Lord Campbell-Savours
“(1A) A trade union must make available to a member who has given an opt-in notice under section 84 (contributions to political fund from members of the union) a form enabling that member to claim tax relief on their contribution to the union’s political fund.
(1B) Any member who fills out and returns a form under subsection (1A) to a trade union shall be granted tax relief on his or her contribution to the union’s political fund.”
Lord Campbell-Savours (Lab)
My Lords, Amendment 65 is on the question of tax relief on the trade union levy. This is not the first time that I have raised this issue in this House. I first raised it on the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill in 2014. On that occasion, I sought to insert into the Political Parties, Elections and Referendums Act 2000 a new section which provided tax relief on small donations to any political party, and the response of Ministers was to point to the stalled inter-party talks on political funding and the need to find a consensus. There had been seven discussions on political funding, culminating in no reform and a Statement in July 2013 from the Deputy Prime Minister in the last Parliament, in which he said,
“it is now clear that reforms cannot go forward in this Parliament”.—[Official Report, Commons, 4/7/13; col. 62WS.]
That Statement effectively blocked off any sensible discussion on the issue that I wish to raise today of tax relief on the trade union political levy.
I am arguing today that the political levy should be paid out of pre-tax income and not post-tax income. I have to admit that there is some confusion as to whether the levy, as it currently stands, is in or out. My latest advice is that it is out of net income, whatever the circumstance. I am seeking a standardised practice among all trade unions. The proposal I make is built on the gift aid scheme, which applies to donations to charities. I argue that there is much in the work of trade unions which is essentially charitable, as is the case with much of the work carried out by political parties.
In reality, the political levy, per member, is quite small—very often in the region of £10 per member or less. It would therefore be for the convenience of all concerned if the opt-in notice included the application for tax relief on the levy, signed by the applicant member concerned. It would be even more helpful to the whole administrative process if trade unions could opt to have group submissions to HMRC on behalf of each of their members, thereby avoiding the burden for both the Revenue—I keep referring to the Revenue, as I am very old-fashioned on these matters—and the union of handling the tax relief applications individually.
I suppose it could be argued that a very small minority of members do not meet the standard rate threshold for the payment of tax. This, I suggest, could be dealt with by a special Revenue concession based on the presumption that the applicant is a basic-rate taxpayer. Otherwise, dealing with such cases would be administratively burdensome. A tax relief on the levy would certainly help incentivise the take-up of opt-in notices. I would like to think that the Government would not be so malevolent as to resist my amendment on the basis that it would be an incentive for the submission of opt-in notices.
There is a great danger that the change from opt-out to opt-in will reduce the donor base. That should not be the objective. We should all be signing up to the widest possible donor base and making every attempt to foster active forms of political engagement, with money and contributions paid to political parties. That is precisely what President Obama set out to do in America inviting, as he did, a system of mass but smaller donations to his political campaign, as indeed has Mr Bernie Sanders.
Now the Government might again argue the need to resume talks on political funding—that is to say, talks that complement those going on in the special Select Committee currently considering these clauses. I believe we need to break the logjam and begin legislating now. What better to start with than the union levy, which under this Bill is a voluntary contribution to a political party? The breakdown and the inevitable stalemate that followed led to the 2007 review undertaken by Sir Hayden Phillips. It was hoped that this review would lead us out of the impasse but its report indicated only the nature of the problem and did not provide a solution. However, the review did pave the way for further talks between the three main political parties under Hayden Phillips himself. Again, the inevitable happened as the talks broke down in October 2007.
In May 2010, after aborted discussions and a general election, a reference to the problem surfaced in the coalition agreement, where it said:
“We also agree to pursue a detailed agreement on limiting donations and reforming party funding”.
The coalition agreement was followed in July 2010 by the Committee on Standards in Public Life, which re-energised the debate with its 2011 report. The report was accompanied by caveats in the appendices from both Labour and Conservative party representatives. Indeed, we were back on the old merry-go-round, with caps on contributions and trade union donations, and the usual differences and suspicions. Two months later the Political and Constitutional Reform Committee despairingly called for a resolution of the problem to help avoid further party funding scandals, not that that plea had much of an effect.
Then, Mr Francis Maude—now the noble Lord, Lord Maude, at that stage a Minister in the other place—announced a new series of talks. In his statement establishing the talks he said:
“We could also look at how to boost small donations and broaden the support base”,
for the parties. There were seven meetings in 2012 and 2013 which, as I have already explained, predictably collapsed. My amendment does exactly what the noble Lord, Lord Maude, called for in his statement. It seeks to broaden the support base by preserving and boosting small donations, in this case through the machinery of trade union political levies. I beg to move.
Lord Leigh of Hurley (Con)
My Lords, I support the amendment from the noble Lord, Lord Campbell-Savours—which is not something I thought I would hear myself say. To put it in context, I declare my interest as a treasurer of the Conservative Party. Having supported the amendment, I have to say that I do not think the right place for it is in this Bill—this Bill is not about party funding but about trade union reform. But I welcome the direction of his remarks. Party funding is a big issue on which, frankly, there will not be much agreement in the near future but there are some very small steps that we can take together—and I have discussed this matter with the noble Lord, Lord Tyler, as well. I think there is general consensus about gift aid—or matched funding from government, which is in effect what it is. Part of the reason for my support is not the financial benefit to all parties but to explain to the public and encourage them to understand that supporting a political party is a public duty. It is a good deed. It is something for the benefit of the entire country and community and moves the dial away from people, unions, business and individuals being perceived as bad people who just wish to support a party financially.
Lord Stoneham of Droxford (LD)
I said earlier that I would not make many interventions but I was interrupted when I was speaking before dinner. I am not quite sure what procedure we are following here because I thought we were going to have the response to the previous debate after dinner. Are we having a collective here or something?
Lord Stoneham of Droxford
It is a composite. Right. Can I just make a couple of small points on this issue?
The Earl of Courtown
My Lords, perhaps I can just interrupt—I beg the forgiveness of the House. We are dealing with matters that were raised before dinner in the next group.
Lord Stoneham of Droxford
So we are having a debate on the amendment from the noble Lord, Lord Campbell-Savours? That is fine. That is what I was expecting; I just hoped that we were not missing the Minister’s reply.
We are in favour of examining all forms of reform of political donations. The only point I would like to make to the noble Lord, Lord Campbell-Savours, is that I am not quite sure how gift aid would work. Obviously there would be a huge advantage to the Conservative Party with its big donations and the big tax relief it could get on them. That would be a major problem because it would disadvantage the Labour Party and it would disadvantage us. Noble Lords may laugh, but I wondered why the noble Lord was supporting it. I know why. The Conservative Party has worked out that a 40% rebate on £20 million gives it £8 million and the Labour Party’s £15 million gives it £6 million, so the Conservative Party has an advantage of £2 million. These are just rough figures.
Lord Campbell-Savours
I have never done this before: intervening on a speech just after I have spoken. I am being absolutely blunt and frank here. This was the argument I had with my own party when we were dealing with these matters on previous occasions. We should not consider the funding arrangements of other political parties. They are not our business. The Tories will always raise the money they need, because they have the donor base. The fact that they may gain from some tax concession should be irrelevant to other political parties which need to raise money. The noble Lord should not worry about what they get; we should be more worried about the funding of our own political parties. If they benefit, it is simply coincidental.
Lord Stoneham of Droxford
I accept the point that the noble Lord makes, but the key issue is that if we are looking for a fair settlement, we have to do something about the cap on donations. That is the issue. If we are dealing with the political levy, we have to do something about the cap. That is why the Conservatives were worried in the debate the other day, because they know that if they make and pursue an attack, as they are, on the Labour Party and the political levy—I will get a laugh for this, because I know that this Bill is not about political funding of particular parties—it is open season. It is very unfair when they have the generous funds that they already have that they are making it easier for themselves.
We would say, however, that there is plenty of scope here. Let us not forget that there is a lot of political funding currently going on from the state. There is the £40 million spent on the post system during the general election, the Short money, subsidies for party conferences and money for policy development. There is a lot of money currently being spent from government funds on political parties.
The other area where we think we could get money from, if we are not going to allow taxpayers to contribute to political parties, is government political funding for advertising. There is a huge pot of money there, and just a few million pounds of it could contribute to solving this problem. If that is in the form of tax incentives, that is fine, but let us also make sure that we have an equitable resolution of these problems that does not give political advantage to one party or another.
Baroness Smith of Basildon (Lab)
My Lords, I say at the outset that we have got ourselves into a bit of a pickle over procedure; I know that the Government Whip is not in his place at the moment. It is rather unusual for the Minister to agree to answer one debate when responding to another. I hope that that does not mean that she will avoid any of the questions raised in the previous debate, however unusual the procedure that has been adopted may be. I also hope that she has found her folder: she told me in the Ladies that she had lost it, and I think that she would struggle to respond to some of the debates without it.
I thank my noble friend Lord Campbell-Savours for raising this issue, which he did with his usual tenacity and also his usual thoughtfulness. There is merit in discussing this further. Surprisingly, I agree with the noble Lord, Lord Leigh—although not with his analysis—that this is probably not the right place to debate it. The noble Lord says that the Bill is not about the funding of political parties, but the amendment is about the political levy, which is in the Bill. If the amendment affects political parties because it discusses the political levy, so does the Bill—so that is a curious and tortuous reason he gives for not supporting it.
The wider point is that my noble friend Lord Campbell-Savours highlights why the issue of the political levy, which involves party-political funding and political funding of the work of trade unions, should properly be considered in the round, as it was by the Committee on Standards in Public Life when it looked at the issue. If we consider tax relief on those paying their contribution to the unions’ political funds, that has wider implications. To look at it in isolation from the other issues raised by the Committee on Standards in Public Life is wrong—as we have argued that these two clauses are wrong.
My noble friend highlights the inadequacy of the Bill. I agree with the noble Lord, Lord Leigh, on one point: there is a debate to be had about whether contributions to political parties or the political levy of a trade union are part of wider civic society and should be recognised as such. I suspect that the Minister feels nervous at the idea that trade unions could be regarded as part of civil society, from her earlier comments, but this should be fed into the overall debate on party-political funding. It is worthy of consideration, but today is probably not when we should be discussing these issues; the proper place would be in a debate on party-political funding.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, I am grateful to the noble Lord, Lord Campbell-Savours, for tabling this amendment and sparking this debate. He sought to build an analogy between trade unions and charities. It is, of course, true that unions do philanthropic good, as indeed do many companies. However, having said that, I am afraid that the rules on tax relief on voluntary donations are well established and very clear. They apply to charities. To qualify, an organisation must be recognised as a charity by HMRC and the independent Charity Commission. This tax relief does not apply to money that is used for political purposes.
I agree with my noble friend Lord Leigh that this is not a matter for this Bill. As we have said, it is not about party funding. I am slightly less sure about his direction of travel. I was pleased to have a curtain-raiser from the noble Lord, Lord Stoneham, with some of his thoughts on party funding.
I agree with the noble Baroness, Lady Smith, that this is not a matter for this debate. I would ask the noble Lord to withdraw his amendment.
Lord Campbell-Savours
My Lords, when I was called, I was in a little bit of a pickle over procedure because I was quite surprised that my debate came as early as this. I thought I would be waiting another hour or so for it.
I say to the Minister that this proposal has many supporters on her own Benches. When I was tabling my amendments in the Table Office those years ago, I always made sure that they were supported by Conservative Members. The resistance has actually always been on my own side, because people felt that if we went down the route of tax relief on donations to political parties, the Conservative Party would be the main beneficiary. It may well be, but it is completely irrelevant. What matters is that we preserve the contribution base and bring hundreds of thousands of new people and individuals into donating to political parties.
The noble Lord, Lord Leigh, and other noble Lords have said this is not the vehicle. It could be the vehicle in so far as the committee that is sitting in parallel, dealing with these matters, could make a recommendation for it. The Chancellor could then consider it in the next Budget. There is no reason why the Conservative Government should not take a far more liberal view on the issue of tax relief on political donations, when it has so much support in their own party. I am told privately that Prime Minister Cameron at one stage expressed support for the idea of capped donations to political parties with tax relief. When I proposed £100 originally in previous legislation, the word that came back was that there was a lot of support in the Government for it. I understand why, because they saw themselves as the major beneficiary.
I thank my noble friend Lady Smith for her support from the Front Bench. I also thank the noble Lord, Lord Stoneham. I am sorry if I leapt in on his response. I have never done that before but I thought I should deal with it at that particular point. I also thank the noble Lord, Lord Leigh of Hurley, for his clear and unequivocal support for my amendment. I beg leave to withdraw the amendment.
Baroness Smith of Basildon
I have never yet been intervened on before I have said one sentence, but I will happily give way.
Lord Callanan
I thank the noble Baroness for giving way. I wonder if she could help me with something which is troubling me. I noticed when the noble Lord, Lord Collins, was speaking earlier that he was wearing a “I ‘heart’ unions” badge. I noticed in Prime Minister’s Questions earlier today that the right honourable gentleman the leader of the Opposition was also wearing one. I cannot help noticing that the noble Baroness is not wearing one. Should we read anything into this sartorial omission?
Baroness Smith of Basildon
I have to say to the noble Lord that that is one of the silliest interventions that I have ever heard in this House. I am really sorry—I have been left off the list; I did not get the memo this morning. Perhaps I should ask my noble friend Lord Collins if I could have a badge too, please, as it might calm the noble Lord opposite. Seriously, though, I think that it is a rather silly point to make on what I think is a serious issue, and I am not normally devoid of a sense of humour.
Noble Lords will recall from debates at Second Reading and on my Motion to establish a Select Committee that there are really deep concerns about Clauses 10 and 11. Regardless of what any of us in this Chamber say, and as we may learn in the Select Committee, we believe that this Bill has an impact on trade union political funding and, as a consequence, on party-political funding. I use as my reference on that the Committee on Standards in Public Life, which addressed those points. It is hugely controversial and we will not resolve it across this Dispatch Box, whether or not I have a union badge on—I thought that my brooch was rather nice. I think that it is right that your Lordships’ House has sought a Select Committee to get further information on this issue and really get under it in a lot more detail than we will be able to do in this Chamber. Its report will enable us to have a much more informed discussion on Report, and I am looking forward to it.
The noble Lord, Lord King, was right to raise earlier the process of discussing the overall principle underlining the two clauses. We did so at Second Reading and when we had the debate on the Select Committee, and I suspect that we will return to it again on Report. I want to touch on some of those principles today while addressing the clauses and the amendments tabled by me and my noble friend Lord Collins. I do not want to repeat the points that I made when we debated the Select Committee, but I think that some of them are worth emphasising and amplifying.
The Government’s proposals are that every trade union should within three months or 12 weeks ensure that all the members who wish to contribute to the political levy of their trade union should have to opt in to the political fund rather than having the right to opt out. The purpose of the amendments in this group is to probe the Government’s intentions a bit further but also to recognise and demonstrate why the timescale is so unrealistic, unnecessary and unreasonable. It also seeks a government response to what we believe is a sensible and practical way forward, either through extending the transitional period to five years or delaying commencement, both of which would have the effect, in practice, of providing the time to plan and prepare for the changes in a sensible way. I appreciate that this is not to do with the overall, overarching theme, but I think that we have established that there is a lack of credibility and robustness about the principles underlining the Government’s proposals.
The timescale of five years that we propose has not been plucked out of thin air. Unlike the Government’s proposals, and unlike this flimsy and inadequate impact assessment, we have taken the timescale from previous independent reports. The Committee on Standards in Public Life made similar recommendations, which allowed for changes to be made within five years. But let us be absolutely clear about those recommendations, which were made in the context of, and alongside, those three other recommendations that it envisaged would be acted on at exactly the same time. Those four recommendations, across the board on political funding, were made together. The committee’s report from 2011 said:
“Failure to resist the temptation to implement some parts, while rejecting others, would upset the balance we have sought to achieve”.
It was very clear—it sought not to advantage or disadvantage one political party over another but to have a balanced approach. That is what I find so offensive about the Government’s approach; they do not even pretend to seek a balanced approach but identify just one of four recommendations and seek to legislate on it while pretending that it does not have an impact on the very thing that the Committee on Standards in Public Life said that it did have an impact on. The report said:
“Both as a matter of principle and to support its sustainability, the regulatory regime must be fair to all political parties, and widely believed to be so”.
Lord King of Bridgwater (Con)
My Lords, the House has great respect for the noble Baroness the Leader of the Opposition and for the speech that she has just made about amendments whose effect would be that these proposals would come in but over a longer timescale. Although she then dealt with the core issues behind the amendments—I understand entirely why in her position she felt it necessary to do so—this Committee is in some difficulty with the way in which the amendments have been grouped.
I had not intended to speak until I had heard the contribution of the noble Lord, Lord Monks, but I have a suggestion to make, although I do not know whether I can persuade him to do this. Would he be prepared to make his speech on his amendment in the debate on this group of amendments? The serious issue here is that the noble Baroness’s amendments deal with contracting in and contracting out but over a different timescale. I do not in any way seek to misrepresent her, but that is the core issue that we need to discuss.
I myself have serious reservations. The noble Baroness will know—she has referred to it—that there is a considerable historical background to this matter, and the noble Lord, Lord Monks, has kindly provided me with material to remind me of the correspondence that I had when this matter arose before. It would be helpful to the progress of business and to the relevance of the speeches that no doubt a number of noble Lords on both sides wish to make if we could deal with the issue in that way. I would not otherwise have intended to speak because this is a more limited amendment on the timeframe in which these changes come in, whereas I want to talk about the general principle.
Baroness Burt of Solihull (LD)
My Lords, this transitional period of three months, during which the trade union member is treated as a contributor to the trade union before they must register the opt-in to the political fund, is clearly punitive and designed to inflict maximum damage on trade union funds.
Much has been said tonight about the Select Committee which is to take evidence on the impact of this legislation on political funding. The noble Baroness, Lady Smith, mentioned this, and I suspect that we may get a contribution from my noble friend Lord Wrigglesworth, who is a member of that committee. We have to await the report, but you do not need a report to understand what this three-month period will achieve.
Let us take the example of the union Unite. It has 1.2 million members whom it has to approach within the three-month period. It has to speak to each one and ask them to opt in. If they do not opt in in time, the union is not empowered to deduct the money. If it does, one presumes that it will be acting illegally.
Labour has proposed a five-year timescale. I wonder whether five years might be a little long but I understand the logic behind it, because within that period every member of the trade union will have the opportunity to renew their membership, and new members of the union will be covered by the opt-in as well.
I do not want to get into the argument of how long the period should be, but I am supportive of the trade unions. If they have to do this, they need time to adapt, just as, if the Conservatives were in the same position regarding donations, we would want them to have a fair period of time in which to make the adjustment.
Lord Monks (Lab)
My Lords, perhaps I may jump in. The procedure is a little muddled but I think that it makes sense for the general points to be made and for the Minister to reply at the end, provided that she replies to all the points made by my Front Bench colleagues.
I thank the noble Lord, Lord King, for the trailer for this speech, in which I shall talk about Amendment 68. The reason we have a bit of teamwork going on is that in 1984, when the noble Lord, Lord King, was Secretary of State for Employment, the then Government, under Mrs Thatcher, considered this very issue.
Opting in was on the agenda, possibly, but they decided to ask the TUC to come up with a transparent scheme to ensure that people have the right to opt out. I call it the King-Murray agreement; Len Murray was the negotiator and I was his assistant and scribe on the job. They reached an agreement on opt-out, of which I have a faded copy from 30-odd years ago. We undertook to remind members about their right to opt out and to give them the procedure whereby they could do it. It was done by an information sheet, as it was called then, and we did it. As I say, that was 32 years ago, and we have never had any complaint in the TUC that this agreement has not been carried out, from members, from government—from either of the two major political parties—or from employers.
As has been mentioned by my noble friend Lord Collins, unions already have to ballot every 10 years on whether it is legitimate for them to have a political fund at all, and they have done that four times since 1984, most recently in 2014. If we are going to go down the deregulation route of two out for one in, then this is one of the ones that should go out at some stage. However, we are still doing the ballot and we have never lost one. Indeed, as my noble friend Lord Collins said, we have actually put on some extra funds.
I am expecting that the Government will say that the King-Murray agreement has not been honoured in full by the unions—I have seen the letter to which reference was made earlier. But the fact is that it has been carried out, and it has been carried out in various ways: by inclusion on the membership form, which more than half the unions do, and by reference on the union website. I dug out a copy of the Unite exemption form that I printed from the website, which makes it extremely clear. Unite, UNISON, USDAW and the GMB—the four largest unions, and 90% of the affiliated trade union membership of the Labour Party—provide it in a very prominent place on their websites, and with references to it in union journals and communications. Thirty-two years on, unions are still carrying out that agreement.
Have there been any problems? None that I know of, and I have been around all those years, since carrying the bag into the office of the noble Lord, Lord King, for Len Murray. If there are any problems, and we are very ready to listen to those, we will take them up. If any union is not doing what it should be or what the four large unions are already doing, we will take them up on that; we will tell them what is at stake and that they need to get into line.
My amendment seeks to provide for the drawing up of a code of practice on contracting-out—an updating of the King-Murray agreement, because obviously information sheets are not quite the same thing in the age of digital technology, websites and so on. In that way, much more cheaply, efficiently and effectively, and without any accusations of political partisanship from the Conservative Party, we could sort out any problems there are that the Government know about and we do not. That was the wise course taken by Mrs Thatcher and the noble Lord, Lord King, in 1984. They did not want to hit the Labour Party—and they could easily have done so at that time—or the funding base, but they did take on a particular issue, to which we responded.
Despite the nice way that the Minister often puts it, I believe that the only possible explanation for this measure, a return to contracting-in, is an attack on Labour Party funding, the impact of which will be measured by the Select Committee. It is also, by the way, an attack on unions not affiliated to the Labour Party, which the noble Lord, Lord Balfe, has been championing, that have developed political funds since 1984 and get caught in this particular cross-fire, and quite unfairly too.
Contracting in was introduced after the General Strike in 1927, and it poisoned the trade union mind, so much so that the very first thing that the Labour Government of 1945 did was to repeal it and go back to contracting out. I think it was Hartley Shawcross who said, at the other end of the corridor, “We are the masters now”—not a very pleasant thing to say, but that gives some sense of the bitterness that there was around the question of opting in. So I ask the Government to follow the examples of Winston Churchill in the late 1940s, who warned against interfering in the other parties’ funding mechanisms without agreement, and of Mrs Thatcher in the 1980s, to eschew any suggestion of political malice and to show some statesmanship.
Lord King of Bridgwater
My Lords, I am very grateful to the noble Lord, Lord Monks, for responding to my invitation, which the Committee understood, and I hope that the noble Baroness, whose very proper and powerful speech I fully understood in connection both with the question of the technical amendment she had and the general point that she made as well, will also understand. I thought I might just intervene.
We are in a bit of living history at the moment—I suppose that is how some people would describe me at this time—but it also involves another Member of this House who, sadly, for personal reasons cannot be here tonight; I refer to the noble Lord, Lord Tebbit. He and I share responsibility for the actions that we took, in that he was Secretary of State after the election in 1983, inheriting a Conservative manifesto commitment that trades unions must take steps to ensure their members are fully aware of their statutory rights concerning the political levy and are able to exercise them freely. That was in the Conservative manifesto of 1983. Norman Tebbit, as he then was—the noble Lord, Lord Tebbit—who was then Secretary of State for Employment, proposed that, in the absence of such steps by the trades union movement to ensure that members were able to exercise their statutory rights concerning the political levy freely, the Government would introduce measures to guarantee the free and effective right of choice whether to pay the political levy.
Owing to the unfortunate resignation of our, sadly late departed and lamented, noble friend Lord Parkinson, there was a reshuffle in the Government and I then became the Secretary of State for Employment, inheriting these discussions which continued with Mr Lionel Murray—Len Murray, as everyone knew him, who then became Lord Murray. In the Trades Union Congress correspondence that I have, which was kindly provided by the noble Lord, Lord Monks, I see that he is “Lionel Murray”. I must say that his keeping of the TUC correspondence is very much better than my own personal records, which has been a great comfort. The correspondence is from General Secretary Lionel Murray, Deputy General Secretary Norman Willis and Assistant General Secretaries Kenneth Graham and—a promising newcomer—David Lea, who bears a striking resemblance to the noble Lord, Lord Lea, on the Benches opposite.
The position at that time, when I saw the representative of the Trades Union Congress, was that unless we could be sure that every possible step had been taken to ensure that union members were aware of their rights, and had the opportunity to opt out, we would feel it necessary to act in this case. After considerable consultation within the trade union movement—I received a very full submission—I received a copy of the directions that were sent to the general secretaries of all affiliated unions, TUC regional councils and the Wales Trades Union Council. Those recall the conversations with the previous Employment Secretary,
“to explore the steps that trade unions themselves might take to ensure that their members are fully aware of their statutory rights”.
It goes on to say:
“On 19 October, the General Council’s Employment Policy … met the Employment Secretary, whose central criticisms were that some unions with political funds did not take adequate steps to ensure that their members knew that they could contract-out of paying the political levy or how they could do so, and that the practical arrangements for enabling members to contract-out were of doubtful efficiency”.
The submission that came to me goes on to describe the arrangements proposed.
Lord Lea of Crondall
The noble Lord, Lord King, who is a very honourable man, has taken us through the history accurately, as far as I can see. The lacuna at the end is as follows; will he comment on it? If he has information that has come to him, has he given it to the Minister? If he has, it is for the Minister to reply as to why the Government have not raised it with the TUC. As far as I am aware, these matters have not been raised directly, with evidence, between the Government and the TUC.
Lord King of Bridgwater
This is a very serious issue—the issue of whether people are being conned, whether a lot of union members are being taken on and where the unions are not abiding by that original undertaking. This is the value of Committee stage; we will move on from Committee and the special committee which is now looking at these issues will, no doubt, consider these matters as well. My understanding, having looked at the impact assessment, is that there are now 5 million members paying the political levy, some £24 million—is that per annum? I am not sure—and some 25 political funds, of which 12 make no mention at all, in their membership, of the political fund. When new membership forms go out to people who are thinking of joining ASLEF, PCS, the RMT and the TSSA, there is absolutely no reference to people’s rights, as new members, to opt out of the political levy.
Let me state my purpose in saying this. I do not know whether it is right or wrong; I have just seen a briefing to that effect and I think it is very important that we should check. I stand by the decision that I took; if it could be shown that there would be absolute observance of the rights of union members in these situations, and if this were honoured, it would certainly strengthen the argument against introducing this proposal. That is my concern.
Baroness Smith of Basildon
I would not normally intervene on the noble Lord, but I have listened with great care and I am grateful: his historical perspective is very helpful to this debate, from a practical point of view. He mentioned three questions in taking us to this point. One concerned the code of practice that he agreed with the late Len Murray: was it observed, did it lapse and what has changed? Those were the questions he asked.
I will ask him whether he thinks there is a fourth valid question: if the Government consider that there is a problem, even along the lines he suggested from the briefing we have all seen—I am not going to question whether it is accurate or not—does he think that the legislation before us is the most cost-effective and admin-effective and efficient way of dealing with it? Or does he think there might be a case, with the TUC and the trade unions, for revisiting the code of practice to see if it needs to be updated in any way, or looked at to ensure that it is being effectively enforced?
Lord King of Bridgwater
The noble Baroness raises a serious point. The real difficulty is that others will stand up and say, “We tried that once; we tried the voluntary approach and the evidence is that it was not honoured”. The noble Lord, Lord Monks, speaking to the amendment, argued that we should get back into an improved code of conduct, but there will be many who will say that that approach was tried and it did not work: unions have not observed it and that does not give a lot of encouragement.
Lord Monks
This is the kernel of the issue: what is the evidence? I cannot vouch that over 32 years goodness knows how many unions have done everything perfectly. I am not arguing that. I am arguing that today—and it is not because of this particular clause—the four largest unions, with 90% Labour Party membership, are doing it. Those are the only unions I have managed to check since the Minister wrote the letter that the noble Lord is quoting. They have been doing it in different ways from time to time—that is for sure—but their websites are very clear. Unite’s rulebook says:
“All members are encouraged to contribute to the union’s political fund but have the right to request exemption if they wish”.
That is sentence one. Unison, GMB and USDAW’s websites say similar things.
So where is the evidence? It is not on the application form—which, by the way, is not what the statement requires. For new members it does, but there is some flexibility on how to do it. I am satisfied that the websites of these four unions—the only four I have yet had a look at—are in line with the spirit and, more or less, the letter of the statement, though of course we did not have websites 32 years ago. I am satisfied they are in compliance with it. I am happy to discuss that with officials and get it properly researched, but this general blackguarding of unions by saying that they are not carrying out the agreement is disgraceful and I hope that the Government will think again.
Lord King of Bridgwater
I think that one of the difficulties with what the noble Lord, Lord Monks, said is that there are undoubtedly an enormous number of people who vote Conservative and are paying a political levy to the Labour Party because of inertia and ignorance. While he has said that it is not technically in the TUC code that a new member should be advised of his rights to opt out of the political levy, I would have thought that, on reflection, he may realise that every new member ought to be aware of their rights.
I do not want to say any more at this stage because we will continue with this issue. I understand the seriousness of this for the Labour Party and I understand why Mr Jack Dromey said what he did in the quote that I gave. It is a very serious issue. It will be difficult to persuade the Government that the previous voluntary code—which I entered into in entirely good faith, and I am sure people from the TUC side did, too—has been honoured and respected by a number of individual unions. I do not just mean in the first five or 10 years after signing but on a continuous basis. Their failure to do that is perhaps why we are discussing this.
Lord Wrigglesworth (LD)
My Lords, as my noble friend said, I am a member of the Select Committee looking at Clauses 11 and 12. I had not really intended to intervene in this debate but on the specific amendment moved very eloquently by the noble Baroness, Lady Smith, on the three-month transition period, I felt it would be helpful to the Committee to recount some of the evidence that has been given to us since the committee started sitting.
I declare an interest as the national treasurer of the Liberal Democrats over the past four years. I have been involved as a company chairman and company director for much of the past 25 years, but in the dim and distant past I was also a full-time trade union official and therefore have some understanding of the internal organisation, activities and culture of the trade union movement. Indeed, in those companies I have been associated with, we had extremely good relations with the trade unions and worked in partnership with them in a way that I think the best companies always do.
But the debate this evening and all the evidence that has been presented so far demonstrate the truth of the comments made by the noble Lord, Lord Forsyth, when he said that the Bill was a solution searching for a problem. That has been borne out in everything I have seen so far in the consideration of the Bill, both on the Floor of the House and in the Select Committee.
Lord Balfe
My Lords, it is 36 years since I last agreed with the noble Lord, Lord Wrigglesworth, and at that time we were both in a different party. Perhaps I could add a few things. First, I have stood here before and said of certain things that they were in the manifesto and that we should respect the manifesto. This is one of the things in this Bill that is not in the manifesto, and I echo something that I think that my noble friend Lord Cormack said: if I were starting from here I would not have a Bill. But we have a Bill and it reflects some of the commitments in the manifesto.
Perhaps I could add to my noble friend Lord King’s history book something a bit more up-to-date. I was fortunate enough to be expelled from the Labour Party in 2001, and I was even more fortunate to be rung up by the present Prime Minister’s office in 2007 after he became leader. He asked me to go to see him and I wondered what this was all about, because I had done no deals when I joined the Conservative Party. He said to me, “We have got far too distant from the unions. I would like you to get a link built between the trade union movement and the Conservative Party”. For five years, I worked away at that endeavour—with, I think, some success. The unions are never going to be the best friends of the Labour Party but there is no reason for them to be the enemies.
Lord Balfe
Sorry, the Conservative Party—it is probably true of the Labour Party as well if you look at it.
Baroness Smith of Basildon
I say to the noble Lord that old habits die hard.
Lord Balfe
There is no need for there to be a huge gap between us. One of the points that I put forward when I was working for the Conservative Party in conjunction with the 2010 manifesto was a suggestion that instead of contracting in to the political levy, one should be enabled on the box to tick any political party to receive part of the political levy donation—any party represented in Parliament, to prevent money going to fascists and the like. That was rejected by a very senior person who is still in the Cabinet, who said to me that it would be unfair unless we had an overall settlement of the party funding issue, because it would mean impacting on one party without having an overall effect.
I have made my views clear in this House before: I do not believe in public funding of political parties. But this is not public funding. I do not queue up to get my hand in the gravy bowl to give money on the basis of the number of votes or things like that. In fact, if it were left to me, I should set a quite low limit of probably no more than £2,000 a year on donations to political parties. I happen to be suspicious: if people put more than £2,000 in, I say, what on earth are you after, then?
We could look at the issue of contracting in or out, but only in the context of a reform of the system. The noble Lord, Lord Wrigglesworth, is absolutely right. Anyone who has had anything to with the trade union movement knows that three months is a ridiculous timespan. It is just not administratively possible, any more than it is possible to convert to not giving away plastic bags in three months: you cannot do it. I am afraid that this clause in the Bill is not motivated by anything other than a desire to take a partisan stand. One of our strengths in the House of Lords is that we can be a little more independent than in other places. I am very unhappy with this as a system, and the whole way it has been put forward is wrong. I am not against the principle of contracting in as part of an overall reform, but this is not the way to do it.
The whole political fund thing of course went wrong. As my noble friend Lord King probably knows, it was brought in because they thought that if they gave the unions a chance, all the union members would vote against political funds. If I remember rightly, the trade union movement got a chap called Bill Keyes to organise political funds, and he did brilliantly: he almost doubled the number of unions with political funds. Not a single ballot has ever been lost. This could bounce back the other way if we pursue this particular reform. It is neither fair nor democratic, and we should think very carefully before we upset the democratic apple cart.
I speak from this side of the House, from a party that is not affected. But we in the House of Lords, an unelected Chamber, to an extent have the strength to ask the Government to please go away and think again. We are not asking the Minister to give concessions tonight, because we realise that this is complex, but as it stands this is a very partisan move. I do not think that it has a place in a trade union Bill, and it is not in the manifesto. I appeal to the Government to think carefully and to at least allow a version of the noble Baroness’s amendment on to the book to give a decent amount of time so that this can be done properly.
Lord Cormack
My Lords, as one who has never been a member of the Labour Party, I entirely agree with the forceful plea made by my noble friend Lord Balfe. I very much hope that this does not come to a vote on Report, but I have to give notice that if it does, unamended, I will almost certainly vote against it, because it is intrinsically unfair. If one tries to stand for anything in public life, it should be for fairness. Of course my noble friend cannot announce concessions tonight, but I appeal to her to listen very carefully indeed to everything that has been and will be said.
The way forward, if there is to be legislation, has probably been hinted at in the extraordinarily important speech made by my noble friend Lord King of Bridgwater. As he said, he negotiated in good faith with the then leaders of the TUC and an agreement was reached, which clearly has been honoured. What is not clear—my noble friend himself made it abundantly plain that he did not know—is whether it has been honoured more in the breach than in the observance or more in the observance.
I am prepared to give the benefit of the doubt until it is proved otherwise, on the same basis that a man or woman is innocent until proved guilty. But if it does transpire that this has not been honoured as scrupulously as the noble Lord, Lord Monks, believes it has been and should have been, and if it is considered that there should be any legislation on this, it is the enacting of that code of practice that should follow. We should not have what is proposed in this Bill—and we most certainly must get rid of this utterly iniquitous three months. It is quite wrong. The noble Lord, Lord Wrigglesworth, made a very effective and telling speech on this.
Lord MacKenzie of Culkein (Lab)
My Lords, I shall intervene briefly, given the lateness of the hour. First, I apologise to the Committee, because I was unable to be present for Second Reading; I was out of the country.
Like most other people, I wondered what mischief this clause sought to remedy. Having read the impact assessment, I found that the rationale for intervention is a potential lack of awareness among members that they might be contributing to a political fund.
I have been around in the trade union movement for a very long time. When I first joined my former union, the Confederation of Health Service Employees, in 1958, I was given a rulebook which explained that there was a political fund and told you how not to pay into it if you did not wish to. In those days, that was probably as far as it went. We have heard tonight about the King-Murray agreement, if I can describe it as such. I wanted to check tonight whether my more recent union, UNISON, was still honouring that agreement. We have heard from my noble friend Lord Monks that the four big unions are still doing that in one way or another. I looked at UNISON’s website tonight. UNISON came together from the merger of three unions with two different traditions. Two of the former unions, mine and the National Union of Public Employees, were affiliated to the Labour Party, but the third, NALGO, was not. We wanted to bring the traditions of those three different unions together.
On the website—I have printed it off and it is writ very large; I am sure that it can be read from the other side of the Chamber—it states, under “Our political funds”, that,
“in UNISON you can choose whether to pay a proportion of your subs into the affiliated political fund (Labour Link), the general political fund … both, or neither”.
At the bottom of the page, it gives a list of forms, including the political fund exemption form, so it is writ large in that document. I printed off the political fund exemption form which, again, is fairly large.
Every member gets a rulebook when joining. I am sure that they do not all read every page of it, any more than I have read the 16 pages of contract rules for a holiday I booked last weekend. Nevertheless, that rulebook states:
“A member who is exempt from the obligation to contribute to the political fund shall not be … directly or indirectly under any disability or disadvantage”.
That is honouring the agreement reached by the noble Lord, Lord King and the late Lord Murray. The rulebook also tells you how to get in touch with the Certification Officer if you are aggrieved or believe that there is a breach of the rules on the political fund. As we have heard tonight, there have been very few complaints and none has been upheld.
I make that point in support of my noble friend Lord Monks and Lady Smith of Basildon. My noble friend’s amendment or something like it is an answer to some of the perceived problems that are referred to in the impact assessment. If it is not possible to go along those lines, it is quite clear that it is about much more than a perception of a potential lack of awareness; it is about that unfairness which we heard about a few moments ago. That is something up with which I hope that this House will not put.
Lord Leigh of Hurley
My Lords, I referred earlier to my interests in the register. I further declare that I am a donor to a party and regularly opt in—not as regularly as my party would like, but at least once a year I choose to opt in voluntarily.
There are a number of issues which I want to address, not least those raised by my noble friends on this side of the Committee. The opt-in is discussed in the manifesto on pages 19 and 49, and it is clear from reading those two pages—which are completely separate from the pages to do with party funding—that this is a manifesto pledge.
The noble Baroness, Lady Smith, made the point that party funding has to be taken as a package and, if it were a matter of party funding—which I do not believe it is—it would be inappropriate to cherry pick. Well, up to a point. For example, in 2000, the PPERA imposed a condition on companies for shareholder approval before donations could be made and that was a unilateral act. As a result, donations from public companies to all political parties have pretty much dried up. Likewise, in the Labour Party manifesto, there were a number of commitments to change the way parties were funded, including putting on caps. If Labour had won the election, I am sure that it would have wished to implement its manifesto. We would have put a contrary argument but, none the less, we would have accepted that the manifesto commitment of the Labour Party would be enacted. So it is not quite as clear as we have been led to believe.
I believe that this is all about transparency. I have read some of the proceedings of the Select Committee. It was quite interesting to read Mr McNicol’s submissions where he reveals that, of the £22 million raised in total by political funding, some 54% does not go to Labour nor to any political party. This begs the question, where does 46% of the £22 million go? I have tried very hard to find the answer within political fund accounts, but we do not know. It is not purely about money to political parties; it is for political activities. Within UNISON’s accounts, it states that it is up to the executive committee to determine where that money is spent. So there are wider implications than just political funding—it is about political activities.
Lord Monks
I do not know whether I am helping or not, but the unions do not necessarily spend all their political fund money on the Labour Party. New ones have come in since 1984 and, because of the helpful legislation by the noble Lord, Lord King, on ballots, none of them is affiliated to the Labour Party. Even the affiliated unions spend only a proportion of their money on the Labour Party.
Lord Leigh of Hurley
Indeed, as I have said. We do not know where a very large proportion of it—46%—goes; it goes on political activity.
Lord Collins of Highbury
The trade union movement in this country is one of the most highly regulated in the world. It is required to submit an annual return to the Certification Officer. Every single penny that is held in trust of the membership is accounted for in that annual return. Every single penny is also recorded in the published annual report. This is far more transparent than any private company that donates to the Conservative Party. As I said, that is money that it may spend on political purposes. It does not have to. It could be for a campaign for civil liberties or voter registration, or a campaign against racists and fascists—and for safety at work, and lots of other things.
Lord Leigh of Hurley
I thank you. I did actually read the Certification Officer’s report this afternoon. It details exactly income and expenditure, union by union, but it does not specify exactly where the money goes.
Lord Collins of Highbury
The noble Lord read the annual report of the Certification Officer, but if you go on the Certification Officer’s website you will see published there the annual return of every single union. You can see that—and it will have a copy of the annual report.
Lord Leigh of Hurley
Thank you. I have read the annual reports of a number of the unions and, as I say, 54%—according to Mr McNicol; I am taking him at his word—goes to the Labour Party. On the rest, it is not clear; he has not stated where it goes, and I believe he was asked or will be asked where it goes.
Lord Collins of Highbury
The money that a union collects is foremost a union’s money to spend for the benefit of its members. The fact that it does not give money to the Labour Party does not mean that it disappears in a cloud of smoke; it is there to be used. If it has not spent it in one financial year, it will be on its balance sheet. The impression being given is that somehow something dodgy is going on with millions of pounds. Nothing dodgy is going on. If you want to see something dodgy, go to private companies that do not have shareholders which donate to the Conservative Party.
Lord Leigh of Hurley
With great respect, private companies do have shareholders and have to produce annual accounts. The point that I am making is simply that there is money raised for political funds, and we do not know where 48% of it is allocated. It is entirely up to unions how they wish to allocate the money. The point I am making is that those people whose money is taken on an opt-out basis do not have the transparency that they might be given.
Let me help a little further. The point has been made, first, about whether it is fair and, secondly, that there have not been any complaints. I do not think it is enough to say that there have not been any complaints, given, in most cases, the very small sums that are taken on an opt-out system. I draw noble Lords’ attention to a poll of Unite members, undertaken in July 2013. The poll had a statistical margin of error of 3.67%. Before taking the poll, Unite members were asked a factual question: “In the 2010 election, how did you vote?”. Of the people questioned, 28% voted Conservative, 20% voted Lib Dem and 40% for the Labour Party. I am sure the political spending did not reflect that, but none the less that is how Unite members actually voted. They were also asked whether they contributed to the union’s political fund. Only 37% said that they believed they contributed to the political fund. That is factually incorrect, but that is what they thought. They were then asked: “Would you support or oppose Unite making further large donations to the Labour Party in the future?”. Some 49% of Unite members, when asked that question, said no. They may not be complaining, but are they really aware of what is going on and is it really fair that their money is taken on an opt-out basis?
Some people think that the rules should be changed so that members have to opt in—
Lord Lea of Crondall
The noble Lord says that we are not talking about the Conservative Party, only about the Labour Party. That is very convenient—but on the analogy that he is now presenting, reiterating and repeating all the time he is speaking, the same analysis of how Conservative Party finances work would come off a lot worse. It is really rather inequitable that he should make these unilateral statements about the Labour Party without recognising what goes on inside his own party.
Lord Leigh of Hurley
With respect, we are discussing the Trade Union Bill and the opt-in or opt-out of the Trade Union Bill. As I said, PPERA came in to deal with another matter separately, perfectly properly.
Baroness Smith of Basildon
I do apologise to the noble Lord—I rarely intervene on these matters, but he has moved me to do so. He has been speaking in his contribution so far about funding to political parties but, earlier today, when he intervened on me, he said that the Bill had nothing to do with political party funding. How does he square those two comments?
Lord Leigh of Hurley
They have been raised and the point has been made that there have been no complaints. I am trying to make the point, which I hope the poll makes perfectly clear, that Unite members themselves are not aware of this opt-out/opt-in and of the effect of the opt-out, and their views do not necessarily reflect the level of donations made by Unite on their behalf.
The concept of money being taken from you without your specific and particular permission is alien. With great respect, private companies have to have permission from shareholders, as I have already said. For any amount over £5,000, there has to be a specific vote by shareholders. Individuals who are members of Unite have an opt-out; they do not have the ability to state that they wish to opt in. Accordingly, it is a manifesto commitment of the Conservative Party. Taking out the whole of Clause 10 would be a very retrograde step. I encourage the Minister to ensure that it stays in.
Baroness Neville-Rolfe
My Lords, as the noble Baroness, Lady Smith, has said, the impact on party funding of Clauses 10 and 11 is being looked at by a Select Committee. I thank the chairman of the committee, the noble Lord, Lord Burns, who I am glad to see in his place, for taking on this burden, and all the noble Lords, some of whom are here this evening, who will be serving on and contributing to the Select Committee. I also thank the Committee for being so pragmatic in taking the groups led by Amendments 57, 66 and 68 together. There is such a lot of overlap. I will try to answer the questions under the various headings, as I have said that I would. Where I cannot, I will write to noble Lords.
I should welcome the noble Lord, Lord Wrigglesworth, to our debate on this Bill for the first time. He will be interested to know that the Minister, Nick Boles, will be giving evidence to the Select Committee tomorrow. It is also good to see the noble Lord, Lord MacKenzie of Culkein, contributing.
These clauses will give union members more information about what unions are doing with their money. They will ensure that the members’ contributions to the political fund are made only with their explicit assent. Contrary to what my noble friend Lord Balfe was saying, that is a clear manifesto commitment. We will legislate to ensure that trade unions use a transparent opt-in process for union subscriptions. As my noble friend Lord Leigh pointed out, there were transparency initiatives by Labour in the Labour years affecting corporate donations.
I think we all felt that it was very good to hear from my noble friend Lord King. Earlier this week he was kind enough to draw my attention to the exchange of papers on political funds that he had as Secretary of State for Employment with the then general secretary of the TUC, the late Len Murray.
Lord Monks
So the Bill was prepared without any knowledge of an agreement made by the previous Conservative Government with the TUC.
Baroness Neville-Rolfe
The first time that I saw the papers in relation to 1984, shown to me by my noble friend Lord King, was at the beginning of this week. I would have to ask others what they knew.
Baroness Smith of Basildon
I am grateful to the Minister for that extraordinarily candid answer. Will she check with her officials, and report back to your Lordships’ House, whether at any time, when they were either preparing the impact assessment or briefing Minister on policy, they were aware of that agreement negotiated by the noble Lord, Lord King, and the late Len Murray?
Baroness Neville-Rolfe
The agreement of course dates back a fair number of years. The letter from the then Government, as I have now seen it, undertook not to introduce in the then Trade Union Act provisions to require an active opt-in on the condition that the TUC council adopted a statement of guidance on trade union political funds. However, my noble friend Lord King made it clear that if the guidance were not to prove effective the Government must of course reserve their right to legislate to ensure that union members were fully aware of the choice that they had in relation to political funds and were readily able to exercise it. The noble Lord, Lord King, quoted from the original guidance. Currently, a member automatically contributes to a political fund as part of their union subscription, unless or until they notify the union that they do not wish to do so. This system relies on the inertia of members to opt out.
We have concerns about the system because it does not seem to be providing union members with the information they need to make an informed decision, so those who might want to opt out and get their money back simply do not know. That is why I share some of the scepticism that my noble friend Lord King mentioned this evening. We have reviewed the available online membership forms—the point at which the applicant is actively contributing money—for 25 unions which have political funds. We discovered that 12 unions—just under half—do not mention the existence of a political fund. Of the 11 that refer to a political fund, a further five do not make it clear that a member has a choice to opt out, and in many cases it is unclear whether there is a reduction in contributions when a member chooses to opt out.
The noble Lord, Lord Monks, whom I have known for many years, shared some other examples of good practice with us. I will certainly get officials to look at them and will look at them myself. The point is that all union members who pay the levy must have a choice, and that needs to be transparent at the start of the process. I am sure everybody would agree that it should not be in some complicated and separate link.
The noble Baroness, Lady Smith, asked about our impact assessment, which we were able to publish in good time for Committee.
Baroness Neville-Rolfe
In time for Committee. The impact assessment sets out scenarios about how the move to opt in might change the number of those contributing and therefore the level of contributions. This reflected the uncertainty around the impact. This approach was endorsed by the Regulatory Policy Committee. The assessment recognises that member inertia might reduce contribution rates, but that unions are likely to respond with a stronger rationale and more communication to encourage contributions. As I recall, PCS did such a campaign when changes were introduced in the Civil Service. There will be other factors beyond any reforms that will also affect contributions levels. Contribution rates to political funds have been rising among union members over the past few years, which is perhaps a reason for some optimism among the political classes.
The Certification Officer has been mentioned. We will come to that on day four. I see the strengthened Certification Officer as having an important and useful role.
The noble Baroness, Lady Smith, in relation to burdens, mentioned penalties and asked me about the penalties that might apply if members did not opt—
Baroness Smith of Basildon
I asked about penalties if organisations used their best endeavours to achieve what the Government are setting out for them but were unable to do so in the time stipulated.
Baroness Neville-Rolfe
The answer, which I hope the noble Baroness will welcome, is that a union will not be able to deduct a payment to a political fund if the member has not opted in within three months of the commencement of the Act, but there are no penalties and a member can always opt in at a later date.
Baroness Smith of Basildon
Is the Minister saying that she is creating a criminal offence, but if someone fails to comply with the provision, there will be no penalty?
Baroness Neville-Rolfe
My understanding is that it is not a criminal offence. It is an offence. This quite often happens in regulations. I deal with a lot of regulation. You do not always have severe penalties. In this case, that is the situation. We will certainly look further, but it seemed to me a reasonable and moderate approach.
The noble Lord, Lord Stoneham, raised the issue that the Certification Officer had not been consulted and that there had been very few complaints. Given this lack of transparency in a significant number of cases, how would people know that they should complain, that they could get an opt-out or, indeed, that the Certification Officer existed? In some cases the union may publicise that; in others it may not.
Lord Stoneham of Droxford
I suspect that one reason the noble Lord, Lord King, did the deal with the TUC was that he knew that every 10 years there was going to be a ballot on the political funds in the unions, of which there have been three or four. So every 10 years all trade union members are reminded that they contribute to the political fund, and they have the option of voting it down if they wish to do so. Surely that is pretty transparent.
Baroness Neville-Rolfe
I thank the noble Lord for mentioning that because I am going to talk about the 10 years in a minute.
Clause 10 seeks to address the previous point by adopting a transparent opt-in process for union subscriptions. Additionally—in response to the point made by the noble Lord, Lord Stoneham—the only time a union member is informed of their choice to contribute is at the time of a political fund ballot, which happens only once every 10 years. Ten years is a long period of time to update members with the information they need about political fund contributions and activities. Clause 10 provides that members should decide whether to contribute every five years. This will ensure that members make their choice based on more current and transparent information of spending on political activities.
Moreover, the move to an opt-in approach for union members to contribute to political funds is in line with current best practice more broadly; that is an important point. I shall give two examples. In consumer law, reforms have reinforced transparency for consumers when they are charged for goods and services. The consumer rights directive was implemented in the UK in 2014. This reform reinforced the concept of express consent. Traders need the active consent of the consumer for all payments. Pre-ticked boxes are not permitted. Moreover, the Information Commissioner’s Office provides guidance on best practice in relation to direct-marketing communications. This recommends that best practice is to provide an unticked opt-in box and invite the person to confirm their agreement by ticking.
Lord Monks
I am sorry to make another intervention. In comparison with these examples, the amount of a union political fund contribution is, on average, about £2.50 per member per year. So that is the amount of money on an individual basis. We are talking about millions when all the aggregates are done, but for the individual this is not the biggest financial decision of their life.
Lord Taylor of Holbeach (Con)
It is a political decision. That is the whole point.
Baroness Neville-Rolfe
It is an important political decision, as my noble friend said. In other parts of the Bill we have been talking about looking forward, and this is an area where I think the opt-in is a good way forward.
Lord Polak (Con)
At present, as I understand it, union members contribute to the political fund of a union unless they opt out. There is no active decision by union members to contribute. As a result, many union members may be unaware that a portion of their membership fee funds campaigns that they may disagree with. Given the controversial nature of some of these campaigns, surely clear consent from the individual member making the financial contribution, even if it is £2.50, is imperative.
Baroness Neville-Rolfe
I agree with my noble friend. These are important decisions, and there are differences between us on the various Benches. But the Bill will make the default position for a member to exercise a positive and up-to-date choice in line with what I see as best practice.
Lord Stoneham of Droxford
I hope that the Minister is going to come to this point. Given that she is one of the pioneers of the digital world, surely she must accept that that is also something that the Government must consider—otherwise people will say that they are trying to deter people.
Baroness Neville-Rolfe
As is so often the case, the noble Lord makes a good point. Perhaps he will give me a minute. I wanted to say that we will not be discussing Clause 11 until another day, but it provides for the transparency of expenditure and information that members need to make a sound decision. I am clear that these changes are proportionate and for the benefit of individual members. They are not aimed at what unions decide to spend their money on but provide a transparent choice for individual members.
I now turn, for the benefit of the noble Lord, Lord Stoneham, to Amendments 57 and 64 on giving notice via electronic means. I recognise the arguments that have been made in favour of electronic means of communication and have acknowledged in the Bill’s impact assessment that there are extra costs for unions in communicating with their members. I can see that moving to an electronic means of communication would help reduce the burden of postage costs for both unions and members, but particularly for unions at a time when they are going to have to contact members to make an active opt-in to the political fund.
Lord Collins of Highbury
We have been talking about whether members should get information through the website. Has any analysis been done of how people join unions nowadays? Certainly, when I looked at this, at least 60%, and possibly more, of the members of the biggest unions were joining online—so the process of being aware of the current position on opting out is better effected online. Has the noble Baroness made any analysis of how people are joining and staying in unions?
Baroness Neville-Rolfe
The noble Lord makes an interesting point. I have said that we are in favour of looking at electronic means of communication and I will take that point into account in the further work that we are doing. I do not know what we have done so far.
The noble Baroness, Lady Smith, has proposed that the implementation of Clauses 10 and 11 should be delayed, and she looked at this in two different ways. Amendment 66 would in effect change the transitional provisions in Clause 10 for members to sign up to the new opt-in system from three months to five years. This would mean that the current arrangement whereby union members have not made an active decision to opt in, and indeed may not know what they are contributing to or even whether their contribution will remain in place, was absurd. To be clear, the three months relates to the time that an individual member has to opt in, and the general commencement of these clauses is a separate matter. There are two different things happening here: the three-month period and the commencement of the provisions. We will give this matter proper consideration. We will listen and reflect further on the points that have been made.
Amendments 123 and 124 are similarly intended to delay implementation. Whereas Amendment 66 would introduce a delay by lengthening the transition arrangements, these amendments seek to delay commencement of the provisions for five years.
On the substance, noble Lords will not be surprised to hear that I do not agree that we should delay implementation of the transparent opt-in provisions for five years, by whatever means. Having said that, I recognise that there is a lot of angst about the lack of necessary preparatory time for unions to implement the new arrangements. We do not want to make the system unworkable by rushing it, and I will reflect further on the two approaches to the issue of timing that have been put forward this evening.
In response to the point made by the noble Lord, Lord Stoneham, about the system of reducing contributions, it is up to individual members whether to contribute to a political fund.
Finally—as it is getting late—there are some amendments in relation to opt-in renewal dates on which I will write to noble Lords. They seem straightforward and I do not want to delay the Committee any longer. However, I should comment on one issue. It has been proposed that the new opt-in arrangements should apply only to new members. However, that would exclude very large numbers of trade union members from the purview of these clauses. It is important that all members have a choice about whether or not to contribute to a political fund.
Lord Collins of Highbury
I asked this question and it is the subject of one of my amendments. It would help if the Minister, perhaps before she comes back more formally, could consult unions on how people join nowadays and what the turnover is. This process could be managed through new members, possibly within a relatively short timeframe. So before the Minister reaches a final conclusion, I urge her to consult unions on this particular issue.
Baroness Neville-Rolfe
My Lords, my mind is not closed to logistic arrangements that would make these provisions workable; that would be ridiculous. But I did not want to leave the House with the idea that, somehow, just new employees, as it were, would come into the system. We feel that that would not quite hit the mark. However, of course I will look at the process and how it is working in reflecting on this issue before we return to it at Report.
We have had a good, long and late debate. We will reflect further in the way that I have indicated but, in the mean time, I ask the noble Baroness to withdraw this amendment.
Baroness Smith of Basildon
My Lords, I thank the Minister for her response and her willingness to reflect on some of these issues. I have found this quite an extraordinary debate. The more I think about it, the fact that the Minister did not know of that letter—I am grateful to the noble Lord, Lord King, on this point—is amazing, given that that would have been something for her to look at and consider.
This comes back to the impact assessment. I am used to Home Office impact assessments, which often state what other solutions have been considered, why they were rejected and how much they would cost. It seems to me that, on this, no other way forward was ever considered. The amendment that my noble friend Lord Monks put forward is something that the Government should have considered before coming forward with this proposal, particularly if they had known about the arrangements of the noble Lord, Lord King, in 1984.
The Minister has addressed some of the detailed points, and I think she understands that my amendments around implementation are, in essence, probing amendments to try to ascertain the justification for the proposals that the Government have brought forward and the urgency of them. That is the key part that the Minister missed in her response. She should look again at the answers she has given, or I could table some Written Questions, because clearly there are some points missing. On the impact assessment, she admitted—or confessed to your Lordships’ House—that there is uncertainty around the impact. I think that is an honest and candid statement, and I am grateful to the Minister for that. The rationale she gave was that there are concerns about the system because it does not “seem” to work. I find it extraordinary that we get such legislation through because there are concerns that the system does not “seem” to do what we want it to. To me, that is not the way in which legislation should be made.
Lord King of Bridgwater
My Lords, the noble Baroness has attacked my noble friend the Minister for the Government apparently not knowing about the agreement reached by me and Len Murray. It is quite interesting, is it not, that this Bill has come clean through the House of Commons, where there are a lot of union members on the Labour side? It is quite clear that every union member on the Labour side in the Commons had forgotten about it as well, which is part of my concern.
Baroness Smith of Basildon
There is a real point in that. I think that there should be longer memories in your Lordships’ House, but perhaps there should be collective memories in government departments. It is one thing knowing in a debate what letters were written and agreements reached many years ago, but when Governments bring forward legislation there is a duty on them to understand what has happened previously on these issues.
I am grateful to the noble Lords who contributed to this debate. I say to the noble Lord, Lord Balfe, that I particularly agreed with and enjoyed his contribution. He and I rarely agreed when he was in the Labour Party. He was far to the left of where I was then. I do not doubt his sincerity or loyalty to his new party. He made a very sincere plea to the Minister tonight. I concur with everything he said.
In fact, the only support for the Minister came from the noble Lord, Lord Leigh, who was concerned about my jewellery.
Baroness Smith of Basildon
I apologise to the noble Lord; he would never make such a silly comment. Quite extraordinarily, though, he had said earlier that this was not about party-political funding, and then he made an entire speech about party-political funding.
I am glad that the Minister will reflect on some of these issues, but I am disappointed that she is not reflecting on the rationale behind them and the justification for them. I am sorry for the noble Lord, Lord Burns, who has sat through a long debate tonight. We are expecting a lot from him. I say in all sincerity that the work of the Select Committee will be very important. We heard tonight how that factual approach will inform how we proceed on this matter. I beg leave to withdraw my amendment.