The noble Lord, Lord Phillips, mentioned the banking world and my noble friend Lord Wills mentioned the construction industry, which is a great example. If a construction worker raises health and safety concerns, there are very good companies in the construction world where they are taken seriously. Overall, my noble friend knows that there has been considerable improvement but

11 Mar 2015 : Column 699

there are companies where, if employees raise those concerns, they are blacklisted and cannot get work in the industry. Again, where is the protection for those people?

What about education, a notorious sector where if teachers raise concerns they can look for very little protection? In education, the principal or head often has a dominant role in the governing body. In schools and colleges, there are often no procedures whatever for whistleblowing. At least in the health service there are procedures and very strong corporate governance, with a tradition of company secretaries who should be able to make sure that the procedures work. In the education sector, there are no such guarantees at all. It seems to me that my noble friend and his colleagues are absolutely persuasive. We need protections which go far beyond the National Health Service. I very much hope that the Minister will listen to these arguments and agree either to support these amendments or come back with amendments on Third Reading which would meet the point raised by my noble friend.

Baroness Neville-Rolfe: My Lords, I thank the noble Lords, Lord Wills and Lord Low, and my noble friend Lord Phillips for these amendments. I pay tribute to the tireless campaigning of the noble Lord, Lord Wills, on whistleblowing. I am not sure that we would be where we are, if not for him. I also thank others who have been involved. The noble Lords, Lord Young and Lord Stoneham, and the noble Baroness, Lady Mobarik, were involved in Committee. It is good and right to hear also from the noble Lord, Lord Hunt, given the health aspect of this problem.

I make it absolutely clear that the Government share the widespread support in this House for whistleblowers and will continue to make strides in strengthening the whistleblowing framework, obviously not least because of the scandals at Mid Staffordshire and Morecambe Bay, which have been so eloquently referred to. That is why we are taking action through this Bill and elsewhere. I was glad that my noble friend Lord Phillips and the noble Lord, Lord Hunt, acknowledged that. First, we are protecting whistleblowers from being discriminated against when applying to work in the NHS. The noble Lord described some graphic examples. Secondly, we are taking action to improve transparency in the way that regulators handle whistleblowing concerns.

On the first point, the Government have tabled an amendment in response to the recent Francis review. This recommended that the Government,

“review the protection afforded to those who make protected disclosures, with a view to including discrimination in recruitment by employers”.

Based on Sir Robert’s findings, we are convinced that blacklisting applicants for NHS jobs because they are whistleblowers causes a very serious injustice. They are effectively excluded from the ability to work again in their chosen field. When NHS staff raise concerns, they can save lives and prevent harm. That is why we are taking the opportunity, very much at the last stage of the Bill, to protect whistleblowers seeking employment in the NHS.

Amendment 58ZA, tabled by the noble Lord, Lord Wills, seeks to protect all job applicants who have blown the whistle. I have listened to his arguments

11 Mar 2015 : Column 700

around other sectors; I think that this evening people have mentioned policing, social care, construction, banking and education. I sympathise. No job applicant in whatever sector should be disadvantaged by being a whistleblower but—I have to use the word of the noble Lord, Lord Wills—when we debated this in Committee, I expressed my concern about the lack of evidence that there was a widespread problem right across the board. We do not have the level of evidence for other sectors on the nature of the gap or the scale of the problem.

Lord Hunt of Kings Heath: Is the point not that for all the NHS’s failings, it probably has a more open culture than many other sectors? That is why we know more about the problems of whistleblowing there. In education, it is much more difficult to have central government intervention in cases where staff have clearly been intimidated. In a sense, some of these other sectors need much more attention. The noble Lord, Lord Phillips, talked about the banking industry. Does anyone have any confidence at all that if someone working in the City raised concerns, even after the failures, they would be taken seriously? I rather doubt it.

6 pm

Baroness Neville-Rolfe: We have very good evidence from the Francis review. We do not have evidence for all other sectors and, of course, the amendment would apply to the private sector and the coverage would be very wide-ranging. Several noble Lords asked why it is a two-tier system and the noble Lord, Lord Hunt, asked why we are not doing it universally. Sir Robert’s findings were health-specific. He reported that he had seen evidence of individuals suffering serious detriment in seeking re-employment in the NHS after making a protected disclosure. That is what we are talking about. The health sector has one of the highest instances of whistleblowing reporting, perhaps for the reasons that the noble Lord, Lord Hunt, suggested, and, consequently, has the greatest potential for discrimination against whistleblowers, who therefore cannot get another job. The NHS is one of the largest employers in the world, I am glad to say, and should operate to the very highest standards of integrity in its recruitment practice.

Lord Low of Dalston: I thank the Minister for giving way. She makes the case that we have particular evidence in relation to the health service and so she wants to act on the health service. With regard to all the other sectors that we have asked the Government to take into consideration as well, would it not be better to put a system in place to stop the scandal before it happens rather than wait and close the stable door after the horse has bolted?

Baroness Neville-Rolfe: I thank the noble Lord, Lord Low, for his intervention. We have to legislate in an informed and evidence-based way. We have brought forward the provisions on the NHS and it is very good that noble Lords opposite support that at this late stage. We are not in the same situation in relation to other sectors. There are various arrangements and we are making general improvements on whistleblowing.

11 Mar 2015 : Column 701

Lord Stevenson of Balmacara: I am sorry to interrupt. I just want the Minister to clarify something. She said that our support for her amendment was at a late stage. I point out that that is not the case. We saw the amendment at noon one day and I signed up to it as soon as it appeared. It was certainly not at a late stage. We are very supportive of what she is doing. Our problem is that she is not doing it in nearly enough other cases. Her case that more evidence is required really does not stack up.

Baroness Neville-Rolfe: I am sorry if I caused confusion. What I was saying is that this is a relatively late stage in this Bill and that what we have done is taken steps to bring forward some of the actions that follow from the Francis review. Noble Lords opposite have been extremely helpful about supporting that and supporting it instantly. I am very glad to have been able to end that confusion.

Lord Wills: I am very sorry; the Minister is gracious in giving way yet again. Before she leaves this amendment, will she clarify the points that she is making about process? Just to be clear—she can indicate with a nod, if she wishes, rather than getting to her feet yet again—does she accept that whistleblowing can be essential in protecting the public interest and the public in other sectors apart from the NHS, such as the financial sector, the police, and adult and child social care? That is my first question to the Minister.

Baroness Neville-Rolfe: I thank the noble Lord, Lord Wills. Of course whistleblowing can play a vital part in all areas. I said that right at the beginning. As far as this Bill is concerned, we are taking specific steps in relation to the NHS. Perhaps if I could make a little bit more progress, I could explain some of the other things that we are also doing.

Lord Wills: I wonder whether I could just push the Minister a little bit further on this process. She says that the Government do not have the evidence to take the measures for other sectors that they are currently taking in relation to the NHS. She said that the Francis report has produced the evidence that the Government feel they need to proceed. I accept that. It is a perfectly reasonable approach. However, if she accepts that whistleblowing is so important in all these other vital sectors and that there is a loophole in protections that the Government are seeking to plug—clearly they accept that there are loopholes because they are seeking to plug them in relation to the NHS—why will the Minister not commit now to launching an inquiry to see whether such evidence exists? The Government did it with Mid Staffs; they have done it with other scandals; they know that there is a problem here; they know that it is important to tackle this problem. Why do the Government not commit now to collecting the evidence to see how best they can move to plug these loopholes?

Baroness Neville-Rolfe: My Lords, I am not sure that we are going to agree this evening on extending to other areas the provisions that we are very happy to include for the NHS. I have made clear that we need an evidence base and that we are doing things in other areas. The things that we are doing in other areas, to which I hope to move on, will also help to show what

11 Mar 2015 : Column 702

is happening on the ground. The debates that we have had in the House, which the noble Lord, Lord Wills, has encouraged us to have, will also change the culture in relation to whistleblowers. The very fact of the disastrous circumstances in the NHS has shown how important whistleblowers are, which is why we are making the changes that we are in relation to recruitment in the NHS.

If I may make progress, I will turn to the noble Lord’s Amendment 59, which seeks to introduce a rolling statutory review of the whistleblowing legislation. I can reassure the noble Lord, Lord Wills, that it was only last June that the Government reported the findings from their call for evidence that reviewed that legislation. The Government have also carried out an extensive employment law review during this Parliament. Looking to future review processes, we see that post-legislative scrutiny is applied to all changes to legislation five years after the measures have come into force. We have an impressive rolling programme. The changes that we introduced to the whistleblowing framework in the Enterprise and Regulatory Reform Act 2013, and the changes in this Bill, will be included in the rolling process. Considering the steps that we have taken to review employment legislation, and specifically whistleblowing legislation, I do not believe that it is necessary to introduce another review next year.

I turn now to Amendments 59A to 59F, which seek to create a national whistleblowing review officer. The Government fully understand the intention behind the proposed new clauses, which is to ensure that concerns raised by whistleblowers are acted upon. We know from research carried out by the University of Greenwich and Public Concern at Work that 75% of whistleblowers believe not enough is done about the concerns that they report. We want employers or the relevant authority to take action. That is why we are introducing the important measures in this Bill to require prescribed persons to report on how they handle whistleblowing concerns. That will increase transparency and reveal any circumstances where whistleblowing concerns are not addressed. The Government will want to allow time for this measure to take effect before they consider yet further measures. Introducing a body that has oversight of all investigatory action in response to whistleblowing concerns would be one way of going further, depending on what the need for further action was. But of course there could be other options for the Government to consider, based, as I have said, on evidence. Before introducing legislation, the Government will want to carry out a proper assessment of all available options to ensure that they are not introducing a body that was duplicating the existing functions of the regulators. This is a complex area.

Evaluation work will begin by the Department of Health publishing a consultation, which will explore the case for creating an independent whistleblowing guardian for the NHS. The Government will be able to use the evidence gathered from that consultation to look at the situation in other sectors. I cannot emphasise enough the importance of having a proper evidence base and the fact that we have been able to fast-track the Francis recommendations because of the very powerful work that he has done.

11 Mar 2015 : Column 703

The Government are committed to addressing the barriers that whistleblowers face. In addition to the measures in this Bill, we have made significant progress. Perhaps I could mention some other measures that we have taken forward. We are updating a set of comprehensive guidance for whistleblowers and employers as well as introducing a non-statutory code of practice for employers. The Government intend to publish this shortly. We have carried out work to update the list of prescribed persons. This is a list of more than 60 individuals and bodies, which includes all MPs, that a whistleblower can approach to raise their concerns. The Government have recently introduced separate legislation, which comes into force in April this year, to extend the scope of the whistleblowing framework to student nurses and student midwives.

The whistleblowing framework is improving and robust processes are in place for future work and the continuous review of the legislation that we have introduced. I hope that the noble Lord will agree that much further exploratory work would be required before proper consideration could be given to his proposal for a national whistleblowing review officer and for extending legislation to cover all job applicants, whether in the public or the private sector.

We have made a major change in relation to the NHS. Perhaps that has eclipsed the other important changes in this Bill and other progress that we have made on whistleblowing. I commend the Government’s amendment and invite the noble Lord to withdraw his amendment.

Lord Phillips of Sudbury: My noble friend the Minister said a number of times that there is insufficient evidence for extending what the Government are doing in this Bill vis-à-vis health to other sectors. Let us think again of the financial centre of this country. The collapse that we had in 2008 was perhaps the greatest financial collapse in our entire island history. It involved extensive and universally accepted huge breaches in the criminal law: the LIBOR fixing, the forex fixing, PFI—the list goes on and on. How can my noble friend say that there is insufficient evidence to warrant extending to this sector, if none other, some of the requirements that we are now extending to the health service?

Baroness Neville-Rolfe: My Lords, we are bringing in the new process provided for in the Bill which will allow greater review and engagement in those other sectors.

Lord Wills: My Lords, this has been a short but worthwhile debate on some important issues about improving protections for the public through whistleblowing. I am grateful to all noble Lords who have taken part. I am particularly grateful to the noble Lords, Lord Low and Lord Phillips, for adding their names to the amendments and for their compelling arguments in support of them. I also thank my noble friend Lord Hunt for his powerful support. I am grateful also to the Minister, who throughout our discussions, both in Committee and again today, has engaged thoroughly and thoughtfully with all these complex issues and has been helpful and constructive.

11 Mar 2015 : Column 704

In view of everything that the Minister has done so far, it is all the more disappointing that she has so summarily dismissed all the amendments. I accept the case that she made about review; I accept that there is a review process in place. Personally, I would like to see rather more frequent review, which may be a matter we can return to—although I reassure her that it will not be at Third Reading. I also accept the arguments that she made about the national review officer. This is a big and complex issue. There is a case to be made for seeing how the Francis recommendation beds down to learn the lessons from that, but I hope that it will remain on the Government’s agenda because it would be well worth pursuing.

However, I can see no good reason for the Government not to accept Amendment 58ZA. There is no good argument for confining protection for job applicants to those working in the NHS. The Minister made great play of the need to acquire more evidence. There are two problems with that approach. The first was identified by my noble friend Lord Hunt, which is that, by definition, it is extremely hard to find evidence of the harm that is done in advance of a scandal happening. When people working in professions such as the NHS, the financial sector and the police look at the examples, perhaps the rare examples, of their colleagues who have blown the whistle, they see the acute detriment that they have suffered as a result. Who is going to come forward and suffer in that way—which is actually the evidence that the Minister appears to be asking for? We know that there is a problem; we should be tackling it.

If we persist with the desire for more evidence and if that is what the Minister needs to make progress in tackling the loopholes that the Government have conceded exist, why has she just rejected my plea for her to commit to seeking out such evidence? The only reason that we are discussing the government amendment today is that a scandal happened with Mid Staffordshire, and Sir Robert Francis conducted his exhaustive and excellent inquiry and came up with the evidence. Do we have to wait for another such scandal in the financial sector finally to get to the bottom of all the skulduggery that lay behind the crash of 2008 and subsequently, or another scandal in the police such as Hillsborough, before the Minister acquires the evidence that we need to plug the loopholes?

I want to encourage the Government to think again. They have already shown themselves to be extremely flexible between Committee and Report. To encourage them to be similarly flexible between today and Third Reading, and in the hope that they will move forward in some of the ways that I have suggested today, I would like to test the opinion of the House on Amendment 58ZA. If I am successful, may I assume that the Government will accept my Amendment 59A as consequential, as it so closely mirrors the Government’s Amendment 58A on the creation of a national review officer?

6.17 pm

Division on Amendment 58ZA

Contents 174; Not-Contents 231.

Amendment 58ZA disagreed.

11 Mar 2015 : Column 705

Division No.  2

CONTENTS

Adams of Craigielea, B.

Alli, L.

Anderson of Swansea, L.

Andrews, B.

Armstrong of Hill Top, B.

Bach, L.

Bakewell, B.

Bassam of Brighton, L. [Teller]

Beecham, L.

Best, L.

Bilimoria, L.

Billingham, B.

Blackstone, B.

Boateng, L.

Borrie, L.

Bradley, L.

Bragg, L.

Brennan, L.

Brooke of Alverthorpe, L.

Brookman, L.

Campbell-Savours, L.

Carter of Coles, L.

Cashman, L.

Chandos, V.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Collins of Highbury, L.

Colville of Culross, V.

Corston, B.

Cunningham of Felling, L.

Davies of Coity, L.

Davies of Oldham, L.

Dean of Thornton-le-Fylde, B.

Desai, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Dubs, L.

Eatwell, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foster of Bishop Auckland, L.

Foulkes of Cumnock, L.

Gale, B.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Gould of Potternewton, B.

Grantchester, L.

Greaves, L.

Grocott, L.

Hanworth, V.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskel, L.

Haworth, L.

Hay of Ballyore, L.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollick, L.

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.

Irvine of Lairg, L.

Jay of Paddington, B.

Jones, L.

Jones of Moulsecoomb, B.

Jones of Whitchurch, B.

Jordan, L.

Judd, L.

Kennedy of Cradley, B.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

King of Bow, B.

Kinnock, L.

Kinnock of Holyhead, B.

Kirkhill, L.

Layard, L.

Lea of Crondall, L.

Leicester, Bp.

Lennie, L.

Liddell of Coatdyke, B.

Lipsey, L.

Lister of Burtersett, B.

Low of Dalston, L.

Lytton, E.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

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.

Patel of Blackburn, L.

Pendry, L.

Phillips of Sudbury, L.

Pitkeathley, B.

Prescott, L.

Prosser, B.

Quin, B.

Ramsay of Cartvale, B.

Rea, L.

Rebuck, B.

Rees of Ludlow, L.

Richard, L.

Rooker, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Russell of Liverpool, L.

Sawyer, L.

Scotland of Asthal, B.

Scott of Foscote, L.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Smith of Gilmorehill, B.

Snape, L.

Soley, L.

Stevenson of Balmacara, L.

11 Mar 2015 : Column 706

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Blackburn, L.

Taylor of Bolton, B.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turner of Camden, B.

Uddin, B.

Walpole, L.

Warner, L.

Warnock, B.

Watson of Invergowrie, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Wills, L.

Wood of Anfield, L.

Woolmer of Leeds, L.

Young of Norwood Green, L.

Young of Old Scone, B.

NOT CONTENTS

Aberdare, L.

Addington, L.

Anelay of St Johns, B.

Ashdown of Norton-sub-Hamdon, L.

Ashton of Hyde, L.

Astor of Hever, L.

Attlee, E.

Bakewell of Hardington Mandeville, B.

Balfe, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Borwick, L.

Bottomley of Nettlestone, B.

Bourne of Aberystwyth, L.

Bowness, L.

Boyce, L.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Burnett, L.

Byford, B.

Caithness, E.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chadlington, L.

Chidgey, L.

Colwyn, L.

Cooper of Windrush, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Craigavon, V.

Crathorne, L.

Crickhowell, 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.

Empey, 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.

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.

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.

Inglewood, L.

James of Blackheath, L.

Janke, B.

Jenkin of Kennington, B.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

11 Mar 2015 : Column 707

Kalms, L.

Kerr of Kinlochard, 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.

Loomba, L.

Lucas, L.

Ludford, B.

Lyell, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Magan of Castletown, L.

Mar and Kellie, E.

Marks of Henley-on-Thames, 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.

Rowe-Beddoe, L.

Ryder of Wensum, L.

Sanderson of Bowden, L.

Scott of Needham Market, B.

Scriven, L.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Sharples, B.

Sheikh, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shields, B.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Skelmersdale, L.

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.

Suri, L.

Suttie, B.

Taverne, L.

Taylor of Holbeach, L. [Teller]

Thomas of Gresford, L.

Thomas of Winchester, B.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

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.

Young of Hornsey, B.

Younger of Leckie, V.

6.30 pm

Amendment 58A

Moved by Baroness Neville-Rolfe

58A: After Clause 147, insert the following new Clause—

“Protection for applicants for employment etc in the health service

(1) The Employment Rights Act 1996 is amended as follows.

(2) After section 49A insert—

“Part 5Aprotection for applicants for employment etc in the health service

49B Regulations prohibiting discrimination because of protected disclosure

11 Mar 2015 : Column 708

(1) The Secretary of State may make regulations prohibiting an NHS employer from discriminating against an applicant because it appears to the NHS employer that the applicant has made a protected disclosure.

(2) An “applicant”, in relation to an NHS employer, means an individual who applies to the NHS employer for—

(a) a contract of employment,

(b) a contract to do work personally, or

(c) appointment to an office or post.

(3) For the purposes of subsection (1), an NHS employer discriminates against an applicant if the NHS employer refuses the applicant’s application or in some other way treats the applicant less favourably than it treats or would treat other applicants in relation to the same contract, office or post.

(4) Regulations under this section may, in particular—

(a) make provision as to circumstances in which discrimination by a worker or agent of an NHS employer is to be treated, for the purposes of the regulations, as discrimination by the NHS employer;

(b) confer jurisdiction (including exclusive jurisdiction) on employment tribunals or the Employment Appeal Tribunal;

(c) make provision for or about the grant or enforcement of specified remedies by a court or tribunal;

(d) make provision for the making of awards of compensation calculated in accordance with the regulations;

(e) make different provision for different cases or circumstances;

(f) make incidental or consequential provision, including incidental or consequential provision amending—

(i) an Act of Parliament (including this Act),

(ii) an Act of the Scottish Parliament,

(iii) a Measure or Act of the National Assembly for Wales, or

(iv) an instrument made under an Act or Measure within any of sub-paragraphs (i) to (iii).

(5) Subsection (4)(f) does not affect the application of section 236(5) to the power conferred by this section.

(6) “NHS employer” means an NHS public body prescribed by regulations under this section.

(7) “NHS public body” means—

(a) the National Health Service Commissioning Board;

(b) a clinical commissioning group;

(c) a Special Health Authority;

(d) an NHS trust;

(e) an NHS foundation trust;

(f) the Care Quality Commission;

(g) Health Education England;

(h) the Health Research Authority;

(i) the Health and Social Care Information Centre;

(j) the National Institute for Health and Care Excellence;

(k) Monitor;

(l) a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006;

(m) the Common Services Agency for the Scottish Health Service;

(n) Healthcare Improvement Scotland;

(o) a Health Board constituted under section 2 of the National Health Service (Scotland) Act 1978;

(p) a Special Health Board constituted under that section.

(8) The Secretary of State must consult the Welsh Ministers before making regulations prescribing any of the following NHS public bodies for the purposes of the definition of “NHS employer”—

(a) a Special Health Authority established under section 22 of the National Health Service (Wales) Act 2006;

11 Mar 2015 : Column 709

(b) an NHS trust established under section 18 of that Act;

(c) a Local Health Board established under section 11 of that Act.

(9) The Secretary of State must consult the Scottish Ministers before making regulations prescribing an NHS public body within any of paragraphs (m) to (p) of subsection (7) for the purposes of the definition of “NHS employer”.

(10) For the purposes of subsection (4)(a)—

(a) “worker” has the extended meaning given by section 43K, and

(b) a person is a worker of an NHS employer if the NHS employer is an employer in relation to the person within the extended meaning given by that section.”

(3) In section 230(6) (interpretation of references to employees, workers etc) for “and 47B(3)” substitute “, 47B(3) and 49B(10)”.

(4) In section 236(3) (orders and regulations subject to affirmative procedure) after “47C,” insert “49B,”.”

Amendment 58A agreed.

Amendments 59 to 59F not moved.

Clause 148: Financial penalty for failure to pay sums ordered by employment tribunal etc

Amendment 60

Moved by Baroness Neville-Rolfe

60: Clause 148, page 127, leave out lines 20 to 23 and insert—

“(2) “Financial award”—

(a) means a sum of money (or, if more than one, the sums of money) ordered by an employment tribunal on a claim involving an employer and a worker, or on a relevant appeal, to be paid by the employer to the worker, and

(b) includes—

(i) any sum (a “costs sum”) required to be paid in accordance with an order in respect of costs or expenses which relate to proceedings on, or preparation time relating to, the claim or a relevant appeal, and

(ii) in a case to which section 16 applies, a sum ordered to be paid to the Secretary of State under that section.

(2A) Subsection (2)(b)(i) applies irrespective of when the order was made or the amount of the costs sum was determined.”

Baroness Neville-Rolfe: My Lords, our penalty measure provides incentives for full and prompt payment of employment tribunal awards and creates sanctions for non-payment. This is supported by our non-legislative work to improve guidance to help individuals understand how to enforce their rights.

In Committee I agreed to consider an amendment to include costs in the relevant amount on which the financial penalty is to be calculated. We have been persuaded by the principle that the penalty should incentivise workers receiving all that they are owed by their employer, and that where a tribunal has decided that costs are to be paid, an employee is entitled to receive them. Our amendments do exactly that.

The amendments also allow the Government to make changes by regulation if, in practice, waiting for costs to be finalised before financial penalties can be issued causes too much delay. These amendments also deal with some other minor and technical issues. For example, they make it clear that penalties which are payable to the Secretary of State are not included, and clarify technical points such as when an award is considered paid in full.

11 Mar 2015 : Column 710

I hope that noble Lords will be reassured that the Government have listened to the concerns raised in Committee and that we are creating the right environment for a worker to be able to receive their full employment tribunal award promptly. I thank noble Lords for the debates we have had on this subject, and I beg to move.

Lord Young of Norwood Green: My Lords, I thank the Minister for her contribution. If I may paraphrase, “Never look a gift horse or a gift concession in the mouth”. However, in this case I will make a slight exception. We had a useful meeting with the noble Baroness—who has disappeared out of sight now, but not, I hope, out of hearing—and her civil servants. I was asked by the noble Lord, Lord Low, to make his apologies. As the noble Baroness knows, he has been a frequent participant in this debate, and he regrets that he cannot be here tonight, so I said that I would apologise on his behalf.

In the meeting that we had with the Minister I raised the disparity between two cases. If an award is made for a failure to pay the national minimum wage and the employer does not respond after having been contacted by HMRC, and does not pay the outstanding national minimum wage, an enforcement officer takes action against the employer. In the case of somebody who has struggled, probably for a significant period of time, gone through enforced mediation, and who has been successful at an employment tribunal, if the employer still fails to pay, it is true that they now incur penalties—and the Minister has told us about the improvements made in that area. However, we suggested that the successful claimant ought to have first recourse to those payments—but the Minister rejected that, saying that for a variety of reasons it could not be done.

I then suggested in the discussions we had that if that were the case, why at that point in time—which could be anything between a year and two years —should the cost of enforcement fall on the claimant, who will have been through mediation and an employment tribunal, been successful, and won an award? I suggested that the Government should examine the possibility of enforcement, as they are doing with the national minimum wage. That was what I hoped the Minister would take away.

That has not been the case. I am not expecting a detailed response this evening, but I make a plea that she might take that away, and between now and Third Reading perhaps we can meet to see whether any further progress can be made. However, with those few comments, we are happy to support the amendments.

Amendment 60 agreed.

Amendments 61 to 74

Moved by Baroness Neville-Rolfe

61: Clause 148, page 127, line 30, leave out “In subsection (2)”

62: Clause 148, page 127, leave out line 33 and insert—

“( ) a decision to make, or not to make, an order in respect of a financial award (including any costs sum) on the claim,”

63: Clause 148, page 127, line 34, leave out second “the” and insert “any such”

64: Clause 148, page 128, line 6, leave out “subject to subsection (4),”

11 Mar 2015 : Column 711

65: Clause 148, page 128, line 10, leave out from “17(3))” to end of line 26 and insert “together with any costs sum, and

( ) in any other case, the sum or sums of money ordered to be paid (including any costs sum).”

66: Clause 148, page 128, line 28, at end insert—

“( ) when the worker could make an application for an order for a costs sum in relation to—

(i) proceedings on the claim to which the financial award relates,

(ii) proceedings on a relevant appeal,

( ) when the worker has made such an application but the application has not been withdrawn or finally determined,”

67: Clause 148, page 128, leave out line 31 and insert—

“( ) a decision to make, or not to make, a financial award (including any costs sum) on the claim,”

68: Clause 148, page 128, line 32, leave out second “the” and insert “any such”

69: Clause 148, page 129, line 24, at end insert—

“( ) The provisions of this Part apply where a financial award consists of two or more sums (whether or not any of them is a costs sum) which are required to be paid at different times as if—

(a) it were a relevant sum to be paid by instalments, and

(b) those sums were the instalments.”

70: Clause 148, page 135, line 20, leave out from “in” to end of line and insert “particular cases”

71: Clause 148, page 135, line 30, at end insert—

“(3) The Secretary of State may by regulations make provision for this Part to apply with modifications in cases where a financial award has been made against an employer but is not regarded as outstanding by virtue only of the fact that an application for an order for a costs sum has not been finally determined (or any appeal within section 37B(5)(a) so far as relating to the application could still be made or has not been withdrawn or finally determined).

(4) Regulations under subsection (3) may in particular provide—

(a) for any provision of this Part to apply, or to apply if the enforcement officer so determines, as if the application had not been, and could not be, made;

(b) for any costs sum the amount of which is subsequently determined, or the order for which is subsequently made, to be treated for the purposes of this Part as a separate relevant sum.”

72: Clause 148, page 136, line 19, at end insert—

““costs sum” has the meaning given by section 37A;”

73: Clause 148, page 136, line 24, at end insert—

““relevant appeal” has the meaning given by section 37A;”

74: Clause 148, page 136, line 40, at end insert—

“( ) For the purposes of this Part a relevant sum is to be regarded as having been paid in full when the amount unpaid in respect of that sum on the date of payment has been paid.”

Amendments 61 to 74 agreed.

Clause 151: Exclusivity terms unenforceable in zero hours contracts

Amendment 74A had been withdrawn from the Marshalled List.

Amendment 74AA

Moved by Lord Young of Norwood Green

74AA: Clause 151, page 140, line 12, at end insert—

“(4A) An employer must offer a fixed-hours contract to a worker who has worked regular hours for a continuous period, or series of continuous periods, of employment, to be determined by the Secretary of State.

(4B) The Secretary of State shall by regulations make provision for the determination of “regular hours” under subsection (4A).”

11 Mar 2015 : Column 712

Lord Young of Norwood Green: My Lords, we have again had a long debate this afternoon about the flexibility of zero-hours contracts and what constitutes fairness in such contracts. The last Division was on an amendment which looked at the question of cancellation; unfortunately, we were not successful on that. Again, in this area there is an unfairness to zero-hours contracts. The House will note that we have not specified the period; we just wished to draw attention to a serious problem.

A number of contributions this evening talked about the need for flexibility in those contracts. As my noble friend Lady Hollis—who I see is in her seat—made clear, we are not opposing the principle of zero-hours contracts, but trying to lay the foundation for what we believe to be fairness in the arrangements. In a situation where regular hours are being worked for a continuous period or even a series of continuous periods of employment, surely that does not constitute the kind of flexible zero-hours contract that workers ought to expect. In those circumstances, we believe that the employer should be bound to offer the employee a fixed-hours contract.

If we look at the statistics behind the number of workers employed on contracts that last for a year or even two years, we find that they are not the kind of thing that we envisaged, or what was described today by noble Lords who talked of the need for a very flexible contract. That is, we believe, the justification for injecting fairness into a contract that in previous circumstances would probably have been a standard contract of employment. I look forward to the Minister’s contribution, and to hearing about the Government’s attitude to the amendment. I beg to move.

Baroness Neville-Rolfe: My Lords, I am grateful to the noble Lord, Lord Young, for tabling the amendment and giving us the opportunity to return to the matter of zero-hours contracts. I know that he genuinely wants the new regime to work, and I am grateful for that.

The amendment relates to a right to request fixed hours. However, it goes beyond zero-hours contracts and would introduce a right for all workers to demand a fixed-hours contract. This means that it would extend the right to the vast majority of the labour market. I have some sympathy with the noble Lord’s intention, but I am afraid there is a clear risk of negative consequences for the individuals affected, with some unscrupulous employers finding relatively simple ways to circumvent the legislation. For example, some employers could be incentivised simply to let people go before the qualifying period. That would impact negatively on the very people the amendment seeks to help.

None the less, I hope that I can reassure the noble Lord that the spirit of his amendment has already been addressed. The amended flexible working regulations, brought in on 30 June last year, give all “employees” the right to make a request to change their pattern of working after 26 weeks’ continuous service. The amendment would go further, by extending this right to all workers, but it is possible that individuals on zero-hours contracts who can prove a requisite qualifying period of 26 weeks may well be considered to be “employees”, and therefore be entitled to this right.

11 Mar 2015 : Column 713

The Government’s approach has been proportionate in ensuring that employees have the right to request a change to their working pattern, while ensuring that businesses retain the flexibility they need to help drive economic growth. This flexibility will sometimes include a legitimate need to hire someone on a casual contract.

By extending the provision to all “workers”, the amendment could end up capturing many contractors and freelancers who may not want or need this right. What is more, many businesses rely on these individuals and other casual labour to provide specific tasks, and do not expect to hire them on a permanent contract at the end of their contract. A right to fixed hours after a certain period would obviously restrict this ability. I believe that the amendment could open a loophole, and might encourage employers simply to let individuals go before the end of the qualifying period. That is clearly not the outcome that any of us wants. I hope that on that basis, the noble Lord will feel able to withdraw his amendment.

Lord Young of Norwood Green: My Lords, I listened carefully to the Minister. If the wording of the amendment is not perfect, that does not stop her accepting the principle contained therein: and proposed new subsection (4A) does end with the words,

“to be determined by the Secretary of State”.

Yes, there will be a need for regulations, and I accept the noble Baroness’s point about freelancers and so on; there will be some exclusions. However, I return to the basic principle of fairness. We are talking about people who are not necessarily in a traditional freelance role but who, in a significant number of cases, are employed on a zero-hours contract for a year or even two years. We therefore feel that this is an important enough issue to test the opinion of the House.

6.44 pm

Division on Amendment 74AA

Contents 133; Not-Contents 208.

Amendment 74AA disagreed.

Division No.  3

CONTENTS

Adams of Craigielea, B.

Alton of Liverpool, L.

Anderson of Swansea, L.

Armstrong of Hill Top, B.

Bakewell, B.

Bassam of Brighton, L. [Teller]

Boateng, L.

Borrie, L.

Bradley, L.

Brooke of Alverthorpe, L.

Brookman, L.

Campbell-Savours, L.

Carter of Coles, L.

Cashman, L.

Chandos, V.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Collins of Mapesbury, L.

Corston, B.

Cunningham of Felling, L.

Davies of Oldham, L.

Desai, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Dubs, L.

Eatwell, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foulkes of Cumnock, L.

Gale, B.

Gordon of Strathblane, L.

Goudie, B.

Gould of Potternewton, B.

Grantchester, L.

11 Mar 2015 : Column 714

Grocott, L.

Hanworth, V.

Harris of Haringey, L.

Harrison, L.

Haworth, L.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hollick, L.

Hollis of Heigham, B.

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.

Irvine of Lairg, L.

Jones, L.

Jones of Moulsecoomb, B.

Jones of Whitchurch, B.

Jordan, L.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

King of Bow, B.

Kinnock, L.

Kinnock of Holyhead, B.

Kirkhill, L.

Layard, L.

Lea of Crondall, L.

Leicester, Bp.

Lister of Burtersett, B.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

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.

Patel of Blackburn, L.

Pendry, L.

Pitkeathley, B.

Prescott, L.

Prosser, B.

Quin, B.

Ramsay of Cartvale, B.

Rea, L.

Rebuck, B.

Reid of Cardowan, L.

Richard, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Sawyer, L.

Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Snape, L.

Soley, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Bolton, B.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turner of Camden, B.

Uddin, B.

Warner, L.

Watson of Invergowrie, L.

Wheeler, B.

Whitty, L.

Wigley, L.

Wills, L.

Wood of Anfield, L.

Woolmer of Leeds, L.

Young of Norwood Green, L.

Young of Old Scone, B.

NOT CONTENTS

Aberdare, L.

Addington, L.

Anelay of St Johns, B.

Ashton of Hyde, L.

Astor of Hever, L.

Attlee, E.

Bakewell of Hardington Mandeville, B.

Balfe, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Bew, L.

Blencathra, L.

Borwick, L.

Bottomley of Nettlestone, B.

Bourne of Aberystwyth, L.

Bowness, L.

Brabazon of Tara, L.

Bridgeman, V.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Burnett, L.

Byford, B.

Caithness, E.

Callanan, L.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chadlington, L.

Chidgey, L.

Colville of Culross, V.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Craigavon, V.

Crathorne, L.

Crickhowell, L.

Cumberlege, B.

Deighton, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dundee, E.

Eaton, B.

Eden of Winton, L.

11 Mar 2015 : Column 715

Elton, L.

Empey, L.

Evans of Bowes Park, B.

Falkland, V.

Falkner of Margravine, B.

Farmer, L.

Faulks, L.

Fellowes of West Stafford, L.

Fink, 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.

Geddes, L.

German, L.

Glasgow, E.

Glenarthur, L.

Goddard of Stockport, L.

Gold, L.

Goodlad, L.

Goschen, V.

Greenway, L.

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.

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.

Humphreys, B.

Hunt of Wirral, L.

Hussein-Ece, B.

Inglewood, L.

Janke, B.

Jay of Ewelme, L.

Jenkin of Kennington, B.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

King of Bridgwater, L.

Kinnoull, E.

Kirkham, L.

Knight of Collingtree, B.

Kramer, B.

Lamont of Lerwick, L.

Lang of Monkton, L.

Leach of Fairford, L.

Lee of Trafford, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Linklater of Butterstone, B.

Liverpool, E.

Loomba, L.

Ludford, B.

Luke, L.

Lyell, L.

Lytton, E.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Marks of Henley-on-Thames, 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.

Phillips of Sudbury, L.

Popat, L.

Purvis of Tweed, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Rennard, L.

Ribeiro, L.

Risby, L.

Roberts of Llandudno, L.

Rogan, L.

Rowe-Beddoe, L.

Russell of Liverpool, L.

Ryder of Wensum, L.

Sanderson of Bowden, L.

Scott of Needham Market, B.

Scriven, L.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Sharples, B.

Sheikh, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shields, B.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Skelmersdale, L.

Smith of Newnham, B.

Spicer, L.

Stedman-Scott, B.

Stephen, L.

Sterling of Plaistow, L.

Stewartby, L.

Stoneham of Droxford, L.

Storey, L.

Stowell of Beeston, B.

Strasburger, L.

Suri, L.

Suttie, B.

Taylor of Holbeach, L. [Teller]

Thomas of Gresford, L.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

Tugendhat, L.

Tyler, L.

Tyler of Enfield, B.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

11 Mar 2015 : Column 716

Wallace of Tankerness, L.

Walmsley, B.

Wasserman, L.

Wheatcroft, B.

Whitby, L.

Wilcox, B.

Williams of Trafford, B.

6.56 pm

Amendment 74B

Moved by Lord Mitchell

74B: After Clause 151, insert the following new Clause—

“Growth and impact of unpaid internships

(1) The Secretary of State must publish a report on the growth of unpaid internships within the United Kingdom labour market over the past five years.

(2) The report shall include details on, but is not limited to—

(a) the incidence of unpaid internships by industrial classification;

(b) the average and median length of unpaid internships;

(c) an analysis of those who undertake unpaid internships including details on age; gender and ethnicity;

(d) the impact of unpaid internships on social mobility;

(e) the impact of unpaid internships on graduate prospects; and

(f) current legislation and provisions available to address the exploitation of unpaid internships.”

Lord Mitchell (Lab): My Lords, in moving this amendment, I restate my interest as the chairman of Instant Impact, a graduate recruitment company.

In speaking to her amendment in Grand Committee, my noble friend Lady Donaghy asked the Minister to respond to several questions. Some were addressed and some were not. I aim to push these points a little further. Whether we like it or not, intern experience is a key component of many CV statements. Competition for top jobs is fierce. In my time, I have looked at many CVs and found that each one seems to be more impressive than the last. Much time and energy are expended by a candidate to show himself or herself in the best possible light. In my day, you could wing it and hope that it would be all right on the night; today, that is no longer the case. These days, organisations look for the brightest and the best. They look at not just the quality of their degree or of the university they attended, but at the kind of person they are. Is he or she well rounded? Will they fit into the team? Do they have resilience? Can they articulate an argument? Will they make a positive contribution to the organisation? And perhaps the most important question of all: what is their employment experience?

We on these Benches support internships, much as we support schools’ work experience. The relationship between schools and business needs to be much improved and there is nothing better than sixth formers spending time getting to understand the work environment. In such situations we understand that it is unrealistic to expect payment. However, this amendment is concerned not with work experience but with internships, which often become quasi-employment or, indeed, actual employment.

A couple of weeks ago, I read an article in the Sunday Times which highlighted a recruitment company that charges young people a fee of up to £3,000 to secure unpaid internships in the City. I have been present at a charity auction which raised tens of thousands of

11 Mar 2015 : Column 717

pounds by offering internships at a major fashion magazine. Such extreme examples illustrate the lengths to which people will go to spice up their CVs. The media, fashion, advertising, PR as well as high-tech and, indeed, our Palace of Westminster, are the prime offenders. They have bright young things working for them free of charge simply because they can. They get away with it because people are desperate for good jobs and they want the kudos of good names on their CVs. In some ways it resembles the unpaid pupillage that used to exist in the legal profession. It was banned there; it now ought to be banned in the wider world.

The Chartered Institute of Personnel and Development estimates that there are 20,000 unpaid interns. I bet that it is significantly more. The Sutton Trust says that the cost to a young person of being an unpaid intern in London is nearly £1,000 a month. A poll has said that 70% of the population say that unpaid internships are unfair and 65% of businesses want to end them. Many have suggested that the full minimum wage should come into effect after a four-week internship. Intern Aware, to which I pay tribute, has lobbied hard on this issue and I have much sympathy with this position.

7 pm

In Grand Committee, the noble Baroness the Minister stated that mechanisms are in place to ensure that there should be no unpaid interns. However, I think she knows—I know this for certain—that the powers available are rarely enforced. I would love to hammer the Government harder on this issue, but the truth is I do not have the data in my hands—hence this amendment.

I suspect that the Government are sympathetic to our position. After all, both the Conservative Party and the Liberal Democrats believe in meritocracy and equal opportunity for all our young people, but they, too, do not have the data in their hands. Getting the best job available is the first and possibly most important step on a long career path. Surely, we owe it to our young people to ensure that artificial barriers are not put in their way. We need the level playing field that compulsory payment for work would introduce.

The amendment asks the Secretary of State to engage a study that reports on the growth of unpaid internships in the UK labour market over the past five years. The report should include: the incidence of unpaid internships by industrial classification; the average and medium length of unpaid internships; an analysis of those who undertake unpaid internships, including details on age, gender and ethnicity; the impact of unpaid internships on social mobility; the impact of unpaid internships on graduate prospects; and current legislation and provisions available to address the exploitation of unpaid internships.

Unpaid internships benefit those whose parents can afford to support them and detrimentally affect those whose families simply cannot afford to do so. This is a problem we need to solve, but we need the data available to do so. I beg to move.

Baroness O'Cathain (Con): My Lords, I wonder who would collect the data. Could we be assured that the data would always be fully acknowledged? I can see companies saying, “Well, I’m not going to fill in that form”. Many is the time one gets questionnaires and

11 Mar 2015 : Column 718

just throws them out. I am slightly concerned about the way in which this could be done. I agree with the noble Lord that there is an awful lot of difficulty in this whole area, partially because careers advice is not great in schools. As a result, people are really desperate to know what sort of jobs would be available. If they are offered an unpaid internship I can see them being tempted to take it, but I absolutely agree that it creates yet more haves and have-nots. But how does the noble Lord think that it would actually work?

Lord Storey (LD): My Lords, that is the important issue. Let us be quite honest about this: a number of MPs, for example, have unpaid interns with parents who can afford to bankroll them. But if a young person is living on a council estate in Newcastle or Liverpool, how on earth would they be able to come to Westminster and have that experience? If we talk about social mobility, opportunities for all, the raison d’être of internships should be about providing those opportunities for every single person. It does not happen, which is very sad indeed.

I am pleased to say that some internships are paid and one applauds the businesses and individuals who pay interns at the minimum or living wage. Many internships are unpaid and there are businesses—advertising, for example—where the whole ethos is to take on unpaid interns who fight their way to the top. That is true of other businesses as well. It is interesting to look at America, where legal action is being taken against those companies that do not pay internships. In many cases, those businesses are putting their hands up and saying, “Right, we are going to pay our interns”. The same should happen in this country. We have work experience, which is about helping not the employer but the person gaining that short work experience. We have volunteering which, as the name says on the tin, is about volunteering because you want to do something good for a particular cause. Maybe for the first few weeks, an internship should be at your expense, but if it is any longer, you should be paid at a living wage.

I know the Government are sympathetic to this. I think right across this House we are sympathetic about it. There are issues to do with taxation and salaries that we need to understand. I realise it is very late in the day and the Minister cannot give any commitments. I guess nothing can change now, unless we push this to a vote, and I perhaps hope we do not. However, perhaps the Minister can meet us to go over in our own minds about how we might take this forward. I have talked to Ministers and I know that there is a degree of wanting to support this move.

Baroness Neville-Rolfe: My Lords, I am grateful to the noble Lord, Lord Mitchell, for giving us the opportunity to come back to the important subject of interns, to my noble friend Lady O’Cathain for her helpful and insightful comments, and to my noble friend Lord Storey for reminding us that this is a complex subject. I will begin by answering his first question. Obviously, I would be entirely happy to meet him to talk through this issue. I do not think it is possible—as I will come to explain—to do anything in this Bill, but that does not mean that we should not be exchanging comments, knowledge and evidence on this very important area, which I am also passionate about.

11 Mar 2015 : Column 719

I think we all agreed in Committee that we wanted to encourage internships and that they should be fair, open and transparent in order to encourage candidates from a wide variety of backgrounds. The flexibility of our labour market is a great source of pride, as we discussed earlier. Of the growth of 2 million jobs in this Parliament, nine out of 10 were employees and nearly eight out of 10 were full-time jobs, so there are a lot of opportunities for young people, the unskilled and the long-term unemployed. Youth unemployment fell in the past year by 188,000, so that is good news.

Obviously in any part of the labour market, not just internships, we have to take action where there is any exploitation of individual workers. The use of internships is relatively new in the UK labour market. There is a lot more practice elsewhere, especially in the United States, and there is no definition of internship in our legislation. Individuals undertaking an internship will be workers, employees, or volunteers, depending on the reality of their employment relationship, and not their job title or what an employer decides should be set out in a contract.

Where the intern is an employee or a worker, they are entitled to at least the national minimum wage from day one and all other rights attached to their employment status. The Government are very clear that employing unpaid interns as workers to avoid paying the national minimum wage is illegal. Through tougher enforcement measures, such as increasing the maximum penalty fourfold, and naming and shaming employers, we have shown that we will crack down on employers who break that law. The Bill will also ensure that the maximum penalty is calculated on a per-worker, rather than per-notice, basis, as we discussed in Committee. We have also increased HMRC’s enforcement budget from £8 million to £9.2 million and we will increase the enforcement budget by a further £3 million in 2015-16.

Baroness Morgan of Huyton (Lab): While I recognise that it cannot be done now in the Bill, it would be helpful to investigate the difference between work experience and internships. All of us are absolutely committed to work experience; the noble Baroness, Lady O’Cathain, and I have discussed this on several committees recently. Work experience cannot go on for ever; it cannot go on for week after week or month after month. There is a real difference. We need to encourage work experience, but that is, in essence, very different from the sorts of internships one comes across. One talks to people who are on their third unpaid internship and are clearly working. They can reach the age of 25 or 26 before they get paid employment. That is in particular sectors of the economy. Collectively, around the House, I think we are anxious to make sure, in encouraging social mobility, that we differentiate properly between work experience and internships.

Baroness Neville-Rolfe: I thank the noble Baroness for her intervention. She is absolutely right: we need to think about work experience and internships. I will come on to mention the work we are doing. We should certainly look at both aspects.

Before I finish on enforcement—this is an important point and I was asked about it in Committee—in this financial year alone HMRC has identified more than

11 Mar 2015 : Column 720

£41,000-worth of arrears for 21 interns who were underpaid the national minimum wage, so enforcement is taking place in this area.

One of the issues that we believe may make some interns uncertain is determining their employment status, which is obviously an essential precursor to understanding what their rights are and whether they are entitled to the national minimum wage. Determining an individual’s employment status can be difficult, as the noble Baroness showed so clearly. There is no one single test to determine whether a contract of employment exists and therefore whether an individual is an employee. We understand that, at times, this is very confusing. It affects various employers, but it also affects interns. Therefore, my right honourable friend in the other place the Secretary of State announced a review in October of employment status to consider these issues. The review will conclude soon.

I understand the concerns raised about pay and social mobility. Some young people probably do not know about opportunities or have access to internships that already exist. That is why the Government fund the Graduate Talent Pool to ensure that all young people have access to internships. That service is on GOV.UK. It is free to employers and graduates, and provides information on all aspects of internships. I am sure that we can do more, but I think it is good that we have done that. We want to encourage social mobility in particular and the Government’s Social Mobility Business Compact, which was launched in 2011, gets employers to commit to fair and open work experience and paid internship opportunities. I know from personal experience that many employers provide such internships and not just for the privileged few. We need to encourage that and keep it going.

My noble friend Lady O’Cathain mentioned career advice. We have recently committed new resources to career advice. That is an interesting addition to the debate.

I turn to the amendment. Internships are not formally defined and therefore the Government do not collect reliable information on a consistent basis that would allow the robust provision of data sought in the amendment. The Government have undertaken research on wider issues that may relate to internships, such as social mobility. We need to be properly informed of the issues around internships to ensure that policy is set appropriately to maximise flexibility and prevent exploitation.

As part of our employment status review, the Government are gathering information through consultation with stakeholders to understand both the current position of groups in the labour market and whether future changes are appropriate. This includes internships and will no doubt provide useful information and data for future discussions.

In summary, I understand and share some of the concerns raised in this debate. We take exploitation of interns very seriously and we already try to act through national minimum wage enforcement to prevent exploitation. Other employment measures in the Bill, such as changing the penalty regime, will of course be helpful. There must be more that the Government can do—that is why we have undertaken a review of

11 Mar 2015 : Column 721

employment status—but I hope that the noble Lord will support what the Government are doing and will be content to withdraw his amendment.

7.15 pm

Lord Mitchell: My Lords, I thank the Minister for that reply. What she has said is certainly very helpful. If I detect the mood in your Lordships’ House at the moment, everyone seems very supportive of improving the situation regarding internships, ensuring that these young people are paid and taking the necessary action on it. I thank the noble Baroness, Lady O’Cathain, for the supportive comments that she made. She made a fair point about how the information will be gathered. I suspect that lots of companies are deluged with information; one more piece of information is probably not a good thing, but all the same, it has to be obtained otherwise decisions cannot be taken. The noble Lord, Lord Storey, has been very supportive on this all the way through. I thank him very much for that, and for the helpful comment from my noble friend Lady Morgan.

As I said, there is unanimity in the House on this issue, for which I certainly feel very grateful. I will of course withdraw the amendment.

Amendment 74B withdrawn.

Amendment 74C

Moved by Baroness Hollis of Heigham

74C: After Clause 151, insert the following new Clause—

“Workers: inclusion within national insurance system

All workers shall be eligible for inclusion within the national insurance system where the relevant worker’s annual earnings reach or exceed the annualised level of Job Seeker’s Allowance.”

Baroness Hollis of Heigham: My Lords, I hope that your Lordships will forgive an amendment that superficially seems nerdish, but it is an issue that will make or break many people’s lives. Please bear with me.

National insurance is a contributory system entitling you to sick and holiday pay, and, above all, the state pension. You come within it if, in any one waged job, you earn £5,700, which is about 16 hours a week’s work at minimum wage, which is the lower earnings limit—the LEL—although you do not actually pay national insurance until you earn £7,500. Over the years, all parties have rightly recognised that people in unwaged work—primarily women caring for children or elderly people—should be credited into NI and not lose their right to the state pension because they put their family first. All around the political spectrum, we have also respected the position of disabled people with difficult work prospects, who are also credited in, and those who are unemployed on JSA—assuming, of course, that they are properly searching for and training for work. They, too, get credited into national insurance.

Who, then, is left out? It is workers with part-time jobs, which includes two groups in particular. The first is middle-aged women. They have juggled a portfolio—to put it grandly—of part-time jobs, such as cleaning and shop work, with family care. It is a splintered

11 Mar 2015 : Column 722

workload, none of which separately qualifies them for national insurance. At least in the past married women could rely on the 60% dependency pension from their husbands. That disappears from 2016, so they will then not get a pension from their husband and currently they do not get one from their own waged and unwaged work. Depending on their back history, they will not get much from the state either. That is how we will reward them for doing what most of us believe is right: fitting their work around their family responsibilities. As a result, they lose years of state pension.

The second group is young people. They may be on JSA. They do everything that is required of them. They apply for countless full-time jobs and do not even get their application acknowledged. Going to Jobcentre Plus, nearly all of the jobs available are part time; many of them are also on ZHCs. It has been estimated that one-third of young people under the age of 30 are in short-hour or ZHC jobs. They do what we should be cheering them on to do. They come off JSA and cobble together a portfolio of perhaps three part-time jobs such as a sandwich job at lunchtime, security work in Boots of an afternoon and bar work in Wetherspoons of an evening. It is hard, risky, expensive and tiring work travelling to and maintaining several insecure jobs whose hours may change and clash with each other every week. They just hope that one of those jobs may lead to secure work but with the portfolio work they lose the NI rights they had when they did nothing but remain on JSA. Stay passively on JSA, come into national insurance and get your pension; come off JSA into several part-time jobs, work 30 hours a week or more but because no one single job is above the LEL lose your national insurance rights, holiday pay, sick pay and, above all, pensions. Can you imagine anything more morally perverse?

The national insurance problem is not exclusive to ZHCs; it affects perhaps up to 6 million people, largely women, with part-time jobs, but ZHCs make it far worse. On ZHCs you may work 20 hours in week one, 10 hours in week two, 20 in week three and, because that is all your employer wants, 10—back down the snake—in week four. So in weeks one and three with 20 hours a week you seek tax credits from HMRC to top up your wage. In weeks two and four on 10 hours you cannot, so instead you turn to the DWP for JSA, only you will probably not get it because you are not fully available for work and, as your 10 hours may suddenly become 20 hours, if that is what the employer requests, you are excluded from JSA. Simultaneously you are dealing with HMRC for tax credits, the DWP perhaps for JSA and the local council for fluctuating housing benefit payments and council tax support. It is a nightmare. It is a full-time job just applying for benefits.

Universal credit will help, and I support it, but it will take until 2020—another five years—before it is fully rolled out, if then. It should help that lone parent but not the older woman whose partner’s earnings float them off universal credit, nor the young man with the sandwich shop job, security job and bar work. Even for the lone parent, UC is paid monthly and in arrears, so what does she do in a low-pay job in a low-hour week? She goes for payday loans.

11 Mar 2015 : Column 723

I could not do it. I could not cope, especially if I had children to care for, with not knowing my hours or my wages each week, or what the three bureaucracies of HMRC, the DWP and the local authorities might do about it either. Nor could I cope with not knowing when any or all of the money may come in and when it does, whether it is even correct. These are years when you may lose all entitlement to accrue a state pension. Lose seven years of NI and you lose £30 a week for the rest of your life. Have 10 years on a set of ZHC jobs and lose NI and you lose £45 a week for the rest of your life. What to do?

In a vote a few months ago, your Lordships agreed to allow two jobs below LEL to be aggregated to bring someone into NI. A number of Conservatives—although I do not think any Lib Dems—spoke in favour of it. I am not sure of that. The coalition Government, however, said no and overturned it. I then suggested that we should treat such people as self-employed. That was not accepted by the coalition Government. Could a part-time job or three be regarded as meeting JSA conditionality and, as with JSA, get you into national insurance? That was not acceptable to the coalition Government either. I tried in Committee on the Bill to reduce the LEL, bringing it down to about £3,000; I calculated that the cost would be trivial. That was not acceptable to the coalition Government either. So what then?

Lord Stoneham of Droxford: What was the noble Baroness doing for the 13 years of the previous Government, if she is accusing this Government of doing nothing?

Baroness Hollis of Heigham: That is a perfectly fair question. I point out to the noble Lord who sat opposite someone like me throughout the passage of the Welfare Reform Act from 2011 to 2012, with something like 17 Committee sittings, that I believe that the phrase “zero-hours contract” was not mentioned once—certainly not by me nor by the noble Lord, as far as I am aware. Therefore, in that context, the issue did not arise.

I tried to reduce the LEL but I could not. This time I suggest we again lower the LEL—the cash threshold at which you come into NI—to the cash value of JSA, which is £72.40 a week or near enough £3,750 a year. On JSA, at £72.40, you are currently credited into NI. With this amendment if you are earning £72.40 per week in any one job, 11 to 12 hours per week at minimum wage, you also get your NI stamp. It is simple and fair. If it is good enough for JSA, it should be good enough for part-time work. Get JSA and get your pension, work hard in three 12-hour jobs, each below the LEL, and do not. What sort of message is that?

The question is do we want social security to support a flexible labour market, to abate some of its risks, to ensure for workers some of its rewards such as the state pension or do we simply not care what happens to them down the line? If so, what are we saying to people about wanting to come off benefits and go into work? Why, under the system we now have, would they want to? It is not rational to do so. Too many people have more to lose than to gain and this amendment would help overcome that moral dilemma. I beg to move.

11 Mar 2015 : Column 724

Baroness Drake: My Lords, I support Amendment 74C. It is an argument that many in this Chamber are familiar with. As my noble friend Lady Hollis so clearly explained, there is a group of workers caught by the rules whereby someone has to earn in a single job an amount above the lower earnings limit—the LEL—currently £5,700 a year, to come into the national insurance system. If, however, someone has two jobs, both of which pay below £5,700, but which may still involve them working, say, 30 hours a week, they cannot add the wages of those jobs together to get above the lower earnings limit and into the national insurance system. If they are not in the national insurance system, this affects their eligibility to statutory sick pay, statutory maternity pay and the accrual of the state pension.

In the past it was thought that perhaps 50,000 people, mostly women, were affected, but the scale of the problem is now far greater because of the increase in the use of minimal-guaranteed-hours contracts in the economy, particularly over the last five to six years. It is the scale of the increase in the problem in recent years that has made this such a significant issue on the agenda—not that it was not always significant for the 50,000 people who were previously affected.

Contracts with minimal guaranteed hours deliver little or no wages in some weeks, if little or no work is offered. Workers may need several casualised jobs to get an income and may then find that not one of them pays above the £5,700 entry level for the NI system. It is estimated that two in five zero-hours contract workers earn less than £111 a week, which is the approximate weekly equivalent of £5,700. The incidence of working zero-hours contracts, agency working and limited-hours contracts has, as I said, increased since the recession and brought with it the incidence of low and unpredictable pay. As I quoted in a previous debate, in August 2014 there were some 3.2 million zero-hours contracts on employers’ books, of which 1.8 million provided work to people in the period when the survey was undertaken.

A modern welfare state has to be responsive to the realities of the contemporary labour market. In the earlier debate on zero-hours contracts we heard arguments from the Benches opposite that one has to keep flexibility in the labour market. However, if that is the case, the welfare system has to be responsive to the realities of that contemporary labour market.

7.30 pm

Over the years, Parliament has recognised the unfairness of locking certain groups of people out of the national insurance system and has been willing to amend the rules accordingly. Thus, mothers of young children under 12, disabled people, carers, a grandparent caring for a child while the mother works and the unemployed on JSA are credited into the national insurance system.

As my noble friend Lady Hollis convincingly argued, the Government give a certain value to those who have the misfortune to be unemployed and are available for work. They are eligible to receive £72 per week—approximately £3,750 per year—in JSA and are credited into the national insurance system. It therefore seems unfair and inconsistent to rule that someone who then finds work with a job paying £5,400 or two jobs both paying below £5,700 is not credited into the NI system.

11 Mar 2015 : Column 725

It is now suggested that the Government will raise the threshold before income tax is paid to £11,000 to make work pay for modest earners—a policy with some merit. If that is correct, it makes it even more inconsistent that a group of workers whose pattern of employment and earnings does not deliver wages of £5,700 in any one job is not credited into the national insurance system. One hundred pounds a week, which is below the entry point, equates to almost 16 hours on the national minimum wage, so a person with more than one such mini-job could work a significant number of hours but still be excluded, which is not fair. Increasing the personal allowance may not be a tangible benefit to those on limited hours and low wages because they do not earn enough to gain from the increase, but at least they should be let into the national insurance system.

I acknowledge, as my noble friend has done, that under universal credit 800,000 more people will be credited into the NI system. That is great, but significant numbers will still be excluded. For example, universal credit is income-based. Therefore, if a single person earns more than £4,000 a year in any job, they are above the level for universal credit and so do not get credited into the NI system. But £4,000 is significantly below the lower earnings limit of £5,700, and if none of their mini-jobs pays above this level, they still cannot get credited in.

My noble friend powerfully described the situation of many women who are impacted, and I will not repeat that detail. However, I stress, as she did, that their position is made even more urgent because from April 2016 women will no longer be able to gain a state pension through their husband, as the married women’s dependency pension will cease. It is intended that women will accrue a pension in their own right, which is a good thing—I have campaigned for that for more than a decade—but you cannot accrue if you are not in the NI system.

The Secretary of State, Vincent Cable, and the CBI argue that zero-hours contracts have a place in today’s labour market and that employers need flexibility in today’s economy. If that is correct, the issue of workers who accrue wages across one or more contracts but cannot enter the NI system is here to stay. And if it is here to stay, that means that it is here to be addressed, too. Indeed, the persistency of zero-hours contracts is evidenced by the Chartered Institute of Personnel and Development, which finds that, of the workers affected, 65% have been on such contracts for two or more years, 40% for five or more, and 20% for 10 or more.

The Government will ban the use of exclusivity clauses in zero-hours contracts. Again, that is a good thing and it is welcome, but it will not provide a definitive solution to this problem. The freedom to have several contracts does not provide entry into the national insurance system if none of them produces a wage above £5,700. My noble friend Lady Hollis has argued this case for many years and has faced varied rebuttals from the Government on her proposed solution to the problem, which she described. However, persistent rebuttal is becoming increasingly hollow; we need to find a solution.

Over the years, Parliament has recognised the unfairness of locking certain groups out of the national insurance system and has amended the rules accordingly. This is

11 Mar 2015 : Column 726

another unfairness, and the amendment poses a solution. Basically, it says that if you are unemployed and looking for work, you can receive £72 a week in JSA and enter the NI system. So if a worker is employed and earning the annual equivalent of JSA—that is, approximately £3,750—they should be eligible for inclusion in the national insurance system.

Lord Newby (LD): My Lords, the noble Baroness, Lady Hollis, is again bringing to our attention the issue of workers in multiple low-paid jobs. We debated this matter in Committee and the noble Baroness put forward a number of proposals then for dealing with the situation. We have before us today a proposal to include people with earnings at or above the annual value of jobseeker’s allowance. As contributory jobseeker’s allowance is payable for only six months and there are different amounts, I assume that the noble Baroness means to proxy the higher rate of around £4,000.

Just so that we are clear about the figures that we are talking about, I can confirm the characteristics of the workers that the noble Baroness is concerned about. They are people whose earnings in a single job fall below the threshold for paying or being credited with national insurance, that threshold being £5,700. That is the band of people the amendment is dealing with.

The noble Baroness has been very dogged on this issue and has suggested a number of other ways in which we might deal with it, such as changing the system to allow earnings to be aggregated; treating those people as self-employed and being able to pay class 2 contributions; treating them as unemployed and being able to receive NI credits; or lowering the earnings entry point for access to the NI system to £3,000 or, now, £4,000.

However, as I explained in our previous debate, I am afraid that none of those solutions is at all straightforward and there is a danger that they could all, to a greater or lesser extent, involve unnecessary administrative expenditure, perverse outcomes and possible new inequalities in the national insurance system. I know that such potential unintended consequences are not the noble Baroness’s intention, but they exist and they underline the reason for treading carefully in this area.

The proposal before us today would, for example, create a new cliff edge for those who earn below the threshold and increase the exchequer cost in terms of both administration and benefits paid, with little or no corresponding revenue. It would also bring in workers who might not need protection, such as students with weekend jobs working fewer than 12 hours a week. Such students are highly likely to gain sufficient years to qualify for a full state pension later in their working lives. The noble Baroness’s other solutions would increase the burdens on businesses, require a significant compliance regime to police people’s employment status or need to be extended to everyone with more than one job in a tax year to avoid unfair consequences.

The noble Baroness has expressed a view on the likely size of the group, the persistence of this type of work pattern and its effect on benefit entitlements. In February, the Department for Work and Pensions published updated estimates that around 50,000 people a year have multiple low-paid jobs and are not paying,

11 Mar 2015 : Column 727

or being treated as paying, national insurance that they would otherwise do if their earnings were aggregated —that is 0.2% of the workforce.

In response to concerns from your Lordships’ House during debate on the Pensions Bill last year, the DWP set up a forum of analytical experts last July, with an independent chair, of which the noble Baroness, Lady Hollis, is a member. This forum’s remit is to consider the available evidence, the characteristics of this group, the effect of zero-hours contracts and the implications for state pension outcomes. The forum has looked at a number of alternative data sources, but none was found to provide more reliable information than that available from the Labour Force Survey on which DWP based its analysis. Having been party to the forum, the noble Baroness will be aware that it has yet to draw any firm conclusions, so in our view it would be premature to legislate now.

I accept that, of this group of 50,000 people, around 80% are women. However, this population is by no means static. Many of those affected are likely to build up their national insurance record in the future through paid or credited contributions. Under state pension reform, over 80% of people would be entitled to the full pension amount by the mid-2030s. There is also no evidence that this is a growing problem. The number of women working in two or more jobs has hardly changed for the past 10 years, remaining at about 5% of those in work. Furthermore, the recent Johnson review concluded that earnings change significantly over a lifetime and most low earners go on to earn more.

I reassure the noble Baroness and the House that the Government are continuing work in this area, and the findings of the forum, once available, will help inform what, if any, action should be taken. However, I believe that it would be premature to pass this amendment now. In part, that is because the point of setting up the forum was to examine the evidence presented and then move to the next stage. Secondly, before taking any action in this very complicated area, we should undertake a full analysis of the costs and benefits of the various courses before us—something that, in general terms, I believe the noble Baroness has been in favour of.

I doubt that I shall have satisfied the noble Baroness, but none the less I hope that she will feel able to withdraw her amendment.

Baroness Hollis of Heigham: My Lords, I thank my noble friend Lady Drake for her superb contribution. She put it wonderfully well.

Although the noble Lord, Lord Stoneham, intervened, I thought that he might make a fuller contribution. His basic charge was that we did not do anything about this. We did. I do not normally go around shouting about this, but we persuaded James Purnell that grandparents who were caring for children and carers of older people should come into the national insurance system and be credited at 20 hours a week. Previously, carers of older people came into the system only if they worked for 35 hours a week—effectively full time—for one person only. I persuaded the then Secretary of State that a carer doing more than 20 hours a week should get, not carer’s allowance, but national

11 Mar 2015 : Column 728

insurance credit. I also persuaded him that grandparents caring for their grandchildren and thus freeing their daughter to work should benefit from what was then HRP. This was effectively transferred from the daughter, who, since in work, would be in the national insurance system in her own right. I thank James Purnell, the last Secretary of State with whom I worked on this, who agreed both those changes.

Lord Stoneham of Droxford: I am grateful to the noble Baroness for giving way. Now that she mentions them, I accept that there are things that her Government did. Will she also accept that there is quite a lot that this Government have been doing to look at what is quite a complex problem?

7.45 pm

Baroness Hollis of Heigham: I do not accept that at all. We shall come back to that point when we talk about the forum. Apart from the wider issue of universal credit, the Government have not done anything to help these groups in the last four and a half years—I can think of not one thing. If the noble Lord, Lord Stoneham, can think of something, then we shall see whether we agree on the evidence. Not only did we persuade James Purnell, who responded generously and positively, but also, as my noble friend rightly said, women had the safety net of a 60% dependency pension. The noble Lord’s party, through his right honourable friend, Steve Webb, has got rid of that 60% dependency pension for married women from 2016 so that a group of women who would have had some pension in retirement have now lost it. I should not be too keen on boasting about that if I were the noble Lord, Lord Stoneham.

At that time we were also told that the number of people with multiple jobs was only 20,000—mostly women, so they did not count. Now we have 50,000 and apparently they still do not count. The noble Lord, Lord Stoneham, said earlier today that zero-hours contracts were a response to the recession. The increase in jobs has come largely since 2010 and has only been apparent for most of us since about 2012. We went through very many mostly happy hours in which this was never discussed when we were considering the Welfare Reform Bill.

Lord Stoneham of Droxford: The zero-contracts did not come about—

Lord Popat (Con): Order please. We are on Report. I am afraid that intervention is limited.

Baroness Hollis of Heigham: It is my fault, my Lords—I tempted the noble Lord and he could not resist. The point about zero-hours contracts and short hours is that they were seen largely as a middle-aged women’s problem, but there was some degree of protection. What has happened since the recession is that a third or perhaps a half of those under the age of 30 are cobbling together 30 or 35 hours’ work a week from splintered jobs, none of which, as far as we can see at the moment, would for many of them bring them into the national insurance system. That is the new dimension. It is the very dimension that the noble Lord, Lord Stoneham, mentioned in his speech on the previous amendment.

11 Mar 2015 : Column 729

The noble Lord, Lord Newby, said that we should be introducing a new cliff edge for those below the JSA level who might be working only 12 hours a week. However, in this case, they would be better off on JSA, which they could still receive. The first £20, or the first £5 depending on their status, would be disregarded for these purposes. The rest of the hours would not be counted up until they hit JSA level, at which point the person would get JSA. That can already be done now. Therefore it is not true that there would be a cliff edge—it is not an adequate offer back. When people work 10, 12 or 14 hours, it is deducted off their JSA and if their JSA is higher, they keep it. The argument is invalid.

Secondly, the noble Lord, Lord Newby, says that many students will not need to be within the national insurance system since in later years they will go on to build their contributions. In that case there is no cost or problem to the Government at all. The problem now is that people only know at the end of their working lives whether they have got a sufficient contribution record. If you are poor and you have got missing years you are not able to fish your earlier years. If students are building up redundant ones they are no different from anyone who works for 40 years’ worth of stamp and only needs 35 to get into the national insurance system. What we are giving them is a measure of protection that they might not otherwise have. Therefore I do not see why the noble Lord, Lord Newby, is worried.

The noble Lord’s third and final point was that this affects only 50,000 people, as if 50,000 people do not really matter. There were something like 25,000 or 30,000 women who were partners or spouses of people in the armed services who lost national insurance when they accompanied their partner abroad. I made this point. His right honourable friend in the other place, Steve Webb, conceded and brought those partners— mostly women but not invariably so—into the NI system. They were only half the number we are talking about today, but he deemed that it was appropriate and desirable. Even though it was far more complex than what we are dealing with today, he did it. I hope we are not being told that 50,000 is too trivial to bother about in one area but that 20,000 is fine in another. That argument simply will not run.

Finally, as I have said, the Minister says that we are talking about only 50,000. I reckon that that is a gross underestimate. He is drawing on the ONS and the Labour Force Survey in which people self-report their status. The CIPD figures we talked about earlier drew instead on a survey of employers who had far more accurate information about the employment status of their staff.

As he will know, the forum we set up, of which I was fortunate enough to be a member, recently has had information which suggests that if you look at the P14s, which is what the employers submit to HMRC, as opposed to what the employees submit, it looks as though something like 130,000 people additionally may come into this situation, as well as another 30,000 or so who we do not know about because the employers are too small. Therefore, the figure clearly is more likely to be 200,000 based on more reliable information

11 Mar 2015 : Column 730

coming from the employers through P14s than the 50,000 figure that the noble Lord offered us, which is based on incomplete and inaccurate information or on people simply not fully understanding their legal status as far as their contract of employment may be concerned.

Those are the arguments of the noble Lord. I do not think that any of them is true. The cliff edge argument is not relevant; the number argument is not the case; and the question of students making it unnecessary does not matter because there will be no cost or complication for us.

As for having to wait for the results of the forum, I have tried to get that forum to discuss the policy options. The civil servants have been most helpful. The forum was explicitly told by the Minister’s right honourable friend Steve Webb that we were not to discuss policy but only to try to get some accurate numbers. That is fine but we could have discussed policy on the basis of this; that was prohibited and therefore we were not able to do so. I am afraid that he attributes to this forum greater powers, greater range, greater extensiveness and greater capacity to encourage change, which is an assumption that I would have liked to share with him, than his right honourable friend permitted.

I am sorry but I do not think that anything the Minister has said tonight takes us one step forward. He does not rebut a single argument that my noble friend Lady Drake and myself made. None the less, given the time, obviously I beg leave to withdraw the amendment.

Amendment 74C withdrawn.

Clause 152: Regulations in connection with public sector exit payments

Amendment 75

Moved by Lord Newby

75: Clause 152, page 141, line 29, leave out “prescribed” and insert “qualifying”

Lord Newby: My Lords, Clauses 152 to 154 give Her Majesty’s Treasury powers to make UK-wide regulations with regard to public sector exit payments. Amendments 77 to 80 seek to address concerns raised by the Delegated Powers and Regulatory Reform Committee that these powers are framed more broadly than is required for the stated policy intent. The Government are grateful to the DPRRC for its scrutiny of the Bill.

Since the Government have now consulted on the detailed use of the powers, we are able to narrow their scope to match our settled intentions for implementation. This intention is that exit payments may only be recovered within a year of exit from the employment or office in respect of which the payment was made. None the less, in order for the regime to work effectively, it is crucial that we retain sufficient flexibility in the powers to enable the regulations to deliver the policy intent. This flexibility may include the types of exit payments that can be recovered to circumvent any potential for avoidance by using new or novel types of payment. Regulations will also set out prescribed circumstances for recovery, so that subsectors can be adequately defined and in order to accommodate changes

11 Mar 2015 : Column 731

in the machinery of government. Both flexibilities will be subject to the overriding requirement of return to the public sector within a year.

Further to the DPRRC’s most recent report, I can also announce today that the Government intend to bring further amendments at Third Reading to enable the first set of the secondary regulations to be made by the affirmative procedure. This first use will be the substantive one, which establishes the exit payment recovery regime. Further regulations which make minor and technical changes, for example to the list of bodies covered by the regulations, will be made by the negative resolution procedure. I should take the opportunity to say that we have also published draft regulations which will provide a further indication of how these powers are intended to be used.

Amendment 81 is a minor and technical amendment to ensure that the Scottish Parliamentary Corporate Body falls under the scope of Scottish exit payment regulations. The body has the duty to ensure that the Scottish Parliament is provided with the property, staff and services required. It controls its own remuneration, and the Government and Scottish Government always intended for it to fall within the Scottish exit payment regime.

Finally, Amendments 82 and 83 are further minor and technical amendments to correct potential ambiguity in the drafting of Clause 159. I beg to move.

Lord Young of Norwood Green: My Lords, I thank the Minister for his introduction to the amendments. He will be pleased to know that at this time of night we do not wish to pick holes in them. We think that they address an understandable concern, which I suppose became apparent in the NHS reorganisation that we thought we would never see where people disappeared out of one door and came back through another. It is right that a hole is being plugged that needs to be plugged. I welcome the point made about flexibility to prevent any avoidance tactics and the assurance that some of the important further amendments will be the subject of affirmative resolution. We are happy to support them.

Amendment 75 agreed.

Amendment 76

Moved by Baroness Neville-Rolfe

76: Clause 152, page 141, line 30, leave out “qualifying exit payments” and insert “the repayment mentioned in subsection (1)”

Amendment 76 agreed.

Clause 153: Section 152(1): further provision

Amendments 77 to 80

Moved by Baroness Neville-Rolfe

77: Clause 153, page 142, line 17, leave out subsection (1) and insert—

11 Mar 2015 : Column 732

“(1) For the purposes of section 152(1) circumstances are qualifying circumstances if—

(a) an exit payee becomes—

(i) an employee or a contractor of a prescribed public sector authority, or

(ii) a holder of a prescribed public sector office,

(b) less than one year has elapsed between the exit payee leaving the employment or office in respect of which a qualifying exit payment is payable and the event mentioned in paragraph (a), and

(c) any other prescribed conditions are met.”

78: Clause 153, page 142, line 22, leave out subsection (2)

79: Clause 153, page 142, line 31, after “(1)” insert “(a)”

80: Clause 153, page 142, line 41, after “(1)” insert “(a)”

Amendments 77 to 80 agreed.

Clause 154: Power to make regulations to be exercisable by the Treasury or Scottish Ministers

Amendment 81

Moved by Baroness Neville-Rolfe

81: Clause 154, page 143, line 24, leave out “an” and insert “—

(a) the Scottish Parliamentary Corporate Body, or

“(b) any”

Amendment 81 agreed.

Amendment 81A

Moved by Baroness Verma

81A: After Clause 155, insert the following new Clause—

“Concessionary coal

(1) This section applies to an entitlement to concessionary coal or payments in lieu of concessionary coal—

(a) arising in connection with employment by a company which on 1st January 2014 was carrying on the business of deep coal-mining in the United Kingdom, and

(b) which is not being met otherwise than by virtue of this section.

(2) The Secretary of State may, out of money provided by Parliament, make such payments as the Secretary of State considers appropriate for the purpose of securing that an entitlement to which this section applies is met.

(3) Payments under this section may be made only with the consent of the Treasury.

(4) “Concessionary coal” means coal or other solid fuel supplied free of charge or at reduced prices.”

Baroness Verma (Con): My Lords, Amendment 81A provides the Government with an enabling power under which to provide support to persons with an entitlement to concessionary coal, or cash in lieu of concessionary coal, in accordance with the rules on regular and proper expenditure. This entitlement arises in connection with employment at UK Coal Production Ltd, UK Coal Kellingley Ltd and UK Coal Thoresby Ltd.

In November 2013, the Government assumed responsibility and met the costs associated with the lost concessionary fuel allowances of a previous cohort of UK Coal under the Supply and Appropriation Act. Unfortunately, the same basis could not be used for

11 Mar 2015 : Column 733

concessionaires at Kellingley and Thoresby collieries because this cohort, when taken in conjunction with the last, exceeds the £1.75 million per annum threshold permitted by the Act. It is therefore necessary for the Government to take a new, bespoke power to enable this support provision to continue.

The persons covered by the power are employees, redundant persons, retired persons and in some cases, depending on the terms of contract, dependents of such persons. A dependent will not have direct contractual entitlement to concessionary coal or cash in lieu with the company. However, their entitlement would be referable to a right in the employment contract. These entitlements must be contractual entitlements. In particular, the company must have been carrying on the business of deep coal mining on 1 January 2014.

The UK Coal group has been restructured on a number of occasions. In January 2015, UK Coal Production Ltd submitted a request for support in relation to the managed run-down of its last two deep mines—Kellingley and Thoresby. Around 730 employees will be affected by the run-down. This important provision provides the reassurance that the Government are able to act quickly to meet the concessionary fuel entitlements of persons affected. Amendment 83A to Clause 162 simply provides that the clause will commence automatically, two months after the Bill receives Royal Assent. I hope that noble Lords will support the inclusion of these important amendments and I beg to move.

8 pm

Lord Grantchester (Lab): I thank the Minister for her explanation of the amendment. Even if today the closure of a mine is not of the significance that it was a generation ago, it is still an important matter to the industry, to the local community around the pit and to the people directly involved. It is right that the Government should be able to provide appropriate support in this amendment through concessionary coal payments.

The amendments in this group are welcome as they can help to provide assistance at a time of great anxiety and stress to employees, who will appreciate the security that they can provide. In order that these concessionary coal or payments can have some certainty as well, I ask the Minister if she can provide a bit more clarity on certain points with regard to subsection (3) of the new clause proposed by Amendment 81A, concerning Treasury consent. I understand that her department is preparing to submit these proposals for clearance under state aid rules. Does this mean that this enabling power could never be needed should the Treasury refuse to sanction her department’s submission? What would be the scope of that decision? Is it likely to lead to a reduction in the concession?

I understand from my honourable friend Tom Greatrex in the other place that the Minister, Matt Hancock, has promised to submit the proposal before Dissolution. I would be grateful if the Minister can confirm that commitment tonight and make the announcement before Parliament rises. For the comfort of the people who will be nervous of their situation in the coalfield, can she provide as much information as possible concerning how long she would envisage clearance to

11 Mar 2015 : Column 734

take on this state aid submission to the EU? Every week that goes by without state aid, the sum required actually increases. Should clearance be received before Dissolution, will she make the commitment that this will be announced to Parliament? However, should clearance not be received before Dissolution, can an announcement be made between Parliaments? Clarity and certainty in her assurances will be vital to those in these vulnerable communities.

Baroness Verma: My Lords, I am extremely grateful to the noble Lord, Lord Grantchester, for his support for the amendments. He raised a couple of questions which I hope I will be able to clarify. The Treasury has confirmed that it will meet the entitlements, although the reinstatement remains conditional, as the noble Lord is aware, on the Government securing the necessary approvals, including one from the Commission. We can assure concessionaires that entitlements will be reinstated, as they have been in the past, on the same terms and conditions.

We will be discussing state aid aspects with the Commission at the earliest opportunity and will formally notify the concessionaires as soon as practicable. The state aid clearance processes can take time, as the noble Lord is aware, so it is difficult for me to provide your Lordships with definitive assurances at this time. We will discuss, of course, with the Commission at the earliest opportunity to ensure a prompt and smooth clearance process. I reassure the noble Lord that no concessionaries will suffer loss as a consequence of any inertia in the process. Entitlements will be backdated, as they have been in the past, should any delays arise. I am extremely grateful to the noble Lord for his support and I hope that my response has satisfied him.

Amendment 81A agreed.

Clause 159: Supplementary provision about regulations

Amendments 82 and 83

Moved by Baroness Neville-Rolfe

82: Clause 159, page 146, line 36, leave out “made by regulations” and insert “included in an instrument”

83: Clause 159, page 146, line 39, leave out “made by regulations” and insert “included in an instrument”

Amendments 82 and 83 agreed.

Clause 162: Commencement

Amendments 83A and 84

Moved by Baroness Neville-Rolfe

83A: Clause 162, page 148, line 20, at end insert—

“(j) in Part 11, section (Concessionary coal) (concessionary coal).”

84: Clause 162, page 148, line 23, leave out “section 89D” and insert “Part 4A”

Amendments 83A and 84 agreed.

11 Mar 2015 : Column 735

EU: Balance of Competences Review

Question for Short Debate

8.04 pm

Asked by Baroness Falkner of Margravine

To ask Her Majesty’s Government, on completion of the European Union balance of competences review, how they will use the information gleaned.

Baroness Falkner of Margravine (LD): My Lords, I declare that I am on the advisory board of British Influence; a British member of the Anglo-German Conference, Koenigswinter; and a member of the advisory group of Demos, the think tank. I bring in the latter as I will comment on its evidence.

Before I begin my substantive remarks on this balance of competences review, I commend the Minister for the role that he has played both in the Cabinet Office and with the FCO Minister, David Lidington, in delivering the 32 papers. The House is truly in their debt. I should also note that the European Select Committee of this House—I am delighted to see that the chairman is here in his normal place—is conducting an inquiry into this exercise and I look forward to its report, which I understand will be published shortly.

In July 2012, in the Command Paper setting out the parameters of this review, William Hague said:

“Now is the right time to take a critical and constructive look at exactly which competences lie with the EU, which lie with the UK, and whether it works in our national interest”.

This Command Paper was the product of the coalition agreement, which pledged to examine the balance of the EU’s existing competences. As William Hague went on to say:

“It will ensure that our national debate is grounded in knowledge of the facts and will be a vital aid for policy making in Government”.

This has been a marathon. In fact, given that a marathon is 26 miles, the publication of 32 papers has overtaken that finish line by some distance. When the most contentious paper was delayed—that dealing with the free movement of persons—ostensibly due to coalition squabbles over its content, many wondered whether the exercise would and could be completed successfully, given that impartiality was to be a benchmark. But again, this coalition Government have confounded the sceptics in producing papers that are balanced, fact-based and widely contributed to, setting out clearly where the wins, the draws and the losses lie for the United Kingdom as a single state when the EU negotiates with and legislates for 28.

It is fair to say that after the initial incredulity in the media about quite how balanced the papers were, they have elicited so little publicity that one fears they might just quietly end up on a shelf. But this lack of media attention does not detract from their merit. I predict that, when and if a referendum gets under way, they may well get a bit of a dusting down.

Nevertheless, one objective of the review bears examination: the question of how many partners from other EU member states and EU institutions engaged with this exercise. I know that the EU committees of this House have a multiplier effect in terms of our scrutiny, but noting our reports is a different matter

11 Mar 2015 : Column 736

from that of actively participating in a shared analysis of common problems. A lack of engagement could signal how out in the cold the UK has been from the rest of the Union. So I hope the Minister will be able to tell the House which other member states and institutions contributed to the analysis of these reports.

However, the overarching question has to be about where we go from here. The White Paper stated:

“A final decision will be taken closer to the time on how best to draw together the analysis produced during the review in the light of the EU’s rapidly changing situation”.

With my noble friend Lady Ludford, who has extensive experience on the EU end of this relationship and now leads on EU matters in this House, I attended the evidence session that the EU Committee of this House conducted yesterday with the Minister for Europe, Mr Lidington. He was asked where we go from here and, unsurprisingly given that the election is a few weeks away, he was non-committal. It is clear that this was conducted between two parties with very different views of the UK’s role in the EU, and could have turned into a far more partisan exercise than it did. However, I did get the impression from yesterday’s session that there would be a little selective emphasis on the analysis, should the Conservatives win the next election and move towards their referendum.

What if Labour wins the election? We know that it has ruled out an in/out referendum. But, given that it has taken the Government some 42 years after the UK joined the European Economic Community to carry out such a thorough exercise, one would hope that if Labour were in power, it would not leave these reports to gather dust but would actively use the analysis to guide its policy-making. It is notable that the treaties of Amsterdam, Nice and Lisbon took place on its watch without it undertaking any such exercise to inform themselves about the British people. I hope that the noble Baroness, Lady Morgan, will commit in her reply to build on that work.

What could be the useful purpose in practical terms? One way to build evidence would be to have a dedicated website hosted by the FCO or the Cabinet Office, which would be updated periodically as directives, regulations and case law developed. That could be accompanied by a refreshment of the analysis every now and then when the pace of change merits a different emphasis or conclusion.

We know that there is now a residue of EU expertise built up in each government department. Without very much additional cost, those roles could be maintained to keep a watching brief on changes. In other words, it could be possible to hardwire an area of EU analysis into each functional department.

I am aware that Liverpool University’s European law unit is undertaking detailed work on the methodology and statistical analysis of the evidence. That is important, as the data contained in the report are already at risk of being outdated, given that the research started in 2012. Liverpool has suggested a synoptic review of the reports, which is sensible, but I go further and suggest that they are periodically refreshed.

I turn to the substance of some of the reports—although, in the limited time, I shall have to be very brief. The report on foreign affairs was one of the

11 Mar 2015 : Column 737

early reports and is therefore somewhat dated. However, its evidence suggests that the creation of the External Action Service has understandably been challenging—as has been particularly experienced in the division of the responsibilities assigned to the high representative, who is as well the VP of the Commission. Some years on, the notable success of the high representative’s role in the E3+3 talks in Iran and the transition in Burma show that, when the EU has a clear focus, the sum can be greater than its parts. I should pay tribute to the noble Baroness, Lady Ashton, in that role. However, the real test will come here in Europe itself, where any divisions over Russia could have a disastrous impact on not only EU security but EU cohesion overall. A further point of potential disunity will be China, where we have seen selective attempts by the Chinese to play on bilateral relations to the cost of common EU rules, particularly in the area of competition policy.

I have a word or two to say on enlargement. The report commented on the use of conditionality after accession. It has been instructive to see that the co-operation and verification mechanism has been used for Bulgaria and Romania, because they did not conform to the Copenhagen criteria, but we have a fairly substantial slide into regression by Hungary and do not seem to be able to do anything about it. I accept that the Commission has been able to use limited infringement proceedings, but it seems rather impotent overall.

One wonders how egregious a state’s diversion from democratic values has to be before Article 7 of the TEU is invoked. That test is:

“a serious and persistent breach by a Member State of the values”,

but there seems little clarity as to whether the Commission can use EU law for a general failure to abide by the Copenhagen criteria.

I turn to a mild criticism by the EU Select Committee on the use of selective evidence in the free movement of persons report. In its letter of 22 October 2014 to the EU Minister, the committee states that,

“there was significant reference ... to evidence by Demos and Open Europe, evidence that was closely aligned with the position of the UK Government”.

As the noble Lord, Lord Boswell, will know, I have the highest regard for the committee, but I respectfully suggest that when there are strongly held views about a subject matter, such as immigration, as opinion polls show that there are in this country, it is not only inevitable but important for a report to reflect that in its analysis. Otherwise, it would not be balanced and would not therefore command public respect as a serious exercise.

Moreover, Demos and its director, David Goodhart, should be taken seriously, as his book, The British Dream,is an important contribution to the debate from the progressive side of the political spectrum. Demos is no tool of the right, I assure him.

Finally, with about 10 days left of this Parliament, this is probably the last time that we will have substantively to discuss EU matters in this House. With one EU Act, two referendum Bills and numerous debates and Statements on the Floor of the House, I thank my noble friend Lord Wallace of Saltaire for his regard, courtesy and good humour over five years, when he

11 Mar 2015 : Column 738

has covered such a wide brief with such knowledge and insight. We wish him a happy retirement after the general election.

8.15 pm

Lord Balfe (Con): My Lords, I begin with the statutory declarations as a vice-president of the European Parliament Former Members Association, chairman of its pension fund, a lifelong member of the European Movement and a member of the Conservative Europe Group—a flourishing group within the Conservative Party, let me say. Let me also say how much I appreciate the contribution that the noble Lord, Lord Wallace, has made to this House and the debate on Europe over many years.

This is of course a very traditional debate on Europe in that the party that makes them most noise—UKIP—has failed to appear. That is par for the course.

The balance of competences review is a mighty document, and we can deal only with selected parts of it. I want to deal with one or two issues within it—perhaps some of the more controversial ones. The first is the European Parliament itself. There are some fantastic suggestions in the document. Among them is one from a gentleman called Straw who lives down the corridor—or used to; well, he does for another 10 days. He suggests that the democratic legitimacy of the European Parliament could be increased by abolishing European elections. I am not sure that that is correct. I do not think that you increase the democratic legitimacy of anything by abolishing elections to it. I do recall that he has a bit of form. He was the one who opposed open lists for the European Parliament in 1999. I would say that we need more democracy in the Parliament; we need more knowledge about it. If we wish to reform, perhaps we should move towards open lists for the Parliament. This would of course reduce the terrible power of the parties but increase the democratic legitimacy of the list; it would also increase the ability of the electorate to choose who they want to represent them in the Parliament.

I feel also that we should build on the mechanism that we have through COSAC and other arrangements by which this House participates in relations with the other Parliaments of the EU. The trouble with talking about how you legitimise or increase the legitimacy of the European Parliament is that that is not the problem. Developments are needed to develop the COSAC system and the system of interlinking our different countries. I am not particularly campaigning against the Commission, but the fact that the yellow card procedure has hardly been used and the orange card not at all is a weakness in the procedure. We need to look at things much more thoroughly, because the Commission needs to be pulled up by its national Parliaments, not just by the EU.

I move on from there, in the democratic tradition, to look at the issue of voting in elections. The competences review is very interesting on that, because that is where we really get to grips with what matters in countries. My view is that the voting system in the United Kingdom is a complete and utter mess. If you come from Bangladesh, you can be on the electoral register as soon as it is produced after you land. I have nothing against people from Bangladesh or any other

11 Mar 2015 : Column 739

Commonwealth country, but it seems to me ridiculous that citizens of France who come to London, work in London and pay taxes in London have no say. I am in a minority in this House—certainly in my present party and in my previous party.

I do not think that Brits who go abroad should be given the vote at all. I think that the essence of democracy is control over the state that you live in. The essence of democracy should be that we extend to all taxpaying citizens who live in this country a vote. If you pay tax into the British Exchequer, I am not really bothered whether you come from France, Denmark, Bangladesh or Nigeria, you should be given a vote in return for the money you pay for the society that you live in.

We have got part of the way with local councils and European elections, but I completely reject the notion in the competences review on voting, because I think we are going the wrong way. Surely it is ridiculous that if you are a Cypriot or Maltese citizen of the European Union you can vote here in the elections. So there are citizens of two countries in the European Union who can vote—but for the wrong reasons, you might say.

My third point concerns migration. A huge amount is said in all parties about migration. One party apologises for it, the other party wants to stop it and I think the third party may be half right in its policy. Look, we have a problem with migration because in 2004 Britain decided that anyone anywhere in the joining countries could come and live in Britain, so a lot of people in eastern and central Europe who looked at the future said, “Oh, we can go and work in Britain. We can’t go and work anywhere else, but let’s go and work in Britain”. So they came here and they have contributed enormously to the economy of this country. One of the reasons, I believe, that Britain is an expanding and booming economy–in the European sense, which is not much of a sense—is because of the people who have come to work here in Britain and are contributing to our economy. We should celebrate that.

We all know that patterns of migration tend to follow chosen paths. If people come here from, let us say, Poland, which has been a big contributor, more people will come from Poland, because they will know people here. So let us not start grumbling about a problem—if it is a problem, and I deny that it is—or about a situation that we ourselves brought about. We opened the borders. We said, “Come to Britain”. I would love to see the papers, because I do not believe that it was an accident. I like to believe that there were people in the previous Government who had the intellectual capacity to sit down and analyse the problem. They worked it out, probably correctly. There is probably something buried, which we will see under the 30 year rule, in which someone—it was probably the noble Lord, Lord Mandelson, because he was one of the brighter members of the previous Government—sat down and said, “There are a lot of bright people in eastern Europe, how can we get all those people with degrees and PhDs and skills and drive to come and work in Britain? I know, we’ll open the borders”. I would love to see those papers, because I am sure that they exist. I do not think that this could have happened by accident and I do not think that we should be consistently condemning it.

11 Mar 2015 : Column 740

My final point is on enlargement. Those who have known me for a long time will not be surprised that I wish to mention Turkey, a country I have had a lot to do with in the last 30 years, and a country which the European Union has consistently deceived. As long ago as 1961 we signed a treaty—or rather, the European Union did, before we joined—saying there was a prospect of membership for Turkey. We signed up to the common acquis when we joined in 1974. Ever since then we have been holding the carrot in one hand and the stick in the other. In the mean time, the European Union has enlarged and enlarged and enlarged again. It was six countries when that promise was made. It is now 28 and there is still no sign. I believe that we have to stop playing around with Turkey.

It is possible, as the EU develops, that we could actually have a three-circle union. We talk about a two- speed Europe, but there is a third Europe, the Europe of the Council of Europe, of countries that are neither considered nor probably will ever be considered for membership of the European Union. Then there are countries on the penumbra. There are the western Balkans. There is Turkey. If we have objections to a Muslim state, do we have objections to Albania? I do not believe that we do have objections to a Muslim state; I think we have objections to a big state. I do not think that big countries want another big country around, but I do think that we need to clarify our views on Turkey. Certainly, if we need and wish to influence it, we need to open the chapters on accession. Having opened the negotiations, to leave the chapters closed that we need to talk about to get the community acquis agreed on both sides is a dereliction of duty.

I hope that the Minister can assure us that the Government will be putting all their efforts into this. Do not bring Cyprus up: we knew what we were doing when we let Cyprus into the EU. Everybody said, “If you let Cyprus in as a divided island, it will block all progress”—so let us not say that we did not know. We knew what we were doing and it is now up to us to get ourselves out of this jam.

8.25 pm

Baroness Ludford (LD): My Lords, I warmly thank my noble friend Lady Falkner for initiating this debate. I declare an interest as a former Member of the European Parliament and now a pensioner of the said institution.

I was one of those who was a bit suspicious of the balance of competences review and its motives—not as much as some of my political colleagues, but I was mildly sceptical as to its value. I am happy to admit that I have been proved wrong, and I am in danger, indeed, of having the zeal of the converted.

I was already somewhat reassured by the statement in the Command Paper that launched the review in 2012 that it would not be asked,

“to look at alternative models for Britain’s overall relationship with the EU”.

That somewhat allayed one’s fears about it being the basis for a renegotiation exercise, but I do think that, in fact, many of its aims have been fulfilled. The objective was,

“a thorough and analytical piece of work … to take stock of the impact of the EU on our country … to … allow everyone, those in Government, in Parliament and, most importantly, the British people themselves”—

11 Mar 2015 : Column 741

I shall come back to that—

“a far better understanding of an important part of the governance of the UK … ensure that our national debate is grounded in knowledge of the facts … and develop this country’s policies in relation to the EU”.

Like my noble friend Lady Falkner, I have taken an interest in the valuable inquiry by the committee of the noble Lord, Lord Boswell. I shall quote the evidence from Dr Thomas Horsley from Liverpool University’s European law unit, which gives a very positive view.

“I think that overall we would summarise our assessment as positive of the review. We would say that as a whole the individual reports are an impressive technical exercise in attempting to understand the current balance of competences across a range of fields, and to try to collate in a fair, synthesised and balanced manner the range of responses that were received as the evidence base. In result, the exercise has provided a very rich, unique resource that we suggest is greater than the sum of its parts”.

I think that that is a great tribute to the Foreign and Commonwealth Office and the Cabinet Office and, indeed, to my noble friend Lord Wallace of Saltaire and other colleagues in Government, including the Europe Minister, David Lidington, who I am very pleased has kept his post throughout these five years.

The review is most certainly not a whitewash. Every one of the individual 32 reports has criticisms of aspects of EU policymaking. As those Liverpool academics said, the reports are a faithful synthesis of the full range of evidence and there is no sign of an attempt to prejudge conclusions and select evidence to fit those prejudged conclusions. So it has integrity as an intellectual exercise and it has certainly provoked debate.

We have seen more businesses in the last couple of years prepared to speak out on EU affairs. They have been mainly positive about the EU but ready to complain or criticise, where they saw the need to do so. It is almost as if the review has liberated people to talk, without it being politically loaded, about what the EU does and does not do well. Now we need to reflect on how the engagement with stakeholders at home and in other member states will be continued and built on, in particular to develop intelligent, well founded ideas for reform of the EU and refreshment of the way that it operates.

We learnt from the Europe Minister, Mr Lidington, yesterday that the paper which the UK submitted on the development of the digital single market, on the basis of the balance of competences review, was very well received in Brussels. His officials mentioned energy union as another topic on which the work done in the review could contribute reflections of value.

It is true that we need to wonder how we can move that interest from organisations in the private and public sectors and other Governments into the more popular public domain. I have no brilliant ideas on how to do that, but some of the businesses and NGOs that participated in the review are helping to disseminate their experience among their memberships. As has already been commented, media coverage has been relatively limited—but then the media on the whole only ever want to report sensationally bad things about the EU. The danger is that the value of the review will get overshadowed or squeezed out by the sloganeering of a possible referendum campaign, which would be a great pity.

11 Mar 2015 : Column 742

I will mention a few of the themes that I felt were valuable in the review. The launch Command Paper in 2012 mentioned that,

“it is … important that the EU addresses the legitimate demands for greater accountability, transparency, efficiency and probity”.

In the light of the last few years, the contrast that the paper made between the EU and,

“the roots that sustain national democracies”,

may have been a bit complacent about the legitimacy of, for instance, Westminster. However, we need to look at questions of the EU’s legitimacy. Many people who do not really understand how their local council or town hall works, or how Westminster works, do not mind too much because they still think those are within their sphere of legitimacy. Unfortunately, the EU does not come into that category so it has to work even harder.

Like the noble Lord, Lord Balfe, I do not accept that the EU is not democratic, because the European Parliament is directly elected, but for those legitimacy reasons we also need to bring in fully the national Parliaments. I was extremely disappointed when the European Commission did not respond in the right spirit to the yellow card put up by, I think, 11 national Parliaments to the European public prosecutor proposal. That was very arrogant of the Commission and extremely regrettable. Perhaps under the new Commission, that sort of arrogance will not be repeated.

The balance of competences review was particularly valuable in its discussion of subsidiarity and proportionality, and in its coverage of impact assessments and how we get better lines of accountability. Some other things were not covered very well, as I think was commented on. Enhanced co-operation, flexibility and inter-institutional relations, which were mentioned by the Minister yesterday, were not really covered and could have done with some attention. The paper on fundamental rights was very interesting, with a useful discussion on the value in particular of EU accession to the European Convention on Human Rights. That would mean that you would be able to take the EU to court when it tramples over rights.

When I was preparing for this debate and thinking of the legitimacy of the EU, one thing I read was the news that small cider and perry makers might have their excise duty break removed because it is seen as a contravention of state aid. I thought, “Must this really be the focus of a Brussels crackdown?”. If we really do not want to alienate people, given their attachment to the workings of Brussels, that does not seem to be going about things the right way.

I am running out of time so I cannot say anything about justice and home affairs, which is very close to my heart. I finish by mentioning that I felt that this report is very useful as a contribution to the ideas on reform, but it is a somewhat technocratic exercise. It is not the whole of the debate on the value of our membership of the EU. There is the question of how we prepare the EU for the pressing challenges to deliver prosperity and security for our 500 million citizens, and the influence that Europe’s voice can have in the world. The answer to that challenge inevitably goes beyond, and wider than, the balance of competences exercise. However, in its own right it is extremely useful.

11 Mar 2015 : Column 743

8.35 pm

Lord Maclennan of Rogart (LD): My Lords, I, too, express my gratitude to my noble friend Lady Falkner for initiating this useful debate. I also congratulate the chairman of the Select Committee, the noble Lord, Lord Boswell, on having a meeting with the Minister for Europe, Mr David Lidington, on this subject as recently as yesterday. The Minister answered questions with great intelligence and wisdom but did not answer all the questions which were put to him, as the evidence will reveal in due course. That was almost inevitable, because the reports are so extensive in their coverage that it would have been impossible to reveal all the conclusions in that time.

When the exercise was launched, in mid-2012, it was expected, and indeed it was stated, that the review on who does what between the EU and the UK would form the basis of a United Kingdom bid to renegotiate the Treaty on the Functioning of the European Union. It was also intended that it would inform a possible referendum on EU membership in 2017. In some ways, it has to be said, these objectives have not been met.

The Minister indicated that it was not feasible to have an overall analysis of the multiple volumes of the report, which were organised by different departments but not according to a particular structure; they vary from one to another. I understand that, although I would be much happier if the Government extracted from these reports the messages that have to be conveyed to the British public. The public are not sufficiently aware of what is going on in the European Union or of how our relationship with the institutions works. That could yet be an outcome of this series of inquiries. I hope that, after the election, there will be a reconsideration of these matters. No money was put aside to convey the messages of the reports to the general public. It scarcely sums up what the future policies of this country will be in respect of the European Union.

We have to recognise that, in many of the reports, there is no real conclusion. Many facts and many opinions are enunciated by those who gave evidence, but some of this is left up in the air. The report on the balance of competences between the United Kingdom and the European Union in respect of the EU budget illustrates this point very well. The operation of the multiannual financial framework has been advocated yet also criticised. The expenditure schemes are subject to different views among the different parties. There is different evidence: academic evidence; evidence from the devolved Governments in this country; evidence from Members of the European Parliament—evidence from all quarters. It is not surprising that there were not significant attempts to draw together the evidence.

What I think is missing from this review is what the Government think. Yesterday, the Minister, Mr David Lidington, was extremely cautious in making his points, so the case for change in the European Union was scarcely articulated.

I do not expect my colleague the noble Lord, Lord Wallace, to come to any conclusions in the few minutes that he has to conclude this debate. It would also be, to some extent, untimely. We need an overall review of

11 Mar 2015 : Column 744

the evidence that has been given, to inform the public and enable them to know what the Government’s reaction to all this evidence is.

It seems sensible to use the review in the renegotiations on the relationship with the European Union. My personal view is that it would be sensible to have another convention on the future of Europe. I served on the previous convention, which percolated some of its ideas down through various treaties which my noble friend Lady Falkner mentioned. What was so striking about the convention was that it brought about a consensus. People started from different angles of vision, but they listened to each other. That sort of process should be reconsidered. It should not be concluded before the elections in Germany and France in 2017, but it could be started before then. The evidence from the reviews from the different departments could be put to other countries and other representatives at such a convention. It would enable, or stimulate, other countries to consider how they might evaluate the problems and the structures of the current situation. The work has been well done but it has not been concluded. We need an overview and we need the recommendations, in so far as they exist, to be made public, so that people will have a better understanding of how the European Union and the United Kingdom work together.

8.46 pm

The Earl of Dundee (Con): My Lords, I want to pick up briefly three themes: the European Union’s function to maintain peace in Europe; its task to assist the well-being of its citizens and their economies; and its external role of fostering international stability.

To achieve proper results, it is clear that the European Union’s competences should always be under scrutiny. Let alone at present, there is a case for that at regular intervals and at all times. It is also important that the performance and competences of its 28-state affiliation should be judged and reviewed in association with those of the Council of Europe’s 47-state affiliation.

Not least is this plain in considering the European Union’s function to maintain the peace of Europe. For the backbone of European peace is the consensus shared by Council of Europe member states on human rights and the rule of law; and the court’s ability, if need be, to uphold the rights of an individual citizen against a nation state. Until the Second World War, this would have been unthinkable. The fact that it no longer is, even if only symbolically, has exerted a powerful curb on nationalism and those of its policies which have led to European wars. Does my noble friend the Minister, therefore, agree that the European Union’s peacekeeping function and any adaptations of related competences must be closely allied to those of the Council of Europe?

Assistance to the well-being of citizens and their economies also requires the joint efforts of the European Union and the Council of Europe. We hear much about the democratic deficit: the alienation of people and voters from politicians and parliamentarians. Yet in the present Europe one great opportunity is that for grassroots democracy and the scope for flourishing regions and communities. Does my noble friend concur

11 Mar 2015 : Column 745

that this task is best accomplished by making full use of the respective competences of the European Union and Council of Europe together?

The same applies when fostering international stability; for this is done not just through trade and economic investment—the strengths of the European Union—but also through the moral authority and programmes of the Council of Europe.

Certainly, on all these fronts, whether internal or external to Europe, relevant adaptations to the European Union should be considered in the first place, as we rightly do today. For best results, however, the competences of these two complementary European institutions should be structured and reviewed together.

8.48 pm

Baroness Morgan of Ely: My Lords, I thank the noble Baroness, Lady Falkner, for ensuring that this important debate has taken place. We are about to enter an election where the future of this country will be decided—not just domestically, but in terms of how we see our place in the world. The question we must ask is: are we going to pander to the hysterical, emotional and populist call to retreat from the EU, or are we going to take heed of the importance of the EU to our domestic economy and to our ability to have influence in the world?