Trade Union Political Funds and Political Party Funding
Debate between Baroness Neville-Rolfe and Baroness Smith of Basildon
Baroness Neville-Rolfe
I think I have already been very clear on the point. I do not accept the link, but I am trying to answer on the question of Labour Party funding, and to move forward to say something about party funding, because that is the subject of the debate and the report.
There is, in my view, no reason why a union that is using the political fund to advance the interests of its members could not get a large majority of them to contribute. In Northern Ireland, where the system has existed since the 1920s, some unions, such as the Prison Officers Association, have up to 89% of their members contributing. It is clear that if unions are providing a service that people want through their political funds, members will willingly pay for them. It is not unreasonable, as some have suggested, that some union members may want to contribute more.
I move on to what might loosely be described as the mechanics of the opt-in process. The committee has made a useful contribution to the debate on this issue, analysing the Bill’s measures and suggesting changes to the opt-in process. I remind your Lordships that my honourable friend Nick Boles told the committee that he wanted,
“to make sure that the transition from the pre-existing approach to a modern approach of opt-in is possible for the unions to do in a way that is successful for them and their members and not punishing in terms of costs”.
I repeat that because I think it is an important statement.
Baroness Smith of Basildon
I am grateful to the noble Baroness for repeating that quotation, because she talks about a modern method of opting in. Does she think that the hurdles placed in the way—that it has to be within three months in every five years but also that it has to be in writing, on paper—are a very modern approach?
Baroness Neville-Rolfe
If I may, I will continue and perhaps return to that point in due course.
No doubt on Report, which starts next week, your Lordships will wish to debate the further specific measures and suggestions contained in the report, but an important point is that the Government remain committed to introducing a transparent opt-in system for political funds for all union members, not just new ones. However, we will reflect on both the recommendations of the committee and the views of other Members of the House expressed in Committee on the Bill and this evening on the mechanism of the provisions.
As for the specific recommendations on the operation of Clause 11, I am pleased that the committee has endorsed the principle that union members are entitled to a reasonable amount of detail about the political expenditure of their unions, and agrees that the current level of reporting is insufficient. Again, we will reflect on the committee’s technical recommendations and, as I said, continue to engage with the Certification Officer on this and other matters.
I turn to the wider issue that the committee was asked to consider in relation to party funding: the necessity of urgent, new legislation to balance those provisions with the other recommendations made in the Committee on Standards in Public Life report. As the committee itself noted, we have a democratic mandate to introduce the opt-in for political funds. Our manifesto did not state that that depended on there being party funding reform. So the Government agree with the committee’s conclusion:
“While there is no agreement between the political parties, we see no scope for introducing urgent new legislation on party funding to balance the provisions of this Bill. We believe that the political parties should give effect to their manifesto commitments on party funding”.
The Government agree in principle, but for any talks to be productive, there needs to be a sense that all parties agree on the basis for discussion.
Let us not forget that, despite the efforts of its members, the 2011 Committee on Standards in Public Life report did not get cross-party support. Indeed, both parties opposite objected to at least some of its conclusions. It is also important to note that the report predated the Government’s 2015 manifesto.
There are clearly major stumbling blocks to progress. There is no appetite for state funding of political parties. As the noble Lord, Lord Wrigglesworth, a former treasurer of the Liberal Democrats, told the committee:
“I cannot see a time when political parties will be willing to go to the taxpayer and ask for money for their own organisations”.
So what might the approach be? The unfortunate fact is that inter-party party funding talks over the last decade have failed to reach any consensus, in part because they have focused on controversial and complex structural changes. Evidence to the Select Committee suggested moving ahead with smaller reforms that might command cross-party support, such as finding practical ways in which to encourage more and smaller donations from wider audiences. As part of the Government’s broader approach of promoting giving to good causes, the Government would be willing to take that forward for further consideration, such as publishing a discussion paper in the first instance, if there was a positive reaction to such a potential step from the political parties. I hope noble Lords will be pleased to hear that; I shall be particularly interested to hear the views of the committee chaired by the noble Lord, Lord Bew, on these issues.
To conclude, we are heartened that the committee agrees on the fundamental principle behind Clauses 10 and 11—that union members should be given an active choice to contribute or not contribute to political funds. We welcome the contribution and ideas on how that mechanism might work and commit to reflecting further on these recommendations, such as the transitional provisions for implementation and the methods of communication that a union is permitted to use in our digital world.
Trade Union Bill
Debate between Baroness Neville-Rolfe and Baroness Smith of Basildon(8 years, 5 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.
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.
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.
Trade Union Bill
Debate between Baroness Neville-Rolfe and Baroness Smith of Basildon(8 years, 6 months ago)
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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.
Trade Union Bill
Debate between Baroness Neville-Rolfe and Baroness Smith of Basildon
Baroness Neville-Rolfe
That the Bill be now read a second time.
Relevant document: 15th Report from the Delegated Powers Committee
Baroness Smith of Basildon (Lab)
My Lords, I do not want to delay the House and I wish noble Lords a very happy new year, but perhaps I may seek guidance and advice from the Government. We are about to start our deliberations on the Trade Union Bill, in which there is considerable interest in your Lordships’ House today, yet, not for the first time, we have no impact assessment. This has happened before but this Bill started around five months ago in the House of Commons and we still do not have that impact assessment. I am sure the noble Baroness is aware that the Cabinet Office manual on impact assessments states:
“The final Impact Assessment must be made available alongside Bills published in draft for pre-legislative scrutiny or introduced to Parliament, with 80 copies sent to the Vote Office … and 10 to the Lords Printed Paper Office”.
We do not need 10: we will settle for one but we would like it as soon as possible.
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 thank the noble Baroness for raising this issue, which I was intending to cover today. To assist the House, I am happy to clarify that the Government have already published consultation impact assessments alongside the public consultations that support our package of reforms, as well as an equality impact assessment. As foreshadowed when I met noble Lords before Christmas, we will publish a further impact assessment on the Bill before Committee.
This is an important Bill, dealing with a very important subject. Trade unions have a long and distinguished history. They first came into being when many workers led a precarious existence and incapacity in a family’s main breadwinner could spell tragedy. They helped bring about higher wages and safer workplaces, and have many more worthy accomplishments to their credit. Everything I say today should be seen against this background.
In an earlier life, I worked at a company that had excellent relations with its main trade union, which achieved many benefits for its members in the company. However, every great social institution requires occasional modernisation if it is to remain relevant and responsive. I know how keen on modernisation noble Lords opposite are. Every institution can benefit from greater transparency, better accountability and clearer regulation.
The Bill seeks to modernise trade unions—not to undermine their place in society, but to strengthen it by making sure that they are accountable and transparent and use their powers responsibly. It is not fair that a strike in the education sector in 2014 organised by the National Union of Teachers was held on the support of just 22% of its members. Similarly, in 2014 a strike among NHS workers was called by Unite on the basis of the support of just 12% of members.
The consequences of strike action can be widespread and severe for many. I think especially of those having to juggle childcare whenever schoolteachers or Tube drivers take industrial action. As a parent and, indeed, now a grandparent, I know just how difficult such disruption can be. and remember that in Britain today we have the highest level of women’s participation in the workforce ever.
Some people have described the Bill as an attack on trade unions, on workers’ rights, on their ability to strike, and even on human rights. Nothing could be further from the truth. The Bill is about bringing more democracy and transparency to industrial relations. It seeks to achieve a better and fairer balance between the rights of workers and the needs of people who rely on important public services.
Taking democracy first, the key purpose of the Bill is to ensure that strikes take place only where there is a genuine democratic and recent mandate. The Bill therefore provides that all strike ballots will require at least a 50% turnout before industrial action can commence. In addition, in important public services we will require at least 40% of members eligible to support a yes vote. We need to find a better balance to ensure that people who rely on these services do not find their lives disrupted at short notice by strikes that have the support of only a small proportion of union members. The Government’s reforms will restore public confidence that, where industrial action takes place, it always has the strong support of union members.
The Bill also requires unions to provide their members with a more detailed explanation of what issues are in dispute and what form of industrial action is planned on the ballot paper. This will allow all members to vote meaningfully and with confidence. Once a ballot has been won under our proposals, it would be valid for four months. This measure means that a strike can be called only on a recent decision by union members, not on a ballot that happened years before. The National Union of Teachers called a strike in July 2014 on a mandate from June 2011. We cannot go on in this way.
Moving on to transparency, the Bill will allow individual union members to make an active choice whether to contribute to a union’s political activities. Paying into the fund automatically will no longer be the default position. Having taken the decision, we want members to consider whether they want to continue to support the political campaigning of their union. That is why the Bill requires that union members will have to refresh the decision every five years. There is no reason why this new transparency should reduce the appetite for individual members to contribute to a union’s political fund. Indeed, we hope that it will increase the democratic debate within unions about the appropriate use of such funds.
Facility time is another area where we want to increase transparency. Most taxpayers are surprised to hear that some public sector workers are paid by the state to do a specific job, but spend a significant proportion of their time—indeed, in some cases, all their time—working on union matters. This, however, does not mean that the duties carried out by union representatives are not valuable. The measure will aid a more effective use of taxpayers’ money, while allowing public sector employers to focus on those areas that are vital to maintaining good industrial relations. It allows Ministers to require employers to publish information on the use of facility time in their own organisation. In the Civil Service, we have already introduced such a transparency requirement. Before these 2012 reforms to facility time, the cost to the taxpayer was around £36 million annually; now it has reduced to £9.45 million a year. Although we have taken a reserve power to set a limit on facility time, we will use that only if facility time is disproportionately high.
I now turn to measures to ensure a modern framework for union activities. We are grateful for the democratic debate that has taken place during the passage of the Bill through Parliament so far. We have listened, which has allowed us to improve the Bill. For example, our manifesto committed us to tackling the intimidation of non-striking workers. We held a wide-ranging public consultation and published our response in November. Much concern was raised during that consultation over what we may and might not do, most of which was unfounded. For example, we were never going to approve the text of individual tweets. Following the consultation, we are not pursuing a new offence of intimidation on the picket line. However, the consultation has allowed us to be clear that we need to update the 1992 code of practice on picketing to ensure that it addresses the use of social media. The Bill also makes an obligation of the appointment of a picket supervisor. This requirement is already in the code of picketing, which has been followed without difficulty on many occasions by many unions.
We believe that better transparency and democratic accountability will be further enhanced by a stronger and more direct relationship between unions and their members. That is why we are ending the practice of check-off in the public sector. Nowadays, in a world of direct debits and easy online payments, it feels unnecessary. Unions need to have a more direct relationship with their members.
We are also reforming the role of the Certification Officer to allow proper, robust and proportionate regulation. A modern regulator should not be a burden on the taxpayer. That is why we are asking trade unions and employer associations to pay for their regulator via a levy. This is not an unusual approach. The Bill equips the Certification Officer with appropriate new powers for a modern regulator of trade unions and employer associations. We are widening the Certification Officer’s powers of investigation in relation to suspected breaches of statutory requirements. These are neither unusual nor draconian. For example, the CO will be able to request the production of documents where there is good reason to do so. He or she will be able to consider concerns from third parties in deciding whether to investigate potential breaches. He or she will also have the ability to impose financial penalties for those who do not apply the statutory requirements. I shall say more about the exact levels of financial penalties at a later stage of the Bill.
I recognise that many noble Lords feel passionately about unions and industrial relations and are wary of any attempts to change the laws relating to them. I hope they will accept that these are sensible, proportionate measures that will bring industrial life into the 21st century.