Trade Union Bill

Baroness Smith of Basildon Excerpts

Wednesday 20th January 2016 Lords Chamber

Moved by

[Baroness Smith of Basildon]

That it is desirable that a Select Committee be appointed to consider the impact of Clauses 10 and 11 of the Trade Union Bill in relation to the Committee on Standards in Public Life’s report, Political Party Finance: Ending the Big Donor Culture, and the necessity of urgent new legislation to balance those provisions with the other recommendations made in the committee’s report; and that the committee do report by 29 February.

[Baroness Smith of Basildon (Lab)]

My Lords, as a House, our scrutiny role appears to have excited some interest in recent months, with our powers and limitations becoming more widely known and understood—and, indeed, facing scrutiny. So I want to be crystal clear about what my Motion is intended to do, but also what it does not do.

Noble Lords will be aware that Clauses 10 and 11 of the Trade Union Bill are deeply controversial. These two clauses basically deal with how trade unions raise and spend their members’ money for political purposes. The Government contend that this has no direct bearing on political party funding—specifically, Labour Party funding—but both we on this side of the House and the trade unions contend that it does.

I am not seeking today to make the case one way or the other, but I am seeking a way through that will allow us to consider the Bill in the normal way and, at the same time, provide for a Select Committee to examine this specific point. The noble Lord, Lord Tyler, made a similar proposal about a Select Committee in his excellent speech at Second Reading.

The merit of our approach is that it will take the political argument on the clauses away from the debates on the Bill during the normal Committee stage. It will ensure that the issues other than those in those two clauses, Clauses 10 and 11, receive proper and full consideration, without being clouded by what is a very specific party-political point. Select Committees of your Lordships’ House are highly regarded. Such a committee could take evidence, including from those who have independent expertise, to assess any potential impact of the Government’s proposals on party-political funding. It would examine the Government’s proposals in the light of the recommendations of the Committee on Standards in Public Life in relation to party-political funding, a committee now chaired by the noble Lord, Lord Bew. Our approach would not prevent any of our other committees from reporting on this Bill, and a Select Committee could make recommendations and offer advice as to whether legislation could be improved.

What the Motion does not do is in any way to seek to hinder, delay or impede the passage of the Bill. I have suggested 29 February as a time limit for the Select Committee to report back, as that would allow time for consideration and for any findings to be taken into account on Report. I appreciate that the Minister and the Government do not share our concerns, but the BIS Minister, Nick Boles, responded to a Written Question by saying:

“The proposals in the Bill are not about party funding … Therefore no assessment has been made in relation to the impact on the finances of any political party”.

In answer to a similar Question, the noble Baroness, Lady Neville-Rolfe, the Minister in this House, responded:

“There has been no assessment. However, the proposals in the Bill are not about party funding”.

Many noble Lords will have seen her letter circulated yesterday, which reiterated the same points at some length. I wish that I could accept those assurances, but we believe that the Government are wrong or, at the very least, in denial about the consequences of Clauses 10 and 11.

Let us be precise: our genuinely held concern is that this aspect of the Bill will have a significant impact on the resources of one major political party—my party, the Labour Party. In doing so, that will both disrupt the political balance in the UK and have a damaging effect on the electoral process and on our democracy. Any examination of this issue by your Lordships’ House should be evidence based rather than reliant on opinion—even if they are the opinions of the Minister or myself. We should examine the facts and the detail. The problem is that, even when we eventually receive the long-promised impact assessment—and I find it extraordinary that the Bill has gone this far before we even get one—there will be no consideration of any impact on party-political funding. It will not even look at it as a potential unintended consequence.

The Committee on Standards in Public Life, then chaired by Sir Christopher Kelly, sought to reach a political consensus on this vexed issue in its 2011 report, Political Party Finance—Ending the Big Donor Culture. That committee made four recommendations, only one of which has found its way into any legislative proposals from the Government—this one, the one on trade union funding. The noble Lord, Lord Bew, who now chairs the committee, wrote this week that:

“The committee made a similar recommendation but as part of an overall package of measures”.

He quoted from that report, saying:

“Failure to resist the temptation to implement some parts, while rejecting others, would upset the balance we have sought to achieve”.

[Lord Robathan (Con)]

The noble Baroness is talking about party-political funding, but I thought that we were discussing the Trade Union Bill. Is she not being perhaps a bit sensitive to the idea that trade unionists wish to subscribe only to the Labour Party? Actually, the political funds might easily go to any other party that they wish.

[Baroness Smith of Basildon]

I would entirely agree with the noble Lord’s final point. As I said, the clause looks at how trade unions collect and spend the money from their members on party-political issues. But it might be helpful to him if he took care to listen to the point that I am making—he says that he is all ears, so let us see if he proves it—which is that the Committee on Standards in Public Life made four recommendations on party-political funding, and only one of those is proposed by the Government in this Bill. The others are being ignored. When we look at such issues, they are sensitive. The noble Lord is quite right—I am sensitive about my party funding, and I am sure that he is equally sensitive about his. But we have to look at this in the round, and consensus is always sought on this issue. That point was made very well by the committee, which was very clear, saying:

“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”.

--- Later in debate ---

[Lord Forsyth of Drumlean]

My Lords, I was not planning to speak on this matter but I have been provoked. I do not know what I think about this because I am in two minds. First, this is a manifesto commitment. This House is not expected to oppose Conservative Party manifesto commitments. However, the manifesto commitment is in two parts—it is about a review of funding, and this is only one part. I had to deal with this when I was a Minister of State in the Department of Employment in 1992.

In 1982, my noble friend Lord Tebbit dealt with the matter very well. The issue then on opting out or opting in was that people were not able to choose whether they wished to subscribe to the political fund and many were not aware that there was a political fund. In 1982—I hope that my memory is correct— my noble friend Lord Tebbit and Lady Thatcher’s Government decided that the fairest way to deal with this was to have a regular ballot every 10 years to establish whether there should be a political fund and that people should be able to opt out if they wished, thus preserving individual freedom.

In 1992, 10 years on, we looked at this again and we had some employment legislation which was a little controversial. It included abolishing wages councils and one or two other things like that. The debate in the Conservative Party and the Government at the time was that we should change the law and make a requirement to opt in. I decided that we should not do that and the Government took that view. I decided that we should do so not for any reasons about party political funding, but because I thought that it would be unfair to the Labour Party, reduce its funding and inevitably start a debate about state funding of political parties, to which I am totally opposed. The day we put our hands in the pocket of the taxpayers to pay for our party political campaigning is the day when a bigger gap will open up between us and the electorate.

It would be a great mistake if we moved away from the system that we have—I take the point raised by the noble Lord, Lord Tyler, about the importance of controlling expenditure in constituencies—and the need for political parties to raise their funds by getting members on the ground and in the constituencies. A culture that enables one or two very rich people to bankroll one party, or three or four trade unions to bankroll another, encourages the loss of that grass- roots support that is so desperately needed at present.

As I say, I am in two minds. I hope that my noble friend will be able to answer this in responding to the debate on the Motion: what is the problem that we are trying to solve? What has gone wrong with the trade union political funds and the system established in 1992? I have seen the letter that my noble friend wrote to all of us. Is it that we think that people are being lent on not to opt out of the political levy? Is it, as she said in her letter, that we think that people are not aware that they have the right to opt out of the political fund? If that is the case, is it not possible for the trade unions to come forward with proposals on a voluntary basis that would establish that whatever these deficiencies are would be put right? I know that they have done so.

We are provoking a confrontation that will do none of us any good and certainly will not do the political system any good. I say to the noble Baroness, who I have enormous respect for, on the idea that we can sort this out in five weeks: this will be a bean-feast for the media to have a go at all political parties and their funding.

[Baroness Smith of Basildon]

If I might briefly assist the House in looking at this issue, I am not for one moment suggesting that, in the five weeks or so to the end of February, the Select Committee would be able to look at all issues of party funding. That is not the purpose of my Motion. It is on one specific point: that, on the issues that the Committee would be deciding and voting on, there should be a parallel process to inform its deliberations. No one would dream that it could do it in five weeks—if we cannot do it five or 10 years, we will not do it in five weeks. It is specific on the point of what the committee will be debating.

[Lord Forsyth of Drumlean]

The noble Baroness is very smart and clever and that is exactly the right answer to give to my point, but I am trying to make bricks here. She may be correct in saying that the terms of reference for the committee and its functions could be limited to that period of time, but that will not affect what goes on in the outside world. We will have a great old row about party funding and we will not be in a position to get agreement between the political parties. We all know that it was about setting a limit. The trade unions think that the limit should not apply to them, the Labour Party is so dependent on the trade unions that it will not want to do that, and the same on our side. We know where the differences are. I hope that these might be resolved in the future, but I do not think that the noble Baroness’s Motion is the right way to do that. I agree with my noble friend Lord Cormack that the proper way to do this is in consideration of the Bill.

I hope that my friends on the Front Bench will recognise that this will take away funding from the Labour Party at a time when the Labour Party is perhaps not at its strongest. I have no brief to build up the Labour Party, but our parliamentary system depends on having a strong and effective Opposition. The Short money is supposed to enable the Opposition to operate in Parliament; it is nothing to do with party politics as such and is being cut, so that makes it harder for them to operate. At the same time, to attack the funding is, I think, misguided because I know what will happen. The people will say, “Well, let’s have a look at the Tory Party. How can we inflict this there?”, and we will get into a war of mutual destruction. I do not think that would help enhance the reputation of Parliament or of the political parties. Therefore, the best possible outcome would be not to pass the noble Baroness’s Motion and for the Government to think again about whether there is a way to meet our manifesto commitment and, at the same time, reach a deal with the trade unions which enables whatever the problem is that the Government perceive makes it necessary to do this to be resolved.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I promised in a meeting that they would be published before Committee stage and I have delivered on that promise. I have arranged for them to be published tomorrow, which will give plenty of time before Committee starts on 8 February. I look forward to discussing them with noble Lords across the House.

In conclusion, this Bill seeks to modernise the relationship between trade unions and their members and to redress the balance between the rights of trade unions and the rights of the general public, whose lives, as I have said before, are often disrupted by strikes. Clauses 10 and 11 embrace the good democratic values of choice, transparency and responsibility. I look forward to full scrutiny of the Bill in this House.

This Bill is a package of measures and it is disappointing that the party opposite has chosen to misinterpret our intentions. As I have demonstrated, Clauses 10 and 11 are quite distinct from the report of the Committee on Standards in Public Life mentioned in the Motion and relating to party-political funding. We would merely be adding confusion if we established a Select Committee.

Our reforms in the Bill look at how trade union members choose to contribute to trade union political funds. We are not looking at how trade unions fund political parties. Opt-ins and opt-outs for trade union political funds have always been a matter for trade union legislation. Party funding and its regulation have always been a matter for party funding legislation. Party funding is rightly outside the scope of the Bill and I call on the House to reject the Motion.

[Baroness Smith of Basildon]

My Lords, I thought the Minister was making quite a good fist of it until she said that we had misinterpreted the intention of the Bill. I thank all noble Lords who have contributed to today’s debate. That has been very helpful.

It may assist the House if I very briefly make it absolutely clear what my Motion seeks to do. The noble Lord, Lord Kerslake, hit the nail on the head when he said it was about the impact of the legislation, not the intention. The Minister says that the impact assessment will be published tomorrow. That is great but it would not have informed this debate at all, I say to the noble Lord, Lord Rennard, because there is nothing in there about any impact that the Bill may have on party-political funding.

We strayed a long way from the specifics of my Motion. My Motion is quite clear. It is not about party funding as a whole; it is not about the Trade Union Bill as a whole. It is very specifically about the two clauses in the Bill over which there is a clear difference, as noble Lords have heard, between the Minister and this side of the House—between the Government and I was going to say the Opposition but I think it is much more widespread than that—about whether those clauses will have an impact on political funding.

The Minister reminded us of the Conservative manifesto. The noble Lord, Lord Forsyth, was quite right to challenge on this—I apologise for citing him again. The Conservative Party manifesto says, on page 49:

“In the next Parliament, we will legislate to ensure trade unions use a transparent opt-in process for subscriptions to political parties”,

but now she tells us it is nothing at all to do with political parties. Is the manifesto right or is she? The manifesto goes on:

“We will continue to seek agreement on a comprehensive package of party funding reform”.

I entirely agree but that is not what is in the Bill. The Bill looks at what the Committee on Standards in Public Life says and picks one area. The noble Lord, Lord Bew, was quite clear that one of the recommendations is reflected—I am not saying it is exactly the same—in these proposals.

I particularly thank the noble Lord, Lord Cormack, for his contribution—wise words, as usual. I remind him how narrow and specific our Motion is. He says that he would much rather not have the clauses implemented. That could be debated by the Committee on the Bill when we get to those clauses. What I am proposing today is the opportunity to inform the debate on those clauses on one specific point; otherwise, the debate on those clauses will be clouded by the debate on whether or not there is an impact on party-political funding, although I entirely accept the point about what was in the manifesto about the opt-in or opt-out. I am seeking to remove that party-political element from the debate and debate the specifics of that in a Select Committee in order to then inform the Committee.

[Lord Cormack]

Does the noble Baroness not appreciate the points made by the noble Lord, Lord Bew, as well as by me, that the timescale is wholly unrealistic? A committee has to be set up. It then has to meet. It has to decide precisely on its remit. It has an order to report back by Monday 29 February. That is just unrealistic.

[Baroness Smith of Basildon]

I understand the point the noble Lord is making but I respectfully say to him that he is wrong. The timescale of this is dictated by the timescale that the Government have set to debate the Bill. These issues have to be debated in that timescale because that is the timescale the Government have set for conclusion of the Bill. With due respect to both noble Lords—I think the noble Lord, Lord Bew, made this point—this committee would not address the far wider issues of party funding. Both noble Lords are absolutely right: it could not do so in that timescale. But what it can do is inform the Committee that will be discussing the Bill as a whole in the timescale set down by the Government. It is purely to inform. If we do not have the committee that I am suggesting, those issues will be discussed in the same timeframe but without the external information provided by the Select Committee.

The key thing here is not what the Minister or I think. It is about an assessment of what the impact will be—a forensic assessment of whether it will have that impact. The Minister says no, and I say yes. Who is right? I do not think that we can reach a conclusion on that here, but a Select Committee could look into that impact and it can inform our deliberations on the Bill.

I apologise for citing the noble Lord, Lord Forsyth, again but he gave reasons for not voting for my Motion. I say to him that there were reasons for not bringing forward the Bill in the first place because those clauses are so deeply flawed. For the Government to produce an impact assessment which does not even address one of the major issues of controversy that is causing concern across your Lordships’ House is an absolute disgrace. I have heard the Minister but I do not think that she made her points very well and I beg to test the opinion of the House.