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

Lord Lea of Crondall Excerpts

Tuesday 22nd October 2013 Lords Chamber

[Viscount Younger of Leckie]

I note, however, the point that the noble Lord has made.

Let me now turn to the second part of the Bill. Part 2, put simply, requires those who want to influence the outcome of a general election to be transparent in doing so. The changes proposed update a system of regulation which has been in place at the past two UK parliamentary general elections.

Noble Lords will no doubt be aware of the influence that third parties can have on elections. This influence is often very positive, but we believe it should be proportionate. Despite existing controls, there is a real risk of distortion by those who seek to unduly influence the outcome of the election. The Bill takes forward a number of important measures to prevent this occurring.

Expenditure will now be more fully recorded and disclosed. Donations to third parties will now have to be published in advance of an election, rather than after. Certain third parties will also have to provide a statement of accounts. The spending limit for third parties will be lowered. Thirteen years ago, the existing spending limit was fixed in legislation at 5% of the maximum campaign expenditure limit for political parties. This amount was considered quite generous by the organisation that recommended it, the Committee on Standards in Public Life. The committee also noted that groups of third parties could outnumber expenditure by candidates or political parties. That argument remains valid today. Reducing the limit to 2% of the maximum campaign expenditure limit for political parties combats the risk of third party expenditure being used to influence elections. The reduction to a lower, but still very significant, sum is justified. To that same end, the Bill also introduces a measure that will prevent third parties directing the entirety of their spending limit at a single constituency or local area. It will become more difficult for large, well-funded campaigns to overwhelm the local political landscape.

The test for determining if a third party’s expenditure is in fact controlled expenditure is the same in both the Bill and existing legislation. Only expenditure that can,

“reasonably be regarded as intended to promote or procure electoral success”,

of parties or candidates will be regulated and count towards a third party’s spending limit.

Currently only expenditure on election material is regulated. This Bill extends the range of activities that are regulated to other activities such as public rallies and organised media events. This is the same list that applies to the activities of political parties. It implements a very sensible recommendation by the independent regulator, the Electoral Commission.

I should also make clear what this Bill does not do. Noble Lords will be aware that some charities and other organisations have expressed concern that the Bill will prevent campaigning on policy issues. I can reassure the House that only those campaigns that promote electoral success will be regulated.

It is the Government’s belief that the vast majority of charities or other groups campaigning for their preferred policies will not be affected by the Bill. This belief is based on the guidance of the Electoral Commission and its experience of regulating third parties at the 2005 and 2010 UK parliamentary general elections. At those elections charities and other campaign groups were not prevented from engaging with, commenting on or influencing public policy.

No elements of this Bill will deprive third parties of the ability to make a contribution to political debate. The regulatory requirements strengthened by this Bill are proportionate. Third parties will not be precluded from campaigning. They will simply be brought into an enhanced spending and donations reporting regime. As a result, the process as a whole will become more transparent.

I now turn to Part 3, which addresses a gap in enforcing existing duties. Section 24 of the Trade Union and Labour Relations (Consolidation) Act 1992 requires unions to maintain a register of their members’ names and addresses, and, so far as is reasonably practicable, to keep it accurate and up to date. I hope noble Lords will agree that this measure always was, and remains, reasonable.

Under the Act, however, union members, employers and the public cannot be wholly assured that a register is up to date. The Bill therefore requires unions to provide an annual assurance to the certification officer. Those with more than 10,000 members will be obliged to appoint an independent assurer. The Government are keen not to inhibit the operation of small unions—

[Lord Lea of Crondall (Lab)]

I thank the noble Viscount for giving way. Does his last comment imply that certification officers have had problems with the current regime?

[Viscount Younger of Leckie]

One of the issues that we wish to address is the fact that the certification officer has a passive mode so that anybody who wishes to make a complaint can do so, but only if he is a union member.

As I was saying, the Government are keen not to inhibit the operation of small unions, so those with 10,000 or fewer members will be required to submit an annual self-certification that their membership list is up to date.

The Bill will also enable the certification officer proactively to investigate possible discrepancies in the register. He will be able to require documents to be submitted and to appoint an inspector. If a union is non-compliant with the duties in Section 24, the certification officer may make a declaration and a civil enforcement order. Unions will always be given an opportunity to make representations before a declaration or order is made.

I look forward to these measures benefiting from the scrutiny of noble Lords. The Government are committed to implementation which is both effective and proportionate, and we will support the transition by producing guidance. I am aware of concern regarding the impact of the proposals, and I hope to reassure noble Lords now. First, I reiterate that the Government are not challenging the vital role that unions play representing their members’ interests and contributing to public debate.

Secondly, I reassure noble Lords that these proposals do not breach human rights to privacy or freedom of association. If a union is non-compliant with duties under Section 24, it is important that every opportunity is given for that to be remedied. The investigation powers will be proportionate: the certification officer can require information only where he deems there is good reason to do so. Existing safeguards in the Data Protection Act and the Human Rights Act will apply as they do elsewhere. The Bill also includes additional protections to prevent the unauthorised disclosure of member data. These provisions will not allow employers unauthorised access to such information.

I believe that these proposals are reasonable. By proactively providing an annual assurance, unions will give even greater credibility to the important voice that they have in public debate. I also hope that unions themselves will recognise the benefit: many unions have up-to-date registers but there is anecdotal evidence of doubt that that is always the case. The annual assurance process will bring greater credibility in future about the result of ballots; for example, in electing a new general secretary.

This Bill will shine the light of transparency on those represented by consultant lobbyists as they meet key decision-makers in government. This Bill brings further clarity on the influence third parties have on the outcome of elections. This Bill will provide assurance that trade unions have accurate membership records, given that their influence extends far beyond their members. This Government believe that transparency generates accountability.

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[Lord Lea of Crondall]

My Lords, the Bill takes us back to the insulting doctrine that trade unions are the enemy within. When I first saw it, I was rather shocked—but then I thought that it must be some sort of spoof written by the provisional wing of the Committee on Public Safety. The first point which I ask the Minister to comment on is that it is very asymmetrical so far as trade unions and employers are concerned. How can he say that all these requirements should be placed on trade unions, at vast cost, without parallel requirements being placed on employers?

In the published material that one finds, with difficulty, in the Printed Paper Office as the Part 3 financial assessment, we have a fascinating set of paragraphs on pages 3 and 4. It is headed:

“Evidence Base … Problem under consideration”,

and it is worth reading. It says:

“An increase in an individual union’s membership diversity and membership turnover is a key reason why managing a large database of members is complex. It means that the information held in the unions’ registers will decay rapidly. In addition, the information held on the registers will decay for other reasons: changes of addresses; and deaths, divorces, and marriages … All of these changes may undermine the accuracy of union registers, unless adequate and relatively frequent management procedures are in place to resolve inaccuracies and maintain the register. Some of the reasons for inaccurate data are explored in more detail below”.

We get fantasy piled upon fantasy as we come to that more detailed explanation, which goes into gross and net flows by work status, the high degree of churn in the UK labour market, and the flow estimates of the size of movements between the three main labour market statuses of employment, unemployment and economic activity. So it goes on.

Then the material comes to the “Rationale for intervention”. I wonder how all these people came to be so readily brainwashed, but I have to read it. It says:

“Given the complexity of maintaining up-to-date registers there is a danger that trade union members, employers and the general public will not be confident that unions are complying with their duty to maintain an accurate and up-to-date register. And, as trade union activity has the potential to affect the daily lives of members and non-members, the general public should be confident that voting papers and other communications are reaching union members so that they have the opportunity to participate, even if they choose not to exercise it”.

It then goes on to the division between unions with more than 10,000 members and those below that figure.

As my noble friend Lord Monks pointed out, it says that,

“the Certification Officer will … be given powers enabling him to both act on his own authority to appoint inspectors and require documents to be produced to help investigations. The powers will provide a mechanism by which the general public and employers can ensure that trade unions are complying with their duty to maintain an accurate and up-to-date register”.

After all that, we come to the policy objective. I will read out one more passage. It says:

“The policy objective is to give greater assurance that unions comply with the existing duty to maintain a register of members’ names and addresses. However, we wish to do this in a way which minimises the burden on the union in providing this assurance and is not prescriptive … the intended effect of the policy is to ensure that members, the general public and employers are confident”,

et cetera. My reaction is, “You must be kidding”—but then it dawned on me what was going on here. There are two groups of civil servants being instructed by the Secretary of State to provide a case for this. One set of civil servants, job team A, is asked to write one set of arguments. In the next paragraph, job team B is asked to demonstrate the absurdity of the arguments presented by job team A.

Having cracked the code on this, I realised that it is all very logical—right down to the detail of why the sum involved is an extra burden on the trade unions of £420,000. That has been arrived at by using the salaries of trade union officials from the Annual Survey of Hours and Earnings, which says that the basic hourly median pay for officers of non-governmental organisations —that obviously implies voluntary organisations—who are the closest match to a trade union official, is £12.03 an hour. The basis of all this is that union officials doing all this stuff are paid that, on average, but I suppose that the people who have to provide all this stuff in Whitehall have telephones and might ring up any trade union to find out more directly.

I return to the main theme that many of my colleagues have brought out: why are we picking on the trade unions and making them keep their lists up to date for transparency, which we simply do not do for shareholders’ lists, boards of directors or banks? We are now insisting that we have to do even more for the most openly democratic and transparent organisations of any size in the country—the trade unions.

I will use a different word from that used by my noble friend Lord Whitty: I say that this is just party-political vindictiveness. I am very sad to hear that, because over many years of my working life we have had very good working relations with Conservative Governments, such as those of Mr Macmillan and Mr Heath. We had acceptance from them as social partners, and they would not have dreamt of this nonsense. I hope that in Committee we will have time to move away from the idea that a Secretary of State can say to Whitehall, “This is what we want to do; find reasons for it”. They have failed in that, because there are no good reasons—it is absurdity.

As my noble friend Lady Donaghy said, you do not need a lobby if you are chairman of a company in the energy field, whether it is a nuclear power station or anything else; you are probably president of the CBI and talk to the Prime Minister every day of the week anyway. To take another, more practical example: KPMG’s employees are scattered around Whitehall. Does it need a lobby? Of course not.

This is a quite extraordinary development, but I have reached the 10-minute limit so I will leave the issue there. As far as I can see, though, there has to be much deeper consideration by the Government. As things stand, my view is that the Bill should simply be withdrawn as an outrage to democracy. When I go to do work for the Westminster Foundation for Democracy in Congo or Mozambique, these are some of the practices that we state that you do not do—and we should not do them here.

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[Lord Wallace of Saltaire]

My Lords, I was about to come to precisely that distinction because it seems to me to be the nub of what we will have to discuss when we deal with Part 2. There is a line to be drawn between the promotion of policies and the promotion of the success or defeat of particular parties or candidates. Policing the line between informing and educating the public during a campaign, promoting particular policies during a campaign and, on the other side of the line, supporting or opposing particular candidates or parties during a campaign, is the point on which we need to focus during Committee and Report. I am concerned that this is not an easy line to define. We want to make sure that there is as small a grey area as possible. At the all-Peers meeting, the noble Lord, Lord Dubs, quoted a leaflet which had been put round his constituency the day before he lost an election which had a very large headline saying, “We are not telling you who to vote for”, and then a lot of small print which did. That is the sort of thing that we will have to look at in detail.

This measure is not aimed primarily at charities. Indeed, of the 30 organisations on the list, three are the campaigning non-charitable associated bodies of charities, but none is a charity. Charities should not be caught by this measure. After all, charities law limits how far charities can become involved in partisan campaigning. Charities should be involved in political campaigning. I recommend that noble Lords look at the list to see how far we can come to an agreement on the borderline. The noble and right reverend Lord, Lord Harries, talked precisely about the borderline between current activities and controlled activities, and the chilling effect of having an uncertain definition of that. However, that is where we are. From the discussions I have had with people over the past few weeks, I have the slight impression that a large number of charities had not actually read the Political Parties, Elections and Referendums Act until this Bill was produced. Having looked at the language of that Act, a number of charities are telling us that they are not happy with that language as it stands. We have entered a discussion that we should perhaps have had earlier. The Government started on the assumption that the language of PPERA was fine because we had—

[Lord Lea of Crondall]

My Lords—

[Lord Wallace of Saltaire]

May I just finish my point? We had been through two elections with that language and charities do not appear to have found it difficult. If charities are now telling us that they find that language difficult, clearly we need to have a rather different discussion. I give way.

[Lord Lea of Crondall]

I thank the noble Lord for giving way. He may not be able to answer my next point tonight. However, as I understand it, charities registered with the Charity Commission cannot be so registered if they have political purposes. Therefore, will the noble Lord comment on, or write to me, about what he means when he talks about charities having political purposes?

[Lord Wallace of Saltaire]

I hesitate to go into a definition of politics as the noble Lord, Lord Norton, will immediately correct me. The promotion of particular policies, particularly broad policy areas, is a natural and accepted part of what charities and faith bodies do. That is a normal part of civil society. Part of my puzzlement, in listening to one or two of the speeches tonight, is that civil society is itself broader than the charitable sector. There are campaigning bodies in civil society which are not, and should not be, charities. Charities promote particular ideas, developments and social objectives which are also unavoidably political objectives, but they are not necessarily partisan objectives. That again is the line that we need to draw. I note that the noble and right reverend Lord, Lord Harries, said that charities are already unhappy about PPERA. Having looked at it, there are a number of difficult questions that we need—

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[Lord Wallace of Saltaire]

My Lords, the Government are concerned that there is insufficient public understanding when, for example, a union calls a strike vote, that those being polled are those who are currently working. They wish to assure the members and others in society that the lists are accurate. This is not just for unions. Companies are also expected to maintain an accurate register of their members and shareholders and to keep it up to date. This will cover a range of different bodies. I give way once more and then we must finish.

[Lord Lea of Crondall]

Is the Minister aware that that is not the reason given in the explanatory document?

[Lord Wallace of Saltaire]

My Lords, we will return to the explanatory document at a later stage. This has been an extremely vigorous evening. We look forward to several days in Committee and on Report. The Government will consult a range of stakeholders between Second Reading and Committee, and we will continue to consult between Committee and Report. This House will, as the noble Lord, Lord Greaves, assured me very vigorously, look in detail at the language of the Bill and also look back at the language of PPERA, and, we hope, produce something of which we can all be proud at the end of the day.