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Clearly, trade unions—and, incidentally, some other bodies—do types of work that are not appropriate for the sort of regulation provided by the Bill. I am more than happy to consider that issue. I am thinking of work done on behalf of trade union members in pursuit of the core business of the trade union. I entirely agree that regulation that got down to the level of shop steward intervention or advice would not be appropriate. If that is the mischief that the Government are trying to remedy, I am with them. That is right.
Mr. Kidney: Like the hon. Member for Huntingdon (Mr. Djanogly), I have read the Law Society brief. It says that the answer is to limit the exemption to the
“provision of legal services ancillary or incidental to the trade unions’ main employment relations functions.”
That is precisely what the hon. Member for Somerton and Frome (Mr. Heath) has just said. Do any of the amendments do that?
Mr. Heath: My candid view is that they do not. That is why I hope that other wording that does the job will emerge as part of our consideration subsequent to this debate and in another place. There is some common ground—certainly between the hon. Gentleman and me; I am not sure about others—on what is required. We need something in respect of not only trade unions but the other bodies that we have mentioned.
With the honourable exception of the amendment tabled by my hon. Friend the Member for Birmingham, Yardley, the amendments have the deficiency of not dealing with the other mutual bodies that provide services. There should be provision for a kick-in of regulation when the trade union or other body is effectively competing in the marketplace—albeit a limited one, given its membership or associate membership—for the provision of general legal services. I am talking about when there is a legal practice that happens to be within a trade union or mutual context, rather than about the provision of the sort of services that it is reasonable to assume would be provided for members in the pursuit of the objectives of a trade union or other mutual organisation.
Mr. Jones: I agree with the hon. Gentleman. Does he agree that some such issues are caught by the claims-handling regulations? I understand that Durham NUM has now registered with the claims-handling authority as a claims handler.
Mr. Heath: It is interesting; yes, the hon. Gentleman is right in that particular instance. As he knows, I also come from a mining constituency and have also had to deal with the sort of cases that he and the hon. Member for Bassetlaw (John Mann) have had to deal with. I know perfectly well how much the current system has failed individuals who deserve better.
It is right that the issue should be addressed. However, I do not think that the Minister’s blanket exemption fits the bill. It is entirely possible that, with careful drafting, we can arrive at a form of words that exempts the core activities of a trade union but catches activities that fall into the category of general legal practice provided by lawyers who happen to be employed or subject to the supervision of a trade
union. Such wording would apply to other mutual bodies as well as trade unions, so that they were put on an equal footing. There would then be the proverbial level playing field for all concerned.
I look to the Minister to provide assurances that she will explore such issues before the Bill goes to the other place. I hope that a formulation appears that satisfies the conflicting requirements. If we can do that, we will have achieved all our objectives. I am not persuaded by the exemption before us; it would be better if it were taken away and we looked at it again, and if it were considered again at the other end of the corridor. Hopefully, there would be a much better formulation at the end of the day.
I invite my hon. Friend the Member for Birmingham, Yardley to withdraw his amendment. Despite its good intentions and the excellence of much of its content, it, too, does not fit the bill as I have set it out.
John Mann: To varying degrees, there is support on both sides of the House for an exemption for trade unions. I was pleased to see the movement, which Hansard will accurately record, in the speech made by the hon. Member for Huntingdon (Mr. Djanogly). That movement is welcome.
I wish not to repeat the informed comments made in the debate, but merely to pick up on the one inaccuracy in it—an inaccuracy also trailed in The Times today. Presumably to try to create a basis for suggesting that there needs to be a vote, when clearly there need not be, the hon. Gentleman attempts to jump on the coat tails of the scandal of double-charging solicitors and miners’ compensation. To make the record clear and assist in the hon. Gentleman’s and the House’s understanding of the matter, I should say that the four unions that benefited from the double-charging have all done so via solicitors. None has done so through any other mechanisms, except the Union of Democratic Mineworkers, which has used a claims-handling company called Vendside Ltd. That company is not and never could be regulated by the Solicitors Regulation Authority under any of the options before us.
Justice will be done only through legal action in the civil courts. I feel confident that a large number of retired miners and miners’ widows will seek a remedy through the civil courts. If there is a weakness, it is in the claims-handling regulator’s apparent lack of teeth in dealing with such claims handlers.
However, when it comes to those who have gone through solicitors, the Solicitors Disciplinary Tribunal and its misconduct hearings in the next four weeks demonstrate not only that there is regulation through the Law Society, but that that regulation is effective. Later this month, the first of the UDM solicitors will be in front of the tribunal on misconduct charges. Wake Smith and Beresford’s solicitors both go this month, and a series of others will follow them. In November, the solicitors for the Yorkshire NUM, Raley’s, which, the House may recall, double-charged not only miners but their widows, against the rulebook, will go in front of the disciplinary tribunal.
People using the existing systems have been able to get their money back and, when their solicitors have fought, have got compensation on top. There are many more to go. Just this weekend, I discovered that a
management union called the Colliery Officials and Staff Association had been using a solicitors firm called Browells. I have had no cause to take issue with the firm until now; it was collecting 4 per cent. for COSA from one of my constituents. It is not entitled to do so.
The remedy is straightforward. That cosy relationship has been exposed. If parts of the NUM, the UDM or COSA, via Browells, and if the National Association of Colliery Overmen, Deputies and Shotfirers in south Wales—one of the unions that has profited most via its solicitors—choose to profit through their solicitors, the remedies exist. It is disingenuous for the hon. Member for Huntingdon to throw such issues into the debate when he knows full well that they have nothing to do with it. I suggest that in future he should stick to the facts instead of embellishing his case in a most unbecoming manner.
Tony Lloyd (Manchester, Central) (Lab): I begin by pointing out to the House that I had to miss the earlier part of the debate because I had to go to this evening’s meeting of the parliamentary Labour party.
My hon. Friend the Member for Bassetlaw (John Mann) touched on an important point. A very badly written article that appeared in The Times this morning seemed to imply that the amendments were something to do with the miners’ compensation scheme, which, in reality, is completely irrelevant to the impact of the Bill. The hon. Member for Huntingdon (Mr. Djanogly) shakes his head. I am happy to give way if he can demonstrate how they are connected. He chooses not to do that, which is interesting in itself because it begins to get us to the whole Conservative—
Mr. Djanogly: The hon. Gentleman is right inasmuch as the miners’ compensation scheme refers to incidents that happened before the Bill, so I suppose that he could say it is irrelevant. However, the issues involved in the scheme are directly relevant to the issues in the Bill, as I made clear—if he had been here for my earlier remarks, he would understand that.
Tony Lloyd: The hon. Gentleman simply digs a bigger hole for himself. The simple truth is that, as my hon. Friends the Members for Bassetlaw and for North Durham (Mr. Jones) demonstrated, there was a remedy, which has been sought and taken in some cases. To that extent, there was no relevance in the charge made by the hon. Member for Huntingdon. I hope he will accept that that leads us to the view that this is rather more a splenetic attack on trade unions than a considered assault on real events on the basis of which a case could be made for the need for further regulation of trade unions. Neither the hon. Gentleman, in the remarks of his that I heard, nor the hon. Member for Somerton and Frome (Mr. Heath) gave us any examples of where there is a problem caused by representatives of trade unions—shop stewards or others—that would be remedied were the amendments to be accepted. That is a very important point. I hope that my hon. Friend the Minister takes this strongly on board, because it would be absurd to move unions along a track that is not necessary at this time.
The majority of trade unions now subcontract out, to solicitors or elsewhere, the provision of their legal services, so they would be beyond the impact of the Bill. A small number of trade unions still maintain an in-house professional legal service but, as my hon. Friends have pointed out, such services are regulated in any case. We would end up with the absurd situation whereby if two shop stewards from two different unions were advising members of their union in the same workplace on the same series of events, the union that contracted out its legal services would be able to do that without any concern whatsoever, while the union that did not would find itself in a much more restricted position and would be unable to provide the same service to its members. It would be absurd to have that difference in standards between trade unions.
Many words have already been spoken about this. Let me conclude by saying that it will be viewed as scandalous by ordinary trade unionists throughout the country that trade unions are being attacked not because of any real offence that has existed in the past and would be remedied by these amendments but because, once again, the Opposition parties are combining to attack free trade unions in our society. That is very regrettable, and I hope that it will be registered by the public. I notice that the Opposition have not managed to assemble enormous support for this on their own Benches; I hope that that, too, will register with the public. On that basis, I hope that the House will resist the amendments as being unworthy and irrelevant.
Bridget Prentice: This has been a very interesting debate, and it is not surprising that it has divided us in this way. As my hon. Friend the Member for Manchester, Central (Tony Lloyd) said, perhaps some Opposition Members have not yet come into the real world and understood the role of trade unions within it.
I shall begin with the amendment tabled by the hon. Member for Birmingham, Yardley (John Hemming) and explain why I do not think that it is necessary or desirable. Yes indeed, special provision has been made for trade unions, and it might be tempting to make similar provision for other membership bodies, but it is not necessary and there would be risks in going down that road.
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Let me deal first with the question of whether the provision is necessary. The reason why we have made special provision for trade unions, as we were at pains to explain in Committee, and as my hon. Friends have said this evening, is to deal with the special position that they are in. A lot of valuable advice is given by non-lawyer union staff to their fellow members. If unions had to be regulated as entities, some of them would be unable to put into position the necessary arrangements and would therefore have to stop their officials giving that advice. The amendments agreed in Committee ensure that there is absolutely no doubt about the unions’ position. They give clarity by setting out that services provided to union members are not being provided to the rest of the public.
When I explained that in Committee, I mentioned that other types of membership organisation can also
benefit from the provisions in clause 15. To remind the House, that clause provides that where a body’s employees are carrying out reserved legal activities, the body itself is not doing so if the provision of services to the public or to a section of the public is not part of its business. A membership organisation whose employees are providing services only to members will generally fall within that definition. If there is any doubt about its position, it can seek an order under subsection (7), which defines what is or is not a section of the public.
By their very nature, trade unions are unlike other organisations, and I do not consider that there is a case for making a provision such as subsection (6) in respect of other bodies. Even if I were persuaded of that, there are potential problems with amendment No. 152. For example, it singles out bodies whose members are engaged in a particular trade or profession. That is, of course, only one type of membership body. In Committee we discussed others, including motoring organisations and even the Hospital Saturday Fund, which was mentioned by the hon. Member for North Southwark and Bermondsey (Simon Hughes). If the House were to agree to the amendment, those bodies would still not be subject to specific provision and would still need to use the general provision in subsection (4) and, if necessary, subsection (7). That might work, but it would be unnecessary and would create risks for the clause 15 exemptions. I find it hard to see why we should make special provision for trade bodies and not for others.
There are other problems. None of those types of body has the special circumstances of trade unions. If we make special provision for one class of bodies, we risk making life harder for others. That could lead to an increase in attempts to abuse the system, as unscrupulous businesses tried to badge themselves as representing members of a trade or profession. Although the legal services board would eventually root them out, there would be a period of time when consumers could suffer. In addition, some might conclude in future that because Parliament had given treatment to one group of people, it must by implication have intended that other groups should not get access to equivalent treatment. That could make it harder for genuine cases, particularly ones which we are unable to anticipate at the moment, including those who may need to secure an exemption under subsection (7). I do not think that that is what the hon. Member for Birmingham, Yardley would want to happen. I assure the House that the order-making power under subsection (7) is available to any category of membership body—to make that absolutely clear, should there be any doubt. Without better evidence that other groups need different treatment, I see no reason why we should provide it and risk undesirable consequences in doing so. On that basis, I hope that the hon. Gentleman will feel able to withdraw his amendment.
The other amendments in this group are clearly intended to reverse the trade union amendments agreed in Committee. We believed that the amendments to clause 15 were necessary in order to give effect to the policy set out by my noble Friend Lord Falconer in the other place. It is unfair for the hon. Member for Huntingdon (Mr. Djanogly) to suggest that they were sneaked in during Committee sittings. The then Lord
Chancellor made it absolutely clear in the other place that the amendments would be introduced. I am sorry that we were not able to bring them forward sooner, but it is right that we have introduced them.
It is really important that we do not inhibit the trade unions’ scope to work for their members. They provide a socially useful service to millions of people—one that helps to foster good labour relations while helping union members to stand up for their rights. It seems rather sad that I have to spell that out, but it is obvious that Opposition Members are either deliberately or naively unaware of the important role that trade unions play in our society. To require unions to be regulated as entities and licensed as ABS bodies in all circumstances could cause problems, particularly for the smaller unions. They might have to shut down their legal services altogether, with the result that access to justice, which I know is at the forefront of the minds of Opposition Members, would be reduced, not improved.
Mr. Djanogly: The Minister discussed how alternative business structures would apply to trademark attorneys and patent attorneys—small bodies that provide a good service quite separate from mutual societies. They will all have to be licensed and regulated because the Clementi vision was all-encompassing. Why are the Government carving out trade unions from the process?
Bridget Prentice: To be fair to the hon. Gentleman, I have already answered that question with regard to the different role that trade unions play in our society.
In Committee I set out the limitations of the Government amendments. First, they apply only where a union is providing services to its members and others with similar rights. If it expands into more commercial work, it will be regulated as an entity and it will have to be licensed. In other words, the clause 15 exemption would not apply. Secondly, all reserved services still have to be provided by qualified lawyers, subject to the regulation of bodies such as the Law Society, and my hon. Friends have already made that clear. Regulators will be able to change their rules if problems arise so that lawyers could effectively be prevented from working within bodies that are not regulated, or they could be limited in the services that they provide.
Such rules could not force trade unions to become ABS bodies in order to get round the problem. Clause 15 means that they are not carrying out reserved legal activities, which means that they do not need to be licensed under part 5 of the Bill. A regulator’s rules cannot change that. There is, none the less, some scope for regulators to constrain lawyers working in environments where they have cause for concern.
If the Opposition amendments are passed today, they will not guarantee that trade unions will be regulated as entities and licensed as ABSs. The amendments would only remove a clause that confirms an exemption to which trade unions already have access in certain circumstances. To explain, clause 15 contains a general rule about employed lawyers. It provides that, where an employed lawyer is carrying out reserved activities, the employer is not considered to be carrying out such activities for the purposes of regulation under the Bill as long as the provision of reserved services to the public or to a section of the
public is not part of the employer’s business. In other words, if a body can establish that its employed lawyers are carrying out a reserved legal activity for a restricted group, such as its membership, and that that service is not part of the body’s business, the body will not be considered under the Bill to be carrying out a reserved legal activity. Consequently, it will not need to be regulated, although the individual lawyer will. As my hon. Friend the Member for Stafford (Mr. Kidney) pointed out, individual lawyers will be regulated by the Law Society, or another appropriate professional body. I hope that the Opposition are content with that in principle, since they have not tabled amendments about it.
The purpose of the provisions is to enable employed lawyers to continue to do the work that they currently do for restricted groups in limited circumstances. It allows them, for example, to work for companies connected with their employers, and it allows in-house lawyers to offer pro bono services without their employers needing to be regulated, providing, of course, that the company employing them is not actually in the business of legal services. A telecommunications company, for example, might want to allow its in-house lawyers to provide a pro bono service from time to time. That in-house lawyer would be fully regulated, but the company would not have to be regulated as an ABS by virtue of the limited service provided by the in-house lawyer. The same provision can apply to trade unions. A union that is providing services only to its members could fit into that definition. If there is any doubt about whether its membership counts as a section of the public, subsection (7) has a route for the Lord Chancellor to make an order clarifying it, on the board’s recommendation.
Subsection (6), which we introduced in Committee, makes the position of unions clear from the start. It provides that persons receiving services by virtue of union membership do not constitute a section of the public. That ensures that unions do not have to be regulated as entities, which in turn ensures that the activities of lay advisers within unions are not regulated, in line with the policy we set out in the other place. Taking out subsection (6) would not necessarily prevent that from happening. Unions could fall under subsection (4), and in cases of uncertainty they would be able to seek an order under subsection (7). The board would be able to recommend an order for a specific union or for classes of activities by unions. If the Opposition believe that the amendments can force unions to be regulated as entities, they are wrong. The Government have considered the position carefully and think that it is right to put trade unions outside the scope of regulation. The safeguards I have outlined will ensure that trade union members are protected.
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