11 Mar 2015 : Column 653

House of Lords

Wednesday, 11 March 2015.

3 pm

Prayers—read by the Lord Bishop of Leicester.

Pensions: British Pensioners Overseas

Question

3.07 pm

Asked by Baroness Benjamin

To ask Her Majesty’s Government what consideration they are giving to uprating fully or partly the state pensions of British pensioners currently living overseas whose pensions are frozen.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, there are no plans to change the current arrangements for payment of state pension to those recipients who live outside the UK. The policy of this coalition Government is to uprate UK state pensions where they are legally required to do so under the terms of EU law or through a bilateral social security arrangement which covers uprating. Changing the policy as suggested would incur significant costs—moneys which are currently just not available.

Baroness Benjamin (LD): My Lords, I thank my noble friend for that Answer, but it is unbelievable that British pensioners who have paid in their full contribution do not receive their full pension when they retire to many parts of the world, including to the Commonwealth. If full uprating is thought to be costly and a liability for back-payment claims, will the Government adopt the solution of partial uprating of frozen pensions at their current level, since this involves neither of these barriers? It is affordable, it is cost effective and it will stop the gradual decline of pensions year on year. I beg the Government to include a partial uprating option in the Budget and put an end to this injustice once and for all.

Lord Freud: I regret I cannot give my noble friend any comfort. Full uprating to today’s levels would cost us more than £0.5 billion and while partial uprating—in other words, just starting to move current levels of pensions up by the increases—would start off being much less than that, those costs would rise in the medium term to a similar level to the full uprating.

Baroness Turner of Camden (Lab): My Lords, is it not really rather unfair? I have a relative who retired to South Africa where there is no reciprocal agreement. He is very upset that he paid the appropriate contributions before leaving this country and his pension will nevertheless be frozen. Should not people who have made some contribution at least have some gesture from the Government in favour of fairness, which is, apparently, not available at the moment?

11 Mar 2015 : Column 654

Lord Freud: This policy has been running now for 60 years. It has been upheld in the European Court of Human Rights. We have made pensions available to many pensioners abroad, which is different from many OECD countries which do not do so. Most pensioners migrated well before they became pensioners and have built up rights in their adopted countries.

Baroness Gardner of Parkes (Con): My Lords, you will not be surprised that, with my Australian origins, I have been approached many times about this, and successive Government after successive Government have given me exactly the same reply over the 30 years that I have been asking this question—that it simply cannot be afforded. But when I followed this up at the Australian end, I was assured that they top the pensions up, or did so. Does my noble friend know whether it stills happens that a number of the Commonwealth countries take on and give the extra pension?

Lord Freud: This is the reason why this is a complicated area: it is about a bilateral agreement with another country. In practice, to take the example of Australia, I estimate that for any extra amount that we paid to ex-UK pensioners or UK pensioners living in Australia, more than 25% of that money would go straight into the Australian Treasury.

Lord Rooker (Lab): My Lords, I fully accept the position that the Minister is in by answering this Question, but how often do the Government check and audit that the recipients of these pensions who are thousands of miles away are still alive?

Lord Freud: The noble Lord will be very pleased to know that we now have a system, which has been introduced reasonably recently, of checking that rather more regularly than it used to be done.

Lord Shipley (LD): My Lords, could I add to my noble friend’s example of Australia that of Canada, which uprates the pensions of its pensioners who are living in the United Kingdom? Given also that, in some countries in the Caribbean pensioners from the UK have uprated pensions whereas in other countries in the Caribbean they do not, does the Minister not agree that it really is time to get this sorted out and that the partial pensions uplift route is the way to go?

Lord Freud: The reason for those differences in Caribbean countries and elsewhere is because we have historic bilateral agreements. Interestingly, to pick the Canadian example, no Canadian pensions were paid in the rest of the world when we were looking to do a bilateral in the 1960s. That is the reason that we do not have one today with the Canadians.

Baroness Scotland of Asthal (Lab): My Lords, is there not a difficulty because, while I accept that there has been an iterative process over time, what we now have is a situation of fundamental unfairness? A number of British citizens who worked in this country all their lives, making a considerable contribution, are going to be treated differently if they choose to return to the countries of their birth. For example, if someone from the Caribbean was, happily, a Barbadian or a Jamaican

11 Mar 2015 : Column 655

they would be treated in one way; if they were not, they would be treated in another way. Does the Minister not think that there is now absolute necessity for us to address this unfairness, as opposed to allowing it to continue?

Lord Freud: My Lords, bluntly, this is about money. The approach in this policy has been in place for 60 years —effectively, the current structure dates from 1955—and, as far as I am aware, during the discussion that we had on this during the passing of the Pensions Act 2014, both the Government and the Opposition confirmed that they had no desire to change current arrangements.

Baroness Hooper (Con): My Lords—

Lord Marlesford (Con): My Lords—

Baroness Knight of Collingtree (Con): My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, I think that the House is signalling that it would like to hear from my noble friend Lady Hooper.

Baroness Hooper: My Lords, can my noble friend tell us about the situation for British pensioners in the overseas territories, such as the Falkland Islands, St Helena, Gibraltar and so on? Would it be possible for the scheme of partial uprating described by my noble friend Lady Benjamin to apply at least to the small number of pensioners who live in our overseas territories, which are, after all, a very special case?

Lord Freud: Of the 14 overseas territories, two are uprated—that is, Gibraltar and Bermuda, where we have bilateral agreements—but the other 12 are not. The reason that we cannot go ahead and treat them differently is because that would open the door for us having to do it elsewhere.

Fracking

Question

3.15 pm

Asked by Lord Greaves

To ask Her Majesty’s Government whether they intend to carry out a full assessment of, and public consultation on, the environmental, landscape and community impacts of any schemes that take place for exploratory fracking before granting any consent for commercial shale gas extraction.

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, the environmental, landscape and community impacts of any exploratory hydraulic fracturing for shale gas are already taken into account through the UK’s regulatory and planning regimes. These regimes also provide opportunities for the public to be consulted.

Lord Greaves (LD): My Lords, there are two very broad arguments against fracking. The first is that the carbon should be left in the ground, because to remove

11 Mar 2015 : Column 656

it will contribute to climate change. The second concerns the whole range of environmental, social, cultural and landscape issues around fracking. We simply do not know what the effect of fracking will be, in all circumstances, on this densely populated country, with our regulatory regime. Surely, it is sensible to have two or three pilot schemes and to evaluate those properly and officially before going ahead with any more.

Baroness Verma: My Lords, the economic impact of shale, both locally and nationally, will of course depend on production. However, there will clearly be opportunities for the UK to benefit, particularly through being much more self-sufficient in energy production. On the wider issues that the noble Lord, Lord Greaves, mentioned, we need to make sure that, during the process, communities—the public—have opportunities to partake in the consultation at many junctures.

Lord Wigley (PC): My Lords, does the Minister accept that, since the Infrastructure Bill went through this Chamber a few months ago, there have been changes with regard to both Scotland and Wales and that control over on-land fracking will be devolved? Indeed, in the National Assembly in Cardiff, an indicative resolution was passed supporting a moratorium, supported by Members of all parties. In these circumstances, can she give an assurance that all those approaching the department with regard to fracking will be notified that the situation in Wales and Scotland may be different?

Baroness Verma: My Lords, we have made it clear that onshore exploration will be devolved.

Lord Judd (Lab): My Lords—

Lord Taverne (LD): My Lords—

Lord Lawson of Blaby (Con): It is the turn of this side. Given that there is agreement—

Lord Judd: My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, if the noble Lord is not going to give way, it is actually the turn of the Labour Benches, and then I am sure that the House will want to hear from my noble friend Lord Lawson.

Lord Judd: My Lords, does the Minister agree that, while fracking may have a vital contribution to make to our economic future and our energy resources, we are not seeking to generate energy as an end in itself? We are seeking to generate energy to have a United Kingdom worth living in. The richness and preciousness of our countryside is one of the most invaluable assets of that society worth living in. Therefore, is not the Question asked by the noble Lord, Lord Greaves, absolutely fundamental to the kind of Britain that we want to live in?

11 Mar 2015 : Column 657

Baroness Verma: My Lords, we have been fracturing for many years. It is nothing new. We are making sure, through legislation recently enacted, that there will be protection for national parks and areas of outstanding natural beauty, but we need to explore potential so that we do not rely on overseas energy that spikes up in price and whose supply can be dictated by geopolitical events. I think that this Government have approached it very responsibly.

Lord Lawson of Blaby:My Lords, given the agreement on all sides of this House, and indeed more widely, on the desirability of boosting the development of the economy of the north of England, and given that American experience suggests strongly that the greatest single contributor to that could be the successful development of the Bowland shale in the north-west, is it not deplorable that Labour-led Lancashire County Council is doing its best to prevent this happening by turning down every single application for exploratory drilling?

Baroness Verma: My Lords, while my noble friend of course makes a very helpful intervention, we need to be mindful that development needs to take account of local communities. Therefore, it is absolutely right that the processes in place are followed properly so that community benefits reach out to those people. We should ensure that the case for fracking is made properly and that businesses, suppliers and operators are all engaged with local communities.

Baroness Worthington (Lab): My Lords, it was incredibly gratifying to see Ministers in the other place finally relent and accept that, far from being fine or perfectly capable, the regulatory regime for fracking in this country needs a massive overhaul. When do the Government plan to consult the public on bringing in the new regulations that were won by Labour in the House of Commons?

Baroness Verma: My Lords, I think that the noble Baroness recognises that this Government have been responsive to concerns raised by the public. That is why we have taken those decisions to look carefully at legislation that is going through both this House and the other place. However, to say that our regulatory organisations are not robust would be unfair, because we have among the most stringent regulatory frameworks in the world.

Lord Tebbit (Con): My Lords, could my noble friend contemplate for a moment what our Victorian forebears would have said if those who are now opposed to fracking had been present in those days to oppose coal mining? It would of course have avoided the coal miners’ strike, which was about keeping open our uneconomic pits to dig more coal.

Baroness Verma: My Lords, I am sure that my noble friend has made some very important points in that contribution. On going forward and ensuring that we become less dependent on external factors, I agree with my noble friend that we need to make progress.

11 Mar 2015 : Column 658

Immigration: Regulations

Question

3.23 pm

Asked by Lord Roberts of Llandudno

To ask Her Majesty’s Government what representations they have received in the past year from organisations dealing with the welfare of immigrants expressing concerns about the current immigration regulations.

The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con): My Lords, the Government are determined to ensure that people in all parts of our immigration system are treated with dignity and respect. Regular engagement with external partners takes place through the national asylum stakeholder forum and is an important part of ensuring that issues about migrants’ welfare are raised and addressed.

Lord Roberts of Llandudno (LD): My Lords, has the Minister read the all-party report on immigration detention, published in the last few days? If so, does he agree with that committee that the system that we have at the moment is totally unworthy? There have been protests in both Yarl’s Wood and Harmondsworth in the past couple of days. Will the Minister work to remove the injustice whereby those affected are detained indefinitely, with indefinite deprivation of liberty and of human rights? Is it not hypocrisy to celebrate 800 years of Magna Carta while we allow this sort of situation to continue?

Lord Bates: My Lords, I have read the report which came out last week. The Home Office will, of course, give a proper response to such an important and thorough piece of work. As to the noble Lord’s point about detention, he will be aware that 93% of those who are actually detained in immigration removal centres are there for less than four months. They are the most serious of cases—people who have come to this country clandestinely. We need to establish their identity because it would be a dereliction of duty not to identify those whom we are letting into this country. There are foreign national offenders and people whose appeals have been exhausted. However, we are keeping this under review and that is why the Home Secretary has asked Stephen Shaw to undertake a thorough review.

Baroness Lister of Burtersett (Lab): My Lords, in its recent report on violence against women and girls, the Joint Committee on Human Rights, of which I am a member, expressed concern about how current Home Office policies leave some people destitute during the immigration and asylum process. This can lead to women being at greater risk of violence and sexual exploitation. Will the Government now amend the very welcome action plan on violence against women and girls to stop this happening?

Lord Bates: There is rightly support available for people who are in severe states of destitution. There are differing levels for those who are seeking asylum and for those whose asylum cases have been refused.

11 Mar 2015 : Column 659

These amounts are kept under review. There are additional facilities to provide accommodation, to help with food and access to legal and health care. These are all very important and we need to continue with them.

Lord Lloyd of Berwick (CB): My Lords, when this point was raised last week, the noble Lord indicated that he might be willing to meet some of us who took part in that APPG. Could we not meet him so that we can discuss our real concerns about that report?

Lord Bates: The noble and learned Lord is right. We need a few days to get that in place but, on Tuesday 17 March, a notice will go out through the all-party Whip for all interested Peers to attend a meeting with officials. I know there is a great deal of concern on all sides of the House. We will also offer some reassurance about actions and steps which have been taken.

The Lord Bishop of Chester: My Lords, does the Government accept that, because the number of migrants who come here perfectly legally from the EU is much higher than expected, the downward pressure from the authorities on non-EU immigrants is onerous, aggressive and leads to the sort of report we have just heard? There is now such a disparity of treatment between EU and non-EU immigrants that it is producing all manner of injustice.

Lord Bates: We have to look at the reason why we have seen pressure on immigration; we have to take it seriously. The right reverend Prelate will recognise that uncontrolled immigration, which we have had in the past, puts intolerable strains on our public services. In this country we rightly have a proud tradition of offering asylum to those who are in fear of persecution and that will continue under the present regime.

Baroness Hussein-Ece (LD): My Lords, in the Channel 4 undercover filming at Yarl’s Wood there was terrible language and treatment of women and black people. Was my noble friend also struck, as I was, by a particular comment about older people with disabilities being held there? What is the policy concerning the welfare of such people in detention centres? How are they being cared for? As the guard said in the footage, why are they here? It is not as if they can abscond.

Lord Bates: A number of issues were raised in that very distressing report by Channel 4 which we are investigating. Stephen Shaw will also be investigating them as part of his independent review.

Baroness Smith of Basildon (Lab): My Lords, may I also raise the Channel 4 documentary which, as the noble Lord said, shocked and distressed us all? On 8 March, my noble friend Lady Bakewell asked about female staffing levels in Yarl’s Wood. The Minister, reminded your Lordships’ House that Serco was contractually committed to delivering a level of 66% by 2015—that is, now. Following that debate, the chief executive of Serco, Rupert Soames OBE, wrote to me to say that the

11 Mar 2015 : Column 660

number of female officers was being increased. His letter says that Serco is working to increase this to 60%—not 66%—and “aim to achieve it” by the end of 2015. Will the noble Lord confirm the correct figure? Is it a contractual and therefore legal obligation to increase the number of women officers and what happens to Serco if it fails?

Lord Bates: Serco was offered that contract. One of the principal concerns which many people have had, which the Women for Refugee Women report also identified, was that there were insufficient female detention officers in that facility, and that their numbers needed to be increased. One of the conditions put out before renewing the contract to the tender organisation was that it needed to increase the proportion of female officers. The figure I gave was 65% or 66%; the chief executive may now be saying 60%. I will certainly look into that; I will speak with him and of course will write to the noble Baroness and ensure that she gets the right information. However, the principle is that we need more female detention staff to look after female inmates.

Lord Avebury (LD): My Lords, does not my noble friend agree that if every other European country imposes a time limit on the length of detention, there is something wrong with our system? We should find some means to grant temporary status to people who are not going back to their own countries through no fault of their own—sometimes their countries will not accept them.

Lord Bates: My noble friend will recall that that was discussed during the passage of the Immigration Act; the proposal was made by the noble Baroness, Lady Williams, and was rejected by the House. We continuously keep that under review, but I reassure the House that 96% of female inmates are there for a period of less than four months—we want to keep detention to the minimum period possible.

Data Protection: Legislation

Question

3.31 pm

Asked by Baroness Ludford

To ask Her Majesty’s Government what is their assessment of the case for updating domestic data protection legislation in the light of the reported comments by the Information Commissioner that European Union law requiring notification of data breaches is three years away.

The Minister of State, Ministry of Justice (Lord Faulks) (Con): My Lords, the Government do not have any plans to update domestic data protection legislation in respect of data breach notification in advance of agreement and implementation of the proposed EU regulation. The Government take the protection of personal data very seriously and believe that a strong system of breach notification will be an important element of a revised EU data protection framework, but that the changes should be made only once the package has been agreed in full.

11 Mar 2015 : Column 661

Baroness Ludford (LD): I thank my noble friend for that Answer. However, should the Government not act with greater urgency to incentivise organisations, from which we have seen a series of major scandals of lost data—whether through lost discs or laptops, or hacking—such as from HMRC, Sony, or health organisations? Would it not be salutary for them to have to report major breaches to the regulator and to customers, who might suffer fraud or identity theft? We cannot wait possibly three years until we get EU law. We need to prioritise this so that we encourage companies to get their act together on security.

Lord Faulks: In fact, companies, conscious of their reputation, do—and quite rightly, should—report any breach of security, as indeed Sony did. That would be good practice. The proposed regulation would provide an obligation to notify the breach no later than 72 hours after it occurs to the ICO or equivalent in the relevant country or the subject, but only where there has been a serious breach. I entirely accept the noble Baroness’s concern, but these things must be approached as a whole, which is what the Government intend to do.

Lord Pearson of Rannoch (UKIP): My Lords, have we become incapable of organising our own data protection? Why must we wait for the famous and inevitable incompetence of the EU to make a mess of it for us?

Lord Faulks: Data do not respect boundaries in quite the same way that the noble Lord does. We do indeed take a number of steps to protect our data—the ICO has a number of powers which it exercises regularly to control data. However, it is appropriate that our data protection legislation should be in harmony with that of the rest of the European Union.

Lord Deben (Con): Would my noble friend not accept that it would be quite difficult to explain to companies which work all the way across the European Union that we were so fed up with the European Union that we did not do the sensible thing for them, which is to do through Europe the things that are best done in Europe?

Lord Faulks: My noble friend takes a slightly different view of this country in Europe. Certainly that is the approach that the Government take, although of course they make a major contribution themselves to the development. Indeed, I shall be attending on Friday a meeting at which we will discuss the final version of European data regulation, or at least the partial general approach to it over the forthcoming year.

Lord West of Spithead (Lab): My Lords, last year 81% of firms above SME level lost data and had data breaches, primarily by cyberattack, and the average cost to each firm was about £1.5 million to get that sorted out. Our voluntary agreement in terms of telling people that they have been attacked seems to be working well, but at board level there are still companies that do not have a CIO or board responsibility for data. Does the Minister not agree that that absolutely has to be done in every company if we are to stop this sort of thing happening?

11 Mar 2015 : Column 662

Lord Faulks: The noble Lord makes a valuable point. He will know that the ICO monitors security breaches, and that if it finds that an organisation has failed to put in place measures to avert a security breach, it has powers to issue monetary penalties of up to £500,000. None the less, I entirely accept the essence of what he says.

Lord Kakkar (CB): My Lords, I declare my interest as professor of surgery at University College London. What assessment have Her Majesty’s Government made of the potential implications for biomedical research of the proposed revision to the data protection regulations from Europe?

Lord Faulks: The noble Lord makes a valuable point. One of the difficult tasks that have to be performed in assessing the appropriate stance to take on data is ensuring that medical research is not in any way compromised, while at the same time making sure that individuals’ data are adequately protected. This issue does not have a simple answer, but it is very much a relevant consideration.

Lord Foulkes of Cumnock (Lab): Has the Minister seen the interesting data published today entitled Government Expenditure & Revenue Scotland, which shows exactly what I predicted in this House a few weeks ago—that if we had voted for an independent Scotland it would by now be bankrupt?

Lord Faulks: A fascinating insight, but a little way away from the Question.

Single Use Carrier Bags Charges (England) Order 2015

Public Bodies (Abolition of the Advisory Committees on Pesticides) Order 2015

Motions to Approve

3.37 pm

Moved by Lord De Mauley

That the draft orders laid before the House on 15 December 2014 and 21 January be approved.

Relevant documents: 17th and 21st Reports from the Joint Committee on Statutory Instruments, 21st and 23rd Reports from the Secondary Legislation Scrutiny Committee.Considered in Grand Committee on 4 March.

Motions agreed.

Specialist Printing Equipment and Materials (Offences) Bill

Third Reading

3.37 pm

Bill passed.

11 Mar 2015 : Column 663

Self-build and Custom Housebuilding Bill

Third Reading

3.38 pm

Bill passed.

Small Business, Enterprise and Employment Bill

Report (3rd Day)

3.38 pm

Relevant documents: 11th, 13th and 19th Reports from the Delegated Powers Committee.

Clause 122: Abolition of requirements to hold meetings: company insolvency

Amendment 57B

Moved by Baroness Neville-Rolfe

57B: Clause 122, page 98, line 31, leave out “prescribed proportion of the” and insert “minimum number of”

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con): My Lords, these amendments relate to Clauses 122 and 123 which remove the requirement for face-to-face meetings in insolvency proceedings.

I am grateful to the noble Lord, Lord Stevenson, and my noble friends Lord Flight and Lord Leigh for their questions about when face-to-face meetings should be held and the position of small creditors. I have also met R3, the trade body representing insolvency practitioners, as I promised to do in Committee, and am grateful to it for the valuable insight that it provided.

After further consideration, the Government intend to expand the thresholds so that a face-to-face meeting may be requested by 10% of the total number of creditors or contributories, as well as 10% by the value of their claims, which was, of course, the Government’s original proposal. This would mean that on average three or four creditors could trigger a meeting in a liquidation case. Moreover, to account for the larger insolvency cases with lots of small creditors, a further threshold of an absolute number of 10 or more creditors or contributories—a third 10—has also been introduced.

I thank the Delegated Powers and Regulatory Reform Committee for its recommendations on this part of the Bill. We have listened to its concerns and moved the various thresholds to the face of the Bill so that they will appear in the Insolvency Act as amended. Any changes to these thresholds will also now be subject to the affirmative resolution procedure.

Before I sit down, I should like to comment on another insolvency issue raised in Committee by my noble friend Lord Flight. This was the temporary exemption from the scope of the no-win no-fee reforms in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 for insolvency officeholders to bring civil proceedings. The Government have listened to the concerns raised in this House and elsewhere. As a result, we announced on 26 February that we

11 Mar 2015 : Column 664

would defer commencing the no-win no-fee reforms for proceedings brought by insolvency officeholders beyond April 2015.

I am most grateful for the input of noble Lords on all sides of the House and I hope they will agree that we have found a sensible solution on all these issues. I beg to move.

Lord Flight (Con): My Lords, I thank the Minister for listening to the various concerns in this territory and for the government amendments. I am aware that the insolvency industry is comfortable with the legislation as it now stands. It understandably has the view that it hopes creditor meetings will not disappear as they can be extremely useful. However, a most satisfactory compromise has been achieved, for which I thank the Minister.

Lord Stevenson of Balmacara (Lab): My Lords, as the Minister said, in Committee we were concerned that, rather than increase creditor engagement, the original clauses in the Bill would reduce it. We reported that the Federation of Small Businesses believed that the proposal would be detrimental, the British Property Federation had concerns and that R3, to which the Minister referred, wanted the Government to think again about the issues.

We take the view that creditor engagement is a core part of a strong, transparent, fair and trusted insolvency regime. Indeed, we have such a regime in our country. Creditor meetings are an essential part of that and build trust and confidence in that regime. Although the clauses also included proposals on virtual meetings—we are not against that—we wondered whether it was a bit previous to suggest that they might entirely replace face-to-face meetings. I am delighted that the Government have listened to the arguments from all around the House and have agreed to come forward with these amendments, which we support. The noble Lord, Lord Flight, has been assiduous in his attendance and has pressed amendments without number. There were so many, it was hard to keep track of them. I think that only one has landed, but I am glad it is this one on no-win no-fee conditions, which will make a big difference. I am grateful to him for his support for this.

Amendment 57B agreed.

Amendments 57C to 57J

Moved by Baroness Neville-Rolfe

57C: Clause 122, page 98, line 32, leave out “of the”

57D: Clause 122, page 99, line 7, at end insert—

“(6A) For the purposes of subsection (3) the “minimum number” of creditors or contributories is any of the following—

(a) 10% in value of the creditors or contributories;

(b) 10% in number of the creditors or contributories;

(c) 10 creditors or contributories.

(6B) The references in subsection (6A) to creditors are to creditors of any class, even where a decision is sought only from creditors of a particular class.”

57E: Clause 122, page 99, line 12, leave out “In this section references” and insert “Except as provided by subsection (6B), references in this section”

11 Mar 2015 : Column 665

57F: Clause 122, page 99, line 36, leave out “prescribed proportion of the” and insert “appropriate number of”

57G: Clause 122, page 99, line 37, leave out first “the”

57H: Clause 122, page 99, line 47, at end insert—

“( ) For the purposes of subsection (4) the “appropriate number” of relevant creditors or relevant contributories is 10% in value of those creditors or contributories.”

57J: Clause 122, page 100, line 10, at end insert—

“246ZG Power to amend sections 246ZE and 246ZF

(1) The Secretary of State may by regulations amend section 246ZE so as to change the definition of—

(a) the minimum number of creditors;

(b) the minimum number of contributories.

(2) The Secretary of State may by regulations amend section 246ZF so as to change the definition of—

(a) the appropriate number of relevant creditors;

(b) the appropriate number of relevant contributories.

(3) Regulations under this section may define the minimum number or the appropriate number by reference to any one or more of—

(a) a proportion in value,

(b) a proportion in number,

(c) an absolute number,

and the definition may include alternative, cumulative or relative requirements.

(4) Regulations under subsection (1) may define the minimum number of creditors or contributories by reference to all creditors or contributories, or by reference to creditors or contributories of a particular description.

(5) Regulations under this section may make provision that will result in section 246ZE or 246ZF having different definitions for different cases, including—

(a) for creditors and for contributories,

(b) for different kinds of decisions.

(6) Regulations under this section may make transitional provision.

(7) The power of the Secretary of State to make regulations under this section is exercisable by statutory instrument.

(8) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

Amendments 57C to 57J agreed.

Clause 123: Abolition of Requirements to hold meetings: individual solvency

Amendments 57K to 57Q

Moved by Baroness Neville-Rolfe

57K: Clause 123, page 101, line 10, leave out “prescribed proportion of the” and insert “minimum number of”

57L: Clause 123, page 101, line 22, at end insert—

“(6A) For the purposes of subsection (3) the “minimum number” of creditors is any of the following—

(a) 10% in value of the creditors;

(b) 10% in number of the creditors;

(c) 10 creditors.

(6B) The references in subsection (6A) to creditors are to creditors of any class, even where a decision is sought only from creditors of a particular class.”

57M: Clause 123, page 101, line 27, leave out “In this section references” and insert “Except as provided by subsection (6B), references in this section”

11 Mar 2015 : Column 666

57N: Clause 123, page 102, line 8, leave out “prescribed proportion of the” and insert “appropriate number of”

57P: Clause 123, page 102, line 17, at end insert—

“( ) For the purposes of subsection (4) the “appropriate number” of relevant creditors is 10% in value of those creditors.”

57Q: Clause 123, page 102, line 24, at end insert—

“379ZC Power to amend sections 379ZA and 379ZB

(1) The Secretary of State may by regulations amend section 379ZA so as to change the definition of the minimum number of creditors.

(2) The Secretary of State may by regulations amend section 379ZB so as to change the definition of the appropriate number of relevant creditors.

(3) Regulations under this section may define the minimum number or the appropriate number by reference to any one or more of—

(a) a proportion in value,

(b) a proportion in number,

(c) an absolute number,

and the definition may include alternative, cumulative or relative requirements.

(4) Regulations under subsection (1) may define the minimum number of creditors by reference to all creditors, or by reference to creditors of a particular description.

(5) Regulations under this section may make provision that will result in section 379ZA or 379ZB having different definitions for different cases, including for different kinds of decisions.

(6) Regulations under this section may make transitional provision.

(7) The power of the Secretary of State to make regulations under this section is exercisable by statutory instrument.

(8) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

Amendments 57K to 57Q agreed.

3.45 pm

Amendment 58

Moved by Baroness Thornton

58: Before Clause 147, insert the following new Clause—

“Equal pay: transparency

(1) The Secretary of State must, as soon as possible, and no later than 12 months after the passing of this Act, make regulations under section 78 of the Equality Act 2010 (gender pay gap information) for the purpose of requiring companies to publish information showing whether there are differences in the pay of male and female employees.

(2) The Secretary of State may consult such persons as the Secretary of State thinks appropriate on the details of such regulations prior to publication.”

Baroness Thornton (Lab): My Lords, I start by thanking all supporters who have put their names to the amendment—the noble Lord, Lord Low, and my noble friends Lady Prosser and Lord Young—and also those who failed to put their names to it, because there were many others who wished to offer their support and were keen to support the purpose of the amendment.

I thank the Minister for the two meetings that we had to discuss the amendment and the issues it raises. I welcome the amendments that she has put to my amendment and congratulate her on doing so. I inform the House from the outset that as long as the Minister intends to accept my amendment, as amended by her, the proposers of the amendment are happy to accept her amendments.

11 Mar 2015 : Column 667

I thank my colleague Gloria De Piero MP for her leadership in this recent campaign. I also thank the TUC and Unite the union for their briefing and continuous commitment over many years and pay tribute to Frances O’Grady and many women trade unionists who have worked without cease and done a huge amount to support women in the workplace against discrimination. I also thank Graziamagazine for its inspiring campaign and petition, reflecting always what its readers have had to say about equal pay and the injustices that they have experienced. Finally, I thank the unsung heroine Nicola Jayawickreme in our Labour Party office here who had the idea that the Bill might lend itself to bringing forward this amendment. She has done a great job.

One of the strengths of this House is that we can and do seize the moment on issues. I suggest that this is one of those times. We were wise to put the powers on transparency in Section 78 of the Equality Act 2010 and I hope that we will now be wise to enact those powers. It is 46 years since the machinists walked out of Dagenham’s Ford plant in protest over the pay divide which prompted the Equal Pay Act. Overall, women in the UK are still earning just 81p to every pound that men earn. According to the new figures based on the Office for Statistics annual survey of hours and incomes, the pay gap between men and women in their twenties has almost doubled since 2010, from 2.6% to 5%, and it has also increased for women over 50.

We are falling down the international scales on equal pay. Women across the world still earn only 77% of the amount that men earn, a figure that has improved by only three percentage points in the past 20 years, according to the United Nations International Labour Organization report this week. Frankly, I do not think we can wait another 40 years to get equal pay.

The most exciting moment for me in the recent equal pay campaign was meeting the Dagenham women last December. They were right to be astonished and dismayed that we still do not have equal pay. At the time, I wished we had better news for them. Perhaps after today’s business we can say that we are absolutely on our way to delivering the equal pay that they fought for all those years ago.

It is without doubt true that under this Government some progress has been made by exhortation and encouragement, but the truth is that it is not nearly enough when one considers that, despite this effort, a mere five companies actually publish their gender pay scales: PricewaterhouseCoopers, for example, is one of them. The company says that it has had only a positive impact, because it is tangible proof that it is a fair employer. Why would our large employers not wish to embrace such a programme and have such a reputation with their employees?

Amendment 58 calls for the enactment of Section 78 of the Equality Act within a year. Last week, my noble friend Lady King mentioned some of the examples that Grazia has so usefully collected from its readers. Shannon, aged 25, works in advertising and felt too insecure in her job to ask for a pay rise, despite knowing that her male counterpart was earning more than she was. To make matters worse, for an end-of-year

11 Mar 2015 : Column 668

bonus he was given £2,000 in cash while she received a £100 Liberty voucher. Erin, 30, is a lawyer who was asked to take a pay cut to avoid redundancy, only to find that none of her male colleagues had been asked to do the same. Amanda, who works in the media, was stunned when two of her male colleagues drunkenly boasted about their salaries as she realised both were being paid an average of £10,000 a year more, despite having the same experience as her.

Last autumn, an overwhelming majority of 258 MPs voted yes to the implementation of Section 78 of the 2010 Equality Act, so we know that there is support for this in the Commons.

We do not believe that this new clause will place a disproportionate burden on British business. Of the 4.9 million private sector employers in 2013, 7,000 employ more than 250 staff and will be affected by this legislation. These are data that these companies already routinely collect and which they would publish with their annual reports. That will make a difference to women, because close to 50% of the employees in the private sector in Britain work in these large firms.

What of the EHRC? During the passage of the Equality Act 2010, it said in relation to Section 78 that if a voluntary regime,

“is achievable, then there would be no need for the clause to be brought into play”.

It made it clear that over time it would,

“be looking for an increase in the proportion of employers measuring and sharing information on the differences between men’s and women’s pay”.

Indeed, during that time the EHRC has supported the Government’s Think, Act, Report initiative to encourage companies to improve gender equality on a voluntary basis. However, can the Minister confirm that only 270 employers are involved in the Think, Act, Report initiative, compared with 7,000 companies with more than 250 employees in the United Kingdom? Indeed, of those, only five have signed up to publish their gender pay gaps. This suggests that a voluntary approach on its own will not deliver the transparency needed to achieve a change in companies’ behaviour. This is what the EHRC says:

“The persistence and extent of the pay differences between women and men suggest that considerably more needs to be done to reduce the gender pay gap. In light of the low impact of voluntary gender pay reporting and the recent increase in the size of the gender pay gap, the Commission believes that the time is right for implementing section 78 of the Equality Act through this New Clause. By having to publish information about their gender pay gaps, companies will be encouraged to address those gaps in order to demonstrate that they are complying with equal pay legislation and to attract and retain talented women in their workforces”.

Closing the gender pay gap is a priority for all political parties—possibly with the exception of UKIP, but who knows—so I think we need to get on with it. I beg to move.

Amendment 58ZZA (to Amendment 58)

Moved by Baroness Neville-Rolfe

58ZZA: Before Clause 147, line 6, leave out from “requiring” to end of line 7 and insert “the publication of information showing whether there are differences in the pay of males and females”

11 Mar 2015 : Column 669

Baroness Neville-Rolfe: My Lords, I thank the noble Baroness, Lady Thornton, for her amendment and all her supporters, including Grazia magazine. I pay tribute to her tireless campaigning on gender equality. This is a very timely debate, following International Women’s Day on Sunday. I am pleased to confirm that it is the Government’s intention to accept the noble Baroness’s amendment, subject to changes that I am proposing by way of government Amendments 58ZZA and 58ZZB.

Before turning to the amendments, I remind the House of some key facts about the pay gap and the work that the Government have already been doing to close the gap and improve transparency. First, it is important not to lose sight of the fact that, according to ONS figures, the gender pay gap has fallen to its lowest level ever. It has been virtually eliminated among full-time workers under the age of 40, which is a more positive way of looking at the statistics. We are broadening the career aspirations of girls and young women by encouraging them to get into STEM-related careers through the Your Life campaign. Opening up these highly skilled areas ensures that women are less concentrated in sectors that offer narrower scope for reward and career progression.

We have also championed the voluntary, business-led drive by the noble Lord, Lord Davies, to get more women on boards. Women now account for around 23% of FTSE 100 directors, up from 12.5% in February 2011, and there are now no all-male boards in the FTSE 100. It is a huge step forward. Last night I attended the fantastic dinner for women on boards, hosted by the Secretary of State for Business, Innovation and Skills and sponsored by Lloyds Banking Group, encouraging this key group of women to drive forward further progress, which I believe is very important.

We are modernising the workplace to give women a fair chance to get to the top. Last June, the right to request flexible working was extended to all employees, and from April we will introduce a new system of shared parental leave. Further, almost 2 million families could benefit from our new tax childcare scheme from autumn 2015, which is worth up to £2,000 per child.

In January we published new guidance for employees on the gender pay gap. Research has shown that organisations perform better when they have a good balance of women across teams and in senior roles. Our guidance helps women to check if they are being paid fairly and encourages good practice of the kind the noble Baroness mentioned. Furthermore, new EU software to help UK employers analyse their pay data can now be downloaded for free. We are already encouraging greater transparency about pay. We have banned pay secrecy clauses, changed company reporting on boardroom diversity and introduced mandatory equal pay audits for companies that lose equal pay claims. We have also been working in partnership with business to tackle the root causes of the gender pay gap and promote culture change and greater transparency through the Think, Act, Report initiative, which the noble Baroness mentioned.

Because of Think Act, Report we now we have a powerful business community of best practice with more than 275 leading companies—the figure is right—employing more than 2.5 million people, leading the way on gender equality. Of course, Think, Act, Report was

11 Mar 2015 : Column 670

never intended as a substitute for Section 78; it is so much broader and has achieved a lot. We said that we would keep Section 78 under review and that is exactly what we have done. We now want to build on the progress we have made. We need to take into account that one size will not fit all and that is why the Government feel strongly that we must consult on how Section 78 is taken forward. I welcome the amendment from the noble Baroness, Lady Thornton. I am proposing two amendments to it—Amendment 58ZZA to ensure it fits properly with the Equality Act provision, and Amendment 58ZZB to require consultation before implementation—which the noble Baroness has graciously indicated that she will accept.

We know that business is particularly concerned about being required to report more information, so we also want to ensure that the Government actively engage business during a proper consultation. This will ensure that we find the best way of implementing Section 78 in a business-friendly way, making use of information employers already have available and without being bureaucratic. In order to bring forward tailored, workable regulations, it will be essential for the Government to consult business properly, as well as others with interests and expertise in the area. We want to ensure that the requirements on business can be fulfilled and that the data published are of real use. I am therefore grateful to the noble Baroness for agreeing to these important adjustments to her amendment.

Lord Low of Dalston (CB): My Lords, I was glad to put my name to the amendment in the name of the noble Baroness, Lady Thornton, and I am equally delighted to support the government amendment that essentially accepts the noble Baroness’s amendment but makes some minor modifications to the text. In view of the welcome degree of consensus that is breaking out, I will endeavour to speak quite briefly.

The Equal Pay Act was passed in 1970—all those years ago—but 45 years on there is still a significant gender pay gap. In 2014, women in full-time employment earned 9.4% less than men in full-time employment. The gap was wider for part-time work. Female part-time employees earned 37.9% less than male full-time employees. For all employees, the gender pay gap was 19.1%.

4 pm

The Government’s equality strategy, published in December 2010, stated that they were working with business and others to develop a voluntary scheme for gender pay reporting in the private and voluntary sectors, and that, while they were doing so, they would not commence, amend or repeal Section 78 of the Equality Act 2010. They committed to annually review the number of companies releasing information and the quality of that information to assess whether this voluntary approach was working. The Government have accordingly been pursuing a Think, Act, Report initiative to encourage companies to improve gender equality on a voluntary basis. However, as the noble Baroness, Lady Thornton, told us, only 270 employers have taken part in this initiative, compared with 7,000 companies with more than 250 employees in the UK. Of those, only five have signed up to publish their

11 Mar 2015 : Column 671

gender pay gap. This suggests that a voluntary approach on its own will not deliver the transparency needed to achieve a change in companies’ behaviour.

The EHRC surveyed 900 private and voluntary sector employers in 2011. The survey suggested that employers might be reluctant to report and to address pay gaps voluntarily. Most employers, with no apparent or planned analysis of their gender pay gap, said that they would consider measuring the gap only if employees complained or took action against them, or if legislation required it. Of the 23% of organisations which had conducted a formal gender pay review, very few reported the findings. Of all organisations surveyed, just 3.7% reported their gender pay gap internally to their own staff, and only 1.3% reported it externally.

Five years on from the passing of the Equality Act in 2010, more action would seem to be needed to improve transparency about differences in the pay of men and women by shining a light on the issue to encourage companies to take steps to close their gender pay gap. The persistence and extent of the pay differences between women and men suggest that considerably more needs to be done to reduce the gap. By having to publish information about their gender pay gap, companies will be incentivised to address those gaps in order to demonstrate that they are complying with equal pay legislation and to attract and retain talented women workers into their workforce.

In the light of the low impact of voluntary gender pay reporting and the recent increase in the size of the gender pay gap, the case is very strong for implementing Section 78 of the Equality Act through this proposed new clause, and there is a very strong case for doing this now. I support the amendment.

Baroness King of Bow (Lab): My Lords, I, too, thank the Government for fiddling with Labour’s amendments so that they now feel able to embrace this area of gender equality. Anyone who has followed this debate closely cannot help but be aware that this is Labour policy, tabled by Labour Peers and others. Our amendment has been on the Marshalled List for weeks. In the debate on International Women’s Day last Thursday, I made this the main focus of my remarks, but not a single Liberal Democrat or Conservative Peer spoke in favour of it. But rejoice—a week is a long time in politics. I am absolutely thrilled that suddenly the Liberal Democrats and Conservatives are all over this like a rash, as they should be, and I have come to heap praise upon them for this most athletic U-turn.

My noble friend Lady Thornton has given the requisite thanks to organisations such as the TUC, but I, too, must come back to the role played by Grazia magazine, which has shone a light on this issue. Ordinary women up and down the country are being paid less every minute of every day in Britain in 2015. It is a scandal. I take on board what the Minister said about being able to look on the figures in a more positive light. However, the case of Shannon, 25, who is getting a £100 Liberty voucher when her male colleague is getting £2,000 in hard cash, shows that we need pay transparency. This amendment on its own will not solve the whole problem but it is a first step in the right direction. Therefore, I thank all those involved.

11 Mar 2015 : Column 672

I hope that this will encourage Grazia to continue its campaigns. It is possible for ordinary women to change the law even though there are not enough ordinary women in Parliament. The voices of those Grazia readers who bothered to write on this subject have now been heard in Parliament. The result will give women in companies with more than 250 employees the right to pay transparency. We cannot continue to hide blatant and illegal sexism under the cloak of darkness. I very much welcome this amendment.

Lord Stoneham of Droxford (LD): My Lords, I congratulate wholeheartedly the noble Baroness, Lady Thornton, on her amendment and on raising this issue. I also congratulate the Minister and the Government for agreeing to bring forward the amendments, to which I added my name and which the noble Baroness, Lady Thornton, has agreed to accept. It is a good move. My group has been committed to equal pay for a number of years. We accept that there is still a long way to go in terms of culture and practice to achieve it. This measure will publicise more widely gender pay gaps in companies and will be a step in the right direction, so I welcome it immensely. It builds on some of the Government’s other policies, in particular to improve the gender balance on boards. It also shows the benefits of cross-party agreement to achieve better legislation that is likely to be more effective and more influential in its impact in the country.

Lord Watson of Invergowrie (Lab): I welcome the Government’s acceptance of the amendment in the name of my noble friend Lady Thornton and their decision to take it slightly further by changing “may” to “must”. That is an improvement and it is to be welcomed as well. I am not quite sure that I would go as far as my noble friend Lady King who was rather effusive—perhaps she was indulging in irony—in saying that the Conservatives and Liberal Democrats were now all over this like a rash. Having been involved with various aspects of this Bill through its passage, I suspect that the driving force in this is in fact the Minister herself and that some of her colleagues may not be entirely signed up to it. I suspect that the word “burdens”, which we have already heard today, will be one that will appear more than once this afternoon in terms of zero-hours contracts, fixed-term contracts, internships and so on—and yet the burdens will always be the burdens on industry and never the burdens on the individual workers who have to work those hours.

This particular amendment is about women. I hope that we can hear a bit more about the burdens that people have to suffer. Earning only 81p in the pound is a burden that no woman should have to suffer. If the amendment opens things up and exposes companies that for whatever reason are paying at different levels, that is a real step forward. I welcome the amendment—and the amendment to the amendment

Baroness Neville-Rolfe: My Lords, I thank the noble Baroness, the noble Lords, Lord Low and Lord Watson, and the noble Baroness, Lady King of Bow, for their contributions to the debate. I am pleased that there is widespread support for the approach. It builds on the Equality Act 2010 and the progress that I believe has been made since 2010. I also pay tribute to the noble

11 Mar 2015 : Column 673

Lord, Lord Stoneham, and thank him for what he said about culture, since culture and transparency are very important in promoting gender equality. I ask noble Lords to support these amendments.

Amendment 58ZZA (to Amendment 58) agreed.

Amendment 58ZZB (to Amendment 58)

Moved by Baroness Neville-Rolfe

58ZZB: Before Clause 147, line 8, leave out “may” and insert “must”

Amendment 58ZZB (to Amendment 58) agreed.

Amendment 58, as amended, agreed.

Amendment 58ZZC

Moved by Baroness Hollis of Heigham

58ZZC: Before Clause 147, insert the following new Clause—

“Employment: compensation for shift cancellations

The Secretary of State shall make regulations requiring employers to pay compensation to workers, including zero hours contract workers, whose shifts are cancelled with short notice as defined in the regulations.”

Baroness Hollis of Heigham (Lab): My Lords, there are many benefits to a flexible labour market but I believe, and I am sure your Lordships believe, that exploitation of staff by employers should not be one of them. One woman who worked in hospitality on a zero-hours contract said, “I never worked no hours in a week but couldn’t find out until the Sunday before the working week began how many hours I would have in the coming week—never more than 30, sometimes as few as 13. My hours were often changed on very short notice and you would be sent home if it was quiet”. She would turn up for work and be told that, “It wasn’t busy enough for me to be needed, even before I could take off my coat”. She went home unpaid. She could not complain as she would be punished with fewer hours the next week. You could not call in sick even if you were because you would be punished with fewer hours the next week, and you could not risk leaving the job without fear of being sanctioned by the DWP.

Let me remind the House that under ZHCs you have no guaranteed hours of work. People on such contracts include cooks, cleaners, call centre and customer services staff, drivers, waiters, hotel and shop workers and domiciliary care workers—there are 300,000 of those. They are mostly women. Over 1 million people on or around the minimum wage are on ZHCs and do not usually know on Friday what hours they will be working on Monday. Three-quarters of those on ZHCs find their hours vary every week. Nearly half are given no notice at all. As one SportsDirect worker said, “Shifts are changed and cut without any notice. Shifts vary week by week”. Another call centre worker never knows whether she will work 48 hours or no hours the next week.

We all want people to work. It is right that they should but insecurity and exploitation from ZHCs can sabotage the rewards of work, including people’s efforts to build a job, a home and a life for their family. These are not temporary jobs: one-quarter of people have worked in their job for 10 years or more. Without a

11 Mar 2015 : Column 674

steady income, they cannot buy, or sometimes even rent, a home. They cannot replace a broken washing machine because the next week they may have only five hours instead of 25 hours of work. They cannot get credit or enter into a financial contract, even for a mobile phone. Instead, of course, they go into debt.

As the Government rightly remind us, ZHCs work for some—students, obviously, or the recently retired supplementing their income. But let us just imagine what it is like for the rest, particularly those with children, who work on ZHCs for hours on end and really do not know from one week to the next what they will earn and what they can feed their children, for five, or even 10, years.

I am very pleased that, in the Bill, the Government are banning exclusivity contracts, under which you are tied to an employer 24/7, whether there is work or not. That is good and right. However, there is one minor but deeply unpleasant issue that we could and should address today, if your Lordships agree. Nearly half of ZH workers get no notice when their shift is cancelled. A further 10% get up to 12 hours’ notice. Only 4% have one week’s notice.

4.15 pm

A Domino’s Pizza driver reported that he had such unstable hours that, as he said, “I never really know how much money I will make from week to week. The worst part is, if I come in to work for an evening and the shop is quiet, my boss can send me home after just one hour’s work. This means that I get paid only for that hour, so I actually end up losing money in the evening as it costs me more than an hour’s pay to get to work”.

A door steward, working for a security company, said, “I never knew where I would be placed, how far I would have to travel or how many hours I would get”. He could be sent home early, getting three hours’ work instead of the five promised, having spent almost two hours-worth of pay in petrol to get there for his three hours’ wage.

A lone parent expected to work on a Friday. She had arranged and paid for childcare in advance, as she must. Her shift was cancelled at an hour’s notice and she was told to work on the Saturday instead. She had to pay for the childcare that she did not need on Friday and could neither find nor afford the childcare that she needed on Saturday. She had to refuse the Saturday job, and her hours were cut the next week as punishment.

This exploitation of people called in and turning up for work, having incurred costs for travel and childcare—and, increasingly, elder care—only to find themselves denied work and then sent home without any compensation, is surely wrong. Bluntly, as the House of Commons Scottish Affairs Committee said, it is,

“unacceptable and a symptom of lazy workforce planning”.

At the evidence sessions on this Bill in the other place last October, the CBI and the independent Chartered Institute of Personnel and Development both called for compensation for lost pay and travel costs incurred. The Minister for Employment confessed:

“Late-notice cancellations are clearly an issue for some individuals, as we heard in the evidence sessions, so I have some sympathy

11 Mar 2015 : Column 675

with the spirit of the amendment and the thinking behind it”.—[

Official Report

, Commons, Small Business, Enterprise and Employment Bill Committee, 6/11/14; col. 553.]

I hope that we can turn her sympathy into policy today.

The amendment is modest, simple and fair and, of course, it has no cost for the taxpayer. It makes clear that it is wrong that people plan or turn up for work as required by the employer but then find their hours suddenly cut or scrapped without compensation—as one woman said, before she even had time to take her coat off. Then, to add insult to injury, they have to fund their work-related costs—for travel and child or elder care—from their own pocket, without any pay to cover them. They are penalised and poorer simply because they have come to work as required. They have done what they were asked to do. They have kept their side of the ZHC and then find themselves worse off for doing so.

The right to modest compensation is not only fair to the worker but just might—this is what I hope—encourage employers to plan their staff needs properly. This amendment would require the Secretary of State to make regulations to that effect. He could consult as widely as he wished and include in the regulations whatever content he thinks appropriate if he needs that power.

I cannot believe that anyone would defend this practice of cancellation without pay, when the worker has turned up as required—often summoned overnight by text—and then finds themselves having to pay for the privilege of being denied work by paying for their costs out of their own pocket. I cannot believe that anyone in your Lordships’ House today would defend this practice. Along with the CBI, we all know that it is not right. With your Lordships’ help today, we could change that. I beg to move.

Baroness Drake (Lab): My Lords, the drive behind the amendment is to encourage employers to give workers reasonable notice before work which has been offered is withdrawn and to require, where a shift is cancelled at short notice, that workers have the right to compensation.

The recession in 2008 led to lower levels of unemployment than anticipated, due in part to employers responding by using more flexible employment to manage the consequences of the downturn. Their response heralded significant changes in the UK labour market, including a sharp increase in the use of zero-hours contracts. The ONS annual business survey of employers conducted in early 2014 estimated that there were 2.7 million zero-hour contracts on employers’ books, of which 1.4 million provided work to people and 1.3 million did not. By August, those figures had risen to 1.8 million and 1.4 million respectively. Those contracts are now common among larger employers, with 50% of those with at least 250 employees using them.

Those findings are consistent with a survey conducted by the Chartered Institute of Personnel and Development. The Labour Force Survey estimated that in the last quarter of 2014, there were 697,000 people on zero-hour contracts in their main job, up from 586,000 in 2013 and 250,000 in 2012. Increased awareness following media coverage may partly explain that rise, but, as the ONS

11 Mar 2015 : Column 676

concedes, the survey may also significantly underestimate the true level because it is based on interviews with workers who often lack awareness of their type of contract. Whatever the qualifications about the data, the trend is undeniably upwards. With concentrations in sectors such as education, accommodation and food, and health and social care, women accounted for 55%, and young workers 50%, of those on those contracts.

The advantages for employers are clear: managing peaks and troughs in demand and cost-efficiencies from a supply of workers available at short notice. Zero-hours contracts may give some people choice, but others are offered them on a take-it-or-leave-it basis. The ONS Labour Force Survey confirms that zero-hours workers’ average weekly earnings were just £188, compared to £479 for permanent workers. One in three has no regular amount of income and is far more likely to want more working hours compared to other types of staff.

In 2008, 19% of zero-hours contract workers reported that they were in temporary work because they could not find a permanent job. By 2014, that figure had jumped to 41%. For those in the 25 to 29 age group, more than 58% said that that was because they could not find a permanent job—a depressing statistic.

Although there is a place for such contracts in the modern economy, their misuse causes real concern. In some sectors, they are becoming the default setting. True flexibility rests in a genuine reciprocal arrangement, but the increasing body of evidence reveals an imbalance in the employment relationship, not least when the promise of work is withdrawn at short notice, leaving the worker high and dry. The imbalance means that the employer reaps the benefit of flexibility and the risks and insecurity are transferred to the worker. Employers are required to pay zero-hour contract workers only for the time that they actually work. They are under no obligation to pay an individual who, at the behest of the employer, prepares to go to work or turns up but for whom work is not provided. The employee loses the chance to earn wages and may have paid for fruitless travel costs or childcare.

Findings from the survey revealed that 46% of zero-hour staff receive little notice or find out at the start of a shift that work has being cancelled. The CBI and the Chartered Institute of Personnel and Development recognise these problems. In its March 2014 zero hours briefing the CBI stated:

“An intervention which creates a simple formula for compensation … when a shift is cancelled at short notice … would be better targeted.”

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development told the Bill Committee that people on zero-hours contacts had concerns,

“if they were called in to work at short notice and that work was then not subsequently provided. So, for example, they had to travel for half an hour … and then be told, ‘Really sorry, but the shift is not available’. We think there should be some form of compensation for that … a reflection of what we saw as good practice”.—[

Official Report,

Commons, Small Business, Enterprise and Employment Public Bill Committee, 14/10/14; col. 65.]

This amendment is not challenging flexibility or making the UK labour market uncompetitive; it addresses a real and deep unfairness. When an employee is offered work which they accept and then at short notice that

11 Mar 2015 : Column 677

work is not subsequently provided, they should receive compensation. Many zero-hours workers already face a pay penalty. The unpredictability of their earnings makes it difficult to access credit or secure mortgage and tenancy agreements. Constantly varying hours impacts on families, making it difficult to organise childcare and have a social life. Compensation for employees who are offered work which at short notice is not then provided is a most modest correction to the imbalance in the employment relationship, one which my noble friend Lady Hollis has confirmed that both the CBI and the Chartered Institute of Personnel and Development say they support.

An uncertain employment status can make it difficult for zero-hours contract workers to complain. If they do, they may be “zeroed out”, meaning they receive even fewer hours. This makes it even more important that regulations should require employers to pay compensation to workers whose shift is cancelled at short notice. This is not a challenge to flexibility but a call for simple fairness.

Lord Stoneham of Droxford: My Lords, no one wants to see exploitation of zero-hours contracts, but we need to see the wider picture. There are obviously some particular issues which need to be addressed but we need to have a wider view of the benefits of some of these practices. I obviously welcome what the Government are seeking to do on getting rid of the unwarranted exclusivity aspects of zero-hours contracts, but let us not forget that we are recovering from a recession and the most important thing in a recession is to find jobs for people. That gives them confidence and well-being. In previous recessions we found it much more difficult to get flexibility and enable jobs to be created at the pace that they have been in the last couple of years.

We may have certain concerns about the growth of zero-hours contracts, but they have certainly provided flexibility both for employers and employees in the labour market. As the labour market tightens, as we hope it will as growth picks up and productivity improves, we expect that the growth of these contracts will probably slacken because employers in a tighter labour market will have to offer permanent contracts to keep people in the jobs that they have offered them. They will obviously have to do that; that is the nature of the labour market at the moment and there has been a huge benefit to people in it remaining flexible.

We have had certain statistics about people on zero-hours contracts and we have to understand the nature of people who are doing this work. Some 17% are in full-time education, 6% are over 65; people on these contracts work more than 25 hours per week: there is no great resistance to them, in fact. We have already heard that a lot of people on these zero-hours contracts have been on them for some while. Maybe it is convenient to them as well. Some 60% have been on these contracts for more than a year, 66% do not want more hours, only 3% want additional jobs and only 10% want to change jobs to get more hours. So there are some benefits on both sides.

By all means, we should consult and review what is happening with zero-hours contracts, but wait a year or two and see whether we can maintain the growth of

11 Mar 2015 : Column 678

employment that we have had over the last couple of years and whether the economy is genuinely moving ahead, before we start to interfere with these contracts in a way which could be detrimental to the growth of employment.

There are lots of other things we should be doing, such as looking at public sector contracts which are forcing some of these zero-hour practices in the public sector. I declare my interest as a director of Housing & Care 21, which is involved in the care sector, so I understand that we need to work on that area. We want also to look at the living wage but you cannot at the same time put your costs up, unless productivity is rising and we can sustain employment. There was quite an influential article in the Sunday Times a couple of weeks ago by David Smith, who said:

“People need to be safeguarded against exploitation but clamping down too hard on zero-hours contracts would risk throwing the baby out with the bathwater”.

I ask the House to be very cautious about supporting this amendment.

4.30 pm

Baroness Butler-Sloss (CB): My Lords, I very often find myself in disagreement with the noble Baroness, Lady Hollis, as she knows very well, but on this occasion I strongly support her powerful and very moving speech. We are talking about a disadvantaged section of the workforce. As the noble Lord, Lord Stoneham, has just said, the wording of the regulations is a matter for the Government of the day, who could therefore keep regulations in such a way as to allow the maximum flexibility. However, l I felt that he was not thinking about the single mother or the examples given by the noble Baroness, Lady Hollis, such as the woman who gets somebody to look after her child on Friday, then finds that she has not got the job on that day but has still had to pay for care. She is then expected to turn up on Saturday and cannot afford the care for the child or to go to work. She is therefore penalised the following week. That cannot be what the noble Lord thinks that we should be cautious about.

I absolutely recognise that in a time of austerity—a time when the GDP is at long last rising and we want the utmost flexibility in business—we should not generally be putting curbs on business. However, speaking as a woman, we have to look at this. As a mother and grandmother who had to play my job as a barrister, and then as a judge, against the care arrangements when the nanny did not come in or the au pair was sick, I just said, “What do I do? How do I get to court?”. I was very lucky—I was very privileged but these women are not. To suggest that we should keep the flexibility at their expense is something that I feel very concerned about. I am speaking rather passionately about this because of what the noble Lord, Lord Stoneham, said.

For goodness’ sake, the CBI, which cares about improving the GDP and having flexibility in business, supports some form of compensation. That is very significant support for what, to me, is a modest amendment. I hope that the House agrees.

Lord Deben (Con): My Lords, I must confess that I find myself in a very difficult position. Your Lordships will know that I usually have views on things and

11 Mar 2015 : Column 679

people will know pretty clearly which side I am on. I find this one of the most difficult things to come to terms with because, for example, having some experience of employment in France I am perfectly clear that the unemployment rates there are very strongly affected by the stupidity of French employment laws. We in this country have had a much more open way of dealing with employment and, although we may think that zero-hours employment is not the ideal form of employment, it has certainly provided people who would otherwise not have a job with one.

As an employer who does not use this employment in any circumstance, I can honestly say that that is because I am privileged to run businesses which have been able to hold their head well above water during this depressing time. Businesses which have not been able to do that would not have been employing anybody if they could not have managed their way through recession in the way that they have done, through the use of employment practices of this kind. My concern is that this House should be very careful about making decisions that replace a form of employment with these disadvantages with no employment at all. I am sorry, but that is the issue. We are, I think, in danger if we say to ourselves, “This is what we would like to see, and we don’t see why we shouldn’t see it, and therefore we must see it”. I have a problem with that.

On the other hand, I accept very strongly that there is a difficulty for the single parent who has to make all sorts of arrangements in advance if they are to do a job at all. This Government have been absolutely right in trying to find ways in which we could encourage such women back to work. They do that not only because it contributes to society but because it also contributes to the women themselves. There is nothing as depressing as trying to live on a very small income and not being able to get out of that very closed-in situation. Those of us who have been lucky enough to bring up children in relative comfort and with two parents know how important it is for one or other of you—usually your wife—to hand the child to the other and say, “Look after it, I just have to have a moment”. That is the nature of bringing up children, and I have every sympathy with that.

I wonder, though, whether we should be careful and mindful of what the amendment says and whether the Minister will think on this: we do not want to do something that replaces less than good employment with no employment at all. The issue that the noble Baroness raised is very important. I am not sure that the amendment is right, but it is not an issue which we can just leave and let it go on. We really do have to see whether we can find proper evidence for a way of doing this that is not going to have the downside that I suggested. Is it possible for the Minister to give us some suggestions as to what she might do to meet the gravamen of the case in a way that does not have the downside that my noble friend Lord Stoneham has put forward? Is there a way in which we could get better evidence and find a more precise way of helping people, particularly the women concerned?

I think that it is very difficult for young people. But, in the end, young people are normally resilient enough to overcome those difficulties and I am not sure that I

11 Mar 2015 : Column 680

would risk anything to remove that. However, there is a specific case here for a specific group of people. I wonder whether the Minister can find a way through that, because otherwise I, along with my noble friend Lord Stoneham, think that the balance is just too dangerous for us to step over. But I would still like us to do better than that. Perhaps the Minister will find a way of helping me, for a rare time, find a clear answer to what seems a very difficult problem.

Lord Butler of Brockwell (CB): Does the noble Lord recognise that all that this amendment does is force the Government to make regulations? In making those regulations, they can find a way of doing precisely what he is asking the Minister to do—to meet this problem in those areas where it needs to be met without damaging the principle of zero-hours contracts.

Lord Deben:I think that I am being tempted to answer in an uncharacteristically charming way. The people who are going to make these decisions are, if I may say so to an old friend and civil servant of mine, civil servants. I want this House to be a little bit careful about that, because very few civil servants have ever run any business in their life. It is one of our biggest problems that we have a system in which business is not understood by those who make most of the decisions. I want to know much more about what this regulation would be. If we agree to an open-ended provision that regulations shall be made, I am not sure that I would be happy to trust such regulations without a closer understanding of what they would be.

Lord Cunningham of Felling (Lab): My Lords, I support the intervention of the noble Lord, Lord Butler, who seems to have got to the nub of this issue: the amendment is not about abolishing anything; it is about abolishing exploitation at the lower end of this employment policy. I could not disagree more with what the noble Lord, Lord Stoneham, said, which seemed to be a hagiography of the system. He seemed not to recognise that vulnerable people are regularly and deliberately exploited by it. I believe that the amendment in the name of my noble friend Lady Hollis is aimed at correcting that exploitation and nothing more. It is not about abolishing the system, as the noble Lord, Lord Stoneham, seemed to imply—I apologise if I have misinterpreted his comments. The noble Lord, Lord Butler, has got this absolutely right. That is why I urge the House to support my noble friend’s amendment.

Lord Lloyd of Berwick (CB): My Lords, I, too, support the amendment and I do not share the difficulties which it is obvious are felt by the noble Lords, Lord Stoneham and Lord Deben. If those difficulties have any force, they were surely answered by my noble friend Lord Butler.

I support the amendment on the simple grounds of fairness. It is not confined to zero-hours contracts, but one imagines that those will be the most frequently affected. The facts in relation to them have been clearly set out by the two noble Baronesses who introduced the amendment. If an employee on a zero-hours contract is given notice by his employer that there will be work for him the following morning, and if he turns up having incurred expense and finds that his shift has

11 Mar 2015 : Column 681

been cancelled, it seems only as a simple matter of fairness—I think that that was how it was put—or of justice that some compensation should be payable.

I suggest to your Lordships that that is how we would all behave in our private lives. If I had a gardener, which I do not, and they turned up hoping for work and found then that the weather was against them or that the ground was too hard, of course I would offer them any expenses that they might have incurred in coming for work which in the event was not available. If that is the way in which we would behave in our private lives, is it not sensible that that is how we should require employers generally to treat their employees? I can see none of the difficulty seen by the noble Lord, Lord Deben, in terms of employment drying up as a result. This is a simple matter of fairness to avoid exploitation—a word which was also used. That reason seems to me to be enough to persuade the Government to accept the amendment.

Baroness Harding of Winscombe (Con): My Lords, I oppose the amendment, which I appreciate might make me rather unpopular in this House today. First, I declare an interest: I run a large public company, TalkTalk. We do not in TalkTalk use any zero-hours contracts today, but I have worked for a number of organisations which do, one of which is very much in my thoughts today—Cheltenham racecourse, where I imagine some noble Lords are today. Many people in the entertainment industry will work on zero-hours contracts.

The noble Baroness, Lady Hollis, spoke powerfully and emotively about the evils of zero-hours contracts, and I am sure that there are individual instances that would deeply shock us all in all forms of employment across this country, but I want to put some facts into the debate. The CIPD did a study in 2013, asking people on zero-hours contracts whether they enjoyed their job and whether they felt they were being well treated. The results were quite interesting, compared to the comments we have heard in the debate so far. Those on zero-hours contracts were just as satisfied as people in more standard contracts—60% said they were satisfied, versus 59% in more standard contracts. They said that they had a better quality of work-life balance—65% versus 58%. They believed that they were less likely to be unfairly treated by their employer—27% playing 29%. So we have to be careful not to make assumptions about people who are making choices to lead flexible working lives in a way that we might not. Those are the facts, as opposed to my personal opinions.

4.45 pm

In general, I do not think that zero-hours contracts are evil. Actually, they allow businesses to serve an important constituency that has not been mentioned yet—their customers. Businesses that have highly seasonal, highly variable demand need to be able to react quickly; hence my thoughts about my friends at Cheltenham racecourse today.

I am also troubled by the specific wording of the amendment. I do not know how a group of civil servants, however well trained or smart, can define what “late notice” is in every single walk of life in this country.

11 Mar 2015 : Column 682

For example, in racing, I do not know whether late notice is the night before. What happens if there is a frost overnight and there is no decision to race until 7.30 in the morning, or perhaps midday when the jockeys decide it is not safe? Which is late notice? I know a lot about horseracing and I could not make that judgment. Yet, in this amendment, we are giving the Government the ability to define that detail in every industry. We are likely to get highly perverse results because of it. We would be much better encouraging different sectors to develop codes of practice, publicise how they are doing it and ensure that the very people who say they really value these contracts get the chance of more jobs. I oppose this amendment.

Baroness Perry of Southwark (Con): My Lords, I want to follow the powerful points made by my noble friend with a small point which has occurred to me while listening to this debate. We heard the very moving thoughts of the noble Baroness about the single mother on a zero-hours contract who has to pay her babysitter when she turns up and then cannot afford her the next day. I, too, have been a working mother who has needed to use babysitters for my children if there was a sudden crisis and one of them was ill and could not go to school on the day that I was due to work. Like that single mother’s babysitter, my babysitter was also on a zero-hours contract. She was able to be paid for the day she turned up but, when she was not needed the next day, she was cancelled. We need to think more broadly about the needs even of single mothers who use a babysitter on a zero-hours contract just as much as we think about the needs of those on zero-hours contracts in other kinds of jobs.

My noble friend made the point that there is a varied range of employment positions and a wide range of ways in which people were employed. The way in which people are employed in domestic situations is usually on zero-hours contracts. We use our babysitters when we need them, not when we do not. Sometimes we cancel them at the last minute because we do not need them after all. We need to stop trying to see everything in terms of good and evil, right and wrong; there are shades. Trying to make regulations across that range would be a very dangerous thing.

Lord Young of Norwood Green (Lab): My Lords, I intend to be brief. My noble friends Lady Hollis and Lady Drake have given a forensic examination, based on factual analysis, and I do not feel I need to go through it again. I want to address some of the comments made by the noble Lords, Lord Stoneham and Lord Deben, and the noble Baroness, Lady Harding.

On the UK labour market, the first thing we need to understand is that it is probably the most flexible labour market in Europe. Nobody could say that we are like France, Italy or Spain—that we have something that makes it almost impossible for employers to hire people flexibly. I will leave noble Lords with the following thought. On grounds of fairness, are we going to say that a zero-hours contract means zero rights? Just to remind us, under zero-hours contracts there is no sick pay, no holiday, no national insurance contributions and nothing towards a pension—that is a pretty demanding contract as it is, and it is hardly weighted against the employer.

11 Mar 2015 : Column 683

Nobody on this side who has supported these amendments has suggested that we want to do away with zero-hours contracts in their entirety. We accept that, for some people, they are a valid and necessary means of employment, both for the employee and the employer. However, there ought to be some reasonable ground rules. If you are running a business, yes, there will be changes in circumstances; that is undoubtedly right. However, this amendment aims to lay down a principle which it says will be interpreted in regulation and which will not just be dealt with by the spectre of solitary civil servants, who apparently between them have never experienced an hour of work in industry at all. From my brief ministerial career, I know that that does not necessarily apply to all civil servants, so I do not accept the idea that they will work in a total vacuum—that is an unnecessary fear.

Are we really putting forward the basic argument that, if I am being contacted and told by the employer, “I want you to turn up for work”, and I turn up, honouring my side of it, the employer has no responsibility whatever? I listened carefully to the noble Baronesses, Lady Perry and Lady Harding, and there might be other circumstances, but that is a question of taking into account how we phrase the regulations, so we can take those into account. That is not an argument for saying that there should be no control over this situation at all.

The noble and learned Baroness, Lady Butler-Sloss, reinforced the point, which my noble friend Lady Hollis had made, that it is curious that the CBI supports this. That is hardly an organisation that would support something it thought totally inflexible. Surely this is about basic fairness, is it not? If we are enjoying the services of somebody who is working under those conditions, surely it is right that they should have some fairness applied in the way they are summoned to their employment.

Surely we are seeking to encourage reasonable standards of management. I will give another statistic from the Chartered Institute of Personnel and Development: only one in five British managers have any training at all. I point that out to the noble Baroness, Lady Harding, because it is as important as some of the other statistics she quoted. Of course, people will declare that they are satisfied—they need the money and are glad to get into work. However, when we are being served by those people, do we not feel that there should be certain basic rights? This is one of them.

We commend the Government for getting rid of the exclusivity provisions in such contracts, which was clearly unfair. However, because of the way this amendment has been made it ought to attract cross-party support. We are not taking a political stance here, but a stance on responsible and effective management—that is what it is all about—and on giving a reasonable right to the employee. It can be dealt with very effectively in regulations, and I hope that the House will overwhelmingly support it.

Baroness Neville-Rolfe: I thank the noble Lord, Lord Young, for his intervention. I am very grateful to the noble Baronesses, Lady Hollis and Lady Drake,

11 Mar 2015 : Column 684

for their amendment and for allowing us the opportunity to return to the important provisions on zero-hours contracts in the Bill, and specifically to the matter of compensation for late-notice shift cancellations.

We had a debate in Committee, but I see that the noble Baronesses’ amendment now seeks to apply their proposal much more widely across the workforce. I also listened to the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Perry, both of whom brought the benefit of their own experience of this matter. I have some myself, as I have four children —although the noble Baronesses are right to say that that is not necessarily relevant to the debate. I thank the noble Lords, Lord Butler and Lord Cunningham, and the noble and learned Lord, Lord Lloyd. I was also pleased to hear my noble friend Lord Deben comment on the dilemma of replacing less good employment with no employment.

The noble Lord, Lord Stoneham, rightly reminded us of the need to be careful not to throw the baby out with the bathwater. We in this country have done a lot with our flexible labour market, which has helped us to create 2 million jobs in this Parliament. I was also glad to hear from my noble friend Lady Harding, who came at the matter as a practical business person and thought about customers and the detailed definitional issues that we always get into on these matters.

Perhaps I should remind those who were not in Committee of what we are already doing about zero-hours contracts. Our consultation identified exclusivity clauses as the biggest issue. We have acted, and as a result of Clause 151, no zero-hours worker will be forced to be exclusive to an employer that does not guarantee them any work. There is also new information. The Government have published today our response to the consultation on zero-hours contracts, Banning Exclusivity Clauses: Tackling Avoidance. We have also published draft regulations that illustrate how the Government intend to use this power in the Bill.

The draft regulations propose that those employed on a zero-hours contract will have protection against suffering detriment on the grounds of working for another employer, and will be able to make a complaint to an employment tribunal. If a complaint is upheld, they may receive compensation. I know from our Committee debates that this is something that noble Lords opposite were keen to see, and I hope it will be welcomed.

In addition, the draft regulations propose to widen the ban on exclusivity clauses to all contracts of employment or workers’ contracts where the individual is not guaranteed a certain level of income. I hope that this, too, will be welcomed by the noble Baronesses, and will improve the situation. The regulations will extend the protection and ban exclusivity terms for other vulnerable groups in the labour market, beyond zero-hours contracts alone. People will be able to work more hours and boost their income if they so wish. This is in line with the responses we received.

What is more, the Government are updating the guidance on zero-hours contracts, and we intend to publish this on GOV.UK before the end of the Parliament.

11 Mar 2015 : Column 685

This is in addition to any sectors producing their own codes of practice on the responsible use of these contracts, as some noble Lords suggested.

We consider that a business-led approach is the best way to ensure a lasting culture change in the treatment of zero-hours workers, which the whole House wants. I hope that that demonstrates that we are listening to the concerns raised in this House and are acting to protect vulnerable workers—because I take the point that it is the vulnerable workers whom we are concerned about.

Amendment 58ZZC seeks to provide compensation for short-notice shift cancellations—but it proposes that the rights should apply to all workers, not just zero-hours workers. So it is not, as the noble Baroness suggested, a modest amendment, and I am not sure that the CBI supports the proposal. In March 2014 it said that a simple system of compensation might work for some zero-hours contracts. That was before we introduced the changes in this Bill—and the CBI’s comment did not apply to all workers. More recently, it has, I think, come round to the idea of regulating zero-hours contracts, and has said that the Bill’s,

“ban on exclusivity clauses in zero hours contracts … is a proportionate response to tackling examples of poor practice, and strikes the right balance between flexibility for both employers and workers”.

All those in work in the UK will have an employment status, which determines the protections to which they are entitled. Most commonly, individuals are “employees”, “workers” or “self-employed”. As the “worker” category includes all “employees”, this means that this amendment would potentially extend to the vast majority of the labour market. It requires the Secretary of State to make regulations—the wording is “shall”—and requires employers to pay compensation to workers whose shifts are cancelled without notice.

5 pm

As we set out in previous debates, we have sympathy with the intention of the amendment, but have great concerns about how it would work in practice and the risk of potential unintended, negative consequences for the individuals affected. We all agree that individuals deserve to be treated fairly, regardless of what type of contract they are on. The noble Baroness referred to some very bad individual cases. However, legislating for a one-size-fits-all solution is not the right answer and could lead to some very perverse effects. Like my noble friend Lady Harding, I have been a business executive in a small and a big company, and I worry that the proposal could lead to unscrupulous employers attempting to circumvent the rules. Most obviously, this could be done by avoiding planning shifts too far in advance and calling individuals at short notice instead to avoid compensation payments.

For instance, those who currently receive a week’s notice of their shifts could find themselves being informed at the last minute, resulting in them having to stay in, waiting for the phone to ring. This would increase insecurity for those individuals whom the amendment aims to help. What is more, an attempt to deal with this kind of avoidance by introducing compensation for late-notice rostering—a logical next step—could also impact heavily on workers who rely on late-notice

11 Mar 2015 : Column 686

call-ups for work or employers who need to call in cover for the unexpected absence of others. The obvious example of that is locum doctors.

In addition, given the breadth of this provision, covering all workers in the labour market, it would be almost impossible effectively to define key terms to make the regulations meaningful. There would be considerable complexity legislating for a universal approach that covers a multitude of different sectors and work patterns. While the Government have a role in delivering clear guidance, we also believe that the answer to ensuring that employers deal with cancellations fairly lies with sector-specific codes of practice and the sharing of best practice on the responsible way to use casual arrangements such as zero-hours contracts.

I hope that I have assured the noble Baroness that we have sympathy with her case and the examples that she has given and are taking steps to address it, in part through clearer guidance. As I said, in the case of compensation for late-notice cancellations, legislation of this kind is not the answer. Rather, we should encourage lasting culture change, led by business, on the basis of the clear new legislation we have brought in on zero-hours contracts.

Given the actions already taken by the Government, the response we published today and the commitment to update our guidance, I hope that the noble Baroness will acknowledge that we are listening and will be content to withdraw her amendment.

Baroness Hollis of Heigham: My Lords, I am grateful to all my noble friends who took part in the debate—my noble friends Lady Drake, Lord Young and Lord Cunningham. Indeed, I am grateful for all the contributions from around the House. However, what has puzzled me a little about the contributions from around the House is the fact that most of the argument seems to have been about the need for, and virtues of, zero-hours contracts as such, and the need for a flexible labour market. I had hoped that we had been at pains to establish that of course customers, consumers, passengers and patients now live in a 24/7 economy. The issue is not about ZHCs; it is not even about codes of practice, because good employers such as Marks & Spencer do not abuse ZHCs, whereas Boots does. Pret a Manger does not abuse them, although McDonald’s does. Good employers can already decide how best to employ their staff. Whether a company does or does not have ZHCs is not the issue.

The issue is that there are some people with ZHCs, as the noble and learned Baroness, Lady Butler-Sloss, and the noble and learned Lord, Lord Lloyd of Berwick, rightly said, who are exploited and suffer because although they are summoned to work by text, often overnight, they turn up and are then sent home again without a penny. What is more, they may have spent £5 or £8 in travel costs to get there and back. They may have spent £15 or £20 in childcare to get there and back and they get not a penny of recompense for the expenditure they made to uphold their side of the ZHC contract.

All that I am asking for is fairness, as the noble and learned Lord, Lord Lloyd, said—fairness between the employer who can dispense with the services of somebody and the employee. He may need to do that—I can see

11 Mar 2015 : Column 687

the point—but it should not be the worker who exclusively and solely bears the cost of the cancellation. That is what is unfair; not ZHCs, not flexible labour contracts, but the fact that only one party, the most vulnerable, the poorest, the weakest, should bear the cost of a zero-hour contract when they turn up to work and the work is taken away from them, even though they are doing exactly what the employer requests.

The noble Lord, Lord Deben, was worried. I thought that the speech by the noble Lord, Lord Butler, was admirable in putting the simple point that the amendment would require the Secretary of State to make regulations, but keeps the content entirely open. However, we expect them to reflect the spirit of the discussion in this House tonight that zero-hour contract workers—the people we are concerned about—should be able to be protected in this way.

In Committee, the Minister said that the Secretary of State already had powers to do that. This was followed up by a letter saying that that was not the case. The order-making power does not extend to other issues around ZHCs such as compensation for late-notice cancellations. I repeat that the Secretary of State has no power presently to regulate this anomaly at best—this exploitation, bluntly, at worst—that we all agree is unfair. He has no such power. The amendment would give him that power. After consultation with the sector—it may take months, I fully accept that—he can then introduce appropriate requirements for codes of practice or whatever may be proper to defend the people of whom the noble and learned Baroness, Lady Butler-Sloss, so eloquently reminded us: the lone parent who may be £20 or £30 out of pocket because at five minutes’ notice her shift is cancelled. At the moment, the Secretary of State does not have the power to do that.

This is not about ZHCs or the flexible labour market, I am asking your Lordships to do what this House is always at its best in doing: say to the Secretary of State, “We are willing to give you the power, we expect you to handle it sensibly, in consultation with industry, but it is not fair, as the noble and learned Lord, Lord Lloyd, said, that the most vulnerable should pay the cost of the employer’s requirements”.

Baroness Neville-Rolfe: The noble Baroness’s amendment goes beyond zero-hours contracts. She is emphasising the zero-hours aspects, but this is compensation to all workers, as I sought to explain—and I sought to explain the perversities.

Baroness Hollis of Heigham: If the noble Baroness is worried that the technical quality of the amendment is insufficient, it can be overturned in the other place and replaced with an amendment that embodies what she and the Secretary of State would wish to see. There is no problem about that. When I was a Minister, I accepted amendments all the time that were technically defective but which reflected the spirit and will of this House, because it was the right thing to do. If they needed tidying up, that could be done perfectly easily in the other House. That is not a reason not to accept the amendment today.

11 Mar 2015 : Column 688

We are talking about ZHCs; all of us have been talking about ZHCs. As the noble and learned Lord, Lord Lloyd, said, this is fair and the right thing to do. Workers who keep their side of the contract should not then find themselves out of pocket, because the employer does not. The CBI agrees. I hope that your Lordships will also agree tonight. I beg leave to test the opinion of the House.

5.09 pm

Division on Amendment 58ZZC

Contents 221; Not-Contents 235.

Amendment 58ZZC disagreed.

Division No.  1

CONTENTS

Aberdare, L.

Adams of Craigielea, B.

Adonis, L.

Alli, L.

Alton of Liverpool, L.

Anderson of Swansea, L.

Andrews, B.

Armstrong of Hill Top, B.

Armstrong of Ilminster, L.

Bach, L.

Bakewell, B.

Bassam of Brighton, L. [Teller]

Beecham, L.

Berkeley of Knighton, L.

Best, L.

Bew, L.

Bichard, L.

Bilimoria, L.

Billingham, B.

Birt, L.

Blackstone, B.

Boateng, L.

Borrie, L.

Boyce, L.

Bradley, L.

Bragg, L.

Brennan, L.

Brooke of Alverthorpe, L.

Brookman, L.

Brown of Eaton-under-Heywood, L.

Butler of Brockwell, L.

Butler-Sloss, B.

Cameron of Dillington, L.

Campbell of Surbiton, B.

Campbell-Savours, L.

Carter of Coles, L.

Cashman, L.

Chandos, V.

Christopher, L.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Collins of Highbury, L.

Corston, B.

Coussins, B.

Cox, B.

Craig of Radley, L.

Cunningham of Felling, L.

Davies of Coity, L.

Davies of Oldham, L.

Davies of Stamford, L.

Dean of Thornton-le-Fylde, B.

Desai, L.

Donaghy, B.

Drake, B.

Dubs, L.

Eatwell, L.

Elder, L.

Evans of Temple Guiting, L.

Evans of Watford, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foster of Bishop Auckland, L.

Foulkes of Cumnock, L.

Gale, B.

Giddens, L.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Gould of Potternewton, B.

Grantchester, L.

Greenfield, B.

Grey-Thompson, B.

Grocott, L.

Hanworth, V.

Hardie, L.

Harries of Pentregarth, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskel, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollick, L.

Hollins, B.

Hollis of Heigham, B.

Hope of Craighead, L.

Howarth of Breckland, B.

Howarth of Newport, L.

Howells of St Davids, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Woodside, L.

Hunt of Chesterton, L.

Hunt of Kings Heath, L.

Hutton of Furness, L.

Irvine of Lairg, L.

Jay of Paddington, B.

Jones, L.

11 Mar 2015 : Column 689

Jones of Moulsecoomb, B.

Jones of Whitchurch, B.

Jordan, L.

Judd, L.

Judge, L.

Kennedy of Cradley, B.

Kennedy of Southwark, L.

Kerr of Kinlochard, L.

Kilclooney, L.

King of Bow, B.

Kinnock, L.

Kinnock of Holyhead, B.

Kinnoull, E.

Kirkhill, L.

Laming, L.

Lane-Fox of Soho, B.

Lea of Crondall, L.

Leicester, Bp.

Leitch, L.

Lennie, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

Listowel, E.

Lloyd of Berwick, L.

Low of Dalston, L.

Luce, L.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

Mackenzie of Framwellgate, L.

McKenzie of Luton, L.

Manningham-Buller, B.

Mar, C.

Masham of Ilton, B.

Massey of Darwen, B.

Maxton, L.

Mendelsohn, L.

Mitchell, L.

Monks, L.

Morgan, L.

Morgan of Ely, B.

Morgan of Huyton, B.

Morris of Aberavon, L.

Morris of Handsworth, L.

Morris of Yardley, B.

Ouseley, L.

Patel of Blackburn, L.

Pendry, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prashar, B.

Prescott, L.

Prosser, B.

Quin, B.

Quirk, L.

Ramsay of Cartvale, B.

Ramsbotham, L.

Rea, L.

Rebuck, B.

Rees of Ludlow, L.

Richard, L.

Robertson of Port Ellen, L.

Rooker, L.

Rosser, L.

Rowe-Beddoe, L.

Rowlands, L.

Royall of Blaisdon, B.

Sandwich, E.

Sawyer, L.

Scotland of Asthal, B.

Scott of Foscote, L.

Sherlock, B.

Simon, V.

Skidelsky, L.

Smith of Basildon, B.

Smith of Finsbury, L.

Smith of Gilmorehill, B.

Snape, L.

Soley, L.

Stevenson of Balmacara, L.

Stirrup, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Taylor of Blackburn, L.

Taylor of Bolton, B.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Walpole, L.

Walton of Detchant, L.

Warner, L.

Warnock, B.

Watson of Invergowrie, L.

West of Spithead, L.

Wheeler, B.

Whitaker, B.

Wigley, L.

Wilkins, B.

Wills, L.

Wood of Anfield, L.

Woolf, L.

Woolmer of Leeds, L.

Worthington, B.

Young of Hornsey, B.

Young of Norwood Green, L.

NOT CONTENTS

Addington, L.

Anelay of St Johns, B.

Ashdown of Norton-sub-Hamdon, L.

Ashton of Hyde, L.

Astor, V.

Astor of Hever, L.

Attlee, E.

Bakewell of Hardington Mandeville, B.

Balfe, L.

Barker, B.

Bates, L.

Benjamin, B.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Borwick, L.

Bottomley of Nettlestone, B.

Bourne of Aberystwyth, L.

Bowness, L.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Byford, B.

11 Mar 2015 : Column 690

Caithness, E.

Carlile of Berriew, L.

Carrington of Fulham, L.

Cavendish of Furness, L.

Chadlington, L.

Chidgey, L.

Colwyn, L.

Cooper of Windrush, L.

Cope of Berkeley, L.

Cormack, L.

Courtown, E.

Crathorne, L.

Crickhowell, L.

Crisp, L.

Cumberlege, B.

De Mauley, L.

Dear, L.

Deben, L.

Deighton, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dundee, E.

Dykes, L.

Eaton, B.

Eccles, V.

Eden of Winton, L.

Elton, L.

Evans of Bowes Park, B.

Falkland, V.

Falkner of Margravine, B.

Farmer, L.

Faulks, L.

Fellowes of West Stafford, L.

Fink, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Fox, L.

Framlingham, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Glenarthur, L.

Goddard of Stockport, L.

Gold, L.

Goodlad, L.

Goschen, V.

Grade of Yarmouth, L.

Greengross, B.

Greenway, L.

Grender, B.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Hannay of Chiswick, L.

Harding of Winscombe, B.

Harris of Richmond, B.

Helic, B.

Henley, L.

Heyhoe Flint, B.

Higgins, L.

Hodgson of Astley Abbotts, L.

Holmes of Richmond, L.

Hooper, B.

Horam, L.

Howard of Rising, L.

Howe, E.

Howe of Aberavon, L.

Howell of Guildford, L.

Humphreys, B.

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

King of Bridgwater, L.

Kirkham, L.

Knight of Collingtree, B.

Kramer, B.

Lamont of Lerwick, L.

Lang of Monkton, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Linklater of Butterstone, B.

Livingston of Parkhead, L.

Loomba, L.

Lucas, L.

Ludford, B.

Lyell, L.

Lytton, E.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

Maddock, B.

Magan of Castletown, L.

Mancroft, L.

Manzoor, B.

Mar and Kellie, E.

Marks of Henley-on-Thames, L.

Marland, L.

Marlesford, L.

Mawson, L.

Miller of Chilthorne Domer, B.

Mobarik, B.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Neville-Jones, B.

Neville-Rolfe, B.

Newby, L. [Teller]

Newlove, B.

Northbrook, L.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Paddick, L.

Palmer of Childs Hill, L.

Patten, L.

Perry of Southwark, B.

Popat, L.

Purvis of Tweed, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Redesdale, L.

Rennard, L.

Ribeiro, L.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Rogan, L.

Ryder of Wensum, L.

Sanderson of Bowden, L.

Sassoon, L.

Scott of Needham Market, B.

Scriven, L.

Seccombe, B.

11 Mar 2015 : Column 691

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sharples, B.

Sheikh, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shields, B.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Skelmersdale, L.

Slim, V.

Smith of Clifton, L.

Smith of Newnham, B.

Spicer, L.

Stedman-Scott, B.

Steel of Aikwood, L.

Stephen, L.

Sterling of Plaistow, L.

Stewartby, L.

Stoneham of Droxford, L.

Storey, L.

Stowell of Beeston, B.

Strasburger, L.

Strathclyde, L.

Suri, L.

Suttie, B.

Taverne, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L. [Teller]

Thomas of Gresford, L.

Thomas of Winchester, B.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

Trumpington, B.

Tugendhat, L.

Tyler, L.

Tyler of Enfield, B.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warsi, B.

Wasserman, L.

Wei, L.

Wheatcroft, B.

Whitby, L.

Wilcox, B.

Williams of Trafford, B.

Willis of Knaresborough, L.

Younger of Leckie, V.

5.23 pm

Clause 147: Protected disclosures: reporting requirements

Amendment 58ZA

Moved by Lord Wills

58ZA: Clause 147, page 127, line 2, at end insert—

“( ) In section 43K(1) (extension of meaning of “worker” etc. for Part 1VA), after paragraph (d) insert—

“(e) is or has been a job applicant.””

Lord Wills (Lab): My Lords, I shall speak also to Amendment 59 and Amendments 59A to 59F. All these amendments seek to provide additional protections for whistleblowers, and they follow on from discussion of these issues in Committee.

I shall take Amendment 59 first. It arises from the Government’s response to the amendment that I moved in Committee seeking to place a code of conduct for whistleblowing on a statutory basis. I shall not repeat all the arguments that were made in Committee, but a statutory code of conduct would send out to all organisations a powerful signal about the importance that Parliament attaches to providing adequate protection for whistleblowers, and it would help to drive cultural change within organisations to encourage whistleblowing.

In Committee, the Minister engaged with this very constructively—I repeat my thanks to her for doing so—and she did not reject the case for this. However, she felt that the voluntary code that the Government are developing would offer sufficient protection. She said:

“We will keep this under review, and if this is not bringing about the change that we expect to see, we will consider introducing a statutory code of practice”.—[Official Report, 26/1/15; col. GC 9.]

All Amendment 59 seeks to do is to ensure that such a review does indeed take place.

11 Mar 2015 : Column 692

The government measures in the Bill to improve protections for whistleblowers are welcome, and I congratulate the Minister and all her colleagues on them, but I am sorry that I could not convince her in Committee to go further. Loopholes remain in these protections and, where loopholes exist, all history suggests that the powerful take advantage of them.

The action that the Government are now taking on whistleblowing is being driven by terrible recent scandals, which might have been prevented had better protection for whistleblowers been in place. This is a clear lesson from, for example, the Francis reports into the NHS and the recent inquiry into the Rotherham abuse scandal. Despite this, the facts of Westminster life are such that scandals fade as time passes. Unfortunately, Ministers and officials come and go, collective memory is increasingly eroded and there are always new pressures on new Ministers and officials. In these circumstances, we should not wait for another scandal to be revealed to introduce any necessary new whistleblowing protections.

Continuing scrutiny is required to ensure that whistleblowers receive all the protections that they need to prevent such scandals recurring. This amendment seeks to set up a regular review process to do just that. It is not onerous. It simply puts in place a system to guarantee delivery of what the Minister has said that the Government will do. I accept, of course, the Minister’s good faith in offering reassurances, but because of the circumstances that I have just described future delivery of those cannot necessarily be guaranteed and relied upon. In these circumstances, I hope that the Minister will accept this simple amendment.

Amendment 58ZA provides improved protections for whistleblowers who are job applicants. Unlike other areas of discrimination law, the Public Interest Disclosure Act 1998 does not currently consider job applicants to be workers and so they do not receive protection for whistleblowing. Your Lordships’ House discussed the case for tackling this anomaly in Committee. Again, I do not intend to repeat all the arguments, but the Minister said then that, while she appreciated the amendment that I moved, she rejected it because,

“there is work to be done to get this right and it will take time, beyond this Parliament, to reach a suitable solution. It would not be right to add this half-cooked work to a Bill designed primarily to help small business and not to introduce new burdens for employers”.—[

Official Report

,

25/1/15; col. GC 10.]

The noble Baroness, Lady Mobarik, expressed from the government Back Benches her concern that this important Bill should not be held up. I am delighted that, between Committee and today, the Government have reconsidered the situation and have decided that after all there is time to introduce new protections for whistleblowing job applicants. I congratulate them. I particularly congratulate the Minster for their change of heart and I thank her for her characteristic courtesy in alerting me of it in advance.

But—I am afraid that there is a “but”—the Government’s amendment covers only the NHS. There is no logical reason why it should be so restricted. That is why Amendment 58ZA is still necessary. It extends the Government’s proposals for protecting whistleblowing job applicants in the NHS to all workers. The risk of the sort of informal blacklisting that government Amendment 58A tackles occurs far more widely than

11 Mar 2015 : Column 693

just in the NHS. For example, in the construction industry there have been notorious instances of workers failing to find new work after raising concerns about safety. No Government have adopted such a piecemeal approach to other legislation that outlaws discrimination. Actionable offences of sex and race discrimination are not restricted to the NHS, so why should discrimination against whistleblowers be so restricted?

This is a short, simple amendment. It will prevent what I assume is the unintended consequence of the government amendment in creating what would be a two-tier system of protection, with NHS workers, important and valuable as they are, privileged to enjoy protections not extended to all other workers who seek to protect the public by whistleblowing. Such a two-tier system would be unfair to individual workers and would hinder the development of the culture of transparency, which I think all your Lordships would agree has been shown in scandal after scandal to be so critical in protecting the public. I hope that the Minister will finish today the work which her own amendments have started and accept Amendment 58ZA.

5.30 pm

Finally, Amendments 59A to 59F follow up discussions in Committee about an amendment I moved then to set up a whistleblowing ombudsman. At that point the Minister felt such an institution would be too broad in its remit but, in my view, the need for some such institution remains. Again, I am delighted that, between Committee stage and today, the Government have reconsidered their position and have said that such an institution should now be set up in the form of a national review officer. This is welcome news but, again, the Government are restricting this new approach to the NHS, and, again, there is no good reason to do so. The problems that the Government seek to tackle with the establishment of the national review officer are not confined to the NHS. There is no reason to restrict it in this way.

All large organisations which serve the public in both public and private sectors are powerful institutions. Many are driven by a potent internal culture. Every case of whistleblowing challenges the powerful interests who run such organisations. After a scandal has been revealed, the abuses tackled, the guilty punished and the words about whistleblowers spoken, there is always the risk that it is too easy for those vested interests to find ways to carry on much as they did before. The powerful never like being challenged.

There is a gap in the legislative framework. The Minister identified it in Committee. It was identified also by Sir Robert Francis in his recent report on whistleblowing in the NHS. That is the gap created by the fact that the Public Interest Disclosure Act protects whistleblowers by compensating them when they are dismissed or forced out of their job, or victimised by the employer in some other way, but that Act does not address failures to investigate the public interest concerns, which so often lie at the heart of such employment disputes. That is why the establishment of an institution such as the national review officer, which has been proposed by Sir Robert Francis and is now endorsed by the Government, or the establishment of an ombudsman which was proposed in Committee, is so important.

11 Mar 2015 : Column 694

These amendments do not follow the ombudsman model which I proposed in Committee. Instead, they adopt the Government’s concept of a national review officer and they apply it more widely than the NHS. The national whistleblowing review officer in these amendments is a role that could be set up in any sector by the Minister or by the relevant prescribed person. This means that the power to review this vital issue can be flexible. It could be set up, for example, to review whistleblowing in the financial services sector, or in the safeguarding of vulnerable adults and children in the education system, or in relation to health and safety reporting within the construction industry. I hope that the Minister will today at least agree that all these are vital areas where whistleblowing can be critical in protecting the public.

Recently in the NHS and elsewhere, we have seen that regulators have too often not done enough to encourage and protect whistleblowers. These amendments provide that a national whistleblowing review officer can be created for any industry or sector where there is a need to challenge an overly defensive or hierarchical or fractured regulatory environment. The review officer will have the power to investigate complaints over a failure to investigate issues of wrongdoing or malpractice by the employer or the regulator. From there, the review officer can advise the employer or the regulator how to follow best practice and be responsible for providing guidance on best practice for investigations. Where that review officer believes there is a problem with a system, an industry regulator or an oversight body, they can recommend that the relevant authority address any continuing risk, correct any failure in investigation, correct non-compliance with good practice and recognise the contribution made by the whistleblower in raising their concerns.

These are proportionate and modest amendments. The Government have already accepted the principle behind the approach. These amendments simply ask them to accept that it should not be restricted to the NHS and should be applied more widely, wherever the public interest is sufficiently involved to require a regulatory mechanism. I beg to move.

Lord Low of Dalston: My Lords, I have put my name to all these amendments, which have been spoken to so ably by the noble Lord, Lord Wills. I will speak very briefly to them in the order in which they were grouped.

I very much welcome the Government’s speedy response to the recommendations of the report by Sir Robert Francis on speaking up, or whistleblowing, in the NHS. However, like the noble Lord, Lord Wills, I am concerned that too narrow an approach has been taken to the issue of protecting whistleblowers in the job application process. Surely it is not right to adopt such a piecemeal approach to the development of legal protection for whistleblowers. This is why I support Amendment 58ZA, tabled by the noble Lord, Lord Wills, which calls for the protection of anyone who, in applying for a new job, is discriminated against for making protected disclosures or for blowing the whistle in a previous job. I emphasise anyone, not just workers in the NHS. The Government’s movement on this issue and their recognition of the principle is very

11 Mar 2015 : Column 695

welcome but, like the noble Lord, Lord Wills, I cannot for the life of me see why they should confine their approach to the NHS. Surely what is good for workers in the NHS must be just as good for workers in any other sector. This is an issue that many whistleblowers have said results in real hardship, as is evidenced in the Francis report. I believe that anyone who is not employed because the potential employer knows about their whistleblowing activity in a previous job should be able to remedy such discrimination in law.

I also support Amendment 59, as I believe that it will assist the Government in taking a cross-sector, strategic view of the UK whistleblowing framework. As the noble Lord has indicated, now is the time to put in place a structure that will collect and analyse not just the reforms in this Bill but recommendations from other inquiries that will impact on the whistleblowing framework, whether these come from the banking sector, the NHS, social services or the police. There is real value for employers, regulators, the Government and society as a whole in reviewing these issues on a regular basis. I hope very much that the Minister will see this amendment, which provides for a regular review of the whistleblowing framework, as a useful mechanism not just for identifying what is missing from the framework but also for helping to spread and encourage good practice among employers.

Turning finally to Amendments 59A to 59F, which give power to the Secretary of State to establish a number of national whistleblowing review officers, I agree with the noble Lord, Lord Wills, that a role such as this will help to plug the regulatory gap that exists in the whistleblowing framework. This would make it possible for such a national whistleblowing review officer role to be created, by order of the Secretary of State for Business, Innovation and Skills, in any industry, not just in the NHS, as the noble Lord, Lord Wills, said. This role complements the regulatory reporting provisions contained in the Bill that the Government intend should drive change in relation to whistleblowing across all industries. It will enable a review officer to be created in any sector or industry, whether that is financial services, the health and care sectors, or services in relation to vulnerable adults and children.

Given the very many scandals brought to light by whistleblowers in recent years—in our care homes, our schools and our local authorities—I consider that such a role could only do good in driving forward the development of good practice in whistleblowing across all sectors. What is more, a role that has the features described in this amendment will provide a quick and simple warning system for regulators and organisations where there is a failure to deal properly with a whistleblowing issue. I therefore look forward to hearing the Minister’s response on these amendments, which I am pleased to support.

Lord Phillips of Sudbury (LD): My Lords, my name is also to this group of amendments. I thank the noble Lords, Lord Wills and Lord Low of Dalston, for making most of the points that need making, and making them forcefully.

It seems extraordinary that the Government should have introduced Amendment 58A in the wake of the 200-page report by Robert Francis QC, entitled Freedom

  11 Mar 2015 : Column 696 

to Speak Up

and published only last month. It is bizarre that they confine the provisions in the amendment to the National Health Service, for reasons which have been touched on by the two Peers who have already spoken. The need for the protection of Amendment 58A is universal.

I should perhaps say that in my long legal career I have dealt with a number of whistleblowing cases, and was charged back in the 1980s with trying to register a charity which had as its principal purpose the support of whistleblowers. That was successful—not, I may say, without vast and prolonged effort, because at first the Charity Commission viewed the very idea as bizarre. In 1993, the charity Public Concern at Work was formed and is still operating with huge effect. All of us here tonight are grateful for the work that it has done and the information which it has provided to us under the leadership of Cathy James. Its work leads it even now—or perhaps more than ever now—to advise about 800 people a year who have personal, direct, often plangent problems in relation to their employment and their attempt to try to get those who employ them to take seriously malfeasance—sometimes corruption, sometimes wilful and terrible illegality.

Public Concern at Work is, as I said, better informed than any other agency in this country as to just what whistleblowers have to go through. Our point is that whistleblowers are not some little sideshow. If we are serious about attacking the widespread and growing corruption and criminality that, I fear, infects so much of what we value in this country, we have to support whistleblowers. Frankly, they are the only people who can uncover criminality at source, often at a time when, if it can be dealt with, doing so will save vast loss and suffering. One has to look only at the collapse of the financial markets of the world, led by the City of London in 2008, to realise just what terrible losses we have all suffered—trillions rather than billions—by reason of the fact that there were virtually no whistleblowers from within the City of London, or indeed the other financial centres, who were able to get the facts relating to what was going on in their entities to the authorities in time for them to take action.

Again, I have a certain amount of personal experience of this. One thinks, for example, of Paul Moore of HBOS. He blew the whistle, except that he blew the whistle to his own board, saying openly and clearly that the measures taken in that bank to balance risk and opportunity were unsustainable and were leading the bank, and had led the bank, into the most dangerous of situations. He not only got no succour when he took this matter up the scale in the bank but has not had a job in the City of London since then—we are talking about 2007 or 2008—despite his huge experience as a former partner at KPMG and senior financial officer at HBOS.

5.45 pm

I can think of another person. Wendy Addison was one of the youngest female chief executives of a major corporation in South Africa. She found that the two owners of the company were engaging in fraudulent activity and confronted them with it. They sacked her and because it was South Africa they were able to square the police and the authorities. She had to leave

11 Mar 2015 : Column 697

in danger of her life and came here only to find that the whispering machine that operates, I fear, within financial markets had put her name on the blacklist in London. Despite being a qualified accountant and a very senior and successful executive she failed, over 11 years, to get a job. She was driven, because she had a young son, to live on the streets, begging.

Noble Lords who know about whistleblowing, of which there is far too little, will have to agree with this key finding of Robert Francis QC, which appears in the letter he wrote to the Secretary of State for Health and included in his report. It says that in the course of inquiries within the health service,

“over 30% of those who raised a concern”—

namely, whistleblowers—

“felt unsafe afterwards. Of those who had not raised a concern, 18% expressed a lack of trust in the system as a reason, and 15% blamed fear of victimisation”.

This is not a story confined to the national health service. It is, I suspect, to be found in the majority of large entities in this country. The larger the entity or corporation becomes, the more impersonal, the more distant, the more depersonalised and bureaucratic. The reason we feel so strongly about this set of amendments is because they build on changes that I commend the Government for having introduced into the Bill. They build on sound reforms that are included now, by amendment, but extend them to the whole business sector; and not just the business sector because some of these things, I fear, go on in the public sector. We only have to think of child victimisation among many other sectors.

Finally, the issue of public trust seems to me to be perhaps the greatest issue of our times. It has steadily diminished, let us be honest about it, in virtually every quarter of our national life, including, I fear, in this place. Frankly, public trust is to society what oxygen is to our bodies: we cannot do without it. I make no pretence that the group of amendments we are debating will solve the problem. The only thing that will solve the problems we are grappling with—grappling is the word—is the restoration of good values and a remoralisation of our society. However, what I and my colleagues are saying is that part of that—a small but crucial part—is to give protection to those extraordinarily brave people who will speak out when faced with a corrupt culture in the institution or company in which they work. They must be given fair protection and frankly, if we do not give it to them we are encouraging the sort of conduct that we all utterly deplore and which is utterly self-defeating and self-destructive. I hope that my noble friend the Minister will look kindly on these amendments.

Lord Hunt of Kings Heath (Lab): My Lords, this is a very important group of amendments. The government amendment, which the Opposition are supporting, clearly comes on the back of the Francis report on Mid Staffordshire. I also point noble Lords to the very recent report by Dr Bill Kirkup and an expert panel of members, who looked into maternal care at the University Hospitals of Morecambe Bay NHS Foundation Trust.

That report, as the Statement which we had last week in this House said,

“found 20 instances of significant or major failings of care at Furness General Hospital, associated with three maternal deaths

11 Mar 2015 : Column 698

and the deaths of 16 babies at or shortly after birth. It concludes that different clinical care would have been expected to prevent the death of one mother and 11 babies”.

It described,

“major failures at almost every level … mistakes by midwives and doctors, a failure to investigate and learn from those mistakes, and repeated failures to be honest with patients and families, including the possible destruction of medical notes. The report says that the dysfunctional nature of the maternity unit should have become obvious in early 2009, but regulated bodies”,

including the north-west strategic health authority, primary care trusts, the CQC, Monitor and the PHSO—that is, the ombudsman,

“failed to work together and missed numerous opportunities to address the issue”.—[

Official Report

, 3/3/15; cols. 158-59.].

For the purpose of our debate, the report also showed that the drive for a transparent and open culture in the NHS has some way to go. Notes were destroyed and mistakes were covered up. Dr Kirkup’s assessment is that it was,

“possibly because of a defensive culture where the individuals involved thought they would lose their jobs if they were discovered to have been responsible for a death”.—[

Official Report

, 3/3/15; col. 160.].

It seems from Francis, the Morecambe Bay report and our general experience of the NHS that there is a pressing need for a transparent and open culture, in which the protection of whistleblowers is an important element.

Ministers in this Government and the previous Government have from time to time issued various edicts about the importance of the protection of whistleblowers. There has been guidance on this, but it is clear that a whole swathe of staff in the NHS still do not feel confident about raising concerns on patient care. That is why the Opposition very much support government Amendment 58A but I, like other noble Lords, do not think that we can stop at the NHS. That is why I also support the amendments tabled by my noble friend Lord Wills and the noble Lords, Lord Low and Lord Phillips.

As my noble friend Lord Wills said, there are “significant gaps” and loopholes,

“in the current protections for those making disclosures in the public interest”.—[

Official Report

, 26/1/15; col. GC1.]

While we have at least had a lot of debates about failures in the NHS, one has only to think of the issues following the Hillsborough football disaster, as my noble friend said in Committee, more recently in Rotherham with child abuse and then recently in Oxfordshire, again with child abuse. I am not sure whether this has been corroborated by an independent inquiry, but the point has certainly been put that a junior member of staff in Oxford City Council was subject to discouragement for raising concerns because of approaches made by Oxfordshire County Council, which was responsible for childcare, to senior officials in Oxford City Council to try to stop this person raising what seemed to be eminently sensible concerns about the way that these cases were being dealt with—or not being dealt with—in Oxfordshire.