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Grand Committee

Thursday, 27 November 2014.

Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2014

Motion to Consider

2 pm

Moved by Baroness Williams of Trafford

That the Grand Committee do consider the Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2014.

Relevant document: 13th Report from the Joint Committee on Statutory Instruments

Baroness Williams of Trafford (Con): My Lords, this order was laid in Parliament on 7 November. It is part of continuing efforts to tackle the trade in so-called “legal highs”—a term which is unhelpful. On 30 October the Government published their response to the expert-led review into new psychoactive substances. They have set out an enhanced package of measures that includes looking at the feasibility of new legislation in this challenging area.

The Misuse of Drugs Act will remain the cornerstone of the Government’s legislative actions to curtail the availability of these new drugs where there is expert advice on their harms. The order being debated today is one part of the Government’s actions, which they continue to pursue with full vigour.

I would like to thank the Advisory Council on the Misuse of Drugs for its continued support in reviewing the evidence base on new psychoactive substances sold as legal highs that have the potential to cause harm. The ACMD’s considerations and advice continue to inform the Government’s response to these drugs. Noble Lords will wish to note that the legislative measures the Government are proposing through this order are entirely in line with the ACMD’s advice.

If made, this order will specify for control the synthetic opioid AH-7921 and a number of LSD-related compounds, commonly referred to as ALD-52, AL-LAD, ETH-LAD, PRO-LAD and LSZ. The order will also extend the definition used to control the family of tryptamines to capture compounds such as alpha-methyltryptamine as well as 5-MeO-DALT for control under the Misuse of Drugs Act 1971.

The Government have received advice from the ACMD that the drugs to be controlled are being misused or likely to be misused. In the ACMD’s view, their misuse is having, or is capable of having, sufficiently harmful effects to warrant legislative action under the 1971 Act. Legislative action is necessary as a result of the real and potential harms identified by the ACMD. This action will send out a strong message to those who are considering experimenting with these drugs and help the Government to target their public health messaging in order to protect the public. It will also

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allow enforcement partners to prioritise resources accordingly to tackle the sale and supply of these drugs, sending out a strong message to those who trade in these harmful drugs, including high street “head shops”.

The Committee will be aware that this Government and the ACMD continue to monitor, through UK and EU drugs early warning systems, emerging substances marketed as legal alternatives to controlled drugs. This work has informed the ACMD’s deliberations and, as appropriate, its current advice to update our drug laws in relation to the new psychoactive compounds being controlled.

AH-7921 is a potent synthetic analgesic developed over 40 years ago by Allen & Hanburys pharmaceutical company in the UK. The ACMD reports that,

“the compound was not developed further, presumably because animal studies revealed a high addictive potential”.

AH-7921 has recently become available as a new psychoactive substance. It was first detected in Europe in July 2012. Since then a number of drug-related deaths have been reported in Europe, including three related deaths reported by the National Programme on Substance Abuse Deaths in the UK in 2013. AH-7921 is reported as being highly addictive, with a potency similar to morphine. Harms from the misuse of this drug are reported to include difficulty in breathing, severe pain and death.

The LSD-related compounds are potent hallucinogens which currently evade UK controls on this family of drugs. These compounds are reported as being offered for sale on specialist websites devoted to hallucinogens as new psychoactive substances. The harms associated with the misuse of these compounds are reported to include euphoria, hallucinations, rapid heartbeat and depression. These compounds are also known to cause acute mental health disturbances.

The tryptamines are hallucinogens, a large number of which are already controlled via a generic or group definition under the 1971 Act as class A drugs. The ACMD reports that in recent years there has been a significant interest in hallucinogens of this type. A number of these substances, which fall outside the current group definition, are being offered for sale as new psychoactive substances. Two in particular, commonly referred to as AMT and 5-MeO-DALT, have been encountered through the Home Office forensic early warning system. AMT was linked to the tragic deaths of Adam Hunt and Christopher Scott last year.

The physical effects of the tryptamines are reported as visual illusion, hallucination and euphoria, among others. The ACMD also reports a small number of confirmed post-mortem toxicology reports, rising from one in 2009 to four in 2013, with AMT being the most frequently linked to reported tryptamine deaths. For all these reasons, the Government accept the ACMD’s advice to extend current controls to these compounds as class A drugs under the 1971 Act.

The Government intend to make two further, related statutory instruments, which will be subject to the negative resolution procedure. The Misuse of Drugs

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(Designation) (Amendment No. 2) Order 2014 will amend the Misuse of Drugs (Designation) Order 2001 to place the compounds being controlled in Part 1 of the order as compounds to which Section 7(4) of the 1971 Act applies. These compounds have no known legitimate uses outside research. Their availability for use in research will be enabled under a Home Office licence.

The Misuse of Drugs (Amendment No. 3) Regulations 2014 will amend the Misuse of Drugs Regulations 2001 to place the compounds being controlled by this order in Schedule 1 to the 2001 regulations, as they have no known or recognised medicinal uses. These instruments will be laid in time to come into force at the same time as the Order in Council, if it comes into force as proposed. The Government will publicise the approved law changes through a Home Office circular. I commend the order to the Committee.

Baroness Smith of Basildon (Lab): My Lords, I thank the noble Baroness for the detail on this. The explanation she gave was very helpful. I also congratulate her on her pronunciation—these are not easy words; they have foiled many a Minister. However, the complications are more than just verbal when we look at the detail of the complexities of the compounds that we are seeking to prohibit. This order was actually laid in July and had to be withdrawn because of a mistake. That indicates how complex these issues are and how important it is that we get it right.

Too often, these drugs are referred to in a phrase that I do not like: “legal highs”. Sometimes the only reason that they are legal is because of the technicality that no one has got round to banning that particular compound yet, even though it has a very similar effect to another. That might be the initial reaction to these highs, but in too many cases they lead to death or very serious illness or psychosis, so it is right that action is taken against them. One thing that gives cause for concern is the growing number of artificial drugs—created or synthetic compounds—on the market. The Government’s approach now, of looking at groups of compounds rather than trying to ban an individual one so that when there is a slight change in the make-up another one has to be banned, is a much more sensible approach and one that we welcome.

I will just ask something briefly about process. There are two questions here. The Government sought advice from the ACMD on this order and it fully supports it. It is always helpful where there is consensus in these matters. Is there a process by which the ACMD can draw the attention of the Government to drugs being used on which it thinks action should be taken? Is there a two-way process?

The Minister referred to other orders coming before us. I think that this is the fifth order on the Misuse of Drugs Act that I have spoken to, so a number of substances have been banned already. We need to ensure that the action that we are taking is effective. There is no point in us sitting here, with the Minister having to learn the names of the drugs and read them through, with the immense work that goes into preparing

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such orders and the advice from the ACMD, if at the end of the day it is not going to have much effect. How many prosecutions have there been in line with all that has been done already in respect of substances and compounds that have been banned, and how many seizures of drugs banned in previous orders have we seen? Has any assessment been made or evidence emerged of a decline in their use? I am happy not to receive answers today, but I am looking for reassurance that when we take such action it does have an impact and makes a difference. With those points and questions, we give our support to the Motion.

Baroness Williams of Trafford: I thank the noble Baroness for taking part in this quite brief discussion of a matter which—I think there is general consensus—needs to be tackled. Obviously, approval of the order will ensure that our drug laws remain effective and assist law enforcement to restrict the availability of compounds that have no legitimate use outside research.

The noble Baroness mentioned how unhelpful the term “legal high” is—because, as she said, the only reason that a substance is a legal high is that it has not yet become an illegal high. She also referred to how complex the whole thing is, because we are almost running to stand still, given the number of new compounds and substances being developed.

The noble Baroness asked whether the ACMD can take a proactive as opposed to a reactive approach if it gets intelligence on new drugs that are being developed. Given that it is a two-way dialogue, I assume that the answer is yes, but if it is any different from that, I will let her know. The expert panel made an assessment of our approach and concluded that we should build on it, but I am happy to write to the noble Baroness on that point.

On the increase or the decline in use, the use of new psychoactive substances among the general population remains relatively low overall compared to that of some of the traditional illicit drugs, with 0.6% of adults—that is, 16 to 59 year-olds—reporting use of mephedrone in the last year compared to 6.6% for cannabis, 2.4% for powder cocaine and 1.6% for ecstasy.

Baroness Smith of Basildon: That does not address the point that I am making; it tells us about the average use. What I am trying to do is understand the impact of orders such as these. I understand what the use is in the UK; I want to know whether the orders are having any effect. I am happy for the Minister not to answer today but to write to me, because I think that is a more complex question.

Baroness Williams of Trafford: I will clarify that in a letter.

I think that I have answered the two main questions. I am happy to write with detail on the other questions that were asked. In light of that, I commend the order.

Motion agreed.

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Electricity and Gas (Energy Companies Obligation) (Amendment) (No. 2) Order 2014

Motion to Consider

2.15 pm

Moved by Baroness Verma

That the Grand Committee do consider the Electricity and Gas (Energy Companies Obligation) (Amendment) (No. 2) Order 2014.

Relevant documents: 8th Report from the Joint Committee on Statutory Instruments, 9th Report from the Secondary Legislation Scrutiny Committee

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, I am pleased to open this debate on the two draft orders before us. We are proposing amendments to the existing ECO order which covers the period to March 2015, and a new ECO order which introduces a new period for the scheme, extending the obligation to March 2017.

The Government have faced up to the enormous energy challenges our country faces over the coming years. With the overhaul of the electricity market and record investment in renewable technologies, we are well on the way to making sure that the UK’s energy is secure, low carbon and affordable, and improving the energy efficiency of the UK’s homes is central to this challenge. Through the Energy Company Obligation scheme and the Green Deal, we are making homes warmer, more energy efficient and cheaper to heat. Since the introduction of ECO and the Green Deal framework we have made tremendous progress towards our target of 1 million homes making one or more permanent energy efficiency improvements by March 2015.

Altogether, around 995,000 energy efficiency measures had been installed in more than 819,000 homes by the end of September. The vast majority of households benefiting have received support from ECO, with more than 585,000 measures going towards around 482,000 low income and vulnerable households, and households in deprived areas. Under the Affordable Warmth scheme, we had delivered just under 380,000 measures into around 304,000 households by the end of September. This work has delivered £4.2 billion-worth of notional lifetime bill savings and is a significant investment in addressing fuel poverty. Thanks to the new ECO order we are introducing today, more than 400,000 further insulation measures and around 250,000 more heating measures are due to be delivered through ECO by 2017. This will provide long-term certainty for the industry and enable it to deliver as effectively as possible.

I recognise that the changes we are making to the existing ECO order are significant. Nevertheless, the policy will continue to drive large-scale investment in energy efficiency across the country. Going forward, it will be targeted more at those who need it most: those who are, or are at risk of, becoming fuel poor. These changes were proposed in December 2013 as part of a package of measures introduced by the Government to reduce energy bills by an average of £50. The

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changes to ECO alone will reduce energy bills by around £35, which energy companies have confirmed they are on track to deliver.

The vast majority of customers pay for the ECO as part of their energy bills. We all know that energy bills have been rising in recent years, which is why it is right and fair to review the impact that this policy has had on household costs. We are continually monitoring the scheme to make sure that we strike the right balance between the long-term benefits of energy efficiency and the more immediate impacts on consumer bills. This is so that we can continue to offer help to those in need while ensuring a sustainable scheme that delivers value for money for everyone else.

I am proud to say that, thanks to the impact of government energy policies, household energy bills are on average £90 lower this year than they would have been otherwise, as the costs of supporting home-grown, low-carbon energy sources are, on average, more than offset by savings from the Government’s energy efficiency policies. An average household dual fuel bill in 2014 costs £1,369, compared to a projected £1,459 if Government policies, including ECO, did not exist to support cleaner energy, to ensure security of supply this winter, to help vulnerable households and to promote energy efficiency.

To reduce the cost of delivering ECO, the amendment order will reduce the 2015 target for the carbon emissions reduction obligation by 33%. These orders extend the eligible primary measures for the carbon emissions reduction obligation to include loft insulation, cavity wall insulation and district heating systems where these measures are installed from 1 April 2014 onwards. We recognise that some energy companies will have delivered more than others and will have done so by investing in more expensive measures. Therefore, we intend to provide a carbon uplift for those companies to ensure that they are not penalised for acting early. However, alongside some scaling back intended to lower overall costs, we are also introducing a minimum target for solid wall insulation, which will guarantee for the first time that a substantial number of solid walled properties—around 100,000—will be treated under ECO to March 2017. We have done this to ensure that we continue to support people living in cold, hard-to-treat homes, as well as to deliver carbon savings.

In addition to this, we allocated an additional £450 million in support of household energy efficiency over three years. As part of this, we have provided further support for energy efficiency measures, including solid wall insulation, through the Green Deal home improvement fund. The success of the Green Deal home improvement fund demonstrates that consumers will take up energy-saving technologies where costs and disruption have previously resulted in low take-up rates if incentives are sufficiently attractive. I am pleased that the Government will soon announce a second release of the Green Deal home improvement fund as part of making a further £100 million available to household energy efficiency.

Furthermore, our changes to ECO do not involve any reduction in the level of support for low-income and vulnerable households. As noble Lords will know,

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the Government are putting in place a new energy efficiency-based fuel poverty target for England. Parliament is currently considering the proposed legislation. Extending support under the ECO Affordable Warmth scheme ensures continued long-term investment in energy efficiency in fuel-poor homes. It is considered the most sustainable way of tackling fuel poverty and reducing the cost of keeping warm. Reflecting that reducing fuel poverty is a priority, the orders we are considering retain dedicated Affordable Warmth activity under ECO at the original level of investment. Thanks to our new order, we are giving certainty to industry by extending activity on the same scale to March 2017.

We have also sought to make ECO easier and cheaper to deliver in low-income communities and rural areas. We are therefore extending the carbon-saving community obligation part of ECO to cover the bottom 25% of areas on the index of multiple deprivation, meaning more households in low-income areas have access to ECO funding, and we are simplifying the eligibility requirements for installing measures in rural areas. These changes will apply for measures installed since 1 April 2014 and have already resulted in a significant increase in the number of measures delivered to hard-to-reach rural homes.

The new order extends the ECO scheme to 2017, with new carbon and Affordable Warmth targets to be met over the period April 2015 to March 2017. This will ensure that ECO continues to deliver energy-efficiency measures in households for an additional two years. It will give certainty to industry and, together with the impacts of the amending order, we expect it to result in interventions for an additional 620,000 households.

The order makes some adjustments to the ECO Affordable Warmth scheme. We are rebalancing delivery towards non-gas fuelled households, which are more likely to be in fuel poverty, by introducing an uplift to be applied to insulation and qualifying boilers in non-gas fuelled households; and bringing in a new eligibility measure—a qualifying electric storage heater—which will incentivise delivery to electrically heated homes by giving these measures a different score than they would previously have received. This will now be calculated in a similar way to the score for a qualifying boiler.

ECO has delivered 267,000 new boilers in low-income and vulnerable households. This is a significant achievement. For the future, we are incentivising a more balanced profile of delivery, by setting the score for measures in such a way that will mean insulation measures will be more likely to be promoted than they were previously. We are also introducing additional customer protections by requiring that a warranty covering the installation of new boilers is provided free of charge to the customer.

In conclusion, the amendments to the current ECO order will bring much needed reductions to energy bills at a time of rising energy costs, while protecting energy-efficiency funding for vulnerable and low-income households. I commend these orders to the Committee.

Lord Whitty (Lab): My Lords, I thank the Minister for explaining these extremely complex changes, and for doing so despite a short-term disability in terms of

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delivery. It is probably sensible that she indicates that she will write to me on any points she wishes to take up because we have another set of regulations to get through before we finish on energy today.

I also thank the Minister’s officials because they have produced Explanatory Notes and an impact assessment that are extremely complex. However, some of that raises rather more questions than it answers. The Minister has done her best to present this as an advance in tackling energy efficiency but my assessment is that in some ways it is a retreat. It is obviously part of the broader approach of government to the multifarious challenges of energy policy but most commentators would say that the energy-efficiency dimension of it is faltering.

Let us look at a bit of history. When they came in, the Government inherited a number of different schemes from the previous Government: Warm Front, CERT and CESP in England and the equivalent taxpayer-funded Warm Front schemes in Scotland, Wales and Northern Ireland, which are still running. None of those schemes was perfect, although when I was a Minister Warm Front actually delivered 250,000 interventions per annum, which is considerably more ambitious than the aggregate of all the schemes to which the Minister referred.

The intention of the Government was that the ECO, funded by consumers rather than taxpayers, would replace all those schemes in one way or another, at less cost. It would be more consolidated, more stable and more geared to the physical and social challenges implicit in dealing with energy efficiency and fuel poverty. It has fallen well short of that so far. Some minor improvements have been made and are being made today in terms of the coverage, techniques and technologies for which ECO can pay—but on balance it is going backwards. That is partly because the Government’s very good first intention when they introduced the concept of the ECO was that this framework would last for 10 years. It was said that it would run to 2023 in broadly these terms. However, after two years we have some pretty major changes and some significant underperformance.

2.30 pm

As the Minister explained today, the ambition has now been reduced on a number of fronts. There is a reduced ambition in relation to carbon. She referred to the 33% reduction. There is in my estimation a reduced focus on the output of the ECO on fuel poverty and a reduced focus, at least in the short term, on what are known to be the least energy efficient forms of housing, which house many of those most in need, principally in the private rented sector.

The Government intend by these changes to refocus the programme and to reduce, or at least control, the cost to consumers. As the Minister repeated today, the average cost to consumers through their bills should be reduced by £35 a year as a result of the changes. Previously I received letters from the Minister which I looked at again to determine where the £35 comes from. I will not go into the full details of that but I was not totally convinced by the figures. The final paragraph of one of the letters sent by the Minister’s officials stated that this was the figure that the companies

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estimate will be the saving. You cannot work out a priori a figure of £35 from the figures that are given. However, if that is what the companies are saying, it has not been delivered. Four of the big six companies have delivered less of a cut than £35, and those on fixed prices are particularly affected. Part of the problem is that we not only depend on the supply companies to deliver energy efficiency improvements, we also appear to trust the way they calculate their effects and the effect on bills. That may be a mistake in the medium term.

Because we are introducing changes there has also been a bit of a hiatus in delivery. One estimate suggests that 55,000 households have missed out because of the uncertainty about where we were moving. There are certainly anxieties within the insulation industry and the installation industry about how these changes will affect the way in which they deliver and the cost efficiency with which they can deliver. So we have a situation where some uncertainty has been introduced on top of pre-existing uncertainty. It is not entirely clear to me that the Government intend to maintain this framework beyond the two years we are talking about. Perhaps the framework should be changed, as I shall discuss later.

I turn to the proposals themselves and the documentation provided with them. As I say, we have reduced the carbon ambition, as was explained by the Minister and is set out in the impact assessment, which states at page 27 that only 10,000 will be taken out of fuel poverty by 2018 out of 1.8 million or so—depending on the definition you use. As regards the type of housing being addressed, it is well known, and has been for years, that the lowest energy efficiency is found in the private rented sector. As noble Lords will know, the private rented sector is an increasing part of our housing tenure. Roughly 21% or 22% of people now live in the private rented sector. The impact assessment states on page 23 that from 2013 to 2015, only 11% of interventions will be in the private rented sector and only 6% in 2015 to 2017. However, dwellings in the private rented sector continue to pose the greatest problems as far as energy efficiency and fuel poverty are concerned.

Some beneficial changes have been made in terms of the particular problems of rural areas but what has been given with one hand has been taken away with the other. While there is an extension of the technologies which can be employed so that off-grid households within rural or semi-rural areas can be addressed more effectively, the focus on the poorest within those areas has effectively been removed because we now have an objective of rurality as well as of need. That could mean that within rural areas those in the most desperate need may not be given priority.

As to the total number of interventions, page 27 of the impact assessment states that in the period 2013 to 2015 just over 1 million interventions are envisaged. Over the following two years, only 842,000 will be addressed. That is a reduction of nearly 20%. However, because ECO is divided into three parts, in the affordable warmth section which affects certain types of fuel poor housing, it represents a decline of 47% in the number of interventions. The impact assessment shows

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that the changes that have been made, primarily to reduce consumers’ bills—which no one is objecting to although the form of the Bill is a matter of contention—have led to distortions which have reduced the total impact on carbon and on the focus on the fuel poor and the least energy efficient housing. At the same time, because it has caused some disruption in the industries, the cost per intervention may also have suffered. Certainly there are elements within the installation industry which would suggest that.

There are objectives for landlords within the private rented sector to improve the energy efficiency of their dwellings by 2018 to at least band E. However, with the reduction in the focus on the private rented sector, any help for landlords to meet that target is to be reduced at the point where they begin to focus on needing to do so. So it affects not only the tenants within the private sector but the preparation for tighter requirements on landlords.

Behind all this is the problem that the policy of relying on the ECO and the way it is structured as the sole measure of delivery on energy efficiency in terms of carbon savings, savings on consumers’ bills in general and tackling fuel poverty is flawed. A single measure by itself cannot be sufficient to deal with all of these issues, even though there are at least three different sub-schemes within the ECO. It is flawed also because we rely heavily on the supply companies to deliver it.

The Government have indicated that they would support a more area-based approach. However, these regulations do not facilitate that. A more area-based approach would be more cost efficient and more able to focus on areas of bad housing and low incomes than one which goes house by house or is delivered by the supply companies. There will be different supply companies for different consumers, different households and different streets.

It is also a political problem in that the cost of this has fallen on the general consumer in the form of what is almost a poll tax. Although attacks on government additions to energy bills have tended to focus on the subsidy for green energy, it has also been subsumed in relation to the social redistribution which the ECO levy covers. That makes it difficult to ensure any consumer understanding of the way in which these costs are being paid for and delivered.

I am speaking for the Labour Front Bench today, but the following is one of the bees in my bonnet, if you like. It is probably too late for this now, but if we are going on a house by house basis, the best way to deliver this would have been to associate it with the smart meter programme, as every single house in the country has to be associated with that and we could have prioritised those who were in most income need. However, we are where we are. There are some extensions that I approve of here, but the total ambition is sadly lacking, and we are going a bit backwards, both on the number of interventions and on the carbon outcome, as well as not contributing as effectively as we could to the reduction of fuel poverty.

As I say, the political problem is that consumers do not understand what they need to do in terms of improving the energy efficiency of their housing or

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why they are paying for what they may regard as other people’s problems with energy efficiency. The problem is that the Government have not managed to deliver a narrative through all these changes and have not really convinced the industry that there is a stable environment in which it can invest for the future and thereby bring down unit costs in terms of future interventions.

This is going to run for two years, and we will see whether even the reduced targets are actually delivered. I hope that they are and that we in fact exceed them—we may well do so if the industry gets it act together, but there are more fundamental problems here. I am not convinced that the ECO as it stands will deliver what needs to be achieved. We need a longer-term framework, and in that sense I cannot fully support these regulations, although there are parts of them, as I say, that I do approve of.

I can only hope that an alternative Government will perhaps rethink this and have a more holistic, cost-effective and long-term strategy for tackling the triple problem of carbon reduction, energy costs and fuel poverty. I am afraid that these regulations as they stand do not take us very far down that road—and in some respects, they go backwards.

Baroness Verma: My Lords, I start by thanking the noble Lord, Lord Whitty, although I disagree with absolutely everything that he said. In case I go into a coughing fit, I will just say now, while I am not coughing, that I will write to him if I do not reach some of the answers to the questions that he asked.

In the view of the Government, these measures achieve all the objectives that the noble Lord has highlighted them as not achieving. The noble Lord compared Warm Front in 2010-11 with Affordable Warmth. Warm Front did deliver, but it delivered less for the same amount of money: 80,000 houses from a budget of £366 million, whereas ECO Affordable Warmth is expected to deliver 160,00 households up to 2017, for £350 million a year. You cannot always compare like for like, because we are offering different tools. The same applies to CERT and CESP compared to ECO. We in this Government are looking at measures that are harder to deliver. CERT offered LED lights as part of the bigger drive to increase energy efficiency, but these were short-term fixes. We are trying to offer longer-term measures such as solid wall insulation, replacement of boilers and other measures like that.

I agree with the noble Lord, Lord Whitty, that we need to look at this in the long term. We have some of the most energy-inefficient housing stock in Europe, so rather than address the issue by using short-term fixes, we need to adopt a more holistic approach by considering what measures we can put in place alongside the smart meter programme, which the noble Lord rightly pointed to in his remarks. The foundation phase is currently under way and the rollout will begin to take place from next year. Smart meters will empower individuals to reduce energy costs because they will have more control over their energy consumption. However, the focus has to be on ensuring that low-income

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and vulnerable households are reached and helped first. The fact that we are extending ECO to 2017 and that 620,000 households will receive at least one measure assures us that we are meeting the needs of those households about which the noble Lord and I are both genuinely concerned.

The noble Lord also asked how we can be sure that the energy companies are going to pass on the full value of the savings to their customers. The companies have confirmed publicly that they will pass on the savings, and we have made it easier for consumers to be able to switch between different companies if they do not deliver. From a base of six companies, I believe that we now have 19 new independent companies on the scene. Choice and competition are now in place, and ultimately it will be competition that drives down costs, alongside companies being more receptive to consumer needs.

The noble Lord talked about uncertainty in the sectors that deliver these measures. Actually, the fact that they know they are going to be working on these ECO measures until 2017 means that they have another two years in which to deliver. Ultimately, as a responsible Government, we have to listen. When people say that they are concerned about energy prices, we have to respond to that. That is why any responsible Government would review what they are doing in order to make sure in particular that those who are finding it hardest to meet the costs are helped the most. The way we have undertaken to put this order in place means that we are doing exactly that.

I do not want to encourage political point scoring here, but at least we have come forward with a constructive approach. The noble Lord’s colleagues in the other place have been talking about energy price freezes. As we know, and as the energy companies are telling us, energy price freezes actually raise prices both before and after the freeze, while keeping the price level for two years. That will not encourage certainty in the sector; it will just make things very uncertain for consumers. We must not protest that these measures do not go far enough, rather we should encourage a review to see how well they are working. The fact is that we are now addressing vulnerable people in rural areas as well as low-income households, which shows that the Government have taken very seriously the points raised by the noble Lord.

The noble Lord also talked about the private rented sector. I think that he is aware that we carried out a consultation which closed on 2 September. We are now going through the responses we received, and once they have been considered, the Government will publish their view. That response will be available to the noble Lord and others. I will have to read Hansard carefully to ensure that I have answered the many questions put by the noble Lord. However, I thank him because I know that we genuinely share a desire to ensure that we address people’s anxieties about high bills in a very responsible and sensible manner. I believe that the order goes some way to achieving that and I commend it to the Committee.

Motion agreed.

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Electricity and Gas (Energy Company Obligation) Order 2014

Motion to Consider

2.50 pm

Moved by Baroness Verma

That the Grand Committee do consider the Electricity and Gas (Energy Company Obligation) Order 2014.

Relevant documents: 11th Report from the Joint Committee on Statutory Instruments and 12th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Fuel Poverty (England) Regulations 2014

Motion to Consider

2.50 pm

Moved by Baroness Verma

That the Grand Committee do consider the Fuel Poverty (England) Regulations 2014.

Relevant document: 10th Report from the Joint Committee on Statutory Instruments

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, I am pleased to open this short debate on the Fuel Poverty (England) Regulations 2014. Before I go into the detail of the regulations, I will set out their context. They are the result of three years’ detailed work, which has sought to overhaul the framework for tackling fuel poverty in England. Since taking office, this Government have been clear in their aims to understand the problem of fuel poverty, measure it effectively, and put in place a suitable, ambitious and meaningful target for change, supported by a strategy to meet that target. Since 2010, we have seen a consistent fall in the number of homes in fuel poverty, but the cost of energy remains a real problem for many people. We must address the issues over the long term.

This journey began from first principles with the independent review of fuel poverty, led by Professor Sir John Hills and published in 2012. Professor Hills concluded that fuel poverty is a distinct and serious structural problem, requiring an ongoing targeted effort to properly address it. Indeed, fuel poverty is driven not only by low income but by the characteristics of the homes we live in. His review also highlighted that, while the previous 10% indicator used to measure fuel poverty was well meaning, it was fundamentally flawed. Its sensitivity to energy prices meant that the official figures often suggested significant progress in alleviating fuel poverty, while masking the real problems faced by those on low incomes living in the coldest, least energy-efficient homes.

The Government have been determined to learn these lessons and we have acted. In 2013, we confirmed that we would adopt the low income, high costs indicator

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of fuel poverty in England, which finds a household to be fuel poor if it has an income below the poverty line—including if meeting its required energy bill would push it below the poverty line—and if it has higher than typical energy costs. In essence, it means that fuel poverty is an additional problem faced by some low-income households that have the highest energy costs. This measure also takes into account how a home is used. For example, it now captures specific heating patterns for people who need to spend more time at home, which often includes households with young children, the elderly or the disabled.

Measuring fuel poverty properly really matters. The major advantage of the low income, high cost indicator is that not only will it allow us to judge the scale of the number of homes affected, but it will enable us to understand it through the fuel poverty gap, telling us how badly affected each household is. This means that we can prioritise households in the most severe fuel poverty—those which we will want to help first. The indicator will allow us to home in on the factors that mean that low-income households face higher costs, the most notable of which is the energy efficiency of the property they live in.

Last year, the Government published the Framework for Future Action. We laid out a set of principles to guide progress: prioritisation of the most severely fuel poor; supporting the fuel poor through cost-effective measures; and ensuring that vulnerability is reflected in policy decisions. These strategic principles are useful tools for assessing the effectiveness of current policies and shaping their future development so that the Government can use their resources in the most effective way.

Our current policies are already making a difference. For example, since 2011, the Warm Home Discount has meant that more than 2 million households receive a discount on their energy bill each year. More than 480,000 low-income and vulnerable households will be warmer after having received measures under the energy company obligation.

The new definition of fuel poverty has now enabled us further to shape existing policies to take into account a new understanding of the problem. For example, we are amending ECO to incentivise the delivery of affordable warmth measures to non-gas fuelled households, as we discussed in our previous debate.

Significantly, through the Energy Act 2013, we amended the Warm Homes and Energy Conservation Act 2000 to remove the previous fuel poverty target, create the necessary legislative framework for our new approach and place a duty on the Secretary of State to set out a clear objective and way forward for tackling fuel poverty.

Today’s debate marks the most important step in this process. These regulations set out the form of the fuel poverty objective, the level of ambition to be achieved and the date by which this must be done. The new statutory target aims to ensure that as many fuel-poor homes in England as is reasonably practicable achieve a minimum energy efficiency rating of band C by 2030. This is because improving the energy efficiency of properties is the best way to lower energy bills in the long term. Reducing energy waste will help to protect

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fuel-poor households from future bill rises. It will also help to improve the energy efficiency of the wider housing stock in line with the UK’s carbon budgets.

Importantly, the target will be based on a minimum threshold rather than an average and will focus on those fuel-poor households where improvements can be made at least cost. This approach is very much in keeping with our first principle—to help the worst-off first—and has overwhelming support from fuel poverty stakeholders, including National Energy Action and the independent advisory body, the Fuel Poverty Advisory Group.

The target metric—the energy efficiency standard for measuring progress—is based on the standard assessment procedure but with an adjustment so that current policies that have a direct impact on energy costs, such as the rebate delivered by the Warm Home Discount, are accounted for. This recognises that important tool in helping people to keep warm.

It is important that this is a long-term goal because fuel poverty is a long-term structural problem. Action will require the support of successive Governments if we are to deliver the necessary energy efficiency improvements to fuel-poor homes in England. The 2030 timeline is also in line with the UK’s existing carbon budgets.

We are setting a statutory goal that aims to see as many fuel-poor homes as is reasonably practicable reach an energy efficiency standard that currently fewer than 5% of fuel-poor homes enjoy. It is a standard that will help people keep warm and cut bills, making a real difference to the lives of fuel-poor households.

The average energy efficiency rating of all homes today is band D. For fuel-poor homes, the situation is worse: they have an average of band E. To put this in context, if you are fuel poor and live in a band F or G home, this means that you could typically face energy bills of £2,100 to stay warm. But if you lived in a band C home, this could be only £1,000, or £1,200 if you lived in band D.

To get as many fuel-poor homes as is reasonably practicable to a minimum of band C will require a range of actions, such as the installation of energy-efficiency measures and bill rebates to help households with energy costs. It will mean trying to ensure that fuel-poor homes have sufficiently insulated walls and lofts. Some homes could see the installation of central heating systems for the first time, while others could receive an upgrade to the most efficient boilers available or potentially have a heat pump installed.

The Warm Homes and Energy Conservation Act also requires the Secretary of State to publish a strategy for achieving the new target. In this strategy, the Secretary of State is required to specify interim objectives and target dates for achieving them. These interim milestones will be important, given the long-term nature of the target, so that we can monitor progress.

3 pm

In consulting to prepare for the strategy, we have proposed that the first milestone seeks to ensure that as many fuel-poor homes as is reasonably practicable achieve an energy efficiency rating of band E by 2020.

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A second milestone seeks to ensure that as many fuel-poor homes as is reasonably practicable achieve an energy efficiency rating of band D by 2025. This stepped approach to meeting the 2030 target reflects our principle of ensuring that we support those facing the worst problems. F and G-rated homes are more likely to be cold, expensive to heat and a health hazard. Striking at the heart of this in the short to medium term should be our priority.

Recognising that this picture may change over time, we have taken steps to ensure that there are regular points of review and that progress towards the target is scrutinised. We are reforming the Fuel Poverty Advisory Group to enhance the fundamental role it plays in holding the Government to account. This is already under way: we are seeking a chair for the reformed body. I take this opportunity to recognise in this Committee the work that Derek Lickorish has done in leading the FPAG in the last six years.

We will regularly review the strategy for meeting the target; current thinking is that three years would be an appropriate interval. These reviews will look at the overall strategy in light of any developments and decide whether changes in the overall policy mix are required. Successive spending reviews will consider the resources available for meeting the target and how they should be directed.

In conclusion, we now know more about the problem of fuel poverty than ever before. However, this means that we know fuel poverty is a serious national problem. We know that households living on low incomes all too often are left to live in the coldest and least efficient homes. Our ambition and the strategy underpinning it make it clear that the Government do not accept this situation and are committed to providing support to the households that need it most. I commend the order to the Committee.

Lord Whitty (Lab): My Lords, I thank the Minister for that explanation and congratulate her on getting through it. I hope that indicates that her health is improving even as we have this discussion. We touched on some of the same subjects in our earlier discussion, but on this one I probably should formally declare an interest as the chair of a charity dealing with fuel poverty.

There is a bit of a problem in dealing with what is, in effect, putting into motion the totality of the strategy on fuel poverty by discussion of secondary legislation. The Minister referred to previous bits of legislation, which were primary legislation. It seems a bit odd that we are defining the interim targets, the means of delivery, the overall strategy and, of course, the definition in secondary legislation. In future, Parliament really will require a rather more substantial discussion than one in a sparsely attended Grand Committee—although it is very welcome to see my noble friend Lord Hunt of Kings Heath, and indeed the noble Earl, Lord Howe, here. It is a rather limited form of scrutiny and this is a rather important subject.

The Minister will have heard me giving my doubts previously about the new definition. The old definition had problems—I accept that—but I think the new definition has almost the converse problems. None the

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less, one part of it is a very positive advance: in addition to measuring overall fuel poverty, there are measures of the depth of fuel poverty in Sir John Hills’s redefinition. That seems to me an advance, but it is one that does not seem to have flowed through to policy in terms of the way in which fuel poverty interventions are being prioritised. The Minister spoke about prioritisation, but maybe I missed how we are using those new definitions. Would she care to write to me on that matter?

Overall, this is another reduction in ambition. There was a 30% reduction in expenditure on consumer-funded interventions on fuel poverty from 2010-11 to this financial year. If you add the taxpayer-funded interventions, which were being run down by 2010, it would be a 40% reduction. We are running down the actual resources being devoted to tackling fuel poverty, despite the fact that the problem remains considerable. All Governments have recognised that, but we are working in a context where the total resources are constrained.

Notionally, it is a very good idea, instead of defining the target in terms of outcomes, number of households or number of individuals, to focus on and define it in terms of the energy-efficiency performance of buildings. Regrettably, it is a little difficult to measure buildings’ energy efficiency as we do not have a comprehensive index of energy efficiency. A building’s real energy efficiency may well differ significantly from the notional energy efficiency, as that depends to some extent on household behaviour, landlord-tenant relationships and all sorts of other things.

The phrase “as many as reasonably practicable” is a useful get-out for Governments of all sorts. I am sure that my noble friend Lord Hunt and I can remember using similar phrases. However, we cannot by any means be certain that the progress of interim targets, which are very clearly defined right up to 2030, can easily be measured by something as subjective as “reasonably practicable”. Indeed, 2030 seems a very long way off for those targets. We are attempting to ensure that the private rented sector reaches band E by 2018, whereas the general target appears to be behind that. We should surely do better than that. Most people think we could go faster than that in the private rented sector. The end date of 2030 should be brought forward at least to 2025.

On prioritisation again, if there is a more sophisticated way to use the new fuel poverty gap information, we need to see how we focus on those who are in the worst fuel poverty as distinct from—as has often been the case under all Governments—focusing on the easiest cases and the cheapest individual interventions. We are, of course, not only dealing with those in deepest fuel poverty but attempting to reduce the average level of fuel poverty at the same time. It will be quite difficult to ascertain how well we are doing on that under the new definition, for the reasons I have tried to explain.

Frankly, the central problem is the same one that we had on the previous group of regulations, which is that ECO, as the main deliverer of this policy, is flawed. ECO, particularly as defined now, is not sufficiently geared to prioritise attention to the fuel poor. In some

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ways, broadening the measures takes attention away from the fuel poor even though it may help in otherwise neglected areas such as off-gas dwellings. The ECO does not deliver the required targeting because delivery is down to the supply companies, which have to fulfil their quotas and are not necessarily going to follow any identification of priorities set out by the Government or the regulator. It is not clear how targeting and prioritisation can exist under the ECO.

Because we are dealing with this house by house via the suppliers rather than area by area, because we are focusing on the fabric of the notional energy efficiency of the house rather than the people within it and because we are focusing on defining the measures rather than the need, there is a serious problem. This is epitomised, again, primarily by the neglect of how we are going to intervene within the rented sector. We still have not fully resolved how to deal with the issue of the landlord-tenant relationships there. As I said earlier, this sets up changing and difficult-to-interpret signals to the industry. I am informed that there is a real danger that we will have fewer players in the insulation and installation industries and probably, therefore, higher unit costs and possibly lower standards.

If the deficiencies in the ECO were made up by other interventions, this would not matter; or it would matter significantly less. However, the other government interventions in this area are not going to deliver for the fuel poor. The Green Deal is primarily and explicitly for those who are able to pay and has its own problems, which we need not go into now.

The Warm Home Discount undoubtedly helps the fuel poor in the immediate term by giving them money off a bill, but it does not resolve the problem of keeping those bills down through greater energy efficiency in the medium term. The rationalisation of the number of tariffs that Ofgem now requires of companies, in order to fulfil a rash commitment by the Prime Minister a couple of years ago that the number of tariffs should be reduced to four, has led to some companies reducing the number of tariffs that they are able to offer to various elements of the fuel poor, particularly pensioners. The Green Deal, the Warm Homes Discount and Ofgem’s approach to tariffs do not help the numbers of fuel poor being treated or the speed with which we can deal with them.

The ECO as it is currently designed and due to be delivered will not achieve the full results which both the Government and I would like to see. We need some new thinking. My party has produced a Green Paper on energy efficiency and is prepared to discuss it with everyone involved. Although campaigners in this area support aspects of what the Government are attempting to do, and are certainly prepared to work within the new framework and the new definition, they need to see more resources and interventions at a faster rate than has been the case. The ECO is geared only for the two years to 2017, and the long-term view as to how people can have confidence in the aims and the targets that the Government are setting down here today is subverted by not extending the measures beyond 2017.

We need new long-term thinking and better means of delivery if we are to reinstil confidence among the fuel poor, among the consumers and taxpayers who

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have to pay for it, and among the industry which has to deliver it. We are not yet in that position. Many things are included within this document which I can support, but the overall level of delivery will be woefully short of what is required.

3.15 pm

Baroness Verma: Again, I thank the noble Lord, Lord Whitty, for his response and, again, I start by saying that we will disagree on most of the points he has raised because I think that these measures do address what he and the Government both recognise as being embedded structural issues that we have needed to address for a long time.

The noble Lord said that 2030 is a long way away, but these interim measures will ensure that at each juncture we will be able to see whether or not progress has been made, so that we are able to revise the way in which we are addressing a long and deeply embedded issue. Looking at households within a particular banding will enable us to measure far better those people who we are beginning to reach. There will always be areas that need improvement, and that is why it is absolutely right for the Government to take stock from time to time and look at who is benefiting and who is not, along with monitoring how well the programmes are working.

The noble Lord said that we need more scrutiny. We have committed to an annual fuel poverty debate. Regular reviews of the framework will be carried out, and we are reforming the Fuel Poverty Advisory Group. All that will hold us to account. It is really important that, whatever we do, we work towards the end mission: a firm principle which ensures that those who need help the most get help first. By implementing these measures, that is exactly what we will try to deliver.

I will write to the noble Lord about the fuel poverty gap and set out in a little more detail how through these measures we will increasingly be able to target homes by extending the ECO to 2017, which we considered in the previous debate. The fuel poverty gap underpins the principle that we need to help those who are worst off first. I had hoped that I had set that out quite clearly in my opening remarks, but I suspect that there are areas on which the noble Lord requires further clarity. I will read Hansard carefully to see whether there are any points which he feels I have not responded to fully.

The noble Lord also said that the ECO has deficiencies. A larger share of the ECO will be available to low-income households than ever before. Through the ECO we are seeking to evolve and improve on how we reach out and ensure that households are given help. We have made changes so that between now and 2017 there will be a greater drive to ensure that measures are in place for the most vulnerable households. However, it is right to say that there is always more to be done. We need to keep on looking at this issue and make sure that we are doing everything we can.

I think that if the noble Lord reads Hansard tomorrow, he will see that I have addressed some of his questions in my opening remarks. Ultimately, the Government have taken action in order to reach out and ensure that

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the long-term goal for all homes to be energy efficient is met. We should be able to drive energy costs down. We discussed in the previous debate the programme to bring forward smart meters, which will add another tool. Standing still and not implementing these measures would actually have increased bills, so the Government have gone a long way towards trying to reduce costs to the consumer. We have listened very hard to what consumers have said. While we believe firmly that we must reduce our carbon footprint and our carbon emissions, that must not be done at any cost. It cannot be done so that those who can least afford it feel the greatest pain.

Of course, I will write to the noble Lord with further detail on any points that I have not responded to here, and I commend the regulations.

Motion agreed.

Nursing and Midwifery (Amendment) Order 2014

Motion to Consider

3.20 pm

Moved by Earl Howe

That the Grand Committee do consider the Nursing and Midwifery (Amendment) Order 2014.

Relevant document: 9th Report from the Joint Committee on Statutory Instruments.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, the Government have identified improvements that can be made to the legislation within which the Nursing and Midwifery Council operates, to improve public protection and increase public confidence in the Nursing and Midwifery Council. Therefore, the department carried out a UK-wide consultation on proposed changes to the Nursing and Midwifery Order 2001, which is the Nursing and Midwifery Council’s governing legislative framework. The majority of respondents supported these amendments.

The first of the proposed changes is to enable the Nursing and Midwifery Council to appoint case examiners who will be given powers currently exercised by the investigating committee to consider allegations of impairment of fitness to practise, following an initial screening which has considered that an investigation is appropriate. Two case examiners—one lay and one registrant—will consider the allegation, following the procedure set out in amendments to the Nursing and Midwifery Council (Fitness to Practise) Rules, which are being developed in parallel to this order by the Nursing and Midwifery Council.

The case examiners will then agree their decision on whether or not the registrant has a case to answer—this is the same process used by General Medical Council case examiners—and whether the allegation should therefore be considered by the health committee or by the conduct and competence committee. If case examiners fail to agree on whether there is a case to answer, the allegation will be referred to the investigating committee

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for determination. The introduction of case examiners should lead to the swifter resolution of complaints and thereby improve public protection and the efficiency of the Nursing and Midwifery Council’s fitness to practise processes, as well as reducing the stress to registrants caused by lengthy investigations.

The second change is to introduce a power for the council to review “no case to answer” decisions made at the end of the investigation stage in fitness to practise cases, and to make rules in connection with the carrying out of such a review. This will bring the Nursing and Midwifery Council’s power in line with the General Medical Council’s power.

The third change is to introduce a power to allow the council to delegate this function to the registrar—the chief executive. The amendments to the fitness to practise rules being developed by the NMC will provide that the registrar may review a “no case to answer” decision where new evidence comes to light that has a material impact on the original decision or if it is considered that the decision may be materially flawed, and in both cases that it is in the public interest to review. Save in exceptional circumstances, a review of a “no case to answer” decision cannot be commenced more than one year after the date of that decision.

The fourth change is to revise requirements for the composition of the registration appeal panel by removing the requirements for a Nursing and Midwifery Council member to chair the panel, which is intended to establish a clear separation of duties between the operational and governance functions to avoid suggestions of perceived bias and conflict. Additionally, it will remove the requirement for a registered medical practitioner to be on the panel in cases where the health of the person bringing the appeal is an issue. It is intended that medical advice will be provided by independent medical witnesses and reports to ensure the panel remains detached from that part of the process, and therefore making the process more robust and transparent. This will also ensure more consistency between registration appeals and fitness to practise appeals.

The fifth element is to clarify existing legislation that the Nursing and Midwifery Council’s Health Committee or Conduct and Competence Committee has the power to make a strike-off order in a health or lack of competence case upon a review of a final suspension order or conditions of practice order, provided the registrant has been the subject of such a final order for at least two years. This is not a new power but provides clarification of the existing legislation to protect patients and the public by ensuring that those whose fitness to practise is impaired cannot continue to practise.

The sixth change is to introduce a power for the Nursing and Midwifery Council to disclose to a third party certain information relating to a person’s indemnity arrangements for the purpose of verifying that information for the Nursing and Midwifery Council’s purposes. This will enable the Nursing and Midwifery Council to verify the information it receives to ensure that indemnity arrangements are in place and provide sufficient cover against the liabilities that many be incurred by a practising nurse and practising midwife registrant.

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The seventh change is to give the Investigating Committee a new power to also make an interim order after it has referred a case to the Health Committee or to the Conduct and Competence Committee if that committee has not begun its consideration of the case. At present, once the Investigating Committee refers a case, the power to make an interim order rests only with the Conduct and Competence Committee or the Health Committee. This will ensure that if new information is received which suggests that an interim order is necessary for the protection of the public after a case has been referred to another practice committee, but before the committee has started to consider it, the Investigating Committee will have the power to make an interim order.

The introduction of case examiners and the power to review “no case to answer” decisions, made at the end of the investigation stage in fitness to practise cases will bring the Nursing and Midwifery Council in line with the General Medical Council. The implementation of these recommendations requires a Section 60 Health Act 1999 order to amend the legislation governing the Nursing and Midwifery Council. I commend this order to the Committee, and I beg to move.

Baroness Brinton (LD): My Lords, this amendment to the Nursing and Midwifery Order is to be welcomed. A regulatory body has to balance the respected traditions and structures of an informed 150 years of experience with the urgent needs of the current issues that the council faces when there may be rare problems with registered nurses and midwives. Much of what is proposed follows good practice. However, there is one area in which I have some minor queries and I wonder whether my noble friend the Minister can help.

The move away from independent consultants forming an investigation committee to having an in-house employed case examiner raises two minor concerns that are not reflected in the consultation response at paragraph 8.6 of the Explanatory Memorandum. Will the case examiners have extensive training in gathering the evidence that they will have to present to the quasi-judicial relevant committee considering each case? Will the benefits that other investigating groups such as Ofsted and local government inspectors have, given that at least one member of those teams comes in from outside, ensuring that there is always fresh challenge, be lost with this new arrangement?

Secondly, as employees of the council, will their job specification make it absolutely clear that they must conduct their role without fear or favour? It may be obvious when they are dealing with people outside the council but occasionally—very rarely—there may be a case where, for example, a decision not to have an interim suspension might have resulted in further injury or damage, and therefore members of the council themselves and other judgments might be being examined. The case examiners must be truly free to examine the council’s own processes and to feel no pressure from their own managers.

The no case to answer decision and the independent chair of the appeals panel are important and to be welcomed. However, given what I have just said about

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the case examiners, I find it slightly peculiar to remove the requirement for a registered medical practitioner to be on the panel, because that person in the past has provided that independent voice from the members of the council.

The points that I have raised are minor ones, and I welcome the order. However, I hope that I can have some reassurance on these points relating to the new role of case examiners.

3.30 pm

Lord Hunt of Kings Heath (Lab): My Lords, I, too, am very grateful to the noble Earl, Lord Howe, for explaining the details of the order so clearly. However, he did not mention the Law Commission proposals for legislative changes relating to all health regulatory bodies. I note that the Explanatory Memorandum says that the Government will publish a response in due course, but I have to say that there is huge disappointment among the regulators that no Bill appeared this Session—not even one for pre-legislative scrutiny. Essentially, we are now faced with a series of Section 60 orders dealing with the regulatory bodies in an individual and piecemeal way, without the consistency and modernisation of the regulatory landscape that was promised by the Law Commission work. I hope that the noble Earl will be able to say a little more about when the Government will publish their response to the Law Commission proposals and perhaps give a little more information about how he sees the pipeline for Section 60 orders coming forward.

In particular, he will know that, in relation to the NMC, part of the Law Commission proposals were that there would be a reduction in the number of public hearings that have to take place. That would reduce the cost to the NMC and the time it takes to deal with cases. Given that we are not having primary legislation, is it the Government’s intention to bring forward as quickly as possible a Section 60 order in relation to that? As far as the proposals in this order are concerned, they seem sensible and unexceptional. I hope that they will lead to the NMC being able to be more efficient in its processes.

Having read the consultation document, I would just like to raise a couple of points on it. First, I will follow up what the noble Baroness, Lady Brinton, said about case examiners. The consultation document refers to a small number of people who are unsure about this proposal. I am particularly worried that as case examiners will be employees of the NMC, they will be target driven rather than acting as independent professionals. The consultation response from the Government says this will not be the case. It states:

“Although employed by NMC, Case Examiners will be both registrant and lay (non-registrant) and experienced senior decision makers who are used to making independent decisions”.

I very much endorse the comments of the noble Baroness, Lady Brinton, on training and the need for people to be brought in to provide fresh challenges. However, this issue about targets is a very important one, and I wonder whether the noble Earl can give me a reassurance that there will not be targets—even unseen ones—in relation to cases and their outcomes. Can he just say a

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little more about how we can ensure that case examiners will be wholly protected when they carry out their duties? If they are in a managed organisation, they will be accountable to a manager, and we need to have some assurance that there is not going to be interference by the hierarchy of the NMC in case examiners’ decisions.

I would like to ask about another point raised in the consultation document. One response was about the need for more diversity on panels,

“in particular a point that black, minority and ethnic (BME) employees are disproportionally represented within the disciplinary systems of both employers and regulators”.

The consultation says:

“These comments have been fed back to the NMC to consider”.

Has the NMC now given consideration to that issue?

Turning to the Deregulation Bill, the noble Earl was present at our debate last week and will know that we have some concerns that, according to a list issued apparently by the Government, the Professional Standards Authority is subject to the economic growth duty within that Bill. I do not expect the noble Earl to answer me on that today. But, given that the Professional Standards Authority is to be involved, can I take it that by implication that duty will fall also to the NMC, the GMC and other professional regulatory bodies? Obviously, we will come back to this issue when the Deregulation Bill returns on Report but we are finding it difficult to find out the list of organisations that the Government consider should be encompassed within it.

Of course, the issue is that there may be an impediment to the non-economic regulators taking regulatory action because they now have to consider the economic growth duty. In the main, that will apply more to the CQC when dealing with organisations than it will to the individual regulatory bodies. But as the Government think that the PSA is encompassed within the Bill, I would be interested in a response from the Government.

Will the noble Earl say something about the overall performance of the NMC? He will know that this has been the subject of some concern and indeed scrutiny by the Health Select Committee. At the most recent accountability hearing in 2013, the Health Select Committee concluded:

“The NMC is an organisation with a recent history of poor performance, including lack of focus on its core regulatory activities, financial mismanagement and long delays in processing Fitness to Practise cases”.

The PSA’s 2013 performance review of the nine healthcare regulators it oversees, which was published in July this year, stated that the NMC,

“is not yet meeting eight of the 24 Standards of Good Regulation”.

I know that in the 2013 accountability hearing the Health Select Committee concluded that,

“the NMC has made progress”—

indeed, I pay tribute to the chief executive and the chairman, who have done a lot to ensure that this happens—but it also says that,

“more progress is required before the NMC can be regarded as an effective regulator”.

Would the noble Earl care to comment on that?

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The Select Committee also looked at the issue of revalidation. Following the introduction of revalidation for doctors, the need for revalidation for nurses is self-evident. The Health Select Committee says that it welcomes,

“the commitment of the NMC to introduce revalidation for nurses and midwives from the end of 2015”,

but that,

“it does not believe the NMC yet has a workable plan to deliver this commitment”.

That is the 2013 report of the accountability hearing. The Select Committee has not yet had the 2014 hearing, which I think will take place in January. Will the noble Earl update the Committee on whether he now thinks that the NMC has a workable plan?

Overall, this is a sensible order. We need to do everything we can to help the NMC improve its processes. I express my thanks to the current leadership of the NMC and the work that it has done. It clearly needs to do more and Parliament needs to be prepared to help it. If we are not going to have a substantive Bill, I would have thought it a priority to bring further Section 60 orders in relation to the Nursing and Midwifery Council, particularly on the question of whether we can help it streamline its fitness to practise hearings.

Earl Howe: My Lords, I am grateful to my noble friend and the noble Lord, Lord Hunt, for their questions and comments. My noble friend Lady Brinton asked for reassurance about the case examiners. Under the proposals, the two case examiners will independently review the evidence and then agree their decision. This is the same process as used by GMC case examiners, and I am not aware of any particular difficulties that it has encountered in this connection. If the case examiners cannot agree the decision, the case will then be referred to the investigating committee for determination, as I explained.

My noble friend asked about training of the case examiners. Two case examiners, one lay and one registered nurse or midwife, will consider an allegation of impairment of fitness to practise, whereas three investigating committee members are required at present. Co-ordinating meetings of the investigating committee members is time-consuming due to panel members having other commitments or requiring refreshed training. A case examiner will be a skilled role. They will develop expertise that will lead to greater consistency when making decisions because they will be considering a greater number of cases on a regular basis than individual members of a large pool of investigating committee members. This will speed up the fitness-to-practise process and result in reduced costs.

My noble friend asked whether the job specification of case examiners, as employees of the council, must specify that they carry out their roles without fear or favour and be truly free to make comments. Case examiners will be employed by the NMC, whereas investigating committee members, who currently consider allegations of fitness to practise, are chosen from a pool of around 100 individuals who provide their services to the NMC as independent contractors. But, once again, there is no reason to suppose that, as professional people, they will feel inhibited from voicing their full and frank views whenever they feel the need

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to do so. Despite their being employees, it is more than any professional’s self-esteem is worth to feel inhibited in that sense. It is a very responsible role. While the individuals will need to be carefully chosen, I have confidence that this arrangement will work.

My noble friend asked about the removal of the requirement for a registered medical practitioner to form part of the panel where health is an issue. We consider it more appropriate for medical advice to be provided by independent expert witnesses and medical reports. Having an independent medical witness will ensure that the panel remains detached from that part of the process and is therefore more able to make an independent decision so making the process more robust and transparent. This would ensure consistency between registration appeals and fitness-to-practise appeals.

The noble Lord, Lord Hunt, expressed concern that case examiners might be target driven, and this was an issue raised in the consultation. We do not believe that this will be the case. Although they will be employed by the NMC, case examiners will be both registrant and lay; that is, a registrant nurse or midwife and a lay person. Their role will be distinct; they will be responsible only for making an assessment of whether a registrant has a case to answer against an allegation that is made to the NMC that their fitness to practise is impaired. They will make their decisions impartially and independently, and based solely on the information provided for the case, including any representations made by the registrant. Any such decision would be made by a pair of case examiners. The NMC will seek to appoint people to these roles who have demonstrated sufficient skills and experience to make robust decisions. The NMC’s case examiner resource will be sufficient to ensure that all decisions will be considered on their merits, without any undue time pressure. Case examiners will not be involved in undertaking the fitness to practise investigation itself, nor in presenting cases at any final hearing.

3.45 pm

I am aware that the decision not to progress a professional regulation Bill in the current Session has come as a disappointment to interested parties and I understand the comments made in that connection by the noble Lord, Lord Hunt. The process of putting together a Bill dealing with all the professional regulators is a complex matter because it touches on many pieces of legislation. However, this decision provides the opportunity to invest time to ensure that this important legislative change is right, and that we get the right framework in place for the benefit of those who will ultimately be affected by it. We continue to work and engage with all the regulators responsible for the healthcare professionals, the Professional Standards Authority and other stakeholders. We are committed to legislate on this important and complex issue when parliamentary time allows. The department is working on a formal response to the Law Commission’s recommendations and will publish it in due course.

The noble Lord asked me about the performance of the NMC and remarked on the progress made to date. I am sure he knows that the NMC has something of a troubled history regarding its performance, which is

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why Ministers commissioned the predecessor body to the Professional Standards Authority, the CHRE, to undertake a full strategic review in 2012. On 3 July 2012, the final report of this strategic review was published, which put forward 15 high-level recommendations for improvement in the delivery of the NMC’s regulatory functions, along with the expectation that demonstrable improvements should be seen within two years.

Earlier this year, the NMC commissioned KPMG to undertake an independent review to assess its progress in addressing the recommendations from the 2012 strategic review. The associated report was published on 15 September this year, in which KPMG concluded that the NMC had made a substantial number of improvements, which cumulatively placed it in a much stronger position than in 2012. We have welcomed KPMG’s report on that progress, but we want the NMC to improve much further and faster. These amendments to its existing legislation will undoubtedly help in that endeavour. We welcome the appointment of Dame Janet Finch as NMC chair from 1 January next year and hope that, under her leadership, the NMC will continue to make improvements to become a confident and capable regulator.

On 3 September, my honourable friend the Parliamentary Under-Secretary of State for Health met with Mark Addison, the current NMC chair, and Jackie Smith, the NMC’s chief executive, primarily to discuss the NMC’s failure to meet the standards that were highlighted in the Professional Standards Authority annual report. He explored with the NMC how it is responding to the concerns expressed by the PSA and the action it is taking to ensure compliance. The report shows that the NMC has made progress in becoming a more effective regulator, supported by government grants and decisive NMC leadership, but, as I have said, we believe there is further to go. We will continue to monitor its performance closely and are working to amend existing legislation—this Section 60 order being the first such example—to help in that process.

On revalidation, nurses and midwives have some of the most important jobs in the NHS, caring for patients every day. Making sure that they are up to speed with the latest treatments and practices will help them maintain the high standards that they and their patients expect. That is why we support the NMC in its drive to introduce revalidation. It will improve safety and quality of care and reassure patients that nurses remain fit to carry out their important work.

I am happy to write to both noble Lords to cover the points that I may not have done full justice to. With that, I beg to move.

Motion agreed.

Employment and Law Tribunals

Question for Short Debate

3.51 pm

Asked by The Earl of Glasgow

To ask Her Majesty’s Government how they define the word “discrimination” with particular reference to employment law and tribunals.

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The Earl of Glasgow (LD): My Lords, up until about 10 years ago the word “discrimination” had no derogatory implications. It simply meant a choice based on relevant information. You chose one thing or one person in preference to another because you had convinced yourself that that thing or person better suited your purposes. You discriminate when you buy a packet of cereal in the supermarket or when you choose a new car and, if there is any choice in the matter, you discriminate when you choose a wife, husband or partner, and he or she has the opportunity to discriminate back.

However, now it seems that the word discrimination has come to mean one thing: “unfair” discrimination, or, in the case of employment tribunals, “unlawful” discrimination. The law attempts to define discrimination by combining the deliberations of a number of Acts—the Sex Discrimination Act 1975, the Race Relations Act 1976, the Disability Discrimination Act 1995 and the Equality Act 2010.

We all accept the necessity and desirability of laws to prevent unfair or prejudiced racial, sex or disability discrimination but, as time has gone by, the definition of discrimination has got wider and wider and now encompasses almost anything or anybody who, for whatever reason, has a grievance and feels they have been unfairly treated. I contend that the laws on discrimination actually go against common sense.

For instance, no employer of a small business who is in his right mind is going to take on as a new employee a girl who is pregnant, and yet, as the law now stands, the girl who is refused the job for that reason can take her potential employer to a tribunal for unfair discrimination. She would be right—it was discrimination: but not unfair, simply sensible. That is not the same as an employer firing a girl who becomes pregnant after working for the company for two years or more. In that case she would expect to keep her job and the law would rightly back her up on this.

My interest in this question of discrimination stems from a recent personal experience. I am the owner of a visitor attraction in Scotland, which provides a number of entertainments for the public and employs up to 40 people during the height of the season. It has been running for nearly 40 years now and I had always believed that staff relations were pretty good. However, in 2011, after a series of bad years and trading losses, I was compelled, with pressure from the bank, to cut down on staff during the quieter winter months.

There were two people working on the accounts, and I decided that I could manage with only one. I wrote to the bookkeeper to explain that I was going to lay her off for four months in the winter. At the time I did not appreciate, as I do now, that under employment law laying someone off is the same as making someone redundant. I had therefore not followed the correct procedures. The bookkeeper decided to take me to a tribunal. I was successful in agreeing a settlement with her union representative, but she refused to accept it. She wanted to charge me with discrimination. Another thing I did not appreciate at the time was that if you win a case of discrimination against your employer, you can be awarded at least 10 times the amount you are likely to receive as a result of him not following the proper procedures.

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The case went to the tribunal. Her no-win no-fee lawyer was determined to prove that his client had been discriminated against. She had been employed for longer than the accountant, who by the way happened to be a heavy drinker, and therefore he should have been laid off instead of her. She had a disabled son who needed special care, and she asserted that we had not taken this circumstance into sufficient consideration. She also claimed that my manager favoured another female member of our staff over her, and that she should have been offered her job instead of being laid off.

Many of the staff were called in as witnesses and nine full days were spent on the case. Indeed, it took two years to be concluded. The result was that she failed to convince the tribunal or anyone else that she had been discriminated against and, as I expected, I had to pay a fine for not complying with the proper procedures. The tribunal had spent nine days attempting to disentangle a charge of discrimination which was always more than questionable.

After the case was over, I learnt from my lawyer, who specialises in employment law, that almost half of his cases are concerned with defending employers like myself against charges of discrimination brought by disgruntled former employees, and that the majority of discrimination claims are thrown out by the tribunals. As the law stands at present, no-win no-fee lawyers stand to gain a lot more if they can establish discrimination against their client. That is why they encourage them to go for that charge, even if the odds are stacked against them.

Speaking as a small businessman, and based on my recent experience, discrimination laws are the ones we fear the most because they are so broadly based. They offer a disgruntled or troublemaking employee a great deal of opportunity to hold their employer to ransom. Of course an employer is going to favour a hardworking and loyal member of staff over a lazy and difficult one, but as the law stands, that is already a discrimination. Discrimination has come to mean “unfair”, which is neither rational nor sensible. So we employers, who must discriminate sensibly in order to run our businesses, must be careful not to look as though we are being discriminatory. Unsuitable employees who fear for their future must build up a history of incidents so that, if need be, they can be read at a later date as being discriminating against them.

I tried to bring up the issue of discrimination and tribunals during consideration of the Enterprise and Regulatory Reform Bill, which became law in 2013. However, I was discouraged from doing so. I was told that it was too complicated, and besides it was all tied up with the European law. I got the feeling that discrimination was regarded as too much of a hot potato and that it was the duty of tribunals to deal with it. That is all very well, but these are long tribunal hearings which usually end with the charges of discrimination being thrown out. This is costing the country millions of pounds every year. Surely we are trying to make savings across all government departments.

Measures against discrimination on the grounds of race, sex and physical disability are clearly necessary and, if anything, the law should be strengthened in

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these areas. Obviously, there must be laws to redress and compensate employees who have been dismissed or treated unfairly, but charges of discrimination are much too subjective and open to interpretation. For instance, as regards age, I am over 70 and in many situations I expect to be discriminated against. Who would want to employ me if a vigorous, enterprising man of 40 was the alternative?

Employment law, as it stands, is quite hard enough for small businesses to comply with. Will the Government consider dismantling or at least revisiting the laws on discrimination to at least make them more sensible? It could save the country a lot of money.

4 pm

Baroness Thornton (Lab): My Lords, I welcome the opportunity to look at the legislation which underpins our equality practices in the UK. I would say to the noble Earl that I see myself as discriminating. I do not see that there is a problem with the use of the word, and I am not quite sure what other word one would use in these circumstances.

It is against the law to discriminate against anyone because of their age, being or becoming a transsexual person, being married or in a civil partnership, being pregnant or having a child, disability, race, including colour, nationality, ethnicity or national origin—and, I hope, caste at some point—religion, belief or lack of religion or belief, sex and sexual orientation. These are called protected characteristics. You are protected from discrimination at work, in education, as a consumer, when using public services, when buying or renting property or as a member or guest of a private club or association. These protections from discrimination are covered by the Equality Act 2010. I cannot think which of those the noble Earl would suggest that we should get rid of because it seems to me that all of them can be justified in different ways.

Discrimination can be direct or indirect, which involves putting rules or arrangements in place that apply to everyone but which put some people at an unfair disadvantage, or it can come in the form of harassment or victimisation. It seems to me that those anti-discrimination provisions are all perfectly legitimate.

The law protects you against discrimination at work, including discrimination in dismissal, employment terms and conditions, pay and benefits, promotion, training, recruitment and redundancy. If you are disabled, you have to have the same rights as other workers. It seems to me that in a civilised society one needs these provisions to underpin the rights of employees. You are also protected from being treated unfairly because of trade union membership or the provisions of a fixed-term contract or as a part-time worker.

I had a small business for about eight or nine years before I became a Minister in the previous Administration. Running that business was a very happy period of my life. I never employed more than nine or 10 people, quite a few of whom were young women, so I did deal with two lots of maternity leave and with disciplinary issues from time to time, and I even parted company with one of my employees over that period. All of that was done in accordance with the legislative framework covering employment, maternity rights and so on.

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I did not find any of that difficult. A lot of advice is available from different sources, including government agencies, telling employers how to deal with these issues.

If you are going to employ people, it seems to me that you have to make sure that you understand what your responsibilities as an employer are. I suggest that good and sensible employers have nothing to fear and, indeed, should take pride in the good staff relations that being a good employer brings, as well as benefits to the bottom line such as lack of staff turnover and harmony within the workplace. It is obviously very difficult to part company with an employee, but there are clear procedures and steps that you take in doing that. So long as you follow the procedure, the outcome is usually the one that you are seeking as an employer. I am not quite sure what the noble Earl wishes would happen. None of these things is easy but they are all quite doable.

I have some questions about employment tribunals for the Minister, which I have warned her about. In a way, I am returning to the issues that I raised yesterday in Question Time. Since July 2013, workers who have been sexually harassed, sacked because of their race or bullied because of their sexuality are forced to pay £1,200 for their claim to be heard by an employment tribunal. Those seeking to recover unpaid wages or holiday pay have to pay £390. The introduction of these fees has had a devastating impact on people’s access to justice in employment tribunals. It is slightly ironic that the noble Earl has raised the issue of the waste of money and the use of employment tribunals. I am not happy about this, but he might be happy to hear that the latest figures show that there has been an 84% drop in the number of people going to employment tribunals. That is not good because it means that lots of people are being deterred from seeking justice in unfair situations by these fees. I asked the Minister yesterday whether the Government will recognise that this is inherently unfair and discriminatory and that it is a policy they should think about reversing.

It is not only to do with employment, but also with other claims of discrimination. These are figures from the Ministry of Justice. During the first three months of 2014, the number of race discrimination and sexual orientation claims fell by 60% compared with the same period in 2013. Disability claims have experienced a 46% year-on-year reduction. That means that there are hundreds of people with disabilities and people of colour who think they have been discriminated against or harassed at their place of work who are deterred from taking action because of the charges. I ask the Minister what the Government are going to do about that.

The Earl of Glasgow: I am not against employment law, which I think is quite sensible. I was wrong, because it was a bit of employment law that I did not understand. I now understand it and I will never do that again. That is not what I was saying. It is the fact that someone can make claims for discrimination, as the person in my case did. Her lawyer was advising her to get more money, because she could get a lot more money from me if she claimed that she had been

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discriminated against. I thought the way that that was handled was extremely unpleasant. It was a very nasty episode in my life.

Baroness Thornton: I absolutely accept that it is unpleasant, but if somebody feels that they have been discriminated against, it is their right to seek redress. The fact that the case was not proved means that the law is working.

4.08 pm

Baroness Garden of Frognal (LD): My Lords, I thank my noble friend Lord Glasgow for calling today’s debate on discrimination, with particular reference to employment law and tribunals. Eradication of discrimination in this country remains a priority for this Government, as I shall set out.

First, I would like to explain for the benefit of the Committee that, subject to certain exceptions, discrimination is prohibited in the Equality Act 2010 where it occurs because of a person’s protected characteristic. The protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. As my noble friend pointed out, the 2010 Act brought together and strengthened a raft of equality legislation that had built up over time, beginning with the race and sex discrimination Acts of the 1960s and 1970s. Protection generally applies across a number of fields, notably employment, the provision of services, and the exercise of public functions, schools and transport.

The Government have added further protections since 2010, chief among them the introduction of provisions for the marriage of same-sex couples. In October 2012 we also brought in the prohibition on age discrimination in the provision of goods, facilities and services. Unusually, neither of these initiatives was required under EU law, but most of the protections in the 2010 Act are and implement either an equal treatment directive or a decision of the Court of Justice of the European Union.

As with other employment laws, the 2010 Act’s provisions, as they relate to the field of employment, are enforceable at an employment tribunal where attempts at non-judicial settlement have failed. I note my noble friend’s attempt to settle his case through non-judicial means. A party losing at a tribunal has the option to appeal the decision to the Employment Appeal Tribunal. Fees are now charged for lodging cases at a tribunal but if an appeal succeeds, the tribunal may order the employer to refund the fees as well as pay compensation to the claimant.

My noble friend mentioned a suggested award of 10 times the claim if discrimination had been proven, but while that might have been the claim it would have been fairly exceptional for a discrimination award. Most awards are still in the hundreds or very low thousands of pounds. Nevertheless, the level of compensation in discrimination cases is in theory unlimited. This is a requirement under EU law, since any statutory capping of compensation means that victims of discrimination do not have an effective remedy.

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When considering cases of alleged discrimination, employment tribunals will therefore have regard to the Equality Act 2010. The Act includes a number of key provisions which together define “discrimination” for the purposes of that legislation. For the purpose of this debate, I will talk briefly about the definition of “direct discrimination” in the 2010 Act. Section 13 defines direct discrimination as the “less favourable treatment” of a person because they have one or more protected characteristics.

Following EU directives and a ruling by the European Court of Justice, this definition of direct discrimination is now broad enough to cover cases where the less favourable treatment happens because of a person’s association with someone who has one or more protected characteristics; for example, where a person is treated less favourably because they are associated with someone who has a disability. This definition also covers situations where people are wrongly thought to have a protected characteristic; for example, where a person is not offered a job because they are wrongly thought to be gay.

I appreciate that my noble friend might have concerns about the breadth of the legal definitions of discrimination, but I have to say that the Government fully support the approach of the 2010 Act, since a narrower definition would exclude from protection people who really ought to be protected. We have, however, been discriminating—as opposed to discriminatory—in our approach to the Act. As I have mentioned, we have implemented most of the Act, including one or two key protections, such as that against age discrimination in the provision of goods and services, in the past couple of years. At the same time, we have sought to protect employers and businesses from excessive regulation by repealing or leaving uncommenced some unnecessary, outdated or otherwise unsatisfactory provisions in our drive for better regulation.

My noble friend may also be concerned about legal costs and a burgeoning legal industry around discrimination claims, but I have to say that this is not borne out by the recent statistics, which show that disability discrimination claims in the first quarter of the current year fell by 31% compared with the first quarter of last year. Indeed, as the noble Baroness, Lady Thornton, pointed out, a general and significant fall in claims of 59% since 2012-13 for all employment claims, including discrimination, has clearly been one of the key developments in this area of litigation during this Parliament. It is attributable to a number of factors; namely, better compliance by employers and a major drive towards encouraging pre-hearing settlements through the involvement of ACAS in every claim—as well as, no doubt, the introduction of a fee structure.

I hear what the noble Baroness says about her concerns that fees are pricing claimants out of the justice system. The Government believe that it is reasonable to move away from employment tribunal funding being largely provided by the taxpayer towards a more balanced process, where the £74 million cost of administering claims to the employment tribunal system are met in part by those who use and benefit from the system. However, the Government are being very careful in

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ensuring that fee waivers are available for people of limited means so that they are not excluded from seeking redress in tribunals. The Government have committed to reviewing the introduction of fees and are currently considering the scope and timing of the review, and we will bring forward our plans in due course. I hope that provides some reassurance to the noble Baroness.

Whatever weight one gives to each of these factors, it can no longer be claimed that employers are being subjected to an ever-increasing volume and array of discrimination claims to the benefit of lawyers. The nature of the law has remained the same but the litigation arising from it and the claims confronting employers as a result of it have been substantially reduced.

I turn now to some of my noble friend’s specific questions. Why cannot discrimination be more precisely defined? The UK definition of discrimination is largely dictated by European measures such as the treaties and various directives. It is not for the Government to define discrimination. This has already been done by Parliament and it is now for the courts and employment tribunals to apply the statutory definition of discrimination to the facts of the different cases they hear. It sounds as though that was done in my noble friend’s case, but obviously not until after a quite long and lengthy business.

My noble friend asked about employees abusing the discrimination laws by making vexatious and frivolous discrimination claims. Anyone who feels that they have been wronged is entitled to make a claim. Whether they will be successful is a matter for tribunal judges to decide. However, as I have mentioned, the latest statistics show that there has been a sharp decrease in the volume of cases brought before employment tribunals. Among other factors, this fall can be attributed to the impact of mandatory conciliation. This was introduced in May 2014 and will probably help a great number of small employers in the position that my noble friend found himself in.

My noble friend also mentioned the hiring or firing of pregnant women. In the case he quoted, surely the outcome for the woman is the same. Whether she is taken on or whether she is fired, the result is that she is deemed not to be employable when she is pregnant. That is one of the things we have tried to move away from in the laws that have been introduced.

My noble friend claims that the compensation award for successful discrimination cases is too high.

Baroness Thornton: The noble Baroness is absolutely right on the point she has just made. Many years ago I was in charge of the CABs in north London and I was looking for a Spanish speaker to work in the Paddington law centre. The best candidate was a six-month pregnant Chilean woman. I gave her the job because she was the best candidate and I believed that she would not have put herself forward if she did not think she could manage that job and having a baby. You know what? She was brilliant.

Baroness Garden of Frognal: There we are. Thank you very much for that. My noble friend and I are both Liberal Democrats, a party with a long-standing

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commitment to equality, a proud record of tackling inequality and of trying to face up to discrimination in the past. We strongly support the need for the law to defend the rights of all citizens to play a full part in an increasingly global society, whether or not they are pregnant, as the noble Baroness said.

My noble friend has raised a difficult case which merits airing. I hope this clarifies for him, to some extent, the Government’s position on the definition of discrimination. If he had a similar case again now, the mediation and the other factors would perhaps result in a happier conclusion at an earlier stage for him.

The Earl of Glasgow: It was a happy conclusion.

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Baroness Garden of Frognal: It was a happy conclusion but it was not a happy process. I hope the process has now been improved.

The operation of employment tribunals which hear discrimination cases is of great importance and the Government seek always to strike the right balance between the rights of claimants on the one hand and those of employers such as my noble friend on the other.

I again thank my noble friend for bringing this debate forward and the noble Baroness, Lady Thornton, for her contribution. I hope we have brought clarity to this matter.

Committee adjourned at 4.19 pm.