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Baroness Hollis of Heigham: The same—

Lord Mackay of Ardbrecknish: I wish I could finish my sentences.

Baroness Hollis of Heigham: We are trying to stop the Minister from falling even further into error and are trying to be helpful. The same point was made on the previous debate when we on this side of the Chamber used the same figures in relation to the CBI. The Minister sought to answer the point then. Therefore, not only did he mishear his noble friend, but he forgot what he said the first time round.

Lord Mackay of Ardbrecknish: I remember what I said and I believe I understood what I said. I mentioned the fact that the Federation of Small Businesses supports the exclusion of small firms. I felt that that was slightly better ground on which to stand than praying in aid the CBI which, as we have all agreed, does not incorporate all that many individual small member firms. As my noble friend rightly pointed out—I concur with him—most of the small firms counted in the 50 per cent., which is claimed by the lobby in relation to the CBI, are only indirect members of the CBI through trade associations. As long as we are all clear on that, perhaps I can carry on.

Baroness Seear: I am afraid the Minister seems to be having a bad time. However, I am amazed that he makes such a meal of the fact that the Bill will be difficult to understand. The Bill says that in taking on a new employee one must not discriminate because that person is disabled. I would lay a wager that the small employer who the Minister sees at the weekend—and whom he is afraid to meet this coming weekend—could have the Bill explained to him in 10 minutes flat. He would not have the slightest difficulty in understanding what he must do. Where is the difficulty? I agree that some legislation drives all employers, small and large, absolutely dotty, but this is straightforward. What is the difficulty?

Lord Mackay of Ardbrecknish: The difficulty is twofold. It is not as easy as the noble Baroness makes out. There is the qualification that the employer must not discriminate. However, there is also the fine tuning that he can discriminate if employing a person would mean adjustments to his firm that were not reasonable in their cost. Therefore, other aspects are involved bar the simple statement that he must not discriminate against disabled people. I hope everybody will think about that; it is the qualification that adds to the complication.

While I may explain the Bill to my friend this weekend, it may be some months before he is interviewing and employing or replacing an employee. That must be borne in mind. In any case, it is our view and that of the

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Federation of Small Businesses, that this is a reasonable line to draw. In a few minutes I shall explain how we will be prepared to review it in four years and then come back to the House in five years' time. At that stage, if it is the view of your Lordships and the Government, I have little doubt that under the powers in this clause we shall be able to reduce to whatever figure it is decided is reasonable. For the moment, we would like to keep it where it is.

I said to my noble friend that I should like to check the question he asked in regard to a company breaking itself up or being part of a group. I answered him but indicated that I would write to him if I was wrong. I can do better than that. I can say that I probably got that wrong. Each individual company within a group is a separate employer. My point is that it would not be sensible for a company to split itself up into groups just to get away from having to apply this Bill. Therefore, that is not a realistic scenario to contemplate.

To return to the legislation in front of us, I have said on a number of occasions—I appreciate that there is a difference of opinion on this—that the smaller the firm, undoubtedly the more difficult and costly it is for the individual who runs that firm to, not just take on board this piece of legislation, but also take on board all the pieces of legislation, some of which the noble Baroness, Lady Seear, described as being "dotty". I believe, therefore, that she is slightly on my side in relation to the generality of this issue.

We must take account of the need to keep down the burden on small businesses. That is a burden not just of cost, but of administration and the knowledge of legislation and so forth. Of course, as the small business grows—as we hope it will do—and grows sufficiently, it will fall to be considered within the terms of the Bill. For all those reasons, which are similar to the ones on the previous amendment, I cannot accept my noble friend's amendment.

Lord Campbell of Croy: I did not interrupt my noble friend because he was coping manfully with many other interruptions. But I should like to ask him—he need not reply now because there will be more debates on this clause—whether his department is watching what is happening in the United States.

None of us wants to impose burdens on small firms. I am sure we all agree with what my noble friend said. But the Americans With Disabilities Act, known as ADA, requires a reduction of the equivalent figure for small firms. That is graduated over a number of years and the first graduation is just taking place or has just taken place. It would be interesting to know whether the British Government are watching what is happening in the United States in this field and whether the small firms there, who again are described as firms which employ a certain number or less of employees, are going through difficulties in the reduction which must take place under that legislation every few years, as is suggested in the amendment. Though I accept all the problems indicated by my noble friend that may arise for small businesses, it would be interesting to compare notes with similar legislation which is ahead of us on this.

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Lord Mackay of Ardbrecknish: I am happy to answer my noble friend. The Department of Employment does indeed look carefully at the United States' experience. It is from that experience that we have drawn the average cost figure of £200. I believe I am right in saying that the United States started off with 25 and has now dropped the number to 15. Therefore, while the US approach may be slightly different, it appreciated the need to have a line below which a small firm did not come within the compass of the Act. The United States agrees with us in that regard, although it has done it in a slightly different way and is now down at 15. I am starting at 20. I am suggesting that if in five years' time, after review, the government of the day and both Houses think it is reasonable to go down to 15, that is the right time to do it. But I think that we should start with the line being drawn at 20.

5 p.m.

Lord Monkswell: Perhaps I may ask for some clarification on what might happen once the Bill becomes an Act. Would it be possible for a firm employing fewer than 20 people to have an advertisement for recruits effectively saying that only able-bodied people should apply? Furthermore, would it be possible for a firm employing fewer than 20 people to advertise itself as employing only able-bodied people? What would be the implications and the effect of such an advertisement appearing in newspapers?

Lord Mackay of Ardbrecknish: With regard to the question of my noble friend Lord Campbell about the American Act, the Act did allow for a reduction from 25 to 15 after two years, but, interestingly enough, it has no provision for going any further down than 15; whereas if future governments want to reduce the figure they can use the provisions of this Act. I am advised that the answer to the question of the noble Lord, Lord Monkswell, is that a firm could do what he suggests.

Lord Rix: Just to back up my earlier statement that it might imply that disabled people were not particularly cost-effective or efficient, perhaps I may read briefly from the parliamentary brief given by the CBI. It states:

    "While all firms want their competitiveness safeguarded, few would wish to be seen to occupy a sector where discrimination is tolerated and where individual, talented disabled people might be deterred from employment".

It seems that the CBI has the same idea that disabled people might well consider themselves not up to the job if this clause goes through in its present form.

Lord Swinfen: We have had quite a useful debate on this subject and I thank all those who have taken part. In his first intervention the noble Lord, Lord Rix, quite rightly said that I was trying to be of assistance to the Government. If my noble friend has the foresight to accept this group of three amendments he will not need to move his amendment; nor will he have all the hard work of consideration after four years, and presumably from time to time after that; quite apart from the cost to the taxpayer and everything else. The amendments would help over a number of years to produce a level playing field throughout the world of work.

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The noble Lord, Lord Monson, was worried about the current cost of employing a disabled person. In my view, that would have to be taken into consideration when the question of reasonableness was being considered: and what was reasonable for one small firm with a very large turnover and large profits might not be reasonable for a firm employing the same number of people with only a very low turnover and marginal profits. That was also brought out by the noble Baroness, Lady Lockwood, who pointed out that reasonableness would vary from case to case.

An interesting intervention from the noble Lord, Lord Monkswell, brought out the fact that each firm in a group was a separate employer. That means not that a firm would split itself up—that would be totally impractical, as the noble Lord, Lord Mackay, suggested—but that a firm wishing to expand would, under certain circumstances, set up separate firms under one group as separate employers. What would be the position during recession of a firm dropping below the 20 mark and then a few years later, or a few months later, going back over that figure?

The Minister said that something would have to be borne in mind and—I think I have got him right—that it would be a difficult position. But that is in a totally different context from the present position of all employers in regard to the requirements of a fire officer. A new fire officer in an area may have different fads, but his instructions must be followed, whether one likes it or not, sometimes at costs considerably higher than the figures that have been mentioned in this short debate.

I should like to reflect on what has been said, perhaps discuss the matter with my noble friend between the end of the Committee stage and Report, and possibly come back to the matter at Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 54 not moved.]

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