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12.46 pm

The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): I beg to move, That this House does not insist on Commons amendment No. 4 to which the Lords have disagreed, disagrees to Lords amendment No. 4A proposed in lieu of that amendment and proposes amendments (a) to (c) in lieu of Lords amendment No. 4A.

The House will be aware that although this House agreed with the Government amendments to clause 15 that apply to trade unions, they were not accepted in the other place. Their lordships disagreed and substituted different words that limited the exemption that trade unions would have from the need to be regulated as entities. In our original wording, trade unions were to be exempted in respect of any reserved legal services provided by virtue of membership. In the Lords amendment, the exemption applied only to what we might call a limited range of employment-related services.

I have thought about the issue very carefully and I accept the spirit of the Lords desire to narrow the exemption. Although I would still be happy with a wider exemption, I acknowledge the strength of feeling about the subject and particularly the concerns that were held by some consumer organisations about whether union members might not get the full level of protection. As everyone will be aware, I am very concerned that all consumers—whether they are union members or otherwise—are properly protected.

I think it would be right to say that no one wanted to prevent unions from continuing to provide legal services to their members in areas connected to their employment, trade, occupation or other membership-based activities. The services that unions provide are vital for access to justice and for industrial relations, but I can see force in the argument that preserving that position does not require an absolute exemption for all kinds of legal services.

Nevertheless, today large numbers of people earn their living in ways that differ from the traditional employer-employee relationship. It is important therefore that the amendments that narrow the exemption recognise that and provide for the different ways in which people work today and through which, by virtue of their membership of a particular union, they may benefit from assistance by that union in the same way as people employed in more traditional employment situations. On that basis, we have tabled amendments that will have a similar effect to those considered in the other place, but that will also ensure that services relating to trades, occupations or other activities associated with a person’s union membership are included.

Our amendments are not confined to employment in the narrow employer-employee sense. There are many
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other ways of earning a living or of being a trade union member, including through self-employment and holding a non-remunerated occupation, and trade unions deal with all of them. That is covered by the definition of “relevant activities” in proposed new subsection (9) to clause 15.

Our amendments go wider than the Lords amendments in the range of circumstances that they cover. The Lords amendments were fairly closely focused on the workplace, but our amendments apply the exemption to other situations as well. For example, proposed new subsection (5B)(b) to clause 15 covers other

the member’s employment, trade, occupation or other relevant activities.

An example would be that of a university lecturer who has a publishing contract arising out of his or her research obligations. That contract would not be with the university that employs him or her, but it does arise out of the lecturer’s employment by the university. That provision enables unions to provide services if a dispute arose about the publishing arrangements. Another example would be a case in which an agent acts on behalf of a musician who is a member of a union. The provision would allow the union to provide services to the member if there was a problem regarding an engagement, even if the agent was working on the member’s behalf.

Proposed new subsection (5B)(c) covers events that occur in the course of, or in connection with, a member’s employment, trade, occupation or other relevant activities. That would, for example, allow unions to continue to provide services to teachers who need legal help when something untoward happens on a school field trip. Proposed new subsection (5B)(d) covers activities carried on by a member for the purposes of, in connection with or arising from membership of the union. That will apply the exemption to matters that do not directly concern the member’s occupation but are nonetheless an important part of his membership role. An example would be a member’s position as a trustee of an employer’s pension fund.

Obviously, those are only examples, but I hope that the House will agree that it was important to cover the wider range of work-related and membership-related activities; I hope that Members agree that the amendments do that. Of course, under the amendments, the Lord Chancellor has the power to clarify the reach of the provisions by order, on the recommendation of the legal services board.

I can also confirm that our amendments are intended to ensure that “excepted membership services” includes reserved legal services for a member, or one of the other persons set out in proposed new subsection (5A)(a), where such services relate to, or have a connection with, activities set out in proposed new subsection (5B) that have been carried out by another person on behalf of the member. In other words, if a musician who is a member of a union has a contract for music services negotiated by an agent, any reserved services to the member that relate to, or have a connection with, those music services should be covered by proposed new subsection (5B).

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Finally, for the sake of completeness, I should add that none of what I have said changes the general position on regulation that we have already set out. Any reserved services within that exemption that a union provides directly will still have to be carried out by a qualified lawyer. Approved regulators will still be able to take action if something untoward develops. Union members will still be able to take complaints about reserved services to the office for legal complaints, and will still be able to complain within the union’s rules, too.

I hope that it is agreed that the amendments deal with the main concerns expressed about the original exemption. The amendments will continue to enable unions to provide the range of work and membership-related services that they do now, which I think we all agree is important. However, the amendments also ensure that the exemption is not wider than necessary. I commend them to the House.

Mr. Jonathan Djanogly (Huntingdon) (Con): I declare my interests as a member of the Law Society and of the corporate finance faculty of the Institute of Chartered Accountants. Putting aside the mechanical complexities of the ping-pong process, the issue that we are dealing with first today is straightforward. That issue is whether the trade unions deserve exemption under the Bill and, if so, to what degree. We recognise that the Government have made significant movement on the issue.

The Government’s original amendment, tabled in Committee, attempted to exclude trade unions entirely from the requirement, under part 5, to become licensed alternative business structure firms when providing reserved legal services to their members. Unsurprisingly, that wide-ranging amendment, which would have allowed a trade union that operated entirely outside the regulatory structure to provide, say, conveyancing services or representation in divorce proceedings, was rejected in the other place when the Lords were belatedly given the opportunity to examine it. A proposal was then put forward by my noble Friend Lord Kingsland, limiting the trade union exemption to those legal services ancillary or incidental to the trade unions’ main employment-related function, and it was accepted in the other place.

The Government have now tabled a compromise amendment, which attempts to broaden our narrowing of the union exemption to cover membership services which relate to what they describe as the “relevant activities” of a member or former member of an independent trade union. But, taking a step back, it still remains unclear to me why the Government were prepared to expose union members who receive legal services to a potentially lower level of regulation and protection than that which other people receive when accessing similar legal services from bodies other than unions.

We are at least thankful that the Government have now accepted, however grudgingly, the absurdity of a blanket exemption for trade unions. We do, however, maintain that as a matter of principle the trade unions should not be granted that special treatment. Why should mutual societies, voluntary and not-for-profit bodies such as Citizens Advice, and small legal entities such as trade mark and patent attorney bodies, which
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have operated as companies without significant complaint against them for many years, all be required to be regulated alternative business structures if unions are not? Why should trade unions receive special treatment?

Who is prepared to speak out for the bodies that I mentioned, and to recognise the unequal way in which the Government are dealing with bodies that will be affected by the Bill? It is the Conservative party that is prepared to speak out, and it is the Conservative party that is prepared to question the trade unions’ unjust influence over the Government, which the unions have levered to ensure that their circumstances, and only theirs, were thought worthy of a blanket exemption and now a partial exemption. Could that be something to do with the fact that 73 per cent. of cash donations to the Labour party in 2006 came from trade unions? Perhaps the Minister would like to comment on that.

The Government should be thinking about the interests of trade union members, and not the interests of trade union bosses. We will be watching to see whether the union privileges granted under the Bill are abused. On Report, various Labour Members maintained that unions were regulated by the certification officer. The role of the certification officer is a matter for another debate, and we should have that debate, but why should trade union members be exposed to poor, inadequately regulated legal services from trade unions? The result of the union exemption, if it goes through, will surely be to make necessary a thorough review of the certification officer’s role.

Mr. Kevan Jones (North Durham) (Lab): I know that the hon. Gentleman has a paranoia about trade unions, but does he not realise that millions of people in this country who get access to justice would not do so if it were not for the legal services provided by trade unions?

Mr. Djanogly: I totally accept that, but when we last debated the subject on Report, the hon. Gentleman said, when referring to the certification officer:

I agree with him, and we should review that.

Furthermore, it must be highlighted once again that under the amendment it will still be up to the unions to determine who is classed as a member, and therefore to whom they can extend reserved legal activities without needing to be licensed under part 5. That still creates the proven possibility of unions bringing in non-connected associate members and providing a poor service to them. I would be grateful if the Minister could outline how the Lord Chancellor would consult on what are the “relevant services”. In particular, would that need to be confirmed in a statutory instrument?

The Government should be aware that the provision, together with the role of the certification officer, represents unfinished business. The compromise reached remains far from ideal, even though we accept that the Government have made a dramatic concession on the issue. The exemption would be limited to the relevant activities of the union members, but what does that mean? How would that be regulated by the Lord Chancellor? On this matter of principle, we are not yet satisfied, and we will press the amendment to a Division.

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1.00 pm

Mr. David Heath (Somerton and Frome) (LD): As the House may recall from our previous discussions on the subject, we had two problems with the Government’s proposal. First, the blanket exemption was far wider than we were prepared to accept, because in the provision of legal services by trade unions, it would have allowed what I would term trading in the open market. There is nothing to stop trade unions offering legal services on the basis of a general legal practice, rather than on the specific areas that were relevant to members.

The other issue for us was the position of other mutual organisations and how they might be accommodated. We still do not have satisfaction on that, but I accept that it would be extraordinarily difficult to draft an appropriate amendment to the Bill which did not effectively provide a get-out clause for a great number of organisations that would want to provide legal services on a commercial basis. Although I still think that there is a substantial argument that what is right for the trade union goose should be right for the mutual gander, I have yet to persuade myself that I can draft something that adequately makes the point in legislation. I therefore do not criticise the Government for acknowledging the point but failing to accommodate it.

On the position of trade unions, I welcome the amendment moved by the Minister. It represents a substantial reduction in scope from the previous drafting. I find little difficulty in accepting the Minister’s amendment as being very close in spirit and in letter to that which was proposed by noble Lords in another place, and it achieves the same results. The hon. Member for Huntingdon (Mr. Djanogly) shakes his head, but I look at the Lords amendment and at what the Minister has produced today, and I do not see a substantial difference between them. Of course there are still issues of definition. We know that there always would be, because it is impossible to provide a schedule to the Act that lists every single potential activity of a trade union. I accept that there are still problems of definition.

However, I do not have the same sort of problems, which seem to be reaching phobic proportions on the part of the hon. Member for Huntingdon, in respect of trade unions providing services to their members. I acknowledge the valuable work that they do. I shall therefore recommend to my right hon. and hon. Friends that they support the Government amendment. I have quarrels with the Minister later, so she should not feel too complacent. I applaud the considerable movement that the Government have made in our direction and see the amendment as an acceptable compromise.

Mr. Kevan Jones: I support the amendment, which is a sensible compromise. We heard again today from the hon. Member for Huntingdon (Mr. Djanogly) his complete ignorance of the way in which trade union legal services operate. Reference has been made, for example, to trade unions offering conveyancing to members and their families. Most trade unions do so now, but they do it though a panel of solicitors or it is put out to various legal firms. They will be covered by the Bill because they are independent solicitors or legal practices. The Conservatives seem to wish further to limit the activities of independent trade unions and to damage them.

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Mr. David Marshall (Glasgow, East) (Lab): Does my hon. Friend agree that the hon. Member for Huntingdon (Mr. Djanogly) has done us a service by reminding us of all the anti-trade union measures introduced by his party when it was in power?

Mr. Jones: I am grateful to my hon. Friend for that point. I was proud to work for a trade union that offered legal services to its members. In some of those cases people had suffered industrial injuries and would not have had access to justice if not for the trade union. The Conservative party should recognise that the service is given to many millions of people across the country, including even people in Huntingdon, who rely on trade unions for that service. We should get away from attempts to emasculate independent trade unions. I hope that the new Conservative party will recognise that independent trade unions providing such services are a vital part of a modern democracy.

John Mann (Bassetlaw) (Lab): I commend my hon. Friend the Member for North Durham (Mr. Jones) for again making relevant and pertinent points, and I commend the hon. Member for Somerton and Frome (Mr. Heath) for succinctly putting across arguments of great relevance, as he often does in our debates.

Considering the amount of thought that the Minister has put into the Bill and the amount of listening that she has done to detailed representations through formal channels and informally from my hon. Friend the Member for North Durham and me, one would expect that on this matter of all matters she would have got things right. I am pleased to inform the House that she has listened and she has got things right.

If anyone were wary of a loophole, it would be my hon. Friend and I. I would call it the Union of Democratic Mineworkers question, against which all trade union legislation needs to be proof. In law, the UDM is a recognised trade union, albeit one not within the TUC and not with many members. The UDM question is whether there would be any loophole in the law that would allow the UDM to find a route through it. If there is a loophole, the union will pay vast amounts of money for advice to find a way through it. If I felt that the Government were allowing a UDM loophole, I would want that loophole closed. Those who listen to these debates know that that would be the case for me and for my hon. Friend the Member for North Durham, so we commend the Minister for the detailed thought that she and her civil servants have put into responding to the many points that have been raised.

It is with a little incredulity though no surprise that I find the hon. Member for Huntingdon (Mr. Djanogly) continuing to attempt to promote his career through traditional but rather antiquated attacks on the trade unions. Only last week he attempted to equate what he was doing with the fight of miners for justice over their compensation. Sadly, he has been all too quiet about supporting the work that has been done in relation to that. He may want to consult his hon. Friends the Members for Newark (Patrick Mercer) and for Boston and Skegness (Mark Simmonds), who will be able to describe in detail how the work done by Back Benchers to challenge injustices can be taken forward by Conservative MPs with vigour equal to that of some of the Labour Members who have done so. To confuse the issue seems disrespectful to the quality of our recent debates.

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I appreciate that there are pressures on the hon. Member for Huntingdon as he gets his instructions to stick the boot in and go for headlines in some obscure publication unsympathetic to the trade unions. However, he does his party and its vague attempts to move to the centre ground a great disservice. There are 7 million trade unionists in this country, and the hon. Gentleman has done nothing more than remind us of his party’s traditional, unthinking bias against trade unions over the past 20 or 30 years.

Trade unions, after all, are a fundamental and integral part of a free and democratic enterprise society. I would have thought that in attempting to move to the centre, the hon. Gentleman’s party would recognise the vital and valuable role of trade unions. Sadly, old prejudices die hard, even among some of the newer and younger members of the Opposition Front Bench. That is to their cost; the public and trade union members across the country will see them out on that.

I commend the Minister on how she has listened in detail to all parts of the House, including Back Benchers, to get the Bill right.

Bridget Prentice: For completeness, I should say to the hon. Member for Huntingdon (Mr. Djanogly) that I am disappointed that he has not been mature enough to join the consensus that everyone else has reached; he obviously wanted to make his partisan party point. There are safeguards in the amendments. I remind the hon. Gentleman again that reserved services can be provided only by qualified lawyers who are subject to regulation by the approved regulators. I do not think that I can make the point much simpler for him; perhaps he should speak to his right hon. and hon. and learned Friends in the other place, who might be able to explain it to him in words of half a syllable. That might help.

I understand the point made by the hon. Member for Somerton and Frome (Mr. Heath) about mutuals. However, mutual bodies and other membership-based organisations can have exemptions under proposed new subsection 15(4) if they meet the relevant criteria, which involve not providing services to the public or a section of the public. A lot of membership-based bodies will qualify for that exemption. I commend the amendments.

Question put :—

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