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Lord Mackay of Ardbrecknish: If that was an intervention before I sat down, I understand my noble friend's scenario. However, I believe that the noble Lord, Lord Marsh, has a later amendment which deals

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with the situation. By the time we reach it I may be able to make comments to my noble friend about the matter of a loan and how one would define it.

Lord Marsh: One needs to read the Minister's reply. As the noble Earl has just said, the whole basis and thrust of the arguments is that the industry is cyclical. The downturns do not place at risk well run pension funds; they never have done and never will. It is important to enable the pensioner to be protected against the depredations of the incompetent and the downright criminal. Therefore, we must cover the broad brush situation.

However, the burden upon industry and companies at times is so enormous that it makes sense not to seek some theoretical balance but to ensure that flexibility is available which enables the employer to retain the cash. He effectively only puts it in as a bridging loan and it will not be called in 99.9 per cent. of cases anyhow. We shall come in a moment to the argument of allowing him to take it back. Any opportunity for him to do that makes sense. The alternative is that British industry in general will suffer. I understand that there are grave anxieties in the Bank, in the CBI and among virtually everyone concerning the potential impact of depriving companies of hundreds of millions of pounds for a time for something which is a cyclical fluctuation and which deprives them of financial backing.

If the problem is one of definition, we all understand that the regulations must be framed in a certain way. It is a pity that so much of the Bill involves regulations because it means that we do not have an opportunity to discuss them. That is a great weakness. If the Bill has to be dealt with in this way, I quite understand that one may suggest different wording and different formulae. However, if a vast organisation is totally solvent and has massive assets but is not allowed to take that into account, then, with the greatest respect, it is a ludicrous situation.

I hope that before the next stage of the Bill the Minister will reconsider the matter. He will continue to receive pressure from many sources on the dangers which are inherent in the Bill. If it is a matter of the definition, he could turn it around. In my view there is no reason why in these circumstances a degree of flexibility should not be available to companies to avoid the pointless transfer of money which they need to make their industries work and for it to sit in a fund for no particular purpose. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 145YK and 145YL not moved.]

The Deputy Chairman of Committees (Viscount Davidson): If Amendment No. 145YM is agreed to, I cannot call Amendment No. 145YN.

Lord Eatwell had given notice of his intention to move Amendment No. 145YM:

Page 30, leave out line 14.

The noble Lord said: I wish to suggest to the Minister that in his search for balance with respect to the funding and the provision to make up the minimum solvency

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requirement, he has gone too far in referring to the possibility of ring-fenced assets. So far as I can tell, there is no way of ring-fencing assets other than to put them into a trust. What does the notion of "ring-fenced assets" mean? Cash, we understand; bank guarantees, we understand. I am sure that on mature reflection the Minister will find that ring-fenced assets are not a satisfactory approach to the problem. I leave the point for the Minister to mull over. I shall not move the amendment.

[Amendment No. 145YM not moved.]

[Amendments Nos. 145YN to 145YQ not moved.]

Clause 53 agreed to.

Lord Lucas: I beg to move that the House be now resumed. In moving that Motion, I suggest that the Committee stage begin again not before 8 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Sex Discrimination Regulations: Armed Forces

7.16 p.m.

Lord Lester of Herne Hill rose to move to resolve, That this House calls on Her Majesty's Government to revoke the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 (SI 1994, No. 3276), and to make in their place regulations which are fully in compliance with and give full effect to European Community law, by prescribing only such derogations from the Community principle of equal treatment for men and women in employment as are in accordance with Council Directive 76/207/EEC; and by repealing the blanket derogation in Section 1(9) of the Equal Pay Act 1970, so as to ensure and maintain the Community principle of equal pay for equal work for men and women serving in the naval, military and air forces of the Crown.

The noble Lord said: My Lords, before coming to the business in hand perhaps I may deal with two preliminary matters. First, my noble friend Lady Williams of Crosby had hoped to speak in the debate. However, she has asked me to apologise to the House for her absence; her daughter is being called to the Bar this evening and although lawyers are not popular in all parts of the House, I am sure that your Lordships will think that it is an important reason for her to be absent.

Secondly, I should make it clear that this is a topic on which my party does not take a collective position, I speak for myself. Thirdly, I am glad to have the opportunity to introduce the Motion. It is the only means by which the House can perform its important function of scrutinising subordinate legislation, subject to the negative resolution procedure, to do its best to ensure that it achieves its object. In this case, that is properly to implement European Community law.

On 20th December, hastily and, I am afraid, without consultation, just before the Christmas Recess, the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 were laid before the House. They

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were laid under the powers conferred by the European Communities Act 1972 to give effect to the European Community principles of equal treatment in employment and of equal pay for equal work, without sex discrimination.

The fact that the Government have at last introduced implementing regulations is welcome. Unfortunately, however, I believe that the regulations lack clarity and transparency. Far from removing, they create legal uncertainty and they fail to achieve their purpose of giving proper effect to Community law.

To explain what I mean, I must briefly describe the statutory scheme governing sex discrimination in employment and equal pay. I shall try to do so avoiding legal jargon, but I shall probably fail.

The Sex Discrimination Act 1975 makes sex discrimination unlawful in the employment field. Until amended by these regulations, Section 85(4) contained a blanket exception for service in the naval, military or air forces of the Crown. Section 85(5), which is unaffected by the regulations, still permits sex discrimination in admission to cadet forces administered by the Ministry of Defence.

The other statute, the Equal Pay Act 1970, requires equal pay for equal work without sex discrimination. But Section 1(9) excludes from its scope service in the Armed Forces. Therefore, it is not lawful under the present statutory scheme to deny women employed in the armed services equal pay for equal work. I emphasise that Section 1(9) is untouched by these regulations. The principle of equal pay for equal work, guaranteed by Article 119 of the Treaty of Rome and reinforced by the Equal Pay Directive, contains no such exception. Therefore, I submit that there is a continuing mismatch between the British statute book and Community law.

I turn now to Council Directive 76/207/EEC which came into force as long ago as 9th August 1978. That guarantees the principle of equal treatment without sex discrimination as regards access to employment, including promotion, and to vocational training, and as regards working conditions. Article 6 obliged the member states to introduce into their national legal systems the measures necessary to enable everyone to pursue their claims by judicial process. Article 5(2) obliged the member states to abolish any laws, regulations and administrative provisions contrary to the principle of equal treatment.

Article 2(2) is the key derogation clause. It says that the directive is without prejudice to the right of member states to exclude from its field of application those occupational activities and, where appropriate, the training leading thereto, for which, by reason of their nature or the context in which they are carried out, the sex of the worker concerned constitutes a determining factor.

The European Court of Justice—I hope that I shall be forgiven for mentioning briefly a few of the landmark points —gave an authoritative ruling on the scope of that derogation in a case called Marguerite Johnston v. Chief Constable for the Royal Ulster Constabulary in 1986. The Court there laid down the following important principles. First, that member states must take

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measures which are sufficiently effective to achieve the aim of the directive. Secondly, that Article 2(2), being a derogation from an individual right laid down in the directive, must be interpreted strictly. Thirdly, that in determining the scope of any derogation from the right to equal treatment of men and women the principle of proportionality must be observed. That principle requires that derogations remain within the limits of what is appropriate and necessary for achieving the aim in view. Fourthly, the only provisions in the treaty which provide for relevant derogations, including Article 224, the Court said, deal with exceptional and clearly defined cases. Because of their limited character, those articles do not lend themselves to a wide interpretation.

I should explain to your Lordships, even though it is dull to have to do so, that Article 224 of the Rome Treaty is a quite exceptional derogation clause, catering for extreme circumstances. It states:

    "Member States shall consult each other with a view to taking together the steps needed to prevent the functioning of the common market being affected by measures which a Member State may be called upon to take in the event of serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security".

Therefore, it is not surprising that the Court of Justice rejected the British Government's reliance in Johnson on Article 244 of the treaty to justify discriminating against women members of the RUC full-time reserve on the basis of their gender, even in the quite terrible conditions of emergency and terrorism then prevailing in Northern Ireland. As the Court made clear, Article 224 is not a general escape clause permitting states to infringe the fundamental right of women to equal treatment. What matters is that a state can bring itself within the derogation clause in Article 2(2) of the directive which permits sex discrimination only where there are particular occupational activities, and, where appropriate, the training leading thereto, for which by reason of their nature, or the context in which they are carried out, the sex of the worker concerned constitutes a determining factor.

In another case, this time against France—Commission v. France in 1988—the Court held that it follows, from the fact that the exceptions provided for in Article 2(2) of the directive may relate only to specific activities, that they must be sufficiently transparent.

Finally, in another case—Emmott v. Minister for Social Welfare in Ireland in 1991—the Court of Justice decided that, so long as a directive (in that case guaranteeing equal treatment in social security) has not been properly transposed into national law, individuals are unable to ascertain the full extent of their rights. Only the proper transposition of the directive, said the Court, will give the necessary legal certainty. Until such time as the directive has been properly transposed, a defaulting member state may not rely upon an individual's delay in bringing proceedings against the state to protect rights conferred on her by the directive; and national time-limits cannot run unless and until

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there has been proper transposition of the directive into national law. That is a heavy sanction against a defaulting state.

Let us now leave aside the legal framework. In December 1991, two former servicewomen, both nurses, for whom I acted as counsel, obtained declarations from the Divisional Court that their exclusion from the scope of the Sex Discrimination Act was contrary to the directive and that the long-standing policy and practice of dismissing all pregnant women from the Armed Forces breached the directive. That put the Government on notice that servicewomen and men could not be excluded wholesale from the protection of the Sex Discrimination Act and that the statutory exclusion could not stand in its present form. Most unfortunately, for the past three years the Government have done nothing to give effect to the decision by introducing implementing regulations. As a result—I hope that I shall be forgiven for this criticism—they have undoubtedly caused themselves and the British taxpayer, which is more to the point, readily avoidable problems and expense.

What has happened meanwhile? Several thousand women who had been dismissed from the Armed Forces because of pregnancy brought proceedings in industrial tribunals claiming compensation. The ministry admitted liability in all the claims but sought to dispute the quantum of damage, as is its right. Claims are still proceeding in industrial tribunals nationwide.

The ministry estimate that those claims have so far cost it and the taxpayer some £35 million. One reason why that figure is so high is that the ministry is liable to pay compensation to every woman dismissed because of pregnancy between 9th August 1978 (when it should have implemented the directive) and the summer of 1990, when maternity leave was finally introduced for servicewomen. In other words, the ministry had maintained an unlawful sex discriminatory policy for 12 years and thereby blighted the careers of over 5,000 women.

Some 80 per cent. of the cases have been settled, for an average of about £10,000 each. A few of the awards have been very high and that has attracted considerable adverse comment in hostile elements of the media. Those few awards are high because the women concerned have been able to demonstrate that they have been deprived of lengthy and successful careers because of the unlawful actions of the Ministry.

Perhaps I may give just two examples to serve for all. Nichola Cannock was commissioned into the WRAF. She was a mechanical engineer who in the early 1970s had obtained a degree in engineering at a time when almost no women were qualified in that way. While in the WRAF, she was involved in a senior capacity in servicing aircraft taking part in the Falklands campaign. She served on Ascension Island, where special accommodation had to be provided for her because she was the only woman engaged on that job. She became a specialist in the servicing of Tornado fighters. After some nine years of service with the WRAF, she became pregnant and her employment was terminated. Her damages were very substantial because the industrial

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tribunal accepted that she was a career woman of great ability and dedication and that she would have served to the end of her 16-year commission if she had been permitted to do so. At that time she would have been entitled to an immediately payable index-linked pension. There is no civilian employment which could have provided her with equivalent benefits.

Alison Mutton was serving in the WRAC. Her husband left the Army and took various jobs as a driver. She was the primary bread-winner, and she and her husband lived in married quarters that were in her name, which they were entitled to occupy solely by virtue of her service. She became pregnant and was informed that she must choose between the termination of her pregnancy and the termination of her service. She realised that, if she were dismissed, she and her husband would lose their home. They would not be able to remain in Oxfordshire where they were posted because they had nowhere to live, and would have to live with his parents in the north of England. Therefore, her husband would also become unemployed and they would be reduced to living with their in-laws. She decided to have the abortion, and did so at great personal cost.

The following year, as a result of a failure of contraception, she became pregnant again and decided to have a further abortion for the same reason. She went to the hospital and saw the baby move on the scan and realised that she could not go through with the termination. She therefore had the baby, and the consequences which she feared materialised. Within a matter of two weeks she and her husband were reduced from a situation in which they had had two incomes and a home to one in which they were both unemployed, she was pregnant and they were living with his parents in an area of high unemployment. Their marriage was unable to withstand the strain and they eventually separated. She won her case in an industrial tribunal last week, and will receive substantial compensation, probably in the region of £100,000.

The problems of sex discrimination in the Armed Forces are not confined to dismissal on grounds of pregnancy. For example, there is a continuing problem, I understand, about discrimination in redundancy terms under the Options for Change programme. Until 1991, women joining the WRAC were permitted to commit themselves only for a maximum of three years, whereas men joining the Army could commit themselves for three years', six years' or nine years' service. Men who committed themselves to nine years' service were immediately paid on a higher scale. Women could not be paid on that scale until they had actually completed their nine years' service. Applications for voluntary redundancy were invited from service personnel with between six and nine years' service. Women who applied for redundancy but had less than nine years' service found that, because they were on a lower pay scale than men with the same length of service serving in the same trade at the same rank, the redundancy payments they were offered were about £6,000 lower than those which were offered to men in an equivalent situation.

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In what respects do these regulations fail to comply with Community law? They permit any acts of sex discrimination done for the purpose of ensuring the combat effectiveness of the Armed Forces. But Community law requires not only the pursuit of a legitimate aim, such as ensuring combat effectiveness; it also requires compliance with the principle of proportionality. The means employed must be no more than is necessary or proportionate to achieve that legitimate aim.

The phrase,

    "for the purpose of ensuring ... combat effectiveness",

is unclear. It is not clarified by any list of the specific occupational activities affected: for example, two personnel being employed in a tank where plainly for reasons of privacy and personal hygiene it would be inappropriate for members of different sexes to share that close confined space. Individuals will not be able to understand the scope and limits of their rights and unnecessary litigation will result.

Nor is there any reason why "combat effectiveness" should of itself require or justify treating servicewomen less favourably than servicemen. What the law requires is that men and women should be treated by their employers on the basis of their individual skills and abilities and not on the basis of broad gender-based assumptions and generalisations. Last year the United States Government decided to open combat jobs aboard ships and in naval aviation squadrons to women. Last week Secretary of State John Dalton provided departmental guidance explaining why pregnancy and parenthood are compatible with a naval career for women. But under these regulations our Secretary of State could discriminate against women with the aim of promoting combat effectiveness.

I suggest that the blanket derogation in the regulations sweeps too broadly. It goes well beyond the derogation permitted by Article 2(2) of the directive. It fails to give effect to the proportionality principle. It also lacks transparency. It is not related to specific activities, so that members and former members of the Armed Forces of both sexes are able to ascertain the full extent of their rights. It does not ensure that members of the Armed Forces are judged on the basis of their individual skills and abilities. And it manifestly falls outside the very exceptional circumstances envisaged by Article 224 of the Rome Treaty.

Because Section 85(5) of the Sex Discrimination Act is unaffected by the regulations, sex discrimination remains permissible in admission to cadet forces administered by the ministry, even where such discrimination is wholly unrelated to combat effectiveness. Because Section 1(9) of the Equal Pay Act is unaffected by the regulations, the principle of equal pay is not properly transposed into our legal system.

The Government will no doubt argue that the wording of the regulations must be broad to enable account to be taken of changing circumstances, as military technology and equipment change. However, I submit that there is no reason why the regulations cannot prescribe a specific list of exclusions which can be readily amended by subordinate legislation. That would achieve the

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necessary transparency and legal certainty, while permitting the necessary flexibility as circumstances change.

For those reasons, I hope that the Government will think again. Otherwise, I fear that there will be unnecessary litigation in our courts and tribunals, and probably in the European Court of Justice, because of the failure by Parliament to use our much-vaunted sovereignty to enact regulations which enable our fellow citizens to know the proper extent of these important rights. Employment lawyers, like myself, will thrive; the victims of sex discrimination will suffer; and the taxpayer will pay for the ministry's failure to introduce the necessary policies and legislation. I beg to move.

Moved, to resolve, That this House calls on Her Majesty's Government to revoke the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 (SI 1994, No. 3276), and to make in their place regulations which are fully in compliance with and give full effect to European Community law, by prescribing only such derogations from the Community principle of equal treatment for men and women in employment as are in accordance with Council Directive 76/207/EEC; and by repealing the blanket derogation in Section 1(9) of the Equal Pay Act 1970, so as to ensure and maintain the Community principle of equal pay for equal work for men and women serving in the naval, military and air forces of the Crown.—(Lord Lester of Herne Hill.)

7.37 p.m.

Lord Tebbit: My Lords, I am grateful to the noble Lord, Lord Lester, for finding a more effective means than the one which occurred to me—that of merely praying against this regulation—to ensure that we were able to debate these issues. I did not wish to interfere with the flow of his argument, but in both his Motion and in what he said, the noble Lord referred to Section 1(9) of the Equal Pay Act. That puzzled me. In my copy of the Act it appears to be Section 1(8). Are we talking about the same thing? It is not an important point and the noble Lord need not answer at this moment, but I raise it for greater certainty.

The House will no doubt be relieved to hear that I shall not argue tonight the merits of sex discrimination legislation. That is not my purpose, neither as it applies to the Armed Forces in particular, nor to society in general. I am concerned, as indeed was the noble Lord, Lord Lester, with the effectiveness, and indeed the vires, of the legislation. It may be helpful, not for the benefit of noble Lords, but for those who may read the debate at some stage, for us to remind ourselves how statutory instruments arise and how they work. I believe that to be important to my argument.

The basic rules containing statutory instruments are set out in the Statutory Instruments Act 1946. It is in Section 1 of the Act that they are defined, broadly speaking—I do not quote from the Act but summarise it—as instruments making, under the power granted in an Act of Parliament, orders, rules, regulations, or subordinate legislation. Quite clearly, this statutory instrument does not fall within that definition. It is not

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making orders or regulations in that manner. It is, in fact, repealing part of an Act and amending substantially that Act.

Of course, statutory instruments have been developed to give such power and particularly where it has been granted in a particular Act to amend prescribed provisions of that Act. There is such provision in the Sex Discrimination Act 1975. But it does not apply to the power to amend Section 85. Therefore, this statutory instrument is made—so it tells us on the face of the paper—under Section 2(2) of the European Communities Act 1972. Confusingly, Section 2(2) has nothing to do with the Article 2(2) to which the noble Lord, Lord Lester, has been referring.

When in the other place I voted for the European Communities Act 1972, I never dreamt that Section 2(2) would be used to amend at the diktat of the European Court the law concerning sex discrimination in the armed services. Clearly, I was not alone in that because subsequently, three years later, Parliament, knowing its own mind, knowing it could not be bound by the legislation of a previous Parliament (or can it these days?) made its intentions crystal clear in Section 85 of the 1975 Act, saying in the broadest terms—terms to which the noble Lord, Lord Lester, objects very strongly but they were very clear—that the sex discrimination law did not apply to anything of this kind in the armed services.

Well, Parliament has been bounced. We have been overridden. And why? Does sex discrimination in the armed services have anything whatever to do with the Common Market, the internal market, or the single market? Is it some form of barrier to trade which prevents BMWs being sold in Britain or insurance policies being sold in Germany? Not at all. It has nothing whatever to do with trade or the free movement of goods, people or capital across the internal borders of the European Community. It is about what should or should not be the rights of members of Her Sovereign Majesty's Armed Forces. That surely is not a matter for a treaty which, we were told, was primarily one concerning trade and economic matters. It must surely be a matter for a sovereign state —either this sovereign state or another sovereign state. It is clear that it is now not a matter for this sovereign state, not a matter for Her Majesty's Ministers or her Parliament, to decide in what manner her Armed Forces should be organised, but it is a matter for another body external to this kingdom, over which the people of this kingdom have no control and no rights.

Just to make all these matters rather worse, the Joint Committee on Statutory Instruments in its Eighth Report—we have before the House as HL Paper 27 an extract from that Eighth Report—casts doubt upon the vires of this statutory instrument, the very point which the noble Lord, Lord Lester, made. It suggests—and it argues it well—that it is simply not within our powers to legislate in this matter. It says that we cannot rely on Article 224 of the Treaty of Rome, nor, I take it, on the

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doctrine of subsidiarity, to give to this Parliament the right to legislate in the way that is proposed and to say, as the statutory instrument purports to do, that:

    "Nothing in this Act shall render unlawful an act done for the purpose of ensuring the combat effectiveness of the naval, military or air forces of the Crown".

If Article 224 does not allow such a provision, is there some other legal basis on which a provision might be made? How do other member states proceed? Have they abolished sex discrimination in its entirety in their armed forces? We are told—I am sure that the noble Lord, Lord Lester, is right—that this matter has been hanging over our heads since 1978. Are the Greeks in line? Are the Spaniards in line? The French, the Germans? No doubt our Danish friends are—they have always had rather extraordinary views about matters of sex discrimination, as I remember from my time in the Council of Ministers. But I would be intrigued to know whether we are being pushed along rather more quickly, even if it does appear rather slowly, than our fellow member states.

I have to say, however, that it may be that we have been cutting any ground on which we might have stood away from under our own feet. After all, the navy has been putting women sailors to sea in operational ships. There are precedents for that. I understand that there were a number of women on board HMS "Victory" at the Battle of Trafalgar. I do not know whether that had anything to do with the scale of the victory—I mean the outcome of the battle not the scale of the ship itself—but undoubtedly they were there in those days. More recently, the Royal Air Force is now training women as fast jet pilots.

But I should like to come away from that gentle edging towards the merits of the matter—I want to try to avoid getting entrapped into such matters of controversy: they do not come easily to me—and back to the vires of the issue. I note also what the joint committee said in the final paragraph of HL Paper 27 concerning the making of this order under the negative procedure. It is worth quoting a little from that paragraph:

    "The Committee notes that these Regulations have been made subject to negative procedure... The Ministry explain their decision to make these regulations subject to negative procedure by saying 'Given the content of the Regulations (which essentially amount to regularisation of the statute book)'"—

I emphasise the words "regularisation of the statute book"—

    "'it was considered appropriate for the negative resolution procedure to apply'. However, the Committee considers that the content of these Regulations is so significant in embodying a policy choice in the formulation of the new exception from the 1975 Act that it would have been more appropriate to have made the Regulations subject to draft affirmative procedure".

That is certainly true, and, indeed, I might like to go further. It is not my intention—and never was when I set down a Prayer—to seek to challenge the convention that this House does not seek to overturn statutory instruments brought under the negative procedure in particular nor that it should reject those under the affirmative procedure, unless there are somewhat exceptional circumstances.

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A marker should be set down and perhaps the joint committee has done so. When statutory instruments go beyond the implementation of the intentions of an Act already approved after due debate in both Houses of this Parliament and, like this one, reverse the effect of a key section of an Act passed by this Parliament, it seems to me that that is scarcely subordinate legislation at all.

This statutory instrument is in fact primary legislation and would have been treated as such but for its provenance; that is, that it comes because of the diktat of a foreign court. If this proposal had been brought forward in the normal manner of reforming legislation there is no doubt whatever that it would have been treated as primary legislation with a proper debate in both Houses of Parliament.

As noble Lords will know, as a result of a Prayer laid by the Opposition in the other place, there was a 90-minute debate in a Committee upstairs at the end of which I believe eight members of that Committee voted to say that they had discussed the regulation and considered it and three voted to say that they had not. That was the extent of the democratic procedures to check on what this major piece of legislation was about and in what manner it should be conducted.

Primary legislation is now to be legislated by a means which restricts debate and prohibits amendment otherwise the noble Lord, Lord Lester, would have put down amendments to such a Bill and they could have been properly and fully discussed.

That leads to me to put a direct question to my noble friend who will answer this debate and for whom I have the greatest sympathy. I feel that he is in an almost impossible position. Let us suppose that this statutory instrument proves to be ultra vires or it is rejected. We know it is not going to be rejected tonight, but let us suppose that it is. Let us suppose that it had been rejected in the other place. What effect would that have on the law which is now being imposed in the United Kingdom? I did not ask what effect it would have on the statute book of the United Kingdom because we now know that that statute book is not the law of the United Kingdom. The law of the United Kingdom is what the European Court says is the law of the United Kingdom.

If the joint committee is wrong and the Government right, we would not even have this fig leaf of protection which is set out in Paragraph 2(a) of the order in the event that we reject it. In essence, these proceedings this evening—rightly taken during the dinner hour because the taking of dinner must surely be more important than the consideration of a trifling matter like the operation of sex discrimination within Her Majesty's Armed Forces—are nothing more than a farcical reminder of a very unpleasant fact. This Parliament is no longer a sovereign body. It no longer has the power to legislate on matters which are concerned solely with the management, leadership, effectiveness and good order and discipline of Her Majesty's Armed Forces. How much more is there left for us?

7.54 p.m.

Lord Williams of Elvel: My Lords, I shall not take up much of your Lordship's time because most of the

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arguments that I had in mind to deploy have been deployed either by the noble Lord, Lord Lester, or by the noble Lord, Lord Tebbit.

The major issue here is that of vires and hence the legality of what the Government have done, because this order is now part of the corpus of law. When the Minister comes to reply he will no doubt comment on the report of the Joint Committee on Statutory Instruments. Our view is that the Joint Committee is broadly right that the Government cannot rely on Article 224 of the Treaty of Rome as authority to introduce the order specifying "combat effectiveness" in the terms of the order. Our view is that Article 2.2. of the Equal Treatment Directive does not give the Government power to make this derogation and that therefore it has to be made under some other principle which no doubt the noble Lord will explain to us.

Our view is that the expression "combat effectiveness" in the order, as the noble Lord, Lord Lester, said, goes very much wider than the derogation which is allowed in Article 2.2. of the directive. It is clear from that that the only form of allowable discrimination is contained in the provisions of the Sex Discrimination Act 1975 and that is genuine occupational qualification. That is when, for physical or other reasons, it will not serve for the two sexes either to be jointly in an operation or together in a particular capacity. I believe that those points have been made by the noble Lords, Lord Lester and Lord Tebbit, and I am not going to elaborate on them.

I have only two other points to make. I believe that there are further omissions in the Government's approach which the directive would normally require. For instance, under Section 85(5) of the Sex Discrimination Act recruitment to military cadet forces is excluded from the ambit of the sex discrimination provisions. I believe that to be contrary to the Equal Treatment Directive. I ask the Minister to comment on that.

Then there is protection from victimisation. The Equal Treatment Directive is perfectly clear that if someone complains of discrimination they should be protected. At the moment that does not seem to appear in legislation even as amended by this order. As regards equal pay, there appears to be an omission because, as I understand it—and I stand to be corrected by the noble Lord, Lord Tebbit—under Section 1(9) (a) of the Equal Pay Act, if a member of the Armed Forces believes that the Secretary of State has not met the principle of equal pay set out in Section 7(1) of that Act, he is not entitled to complain, but an ordinary employee is entitled to complain to the Secretary of State. Again, it is likely that that exclusion violates the Equal Treatment Directive. I hope that the Minister will deal with that problem.

In sum, it seems that there is justification for the Joint Statutory Instruments Committee casting very considerable doubt on whether the Government have the vires to do what they have done. I echo the point may by the noble Lord, Lord Tebbit. If challenged, what happens if the courts overturn this particular order? What happens to our general legislative principle then? If Article 224 is the authority for this order, as the noble Lord, Lord Lester, indicated in reading out that article

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in the treaty, member states shall consult each other. Did member states consult each other about the order which we are now discussing or did the United Kingdom act unilaterally?

There are serious doubts about this whole operation. I want to emphasise to the Minister that we certainly believe that we should have combat effectiveness and nothing which I have said casts any shadow of doubt on that principle. It may well be that many women do not want to undertake the risk of combat. The same is true of many men. If they do not wish to do so, they should not volunteer to join the Armed Forces. That seems a simple matter. If they do volunteer, they must expect to be in combat situations. There is no difference between the front line and the second line in modern technological warfare, as was shown by the death of several US women in the armed forces in the second line when they were struck by a Scud missile.

So, where does that get us? Either the Government can justify the vires and can say that they fulfil the terms of the equal treatment directive, or we shall have to say that the Government are wrong and, as the noble Lord, Lord Lester, said, they will be proved wrong. And when they are proved wrong, that will be of great benefit to the noble Lord, Lord Lester, but, as he rightly pointed out, to the great detriment of the taxpayer.

8 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, let me try to respond to the points that have been raised and let me hope that I can respond reasonably briefly. First, perhaps I may remove any misunderstandings about the aim of the regulations which were laid before the House in December and which came into effect six weeks later on 1 February. They remove the complete exemption of the Armed Forces from the provisions of the Sex Discrimination Act 1975 which the noble Lord, Lord Lester will know well—an exemption which has proved to be inconsistent with European law—and replace it with the provision that nothing done for the purpose of combat effectiveness shall be unlawful under national law.

I must stress that it is not our intention to use the regulations to place further restrictions on the areas where women can be employed in the Armed Forces. Indeed, our policy on the employment of women is moving in quite the opposite direction. I should like to say a little about that later.

Following the remarks of the noble Lord, Lord Lester, and others and the comments of the Joint Committee on Statutory Instruments, which were rightly stressed by the noble Lord, Lord Williams, I think it would be right if I said a little about the vires of the regulations and why we consider them to be intra vires. I stress that the committee said only that there was a doubt as to whether the regulations were intra or ultra vires. I should like to make our position clear.

As we set out in our memorandum to the joint committee, the essential point is that Article 224 of the treaty, which has been referred to on many occasions, is

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evidence that the treaty does not extend to action taken by a member state to ensure the combat effectiveness of its armed forces. An alternative way of putting the argument is that while certain aspects of such measures might in principle affect some matters that fall within the treaty, a member state is entitled to rely on Article 224 in order to preserve the prerogative of that state to protect its national security.

Article 224 of the treaty contemplates a member state taking measures in a number of specified events. Of particular relevance to the regulations, two of those events are war or serious international tension constituting a threat of war. Article 224 is written on the assumption that the antecedent treaty obligations do not restrict the power of the member states to take action in any of the events described therein.

As I am sure the noble Lord, Lord Williams, will accept, in order to be in a position to take action in relation to war or the threat of war, a member state must be free to organise, recruit and train its armed forces in the manner it considers best calculated to ensure the combat effectiveness of those forces. If that involves a limited departure from the principle of equal treatment, that is a matter for the member state and is beyond the scope of the treaty and any directives made thereunder.

As to the Johnston case, which was referred to in the committee's report and by the noble Lord, Lord Lester, I believe that the court's decision in that case is complex and in places difficult to follow. I should stress that it involved the civil police, not the Armed Forces, and even in that context did not answer the question that was referred to it on Article 224. In so far as the judgment can be interpreted as suggesting that reliance cannot be placed on Article 224, we would not expect the court to maintain that position in the context of the defence of a member state. It should also be noted that the Joint Committee on Statutory Instruments also concluded that the Johnston case might not be followed by the European Court in the context of the defence of a member state.

Our memorandum also makes clear that the ministry would be able to rely on the expressed derogation from the principle of equal treatment contained in Article 2(2) of the equal treatment directive to which the noble Lord referred. The approach which the ministry has taken to new Section 85(4) is consistent with the terminology used in Part V of the 1975 Act. I refer in particular to Section 52 which provides that nothing in the earlier parts of the 1975 Act renders unlawful an act done for the purpose of safeguarding national security. Indeed, it might well have been possible for the ministry simply to have relied on Section 52(1) and repealed the old Section 85(4). It was, however, considered desirable to make the position in relation to combat effectiveness clear by inserting new subsection (4). As the ministry's memorandum made clear, where the ministry proposes to depart from the principle of equal treatment in order to ensure combat effectiveness it would be because of the nature of the activity in question and the context in which it will be carried out. The ministry will accordingly, as a matter of principle, be squarely within the derogation in Article 2(2).

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I should respond to the committee's views on the use of the negative resolution procedure, which was referred to by my noble friend Lord Tebbit. Given the content of the regulations which, I would argue, essentially amount to regularisation of the statute book, the ministry considered it appropriate to use the negative resolution procedure. That was consistent with previous practice. The sex discrimination and equal pay remedies regulations of 1993, which amended the 1975 Act, using the same powers under Section 2(2) of the 1972 Act, were also made using the negative procedure. The ministry had considered that a substantial change was being made to the existing legal position by the regulations and would carefully have considered the use of the affirmative procedure. But we believe that that is not the case with these regulations.

It has been suggested by the noble Lords, Lord Lester and Lord Williams, that the wording of the regulations is too broad and that we should have specified those areas where the nature of the activity makes it inappropriate for one sex or another. I believe that it would be quite impractical and totally unnecessary to do this on the face of the legislation—or for that matter in regulations. The wording is deliberately broad. It needs to be to take account of changing circumstances both now and in the future. Military technology and equipment changes. Society's attitudes change. If there were a specific list of exclusions, we would have to resort to legislation every time we wished to amend it.

Perhaps I can give just one example: the employment of women on ships. That has grown dramatically over the past few years. I stress to the noble Lord, Lord Lester, that something of the order of 700 women in the Royal Navy are now serving at sea. We were certainly ahead of the United States, to which the noble Lord referred, in taking that step. I think everyone will agree that it has been an enormous success, despite considerable misgivings at the time and considerable fears, particularly among the wives of those serving at sea who had been left back at home—and despite the misgivings of some of the tabloid press. I believe that if we had drawn up a list allowing that to be one of the areas into which women could go and it had not been a success, to have had to come back and make a small amendment and then another amendment a few weeks later would not have been the right way forward.

I wish to refer briefly, in response to the noble Lord, Lord Williams, to consultation under Article 224. If the noble Lord looks at the wording of Article 224, he will see that it is quite clear that on an issue such as this, which is not related to the Common Market and such matters, consultation is not appropriate.

Perhaps I may briefly remind the House, as I said I would, of the role of women in the Armed Forces. Servicewomen have always undertaken a wide range of duties, although they did not serve in combat roles. I am sure that all noble Lords would wish to pay tribute to the valuable contributions made by women in the Armed Forces over many years. Indeed, in order to make fuller use of the undoubted abilities of women in the services and to improve their career opportunities, new areas of employment have been opened up to them in recent

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years. Over 20 women are serving as aircrew in the three services and more than 50 others are undergoing training, including training in fast jets.

As I said earlier, about 700 women are serving at sea in the Royal Navy. That is way ahead of America where women were prohibited from serving on naval ships except hospital ships. The case referred to by the noble Lord, Lord Lester, was ruled to be illegal by the American courts. As all noble Lords will know, women are serving with the UN forces in Cyprus and the former Yugoslavia and in ships patrolling the Adriatic.

Other than normal considerations such as privacy and decency, which of course apply also in civilian life, we expect that women will not be excluded from posts in the Armed Forces except where their presence would impair combat effectiveness. It is important that I define what we mean by "combat effectiveness". I mean the ability of a unit to carry out its missions and operations successfully. Obvious examples, which are likely to continue to be for males only, include the infantry and armoured corps. But the Army and other services are keeping those matters under review and are at present looking into means of gender-fair physical testing. We recognise fully the importance of ensuring the maximum equality of opportunity consistent with the maintenance of combat effectiveness.

I shall do all I can, as will my colleagues in another place, to keep this House and another place informed of any further developments, but we are not making any immediate changes. Nor do the regulations require us to do so. There have been suggestions—made outside the House—of reduced opportunities for women in the Armed Forces. I give the House the firm assurance that the general effect of the changes will be towards a further improvement in the overall opportunities for women in the services.

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