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Baroness O'Cathain: My Lords, my amendments, Amendments Nos. 46, 47 and 48, are grouped with Amendment No. 17 and it is appropriate to speak to them now. Although they do not deal specifically with the issue of 10 or 20 employees, they are tangential to it. I should add that I am not sure whether the wording of my amendments is correct, but perhaps that point could be considered later.

The Confederation of British Industry has been briefing me on this issue. It accepted from the start that 20 employees should be the cut-off point. Indeed, it is happy that the cut-off point is set at 10 rather than any other figure. The amendments seek to require the Secretary of State to undertake a review whenever he wishes to amend the cut-off figure of 20 employees—according to the Bill, it seems that the number can be moved downwards only—and not only after four years.

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We want a review because it is imperative that business is aware of the parameters within which it is operating. It cannot at one minute be 20, the next 15, and then, say, a year later, 10. We want a clear procedure to ensure that all relevant regulations are reviewed when any change which would affect small firms is contemplated. I hope that my noble friend will listen to these requests.

Lord Rix: My Lords, I support specifically Amendments Nos. 42 and 44 to which my name is attached, although I must admit that I do not feel entirely at ease with them as it is my strong view that no firm should be exempt from the legislation just on the basis of size. We all know of wealthy small firms and of larger ones which are struggling to keep going. Taken in isolation, the number of staff employed in a firm provides no satisfactory picture of its capacity to accommodate a disabled employee.

However, we must move forward. So I urge the Minister to look again at this issue. At the moment we are in danger of making detailed regulations, firms establishing their practices and procedures, and legal rulings being made on the basis of a threshold which is likely, as we have heard, to shift within five years. The amendment might help us to minimise the nonsense we are at risk of creating.

Lord Addington: My Lords, I support the amendments, especially Amendments Nos. 42 and 44. I see that my name is against Amendment No. 44 but not against 42. That is a mistake. I support both amendments. We are talking about the drawing of an arbitrary line. The noble Baroness was correct when she drew a historical precedent for the number of 20. As almost every speaker involved in this short debate has pointed out, the number of employees a firm has is no guarantee of its state.

The concept of reasonableness would surely be better than any figure, because if it is reasonable for a reasonably prosperous firm to make a small accommodation for a disabled person, that would make more sense than just saying that because a firm has X employees it is excluded or it must make some arrangements for disabled employees. There is a far stronger logic here. Reasonableness is already in the Bill.

I have never liked the idea of having an arbitrary line. In Committee I opposed the inclusion of the clause in the Bill. However, if the arbitrary line is to exist, it should be drawn at the lowest practical figure. If one has 10 employees, that would mean that the business is small. Whether businesses are rich or poor, are doing well and have good prospects, are factors we cannot bring into the Bill. At least we can ensure that the businesses are genuinely small. I hope that all Members of the House will support the amendments as they address the issue of ensuring that only the minimum number of firms are excluded from a concept which is based on reasonableness and fairness.

Lord Hamilton of Dalzell: My Lords, working at the coalface, so to speak, of those who are getting people with disabilities employed, I have to tell the House that

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the Bill is known as the magic wand syndrome. The technique of getting people employed is, first, to convince the disabled person that he is capable of doing the job. We employ educational psychologists who encourage disabled people to apply for advertised jobs and talk to firms to persuade them that they can usefully employ disabled people in their businesses. We then send the disabled person to the interview and ensure that all the equipment is provided to ensure that he or she can do the job.

There are many small firms which employ disabled people, and I fear that by regulating so that they cannot refuse to employ them or say that they think it is a bad idea, and using a foot-in-the-door technique to employ disabled people, will mean that the door will be shut firmly when one appears on the scene.

My great fear about the Bill is that it will produce less employment for disabled people than if the matter is left alone. So I support the Government's view that the line should be drawn at 20 people.

4.15 p.m.

Lord Campbell of Croy: My Lords, I spoke at earlier stages of the Bill on this subject, and I shall not repeat what I said then. I favour a reduction of the threshold of 20, but I understand also the reasons for that being done by stages because small firms have not been involved in this before. The National Federation of Self-Employed and Small Businesses vociferously supports their exclusion, but of course that is what one would expect. Nonetheless, its reasons are not just reasons of expense.

The Government made an amendment in Committee last month which, as I understand it, means that there will be a review five years after the coming into force of the Bill when enacted. The whole concept of reasonable adjustments, which is the basis of the Bill, would apply where a small firm had special circumstances or difficulties which would not be encountered by a large firm. Taking that into account, I believe that the reduction should take place in due course.

I favour the inclusion of smaller firms and a gradual reduction of the threshold. However, I should be grateful to have reassurance from the Government about their intentions, and that they do, with the amendment they made last month, intend, when it is practicable and does not cause great damage to individual firms, to lower the threshold by stages.

Lord Monson: My Lords, this is a wide-ranging group of amendments. I turn first to Amendment No. 30. I hope that the noble Baroness, Lady Hollis, will not think me in any way frivolous or nit-picking if I suggest that the wording of the amendment is a little ambiguous as well as far-reaching. She talks about "the future existence of the employer", which implies that only if the employer is so driven to despair by the provisions of the Bill that he contemplates jumping off the top of a 10-storey building will any exemption be made for him. The phrase "future existence" might well be replaced by the words "economic survival". But even that seems to me to go a little too far.

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After all, a small firm could be earning £15,000 a year gross before the employer draws any salary. If as a result of the Bill the gross profit before salary were reduced to £12,500, the employer would survive but he or she would still be obliged to endure considerable hardship.

I turn now to the amendments in the names of the noble Lords, Lord Swinfen, Lord Rix and Lord Addington. In Committee they moved an amendment which would have obliged the Secretary of State to reduce the minimum of 20 to a minimum of 10 within a period of years, and subsequently to a minimum of five within a further period of years. This amendment goes much further than that. It suggests that the number be reduced to 10 immediately.

It is unusual on Report to introduce an amendment which is more extreme than the amendment introduced in Committee. Normally one tries to reach a compromise on Report which will find favour with the House as a whole. I believe that the Government are right in sticking to their guns and insisting upon starting with a minimum of 20.

Lord Renton: My Lords, I find the difficulty with this subject is that generalisation is almost impossible. If we take Amendment No. 42, which I somewhat favour, my noble friends Lord Swinfen and Lord Rix want the threshold reduced from 20 to 10. In a wide range of industries that means a very small factory, but this provision refers to farming. At MENCAP we have taken the trouble in the past to train mentally handicapped people to look after animals. It has been a successful experiment over the years. They have gone into horticulture as well.

I happen to live near a farm of just over 2,000 acres which 40 years ago employed 10 men. Now it employs only four men. A farm with 20 men, which is what the Government have in mind, is a very big farm indeed these days. I am glad to say that it is the kind of farm, especially in the west country, on which one would find several mentally handicapped people employed looking after animals.

We do not want to reach the situation in which, with regard to such farms, we are putting the clock back. We do not want to reach the situation in which the farmer says, "Look here, I have a very big farm but I employ only 16 men". These days, that is an enormous farm. To say that such a person should not be required even to consider employing a mentally handicapped person seems to me to be most unfortunate.

The coming Recess is an opportunity for further thought. I hope that the Government will use the Recess, before Third Reading takes place in the overspill period, to take wide consultation on this matter, in particular with the National Farmers Union, the Country Landowners' Association and so forth. They may well find that the generalisation that they have in mind is a bit dangerous and that more particularisation may be necessary, much opposed as I am to too much detail in statutes.

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