HC Deb 04 August 1971 vol 822 cc1690-718

Lords Amendment: No. 128, in page 50, line 5, after "Act" insert "(subject to section 84)".

The Solicitor-General

I beg to move, That this House doth agree with the Lords in the said Amendment.

Mr. Deputy Speaker

It will be convenient also to discuss Lords Amendment No. 129, in page 50, line 13, after "Act" insert "(subject to section 84)".

The Solicitor-General

These Amendments propose small changes in the wording of Clause 59 to bring it into line with the wording of Clause 84. Clause 59, as drafted, dealt only with the registration of workers' organisations as such. As a result of the establishment of the special register—which was designed not for professional organisations but for bodies which by reason of their constitution as chartered or incorporated bodies could not qualify for registration on the ordinary register—it has become necessary to make a small adjustment in the terms of Clause 59.

Once a body is on the special register, then, by Clause 84, it becomes an organisation of workers, but its terms of eligibility for entry on the special register are different from those set out in Clause 59 for entry on the ordinary register of organisations of workers. To make those two provisions match, there is a reference in Clause 84 to Clause 59. Corresponding cross-references from Clause 59 to Clause 84 are needed, and it is those which are inserted by the Amendments.

Mrs. Castle

The Solicitor-General says that the Amendments make small alterations to Clause 59, but he would be the first to recognise that they cloak a quite large point of principle and of policy. The purpose of the Amendments is to qualify the definitions of subsections (1) and (2) so as to provide that an organisation of workers whose principal object is not the regulation of the terms and conditions of employment of its members can still enjoy the benefits of the Bill by going on the special register.

An organisation of workers which does not register on the ordinary register and which is not qualified for the special register not only loses all the benefits of the Bill, but incurs severe penalties. It not only faces the risk of paying unlimited damages if it engages in an unfair industrial practice but loses certain tax privileges which it at present enjoys on its provident funds.

We all know whom the special register is designed to accommodate. The introduction of the concept of the special register here and elsewhere in the Bill is the result of urgent representations by the British Medical Association on its own behalf and on behalf of other professional bodies, like the Royal College of Nursing and the chartered engineers, which wanted the best of both worlds. They wanted to retain both their industrial relations activities as representing the interests of their members concerning their terms and conditions of employment and their educational and other purposes which were the basis on which their charters were granted or which were, they claimed, an equivalent part of their activities.

The Government had a very ready ear for the needs of professional groups of this kind, and the special register concept was introduced—and this is why we are having to amend the Clause—in order to give them the best of both worlds so that they did not have to give up their negotiating activities or the other activities on which their royal charters and other raisons d'être were based.

There is, however, a neat form of class distinction here. Other organisations of workers which also have excellent reasons for not wanting to register on the ordinary register are given no choice. They have to submit to the indignity of having to acquire a State licence to operate on the State's terms—and those terms are embodied in the Bill—or become industrial outcasts.

In the Bill there is a succession of indications of the ways in which the Government intend to penalise organisations of workers which do not want to register on the ordinary register and for which the special register is not designed to cater. Not only do they lose the immunity of Section 3 of the 1906 Act on their industrial relations activities; they are given no bargaining rights under the Bill. They are even denied the privileges of the Terms and Conditions of Employment Act. If they are held to have committed an unfair industrial practice, they are liable for unlimited damages. Finally, the tax relief on their provident funds is placed in jeopardy.

There is a parallel here. Many organisations of workers which fully operate as trade unions have different facets to their activities. They are not merely bargaining units concerned wtih negotiating terms and conditions of employment for their members. They go wider. They, too, have their ideals and educational rôle. Above all, there is the humane aspect of the provident benefits which they provide for their members and which help to form a cohesive factor in the life of the organisation. They help to give it its morality and solidarity. They help to give their members their sense of comradeship. This has been a genuine aspect of their rôle in our society since the beginning of trade unionism. People banded together as brothers to protect each other in all sorts of ways, not least when it came to sickness or unemployment or in the event of other misadventures of life against which working people, in particular, are so defenceless. Therefore, these provident activities of unions have always been an integral part of their personality, and, I repeat, they are separate from and different from their industrial activities, as the educational work of the B.M.A. is different from its negotiating activities.

8.30 p.m.

Therefore, in our earlier discussion of this we advanced the proposition to the Government that they were exercising an intolerable piece of discrimination in this Bill against one type of organisation of workers, because, we argued, if an organisation of workers, if a trade union currently registered under the 1871 Act, did not register under this Government's Bill on this Government's terms, which the unions find repugnant, then the rest of its activities would be placed at risk, because we know that the provident activities can operate successfully only with the benefit of tax relief to which they have hiherto, happily, been entitled in respect of those activities.

We got a good deal of support from the other side of the House. I remember the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) getting up and saying, in a very fair and excellent speech, "Yes, of course, the provident activities of trade unions are entirely different from their industrial activities, and the unions ought not to be penalised for their provident activities because they do not wish to register for industrial relations purposes under the Bill."

This is a very basic point of principle, and so basic is it that the right hon. Gentleman himself got up and repudiated the suggestion that this was in any way the Government's intention. I remember that he did so when rejecting an Amendment which we put before him at that time to make the position of the provident funds of trade unions absolutely clear.

The right hon. Gentleman, in our debate on the special register, had been arguiing that it would be quite wrong to subject the B.M.A., the lordly B.M.A., to the inconvenience of separating out its activities so as to avoid any difficulties under the Bill as it then stood. When we said to him, "Look, it is equally wrong, therefore, to ask trade unions to separate out their activities" and pressed an Amendment upon him to safeguard their tax reliefs, the right hon. Gentleman turned us down. Our proposition was that trade unions which did not want to register on the right hon. Gentleman's new register for industrial relations purposes should still be able to obtain tax relief for their provident activities provided they registered under the 1871 Act. We accepted his point that registration was a condition for that relief, but we said that for this purpose they should have their own special register, just as the B.M.A. is given one.

The right hon. Gentleman turned us down on that; but he said he was not turning us down on ideological grounds. There were some hon. Gentlemen opposite who, in the usual truculent Tory way, said, "It is quite right that if trade unions do not register they should lose tax relief". I am glad to say that the right hon. Gentleman disowned some of the more reactionary of the hon. Members behind him. "But", he said, "while I accept the principle, I am rejecting the Amendment because it is unnecessary." That was his argument. Let me quote what he said at that time: I assure the House that if it were necessary to set up a special register for trade unions which wished not to register in the industrial relations sense, so that they could continue the other half of their activities, their provident fund activities, I would propose a special register. But it is not necessary. I have gone into this most carefully. I am told that there is no technical, constitutional or legal difficulty. I am assured on technical advice that the Industrial and Provident Societies Act, 1965, or the Friendly Societies Act, 1896, is available for registering for the provident funds of unions which do not wish to register under the Bill in the industrial relations sense."—[OFFICIAL RFPORT, 23rd March, 1971: Vol. 814, c. 335.] We pointed out to him at the time that even if his argument was correct he was still subjecting the trade unions to an inconvenience in the arrangement of their affairs that he was prepared to protect the B.M.A. against. But since he gave the House that assurance a lot of things have happened, and it is essential to examine them. I hope that he will listen carefully.

First—I do not think that the right hon. Gentleman will deny this—it is now admitted by his noble and learned Friend in another place that his reference to the Industrial and Provident Societies Act as being available for this purpose was wrong. He assured us that it would help. I understand that it is now accepted that the advice he had on that point was wrong. So we are left with the facilities and hopes available to the trade union movement under the Friendly Societies Act. Since our debates earlier in the House, in which the T.U.C. took a profound interest because some £5 million to £6 million of union funds are at stake here, the T.U.C. itself has taken the advice of two learned counsel as to what the position will be if the Bill goes through in its present form. The advice of learned counsel is that the right hon. Gentleman's reference to the protection of the Friendly Societies is wrong as well. As a result of this, the T.U.C. has sent out a circular letter to its members which includes the following: The conclusion seems unavoidable that neither of these"— neither of the Acts— would provide a satisfactory means of securing tax exemptions. It is however possible that one or two unions might find the Friendly Societies' solution practicable in their own circumstances. You will note that the Opinion of Counsel demonstrates that in his statement of March 23 Mr. Robert Carr was—intentionally or otherwise—giving a very misleading account of the operation of the Friendly Societies Act. It is a major interest of the T.U.C. that it should be able to assure its unions on this point, because it is official T.U.C. policy to advise its members not to register. It is hardly likely, therefore, to produce evidence of the disabilities of refusing to register unless it thought that the evidence was so sound that it should warn its members on this point.

I think that all of us will agree that every union has been led, as the result of the advice it has received, to act on the assumption that if it decides not to register it will be financially penalised through the withdrawal of this tax relief. Every article one reads in the Press as to the effect of the Bill follows the same theme. There was an article in The Guardian only a day or two ago about the agonising choice facing unions on the question of whether or not to register. It too assumed, totally contrary to what the right hon. Gentleman was telling the House, and as everyone assumed, that, of course, if a union did not register its tax relief would be placed at risk and almost certainly be not available.

I do not want to weary the House with the details of why the T.U.C.'s learned counsel argue that the protection afforded by the Friendly Societies Act is no protection at all. There was a complicated, complex and abstruse argument on this point in another place whether that Act applied only to organisations whose contributions were voluntary, and so on and so forth. The House over the past five days has had—to use a vulgarism—a belly-full of legal details and I do not want to add to them. Hon. Members can read in the Lords Hansard for 20th July the arguments advanced by Lord Diamond, who quoted the T.U.C.'s learned counsel.

The point I want to make is this, and I put it moderately to the right hon. Gentleman because it is a matter of major substance. Surely he will admit that, at least, there is a legal doubt whether the advice he gave on the Friendly Societies Act is any more reliable than the advice he gave us on the Industrial and Provident Societies Act. When Lord Diamond and the Lord Chancellor debated this matter in another place, the Lord Chancellor was very frank about it. He more or less said that they should agree to disagree. He said: there is a considerable difference between the noble Lord, Lord Diamond, and myself about this matter. … I can only leave the House to judge between us …". He then repudiated the suggestion that the Secretary of State's honour was in any way at stake because he said that the right hon. Gentleman acted on the advice of the Solicitor-General.

The Lord Chancellor then made the moving statement: although I belong to a profession where we have to acknowledge that legal advice is not infallible, I know of no particular reason to believe that the Solicitor-General is wrong in this case."—[OFFICIAL REPORT, House of Lords, 20th July, 1971; Vol. 322, c. 912 and 915.] That is the final word on this subject from the highest legal luminary in the land. It confirms in my mind that the Solicitor-General's monopoly in this Bill is now complete. He is the only one who understands it; and he is the one person whose word everybody, including the Lord Chancellor, now has to take as holy writ. If we cannot get anything more comforting than those words from the Lord Chancellor, I suggest that the right hon. Gentleman owes a duty to the House to fulfil the pledge he gave that he did not intend a trade union's provident funds to be penalised.

There are technical quite apart from legal considerations. Although the right hon. Gentleman has said that there are no technical, constitutional or legal difficulties, these have been admitted by Lord Drumalbyn during the discussions in another place. Lord Diamond quoted a letter he had received from Lord Drumalbyn on 30th June when they were exchanging a vast amount of correspondence on this matter. That letter included the following words by Lord Drumalbyn: I would not, of course, wish to imply that it would be a simple matter for a trade union to take this step"— that is the step of separate registration as a friendly society— It might face problems depending on the provisions in its constitution and rules relating to the powers of its trustees, the nature of the provident benefits to be provided to members, and the method by which they are financed. At the very least it seems probable that the consent of members to major changes in union rules would be needed, and in some cases it seems quite possible that complex financial and actuarial questions might arise over the division of union funds and assets between those to be used for general purposes and those to be allocated to the friendly society taking over responsibility for provident benefits."—[OFFICIAL REPORT, House of Lords, 20th July, 1971; Vol. 322, c. 909–10.] In view of his noble Friend's letter, can the right hon. Gentleman in all honesty repeat tonight that he knows of no technical difficulty? If that is not a list of technical difficulties, I do not know what is. On the very best interpretation, this is hardly honouring the undertaking which the right hon. Gentleman gave the House.

8.45 p.m.

The right hon. Gentleman showed enormous concern in protecting organisations like the B.M.A. from technical difficulties. In calling on him tonight to honour the undertaking which he gave, I suggest to him that there is a simple way out of the problem. At this stage, because of the restricted scope of the Lords Amendments and the fact that such an Amendment was never carried in the other place, we are estopped from introducing an Amendment now, but I put it to the right hon. Gentleman that he has a way out.

I understand that the Government have already recognised that there may be difficulties for unions which are on the provisional register and are not, therefore, fully registered for the purposes of tax relief. The Government have leaned over backwards to help them, no doubt because the right hon. Gentleman hopes that they will be the good boys who will register fully in due course. They have found an easy way to help them by announcing that it is proposed to bring in a Clause in next year's Finance Bill giving the same tax treatment to organisations on the provisional register as though they were fully registered as trade unions.

A similar remedy is within the right hon. Gentleman's grasp in the present case. I believe that he gave his undertaking in good faith, but I assure him that very eminent people believe that, as the Bill stands, he is not in a position to honour the undertaking. So I ask him to give an assurance that if his advice proves to be wrong in the event and the legal and practical difficulties for trade unions are insuperable, the Government will in the next Finance Bill introduce a Clause to cover unions registered under the 1871 Act for tax relief purposes, as they are proposing to do for unions on the provisional register.

That is very little to ask if the right hon. Gentleman really meant what he told us in Committee.

Mr. Charles Pannell (Leeds, West)

A lot of the Government's argument springs from a complete misunderstanding of the history of the trade union movement in this matter. I cite the example of the union to which I belong, which, I believe, is more disadvantaged by the Bill than any other. Its present title is the Amalgamated Union of Engineering Workers. If one looks back into history, one can see how deeply inherent friendly society benefits are in that organisation.

We started as the Millwrights' Society in 1780. Friendly society benefits were inherent at that time for probably 1d. or 2d. a week. By 1825 we were part of the Steam Engine Makers' Society, by 1850 the A.S.E. and by 1920 the A.E.U. We became the A.E.F. and we are now the Amalgamated Union of Engineering Workers. Changes of that sort mark forward stages in the normal progression of an organisation. This is what I want the right hon. Gentleman to understand.

Mr. Orme

He is not listening.

Mr. Pannell

I am trying to make the point—

Mr. R. Carr

I am sorry.

Mr. Pannell

—that when I take a section one A.U.E.W. card—but it was the A.E.U. when I was working for a living—into a factory, I take in not only a trade union ticket, not only a licence to work, but a certificate of proficiency in the job. The ticket is not given unless a member is a skilled tradesman. There are still places on the Clyde where it is more important to take in the ticket than to take in indentures.

Built in throughout the years have been the friendly society benefits which were once characterised, I think, by a famous novelist as the first defence of the poor. Through the years those funds have been built up. The superannuation fund of my union is built in. No executive council, no ballot vote of the members—nothing—can interfere with it. It is a built-in fund which has nothing whatever to do with the industrial action of the union. And so it is with sickness benefits, funeral benefits and all sorts of other things which in the modern days of the Welfare State may seem rather small but are an essential part of the reason why people joined that union in days gone by.

I understand that the Minister said that this difficulty could be overcome if only we somehow rearranged the funds of the union. A great amount is at stake. I am being modest when I say that the penalties of the Bill would carry my union into the realm of £500,000 a year and that the whole trade union spectrum is disadvantaged to the tune of about £5 million a year. That is very considerable money.

I could understand when the Bill started—although it was mistaken—that we were concerned with industrial relations. We were not concerned with the disadvantaging of friendly societies, which is what the Bill does. One has only to consider what my right hon. Friend the Member for Blackburn (Mrs. Castle) has read out to know that there is considerable dubiety.

The law has always been an unknown quantity. When one considers the Taff Vale or the Osborne judgment one usually finds that one's expectation is overturned by a majority vote in the Court of Appeal or the House of Lords.

The late J. H. Thomas was absolutely sure in the Osborne case. I knew Osborne. He was a fellow townsman of mine. He was a Liberal born out of his time and not the miscreant that he was made out to be. J. H. Thomas was assured by the best lawyers in the land that there was no case at all, but it went wrong. One has only to search one's legal memory to find the number of occasions that that sort of thing has happened in the House. A Minister assures us, "This is the law, the case is built in", but then we find that it is overturned in the Court of Appeal.

Who is the Lord Chancellor in the other place? Lord Hailsham. His father, who was also Lord Chancellor, made an expensive mistake here on the deportation of Irishmen. There was a very famous case in which Lord Hailsham was a great Parliamentary figure. He was one of those lawyers who was a natural, eloquent performer in this place. He was opposed by Sir Patrick Hastings on our side, who was not a good Parliamentary performer. When Patrick Hastings put up the case in about 1920 or 1921, he was almost laughed out of the House because his manner seemed so inept compared with Lord Hailsham. But when the court got hold of it it was Lord Hailsham who was turned over and this House had to bring in a Bill of Indemnity. I doubt whether the Solicitor-General would claim that he had the eminence of Sir Douglas Hogg, as he then was, but he was proved wrong. All that my right hon. Friend has asked is that if this is proved wrong the Minister should do no more than enter into an undertaking to right it in the Budget next year. That is a small thing to ask in a case like this.

The unions do not want a register. We understand that. They will probably have to face the penalties of the law. But we should not get over this business by twisting the necks of their sick and superannuated members. Let us make no mistake about it. If a union sacrifices £500,000 a year it means a reduction in investment policy. It also means that the penalty is inflicted upon the applicant seeking relief.

We say a great deal about the sturdy, self-respect of the British working class. It is no more ingrained than in the craftsman class. These people have ensured in other ways, apart from the State, for benefits which often take them beyond social security benefits. It is part of their self-respect. Yet, at the end of the day, we find that the Government have decided to treat craft unions somewhat less than the professional associations. They have drawn a sharp line between them. But anybody who has looked at the practices of the professional associations—the lawyers, the doctors or anybody else—knows that they have their sanctions against members. Like the craft unions, they are just as much motivated by self-interest, if not more so. I hope, therefore, that the Minister will appreciate that he has got something to put right. He has given assurances to this House in good faith on which doubt has been cast by the law.

Every trade union, including my own, has sought the best possible legal advice. If I had been assured by my trade union that what the right hon. Gentleman wants can in fact be arranged, I should not be making this point tonight. After all, I have been a member of my trade union for 53 years.

I hope that the Minister will come clean on this matter, bearing in mind the great amount of doubt which has been cast on what he has said. I assume that he gave his undertaking in good faith. His good faith is not in doubt, but his judgment and the quality of the legal advice which has been given to him are in doubt. This is a matter where the stakes are high and mean so much to a most useful section of our society. Therefore, I suggest that the right hon. Gentleman should reconsider the position.

9.0 p.m.

Mr. Kenneth Lewis

There is no doubt about the value of trade union provident funds. Many unions started their activities through their provident funds. Their membership grew because of the impact of these funds at a time when social security was not what it is today, and when the State was not involved in welfare of one sort and another.

Anyone who knows anything about the trade unions and who supports the work they have done in industry must feel a certain amount of sympathy for those who want to maintain union activity in this respect. It is true that in recent years there has been a considerable reduction of trade union activity in welfare and provident matters. I regret that somewhat, because I think there would be an advantage in trade unions getting away from concentrating on pure wage bargaining and increasing their activities in matters in which they have been involved for many years but in which they have reduced their activities recently.

In conversations that I have had with several trade union members, almost without exception they have said that this is an activity which they do not want to develop themselves because they think that the State ought to be more involved in it. They do not seek to diminish their responsibility, but they do not seek to develop it. This is unfortunate. I should prefer that it were otherwise, and it might be in due course.

I do not want to take sides in the dispute between the right hon. Lady the Member for Blackburn (Mrs. Castle) and my hon. and learned Friend the Solicitor-General. I find it difficult to be certain whether on this issue the lawyers will not find themselves wrong in any event when a case comes before the Court. It may be that in a test case a union will find that things are much easier than it thought they would be. It may, equally, find things more difficult. Some unions may find things easier than others will. The solution, of course, is for the unions to register. If they do, there is no problem.

I think that there are great disadvantages in not registering. There will be disadvantages in another direction in any event, but I do not think that it would be worth while any Minister or Government setting out to force a union to register by getting at its funds, and I am sure that my right hon. Friend and the Government do not have that in mind. We are at the stage of the Bill where we have to take things as they are, and I support those who ask that perhaps this might be looked at in due course by the Chancellor of the Exchequer.

I say that because the issue may resolve itself over the next few months. It could resolve itself in a number of ways. First, the unions may register, although at present they say that they will not do so. But they may have a change of heart. They may decide that there are advantages in the Bill which they want which outweigh the disadvantages. Despite what has been said in this House, after a period of time the unions may want to register. If they were to do so, there would be no problem.

They may, on the other hand, go to the Court at an early stage, or at least one of them may do so, and that may resolve the problem. But, whatever action is taken in the course of the next few months, I think that it is fair for us on this side of the House to ask my right hon. Friend to take good note of all that is said. Although he cannot anticipate the Budget—that can be done only by the Chancellor himself—if it so happens that in the course of the next year there is a difficulty which puts at hazard provident funds, which are out- with the normal activities of the union as an industrial bargaining organisation, the Chancellor will consider this to see whether he can assist otherwise, let us face it, the action that would be taken would not really be against the union as such, but would be against certain members of it, because only certain members gain any advantage from provident funds. They are usually those who are sick or old-age pensioners, who are not active and certainly not militant members. At this late stage in the Bill, if it is any consolation to right hon. and hon. Gentlemen opposite, I wish to say two things—

Mr. Charles Loughlin (Gloucestershire, West) rose—

Mr. Lewis

I will give way in a minute. I want to make these points. First, it must be the aim of the Minister to get registration, and it is obviously my wish that there should be registration. Secondly, in the course of time this matter can be looked at again in the light of what I have already said—the possibility that the unions themselves may be taking action, and secondly, in the light of what the Minister sees happening in the country arising from the effects of the Bill. If we leave the matter on that basis, I am sure that it will be concluded satisfactorily in due course.

Mr. Loughlin

I am grateful to the hon. Gentleman for giving way. He said that only a given number of members of a union had an advantage from the provident fund. Is he aware that a very high proportion—in the region of 90 per cent. plus—pay contributions based upon the provident fund benefits? If the hon. Gentleman takes out an insurance that presupposes that he is catering for a situation that might arise. Therefore, every one of the members who pays on the basis of scales related to provident benefits gets an advantage out of the fund.

Mr. Lewis

I accept that. What I was saying was that at any one moment there are only certain people who are getting an advantage. Anyone who pays may get an advantage, and at the end of the day, on retirement, they certainly will. I accept that.

Mr. John Mendelson

The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) has produced a number of logical points and I do not dissent from what he has urged upon the Minister. I want to make only one comment on what he has said.

The hon. Gentleman has invited the House to leave the matter in uncertainty, and that is a consequence which I cannot accept. Before the House parts with this legislation, it must be the duty of hon. Members to create reasonable certainty about the incidence of this legislation before we allow it to leave the House of Commons. That is essential. I do not comment in a carping spirit on what the hon. Gentleman has urged, but we need much more certainty than has been suggested.

As the Secretary of State well knows, we are discussing one of the two most critical areas of this legislation. It has been the contention of the Secretary of State that he has felt aware of his function as Minister of Labour in his present office, whatever the name of that office. He has said many times that he fully accepts the case when it is urged upon him that it puts him in a special position among Ministers. In fact, as Minister of Labour, he has denied that there is any attempt at vindictiveness in this legislation.

There have been two main critical areas throughout these debates. The first has been the charge that the Secretary of State and the Government are deliberately attempting to reduce the strength and power of the trade unions. The right hon. Gentleman has always rejected that charge, although he has left us unconvinced.

The second main area of criticism is that in parts of the Bill—this is one—the Secretary of State is trying to hit trade unionists, whether they are engaged in industrial conflict or not. He has many times protested that that charge was unworthy—

Mr. Anthony Fell (Yarmouth) indicated assent.

Mr. Mendelson

I am glad to have the agreement of the hon. Member that that is what the right hon. Gentleman said.

This is a test case. The passing reference to militants by the hon. Member for Rutland and Stamford which was taken up by my hon. Friend the Member for Southall (Mr. Bidwell), showed that he accepts our criticism that the first purpose is to hit militants and to reduce the power and strength of the unions.

Mr. Bidwell

Is it not ironic that the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) has earned himself the reputation of being one of the most militant Conservative Members?

Mr. Mendelson

That is an epithet which the hon. Gentleman will probably accept.

We are now in the second most critical area, concerning the social activities of unions. As my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) with his profound experience of the trade union movement has said, this is part of the essence of every union—from the Transport and General Workers Union, to which I belong, to many small unions covering only a small range of industrial activity. No one can understand the growth of the trade union movement without understanding that side of its activities.

The Secretary of State has said many times that he wants no part of any attack on the provident funds of the union, but, if he makes no further assurance, he will be convicted of two crimes—vindictive legislation and an attempt to coerce unions to register against their democratic decisions.

We have quoted Mr. Victor Feather's reasons for opposing registration, and since Committee stage there have been many union conferences which have discussed this matter. Since it is the essence of the right hon. Gentleman's case that he is not coercing unions to register in this roundabout way, surely he should pay due regard to what was said at those conferences.

9.15 p.m.

It is the duty of the Government to accept the burden of the case we are making and agree that a way out must be found. I am not at present commenting on the proposal made by my right hon. Friend, who has been in touch with all sections of the trade union movement through the T.U.C. It is open to the Minister to consider a range of methods to deal with this problem. Either way, he must find a way out and say tonight that he accepts the general case being urged on him.

It would create far too much uncertainty for the Secretary of State to accept the case of the hon. Member for Rutland and Stamford. One cannot say in this matter that the problem may resolve itself or that there may be a test case. A responsible Government must accept the logic of the situation and show that they are prepared to provide a remedy.

On many occasions since the Bill was introduced people have said that the Government have set out, in cold blood, to weaken the trade union movement and to use all sorts of methods to bring about a weakening of the movement's industrial activities. The Government have repeatedly replied that those who make these allegations are misguided, though little impact has been made on the trade union movement by the assertions of the right hon. Gentleman and his colleagues.

We are discussing a matter that goes beyond contentions about the purpose of the Government in respect of trade union activity. We are branching out into the whole sphere of humanitarian social provision. In this instance, the Government must respond to our case and give an assurance that they accept what we are urging on them. We must also be given a clear indication of the way out the right hon. Gentleman intends to provide, and if this is not done the Government will stand convicted of the allegations that have been made about them.

Mr. Skinner

I intend to concentrate on one issue and one section of people. I refer to the Derbyshire miners, though to be accurate I am really speaking of those who have left the industry.

In 1969, when I was their president, there were 15,000 Derbyshire miners belonging to the N.U.M. Out of their contributions of 3s. a week—the overall amount contributed was gradually reduced because of the loss of 23,000 jobs in the mines in 12 years—1s. 10d. went in old-age benefits. About £70,000 was allocated by the N.U.M. out of its funds not to members of the mining industry but to those who had left it.

The matter did not rest there. In the 'fifties, with pits closing at a fast rate, it was found necessary in the Derbyshire area to introduce a scheme to provide concessionary coal for retired miners and their widows. To this end, the miners contributed a proportion of their own concessionary coal.

There have been a lot of misconceptions. Many people thought that Lord Robens and the Coal Board had always provided the concessionary coal, but in Derbyshire, as elsewhere, it has been provided by the miners themselves. With the closure of the pits in the late fifties and into the sixties it was found that the four tons a year of concessionary coal for miners and widows of retired miners could not be continued unless something was done, so the miners, with the solidarity that has been evident among them for more than a century, surrendered 10s. of the 11s. 9d. in the price of the coal. It was only then that Lords Robens or someone else decided as a quid pro quo to add 10s. to each 10s. contributed by the miners. Yet, I repeat, this was done for those who had left the industry.

Gradually, that concession proved to be not enough, and in my last year as president of the union in Derbyshire we decided to contribute £47,000 out of union funds. That was in addition to the £70,000 already contributed in old age benefits at the rate of £74 per member. It did not rest there. It was decided in the same year to spend another £30,000 on giving retired miners and widows, and in some cases families, a holiday at Skegness. Every penny piece came from the Derbyshire miners.

The people concerned are not people who will have an opportunity to decide whether they should register. They are not even members of the union. Therefore, if the Government let this wording go through as it is they will not be attacking the 13,000 miners of Derbyshire but those countless thousands of retired miners and widows of miners who have benefited from the old age benefits scheme, the holiday scheme and the concessionary coal scheme, which they think will last for a lifetime. It is high time that the Government stopped attacking the mining industry as it has been doing during the last 15 months, and started carrying out their so-called honest policy of which the Prime Minister spoke on 18th June last year.

Mr. Orme

My hon. Friend the Member for Bolsover (Mr. Skinner) has presented to the House a pertinent and moving description of how the trade unions deal with their provident funds. There is a long history behind these provident funds. In the early days they were built up of halfpennies and pennies, until we had accumulated thousands and then millions of pounds for the benefit of members, many of them no longer working at the trade, or perhaps suffering from industrial injury, or fallen on hard times. The trade union movement has maintained the provident funds even in the Welfare State in which the Government have made some dents. We have been told by the Secretary of State for Social Services that people must stand on their own feet more, must make their own provision. The trade unions realise that there is still a need for their provident funds.

I am proud to be a president of my own trade unions branch, and I have been for the last 21 years. Once a fortnight on a Friday evening 30 or 40 superannuated members come to the branch meeting to collect their superannuation to which they have contributed. They are the people who will be penalised by these proposals.

The trade union movement firmly believes that the Government are continuing with this proposal as a means of forcing trade unions to register. I speak not from hearsay but from having attended branch meetings and meetings of shop stewards and other trade union meetings throughout the country when I say that if the Secretary of State wants to mitigate the bitterness already created, if he does not want the trade union movement to be driven beyond being able to accept a reasonable solution from the Government—and as things are going it will be completely impossible if the Bill goes on the Statute Book—if he does not want even more deterioration in the situation, he must do something about this matter.

Some of my hon. Friends and I recently met the executive council of the A.E.U.W. We were then told that the union's best legal advice, the advice not just of one adviser but of two or three, was that it would be impossible to offset the cost of this money and that the union would have to meet it, that the only way it could get round the problem would be by putting its provident funds into the hands of members over whom it would have no control; and it is impossible for my union to separate these moneys, because of the way in which it is constructed and organised.

Many of us believe that the right hon. Gentleman gave us an assurance in Committee. He has not sought to address the House on this subject in the last five days and it is only through the ingenuity of my right hon. Friend that we have been able to debate it at all. He owes the House and certainly the trade union movement an explanation. The only way out for him and his right hon. Friends is to seek some way to protect these funds so that the argument may be carried on at another level, so that the Government do not try to force the trade unions to register by threatening their sick, industrially injured and old members.

9.30 p.m.

Mr. Loughlin

It would be impudent if I were to attempt to detain the House for long, because I was not present during the earlier part of the debate. My hon. Friends have discussed the Government's intentions. I have never had any allusions about the Bill or the Government. I said many times in Committee and on Report that the Bill was designed as a deliberate measure—to use the words of right hon. Gentlemen opposite before and during the General Election—to cut the unions down to size. That is the sum total of it.

What I cannot understand is that the Government should be prepared not merely to shackle the trade unions over industrial disputes through the legal technicalities of the Bill but to be so spiteful and vindictive as to attack the unions through those who have tried to provide additional benefit for themselves over and above that which the union provides when they are sick or unemployed. As my hon. Friend the Member for Bolsover (Mr. Skinner) so graphically put it, these men may leave the industry and seek benefit from the unions which are prepared to provide it, at some cost and sacrifice, because of the contribution which these people have made to the industry.

The Government have only one point to answer here. They have to say why, if societies normally known as provident societies, such as the Oddfellows, the "Buffs" and the various other societies, obtain the benefits of tax concessions on the basis of benefits paid to their members because they are registered under the Provident Socities Act, trade unions providing exactly the same benefits for their members should not be treated in the same way. If they cannot answer that I can only deduce that the requirement for trade unions to register to safeguard their position as a provident society is a further sanction upon the unions.

If I were a member of a Government seeking to obtain the co-operation of the trade unions because of our financial and trading position I would want to be able to demonstrate clearly that any action of mine which differentiated between the unions and the provident societies was not based on discrimination against the unions. It would be a gloomy outlook for us without their cooperation. Maybe the right hon. Gentleman has reasonable grounds for imposing this additional requirement, but if he has not, then I charge him with discriminating against the unions in cold blood, as a method of playing on the deficiencies of an individual member, whether sick or unemployed, to dragoon the unions into registration.

Mr. R. Carr

The right hon. Lady the Member for Blackburn (Mrs. Castle) began her speech on this important matter by entering the argument through the door of the special register. She said that I was prepared to do something for the wonderful British Medical Association which I was not prepared to do for other people. Whatever may be the rights and wrongs of this case, that is certainly not one of them, because I am sure that she must know that that argument is totally irrelevant, for the following reason.

The special register, which we provided for companies and chartered bodies which also carry out industrial relations activities, carries exactly the same responsibilities as the ordinary register under the Bill. Bodies which go on the special register accept no more but equally no less than ordinary trade unions and organisations of workers do when they register. When they go on the special register, bodies like the B.M.A. and the Royal College of Nursing accept the public accountability of registration which is the inherent principle in the concept of registration in the Bill for the conduct of industrial relations. Bodies which go on the special register accept the very degree and the kind of public accountability which some unions are at the moment saying they will refuse to accept. Therefore, whatever may be the rights and wrongs of the main issue, the special register argument is a red herring which is not concerned with it.

In the debate on 23rd March I assured the House that if it were necessary to set up a special register for trade unions which, although not wanting to register with the new Registrar of Trade Unions and Employers' Associations, nevertheless would need the benefit of an amendment to the Bill to preserve and continue their provident fund activities, I would propose such an amendment. I most certainly stand by that assurance.

I said in the earlier debate that I did not consider that a special register was necessary. Since then I have again carefully studied the position and the case which has been advanced to the contrary, and I assure the House that I remain convinced that such a register is not necessary. It is true that on 23rd March I mentioned two Acts as being possible ways by which trade unions could solve this problem if they decided not to register or to leave the provisional register when they were on it. I accept, as a result of further investigation, that the Industrial and Provident Societies Act is not helpful in this respect. But I am convinced that the other Act, the Friendly Societies Act, is helpful.

I should like to spend a few moments examining the reasons for that opinion. The legal opinion obtained by the T.U.C. not only has been dealt with in debate in another place but has been the subject of meetings and correspondence and has been looked into very carefully. I wish to deal with the major difficulties which the advice received by the T.U.C. seemed to present and to try to explain why we believe the difficulties are not of the kind which were supposed.

I gather that, according to the advice received by the T.U.C. the first major difficulty was that membership of the unregistered trade union and that of the associated friendly society which it would have to set up might diverge. But, even if that were to happen, I would regard it as no more than a disadvantage, certainly not as an insuperable difficulty. However, I cannot see that it need be so in this case on the ground which was put forward, relying on the advice which was given to the T.U.C. that the requirement of Section 8 of the Friendly Societies Act, 1896—that membership of the friendly society must be voluntary—must preclude the maintenance of common membership with the trade union.

We do not agree that this is so. This requirement would not prevent a friendly society from adopting a rule limiting membership to persons who were members of a particular trade union. Indeed, there are examples of registered societies with just such rules. Moreover, there is, in our view, no reason for assuming, if a trade union found it necessary in its particular circumstances, that membership of a friendly society should not be made a condition of membership of the trade union, though I am bound to say I do not clearly understand, from what I have heard so far, in what kind of circumstances a union would find it necessary to ensure that all its members were members of a linked friendly society.

I say that because I know that the majority of trade unions at present do not require their members to contribute to their provident schemes as a condition of membership. Such schemes are, I think, normally optional, and trade unions seem quite able to cope satisfactorily at the moment with two classes of members, those who contribute to the provident funds and those who do not. Be that as it may, I see no reason why a union should not have such a rule as that to which I have referred if for some reason it wanted to do so.

Mr. C. Pannell

The right hon. Gentleman is advancing the argument that unions can separate their friendly society functions now. That is true. But take the case in point, which I know best. Section one membership has to be complete membership. It has to be. The sections three, four, five membership does not carry the same prestige as that of trade unions. I have known an admiral boast about his membership of my union—under section one; but he could not belong under any other.

Mr. Carr

I have just said that I see no reason why a trade union, if it forms a separate friendly society, should not have a linking rule of the kind I have mentioned. I am sure the right hon. Gentleman would be fair enough to admit that the point he has made was not part of the assurance which I gave the House on 23rd March. Nevertheless, I see no reason why such a linking rule should not be made.

I would add the fact that the friendly society must be a separate organisation—as it must, technically—but that does not mean that it cannot have any link with a trade union in respect of those who govern it and in respect of control of its funds. Certainly, the trade union itself could not run the friendly society as a trade union, but if the friendly society has a substantial common membership with the trade union—which, after all, is precisely the kind of circumstance we are envisaging—there is no reason why persons who have been elected to the governing body of the trade union could not be elected by members of the friendly society to equivalent governing posts in the friendly society. After all, they will be the same people choosing in both cases.

Mr. Norman Atkinson (Tottenham)

This is a very important point which the right hon. Gentleman is now enunciating, but is it true? Suppose a friendly society fund has the right to elect a totally different leadership from that running the union. Is the right hon. Gentleman suggesting that both ballots should be free to elect different leaderships one in contradiction of the other?

Mr. Carr

I do not really see that that would be shocking if that were so. No part of the assurance I gave would affect it in that way. There would be nothing in that to prevent members of a trade union from carrying on provident activities which they are at present carrying on. If they choose—I think it unlikely, but presumably they will do it if they have good reason—to have different numbers of their members to run the provident side of their activity, that is something that they must be free to do. But I do not see why they should do it.

9.45 p.m.

Mr. Atkinson

The leadership of the trade union is responsible for the investment of its funds and the return that it requires from its property. These funds would be handed over to possibly a totally different leadership, and therefore, there could be a contradictory arrangement within the same organisation arising from a totally different leadership being elected to administer the investment policies being pursued by a different executive.

Mr. Carr

I made it clear on 23rd March that of course they must be separated. It is no part of our intention, and I have never suggested that it is, that in some way specially protected provident funds should all be mixed up with the industrial relations fighting funds of an unregistered organisation of workers. Nothing I have ever said could conceivably have been taken to suggest that I have anything like that in mind. The assurance which I gave, and which I stand by, is that it should be possible for a union which decides not to register under the new scheme of registration to take measures without insuperable difficulty to enable it both to protect its present provident funds and continue its provident fund activities.

As I said in March, the way to do this is by setting up a separate friendly society. That was my assurance. The argument we have had to meet is the suggestion that, contrary to the advice I was given, it would not be possible to do this, that there would be insuperable difficulties. That is the charge which has been made against me and that is the charge which I am answering, so do not let us get confused. I am not trying to deal with the general dislike of the hon. Members opposite to the whole question of registration. What I am answering, and answering categorically, is the charge that I was wrong when I assured the House in March that provident funds and provident activities could be protected by transferring to a separate friendly society. I am not saying that this is something the unions want to do, but it is something that they could do. I am defending that assurance on the ground that it is possible to do it. I am not presenting it to the House as something which these organisations would wish to do, but I am saying, just as I said in March, that it is something they can do. I will go on to deal with the difficulties which were put up against the possibility of doing what I said.

Mr. Atkinson

This is an extremely important aspect of the whole business of registration. Can we take it, from what the right hon. Gentleman is saying, in relation to what he told us on 23rd March, that the Registrar will require the separation of friendly society funds from union funds if registration is to be allowed? The right hon. Gentleman has said that the Registrar will require a separation of these two things; at least, in the right hon. Gentleman's opinion, the Registrar could insist upon the separation of friendly society funds from the rest. On the other hand, if a union does not register, the right hon. Gentleman is now proposing that the only way possible for it to continue to receive benefit from income tax allowances or concessions is to have possibly two executives controlling its two functions.

Mr. Carr

The hon. Gentleman is putting what I said the other way round. If unions register under the new Bill they will be able to continue, as I understand it, as they are at the moment. What I was saying, repeating what I said two months ago, was that when we were talking about how we might protect the provident activities and provident funds of unions which chose not to register they would have to separate those provident funds. If any hon. Member refers to the HANSARD of 23rd March he will see that that is what I was saying.

I have now dealt with the first major difficulty put forward in the legal advice to the T.U.C. on the ground that there was an insuperable difficulty in doing what I suggested should be done on 23rd March.

The second major point of difficulty from this advice was that a friendly society set up by the members of the trade union would not be able to be financed by a transfer of funds from the trade union on the ground that Section 8 of the Friendly Societies Act, 1896, requires that the benefit paid by the society must be provided by voluntary subscription of the members. However, what that section actually provides is that benefits should be provided by voluntary subscription of the members thereof"— and then come the important words with or without the aid of donations. This specific reference to donations in our view would enable a friendly society to accept the funds initially transferred to it from the trade union without jeopardising its status as a friendly society. There is no doubt that thereafter the friendly society could not be financed solely by donations from the union, but provided that subscriptions to friendly societies were payable by its members the society would be able to receive further donations from the unions if this were thought necessary or desirable. That was the other major difficulty, and we are convinced that is not an insuperable one.

Another point, though less important, related to the differences in the range of benefits available to members of friendly societies compared with those for which a trade union may obtain tax relief under Section 338 of the Income and Corporation Taxes Act, 1970. The only differences suggested in the advice received by the T.U.C. which might be significant is that benefits provided by a friendly society must be for the relief or maintenance of the members or of their dependants whereas trade unions may provide benefit to the sick, injured or unemployed members without any similar qualification.

The Registrar of Friendly Societies has stated that he does not share the view that the words relief or maintenance of the members imply that a claimant for benefit from the funds of a friendly society must be in poverty or need. In fact, he tells us that friendly societies have always paid benefit to their members when sick irrespective of any question of need, and in practice there will be no difference in this respect from the position adopted by trade unions.

Thus, having examined the legal submission fully and in detail, I am satisfied that it has not been shown that there are technical, legal and constitutional difficulties which would prevent a trade union continuing its provident activities by the setting-up of a friendly society.

It must be within the knowledge of many hon. Members, though it may be of interest to remind the House as a whole, that there are two well known unions, N.A.L.G.O. and the National Union of Teachers, which already have separate friendly societies, the condition of membership of which is that the would-be member of the friendly society has also to be a member of the respective union. There are at least two cases—I believe I could find more—of unions which have already done what I am proposing they could do if they wished.

I did not say last March that this was something which a union would want to do, but I gave an assurance that it was something which it could do, and that I genuinely believe to be so. I am convinced that it is so. The difficulties which have been put forward have been closely examined, and I believe that the answers which I have given tonight are firm and definitive answers to the difficulties which have been advanced. I stand by my assurance, and I believe that it will prove to be correct.

Mrs. Castle

By leave of the House, I should like to comment on what the right hon. Gentleman has said.

He has not advanced the argument any further; nor has he answered the points which I raised. He has merely repeated at length the very arguments about detailed questions on the Friendly Societies Act which were put forward by the Lord Chancellor in the other place, that is, the arguments which I said I would spare the House when I spoke earlier because they were irrelevant to my main argument. Those arguments were irrelevant, first, because they represented only one legal opinon, the opinion which the Lord Chancellor was giving to the other place, and that was not even his opinion. He frankly admitted that he was basing his legal analysis on the Solicitor-General's point of view. It was in that context that the Lord Chancellor made the observation which I quoted earlier: … although I belong to a profession where we have to acknowledge that legal advice is not infallible, I know of no particular reason to believe that the Solicitor-General is wrong in this case."—[OFFICIAL REPORT, House of Lords, 20th July, 1971; Vol. 322, c. 915.] The fact that the Lord Chancellor does not know of any particular reason to doubt the Solicitor-General's advice does not require us in the House of Commons to take the hon. and learned Gentleman's word as holy writ. When I am advised that learned counsel who have to give detailed consideration to this problem for the T.U.C. come to a view different from that of the Solicitor-General, I am, to say the least, entitled to say that the legal arguments are not proved.

The Secretary of State says that he stands by his view that there is no insuperable difficulty to the separation of the provident funds of a trade union from its other funds so as to continue to qualify for tax relief. If there really were no insuperable difficulty, why should trade unions which are determined not to register not take the steps which he says are not insuperably difficult? They stand to lose money if they do not. Why on earth should trade unions which are anxious to persuade their members to endorse their decisions not to register then say: "We are sorry, but, on careful examination of the situation, we find that if we do not register we lose this tax relief because it is impossible for us to separate our provident funds in this way"?

Who is the judge of the insuperability of the difficulties in this situation?—not the facile and plausible Secretary of State but the trade union movement, which has its back to the wall.

The right hon. Gentleman has made no attempt to answer the points which Lord Drumalbyn made in his letter to Lord Diamond about the technical difficulties. The right hon. Gentleman has repeated that he saw no technical difficulties. Let me remind him of what Lord Drumalbyn said: At the very least it seems probable that the consent of members to major changes in union rules would be needed, and in some cases it seems quite possible that complex financial and actuarial questions might arise over the division of union funds and assets in the way the right hon. Gentleman is suggesting. All I can say is that if complex financial and actuarial difficulties are not technical difficulties—

It being Ten o'clock, the debate stood adjourned.