Draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017

(Limited Text - Ministerial Extracts only)

Wednesday 25th January 2017 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I beg to move,

That the Committee has considered the draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017.

It is a pleasure to serve under your chairmanship, Mr Stringer. During the passage of the Trade Union Act 2016, the House debated at length the principle that union members should make an active choice to contribute to a trade union’s political fund. The other place established the Select Committee on Trade Union Political Funds and Political Party Funding, under the chairmanship of Lord Burns. I would like to start by thanking Lord Burns and all the peers who sat on that cross-party Committee for their work.

I want first to remind hon. Members why the Act’s reforms to political funds are important. Under current legislation, a union member automatically contributes to a union’s political fund as part of their union subscription, unless they notify the union that they do not wish to do so. We have debated at length the principle of those rights of union members. The Select Committee also assessed the extent to which unions were, in practice, transparent to their members about the existing choice to opt out of contributing to their union’s political fund.

The Select Committee concluded that there is significant variation in how different unions convey opt-out information to their members. The Government’s analysis of online union subscription forms—the point at which an individual makes their first financial commitment to the union—found that nearly half of unions that have a political fund make no mention of its existence.

The provisions in sections 11 and 12 of the Act meet our manifesto aim to provide a transparent, active choice for union members by allowing new members joining a union to opt into making payments to a political fund. As required by the Act, we consulted the TUC, 24 unions with political funds and the certification officer to seek their views on the length of the transition period.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

First, I declare my proud membership of the GMB. I worked on the Trade Union Act in its early stages in Committee and on Second Reading, along with other Opposition Members. The Minister mentioned the consultation period and the TUC. Of course, the TUC and many individual unions have expressed concerns about the length of the transition period. Though willing to try to comply with the legislation, they have raised very reasonable concerns about the timeframe. Why has that not been taken into account?

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[Margot James]

The hon. Gentleman is right to say that the Government consulted widely with individual unions, the TUC and the certification officer on the length of time deemed reasonable for the transition period. The unions gave differing views. Many have lobbied us for longer than 12 months, but, taken in the round, the Government have decided that 12 months is a reasonable amount of time for unions to introduce the necessary changes to comply with the legislation.

[Christian Matheson (City of Chester) (Lab)]

First, I declare my membership of the Unite and GMB trade unions, in common with my hon. Friend the Member for Cardiff South and Penarth. What was the point of consulting if the Government were simply going to ignore every response they received ?

[Margot James]

We conducted a consultation and took it seriously. We listened to people’s views and arrived at a judgment. I remind the hon. Gentleman and other hon. Members that this is not news to the trade unions concerned. It passed into law last May, following intensive debate on the Floor of the House and a great deal of publicity. In effect, the unions have had more than 12 months to introduce the necessary changes to their systems.

[Chris Stephens (Glasgow South West) (SNP)]

I, too, declare my membership of Unison and refer to the Register of Members’ Financial Interests and my post as chair of the Public and Commercial Services Union parliamentary group. Why was 1 March 2018 chosen as the specific date, when we know from trade union feedback that that will cause considerable problems? Trade unions discuss rule changes at their conferences, but many of them are held biannually.

[Margot James]

If trade unions hold conferences biannually, they will surely have at least one conference opportunity between now and March 2018. As the hon. Gentleman probably knows, under the Trade Union and Labour Relations (Consolidation) Act 1992, it is not necessary for unions to amend their rules in this regard at a conference. They can apply to the certification officer for the acceptance of any form of union ballot on such a change of rules. Although many unions would prefer to give effect to the changes at a conference, there is no obligation on them to hold a conference to achieve that.

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Minister give way?

[Margot James]

As it is the hon. Lady, I will give way.

[Ms Eagle]

I thank the Minister for giving way. I declare my proud membership of Unison and the journalists’ union. One of them allows members to opt in and has a political fund, while the other does not. Does the Minister not realise that trade unions rely on their rulebooks and the legitimacy of any changes to them in order to ensure that they are appropriately and politically accountable to members who may have different views on different policies? If they were to start amending their rules in this unorthodox way, to fit in with the Government’s purpose, that would set very unhelpful precedents for many other issues. I speak as someone who has very detailed knowledge of how trade unions operate their internal affairs. Will she at least acknowledge that point and go away and think about it? Will she also—

[The Chair]

Order. Interventions should be brief and to the point.

[Margot James]

I defer to the hon. Lady’s considerable experience of trade union matters, but she has just pointed out that trade union members have widely different views on many political issues. I think that that provides inherent justification for the measures.

[Ms Eagle]

Will the Minister give way?

[Margot James]

I have not finished responding to the hon. Lady. She correctly referred to a reliance on rules to provide proper accountability to members, and we respect that. However, the hon. Member for Glasgow South West said in an earlier intervention that many unions hold biannual conferences. There is therefore an opportunity between now and March 2018 for the vast majority of those unions with political funds to agree the rule changes at a conference. As I have said, if they cannot meet at a conference to introduce the new rules, they can at least ballot their members in consultation with a certification officer.

I am sorry that the hon. Member for Wallasey is frustrated and disappointed by my response, but I think that it is reasonable. The Government believe that a 12-month transition period is adequate for unions to ensure that they comply with the statutory requirement under the Trade Union Act. That balances the need to provide unions with sufficient time to implement the changes with the Government’s view that the measures are delivered promptly.

Once the regulations have received parliamentary approval, they will come into force on 1 March 2017 and the formal 12-month transition period will run from that date. The Government’s view is that unions have known about these changes for some time and it is not unreasonable to expect them to have already done some planning to meet the requirement. We are also grateful to the certification officer, who has consulted unions and issued model rules and guidance, which should assist them in complying with the new requirements.

[Chris Stephens]

I am grateful to the Minister for giving way again. It is important to note that the certification officer has indicated that there will be a period of at least five weeks for him to sign off the changes to a trade union’s rule book. Does the Minister agree that that means that, in effect, trade unions have only 11 months?

[Margot James]

The hon. Gentleman quibbles about weeks and months. We are approaching the end of January and the measure will not come into force until 1 March, from which point the unions will have 12 months in which to comply.

[Stephen Doughty]

The Minister is being generous in giving way. Unfortunately, she has mischaracterised what many unions have done with regard to planning. The Union of Shop, Distributive and Allied Workers will hold its annual conference on the last Sunday in April. It booked the venue many years in advance and informed the delegates, and they have had to book time off work. USDAW and other unions want to agree the changes in order to comply with the legislation, but they will not be able to do so because the Minister is not willing to move the deadline by a few months. That is absurd.

[Margot James]

I am sorry about the situation that the hon. Gentleman describes at USDAW. Perhaps it could make some progress at the end of April, if that is when its conference will take place. If it is not scheduled to take place until next April, I concede that that is a disadvantage for USDAW. It may have to take other measures, which I have outlined, to consult its members on the necessary rule changes.

The Secondary Legislation Scrutiny Committee noted that the Government had not published a summary of responses to their consultation with unions and the certification officer on the length of the transition period covered by the regulations. I apologise that we were unable to publish a summary of responses when the regulations were laid. We accept that we should have done so. The Committee advised us that it is best practice to publish a summary of consultation responses and we have now done so on gov.uk. The Government believe that the regulations are proportionate and strike the correct balance between the interests of unions and members of the public.

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[Margot James]

I thank hon. Members for their contributions. This has been a thought-provoking, passionate debate. First, I thank the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough, for her contribution. I have spoken before about our consultation process with individual unions, the TUC and the certification officer. I accept that there is a degree of complexity to the changes that unions are required to make. At least the certification officer has this month published the model rules and the changes to union rulebooks, which is important.

[Ms Eagle]

Will the Minister give way?

[Margot James]

Not yet. There are 13 months to go before the due date. The hon. Member for Sheffield, Brightside and Hillsborough talked about “wholly irresponsible” regulations, and many hon. Members challenged the basis of what we are doing, not just the length of time that we are allowing unions before they must comply with the law. We Government Members feel that if people’s money is directed into a fund that is used for political purposes, they should at least know that, and have a say in whether they want that to happen. There may be a divide between the two parties on this, but I am afraid that we Government Members feel strongly that if people have money taken off them, they should have a say in where it goes, and that is all that the measure ensures.

Mr Stringer, you rightly allowed Members a degree of liberty in going beyond the confines of what we are debating; I shall take advantage of that and challenge the idea that we have taken an ideological position on this matter. I do not for one instant believe that. In fact, our research showed that almost half of the money raised through donations to political funds is, as the hon. Member for Glasgow South West pointed out, devoted to other campaigns, and not Labour party funds. Almost half goes on the sort of good campaigns that he mentioned. It is a complete myth that this is some sort of political attack on the way that the Labour party is funded.

[Stephen Doughty]

The Minister is generous in giving way. She makes the argument that a lot of money goes to other important campaigns, such as the USDAW campaign on stopping violence against shop workers. Let us take the politics out of this for a moment; will she listen to the very reasonable concerns felt by a number of unions about the length of the transition—points echoed by the right hon. Member for West Dorset, a former Cabinet Minister who sits on her party’s Back Benches? He made an important point about the timing, and the impact that the transition period will have on some very reasonable unions that are trying to comply with the legislation.

[Margot James]

I thank the hon. Gentleman for his intervention; he made a powerful speech earlier. Of course I noted the comments of my right hon. Friend the Member for West Dorset, and I will give them consideration, but I have made the case—I will not repeat myself—for why we feel that 12 months is acceptable. This comes on the back of an Act that was passed almost a year ago.

[Several hon. Members rose—]

[Margot James]

I will not give way for a little while. I want to go back to our purpose, and remind Opposition Members that when we concluded the Act’s Public Bill Committee sittings, the shadow spokesperson, the hon. Member for Cardiff West (Kevin Brennan), said on the record:

“we recognise that the Government’s new proposal”—

that is, that only new members should be required to opt into the political funds—

“is a substantial improvement ?on the original Bill, which would have required all members to opt in within three months and to renew that opt-in within five years.”––[Official Report, Trade Union Public Bill Committee, 27 April 2016; c. 1510.]

Hon. Members are making a great deal of something that really ought to be happening already, and is a modest advance.

[Chris Stephens]

I thank the Minister for giving way; she has been most generous. As the right hon. Member for West Dorset pointed out, there is a real problem with the date given in the statutory instrument—1 March 2018. Is the Minister indicating that she is amenable to moving that date by a couple of months, as the right hon. Gentleman suggested?

[Margot James]

I am not going to proceed down that path at this point. As required by the Act, we have consulted and sought views on the length of the transition period.

[Gill Furniss]

rose—

[Margot James]

Sorry, I am not going to give way again; I have been very generous. [Interruption.] As it is the shadow Minister, I will give way, but for the last time.

[Gill Furniss]

Will the Minister take on board what the right hon. Member for West Dorset said and give us some flexibility in implementing the transition? She seems to have indicated that she may look at that, but it would be good to put on the record whether that will occur.

[Margot James]

I can only repeat what I said to the hon. Member for Glasgow South West. I am not going to repeat myself again. The regulations implement the Act’s provisions by providing for a 12-month transition period. We have taken a proportionate approach on the political funds opt-in transition.

[Christian Matheson]

rose—

[Margot James]

Sorry, I am not going to give way again. We have taken on board the comments from this debate as well as those during the consultation. Our view is that the 12-month period gives sufficient time.

Question put.

Division 1

Ayes: 10

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Conservative: 8

Noes: 7

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Labour: 6
Scottish National Party: 1

Resolved,