Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2023

Baroness Chapman of Darlington Excerpts

Monday 18th December 2023 Grand Committee

Those are my three questions. Why are they interfering in industrial relations? Do they accept that good industrial relations involve a cost? If they are interested in modernisation, why not have ballots through the internet?

[Baroness Chapman of Darlington (Lab)]

It is a pleasure to follow the noble Lord, Lord Wallace, and my noble friend Lord Davies; they made some very good points that I would have made myself. I will not repeat what the noble Lord, Lord Wallace, said in terms of advice to the Conservative Party; I suspect that the Minister will, as he said, have secretly agreed with some of it. It is sad what has happened to the Tory Party. It is sad that the Government have picked what is, in the scheme of things, such a minor issue—for goodness’ sake, what is happening with our public services?—when to pretend that it will somehow restore the faith of the British taxpayer is laughable. Certainly, no one in the Committee this afternoon is buying it. This is a classic case of getting the facts to fit an argument that the Government want to have.

We know that for some reason Conservative Governments tend to want to limit check-off, whereas we on these Benches see it as more of a positive and helpful thing in supporting good industrial relations, as my noble friend Lord Davies said. I would have thought that these things, small scale as they are—although I will go on in a minute to talk about some of the data, or the lack of it, that the Government are choosing to rely on to make their case—ought to be resolved locally. Local managers and trade union officials resolve things all day, every day. That is the norm.

There are occasions that we all know about where the Government have chosen to get themselves involved or to pick a fight. We have seen what has happened in the NHS. Far be it from me to give the Government advice on good industrial relations, but they need to take some advice from somewhere because there are disputes that have been going on for far too long that are having a direct impact, for example, on patient care in the NHS, where the Government have been far from helpful.

It is striking that the Government admit that they do not have reliable information on the extent of the use of check-off by government departments and are relying on estimates, most heavily, as the noble Lord, Lord Wallace, said, those from the TaxPayers’ Alliance report of 2014. This is interesting because it claims that only 22% of those offering check-off were reimbursed by trade unions. At the moment, as we know, it is already possible to be reimbursed, but when it asked the same question of local councils, the LGA found that 67% were reimbursed. There is no attempt within the report provided by the Government to explain this difference. I think we can all come up with our own explanation of why these two organisations might have come to very different outcomes, but it is extraordinary that a policy change such as this, which could have some negative repercussions, is being based on such wide-ranging estimates. Given that we do not have accurate information about how many people use check-off or how many organisations are already reimbursed, it is impossible to know what the financial impact of the changes that the Government are implementing will be when taken against the potential damage to good will.

A number of questions arise from this. On devolution, which the noble Lord, Lord Wallace referred to, my reading is that these regulations will apply to England, Wales and Scotland. We know that many public services are devolved. I think I am right that industrial relations more widely are a reserved power, but the Minister will correct me. For example, obviously much negotiation goes on between the Senedd and public services in Wales, so why is it that this measure will be mandated from Whitehall? I have not asked the Welsh Government—perhaps I should have done—what their attitude to this is, but I am assuming that the Minister has had conversations with her counterpart in Cardiff. Can she let us know the Senedd’s view on this issue?

The estimated savings are bizarre and do not seem to take account of the diversity of services within the public sector in terms of the rates of trade union membership, the use of check-off and the rate of reimbursement. Big assumptions are being made about the standardisation of involvement in check-off. No justifications for them are provided.

Employers are required to assure themselves that the reimbursement amount is—this is the phrase the Government use—“substantially equivalent”. I am not clear what that means. We accept that a cost of check-off exists. That cost is then calculated, that money is to be reimbursed by the relevant trade union and that amount is to be substantially equivalent. I am interested in that choice of words, as I would have thought the Government’s aim would be better reflected by use of the term “full cost recovery”. I have heard “substantially equivalent” used for medical devices and sometimes in maritime situations, but I do not understand why it and not an alternative phrase has been used here. Perhaps the Minister could explain.

It seems very strange that on page 8 of the impact assessment, in its analysis and evidence, the Government rely on the TaxPayers’ Alliance’s assertion that 90% of public sector bodies use check-off to justify the need to act but later, on page 26 of the same document, when estimating the cost of implementation, the Government repeatedly assert BEIS data that states that 56% of public bodies offer check-off. Can the Minister explain why the document relies on different figures for the same thing to support action? One overestimates the need and the other underestimates the cost. This does not seem a very sensible way of making policy. If there is no accurate information, perhaps the Government should say so or perhaps go out to consultation to get some more accurate data.

It is fascinating to read in the Explanatory Memorandum that the Government did not think that consultation would be helpful because

“the principles of this provision were debated extensively in Parliament … in 2016”.

This is a bit shabby. I follow our proceedings very carefully, as I am sure do the noble Lord, Lord Wallace, and my noble friend Lord Davies. To say that because we had an extensive debate in Parliament in 2016 there is now no further need to seek advice, comment or consult more widely is quite extraordinary. It perhaps overemphasises the interest which people outside the House take in our proceedings. There has been no opportunity for the main partners in this endeavour to share their thoughts because, the Government say, they did so seven years ago. That is not good enough.

The guidance to employers is not available, so we are not able to assure ourselves that employers will be given sufficient advice to make calculations about the cost, agree reimbursement and assess this “substantially equivalent” phrase. None of that is available to us for this debate and it would have helped to have sight of it. If we had examined the guidance, it would have helped us to assess how much care—I think that is the right phrase—the Government are taking on this. On the face of it, it appears that Ministers are reaching for this policy for reasons of political positioning or because they are seeking some sort of wedge issue rather than because of genuine concern about the practical impact. They do not know how widespread check-off is, how many individuals are involved or how many public bodies are affected. They therefore cannot possibly know what, if any, impact this will have in savings to the taxpayer.

This is not a good way to carry on. We expect better of the Government when they ask us to agree this sort of thing. I will listen carefully to what the Minister says, but I put on record our dissatisfaction with the way that the impact assessment is written and its reliance on different data sources. This slapdash approach is because the Government are hell-bent on getting this done without considering some of the issues that I raised as carefully as they ought to.

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[Baroness Neville-Rolfe (Con)]

I cannot just accept that, I have to say; I believe that views from all different directions can be valuable in debate, and that includes the TaxPayers’ Alliance. I explained why it had done some work in this area. It was used in these estimates—entirely transparently—and we have also taken data from other sources. I nevertheless thank the noble Lord for his comments.

[Baroness Chapman of Darlington (Lab)]

The point is that the TaxPayers’ Alliance is a campaigning organisation. Our concern is not that it is included at all; the Minister is quite right in what she said about a range of sources and perspectives. But given that there is a lack of data, which the Minister has acknowledged, it seems a little odd that it is relied upon quite as much as it is. You do not need to make any assertions about some of the estimates that the TaxPayers’ Alliance is making to pursue the policy. It seems a bit strange that it is included.

My attention was drawn to this by what is on page 23 of the impact assessment. There is a little table that lists probable estimates of savings to the public sector. It just seems strange that—to take the Civil Service, as the first example—the high estimate of savings is £149,000, the low estimate is £1,500, and the most probable estimate is £11,500. Then, however, there are local authorities, for example, with a high estimate of £161,500, a low estimate of £91,000 and a most probable estimate of £161,500. It just is not clear how some of these figures have been reached. Are the Government treating the TaxPayers’ Alliance evidence with equal weight to a survey conducted by the LGA, for example? That would seem a strange thing to do without further inquiry or more critical analysis. Maybe this is a point to make to officials behind the Minister rather than the Minister herself, but it is not really what we would expect in this kind of document.

[Baroness Neville-Rolfe (Con)]

I commend officials for producing a detailed impact assessment and I will not renege on that. I also think that the TaxPayers’ Alliance is a perfectly respectable source. Obviously, every think tank has different people working for it; some people are excellent at estimates and some are not. I have already said to the noble Baroness that I will go away and look in a little more detail at the estimates. This impact assessment was not written by me personally, of course, but I will take it away and have a look. I commend the use of different sources of data and data standards. The noble Baroness probably knows that that is what I would want, but I will of course take a look.

Perhaps I can move on and just try to answer one or two of the questions about devolution. Matters of industrial relations are clearly reserved and there is no obligation for the UK Government to consult with the devolved Administrations. However, the Scottish Government were consulted on the scope of the regulations to ensure that they capture all public bodies that are wholly or mainly funded by the taxpayer. Wales is not in scope as a result of the Trade Union (Wales) Act 2017. The Government will take action to bring Wales into scope at the earliest possible opportunity.

I should mention that the TUC has been engaging with us on, and had input into, the guidance. I noticed its flash new logo on its writing paper. This also included engagement with employers in the public sector, so I hope that that provides some reassurance.

In conclusion, I am confident that the regulations provide a fair and appropriate intervention and capture an appropriate scope to meet the policy aim. They allow check-off to continue, as was agreed during the passage of the Trade Union Act 2016. They represent a reasonable direction of travel and continue to support productive industrial relations in the UK—which, Members may recall, was my experience during my past career at Tesco. To return to the point that the noble Lord made, of course the trade unions have a role to play in our society, so I am delighted to have this opportunity to be at the Dispatch Box today to put to bed the last of the regulations relating to that Act. I hope that colleagues will join me in agreeing the regulations, which I commend to the Committee.