Trade Union Bill

Earl of Kinnoull Excerpts

Wednesday 16th March 2016 Lords Chamber

[Baroness Symons of Vernham Dean (Lab)]

My Lords, before the noble Lord sits down, I put to him the point that the noble Lord, Lord Burns, made in putting this amendment before the House. The argument is not about the principle of the opt-in process—it was clearly put in the governing party’s manifesto. The argument is about whether it is being done fairly. The noble Lord simply argued about the principle but the amendment is about the fairness of applying the principle. I am afraid that he did not listen to the clear argument put by the noble Lord, Lord Burns, and I am sorry that he did not.

[The Earl of Kinnoull (CB)]

My Lords, I, too, had the great privilege of serving on the Select Committee of the noble Lord, Lord Burns. We were much heartened on the morning of 11 February, when Nick Boles, the Minister of State at BIS, came to give evidence. Amid that evidence he said:

“I know that Baroness Neville-Rolfe indicated yesterday in the debate that on questions of timing for transition and methods by which an opt-in could be declared she was very much open to arguments and would be reflecting on them before Report”.

Your Lordships can imagine that that was very heartening when we were struggling with precisely some of those issues in contemplating Clauses 10 and 11. I will take some transition period points first—I refer of course to the transition periods contained within the amendments and not to what would be included if paragraph 142(b) of our report had been taken up.

Three things made us feel that three months after the commencement date was not nearly enough. First, there were the union rules themselves. Here I am grateful to the noble Baronesses, Lady Dean and Lady Drake, and to the noble Lord, Lord Whitty, for educating us with great tact and patience on exactly how trade unions work and therefore how difficult it would be for unions to make changes to their rule books in a hurry without exceptional and unreasonable cost. Secondly, it was raised with the committee that each of the unions concerned would need to make changes to its IT systems. I can see a number of Members groaning at the thought of that. It was felt that each one would have to make changes to two IT systems, the membership system and the accounting system, and all of that would have to be done, no doubt, with considerable expense. Of course, such expense did not appear in the impact assessment.

Finally, the actual process of mail-out was assumed to be just a simple letter out and in. In fact, I know from experience that mail-out processes are considerably more complex than that. You have to answer questions from people who get letters, send out replacement letters and chase people up. That is why we came to feel that the absolute minimum period was 12 months and that the Government should certainly settle down with the unions and the Certification Officer to get that period right.

On the second bit, the methodology of the opt-in, the amendments include the Certification Officer so we could get the proportionality right where one is talking about an average political contribution of £4.84 a year. We felt that the Certification Officer, who was most impressive in evidence, would be able to find a way through so that opting in could be done on a basis that was not cripplingly expensive for the unions concerned.

Finally, on the point which the noble Lord, Lord Tyler, raised on the manifesto, I will not repeat what he said. However, one of the interesting things which we considered as a committee in trying to strike that balance between fairness and the manifestos was what would happen to the percentage of trade union members who, at the next election, were still on an opt-out basis. Basically, we took evidence from USDAW, which said that its turnover was about 20% of its membership per year. Therefore, even if the average was 10% for the whole of the union movement, at least 40% of that membership would have turned over by the next election. So in many ways the Government would already have achieved substantial progress toward their target, even if they go on the basis which we have recommended. As I said, I feel we have achieved a balance of fairness and manifesto commitments in the committee report.

--- Later in debate ---

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords, I support Amendment 13. Paragraphs 101 to 107 of the Select Committee report dealt with our unanimous concerns—this is one of the unanimous parts of the Select Committee report—that Clause 11 would be disproportionately burdensome, especially when considered in relation to the size of the political fund contribution from members, which is an average of 9p a week. This is particularly burdensome.

Paragraph 141(e) declares our unanimous view:

“The reporting duties in clause 11 should be revised after consultation with the Certification Officer, to ensure that they are not disproportionately burdensome”.

This amendment will give effect to that unanimous recommendation of the Select Committee—I look forward to noble Lords on the Government Benches supporting the views that they agreed to.

Looking at the evidence given to the Select Committee, the Certification Officer on 9 February said, in oral evidence:

“The impact of Clause 11 will cause me a great deal of work … I can see that it will cause unions quite a lot of difficulty, for very practical reasons”.

He goes on:

“Trade unions give money from their political funds at not only national but regional and branch level, and there is a job of collating to do. If there is sometimes use of a trade union room for general political purposes, who is the recipient? There is an issue of doubt there. Each payment has to be categorised under one of the six headings in Section 72 of the 1992 Act. A lot of those overlap, so which category is it put into? … In my experience, uncertainty gives way to litigation”.

Is that the intention of the Bill?

The impact assessment, which has come in for quite a bit of criticism, says at paragraph 266:

“We therefore assume it will take a day of a trade union official’s time each year to provide the details of the specific expenditure from the political fund”.

It is on that basis that this clause is in the Bill. It is completely disproportionate and not based on any kind of proper impact assessment. Yet the next government amendment ploughs on irrespective of that.

I wonder whether anyone associated with writing the Bill has any idea how trade unions work. Trade unions have external, independent auditors who ask questions. Noble Lords on the Benches opposite who have dealings with a company will know the kinds of questions; they do not ask any different questions when they are looking at the accounts of unions. Those accounts have to go to the union conferences. The members at the union conferences analyse and debate those accounts and when it comes to the political fund, they have to list the affiliations that the union has. They have to discuss the policies of support that the union has. So transparency is already there. I wonder on what the Government are basing their argument about transparency.

The government amendment, which I hope the House will not accept, has no relevance to dealing with the disproportionality and does not assist transparency. There has been no consultation at any point with the Certification Officer—he told us that in his evidence, in direct answer to a question. There has been none with the trade unions, to which this clause will particularly apply and for which it will cause problems. Yet the Government are trying to say, “We know all about how these funds work and we are trying to get transparency”. This is a very small amendment; it does not prevent the clause going through but simply asks for consultation with the Certification Officer. I hope that the House accepts the amendment.

[The Earl of Kinnoull]

My Lords, I will not detain the House for very long. When the committee met we noted that this clause was not a manifesto commitment. Accordingly, there is not that complication as one seeks to apply common sense. The committee was lucky to receive a written submission from BIS as to what Clause 11 was intended to do. It stated:

“Clause 11 provides for additional transparency over the expenditure of the union’s political fund. It places a requirement on unions to provide more detail about political expenditure … This information will allow union members to make an informed choice about whether they wish to contribute to the fund”.

We were lucky also that Nick Boles in his evidence said several times—I have picked just one instance—that we must make sure that this is,

“not designed to trip people up”.

The difficulty—I think the Select Committee was unanimous on this—was that the current clause did not “scratch the itch” that was outlined by BIS but certainly amounted to “tripping up”, for the reasons that the noble Lord, Lord Burns, and the noble Baroness, Lady Dean, have just given. I feel that the amendment we have put forward does scratch those itches. I therefore urge the Minister to accept it as it is proportionate, effective and balanced.

[Baroness Neville-Rolfe]

My Lords, the Government are committed to greater transparency for union members in the use of political funds. Members can then make an informed decision as to whether they want to contribute.

I am pleased that the Select Committee has also endorsed the principle that the current level of reporting is insufficient and that union members are entitled to a reasonable amount of detail about political expenditure.

On the amendment tabled by the noble Lords, Lord Burns and Lord Tyler, the noble Earl, Lord Kinnoull, and the noble Baroness, Lady Dean, the aim of Clause 11 is to make sure that all unions meet a minimum standard of transparency. The current provisions in Clause 11 ensure that where unions spend more than £2,000 per annum from their political fund, they provide a breakdown of expenditure.

I do not believe that we should start from the position proposed in this amendment, which is to place all the detail on the level of reporting in secondary legislation. Placing these requirements on the face of the Bill helps to reduce uncertainty about what is intended—a consideration which often appeals to noble Lords.

As I said in the Select Committee debate last week, we will reflect on the technical recommendations of the committee in relation to Clause 11. The noble Lord, Lord Burns, pointed out that the provision could mean that a union would have to declare the reimbursement of a bus fare to one of its members who attended a Labour Party conference. That was never our intention. We are not trying to trip people up, as the noble Earl, Lord Kinnoull, suggested.

On the amendment of the noble Lord, Lord Stoneham, and the noble Baroness, Lady Burt, the Government have always been clear that the transparency requirements in Clause 11 are important so that members can exercise an informed choice. The proposal for a review would delay this transparency and I cannot see its rationale. However, I have said that I am open to continuing the conversation on how best to achieve improved reporting of political expenditure in the most proportionate way, and on making the requirements of the provision less onerous, with a view to coming back to this issue at Third Reading. As I said earlier, I am already planning to see the Certification Officer, which I am sure will be helpful.

Finally, I turn to the government amendment. I am grateful to the Delegated Powers and Regulatory Reform Committee for its careful scrutiny of this clause. It has noted that the power to substitute the £2,000 threshold in Clause 11 can be used not only to raise the amount but also to lower it again to an amount not less than £2,000. Raising the threshold would reduce the reporting requirements on unions. However, if, in the future, a Government wished to reduce the threshold back again, the reverse would happen and the reporting requirements on unions could increase considerably. I have listened carefully to concerns voiced by the committee. Our amendment ensures that any decision in future to lower the threshold would be subject to the affirmative procedure, and therefore subject to full parliamentary scrutiny. I do not agree with the noble Baroness, Lady Dean—if I have understood her correctly—that this would increase burdens. I hope that she agrees with me now that I have explained what is intended by this amendment.