HL Deb 19 October 1976 vol 375 cc1219-26

7.27 p.m.

Report received.

Clause 1 [Grants and loans]:

Lord MELCHETT moved Amendment No. 1: Page 2, line 19, leave out from ("enterprises") to end of clause.

The noble Lord said: My Lords, back to my old hat again! During the Committee stage on this Bill an Amendment in the name of the noble Baroness, Lady Seear and the noble Lord, Lord Wigoder, was accepted by your Lordships' House after a Division. The effect of the Amendment was to delete the requirement that the relevant body mentioned in the Bill must include among its members one or more representatives of trades unions. In its place was inserted a requirement that the body must include one or more representatives of employees of existing common ownership enterprises. This Amendment in my name would delete all reference to membership of the relevant body. In moving this Amendment I should like to make clear that I in no way accept the arguments put forward by the noble Lord, Lord Wigoder, or the noble Baroness, Lady Seear, or indeed of noble Lords on the Conservative Benches during the Committee stage in your Lordships' House, nor indeed during the Committee stage in another place, for deleting the reference to representatives of the trades unions.

It is still the Government's view that if the relevant body is to function efficiently and workpeople's interests are to be properly represented, it must include such a person among its membership and that this should be specified in the Bill. Nevertheless, I recognise that it is the wish of this House that the reference to trade union representation should be omitted, and in view of the pressures on the timetable and because we are all in favour of the general principles of the Bill and have no wish to see it fall through default, I do not attempt in this House to reinstate the original wording. But I cannot of course rule out the possibility that attempts may be made to do this in another place.

In any case, the present wording as inserted in the Bill at the Committee stage in this House has two substantial defects.

First, it relates only to employees of existing common ownership enterprises and makes no mention of co-operative enterprises, although the "relevant body" must be one which has the purpose of encouraging the development of both common ownership enterprises and co-operative enterprises. This means that a body concerned solely with encouraging the development of co-operative enterprises cannot qualify as a "relevant body", unless it can include among its membership at least one representative of an existing common ownership enterprise.

It would be inappropriate for an organisation with the sole aim of encouraging the development of co-operatives to include such a person among its membership but, unless it does so, the Secretary of State will not be able to make grants or loans to it under the provision because the body could not be classed as a "relevant body". The present wording clearly discriminates against co-operative enterprises. I am sure that this is not what was intended by the proposers of the Amendment or by those who voted for it. Nevertheless, the Amendment has that unfortunate effect.

There is one other smaller flaw in the present wording, in that it almost certainly ensures—again, no doubt, inadvertently—that there would be some considerable and unnecessary delay before the provisions of the Bill could come into force. This is because, before the Secretary of State can recognise a "relevant body", it must, as the Bill is now drafted, include among its members one or more representatives of existing common ownership enterprises. The definition of a "common ownership enterprise" appears in Clause 2(1) and lays down that this is a body that has been granted a certificate by the Registrar of Friendly Societies that certain conditions have been satisfied. Such a certificate cannot be granted until after the Bill has become law and the Registrar has considered applications made to him. This will undoubtedly take some time and would involve delay before the Secretary of State could recognise a "relevant body" and consider making any grants or loans even for the purpose of assisting the advisory function.

The difficulty really is that we have put the cart before the horse in the Amendment because we had always envisaged that the advisory executive of the body would be set up almost immediately upon the Bill's receiving Royal Assent so that it could help existing new common ownership enterprises and co-operative enterprises to go to the Registrar and obtain registration under the Bill. Unfortunately, that will not be possible until somebody has obtained registration and has been put on the advisory body. Again, I am sure that this was not an intentional effect of the Amendment, but I believe that it would complicate setting matters in motion once the Bill gets Royal Assent.

For those reasons, the Government consider it essential that the clause should be amended as I have suggested in Amendment No. 1. The proposal removes any element of discretion from the Secretary of State in considering whether or not to recognise "a relevant body". If the body appears to him to have been constituted for the purpose of encouraging the development of common ownership enterprises or co-operative enterprises, he will be obliged to accept that it is "relevant" regardless of its membership or organisation. However, the Secretary of State will not be obliged to grant or lend money to an unsuitable body. His discretion under subsections (1) and (2) remains and, before funding the relevant body, it would again be necessary to consider whether its membership was sufficiently broad and encompassed the necessary expertise to carry on efficiently the responsibilities envisaged by the Bill.

I am sure that, in assessing the suitability of a relevant body to receive grants or loans, the Secretary of State will wish to ensure that the membership in fact includes a representative of trade unions. As I made it clear when discussing the Amendment at the Committee stage, I know that that will be the wish of those involved in setting up the relevant body and of those involved in existing common ownership bodies and in supporting and encouraging new common ownership enterprises.

As I said at the start, the Government would prefer to reinstate the original wording requiring trade union representation on the body, but it might well be that, if the Bill returned to another place as a contentious piece of legislation, it would fall for lack of time. As I have made clear throughout the passage of the Bill through your Lordships' House, this is a Private Member's Bill but it has the support of the Government. Frankly, I am not prepared to put its chances of reaching the Statute Book in jeopardy because of Party political point scoring. If we can find time in another place, we shall of course seek to reinstate the Bill as it came to your Lordships' House but, if time cannot be found, the present Amendment will ensure that the Bill will reach the Statute Book in a sensible form, and I commend it to your Lordships. I beg to move.

7.36 p.m.


My Lords, I am very pleased that the noble Lord, Lord Melchett, is moving this Amendment, particularly because it takes the provision back to what was proposed on my original Amendment which I withdrew saying that I would return to it at Report. I take the points that the noble Lord has raised. I appreciate his unhappiness, but nothing in life is perfect, as we shall see as well on the next Amendment. Clearly, there must be a considerable amount of give and take in this area. I am slightly surprised that the noble Lord said that this might be changed in another place if time is found, because he assured me that time could not be found. I hope, therefore, that I do not detect a change of heart on this point.

We, of course, supported the Liberal Amendment when it was proposed but as I said when speaking in Committee, I feel that our Amendment is the cleaner and I believe that this has been borne out by what the noble Lord, Lord Melchett, said. I am only too anxious that the Bill should have a speedy passage and I hope that it will not be changed at a later date.


My Lords, I suppose that I have heard an Amendment moved less graciously, but I find it difficult to recall when. The position is perfectly simple: there was found by a substantial majority of your Lordships' House to be a phrase in the original Bill that was thoroughly obnoxious. Two Amendments were put down, one in the name of the noble Lord, Lord Redesdale, and another in the name of the Liberal Party. We made it perfectly clear in Committee that we slightly preferred our Amendment to the Conservative Amendment, but that we were prepared to support the latter if ours was not thought to he marginally better.

What the noble Lord now seeks to do is to remove the Liberal Amendment and substitute the Conservative Amendment. Entirely consistently with what we said in Committee, we accept the position and fully support the Bill and the principles behind it. I have made that perfectly clear and we have no intention whatever of taking any steps at this stage to prejudice the Bill's passage on to the Statute Book this Session. Therefore, we do not oppose the Amendment. In all the circumstances I can only add that I should have liked to say, but unfortunately am not able to, that we are grateful to the noble Lord, Lord Melchett, for his courtesy in notifying us of his intentions to table this Amendment before he did so.


My Lords, I do not want to make too wide an issue of this as we are discussing a small, though very useful, Bill. However, when the noble Lord, Lord Wigoder, suggests that my noble friend was not very gracious in introducing the Amendment, I must say that for my part, I do not feel very gracious about the manner in which the noble Lord referred to the contents of the Bill when discussing the Liberal Amendment. I should like to put it in this way: the function of a trade union has always been to look after the best interests of its members.

In my young days in the trade union movement one had to fight hard to get trade union recognition. But the coming of more power carried with it more responsibility. Therefore we have spent some years of our lives trying to get recognition within trade union movement that they must move further than merely to argue that their job is to safeguard the best interests of their members and that managerial problems are for managment to solve. That was the straight, simple issue.

I know that in a small Bill of this kind it can even be said that the trade union movement has not displayed a great amount of interest in this kind of thing. On the other hand, if we are to see Amendments carried which deliberately delete the mention of a trade union representative, I can visualise some trade union members saying, "All right, if our services in management are not required we will revert to where we were and we will deem our job to be simply to improve the rates of pay and conditions of employment of our people"; because what we are here discussing, when all is said and done, is the acceptance of trade union representatives on what are virtually boards of management.

I do not want to go too widely with this. But it goes a little against the grain with people like myself, and very many of my colleagues, who believe that our work has not been in vain in getting trade unions to a point at which they accept a very wide degree of responsibility, which a few years ago would have been unthinkable—indeed the Social Contract itself exemplifies the manner in which they have moved from their previous position—when we see Amendments to delete the name of a trade union representative. As I said, some time ago they would not have permitted the name of a trade union representative to be on it. If we are to have that kind of thing, which I thought was a very retrograde step indeed, then we must not be too surprised if the speed that has been made in obtaining a responsible attitude in areas over which they now have great power becomes eroded. I am pleased that there is to be no attempt to resurrect the Liberal Amendment, and I commend the Amendment as it is to the House.

Clause 2 [Common Ownership enterprises and co-operative enterprises]:

7.43 p.m.

Lord REDESDALE moved Amendment No. 2: Page 2, line 38, after ("description") insert ("which do not discriminate between persons by reference to politics or religion").

The noble Lord said: My Lords, we were subjected on the last Amendment to a whole lot and, of course, I could not reply. I had no sympathy for the noble Lord's remarks; in fact, I thought they did something to destroy the good will existing on this Bill and what was happening. I deplore very much what he was saying, because it did not really apply all the way along the line. However, as I said earlier, nothing in life is perfect. I was prepared to go along and I still try to offer good will and I am not sure the noble Lord, Lord Melchett, does on this point. I am showing good will on this Amendment, in that I am not entirely happy with it, I must confess. Perhaps it is ironic to move an Amendment which one is not happy with, but I hope it is acceptable to the noble Lord. I would have preferred to have taken out the words "of any other description". However, I accept that that is not perfect, taking those words out, in the Amendment that I did originally propose. This one is not perfect either but it does go a long way towards meeting my particular worries on this, which were mainly of politics or religion. Therefore I will go along with this particular wording.

I hope it is not thought that I am being ungracious in moving this Amendment. I would not do this, and I repeat, as I said earlier, that I wish this Bill a speedy passage and I hope it is not changed in any way, because if it was going to be changed I think I might have to come back to my original Amendment on it. But I have accepted this wording, as I say, because I felt that if it is to go through, and to go through on the nod, this is the way to do it. Consequently, my Lords, I hope graciously, I move this Amendment.


My Lords, I would not accuse anybody of moving the Amendment ungraciously and I entirely accept that the noble Lord moved it with very great grace indeed. During the Committee stage debate on 28th September I undertook to reconsider the point of principle at stake at this point in the Bill which is, broadly, whether or not the expression "other factors of any description" goes too wide. Fears have been expressed on a number of occasions, both in your Lordships' House during the Committee stage and also in another place, that this drafting opens the door to unfair and undesirable discrimination, and that it might constitute an unfortunate precedent for future legislation. The noble Lord, Lord Redesdale, mentioned in particular the two factors which he has now covered in his Amendment, discrimination on grounds of politics or religion, and he gave us the unfortunate and unthinkable example of someone being discriminated against on the grounds that he was a member of the Conservative Party, which of course none of us could possibly imagine happening in any circumstances whatsoever.

My Lords, as I say, I promised to have a further look at the point to take account of the views expressed in this House and in another place. Having done so, I am bound to say that, on legal advice, I remain unconvinced that objectively the dangers that have been seen by noble Lords are very real or very significant. The Government still feel, and are advised, that a general formula in the clause is preferable to the alternative of specifying a number of factors, since it is virtually impossible to determine in advance for all circumstances the sort of factor which would be reasonable in each individual case.

I merely make that point as it has been the advice I have offered your Lordships' House and which my honourable friend offered in another place, and which stays the same. However, I recognise the very real fears that have been expressed and which are met by the noble Lord's Amendment. I make the point again that this is not a Government Bill, it is a Private Member's Bill, and my understanding—my noble friend Lord Lee will be able to confirm whether I have this right—is that in this part of the Bill the Bill's sponsors are aiming to put a statutory definition of the common ownership enterprise on the Statute Book. My understanding is that the sponsors are content to accept the amended definition, since this would remove an obstacle to the progress of the Bill.

It is in the spirit, I hope, of reasonable compromise that the Government are prepared to recognise the force of the anxieties—the very real anxieties, I accept—which have been expressed. As I see it, the Amendment has the very real advantage that it retains a flexible general formula and at the same time excludes the right to make rules which discriminate on the two grounds about which the noble Lord, Lord Redesdale, has expressed most concern. Therefore, I am certainly happy to suggest to your Lordships' House that the Amendment should be accepted.