign, and some certainty that there will be resources to invest after that period. So far, the sounds that have come out of the Treasury, if not BIS, which sponsors this Bill, is that it is pretty reluctant to make that commitment. That undermines the chairman and the chief executive of the bank, whom I have met. Their appointments are excellent, and I congratulate the Government on them, but we pull the rug from under their feet if we do not assure them that there is a financial future, an investment future and a lending future beyond 2015.
Another area that I shall briefly bring up is that it concerns me to some degree that the £3 billion is going to be available to the Green Investment Bank beyond 2015-16, if that period is needed. To build up a track record in terms of investment, it has to make the right choices. I was very pleased that the Minister underlined the investment independence of the bank. That was a very strong and important message, not just to us but to investors and future users of this fund. It would be a tragedy if the board of the Green Investment Bank felt under pressure to spend that money because otherwise it would lose it. Those pressures will be much less if there is a route to further finance for the future. All this amendment does is to put in a simple way a simple mechanism by which that process starts now. In the finance sector, with extremely long gestation periods for investment in green industries, we need certainty now for the time when this £3 billion runs out. I will be very interested to hear the Minister’s assurances on those areas. I beg to move.
Baroness Worthington: My Lords, during the debate in this House much has already been said about the absurdity of creating a bank and then effectively tying
its hands behind its back by not allowing it to borrow. The Government’s statistics show that green industries in the UK are bucking the overall trend, showing healthy growth and contributing to the reduction in our balance of trade deficit. The bank could and should be helping to increase this welcome outcome but, apparently in ignorance of this fact, the Government have provided it with only a relatively limited amount of starting capital and have explicitly stated that it cannot borrow until an economy-wide criterion is met. Its ability to plan for the future and to help further strengthen growth in these particular green sectors is therefore severely limited, and it cannot contribute to getting the wider UK economy back on its feet at precisely the time when we need just that. This amendment seeks to ensure that there is a plan in place for the bank’s future development by setting a deadline by which borrowing will be allowed and creating a defined timeline that removes the uncertainty that currently hangs over the bank’s future, allowing it to plan for the future. Doing so helps to ensure that green growth can help to bring the UK’s economy back to good health even as it helps to restore the health of our environment. Denial of borrowing powers or setting a date for borrowing powers shows a lack of commitment, and the bank will be weakened and undermined as a result.
The arguments presented here and in previous discussions have been very persuasive. I hope the Government will accept this amendment. In the event that the noble Lord, Lord Teverson, does not feel able to test the opinion of the House, we will press the issue to a vote.
Viscount Younger of Leckie: My Lords, the Government are fully committed to providing the UK Green Investment Bank with the funding it needs to become a successful and enduring green financial institution. In Budget 2011, the Government committed to providing the bank with £3 billion until 2015, and I appreciate the endorsement by my noble friend Lord Teverson of the sufficiency of the initial funding of the bank. This is a significant injection of capital, which would allow the bank to build market confidence and begin mobilising investment in green infrastructure projects. As the noble Lord, Lord Smith of Kelvin, explained in his excellent speech at Second Reading, the bank’s initial priority must be to show the Government and private capital markets that it is a well-run organisation with a good track record, worthy of the injection of more capital or borrowing money from capital markets. The noble Lord, Lord Smith, also made clear that, as chairman of the UK Green Investment Bank, he will approach the Government as a shareholder well before 2015 if he believes that it would be in the company’s long-term interests to borrow, either from Government or from the capital markets, from April 2015.
I believe this is the right approach. The bank will, of course, require additional funding in due course, but it is too early to make commitments about the level and type of funding for the bank from 2015-16 or the precise timing of an application to the Commission in respect of borrowing. We should instead take the necessary steps to ensure that the bank has the confidence of investors and other market players by 2015 and put
in place a proper process by which the board can discuss its future funding needs, and how these can best be addressed with its shareholder.
As part of this process we have given a commitment that the Government will seek state aid approval in respect of borrowing from the European Commission before the end of this Parliament. Amendment 10 would go further by setting a statutory timetable for a notification to the European Commission and, subject to this, for permission for the bank to borrow from the capital markets. We do not believe that this is either warranted or wise. The Government should not be committed by statute to making a premature or ill-thought-through application, particularly as this would have cost and resource implications both for the Government and indeed the European Commission.
We should also be clear that the level of bank borrowing will need to be agreed by the Government as part of their future spending plans. We should not be apologetic about this. Any borrowing by the bank would score against the national debt targets and it is essential for sustained growth that the Government maintain tight fiscal discipline. I want to emphasise again, in response to the comments made by my noble friend Lord Teverson, that the Government will consider the full range of funding options for the bank from April 2015, but it is important that we do not run before we can walk. In the light of these points, I hope the noble Lord will agree to withdraw this amendment.
Lord Oxburgh: Can I draw the Minister’s attention to the fact that this is not a commitment to borrow? As he is well aware, perception is almost as important as reality in the matter of fundraising. This amendment would send a very clear message to the investment community that the Government are serious about backing this bank.
Viscount Younger of Leckie: I thank the noble Lord for his intervention. However, it would put the opportunity to borrow in the Bill, and we do not believe that this is the right thing to do at this stage given that the Green Investment Bank is just starting up. As I said, it needs to be able to walk before it can run.
Lord Teverson: My Lords, I thank the Minister for going through that. I understand entirely the issues around public sector borrowing, commitments and national debt and all the areas that are key parts of the coalition’s programme for government. I understand what the Minister is saying about there being a way forward after this time, and welcome the fact that the Government will keep this under review and that it will start to be looked at in some of the future budget forecasting. On that basis, I will give him the benefit of the doubt. It is not an especially strong response to something that is genuinely needed, but I accept the good will of the Government and I beg leave to withdraw the amendment.
3.59 pm
Contents 186; Not-Contents 204.
CONTENTS
Adonis, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Armstrong of Ilminster, L.
Bach, L.
Bakewell, B.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Best, L.
Bhattacharyya, L.
Billingham, B.
Bilston, L.
Blackstone, B.
Blood, B.
Borrie, L.
Bradley, L.
Brooke of Alverthorpe, L.
Brookman, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Coussins, B.
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Donaghy, B.
Drake, B.
Dubs, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Fellowes, L.
Filkin, L.
Ford, B.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Glasman, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grenfell, L.
Griffiths of Burry Port, L.
Grocott, L.
Hameed, L.
Hannay of Chiswick, L.
Hanworth, V.
Hardie, L.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Haskins, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hollins, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Ewelme, L.
Jones, L.
Judd, L.
Kennedy of Southwark, L.
Kerr of Kinlochard, L.
Kirkhill, L.
Knight of Weymouth, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
Listowel, E.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
McKenzie of Luton, L.
Mallalieu, B.
Martin of Springburn, L.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Monks, L.
Moonie, L.
Morgan of Ely, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Myners, L.
Noon, L.
O'Loan, B.
O'Neill of Bengarve, B.
O'Neill of Clackmannan, L.
Ouseley, L.
Oxburgh, L.
Parekh, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Prescott, L.
Prosser, B.
Quin, B.
Radice, L.
Reid of Cardowan, L.
Richard, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sandwich, E.
Sawyer, L.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Smith of Leigh, L.
Soley, L.
Stevenson of Balmacara, L.
Stone of Blackheath, L.
Sutherland of Houndwood, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Teverson, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Walpole, L.
Warner, L.
Warnock, B.
Watson of Invergowrie, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Elvel, L.
Wills, L.
Wood of Anfield, L.
Woolmer of Leeds, L.
Worthington, B.
Young of Hornsey, B.
Young of Norwood Green, L.
NOT CONTENTS
Ahmad of Wimbledon, L.
Alderdice, L.
Allenby of Megiddo, V.
Anelay of St Johns, B. [Teller]
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Berridge, B.
Blackwell, L.
Bonham-Carter of Yarnbury, B.
Bowness, L.
Brabazon of Tara, L.
Bridgeman, V.
Brinton, B.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Buscombe, B.
Butler-Sloss, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Cathcart, E.
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Colwyn, L.
Cope of Berkeley, L.
Courtown, E.
Craig of Radley, L.
Craigavon, V.
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Deech, B.
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Dholakia, L.
Dixon-Smith, L.
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Dundee, E.
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Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
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Falkner of Margravine, B.
Fearn, L.
Fellowes of West Stafford, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Fraser of Carmyllie, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
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German, L.
Glasgow, E.
Goodhart, L.
Goodlad, L.
Greenway, L.
Hamwee, B.
Hanham, B.
Harris of Peckham, L.
Hastings of Scarisbrick, L.
Henley, L.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Home, E.
Hooper, B.
Howard of Rising, L.
Howe, E.
Hussain, L.
Hussein-Ece, B.
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Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Kakkar, L.
King of Bridgwater, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Laird, L.
Laming, L.
Lang of Monkton, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lingfield, L.
Luce, L.
Luke, L.
Lyell, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Mancroft, L.
Mar, C.
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Marks of Henley-on-Thames, L.
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Newlove, B.
Northbrook, L.
Norton of Louth, L.
O'Cathain, B.
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Palmer of Childs Hill, L.
Parminter, B.
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Phillips of Worth Matravers, L.
Plumb, L.
Popat, L.
Randerson, B.
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Redesdale, L.
Renton of Mount Harry, L.
Ribeiro, L.
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Rogan, L.
Rotherwick, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
St John of Bletso, L.
Sanderson of Bowden, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Selsdon, L.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shipley, L.
Shutt of Greetland, L.
Skelmersdale, L.
Slim, V.
Smith of Clifton, L.
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Thomas of Gresford, L.
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Wallace of Saltaire, L.
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4.12 pm
Clause 5 : Accounts, reports and payments to directors
11: Clause 5, page 3, line 30, at end insert—
“( ) Where an order has been made under section 2, each report prepared by the directors of the Bank for a financial year under section 415 of the Companies Act 2006 must include—
(a) an explanation of the steps that the Bank took in that year to ensure that its activities in making, facilitating or encouraging investments in that year and in any previous financial years would (taken as a whole) be likely to contribute to a reduction of global greenhouse gas emissions, and
(b) a statement of the directors’ views on the likely effect of its activities in those years on global greenhouse gas emissions.”
Amendment 12 (to Amendment 11) not moved.
Clause 7 : Conciliation before institution of proceedings
13: Clause 7, page 4, line 33, at end insert—
“( ) In the case of alleged unfair dismissal, should the conciliation officer fail to secure a settlement, the claimant may proceed forthwith to an employment tribunal.”
Baroness Turner of Camden: My Lords, at Second Reading I expressed concern about the provisions of Clause 7 and subsequent clauses. They seemed to me to be designed to make it as difficult as possible for employees to access employment rights. Indeed, the Government made it clear that they wished to decrease the number of tribunal cases. I accept that many issues arising in the course of employment could be better dealt with through conciliation, such as alleged failure to pay a bonus or holiday pay, but alleged unfair dismissal is not one of those cases.
Loss of a job can be completely destructive to the individual concerned and to the employee’s family as well. It is already necessary for an employee to have at least two years in the employment concerned before being able to claim unfair dismissal. In many cases, the length of time in the employment can be much longer. Dismissal can result in illness, mental breakdown and marriage problems, particularly if alternative employment is hard to find, as it is at present. Many people who lose their jobs at the age of 50 or over are still unemployed a year later. I have known of cases where an individual who loses his job does not immediately tell his family but pretends to go to work at the usual time, spending time in the local library, if there is one, and then returning home at the normal time, pretending that the job still exists.
The loss of a job is life-destroying. For these reasons, the drawn-out procedures recommended in the Bill are quite inappropriate. The individual concerned should have easy access to a tribunal. Even if it does not result in a return to the job, if the individual wins the case there will at least be some compensation. Even if the case is not won, the individual will have had the opportunity to put his or her case to an independent body—a tribunal including lay people with knowledge of working procedures.
This is a human rights issue as well as an employment issue. Therefore I hope that the Government will consider my amendment and agree to adopt it, or something very similar. I beg to move.
4.15 pm
Lord Young of Norwood Green: My Lords, I have great respect for my noble friend Lady Turner because she brings not only sincerity but a wealth of experience to these issues. I will be interested to hear the Minister’s response to the amendment.
I want to raise with the Minister the question of funding for ACAS, on which we had an exchange prior to his inauguration in his current role. The noble Lord, Lord Marland, in his response in Committee in relation to funding for ACAS to support the work of the conciliation, said:
“We will produce in the new year a further impact assessment on how this process will work and whether the funding should be upfront, which the noble Baroness asked for. We are working to determine the extent of the funding and how best it is to be provided. I hope that by the time we get to the Report stage in the Chamber, quite a lot of the questions will have been answered”.—[Official Report, 5/12/12; col. GC 198.]
I do not know whether the Minister is in a position to respond, but I look forward to his response.
Viscount Younger of Leckie: I thank the noble Lord, Lord Young of Norwood Green, for that question, which I will address in due course.
I recognise that the amendment tabled by the noble Baroness, Lady Turner, is prompted by her concerns that the purpose of this clause is to prevent those who feel that their employment rights have been breached from reaching an employment tribunal. I reassure her that it is not. While it is and will remain the case that those who wish to bring a claim to an employment tribunal should be able to do so, we recognise that, for many, this can be a costly and stressful process. We are therefore committed to providing parties with the opportunity to resolve their disputes without the need for judicial determination, and early conciliation will do just that. However, while it will be mandatory in most cases for prospective claimants to present the details of their case to ACAS in the first instance, the decision to engage in early conciliation will be entirely voluntary.
Where the claimant or, indeed, the respondent declines the offer of conciliation, or where conciliation has failed, there will be no alternative but for the conciliation officer to conclude that settlement is not possible. A certificate will be issued as soon as that point is reached, either within a few days or after one or two weeks, and the prospective claimant will then be able to proceed to tribunal should they wish. Those prospective claimants for whom determination at tribunal is the preferred or only solution will be able to lodge their claim once the certificate has been received. This will be the case for all prospective claimants, not just those with an unfair dismissal claim.
The second amendment proposed by the noble Baroness would have the effect of removing the requirement for the conciliation officer to try to promote the reinstatement or re-engagement of a prospective claimant by the employer or, if that is not what the prospective claimant wants or it is not practicable, to seek to agree an appropriate sum by way of compensation. This is the same requirement that currently rests on conciliation officers in fulfilling their post-claim functions. While I accept that reinstatement or re-engagement may not be an attractive solution to many prospective claimants, that will not be the case for all. It is right, therefore, that the conciliation officer should endeavour to promote such an outcome where it is right to do so, and, where it is not, then seeking to reach an agreed sum by way of compensation could mean that the dispute will not need to come before an employment tribunal.
I turn to the first of the government amendments in this group. Schedule 2 amends various pieces of primary legislation so that the relevant time limits for bringing a tribunal claim will be extended where necessary in
order to provide sufficient time for early conciliation to take place so that the claimant is not disadvantaged. Currently, other than in a small number of jurisdictions, claimants have three months from the date of the matter giving rise to the claim in which to lodge the claim with the employment tribunal. The amendments made by Schedule 2 address concerns that the early conciliation process will disadvantage prospective claimants by consuming some of the limitation period and therefore the time in which they have to prepare any claim that they want to lodge with an employment tribunal, and thereby dissuade them from engaging fully with the conciliation offered by ACAS.
Schedule 2 effectively stops the clock for those jurisdictions where early conciliation applies so that the time during which a claim is subject to the early conciliation process will not count for the purposes of calculating the passage of the limitation period for that claim. In addition, where the limitation period would expire during the prescribed period for early conciliation, or within a month after the day on which the ACAS certificate is deemed to have been received, Schedule 2 automatically extends the limitation period for that claim so that the claimant has one calendar month from the deemed date of receipt of the certificate in which to lodge that claim at an employment tribunal.
This amendment changes none of that. It is no more than a technical amendment to correct one of the references in the schedule. Section 18 of the Employment Tribunals Act 1996 lists the claims for which ACAS conciliation is available and, as conciliation is not available for claims in respect of breaches of Section 188A of the Trade Union and Labour Relations (Consolidation) Act 1992, it is therefore inappropriate for the changes to the limitation period made by Schedule 2 to apply to such claims. It is, however, the Government’s intention to amend the list of proceedings in Section 18 by secondary legislation in due course. We will add Section 188A to that list and, when we do so, will ensure that the extension to the limitation period applies in such cases too. Amendment 15 will therefore ensure that the changes made to limitation periods by Schedule 2 apply to the right claims.
I now turn to Amendments 22, 36 and 91, which is our second set of government amendments. As many noble Lords will be aware, a recent judgment of the European Court of Human Rights in the case of Redfearn v UK found that the UK has an obligation to ensure that individuals who have been dismissed on the grounds of political opinion or affiliation are able to bring a claim before an employment tribunal in order that the tribunal can decide whether the dismissal was fair.
Mr Redfearn was dismissed from his job as a bus driver following his election as a British National Party councillor. His work involved transporting passengers, the majority of whom were Asian. There were no complaints about his performance. None the less, his employers took the decision to dismiss him on the grounds that his political affiliation would give rise to considerable anxiety among passengers and their carers, and jeopardise the reputation of his employer.
The European Court of Human Rights considered that it was both reasonable and appropriate for the UK to have a requirement for a qualifying period of
service before an employee can bring an unfair dismissal claim. However, the court held that where the reason for the dismissal was the employee’s political opinion or affiliation, the qualifying period, which prevented employees such as Mr Redfearn who had not acquired the qualifying period of service from bringing claims for unfair dismissal, breached the Article 11 right to freedom of association. The court said that where the reason for dismissal was the employee’s political opinion or affiliation, the state should at least allow for an independent evaluation of the proportionality of such a dismissal in the light of all of the circumstances of the case.
Like the majority of people in this country, we in this House do not share Mr Redfearn’s political views, but the protections provided for in Article 11 also extend to those whose views offend, shock or, indeed, disturb. The Government have therefore decided to bring forward this amendment, which will mean that the two-year qualification period will not apply to claims where the dismissal was on the grounds of political opinion or affiliation. Importantly, employers will still be permitted to argue that they had a fair reason for dismissal and that it was reasonable to dismiss for that reason. Dismissals for political reasons will not be automatic unfair dismissals.
Amendment 36 provides that the provision will apply only to claims where the effective date of termination is after the date on which this section comes into force, while Amendment 91 provides that the clause will come into effect two months after the date of Royal Assent of this Bill.
I now turn to government Amendments 16, 35, and 87—the third set of government amendments. The purpose of Amendment 16 is simple: to ensure that the information held by ACAS in the course of performing its duties is properly protected. As noble Lords will know, particularly many of those on the Benches opposite, ACAS undertakes a range of functions in the course of pursuing its general duty of improving industrial relations, including not only the provision of conciliation in individual and collective disputes, but also advice and guidance via its helpline as well as mediation and training. As a consequence, ACAS holds large amounts of information about individuals and organisations that should not, quite rightly, be a matter of public record. The introduction of early conciliation will add further to this pool of information. While ACAS is able to rely on the provisions of the Data Protection Act 1998 and the Freedom of Information Act 2000 to ensure that certain sensitive information is not released, these provisions are not comprehensive enough to safeguard all the records held as part of the operation of early conciliation.
This and previous Governments have taken the view that information relating to respondents in employment tribunal claims should not be made publicly available until the matter is due to come before the tribunal—both to protect employers from unfounded claims that are subsequently struck out and to allow the parties the space to resolve the matter without the need for a hearing. To this end, the register of claims was closed in 2004, a decision that has been reviewed and affirmed by this Government following lobbying for it to be reopened.
There have been a number of requests to ACAS for the release of information relating to claims made to the employment tribunal since the register closed, but these have been refused on the grounds that the information held is a court record. Such a justification will not apply to records held as part of early conciliation and it is therefore necessary to provide ACAS with the protection to allow it to carry out its role with the confidence of those with whom it has contact. The amendment will introduce a prohibition preventing ACAS from releasing specified information, and this will cover information not otherwise protected. While breaching the prohibition carries a criminal penalty, the decision about whether or not to press charges will be a matter for the Director of Public Prosecutions.
Amendment 35 provides that the prohibition will apply only in respect of requests made after the clause comes into force, which, as provided for in Amendment 87, will be immediately on Royal Assent. I hope that noble Lords will agree that this is a necessary step to ensure that ACAS continues to have the trust and respect of all those it serves.
The final amendment in the group, Amendment 38, removes an unnecessary provision from the Bill. The amendment deletes a transitional provision relating to Clause 17 which is no longer required.
I turn to the question raised by the noble Lord, Lord Young of Norwood Green, about whether we can provide further information on additional resourcing required by ACAS. I promised to come back to him. The consultation on implementing early conciliation closed on 15 February and my officials are now considering the responses. The decisions which flow from this will inform the additional resourcing necessary. I can reassure the noble Lord that ACAS will be properly resourced to deliver early conciliation.
I hope that the noble Baroness, Lady Turner, is reassured by what I have said and will therefore withdraw her amendment.
4.30 pm
Baroness Turner of Camden: I thank the Minister for that response. The issue is very complicated and one will need to look at the record in some detail. In particular, I noted that in response to my amendment he stated specifically that after certification by the conciliation officer it will be possible for a dismissed employee to make a direct appeal to a tribunal. That is a very thoughtful response to what I said and I am very pleased to have it on the record.
The Minister also seemed to be prepared to make certain other concessions to make it easier for an employee in a dismissal situation—which he seemed to appreciate is a pretty desperate one for many people— to have access to conciliation and to a way of sorting out their problems without necessarily having to sit and wait for a very long time for their case to come before a tribunal. That is all very useful and in those circumstances I am very willing to withdraw the amendment. I will look very carefully at what the Minister said today as I think there are some concessions that I very much welcome. I beg leave to withdraw the amendment.
Schedule 2 : Extension of limitation periods to allow for conciliation
15: Schedule 2, page 85, line 33, leave out “Section” and insert “Where the complaint concerns a failure to comply with a requirement of section 188, section”
16: After Clause 9, insert the following new Clause—
“ACAS: prohibition on disclosure of information
In Part 6 of the Trade Union and Labour Relations (Consolidation) Act 1992 (ACAS etc), after section 251A insert—
“251B Prohibition on disclosure of information
(1) Information held by ACAS shall not be disclosed if the information—
(a) relates to a worker, an employer of a worker or a trade union (a “relevant person”), and
(b) is held by ACAS in connection with the provision of a service by ACAS or its officers.
This is subject to subsection (2).
(2) Subsection (1) does not prohibit the disclosure of information if—
(a) the disclosure is made for the purpose of enabling or assisting ACAS to carry out any of its functions under this Act,
(b) the disclosure is made for the purpose of enabling or assisting an officer of ACAS to carry out the functions of a conciliation officer under any enactment,
(c) the disclosure is made for the purpose of enabling or assisting—
(i) a person appointed by ACAS under section 210(2), or
(ii) an arbitrator or arbiter appointed by ACAS under any enactment,
to carry out functions specified in the appointment,
(d) the disclosure is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom),
(e) the disclosure is made in order to comply with a court order,
(f) the disclosure is made in a manner that ensures that no relevant person to whom the information relates can be identified, or
(g) the disclosure is made with the consent of each relevant person to whom the information relates.
(3) Subsection (2) does not authorise the making of a disclosure which contravenes the Data Protection Act 1998.
(4) A person who discloses information in contravention of this section commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(5) Proceedings in England and Wales for an offence under this section may be instituted only with the consent of the Director of Public Prosecutions.
(6) For the purposes of this section information held by—
(a) a person appointed by ACAS under section 210(2) in connection with functions specified in the appointment, or
(b) an arbitrator or arbiter appointed by ACAS under any enactment in connection with functions specified in the appointment,
is information that is held by ACAS in connection with the provision of a service by ACAS.””
Clause 10 : Decisions by legal officers
Clause 11 : Composition of Employment Appeal Tribunal
Viscount Younger of Leckie: My Lords, Clause 11 attracted a great deal of debate in Grand Committee. Much of it was concerned with the proposal that judges should sit alone in the Employment Appeal Tribunal as a matter of course, where there is a divergence of opinion between the Government and noble Lords opposite. The concerns expressed by noble Lords then were similar to those raised when the Government brought forward measures last year to allow judges to sit alone to hear unfair dismissal cases in the employment tribunal. Those concerns centred on the loss of the contribution that lay members would make to determining what was fair and reasonable conduct by parties, based on their knowledge of social relationships in the workplace.
This clause relates not to employment tribunals but to the Employment Appeal Tribunal. As noble Lords will know, the EAT differs from the employment tribunal in that, unlike the tribunal, where cases will often involve matters of fact and require an assessment of reasonableness, appeals before the EAT are taken solely on points of law. The current practice is for the EAT panel that is hearing proceedings to be constituted such that it mirrors the composition of the tribunal from which the appeal arises—so, if the matter is heard by a judge sitting with two lay members in the employment tribunal, the EAT will sit with a judge and two members.
It is the narrower focus of the EAT on points of law that persuades us that lay members have a much less valuable role to play here than in the employment tribunal itself. As the noble Lord, Lord Young of Norwood Green, said in the debate on changing the composition of the employment tribunals for unfair dismissal, lay members,
“bring real knowledge and understanding of industrial situations … real experience in a wide range of industries and occupations”.—[
Official Report
, 28/3/12; cols. 1449-50.]
However, this is not a function or a requirement of the EAT.
I am sure that noble Lords will agree that it is incumbent on government to ensure that we use our resources—both judicial and lay member—wisely. The Government are committed to creating a tribunal system that not only is efficient for users but offers value for money for the taxpayer. Indeed, I remind noble Lords that the Equality Act covers a range of sectors, including service provision, property rights and education, and only one of these—work—is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts, where judges sit, and have always sat, alone.
There is, however, an issue on which we can agree, and that is in relation to the exercise of the Lord Chancellor’s order-making power. That will allow the Lord Chancellor to order that specified proceedings should be heard by a panel, rather than by a judge alone. However, as the noble Lord, Lord Young of Norwood Green, rightly observed in Grand Committee, the drafting of the Lord Chancellor’s power could allow an order to be made specifying the number zero. For example, the Lord Chancellor could by order provide that appeals in discrimination cases should be heard by a judge and zero employer-representative and zero worker-representative members. Such an order would therefore remove the judicial discretion that exists in the clause to direct that a panel should hear an appeal. While the Government currently have no plans to use the order-making power, we had never intended that any Lord Chancellor should be able to use the power in this way. Amendment 19 inserts into the clause a requirement for the Lord Chancellor to specify in any order whether the panel should consist of two or four appointed members.
The noble Lord, Lord Young of Norwood Green, also raised the further concern that the power as drafted does not specify that the panel should comprise an equal number of employer and worker representatives. Again, the Government have never intended that any Lord Chancellor should be able to constitute uneven panels. My noble friend Lord Marland recognised the genuine concerns raised by noble Lords and agreed to look again at the wording. Amendment 20 honours this commitment and amends Clause 11 to restrict the power so that any order made by the Lord Chancellor must provide for an equal number of employer-representative and worker-representative members. The provision in Amendment 20 would also apply where a judge gives a direction for a panel; the judge will need to direct an equal number of employer-representative and worker-representative members. As a result, lines 35 to 38 on page 7 of the Bill are no longer needed and Amendment 18 deletes that duplication. I beg to move.
Baroness Turner of Camden: My Lords, I listened with interest to the Minister; I was very much opposed to Clause 11 at Second Reading and I am still not at all happy about it. I have always believed that the involvement in procedures of lay members is a matter of much interest to us all. The workers who appear before tribunals have always been concerned that they should include lay members with some knowledge of working practices, particularly at appeal stage. The value of the involvement of lay members with knowledge of workplace procedures and conditions is widely respected. The individual claimant knows that the appeals tribunal contains people with a knowledge of employment relations and this gives the claimant confidence in the proceedings.
I do not know why the Government are proceeding along these lines, except that there is apparently an estimated saving. However, the saving is only between £120,000 and £130,000 a year, which is not all that much if it results in a loss of confidence in the proceedings. The value of lay members has been specifically recognised by the Court of Appeal. I have been approached by lay members who are very concerned that their services
may be dispensed with. They referred me to the case of Balfour Beatty and Wilcox, where the contribution made by lay people has been directly acknowledged and congratulated.
As it stands, Clause 11 should not be part of the Bill; there is no real good reason to depart from present practice. I accept that the Minister has already offered some modification, but I still believe it is necessary to involve lay people. They make a contribution to the procedures and are widely respected, by employees appearing before them and by employer organisations. I can see no reason for dispensing with them in the present procedures. I do not think that the savings involved are worth what may result in a total abandonment of the existing procedures which have served us well and which have the respect of the people who appear before them. We need more concessions from the Minister about what Clause 11 actually means and how it will operate.
Baroness Brinton: My Lords, I support many of the points made by the noble Baroness, Lady Turner. Indeed, I made some of them in Committee. One of my particular concerns was the issue of diversity and ensuring that lay members were able to inform a judge of their experience of employment practice and diversity than may be apparent to a judge sitting on his or her own.
I welcome the government amendments. In particular, it is extremely helpful to have spelt out the equality of employer and employee representatives, whether it is two or four. I am grateful for that.
I have a question based partly on the noble Viscount’s comments and on the concern of the noble Baroness, Lady Turner, about what the government guidelines will be for when a judge may not sit on their own. I reiterate my support for the government amendments—they go some way—but we still need some clarification.
Lord Young of Norwood Green: My Lords, I thank the Minister for addressing the specific concerns that we raised in Committee. I wish to put that on record. Obviously, I share some of the concerns of my noble friend Lady Turner, which were echoed in part by the noble Baroness, Lady Brinton, who, in her usual forensic way, rightly drew to our attention not only the question of diversity but the guidance that should be issued. I, too, will be interested to hear the Minister’s response on those aspects.
Viscount Younger of Leckie: I thank the noble Baroness, Lady Turner, supported by my noble friend Lady Brinton, for setting out some of her concerns about this clause. I have certainly listened very carefully to the noble Baroness, Lady Turner, who spoke so eloquently.
The Government have also listened to noble Lords’ concerns about the Lord Chancellor’s order-making powers. I have already spoken about the amendments that we have brought forward to address the points that noble Lords made in Grand Committee. In answer to the question raised by my noble friend Lady Brinton, we have no plans to steer the Lord Chancellor on the
necessity to have a panel and to prescribe proceedings as such. However, we are working on that important point that she made and on the diversity point, which I also want to pick up on.
I should also make the point that there is no evidence to suggest that judges sitting alone—this is implicit in the noble Baroness’s question—will have a negative impact on the determination of discrimination appeals, which can be brought only on a point of law. This might address the question that was raised by the noble Lord, Lord Young. The Equality Act also covers a range of sectors, including service provision, property rights and education. Only one of these, work, is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts where judges sit, and have always sat, alone.
I hope that I have been able to reassure the noble Baroness, Lady Turner, to some extent—I am not sure that I have—and other noble Lords that this measure, which is a proposal that was supported by 60% of those responding to the Resolving Workplace Disputes consultation, is not intended to undermine the value that lay members bring to the tribunal system as a whole. Nor will it have the adverse consequences that they fear.
Baroness Brinton: My Lords, I wonder whether the noble Viscount might write to those who have spoken in this debate to give us some inkling of where a judge would be expected not to sit on their own. I am struggling to see where the dividing line is. I apologise for raising this again, as I raised it in Committee. It just feels too far in the future to be able to be confident on the issue.
4.45 pm
Baroness Turner of Camden: My Lords, I support what the noble Baroness has just said. It is very important that we should know what area of diversity, if we can call it that, or what issues would mean that it would be appropriate for a judge not to sit on his own but to have the support of lay people. I can think of a whole range of issues that it would be appropriate in such circumstances for lay people sitting on the appeal tribunal to deal with. Perhaps the Minister could indicate what those issues would be.
Viscount Younger of Leckie: It may be helpful, in answering the question for my noble friend Lady Brinton, to say that the guidance for employment judges to consider when deciding to sit alone, which I agree is important, is set out in the Employment Tribunals Act 1996. That is unchanged. It requires them to consider the likelihood of a dispute arising on the facts that suggests lay member involvement could be beneficial. It is for them to decide. Indeed, the likelihood of issues of law arising that would suggest that a judge sitting alone is sensible is another factor. He would need to take account of the views of the parties and what other proceedings might be heard concurrently. However, to answer the noble Baroness’s question in depth, I think it is best that I write to her and other noble Lords concerned over this particular issue on guidance.
Baroness Brinton: I thank the noble Viscount for that response. It was helpful. I look forward to receiving the letter.
19: Clause 11, page 8, line 2, leave out “a specified number of appointed members” and insert “either two or four appointed members”
20: Clause 11, page 8, leave out lines 4 to 6 and insert—
“(7) In proceedings heard by a judge and two or four appointed members, there shall be an equal number of—
(a) employer-representative members, and
(b) worker-representative members.”
22: Before Clause 12, insert the following new Clause—
“Dismissal for political opinions: no qualifying period of employment
In section 108 of the Employment Rights Act 1996 (qualifying period of employment), after subsection (3) insert—
“(4) Subsection (1) does not apply if the reason (or, if more than one, the principal reason) for the dismissal is, or relates to, the employee’s political opinions or affiliation.””
Clause 12 : Confidentiality of negotiations before termination of employment
Lord Young of Norwood Green: My Lords, in Committee a number of noble Lords expressed our concern about confidentiality in settlement agreements and the inability of these agreements to be raised at an employment tribunal in the future. We felt that this was a totally wrong direction for the Government to proceed in. The worst aspect of this would amount to what we consider to be a charter for bullies. As the legislation currently stands, despite the attempts to introduce a number of amendments, which were rejected by the Government, there is no protection. We believe that this is a thoroughly unsatisfactory approach that will be detrimental to basic employment rights in relation to potentially unfair dismissal. It is on those grounds that we seek to test the opinion of the House.
Baroness Turner of Camden: My Lords, I support my noble friend’s amendment to Clause 12. It would make it easier for employers to end employment by offering the individual a sum of money in return for a compromise agreement. The clause extends the “without
prejudice” rule, which exists where a compromise agreement is offered as a means of ending an existing dispute. Any negotiations cannot then be considered by an employment tribunal. Clause 12 enables an employer to offer a sum of money and a compromise agreement in return for leaving employment when there is no pre-existing dispute. These negotiations will remain confidential and cannot be admitted as evidence before an industrial tribunal.
The TUC opposes these provisions as it believes that they will send a clear signal to employers that it is acceptable to sack employees without following a fair dismissal procedure. The provisions are also complex and can lead to legal wrangles, particularly where an employer has not acted properly in the negotiations and could be accused of discrimination. For these reasons, I support my noble friend.
Viscount Younger of Leckie: My Lords, this clause has been the subject of substantial debate in both Houses, and the noble Lord, Lord Young, has given notice of his intention to oppose it. I hope that I will be able to answer the concerns that have been raised. The clause forms part of a package of measures to facilitate the appropriate use of settlement agreements, encouraging the resolution of workplace disputes outside tribunals. Settlement agreements, or compromise agreements as they are currently known, offer a consensual and mutually beneficial outcome for both parties as distinct from the “no fault dismissal” idea, which we have been clear the Government are not taking forward. The clause does not affect an individual’s right to bring an unfair dismissal claim using other evidence or to bring other types of claim.
This legislative change builds on an existing system that has been successfully used for many years by many employers. It aims to provide additional certainty to enable a wider range of employers, particularly smaller businesses without in-house HR functions, to use settlement agreements with more confidence and in an appropriate way. We are clear about the importance of guidance for employers and individuals, an issue that has been the subject of substantive debate in both Houses. We have recently published our response to the Ending the Employment Relationship consultation on the principles to underpin the use of settlement agreements, and this will inform the development of substantive guidance that we will publish in support of the clause.
In response to concerns raised by all groups, we will include in a new statutory code an explanation of “improper behaviour” to ensure that employees understand the protection and employers are confident that they are acting appropriately when negotiating settlement. A draft statutory code is currently out for public consultation and the Government are working closely with businesses, ACAS and other stakeholders to ensure that the system is understood and can be easily and successfully used by employers and employees. This clause is part of a package of measures to better enable employers and employees to understand and use the existing system of settlement agreements as a mutually beneficial way of resolving workplace issues without resorting to a costly and distressing tribunal process. I therefore commend this clause to the House.
Lord Young of Norwood Green: My Lords, I have listened carefully to the Minister, but I have found little in his words to alter my opinion. He talked about small firms that do not have HR departments. That is part of the problem. This provision is somehow meant to be a remedy for that situation. It does not matter what size a company is. Small firms often fall down because they think that HR is something that they do not have to have any expertise in. I would submit that no matter what the size of the company, if it does not understand its obligations to an employee, eventually the situation is going to end in tears. I do not believe that what the Government are proposing is fair and balanced, and we do not believe that it will encourage employers to be more professional in the way they treat their employees. For these and the reasons we expressed at length in Committee, I wish to test the opinion of the House.
4.54 pm
Contents 194; Not-Contents 227.
CONTENTS
Adams of Craigielea, B.
Adonis, L.
Allenby of Megiddo, V.
Alli, L.
Anderson of Swansea, L.
Andrews, B.
Bach, L.
Bakewell, B.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Best, L.
Bhattacharyya, L.
Billingham, B.
Bilston, L.
Blackstone, B.
Blood, B.
Borrie, L.
Bradley, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell of Surbiton, B.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Deech, B.
Donaghy, B.
Donoughue, L.
Drake, B.
Drayson, L.
Dubs, L.
Eames, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Ford, B.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Glasman, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grenfell, L.
Grey-Thompson, B.
Griffiths of Burry Port, L.
Grocott, L.
Hanworth, V.
Hardie, L.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskins, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jones, L.
Judd, L.
Kennedy of Southwark, L.
Kestenbaum, L.
King of Bow, B.
Kirkhill, L.
Knight of Weymouth, L.
Laming, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Monks, L.
Moonie, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Ely, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Myners, L.
O'Neill of Clackmannan, L.
Ouseley, L.
Parekh, L.
Patel, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Quin, B.
Radice, L.
Reid of Cardowan, L.
Richard, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
St John of Bletso, L.
Sandwich, E.
Sawyer, L.
Scotland of Asthal, B.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Smith of Leigh, L.
Soley, L.
Stevens of Kirkwhelpington, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turner of Camden, B.
Uddin, B.
Wall of New Barnet, B.
Warner, L.
Warnock, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Elvel, L.
Wills, L.
Winston, L.
Wood of Anfield, L.
Woolmer of Leeds, L.
Worthington, B.
Young of Hornsey, B.
Young of Norwood Green, L.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Armstrong of Ilminster, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Berridge, B.
Bew, L.
Black of Brentwood, L.
Blackwell, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Bottomley of Nettlestone, B.
Bowness, L.
Brabazon of Tara, L.
Bradshaw, L.
Bridgeman, V.
Brinton, B.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Burnett, L.
Buscombe, B.
Byford, B.
Caithness, E.
Cathcart, E.
Chadlington, L.
Clement-Jones, L.
Colville of Culross, V.
Colwyn, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Courtown, E.
Cox, B.
Craig of Radley, L.
Craigavon, V.
Crickhowell, L.
Currie of Marylebone, L.
De Mauley, L.
Dear, L.
Deighton, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Doocey, B.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Erroll, E.
Falkner of Margravine, B.
Faulks, L.
Fearn, L.
Fellowes of West Stafford, L.
Fink, L.
Flight, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Fraser of Carmyllie, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
German, L.
Glasgow, E.
Gold, L.
Goodhart, L.
Goodlad, L.
Goschen, V.
Grade of Yarmouth, L.
Greenway, L.
Hameed, L.
Hamwee, B.
Hanham, B.
Hannay of Chiswick, L.
Harris of Peckham, L.
Henley, L.
Heyhoe Flint, B.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Home, E.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
Inglewood, L.
Jay of Ewelme, L.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Kerr of Kinlochard, L.
King of Bridgwater, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Lang of Monkton, L.
Leach of Fairford, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lexden, L.
Lingfield, L.
Liverpool, E.
Loomba, L.
Lothian, M.
Low of Dalston, L.
Lucas, L.
Luke, L.
Lyell, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Magan of Castletown, L.
Mancroft, L.
Mar, C.
Mar and Kellie, E.
Marks of Henley-on-Thames, L.
Marlesford, L.
Mawhinney, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Montagu of Beaulieu, L.
Montrose, D.
Moore of Lower Marsh, L.
Morris of Bolton, B.
Moynihan, L.
Nash, L.
Neville-Jones, B.
Newby, L. [Teller]
Newlove, B.
Noakes, B.
Norton of Louth, L.
O'Cathain, B.
Oppenheim-Barnes, B.
Palmer of Childs Hill, L.
Parminter, B.
Perry of Southwark, B.
Phillips of Sudbury, L.
Phillips of Worth Matravers, L.
Popat, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Reay, L.
Renfrew of Kaimsthorn, L.
Renton of Mount Harry, L.
Ribeiro, L.
Risby, L.
Roberts of Llandudno, L.
Rogan, L.
Roper, L.
Rotherwick, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
Sanderson of Bowden, L.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shipley, L.
Shutt of Greetland, L.
Skelmersdale, L.
Slim, V.
Smith of Clifton, L.
Spicer, L.
Stedman-Scott, B.
Stoneham of Droxford, L.
Stowell of Beeston, B.
Strasburger, L.
Strathclyde, L.
Sutherland of Houndwood, L.
Taverne, L.
Taylor of Goss Moor, L.
Taylor of Holbeach, L.
Tenby, V.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tope, L.
Tordoff, L.
Trefgarne, L.
Trimble, L.
True, L.
Tugendhat, L.
Tyler, L.
Vallance of Tummel, L.
Verma, B.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Warsi, B.
Wasserman, L.
Wei, L.
Wheatcroft, B.
Wilcox, B.
Willis of Knaresborough, L.
Willoughby de Broke, L.
Younger of Leckie, V.
5.07 pm
Clause 14 : Power of employment tribunal to impose financial penalty on employers etc
24: Clause 14, page 10, line 16, at end insert—
“( ) The tribunal shall have regard to an employer’s ability to pay—
(a) in deciding whether to order the employer to pay a penalty under this section;
(b) (subject to subsections (2) to (4A)) in deciding the amount of a penalty.”
Viscount Younger of Leckie: My Lords, I shall speak also to Amendments 25 to 28. I turn to these amendments as the provision for the employment tribunals to impose financial penalties on employers. This is a response to points raised in Grand Committee. Much of the debate on this clause related to amendments tabled by noble Lords opposite in Grand Committee, which were intended to probe the practical application of the new regime, including the reasons for setting the level of penalty at 50% of the value of the award, and to seek that failure to follow grievance or disciplinary procedures be prescribed as an aggravating feature for the purpose of attracting a penalty. Further amendments sought to address concerns, which we share, about the non-payment of tribunal awards.
As my noble friend Lord Marland explained at the time, the decision to make the penalty 50% of the value of the award was informed by the national minimum wage penalty regime introduced by the previous Government, where the level of the penalty is also set at 50%. While we sympathise with the intent behind the amendment to specify that a failure to follow grievance and disciplinary procedures should constitute an aggravating feature, the Government are clear that it should be for the tribunal to determine what constitutes aggravating features, based on the facts of the case before it.