Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Jonathan Djanogly Excerpts

Wednesday 11th September 2013 Commons Chamber

[Ian Murray]

Thank you, Ms Primarolo. You are absolutely right. That would have tempted me to discuss the hon. Member for St Ives (Andrew George) producing amendments to other Bills in Committee and then not following through on the Floor of the House.

I was talking about the Government’s failure to produce any evidence, which I think feeds into amendment 103, because it is critical to the operation of the entire part, in relation to clause 36. My second point about the Department’s consultation is that it has not published or responded to any of the responses. The only information that Members of the House have seen is when people who have responded to the BIS consultation have self-published them, and I do not think that is good enough.

Trade unions are already heavily regulated, not just with regard to membership, but in other areas, too. No other membership organisations, voluntary sector groups, businesses or, indeed, political parties in the UK are subject to equivalent rules. There are already extensive regulations through the Trade Union and Labour Relations Act of 1992 and the provisions of the Data Protection Act 1998—a fact that the Government seem to have wholeheartedly disregarded in bringing forward the Bill—and the responsibility trade unions have to the Information Commissioner.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

When the hon. Gentleman refers to the 1992 Act, he is of course referring to legislation from the mid-1980s that was virtually lifted into that Act. Does he not think that it is now time for a general review of that 1980s legislation?

[Ian Murray]

If the hon. Gentleman wants to bring forward a general review of any legislation, he is more than welcome to do so. Perhaps in my haste I forgot to use the word “consolidated”. I was referring to the Trade Union and Labour Relations (Consolidation) Act 1992, because of course it consolidated lots of legislation from the mid-1980s.

It is self-evident that trade unions want to have good membership records; I cannot see why anyone would argue that they do not. It is in trade unions’ own interests to engage with members just as any voluntary organisation wishes to maximise membership fees and ensure that people want to remain as members. Unions are nothing without their members; they exist to represent their members. They invest in a wide array of ways of communicating with them—from printed magazines, leaflets and posters, to websites, social media and e-newsletters.

Let us look at what clause 36 proposes for unions with more than 10,000 members. Should political parties have to account for their members? On Second Reading, the Leader of the House said:

“Trade unions are influential participants in public life. They have an important role representing members’ interests both with specific employers and in wider public debate.”—[Official Report, 3 September 2013; Vol. 567, c. 184.]

Who would argue with that? On the certification of trade union membership details, the Department for Business, Innovation and Skills discussion paper says on page 4:

“Trade union activity has the potential to affect the daily lives of members and non- members.”

Surely those definitions apply as much to political parties as to trade unions. Political parties represent their members’ interests, influence wider public debate and can affect the lives of members and non-members. Trade union members represent a very wide and varied section of the general public.

The House of Commons Library brief shows that there are 7.2 million trade unionists. They represent a cross-section of ages, are split evenly in terms of gender and are well represented in terms of race, disability and types of work. Surely trade unions are in a good position to influence and share public opinion. In sharp contrast, there is an organisation that is the complete opposite and totally unrepresentative—the aforementioned Conservative party, which refuses to say how many members it has.

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[Ian Murray]

I am sure that he will be phoning round urgently to get that going.

[Mr Djanogly]

rose—

[Ian Murray]

I will give way once more, and then I must make progress.

[Mr Djanogly]

The hon. Gentleman must appreciate that shareholder registers are much more highly regulated than union registers. That is one reason why we need to see the changes.

[Ian Murray]

I do not think that shareholders are balloted on remuneration; they do not have much ability to stop remuneration packages. They are not balloted on political donations or the overall direction of the company. In fact, individual shareholders in businesses are very weak indeed.

[Mr Djanogly]

rose—

[Ian Murray]

I am happy to give way one last time to the hon. Gentleman.

[Mr Djanogly]

The Enterprise and Regulatory Reform Act 2013 does deal with votes for remuneration. Indeed, companies have to have annual votes for political donations—unlike unions, which vote only every 10 years to see whether they have a political fund at all.

[Ian Murray]

At least when everybody is balloted on anything to do with trade union membership, it is completely and utterly transparent because it is already regulated. That is why we do not need this part of the Bill; trade unions are rather heavily regulated already.

I move on to amendment 104, on the membership audit certificate. The Bill states that a union must send any membership audit certificate in relation to the annual reporting period to the certification officer at the same time as the trade union annual report. That may be good and well, but there is absolutely no natural justice for the trade union itself; that point has been made forcefully by the National Union of Teachers. What if the membership certificate is challengeable? It would not be correct for a document of such magnitude to be delivered to the certification officer, with all their new regulatory, enforcement and investigatory powers, without allowing the trade union an opportunity to appeal what the certificate says.



There are no mechanisms at this stage for the union to make representations to the certification officer on the content of the certificate. That does not seem to be a proper process of natural justice or, indeed, fairness. The methods that assurers will follow to determine a membership audit certificate are not yet known. Moreover, given that there is already a well-established body of law covering the membership lists of trade unions, there should be a proper mechanism to appeal or challenge a certificate.

In the absence of a clear process, trade unions should have the right to challenge the certification officer’s acceptance of a membership audit certificate. This should involve a pause in publication and the right for the union to make representations on the content of the certificate, with ultimately, perhaps, an appeal to the Employment Appeal Tribunal, where qualified judges can make a determination that any qualifications on an audit certificate are valid and appropriate. The amendment would pause the sending of a membership audit certificate to the certification officer if the trade union is appealing the certificate or has indicated to the certification officer that he should not accept the certificate and the trade union will be appealing its content through a process to be determined. That is a fair and reasonable way to uphold natural justice and provide a degree of certainty in the system. I hope that the Minister will consider the amendment.

Since the Government have been unable to justify what this part of the Bill is trying to achieve and will not even tell us their party’s own membership levels, we must start from a position of determining whether the existing system is working. The Opposition will do that work for the Government if they are not willing to do it. As the hon. Member for Huntingdon (Mr Djanogly) said, since the mid-1980s every trade union has been under a duty to compile and maintain a register of the names and addresses of its members. That duty is provided for in section 24 of the Trade Union and Labour Relations (Consolidation) Act 1992. Under that Act, a trade union has a duty to maintain a register of names and addresses of its members and a duty,

“so far as reasonably practicable”,

to ensure that entries in the register are kept up to date. Section 24 also provides that a union must allow any member, on reasonable notice, to ascertain whether the register contains an entry relating to him or her and, if requested, supply a copy of any such entry. This means that the trade union has an existing obligation in law to ensure that its records are accurate.

The existing law specifies that there is an obligation to remove from the register the names of those no longer wishing to be members, that the primary responsibility for informing a union of a change of address is that of the member—I hope that hon. Members remember that part, in particular—and that there is a duty to secure an accurate register

“so far as reasonably practicable”,

which permits a margin of error. The remedy for failure to comply with these requirements is by way of complaint to the certification officer or the courts. Section 25 of the Act states:

“A member of a trade union who claims that the union has failed to comply with any of the requirements of section 24…may apply to the Certification Officer for a declaration to that effect.”

The main thrust of amendment 103 is that, in our view, clause 36 is without foundation and encourages vexatious inquiries for no purpose. I also contend that it will not make membership lists any more accurate. I will be interested to hear whether the Minister has any evidence whatsoever that demonstrates that overlaying this law on to the existing law will make trade unions’ membership lists any more accurate.

On Second Reading, the Leader of the House said of the clause:

“It will require trade unions visibly to demonstrate that they know who their members are and can contact them. The principle that unions must be able to contact their members”—

this is key—

“is well established in legislation.”—[Official Report, 3 September 2013; Vol. 184, c. 567.]

He is right; it is well established in law already. The facts bear this out, and I will give some of them to highlight how detailed membership information already is, as shown by the extensive annual reports published on the certification officer’s website. First, the certification officer’s annual report for 2012-13 says that 166 trade unions submitted returns—not membership lists but returns—recording a total of 7,197,415 members, a figure that does not appear to be inaccurate, compared with 7,261,210 in the previous year: again, a very exact figure. The largest reduction in membership was in the construction sector, which perhaps says more about the Government’s policies than trade union membership.

Secondly, the annual return has to include a copy of the auditor’s report on the accounts, allowing the certification officer to compare revenue from dues with the numbers reported. In 2012-13, the last full year for which returns have been published on the certification officer’s website, the returns showed that income from members increased by 1.3% to £873 million. The returns also show that the total number of contributing members was about 90.5% of the total membership, compared with 89.4% in the preceding year. There are a number of detailed reasons why those figures differ, but to go into them would rule me out of order. As I am trying to demonstrate, the information is already available in the public domain for anyone to dig into. It is on the certification officer’s website, transposed from the annual reports of each of the 166 trade unions that submitted their returns. I would think that any reasonably independent person looking at those publicly available reports would agree that the Government already have extensive information-gathering powers on the finances and membership of trade unions.

Significantly, in 2012-13 not a single trade union member lodged a complaint with the certification officer about the maintenance of the register’s names and addresses.

[Mr Djanogly]

The hon. Gentleman says that no one made a complaint. Can that not be turned around? If members of the public suffer when a service is removed because of a fraudulent union vote and they cannot go about their daily work, why should only members of the union be able to complain about that and ask for an investigation?

[Ian Murray]

Members of the public are suffering not because of the trade unions but because of the policies of the Government. While the hon. Gentleman continues to attack ordinary working people up and down this country, people will be looking at this at home and thinking how out of touch this Government are.

I repeat that in 2012-13, significantly, not a single trade union member out of the 7,197,415 members registered with the certification officer made one complaint to him about the maintenance of the registers of members’ names and addresses—that is, not one complaint from nearly 7.2 million people. Let me emphasise that the trade unions and the certification officer work very closely together because they have a mutual interest in ensuring that processes are accurate and transparent. The certification officer’s own figures bear this out, and it is worth recording them; it is a shame that the hon. Gentleman does not have a piece of paper and a pen to write them down. Some of the figures may shock Members because they reaffirm how much of this Bill is completely ideologically driven and total and utter nonsense.

In the past five years, the certification officer has had no complaints to adjudicate on from, if we take the figure of 7.2 million, a total of nearly 40 million people on the membership registers. In fact, he has had only six complaints since 2000. Five of those were dismissed and he did not even issue a declaration on the sixth. Only 10 complaints have gone to a decision since 1987.

[Mr Djanogly]

Is the hon. Gentleman maintaining that because union members are not complaining about their own unions everyone else should be content?

[Ian Murray]

I keep giving way to the hon. Gentleman to be polite, but his interventions are complete nonsense. We are talking about 7 million to 12 million people being on the registers of trade union members every single year going back to 1987. That information is verifiable under current legislation and publicly available on the certification officer’s website. Yet all the hon. Gentleman can say is that there is a problem. Why do we need this Bill to go beyond the existing legislation? I am happy to give way to him again if he wants to tell me, in no more than one intervention, why part 3 and clause 36 are necessary.

[Mr Djanogly]

People who are not members of a union may have a complaint against, for instance, a vote that is taken, and therefore a proper investigation procedure is needed.

[Ian Murray]

That has absolutely nothing to do with the registration of 7.2 million trade union members. If an individual member of a trade union on that list has a complaint, I do not see any reason why they would not raise it.

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[Mr Djanogly]

On process and transparency, will the hon. Gentleman advise the Committee who drafted the Opposition amendments? Was it the unions that gave them to him? If so, which unions, or was it union-paid lawyers? That should be reported for the purposes of transparency.

[Ian Murray]

That kind of intervention is pathetic. Let me put it on the record, in front of the Committee and the country, that I drafted all the Opposition amendments personally because I take an interest in the Bill and it is part of my shadow ministerial portfolio. I did every single bit of the work myself. I also refer Members to my entry in the Register of Members’ Financial Interests. I have a £2,000 constituency development programme with the Union of Shop, Distributive and Allied Workers. That is as far as my responsibilities go in declaring such issues.

If the hon. Member for Huntingdon would like a crash course on how to write amendments, I would be happy to meet him this evening. Perhaps he could then write some amendments to make the Bill better. All I would need to do is show him how to spell the word “delete”. That would certainly make the Bill better. [Interruption.] The Government Whip chunters that we should have declared our interests at the start. He will not even tell us how many members the Conservative party has, never mind anything to do with the Register of Members’ Financial Interests. We are absolutely transparent and people can look at my entry.

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[The Temporary Chair (Sir Edward Leigh)]

Order. Before I call the next speaker, I should say that the amendments are narrowly drafted. I know that hon. Members, when they take part, will not just have a general debate on part 3. That is quite important.

[Mr Djanogly]

I declare any interests I have in the debate arising from my entry in the Register of Members’ Financial Interests.

Essentially, the question on amendment 103 is whether we tweak the existing system for an automatic annual union membership auditing and inspection regime, or, as Labour wants, we tweak the system in much the same way as the Government propose but so that it comes into play only if a complaint is made under the existing rules. I support the part 3 and clause 36 proposals to aid the verification of union membership. The question is how far the measures should go. On listening to Opposition Members on Second Reading, one might have thought that part 3 constituted a massive attack on union rights, or at least a vehicle for what the hon. Member for Wallasey (Ms Eagle), the shadow Leader of the House, has called “cheap” and “partisan” attacks.

The Bill is nothing of the kind, as is immediately apparent when one looks through the Opposition amendments. Their proposals are mainly low-key and technical, and not political. Admittedly, taken in the round, the Labour amendments could be seen as obstructive amendments that seek either to stymie the role of the certification officer or at least to keep him in his existing box, which is why they should be opposed.

[Yasmin Qureshi]

Does the hon. Gentleman believe that, when the Prime Minister said that the next big scandal to break out in British politics would be lobbying—all hon. Members agreed with him—the Bill was what he envisaged? With all the problems and challenges the country has, does the hon. Gentleman believe that this little Bill is necessary?

[Mr Djanogly]

I will come to the hon. Lady’s point— I might agree to an extent with some of what she says.

Let us put the measures in context. An emergency motion on the Bill, which was moved by Unison at the TUC conference, has called for an investigation of a policy of non-co-operation with the Bill. Considering the Opposition amendments, that is way over the top, particularly in relation to the part 3 proposals.

On the other hand, despite the Labour smokescreen, the part 3 provisions are something of a missed opportunity to reform the certification officer role, which has long been in need of reform. The key point is that the certification officer is not a true regulator of unions, as it should be. Rather, as the hon. Member for Edinburgh South (Ian Murray) has said, it is like Companies House. It checks that filings are made, but does not look at what is contained in those filings. There is a limited power of investigation, but only in relation to administrative matters.

Therefore, when I look somewhat more charitably at amendment 103, I note that it gives us the chance to debate what the underlying role of the certification officer should be, and to ask what is the purpose of the records kept by unions. Given the surprising reticence of the Government to set out their answers in much detail to date, the amendment serves a useful purpose.

The clause 36 provisions effectively retain the status quo—that originally created via the Trade Union Act 1984 and replicated in the 1992 Act. One has to look only at the obscure clause numbering in the Bill—it proposes new sections 24ZA to 24ZK—to realise that it is high time properly to review the legislation and, in effect, to start from scratch.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Does the hon. Gentleman not accept that trade unions are one of the most highly regulated institutions in the country—far more so than, say, political parties, which do not have to produce the kind of information the Bill would require? Does he accept that that is because of the ideological wish, from certain people involved in politics, to regulate trade unions highly? That sits ill at ease with some of the comments made regularly by Government Members about cutting red tape.

[Mr Djanogly]

I actually think the opposite. I will be upfront about this. In the previous Parliament I did a lot of work on regulatory issues—the Companies Act 2006 and the Legal Services Act 2007, which was a major piece of legislation. That work was done, for the most part, on a consensual basis by the two sides of the House, and some pretty good laws were passed. My point is that the trade union laws were passed in the mid-1980s and are in serious need of reform and review.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The hon. Gentleman says that the law is in need of review and change, but can he answer one simple question? What is the problem that these amendments and provisions are seeking to address? That is not clear me.

[Mr Djanogly]

I answered that specifically in reply to a question put by the hon. Member for Edinburgh South (Ian Murray), the Opposition Front-Bench spokesman. I have to say that one does wonder why we are missing this opportunity for reform; I am not sure. Perhaps it is because the Department for Business, Innovation and Skills is packed with Liberal Democrat Ministers. Who knows? Perhaps it is the Government’s more general reluctance to look at legislation governing unions and industrial relations. In any event, the toothless nature of the certification officer remains, despite so much having changed since 1984. For example, on the membership register, in the mid-1980s membership records were for the most part probably kept on paper. Official management and database IT systems were not very developed. E-mail did not exist for everyday use and communications with members and voting had to be in person or by post. Of course, postal voting at that time was seen as a novel idea to be used against the intimidation of members at the time of union votes—union intimidation being rife at the time.

There is another key difference between then and now. Unions are, in general, becoming fewer in number, but far larger and more general than in the 1980s.

[Ian Lavery]

The hon. Gentleman mentions union intimidation. Does he want to provide some examples of his experience of union intimidation?

[The Temporary Chair (Sir Edward Leigh)]

Order. I do not think we need to get into these wider areas. I repeat that this is a narrow amendment and that the clause itself is very narrow.

[Mr Djanogly]

Unison and Unite now account for approximately 40% of total union membership. As such, it follows that the larger unions are becoming increasingly powerful politically and economically, and with power comes responsibility and the duty to be accountable. We can make a comparison with companies and the difference between how private and public companies are regulated. It is therefore right that union obligations to administrate themselves correctly, such as membership records, are subject to a suitable level of oversight and scrutiny, and the clause provides for that. I note that the Labour party seems to accept the number of 10,000 as appropriate for the higher level of regulation to apply.

[Mr Anderson]

The hon. Gentleman is being generous with his time. Will he answer the question I asked my hon. Friend on the Front Bench? If there is such a problem, why has the certification officer not raised it? Has he come to the House and said, “I’m really not happy because the unions are not staying within the remit”? Has that been the case? I do not believe it has.

[Mr Djanogly]

I have to say to the hon. Gentleman that the last time I visited the certification office was more than half a dozen years ago, so I am not totally up on what the latest one is thinking. However, from my experience of looking into the matter in detail—the regulations and laws have not changed—I know that the certification office has very limited powers. In fact, most people would not even see it as a regulator; rather, as I said, it is more like a Companies House collection box than anything else.

[Andrew Gwynne]

I am grateful to the hon. Gentleman for giving way; he is being very generous. Regarding his involvement with the certification officer, albeit several years ago, does he have any evidence that the current membership figures for trade unions are incorrect and therefore require the change in law that is being suggested?

[Mr Djanogly]

That is not an issue I have investigated. As I said, complaints emanate from members of unions, not from people outside unions, and I think that that is the wrong way to be going about such an issue.

Let us step back and look at the clause in the round. There is a fundamental question which, to be fair, was picked up by the Opposition on Second Reading and the hon. Member for Edinburgh South today, and it is implied by amendment 103: we need better clarification from the Government on the intention of these clauses. In the 1983 Government Green Paper, it was specifically claimed that decisions made by unions could be contrary to the wishes of their members and that union leaders often appeared not to be responsible to their members. The then Government made the case that legislation could limit malpractice, such as ballot rigging and forgery.

What, therefore, are we trying to do with improved membership registers? Are we concerned about the validity of strike ballots where key public services, such as London trains, are disrupted by a simple majority of an overall minority of members voting? Is there concern that ballot rigging is still going on because of poor membership records? Let us remember that the certification officer has very limited powers in such situations, and that the few powers he does have can be triggered only by existing union members, not by the public who are unable to get to work.

[Ian Lavery]

The Chair said that we were perhaps veering off the subject, but I have to come back to the serious allegations the hon. Gentleman is making. If someone makes serious allegations in the House, they should be big enough to present evidence. Where has there been evidence of ballot rigging in the trade union movement? The trade union movement is an extremely transparent and democratic organisation.

[Mr Djanogly]

The hon. Gentleman is clearly not listening to what I have been saying. I have not been saying that there has been ballot rigging. In fact, in some ways I think I am helping his case by saying that we need to look more carefully at the purpose behind the clause. This would be a good opportunity for the Government to give at least a sense of direction on part 3 about their intentions on strike balloting. Perhaps that purpose is related to party funding, given that the previous part of the Bill relates to election funding. If that is so, why are we not giving the certification officer the power to check that the political opt-out is clearly stated on the union membership application form—that has clearly not always been the case—let alone going the further step, as suggested by the Leader of the Opposition no less, of reversing the position to an opt-in?

Despite the Opposition’s position being muddied following the Leader of the Opposition’s speech at this week’s TUC conference, why are the Opposition not taking this opportunity to amend the Bill to that effect? This is a pressing issue, not least because the majority of union members do not even vote for the Labour party. Even if such reform needs more time to be formulated, why cannot the Government indicate their intentions for party funding as a result of improved membership records?

The clause deals specifically with auditing membership numbers, but what about overseeing matters in the context of the return as a whole, let alone dealing with issues of client care or quality of service? The provisions do not even tighten up the definition of what membership means, which would be helpful, if that is what is to be audited.

[Ian Murray]

I am grateful to the hon. Gentleman for giving way. He is reeling off a list of potential obligations on a trade union with regard to its members. Does he not think that if a trade union was not compliant with obligations under customer service and so on, the member would just simply leave?

[Mr Djanogly]

Let me give the hon. Gentleman an example. If we are to have the provision to audit members, we should know what “member” means. This is a fundamental omission, as was shown with the miners compensation scheme.

In that situation, certain unions created a new class of “associate membership”, with no rights other than the right for the claimants to be referred to the union-picked no win, no fee lawyers, from whom the unions then took a kickback commission. The scam was uncovered and the lawyers were heavily penalised by their regulators. However, not—

[The Temporary Chair (Sir Edward Leigh)]

Order. I have given the hon. Gentleman some leeway, but if he looks—as I know he has: he is a very skilful Member—he will see that this is a narrowly drafted clause. Will he please now restrict himself to the amendments and the duty to provide membership audit certificates, and not give a long history of the trade union movement?

[Mr Djanogly]

Thank you for that clarification, Sir Edward.

The point of amendment 103 is to ask the purpose of the clause, and that is right. If the purpose is to deal with auditing members, perhaps we should be talking about what constitutes a member and what is to be audited. Would it include the associated membership that we saw in the miners compensation scheme, for instance? Should the audit include a description of their rights as members? Alternatively, do we want to know accurately the number of members, so that this can be tied to union political contributions? If so, the Bill might not be as effective as some people think. That is because trade unions have not necessarily been affiliating the same number of members as have been contributing to the political fund. They may affiliate phantom members in order to get more union votes on Labour party matters. I am unsure what effect auditing membership numbers would have in that situation, other than to verify how bizarre Labour’s relationship with the unions can be. Again, however, a sense of direction for future reform from the Government would be helpful.

I support this Bill, because I can see nothing to object to in principle—it basically just repeats and fortifies what has been around since the 1980s. I hope that hon. Members do not take what I have said as anti-union, because I am not anti-union. However, I strongly believe that union law is way behind the times and desperately in need of reform. Can anyone really argue that legislation and procedural regulations passed in the mid 1980s are still adequate now? Although I disagree with Labour’s amendment 103, I appreciate its wider implication of showing up the lack of Government purpose and direction behind these provisions. Given the time the coalition Government have had to formulate policy on these key issues, which have a significant impact on the people of this country, we could and should be doing much better. This is a missed opportunity to reform industrial relations law.