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Lord Lea of Crondall: I declare an interest, having been part of the origin of the negotiations. Perhaps I may remind the House how the Social Chapter works. Ten years ago, a framework agreement in Brussels meant that all the European trade unions and employers were able to come together to deal with the matters in the social action programme. We can take some satisfaction from the fact that this is the third such measure to come before Parliament after a number of years of negotiation in Brussels.

When the Labour Government signed the Social Chapter, to the regret of the Conservative Party, they were in a position to catch up on some of the matters that had taken time in Brussels. In that process, some of the topics have reached this Parliament in a tight timetable. However, the House should take confidence from the fact that the broad framework was agreed by the CBI, which is part of the European Employers Federation. It is therefore reasonable to infer that this is a modest proposal in a series dealing with atypical work.

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We ought to reflect on the fact that during recent months we have had many debates in this House about the rapidly changing nature of the labour markets. What is in Brussels jargon called "atypical" work--part-time work, fixed-term contract work and agency work--is in some industries becoming typical work. Therefore such employees need to be covered pro rata and these regulations are a modest way of dealing with the problem.

It is worth making the point that of the 6 million part-time workers in Britain, 80 per cent are women. In recent years it has been most difficult to deal with such problems by way of collective agreement, and the regulation is a half-way house between a detailed statutory scheme and a collective agreement. It was written in the form of a collective agreement in Brussels and it was signed by the trade unions and employers in Brussels. If five or six years ago people in this country or in any other part of Europe had said that many of these issues would be the subject of successful framework collective agreements in Brussels, it would have been thought most unlikely. A great deal of progress has been made and because of the way in which the matter was handled in Brussels there is a preparedness in industry to take this step forward at this stage. If we had made the move on our own, we would have been open to the charge that we would have lost competitiveness and so forth.

The measure means that we are operating on a level playing field in Brussels. We are not losing competitiveness against any other European country; we are going forward together. These high standards for part-time workers will stand us in good stead of integrating atypical workers into the labour force. I am pleased therefore to associate myself with the regulations before the House tonight.

Baroness Miller of Hendon: My Lords, I ought to make one point to the noble Lord, who has spoken so eloquently on what he believes to be the correct position. I made the point that the timing was difficult because small businesses have only six weeks to ensure that they get it right. The noble Lord mentioned that the CBI was involved in the timing structure. Originally, businesses were given two years from 7th April 1998, but they had to have an extension. The regulations must be implemented in only six weeks' time, on 10th May. I do not know how many small businesses the CBI represents--it usually talks about big businesses--but I know that for those which do not employ many people in their personnel and accounts departments implementation will be difficult.

The other point that I wish to make is that we do not object at all to the EU directive as such. We object to the gold plating on the objective. When one talks about competitiveness, as did the noble Lord, it does not help us to be competitive when it is made more difficult for employers in this country than it is for those in the rest of Europe. That is the point that I was making.

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8.30 p.m.

Lord Pearson of Rannoch: My Lords, before the Minister rises to reply, perhaps I may also say to the noble Lord who has just spoken that it may well be that by these arrangements we do not lose competitiveness with our so-called partners or competitors in Europe. However, of course, we do lose competitiveness with, shall we say, the United States of America, the recovering markets in the Far East and the rest of the world. This is another classic example of EU harmonisation bringing us into line with the sclerotic and declining European market and, in doing so, damaging us in our competition and trade with the rest of the world.

Lord Sainsbury of Turville: My Lords, I believe that the Government's measures on part-time work will ensure that Britain's 6 million part-timers are no longer treated as second-class citizens. In response to the last speaker, perhaps I may say that most businesses, particularly in the service area, have been well ahead on this issue for a long time. It is now well appreciated that part-time workers are an absolutely essential and important part of the workforce and therefore should not be treated as second-class citizens. I would argue strongly that an important part of competitiveness is having a part-time workforce who believe that they are treated fairly and not as second-class citizens.

So far as delay is concerned, we took slightly longer than the regulatory right, although we are allowed a slightly longer period. That seemed to me to be correct in terms of getting the regulations absolutely right, and I believe that several other EU members have taken more time in the same way as the UK have done.

So far as concerns the question of casual and agency workers, I believe that there is a misunderstanding as to how the employment status is defined. Some casuals are employees, some are workers, and the same argument applies with regard to agency workers. If we were simply to exclude workers, that would increase enormously the scope for legal action to determine the legal status of individuals.

So far as concerns the written statement, it seems to me to be a simple case of good practice that everyone should be agreed about the facts before legal action is started. If there is a case for objective justification, that should be put down. I cannot believe that that simple process, which would seem to be good practice and potentially could stop legal actions being taken, is in any way harmful.

The noble Baroness, Lady Miller, raised the rather complicated question of occupational pensions. A decision was taken by the European Court on 16th May that UK legislation, which places a two-year restriction on claims for backdated contributions in respect of occupational pensions, is not compatible with European law. That means that claims for employer contributions from part-timers who were denied access to occupational pension schemes could go back as far as 1976, which was the date of the earlier ECJ ruling. That, of course, is in relation to other

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rights. So far as concerns this measure, rights begin to accumulate only now. Clearly, this particular point will not impact for two years and we shall review the situation during that period. If it is incompatible with European law, we shall examine that and amend it accordingly.

I believe that the point behind the regulations is that part-time work has become important and will be increasingly important in the years ahead. All businesses knew that the legislation was imminent and had plenty of time to prepare for it. I believe that the Government have set the right framework for a flexible and fair approach to part-time work. I commend the proposals to the House.

Lord Pearson of Rannoch: My Lords, I wish to press the Minister on what he has just said, particularly with regard to pensions. I believe that to some extent he echoed what his honourable friend, the amazingly titled Minister for Competitiveness in the other place, Mr Alan Johnson, said in Standing Committee last Thursday, 18th May. Like the Minister, Mr Johnson appeared to be uncertain as to the effect of the backdating of pensions, possibly to 1976, under the European diktats.

Therefore, in the first instance I ask the Minister to give the House an absolutely clear assurance that the figure of £17 billion which has been put upon this aspect of the problem is absolutely not accurate, that it will not happen and that we need not worry about it any more.

Secondly, when he says that the new regulations will not bite for two years and that no one can make a claim until they have been operating for a period of time--in other words, that it will not be until the year 2002 that any court could rule that someone is entitled even to two years' retrospection, which is what I believe the noble Lord said--can we have some idea of the cost of that? It may not be £17 billion, but if we are looking at these regulations introducing that prospect, then what will the cost be of two years' retrospective pension which may then be applied? Is that figure included in the £27.4 million, which I believe is the figure that the Government have already put on these regulations, or is that extra? And who will pay the retrospective pensions for the two years which may be adjudged in the year 2002? And who will pay the £17 billion, if we come to that?

Lord Sainsbury of Turville: My Lords, I make it clear that the £17 billion does not in any way relate to the regulations that we are debating tonight. So far as concerns the regulations under discussion tonight, a question would arise with regard to backdating only if people failed to be paid what, under this legislation, it was their right to be paid. However, it is hardly likely that there will be a failure to do that. But, if they failed to be paid what was due to them under the legislation, then of course the amount would depend entirely on how many people failed to receive the rights that they have under this legislation for whatever period. This is backdating for a right for which people have not been paid. Therefore, it depends entirely on the extent to

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which they have not been paid. Therefore, at this stage it is not possible, even remotely, to say what that would be.

So far as concerns the £17 billion, that figure is not accurate. Our figures are much lower than that; £4 billion is probably closer to the figure. However, we need to examine that in more detail.

On Question, Motion agreed to.


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