Draft Trade Union (Levy Payable to the Certification Officer) Regulations 2022 Draft Trade Union (Power of the Certification Officer to impose Financial Penalties) Regulations 2022

Lord Mackinlay of Richborough Excerpts

Tuesday 25th January 2022 General Committees

[Paul Scully]

The certification officer’s work will be charged accordingly, and the levy will be distributed at a level that is capped for each union and employers’ association. It will be for the certification officer to demonstrate what she has been doing in that regard and how those costs are broken down.

In response to requests by trade unions during consultation, two fees will be preserved—the fee for listing as an organisation and the fee for a union to be granted a certificate of independence. The costs of dealing with those applications will not be recoverable under the levy.

I recognise that these are significant changes for the organisations involved, albeit that they are the clear and required implementation of the Trade Union Act 2016. That is why we announced the reforms in June 2021, to allow trade unions and employers’ associations time to prepare before they are implemented in April 2022. That also allowed the certification officer time to put the systems in place to determine and charge the levy.

[Craig Mackinlay (South Thanet) (Con)]

I declare that I am a member of the Institute of Chartered Accountants in England and Wales. That body does similar things to those that a union might do: it represents its members, makes representations to Government and ensures that the regulated activities that we undertake as members are properly monitored and controlled. There has never been any issue that the Government should somehow pick up the bill for those things—

[Chris Stephens]

The taxpayer.

[Craig Mackinlay]

Or the taxpayer, absolutely. So I am quite surprised that there is huffing and puffing over this. The Minister has made it clear that 2.5% is the maximum. Has he calculated whether, if that 2.5% maximum levy, which I doubt will apply in many cases, were applied across the income of all the trade unions that are registered, it would cover the true cost of the certification officer’s work, or would there still be a shortfall that taxpayers were expected to make up?

[Paul Scully]

My hon. Friend makes some good points. As I say, there are exceptional cases when the taxpayer will be paying, in terms of the consultants that the certification officer may pay and the legal advice that she may require, because that will give unions and employers’ associations the certainty that they need. That is part of the proportionate approach that we have taken. None the less, the distribution that I have here, which I can share with the hon. Member for Bradford East, who asked about it earlier, assumes an estimated total levy of £1.15 million for the next financial year, based on the work that the certification officer has been doing.

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[Imran Hussain]

Again, a point well made that needs no further explanation by me. The value of our trade unions is a good point—again, Government Members are nodding. They accept the value of the trade unions. I do not think that there is a debate about that.

To go back to my point, in imposing the levy, the Government have deliberately misunderstood the role of trade unions, treating them not as a voice of working people but as profit-making companies. Let me be clear: this Government know full well that trade unions do not exist to make profits for themselves; they exist for the betterment of their members and the workforce as a whole in this country. I have already made this point, but given that we would not think to force charities to pay such a high levy to the Charity Commission, it is frankly outrageous to ask the trade unions to do so.

The Government have also failed to set out a real case for why they need to impose the levy. As democratically accountable organisations in their own right, trade unions have high compliance rates with their legal duties. As my hon. Friend the Member for Newport East pointed out, the certification officer dealt with just 34 complaints against trade unions, not one of which ended up with an enforcement order being pursued.

The reality is that if this draft statutory instrument passes, trade unions will have to meet the costs—my hon. Friend made this point—of politically motivated, malicious, vexatious and unsubstantiated investigations into them. Those investigations will almost certainly be initiated by those who have long-standing opposition to our trade unions. That is why we must vote the instrument down today.

[Craig Mackinlay]

The hon. Gentleman is making an impassioned speech about unions, and I do not think there would be any argument from the Government side about the value of trade unions. However, does he have a view about some of the very well-paid officers that many unions have, who earn in excess of six figures in some cases? Could he not apply some pressure through his good offices to try to suppress some of those excessive salaries and fees?

[Imran Hussain]

The hon. Gentleman is somebody who I have time for and who normally makes some very good points. However, pay structures within organisations are pay structures within organisations—again, that issue is not relevant here. I take the point; he wants to make a political point. Again, I do not see the relevance of that issue in this debate.

The second statutory instrument deals with the financial penalties that the certification officer can impose. As the Minister pointed out, these can range up to £20,000 for a level 1 breach and closely resemble fines imposed in a criminal setting. However, the burden of proof is much lower, which means that the certification officer, in a politically motivated complaint, can impose a huge fine with a much lower evidential threshold. As I have pointed out, trade unions have high levels of compliance, with just one complaint for every 200,000 union members. As my hon. Friend the Member for Newport East pointed out earlier, the question is: what is the need for greater financial penalties when there has been no need for them in years gone by? This is a deliberate attempt by the Government to squeeze every last penny that they can from our trade unions, preventing them from putting funds forward, representing their members and fighting for working people. That is another reason why these statutory instruments must be voted down today.

The Minister also referred to the expansion of the certification officer’s investigatory powers—although that is not included in these SIs, Mr Davies, I do not think we can have this debate without discussing it. This expansion, giving the certification officer new and wide-ranging powers, will allow for the initiation of investigations against a trade union even if there are no complaints from within the union itself, allowing anti-union organisations to submit vexatious and politically motivated complaints against trade unions. Even if no such complaint is upheld, the damage to the trade union will already have been done, with valuable time, money and resources being spent on fighting vexatious complaints rather than unscrupulous employers.

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[John Spellar]

You are right to bring me up to date, Mr Davies, because today, from the Government’s point of view, these sorts of regulations, which will be seen as anti-union not only in this country but elsewhere, will not help us in our relations with the United States, where there is an Administration that is strongly pro-union. We are trying to get a trade deal, and trade and workers’ rights are not unconnected. If we look, for example, at the import of personal protective equipment into the United States, a firm in Malaysia has been found guilty of unfair labour practice—forced labour. The United States then says, “We are barring that company from selling into the USA.”

[Craig Mackinlay]

The right hon. Gentleman is offering a great exposé of the history of the trade unions locally and internationally. We are talking here about a sum across the entire trade union movement of approximately £1 million at best, with an income, as highlighted by my hon. Friend the Member for Wyre Forest, of about £1 billion. I have just looked up some donations to the Labour party in 2019: £3.5 million for the election from Unite and £425,000 from the CWU. Is the right hon. Gentleman suggesting that by saving some of the administration costs to the union movement, it can recirculate more to the Labour party? Is that the core of his arguments?

[John Spellar]

That is a pretty poor argument because that would be in breach of very long-standing trade union legislation whereby members make a donation through the political levy to the political fund, which is protected. If the hon. Gentleman has one shred of evidence of administrative general fund money being channelled through into the political fund, even under the current law he can go straight down, because someone is not required to be a member in order to make that sort of payment. He might be a bit more sensitive about political donations and spending, but we will leave that on one side.

[Craig Mackinlay]

On a point of order, Mr Davies. I like political debate. I was acquitted in a court of law, and the right hon. Gentleman wishes to raise that in this debate. I find that disgusting, Mr Davies.

[The Chair]

That is not really a point of order. As I have pleaded before, we must stick to the issue before us today. If the right hon. Member for Warley will not stick to the issue before us today, I will move on to someone else who might. I urge him to stick to what we are debating today. He will have no further latitude because I have already given him plenty.