Avoidance of Certain Contractual Provisions

New Clause 10 – in the House of Commons at 10:15 pm on 22nd April 1980.

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'( ) (1) This Clause applies to any agreement other than a union membership agreement within the meaning of section 30 of the Trade Union and Labour Relations Act 1974.(2) In this Clause—contractor" means a person by whom goods are to be supplied or services provided under an agreement to which this Clause applies, andrelevant employee" means an employee of a contractor or of any other person to whom any part of the performance of an agreement is sub-contracted or delegated or of any person who supplies goods or services for the performance of the agreement.(3) In so far as any provision in an agreement purports to impose an obligation on a contractor to require that any relevant employee shall belong to a trade union that provision shall be unlawful.(4) In so far as any provision in an agreement purports, on the ground that any relevant employee does not belong to a trade union:

  1. (a) to modify or revoke any provision in that agreement which would, but for that ground, confer a benefit on the contractor;
  2. (b) to impose any obligation or liability on the contractor which would not but for that ground have been imposed; or
  3. (c) to make any obligation or liability on the part of the contractor more onerous than that which would but for that ground have been applicable,
that provision shall be unlawful.'.—[Mr. Bruce-Gardyne.]

Brought up, and read the First time.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I beg to move, That the clause be read a Second time.

Photo of Lieut-Colonel Dick Crawshaw Lieut-Colonel Dick Crawshaw , Liverpool Toxteth

With this we are to take new clause 11—Discrimination against contracting parties

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I do not want to delay the House for too long, although the new clauses raise matters of very considerable importance and principle. They relate to the possibility of what I would call the institution of the closed shop by the back door.

I am profoundly antipathetic to closed shops, wherever they may appear, whether they are closed shops of company secretaries, of surveyors, of accountants, or even, dare I say it, of lawyers. I find it profoundly undesirable that one should be obliged to belong to a particular institution as the price of prac- tising one's trade or profession. As far as I am aware, we do not have a professional organisation for Members of Parliament. I would fight to the death against the institution of any such organisation and be the last to join it.

But, having said that, I accept—although I recognise that a number of my hon. Friends do not—the view of my right hon. Friend the Secretary of State that it is not a matter of practical politics today to outlaw the closed shop. I hope that the day will come when it will be possible, but I certainly accept that that is not a practicality at the present time.

The Bill introduces certain important safeguards to the operation of the closed shop. I cite essentially two. First, it seeks to put an end to what one might broadly call the SLADE-type blackmail operation—the technique developed by SLADE in particular to frogmarch employees of particular businesses into SLADE against their wishes, via pressure, and, indeed, blackmail, on their employers. The Bill seeks—and I am delighted to see it—to put an end to that sort of gross impropriety, for that is what it is. The Bill also seeks to ensure that new closed shops cannot be imposed without prior consultation of, and a decisive vote in favour from, all those concerned by their introduction. That too is a major step forward, and I welcome it.

There is a substantial hole in the significantly improved provisions which govern the closed shop. My new clauses are designed to deal with the oversight, that monopoly, or near-monopoly, customers can oblige employers in other businesses to bully their employees into a union against their employees' wishes. In defiance of the Bill's provisions, they can make it a condition of a contract that is offered to tender that companies bidding for that contract may employ only those who are members of specified trade unions. That is quite indefensible. It is surprising that the Bill does not deal with that. However, these two new clauses are designed to cover that hole.

New clause 10 makes it unlawful for a customer to write an obligation into his contract with the supplier that employees working at the customer's place of work should belong to a specified or variety of specified trade unions.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I accept that correction. New clause 11 is essentially supplementary. It is designed to prevent a customer from getting round the terms of clause 10 by limiting invitations to tender to those firms that have given an undertaking in advance to employ exclusively unionised labour.

How widespread is the problem? We have no certain knowledge. However, it is too widespread for comfort. I understand that among Labour-controlled authorities such activity is common practice. Unfortunately, it is, on occasion, practised in Conservative-controlled local authorities. They should be ashamed of themselves. It is also common practice among nationalised industries. In addition, I am led to understand that this practice is indulged in by at least one organ of government.

I should like to quote briefly the types of clause that may be written into a contract. The contractor is expected to sign such a contract as a condition of undertaking work for Labour-controlled and, alas, occasionally Tory-controlled local authorities. The following clauses are included: All contractors or sub-contractors' employees must be fully paid up members of an appropriate trade union and in the case of craftsmen to a trade union which is representative of the craft work they are performing under the contract.The contractor shall ensure that all labour whether of the contractor or of any subcontractor of the contractor used on the site shall be members of an appropriate trade union approved in writing by the engineer. I should like to stress the phrase "The contractor shall ensure." The employer is obliged to frogmarch employees into a union, regardless of whether they wish to be members. It goes on: All manual grade employees employed by the contractor and assigned to work on sites within the group must comply with the following at all times:

  1. (a) Be fully paid-up members of the trade union appropriate to the trade they practise (being out of benefit automatically precludes access to the site).
  2. (b) Carry personal union cards showing proof of the above."
That is typical of the sort of clauses that are written into contracts by local authorities.

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I should like to cite a couple of instances from the nationalised industries. British Airways, August 1979: The Contractor and Sub-contractors shall employ only Trade Union labour under this contract. British Leyland, September 1979: All labour employed by the contractor on site must belong to an appropriate trade union and a similar condition will be imposed on all nominated or domestic sub-contractors. The third category which, in some ways, I find the most horrific of the lot is the Scottish Development Agency—an agency of the Government which has got into the habit of adding a clause to building work tenders stating that the main contractors will agree with all unions on site to collect union dues. What in God's name is a Government organ doing getting into this sort of malarky?

If ever there was evidence of a need for new clauses of the type that I have submitted, the fact that an agency of government is getting into the business of frogmarching people into a trade union without a moment's consultation is sufficient proof thereof. I find this technique of creeping extension of the closed shop profoundly offensive in itself.

But that is not all. I wish to draw the attention of the House to another implication of the Bill if we pass it without my new clauses. Under the Bill as it stands, the supplier can still be bullied into ordering the employees into a union as the price of obtaining a contract from one of these customers in the public or semi-public sector.

Also under the Bill as it stands the employer in question will not have been able to ballot his employees to ascertain their willingness to join one of the appropriate trade unions. The contract says that he must ensure that they belong; the question of ballot does not arise. Therefore, the employer will not have a defence against a claim for unfair dismissal if any of those employees refuses to join the union. Indeed, he will not even be able to require the customer, who has imposed this obligation upon him, to take his part in bearing the burden of paying the bill for a claim which would be bound to be found against him for unfair dismissal as a result of his falling in with the customer's wishes and orders in that respect. That is not only utterly paradoxical it is almost absurd. I do not think that we can allow the Bill to pass in this form.

I am led to understand—my hon. and learned Friend the Under-Secretary will correct me if I am wrong—that it has been suggested that contractors who are concerned about the matter might make it a condition of membership of their respective trade associations that no one belonging to the association would agree to sign a contract that included these clauses. Apart from the fact that this would be in breach of the restrictive trade practices legislation, it is a most inappropriate and improper suggestion for a Government Department to make to contractors that they should get together to require the members of their trade or profession to stand aside from any contracts that include these clauses because the Government find it embarassing to outlaw the clauses, as they should be outlawed, under the Bill.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

Is my hon. Friend aware of the extreme interest shown in his proposals not only by the Labour Party but also by the Liberal Party when only the Front Bench spokesman for the Labour Party is present?

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I am most grateful to my hon. Friend. Those hon. Friends who have watched the activities of Opposition parties during the lifetime of this Parliament regard such attendances as par for the course when matters of great importance to our constituents are under discussion. My hon. Friend is right to draw attention to the naked emptiness of the Opposition Benches.

I hope that I have demonstrated to my hon. and learned Friend that the Bill, as it stands, is profoundly unsatisfactory in this respect. According to my advice, although my hon. and learned Friend may be able to assure me that this is not the case, there is a flagrant breach between the provisions in this Bill for ascertaining the will and approval of those concerned before a closed shop is extended and the manner in which the customer—a near-monopoly customer—can successfully impose the extension of the closed shop, under the Bill as it stands, in precisely the same way as SLADE did. It is a practice that the Government have rightly sought to eliminate from trade union proceedings. It is time that this matter was put right. I hope that my hon. and learned Friend will be able to accept the new clauses.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Thanet West

I support what my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) has said but it seems to me that the Government can take action in the area to which he refers without the need for these new clauses. They can do so in two ways. Government Departments and nationalised industries can do so by circular, or possibly by direction, inviting those concerned not to use the clauses to which my hon. Friend has adverted. Similar action can be taken in respect of local authorities by my right hon. Friend the Secretary of State for the Environment also sending a circular.

This habit obviously grew up during the time of the Labour Government when they were seeking a round-about manner by which they could utilise the closed shop and give it further powers. A great deal, it seems to me, can be done without the need for legislation. I am not derogating in any way from the remarks of my hon. Friend in moving his new clauses that seem to have a great deal to commend them, but a great deal can be done by the practical type of assistance to which I have referred.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I apologise for interrupting, but does my hon. and learned Friend seriously suggest that the republic of South Yorkshire would respond to the type of billet-doux which my hon. and learned Friend suggests should be sent out by the Secretary of State for the Environment? I do not have quite the same confidence in the republic of South Yorkshire as he seems to have.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Thanet West

I agree with my hon. Friend. I do not suggest that there will be success in every instance, but there will be in many instances. The right climate might be created, although it might be better carried to effect by what my hon. Friend has in mind.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe

I shall not detain the House for long. My shortest speech lasted four minutes and my aim is to beat that record. I support my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne). I am fortunate—or unfortunate—to have in my constituency a nationalised industry, the British Steel Corporation which operates a closed shop on its 16,000 employees. Scunthorpe has a Labour-controlled local authority.

Last summer I wrote to the Under-Secretary of State following a representation from a sub-contractor. He and his employees were morally opposed to a closed shop, but, according to the circular letter from the BSC, no employee of the subcontractor would go on to the BSC site unless he joined a union.

The Scunthorpe borough council has sought to impose a similar closed shop restriction on the employees of its subcontractors. That is clearly an imposition of the closed shop by the back door. We may oppose the closed shop—and I am totally opposed to it and any extension of it—but we must recognise that it is part of industrial relations for the time being. However, we must all agree that a closed shop cannot be imposed without the support of a majority of the work force.

As my hon. Friend the Member for Knutsford said, there is no opportunity for obtaining sufficient support from the work force of a sub-contractor. As my hon. and learned Friend was unable to meet the point when I wrote to him last year, the new clause provides an opportunity to put right a grave injustice. I hope that the House will consider it seriously.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I had misgivings about the Bill at its conception, but I am pleased that it is now a much better Bill. It performs almost 90 per cent. of what anybody could wish it to perform. That is more than most Bills achieve, and I congratulate the Secretary of State.

However, I am a little sad that people have said that when they apply for contracts they have been told that they must use union labour. Search though they may through the Government's White Paper and Bill, they can see nothing that will stop that. It would be an even better Bill if the new clause were accepted. I hope that the Government, bearing in mind the strong advocacy which we have recently heard and the cogent case that has been put forward, will accept it.

11.15 pm

It is fundamental to liberty that we should not force somebody to take on workers only where a closed shop agreement is in operation. It is unacceptable that contractors must agree to closed shops before they can take on work. My hon. and learned Friend will probably sympathise with that view.

I agree with the point made by my hon. Friend the Member for Knutsford as a result of an intervention by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies). Circulars may go round in circles, but I believe that if a concept is enshrined in law it is far more effective. For that reason, I hope that the Government will accept the new clause.

Photo of Mr Den Dover Mr Den Dover , Chorley

I speak in support of the new clauses because I feel that unless we give a lead to employers we will find them agreeing with the unions—as is often the case—that, even though such clauses as these are not in contracts, informal agreements will be made between managements and unions that there will be 100 per cent. closed shops on sites.

We must give a lead to the employers' organisations and make sure that a clause such as this is put into effect. I hope that my hon. and learned Friend will give an assurance that we will turn back the tide and make sure that there is freedom to join a union, or not to join one, on the construction sites of this country. Workers employed by contractors and sub-contractors do not enjoy that freedom at the moment. It is important that we work towards its establishment.

The Under-Secretary of State for Employment (Mr. Patrick Maybew):

This has been an interesting—if a trifle one-sided—debate and some important points have been made by my hon. Friends.

My hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) described what his new clauses seek to prevent as the practice of advancing the closed shop by means of creeping extension and by means of the back door. I subscribe to that view, though I am glad that he believes that the Bill is realistic in recognising that to outlaw the closed shop at present would be unlawful. On the most obvious libertarian grounds, I share his distaste for the closed shop and I believe that virtually all my right hon. and hon. Friends think likewise.

I am grateful that my hon. Friend believes that there are, nevertheless, important safeguards in the Bill to protect the interests of those who are affected by closed shop agreements. He rightly points to the important provisions regarding the activities of SLADE and also to the provisions for an 80 per cent. "Yes" vote in a ballot before a closed shop agreement can be made. I believe that those are important safeguards for those who are affected by closed shops.

My hon. Friend describes as an oversight in the Bill the omission of any prohibition to deal with what I think are different circumstances, namely, the inclusion of terms and conditions for subcontractors that require sub-contractors to employ union members only. The distinction, I believe, is one of scale.

If a closed shop agreement is made with a trade union it means that all who work for the employer thereafter must belong to a specified union. The difference of scale in what we are discussing is that a sub-contractor who accedes to these conditions undertakes that at that site, or for the purpose of that contract alone, he will employ nobody who is not a member of a union. The scale, therefore, is limited to the ambit of the contract. To that extent, it is substantially different.

My hon. Friend the Member for Knutsford suggested that there was a conflict between our policy on safeguards for closed shop agreements in the Bill and the implicit acceptance of the present law which permits the practice about which he complains. We see difficulties, particularly in the sphere of immunities, in acceding to the new clauses. We believe that there is considerable scope for voluntary action in restraint of these practices, but we cannot at the moment accept the argument that there is a case for amending the law, and I shall say why later.

My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) indicated that the Government can do a great deal to discourage what we are talking about by their influence in the public sector. I believe that to be right. I hope that the Government, through their various Departments, will act upon that advice. I see no reason why a Government who take the view that I have described about the closed shop as an institution should encourage it through these contractual provisions.

I recall the outline of the constituency case raised last summer by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown). That was a case where no employee of a sub-contractor could go on to a site at all.

I acknowledge that this is an offensive practice. The difficulty that we face is that we have on the stocks the Green Paper that is intended towards the end of the year to open up the whole question of immunities.

If these new clauses were to be incorporated in the Bill, we should immediately come to the question of what sanction could be applied. These clauses are incorporated in contracts principally because trade unions have pressed the main employers to put them in, not always for reasons of recruitment, but sometimes for proper reasons connected with ensuring that their members work on construction sites only with others who are trained to do the job properly and who observe proper safety standards and so on. It is pressure by trade unions, for whatever reason, that has led to the clauses being incorporated.

If, as the new clauses propose, we were to make them unlawful, we should have to consider the practical consequences. Would the legislation by itself be enough to cause trade unions to desist from the pressure that they have hitherto exerted? It is plain that the answer to that question must be "No". They would seek, by covert or perhaps by overt means, to ensure that the position remained unchanged.

Photo of Mr John Townend Mr John Townend , Bridlington

Does my hon. and learned Friend agree that if this proposal were brought into law contractors would abide by that law? As there have not been any cases where the contracting industry as a whole has refused to accept the law, would that not deal with the problem?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

The clause says that the provisions shall be void. The effect is that they will not be enforceable. Let us suppose that contractors in the public sector will comply with the clause—I think that they will—but I believe that trade unions would seek to enforce the closed shop in this context. If we were to make the provisions effective, we would have to say that a union which took industrial action in support of that policy would be deprived of its immunities. I can see the logic of that, but we should not take that decision until we have opened up the whole question of trade union immunities. We should not do it in advance of the Green Paper.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I cannot help feeling that my hon. and learned Friend is making a meal of this. The new clause is designed to outlaw the inclusion of particular statements in a contract put out to tender. The obligation is entirely on the employer—it has nothing to do with the trade unions—not to include these clauses. I suggest that my hon. and learned Friend addresses himself to the question whether it is seriously to be argued that employers, whether they are Labour-controlled local authorities or nationalised industries, would ignore or defy such a provision.

Will my hon. and learned Friend clarify one point that he made earlier? He said that the Government would exert their influence to discourage that practice along the lines suggested by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies). Are we to assume—and this has an important bearing on the conclusion that we shall draw from the clause—that the Government, as the sole shareholder in, for example, British Leyland or British Aerospace, will take action to ensure that such conditions as I have quoted no longer appear in the contracts put out by those corporations?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

My hon. Friend knows that that is not a question that I, with responsibilities in a junior capacity for the Department of Employment, can answer. It is a matter for the Departments concerned. I hope that Government Departments would seek to discourage the use of that practice for the reasons that my hon. Friend has indicated.

I am not persuaded that legislation on the lines of new clauses 10 and 11 would be either effective or desirable. We should look first to voluntary action because the experience of making closed shop agreements void in the 1971 Act does not lead us to go headlong into making new legislation providing that a certain approach should be unlawful. Making an undesirable condition void does not necessarily get rid of the undesirable influence that it is intended to exert. I do not think that it would do so in this instance.

Proscribing discrimination in tendering arrangements, as in new clause 11, would not necessarily prevent the contractor concerned from being discriminated against later. It is often extremely difficult for a disappointed tenderer to prove, perhaps when confronted with a dissembling main employer with the real reason for his action, that the rejection of his tender was in breach of the new clauses. Conversely, someone whose tender had been properly rejected on commercial grounds might suppose, or more damagingly might contend, that discrimination was the true reason. One thing that we are earnestly called upon not to do by businesses throughout the country is to land them in unnecessary, time-consuming and expensive litigation, which the new clause might do.

The new clause could increase pressure upon employers not to use contractors at all, and that would help no one, least of all the contractors and those who work for them. There is great scope in the first instance for voluntary action by the employers and their associations, perhaps with the Confederation of British Industry taking a lead. For our part, we intend that the code of practice on the institution and operation of closed shop agreements, which my right hon. Friend the Secretary of State intends to issue pursuant to clause 2 of the Bill when it takes effect, shall give guidance in that area.

There are great difficulties involved when we examine the sanction by which the policy of these new clauses could be implemented. As I indicated, the reason why they are proposed is largely because of trade union practice. I do not doubt that my hon. Friend the Member for Knutsford is right in saying that in the public sector legislation making these conditions unlawful would be heeded by employers. But the clauses impose no sanction upon the employer for continuing to incorporate those conditions. Unless we remove the immunities of section 13 of the Trade Union and Labour Relations Act 1974 there can be no sanction upon a trade union which insists that sub-contractors should send only its union members onto a site and takes industrial action to enforce that. There is no reference in either of the clauses to trades union immunities. The wider question of immunities must be dealt with in the round and not piecemeal at this stage.

Photo of Mr John Townend Mr John Townend , Bridlington 11:30 pm, 22nd April 1980

Does not my hon. and learned Friend agree that what he suggests will happen in many cases will not? When I was leader of the Humberside county council, we took over a situation where the Labour group had inserted these conditions in all contracts. We insisted on taking them out, because they were against our policy. We never had any future policy on those contracts. We just took the conditions out of the contract documents with no further trouble.

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

That is satisfactory and devoutly to be desired. But what my hon. Friend has just said is encouraging in that it leads one to suppose that there is hope for the voluntary approach. What I am saying is that we understand why the new clauses have been tabled. We share the dislike for closed shop agreements being extended by these back door means, but we do not believe that it is likely to be effective, or that it would be desirable at present, to seek to achieve that end by means of changing the law. What will be the position following publication of the Green Paper remains to be seen.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

I apologise for interrupting my hon. and learned Friend again, but I detect that he may be coming to the conclusion of his arguments. Before he concludes, I hope that he will deal with the question of what happens if the Bill remains as it is and the employer is obliged to frogmarch his employees into a union against their wishes, without the provision for a ballot, when one or more refuses to join and sues for unfair dismissal. What sort of defence has the employer in those circumstances?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

I intend to deal with that question. I understand the point which my hon. Friend makes. He says that there will not have been time to have gone through the 80 per cent. ballot procedures and, therefore, an employer will have no defence to a claim for unfair dismissal. But the position is not as simple as that. Unhappily, it is more complicated, like most things connected with this type of legislation.

Before determining whether and how the Bill changes the legal position of con- tractors and their employees, it is necessary to know the full facts of the situation. For example, when deciding which relevant sections of the 1978 Act, as amended by this Bill, apply, it will be important to know whether a contractor is party to a closed shop agreement himself or whether he applies another employer's closed shop agreement to his own employees.

The new clauses do not directly affect the unfair dismissal provisions one way or the other, and some different amendment would be needed to meet the point. I have well in mind the anxieties of the Federation of Civil Engineering Contractors, which has seen my right hon. Friend and has helpfully set out its own anxieties.

I recognise that this is a practice which has increased, and that it is indulged in by public authorities, nationalised authorities and large private companies. The issues raised are complicated, and we believe that at present it is not right to change the law. I hope that I have indicated the sympathy with which the Government view these new clauses, and I hope that I have indicated why at present we believe that it would not meet the ends which I and my hon. Friends wish to serve by acceding to them.

It is not a satisfactory situation that these practices continue on the present scale. There is scope for their restriction by voluntary means. I hope that I have been able to say enough to persuade my hon. Friend that at present it would be untimely to press the new clauses. If, unhappily, he decides that he must do so, I hope that my right hon. and hon. Friends will not see fit to support them.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

I had not intended to intervene in this debate, but I have been provoked by the Under-Secretary. I did not want to exacerbate his difficulties with his rebellious Back Benchers; the Government have had sufficient agony for one day. However, if the hon. and learned Gentleman challenges me, goads me and provokes me, I shall certainly speak. I had thought that hon. Members would have been anxious to get under the eiderdown.

The hon. and learned Member talks about this being a one-sided debate. He could have fooled me. I thought that we had been listening to a very two-sided debate the whole day, with the two sides or the argument being on the Tory side of the House. That is where the debate has been.

There can be few spectacles more nauseating and absurd than to have lawyers condemning the closed shop. That is the limit. The hon. and learned Member for Thanet, West (Mr. Rees-Davies) threw in a cheap sneer about the Labour Government deliberately encouraging the practices that have been referred to in the debate. That was absolute nonsense. He cannot produce a scrap of evidence to support his remark. I am astonished that an hon. and learned Member who earns a lucrative living outside this House by practising in the courts should be capable of making wild allegations without any supporting argument or evidence.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Thanet West

I think I am right in saying that none of the Conservative-controlled local authorities has a contract of this kind. It is only Labour-controlled authorities and nationalised industries, at least as to 90 per cent. of the cases. Incidentally, while I am on my feet, may I correct the record? I am in this House now and the Bar is almost a thing of the past.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

I accept what the hon. and learned Member says and hope that I have not unfairly misrepresented him.

On the more substantial point, the hon. and learned Gentleman has not answered the challenge I threw out, because he said that the practices to which he referred, and which have been complained about, were encouraged by the Labour Government. It is no answer to say that it is nationalised industries and Labour-controlled local authorities which impose these obligations on outside contractors. That does not answer the point. The hon. and learned Member has not produced a scrap of evidence to support his point that the Labour Government deliberately encouraged the practices complained of.

I must point out to Tory Members that it is not only Labour-controlled authorities which are involved here. It is local authorities, public sector employers, nationalised industries and many private sectors employers. They have recognised lists of tenderers and for a whole variety of reasons they exclude from that list people who would wish to be on it. The reasons include the fact that such people do not satisfy one or other of the many conditions and qualifications laid down. We have not heard criticism of any of those practices.

Government Back Benchers have selected one qualification that is imposed by some authorities and decided to attack that. This is not a new practice at all. It has gone on for many years. It has gone on, with public sector employers very often because, probably, they want to be satisfied that the people to whom they are giving work are proper employers, offering decent terms and conditions of employment and are not employing sweated labour, or otherwise offending against the recognised terms and conditions of employment.

I should be delighted to have a wider discussion, following our earlier debate, on the extent to which workers' organisations and workers as individuals should have the right to have recognised terms and conditions of employment applied to themselves. The anxiety that that should be the case has been expressed, not merely by my hon. Friends, not merely by the trade unions, but by employers' organisations too, which are anxious about unfair, undercutting practices which seek to derogate from recognised terms and conditions of employment.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I feel that the right hon. Gentleman has got things the wrong way round. What people are concerned about is that the employing authority should employ people who do not work under the same restrictive practices as those under which they are working so that they will be working more efficiently and effectively and getting better wages. That is what the right hon. Gentleman is afraid of, because it will explode a lot of the humbug uttered by himself and his hon. Friends.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

That is an extraordinary argument. The idea that local authorities and public and private sector employers who impose the condition about which complaints have been made do so because they want to protect worse working practices rather than better working practices is the most ridiculous argument that I have heard advanced from the Conservative Benches.

Photo of Mr John Evans Mr John Evans , Newton

Will my right hon. Friend make it clear to Conservative reactionaries that one of the major concerns of local authorities is to ensure that no one who operates under lump labour conditions will work for the local authority? Will he make it clear to Conservative Members that people who operate under lump labour conditions are generally people who avoid their contributions to society in income tax and national insurance payments? That is why Labour-controlled authorities are determined not to employ people of that ilk.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

Of course. But the issue is wider than the particular group to which my hon. Friend refers. To attack the practice of local authorities and other employers insisting that those who submit tenders shall employ trade union labour is to attack the principle embodied in the fair wages resolution. Some Conservative Members—and to some degree this is reflected by the Government in their approach to schedule 11—would like to repeal the fair wages resolution, which has stood on the statute book for over 80 years. A public sector employer should set decent standards and should show a good example in employment practices by using employers who observe recognised terms and conditions.

Photo of Mr John Townend Mr John Townend , Bridlington

Does the right hon. Gentleman agree that many firms that do not operate a closed shop employ union labour and pay top rates—sometimes even above those of firms which operate a closed shop?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

Of course I accept that. I am merely saying that the employing authority wants to be satisfied that decent terms and conditions of employment are observed when it places its contracts. One way of doing that is to require those firms with which it places contracts to employ trade union labour. That is not an unreasonable safeguard. If there is an alternative safeguard, we should be prepared to examine it, but no alternative has been proposed and no concern or interest has been shown by Conservative Members to ensure that workers have decent terms and conditions of employment. While the principle objects of the attack have been Labour-controlled local authorities and public sector employers, the new clause would apply to all employers, including private employers.

I can give many examples. The Minister referred to SLADE. SLADE insists on putting a stamp on its work. That work will not be processed unless it includes a stamp. In Committee I recalled that my father worked in the felt hat manufacturing industry in Denton, Lancashire. In those days Denton was wholly dependent on the felt hat manufacturing industry. Hat manufacturers have not been criticised in the House. They have not indulged in militant action because they are reasonable and moderate. I am pleased that the hon. Member for Rochdale (Mr. Smith) is present because he will know of the town of Denton and its former dependence on hat manufacturing.

My father was a hat manufacturer. In those days one could not obtain a job in Denton unless one wore a felt hat. One would not be served in a shop unless one wore a felt hat. Every employer in Denton, whether or not he was connected with the hat manufacturing industry, displayed a large plate at the entrance to his premises saying that no one would be admitted unless he wore a felt hat. Every felt hat manufacturer in Denton displayed a sticker. I hope that some Conservative Members who wear felt hats will look at the hat band when they next buy a felt hat. If it has been made in Denton there will be a sticker saying that the hat has been made by trade union labour.

In those days the felt hat manufacturing workers tried to encourage everyone who wore a felt hat to buy only a hat that bore the little stamp inside it. A retailer would find that he could not sell hats if they did not have that stamp. He would say to the manufacturer who employed non-union labour and could not affix the sticker "I am sorry but I cannot sell your hats. I do not want to place a further order." If the clause had been enacted at that time, he would have committed an offence. He would have been exposed to legal action. That is the nonsense that the hon. Member for Knutsford (Mr. Bruce-Gardyne) is seeking to propagate with his daft new clauses.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe 11:45 pm, 22nd April 1980

As I understand the right hon. Gentleman, he opposes the clause because he feels that public authorities and local authorities should have some assurance from the employing subcontractor that his employee is being paid proper wages. Will he tell the sub-contractor in my constituency, who is utterly dependent upon the British Steel Corporation, what will happen to his employee if his, the right hon. Gentleman's, argument holds water? The result will be that the sub-contractor will be unable to tender and the employee of the subcontractor will be without a job.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

The hon. Gentleman has misunderstood the way in which I am presenting the argument. I do not pretend to be especially articulate or clear-minded, at this time of night. I may be misleading the hon. Gentleman. In advancing my view, I was explaining why the practices of local authorities, other public sector employers and some private sector employers have existed and developed.

I understand the hon. Gentleman's argument, but I find it equally difficult to explain to the electrical wholesaler in my constituency, who is a member of the Conservative Party but despite that a friend of mine, why British Rail refuses to allow him to tender for the supply of electrical equipment. He does not employ non-union labour. That has nothing to do with it. It is because British Rail has a list containing the names of those from whom it invites and accepts tenders. It is a limited list. Try as he might, my friend cannot get on the list. He cannot discover why he cannot get on it.

That does not apply only to British Rail. It applies to Conservative-controlled and Labour-controlled local authorities and a range of large private sector organisations. They have lists of those from whom they will invite tenders. If a person is not on the list, he does not stand a cat in hell's chance of being able to submit a tender. There are those who feel that they can submit competitive tenders to private sector companies. However, they cannot get on the lists. They are not told why and they cannot understand why.

Why should Conservative Back Benchers select one qualification for attack and not all the others? It would be more helpful if the hon. Member for Brigg and Scunthorpe (Mr. Brown) would dig into the reasons why an employer is refused leave to submit a tender to a private sector organisation, the acceptance of which could lead to additional employment It is daft to select one qualification in isolation.

I said that I had not intended to intervene. However, I have been lured into making what I fear is an over-long speech late at night. I apologise to the House for letting that happen. However, I hope that the Under-Secretary of State will not provoke us into getting involved in private family squabbles within the Tory Party. If he wants us to do so, I shall be happy to oblige, as on this occasion, on any other occasion before the night is out.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford

The debate has been widened. I am pleased to note that the Labour Party is alive and kicking—kicking anyway. Some of us were beginning to think it had finally vanished from view. I had no idea that we should get on to the intricacies of felt hats, and I shall not follow the right hon. Member for Doncaster (Mr. Walker) down that line.

The point that the right hon. Gentleman has missed is that one of the purposes of the Bill, one which I think all my hon. and right hon. Friends strongly support, is to ensure that we do not witness extensions of the closed shop against the wishes of those who are coralled into it. It is to deal with that aspect of the issue that the new clauses were tabled.

I listened with great care to my hon. and learned Friend the Under-Secretary of State's reply. He was, as always, temperate and persuasive, but I regret to have to tell him that I am not wholly convinced. The objection he seemed to advance was a "Catch 22" objection. He said that these clauses raised the problem of immunities, and he wanted to deal with the whole issue of immunities in a Green Paper; so, he said, it was not appropriate to widen the whole question of immunities at this point. He went on to say that the trouble with the new clauses was that they made no provision for altering the immunities; they simply outlawed the inclusion of this wording in contracts. It is the second point which is decisive and the foundation of the desirability of the clauses.

I can see that if we were to introduce at this stage new clauses which further raised the whole issue of trade union immunities, substantial additional problems would arise, but these clauses simply say that this type of wording in a contract shall be void and unlawful. The onus is on the tenderer to desist from the inclusion of these offensive words in the contracts he advances. My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) pointed out that this has been done following a change in control of the local authority, and it went through perfectly smoothly without any trouble.

I am grateful for what my hon. and learned Friend the Under-Secretary of State said about the way in which he and my right hon. Friends would exercise

their influence to dissuade local authorities and nationalised industries from persisting in this practice, but on balance I think it would be better if we had this provision on the statute book. I therefore feel that I must press the clause, because the Bill would be better for its inclusion.

Question put, That the clause be read a Second time:

The House divided: Ayes 15, Noes 217.

Division No. 261]AYES[11.52 pm
Alton, DavidGorst, JohnTownend, John (Bridlington)
Bruce-Gardyne, JohnMarlow, TonyWinterton, Nicholas
Budgen, NickPenhaligon, David
Butcher, JohnRoss, Stephen (Isle of Wight)TELLERS FOR THE AYES:
Carlisle, John (Luton West)Smith, Cyril (Rochdale)Mr. Den Dover and
Churchill, W. S.Steel, Rt Hon DavidMr. Michael Brown.
Gardiner, George (Reigate)
NOES
Adley, RobertFinsberg, GeoffreyMajor, John
Alexander, RichardFisher, Sir NigelMarland, Paul
Alison, MichaelFletcher, Alexander (Edinburgh N)Marshall, Michael (Arundel)
Ancram, MichaelFletcher-Cooke, CharlesMarten, Neil (Banbury)
Aspinwall, JackFookes, Miss JanetMather, Carol
Atkins, Robert (Preston North)Forman, NigelMawhinney, Dr Brian
Baker, Kenneth (St. Marylebone)Fraser, Peter (South Angus)Maxwell-Hyslop, Robin
Baker, Nicholas (North Dorset)Garel-Jones, TristanMayhew, Patrick
Beaumont-Dark, AnthonyGlyn, Dr AlanMellor, David
Bendall, VivianGoodhart, PhilipMeyer, Sir Anthony
Benyon, Thomas (Abingdon)Goodlad, AlastairMiller, Hal (Bromsgrove & Redditch)
Benyon, W. (Buckingham)Gow, IanMills, lain (Meriden)
Best, KeithGower, Sir RaymondMills, Peter (West Devon)
Blackburn, JohnGray, HamishMitchell, David (Basingstoke)
Blaker, PeterGriffiths, Peter (Portsmouth N)Moate, Roger
Bonsor, Sir NicholasGrist, IanMonro, Hector
Boscawen, Hon RobertGrylls, MichaelMontgomery, Fergus
Bottomley, Peter (Woolwich West)Gummer, John SelwynMoore, John
Boyson, Dr RhodesHamilton, Michael (Salisbury)Morris, Michael (Northampton, Sth)
Braine, Sir BernardHampson, Dr KeithMorrison, Hon Charles (Devizes)
Bright, GrahamHaselhurst, AlanMorrison, Hon Peter (City of Chester)
Brinton, TimHastings, StephenMurphy, Christopher
Brittan, LeonHavers, Rt Hon Sir MichaelMyles, David
Brooke, Hon PeterHawksley, WarrenNeale, Gerrard
Browne, John (Winchester)Henderson, BarryNeedham, Richard
Bryan, Sir PaulHeseltine, Rt Hon MichaelNelson, Anthony
Bulmer, EsmondHogg, Hon Douglas (Grantham)Neubert, Michael
Burden, F. A.Hooson, TomNewton, Tony
Butler, Hon AdamHordern, PeterNormanton, Tom
Cadbury, JocelynHowell, Rt Hon David (Guildford)Onslow, Cranley
Canavan, DennisHowell, Ralph (North Norfolk)Page, Rt Hon Sir R. Graham
Chalker, Mrs LyndaHunt, John (Ravensbourne)Page, Richard (SW Hertfordshire)
Channon, PaulKurd, Hon DouglasParris, Matthew
Clarke, Kenneth (Rushcliffe)Jenkin, Rt Hon PatrickParry, Robert
Cockeram, EricJohnson Smith, GeoffreyPatten, Christopher (Bath)
Colvin, MichaelJopling, Rt Hon MichaelPatten, John (Oxford)
Cope, JohnKellett-Bowman, Mrs ElainePattie, Geoffrey
Corrie, JohnKing, Rt Hon TomPawsey, James
Costain, A. P.Kitson, Sir TimothyPercival, Sir Ian
Dean, Paul (North Somerset)Lamont, NormanPollock, Alexander
Dickens, GeoffreyLang, IanPrentice, Rt Hon Reg
Dorrell, StephenLawson, NigelPrior, Rt Hon James
Douglas-Hamilton, Lord JamesLee, JohnProctor, K. Harvey
du Cann, Rt Hon EdwardLennox-Boyd, Hon MarkPym, Rt Hon Francis
Dunlop, JohnLester, Jim (Beeston)Raison, Timothy
Dunn, Robert (Dartford)Lloyd, Peter (Fareham)Rathbone, Tim
Eden, Rt Hon Sir JohnLuce, RichardRees, Peter (Dover and Deal)
Eggar, TimothyLyell, NicholasRees-Davies, W. R.
Elliott, Sir WilliamMacfarlane, NeilRenton, Tim
Eyre, ReginaldMacGregor, JohnRhodes James, Robert
Fairbairn, NicholasMacKay, John (Argyll)Rhys Williams, Sir Brandon
Fairgrieve, RussellMcNair-Wilson, Patrick (New Forest)Ridley, Hon Nicholas
Faith, Mrs SheilaMcQuarrie, AlbertRidsdale, Julian
Fenner, Mrs PeggyMadel, DavidRifkind, Malcolm
Roberts, Michael (Cardiff NW)Stewart, Ian (Hitchin)Wakeham, John
Roberts, Wyn (Conway)Stokes, JohnWaldegrave, Hon William
Rossi, HughStradling Thomas, J.Walker, Bill (Perth & E Perthshire)
Sainsbury, Hon TimothyTapsell, PeterWalker-Smith, Rt Hon Sir Derek
St. John-Stevas, Rt Hon NormanTaylor, Robert (Croydon NW)Waller, Gary
Shaw, Giles (Pudsey)Taylor, Teddy (Southend East)Ward, John
Shaw, Michael (Scarborough)Tebbit, NormanWarren, Kenneth
Shelton, William (Streatham)Temple-Morris, PeterWatson, John
Shepherd, Colin (Hereford)Thatcher, Rt Hon Mrs MargaretWells, John (Maidstone)
Shepherd, Richard (Aldridge-Br'hills)Thomas, Rt Hon Peter (Hendon S)Wells, Bowen (Hert'rd & Stev'nage)
Shersby, MichaelThompson, DonaldWheeler, John
Silvester, FredThorne, Neil (Ilford South)Wickenden, Keith
Speed, KeithThornton, MalcolmWolfson, Mark
Speller TonyTownsend, Cyril D. (Bexleyheath)Young, Sir George (Acton)
Spence, JohnTrippier, DavidYounger, Rt Hon George
Spicer, Jim (West Dorset)Trotter, Neville
Spicer, Michael (S Worcestershire)van Straubenzee, W. R.TELLERS TOR THE NOES:
Squire, RobinVaughan, Dr GerardMr. Spencer Le Marchant and
Stanley, JohnViggers, PeterMr. Anthony Berry.
Stevens, MartinWaddington, David

Question accordingly negatived.