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Lord Mackay of Ardbrecknish: My Lords, I appreciate the noble Lord's irritation when hearing the words of his own Prime Minister being quoted to him. I cannot do better than the Prime Minister when he made his remarks and admitted that red tape was throttling British industry. Perhaps I may continue with the quotes--I know it discomforts the noble Lord, but he will have to get used to it--and I shall answer his question in time.

I quote Sir Clive Thompson's words in the Sun:

I can say to the noble Lord who intervened that Conservatives would most certainly not do that. At every turn we attempted to prevent that kind of red tape being inflicted on British industry.

Perhaps the staider words of the Daily Telegraph will appeal more to the noble Lord and his noble friends. The article reiterates the point made by the Prime Minister himself. Who am I to argue with the Prime Minister? Who indeed are the noble Lords sitting on the other side of the Chamber to argue with the Prime Minister? The Daily Telegraph reported that the Prime Minister,

    "Addressing the Confederation of British Industry conference in Birmingham ... acknowledged business concerns that the Government had imposed too much red tape and bureaucracy on industry since coming to power two and a half years ago...

    Mr Blair underlined Labour's pro-business approach by siding with the CBI over the need to water down the European Union's Working Time Directive"--

no wonder the noble Lord who intervened approves of that--

    "despite a strong protest from one of the country's leading trade union leaders".

I have two preliminary questions to ask the Government. First, are our businesses going abroad for their sourcing--outwith the EU indeed, like Marks and Spencer--because at home our industry is being made less and less competitive by one government regulation after another? Secondly, do I take it from what the Prime Minister had to say to the Confederation of British Industry, especially the part about the need to water down the European Union's working time directive, that we actually likely to see another set of regulations in the future, further reducing the damaging impact of the original 1998 working time directive? That is the implication of what the Prime Minister said; and I presume that we are expected to believe the Prime Minister when he says something like that.

The regulations have had a damaging impact. Indeed, the Prime Minister himself has admitted it. By bringing forward this puny little set of regulations, the Minister has admitted it too, as he is toning down in a very minor way the original regulations introduced last summer. The damage is enormous. The estimated

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extra cost to British industry is £2 billion a year. The Institute of Directors was fully justified when, following the introduction of the original regulations in October last year, it said that:

    "the Working Time regulations represent yet more costs and burdens on business. They restrict labour flexibility and impose costly new obligations on companies ... The Working Time regulations are entirely unnecessary and can only damage competitiveness at a time when industry is being exhorted by the Government to be more competitive".

A survey by the IoD found that about half of the respondents to its questionnaire said that their overall business would be damaged by the imposition of the working time directive; a mere 3 per cent said that it would be helped. That is the background.

The regulations are very complex. The original ones are, as are the ones we have before us today. I doubt whether many small businessmen in particular have the time, and the number of cold towels needed to put round the forehead, to study the regulations or indeed the guide to the regulations.

We are discussing unmeasured time. Perhaps I may draw your Lordships' attention to what the Guide to Working Time Regulations says about unmeasured working time. Paragraph 2.2.2 states:

    "It is not possible to specify a complete list of the cases which would fall into the relevant category. The Regulations cite as examples 'managing executives or other persons with autonomous decision-taking powers, family workers or workers officiating at religious ceremonies in churches and religious communities'. However, it is important to note that these are for illustration only. It is the characteristics of a worker's activity that will determine whether the limit may be excluded".

Can the Minister help us by explaining what is meant by,

    "the characteristics of a worker's activity",

showing that he might be excluded under the unmeasured working time? I thought that all time was measured, but I suppose that one must believe government documents that there is some unmeasured time.

Paragraph 2.5 of the Guide to Working Time Regulations deals with the records which employers have to keep. It states:

    "The employer would need to ensure that their means of monitoring workers' working time would be adequate to highlight instances of workers working in excess of the standard working hours. The employer may need to monitor the hours worked by such workers more closely ... The records must be kept for two years".

I wonder how that squares with a speech made by the Secretary of State in June. He said:

    "The vast majority of individuals do not need to keep a specific record of the hours they work".

Whom do we believe: the Secretary of State or the guide?

I could depress your Lordships for the rest of the evening, if many of your Lordships are not already sufficiently depressed by the dreary affair that is happening in the other place, but I probably should not do that. However, I should like to draw your Lordships' attention to one other part of the guide, because I can remember once being teased mercilessly by the Opposition about a similar kind of

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arrangement. I refer to the calculation of night work. Here we come to algebra, so the employer will need to have higher algebra as well. The equation is:

A B - C

    Where A is the number of hours during the applicable reference period which are normal working hours for that worker; B is the number of days during the applicable reference period; and C is the number of hours of weekly rest to which a worker is entitled under the Regulations (i.e. 24 hours for each seven days) divided by 24. (It should be noted that this is not the total amount of hours that the worker is at rest in each week. Only the hours making up the weekly rest period that the worker is entitled to under the Regulations are counted.)

It really is crystal clear, is it not?

That is the original. I now come to an example from the draft guidance. I could read out others but I shall read out only one of them. It relates to Worker E as explained in the draft guidance. I want your Lordships to listen carefully because I shall say this only once. The guidance states:

    "Worker E is keen to be promoted and is working longer hours. If E is working these extra hours because he thinks it will get him promotion, then the additional time will fall within the scope of the proposed amendment as he is choosing to work the additional time. However, if it is established at E's workplace that to get promoted, one must work longer hours, the additional time would not fall within the scope of the proposed amendment because it is an implicit requirement to work longer hours".

It seems to me that E would be a fairly stupid individual if he worked extra hours to get promotion if he had absolutely no evidence that it would be of some help to him in gaining that promotion. So I wonder what all that means. What exactly does,

    "if it is established at E's workplace",

mean? Does it mean that it is to be put on the notice board; does it mean that it is to be whispered around the office; what does it mean? It seems to be fairly fertile ground for a disgruntled employee who does not get promotion. When will employers get a new, preferably clearer, guide to the regulations? When will we see the next tranche of damaging limitation regulations, as was clearly promised by the Prime Minister to the CBI?

When I was coming in on the Tube this morning I noticed a headline that must have brought joy to the spin doctors of Downing Street. It said: "Tax breaks for risk takers who show enterprise". When will we see the headline: "Red tape breaks for risk takers who show enterprise"? There is absolutely no evidence that this Government will look at--or even want--that kind of headline. But that is what British industry wants.

In so far as the regulations reduce by the tiniest fraction--that tiny fraction is a saving of some £13 million on costs of £2 billion--the burden, the uncertainty and the confusion in the Government's original regulations, they are welcome, but the Government have a long way to go before they merit even one cheer on the deregulation stakes. Action is what British business needs; not kind word from the Prime Minister at the CBI conference. Weighing down commerce and industry with regulation upon regulation is no way to run a competitive European

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Union; it is no way to run a competitive country; it may even not be a way to run a competitive supermarket.

Lord Razzall: My Lords, having listened to the noble Lord, Lord Mackay, it is manifestly clear that he is going for promotion! It will come as no surprise to noble Lords and to the Minister that on these Benches we disagree both with the tone and with the content of what the noble Lord, Lord Mackay, said. For those of us who follow debates on the economy and trade and industry in this House and in another place, one remarkable point is the air of significant depression that always comes from the Tory Benches. Last year I remember being told by the noble Lord and by his colleagues here and in another place that as a result of government action and the poor performance of the economy, the economy was going into deep recession. I remember being told that by the noble Lord on a number of occasions. But that did not happen.

The latest depressive canard that comes from the Tory Party is that the regulations which the Government have indicated are the cornerstone of their policy for employment will produce significant unemployment in this country. I hazard a prediction that that depressive indictment of the regulations will be no more true than was last year's depressive indictment from the Conservative Party that the economy was moving into recession. To that extent, I entirely disagree with the tone and substance of the noble Lord's remarks.

However, one aspect deserves a serious answer from the Minister. Over the past year, the Government have imposed an enormous number of procedures by means of regulations and directives on the employment structure of this country. I do not say that that is not right or that the measures were not required to regulate the employment position of many workers. However, I agree with the noble Lord, Lord Mackay, when he says that he doubts very much whether the average director of a small or medium-sized business really understands the obligations that his or her business is now under. I have made this point many times when debating these issues. Will the Minister indicate the steps that the Government intend to take to make sure that the content of these and other regulations is disseminated with a clear explanation to small and medium-sized businesses in this country?

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