Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Trade Union Bill
Baroness Smith of Basildon Excerpts(8 years, 10 months ago)
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Lord Stoneham of Droxford
I accept the point that the noble Lord makes, but the key issue is that if we are looking for a fair settlement, we have to do something about the cap on donations. That is the issue. If we are dealing with the political levy, we have to do something about the cap. That is why the Conservatives were worried in the debate the other day, because they know that if they make and pursue an attack, as they are, on the Labour Party and the political levy—I will get a laugh for this, because I know that this Bill is not about political funding of particular parties—it is open season. It is very unfair when they have the generous funds that they already have that they are making it easier for themselves.
We would say, however, that there is plenty of scope here. Let us not forget that there is a lot of political funding currently going on from the state. There is the £40 million spent on the post system during the general election, the Short money, subsidies for party conferences and money for policy development. There is a lot of money currently being spent from government funds on political parties.
The other area where we think we could get money from, if we are not going to allow taxpayers to contribute to political parties, is government political funding for advertising. There is a huge pot of money there, and just a few million pounds of it could contribute to solving this problem. If that is in the form of tax incentives, that is fine, but let us also make sure that we have an equitable resolution of these problems that does not give political advantage to one party or another.
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 Smith of Basildon
I have never yet been intervened on before I have said one sentence, but I will happily give way.
Lord Callanan
I thank the noble Baroness for giving way. I wonder if she could help me with something which is troubling me. I noticed when the noble Lord, Lord Collins, was speaking earlier that he was wearing a “I ‘heart’ unions” badge. I noticed in Prime Minister’s Questions earlier today that the right honourable gentleman the leader of the Opposition was also wearing one. I cannot help noticing that the noble Baroness is not wearing one. Should we read anything into this sartorial omission?
Baroness Smith of Basildon
I have to say to the noble Lord that that is one of the silliest interventions that I have ever heard in this House. I am really sorry—I have been left off the list; I did not get the memo this morning. Perhaps I should ask my noble friend Lord Collins if I could have a badge too, please, as it might calm the noble Lord opposite. Seriously, though, I think that it is a rather silly point to make on what I think is a serious issue, and I am not normally devoid of a sense of humour.
Noble Lords will recall from debates at Second Reading and on my Motion to establish a Select Committee that there are really deep concerns about Clauses 10 and 11. Regardless of what any of us in this Chamber say, and as we may learn in the Select Committee, we believe that this Bill has an impact on trade union political funding and, as a consequence, on party-political funding. I use as my reference on that the Committee on Standards in Public Life, which addressed those points. It is hugely controversial and we will not resolve it across this Dispatch Box, whether or not I have a union badge on—I thought that my brooch was rather nice. I think that it is right that your Lordships’ House has sought a Select Committee to get further information on this issue and really get under it in a lot more detail than we will be able to do in this Chamber. Its report will enable us to have a much more informed discussion on Report, and I am looking forward to it.
The noble Lord, Lord King, was right to raise earlier the process of discussing the overall principle underlining the two clauses. We did so at Second Reading and when we had the debate on the Select Committee, and I suspect that we will return to it again on Report. I want to touch on some of those principles today while addressing the clauses and the amendments tabled by me and my noble friend Lord Collins. I do not want to repeat the points that I made when we debated the Select Committee, but I think that some of them are worth emphasising and amplifying.
The Government’s proposals are that every trade union should within three months or 12 weeks ensure that all the members who wish to contribute to the political levy of their trade union should have to opt in to the political fund rather than having the right to opt out. The purpose of the amendments in this group is to probe the Government’s intentions a bit further but also to recognise and demonstrate why the timescale is so unrealistic, unnecessary and unreasonable. It also seeks a government response to what we believe is a sensible and practical way forward, either through extending the transitional period to five years or delaying commencement, both of which would have the effect, in practice, of providing the time to plan and prepare for the changes in a sensible way. I appreciate that this is not to do with the overall, overarching theme, but I think that we have established that there is a lack of credibility and robustness about the principles underlining the Government’s proposals.
The timescale of five years that we propose has not been plucked out of thin air. Unlike the Government’s proposals, and unlike this flimsy and inadequate impact assessment, we have taken the timescale from previous independent reports. The Committee on Standards in Public Life made similar recommendations, which allowed for changes to be made within five years. But let us be absolutely clear about those recommendations, which were made in the context of, and alongside, those three other recommendations that it envisaged would be acted on at exactly the same time. Those four recommendations, across the board on political funding, were made together. The committee’s report from 2011 said:
“Failure to resist the temptation to implement some parts, while rejecting others, would upset the balance we have sought to achieve”.
It was very clear—it sought not to advantage or disadvantage one political party over another but to have a balanced approach. That is what I find so offensive about the Government’s approach; they do not even pretend to seek a balanced approach but identify just one of four recommendations and seek to legislate on it while pretending that it does not have an impact on the very thing that the Committee on Standards in Public Life said that it did have an impact on. The report said:
“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”.
Lord King of Bridgwater
This is a very serious issue—the issue of whether people are being conned, whether a lot of union members are being taken on and where the unions are not abiding by that original undertaking. This is the value of Committee stage; we will move on from Committee and the special committee which is now looking at these issues will, no doubt, consider these matters as well. My understanding, having looked at the impact assessment, is that there are now 5 million members paying the political levy, some £24 million—is that per annum? I am not sure—and some 25 political funds, of which 12 make no mention at all, in their membership, of the political fund. When new membership forms go out to people who are thinking of joining ASLEF, PCS, the RMT and the TSSA, there is absolutely no reference to people’s rights, as new members, to opt out of the political levy.
Let me state my purpose in saying this. I do not know whether it is right or wrong; I have just seen a briefing to that effect and I think it is very important that we should check. I stand by the decision that I took; if it could be shown that there would be absolute observance of the rights of union members in these situations, and if this were honoured, it would certainly strengthen the argument against introducing this proposal. That is my concern.
Baroness Smith of Basildon
I would not normally intervene on the noble Lord, but I have listened with great care and I am grateful: his historical perspective is very helpful to this debate, from a practical point of view. He mentioned three questions in taking us to this point. One concerned the code of practice that he agreed with the late Len Murray: was it observed, did it lapse and what has changed? Those were the questions he asked.
I will ask him whether he thinks there is a fourth valid question: if the Government consider that there is a problem, even along the lines he suggested from the briefing we have all seen—I am not going to question whether it is accurate or not—does he think that the legislation before us is the most cost-effective and admin-effective and efficient way of dealing with it? Or does he think there might be a case, with the TUC and the trade unions, for revisiting the code of practice to see if it needs to be updated in any way, or looked at to ensure that it is being effectively enforced?
Lord King of Bridgwater
The noble Baroness raises a serious point. The real difficulty is that others will stand up and say, “We tried that once; we tried the voluntary approach and the evidence is that it was not honoured”. The noble Lord, Lord Monks, speaking to the amendment, argued that we should get back into an improved code of conduct, but there will be many who will say that that approach was tried and it did not work: unions have not observed it and that does not give a lot of encouragement.
Lord Balfe
Sorry, the Conservative Party—it is probably true of the Labour Party as well if you look at it.
Lord Balfe
There is no need for there to be a huge gap between us. One of the points that I put forward when I was working for the Conservative Party in conjunction with the 2010 manifesto was a suggestion that instead of contracting in to the political levy, one should be enabled on the box to tick any political party to receive part of the political levy donation—any party represented in Parliament, to prevent money going to fascists and the like. That was rejected by a very senior person who is still in the Cabinet, who said to me that it would be unfair unless we had an overall settlement of the party funding issue, because it would mean impacting on one party without having an overall effect.
I have made my views clear in this House before: I do not believe in public funding of political parties. But this is not public funding. I do not queue up to get my hand in the gravy bowl to give money on the basis of the number of votes or things like that. In fact, if it were left to me, I should set a quite low limit of probably no more than £2,000 a year on donations to political parties. I happen to be suspicious: if people put more than £2,000 in, I say, what on earth are you after, then?
We could look at the issue of contracting in or out, but only in the context of a reform of the system. The noble Lord, Lord Wrigglesworth, is absolutely right. Anyone who has had anything to with the trade union movement knows that three months is a ridiculous timespan. It is just not administratively possible, any more than it is possible to convert to not giving away plastic bags in three months: you cannot do it. I am afraid that this clause in the Bill is not motivated by anything other than a desire to take a partisan stand. One of our strengths in the House of Lords is that we can be a little more independent than in other places. I am very unhappy with this as a system, and the whole way it has been put forward is wrong. I am not against the principle of contracting in as part of an overall reform, but this is not the way to do it.
The whole political fund thing of course went wrong. As my noble friend Lord King probably knows, it was brought in because they thought that if they gave the unions a chance, all the union members would vote against political funds. If I remember rightly, the trade union movement got a chap called Bill Keyes to organise political funds, and he did brilliantly: he almost doubled the number of unions with political funds. Not a single ballot has ever been lost. This could bounce back the other way if we pursue this particular reform. It is neither fair nor democratic, and we should think very carefully before we upset the democratic apple cart.
I speak from this side of the House, from a party that is not affected. But we in the House of Lords, an unelected Chamber, to an extent have the strength to ask the Government to please go away and think again. We are not asking the Minister to give concessions tonight, because we realise that this is complex, but as it stands this is a very partisan move. I do not think that it has a place in a trade union Bill, and it is not in the manifesto. I appeal to the Government to think carefully and to at least allow a version of the noble Baroness’s amendment on to the book to give a decent amount of time so that this can be done properly.
Lord Leigh of Hurley
With respect, we are discussing the Trade Union Bill and the opt-in or opt-out of the Trade Union Bill. As I said, PPERA came in to deal with another matter separately, perfectly properly.
Baroness Smith of Basildon
I do apologise to the noble Lord—I rarely intervene on these matters, but he has moved me to do so. He has been speaking in his contribution so far about funding to political parties but, earlier today, when he intervened on me, he said that the Bill had nothing to do with political party funding. How does he square those two comments?
Lord Leigh of Hurley
They have been raised and the point has been made that there have been no complaints. I am trying to make the point, which I hope the poll makes perfectly clear, that Unite members themselves are not aware of this opt-out/opt-in and of the effect of the opt-out, and their views do not necessarily reflect the level of donations made by Unite on their behalf.
The concept of money being taken from you without your specific and particular permission is alien. With great respect, private companies have to have permission from shareholders, as I have already said. For any amount over £5,000, there has to be a specific vote by shareholders. Individuals who are members of Unite have an opt-out; they do not have the ability to state that they wish to opt in. Accordingly, it is a manifesto commitment of the Conservative Party. Taking out the whole of Clause 10 would be a very retrograde step. I encourage the Minister to ensure that it stays in.
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.
Lord King of Bridgwater
My Lords, the noble Baroness has attacked my noble friend the Minister for the Government apparently not knowing about the agreement reached by me and Len Murray. It is quite interesting, is it not, that this Bill has come clean through the House of Commons, where there are a lot of union members on the Labour side? It is quite clear that every union member on the Labour side in the Commons had forgotten about it as well, which is part of my concern.
Baroness Smith of Basildon
There is a real point in that. I think that there should be longer memories in your Lordships’ House, but perhaps there should be collective memories in government departments. It is one thing knowing in a debate what letters were written and agreements reached many years ago, but when Governments bring forward legislation there is a duty on them to understand what has happened previously on these issues.
I am grateful to the noble Lords who contributed to this debate. I say to the noble Lord, Lord Balfe, that I particularly agreed with and enjoyed his contribution. He and I rarely agreed when he was in the Labour Party. He was far to the left of where I was then. I do not doubt his sincerity or loyalty to his new party. He made a very sincere plea to the Minister tonight. I concur with everything he said.
In fact, the only support for the Minister came from the noble Lord, Lord Leigh, who was concerned about my jewellery.
A noble Lord
Baroness Smith of Basildon
I apologise to the noble Lord; he would never make such a silly comment. Quite extraordinarily, though, he had said earlier that this was not about party-political funding, and then he made an entire speech about party-political funding.
I am glad that the Minister will reflect on some of these issues, but I am disappointed that she is not reflecting on the rationale behind them and the justification for them. I am sorry for the noble Lord, Lord Burns, who has sat through a long debate tonight. We are expecting a lot from him. I say in all sincerity that the work of the Select Committee will be very important. We heard tonight how that factual approach will inform how we proceed on this matter. I beg leave to withdraw my amendment.