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Lord Lester of Herne Hill: My Lords, I am grateful to the noble Lord. Is he aware that the whole point of a directive, unlike a regulation, is that it wills the end but not the means and leaves to each member state the choice of means of giving effect to the directive and, therefore, gives effect to the principle of subsidiarity, as the committee recognised in its report?

Lord Bridges: My Lords, the noble Lord is, of course, right as regards Community law, but the discretion left to a member state depends upon the degree of discretion allowed in the directive. My complaint is that I do not think this is sufficient.

I am also concerned at the effect which adoption of these directives might have on the negotiations for enlargement. Some of the candidates have large minority populations and a long history of social tension. It is, I think, possible that these new explicit directives might constitute a barrier to their accession in some cases. We could hardly expect these particular social problems, which have existed for several centuries in some cases, to be expunged in a short period.

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Mme Quintin answered my question on this point by stating on page 23 that the potential for discrimination in such places is,

    "one of the reasons why we have made these proposals".

In other words, acceptance of this definition of non-discrimination, as defined in the directives, becomes part of the acquis and must be adopted by all candidates without qualification on entry. The Commission's motives are, of course, impeccable: to make it clear to new entrants that they will be expected to observe the highest standards in relations with their minority communities. But the result is difficult to calculate and perhaps is incalculable.

The final issue which I wish to mention was raised in the House on 16th June, when we debated the Select Committee's report on the charter of fundamental rights, discussed in House of Lords Paper 67. In the course of his speech introducing the report, the noble and learned Lord, Lord Hope of Craighead, in a speech of remarkable power and lucidity, referred to the recommendation in the report that it would be appropriate for the European Union itself to ratify the European Convention on Human Rights. Doing this would avoid the potential for conflict of jurisdiction between the European Court of Justice in Luxembourg and the Human Rights Court at Strasbourg. If these directives proceed, I fear that there is a real danger of such a conflict between the two courts and of "forum shopping" by litigants.

In her reply, the noble Baroness, Lady Scotland, said (at col. 1907 of Hansard) that the European Court of Justice has given an advisory ruling that the European Union does not at present have the competence to accede to the convention since the convention is open only to accession by states and the European Union lacks the legal personality of a state. I am no jurist but I humbly suggest that, if the governments of the European Union decided--say, at a meeting of the European Council--that it would be desirable to accede, they, as Heads of Government, have the plenary, treaty-making power to do so, if necessary adding an article to the Treaty on European Union for the purpose. Surely the Council of Europe would not seek to deny the accession, given the role which the same governments enjoy in its own deliberations. They are key partners in the Council.

If the European Union does not accede to the convention, there could be some awkward situations. Litigants desperate to find a remedy for perceived injustice--in my experience desperation is all too common on human rights matters--will pursue their cause in one forum after another in the pursuit of a remedy. In fact, it would make much sense to have a practical division of labour between the two fora. Infringements of these directives could be pursued at Luxembourg, as can all other infractions of the European Union treaty and obligations, whereas suits regarding the infringement of human rights could be heard at Strasbourg, where such causes have been heard for the past 40 years or more. Surely it should not be beyond the wit of man to arrive at such a solution. Therefore, I support the recommendation of the committee of the noble and learned Lord,

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Lord Hope, that the issue be placed on the agenda of the Intergovernmental Conference. I trust that Her Majesty's Government will be able to reconsider this whole issue, which is also extremely relevant to the draft legislation which we are considering this afternoon.

I conclude as I began by reminding noble Lords that these observations are entirely personal and do not represent the view of the sub-committee, nor of the Select Committee. Nevertheless I venture to submit them to noble Lords for their consideration.

1.54 p.m.

Baroness Howells of St Davids: My Lords, I should like to add my congratulations to the Select Committee and to its chairman, Lord Wallace, on a readable and balanced report.

Realisation of Article 13 of the Amsterdam Treaty will for the first time give the EU a legal basis on which to take action to combat discrimination on the grounds of gender, race and ethnic origin, religion or belief, disability, age or sexual orientation. I welcome this, as Europeans as a body will be able to use legislation to combat the cancer of discrimination. Since I came to live in Britain, I have been made well aware of those individuals and institutions who have been unable to shed the yoke of discrimination without help from legislation.

I should like to consider some of the changes the UK will need to be aware of as the debate on the Race Relations (Amendment) Bill comes to this Chamber. I wish to concentrate on what I see as the key benefits (and the key deficiencies) of the two legislative directives under the treaty as they now stand: the proposal for a directive implementing the principle of equal treatment between persons irrespective of racial or ethnic origin; and the proposal for a directive establishing a general framework for equal treatment in employment and occupation.

I refer to the benefits. Both directives set out a clear definition of both direct and indirect discrimination. A broader and more favourable definition of "indirect discrimination" is given, introducing the liability test. This means that consideration could then be given to whether a procedure is liable to be discriminatory. In my opinion, this is more favourable than the present definition in the Race Relations Act 1976, which will surely have to be amended to incorporate this new definition.

Both directives make it clear that harassment should be regarded as a form of discrimination. This is a useful reminder to all the parties. Both also require a shift of the burden of proof to the respondent from the complainant,

    "once the complainant has clearly established facts from which a court or tribunal can presume discrimination".

This will indeed be helpful. However, it also means that the Race Relations Act 1976 would need to reflect this.

Both directives introduce protection against victimisation; it is intended that this should cover both complainants and those who assist in bringing the

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complaint. Both also permit positive action. This, again, will be welcome to those of us who practise in this field. In the race directive only, protection would not be confined to nationals of member states alone, thereby affording safeguards for third country nationals. There is also a proposal to establish an independent body for the promotion of the principle of equal treatment between persons of different racial or ethnic origin, which I welcome.

I now turn to the deficiencies. I am concerned that the race directive should address discrimination on the grounds of race, ethnic origin, religion and belief, as does the employment directive, but the race directive does not include or address incitement and pressure to commit racial and religious discrimination. Both directives fail to address discrimination on the ground of nationality.

Nor is there a requirement in either directive for statistical monitoring of any aspect of service provision or employment patterns. In addition, the arrangement made for monitoring the implementation of either directive is weak and, in my opinion, should be reinforced. With specific regard to the race directive, the proposed independent bodies have no monitoring requirement or reporting lines identified to a central agency which could assist in the collation of compliance across the EU.

In both directives there is a failure to include all functions of public authorities--that is, not only the services provided by the public sector but also the powers which public bodies are authorised to exercise. That should apply without discrimination. This omission fails to meet the challenge of the Macpherson report--that is, to tackle institutional racism.

As to further amendment of the 1976 Act, the scope of the race directive in particular covers certain areas of discrimination which are not covered by that Act--for example, conditions for access to self-employment or occupation, membership of employers' or professional organisations, social protection, social advantages and cultural activities. I believe that amendments will be required.

The incorporation of the concept of positive action within the package is welcome. However, although no change in the law is required to facilitate this, the Commission for Racial Equality has argued during the passage of the Race Relations (Amendment) Bill that it should include a wider exception for "special needs and overcoming past disadvantage". I should like this point clarified in relation to the scope envisaged within Article 13.

Other amendments would be required also to ensure compliance with a proposal that, in respect of other legislation, priority should be given to the principle of equal treatment. I understand that in the standing committee in another place an amendment was tabled in the name of Simon Hughes to this effect--that is, that all legislation should provide a compatibility statement from an appropriate Minister as to that piece of legislation's compatibility with race relations legislation; and, failing that, a statement as to why the legislation proposed should be considered.

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This practice is nothing new; as the House will know, there is a precedent. Section 19 of the Human Rights Act 1998 obliges a statement of compatibility with the European Convention on Human Rights. I am sorry that the Government decided not to go ahead and accept the amendment, but I hope that during the Bill's final stage in another place and in your Lordships' House, the Government will reflect on this-- especially in the light of the obligation in Article 13 of the race directive.

Post Macpherson, everyone is talking about "mainstreaming race equality" in the decision makers' minds. That is quite right. What better way to do this than to put such obligations on decision makers at the highest level? I trust that the Minister will be able to give some assurances that the obligation will be placed on the decision makers. I await a positive response on this as I know that there is still some scope for flexibility.

2.2 p.m.

Lord Griffiths of Fforestfach: My Lords, like many other noble Lords who have taken part in the debate, I welcome this opportunity. Again, I am sorry that I was not shown the interim response of the Government until five minutes before the debate started. Although I have glanced at it, I have not had time to study it. It is a serious response.

The reason I welcome the debate is because the second directive--that is, the directive which creates a general framework to combat discrimination in employment--is an extremely serious document which, I believe, could potentially have an enormous impact on our society. Indeed, the report itself chooses the words "profound" and "dynamic" to describe the far-reaching effects of the proposed measures in the directive. They are well chosen words.

The directive deals with extremely sensitive issues and, frankly, is nothing less than breathtaking in its proportions. As an instrument for social engineering, it is almost a clean sheet of paper which yet shows all the potential of a continental European enlightenment of mind in devising a framework which will have an enormous impact on our society. I would go as far as to say that if this directive is implemented as it stands, it will have not only far-reaching consequences for the character of British society but will constitute a direct threat to religious freedom in this country and, at the same time, act as a powerful thrust to advance the process of secularisation.

The directive is an invitation for the expression of new grievances followed, as has been shown by the right reverend Prelate, by costly litigation. Therefore, it provides the potential for a source of conflict between those individuals and institutions which have a religious dimension and those which do not.

First, I congratulate our chairman, the noble Lord, Lord Wallace of Saltaire. He was an excellent chairman, who was always open to listening to different views and always fair minded. He did his very best to seek a report which was unanimous. However,

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I had the greatest possible difficulty in signing this report--I was told that a minority report was not the convention of this House--and, I am afraid, there remain areas where I wish to dissociate myself from some of its conclusions, and certainly from parts of the general framework directive we examined.

I think that it is because the European Commission produced a report like this that the previous government were totally justified in opposing what became Article 13 of the Treaty of Amsterdam and which extended the basis of discrimination.

Many aspects of this report could be discussed, but I should like to touch on one. The reasons for my reservations in welcoming the report are concerned with both principle and policy. However, let me make one point absolutely clear at the beginning: I strongly oppose discrimination in employment on the basis of race, sex, disability and age.

The important issue of principle raised by the directive relates to its impact on civil society. I am a great believer in civil society. I believe that a thriving civil society--consisting of a variety of schools, community institutions, voluntary and charitable societies, stable families, partnerships in business and even small businesses--is an important foundation for our freedom in this country and for democracy.

At the same time, individuals, as we have been told, have rights. People who make up our society have human rights, and the directive is an extension of those rights into the field of employment. But--this is the key point I want to make--the extension of these human rights as embodied in the directive has the potential to change the character of the institutions of civil society as we know it today, which themselves do not have comparable rights with which to defend their own spheres of authority and competence.

The obvious example--it has been mentioned a number of times in the debate--is a Church school, in which if the Christian basis on which the school is founded is to be preserved, the governing body itself will require certain rights. It will require, for example, the right to appoint a teacher in religious education who is a practising Christian. But maintaining the ethos of a Christian school requires far more than that. It also requires the right to appoint those who think within a Christian framework, so that in the teaching of subjects such as history, English, the humanities and more generally, civics, the social sciences, and so on, the subject which they teach is presented and understood within a religious world view and not within a secular world view.

In addition, if such a school is concerned with developing the character of its pupils and students, which I hope it would be, the governing body may also feel that all members of staff, and indeed all on the payroll, because they are part of the community which makes up the school, should, if possible, conduct their personal lives so as to express the core beliefs and the values on which the school itself was founded.

Maintaining the ethos of such a school is a difficult and complex business. But certainly it cannot be done without guaranteeing important rights and freedom in

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employment to the governing body of the school. I believe that it is precisely these rights which are under threat in this directive.

Article 4(2) of the directive accepts that discrimination in employment is justified in those cases in which religious belief is a, "genuine occupation or vocation". The noble Lord, Lord Lester, said that there were very broad exceptions. He then went on to refer--I shall challenge it later in my speech--to the hysterical and misguided report and the fears of the Christian Institute. I was surprised about that because if one reads that report, particularly if one looks at the appendix, one discovers that the report itself is based on the views of learned counsel as to what he considers the implications of the directive to be. So, far from being some speculative view of members of a think tank, it is actually based on legal opinion.

However, it is clear from the directive that the use of the phrase, "genuine occupation or vocation", will be acceptable only if the occupational activity is "directly" and "essentially" related to the teaching of religion. However convoluted Article 4(2) may be--and it is--I think we all understand the words "directly" and "essentially".

The legal advice which I mentioned a few moments ago states:

    "This will be a very difficult test to satisfy".

Indeed, that view was reinforced by the evidence we were given by officials from the Commission. Mme Quintin, the Acting Deputy Director General for Employment and Social Affairs of the European Commission, made it perfectly clear how restrictive the interpretation of the expression, "genuine occupational qualification", was meant to be. Speaking of it, she said:

    "We nevertheless think that as it is a derogation and an exception it has to be interpreted ... very restrictively. It has to relate to the specific occupation".

Then, in supplementary evidence with which the officials from the Commission provided us, they stated that the test of a genuine occupational qualification,

    "might be justified in narrowly-defined cases".

The example that is given in the appendix to our report is of a teacher of religion in a Catholic school. Therefore, I want to challenge the noble Lord, Lord Lester, when he says that here are very broad exceptions. I would say exactly the opposite: that there are very narrow exceptions and that they are very restrictive. If the directive were to be implemented in this form, in my judgment there would be no question but that the Christian foundation of a Church school would be undermined, the school's attempt to present the Christian world view through the curriculum would be compromised and that the ethos of the school would be placed in jeopardy. I have used as an example a Christian school, but what I have said about a Christian school would apply in exactly the same way to a Jewish school, a Muslim school or a Sikh school.

It is reassuring to know that the Home Secretary and the noble Baroness, Lady Scotland, who kindly replied to a letter sent by my noble friends Lady Young, Lord Pilkington and myself, are concerned

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about the issue. While he was in the middle of negotiations to deal with the issue, the Home Secretary noted in particular that,

    "the original form of this proposal is likely to be much changed before political agreement is reached".

He also reassured us that religious organisations would be able to discriminate on the ground of religion and belief where such a condition is a "genuine occupational requirement". However, I contend that that is precisely the point at issue. That is the central point which needs clarification.

If this is interpreted as the Commission would like it to be, it is a thoroughly inadequate basis on which to move forward. In schools, decisions as to what constitutes a genuine occupational qualification is, I believe, best left to the individual governing body of each school, which will be far closer to the practical needs of the school than are those issuing directives from Brussels.

I should like to draw the attention of noble Lords to a second feature of the directive. The derogation we are discussing--that permitted for a genuine occupational qualification--applies only to certain organisations; namely, those which pursue what it refers to (in what I think is an ugly and almost offensive phrase) as "ideological guidance". It then lists three kinds of organisations. By confining a possible derogation to institutions dealing with education, information and the expression of opinion, the directive shows itself to hold an extraordinarily narrow view of religion, as if religion was simply the private expression of personal belief. But all the world's great religions see themselves as concerned not only with personal belief, but with the expression of public truth. Hence, it is not only Church schools that would be put at risk through this directive, but any institution in our society that is founded on a religious basis.

I know of small businesses, for example, which were explicitly set up on religious principles. We heard evidence from one such group; that group would be put at risk. I know of legal and medical practices which have a distinctly Christian ethos at their heart and which were set up for that reason. They would be put at risk. I know of religious institutes which carry out research. They would be put at risk. I know of religious publishing houses. They would be put at risk. We have already heard about hospices. Indeed, there are many charitable institutions, of all religions, working in this country and doing an enormous amount of good who think of themselves as being put at risk by this legislation.

The distinctive character of each of those groups, let alone schools, would be placed at risk by this directive. In each case, the threat is to dilute their specifically religious character and to make them more secular institutions. Therefore, far from the issue of including religion or belief being a theoretical rather than a practical problem, as was stated by the noble Baroness, Lady Whitaker, I believe that this is an extremely important practical problem.

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The conclusion I draw from all of this for the Minister and the Government is that the derogation offered by the expression "genuine occupational qualification" is much too restrictive. It needs to be changed significantly. If it is changed, it needs, first, to be interpreted in a broad rather than in a restrictive way and, secondly, it needs to be extended to far more institutions than the limited field covered by the directive itself. The derogation must be more precise, otherwise we shall be at the mercy of the courts, whose judgment in this field may be highly uncertain.

Best of all would be for the Government to veto this directive. Only by doing that would we have the necessary absolute assurance and confidence that this directive will not be used, even in an unintended fashion--and certainly not by the Government--to undermine religious liberty and then advance the cause of secularisation in this country.

2.18 p.m.

Lord Northbourne: My Lords, this is the second occasion on which the Chief Whip has placed me to follow the noble Lord, Lord Griffiths, in the speakers' list. On both occasions he has brilliantly occupied the territory which I was hoping, more modestly, to explore.

Nonetheless, I shall plough ahead a little. I am concerned about the effect of this directive on education in schools. I wish to examine the problem from a slightly wider perspective than that of noble Lords who are concerned with the effect on specifically religious schools.

In this country, parents are obliged by law to see that their child is educated, but they have the right within the law to choose what kind of education the child receives. Brenda Hoggett, QC, the great legal expert on the subject of parental responsibility, states in her book, Law of Parental Responsibility:

    "Children have the right to education, but parents have the right to choose how to educate them".

She quotes Article 2 of the First Protocol of the European Convention on Human Rights, which states:

    "No person shall be denied the right to education ...In the exercise of any functions which it assumes in relation to education and to teaching the State shall respect the right of parents to ensure such education and teaching is in conformity with their own religious and philosophical convictions".

Brenda Hoggett goes on to say:

    "Freedom of religion, like freedom of education, plays an important part in the diversity of lifestyles and beliefs which is the hallmark of a free society".

Some parents today want to see their children grow up familiar with the religious traditions and teaching of a faith which has led the parents themselves to happiness and a fulfilling lifestyle. Surely that is a reasonable and sensible wish. But there is a much larger group of parents, many of whom do not practise any religion, who want to send their child to a faith-based school because they are worried about the values that the child will learn and the example that it will be set in the secular schools system.

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What both groups of parents are looking for is a school where they can be confident that, as far as possible, all the staff will be motivated by the ethos and values of the school, whatever they may, and that that ethos and those values will shine through the teaching in every subject and where the example set by the teachers will be in accordance. We all know that children learn best by example. No education is value-free. Moral values, social commitment and self-discipline are transmitted by example and contact, and by the context in which every subject is taught.

I do not suggest that all religious schools are good, or that all non-religious schools are bad--merely that parents want choice, that they are entitled to choice, and that effective choice means there must be diversity to choose from.

Many parents today want to choose a school where the ethos and the moral and social values to which their children will be exposed are broadly those with which they agree. I believe that every parent has that right. To deny parents the right to choose a school which fulfils their aspirations for their child is both morally wrong and in conflict with the European Convention on Human Rights.

Yet that is exactly what this directive would do. The directive, or at least, the national legislation which would flow from it, would largely remove parents' right to choice because it would remove the diversity of schools from which they could choose. It would prevent schools from selecting teachers and other staff whose values corresponded to the ethos of their school. It is not enough for Article 4 of the directive to make an exception of specialist staff who teach religion or doctrine. The whole staff of a school needs to be committed to the ethos and values of the school.

It is, of course, right to outlaw unjust discrimination based on prejudice. But if we want diversity and choice in schools, governors and heads must be free--a point made by the noble Lord, Lord Griffiths--to select teachers and staff who will sustain the ethos and values of the school as well as teaching their subject well.

I turn briefly to the directive itself. The Select Committee puts its faith in Article 4. I am less than convinced that Article 4 as drafted will do more than protect the right of schools to a derogation from the provisions of Articles 1 and 2 of the directive in the appointment of RE teachers and teachers of religion. As drafted, it will not protect schools' right to appoint the staff most likely, as well as doing a good teaching job, to promote the moral, spiritual and social values and the ethos of the school.

Furthermore, as I think your Lordships all agree, the meaning of Article 4 is unclear. It needs redrafting. I join the Select Committee in believing that it needs redrafting both to extend and clarify its meaning. First, in my view all staff in schools, whatever they teach, should be covered by the exemption--possibly not cleaning ladies, but certainly matrons and house parents as well as teaching staff. Secondly, schools should be exempted from charges of unjust discrimination for including in their selection criteria questions of whether or not they have reasons to

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believe that any candidate will accept and conform to the ethos and values of the school and will set pupils a good example and, where relevant, will act in accordance with the religious beliefs and moral precepts of a particular religious affiliation of the school.

The Government are talking about signing up to the directive in October. I urge them to remember what happened in France when the Government decided a year or two ago to change the arrangements for religious schools. Over a million parents hit the streets in protest, and the proposals were withdrawn. If the Government fail to insist on amendment and clarification of Article 4 before they sign the directive, they will be betraying a large number of children and a large number of parents in this country and the European Union, and will be betraying the tradition of liberal education of which this country can be justly proud.

2.27 p.m

Lord Bruce of Donington: My Lords, the word "discrimination", as used in the title of the report that we are considering and as used in the report itself, had a far different meaning within living memory. There was a time when "discrimination" was a very positive word. It indicated an ability to distinguish between one set of objectives and another. It enabled one to be discriminating in terms of artistic appreciation, appreciation of music and matters of that kind. It is only in more recent years that "discrimination" has been used in the purely negative sense as being in itself, and as experienced and applied over the years, something that we could well do without and that we do not like.

It is the negative aspect of the use of the term "discrimination" that the report deals with and, indeed, Article 13 of the treaty dealt with. It is noteworthy that if one examines the first directive in conformity with Article 13 one finds that a new word has been added: "xenophobia". That insertion was made at the meeting at Tampere, where apparently it was decided that, xenophobia being a state of mind, it was something that we also had to deal with, and by inference that we could deal with it by European legislation or domestic legislation. I do not know whether we should try to pass in this place or permit to be passed in the European Parliament or elsewhere in Europe the concept of trying to control in any way a person's state of mind. Therefore, we might eliminate that aspect of the matter to begin with.

I have read the report very diligently over the past few days. It is a very good report, reflecting great credit on the members of the committee and its chairman.

One matter on which I believe there is agreement is that the report is not in favour of trying to legislate against racial discrimination, sex discrimination and age discrimination and prefers that it should be dealt with by persuasion and by way of a directive, which enables this country to interpret whatever comes from Europe and incorporate it in our legislation, or codes of conduct. I hope that I compliment those concerned

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when I say that that indicates typical British scepticism about the desire to set down everything with cast-iron legal clarity. The report has come out firmly against that, and it is right that it should do so.

Even on the basis of subsidiarity, which is applicable in this case--I trust that the House unanimously supports that--and making allowance for our ability to draft legislation that is appropriate to ourselves, we should try to give people legal rights. Ultimately, legal rights must be determined by the courts, and that takes a heck of a time. I speak with due respect to those--of whom there are not a few--who derive a substantial income from being in the law. Let us assume that we pass a Bill of some kind which removes legally the disabilities complained of in the field of sex discrimination, racial discrimination in particular and various other forms of discrimination. Somebody must bring a case to begin with. That case will involve a search for documents, the schooling of witnesses and, among other things, interrogatories and replies thereto. Ultimately, the matter comes before the courts. I use only as a guide the colossal increase in legal salaries throughout the country. It must take a year before the matter comes before the court, and by the time the appeal procedures have been exhausted perhaps two years have elapsed. If the case then goes before the European Court of Justice, which would have jurisdiction in these matters, another long period will elapse.

At the end of it perhaps only one or half a dozen bodies will be affected. If after a time the habit catches on and more and more people sue, whether they are backed by trade unions or other institutions, at most only a few hundred, or a few thousand, will benefit from the legal determination of their entitlements. It may be said immediately that once those entitlements are legally permissible according to our law trade unions and other bodies will press the wider case and, after a time, the principle will become established. I do not believe that that is an altogether satisfactory way to go about it. The desire for codification, which is subject to very wide interpretation and perhaps legal action, quite apart from the bringing of the action itself, directly affects only a comparatively small number of people.

The report is very useful in laying bare the issues. If one reads the evidence of some of the witnesses, those issues are left in some frank intellectual agony. But the report is very important in helping to determine the climate of opinion. We are really down to the nub of it. The only way in which we can get rid of discrimination in the various fields to which we have referred is by the progressive education of public opinion. That can only be accomplished within a society which is free from fear and insecurity. As long as there is poverty and deprivation on the scale that exists at present and unscrupulous propaganda at the hands of the press, that discrimination will endure.

Before we can even begin to succeed in eliminating such discrimination, we need a drive towards the end of poverty, bad housing and the lack of those facilities which enable poorer people to enlarge their

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personalities and even to think. Those are the vital things we have to do. In that spirit, I should like to support the report before us.

2.35 p.m.

Lord Vinson: My Lords, it is always a great privilege to follow the noble Lord, Lord Bruce of Donington, and to listen to his clarity and wisdom.

I join with other Members of your Lordships' House in thanking the noble Lord, Lord Wallace of Saltaire, for bringing this important debate before the House today. However, unlike him, I do not welcome the directive.

For the average person living in a relatively free and prosperous society for 50 years, the concept of liberty and freedom are little discussed because they are currently taken for granted as our natural way of life. To most people they are of no concern. Few realise that the whole concept of liberty and freedom is enshrined in common law, whereby everything is permitted unless it is expressly forbidden.

The directive, given down to us by a body comprising cultures and backgrounds different from our own, is wholly alien to that concept of liberty, a point well made by the my noble friend Lady Young. It is well said that the price of freedom is eternal vigilance, and we are debating today a subject which lies at the very heart of human freedom--not least freedom of choice and of assembly.

I hope that at the end of the debate we shall not hear anodyne words from the Minister assuring us that there really is no problem; that noble Lords are making mountains out of molehills; that the practical interpretation of the measure will do no more than recognise best practice; and that we can easily live with it.

I find it difficult to understand how any government could begin to defend the directive. Surely, if ever there were a time for Government to stand firm and to defend our deepest freedoms, fought for for over hundreds of years, now is that time. Such liberties have attracted migrants to our shores over the centuries and continue to do so. We are about to turn those freedoms upside down, a point made by the noble Lord, Lord Bruce of Donington.

Sadly, we have been down this legislative route before and have had assurances from a Government who are strong on the rhetoric of liberty, freedom and minimum regulation, but in practice seldom lose an opportunity to sign up to yet another restrictive treaty.

It is also fair to ask: what is the scale of the problem? What massive social injustice calls for a piece of legislation so wholly intrusive into human affairs as this directive? If the Government believe that there is such a problem on any scale which calls for this level of legislation, why have we not heard more about it?

The truth is that a handful of commissioners have a bee in their bonnet about discrimination and so-called prejudice. They are blind to the wider consequences of their actions. The true motive is in the words,

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    "This is a milestone in the construction of a Social Europe".

We have to ask ourselves: whatever happened to the concept of subsidiarity?

We are facing social engineering on a heroic scale, a point well made by the noble Lord, Lord Griffiths. I recognise that behind this particular directive lies the eternal argument between liberty and equality. The fact remains that liberte and egalite are inherently irreconcilable. We are dealing with a piece of legislation specifically aimed at human behaviour and a restriction in human choice, all done under the name of greater equality and fairness. But, in practice, as in so many pieces of legislation, the unwritten law of unintended consequences will produce hugely damaging side effects.

So much of the legislation from Europe is framed in a manner based on European Roman law. Such a code is primarily aspirational, unlike our own, which is mandatory. As a result, those drafting such legislation do so with an entirely different frame of mind from those who would be interpreting it in our own courts. Others in today's debate have provided striking examples of how the UK courts can be expected to implement this directive in practice.

It is well known that we will enforce where other countries turn a blind eye. Can your Lordships imagine parts of this directive being enforced in the Vatican? Today, much employment legislation is designed by those who have in mind huge organisations with well qualified personnel departments and staff dedicated to employment matters. But, in practice, most firms are small firms; most businesses are small businesses. What we are talking about is bringing the full weight of the law into the employment policies not only of religious and other organisations, but of those businesses--the vast majority of them in this country--which employ only a handful of people. Human relationships on this scale are conducted on a one-to-one basis. That is the reality of so much employment.

In this House, we have seen many damaging examples of the onerous and unrealistic nature of such laws when applied to small businesses. Further legislation of this type will only make it harder and less agreeable to set up and run a business. This, coupled with the reversing of the burden of proof, will enormously increase the gold-mining opportunities of the disgruntled and the litigious. When I hear the noble Lord, Lord Lester, who, sadly, is not in his place, talking about these matters, I often feel that I am listening to an eagle talking about the habits of moles. He knows not of what happens down beneath him.

Far from opening up wider opportunities for those who we are told are being discriminated against, the legislation will in fact, over a period, continue to shrink the opportunities available as fewer firms are set up. The inadequacy of small firm creation in continental Europe is well known.

Here at home, if I ask my local self-employed plumber why he does not employ a mate, he says to me, "Guv, I have done it once; I'm never going to do it again. I can't take the hassle again of getting rid of a

30 Jun 2000 : Column 1217

bad bloke". Another job lost; another natural training opportunity foregone; and another person kept in poverty.

Further employment legislation of this kind is not necessary and it would add yet another layer of regulatory bureaucracy. I would remind your Lordships of the cautionary tale of Gulliver in Dean Swift's allegory on the government of his time:

    "No one silken thread held him down but a thousand made him immobile".

This legislation, far from being a silken thread, is a restrictive noose. I do not doubt that good intent, misguided as it is, lies behind it, but I have no doubt whatever of its pernicious and damaging effect on our free society.

I hope that on this occasion the Government will turn their rhetoric about freedom into reality and make it quite clear to our EC partners that they will have no truck with this piece of legislation and will veto it accordingly. Let us make our own laws of this type in our own country.

Perhaps I may conclude with a quotation from Edmund Burke:

    "Men have sometimes been led by degrees, sometimes hurried into things, of which if they could have but seen the whole together, they would never have permitted the most remote approach. The people never give up their liberties except under some delusion".

It is a delusion to think that one can introduce universal equality without a universal restriction of liberty. We cannot make a perfect world. For that reason, this piece of wholly unnecessary legislation must be resisted. It will do more harm than good. It confuses prejudice with preference and, in attempting to eliminate prejudice it would, in fact, restrict that most basic of all human freedoms: the right to make assembly, religious or otherwise, with those of one's preferred choice.

2.44 p.m.

Baroness Stern: My Lords, I joined Sub-Committee F only at the start of this inquiry. It is the first Select Committee report in which I have been involved and I begin by thanking the chairman and my other colleagues. It was a very educational experience, for which I am grateful. I learnt a lot and, in the process, discovered how much more there is to learn. It was indeed a privilege to work with a group of such experts and with such an expert chairman.

I am very pleased to have had the opportunity to participate in a report on the subject of discrimination and racism in Europe. I want to concentrate on the race directive but in principle I very much welcome both directives.

I am glad that our committee supported the directive unanimously. It is good in principle that such a directive is in place. I congratulate the Government on seeing an opportunity to make progress in this area and on supporting the move to agree the directive quickly. Although one can understand the anxiety that there has not been proper scrutiny, on the other hand it was an opportunity that had to be seized.

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The European Union is bound by a set of values. The member states are committed to developing as,

    "an area of freedom, security and justice".

Racism can have no place in such a Union, and to enshrine that specifically in a directive has practical and declaratory impact. It acts as a reminder to racists and a reassurance to those who are discriminated against. I am sure that no one will claim that there is not racism in Europe. Certainly the image and, unfortunately, the experience of the European Union for many people from ethnic minorities is of a white people's club where black people are unwelcome. There is much evidence of that.

The noble Lord, Lord Wallace, spoke of overriding national traditions and cultures that must be taken into account. Sadly, racism is deeply embedded in some aspects of culture in Europe. Those aspects must be overridden if we are to move towards an area of freedom, security and justice.

I want to give one example. There is a body in Europe called the Committee for the Prevention of Torture and Inhuman and Degrading Treatment or Punishment. Fortunately, it also has a short name: the CPT. It is part of the Council of Europe and has nothing to do with the European Union, except that it visits prisons and other places of detention in the states of the European Union and in applicant countries. Although its reports are restrained and meticulous in looking for solid supporting evidence, they shine a light on the darker corners of that Union which claims to be an area of justice.

Among the committee's reports one will find evidence of ill-treatment of foreigners by the police in Spain, including assaults at the detention centre in Malaga; police ill-treatment of suspects of North African and African origin in France, such as beatings and kickings; and beatings of foreigners in Belgium by the police during interrogation and while in police vans. In Austria the committee uncovered evidence of very serious ill-treatment in police stations in Vienna, much of it aimed at foreigners.

The UN committee on the elimination of racial discrimination found in Italy acts of racial intolerance by police and prison staff. In applicant countries, too, racism is deep-rooted, especially against Roma people, as the noble Lord, Lord Lester, said.

Racism in Europe is deeply embedded in many institutions. There is racism in the justice system in this country, too. I understand that French reformers greatly admire the process that has taken place here since the death of Stephen Lawrence, with the publication of the Macpherson report and the work that is under way in the police service to introduce reforms.

The noble Baroness, Lady Howells, to whom this country owes so much for her determination to see something done about a great injustice, might well feel that we have not made the progress that she would like, but we are a role model for some of our European partners, although we, too, need a constant reminder. The race directive should remind us that all is not right here, either. There are lessons for this country.

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Some 25 years ago, I worked in race relations. At that time, we believed in what we were doing and we were optimistic. We never dreamt that we would reach the year 2000 and still be living in a country where the upper reaches of every walk of life are still overwhelmingly white.

Let me give some examples from a field I know and in which the Government helpfully publish figures under Section 95 of the Criminal Justice Act 1991. In August last year, of 1,191 district judges, two were black. The figures for other positions were: of 403 assistant recorders, five; of 916 recorders, five; circuit judges, zero; High Court judges, zero; Lord Justices, zero. The figures for the proportion of police officers from ethnic minorities in 1999 are: constables, 0.9 per cent; sergeants, 0.6 per cent; inspectors and chief inspectors, 0.4 per cent; superintendents and above, 0.3 per cent. The figures for the Crown Prosecution Service are: level B and below, 5 per cent; level C, which is a lawyer grade, 2.6 per cent; level D and above, 1.2 per cent; level D and above administrators, zero. Finally, the figures for the Prison Service are: prison officer grades, 1.4 per cent; governor grades, 0.3 per cent.

Many things have gone wrong and we need a larger debate. The sub-committee heard impressive evidence from Professor Bob Hepple, who is carrying out an independent review of the enforcement of UK anti-discrimination legislation. The noble Lord, Lord Lester, chairs the advisory committee to that project. Professor Hepple made a striking point about a drawback of the UK approach to race equality. He said that it was too heavily based on fault-finding and on retrospective analysis of decisions. It is centred on the process of individual complaints and defensive measures to ensure that the paperwork is in order, in case someone goes to a tribunal.

My experience as the employer of a large number of people bears that out. The personnel department becomes absorbed with individual cases, technical analysis of why we "won" or "lost" and training for staff on the implications of the latest case. What is really lost is racial equality. An employer can breathe a sigh of relief at the end of the year because no cases have been lost and he may forget the all-white management team, the recruitment from the same pool year in, year out and the stereotyped assumptions.

With the Race Relations (Amendment) Bill, there is a welcome move to combine the protection of law against individual cases of discrimination with a more strategic approach, at least by public authorities. That is a start.

In conclusion, I ask the Minister to respond to a number of points. I assume that the race directive will not impact on the behaviour of the police or affect the justice system. The Council of Europe is doing its best in that field with very scant resources. But I should like to know how far the Minister sees the heading "goods and services", including services by the police, applying, for example, to victims of crime.

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Secondly, how does the Minister see the action programme being delivered? Will it include work to improve policing and law enforcement? Thirdly, during the implementation period, will there be opportunity for European-wide discussions at the appropriate level about how to make racial equality a reality rather than just paying lip service? There is much for other states to learn from the British experience, both from our successes and failures. Europe would benefit if we were able to engage in such a discussion.

Finally, I echo the point made so forcefully by the noble Lord, Lord Tomlinson. What can be done to get a better deal for third country nationals who are legally resident? I cannot take a colleague with an Indian passport to a meeting in Paris because it takes two months for him to obtain a visa. That must be wrong. I look forward to the Minister's reply.

2.57 p.m.

Lord Laing of Dunphail: My Lords, compared with many of your Lordships, my reading of this directive may have been rather superficial through lack of time. But I say at the outset that of course I understand what lies behind it and I congratulate the noble Lord, Lord Wallace, and his committee on the time which they devoted to it.

Do we really want to become a grey society where moderately expressed, long-held religious beliefs or wishes expressed in an advertisement can land one in court? I cannot believe that the authors of this directive have thought through the possible consequences and its effect on religious freedom, which is important to me and, I am sure, to many of your Lordships.

In this country, we have long-held traditions of religious tolerance, with respect given not just to Christian minorities but also to those of other faiths. That respect needs to work two ways: not just tolerating other people's beliefs but respecting them so that they are able to operate effectively.

Part of that is linked with being able to recruit like-minded people where jobs are closely linked to religious organisations and activities. In many cases, those rights are enshrined in charities' articles. Our charity laws have understood and respected the need for such a link. They have worked well. They should not be cast aside. If they were, our society would be damaged and our vision of tolerance and respect seriously impaired.

I do not propose to take up the time of your Lordships' House to detail the problems which will arise if the Government sign this directive in its present form. Others have done that much more eloquently and effectively than I can. But let us not accede to a directive that neuters those of us who hold strong religious beliefs and wish to stand up for them. I hope that this directive will be extensively revised.

2.58 p.m.

Baroness Uddin: My Lords, I welcome the opportunity for the House to discuss this extremely important report. I thank the noble Lord,

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Lord Wallace of Saltaire, for introducing this timely debate especially as, due to lack of time, I was forced to withdraw from the committee, so this is a wonderful opportunity for me to say a few words and to add my thanks to the members of the committee who produced this report on European proposals to combat discrimination.

These are complex issues, as was stated so eloquently by the noble Baroness, Lady Stern, the noble Lord, Lord Rix, the right reverend Prelate the Bishop of Southwark, and the noble Baroness, Lady Young. None the less, I am pleased that they have been addressed.

I agree with the noble Lord, Lord Lester, that the United Kingdom has much to teach other European countries. We can be proud of our successes and we must learn from our failures. The possibilities of sharing our anti-racist practices, and the implications of that, are endless.

Article 13 of the Treaty of Amsterdam, which gave the European Community competence to tackle discrimination on a range of grounds, is a huge advancement since I arrived in this country. Despite the fact that this House has not lifted the scrutiny reserved on the race directive, I welcome the urgent action taken on it and the fact that political agreement has been reached. There is no doubt that this Government are committed to combating racism and xenophobia, in this country and through Europe. The historic agreement reached in Luxembourg on 6th June sends the right signal throughout Europe at a time when racism is a stark reality in the European Union and in some of the states that seek to join the Union.

It is most welcome that this directive, when implemented, will give British citizens living and working in Europe protection from racial discrimination. However, there are citizens in this country who do not feel that they are protected from discrimination here. Without that protection of law and that respect for their identity, they cannot truly feel included in British society.

Of course, I speak of members of my own community, which is a Muslim community. My own faith and respect for my faith are one and the same thing--my being, my very existence. If I am discriminated against as a woman, I have redress under the law; if I am discriminated against as an Asian or because of my Bangladeshi origin, again I have redress under the law; but as a Muslim I have no protection afforded me. Members of the Jewish community and the Sikh community have the protection of the Race Relations Act, but Muslims have no such protection. That cannot be just.

Under Article 13, the employment directive is a major opportunity to provide protection against religious discrimination in employment. That is a welcome development and could be a major step forward for the Muslim community. I do not share some of the pessimism raised by a number of noble Lords. Discrimination in employment is one of our

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main concerns. I am sure that outlawing it would be widely beneficial to, and welcomed by, members of other minority faith communities.

In this country there are many good examples of good practice. Marks & Spencer has produced good practice guides for its senior managers to facilitate the religious practices of employees, which is a good example, as is the work carried out by Tower Hamlets Council, Bradford City Council and Newnham Council which ensures that the needs of staff are taken on board to facilitate religious practice and observance. That is helpful and sets a good example to others who wish to accommodate the needs of their diverse workforce.

Of course, some employers do not respect and understand the need to be aware of the faith dimension of their workforce and the need to be sensitive to different requirements. On the whole, I believe that there is widespread ignorance. Therefore, developing good practice in advance of the implementation of the employment directive would be an important and positive signal. To achieve that I believe that Muslim and other religious leaders, alongside businesses and employer organisations, should work together to develop the necessary understanding and practical solutions, because recourse to the law should not be the first step to raising awareness and taking practical actions to root out discrimination in employment.

I believe that protection against discrimination on the ground of religion is a fundamental human right, not an optional extra which an employer should be able to choose or reject. But, like the committee, I recognise the complexities and difficult issues which must be addressed.

The directive talks of discrimination on the ground of religion or belief. I do not know where belief begins or ends; but, given the current status of Muslims in Britain, I am absolutely clear of the need for protection against religious discrimination in employment. The need is absolute. Will my noble friend the Minister, who is not in her place, take this opportunity to reinforce that message today? Will she also assure the House with regard to the exemptions which it is proposed to keep in place with regard to religion, that organisations may continue to use "genuine occupational qualifications" when required for their own purposes?

In that regard, I add my voice to the concern raised by Mr Singh on the "Today" programme. I believe firmly in social engineering of a kind which would certainly have prevented the holocaust of the last century. With the anticipation that we will take the right course, I look forward to the Government initiating a successful outcome on this aspect of the employment directive, to ensure protection from discrimination for faith communities across Europe.

3.5 p.m.

Baroness Greengross: My Lords, I welcome this opportunity to speak on age discrimination in employment. I was interested and pleased by the

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comments of the noble Lord, Lord Wallace, and welcome those of the noble Lord, Lord Lester, and the noble Baroness, Lady Whitaker, in particular.

I was pleased also to give evidence to the sub-committee on behalf of Age Concern and of a pan-European non-governmental organisation, Eurolink Age, which I was privileged to establish some 20 years ago. As the noble Lord, Lord Wallace of Saltaire, indicated, age discrimination would be a new area in which legislation through a directive might be introduced, and would be new as legislation in this country. Nevertheless, it is devastating to the individuals who come up against it. In many cases it leads to isolation, poverty, loss of status and poor health, which provokes a great deal of expense.

We know that at the moment one third of the people of this country aged 50 or over are no longer in the labour market. They are therefore dependent on state benefits for most of their income, and most of them are out of work involuntarily. That is a serious situation and can be extremely costly to the economy of the member states of the European Union. It makes it impossible for many redundant or early retired individuals who wish to contribute to the economy of their country to have the opportunity so to do.

The Department for Education and Employment in this country recently carried out some research on 50 to 64 year-olds. It estimated that the cost per annum to this country of those people excluded from the labour market was £16 billion per year. The Employers Forum on Age has already carried out research on people of 50 and over, not stopping at the age of 64. That research demonstrated that the cost to the economy of the people over 50 who wish to contribute through working but are unable to do so was £26 billion per annum. That is an enormous amount. It also represents the loss of the ability of those people to spend, to save and to pay tax, and it does not take into consideration the expenditure and loss to the National Health Service.

I am not suggesting in any way that people of 50 and over should be compelled to work. But age discrimination, which they so often come up against, is pervasive, destructive and often unrecognised by those who practice it. In other words, it is practised unconsciously. It is considered "normal"--sometimes it is even considered to be a kinder way of dealing with older people than informing them that they are incompetent to do a particular job. But kindness is not the answer. Competence testing must be the only criterion that is acceptable in the labour market of today and that of the future.

We know that the differences between people of similar ages are often much greater than those between the generations. The United States has had the experience of anti-age discrimination for a long time. Indeed, it was introduced in the late 1960s and has had mixed results for all sorts of reasons--partly because federal law clashes with state law and partly because there are an awful lot of accepted justifications for exceptions to anti-age discrimination. It is because of those and the huge amount of litigation that takes

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place that it is not always obvious how beneficial it has been. Therefore, I agree with the noble Lords, Lord Wallace and Lord Lester, that a good deal of consideration and clarification would be needed before such legislation is accepted and becomes part of the law of this country, or of that across Europe.

The Government have already taken some very welcome action in this respect by issuing a code of practice to combat age discrimination. They have indicated that this will be reviewed next year. But we know that, on the whole, this has been taken up in this country mainly by the most committed and most able employers--that is to say, those who are committed to best practice. Many people have absolutely no recourse to any sort of advice, help or legislation if they are treated unfairly. Perhaps I may give your Lordships a few brief examples.

I could be denied the opportunity to do a particular job because my reactions are slow, my sight is not good enough, my hearing has declined or my wrists are not strong enough to carry out a particular task in a job description. All of those conditions can be tested and it would be quite acceptable as part of a job requirement. If I was incapable of doing them adequately, I should not do the job. But one 60 year-old might have very bad eyesight or hearing, very weak wrists or other joints or, indeed, have very slow reactions, while another might be very strong in each of those aspects and very quick to react. The ability of the person is the key, not the age or the number of birthdays that he or she has celebrated. The person might have had slow reactions or poor eyesight from a very early age.

I agree 100 per cent with the comments made by the committee chaired by the noble Lord, Lord Wallace, on the fact that if the currently unacceptable justifications that have been put forward as exceptions to this are agreed to, it will be the first time that age discrimination will be legalised in the European Union. Age could then be used not only directly but also as a gateway to mask other already illegal forms of discrimination, such as those on the grounds of race, gender or disability.

Perhaps I made conclude by saying that the Government took a very welcome step regarding age discrimination through the code of practice. It seems that the best that we can hope for is that legislation will be introduced fairly shortly. We would all prefer it if the latter were not necessary, but I think that it may prove to be so in this country. The framework directive, minus the unacceptable exclusions in Article 5, is an ideal opportunity for the UK Government to take a lead across the European Union in finally outlawing a pernicious form of discrimination that damages our economy and our people. I very much hope that the Government will take the required lead and that the Minister will assure us to that effect.

3.14 p.m.

Lord Dholakia: My Lords, I thank my noble friend Lord Wallace for the able chairmanship under which

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this report was produced. He had to use all his diplomatic skills to produce an agreed report. He has done a good, if a little cautious, job.

Those of us who talk about discrimination do not have to continue to identify case after case. One simply has to open the annual report of the Commission for Racial Equality or, for that matter, the report of the probation inspectorate, published only last week, to identify the extent of racial discrimination that exists. Those of us who have worked in the field of race and community relations are aware that there are wide variations between member states in the acceptance of the need for legislative teamwork to deal with discrimination.

We in the United Kingdom have a good record in enacting legislation on discrimination and disadvantage. We have given a lead to the European Union countries and also to other parts of the world. Of course everything is not perfect and what has been achieved does not mean that our legislation cannot be improved. The Race Relations (Amendment) Bill now progressing through Parliament is a case in point. We must also accept that national legislation in member states will need to be amended to bring it up to the standard in the directives. I say that because we in this country have considerable experience not only of legislation but also of the impact of legislation. Yet from time to time we wonder whether it has had any direct effect.

The noble Baroness, Lady Stern, identified what is lacking, particularly in the criminal justice field. The noble Baroness, Lady Whitaker, gave example after example of how discrimination affects minorities. I have been involved in race relations for over 28 years. However, when I hear of such cases I ask myself whether the world has moved on at all.

We in the United Kingdom have accepted the principle of equal treatment. We further accept that there should be no direct or indirect discrimination. There is a lack of definitions in the proposed directives. Further, the grounds of discrimination are also not defined. There is, of course, an exception in that direct and indirect discrimination are clearly defined. For this reason we argue that it is an over-simplification to leave such definitions to member states. The problem we identified is EU-wide definitions which evolve once the due process of law is followed. However, the process can be long, tedious and uncertain. Securing definitions in Article 13 may also prove politically and practically difficult, as is pointed out in paragraph 69 of the Select Committee's report. However, that does not mean that it cannot be done.

There are issues that require further consideration. We are well aware that religious discrimination is outside the scope of the United Kingdom's Race Relations Act. The matter is not assisted because of the interpretation of the Race Relations Act with regard to ethnicity. However, the matter will simply not go away. I believe that the Select Committee is right to adopt a cautious approach and that we should await research that has been commissioned by the Home

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Office into the effects of religious discrimination and the extent to which it overlaps with racial discrimination in mainland Britain.

I do not believe that it is beyond the capabilities and capacity of our legal brains to come up with an appropriate formula. Here I look to my noble friend Lord Lester of Herne Hill who, as adviser to the former Home Secretary, my noble friend Lord Jenkins of Hillhead, is the country's leading authority on discrimination legislation.

I do not believe that the committee got to grips with this particular issue. I suspect that there is sensitivity to the question of religious discrimination. That was clearly demonstrated in today's debate. I value and appreciate the views expressed by the noble Baroness, Lady Young; her contribution is a case in point.

I also heard what the noble Lord, Lord Griffiths, said. I disagreed with him in the committee and I continue to disagree with him now. I was present--as was the noble Baroness, Lady Howells--when the 1965 race relations legislation was before the House; when the 1968 legislation was before the House; and when the 1976 legislation was before the House. We have heard the same arguments before--and they are being rehearsed again and again.

But there is an added ingredient this time--I hope I am wrong--and that is Europe and the extent to which Euroscepticism actively filters through. That is something we shall have to face. But I do not think we need to be worried because, at the end of the day, it is right and proper that if we believe in equality we should do everything possible to work towards that end.

There are a number of issues here. Let me refer to one or two on which I think clarification is necessary. Before I do so, perhaps I may ask the Minister what progress has been made in studying the relationship between racial and religious discrimination and in correcting the existing anomalies in the UK race relations legislation.

I turn now to the matter relating to the concept of discrimination. There is no problem with the definition of "direct discrimination"; it is similar to the one in the Race Relations Act and there is a general consensus that that is acceptable. However, the definition of "indirect discrimination" in the directive differs from what we are used to in the United Kingdom. To understand that, we have to understand what indirect discrimination is all about.

Indirect racial discrimination consists of treatment which may be described as equal in a formal sense as between different racial groups, but discriminatory in its effect on one particular racial group. A "racial group" is defined by reference to one or more of colour, race, nationality (including citizenship) or ethnic or national origins. Indirect discrimination arises where a person, in this case the discriminator, applies to another, the victim, who is seeking some benefit from him--for example, a job--a condition or requirement with which he must comply in order to qualify for, or obtain, the benefit, and where the condition or requirment satisfies a number of criteria.

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I do not want to go into the legal arguments for fear that I may run foul of the interpretation that my noble friend Lord Lester would place on my contribution. However, questions will arise as to the meaning of indirect discrimination in the sense that the definition proposed in the directive does not require a complainant to demonstrate that a given practice has had a disproportionately adverse effect on the particular group to which he or she belongs. It is sufficient that it is liable to have such an effect. It can also be limited to a single person. I shall not enter into further legal argument, but caution needs to be exercised so that a new definition does not create confusion. The Select Committee is right to press for a definition based on that found in the burden of proof directive. There are complex issues surrounding the agreed text of the race directive.

Perhaps I may cite my concerns. Article 3(2) of the agreed text contains an exemption not only for discrimination between races and nationality but also for,

    "provisions and conditions relating to the entry into and residence of third-country nationals and stateless persons ... and to any treatment which arises from the legal status of the third-country national and stateless persons ... concerned.

The Government told us that they would seek such an exemption. The committee was unconvinced and asked for a fuller justification. Perhaps I may refer the Minister to paragraphs 103 and 104 of the report. In the light of the committee's recommendation, I ask the Minister to clarify the precise significance of this exemption. Perhaps I may refer to his slightly different wording in recital 15 of the preamble. It states that the prohibition of discrimination based on racial or ethnic origin,

    "should also apply to nationals of third countries, but does not cover differences of treatment based on nationality and is without prejudice to provisions governing the entry and residence of third-country nationals and their access to employment and to occupation".

I ask the Minister for an explanation of the intended scope of the phrase "of any treatment" arising from the legal status of third-country nationals. What protection will they in fact be given by the directive? How does it fit with the proposed amendments to our domestic race relations legislation? There is also an issue of scope--I refer to paragraphs 100 to 103 of the report. Article 3 now includes "healthcare", "education" and "housing". However, Article 3 specifies that protection is given,

    "within the limits of the powers conferred upon the Community".

There is no specific Community competence covering housing or healthcare, and only limited competence covering education; for example, student exchanges. So what does it mean in practice? Our interpretation is that where there is no specific community competence, then the rights granted by the directive will apply only where another Community right is in question. For example, a right to non-discrimination in the provision of housing would be an indirect consequence of the right to free moment. Therefore, a black UK citizen would be protected in, say, France by virtue of the fact

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that he was exercising his right to freedom of movement, but he would not be protected by Community law if he stayed within the UK. I ask the Minister to clarify what the effect of these changes will be. In what circumstances will Community law apply and when will UK law continue to apply?

There are dangers when we talk about equality. When we talk about devising equality provision, for many of us it is to suit a particular single dominant culture. Nor can we subscribe to equality as and when it suits us. If equality has any meaning, then it must be at the centre of all our policies. Nothing less will do.

3.28 p.m.

Baroness Miller of Hendon: My Lords, this has been an excellent debate with many first-class contributions from all round the House. That does not come as a surprise when one bears in mind the quality of the committee's report and the excellence of the chairman, as we have heard from many noble Lords who served on the committee.

We on these Benches are implacably opposed to all kinds of discrimination. We have some difficulty with the directive on establishing the framework of equal treatment in employment. I shall return to that point later in my speech. On the face of it the directives and the surrounding background sound innocent and contain a good many phrases to which no reasonable person or State would want to object--liberty, democracy, respect of human rights, fundamental freedoms, equality before the law and protection of all persons against discrimination and so on.

However, the practical application of those concepts, as distinct from the theory, is never only black and white--if I am permitted to use such a politically incorrect phrase. It involves shades of grey. Enforcing one person's rights may result in the diminution of another person's fundamental freedoms in some respect. If I prefer to employ an older or younger person because I believe that one is likely to have better judgment or, on the other hand, one might be physically stronger, then that is ageism. We all agree that that is unacceptable. Indeed, I should tell the noble Baroness, Lady Greengross, that I understand exactly what she said. During my very last political interview, when I was looking for a seat, it was put to me whether I did not think that I was far too mature for the job.

In a small business where fewer employees work in close contact with one another, if I decide that one candidate for a job seems to fit in better with the other employees, then of course I run the risk of being guilty of racism, ageism or sex discrimination--as, indeed, would undoubtedly be the case. So here we have traded, on the one hand, an employer's right to employ whom he wishes to avoid the offence of discrimination. As a civilised society, we deploy the right to deprive an employer of his right to employ whomever he chooses for the benefit of protecting someone else from discrimination. A balance has to be struck. Obviously, we wish to settle for the lesser of the two evils.

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I invite noble Lords to examine the long catalogue of what I would describe as our own domestic human rights legislation, going back over 30 years: the Equal Pay Act 1970, the Race Relations Act 1976, the Sex Discrimination Act 1975 and the Disability Discrimination Act 1995. Those are only a few Acts which were passed by this British Parliament, aside from prohibitions in various different Acts making racial harassment a criminal offence. I do not offer a comprehensive list here, but I wish to make the point that here in the United Kingdom, we are perfectly capable of protecting our citizens from the wrongs listed by the directive in its preamble. While I accept that we are by no means perfect--I know that we have not met all the aspirations of the noble Baroness, Lady Howells of St Davids--I agree with the noble Baroness, Lady Stern, that nevertheless, we provide a role model for the rest of Europe.

Our view on this side of the House is that the latest proposals contained in the directive are essentially a matter for Britain to decide for itself. I do not mind sounding chauvinistic when I say that Britain does have a longer history of freedom and egalitarianism than some of our European partners. No one should run away with the idea that legislation is the only way to make things better, to change people's attitudes or to reduce their prejudices.

Without a doubt, most--indeed, the overwhelming majority--of our citizens are, I believe, the most tolerant in the world. That is for cultural and historical reasons, not because of coercive legislation and threats of sanctions. Tolerance is about attitude and the strength of character of our people. More and more legislation can interfere with that basic culture and can make otherwise tolerant people turn to resentment. It should not happen, but I know that it does.

The two directives with which we are faced today are to some extent inconsistent and contradictory. According to the committee, both are vague and generalised. The setting of the minimal standards in some respects will not affect this country because of our existing legislation. However, the committee is rightly concerned that if the so-called framework directive is not carefully drafted it will not distinguish between different forms of discrimination. It believes, quite rightly, that racial discrimination--that includes racial discrimination as well as that relating to nationality--is a major problem that needs to be tackled first and foremost.

The committee points to the success in this country in dealing with matters of discrimination on what it calls a sectorial basis, which has meant its easier acceptance by the public. In any case, different forms of discrimination may call for different remedies and sanctions. Furthermore, it will be difficult to define what role "genuine occupational qualifications" will play in any legislation.

It should be noted that, by legislating in the form of directives rather than by prescribing the actual regulations, the EU has given individual member states the scope to interpret the requirements in a way

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that suits them individually. The noble Lord, Lord Tomlinson, made that point. I hope that this will mean that the Government will take a sensible attitude to what constitutes compliance with the directive. Although that is my hope, my expectation based on experience is that that may not occur. This Government have a record of gold-plating EU directives, irrespective of the burdens that they place on our industry.

On 2nd December last year, the noble Baroness, Lady Jay, in a long Written Answer, used such phrases as,

    "transform Britain into a society which is inclusive and prosperous ... making equality of opportunity a reality ... stamp out discrimination, remove barriers",

and so on. That is quite right, and entirely commendable. We on these Benches entirely support those objectives. The noble Baroness went on to say,

    "We will avoid unnecessary and burdensome regulation".--[Official Report, 2/12/00; col. WA 49.]

I sincerely hope so. However, the CBI, although naturally in favour of the principles of the intended measures, is concerned that the proposals may lead to "fuzzy law", leading to a welter of legislation.

John Cridland, the director of human resources policy at the CBI, told the committee in his evidence:

    "we are seeing the development of ... fuzzy law, particularly in the area of equal opportunities. Smaller business desperately needs more certainty in employment law and in equal opportunities law".

In the year to 31st March 2000, employees started more than 164,000 actions compared with 124,000 in the year to 31st March 1999. That is an increase of 25 per cent. Of course, there has been an increase as advisers tell employees that starting a discrimination case is like making a bet that you cannot lose. Many employers, especially those with small businesses, will settle the most unjustified and ill-conceived case because of the amount of management time and effort and legal costs it takes to defend it--to say nothing of the lottery of the fanciful figures some tribunals pluck out of the air for compensation. Only a couple of weeks ago we saw a case in which a policewoman received the equivalent of £1 million, and this week a policeman was awarded £750,000. That is far more than either would have received in salary had they remained in the service for the rest of their working life. The point I am trying to make is that one can sometimes go too far with these matters; then, the whole culture is changed, and litigation becomes the norm of the day. The risk is that we shall be adding fuel to the compensation culture that is rapidly developing.

The directive refers to,

    "the Principle of equal treatment between individuals".

But where is the equality when a disgruntled employee can launch a claim, however ill-conceived, against an employer who is faced with the cost of fighting it?

We have a principle in this country that the unsuccessful party pays the costs. A large number of these speculative cases would never be launched if the employee had to put down even a nominal deposit. The current "no win, no fee" regime, with its attendant

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insurance policies against adverse costs, will ensure that a poor employee with no means is not deterred from bringing a justifiable case--and nor should he be. I have to say that I have no hope that anything will happen in this area, although I should like to think that it will.

I turn to two serious problems that arise from the directive. One is the aspect of what may be described in shorthand as the religious problem. This is caused by the extreme lack of clarity--"fuzziness" in the description of the CBI--in the phrase "genuine occupational requirements", which is open to almost limitless varieties of interpretation. That is particularly the case in relation to the employment of teachers in religious schools where the teacher is of a different religion from that of the school or even of no religion at all.

Other noble Lords, including the right reverend Prelate the Bishop of Southwark and my noble friends Lady Young and Lord Griffiths, have spoken in detail about this matter far more eloquently and adequately than I could. The noble Lord, Lord Northbourne, who is no longer in his place, spoke on the subject on a wider level.

All that I wish to add is that it is no answer to argue that it makes no difference in a religious school if, say, the maths teacher or the geography teacher is of a different religion. I know from experience that often just one teacher will have a particular influence on some pupils outside the subject that he or she teaches. Parents are entitled to expect that their children will be taught, directly or indirectly, what they want and in the way that they want, and that the school should have the ethos that they want. This extends to other things--nursing homes and so on. My noble friend Lord Griffiths of Fforestfach gave a whole list, which I am sure was not exhaustive; there must be more.

The other major objection to the proposals concerns Article 9, which in simple terms reverses the burden of proof. As your Lordships know very well, it is almost impossible to prove a negative. A disgruntled applicant for a job has only to allege facts giving rise to a presumption that there has been direct or indirect discrimination and the employer has to prove that there was none. How does he do that? Two candidates of roughly similar qualifications apply for the same job. Only one can get it. Why should it be presumed that the other was discriminated against on the grounds of race, ethnicity, religion, age, sex or whatever? Will the employer have to make the two potential employees toss for it to avoid being accused of discrimination?

What is indirect discrimination? Shall we become involved in the ridiculous nonsense that applies in the United States, where someone who does not meet required educational qualifications can even complain that he has been indirectly discriminated against because the employer did not make allowance for the deprived circumstances in which he was brought up? That, I believe, is what the directive would introduce.

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As the committee points out, a disgruntled employee or unsuccessful job applicant has only to prove that a given practice is merely liable to have an adverse effect. Such as? I shall not go into more details, because many noble Lords have already touched on the matter, and I am aware of the time. I shall move on rapidly and not go into the question of indirect discrimination, except to say that as originally drafted the Government's Race Relations (Amendment) Bill did not cover such discrimination. However, at the Committee stage in the other place the Government introduced amendments including indirect discrimination. The noble Lord, Lord Dholakia, mentioned that, and I heard him say "Hear, hear" just now.

On 3rd December 1999 the Home Secretary said that although the Government were prepared to consider further amendments, nobody had come up with proposals that would not open the door to floods of what he called "mendacious actions". Will the Minister tell us how the present proposals will avoid such actions?

On 11th January this year the noble Lord, Lord Bassam of Brighton, referred to

    "the unforeseen consequence that the incorporation of indirect discrimination may have for government in the pursuance of certain policies".--[Official Report, 11th January 2000; col. 572.]

He listed a number of circumstances, which I will not take up time by repeating.

I have my doubts over indirect discrimination, but if the concept is to be incorporated into the law there must be absolute certainty as to what it means. It cannot vary from judge to judge, case to case, tribunal to tribunal or indeed from country to country.

Perhaps in her reply the noble Baroness the Minister will tell us what effect on litigation against employers is likely to ensue from the incorporation of these anti-discriminatory proposals into our law--especially with reference to indirect discrimination.

Do the Government agree, if not with me, with the Chief Constable of the South Wales Police, whose evidence to the committee--to be found at page 143 of the report--was that reversing the burden of proof might open up "an avenue of expensive litigation"?

Under Article 13, Britain has the right to veto this legislation, and it should do so unless we can be absolutely certain that it will not be harmful to our country and our economy. No less important, it must not be offensive to our religious communities or, in the name of giving some people the right to demand to work in a place where they may not fit, deprive them of their right to conduct their religious affairs in their own way.

The Government, then, had the right to veto the last racial discrimination directive. They said that they would, but they did not. Will the Government veto these objectionable proposals this time? Can the noble Lord give us an assurance that the Government will exercise the UK's rights, especially those of our religious schools of all denominations and faiths? Article 13 is high on the Commission's hit list to get rid of the national veto. If this occurs, either because we

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give it away or lose it through customary disuse, we shall not be able to veto any other objectionable directives. Can the Government give your Lordships a guarantee that they will not support any extension of qualified majority voting in this very sensitive area?

I conclude by repeating that this has been a very good debate. The committee has produced a wonderful report, and I am glad that I have had the opportunity to participate in the debate.

3.45 p.m.

The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, we have had an extremely interesting debate. I know that the House will be grateful to the noble Lord, Lord Wallace of Saltaire, for having introduced the debate and for giving your Lordships the opportunity to discuss the issue. I thank the noble Lord and all the members of the committee for their report on European Union proposals to combat discrimination. Both the report and this debate will help the Government to develop their position on the proposed framework employment directive and the action programme.

I agree with the committee in welcoming Community action to combat discrimination. I am somewhat surprised by the contributions to the debate by one or two Members from the Conservative Opposition. These are detailed proposals which deserve the attention given to them by the committee in its report and in this debate. The report focuses on two directives which deal with race and employment. Towards the end of their presidency the Portuguese decided to focus solely on the race directive and, after a flurry of activity, that was agreed unanimously at the meeting on 6th June of the Social Affairs Council.

The principal effect of this unique anti-racism package is to extend to other EU countries and applicant countries a similar level of protection from racial discrimination to that which, I am glad to say, has existed in the UK for many years. While some of our European partners have had such legislation in place for years, I regret that others have had little or no protection. The Government are deeply committed to fighting all forms of racism and--I point out to my noble friend Lord Bruce of Donington--xenophobia. This directive represents an important step forward in the fight against racism both at home and in Europe. It sends a signal that we are serious about tackling racism and achieving equality for all. I am sure that that is something with which every Member of your Lordships' House identifies and wants the Government to achieve.

The Government particularly welcomed the presidency's decision to fast track the race directive because successive European Councils, including the one held in Cardiff and, most recently, the meeting in Tampere in late 1999, pressed, rightly, for urgent action on a broad front against racism. The European Parliament reflected this view by giving an early opinion on the race directive.

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Ministers felt that it would not have been acceptable for the UK to withhold agreement even though the Lords had not lifted its scrutiny reserve. Given the history of the proposals, the strong UK support for early action and the unanimous support of the other member states, it was clear that a UK veto--withholding UK support would in effect have amounted to that--was unthinkable. I am most grateful for the support of the noble Lord, Lord Lester, and my noble friend Lady Whitaker on this matter.

We shared the concern highlighted by the Select Committee's report that the race directive as originally drafted was too prescriptive in some areas, and we were able to negotiate successfully to overcome that problem. So, for example, it is now clearly spelt out that the precise functions of the independent bodies set up under Article 13 are a matter for individual member states. Other concerns raised by the committee, including potential overlap between the race and employment directives and the possible inclusion of religion, have been resolved.

The rapidity of events leading up to the agreement of the race directive has led us to prepare against a similarly swift conclusion on the employment directive. While I am sure the House will understand that it would be counter-productive to reveal our negotiating position in full, I have asked my officials to work particularly hard at keeping the scrutiny committees of both Houses informed of developments as events unfold. I hope that that reassures the noble Lord, Lord Wallace of Saltaire.

The noble Lords, Lord Wallace and Lord Dholakia, my noble friend Lady Howells of St Davids, and the noble Baroness, Lady Miller, mentioned one of the most important areas of concern in both directives: the wording of the definition of "indirect discrimination". The definition was agreed in negotiations on both directives, but the one which appears now in the race directive is different from the definition given by my noble friend Lady Howells. It states that,

    "indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons of a racial or ethnic origin at a particular disadvantage compared with other persons, unless that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary".

I spell that out for clarification.

I believe that the committee was of the view that there was no need for a new definition; rather we should stick to the definition that was in the burden of proof directive which closely reflected the definition currently used in the Race Relations Act. Frankly, that was our original view too. However, it soon became apparent that several other member states could not support such a line. In some member states the collection of information about ethnic background is expressly forbidden by law.

The definition of indirect discrimination which appears in the race directive therefore represents a compromise. However, perhaps I may say to the noble Lord, Lord Dholakia, that it is a compromise with which we are pleased. The final definition is much

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closer to the burden of proof directive definition than the one contained in the original Commission proposals.

In its report, the Select Committee raised the issue of the lack of definitions in the race and employment directives. While the Government agree that it is an over-simplification to say that the definition of key concepts can be left entirely to member states, it should be pointed out that these are framework directives which leave a considerable margin of discretion to member states as to precisely how they should be transposed into national law. I hope that that helps the noble Baroness, Lady Miller. It would not be compatible with the principle of subsidiarity for the directives to set out extensive definitions of every single concept even assuming that member states were able to reach agreement on those definitions in negotiations for the directive.

It will be important to ensure that the legislation enacted to transpose the directives into UK law is as clear as possible so that all parties concerned, in particular employers, will know exactly where they stand. The Government share the concerns of the CBI that "fuzzy" law should be avoided.

With regard to the race directive, I turn to a question asked by the noble Lord, Lord Lester. It is also relevant to a question posed by the noble Lord, Lord Dholakia. We shall be consulting on the directive before deciding on any changes to the exceptions to the Race Relations Act, so we shall not amend the Race Relations (Amendment) Bill to do that. In any case, the scope of the race directive does not extend to the operation of immigration services; nor does it cover any justice and home affairs activities.

The noble Baroness, Lady Stern, and my noble friend Lord Tomlinson asked about third country nationals. They are covered by the directives in so far as discrimination on the ground of race may affect them, but only within the fields covered by Article 13. That is the point that we must remember. The directives do not, and cannot, relate to differences of treatment based on nationality, neither do they extend to the immigration services. However, under the grounds set out in Article 13, the 2 million residents in the UK, referred to by my noble friend, will be protected throughout the EU in the field specified in the directives, particularly where there is discrimination on the ground of their race with regard to employment.

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