Lord Flight
Main Page: Lord Flight (Conservative - Life peer)
Lord Flight (Con)
My Lords, notwithstanding all that has been said, this legislation is not intended to be hostile to the trade union movement but rather to modernise and address practices that are now outdated and sometimes inappropriate, particularly in the public sector and particularly with regard to the interests of consumers and taxpayers. My perception was that the Labour Party broadly accepted this, and hence in the other place did not table any amendments addressing the key elements of the Bill, but rather initiated a debate on conducting ballots in the workplace by electronic communication, which is important and which I personally support.
I support the important elements of the Bill: the ballot reforms in Clauses 2 and 3; the requirements for an opt-in for union members paying the political levy in Clauses 10 and 11; addressing facility time in Clauses 12 and 13; check-off arrangements in the public sector in Clause 14; and beefing up the powers of the Certification Officer in Clauses 15 to 17.
As we are all aware, the Bill requires that at least 50% of union members entitled to vote on industrial action should cast their vote for the ballot to be valid, and that, in addition, in important public services affecting the public, at least 40% of those entitled to vote should vote in favour of industrial action. The present arrangements, where only a simple majority of those voting is required, have led to abuse by militants, largely in the public sector and frequently inconveniencing the public. Trade unionists should accept that many members of the public are fed up with public sector strikes. Candidly, it is a disgrace that doctors are threatening to go on strike.
Of the days lost from strikes in 2014, 91% were in the public sector, which represents less than 30% of those in work and has both higher pay and better pensions than the private sector. Indeed, reform is needed more in the public sector than in the private sector.
Clause 10 provides that union members must make an active decision to contribute to political funds. Some unions, such as Unison, I understand, already have a tick-box. Clause 11 requires unions to include in their returns to the Certification Officer greater detail on what the political fund is spent on where expenditure exceeds £2,000. My reading of the legislation, however, is that failing to opt in to the levy will not necessarily mean that a member’s union contribution will be reduced by the amount of the political contribution. This could provide for a hidden increase in members’ subscriptions. However, of more moment, statute already requires an annual shareholders’ vote for companies to make political contributions, which should reasonably be matched by union members’ political levies similarly being voted on annually. Contrary to assertions made this evening, no banks or public listed companies make party-political contributions to any of the parties.
There has been a growing lack of distinction between trade union duties and trade union activities that qualify for facility time where there is no statutory requirement to pay union representatives for time spent on union activities. In practice, some union representatives are paid for undertaking activities as well as duties. It is surely reasonable that trade unions should pay for activity representation within the public sector organisations themselves, rather than the taxpayer shouldering this burden. In 2012-13, trade unions received £108 million in subsidies from taxpayers, plus a further £85 million in paid staff time and £23 million in direct payments. In 2013, at least 2,841 full-time equivalent public sector staff worked on trade union activities and duties at taxpayers’ expense. Out of 1,074 public sector organisations, 344 did not formally record facility time. This area needs tidying up and cleaning.
As noble Lords are aware, historically employers have deducted trade union subscriptions from a member’s pay and passed them on to the union. With direct debit facilities more easily available, there is no longer any real need for this practice. Some 972 public sector organisations—91% of public bodies—still provide check-off facilities. Only 213—22%—charge for this service. In 2012-13, these 213 bodies charged £1.77 million. If the other 759 public sector bodies were to charge, this would equate to £6.3 million—effectively another taxpayer subsidy. In today’s world, it is surely not the business of public sector employers to be processing staff dues. But if they do so, they should charge appropriately for the service.
Most legal services, including litigation, are reserved activities and can be provided only by a regulated person. However, the Legal Services Act 2007 was amended, for no particularly valid reason, to provide that trade unions—not other not-for-profit organisations—would be wholly exempt from regulation in the provision of legal services to their members. Experience with compensation claims suggests that trade unions need greater, not less, regulation in related territories.
At present, the Certification Officer, although called a regulator, has little more power than Companies House: in other words, they check that accounts have been received but not what is in them. So beefing up the powers of the Certification Officer in Clauses 15 to 17 is an important aspect of the Bill. It would be interesting to have more detail on what is intended here. For example, where there are potential frauds, the Bill needs to provide the mechanism for action and the Certification Officer needs to be adequately funded to act. The relationship of the Certification Officer to the Electoral Commission as regards the monitoring of union elections and the registration of political donations also needs to be considered. The provisions in the Bill regarding the Certification Officer need further consideration.
Baroness Drake (Lab)
Does the noble Lord accept that the Certification Officer has the power to check that the unions have adjusted the contribution rate of members who have opted out?
Lord Flight
I am not aware of whether that power exists at present. It is certainly intended so far as the Bill is concerned. But I suggest that there are quite a lot of other useful things that a Certification Officer can and should be doing.
Baroness Drake
My Lords, the public can be forgiven for thinking that this Bill is only about strike action. That is what public commentary has focused on. But in reality, as today’s debate has demonstrated, the proposals go much wider. The Bill does not stop at setting high thresholds for strike ballots by train drivers, teachers or hospital workers; it launches a much broader attack on the ability of trade unions to organise and politically engage, subjects them to extended scrutiny from the Certification Officer and expands Ministers’ powers, with significant and unseen secondary legislation still to follow—all of which disturbingly upsets the balance of influence in our treasured pluralist democracy. Amnesty, Liberty and the Equality and Human Rights Commission—the hat-trick—have all expressed their deep concerns.
In contrast to the 1980s, industrial relations today are in a benign state. Strike days are a tiny fraction of the 27 million days in 1984. No evidence is provided for why such extensive provisions are needed today and no assessment of their impact is yet published, yet the Bill shifts the balance of power against workers in the labour market and the balance of political influence against trade unions and the Labour Party.
Currently, the Certification Officer has the power to act on a complaint from a trade union member. The Bill transforms it from an adjudicator on disputes between unions and their members into an enforcement agency with wide-ranging powers—even if a member has not made a complaint—to initiate investigations, require the production of documents and impose substantial fines. It gives the state extensive access to members’ details and privileged correspondence. As the Minister for Skills confirmed, third parties will be able to raise concerns. The failure to act on them could well expose the Certification Officer to judicial review. As the Equality and Human Rights Commission comments, the power to instigate complaints, as well as investigate them and adjudicate on them, compromises the impartiality of the Certification Officer and therefore raises substantive concerns about compliance with Article 6.
As my noble friend Lord Hain observed, excessive state interference with independent trade unions has normally been strongly opposed by all good democrats. The Bill gives Ministers significant reserved powers to amend primary legislation relating to facility time for union representatives in public authorities. The Equality and Human Rights Commission believes that these open-ended powers could be used to introduce disproportionate interference with freedom of association. They are, indeed, open-ended. As the Delegated Powers Committee observed, the Government’s power to require information, or impose a limit on facilities, extends to a person who is not a public authority but who has functions of a public nature because they receive funding in part from public funds. This could include a care home with local authority-funded residents; a charity providing services; indeed, a long list of employers who receive public funds.
The Bill introduces stricter rules for a lawful ballot and lawful industrial action, but meeting those higher standards of legitimacy will still not be enough for a legitimate strike. The Government are intent on removing the restrictions on agency workers being employed to cover striking workers. In effect, responsibility will be transferred from the principal employer to the employment agency, through service-level agreements, to resolve a lawful dispute by strike breaking. Agency workers will have to strike-break to keep their jobs with the employment agency, because the agency’s service contract will require them to supply labour during a strike, and the agencies know that.
Tony Blair once said that British labour law is,
“the most restrictive on trade unions in the western world”.
It is about to get even more so; yet individual protections are also being weakened. The big increase in fees saw employment tribunal claims plummet by nearly 70% in the year following their introduction—way beyond deterring unmeritorious cases.
The Government claim that they are the workers’ party because they increased the minimum wage. I have spoken in favour of such an increase from these Benches. However, as the Centre for Policy Studies argued, it was driven as much by the need to address low levels of UK productivity and stop companies—including many large employers—taking advantage of in-work benefits to subsidise their pay bills as it was by a caring attitude for the low paid. The £4 billion rise in pay which the increase will generate is no substitute for the £12 billion cut in benefits.
The proposals on political funds do not represent a regulatory regime that is fair to all political parties. They are a partisan measure, intended to reduce unions’ political engagement and the funding of the Labour Party. The change from “opt out” to “opt in” does not come from measured cross-party consideration. The established precedent that changes to party funding happen only by consensus has simply been torn up.
Figures show that from 2009 to 2015, excluding donations directly paid to candidates, the Conservative Party received £39,970,822 and the Labour Party £7,437,087 in company donations. They confirm what we all know: Labour receives significant funding from trade unions, the Conservatives from business. But there is no proposal, for example, for businesses to seek the specific approval of individual shareholders for the donations that they make. Employers use opt-out to put employees in salary sacrifice schemes and to change terms and working practices, and the state uses opt-out to get workers to save for retirement. But it is now unilaterally unacceptable for unions to use it, even with the bedrock protection that members cannot be auto-enrolled into union membership. The certification officer will now have new powers to require unions to report in considerable detail on how political funds have been spent.
The Government claim that the rules are even-handed because they apply to employers’ associations. That is disingenuous. None of the 94 employers’ associations on the certification list has a political fund. Companies make political donations individually or via other channels. Everyone with a modicum of understanding knows that these rules will impact only trade unions.
Lord Flight
Companies are obliged by statute to vote on whether or not to make political donations, as a result of which virtually no public companies do so any longer.
Baroness Drake
To the best of my knowledge—do not hold me to the exact detail—all that companies have to do is have a resolution at their annual general meeting every four years. I am sure that trade unions would be prepared to do that at their annual general conferences if we were matching like for like. My point is that the rigour and the conditions are going to be applied only to trade unions. There are no reciprocal intrusive requirements being imposed on employers or companies in the Bill.
The Government have the right to govern but should not use that privilege to unfairly weaken the basis of legitimate opposition. That is not governing; it is undermining our democracy.