Trade Union Bill

Lord Balfe Excerpts

Thursday 25th February 2016 Lords Chamber

[Baroness Donaghy]

My Lords, I think that I know where I am now. We are on to the proposal for a levy. Points have already been made about this proposed levy, which effectively means that trade unions and not the public purse will be paying for the Certification Office. Like others, I oppose that on principle, which is why I support the proposal that Clause 18 should not stand part of the Bill. I will not go into a great deal of detail about that. The points have already been made during general debate about why this levy is a new and very unwelcome development. Even now, I hope that the Government will reconsider.

The TUC is concerned that the Bill does not place a cap on the levy which can be charged to unions, other than providing that the total amount levied must not exceed the expenses incurred by the CO over a three-year period. Under the Bill’s current provisions, the Certification Office could expand well in excess of the Government’s current staffing estimates, with unions expected to cover the entire cost of the increased enforcement regime.

The TUC is also concerned that the Bill does not require either the Government or the CO to consult with stakeholders before determining the level of the levy. It believes that this is unreasonable, so I hope for an assurance from the Minister that there will be such consultation and that it will not take place, as I said, in the August-fest.

To speak specifically about Amendments 118 to 121, this is the old argument about “may” and “must”. If the Government have something in mind, it is really their responsibility to give some indication about their thinking rather than leaving the Certification Office to hang in the wind on this. The amendments would make it mandatory—not just a “may”—for future regulations introducing a levy to cover the costs of the Certification Office to specify what would be considered as recoverable expenses, including costs incurred by ACAS in providing staffing, accommodation and equipment, and to specify how the levy will be calculated for different organisations, taking into account the number of members and whether an organisation is a trade union, an employers’ association or a federated employers’ organisation, and the functions carried out by the CO in relation to different organisations.

I am looking, first, for some chink of light about the Government having second thoughts on the levy at all. Secondly, if there is to be consultation it should take place at a reasonable time and for a reasonable length of time. Thirdly, we need to be clearer about the Government’s thinking on this levy. It seems that it could be a bit like student loans: the minute you have it introduced, it could go really sky-high. As I said at Second Reading, it could look like the thin end of a very large wedge as the Certification Office is part of the ACAS family, which could include other functions of ACAS. I would be particularly concerned about that.

In the light of the time, I will confine myself to those remarks and hope that the Minister will give us some more positive response.

[Lord Balfe (Con)]

My Lords, I will make a couple of points about new Section 257A(4) in Clause 18, which covers the amount of the levy. They could have been made at various points, but they are probably as well made here as anywhere else. Before I start, can the Minister confirm that the various letters and information mentioned today will be sent to all noble Lords who have taken part in this debate?

[Baroness Neville-Rolfe]

The noble Lord will be aware that I have already said, in promising letters, that I will ensure that they go to the nooks and crannies of the Chamber, which I think would include those involved in the debate today. We will of course take a careful look at the list.

[Lord Balfe]

I will not admit to whether I am a nook or a cranny, but I thank the noble Baroness for that.

The impact assessment says that the Secretary of State is,

“to be given a power to make affirmative regulations … The regulations will include a requirement for the Secretary of State to consult trade unions and employer associations on how the fees should be calculated”.

Could the Minister give us any indication about what level of consultation of trade unions will take place?

The impact assessment then says in paragraph 287:

“They will also limit the fees to cost recovery, and provide that the membership size of trade unions … may be taken into account when the fees are calculated”.

This is obviously quite important, and I will come back to it in a minute. It then goes on to say, in paragraph 294:

“The change to the operations of the Certification Officer will not change the costs faced by compliant unions”.

I am not sure I understand that, because if the costs are going to go up, that must surely change the fees, because they will have to go up to meet them. In paragraph 295, the assessment repeats what it says in paragraph 287:

“The mechanism in which the levy will be calculated will be consulted on with trade unions and employer associations”.

Can the Minister give us some idea of how that will take place?

A little further on, paragraph 297 says that,

“secondary legislation will set out how the levy will operate in more detail … a further impact assessment will be needed for the secondary legislation”.

Could the Minister give us some idea as to where we are with that impact assessment? Is it in process and will it be produced after the legislation is adopted? What will happen?

Finally, paragraph 299 says:

“The design of the levy will consider the inclusion of specified criteria such as the number of members or amount of income an organisation has”.

I have raised this privately with the Minister, but make no secret of the fact that a number of these smaller unions are concerned at the impact this levy will have on them. Particular concern has been raised with me by a number of the smaller unions about the difference in costs that could be incurred because a large union with a political fund—for example, Unite—could end up costing the regulator a lot more to regulate than a smaller union without a political fund, such as the British Dental Association.

I am sure that the Minister cannot say anything tonight, but I would like her to agree, in working out how the levy is to be apportioned, to look, first, at giving due regard to these smaller unions—hopefully some sort of graded system will be introduced. Secondly, will consideration at least be given in the consultation to the fact that unions that have chosen to have a political fund, which is of course regulated separately, should pay an extra part of the levy so that, in other words, the levy for the supervision of the political fund will not be placed on unions that do not have a political fund?

I know that these are rather small and technical points, but they are quite vital to small trade unions. If you are looking at a fourfold increase in costs, and these costs being placed on the unions for the first time, coming on top of other costs that they have recently had placed on them, this is a serious financial burden for the smaller unions in the TUC. Many of those smaller unions, which represent important professional subgroups within the population, play an extremely important part. Some people will say that they can always be taken over by big unions but that, to my mind, is not the solution. The smaller unions of this country play an extraordinarily important part in safeguarding the pay and conditions and bringing the detailed knowledge to bear for important groups of largely, I confess, highly professional workers. They do a valuable job, and in constituting this levy and working out where it falls, I hope that the Minister can assure us that due regard will be given to the points I have raised.

[Lord Oates]

I shall speak in particular to Clause 18 stand part in this group of amendments. We have considerable concerns about the shift of responsibility for the costs of the Certification Officer from the Exchequer to the trade unions. The Certification Officer estimated the cost of the levy to be £2 million to the department. But as he said in his evidence to the Select Committee, this is very much a provisional view. He said that,

“we are warning our funders, ACAS, that we may ask for more money … Apparently, you should do only a certain amount of forward planning while the legislation is at Bill stage, as you cannot move forward too quickly with public expenditure at that point”.

I do not know whether that reflects what he was told by the department. Of course there is a cost to the unions, not just of the Certification Officer but also of the additional resources that they will have to put in to answering complaints when third-party complaints are added.

The Minister has made references to and comparisons with other regulators whose members have to pay the fees. Perhaps she could answer a few questions. First is the question I raised earlier to which I do not think I have yet had a response. Why is it right for trade unions to pay a levy to be regulated but not political parties? I am not suggesting that political parties should pay for being regulated by the Electoral Commission, but they do not. It is not right to make comparisons with the Charity Commission or, indeed, any other area because the trade unions are involved in a political arena. It will be more so if third-party complaints are allowed, as a series of partisan and politically motivated complaints will be made.

If the Government insist on pushing this levy on to trade unions, will the Minister look again at the issues relating to third-party complaints? Will she, for example, look at excluding the costs of investigating those complaints from the levy that the trade unions have to pay? Will she look at restricting the scope of third-party complaints? For example, will the Government consider excluding complainants who are members of political parties unless they are also members of the relevant union? That would help exclude some of the partisan complaints that will inevitably be generated.

Will the Government also exclude organisations which refuse to publish their funding sources? I am thinking of the TaxPayers’ Alliance, which we know is very keen on this Bill—one of the few organisations that is. As I understand it, it will be eligible to make complaints against unions relating to details of union finances while refusing to divulge where its funding comes from—as it does at present. That cannot be right. Will the Minister look into that?

Finally, I comment on the irony, given that the partisan nature of the Bill was designed in the Exchequer—in the Chancellor’s office—that it is the trade unions who are having the cost shoved from the Exchequer on to them. That is simply not right.