HL Deb 25 May 1971 vol 319 cc950-1029

3.3 p.m.


My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.

Moved, That the House do again resolve itself into Committee.—(Lord Drumalbyn.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 82 [Organisations eligible for entry in special register]:

THE MINISTER OF STATE, HOME OFFICE (LORD WINDLESHAM) moved Amendment 263UUU: Page 64, line 41, leave out from beginning to ("no").

The noble Lord said: I move this Amendment in the name of my noble Friend Lord Drumalbyn. In Clauses 82, 83 and 84 we reach the provisions of the Bill concerning the special register. Noble Lords may remember that this was a subject which attracted some interest which I argued was rather premature last week when we were discussing an earlier Part of the Bill. The first three Amendments are all fairly narrow ones; therefore the alternatives before us, if noble Lords wish to discuss the principles underlying this Part of the Bill and their application, are either to have a full discussion on the Opposition Amendments Nos. 263QQ and 263RR, or to discuss the aims and purposes of these provisions on the Motion that Clause 82 stand part of the Bill, or, if noble Lords want to get it out of the way, I should be quite happy to discuss this subject on the first Amendment which I shall move rather shortly, although I am happy to go along to the wider issues. This is a matter for the convenience of the Committee.


I am most grateful to the noble Lord, Lord Windlesham, for having given consideration to this issue. In my view, provided it follows the traditions and precedents of your Lordships' House, I am sure that it would be much more convenient if the noble Lord dealt with it straightaway. Then noble Lords taking part in the debate will know what it is about.


I think there is a great deal to be said for that course of action and I willingly concur with it. If I may explain the purpose of the Amendment first, I will then move on to general considerations. The Committee will remember that on Thursday a Government Amendment to Clause 65, Amendment No. 288D, was approved which would enable a federation to register as a trade union if each of the organisations affiliated to it was registered either as a trade union or as an organisation on the special register. Subsection (4) of this Clause 82 similarly provides for organisations so composed to be eligible for entry on the special register, but the effect of the words in lines 15 and 16 on page 65 would have been to grant those facilities to federations whether or not they were themselves registered companies or chartered organisations.

In the case of an organisation not being so registered there is nothing to prevent its registering as a trade union in the normal way. Moreover, it would be wrong to register it on the special register since it would thereby avoid liability for certain administrative requirements from which organisations on the special register are exempted under this Bill because they are already subject to similar require- ments by reason of existing corporate status. These Amendments restrict access of federations to the special register only to organisations which are themselves registered as companies or are incorporated by charter or letters patent. I should have said in opening that Amendment No. 263VVV is on the same point, so perhaps these remarks could be taken to apply to Amendments Nos. 263UUU and 263VVV.

Some general questions were asked by the noble Lord, Lord Shinwell, about the special register. This is on the part of the Bill which was introduced in another place on Report. I should like to begin by making absolutely clear that the Bill is not concerned with the relationship between the professional man and his client. It is, however, very much concerned about the relationship between the worker and his employer and about the relations between the organisations which represent workers or employers. Indeed, this is as good a summary as we can find for what is meant by the term " industrial relations " and it is contained in the Long Title of the Bill.

As your Lordships are aware, many professionally qualified people work, not for their clients in the sense in which a solicitor may be working directly for his client, but for employers. There might be, let us say, a solicitor employed in the legal department of an industry. He would be working, not in the relationship of a professional man and his client, but in the relationship which a worker has to an employer. Other examples are doctors employed in hospitals, engineers employed in industry, architects employed by local authorities and so on. The relations between these professional workers and their employers are covered by the term " industrial relations " and are just as appropriate to be regulated by this Bill as relations between other workers and their employers. Further-more—


May I intervene for the sake of clarity? Surely there is a difference between an engineer who works for a firm which tells him to design a bridge and a doctor who works in a hospital, whose first duty is to the treatment of the patient in the hospital and not to the hospital management committee?


I should like to continue with the explanation, if I may. What I was dealing with was the relationship between the professional worker and his employer, which is a direct relationship of worker and employer. I have to move on to some of the other points the noble Lord and others have raised on this important subject. The organisations which represent professional workers in some cases do regulate terms and conditions of employment and fulfil the same functions as the trade unions in factories, offices, shops and anywhere else where people work. Most of these organisations fall within the definition of " organisation of workers " in Clause 59 and so will be able to register as trade unions. But some of these organisations will not be able to register as trade unions under Clause 59. Professional organisations have a long history and have developed according to the needs of their particular profession, and although they have a lot in common it would be a mistake to assume that all are exactly alike. Some, such as the Law Society and the British Legal Association, are not much concerned with industrial relations because the majority of their members work for clients. They have no relationship with an employer and therefore no relationship which could be regulated by this Bill. Others, on the other hand, like the engineering institutions, are largely composed of people who work for employers but have chosen not to concern themselves with the relationship between employers and workers. Again the Bill would not touch them so long as they continue their current practice.

Now we come to the third group with which the Bill is concerned in these clauses. These are the organisations which consist mainly of workers and are concerned with the employer/worker relationship. As I have said, many of them will be able to register as trade unions but there are some which will not be able to do so. These are the organisations which started off without much concern with industrial relations and which have been incorporated by Charter or registration under the Companies Acts which was only granted because their objects were primarily other than representing the interests of workers. Therefore they remain ineligible to register as trade unions so long as they remain chartered or incorporated as companies because their principal objects do not include regulation of relations between employers and workers. Over the course of time collective bargaining has developed in the professions and certain of these organisations have become involved. Therefore their inclusion in this Bill is very pertinent and it would be a pity if they were excluded.

It sometimes helps to bring light to general observations of this sort by taking an example. The one I should like to discuss for a moment is the one that was touched upon by the noble Lord, Lord Hughes, last Thursday, the Royal College of Nursing. And I do so because I know that the noble Lord, Lord Diamond, has had an interest in matters concerning nursing. The Royal College of Nursing was granted a Charter many years ago and is known mostly for its work for the advancement of nursing as a profession. It is also the organisation which represents nurses on the Whitley Council for the National Health Service, the body which regulates relations between nurses as employees and their employers in the National Health Service. In this capacity the College naturally desires the benefit of trade union status as much as any other body set up for this purpose. It will want to have access to the machinery for settling disputes which may arise about its recognition as a bargaining agent for the nurses.

By setting up a special register the Government are enabling the College and other organisations in a similar position to obtain trade union status without dissolving themselves and starting all over again. In return, we think that it might provide that they should be subject to the same obligations as to their rules and conditions as trade unions have under the Bill. In short, the organisations on the special register will be trade unions for the purpose of the Bill in respect of those parts of their activities with which the Bill is concerned. These are provisions of the Bill which affect only a relatively small number of organisations. They have made representations to my right honourable friend the Secretary of State and this is the solution which has been proposed to meet their needs. I hope that the Committee will agree with these proposals. I beg to move.


I am sure that we are all grateful to the noble Lord for having given that clear explanation of the general purpose of these three clauses as well as of the particular purpose of the Amendment. His analysis was clear and helped. As he rightly said, these general discussions are best illuminated by reference to a particular example; and the particular example that he used was a happy one. I should like, therefore, to raise the question of the general matters that he has discussed in relation to this particular example. One notes that an organisation going on to the special register is distinguished from a trade union in that it neds only to have as one of its objects, instead of its main object, the regulation of relations between employer and employee. In that situation, one is concerned to see that such an organisation does not get inappropriate benefits and reliefs from obligations as compared with the normal trade union on which I might call the normal register, when possibly the two types or organisations might meet and might compete in doing the same work. For example, the noble Lord has referred to the Royal College of Nursing which has as a subsidiary, but not as a main, purpose the regulation of relations between employer and employee It is to be distinguished from the General Nursing Council which has no such responsibility but which has a responsibility for keeping the register.

As the noble Lord is aware, there are others. There is one trade union whose main purpose is to look after the relations between employer and employee in the nursing profession. It is COHSE which is the nurses' trade union. So we have the nurses' trade union, COHSE, and we have the Royal College of Nursing. COHSE, if it wishes to do so, will register and will become a trade union in the ordinary way; the College will register, if it so desires, on the special register, and will become a trade union in what I might call 'the extraordinary way. The Royal College might seek to be the representative bargaining agent in a particular situation where COHSE might also seek to be the bargaining agent. One has therefore set up a situation in which there might be fair and proper competition between two bodies looking after the same category of professional persons, to wit, nurses of either sex, and to seek to regulate the relationship of the nurses as employees with their employers.

One wants to be quite sure that they are at no disadvantage or at no advantage one to another in being able to enter the field and compete with one another fairly as representing nurses in that particular situation. It has been represented to me that equality of opportunity does not exist but that the opportunity—I should not say this—for the nurses on the Nursing Council, or of a body entering the special register, is much greater and the burdens lighter than that of a trade union entering the normal register and equipping itself therefore in that way to represent its members.

I should be grateful, therefore, if the noble Lord could cover this whole field because one of his comments this afternoon was very relevant. He said that those entering the special register were to be relieved of many responsibilities falling on normal trade unions because, by virtue of their being either incorporated bodies under the Companies Act or, like my own profession, a chartered body, they were required by the Charter or by the Companies Acts to carry out those duties from which they were being relieved by entering the special register as opposed to the normal register. What one really wants to know is that the combination of duties under, for example, the Royal Charter and the special register, is equivalent to duties which fall upon the trade union entering upon its functions in the normal way, and being entitled to represent workers in the normal way, by going on with the ordinary register. That is the essence of my question at the present moment, the answer to which may help the noble Lord in most of the Amendments which we have down to this particular clause. So if he would be good enough to explain the matter fairly fully I think it would in the long run save time.

I wonder whether it would be convenient if I deal at the same moment with Amendment No. 263VVV, which the noble Lord broadly bracketed with Amendment No. 263UUU? I am concerned with only a small point, that I am unable to understand the drafting. I always hesitate to raise drafting points, but if one looks at Clause 82(3), one finds it starts off with these words: Subject to subsection (2) of this section, any organisation shall be eligible for entry in the special register if…". If one then looks at line 15, as proposed to be amended by Amendment 263VVV, one finds—but I do not assert—precisely the same wording. In short, one has one subsection saying Subject to subsection (2)…any organisation shall be eligible for entry…if ", and another subsection with the words: Subject to subsection (2) any organisation shall be eligible for entry…if ". There seems to me, therefore, to be little point in dividing the clause into two separate categories, but I may have misunderstood the wording.

3.24 p.m.


The noble Lord, Lord Windlesham, was gracious enough to refer to a previous clause in the course of which I ventured to raise the general principle associated with the special register; and in the course of his observations he was kind enough to refer to my intervention on that occasion. There was, I regret to say, some absurdity engendered at the time because, when we were about to debate the earlier clause, the noble Lord, Lord Windlesham, referred myself and other noble Lords to Clauses 82, 84 and so on, which specifically refer to the special register. It was regrettable that there was such absurdity engendered. I was entirely responsible for it. I acquit the noble Lord, Lord Windlesham, of any behaviour of that kind.

Two points occur to me in this connection. They relate not so much to the Amendment as to the general principle, which provides the basis for the clause under review. It might have been more to the advantage of the Committee if the noble Lord, Lord Windlesham, instead of confining himself to one specific example, that of the Royal College of Nursing, had ventured to mention other examples. It might have clarified our minds about the effect—indeed, the purpose and effect, of operating the special register.

The first point that occurs to me is whether there has been any consultation with arty of those organisations, either chartered or semi-chartered as the case may be, to ascertain whether there is a desire to have their names included in the special register. The reason for that question, as is well known, is that there is an aversion—that is a very mild expression —in some quarters against anything related to trade unions, against any suggestion that some of the very high ranking organisations or, rather, associations which operate under a charter wish to be described as trade unions. Any suggestion of that kind would be most bitterly resented. The idea of being described as a trade union is certainly not their cup of tea. That is the first question I wish to address to the noble Lord, Lord Windlesham: were any of these organisations consulted?

The other point is this—it follows on the observations for which my noble friend Lord Diamond was responsible immediately before I rose to address your Lordships' House. These associations—I to call them associations, not organisations—are to be afforded special privileges. That is to say, they are to be afforded all the privileges associated with the register which apply to a registered trade union in the first instance yet will not be placed at the disadvantage to which an ordinary registered trade union will be subjected. I should like the noble Lord, Lord Windlesham, to clarify that particular point because it seemed to me when we were discussing the earlier clause last week there was no particular purpose in having a special register if it had not a very wide-ranging field of operation.

The Royal College of Nursing has been mentioned. Quite frankly, I know of a few others. They are, of course, associations connected with mechanical engineering and electrical engineering, but these associations do not operate as between their membership and a body of employers. The associations, which meet for the purpose of debate for considering matters of common interest, are very necessary indeed. No one could take any exception to their operations and their general purpose, but they are not trade unions as such. They do not embark on any discussion with their employers. What they may do—and I ventured to mention this in the earlier debate—is to make representations to the Government, but that is not an industrial relationship. The points that I make to your Lordship's House are whether these associations have been consulted; whether they wish to be afforded any privileges that are associated with a registered trade union, and whether there is any need for a special register at all.

Without a special register—this is my final point—they can continue their operations, make representations to the Government, engage in propaganda and the like—and good luck to them! They are very desirable organisations and fulfil a very useful purpose. But I cannot understand why this register should have been injected into the Bill. It appears to me to have an association with special privileges, yet the associations which register will not be subjected to the inconvenience associated with the legislation affecting registered trade unions. This may give rise to difficulties in the future. I beg noble Lords to appreciate that I am not raising these matters with a desire to obstruct the legislation, but rather because it is important that the minds of those who are to be subjected to the legislation should be quite clear about its purpose.


Like my noble friend Lord Shinwell I am confused about the reason for the special register. Up and down the country there are medical officers of health attached to local authorities. Some are members of respected trade unions. I remember that on one local authority on which I served the medical officer was a member of two trade unions. The same thing applies in respect of county administration and chief medical officers of health. I have attended industrial courts in respect of increases of wages for chief officials who were members of NALGO. I wonder why we are to have this special register relating to particular sections of society in which there are various professions.

The noble Lord, Lord Platt, may have something to say about the medical profession, but I wish to refer to what is happening in local government and in industry. There is a Treasury Medical Service with whom contact is made by the Post Office; and the Post Office has its own medical fraternity. I am at a loss to understand the reason for the special register, and I hope that the noble Lord, Lord Windlesham, will be able to tell me what will be the position of such people as those to whom I have referred. Will they be forced to leave NALGO and the other trade unions? I hope that will not happen, and that they will be free to continue their membership.

3.34 p.m.


I think I can answer all the questions put to me in what I hope will be a reassuring way. The noble Lord, Lord Diamond, touched on the most important point of principle. He asked whether the organisations on the special register would obtain preferential treatment compared with trade unions on the ordinary register. The answer is that there is nothing very special about the special register in this context. All the provisions in the Bill apply to the organisations on the special register as though they were registered trade unions, with the exception of those listed in Clause 84(3). The only ones of substance—I referred to them in my opening speech—are contained in Clauses 85 to 88, to which we shall come shortly. That is the block of clauses headed, Administrative provisions." They are concerned mainly with the accounts and certain administrative matters which are set out in the clauses. Schedule 5 also refers to them.

The noble Lord, in his own question, provided the reason why that is so. It is that the organisations eligible for entry in the special register, but not in the ordinary register, are already chartered bodies or limited companies with their own obligations in this respect. The key clause is Clause 84(2) which applies all the provisions of this Act as if they had effect in relation to a trade union, with the exceptions listed in the following subsections. The noble Lord asked a more detailed point about the drafting of Clause 82. The answer is that subsection (2) applies both to single organisations and to federations. Subsection (3) applies only to single organisations on the special register; subsection (4) applies to federation. Single organisations and federations are treated separately throughout the Bill, as the noble Lord will know.

From the noble Lord, Lord Shinwell, we had the usual contribution which he makes at this time in the afternoon. If we had a debate on an Amendment in the afternoon without a contribution from the noble Lord, I think it would be rather like a haunted house without the ghost. The noble Lord asked about consultation. The answer is that the Secretary of State has had consultation with four of these organisations. I am informed that, far from having any aversion to registering on the special register, they are anxious to take advantage of this provision, which was worked out after representations had been made to the Secretary of State by these four organisations. The noble Lord asked how many others are likely to be affected. He thought that perhaps the Royal College of Nursing was an exceptional case. There may be others, but there are at least 17 organisations, the names of which I have available if noble Lords wish to check any particular organisation.

The noble Lord, Lord Slater, asked about the need for a special register and expressed a fear that people working in local government service or in the Civil Service who are already members of a trade union might in some way be unable to continue with their present union affiliation. I can confirm that that is not so. A substantial number of professional organisations which are concerned with industrial relations—that is, relations between employers and workers —are unincorporated, and therefore likely to be eligible for inclusion on the ordinary register as trade unions. These include the Association of Local Government Engineers and Surveyors, the Institution of Professional Civil Servants, and, I am advised, many others, including the Civil Service associations.

This is a complicated subject. To summarise the debate we have had, there are four characteristics which have to be displayed by any organisation if it is to be eligible for the special register. Perhaps it would be as well if we kept these in mind as we consider the other Amendments. First of all, it must be either a company or a chartered body, not an unincorporated association of workers because that will be eligible to register as a trade union. Secondly, a majority of its members should be workers as described in Clause 158.Thirdly, its activities should include the regulation of relations between workers and employers. Fourthly, it should have power to alter its own rules and control the application of its property and funds. I think I have answered all the points which have been raised, and I hope that I have been able to reassure noble Lords.


May I ask the noble Lord a question? It is rather a personal question because he made a personal observation. Is there anything ill the Standing Orders of your Lordships' House which prevents me from making a speech early in the afternoon?


I did not intervene in what was perhaps the right place because I thought that the noble Lords, Lord Shinwell and Lord Slater, were making a good many of my points for me. As I understood the gist of their remarks, they wanted to see no hindrance put in the way of a medical person or a professional engineer who was working for an industrial firm or for a municipal corporation, joining the appropriate trade union for that particular industry or corporation. Naturally, I have in mind the medical men who have their own satisfactory organisations and have developed their own negotiating machinery with Government, in cases where, as in most of the medical profession, they are employees of the Government. Why should they not be left alone and why should there be a special register at all? It seems to me that it might have been better to have left them out.

No doubt the noble Lords, Lord Windlesham and Lord Drumalbyn, will remember very well the debate we had on May 10 when the noble Earl, Lord Halsbury, raised the whole question of the professions. As I understood from the noble Lord, Lord Drumalbyn, the Government were going to look at this again and come back on Report with certain suggestions. On that understanding, the noble Earl withdrew his three Amendments. But one Amendment still remains in his name towards the end of the Bill, in which he seeks to give a definition of a profession or a professional person.

I should like to remind the Committee that the main reason why the professionals feel that they are a little out of this is, first of all, because they do not consider themselves normally in industry; and, more importantly, to use the words of the noble Earl, Lord Halsbury, they can find themselves between two fires. They can find themselves in cases—the noble Earl gave two very telling examples—where their professional duty conflicts with the kind of duty they would have in relation to their trade union membership. Therefore, I think there is a reason for the professions to be considered as a special case in some respects, but not necessarily wanting to have special privileges which other people do not have, except in relation to the kind of work they do. I should like an undertaking that this matter is still under consideration, otherwise I think that the noble Earl, Lord Halsbury, and I would seek to reintroduce certain Amendments which we had put down formally.


Perhaps I may deal with the points raised by the noble Lord. Lord Platt. Of course, the undertakings we have already given stand. The noble Lord is dealing at the moment with the position of the individual member of a profession. What we are really dealing with here is the collective aspect of professions. The reason why they have to be treated as a trade union is that unless they are treated as a trade union they could not, under the structure of the Bill, act as a sole bargaining agent. They could not be part of a joint negotiating panel, as they might well be. They could not enter into an agency shop agreement; they could not enter into an approved closed shop agreement. It is for those reasons that they have to be treated as if they were trade unions.


With respect, does not the noble Lord really beg the whole question when he says, " They could not under the Bill "? The whole point is whether the Bill ought to be drawn in this way. If it is drawn in this way, then I am quite sure that the provisions made for the special register meet some of the difficulties of the professions. I know that the British Medical Association has agreed that this is the case. The question of consultation was raised, and I think I am right in saying that the immediate reaction of the British Medical Association was to keep out of this Bill completely. It was only when they were told that if they did not come in they would lose certain privileges under this Bill—that is, assuming that this Bill is going to pass in this form—that they then agreed to come in.


May I make a brief comment? I have listened carefully to what has been said. If the word " principal " in relation to " objects " in Clause 59(1)(a), where it defines an organisation of workers, as art organisation of workers…is and is an organisation whose principal objects include the regulations of relations… had been left out, it would almost appear that there was no need at all for all this business of a special register. However, I am sure that one would get an awfully involved discussion. If it had been started from that point, this would have been unnecessary. We are now on a clause of the Bill which is appallingly detailed and complicated.

May I ask one question which I have been waiting for an opportunity to ask? The noble Lord, Lord Windlesham, when talking about these bodies who have charters et cetera, which disallow them from negotiating with employers, then went on to talk as though the special register allowed them to negotiate. Does the special register override the charters of these people and allow them to ignore those factors of their charter, or is it a fact that those who have charters which disallow them from negotiating on behalf of their members will still be in the position where they are not able to negotiate on behalf of their members? This is just a point of elucidation for me personally, and other Members of the House.


I can answer those remaining points very briefly. The status quo is really reserved as regards those organisations which are negotiating at the moment. That takes me on to the question the noble Lord asked about principal objects under Clause 59. We are not talking about principal objects here. We are talking about activities; what people are actually doing. This is one of the conditions I mentioned previously. This is in Clause 82(4)(b). It says " activities of the organisation ". I think that the noble Lord, Lord Platt, is on a slightly separate point to the one discussed earlier by my noble friend Lord Drumalbyn, which was the status of the individual professional man, whereas what we are talking about here are those organisations which in one capacity or another represent the professional man. When they represent him in a negotiating capacity with an employer, whether they are on the special or ordinary register becomes irrelevant. As regards the British Medical Association, which is a limited company, not a chartered body, there is no compulsion for them to register on the special register. I understand that they have in mind taking advantage of this register, but the decision is for them.


I can only repeat my gratitude to the noble Lord, Lord Windlesham, for what he has said, excluding from that, if I may, what he said in relation to my noble friend Lord Shinwell. I thought that he was living rather dangerously there, especially in regard to the extremely generous statement by my noble friend at the commencement of his speech. However, anybody who has had the privilege of knowing my noble friend as long as I have will know that he needs no help from anybody at all.

May I say to the noble Lord, Lord Platt, that it seems to me that on the professional side there is no real conflict of conscience arising out of these clauses. He is on very solid ground when he regrets being brought into the Bill, and he was looking hopefully to the skies for the possibility of the Bill not passing. All I can say is that if we were to regard merit alone he and I would carry the day, but I believe that mathematics comes into it as well as other matters. With these remarks, and with the reservation that we need to check what the noble Lord has said about equality of opportunity and responsibility as we go through these clauses, I share the view of the noble Lord that this Amendment ought to pass.

On Question, Amendment agreed to.

3.53 p.m.

LORD DIAMOND moved Amendment No. 263QQ:

Page 65, line 3, at end insert— (" or (c) any independent organisation of workers which would qualify to register or is registered by virtue of an enactment in force on the day before the commencement of this Act ").

The noble Lord said: I think it would be worth while to have a short discussion on this Amendment and perhaps it would be convenient to take the following one, which deals with the same point in an alternative way. As is obvious from the wording, the purpose of these Amendments is to consider the possibility of an independent organisation of workers qualifying in the same way as those in the Bill to go on the special register. Amendment No. 263RR takes the matter a little further and deals with it more specifically.

It is for discussion whether the gates into the special register ought to be;widened to permit organlisations who would be likely to go on the ordinary register to become registered on the special register, now that we know in the view of the noble Lord, Lord Windlesham, that there are no special privileges attached to being on the special register as opposed to the ordinary one. If there are no special privileges or special burdens, if in fact being on one or the other is more or less equal, and this satisfies the needs of public duty and public interest in general, then there is something to be said for organisations having a certain latitude of choice about which register they should go on. At the moment there is no such latitude. Certain organisations can only go on the special register and others can only go on the ordinary register. What this Amendment seeks to do is to rake for discussion, not to put it too high, the possibility of organisations which may join the ordinary register going on to the special register if they so prefer. I beg to move.


As I explained fully on the last Amendment, the special register was designed for certain independent organisations, a majority of whose members are workers but which, because of their being companies or chartered bodies, are unable to register as trade unions. These organisations are already subject to statutory administrative requirements which overlap with certain administrative provisions in the Bill, and are not required to satisfy these provisions in the context of the special register. The effect of the Amendment would be to open the special register to other organisations for which such exemptions would not be justified. The bulk of these organisations would be trade unions within the meaning of the Trade Union Acts of 1871 to 1964. With the repeal of the 1871 Act under this Bill, registered organisations among them will be relieved of the statutory requirements under that Act.

This Bill provides that an independent organisation of workers which would have been eligible under the 1871 Act would be eligible for registration on the ordinary register under Clause 59 of this Bill. Organisations so registered would be subject to the full range of the administrative requirements in the Bill, but if instead, as proposed by the noble Lord—though not very strictly because this is only for discussion—they could apply for entry on the special register, they would obtain the benefits of trade union status but without at the same time having to satisfy the requirements in Clauses 85 to 89 and Schedule 5, relating to accounts, audit, annual return and report, register of members, examination of superannuation schemes and winding up. The reasons why companies and chartered bodies on the special register do not have to satisfy these requirements is not because they are irrelevant, but because these bodies are already the subject of corresponding obligations under the Companies Act. For these reasons it seems to be better to keep the two registers distinct.


May I draw the attention of the noble Lord to the subsequent clause where, at the top of page 66, the term " organisation of workers " is used in association with those included in the special register. Why does the noble Lord object to the Amendment?


The expression " organisation of workers " is used in the Bill in distinction from trade union. The definition of trade union is a registered organisation of workers under Clause 59, whereas the expression " organisation of workers " means a group of people who are in a specific relation to worker-employer. The noble Lord will remember the rather protracted discussions we had earlier on the attempt to substitute the word " person " for the word " worker ", and we see throughout the Bill that the expression " worker is a very exact one; so " organisation of workers " merely refers to a collective group of people who are in a relationship of employment with an employer.


I made it clear that my purpose in moving the Amendment was to pave the way for discussion, and I am grateful to the noble Lord for his explanation. It may be that one will have to consider more carefully what he has said in relation to a later stage of the Bill, whether this alternative choice ought to be open, subject to the further condition that those who elect in this way and who are not at the moment subject to the administrative requirements ought to be compelled to elect subject only to these administrative requirements. That would not necessarily remove the choice of electing: it would merely mean they could go on to either register, but that if they went on to the special register they would have to undertake these additional requirements. We will look at this point. Clearly at the present time there is no purpose in pursuing these Amendments, and with your Lordships' permission I beg leave to withdraw Amendment 263QQ.

Amendment, by leave, withdrawn.

LORD WINDLESHAM moved Amendment No. 263VVV: Page 65. line 15, leave out from beginning to (" shall ") in line 16, and insert (" Subject to subsection (2) of this section, any organisation ")

The noble Lord said: I beg to move this Amendment standing in the name of my noble friend Lord Drumalbyn. It has the same purpose as Amendment No. 263UUU which we discussed at the beginning of our proceedings.

On Question, Amendment agreed to.

4.4 p.m.

LORD DIAMOND moved Amendment No. 263SS: Page 65, line 25, after (" union ") insert (" or independent organisation of workers ")

The noble Lord said: I beg to move this Amendment. It seemed to me that there ought to be some method of facilitating registration on this special register of a federated organisation which has as members bodies which are special organisations and organisations of workers—a mixed bag. Again, all I would seek at this stage of the Bill is a discussion of this topic in order to gain the view of the Government on it. I do not think I need say any more at this stage.


This Amendment has a very similar object to the one put forward, I think, by the noble Lord, Lord Champion, the other day on Clause 65; that is to say, it would remove the requirement that all the constituents of a federation must themselves be registered before the federation can obtain and retain registration. Unlike the earlier Amendment which we discussed, this Amendment guards against the possibility that a federation might be composed of workers' organisations which were under employer domination. Therefore from that point of view it is not open to the same objection as was the earlier one. But it is unacceptable for the reason which I gave the other day, which was that it could result in organisations' obtaining the benefits of registered status whilst at the same time avoiding the obligations of registration.


I am bound to congratulate the noble Lord on the brevity of his answer, but 1 doubt whether I can congratulate him on its persuasive- ness. I recognise that the Amendment would have the effect he mentions, but if no such Amendment is accepted, or no such procedure or amended procedure is made available, we are going to have this difficulty of excluding federations which I should have thought ought in the general interest to be included. What I understand the present position to be is this: that if there is a federated organisation which is not perhaps 100 per cent. pure—that is to say, not every single one of its constituents or affiliated members is an acceptable organisation either for one register or the other; and at the moment we are considering the special register—then the whole of the federated organisation is excluded. I should have thought t here ought to be some provision whereby a federated organisation should be allowed to play its proper part and to have the benefit of advice and participation in the federation, notwithstanding that one per cent., two per cent., or at any rate a very small proportion, of its membership was technically excluded as the Bill is at present drawn. I should be grateful, therefore, if the noble Earl would give further thought to this matter and give us his further views as to whether it would not be helpful for that situation to exist, and also to tell us the philosophical approach of the Gov- ernment which would prevent that happening.


When we discussed this matter the other day I remember saying that the Government consider that these federations do a very good job of work and are therefore much to be encouraged. But, quite clearly, it would be creating a difficulty if, for some reason, some of the constituent parts of the federation had declined to accept registration and the obligations, and therefore the benefits too, yet were members of a federation which had decided to accept registration, because by so doing the federation could take the advantages of registration and thereby confer in some way on the members of this federation the very benefits of registration which they had 'themselves declined by refusing to register. I think the noble Lord would agree it would be an anomaly if members of a federation were to have the advantages of registration when they themselves, as individual constituents, had declined to register. It is for that reason that the Government would feel difficulty in accepting this situation.


It is for that reason that I feel the Government are taking the matter much too far. Here we have a situation where a federation is accepted by the Government as being a wholesome body that may be carrying out a useful purpose. A federation, as we know, may consist of a number of bodies, 'the vast majority of which may individually be registered unions on one or other of the registers. Yet just because a very small number (even one would be quite sufficient for the Government's argument on this) finds a good reason—and I am assuming that it is a reason which the Registrar would hold to be a good one—he has no discretion about allowing the federation to register. If he had such a discretion, he could hold that though there was a good reason why it was inappropriate for a particular organisation to register—having regard, perhaps, to its professional 'situation, or some complication of the kind about which the noble Lord, Lord Platt, has always showed considerable anxiety—nevertheless it was right that the federation should be able to register.

The function of the federation is not only to negotiate on wages and matters of that kind; its function is to do a number of things that are helpful to a Government. Every Government knows that the relevant Departments are in continual touch with the federation: there is a continuing two-way traffic, helpful to the Government and to the industry or the organisation concerned, about a number of matters. It is a means of communication; it is a means of enlisting help. Yet just because the one individual organisation has, as I have indicated, decided (and it is free to decide; even the Government have said it is free to decide, and we are grateful to the Government for saying that we are free to do anything) not to register on either the normal register or the special one (here we are considering the special one) it is nevertheless going to prevent the

Government from getting the benefit of the two-way discussions and negotiations with the federation about a whole host of matters, about which one or none could be the regulation on relations, because the Government might not be interested in that side of it at all, and it might be a quite separate function. I am bound to say that we consider the noble Earl's answer on this issue most unsatisfactory, because it illustrates an attitude of nice, tidy, inhuman organisation on the part of this Bill, which we dislike the whole way through.

4.12 p.m.

On Question: Whether the said Amendment (No. 263SS) shall be agreed to?

Their Lordships divided: Contents, 56; Not-Contents, 116.

Archibald, L. Henderson, L. Rusholme, L.
Arwyn, L. Heycock, L. Sainsbury, L.
Bernstein, L. Hilton of Upton, L. St. Davids, V.
Beswick, L. Hughes, L. Samuel, V.
Birk, Bs. Jacques, L. Serota, Bs.
Blackburn, L. Bp. Janner, L. Shackleton, L.
Blackett, L. Leatherland, L. Shinwell, L.
Blyton, L. Lindgren, L. Silkin, L.
Brockway, L. Llewelyn-Davies of Hastoe, Bs. [Teller.] Slater, L.
Brown, L. Sorensen, L.
Buckinghamshire, E. Maelor, L. Stow Hill, L.
Burntwood, L. Moyle, L. Summerskill, Bs.
Champion, L. Noel-Buxton, L. Taylor of Mansfield, L.
Chorley, L. Phillips, Bs. Walston, L.
Davies of Leek, L. Platt, L. Wells-Pestell, L.
Diamond, L. Popplewell, L. Williamson, L.
Douglass of Cleveland, L. Raglan, L. Wootton of Abinger, Bs.
Gardiner, L. Ritchie-Calder, L. Wright of Ashton under Lyne, L.
Garnsworthy, L. [Teller.] Royle, L.
Greenwood of Rossendale, L.
Aberdare, L. Clwyd, L. Exeter, M.
Aberdeen and Temair, M. Colgrain, L. Falkland, V.
Ailwyn, L. Conesford, L. Ferrers, E.
Airedale, L. Cork and Orrery, E. Fortescue, E.
Albemarle, E. Cottesloe, L. Gage, V.
Alexander of Tunis, E. Courtown, E. Garner, L.
Alport, L. Cowley, E. Gladwyn. L.
Amherst, E. Craigavon, V. Goschen, V.
Amulree, L. Craigmyle, L. Gray, L
Auckland, L. Cranbrook, E. Grenfell, L
Balfour, E. Crawshaw, L. Gridley, L.
Balfour of Inchrye, L. Cromartie, E. Grimston of Westbury, L
Barrington, V. Daventry, V. Hailsham of Saint Marylebone, L. (L. Chancellor.)
Beauchamp, E. Delamere, L.
Belhaven and Stenton, L. Denham, L. Hankey, L.
Belstead, L. Derwent, L. Harris, L.
Berkeley, Bs. Drumalbyn, L. Hatherton, L.
Boston, L. Dundee, E. Henley, L.
Braye, L. Eccles, V. Hood, V.
Brooke of Cumnor, L. Effingham, E. Howard of Glossop, L.
Burton, L. Emmet of Amberley, Bs. Hylton-Foster, Bs.
Caccia, L. Essex, E. Ilford, L.
Jellicoe, E. (L. Privy Seal.] Mowbray and Stourton, L. [Teller.] Sempill, Ly.
Jessel, L. Sinclair of Cleeve, L.
Kemsley, V. Northchurch, Bs. Stamp, L.
Kilmany, L. Nunburnholme, L. Strang, L.
Kindersley, L. Poltimore, L. Suffield, L.
Lonsdale, E. Rankeillour, L. Swinton, E.
Lothian, M. Rathcavan, L. Templemore, L.
Loudoun, C. Reay, L. Teynham, L.
Lucas of Chilworth, L. Rhyl, L. Thorneycroft, L.
Lyell, L. Rockley, L. Tweedsmuir of Belhelvie, Bs.
MacAndrew, L. Ruthven of Freeland, Ly. Vivian, L.
Mancroft, L. St. Aldwyn, E. [Teller.] Wade, L.
Mansfield, E. St. Helens, L. Wakefield of Kendal, L.
Massereene and Ferrard, V. St. Just, L. Willingdon, M.
Meston, L. Salisbury, M. Windlesham, L.
Milverton, L. Sandford, L. Wolverton, L.
Monk Bretton, L. Sandys, L. Yarborough, E.
Morrison, L. Savile, L.

On Question, Amendment agreed to

4.21 p.m.

On Question, Whether Clause 82, as amended, shall stand part of the Bill?


I do not think we need to detain the Committee on this matter. We have discussed the essential principles of the Bill and the noble Lord, Lord Windlesham, was good enough to explain them on the first Amendment. We do not require any further elucidation.

Clause 82, as amended, agreed to.

Clause 83 [Application for entry in special register]:

LORD DIAMOND moved Amendment No. 263TT: Page 66, line 8, leave out (" appear to him to be') and insert (" are").

The noble Lord said: This is one of the Amendments which are merely to make sure of what the noble Lord, Lord Windlesham, said a little earlier as to the effect of applying to join the special register. As the Bill is at present drafted, the words used are that in determining whether an organisation fulfils the conditions the Registrar shall have regard to the activities actually carried on. The words " activities actually carried on " are very -important and were stressed by the noble Lord. The subsection says: whether they appear to him to be in accordance with its memorandum and articles… We do not see why this discretion should be given in this way. Either they are or they are not in accordance with the memorandum and articles of association. I should not have thought it was necessary to give a discretion to a Regis- trar to consult himself and to say whether they appear to be. It seems to me a perfectly straightforward matter and one wants to have clarity as opposed to vagueness; and the elimination of these words would assist towards that end.


An Amendment which was identical to the one that we are discussing was the subject of some debate on Report in another place. This has enabled the Government to look again very closely at the drafting of this part of Clause 83 to see whether there is a need for clarification, because we share the noble Lord's desire that the Bill should be as clear in its wording as possible so that no subsequent misunderstanding should arise. We have found it difficult to see that the change proposed would be an improvement. Subsection (4) does not say that if, in the Registrar's judgment, certain activities are not in accordance with an organisation's memorandum and articles of association then he must take a certain decision about its eligibility for registration, and if they are in accordance he must take a different decision. The matters which must govern the Registrar's decision are specifically limited to those which are listed in subsection (3) of this clause. One of them is the question of whether or not in accordance with subsection (3)(b) of Clause 82 the activities of the organisation include the regulation of relations between workers and employers. That is what the Registrar has to establish.

What subsection (4) says is that in doing this the Registrar is to have regard to what the organisation actually does in practice, irrespective of how he interprets its objects as set out in the memo- randum and articles of association. Subsection (4) is, in effect, recognising that the Registrar may come up against a situation where his interpretation of an organisation's constitution would not lead him to expect that its activities would qualify it for admission to the special register, which is why the words, " appear to him to be " are in the subsection.

In that situation subsection (4) clearly tells the Registrar to reach his decision on the basis of the actual activities and not how he reads the constitution. Altering the drafting of the subsection so as to insert the word " are " for the words " appear to him to be " would make it somewhat less clear that this subsection is directed at the Registrar, telling him that whatever he personally may think about the memorandum and articles he must make his decision on the basis of the activities in which the organisation is engaged. I do not think there is a great deal between us on this point. We must be frank and say that this is a point of drafting—a somewhat technical point—but we believe, for the reasons that I have given, to make sure that it is aimed at the Registrar, it is desirable to adhere to the wording in the Bill.


This is disappointing. The noble Lord has said that this matter has been considered since it was discussed in the other place. " Appear to him " gives the Registrar a certain latitude, and we suggest that those words should be deleted and " are " substituted. The Registrar has to work within the legal framework of the Bill, and " appear to him " allows a certain amount of latitude that might be debatable. An applicant will not have any standing at all if it is left so loosely. I hope the Government will have another look at this matter to get something more definite for the Report stage, so that people know that this latitude is not given to an individual. We know that judges differ considerably from time to time in this direction. We get a Lord Justice of Appeal on the question of interpretation giving a different view. The noble Lord has said that it is a matter of drafting and that there is not much difference between us. Therefore I hope that he will not be too dogmatic and say that this wording has to stand, but will have another look at it for the Report stage.


I share the anxiety which my noble friend has been expressing. Nevertheless, I am grateful to the noble Lord, Lord Windlesham, because he has made it clear that we are after the same objectives. I am sure we both share the view that neither of us ought to attempt to be authorities on drafting. The noble Lord encourages me to interpret the words as meaning that if there is a latitude it is a latitude on the Registrar to disregard anything that might tempt him not to have regard to the activities actually carried on; therefore he must concentrate his vision particularly —almost in blinkers—on the activities actually carried on, and that is what we all want. So, if I have followed the noble Lord correctly, I think the words might after all be as suitable as he claims them to be. But he will no doubt look at the matter again and I shall no doubt look at it again, in consultation with my noble friend, Lord Popplewell. In the meantime I think it would be right to seek your Lordships' permission to withdraw the Amendment, which I do.

Amendment, by leave, withdrawn.

LORD DIAMOND moved Amendment No. 263UU: Page 66, line 10. at end insert (" and shall ensure that the rules of this organisation are in conformity with Schedule 4 ").

The noble Lord said: I beg to move Amendment No. 263UU. The noble Lord will recognise this immediately as a most important Amendment, even though it is of a probing nature. When I say that it is most important. it is clearly most important that we should be absolutely sure that the provisions of Schedule 4 should apply to an organisation on the special register just as much as they apply to an organisation on the ordinary register. I myself am really seeking confirmation regarding Clause 84(3), which says: The following provisions of this Act shall not have effect… and then sets out a number of things which are not to apply. Clause 84(3) does in fact put upon organisations registered on the special register the obligations of complying completely with the provisions of Schedule 4 inasmuch as Schedule 4 is not excluded. But I am no lawyer and I do not know the effect of silence. I therefore raise the question, so that the noble Lord can make the position absolutely clear. I beg to move.


I asked exactly the same question and I can give the noble Lord, without equivocation, the answer he seeks. The Registrar can request a chartered or a corporate body which applies for entry on to the special register under Clause 83 to change its rules if they do not comply with Clause 63 or Schedule 4. Furthermore, the Registrar has powers to examine and approve the rules of trade unions and employers' associations under Clause 73, and to request changes if they do not comply with the requirements of the Bill. Clause 73 is applied to organisations on the special register by Clause 84(2), and it is not one of the excluded provisions in Clause 84(3).

The position is, therefore, that the Registrar can notify an organisation on the special register in what way its rules are defective, and can ask that organisation to make the necessary change. He will allow the applicant on to the special register first. But the main clause—that is, the powers in Clause 73—I can confirm are applied to the special register under the terms of Clause 84(2).


I am grateful for that very clear confirmation, and in the circumstances seek your Lordships' permission to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 83 agreed to.

Clause 84 [Effect of entry in special register]:

4.34 p.m.

EARL FERRERS moved Amendment No. 263WWW: Page 66, line 42, leave out ("and 75") and insert (" 7.5 and (Relaxation of restrictions on changes in rules)").

The noble Earl said: On behalf of my noble friend Lord Drumalbyn, I beg to move the Amendment which stands in his name. This Amendment follows one which was moved yesterday by my noble friend on Clause 73; that was Amendment No. 263NNN, which makes way for a new clause after Clause 91, which is Amendment No. 263EEEE. This particular Amendment enables the effects of the new clause to apply to organisations on the special register. With that explanation, I beg to move the Amendment.


This is far too important an Amendment—to leave out " and 75 " and insert " 75 and " is obviously of crucial importance—for us to allow it to go by without saving perhaps just one word. The Committee will see that we are now approaching the stage when the Marshalled List is virtually exclusively used by the Government for putting their Bill in order. To the extent that they are choosing, even at this late hour, to attempt to put it in order is of course acceptable to us. But I say to noble Lords opposite that I hope we shall be able to make some progress on this Bill notwithstanding that they are cluttering up the Marshalled List in this way.


I have only one reservation to make following the observation of my noble friend Lord Diamond. It must not be thought, because there is a series of Amendments advanced by the Government, that these in any way mean concessions.

Clause 84, as amended, agreed to.

Clause 85 [Duty to keep accounting records and register of members]:

On Question, Whether Clause 85 shall stand part of the Bill?


May I ask just one question on this clause? I know we are on administrative provisions which are of perhaps less importance than some other parts of the Bill. Nevertheless, these are some of the matters for which the Bill is being introduced; namely, the requirement of trade unions to comply with these administrative provisions, and they ought to bear some careful examination. Clause 85(1)(b) states: establish and maintain a satisfactory system of control of its accounting records….". " Satisfactory system " is a curious term. One immediately asks the question: " Satisfactory to whom? " Does this mean satisfactory to the auditors?—because I see the auditors at a later stage have to make reference to the system of control. If they had to be satisfied that the system was an adequate system of control, that I could understand, and in that case one would expect the words to be " establish and maintain an adequate system of control ". But, I repeat, the paragraph refers to a " satisfactory system ", and I should like to hear from the Government why they consider that these are the appropriate words to use.

4.39 p.m.


This particular subsection (1)(b) of Clause 85 applies to proper accounting records and cash holdings. receipts and remittances. The whole of this clause replaces something similar which is already to be found under provisions in the Trade Union Act 1871. It means, of course, that the auditors must be satisfied that these are proper accounting records. A treasurer or other officer of a trade union, registered under the Trade Union Act is required, by Section 11 of the 1871 Act, to render proper accounts to the trustees or members of the union—it is actually put down as " just and true accounts ". This clause as a whole replaces these requirements by applying to trade unions and employers' associations the same directions concerning the maintenance of adequate accounting records as already apply to friendly societies and similar institutions under Section 1 of the Friendly and Industrial and Provident Societies Act.


I wholeheartedly agree with this clause, but may I ask one question? Would it be the Government's intention, or the Registrar's intention, to lay down a standardised type of book-keeping to cover the whole of these financial matters within the union?


I do not think it would necessarily be a standardised form of book-keeping. It is for the auditors to to make sure that it gives a true and accurate account.


The noble Baroness must not assume, from what I am about to say, that we are not delighted to have her help in considering this Bill, because we are. We are not only flattered by having her taking part in our deliberations, but in this hour and a half or so we have spent considering the Bill no less than four of the distinguished Members of the Government Front Bench have shared the labour in order to cope with the Opposition's questions. We are very flattered indeed.

I was not absolutely clear whether the noble Baroness was saying that this replaces a provision in the Trade Union Act 1871, but we are delighted that that Act should be regarded as the appropriate standard with which to comply. I am not clear whether she is saying it replaces a provision in that Act which referred to a " satisfactory system ", or whether she said it was to coincide with the provisions already in the Friendly Societies Act, which provide for an " adequate system ". My question really was, why have the word " satisfactory " if the word you want is " adequate "? If the word you have is " satisfactory ", by whom is it to be regarded as " satisfactory "? Is it the auditors, or somebody else? Perhaps the noble Baroness would like to have a second go.


I am always willing to have a second go. My noble friends on this side of the House have attended this Committee so regularly because they are interested in the Bill; and as it also happens that they have responsibilities in other directions, we take it in turns. There are, of course, two main points. The noble Lord, Lord Diamond, wished to know why it was called " a satisfactory system of control ", and to whom it was to be satisfactory. We hope that it is satisfactory to the auditors in question. I referred to the true and fair view of the unions' affairs in explaining its transactions, which is in the clause as a whole, because I thought it only fair to this Committee not to let this clause pass without describing the full provisions of Clause 85. I said that these provisions were in fact similar to those in the Trade Union Act 1871, and that this clause replaces those requirements by applying to trades unions and employers' associations the same directions about adequate accounting records as apply to Friendly Societies and similar institutions.

Clause 85 agreed to.

Clause 86 [Annual return, audit, annual report and members' superannuation schemes]:

4.42 p.m.


Page 67, line 39, at end insert— (" () in any calendar year in which a trade union or an employers' association, in pursuance of such an exemption, does not publish a report under subsection (3) of this section the trade union or employers' association shall supply to each of its members free of charge a copy of its annual return for that year ")

The noble Baroness said: Clause 86 of the Bill requires registered organisations to publish an annual report to members, which must include the annual financial return submitted to the Registrar. However, subsection (4) of the clause authorises the Registrar to exempt small organisations from the obligation to publish a report. Therefore, we felt that it was necessary that, if they did not have to have a report, the members should, in an exempt organisation, at least have access to the financial statement or to the return in some other way. Therefore, this Amendment will ensure that the members of an organisation who are exempted will nevertheless have the right to receive, I am glad to say, a free copy of the annual return which would have been included in the annual report to members had one been published. It fills an unintended gap in the provisions, and I commend it to the Committee for approval.


Would the noble Baroness indicate what might be considered a small number?


A small number might, for example, be under 500.

Clause 86, as amended, agreed to.


I understand that, in accordance with the instructions of April 21, I must now put Schedule 5.

Schedule 5 [Administrative provisions relating to trade unions and employers' associations]:

On Question, Whether Schedule 5 shall stand part of the Bill?


I do not know whether the Government propose to say a word or two about Schedule 5. We shall not detain the Committee long on it, but the Government may wish to make a short explanatory statement.


Schedule 5 relates to the administrative provisions of trade unions and employers' associations, and covers in almost all respects those provisions which were in Part VII of the previous Administration's Bill in Clauses 70 to 79. I think the only difference of any substance is the question of penalties, which we shall come to discuss under Clause 89, and these are higher than previously because I understand that they have not been altered since the 1870s. Therefore, it was felt that they should be brought into line with the provisions for other organisations such as industrial and provident societies and building societies. Otherwise Schedule 5 is entirely the administrative regulations.


Do I understand that what the noble Baroness has just referred to is Schedule 3, Part V, Supplementary Provisions?



It would be discourteous of me not to thank the noble Baroness for the explanation, which was a wholly satisfying one. What she said was that this was an exact copy of what the Labour Government had done, and what further argument was needed. I do agree.

Schedule 5 agreed to.

Clause 87 [Duty to inform registrar of changes in rules, officers and other matters]:

4.48 p.m.

BARONESS TWEEDSMUIR OF BELHELVIE moved Amendment No. 263YYY: Page 68. line 19, leave out (" together with the prescribed fee ").

The noble Baroness said: If it is convenient to the Committee, I should like also to refer to the next Amendment, Amendment No. 263ZZZ. These two Amendments are here for two main reasons. First, subsection (2) of Clause 87, as it is at present drafted, provides for the payment of fees every single time an organisation notifies the Registrar of a change of officers. The Government's intention is to require payment of a fee only for the registration of a change in rules. This is made quite clear in the Amendment. A fee is justified here because the Registrar will have a considerable amount of work to do to study the changes, and to see whether the amended rules still conform to the requirements of the Bill.

The second object of these Amendments is to ensure that the fee to be charged is broadly of the same order to those charged to organisations which are registered under other Acts. Registration fees under the legislation relating to industrial and provident societies and building societies were revised by Statutory Instrument as from April 1 this year, and the figure of £10 proposed in the Amendment corresponds to the fee now charged to such organisations for registering a partial change of the rules. I beg to move.


Can the noble Baroness give me one additional piece of information? She has been kind enough to tell us that these fees for comparable organisations were raised as recently as April 1 to £10. From what?


They all vary, because a good many of them had not been altered since the 1870s. But to give an example, the industrial and provident societies are now charged £30 for registration, £20 for a complete revision of rules, £10 for a partial revision, £6 for a change of name and £1 for a change of registered office.


I recognise that there is a variation and that will not help us very much. I think the first Amendment is an acceptable one, but one does not like the second one. The addition of the words or such other sum as may be prescribed have the unfortunate effect that, without any opportunity of discussion, fees are increased, not only to keep pace with inevitable rises in costs but also to keep pace with rises due to inefficiency, without any opportunity of challenging the inefficiency. I realise that what is in this clause is not something which is unique. Therefore, all I want to do is to register our anxiety about it and to say that we shall obviously watch this. A fee of £10 does not seem out of place for what may be required, although it will rest somewhat heavily on the smaller union. I imagine that such other sum as may be prescribed will always be a higher sum and never a lower sum, but we shall keep the matter under review. With those words, I think my noble friends will wish me to say that we shall allow the Amendments to go through.


I should also like to draw attention to the words together with a fee of £10 or such other sum as may be prescribed ". What is the purpose of those words, unless the Government expect further inflation as a result of their general policy? By the time this Bill is fully implemented, the £10 may have become £30 or £40. Is that what those words mean? Are they there because of impending inflation as a result of Government policy?


As a trade unionist, I strongly object to the increase which the Government are seeking to impose. The noble Baroness said that one of the reasons why this fee must be increased is because of the research and everything else which the Registrar will have to do in compiling rules governing the trade unions. But in all probability there will only be an alteration or addition to one part of the rules governing a trade union. It seems to me that the weakness of the present Administration is that they let prices rise whenever a demand is made. The attitude of the Government seems to be to allow increases here, in accordance with their general policy.


I have sought to explain to the Committee why the sum of £10 is fair in relation to other charges which I gave. I should dearly love to debate the whole economic position of this country with the noble Lord, Lord Shinwell, but I shall refrain as I suspect that that would not be in order. But may I say, in passing, that the present inflation cannot be entirely owing to this Government. It must have some origin in an earlier Administration. I would say to the noble Lord, Lord Diamond, that the Amendment makes provision for a revision of the fee by such other sum as may be prescribed by Statutory Instrument, and that is to take account of increased charges for administration, should they arise. But, like him, I am always hopeful that perhaps they will also come down.


Am I to understand from the last observation of the noble Baroness that any change in the £10 fee would have to be brought about by Statutory Instrument laid before both Houses? This is extremely important. It would have been possible for the Registrar to alter the fees according to the number of changes that might be necessary in the rules. But if any alteration in the fees must be prescribed by Statutory Instrument, then I am very satisfied.


That is the point I was trying to make. I should perhaps have explained it earlier when I sought to allay the anxieties of the noble Lord, Lord Diamond, and the noble Lord, Lord Popplewell. It would be subject to the Negative Resolution procedure.


If I understood the noble Baroness correctly, she said that she would love to debate with me. When can we arrange this debate?


Before the noble Baroness answers that question, may I remind her that she told us that these charges have not been increased since 1880. I hope that the debate will therefore cover all inflationary policies since then, with a list of the various Governments which held command during that period. I am sure the noble Baroness does not misunderstand my point about debating increases in charges, and it is very difficult on a Negative Resolution to have a proper debate. We shall therefore watch the matter and, perhaps by putting down a Question, seek elucidation if necessary. I think my noble friends are reasonably satisfied, but perhaps I could say this to my noble friend Lord Slater, who, I gather, is not wholly satisfied. I accept what the noble Baroness has said with regard to the first Amendment; namely, that whereas charges would otherwise have been open to be made under the Bill. they are no longer open to be made on minor matters. Secondly, that on major matters—that is to say, on a change of rules—the charges compare with charges made to similar institutions for similar functions. That is the starting point, and we think that is perhaps unavoidable. But we shall certainly watch any increases very carefully.


I beg to move Amendment No. 263ZZZ.

Amendment moved— Page 68, line 20, at end insert (" and, in the case of a copy of a change in the rules, shall be sent to him together with a fee of £10 or such other sum as may be prescribed").— (Baroness Tweedsmuir of Bellzelvie.)

BARONESS TWEEDSMUIR OF BELHELVIE moved Amendment No. 263AAAA: Page 68, line 24, leave out from first ("change ") to end of line 25.

The noble Baroness said: I think the fact that something is being deleted from the Bill will be acceptable to the Committee. This Amendment deletes from the Bill the provision stating that a change in the rules of a registered organisation shall not take effect until the change has been registered with the,Registrar of Trade Unions and Employers' Associations. This clause also applies to organisations on the special register, including chartered bodies whose rules can take effect only when approved by the Privy Council. Where a change is to be void until recorded by the Registrar, the status of an amended rule of a chartered body will be unclear. I beg to move.

Clause 87, as amended, agreed to.

Clause 88 [Power for Chief Registrar to inspect and apply for winding up order]:

On Question, Whether Clause 88 shall stand part of the Bill?

4.59 p.m.


I am anxious not to be technical in putting certain questions on Clause 88, but I am emboldened to do so by the fact that when the Committee was discussing Clause 72 I gave notice that there were certain questions which seemed to me to arise and to involve both Clause 88 and Clause 148.

These are the type of questions that I should like to put to the noble Baroness. Clause 88 deals with the winding-up of a trade union. It is, I should have thought, important that one should know precisely how that clause is to work. I hope it will be very rarely brought into operation, but of course it might be on occasions, particularly in the case of a small union. If one looks back to Clause 72 to see what has happened to an organisation of workers when it has become registered, one finds that in the terms of Clause 72(1) it has become a body corporate. If one then looks to see what happens to property broadly speaking applicable to the purposes of the trade union, one finds in subsection (3) of Clause 72 that, All property and funds…for the time being held by any person in trust for the organisation shall vest in the organization…without further assurance. So far one has reached the position that the trade union has become a body corporate. One is not told what sort of a body corporate and, as I have previously pointed out, we do not know what are the rules of the body corporate. The only other thing one knows is that property held for it by trustees is without further assurance vested in that body corporate.

With that store of knowledge, one proceeds to ask what is to happen in the event of it becoming necessary to wind up the trade union under the terms of Clause 88. All one is told when one looks at the actual method which is prescribed (I am reading the words at the end of the clause) is that the organisation is to be wound up by the court in accordance with the Companies Act 1948. I do not know what sections of the Companies Act 1948 are to be brought into operation in relation to this new type of body corporate, the existence of which so far as I know finds no place in the Companies Act 1948 which deals with certain specific corporate bodies, primarily companies with limited liability. These are in terms referred to and dealt with by that Act.

If the court is winding up a limited company one knows precisely what are the provisions of the Companies Act which are to be brought into operation. They are the well known provisions by which the creditor can file a petition, the court has discretion, it considers the wishes of creditors by majority value and so on. It is open to question, I should have thought, whether the words, in accordance with the Companies Act 1948 would in any event bring into operation any of the provisions of the Companies Act 1948 other than those which deal strictly with the parcelling out of the assets among creditors and, if there are any over, among shareholders in the case of a limited company. I should have thought, just looking at these words, that they would in any case only bring into operation that limited number of sections. I do not know how the liquidation is to be initiated before the court because no provision of the Companies Act dealing with that matter is brought into operation in terms, and is also not brought into operation for the further reason which I gave when we were dealing with a new type of amorphous, undescribed body corporate which finds no place in the Companies Act.

If one looks at other parts of the clause one asks, how is it determined whether the trade union is insolvent? One knows the well-known definition of insolvency in this context—" unable to pay their debts as they become due ". But suppose a proceeding is initiated before the Companies Court. A petition is presented. Suppose the Court holds that under the terms of the Companies Act such a petition lies. As I have said, I should have thought this a matter of very considerable doubt. Suppose it is presented by a creditor in respect of debts which a trade union seems to be unable to pay. I would ask myself, upon the hearing of that petition, what assets is the court to have in view in answering the question, aye or nay, is the trade union able to pay its debts and ought a winding-up order to be made upon the petition?

As I have said, is it only to look at the assets vested in the body corporate? Under Clause 72 those are assets which theretofore were vested under trustees and which under Clause 72 have been vested in the trade union. Or, as one would be rather inclined to suppose looking at Clause 148, is the court's jurisdiction to extend to assets of the members of the trade union? In any event we do not know what the relation of the members of the trade union and the trade union itself, now converted into a corporate entity, are and what are the rules and what rights or obligations the members have towards it.

Earlier we moved that the corporate body should have limited liability. We still do not know whether it is to have limited Lability. I quite understand that the noble and learned Lord the Lord Chancellor said—and it was very helpful of him to do so—" I think further consideration must be given to that aspect of the matter." I do not want to be querulous, nor to make complaints; but here we are at Clause 88, some time later in terms of hours of discussion, having passed Clause 72, and I would respectfully submit to the Government Front Bench that they ought by now—and very likely the noble Baroness will do so—to give a very full account in answer to the questions I am putting.

The Government ought by now to know what is to be the procedure and what is the mechanism to be brought into play if a question arises as to whether a trade union is insolvent and unable to pay its debts. Who can put the petition on the file? What discretion is the court to have? What assets is the court to look at'? Is the court only to look at assets previously vested by trustees on behalf of the union and under Clause 72 vested in the union, or to look at some or all the assets of members of the trade union and, if so, subject to what qualifications? How can the court decide whether or not to wind up a trade union even if it knows specifically what are the debts of the body corporate, unless it can have the answers to the questions I have put and knows what are the assets which can be made available to discharge those debts?

That is a mouthful, and I apologise to the noble Baroness. I should have given her notice of these questions although in a sense I did give her notice on Clause 72 that I should be raising them. I think she will agree that they are matters of importance which should be answered before we pass this clause and that we ought to be enlightened by the Government.

5.9 p.m.


Before the noble Baroness replies to my noble friend Lord Stow Hill, will she answer this question? Subsection (2) of Clause 88 says: The organisations to which this section applies are trade unions and employers' associations. Your Lordships have just assented to the establishment of a special register. When this Bill becomes law we shall in future concerning trade union organisations have what 1 call a form of snobbery. We shall have a register and then we shall have a special register which will apply, as the noble Lord, Lord Windlesham, said earlier, to those organisations which have certain qualifications. Can the noble Baroness tell your Lordships whether this will apply to all organisations, irrespective of on which register they are?


The Committee are always grateful to the noble Lord, Lord Stow Hill, when he rises and poses these terrible questions—terrible but very necessary for us to consider. I am rather glad of the opportunity once again to refer to the question of limited liability about which he asked and its relation to the Companies Act. I did not have the opportunity to do so when we discussed Clause 72. As I am advised, the position at the moment so far as funds are concerned is more favourable to the unions than similar provisions in the Companies Act, in two ways: first, registered trade unions are given the opportunity to safeguard their provident funds by separating them completely from their other activities; second, individual members and officials will have no liability to meet any union debts beyond the payment of their normal subscriptions. On the other hand, members of companies have to meet their companies' liabilities up to the full amount of their share holding or, in the case of a company limited by guarantee, up to the limit of that guarantee; because liability for these is imposed by the Companies Act 1948.

When we turn to this particular clause, Clause 88, we find that its object is to give the Chief Registrar of trade unions and employers' associations powers which are broadly similar to those proposed for the Chief Registrar of Friendly Societies under Clause 5 of the 1970 Friendly Societies Bill, which I understand was introduced in your Lordships' House. Its intention is to bring the financial control relating to trade unions and employers' associations more closely into line with those relating to friendly, industrial and provident societies. The powers proposed for the Chief Registrar under subsection (1) are in fact rather narrower than those proposed for the Chief Registrar of Friendly Societies, because the latter would be authorised to arrange an inspection of an organisation if it appeared to be in the interests of members or the public, whereas this clause limits the right of inspection to causes of suspected insolvency. Under the existing law I am advised that any provision in the Companies Act is made inapplicable to trade unions by Section 5 of the Trade Unions Act 1871. But the Bill repeals the 1871 Act and will re-enact that part of Section 5 which prevents registration as a company of any organisation of workers or employers' association. It will not re-enact the exclusion of trade unions from the application of the Companies Act, so the winding-up provisions in Clause 88 will be applicable as proposed in this clause.

The noble Lord, Lord Taylor of Mansfield, asked about the bodies on the special register. These are exempt under Clause 88, but because of the. way they are incorporated there are very strict requirements as to their accounts and the audit of accounts. I can refer to the various sections of the Companies Act in that connection, but I do not think that the noble Lord will particularly wish me to read them out. But I think that the noble Lord, Lord Stow Hill, will recall that when my noble and learned friend the Lord Chancellor was referring to the Amendments to Clause 72 he said that we might consider whether in fact these provisions—and this includes Clause 88 in the respects to which the noble Lord referred—were absolutely watertight. I think that our joint inten tion is the same; we want to make sure that they are watertight. I shall certainly see whether there is anything more that can be done, if it should be necessary.


I am sincerely grateful to the noble Baroness for her full answer and for the thorough way in which she has obviously studied what was said before of the problems arising out of this clause. With respect, I am not certain—I want to study what she has said—that I feel wholly convinced by the advice she has given with regard to the effect of the repeal of Section 5 of the Trade Unions Act 1871. I shall wish to study that fully. It may be that the Government will wish to give further consideration to that to see (as the noble Baroness said) whether it works. I am in some slight doubt about it. I also feel that she did not quite answer the dilemma I sought to pose before and which I still feel. If the effect of Clause 72 is simply to invest in the corporate body property previously held by the trustees, I do not understand how Clause 148(2)(b) can stand up, as it were, beside it. The two are inconsistent. If the body is corporate and the only property vested in it is property previously vested in the trustees, what is the point of excluding from the property which can be taken in execution of judgment against the trade union any property belonging to any member of the trade union or employers' association, otherwise than jointly held in common with the other members of it?

As I read Clause 72, such property in any event does not vest in the trade union. Why it should be necessary to limit the property taken in execution to property jointly held by the members, I do not follow. No doubt the noble Baroness will give further consideration to that point. I quite understand that it is difficult to deal with these points as they arise in a very complicated situation. I shall be content if she says she will give further thought to it. My difficulty is that I do not understand the consistency between Clauses 148, 72 and 88.


I should like to say to the noble Lord, Lord Stow Hill, that before we reach Clause 148 we will give consideration to the points he has made to-day—as was indicated by my noble and learned friend the Lord Chancellor.

5.18 p.m.


I echo my noble friend's gratitude to the noble Baroness, particularly for her saying that the whole of this matter is still under consideration. We are also grateful to my noble friend, Lord Stow Hill, for raising those important matters. If they are still under consideration, then. I should like to add another to the agenda, so to speak, rather than submit it for immediate answer; but I must trouble the Committee with the detail so that it will be on the Record. I am going to talk about insolvency, and the reason why I attach so much importance to it is that here is a clause which gives the Chief Registrar power to wind up a union. Death to the union! We want to be absolutely sure that that power is not capable of misinterpretation. As I understand the clause, and as the noble Baroness has confirmed, the present position is that if the Bill goes through, including the re-enactment and cancellations, the effect will be that the winding-up provisions of the Companies Act will apply here.

Presumably this will mean that insolvency is to be interpreted for these purposes in the same way as it is to be interpreted for its various purposes under the Companies Act. One of those purposes—with respect to my noble friend, as it was touched on by my noble friend, Lord Stow Hill—is the ability to meet one's debts as they fall due. There is another definition in the Companies Act for the purposes of winding up which is a much more troublesome one, and which is very little used. The Government are fully aware of the matters that have been happening in recent times—let me put it that way. It is a definition of insolvency which involves the revaluing of all assets and liabilities at the moment of inquiry on the basis of the amounts likely to be involved, likely to be realised, and likely to be called on to be paid out, and whether that results in solvency or insolvency at that moment of inquiry. On that basis—and noble Lords will be surprised at what I am now going to say—a large number of the most substantial companies in this country are at the moment insolvent.

I must make that dramatic statement to make the House realise the seriousness of what I am talking about, because every large company which invests in large amounts of fixed plant and specialises is in this position. It has got a large, specialised and sophisticated plant which is essential for its large-scale production, which costs a great deal of money to set up, but is worth very little—indeed very little more than scrap iron value —if it has to be sold overnight because of liquidation. The reason is that, by the nature of the situation, it is highly specialised, of great value to the company as a going concern, of very little value to anybody else. There are a number of very large companies, highly capitalised, which have that situation. The gearing of their capital is such that the whole of their share capital is invested in this plant, and indeed they may go further and borrow on debentures repayable over a period of years in order to provide themselves with sufficient finance for this large and sophisticated plant. That is the picture I am putting before the Committee. I will relate this to a union in a moment.

In that situation, where a company has offended against the Companies Actin that a person has traded or caused the company to trade and incur debts—incurred credit, it is an offence, and those who have acted in this way, directors or persons acting as directors, are liable not only to be proescuted—I think this is one of the rare cases where there are two penalties, both a criminal and a civil one—but also to have to pay a very large sum of money. It might be extremely large, depending on the amount of credit that has been taken up; namely, they would have to repay the whole of the credit that might be involved. That is the situation which is very rarely relied upon—I have inquired about the number of prosecutions that have taken place—because it is somewhat unreal, but nevertheless is in the Statute Book and, as I understand it, will apply to a trade union.

I now relate it to a trade union. Take the case of a trade union which has bought a very large, freehold property, at a very large price. There is no question that the price would be large. Suppose it has for this purpose put in part of its own funds, and borrowed on promissory notes or debentures or something in order to pay off over a period of years the cost of the freehold property. If it is a freehold property in a normal situation, of course, it will retain its value; but one can imagine a freehold property suitable for the trade union being in an area which is going to be developed in an unsatisfactory way, where blight is going to apply, and where the capital value is going to fall considerably owing to some unforeseen circumstances. The trade union is then going to find itself in a position of having debts to pay over a period, which it would be able to pay in the normal way, and if no Registrar came and made inquiries it would continue to pay its way. Out of its membership fees it would build up a surplus each year sufficient to repay the debentures and all would be well.

What I am saying is, let us imagine a situation in which a trade union is carrying on perfectly satisfactorily, in the sense that it is building up a surplus each year with which to repay its debentures or what is has borrowed to acquire its freehold premises. There comes a point at which, for some reason or other, this clause applies and an inspection takes place, and the Registrar wants to know whether the trade union is insolvent. The inspector goes along, looks at the premises, and finds there has been an order by the local authority and the whole of the area is going to be pulled down, or there is some unforeseen circumstance affecting the price of the property and the property is going to be worth only one-tenth of what it originally cost. Then the inspector has to consider whether the union is insolvent, not unable to meet its debts if the union carries on in the ordinary way and out of its annual surplus from membership fees meets the debts on the dates due, but whether at that moment of time on a revaluation of assets and liabilities it can do so.

Of course, the inspector will come to the conclusion that the union cannot, by virtue of this drop in the value of its premises, by virtue of the provision in the debentures, saying " If anybody issues a writ against the union then the whole of the capital borrowed must immediately become repayable ", or some quite familiar position of that kind. Then it would be in the situation in which debts would be either due or have to be counted as being due: the assets would have to be revalued, and the two sides would not balance. The Registrar would say, " I am very sorry. I am required under this clause to wind up the union."

It has been a long explanation. I am sorry to have explained it all at such length, but this is a very, very troublesome clause. The Government are aware of that. What I want to do is to prevent the unions, and indeed the Registrar, from having to act in an unreasonable way because certain sections of the Companies Act—which will apply by virtue of this Bill, which will apply to trade unions—will be made to apply, and will therefore inevitably apply harshly. It is that which I naturally want to avoid. All I am saying to the noble Baroness, as she has already been good enough to say she will give further consideration to the points raised by my noble friend, Lord Stow Hill, is that I would be grateful if she would give further consideration to the difficulties which I have indicated might arise. I do not say, of course, that they will necessarily arise, but they might well arise, and when we are dealing with legislation we have to be as far sighted as we can.

5.29 p.m.


I think the Committee will be grateful to the noble Lord, Lord Diamond, for giving expression with great clarity, if I may say so, to a very understandable anxiety. He asked whether I would add to the agenda the definition of " insolvency ". Of course, he was quite right to point out that if a union was, through any very unfortunate and we hope rare circumstance, declared insolvent it might have to dispose of its assets at a very unfavourable moment, and he instanced freehold property. That is rather in my mind because only last night we had a small Scottish Bill in which we do not call a mortgage " a mortgage ", we call it " a heritable security ". But it was really on those lines, about that type of fixed loan and investment, that we had a discussion only yesterday evening.

I think I should point out that the Companies Act is not invoked until after the Registrar is satisfied that the union for the employers' association is insolvent, and creditors or other people are not able themselves to apply for the winding-up of the organisation. I think it is very important to put this on the record. The object of Clause 88 is to enable the Registrar, after there has been an inspection, to apply for a winding-up order when a trade union is unable to meet its financial commitments. What the noble Lord, Lord Diamond, was really saying was that many large companies, and perhaps many individuals, are in fact insolvent if you take into account what they are borrowing from their bank managers or from elsewhere. But I will undertake to see that we look into the definition of the word " insolvency " and I quite understand his concern.

Clause 88 agreed to.

Clause 89 agreed to.

Clause 90 [Cancellation by Registrar on request or where organisation ceases to exist]:

THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD BELSTEAD) moved Amendment No. 263BBBB. Page 69, line 35, leave out (" may at any time ") and insert (" shall ")

The noble Lord said: With the permission of the Committee, I will discuss Amendments Nos. 263CCCC and 263DDDD with this Amendment. In another place considerable anxiety was expressed by the Opposition that the Registrar might for some reason refuse to cancel the registration of a trade union when requested to do so. An Amendment was then accepted to make plain that the:re was no intention of refusing cancellation when the organisation no longer wished to remain registered. This first Amendment is intended to make more plain that if the organisation requests it, the Registrar must cancel its registration. The other two Amendments changed the drafting to take account of this change. I am sure we are all agreed that the Registrar has no need of any discretion in this matter, and I therefore commend these Amendments to the Committee.


I beg to move Amendment No. 263CCCC.

Amendment moved— Page 69, line 39, leave out (" at the request of the organisation ") and insert (" if he is requested by the organisation to do so ").(Lord Belstead.)


I beg to move Amendment No. 263DDDD.

Amendment moved— Page 70, line 1, leave out from (" Where ") to (" he ") in line 2 and insert (" under this section the registrar cancels the registration of an organisation ").—(Lord Belstead.)

5.35 p.m.

LORD DIAMOND moved Amendment No. 263XX:

Page 70, line 3, at end insert— (" (3) Such cancellation shall not affect the traditional tax exemption to any organisation of workers which would have been eligible to register under the Trade Union Act 1871 in respect of provident benefits for which they are now eligible under section 338 of the Income Tax and Corporation Taxes Act 1970.")

The noble Lord said: This is closely comparable with an Amendment which we discussed fairly fully only yesterday, and therefore it would not be right for me to seek to occupy a great deal of your Lordships' time discussing it again in its application to this clause. Although it is, of course, a new clause and a new application, I am bound to recognise that fundamentally the point is very similar to the one I raised previously. But as we do have the opportunity, I should like shortly to raise one aspect on this matter with the Government, and with the noble and learned Lord, who, I gather is to reply.


I was not aware that I am going to reply to this Amendment, but I will pay close attention to what the noble Lord says, and will endeavour to do so.


The noble and learned Lord was looking at me with such pleasurable anticipation that I assumed he was wishing to reply. Whoever is to deal with this Amendment on behalf of the Government I want to refer to the continued eligibility of the unions to have their liability for income tax and corporation tax to be treated in the same way as previously in relation to its provident fund. We discussed this fully yesterday. I want to refer to what was said in the other place by the Secretary of State when this matter was being discussed. He said: 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. So here we have the Government, through their responsible Minister on this matter of industrial relations, recognising the difficulties which I described yesterday and which may amount to the loss of up to three-quarters of a million pounds a year for one union alone. The difficulties are so great that they would have to be met.

The Secretary of State was saying that if it were necessary he would set up a special register. He continued: But it is not necessary. I have gone into this most carefully. I am told that there is no technical, constitutional or legal difficulty. That is a very wide undertaking. 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 REPORT, Commons 23/3/71; col. 335.] What we were discussing yesterday, and it is again under discussion, was the provident funds of unions and a situation where a trade union was being compelled, under duress, to register as a union lest it should be denied the continued benefit of the treatment for income tax and corporation tax purposes which has always been available.

I will repeat very shortly what I said yesterday. The reason why this treatment is what it has always been is because all Governments have taken the view that it is right and wise to encourage saving of this kind for provident purposes —for funeral expenses, for a rainy day, for misfortunes at one time or another—and have given, and continue to give, tax inducements for that saving. The most obvious and continuing case is the relief which everybody gets on his insurance premium, for saving against a rainy day. This is a matter, therefore, of public policy which all Governments have recognised, but the benefit of which is to be denied to trade unions unless they register under this Bill and take on the additional responsibility which registration involves. That is a damaging step, so far as trade unions are concerned, and it is a step they would not wish to take unless they are compelled—as one union has said it will be compelled—to do so, in order to gain these benefits.

That is the background of what we are discussing, and the point to which I am drawing attention is the statement of the Secretary of State that the Acts of 1965 and 1896 are available for registering for the provident funds of unions. I wish to say to the Government that my advice is that there seems to be some possible doubt about the inclusive accuracy of the Secretary of State's statement. I therefore want confirmation from the Government that what the Secretary of State said is right; that there is no doubt but that the provident funds could be hived off from the union and registered in this way so as to continue the same tax treatment for income tax and corporation tax purposes, notwithstanding that the parent union, the union whose members have contributed to, and whose members are entitled to the benefits of, the provident funds does not register under the Bill.

5.41 p.m.


Perhaps I should say first of all that we are dealing in this clause with voluntary cancellation of registration. The Registrar may cancel the entry of an organisation at the request of the organisation, or if the Registrar is satisfied that that organisation has ceased to exist. What 'the noble Lord is implying here is that there may be cases where the registered trade union is compelled to withdraw or a body registered on the provisional register feels that it must withdraw. As I am advised, the position is that although a trade union or other workers' organisation is prevented by Clause 150 from registering as a friendly society, there is nothing to stop it from setting up a separate friendly society for that purpose. Such a body would be limited to provident activities and could in no circumstances act as a trade union, but it could continue to enjoy broadly the same tax concessions in respect of provident benefits.

Clause 148 will encourage this kind of action for other reasons. It is intended to protect non-militant funds from compensation claims. Such funds must be completely separate, so that it is not possible to get at them for militant purposes. In practical terms, this means putting provident funds in the hands of separate trustees, which is more or less the same thing as setting up a separate friendly society.

The first point one has to make is that this is a matter of choice for an individual organisation in almost every case, because they will automatically go on to the provisional register and it will then be open to them to choose whether or not to withdraw. If they do not withdraw, then if they are eligible for full registration they will be issued with their certificate and will be incorporated. They will have six months in which to make that decision. That is a matter for their individual choice, but there will be some organisations of workers at the present time who are not on the register. They will have to make a decision whether or not to apply to go on to the provisional register. But for the rest all that is required is for the registered trade union or the union on the provisional register to decide for itself whether it wants to remain registered or to withdraw from registration under this clause. If it decides that it does not want to remain on the register, then, as I have said, there is nothing to prevent it setting up a separate friendly society for the purposes of its benevolent funds.


The noble Lord will appreciate that he has made a very important statement. It confirms precisely What the Secretary of State said. It is not a controversial statement, although it deals with a highly controversial matter. While thanking the noble Lord for the clarity of what he has already said—and he is right in saying that we put down the Amendment to take care of the kind of event which he himself has described—may I ask one further question. In the event of an organisation withdrawing from the register, as is contemplated by this clause, and setting up its own separate provident friendly society, would the transfer of existing provident funds from the union to the new society be any bar to the income arising from the funds transferred continuing to be treated as it has previously been treated; that is to say, exempt from taxation under the conditions and various maxima laid down Which are well known to your Lordships House?

The noble Lord has made it clear that there is nothing to prevent a trade union setting up a new organisation under the Friendly Societies Act 1896 to deal exclusively with what he called nonmilitant matters, by which I understood him to mean industrial matters in the normal course of events. He has already said that the setting up of such a fund could be organised, and that the funds so applied exclusively for provident purposes would be funds which would earn income which would be treated in the traditional and beneficial way. Taking a circumstance of that kind, coupled with a transfer to that new organisation of the provident fund of the union, the courts would have to inquire into the question of how the income on those old funds would he treated. Would they continue to be treated in the old way, which would be satisfactory, or would they start to be treated in a different way which would be wholly unsatisfactory? I hope I have made the question clear. I am grateful for what the noble Lord has said. I merely want to make sure that his answer covers the circumstance of the transfer of existing funds for provident purposes exclusively.


First, may I again say that we would hope very much that eventually what the noble Lord envisages will occur very rarely indeed. It may be that a union will go out of existence altogether. That is one case. The other case, where it withdraws voluntarily, we hope will not arise. There might be a change of circumstance which might cause it to withdraw. All I can say is that we very much hope that this will not occur very often.

As to the second question, I should not like to answer that " off the cuff ". My general feeling would be that where the funds are held separately at the present time there should not be any great difficulty about it. I should not like to say what the position would be if the funds, as they sometimes are, are merged with other trade union funds. I am afraid that I cannot give the noble Lord a better answer than that now, but I will write to him on the subject.


This is such an important subject. I am delighted with the information we have now obtained, compared with that we had yesterday. Supposing that a union were put on the provisional register and it gives notice that it wants to come off that provisional register. In giving that notice, it also gives notice that so far as these provident funds are concerned it is prepared to take the necessary steps to register them under the Friendly Societies Act as something completely separate from the general funds of the union. Do I understand that now to be the position?


I think that the noble Lord has got it exactly right but for one thing. The tax conLession depends on actual registration under the Friendly Societies Act, not on the basis of it. The noble Lord is exactly right, but with that qualification.


I am grateful to the noble Lord, Lord Drumalbyn, for undertaking to look fully into the matter which I raised and to write to me. I think that would be the most convenient way, but obviously I wish to acquaint my noble friends with his answer. May I say to my noble friend Lord Popplewell that this is not even a second best answer but a tenth best answer. Any union which is able to avail itself of this alternative course will have a number of technical difficulties to get over to achieve this. It will find itself in the awkward position of having two groups of members, one being members of the trade union and the other members of the friendly society.

That is why my noble friend Lord Stow Hill was so right when he asked a question yesterday—to which we have still had no answer of any kind—as to the justification of the Government in dealing with one body of persons in a penalising fashion, when what they seek to do is to penalise another body of persons. In other words, why were the Government penalising potential beneficiaries under provident funds when what they were seeking to do was to penalise members and officials of a trade union for not registering? My noble friend

asked that question several times yesterday, and so far we have had no answer to it. Perhaps the noble and learned Lord the Lord Chancellor would like to give an answer on the logic of this treatment. We will be delighted to hear it. But if not, we regard it as our duty to give the Government a full opportunity of coming back to the matter on Report stage. I am grateful to those who have suggested that the proper course now would be to seek leave to withdraw the Amendment, which I do, having regard to the fact that the noble Lord, Lord Drumalbyn, has been good enough to undertake to consider the matters which we have raised and write to me upon them.

Amendment, by leave, withdrawn.

Clause 90, as amended, agreed to.

Clause 91 [Examination and approval of changes in rules]:

On Question, Whether Clause 91 shall stand part of the Bill?


Clause 91 continues the mischief to which we have drawn attention on many occasions, and I do not wish to spend a great deal of time on it. We have explained our attitude with regard to the Registrar and his excessive powers. We are approaching an area of the Bill which is of enormous importance, and unless my noble friends wish to continue the debate I do not propose to do so, in order to devote the time to a more constructive discussion of the new and even more damaging and mischievous Clauses 92, 93 and 94. Nevertheless, we are satisfied that the contents of Clause 91 are wholly objectionable and that we should divide against it.

5.56 p.m.

On Question, Whether Clause 91 shall be agreed to?

Their Lordships divided: Contents 120; Not-Contents, 47.

Ailwyn, L. Balfour, E. Bledisloe, V.
Airedale, L. Balfour of Inchrye, L. Boston, L.
Albemarle, E. Barnby, L. Bourne, L.
Alport, L. Beauchamp, E. Brabazon of Tara, L.
Amulree, L. Beaumont of Whitley, L. Braye, L.
Auckland, L. Belstead, L. Bridgeman, V.
Balerno, L. Berkeley, Bs. Clifford of Chudleigh, L
Clwyd, L. Hailsham of Saint Marylebone, L. (L. Chancellor.) Rea, L.
Colgrain, L. Rockley, L.
Conesford, L. Hankey, L. Rothermere, V.
Cork and Orrery, E. Harris, L. Rothes, E.
Cottesloe, L. Hatherton, L. Ruthven of Freeland, Ly.
Courtown, E. Henley, L. St. Aldwyn, E.
Cowley, E. Hood, V. St. Helens, L.
Craigavon, V. Hylton-Foster, Bs. St. Just. L.
Cranbrook, E. Inglewood, L. Salisbuiy, M.
Daventry, V. Jellicoe, E. (L. Privy Seal.) Sandford, L.
De Clifford, L. Kemsley, V. Sandys, L.
De La Warr, E. Kilmany, L. Savile, L.
Denham, L. [Teller.] Kindersley, L. Seear, Bs.
Derwernt, L. Lansdowne, M. Sempill, Ly.
Drumalbyn, L. Lauderdale, E. Sherfield, L.
Dundee, E. Lonsdale, E. Somerleyton, L.
Eccles, V. Lothian, M. Stamp. L.
Ellenborough, L. Loudoun, C. Strang, L.
Emmet of Amberley, Bs. Lucas of Chilworth, L. Suffield, L.
Essex, E. Lyell, L. Swinton, E.
Exeter, M. McFadzean, L. Templemore T,.
Falmouth, V. Mancroft, L. Teviet, L.
Ferrers, E Mansfield, E. Teynham, L.
Fisher, L. Massereene and Ferrard, V. Tweedsmuir, L.
Fortescue, E. Milverton, L. Tweedsmuir of Belhelvie, Bs.
Gage, V. Monckton of Brenchley, V. Verulam, E.
Garner, L. Monk Bretton, L. Vivian, L.
Goschen, V. [Teller.] Mowbray and Stourton, L. Wade. L.
Gray, L. Napier and Ettrick, L. Wakefield of Kendal, L.
Greenway, L. Northchurch, Bs. Ward of Witley, V.
Grenfell, L. Oakshott, L. Willingdon, M.
Gridley, L. Poltimore, L. Windlesham, L.
Grimston of Westbury, L. Rankeillour, L. Wolverton, L.
Hailes, L.
Addison, V. Garnsworlhy, L. Royle, L.
Archibald, L. Greenwood of Rossendale, L. Sainsbury, L.
Balogh, L. Henderson, L. St. Davids, V.
Bernstein. L. Heycock, L. Shackleton, L.
Beswick, L. Hilton of Upton, L. [Teller.] Shinwell, L.
Birk, Bs. Hughes, L. Slater, L.
Blyton, L. Jacques, L. Snow, L.
Brockway, L. Janner, L. Sorensen, L
Buckinghamshire, E. Leatherland, L. Stow Hill, L.
Champion, L. Lindgren, L. Summerskill, Bs.
Crook, L. Llewelyn-Davies of Hastoe, Bs. [Teller.] Taylor of Mansfield, I.
Dclacourt-Smith, L. Walston, L.
Diamond, L. Maelor, L. Wells-Pestell, L.
Douglass of Cleveland, L. Moyle, L. Williamson, L.
Faringdon, L. Popplewell, L. Wootton of Abinger, 8s.
Gaitskell, Bs. Ritchie-Calder, L. Wright of Ashton under Lyne, L

On Question, Motion agreed to.

Resolved in the affirmative, and Clause 91 agreed to accordingly.

6.3 p.m.

LORD BELSTEAD moved Amendment No. 263EEEE: After Clause 91, insert the following new clause:

Relaxation of restrictions on charges in rules

".—(1) The provision of this section shall have effect for enabling any organisation to which this section applies to make a change in its rules, whether by altering or revoking existing rules or adding new rules,—

  1. (a) for the purpose of becoming eligible for registration as a trade union or as an employers' association, or
  2. 1006
  3. (b) for the purpose of complying with the requirements of a notice served under section 73(1) or section 91(1) of this Act, or otherwise for the purpose of securing that its rules will be consistent with the principles set out in section 63 of this Act, or with the principles referred to in section 67 of this Act, as the case may be, or that they will comply with the requirements set out in Schedule 4 to this Act.

(2) This section applies to any organisation which is for the time being entered in the provisional register or which is a trade union or an employers' association.

(3) Where at any time after the commencement of this Act the steps which, by the rules of an organisation to which this section applies are required for making a change in the rules for any of the purposes specified in subsection (2) of this section could not, apart from this section. be initiated by reason of a restriction imposed by the rules as to the interval which must elapse between successive changes, or successive proposals for changes, in the rules, the steps so required may be initiated, and any procedures consequential upon those steps may be entered upon and completed, notwithstanding that restriction."

The noble Lord said: Amendment 263MMM was a paving Amendment, and some explanation was given on that occasion. This new clause will apply not only to trade unions and employers' associations, but also to organisations on the provisional and special registers. It will enable all such organisations to take action to alter their rules where necessary in order to be eligible for full registration, and it will enable trade unions, employers' associations and organisations on the special register to take action to alter their rules as may be necessary in order to comply with the requirements of the Bill in accordance with any notice served by the Registrar. I hope your Lordships will be satisfied with that brief explanation, in view of the paving Amendment moved earlier. I beg to move.

LORD BELSTEAD moved Amendment No. 263FFFF: After Clause 91, insert the following new clause:

Inspection of registers and other documents

" The Secretary of State may by regulations make provision with respect to inspection of the registers and other documents kept by the registrar under this Part of this Act, and with respect to the fees to be charged for inspection of any such register or other document."

The noble Lord said: The purpose of this new clause is to make provision for public access to the registers maintained by the new registrar: that is, the registers of trade unions, employers' associations and organisations admitted to the special register. Such a facility is a normal feature of statutory systems for registration and has hitherto applied to registered trade unions by reason of regulations made under Section 13(6) of the Trade Union Act 1871. Since the Bill at present contains no authorisation for regulations concerning inspection of registers and related documents, it is necessary to make separate provision, as in this new clause, which I ask the Committee to accept. I beg to move.

Clause 92 [Inducement of, or threat to induce, breach of contract]:


I must point out to your Lordships that if Amendment 263NNNN is agreed, I am unable to call Amendments 263A and 263BBBB.

6.7 p.m.

LORD HUGHES moved Amendment No. 263NNNN:

Page 70, line 26, leave out subsection (1) and insert— (" (1) An act done by a person or organisation of workers in contemplation or furtherance of an industrial dispute shall not be actionable on the ground only that it induces some other person to break a contract or that it is an interference with the trade, business or employment of some other person, or with the right of some other person to dispose of his capital or his labour as he wills.")

The noble Lord said: I beg to move this Amendment on behalf of my noble friends. In Clauses 92, 93 and 94 we come to a Part of the Bill to which the strongest exception has been taken in many parts of the country and to which my noble friends also wish to object very strongly. The Amendment I am now moving was tabled in another place but was not discussed because it was not called. But some of the things which could properly be said of this Amendment were said in the discussion which took place, particularly on the Amendment which was moved from the Liberal Benches—what was described as the " conscience " Amendment. The Solicitor General, in speaking on this clause in Committee on February 16, made it quite clear that this was specifically aimed at the " wildcat " or unofficial strike; and in the discussion which took place in another place there was a wide-ranging expression of views on this subject.

On this side of the Committee, first of all our objection is centred on the point that protection of the paragraphs of the Bill as they stand does not extend to the non-registered trade unions and, secondly, that the ambit of subsection (1) is far too wide—indeed, so wide that it might well strike at unofficial stoppages arising out of the refusal of workers to do a number of things which have often been done by them and over a long period of time have been regarded as quite proper. For instance, it was pointed out that during the American Civil War Lancashire cotton workers refused to handle imported cotton which had been picked by slave labour. In doing so they expressed the view that to have handled this cotton would have lent support to the Southern States and their desire to perpetuate slave labour in America. In 1920 the London dockers refused to load a ship with arms destined for Russia to be used against the revolutionaries there. The view was expressed that at this time we might have the situation where workers might conscientiously refuse to handle Wasp helicopters going to South Africa. The range of possible objections which people might have included even the possibility that Roman Catholics might object to working on a particular project if they discovered that to do so might help to feather the nest of a manufacturer of the Pill.

The purport of this Amendment is to assert the right of workers to do these things. A strong part of our argument is to criticise the sweeping provisions against inducing or 'threatening to induce which are contained in this clause. It was not only on one side of the House in another place that there were doubts about the correctness of using this word " induce ". Indeed, one Government supporter went so far as to suggest to his right honourable friend that he thought it would be better if Clause 92 (though it was not at that time numbered 92) should be withdrawn altogether, so that an opportunity might be afforded to the Government to bring it forward in a more acceptable form. It has been suggested that, at the very least, " inducing " ought to exclude anything that is indirect or unintentional. The clause, indeed, would not be so bad if the Government had qualified it by saying that it was unfair " knowingly and intentionally to induce " a breach of contract by unofficial action.

But our objection to what this clause does stems from the fact that it seems to 'be accepted that all unofficial strikes are necessarily unfair or bad. Some unofficial strikes undoubtedly fall into that category, and it is not my wish, as I am sure it is not the wish of any of my noble friends, to give encouragement to the strike which in every sense of the word can be called a " wildcat ", unofficial strike. But many of these spontaneous strikes, as I prefer to call them, arise from what seem to the workers concerned to be perfectly legitimate grievances, and in which it seems to them that the right course of action is to walk out there and then—the spontaneous down-tools or walk-out. Such actions will be directly struck at by this clause, irrespective of whether their grievance is justified or not. This seems to us not to be an acceptable situation.

Why should the Bill go to the length of prejudicing what can be regarded, at least in the minds of those who are undertaking it, as a justifiable, spontaneous stoppage? But the position is worse than that, because it does not stop there. The news commentator, who is commentating on an industrial grievance, could be doing so in such a way that, though he is far removed from the industrial dispute, he is regarded as having committed an unfair industrial practice, when all that he is doing is communicating news and making fair comment upon it.

The person who is most likely to be involved in this so-called unfair practice is the shop steward, because it will be regarded as an unfair industrial practice for any person, in contemplation or furtherance of industrial dispute, to induce or threaten to induce another person to break a contract et cetera. It is not the striker but the person inducing the strike who is the object of this provision. It is most likely that he will be a worker on the shop floor who happens to be a shop steward. But not only is it a direct attack upon the shop steward; it interferes with the freedom of the mass media, politicians and others to speak their minds. But I should like to speak to it particularly from the point of view of the difficulties of the man on the shop floor—for example, the shop steward.

On Second Reading, Mr. Carr, the Secretary of State, did not explain very well what was intended. Later on, he gave an interpretation which seemed to help /he situation, but in fact it did not go nearly far enough. The shop steward has an insoluble problem in trying to remain within the law as it was explained by the Solicitor General. For example, if the shop steward himself is acting at each point in accordance with the rules of the union and the authority conferred upon him, he is under no liability. Yet the union may be under liability. This remarkable exposition obviously must give food for thought to the trade unions in redrafting their rules concerning the scope of authority of shop stewards and local officials. As I understand it, the shop steward will be liable during the period until the dispute becomes official. I am talking about the situation where an unofficial strike has taken place and the union has decided to make it an official strike. The shop steward is liable for the position until it becomes official.

In the Guardian, this explanation of the Solicitor General mystified at least one expert commentator on the subject, Mr. Arnold Foster. He wrote: This means that if a shop steward has the authority to call a strike he can do so with impunity, even if it turns out to be an unfair industrial practice under some other clause of the Bill. But in that case, the union and not the shop steward would be liable. If the shop steward has not the authority to call a strike, but calls one nevertheless, he himself is liable, and will still be liable even if his union later makes the strike official. In this case the union can safely do this, because the act of making the original strike unofficial has made it no longer unfair, unless of course it is unfair, anyway, because of some major other provision of the Act. One of our criticisms of this Bill so far as we have gone, and in many places, has been that it is so complicated that it must be exceedingly difficult for the ordinary worker or the ordinary trade union official to make sense of it. It seems to me that in Clauses 92, 93 and 94 we certainly have not entered any area of simplicity. Although I have no real expectation that any Amendment that we may move to this and the subsequent clauses will make the Bill acceptable, I beg to move this Amendment in the

6.19 p.m.


I wonder how far the Government propose to go in the way of Clause 92. What I mean is this. How are they going to catch people who are really determined to induce or to have a strike? What is to stop employees from discussing these things in their homes, in pubs or in clubs? How far are the Government going on this? expectation that, if it were accepted, it would at least make the position a little better than it stands at the present time. I beg to move.

Will they have a series of " private eyes " following these chaps, and putting down exactly what they are saying, in order to prove that they are inducing other people to cause a strike? This really smells of practices that have gone on in Russia, and maybe are going on to-day in Russia, when one member of a family is induced to attack another member, or to give evidence against another member of the family. This clause seems absolutely ridiculous, and it goes much too far.


I should like to support what my noble friend has said. These clauses are some of the most important clauses in the Bill. The definition of what is an unfair industrial practice is extremely important, and the wording of subsection (1) of Clause 92 is very ominous: …to induce or threaten to induce another person to break a contract to which that other person is a party, unless the person so inducing or threatening to induce the breach of contract— (a) a trade union or an employers' association… If we take life on the shop floor, what happens? Certain disputes might arise regarding the payment of a bonus, or it may be some difficulty with regard to piecework based upon some problems on the conveyor belt. People talk, an approach is made to the management, and the management says, " We do not agree with you ". This difficulty develops over a period instead of being dealt with pretty quickly. This is a normal practice in many instances. With a job that is extremely boring, such as one on a conveyor belt, the difficulty is magnified and there is talk, "Let us stop the job; let us walk out. Bring the shop steward in ". But that would be threatening another worker to break his contract because that talk is not with the approval and support of his trade union. Before any discussion can take place. or anything with regard to threatening to stop the job, or strike can take place, there must be approval by the trade union or employers' association.

I could quote a dozen of these instances that come under this particular aspect of unfair practice. For instance, to try to discuss or talk about the unfair dismissal of a worker, whatever that may mean. It could be that a man has committed some disciplinary breach. We all know of a hundred and one issues that can flare up in industry because of an impetuous supervisor or someone of that description. There may have been a repetition of a certain type of situation, and a workman is told. " All right, you can take your cards ". When that happens the shop goes up in flames, as it were. There again that is an unfair industrial practice. I do not want to go through the whole list of them because most of you will know them as well as, if not better than, I do. But a person in circumstances like that is then liable to be brought before the courts and have a penalty inflicted. A situation of that type developing in that way is the quickest way to real trouble. If the penalty inflicted—the fine—is not paid, this amounts to disobeying the court order, and people are then faced with prison sentences.

We often say that the day of going to prison for debt is about over, but there is another way of dealing with it, and that is by imposing a court order. There is a whole chapter of these instances that arise. I think it is extremely dangerous to use the words, " to induce or threaten to induce another person to break his contract ". Instead of doing something towards straightening out industrial relations or establishing firm trade union law, this particular subsection is calculated to increase the difficulties of those engaged in industry.


I think I understand the intention of the Government in this regard. This particular clause is openly making war on shop stewards and hoping to secure the scrapping of the shop stewards system: there is no doubt about that. Shop stewards are going to be handcuffed and manacled from first thing in the morning until last thing at night. I invite noble Lords opposite to consider where industry would be without the services of the shop stewards. Shop stewards, particularly in engineering and allied industries, are not mere agitators; they are also diplomats. In the course of their work they iron out far more differences between the management and the workers than there are cases where their action leads to strikes. I am afraid that instead of improving industrial relations, this handicapping of the shop stewards and this move which will ultimately, in many instances, lead to the abolition of the shop steward system, will do far more harm to industrial relations than it will do good.

Many of your Lordships are probably associated with big engineering companies. The strain in some of those plants is enormous. There may be an occasion where the employer will suddenly speed up the production line, make some minor adjustment in the piecework rate, issue some order about the tea break, or take some other action which may, legitimately or otherwise, irritate the workers on the production line. In cases like that, if there is not a shop steward there as a kind of workers' sergeant-major, it may be that spontaneously the people will just walk out instead of staying behind, listening to their shop steward, asking him to negotiate with the management and perhaps bring about a peaceful settlement of the trouble.

It will not be necessary for the shop steward to stand up and shout, " All out! ", they will all walk out themselves. It may be that the shop stewards will organise a new formula, and instead of saying, " All out, lads! ", they will stand up and ring a bell—a process with which the noble and learned Lord the Lord Chancellor will be familiar. Without the services of shop stewards, industry is going to be far more chaotic than it is to-day. Far more working days are going to be lost than are lost to-day. It is obvious from the wording of this clause that the object is to handcuff the shop stewards and, so far as possible, scrap the whole shop stewards system.


Surely the noble Lord is wrong; he cannot have read the clause correctly. Under paragraph (b), provided the shop steward induces a breach of contract with the authority of his union, he is perfectly in order. This clause seeks to try to prevent unofficial strikes. Surely the noble Lord is in agreement with that.


Must I answer? I know that the clause deals with unofficial strikes. There are many unofficial strikes which deserve to be denounced and I should be among the first to denounce them. But there are some unofficial strikes which spring up spontaneously because of some anti-worker action by the employers. In those cases the workers must not be left defenceless.

6.30 p.m.


I have always tried, in the course of these debates, not to paper over or gloss over differences which have in the end to be discussed and decided by votes. But what I have sought to do is to avoid unnecessary misunderstandings, and the primary object I have in rising now is to clear away some of the misunderstandings because I think that in the end there is a difference which we must discuss. Some of my points may seem therefore a little pedantic, but I hope the Committee will bear with me.

First of all, may I say this. The noble Lord, Lord Hughes, who introduced this Amendment, began by launching what was really a frontal attack on Clauses 92. 93 and 94. I will come back to that very shortly if I may. But may I say to begin with that, although I shall try to deal at any rate cursorily with all the points which have been raised, I am quite conscious that some of them will have to be dealt with in greater depth when we come to look at some more of the individual Amendments which have been put down. To give one example straight away, I am quite convinced that the point made by the noble Lord, Lord Hughes, about the news media is a bad one. I am absolutely convinced that the word " induce " does contain the connotation of deliberate action that he said it ought to contain explicitly, and that nobody who prints the opinion of somebody else in a newspaper or expresses an opinion of his own in a newspaper or reproduces a report in which inflammatory words are used in a newspaper—or, for that matter, on the radio or television—is under any danger at all.

I should need to make a separate speech to justify that rather bald and dogmatic statement, but there will be an opportunity as we go through the clause for me to make that speech and therefore I do not want to do much more now than to state the position.


I would be content, and I am quite certain my noble friends would be content, if the noble and learned Lord were to elaborate on that rather important statement during a debate on the clause stand part, unless he finds a more convenient point for doing so earlier on. But I accept his position, that he wants to leave it at that statement at this point in time.


I am very grateful to the noble Lord because in fact there are quite a number of separate issues. This is one. It has excited quite a lot of anxiety. My own conviction, although nobody is more conscious than I am of his own fallibility, is that the whole of that anxiety is misplaced. But I quite agree with the noble Lord that it would probably be more convenient to probe that question in a little greater depth at a later stage in the sequence of discussions we must have upon this clause.


I wonder whether the noble and learned Lord would permit me to intervene; I am sorry to interrupt a person of his eminence. There is an Amendment down on Clause 132 which should lead to a full debate on this question of journalists and television. Perhaps that might be a better occasion, than to go off at half cock on this particular clause and then have a full-scale debate later.


There is also an Amendment down to Clause 94. I am not trying to dictate to the Committee where they have their debate, but it is important for me to state the position now baldly—to state where I stand on it—so that I am not accepting that criticism but I ask the Committee to postpone judgment on my view about that until we have on one of the other occasions which have been suggested an opportunity to discuss it in a little greater length.

Similarly, this question of prison for contempt of court, raised I think by the noble Lord, Lord Popplewell, is also a pure misconception in this context. It may arise of course in connection with a mandatory order, which is one of the three types of remedy contemplated by a later clause, but it cannot arise in relation to an award of compensation. And may I again rather boldly but shortly state my reason for saying that. The reason is that I shall be bringing into effect (I cannot remember the name of the Act now) the Act which stops imprisonment for debt once and for all, which was passed last year, on August 2. I suppose it is theoretically possible that this Bill may have received the Royal Assent by August 2; but if for the moment the noble Lord, Lord Popplewell, will admit that it is at the worst from his point of view neck and neck, and that by August 2 this Bill either will not have received the Royal Assent or will not have received it sufficiently before August 2 in order to give rise to proceedings for contempt, he can put that fear wholly out of his mind. Various things can be done to somebody who will not pay, but sending him to prison for contempt of court is not one of them. Therefore, we can I think again try and shift that matter away out of our minds in order to concentrate on some of the real problems which exist.

Again to be slightly pedantic, I must point out, although I shall pass from the point almost immediately, that this particular Amendment in the form in which it is proposed would actually do nothing which is not already done rather better and rather more completely by Clause 128 of the Bill. It is limited to what is actionable, and it would give absolutely no protection at all in respect of other unfair industrial practices before the Industrial Court. That is a technical point, and no doubt with greater ingenuity noble Lords opposite could frame an Amendment which achieved something rather more than Clause 128 already does. That, I hope, clears away some of the misconceptions.

Perhaps there are two more preliminary points I ought to make—and I must apologise to the Committee for making rather a long speech about this because I think the Committee would wish to dwell at this stage upon the general picture rather than the particular. But, whatever may be the effect of the clause, I should like to disabuse the noble Lord, Lord Leatherland, that there is any thought in our minds of trying to handcuff shop stewards. I am just as aware as he is, and I think my colleagues are, of their enormous value and the enormous service to industry which shop stewards can do, and are doing, in the main from day to day. They being somewhat numerous, we must expect there to be good ones, bad ones, and indifferent ones. But in fact they perform an indispensable service, and it is not our desire in any way to do away with them or to handcuff them or to hamstring them in the legitimate work which they quite rightly do. Let me say at once that I fully recognise the truth of what the noble Lord, Lord Leatherland, says, that they can very often be—and one hopes will increasingly be—the instrument by which spontaneous outbursts of indignation can be controlled rather than egged on. Obviously, again, there are good, bad and indifferent in any group of men as numerous as shop stewards can be. But I absolutely accept the factual assertions upon which the noble Lord, Lord Leatherland, made his speech.

One more preliminary observation, and that is about the conscience cases which the noble Lord, Lord Hughes, referred to—a somewhat heterogeneous group of cases. There were the Lancashire workers in 1860, or thereabouts who refused to handle cotton from the Confederate States; there were the potential objectors to Wasp helicopters; and there were the group of devout Roman Catholics who would not handle articles which might contain contraceptives. Let me first of all point out that, whatever may be law about that matter—and I am not for the moment going to dogmatise about what it is—it is not affected by this clause at all so far as I can see. This clause is limited to acts, for better or for worse, and indeed this whole sequence of clauses is limited to acts, for better or for worse, in contemplation of furtherance of a trade dispute.

A trade dispute is, I think, defined on page 116 of the Bill. It does not include that kind of dispute at all. Therefore, whatever else we are concerned with, we are not altering the law about that. It may be that the law about that is complicated and difficult to ascertain, as anybody who has read Citrine on Trade Union Law would undoubtedly agree, but this is not a clause which alters it: it does not improve it and it does not make it worse. It leaves it untouched except in so far as such quarrels can be described as a trade dispute. We may come on a little more to this kind of territory when we deal with " extraneous parties " in Clause 94; but even that, if noble Lords will look at the construction of the clause, is still limited to acts in contemplation or furtherance of a trade dispute.


Before the noble and learned Lord leaves that point, I am not following completely what he means when he says that the clause does not cover that kind of dispute. Perhaps he could explain a little more fully. That course of action means that the man feels extremely strongly. After all, I do not apologise for having a wide range of conscience activities, and over a long period of time, because conscience can be a peculiar thing and it can be a very wide-ranging thing. But if the man of conscience felt so strongly about some of these points that he induced some or all of his colleagues to follow his own course of action, would he not be indulging in that kind of dispute?


I think not. I am anxious not to become too technical or over-simple, but if the noble Lord would allow me to use a little intellectual shorthand for a moment, if he will reflect upon the decision in the case of Torquay Hotels v. Cousins or the case of Stratford v. Lindley, he will see that under the existing law the court held against the union officials in both of those cases, but on the basis that there was no industrial dispute in being; and if the noble Lord tries to relate the expression industrial dispute " on page 116 of the Bill to the case of the Roman Catholics and contraceptives, I think he will find that it is either difficult or impossible for him to do so. We are dealing now with actions done in contemplation or furtherance of an industrial dispute. I should have said " industrial dispute " throughout; I think by a lapse of the tongue I allowed myself to use the phrase " trade dispute ". The correct phrase, of course, is " industrial dispute " and it is so defined in Clause 158. So that this is not what these clauses are about.

Again I apologise for the rather inordinate length of what I am saying, but I am trying to open up the discussion into a frank discussion of what our differences may me. The first thing to realise about this sequence of clauses is that we are dealing with what the Donovan Commission described as " a maze ". The legal situation we are now dealing with can by no stretch of the imagination be described as " clear ". It is in fact extremely confused, and I would venture to suggest that as I shall go along one of my themes will be that we are trying to make it a little more clear than it is at the moment. Donovan regarded this as a maze. I respectfully agree with him, and whatever else we are doing is not to confuse the law, and whether we are succeeding or failing in our endeavours we are trying to make it a little more simple. This is the first thing to realise about this sequence of clauses, though naturally with the complication of industrial relations it is not always easy to turn complicated human relations into clear legal phraseology or legal ideas.


Hear, hear!


This of course I accept at once, but if I may say this to those who have just cheered my observation as if I were making an important concession, they are perpetually attacking us for creating what is called a " lawyer's paradise ". I am not altogether attached to that phrase. But if you want to know how lawyers make a lot of money it is by a confused state of the law and not by a clear state of the law, because obviously the more confused the state of the law the more often they will be asked for their opinion. I start by saying that what we are doing is to try to hack away the maze into something which is a little more rational and intelligent. Whether we have succeeded or failed is obviously a matter for the opinion of the Committee, but this is what we are trying to do.

The second point is that Section 3 of the Trade Disputes Act 1906 confers certain privileges and immunities on existing trade unions, and that provides that if in contemplation or furtherance of a trade dispute—and I have the text here if anyone wants me to refer to it, but I take it that most noble Lords are fairly familiar with it—someone tries to induce somebody to break a contract of employment he shall be free from liability in tort for so doing.

Donovan recommended—I forget how much of it was unanimous and how much of it was majority, but part of it was unanimous and part majority—that under the limitation imposed on the community by Section 3 of the Trade Disputes Act 1906, the principle that the contract, the inducement of the breach of which was protected, was a contract of employment, should be removed; and Donovan recommended that any form of inducement of breach of contract should be protected, and not simply the inducement of a breach of contract of employment. Donovan further recommended—and here I am fairly sure that it was a majority, including the chairman, but not a unanimous recommendation—that this should be limited to registered trade unions. That of course is reasonable provided that the conditions of registration are reasonable in themselves. That is a matter about which we have had long debates and I do not want to re-open it; but of course our case is that no responsible body—and we all recognise that the great majority of trade unions are responsible—has anything to fear either from Schedule 4 (in spite of the rather small point about the cost of the brochure which we discussed yesterday) or from Clause 63; that they are no more than what ordinary justice and ordinary good management would require. At any rate Donovan recommended that the protection should be extended to all breaches of contract and not simply to breaches of contract of employment; that it should be extended in that direction but in the other direction limited to registered trade unions under the Donovan Committee's recommendation.

These clauses accept that situation, with two qualifications, both of which arc important and both of which we can discuss in debate; but as Donovan recommended we have extended the protection to all contracts but subject to three qualifications. The first is that we extended it with the qualification which Donovan recommended, that only registered unions should be able to avail themselves of the protection. That is in accordance with the Donovan Report, and I think it is no more than a consequential refinement—and I am not sure that it is even a refinement. Consequential to that, under the umbrella of protection rest those who act with the authority of a union. If they do not have the authority of a union they are not underneath the umbrella of protection.

The two other qualifications are, first, that if a primary piece of industrial action is itself an unfair industrial practice, then secondary action designed to back up an unfair industrial practice should also be an unfair industrial practice. That is the purport of Clause 93, and our view is that this is necessary so as not to make a monkey of the law. This again is something we must probe in depth. But let me say in passing, because 1 am sure the noble Lord, Lord Diamond, or somebody else, will wish to ask me, I fully accept that as it stands at the moment some of the phraseology in Clause 93 is unsatisfactory; and would, pursuant to an undertaking of the Solicitor General, already have put down an Amendment to it, but as I did not like what I was offered I have put it back and hope to have something better still by Report. But the basis of Clause 93 is that nobody should make a monkey of the law by actions in support of industrial action which was itself an unfair industrial practice.


If I may intervene, the noble and learned Lord spoke of the authority of the union, and I inferred that this referred to an organisation of workers not registered and therefore not a trade union. I see in Clause 92(1)(a) a trade union or an employers' association ". Does that mean if a member of a registered trade union discusses with his colleagues a question of influencing a person to break a contract, one of these what are termed unfair industrial practices, it would be exonerated from the penalties involved?


No form of discussion qua discussion, if that is all that is meant, would, as I see it, render anybody liable to penalties at all. But what I am trying to convey at this phase of my argument is that Clause 92 holds an umbrella over registered unions, and as part of the umbrella, as it were, under the umbrella of protection, rest those who act with the authority of registered unions, but not those, whether members of unions or not, who act without that authority. The question of discussion and what amounts to inducement is slightly different, but discussion as such is not involved in the clause.

The other qualification to the Donovan recommendation is that contained in Clause 94. It really deals with the Cousins v. Torquay situation, that where there is no genuine participation in an industrial dispute innocent third parties should be protected from industrial action. That again is a clause which will give rise to a whole complex of questions into which I do not want to go in depth at the present stage. There are a number of different Amendments there, and different questions to be discussed in relation to it. All I am saying at this stage, when we are looking at the sequence of clauses as a whole, is that it is not intrinsically unfair to exonerate wholly innocent third parties from industrial action if they are not contributing to the particular dispute. That is the principle behind Clause 94; the rest, I say at this stage, is draftsmanship. That is the philosophy of this clause. It does mean that we are in dispute with the Labour Party about this. I hope I have not tried to gloss that over, but I have been trying to avoid unnecessary misunderstandings, because what we have to discuss is sufficiently important to make misunderstandings an embarrassment, I hope, to both sides.

One of the things I cannot do is to talk to the Committee and read a note at the same time. I hope it does not mean I have made a ghastly error, but if I have I will try to repair it.


Perhaps I could tell the noble and learned Lord that if at any time he wants me to ask him a long, detailed, unimportant question, I will be glad to do so.


I know I can rely on the noble Lord's co-operation. I shall have to study the note that has been sent to me, but I hope I am on safe ground at the moment.

The thing I am now going to say is controversial. It follows from the philosophy I have been putting forward that we do not accept, and cannot accept, the proposition that unregistered unions should be under the umbrella. This is basic to what I have been describing. This is the point of difference and of substance. In one context or another we have discussed it on a number of occasions. We do attach importance to that. Secondly—and here I would like to try to carry noble Lords with me up to a point—we contemplate at any rate that some employers will be the respondents of complaints of unfair industrial practices. It is I think not a coincidence that in this sequence of Amendments noble Lords have assumed, and I would submit have assumed too readily, that in every case the employer will be the complainant and the respondent will be the trade union or trade union official. We may be wrong about this, but this is not the way we look upon it.

There are a number of cases,.more numerous I think than cases where the union would be the respondent, where the employer can be guilty of an unfair industrial practice. I think the noble Lord, Lord Popplewell, mentioned one, unfair dismissal. We hope that if there are cases of unfair dismissal it will no longer be the case, as it certainly is at the moment and as the noble Lord, Lord Popplewell, pointed out, that the shop floor is in flames immediately it happens; because we hope when the Bill becomes law, and the various imalications come to be appreciated, people will say, " There will be ample compensation available if this is so ", and what is more, compensation will be more if the man is not reinstated. This, I hope, will lead to unions whose members are subject to unfair dismissal taking action through the mechanisms provided by the Act rather than walking out in a fit of spontaneous anger.


In theory it sounds ideal. In actual practice. knowing the men as we do, it is a different story.


What the noble Lord does not know is what they will be like after the Bill is in force. This is something we must wait and see. This, at any rate, is what we believe about it.

The only other thing I think I ought to say at this stage on this Amendment is this. We equally do not hold the umbrella, as I have chosen to call it in, I hope, not unduly over-simplified, language, over people who act without the authority of the union, whether they are union officials or not. I fully accept what one noble Lord said—I think it was the noble Lord, Lord Hughes—that this will probably lead to unions defining the authority they give to their shop stewards rather more precisely tha a they are apt to do at the moment. Personally I hope it does lead to that result, because I think a shop steward is entitled to know where he stands with his union; and if the pressures applied by this clause mean that the union and the shop stewards define what each is able to do with or without special authority more clearly than at the moment, I think the result will be beneficial rather than the opposite.

I do concede—and this is a matter which I must recognise is a matter of difference between us—that our object is to withdraw the umbrella from actions which are wholly unconstitutional and wholly without authority, whether they are trigger happy officials, or whether they are self-appointed leaders who have no authority at all. We believe—and again this may be a matter of difference between us, but it is as well that the two sides of the Committee should understand one another quite clearly about it —that the effect of these provisions will be to strengthen the hand of the official union, because we shall have withdrawn the umbrella of protection from those who act without authority, and are trigger happy. We believe, on the contrary, that the splinter group, the " wild caters ", the minority dedicated to the overthrow of the system of society more than to the promotion of reasonable conditions for their working comrades—that dedicated minority to whom the noble and learned Lord. Lord Donovan. referred on the Second Reading debate, will have something to fear from this clause. We mean that they should. I do not conceal that.

What I do not wholly understand is why so many of the responsible leaders on the other side, who want to strengthen the official unions, who want to strengthen their authority over their members, should be so disturbed at what we are proposing to do. I recognise that they are. I recognise that they are opposing this, but that is the difference between us; and I think that is the matter about which we shall be voting when this Amendment is voted on. I apologise again for this long speech. but this is an important part of this Bill. and I thought your Lordships would wish me to deal with it at length. It may. indeed, save time in dealing with some of the subsequent points.

7.2 p.m.


Would it he an unfair Parliamentary practice to suggest that, as the noble and learned Lord has admitted that his was a very long speech and a speech intended to remove misunderstandings, we might defer consideration until we receive the OFFICIAL REPORT tomorrow morning, and examine it meticulously in order to ascertain whether the misunderstandings have been completely dissipated?


That is not a question for me.


I must confess that seldom in my experience have I listened to such specious pleading, such sophistry of an alleged legal character as, along with other noble Lords, I have just experienced. The noble and learned Lord, the Lord Chancellor, began by saying that it is impossible to debate this clause and this specific Amendment effectively, accurately and in order to remove possible misunderstandings, without reference to subsequent clauses. How right he was! With that observation of the noble and learned Lord I am in full and wholehearted agreement. This is an experience that we have had to endure during the course of our deliberations. We proceed to discuss an Amendment on a specific clause, and then we are informed—and I agree—that it is impossible to debate it accurately and remove any possibility of misunderstanding without reference to subsequent clauses. The noble and learned Lord, although we are debating an Amendment to Clause 92, not that the clause stand part, referred to Clause 94 and even to Clause 128, which refers to action that can be taken against any person who seeks to break a contract. All this is very interesting, but what it had to do with the specific Amendment I am unable to comprehend, except for one thing: that the noble and learned Lord the Lord Chocellor will ask your Lordships to reject it.

In fact, with great respect to my noble friends on the Opposition Front Bench, it has only a limited effect on what, after all, is the solar plexus of this legislation; and that is, what is an unfair industrial practice. That is the issue. If I may say so, much that we have been debating, if I can use a rather odd expression, is " pocket fluff ". This is the very essence of the legislation; and I understand it and, to a considerable degree, appreciate it. I shall tell your Lordships why. Along with noble Lords in all parts of the Committee I dislike unofficial strikes, I believe them, on the whole, to be unnecessary, although I recognise that sometimes they are inevitable. Nevertheless, one dislikes them. They are inconvenient and they are troublesome. They lead to hardship not only to the consumer but to the producer also, the person who is engaged in turbulence. I recognise all that. Of course there is a substantial point of difference between noble Lords on the Government side and noble Lords on the Opposition Benches. Why is that? It is because of the history of the trade union movement and, in particular, what is, after all, an integral element of trade union practice, whether noble Lords dislike it or not. And whatever hardship or inconvenience be the result, this integral element in trade union practice is the withdrawal of labour; not deliberately, sometimes unwittingly, and sometimes gratuitously. It is just as simple as that. What has the worker in his possession? He has the labour, and he is ready to sell it if there is a willing buyer, an employer; but he has the right to withdraw it. At the same time, that withdrawal must be undertaken with a measure of restraint and with the least possible inconvenience; and that we accept.

Let us consider what actually happens. Leave aside the somewhat spectacular incidents that have been disclosed by my noble friend on the Front Bench who led for the Opposition, about the effects on the Roman Catholic persuasion of some workers being asked to engage in the production of the Pill, or what happened during the American Civil War. Those were all very interesting and spectacular incidents. But what really happens on the shop floor? The union engages in a contract. There is a collective agreement. That is the beginning. It is a registered union, and there is a collective agreement. But, despite the collective agreement, despite what is regarded as binding on those engaged on the shop floor and on the employers also, some incident occurs. What kind of incident? A foreman, perhaps in a rather nasty, querulous mood, perhaps having had some quarrel with his spouse early in the morning, arrives at the factory and wants to take it out of somebody. He cannot help himself, and he says something offensive or authoritative to some other worker. The worker resents it and says, " I am leaving ", and asks his colleagues to leave with him. According to the Government, that is an unfair industrial practice. But it is really nothing of the sort. It is a very natural consequence of something that has happened. What do the Government expect is going to happen in that case? I admit—and the noble and learned Lord the Lord Chancellor is absolutely right—that it really is not relevant to this clause, but it is relevant to Clauses 93, 94 and 128. It does not matter very much whether a person induces somebody to break a contract and is therefore regarded as having engaged in an unfair industrial practice. What matters is whether he is going to be penalised in consequence.

What happened with the previous Government? By their legislation—which was not altogether dissimilar from the legislation of the present Government, although there are fundamental differences—they sought to prevent wildcat strikes, to have a cooling-off period, and the like, but their fatal mistake was to inject penal clauses into the legislation. I speak with some knowledge of this matter, because I was very much involved in discussions with the previous Prime Minister and with those in authority. If it had not been for the penal clauses much of that legislation would have been implemented. I am glad to know that my noble friends assent. This is not the occasion to disclose all that happened, although there is nothing sinister about it; it was all above board. But the noble and learned Lord the Lord Chancellor is right in directing attention to Clause 128, which deals with what is actionable and with the kind of penalty that will be consequential.

I do not want to pursue this matter any further. I know that sometimes one speaks at some length. In the course of our earlier proceedings, the noble Lord, Lord Windlesham, suggested that I was making my customary speech at about tea-time. Noble Lords should not worry about that, because they are usually not here at tea-time; they are having tea or are in some other place. I want to ask a simple question about which there can be no misunderstanding. It is as clear as it can be and even the noble and learned Lord cannot misunderstand what I ask. Is he in favour of the Amendment or is he not? If he could make up his mind about that, without going into the 1893 Act with which I am familiar, or the 1871 Act about which I have read then we could get on with the rest of the business.


The answer is no.


Now that he has told us he is not in favour of it, can we decide what we are going to do about it? I suggest that the best thing to do is to divide on it.


May I—


Will the noble Baroness allow me? I think we had an agreement that we would adjourn at about this time and go back to other business.

House resumed.