Trade Union Bill

Lord Collins of Highbury Excerpts

Thursday 25th February 2016 Lords Chamber

[Lord Flight]

I would dearly love to embark on a long debate with the noble Lord on the banking crash, but it was essentially caused in America and not in this country. I do not think that the regulations that have come in since have done very much to prevent another financial crisis arising in the future. They always arise and there is nothing new about them—just look at economic history. But I am glad to have livened the Committee up a little, perhaps.

[Lord Collins of Highbury (Lab)]

The other issue that is constantly reported on the radio is that of mis-selling, which created a huge crisis across the financial sector. I do not understand how that equates to breaches of trade union rules.

[Lord Flight]

I will dig myself in deeper and say that, to my mind, a great deal of the mis-selling issue is unjustified. First, if you go out and buy a new or second-hand car, you buy what you see. Individuals have some personal responsibility for determining what they buy. Secondly, and more specific to the whole area of mortgages, it was largely about inflation reducing dramatically and returns differing substantially. The simple point is that financial services are at one end of the spectrum and, arguably, trade unions are at the other. It is unreasonable not to accept that the behaviour of trade unions can be extremely inconvenient, if not damaging, to the public at large. Therefore, there is a public interest here.

This group of amendments is about cancelling or dumbing down some parts of the Certification Officer’s modest new powers. It seems to me that the powers in question are really not of the substantial importance that the noble Lord suggested. Specifically, the amendments are to remove the new investigatory powers in the Bill and remove the power to investigate in the absence of a complaint by a member. Surely the public have some right to complain if they feel that they have a complaint, and surely a regulator—even a modest regulator—ought to be there to investigate. To say that the trade union itself can investigate does not comply with the government standards of our times, which require some degree of individual investigation.

As we are all aware, the Bill provides the Certification Officer with additional powers he can use proactively to investigate breaches of trade union statutory requirements in relation to political funds, union mergers, internal leadership elections and appointing to, or failing to remove from, a union a person convicted of certain financial offences. It does not seem unreasonable that a very modest regulator should have the power to look at those territories. The Certification Officer ought to be able to investigate formal complaints, not just when lodged by a member but in response to information raised by third parties. Again, his powers beyond investigating are not that great. I do not see why the trade union sector should not be as transparent as any other.

There is a key addition in principle behind what is in the Bill, which is regulation on behalf of the public. The wider public has an interest in trade union conduct where, as I said, unions can by industrial action and in other ways inconvenience the public and damage the economy. Likewise, the investigatory powers cover areas relating to statutory requirements that are of relevance to the public as well as to trade union members.

I note that the Electoral Commission, which is somewhat, if not entirely, analogous to the trade union movement, can impose larger financial penalties. While the Certification Officer has only the discipline of civil penalties, the Electoral Commission can escalate an issue to a criminal offence. I do not propose that that should be the case in trade union regulation, but it illustrates that these measures are pretty modest. On the issue of bearing the costs, again, the industries affected invariably bear the cost of regulation, but I cannot see that what is envisaged here will cost very much at all. I repeat the key point: at present, what exists is purely to protect the interests of members and what is proposed is to protect the interests of the public. That is not an unreasonable change.

I close by saying that I cannot see that there is much in these provisions that is at all inherently damaging to trade unions if they are conducting their affairs in a proper manner. I would have thought, therefore, that it would be a wise strategy to accept the measures, comply with them and make them as unonerous as possible.

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[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, the sore throat that I have been keeping at bay all week overwhelmed me earlier so I apologise to the House. I thank the noble Baroness, Lady Donaghy, for what I think I should call solidarity because she presented me with some Fisherman’s Friends so that I can get through the rest of today. I also congratulate my noble friend Lord Courtown on his interesting contribution to the Committee’s proceedings, and all noble Lords who have spoken in this important debate.

In our manifesto, we said that we would reform the role of the Certification Officer and we are doing just that with, it is fair to say, a great deal of scrutiny in this House. The Certification Officer has responsibility to consider complaints relating to important union processes. It is vital that we have confidence that those processes are conducted properly. For example, the Certification Officer can consider complaints in relation to union leadership elections, union mergers or the accuracy of trade union membership registers—which matter a lot if there is a ballot—or to ensuring the removal from a union office of a person who has been convicted of certain financial offences.

I would argue that there is a legitimate public interest in trade unions running their affairs according to what is required of them. It is not always the case that union members will know their union’s regulatory duties. That is why a responsive and diligent regulator is necessary. I hope that is agreed.

[Lord Collins of Highbury]

If I may interrupt, it is a shame that the noble Lord, Lord Forsyth, is not here because it is important to remember that the reforms of the 1980s, if I am to believe him, were about ensuring that trade unions were representative of and controlled by their members. That is what those reforms were about. I am happy to place it on record that I do not want to see us ever go back on some of those laws. It is a real shame that the Minister is confusing those obligations of a free association, which are to be guaranteed, and then saying that there are other interests which need to be regulated. Can we not go back to what Margaret Thatcher said and ensure that we have free and fair trade unions, controlled by their members?

[Baroness Neville-Rolfe]

My Lords, I do not think that I have a great deal to add on that point now but I have some observations which, with the noble Lord’s agreement, I will move on to. Before doing so, I will comment on the question which the noble Baroness, Lady Donaghy, rightly asked about whether we got the impact assessment wrong. My understanding is that it was not a mistake. The point is that the public in general have an interest in good regulation—in employers, in employees, in families and in the wider public. That is perhaps what we should have said. We are scrutinising this but I am not seeking to change the impact assessment, which has obviously been looked at carefully in the usual way.

Of course the provisions in the Bill have to be proportionate and give effective regulation. As I see it, we are bringing the current powers of the Certification Officer up to date with the accepted normal situation in other sectors. I shall leave the financial services sector on one side, because I want to get through the debate this evening, but perhaps I could give some other examples. There is the Information Commissioner’s Office and the Groceries Code Adjudicator, which has been mentioned. The Charity Commission, the Electoral Commission, the Gambling Commission, Ofcom, the Food Standards Agency, the Environment Agency, Natural England, and Ofwat—it is a long list—can all consider representations from third parties and undertake investigations if appropriate.

I am not sure whether I agree with the noble Lords, Lord Mendelsohn and Lord Oates, on the subject of the costs. The Certification Officer has given views on the potential costs necessary to undertake the new regulatory function and I understand that his comments were consistent with the estimates we have set out in the Bill’s impact assessment. I think he said, rightly in my view, “I do not want to employ rafts of people only for them to be underused. I want to see what happens and increase numbers as appropriate”. My understanding is that we agree that the annual cost will be around £2 million. However, to respond to the point made by the noble Lord, Lord Oates, although I can confirm that the Certification Officer was not consulted before the Bill entered Parliament, we have engaged with him and will continue to do so as we move towards implementing the reform. As the noble Lord, Lord Stoneham, suggested, we want to continue a tradition of good compliance.

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[Baroness Donaghy]

My Lords, it is getting to the stage where I have forgotten what a lot of these amendments are about.

[Lord Collins of Highbury]

I thought you were going to say that you have lost the will to live.

[Baroness Donaghy]

I have also lost the will to live. However, Amendment 109 intends to delete the following:

“Where an enforcement order has been made, a person who is a member of the union and was a member at the time it was made is entitled to enforce obedience to the order as if the order had been made on an application by that person”.

Amendments 110 to 117 are technical in nature and again are consistent with my theory that the role of the Certification Officer should remain simple and that the investigatory powers should be confined to that officer, not spread far and wide. The amendments are all entirely consistent with my view that the Government are going down the wrong track in trying to change this position, which the noble Lord, Lord Stoneham—I might call him my noble friend in view of our common trade union background—has commented on.

It is important to remember that the post originated as a protection for the union member against the union structure, if you like. I know that add-ons have been made over the years, but the role remains essentially the same. Because of its limitations and the way the Certification Officer has carried out his role, it has become a trusted position. The Government have accepted that they are trying to change the nature of the role, saying that it is about modernisation. I think that we shall just have to agree to disagree. We need to take into consideration that any attempt to change the nature of the role by reference to “imperfect relationships” between unions and employers seems to add a meaning that I had not been aware of, which is why I was so worried about the impact assessment. These are probing and technical amendments, but they are consistent with all that we have been saying. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness, Lady Donaghy, for her commendable honesty. I will seek to provide some reassurance on this, which is essentially a technical discussion. I think that there is a reasonable explanation; let us see how it goes.

In the current legislation a union member—so it is a member—can apply to the court to ensure that a union complies with an order of the Certification Officer. That is a long-standing provision of the current legislation, which we heard about. However, to reflect the Certification Officer’s investigation powers we thought it would be helpful when drafting the legislation to remove any doubt that his own orders may also be enforced, as an order of the court, by the Certification Officer. In doing so, the drafting of the Bill reiterates the existing rights of the applicant member and other members mentioned in relevant sections of the current legislation. The words in Clause 17 that the noble Baroness seeks to amend simply refer to those existing provisions. I do not have any examples, but I will see whether we can find one. The main example is that that is existing practice, but I will look at other regulators and add it to my letter.

I am sure that noble Lords would agree that, if the Certification Officer had found that a union was not compliant with its obligations and it did not rectify the situation, it must be right that a union member should continue to be able to take action to protect their interests.

I hope that that provides some reassurance and that the noble Baroness will feel able to withdraw the amendment.

[Lord Collins of Highbury]

I need clarity on this. Currently, where the Certification Officer publishes a decision and an enforcement order, the member can go to a court; having been before the CO on many occasions I am aware of the process. Is the noble Baroness saying that the CO will now be able to see enforcement through the courts on his own?

[Baroness Neville-Rolfe]

My Lords, my understanding is that the orders of Certification Officers are already enforceable as an order of the court under the 1992 Act, so we are just continuing that position.

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[Lord Stoneham of Droxford]

But normally when you reform a process, it is because something is not being enforced properly. I ask again: is there an example of where due process has not been followed?

[Lord Collins of Highbury]

An enforcement order not complied with?

[Baroness Neville-Rolfe]

I do not know the answer this evening. I am not sure I am going to give way on this point. We are setting up a modern regulator and a modern regulator needs appropriate penalties. We can argue about the exact detail of the penalties and I am going to come on to say something of a listening kind.

The range of the penalties that we propose mirrors that available to bodies that I see some parallel with, such as the Electoral Commission, which has a maximum of £20,000 in relation to the civil penalties that it can impose; I think it does criminal penalties as well. The national minimum wage regime also provides for penalties of up to £20,000 per worker. Our general approach is that a strong civil sanctions regime is an effective way of ensuring rapid compliance. That is why we do not think that the amendment, which seeks to reduce the fine to £5,000, would be sufficient.

We want to get this right. As the noble Lord, Lord Dykes, said, we are trying to listen during Committee. Obviously, we will consider and reflect on the debate in the House before bringing forward further details, particularly of the application of these penalties and how they would work. I ask the noble Lord to withdraw the amendment.