Baroness Neville-Rolfe
Main Page: Baroness Neville-Rolfe (Conservative - Life peer)Trade Union Bill
Baroness Neville-Rolfe Excerpts(8 years, 10 months ago)
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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 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.