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 Spellar Excerpts

Tuesday 25th January 2022 General Committees

[Paul Scully]

I will come back to that in my closing remarks. The CO will be able to take up her own views on a matter when there is a breach. It is a wholly reasonable power for a regulator and works on the basis of similar regulators.

[John Spellar (Warley) (Lab)]

I declare an interest as a 50-year member of Unite and its previous unions. How will unions protect against vexatious complaints from individuals who have a political axe to grind, whether from the extreme right or the Conservative party, as opposed to dealing with the members, who are supposed to be the people most concerned?

[Paul Scully]

This is not a political move. This is not politicising the regulator at all. The regulations are simply designed to bring the regulator in line with other regulators.

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[Paul Scully]

Because we have proceeded as quickly as we can, given the circumstances of parliamentary time. We wanted to make sure that, in response to the consultation, we could reflect the views of the trade unions by making some changes to the regulations. I will outline them in a second, but I repeat that this is the right time to be making the changes.

Under the financial penalties regulations, the certification officer’s enforcement powers are strengthened by allowing her to impose such penalties against organisations that breach their statutory obligations. The maximum amount of penalty will vary by the type of obligation breached and will be banded into three groups to take account of the severity of the obligation breached. That approach found support during the consultation.

The most important statutory obligations required of trade unions relate to political funding, the proper conduct of union elections and personnel propriety considerations. Those obligations are serious matters and I believe that the maximum penalty of £20,000 should be made available to the certification officer. That is in line with the penalties imposed by other bodies, such as the Electoral Commission.

For other failures of statutory governance requirements, a lower level of maximum penalty, £10,000, is appropriate, and that includes the requirement to keep the membership register up to date. Where breaches do not relate to failures of governance as a whole but to requirements to provide information, comply with investigatory requirements or breaches of internal union laws, the regulations limit such fines to a maximum of £5,000.

[John Spellar]

I apologise for taking the Minister back to the previous issue, but I have quickly scanned the explanatory notes. How will the levy be distributed between trade unions and employer associations? On what basis?

[Paul Scully]

I will talk about the distribution in a second.

The regulations also provide for a reduction in the maxima by 50%--bearing in mind that we are talking about the financial penalties—for unions whose membership is under 100,000. That means that no small or medium-sized unions will pay more than £10,000, £5,000 or £2,500, depending on the type of obligations breached. The Government took heed of consultation responses that charging interest would unduly penalise small unions, so we decided not to charge interest for the late payment of penalties.

The Trade Union (Levy Payable to the Certification Officer) Regulations 2022 provide for a levy on unions and employers’ associations to fund the certification officer’s work. It is no longer acceptable for the taxpayer to fund the regulation of these organisations. As my hon. Friend the Member for Thirsk and Malton said, a levy is one of the ways used to fund such regulators. The regulations establish a framework for the levy that is equitable, affordable, predictable and simple.

First, the time that the certification officer spends on each of the different categories of regulated organisations, which are non-federated trade unions, federated trade unions, non-federated employers’ associations and federated employers’ associations—

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[The Chair]

It is a matter for each individual member to declare their interests as they see fit. It is not for me to tell them whether they should or should not make a declaration, but for them to decide if they have an interest that they feel they need to declare.

[John Spellar]

Further to that point of order, Mr Davies. Should Members on the Government side also declare whether they are members of trade unions?

[The Chair]

What I said applies to both sides of the House.

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[Imran Hussain]

It is clear that the hon. Gentleman misses the point. There are regulators today and, while I do not know about that specific example, breaches of any kind should of course be investigated, but that is not the matter before us today. This is not a new body that is being set to investigate breaches, so I think the hon. Gentleman will perhaps understand that his point is not relevant to the debate today.

[John Spellar]

It might be helpful if we heard whether the hon. Member for Stoke-on-Trent North or other members of the union actually made a formal complaint to the certification officer.

[Imran Hussain]

That is a matter for the hon. Member for Stoke-on-Trent North, and I will give way if he wants to respond—or perhaps not.

As I was saying, this is an ideological, deliberate attack by the Government on our trade unions, our workers and their rights. Sadly, however, this attack is not without precedent. While they no longer send armed soldiers in to crush striking workers, this Tory Government are no less—[Interruption.] Conservative Members laugh, but they may want to check history and see that those are real events from the turn of the last century. It is not a laughing matter; it is a very serious matter, and if they choose to laugh at that, so be it. This Tory Government are no less opposed to unions.

On that point, let us remind ourselves of this Government’s record. Over the last decade, they introduced the draconian Trade Union Act 2016, eroding the ability of working people to take collective action, imposed illegal employment tribunal fees that priced people out of obtaining justice, and presided over a disgraceful rate of statutory sick pay, which is one of the worst in Europe. They have also broken a promise made during the passage of the Trade Union Act by backtracking on their commitment on electronic balloting, with the Government-commissioned Knight review, published in December 2017 and still awaiting a response from Ministers—more than four years later. It therefore comes as no surprise that Ministers have introduced these anti-union statutory instruments, as well as a further ministerial direction to once more attack working people.

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[Chris Stephens]

It is a pleasure to see you in the Chair, Mr Davies, and I wish everybody a happy Burns day—the day of our national bard. As you know, Mr Davies, 90% of the world claims Scottish heritage; the other 10% are not trying hard enough. In discussing this legislation, I was reminded of the national bard’s poem “Address To The Toothache”. What I have heard so far from the Government—their excuses for trying to force through this levy—reminds me very much of that poem.

I am proud to declare my membership of Unison’s Glasgow City branch, my role as chair of the Public and Commercial Services Union’s group in this place, and my role as a trade union activist for 25 years before I came to this place. I am a proud trade unionist, and I always will be. I am proud of the work that trade unions have done across these islands.

As someone who sat on the Trade Union Bill Committee, I think it is important to give some context for some of the difficulties that the Government have found themselves in over the past four or five years, and that they still find themselves in. They are attempting today to impose fees on trade unions—a tax on trade unions, as was mentioned earlier—for complaints that could be made against them. At the same time, the Government tried to stop trade unions paying employers to take their subscriptions off under the check-off regulations. The Government ended up having to abandon that part of the Bill. They also had to abandon the holding of lists of those who were picketing an industrial action, because of concerns over breaches of human rights. At the time, they voted down attempts to introduce e-balloting for industrial action and internal trade union elections while they were using e-ballots to decide their own parliamentary candidates and their candidates for London Mayor—you really couldn’t make it up.

In the four years that we have been waiting while the Government have held the consultation—as I mentioned earlier, there have been two general elections since the consultation started—they have been promising an employment Bill, but where is it? We now know: when the Government were asked at the last Queen’s Speech where the employment Bill was, they admitted publicly that it was not a priority. Dealing with zero-hours contracts, short-term shift change notices and all the other abuses that we see in the workplace is not a priority, but imposing a tax on trade unions somehow is.

I have real concerns. I deliberately asked who makes a complaint for the certification officer to look at. In my view, it should be a trade union member. Trade union members have the right to go to the certification officer and raise a concern that they have with trade unions. However, I am sure the Minister will confirm that under the current Trade Union Act, with the new powers that have been issued to the certification officer, any organisation or member of the public can make a complaint against trade unions.

As the right hon. Member for Warley and the shadow Minister mentioned, that can include far-right organisations. Far-right organisations can make complaints against trade unions for their spending on anti-racism work. The trade unions have been one of the drivers in the fight against racism in this country, and I am proud of that, but we can have far-right organisations making vexatious complaints about funding for organisations such as Show Racism the Red Card—I declare that I chair the showing racism the red card all-party parliamentary group—and Hope not Hate.

Of course, we might have other organisations, such as that friend of the Conservative party, the TaxPayers Alliance, making vexatious complaints. It is somewhat ironic that the biggest cost to the taxpayer has been vexatious freedom of information requests, on occasion, from the TaxPayers Alliance, which could make vexatious and malicious complaints against trade unions.

[John Spellar]

I think the hon. Gentleman has slightly misnamed that organisation. Given that it will not reveal the sources of its income and that there are credible reports that many of them live abroad, should it not be the “TaxAvoiders Alliance”?

[Chris Stephens]

I stand corrected. The right hon. Member is absolutely correct: it should indeed be the TaxAvoiders Alliance. I can assure him that if we continue to refer to that organisation in this debate, I will use the appropriate term.

There are real issues with who should be allowed to make a complaint. My view has always been that I do not have a problem with a trade union member going to the certification officer with their concerns, but I will have a real concern if members of the public are allowed to do so.

We keep being told the cost to the taxpayer, but it is not a lot of money—£500,000 or £700,000. I have in front of me the transcript of the debate on the certification officer in the Trade Union Bill Committee. It is a good eight pages of reading, and it is very enlightening as to the arguments against fees and against increasing the powers of the certification officer, and the Government’s excuses about that. However, I have real concerns that what is at the heart of this legislation is an attempt to curb the work of trade unions in this country by imposing a financial cost on them.

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[John Spellar]

I want to differ slightly from my hon. Friend the Member for Bradford East, who said that he did not envy the Minister his job. Surely, this must be a blessed relief from being put up on the “Today” programme to defend the Prime Minister’s latest peccadillos.

I declare that I have been for 50 years a member of the Unite union and its predecessors—in that time, I have been a branch chair, a branch secretary, a delegate to the trades council and a national officer of the union—and I am proud to be a trade unionist today. In spite of the behaviour of some trade union leaders, union officials and shop stewards work with employers every day to improve wages, improve conditions and deal with the many personnel issues that do not have to get to industrial tribunals because they are resolved through normal procedure. They are part of the engine that keeps our economy running. They were especially so during the pandemic, when all sorts of changes to rotas, rosters and working arrangements had to take place, particularly for those in public-facing roles who were not able to work from home, who kept society running, often at risk to themselves.

Good employers recognise that role and the importance of their engagement with unions, because they often face unfair competition from unfair employers—those who cut corners, who underpay, who abuse their workforce, who employ people illegally, and so on. Many of those good employers are on employers’ associations, by the way, and we are still not entirely clear how the balance of costs will be allocated. Even a company such as Uber, which initially fought against proper recognition of employment, is working with the unions to regulate that industry, not only here but in the United States. I will return to the international aspect in a little while.

One of the questions we have to address is, “Why now?” Why, particularly, is this coming up now? It has been four years or so in the making. Is this part of Operation Red Meat to throw something to the rabid, foaming Back Benchers of the Tory party, whose leitmotif—one of their articles of faith—is their hatred of trade unions to the benefit of employers, because they know that workers organised will recognise that they need to advance through politics too?

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[The Chair]

Before the right hon. Gentleman resumes his speech, can I make a plea? This is not a general debate on trade unions, interesting though that may be; it is a debate about specific proposals, which we must stick to. We have a time limit, so if we could stick to the proposals before us, that would be helpful.

[John Spellar]

Thank you, Mr Davies. I certainly do not intend to run beyond the time limit in my contribution, and nor would you let me. We are talking about specific proposals, which will bring in additional costs in order to undermine unions. In dealing with the background of that—

[Mark Garnier]

With apologies the right hon. Gentleman, may I provide an update on my intervention on the hon. Member for Glasgow South West? I have had a look at the numbers on Google. These may not be accurate, but the total revenue for unions is just under £1.3 billion a year. Spread among 6.4 million members—according to these figures—that works out as £195 per year. If, through the levy, we are going to pay the certification officer £1 million a year, which is more than we are expecting, that works out at 15p per member per year. I cannot think of anything that can be bought for 15p, anywhere—not even a KitKat—so the levy is tiny in proportion.

[John Spellar]

Of course, it is symbolic for the Tory party, but it is also part of a pattern. The union learning fund, which was mentioned previously; industrial tribunal fees; access to industrial tribunals—it is all part of a drip, drip, drip, wearing away at the ability of trade unions to represent their members.

I am slightly surprised that the Minister prays in aid a time of austerity. Did he not see what happened yesterday in the House of Lords, when his noble Friend Lord Agnew resigned from the Government, saying that they have paid out nearly a billion pounds to banks claiming the state guarantee, and that they estimate that about 20% of that was fraud? Lord Agnew went on to say:

“Total fraud loss across government is estimated at £29 billion”.—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 21.]

Rather than address that, they want to have another go at the trade unions.

In the same way, the Home Office was found in court to have broken the law by charging excessive amounts—grossly overcharging—to register children as British citizens, yet the Government still have not responded to that by introducing legislation. Again, we ask why not.

[Chris Stephens]

The right hon. Gentleman is making an excellent contribution. Does he see the irony in these regulations coming from a Government who preach deregulation in almost all sectors of the economy except for trade unions, which are subjected to massive regulation? It goes from laissez-faire to Stalinism with nothing whatsoever in between, does it not?

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[John Spellar]

I have no objection to the regulation of trade union activities. I think it perfectly proper—many other countries do it—but what we are seeing is steadily undermining trade unions’ ability to operate at work, as we have seen over many years, and putting increasing burdens on them.

Let us take the example of vexatious complainants, which are covered by the regulations. There are no protections in the event that somebody comes along and says, “I read in The Daily Telegraph or the Daily Mail that this has happened, and I am lodging a complaint to the certification officer.” Quite apart from the cost of the certification officer, that puts a great burden on the unions, which will have to defend themselves against complaints not from members or even employers, who have other routes to make complaints about union behaviour, but from somebody sat in his armchair, picking up on a story in his newspaper. Why is that included in the regulations?

[Kevin Hollinrake]

I want to clear up one point. Personally—I probably speak for one or two others on this side of the Committee—I am not against trade unions, but I am for a fair balance between workers’ rights and the rights of business. I am also after a fair balance in who pays for that. In the UK, there are 6 million members of trade unions, but 10 million retired people and 6 million self-employed people. Why should those taxpayers pay for the people who benefit from trade union activities?

[John Spellar]

I think that applies to all sorts of activities. Of course, the hon. Gentleman is assuming that those 10 million retired people were not trade unionists when they were at work—a great majority were. They may actually believe in trade unions and think that there were very good in their time, and may regret that the role of trade unions has been diminished by persistent attack from Conservative Governments and employers.

[Paula Barker]

Does my right hon. Gentleman agree that some retired people are still members of trade unions, participate fully in their structures, and benefit from them?

[John Spellar]

My hon. Friend makes a very good point.

In addition, even those who are not union members benefit from union activity. If they work in an establishment, they will benefit from a pay rise. If they move from employer to employer in an industry that is mobile in and of its nature, such as the construction industry, union agreements underpin their terms and conditions. Interestingly, in Western Australia, when the Conservative Government was trying to bring in very rigid regulation of unions, many well-paid non-union members in the mines recognised that their terms and conditions and balance of power with the employer were underpinned by trade union activity and organisation. Basically, when unions are working well, everybody benefits—not just workers, but the economy and good employers.

What we have seen with the international attack led by the Republican right in the United States, as indeed with their so-called voting regulations—again, to address non-existent problems—is the labour share of gross domestic product around the world steadily declining in the face of those attacks, and that directly reflects the decline in union influence in the workforce.

Of course, that plays into the economy as well, because what we see then is a demand deficit in the economy. As money has been put into the economy, particularly during the era of covid, the amount of money that has been skewed towards the ultra-rich and super-rich has been going up while living standards have been kept down. Again, we saw that with Thatcher-Reagan and—

[The Chair]

Order. I have given the right hon. Gentleman considerable latitude, but I do not want a history lesson on the 1980s. I want us to come back to what we are actually debating today. I trust he will do that.

[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.

[John Spellar]

Thank you, Mr Davies. I am arguing that these measures are not only wrong but, even from the Government’s own point of view, ill-advised, particularly because, as I have indicated, the United States has a new Administration with a very different perspective on labour-union rights. They have made that explicitly clear in policy, but also in appointments and in the decisions of the National Labor Relations Board.

I very much support a trade deal with the United States, as I supported the transatlantic trade and investment partnership, unlike some in my own party. However, if our Trade Secretary is seen as pleading for a trade deal, and we are seen as moving further and further into anti-union territory, into the old Republican right, that will count against us, because Joe Biden will be President for the next three years.

The Minister ought to have discussions with the Department for International Trade to ascertain whether petty, sneaky actions that nibble away at trade unions will actually benefit not just the Conservatives, but this country in securing a very desirable trade deal. It is clear from President Biden’s statements that he very much believes that when unions prosper, the middle class prospers and America prospers. That is true in the States; it is true here. The Government better get the message that there is a new sheriff in town, and these sorts of actions are not going to help them—or Britain either.

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[Paul Scully]

I am grateful to the Committee for its consideration of both sets of regulations and for Members’ valuable contributions to the debate. As I said in opening the debate, unions play a really important role in industrial relations and have a significant impact on our economy. That is why it is imperative that the public have confidence that they are being regulated effectively and fairly, and these reforms ensure just that.

It is a shame that there was a job lot of questions, because I now have eight minutes to answer all of those. Actually, we have just been re-rehearsing the arguments that were made on the overall premise, which was agreed in relation to the Trade Union Act itself. I will answer some of the questions. Clearly, the employment Bill, as the hon. Member for Glasgow South West knows, is primary legislation. It will be announced, when it comes forward in parliamentary time, in the Queen’s Speech. This measure—what we are addressing today—is completing previous legislation and therefore does not have to go through the same process. The certification officer has received 62 complaints in the last few years. Not all of those had to be investigated, because they could be dismissed. Eight were upheld, and there was one enforcement notice. That is what comes through to—

[John Spellar]

rose—

[Chris Stephens]

rose—