I beg to move amendment No. 46, in page 19, line 25, leave out from second 'to' to end of line 26 and insert

'the matters listed in section 178(2)(a).'.

I am pleased that the amendment has been selected, as it is an important example of the Report stage doing exactly as it should; ensuring that there is proper scrutiny of the amendments made in Committee. A cursory glance at the report of the Committee proceedings of 16 March would demonstrate how quickly the Government amendments relating to this part of the Bill were made, with relatively little debate. I must admit that that was an occasion when I was not present in Committee, for which I apologise.

It is important that we focus on this critical aspect of the Bill, which defines those aspects of employment relationships that ought to be considered to be a part of the Bill's collective bargaining proposals.

The amendment relates to section 178 of the Trade Union and Labour Relations (Consolidation) Act 1992. The Act refers to the terms and conditions of employment, or the physical conditions in which any workers are required to work. The objective is to specify the precise dimensions of the issues that are appropriate to the collective bargaining proposals.

That is complicated by the Government amendments made in Committee. In Committee, the Minister said:

"The amendments ensure that the Bill achieves the policy set out in the White Paper. We tabled them because we realised that the original wording went wider than originally intended. The union and the employer are free to include other matters in the collective bargaining agreement—that is a deliberate feature of the legislation, to encourage voluntary agreements by giving the parties room for manoeuvre."—[Official Report, Standing Committee E, 16 March 1999; c. 359.]

I welcome the Government's actions in defining those aspects of the Bill more tightly.

I am a little puzzled. What is voluntary about the scheme if, under the Bill, just 40 per cent. of those actually voting can force collective bargaining on both employees and management?

Order. The hon. Gentleman is going wide of the amendment before us, which is narrow.

I am grateful for your guidance, Mr. Deputy Speaker. I suspect that my hon. Friend may have some opportunity to go down that route in looking at later amendments that are relevant to automatic recognition, which may leave him slightly less baffled than he is at the moment—at least if the Government have the wisdom to accept those later amendments.

The Government's original intention, as set out in the White Paper, "Fairness at Work", was for collective bargaining procedures to cover pay, hours and holidays as a minimum. The White Paper went on:

"There are conflicting views on whether training should also be included. The Government would welcome responses on this point. The parties may add other items if they wish."

That is all very fine, but the Bill, as amended, raises a number of significant questions.

As it stands, the Bill specifies that negotiations relating to pay, hours and holidays should be those that are included in collective bargaining arrangements, but new subsection (6) states that the effect of that will be subject to sub-paragraph (7), which says that wider matters can be included by the parties subject to their agreement, but that in turn is complicated by the exception provided in paragraph 27(3).

I hope that my hon. Friend will explain the effect of the removal of the reference to subparagraph (7). Is he satisfied that the connection between subparagraphs (6) and (7) will be as strong? I fear that the amendment may destroy the effect of sub-paragraph (7).

I am grateful to my right hon. Friend for raising that specific aspect of amendment No. 46. [Interruption.] He is indeed a fine example of the products of the Scottish education system, and does it great credit. I am sure that that is what the hon. Member for Moray (Mrs. Ewing) was trying to suggest from a sedentary position.

Sub-paragraph (7) expressly gives the parties the right to vary agreements. Surely the specification of such terms in legislation is unnecessary, given the voluntary tradition of labour relations in this country. What are the Government driving at? By implication, does not the Bill in its present form perversely suggest to those who may come into contact with it in the courts that any elements that do not carry a specific endorsement of the right to engage in wider issues on a voluntary basis constitute a presumption against it?

It is being considered appropriate to say that it is possible for the parties to engage in wider voluntary agreements, but that specific power is not conferred in other parts of the Bill. It could be said that the implication is that there is no power or freedom for the parties to engage in free bargaining in whatever manner they choose. I hope that the Minister will deal with that, and, in particular, with the exemption relating to paragraph 27(3), which is consequential on the amendment.

The fact that paragraph 27(3) does not apply to voluntary arrangements raises further questions. What scope will the Central Arbitration Committee ordinarily have, under other parts of the schedule, to dictate the conduct of collective bargaining?

In the light of those last remarks, I wonder whether my hon. Friend is encouraged by paragraph 140 of new section 81. Page 35 of the explanatory notes refers to the scope for "collective or workforce agreements". Some adumbration of the significance of that from the Secretary of State would be extremely helpful.

I am grateful to my hon. Friend, although my memory is not as photographic as his and the explanatory notes are not at the forefront of my mind.

Shame.

I freely admit that the fault is entirely mine, and that it does me no credit; but I was educated south of the border, albeit at a very fine grammar school. I know that you would not want me to pursue matters relating to the English education system, Mr. Deputy Speaker, so I shall not do so. [Interruption.] I am sure you know very well that I was educated at Altrincham grammar school, Mr. Deputy Speaker. I have made many references to it in the House, and I shall continue to do so—but not on this occasion. You will be pleased to hear that, Mr. Deputy Speaker.

The aim of amendment No. 46 is to probe the Government's thinking. What led them away from the relatively definitive terms in the "Fairness at Work" White Paper? What—with no reference in Committee to the inclusion of training—led them to think that training should be excluded, presumably following the consultation that resulted from the White Paper? Whatever that was, it then led the Government to move on to the first draft of the Bill, which widened the scope of collective bargaining for these purposes to a considerable extent by including all the matters referred to in section 178 of the Trade Union and Labour Relations (Consolidation) Act 1992. That took the Bill into the spheres of discipline, workers' membership or non-membership of trade unions, facilities for trade union officials, machinery for negotiation and consultation, and numerous other matters.

It was clearly a deliberate move on the Government's part to move from a tight definition in the White Paper to a wide definition in the first draft of the Bill. Having given only limited explanations in Committee, they have seen fit to table amendments further tightening the scope of collective bargaining for these purposes. I must say that I welcome that.

Might not the Government have decided to narrow the field on which collective bargaining can be fought out because collective bargaining is being imposed on both parties? True collective bargaining, as Adair Turner has said, should be based on trust and mutual consent.

My hon. Friend makes an important point, and makes it cogently. Such matters should indeed be conducted on a voluntary basis, with no imposition of collective bargaining arrangements that one or the other party may not want. It must be said that, given the automatic recognition procedures provided by the Bill in its present form, collective bargaining arrangements may not be wanted by either party. Perhaps that is part of the reason why the Government chose to tighten the definitions, but why has training been excluded? So far, we have heard no answer to that question.

8 pm

Why has it been considered necessary to include sub-paragraph (7)—which deals, as far as I can see, with something that would in any case have been presumed in the wider context of employment law—yet then apply paragraph 27(3) to only part of the collective bargaining arrangements, which allows the parties to be directed in how to conduct certain elements of collective bargaining, but not others? Even if there is statutory collective bargaining within the terms of the Bill, that collective bargaining will be better conducted freely and openly, as decided by the parties, rather than in a way that is constrained by the CAC's intervention. That is a point of considerable concern.

The passage of the Bill has "form." I have sought to outline its history. It began with the "Fairness at Work" White Paper. It has had extensive public consultation, particularly in relation to the training provisions. Further comment was implicitly invited by the Government in paragraph 8 of the White Paper. It has become a Bill, which goes far wider. The Government have seen fit to amend the Bill in a way that comes much closer to the tighter terms of section 178(2)(a), which is entirely appropriate.

Given that these matters were not extensively debated in the Standing Committee and that the Minister has given rather scant explanation for the to-ing and fro-ing of Government thinking on the matter, I look forward to hearing what the Minister has to say. I hope that some assurance will be given on my particular concern. By including sub-paragraph (7) and by specifically providing for voluntary flexibility, the Bill may, by implication, mean that, where there is no explicit permission for voluntary variations or voluntary flexibility in arrangements between employers and employees, flexibility does not exist. It is a legal point, but I should be grateful for the Minister's reassurance on it.

My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) has, as those of us who have had the privilege of serving with him on the Standing Committee had anticipated, moved the amendment with characteristic perspicacity and modesty. He has sought to get a clearer view from the Secretary of State and from his advisers as to the legal effect of the schedule, which he rightly says was not extensively debated in Committee.

I make two or three more general points; I am conscious that we wish to make progress in the consideration of the Bill. My hon. Friend has laid out the scene and other colleagues wish to contribute. Therefore, I need not delay proceedings unduly.

The general principle on which my hon. Friend is surely right is that parties should be able, wherever possible, to reach voluntary arrangements for collective bargaining. That is not an issue across the Chamber; it is generally understood. Those arrangements should be as flexible and appropriate as the circumstances permit. I think that that is understood, too.

There is, however, a difference between us as to whether statutory arrangements should be made for the imposition of collective bargaining in particular cases of failure, where it does not seem possible to achieve those by voluntary agreement. The point that my hon. Friend makes is that the Government need to make it clear why they have selected the scope of collective bargaining that is to be imposed after the procedures that are set out in great detail in schedule 1. Ultimately, a declaration by the CAC as to what was required would be needed.

Two tensions can be identified. First, if collective bargaining is to be imposed—as my hon. Friend the Member for Lichfield (Mr. Fabricant) said, it should be a voluntary matter—it should be imposed on the narrowest possible scope, and there should be as much freedom outwith that as possible. That is an understandable principle.

The second point to some extent conflicts with that. It is usually better, where legal concepts exist and have been codified in the 1992 trade union legislation, not to depart from those without good reason. At least their scope and definition have become matters of general awareness among practitioners of employment law, trade unions, employers and others. If we introduce a new set of definitions, we will get ourselves into a muddle.

My hon. Friend the Member for Altrincham and Sale, West has identified that there is a tension. It is for the Secretary of State to explain, after my hon. Friends have made their comments, exactly how he intends his provisions to work.

It is of course with enormous trepidation that I enter the debate, surrounded as I am by those who spent many hours discussing the Bill in Committee, but I wanted to take the opportunity to raise a couple of questions with the Secretary of State.

I am intrigued by the fact that the amendment would remove the reference to sub-paragraph (7). I want to ask two questions about that. First, does that weaken the link that currently exists, as I read it, between sub-paragraphs (6) and (7)? I want some reassurance on that. At least, I thought that I wanted some reassurance until I started to consider the implications of sub-paragraph (7) itself.

I read sub-paragraph with extreme difficulty. It says:

"If the parties at any time agree matters as the subject of collective bargaining".

It does not say how they will agree those matters. The term "agree" always raises more questions than it answers. We are left wondering—unless it is spelt out somewhere else that I have not found yet—exactly what mechanism there is to give effect to that agreement.

It is simply assumed that agreement will be reached. As we all know, that is easy enough to say. It is much more difficult to achieve, particularly in what are sometimes tense or confrontational environments.

Therefore, even though sub-paragraph says:

"If the parties at any time agree matters",

that is not the end of the matter. I hope that the Secretary of State will be able to satisfy me as to how he envisages that agreement will be reached in the different contexts in which discussions take place in the workplace environment.

The right hon. Gentleman will be aware that collective bargaining agreements and recognition of procedural agreements are arrived at by negotiation between the economic partners. It is right that those agreements will be completely reviewed only from time to time. In the in-between time, some agreements may be reached. That is normally done by exchange of letters between the parties. When the whole agreement is reviewed at a future date, earlier agreements are incorporated.

I am grateful for the hon. Gentleman's explanation. I am interested that he believes that that answers all the possible questions that might arise from the words that I have read out. That may be the case, but I need the Secretary of State's confirmation of that. I want to hear him say that that, as the hon. Gentleman has suggested, concludes the matter. It does not necessarily conclude the matter, however, because the schedule continues to say that

"references to collective bargaining are to negotiations concerning the agreed matters; but this does not apply in construing paragraph 27(3)."

That seems to take us into deeper waters. The paragraph in question brings in the CAC, and refers to its specifying

"to the parties the method by which they are to conduct collective bargaining."

According to my reading of the provisions, there is a danger that we shall get into a vicious circle, going round and round and round. I am sure that that was not intended by those who drafted the Bill, and I hope that the Secretary of State will assure me that is not the Bill's effect. However, I am worried that my hon. Friend's amendment appears to remove the consequential link between paragraph 2(6) and paragraph 2(7), and that point must be explored.

The lack of a satisfactory definition of "agree" may also give rise to problems, unless the hon. Member for Eccles (Mr. Stewart) was right. The reference to paragraph 27(3) may in addition be inconclusive when it comes to closing the loop that I have identified. Indeed, it may perpetuate that loop.

The amendment, well intentioned as it is, could complicate matters and weaken this part of the schedule. A cursory reading implies those consequential effects of the amendment, and I look forward to hearing the Secretary of State set these matters straight so that we may make ready progress.

One of my greatest fears is that when I drop dead, my tombstone will read, "He meant well." That phrase also sums up the Bill. It means well, but what will be its effect? More to the point, what will be the effect of its definition of collective bargaining?

I did not serve on the Bill's Standing Committee. However, I have had experience of running a company, a point that I mentioned at some length last night. One thing that I have learned is that collective bargaining is dynamic, as my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) would agree. If it is to be dynamic, it cannot be constrained by a narrow definition of what can be discussed, particularly if it is not entered into freely, as may be the case under the Bill.

My hon. Friend the Member for Daventry (Mr. Boswell) has identified, with his customary incisiveness and perception, two tensions in the Bill. If collective bargaining is imposed, there must be freedom to scale many heights and to discuss matters that develop one into another. To reach a voluntary agreement between the two parties, as the hon. Gentleman whose constituency I do not know has said—

Eccles.

I am sorry.

Go on, give us your Eccles impression.

To continue, there are two economic forces—labour and capital, in the shape of the employer. If they are to reach agreement, it cannot be imposed. An imposed agreement is a frail agreement which will not stand the test of time.

I understand my hon. Friend's point that agreement cannot be imposed. However, on reflection, would he not accept that the prospect, which it seems to me his argument conjures up, of substantial numbers of employers across the country manning the barricades, in support of the extension of the range of matters over which collective bargaining can and should take place, is remote in the extreme? I accept that my hon. Friend has a fertile imagination, but it is difficult to envisage such a circumstance.

I do not like to argue with my hon. Friend, but that question was rather circuitous, with at least three double negatives in it. If he would like to repeat it more simply so that I can understand what information it is that he wants of me, I shall happily give way again.

I am grateful to my hon. Friend to whom I apologise if, inadvertently, I have, at a not particularly late hour, led him astray. The purport of my inquiry was simple. Does he believe, on reflection, that many employers will want, and argue for, an extension of the range of matters subject to collective bargaining beyond those set out by the Government?

I truly believe that if collective bargaining, by which I mean bargaining of any kind, is voluntarily entered into by both parties, each should be free to discuss whatever it wishes. As we debate the Bill, similar bargaining is going on in Belfast, and we all hope that it will succeed. If it is to be successful, however, it is impossible to set constraints, saying, "We will discuss these issues, but under no circumstances will we discuss those ones." That is no way for bargaining to work.

If two parties are forced to discuss matters, forcing them to debate two or three issues to the exclusion of others will doom the bargaining to failure. I find it strange that the Government, who rightly identify the importance of training, have chosen to exclude it from collective bargaining. What is the motivation for that? Is there something cynical behind it, or something subtle? Is there some sub-plot that we do not understand? Or, as I suspect, are the Government simply naive? The Secretary of State, nice as he is, does not come from a management background, although the Minister for Small Firms, Trade and Industry comes from both a management and a broadcasting background, which is as fine as a background can be.

There are tensions in the Bill, then. If we make a change in statutory provisions, it will, if my brief reading of the Committee Hansard is correct, be made with very little discussion. Will the Secretary of State tell us the philosophy behind the changes and the basis on which he will make changes to statutory provisions in place since 1992?

Finally, some costs must arise from the matters raised in this debate and the debate on Government amendment No. 59. I asked early last night what the costs of balloting would be, and I have heard no reply. I am suspicious that the Government have not done their sums, as they have failed to do on many other occasions. They have not taken into account the costs for corporations large—a corporation employing more than 20 people—or small.

I am sorry to trouble my hon. Friend once again, but I am concerned about the potential opening of the floodgates if his argument in favour of extending the range of matters that may be subject to collective bargaining is adopted. Does he agree that, if his idea is followed—employers do not want the range of matters to be extended beyond what the Government envisage, but some organised employees do—the only way in which the matter may be resolved is by a determination by the Central Arbitration Committee? Is he not concerned that, if the Central Arbitration Committee is in future composed of—from our point of view—undesirable or unreliable persons, the consequences could be hazardous for firms in the British economy?

Order. In dealing with arbitration issues, we most definitely are going wide of amendment No. 46, which is narrowly drawn.

I disagree with my hon. Friend the Member for Buckingham (Mr. Bercow), who argues on the premise that imposition of collective bargaining is already a fact. For all we know, the Government may see reason. Heaven knows, we may even win in a Division on Third Reading and defeat the Bill. The very imposition of collective bargaining is undesirable. We are arguing that, if it is imposed, it should be wide-ranging. However, if my hon. Friend is asking me whether that is what employers and employees want, I should say no, as I do not believe that collective bargaining should be forced on anyone.

I remind the House that great friends of Labour—although I do not think that they will be friends for much longer—such as News Corporation, and especially Rupert Murdoch, are only too aware that, had the Government's current proposals been law, Mr. Murdoch would not have been able or motivated to save The Times, after its staff had been on strike for six months, or to crack the stranglehold of the print unions.

Perhaps my hon. Friend was envisaging a breaking of the stranglehold?

No, I prefer a cracking of the stranglehold, as it is more illustrative and imaginative.

How would the hon. Gentleman resolve a situation in which a company has 100 employees, all of whom are trade union members and wish to have a collective bargaining agreement with the employer, but the employer does not wish to have such an agreement?

The hon. Gentleman has got to the crux of the matter. The situation will be resolved because it is impossible to run a company in those conditions. If I were running a company in which 80 or 90 per cent. of employees were members of a trade union, it would be impossible not to have bargaining. That is the reality. I am not against the closed shop—although I shall not stray too far into that issue, which is beyond the scope of amendment No. 46, although it addresses the issue that the hon. Gentleman raised.

Many companies—such as Unilever's subdivisions—prefer dealing with only one trade union, but they do so by voluntary arrangement, which is convenient for both trade union and employer.

I am not ready for this.

My right hon. Friend, who lounges on the same Bench as me, disagrees, but he is being a little naive in the matter. If such arrangements are not imposed by law, they may be advantageous.

My hon. Friend is being unduly provocative at this stage in the proceedings. He seems, uncharacteristically, to have forgotten or overlooked the rights of individuals. He seems to be taking us back to the dark days when a cosy arrangement between an employer and unions could sweep away the rights of individual employees. I am sure—knowing my hon. Friend as I do—that he would not want that to happen; would he?

My right hon. Friend makes a valid point. However, as in all these matters, one has to balance various tensions—to use the word used by my hon. Friend the Member for Daventry. If both an employer and a group of employees feel that there is an arrangement by which a majority will be able to operate collective bargaining, anarchy may be avoided. If there is no agreement on that basis, there may be anarchy.

I tell the hon. Member for Eccles (Mr. Stewart) that, in practice, the type of situation that he described does not occur.

It does.

If the hon. Gentleman would like to give me an example in which it does, I should be interested to hear it.

The hon. Gentleman is trying to approach the matter reasonably. In 20 years as a practitioner and negotiator in industry, I have often encountered many situations in which recognition has been applied for but rejected, although more than 80 per cent. of employees were union members.

I hear what the hon. Gentleman says. Nevertheless, I asked him for a specific example, but he failed to give me one.

I do not want to take up any more of the House's time. I have made it clear that I believe that collective bargaining may be successful only if both parties wish to enter into it, and both parties are free to explore a number of different matters. I do not think that the Government can impose successful collective bargaining, just as I do not think that the Government can create wealth—which is created by entrepreneurs, and by the hard sweat of labour.

As I said, the Government's proposals are just another example of their good intentions—which, sadly, will harm and not enhance labour relations.

If amendment No. 46 is pressed to a Division, I shall ask the House to reject it—which will disappoint some right. hon. and hon. Opposition Members, although probably not the right hon. Member for Bromley and Chislehurst (Mr. Forth), who would be alarmed by the amendment's effect in extending the matters subject to collective bargaining. If the amendment is pressed to a Division, the Government Whips may have some difficulty in keeping some of my hon. Friends from supporting the amendment, which was tabled by the hon. Member for Altrincham and Sale, West (Mr. Brady).

I advise the right hon. Gentleman not to continue on that tack—as he is beginning to tempt me to press the amendment, and I might otherwise be easily placated.

I should warn the hon. Gentleman that, although there are many measures in the Bill dealing with security of employment, they do not protect hon. Members. If he were to press the amendment, he may well find his own security of employment threatened.

rose—

I should like to press on and reply briefly to the debate, as the situation is fairly straightforward.

The Bill provides that, where there is recognition through the statutory procedure, collective bargaining will be required in matters of pay, hours and holidays. There is nothing to stop employers and employees agreeing to increase the topics beyond those three specific ones, but it will be a matter for decision and for agreement to be reached. We believe that that is the appropriate approach to take.

The White Paper, "Fairness at Work", made it very clear that those were the three, very discrete topics on which we should expect there to be negotiations in collective bargaining, when it is subject to the statutory procedures. We did not want to go beyond that, as we recognised that the provisions would have to be tightly focused. However, there was a residual issue on training, on which we consulted separately.

In view of what the Secretary of State said about the potential scope for voluntary extension of the matters subject to collective negotiation, will he confirm that this is an example of a situation in which paragraph 141 on page 35 of the explanatory notes to the Bill would apply?

I have to concede to the hon. Gentleman that, off hand, I cannot recall the precise details of that page—for which I do apologise. What I do know is that amendment No. 46 would extend the three specific topics that we have in mind. There is nothing to prevent the parties from agreeing to that, but when the hon. Member for Altrincham and Sale, West moved the amendment, he referred specifically to the reasoning behind the proposal for training being dealt with in a slightly different way. In the White Paper, we identified this issue as one on which we wanted genuine consultation, which has now taken place. Our view is that it would not be appropriate to extend the three areas to include training, and thereby make it four areas—my numeracy skills are improving. It would be better if training were dealt with by consultation. There is a requirement elsewhere in the Bill that if a union is recognised, it will have to be consulted on training. So the matter is covered in that way.

To clarify the position for the benefit of hon. Members who were not on the Committee or who could not attend when this matter was debated, I confirm that the collective bargaining procedures that go through the statutory process are restricted to pay, hours and holidays. By agreement that can be extended, but it is otherwise restricted to those three areas.

I am grateful to the Secretary of State for giving way, because he is being most helpful. I detect that he is drawing his remarks to a close, and I want ask him to deal with the matter of the inclusion of sub-paragraph (7)—with his legal background he should be well able to do so—which seems to me to be otiose. It provides a right to voluntary extension, but, as I understand it, that would ordinarily be assumed.

My understanding is that sub-paragraphs (6) and (7) address two different situations. Sub-paragraph (6) states that references to collective bargaining are to negotiations relating to pay, hours and holidays, but sub-paragraph (7) addresses the situation in which parties agree further matters as the subject of collective bargaining. We need to cross-reference to paragraph 27(3), which states:

"If at the end of the agreement period the parties have not made such an agreement the CAC must specify to the parties the method by which they are to conduct collective bargaining."

That is if there is eventually a failure to agree, whereas paragraph 2(7) deals with a situation in which an agreement has been reached. That distinction needs to be made. For those reasons, we need paragraph 2(7), because it addresses a different situation in which there is a statutory recognition and the parties enter discussions to extend collective bargaining beyond the three areas. If those discussions subsequently break down, they revert back to the Central Arbitration Committee to establish procedures by which an agreement can be reached. I hope that that has clarified the matter for the hon. Member for Altrincham and Sale, West.

I should like to clarify the Government's fixity of purpose in this matter. An employer may be forced against his will to engage in the collective negotiation provided for in the Bill. Is it the right hon. Gentleman's position that that negotiation should be obliged to take place even if an employer, as a conscientious objector, begins procedures to wind up his company?

If there is statutory recognition, an employer will be under an obligation to address only the matters of pay, hours and holiday. Employers do not have to embark on a discussion or negotiation to extend collective bargaining beyond those three discrete areas. Our concern about amendment No. 46 is that it would extend it beyond those three areas.

I hope that I have addressed the concerns of the hon. Member for Altrincham and Sale, West. In the light of the observations that I have made and the clarification of Government thinking that I have given, I hope that he will feel able to withdraw the amendment.

I am grateful to the Secretary of State, and to colleagues on both sides of the House who have contributed to a helpful debate. As I began by saying, this issue was not fully investigated in Committee, and it has been helpful to have on the record wider and fuller discussion on the points raised.

We had excellent contributions from my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and from my hon. Friend the Member for Lichfield (Mr. Fabricant), as well as interventions from my hon. Friend the Member for Buckingham (Mr. Bercow), who was at one point uncharacteristically illiberal. He seemed to be seeking to constrain the rights of parties voluntarily to enter into agreements. I would certainly not follow him in that direction.

The Secretary of State, in an obviously jocular way, suggested that the Government's current overlarge majority might become larger. I can set his mind at rest on that. Yesterday, he invited my right hon. Friend the Member for Wokingham (Mr. Redwood) to stand against him in Tyneside, North. The Secretary of State is welcome to stand against me in Altrincham and Sale, West at the next general election. We would probably gain some support from the elements of his party who would vote for my amendment to achieve its ends.

The Secretary of State is right to say that the Government's amendment draws these matters tighter than amendment No. 46. The Government were right to do that. My purpose in tabling the amendment was to explore some of the wider issues around the Government's amendments. We have had a useful debate, and we have had helpful reassurances from the Secretary of State. His style is always persuasive—even if the substance is not—and, in a spirit of generosity, I can say that I have been reassured and to some extent persuaded by him. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.Amendment made: No. 66, in page 20, leave out lines 3 and 4 and insert—

'(3) For the purposes of sub-paragraph (1)(a), any worker employed by an associated company incorporated outside Great Britain must be ignored unless the day the request was made fell within a period during which he ordinarily worked in Great Britain.

(3A) For the purposes of sub-paragraph (1)(b), any worker employed by an associated company incorporated outside Great Britain must be ignored in relation to a week unless the whole or any part of that week fell within a period during which he ordinarily worked in Great Britain.

(3B) For the purposes of sub-paragraphs (3) and (3A), a worker who is employed on board a ship registered in the United Kingdom shall be treated as ordinarily working in Great Britain unless—

(a) the ship is registered at a port outside Great Britain,

(b) the employment is wholly outside Great Britain, or

(c) the worker is not ordinarily resident in Great Britain.'—[Mr. Wills.]

I beg to move amendment No. 7, in page 20, line 35, leave out '10' and insert '15'.

With this, it will be convenient to discuss the following amendments: No. 20, in page 22, line 43, leave out '10' and insert '15'.

No. 21, in page 23, line 15, leave out '10' and insert '15'.

No. 22, in page 33, line 2, leave out '10' and insert '15'.

No. 23, in page 33, line 26, leave out '10' and insert '15'.

No. 24, in page 35, line 3, leave out '10' and insert '15'.

No. 25, in page 35, line 26, leave out '10' and insert '15'.

No. 26, in page 36, line 19, leave out '10' and insert '15'.

No. 27, in page 37, line 7, leave out '10' and insert '15'.

No. 28, in page 42, line 22, leave out '10' and insert '15'.

No. 29, in page 43, line 2, leave out '10' and insert '15'.

No. 30, in page 43, line 34, leave out '10' and insert '15'.

No. 31, in page 45, line 31, leave out '10' and insert '15'.

No. 32, in page 50, line 16, leave out '10' and insert '15'.

No. 33, in page 51, line 47, leave out '10' and insert '15'.

For those who were studying the progress of the amendment paper, I should point out that we tabled this amendment early on and had a brisk debate in Standing Committee on the morning of 16 March. The background to the amendments is concern about the reasonable period of notice for an employer to respond to the request of a union or unions for collective bargaining. During the debate in Committee, a number of hon. Members and I challenged the 20-day period which the Secretary of State had assigned. With no disrespect to the hon. Member for Dudley, South (Mr. Pearson), it is a pity that he is not present now. In Committee, he dealt with some of the briefing that had been received by members of the Committee from the Engineering Employers Federation. He said:

"I have some sympathy for the case that the Engineering Employers Federation is making, particularly in relation to small businesses. I am not sure that I would want to go as far as it does and ask for 20 working days' notice. However, a response period of two working weeks could unnecessarily cause problems for some small employers".

He went on:

"A compromise of three weeks would be more flexible."

He then, no doubt, alarmed some of the Government Whips by saying:

"I am minded to support the amendments of the hon. Member for Daventry."—[0fficial Report, Standing Committee E, 16 March 1999; c. 373.]

It was kind of him to say that. We would not hold it against him. He was unable to sustain that in a Division, because we did not give him the opportunity to do so, but he would have that opportunity were we to press the amendment to a Division tonight.

The Minister convinced him.

I am not wholly sure that he did, as he did not speak again, but we shall leave that as it is. It is for the hon. Gentleman to speak for himself.

We press amendments with different degrees of force and conviction, either in a probing way or, as in this case, with a rather strong feeling. The important thing is that Governments should legislate for an appropriate period.

One concern, which I think was in the hon. Gentleman's mind, and was certainly in my mind when I tabled the amendment suggesting a longer period of 20 days, rather than the 10 days that the Government have prescribed as the first period of response—forgive me if I read the signals wrongly a moment ago; there are rather a lot of figures in the schedule—was that that might not be a reasonable period in which a small employer could respond.

As small employers do not necessarily have elaborate support and administrative systems and legal and other advice on tap—circumstances that have been discussed elsewhere during our consideration of the Bill—if they received a letter out of the blue from a union requesting the initiation of recognition procedures, they might have some difficulty in responding within only 10 days. Therefore, they would be on the way to what, in shorthand, I will call delinquency, and a decision might be taken over their heads.

Some might receive a letter or a phone call and deal with it immediately—it is good business practice to get on with one's correspondence, as I hope all hon. Members would—but there are such things as pressures to get an order out, as the hon. Member for Dudley, South mentioned in his brief intervention, and people might go away on holiday or letters might be mislaid, although that might not be an easy matter with which to deal. There are many situations in which a response may not be immediate. I readily concede to the Secretary of State, before he bases his argument on it, that a mere failure to respond within 10 days does not automatically lead to the imposition of statutory collective bargaining. There are a variety of hoops through which to go.

However, I think that the feeling in Committee was that the period has been drawn unreasonably tightly for the small employer. I mentioned the hon. Member for Dudley, South, but the general tone was that the Committee was not averse to the amendment. In order to pick up what I described in Committee as a growing consensus, I have tabled these amendments which prescribe not 20 working days or four working weeks, which we set out in Committee, but a more modest, compromise version, of 15 working days or three working weeks. I hope that that will commend itself to the Minister.

Another possible approach was adumbrated by the Under-Secretary in his response to the debate. He explained the Bill's various interlocking provisions and suggested that it was not necessary to extend the period in general terms. However, towards the conclusion of his remarks—perhaps as a debating point, but it was an interesting point—he said:

"If he"—

the hon. Member for Eastleigh (Mr. Chidgey), who is temporarily out of the Chamber—

"is suggesting that we take a general power to amend all aspects of the schedule, we shall consider that interesting suggestion."

Immediately before that, he said:

"we shall consider a general evaluation of the law."—[Official Report, Standing Committee E, 16 March 1999; c. 376.]

I have detected no general amending power in the schedule, even in those many pages, and we have heard no further details of a general evaluation of the law. Events may show that 10 days is an adequate period for a first response, but I am inclined to think that it is not. In Committee, I tabled a proposal for a 20-day period. That may have been unduly generous because, again, I immediately concede to the Secretary of State, before he makes the argument, that we do not want to send a signal that people should put such a letter behind the clock and hope that it will go away; they need to respond.

The amendments therefore suggest that 15 working days is appropriate. There is no science in the precise number. We are trying to produce what the Secretary of State said that he intends to produce: a sensible working understanding of how the legislation might work. It is an attempt to maintain its credibility and coherence. The worst possible initiation for his legislation would be a technical slip by a comparatively innocent, well-intentioned employer who did not respond in the prescribed period and was caught in a process from which he could not readily escape. I fear that that will happen.

In 20 years, I have not come across an experienced full-time officer who would act in the way that the hon. Gentleman describes. That is because such officers immediately seek to form good relationships with employers. It would not be to a trade union's advantage to press the issue in the way that he described, unless the employer was antagonistic in the first place.

I thank the hon. Gentleman for his intervention. He made many constructive comments from his deep industrial experience in Committee. I understand what he is driving at. I am sure that he describes the typical situation. If a union decided, in normal circumstances, that the moment had come to go for collective bargaining under the new rules, it would ring up the employer to say so and ask him to negotiate. It would send a formal letter confirming that as evidence to establish its position vis-a-vis any subsequent statutory proceedings. That is not an issue between us, but, with respect, he describes the situation that has existed for most of his experience, when there has not been a statutory collective bargaining procedure; it has been an option. We may debate more widely elsewhere whether that is a good idea. Unions have had to be conciliatory to elicit positive responses from employers.

I am worried about where industrial relations between union members, a union representative and employers are comparatively poor, which neither the hon. Member for Eccles (Mr. Stewart) nor I want, and where there is no statutory recognition. Someone might think that the right way to get such recognition would be to bang in a formal application and dare the employer to resist it. In those circumstances, the union might think that it would help its case if the employer failed to respond in the statutory first period. If it sent a letter in a buff envelope requesting collective bargaining, unheralded by a warning telephone call, it would add to the file, if nothing else, if it were able to say that the employer took no notice of it.

That situation would not arise because it would not be to the trade union's advantage to go for a legally imposed agreement. As the hon. Gentleman said, the scope of voluntary agreements is much wider and more attractive than that of legally enforced ones.

I readily agree with the hon. Gentleman in respect of what I hope is the normal case. We will consider later whether we should beef up the context in which the Central Arbitration Committee will work. We have tabled an amendment on the promotion of good industrial relations in the procedure, which we will debate in the proper place. Despite his positive experience and, I am sure, his positive practice when he represented a union in such matters, there will be cases where people try it on, whether out of malice or for another reason.

Does my hon. Friend agree that a longer period would be to the advantage of the unions in such cases, because an employer who was presented with almost a fait accompli would be far more likely to say no and go for the extended 28-day secondary period than the one who had the extra time to give the proposal the proper consideration that it deserved?

Indeed. I commented in a rather more vernacular way in Committee on that precise point, when I said that the employer might respond to such an approach by saying:

"'if you think that is where I am going, sunshine, I don't want anything to do with it."—[Official Report, Standing Committee E, 16 March 1999; c. 378.]

That is perhaps the point that my hon. Friend has in mind.

I say to the hon. Member for Eccles that there are cases in which relations are rather poor, and we do not believe that the statutory procedure will deal with them. We wish it well in the sense that we hope that it will, but it is precisely in such circumstances that the various provisions of the law will be required to work. Therefore, we think that a more reasonable period for the first response would be appropriate.

I want to draw my remarks to a close, but there is one other aspect of the matter to which I wish to draw attention. We laboured long and hard and, the Under-Secretary will concede, not unconstructively for many hours in Committee. We had a good, balanced debate on the issue. The Opposition made some compelling points. There was a degree of what might loosely be termed "emerging consensus" in favour of 15 days. It would not subvert the Government's intentions to accept the amendment, and I rather hope that they will.

I think that I will take issue with my hon. Friend for the first time this evening. He normally has an analytical mind, but he said that there was no science in the proposal that he was making today. I suggest that there is a little science in it. As we know, the Bill does not apply to small businesses. The definition of a small business under the terms of the Bill is any business with 20 employees or fewer. I would say that, in practice, firms of 50, some would say 100, employees or fewer were still small businesses. Small businesses operate under difficult conditions. It is only too apparent that a letter can be received from a union requesting collective bargaining at a time when people are away on maternity or paternity leave or on holiday, and it can be difficult for the employers to respond within two weeks.

We heard from my hon. Friend the Member for South Dorset (Mr. Bruce) about the importance of the temporary labour market. We all accepted in the Chamber a few hours ago that that is important for the mobility of labour and to enable people such as married women to enter and leave jobs flexibly. However, it is a fallacy to assume that key people who are away on holiday or maternity leave can be easily replaced. They cannot. I can well envisage a smaller company that comes within the ambit of the Bill in which some key person is away when the request from a union is received, so that the two-week limit is exceeded.

The hon. Member for Eccles (Mr. Stewart), who has temporarily left the Chamber, has said that it is unlikely that a trade union will wish to cause difficulty in relations with the company by taking action that would precipitate a court appearance, but, if that is the case, one can argue that the provisions in the Bill are not necessary. The fact that the provisions are there demonstrates that it could happen. Although I have not tabled an amendment, given our debate last night about the size of companies, the Secretary of State might consider the following alternative. If he were to be rigid and say that, for large companies, two weeks—10 working days—are long enough, he might consider those companies that fall within the ambit of the Bill, but have fewer than 50, or fewer than 100, employees. Why could they not be allowed a full month—20 working days?

My hon. Friend will recall that there is already a break in the seamless uniformity of the Bill, because a different regime for the initiation of collective bargaining procedure is allowed for small firms with 20 or fewer employees. It would be easy to extend that exemption to small firms with a rather higher number of employees so as to include those time limits.

My hon. Friend makes a most helpful suggestion. Indeed, there is nothing seamless about the legislation; it is digital in its step functions from one area to another. It would be consistent with the shape of the Bill if another such step function were introduced. It would at least be an acknowledgement by the Secretary of State that a small company can be one that has more than 20 employees.

I am sorry to trouble my hon. Friend again. His use of the word "digital" prompts me to ask whether he has any information about the Government's appointment of their digital e-envoy. That was scheduled for 31 March, so they have three hours and four minutes to make an announcement.

My hon. Friend makes an interesting point, but I see that you, Mr. Deputy Speaker, are looking at me as if to say that this is not an area into which I should move. I shall not do so, but would add that I was expecting a statement yesterday about the Freedom of Information Bill. That did not occur either, but I shall say no more on that matter.

If the Secretary of State were to acknowledge tonight that a large company is not one with 21 or more employees, that would show that he understands the pressures under which companies work. Of course many small companies—many large companies—allow people to take two-week holidays. I ask the Secretary of State to imagine that the accounts director or the bookkeeper of a small company has gone away on holiday not expecting any important communications to arrive, but that something important does arrive and by the time that the bookkeeper—I use that word advisedly—returns, the two-week period for dealing with that communication has expired.

I listened carefully to my hon. Friend's remarks and noted his concentration on the number of workers for the purpose of defining a small business. Does he think that the Government would find it more acceptable if large, medium and small businesses were defined according to turnover?

Order. That has nothing to do with the amendment.

I shall not pursue my hon. Friend's point, Mr. Deputy Speaker.

However, the capability of a company to respond within two weeks is based less on turnover than on the number of people employed by that company. For example, there is an American corporation—I had better not mention its name; it is based in Seattle and it is not Microsoft—which has a paid-up value of £44 billion, but has only 24 employees. Nearly all of us use that company's software to allow us to see television pictures.

The hon. Gentleman is woolgathering. He should come back to the amendment.

My point is that it is not a company's turnover or profitability that defines its ability to deal with the notice from a union requesting collective bargaining, but the number of people employed by that company. The definition of a small and a large company in the Bill reflects the Secretary of State's acknowledgement that companies employing fewer than 20 should be subject to a different number of legal requirements than a company employing more than 20. However, I believe that a company employing 21 people should not be regarded as a large company.

The amendment requesting three weeks—15 working days—in which to deal with the notice from the union is not unreasonable in respect of a smaller company. If the Minister rejects the amendment, large public companies, such as Unilever, will continue to be well able to deal with requests within a two-week period; but I would ask him to consider that companies of an interim size—employing up to, say, 50 employees—should be allowed rather more time.

Accepting the amendment would demonstrate a recognition of the fact that companies operate in difficult times and that the implementation of this Bill and others that have recently been enacted—including one that will come into force tomorrow, the name of which I shall not mention, lest you rule me out of order, Mr. Deputy Speaker—might restrict the number of employees employed by a company, force the individuals employed by that company to work even harder and so restrict the amount of time available to them to comply with the requirements of the Bill.

I simply ask the Secretary of State to demonstrate tonight that he is not the enemy of small business, but its friend. I ask him to show not only a little flexibility and a little heart, but a little of the mind and intelligence needed to ensure that small businesses survive. I ask him to accept the amendment, or at least introduce some suitable compromise on the basis that I have suggested.

This issue was debated at some length in Standing Committee. There is clearly a strongly held view among Opposition Members that 15 days—or perhaps 20—is the appropriate period, but I am not sure that that is correct. It is a question of balance, and we believe that 10 days is right in the circumstances. We have heard the argument and considered the issues, but the Government's view remains the same. I am sorry that I cannot agree with Opposition Members' points, but I hope that, having had the debate, they will withdraw the amendment.

I beg to ask leave to withdraw the amendment.

I beg to move amendment No. 8, in page 23, line 48, at end insert—

'(c) the proposed recognition of the union or unions would contribute to good industrial relations.'.

With this, it will be convenient to discuss the following: amendment No. 45, in page 24, line 15, leave out from '18' to end of line 18.

Government amendments Nos. 71 and 72.

I shall be brief, as I now sense that the House might wish to conclude these matters. I shall be able to compress my remarks in view of the express willingness of the Secretary of State to listen to us, and perhaps to some extent he can take some of my points as read.

The amendment would build into the Central Arbitration Committee's criteria a test that

"the proposed recognition of the union or unions would contribute to good industrial relations."

That is a objective which we all share.

The context in which we tabled the amendment was the concern reportedly expressed by John Monks in respect of the restructuring of the trade union movement to produce a modern trade union structure. As the Minister for Small Firms, Trade and Industry knows from our previous debates, I wish no ill toward the trade union movement; in fact, my feelings are to the contrary. The amendment also reflects our desire to eliminate potential conflicts of interest, one of which arises from inter-union disputes, which we are anxious to avoid.

My understanding of the Government amendments in the group is that they would put the CAC more in the driving seat, instead of its relying on union certification. That appears sensible and likely to reduce evidential arguments. Subject to what the Secretary of State has to say about his amendments, I am inclined to welcome them.

The two Conservative amendments cause me some concern. Under paragraph 17, union recognition is based on very clear and exact criteria, such as 10 per cent. union membership or where the majority of workers are likely to favour recognition of the union. The Conservatives wish to introduce a much vaguer criterion in amendment No. 8, which states:

"the proposed recognition of the union or unions would contribute to good industrial relations."

I should like to hear an explanation of how the CAC would judge, on any objective basis, which unions would contribute to good or to bad industrial relations.

If the amendments were passed—I hope they will not be—how would the criterion be measured? How would the new Tory criterion fit with the idea of the democratic choice of the work force? It is surely up to the workers to decide the efficacy or otherwise of the union that they choose to represent them. We should offer the work force more freedom of choice, not less. The amendments are basically anti-democratic and are designed to restrict workers' freedom of choice.

The second Conservative amendment, which refers to "a majority", underlines my suspicions. I have the feeling that the amendments are designed to hamper rather than help the legislation. I believe that the Government have got it right in this case and the amendments have got it wrong.

I am pleased that the hon. Member for Angus (Mr. Welsh) believes, at least on this occasion, that the Government have got it right. I am inclined to agree with him, and I shall ask hon. Members to resist amendments Nos. 8 and 45 if they are pressed to a Division.

Government amendments Nos. 71 and 72 clarify the way in which the Central Arbitration Committee is to decide on automatic recognition. They allow the CAC to examine in a little more detail whether a majority of workers are likely to favour recognition or de-recognition. They alter slightly the criteria by which the CAC decides whether a union has 50 per cent.membership in a bargaining unit. Instead of the union merely showing that it has 50 per cent. of members, the CAC must be satisfied that that is the case. In the vast majority of cases, the results should be the same. However, if they are not, it is better for the CAC to decide to hold a ballot.

The amendments make the method of the CAC's scrutiny of applications clearer and a little more rigorous. That is a desirable result, and I hope that hon. Members will be able to accept Government amendments Nos. 71 and 72.

I beg to ask leave to withdraw the amendment.

I beg to move amendment No. 37, in page 27, line 17, leave out from 'voting' to end of line 18.

I should like also to discuss amendment No. 38, in page 48, line 26, leave out from 'voting' to end of line 27.

Schedule 1 is concerned with the recognition of trade unions by employers for the purpose of conducting collective bargaining on behalf of the workers. Voluntary agreements are still promoted as the best solution, but schedule 1 legislates for statutory recognition. If more than half the workers are already union members and the CAC is satisfied that there is no need for a ballot, the union can be recognised automatically at that stage; otherwise, there will be a secret ballot of the work force.

In order for a trade union to succeed in a ballot on recognition under schedule 1, it must be supported by at least 40 per cent. of the work force—not just a simple majority of those voting. However, the 1997 Labour manifesto did not refer to any such threshold. It said:

"People should be free to join or not to join a union. Where they do decide to join and where a majority of the relevant workforce votes in a ballot for the union to represent them, the union should be recognised. This promotes stable and orderly industrial relations."

I certainly agree with that.

I realise that the hon. Gentleman wants to make progress. However, would his proposal not be divisive for the small business man who knows every one of his 20 or 25 employees? Would it not create two different authorities inside a company?

There is recognition of small companies, and they would not be involved.

Will the hon. Gentleman give way?

No, I want to make progress.

A review of the 40 per cent. threshold was promised in the White Paper of May 1998, which stated:

"This number will be reviewed after legislation has been in place for a period of time so that it can be altered if it is shown to be unworkable".

Whether such a review will come to pass remains to be seen.

The amendments would settle the matter by abolishing the 40 per cent. threshold rule, especially because employment relations and trade union law remain reserved to Westminster and are not to be devolved to a Scottish Parliament. Hon. Members should understand that my hon. Friend the Member for Moray (Mrs. Ewing) and I are justifiably wary of any 40 per cent. voting threshold, having lived through a similar rigged referendum method in Scotland in the 1970s.

In any 40 per cent. rule, the dead, those who are ill and those who abstain are all considered to have been against the proposition and to have voted no. All of them will add to the 40 per cent. barrier, whether or not that was their true intention. Even if a majority yes vote is obtained, it can be nullified by a 40 per cent. rule. Under such a rule, the right hon. Member for Sedgefield (Mr. Blair) would have failed in the Labour party leadership election. He would not even have met a 20 per cent. threshold. If a 40 per cent. rule had been set, London would not have its own government, even though that proposal got a 72 per cent. yes vote.

It is better to let the decision rest with the democratic majority of those who bother to vote, and a maximum turnout should be encouraged to ascertain the true wishes of the work force.

Our amendments have the support of the GMB, Unison, the Scottish Trades Union Congress and the TUC. Given past experience, I hope that the amendments will be supported.

The hon. Member for Angus (Mr. Welsh) made interesting points, but I should like to pose a question to the House, particularly the Secretary of State.

The presumption in the hon. Gentleman's argument is that a ballot for the selection of a union to represent a work force is in all cases and in all ways the same as the election of a democratic representative to the Government of a country or an area. There are different philosophical views about whether that is correct. Will the Secretary of State clarify for me and my colleagues why he believes that it is correct and fair to impose a threshold for the selection of union representation and not to have a full, democratic election among those who decide to vote, as would be the case in elections for representation to a Government or local councils?

I support amendments Nos. 37 and 38. The 40 per cent. hurdle was included in the Bill simply because of pressure from the Confederation of British Industry and other employers organisations. It has nothing to do with industrial democracy or democratic principles. It is intended to make trade union recognition that bit more difficult to obtain.

It is a well-established part of this country's democratic tradition that those who participate in a democratic process such as a ballot should determine its outcome. However, if the 40 per cent. hurdle is allowed to stand, those who do not participate will also be taken into account in determining the result because that threshold relates not to those who participate but to those who are eligible to participate, whether they vote or not.

We could have a scenario in which, for example, 66 per cent., or nearly two thirds, of the relevant work force could participate in a ballot, and 60 per cent. of them could be in favour of trade union recognition, yet that would not pass the 40 per cent. hurdle. Alternatively, 60 per cent. of the relevant work force could participate in the ballot, and 66 per cent., or nearly two thirds, of that 60 per cent. could vote for trade union recognition, yet they would fail to reach the 40 per cent. hurdle.

To my mind, that makes a mockery of democracy. As the hon. Member for Angus (Mr. Welsh) pointed out, if that were applied to parliamentary elections, it would make parliamentary democracy virtually unworkable. Even this Government, with their massive majority in the House, cannot say that they have the support of 40 per cent. of all those eligible to vote in the UK. If the 40 per cent. hurdle were applied to parliamentary constituencies, many hon. Members would not be in the House today.

There was an unhappy precedent in Scotland exactly 20 years ago this month, when we had a referendum on the then Labour Government's proposal to set up a Scottish Assembly, as it was called at that time. George Cunningham, a Labour Member of Parliament, had tabled a 40 per cent. wrecking amendment, the effect of which was similar to what is proposed in the Bill. In that referendum, the majority of people who participated in the ballot voted in favour of a Scottish Assembly, but the people of Scotland were denied it because of the 40 per cent. wrecking amendment. That led to 18 years of bitterness and caused much ill feeling in Scotland and elsewhere.

If we translate that situation into the sphere of industrial relations, and if we had a similar situation as a result of an industrial ballot, it would be a recipe for conflict and could lead to bitterness for some time between employers and employees until another ballot was held. I hope that the Government can be persuaded to think again and will learn from past mistakes.

I never thought that I would see the day when any Labour Government would be resisting a pro-trade union amendment tabled by the Scottish National party. More than 20 years ago, when I was already a Member of Parliament, I remember a Scottish trade unionist sending telegrams to hon. Members. There were no e-mails, faxes or other sophisticated methods of communication at that time. Indeed, the most sophisticated was the telegram. The Scottish trade union movement sent telegrams to Scottish Members of Parliament of various parties, pleading with them to vote for the Bill to save the aircraft and shipbuilding industries in Scotland. I remember the disdain with which those telegrams were treated by some members of the SNP. I think that it was Hamish Watt—[Interruption.] It was not the hon. Members for Angus or for Moray (Mrs. Ewing), but Hamish Watt who made a point of tearing up the telegrams on the Floor of the House.

As I say, I never thought that I would live to see the day when a Labour Government would refuse to listen to the voice of the trade union movement of Scotland or anywhere else. The Scottish Trades Union Congress is certainly in favour of the amendments.

When Ron Hayward was general secretary of the Labour party, one of his favourite sayings was, "Never forget whence you came." He was referring to the fact that the Labour party was born out of the trade union movement. I wonder sometimes what has happened. I think that sometimes the present lot have forgotten whence they came. More seriously, I think that there is growing concern in Scotland and elsewhere about where they are going.

I hope that the Minister will bear my points in mind and think again. If the amendments were agreed to, that would lead to greater recognition of the trade union movement and its democratic rights.

Unlike my hon. Friend the Member for South Dorset (Mr. Bruce), I shall not delay the House with a one-hour speech. I found the speech of the hon. Member for Angus (Mr. Welsh) interesting, and it was obviously supported by the hon. Member for Eastleigh (Mr. Chidgey).

Those people who have responsibility for these matters have no idea how small business operates. They are in a dream world. In small businesses there are no management messages, metaphorically carved in stone, which are sent down from the boardroom to the deputy manager and to the foreman, to be put on the office notice board. Nor are such messages sent through the wage packet.

In a small business, the manager knows everyone by name. Management and staff work together, they know their problems and they know their individual requirements. The various figures and percentages that are presented in this part of the Bill will not be helpful for small businesses. Indeed, they could be damaging or harmful to them. As unemployment starts to climb, we all know that we shall need small businesses to create jobs for the future. I have to exhibit and state to the House my concern over this part of the Bill as it will affect small businesses.

The hon. Member for Angus (Mr. Welsh) and others have eloquently explained the ambiguities, inconsistencies and lack of principle in the Government's policies in this part of the Bill. It will be obvious to the House that amendment No. 9 would work in the opposite sense by taking one of the two ambiguous interpretations of the Labour party manifesto and requiring a higher hurdle rate. I would say that for that purpose it is defensible. We are seeing the imposition by statute of collective bargaining. If that is to happen, it should have the widest possible consent. It is for the Minister now to answer our observations.

I will be very brief because I appreciate the exigencies of the time. It is appropriate that I should speak in a debate in which the hon. Member for Falkirk, West (Mr. Canavan) and I find ourselves in a situation which goes back for many years when he was my boss and I worked with him as a teacher. We had different political viewpoints, but we are essentially in agreement on the very important issue of democracy.

I remind the House of early-day motion 291 of last year which was signed by 22 Labour Members. It rested on the concept of basic democracy, which is the basis of the amendment. I hope that the 22 Labour Members might at least have the courage of their convictions, which they had when they signed the early-day motion, to join us in the Lobby in support of a basic principle.

I was involved in the 1979 referendum in Scotland. The 40 per cent. rule applied, and if someone did not turn out, it meant a no vote. That ridiculed the whole idea of democracy and the amendments that my hon. Friend the Member for Angus (Mr. Welsh) moved so eloquently are a challenge to the concept of basic democracy in this country.

All the amendments deal with recognition ballots, which is undoubtedly a very important issue. The Government are concerned to get it right. I regret that all the amendments are unhelpful and that some of them are more unhelpful than others. I am certainly not convinced that amendments Nos. 37 and 38. are in the best interests of good industrial relations. Amendment No. 37 would remove the requirement that at least 40 per cent. of workers in a bargaining unit must vote in favour of union recognition. We believe that 40 per cent. is the right figure, and I shall come back to that in relation to amendment No. 9.

The basic principle is that a significant proportion of workers must be in favour of recognition before it should be granted. That seems self-evident and deviating from that basic principle would run the risk of a vocal minority overriding the wishes of the vast majority of those affected. That would disrupt good industrial relations. The Government have no wish for that to happen and we cannot accept an amendment that runs such a risk.

For exactly the same reasons, we cannot accept amendment No. 38, which would remove the converse requirement that at least 40 per cent. of workers in the bargaining unit must vote against the continuation of recognition for it to end.

Amendment No. 9 would alter the figure for minimum support in a recognition ballot to 50 per cent. I have already explained the reasons for having a threshold. We have set a threshold of 40 per cent. Precisely where the level is set is a matter of judgment, and we have made our judgment on the basis that we believe that, in the overwhelming majority of cases, 40 per cent. plus a ballot majority will mean that 50 per cent. or more of the work force support recognition, or at least do not oppose it.

Why not set the threshold at 50 per cent? Because that would, in practice, mean that an even greater proportion of workers—perhaps 60 or 70 per cent.—would have to be in favour of recognition before it would be granted. That is a high hurdle, particularly when, we should remember, the union must also win a ballot. In those circumstances, we do not believe that the amendment would be conducive to good industrial relations—it is unnecessary and unhelpful. I hope that Opposition Members will withdraw all the amendments.

I regret the Government's stance. The 40 per cent. rule has met widespread opposition and has, for example, been described by GMB Scotland in the following terms:

"The fly in the ointment is the 40 per cent. rule. It's a pity the same commitment to giving workers rights as individuals is not extended to them when they group together in a union."

John Edmonds, the leader of the GMB has said that the 40 per cent. rule turned the White Paper into a "flawed jewel". The Scottish Trades Union Congress has said:

"Our position is quite clear—there should be no additional hurdles erected. The only requirement should be that a majority of those in a workplace voting for trade union recognition should get it, and we will not accept anything less than that."

We share those sentiments and they would be delivered by the amendments.

I note not only the support of the trade unions. On 9 January 1999, 22 Labour and five Liberal Democrat Members supported an early-day motion on that issue, even though both parties will oppose the amendments. We intend to make the point by pressing this principle to a vote.

I beg to move amendment No. 152, in page 28, line 30, at end insert—

'(IA) In applying sub-paragraph (1) an agreement for recognition (the agreement in question) must be ignored if—

(a) the union does not have a certificate under section 6 that it is independent,

(b) at some time there was an agreement (the old agreement) between the employer and the union under which the union (whether alone or with other unions) was recognised as entitled to conduct collective bargaining on behalf of a group of workers which was the same or substantially the same as the group covered by the agreement in question, and

(c) the old agreement ceased to have effect in the period of three years ending with the date of the agreement in question.

(1B) It is for the CAC to decide whether one group of workers is the same or substantially the same as another, but in deciding the CAC may take account of the views of any person it believes has an interest in the matter.'

With this, it will be convenient to discuss Government amendments Nos. 150. 151 and 153.

I commend the amendments. However, there is an issue that the Government want to consider further: where a staff association or a non-independent union has applied for a certificate of independence, whether the CAC should not consider any application for derecognition until the outcome of that process is known.

The Government want to give some thought to that issue. We have not arrived at any conclusions as to what our response should be. We will give it further thought and may return to that aspect during the House of Lords consideration of those matters.

I understand that the outstanding groups of Opposition amendments are not to be moved. I see that that is so.

I beg to move, That the Bill be now read the Third time.

It is an historic occasion. I am delighted that I will joined shortly by the Minister of State, Department of Trade and Industry, my right hon. Friend the Member for Makerfield (Mr. McCartney), who has been absent from illness.

The Bill establishes and fosters a new culture in the workplace, removing the outdated notion of conflict between employers and employees with a sense of new partnership—a partnership of rights matched by responsibilities. It will address the fundamental imbalance in the workplace that we inherited from the Conservative party.

Now more than ever, we need to foster a new culture in the workplace. The world is dramatically changing and the workplace has changed with it. More people are working part-time and on temporary contracts. More women than ever are working. More families depend on two earners. Those new working patterns put new responsibilities on Government, business and employees.

We want people to be partners in change, not the victims of that change. That places a responsibility on Government to ensure minimum standards of fairness and treatment for all in society and in the workplace. That places a responsibility on business to ensure that the task of making a reality of the flexible labour market does not fall solely and exclusively on working people, and a responsibility on employees to demonstrate loyalty and commitment to their employer.

The Bill will do three things: it will promote family-friendly policies; promote a new culture of partnership in the workplace; and ensure equal and fair treatment for all in the workplace, regardless of whether they work full or part-time, for a single employer, or through an agency. Those are all sensible and achievable goals. It is a matter of great regret that the Opposition will not support them.

We are just a little over two hours away from the introduction for the first time in this country of a national minimum wage, which will benefit 2 million of our fellow citizens by taking them out of poverty pay, and ensuring that they will not be exploited. Two million people will benefit from the National Minimum Wage Act 1998, but even more people will benefit from the Employment Relations Bill.

About 135,000 mothers will benefit from our improved maternity provisions. The 1 million people who work through employment agencies will have greater protection. Some 3.3 million people will benefit from our parental leave proposals. More than 6.5 million part-timers will be protected from discrimination.

The Government are acting for all our people, not just a privileged few. The Bill will play an important part in modernising our country, creating a better Britain and a more modern and fair society in which all the people will have rights coupled with responsibilities. The Bill discharges our responsibility by ensuring that we meet our manifesto commitment. We are a Government who deliver on our promises.

The Employment Relations Bill begins a new era in industrial relations, an era based on partnership and on putting aside the divisions and disagreements of the past. It is a new beginning for industrial relations that will benefit millions of our fellow citizens. I commend the Bill to the House.

In rising to oppose the Bill on the Opposition's behalf, may I agree with the Secretary of State on one matter by expressing our pleasure at the fact that the Minister of State, Department of Trade and Industry is shortly to return from his indisposition. We are pleased that he is able to be with us again.

Now, let me resume normal hostilities by saying that what we have just heard from the Secretary of State was, even from him, a disappointing concatenation of soundbites. The Secretary of State claimed as a credit to himself the imminent introduction of the national minimum wage, but he simultaneously omitted to mention the propensity of both that and of the Employment Relations Bill to destroy jobs by increasing the costs of business. The Government have taken no adequate account of that fact. For all their honeyed words and all their alleged readiness to consult, they are bent on doing damage to British business by imposing costs on it.

The conduct of the Bill has been remarkable. Two reordering motions were required, one on the very first day of consideration. Four major schedules have been tabled during the Bill's proceedings. Consultation and regulations were issued in pre-draft form 90 minutes before we considered them. That does not suggest that the Government understand much of the business about which they lecture real business people.

The Bill will impose statutory collective bargaining. Last time that was done, six short clauses damaged British industry and proved to be unworkable. This time, there are 27 long pages of a schedule, which will damage British industry and which will prove unworkable.

The Bill introduces, for the first time, parts of the European social chapter, which have not yet been fully discussed. The Government have gold plated some of the obligations that they have voluntarily undertaken, adding further to those obligations in ways that will increase costs on British business. The pattern of their policies—including the family-friendly policies—is to put burdens on to business and to reduce competitiveness while increasing costs.

Some loose ends will be left over. The Confederation of British Industry has expressed general concern about the Bill, but has gone along with it. Concerns remain about the importance of asserting the voluntary principle, the best by which to conduct industrial relations. Concerns remain about disciplinary and grievance hearings and about definitions in the Bill, some of which we have been able to explore and others of which we have had no time to explore.

The Bill is an extraordinary confection. There is little in the clauses, more in the schedules, and most of all has lain in the soundbites. Today, the Government are ringing their bells and making their claims, but, in the years to come, British industry will pay the bills and suffer the damage of a Bill which we are pleased to oppose.

It falls to me, in the three remaining minutes of the debate, to have almost the last word on the Bill. I should like to reinforce what Liberal Democrat Members have been saying from the outset—that we have always supported the principles of fair and free industrial and employment relations. I should like also to sum up the past several weeks of our consideration of the Bill.

The Bill's provisions may be divided into three categories: on individual rights, on collective rights and on family-friendly policies. Despite our long debates and Committee sittings, the Bill's provisions—particularly in the first category, on individual rights—still do not provide the clarity that we should have liked. The problem of discrimination—on the basis of age, and of sexual orientation—is outstanding. We are still not satisfied that the Government have properly addressed the issue.

The Government's proposals on collective rights have left us wondering how they decided on the 40 per cent. threshold. I should be grateful if the Secretary of State and other Ministers would give us some further guidance on how they reached that conclusion, so that the wider community—the many whom they claim to represent—might be able to understand it.

We have concerns also about the Bill's proposals on family-friendly policies. Although we appreciate and welcome the introduction of European Community directives on family-friendly policies, we still do not understand why it was necessary for the Government to indulge in what can only be called the gold-plating of specific matters. We are particularly concerned about how the Government dealt in the Bill with leave for urgent family reasons. We feel that much more could have been done to make the provision simple, clear and efficient in operation.

This is an "enabling Bill". Time and again in Committee, we were told by Ministers that, "The detail will come later. We have not finished consulting. In fact, we are continually consulting." I thought that Governments were elected to legislate, but perhaps I have it wrong. We still have to wait. Time and again, massive Government amendments were tabled but with no time to study or analyse them, or to share in the Secretary of State's ambition—which he expressed again today—of improving the Bill.

We are left with an enabling Bill, and still await the regulations. The doubts that I have been expressing are about exactly how those regulations will work. On the Bills and Acts that the Secretary of State has trumpeted today—such as the National Minimum Wage Act 1998—to make them work, the Government have had to think again, to change their mind and to introduce new strictures and regulations. Will the same happen with this Bill after it becomes an Act of Parliament?

When the regulations are tabled, I look forward to examining them forensically, although—because of the way in which this place works—we shall have little time to do so. Nevertheless, I hope that the Government are listening, and that they will do their best to make the Bill work—not only for the many, but for those who employ the many.