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

Lord Lea of Crondall Excerpts

Monday 11th November 2013 Lords Chamber

That would be a drastic measure but there is time in which the Government could think up some new reasons as to why they are making these proposals. There is a pause in relation to Part 2: if the Government use that time to engage in a proper consultation, they may conclude that these proposals are unnecessary, or they may be able to concoct more convincing reasons as to why they are necessary. However, for the moment, as it stands, the Bill is nonsensical and unnecessary, and imposes a cost on trade unions and their members that does not deliver any benefit, as the Government’s impact assessment suggests. That is good reason enough for them at least to pause but possibly abandon this part of the Bill.

[Lord Lea of Crondall (Lab)]

My Lords, I should like to pick up from where my noble friend Lord Whitty left off. The more that the British public start to understand the Kafkaesque nature of the Bill—Part 3 in particular—the more, during the pause to which my noble friend referred, people around the House, not just on these Benches, will recognise that it is an outrageous measure.

I take this opportunity to list the very onerous administrative burdens that, as my noble friend Lord Monks was saying, are going to be placed in addition to those that exist at the moment. It is a rather formidable list. This is what the Bill would do in addition to what is done at the moment: it would require unions to submit to the certification officer a membership audit certificate. Secondly, it would require unions with more than 10,000 members to appoint a qualified, independent person to act as an assurer who will provide the union membership audit certificate and carry out such inquiries as they consider necessary to provide the certificate.

Thirdly, the Bill will give new, substantial investigatory powers to the certification officer who will be entitled to: require the production of relevant documents or authorise another person to do so; require explanations of those documents from their producer or any person who is or has been an official of the union, including assurers; and appoint an inspector to investigate compliance with the duty to maintain a register of names and addresses of members if circumstances suggest that the union has failed to comply with that duty or the duties relating to the membership audit certificate.

Lastly, the Bill will give new enforcement powers to the certification officer, who would be able to make a declaration of non-compliance with duties relating to the register and subsequently to issue an enforcement order that would impose requirements to take steps to remedy the failure. Then, of course, there will be penalties at the end of that.

Where would one normally go in a democracy to find out an evaluation of such a lengthy list of new requirements? As my noble friend Lord Monks has said, it is not exactly a bonfire of red tape. One would go to a Select Committee or a Standing Committee. I think there is scope here for a Select Committee but there are different ways in which you can skin this cat during the pause. One of them is the report from the House of Commons Political and Constitutional Reform Committee which says that this Bill has requirements which are disproportionate to anything that the Bill wishes to achieve. It states that,

“other than in cases of emergency, all Bills should, as standard practice, go through pre-legislative scrutiny in Parliament”.

We are touching on a really serious feature of the way this has been done.

To me, the most significant part of the Regulatory Policy Committee’s damning report is the way it puts the finger on Ministers who, for political reasons, make use of Whitehall expertise so that the business department in effect invents a problem in order to solve it. In other words, the RPC says, in terms, in the impact assessment statement—I have pity on those who have to draw it up—“What is the problem that we are trying to solve?” Because it had not been told exactly, it had to postulate what the problem was. It finds itself going around in concentric circles. In the words of the RPC:

“The IA is not fit for purpose”.

That is not to do with the probity of the people writing it. If I was a former Permanent Secretary of a government department or a former Cabinet Secretary, this would to me be a further example of the way in which respect for the quality of the Civil Service, which, from the famous mid-19th century Northcote report, has been a model for the world, has vanished. Now, civil servants are being used as footballs. It would be very useful to hear from judges, former Permanent Secretaries and others without a political axe to grind—as we obviously can be said to have.

The committee states:

“The IA is not fit for purpose”,

and that it,

“needs to provide a more detailed assessment”,

of the costs. It finds that the impact assessment probably underestimates the cost to trade unions by 100%. In other words, instead of being £400,000 it is probably £800,000. It depends to some extent on the cost per hour of a typical person responsible for those matters in a trade union. The IA puts it at £12 an hour, in line with a voluntary organisation. I may say that the houses that trade union officials live in are not palatial, but trade union officials with those responsibilities get more than £12 an hour. It is that on which we base the rest of the edifice of cost, which the Regulatory Policy Committee says is grossly underestimated.

As we go through the clauses, the case will build for the whole measure being a long way over the top. It is then quite embarrassing to have to ask people: what can we do to amend it? Frankly, the concept is so flawed and so politically motivated that actually clause stand part is the only way to approach it; you might say that about this whole section of the Bill.

Submissions have been made by individual unions. The mindset on the part of the Government is that all those unions are affiliated to the Labour Party by some wicked connection. “Did you know?”, they might say. I will be corrected if I am wrong, but in terms of the number of unions, I think that only 20% or so of unions are affiliated to the Labour Party. My noble friend Lord Whitty says that I have overestimated it, but I will say 20%. We are talking about unions being affiliated to the Labour Party, but not all unions are affiliated to the TUC. In a later amendment, I will be presenting some of the detailed concerns about the Bill from the Royal College of Nursing. It is not affiliated to the TUC. I do not think that it will ring the same bells in the mind of many members of the Conservative Party as unions which are part of the TUC. It makes a point, which is well made in the TUC’s main submission, that people jump to the conclusion that there may be civil liberties issues in Part 2, but there are not civil liberties issues in Part 3. That is not the case at all when one thinks about the circumstances in which people can be identified in reports to independent assessors. There is no regard to information which is supposed to be private, in some cases because names and addresses are sensitive.

At some stage during this pause, between now and the new year, a process must take place to test whether we on this side of the House are right, or whether people on the other side of the House are right. It will not be easy to judge this today, but I think that the case we are putting forward, and will continue to put forward, will prove overwhelming.

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[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, my first point is that I do not wish to make any reference to reports that I read in the Sunday Times yesterday. As the noble Lord, Lord Monks, correctly said, the certification officer has been called in to investigate; it is not for me to comment further and it is for him to progress or otherwise.

Secondly, I want to acknowledge the many distinguished Members opposite who have led unions and have had substantial responsibility for individuals within the unions in the past. Some of these unions have been very big, with many hundreds of thousands of members, so I want to thank those noble Lords for their contributions. I realise that in the past they have been very much in the public eye with all that has gone on over several decades.

I shall deal with the amendments to Clause 36 and the question of whether the clause should stand part together. Clause 36 is intended to give widespread assurance that unions are able to contact their members and that, as a result, union decisions reflect the will of their members. This should enhance the democratic credibility of union actions to a wider audience. The noble Lord, Lord Stevenson, could not have put it better. This is important because unions have extensive influence—in public life and in the daily lives of their members. Actions they take can also have an impact on non-members. As the noble Lord, Lord Monks, and the noble Baroness, Lady Turner, have rightly highlighted, the statistics demonstrating the value that the public place on the unions is high. This is why there is a need to be sure that the registration lists are up to date.

Union members work across a range of critical areas, including in the public sector. Union membership is around 56% in the public sector and 14% in the private sector. We do not want to change or inhibit the vital role that unions can and do play in society—which was raised by the noble Baroness, Lady Drake—but we want to ensure that there is confidence in their accountability to their members. Since 1984, there has been a statutory duty on unions to maintain a list of members’ names and addresses. This is currently enshrined in Section 24 of the Trade Union and Labour Relations (Consolidation) Act 1992, which requires unions to keep the list up to date,

“so far as is reasonably practicable”.

This register will be a union’s primary source for ensuring that its communications, including ballot papers, reach members. I think everyone agrees with the principle of maintaining the register. That principle is not under scrutiny today, and the existing duty remains unchanged. However, there is no mechanism to require reporting on compliance with the statutory duty.

Clause 36 introduces a reporting regime that is proportionate to the practicalities of the duty to which it relates. Unions will be required to supply an annual membership audit certificate to the certification officer, alongside the annual return. As this provision is about giving widespread assurance, all unions will have to make the most recent certificate available to those who request to see it, either free or for a reasonable charge. The certification officer will also have to keep copies of all certificates and allow the public to inspect them. This addresses the fact that there is currently no real way for members, employers or the wider public to check how far the existing duty is being complied with. Finally, Clause 36(3) and (4) ensure that a trade union can discharge the new duty on behalf of its branches and that federated unions must comply with the new duty.

Amendment 118A—and Amendment 118D, which is consequential on it—seeks to limit the duty on unions so that they do not have to submit a membership audit certificate every year, but only if a complaint is made. In practice, if a complaint is received by the certification officer and he investigates, he will want to be satisfied that there is no breach of the duties in relation to the register. If he discovers such a breach, it would be more appropriate to provide a remedy as soon as is reasonably practicable, rather than to impose a reporting requirement. If there were no annual reporting requirement, the legislation would not achieve the level of routine assurance that we want for union members and the wider public. Only individual union members have the right to check their details on the membership register, and they must be predisposed to do so. Even if the member does this, he or she has no right to see all of the register and, in any case, cannot know whether other names and addresses are up to date. Nor can the member know who should or should not be on the register. Therefore the member cannot ascertain or guarantee the accuracy of the register in its entirety. If the member checks the register and finds problems with the accuracy of his or her details, they can make a complaint to the certification officer. However, only the member has the right to do this and, as I have said, they will not be able to determine the accuracy of the register as a whole. If anyone else has reason to believe there might be inaccuracies, they could not make such a complaint. Even if the certification officer received allegations about the union’s register, under the current law he would have insufficient powers to investigate.

I am aware that unions and some noble Lords have argued that there have been a very low number of complaints about union registers. However, given the limitations of the existing regime that I have just set out, that is not a particularly effective indicator of the overall accuracy of union membership registers. Over the summer we carried out a targeted consultation exercise, which was mentioned by noble Lords opposite. Evidence from that suggests that unions face difficulties in keeping their records updated. The noble Lord, Lord Monks, stated that in his opening speech and I will say more about the consultation on it later. The CIPD commented:

“Unions have stated difficulties at times maintaining the addresses of members”.

A member of the Engineering Employers Federation also commented that trade unions,

“do not have a unified way of tracking membership and it remains difficult for them to do so”.

I believe that most noble Lords opposite acknowledge that.

When these measures were debated in the other place, a number of references were made to the challenge of maintaining registers because of the high degree of turnover in members, which was alluded to this afternoon. Around 2 million people move in and out of union membership a year, which equates to around one in four union members. That means that if a union does not regularly update its register, it could quickly become inaccurate. We propose a modest and proportionate approach to providing greater assurance that registers are as up to date as is reasonably practicable. We are not changing the way in which unions record member details, nor are we changing the existing duty to keep a register. Our focus is on the reporting requirements and effective enforcement. That means greater confidence that union members are receiving all necessary information, including the opportunity to vote on key matters such as a new general secretary. That also means greater confidence that when unions decide that they need to take industrial action—which is entirely their right—those affected know that members have been contacted and given the opportunity to vote. Membership audit certificates will be beneficial to unions, give confidence to individual members and more widely enhance the credibility of their decisions.

Amendment 118B would amend Clause 36 to allow a union to delay submitting a membership audit certificate if it is launching an appeal against it or the certification officer’s acceptance of it. I appreciate that unions will want to ensure that an assurer does not, mistakenly or otherwise, send a qualified certificate to the certification officer without the union knowing about it. I hope that I can provide some reassurance that this amendment is unnecessary. The current drafting of Clause 37 ensures that the assurer will send a copy of the membership audit certificate to the certification officer only,

“after it is provided to the union”.

Therefore the union will have seen the certificate and will have an opportunity to engage with the assurer. If the union is able to demonstrate that the certificate is inaccurate, it should be able to remedy it at that point. Furthermore, unions will themselves appoint their assurers and agree their contractual relationship with them. That gives a union discretion to require an assurer to allow the union to comment on any draft certificate or to discuss concerns before it is issued to the certification officer. However, we believe that it is reasonable to require that qualified certificates are sent to the certification officer as soon as reasonably practicable after they are given to the union so that he can decide what steps to take. We regard this as a necessary part of the assurance process.

If a union is required to appoint an independent assurer to provide a certificate because it has more than 10,000 members, that certificate is the membership audit certificate for the purposes of Clause 36. Clause 36 also sets out what is necessary for unions with 10,000 members or fewer. Those unions will be able to authorise a union officer to sign off the certificate, with a statement that, to the best of their knowledge and belief, the union has complied with its duties under Section 24. As we expect smaller unions to have a less complex register, we think it is reasonable to consider that a union officer will have sufficient familiarity with the content to be able to make such a statement. Amendment 118C seeks to alter Clause 36 so that the assurer would no longer provide the membership audit certificate for unions with more than 10,000 members. That would mean that all unions would provide a self-assurance that they are complying with the statutory obligation under Section 24 of the Trade Union and Labour Relations (Consolidation) Act. This amendment would not give sufficient assurance that unions are maintaining accurate and up-to-date registers and can contact their membership. We already have a regime which relies on individual union members actively checking their membership details.

Nowadays, some unions can be extremely large organisations. For example, as many noble Lords opposite will know, UNISON has 1.3 million members and Unite has 1.5 million. To put that in context, the NHS has around 1.7 million employees. Record-keeping for such large organisations is likely to be complex, and maintenance will need to be ongoing to ensure that the register is up to date, particularly given the high level of reported churn in union membership. Equally, where a union consists of many individual branches with individually held membership information, regular and diligent maintenance of the membership register as a whole will be critical. The noble Lord, Lord Monks, recognised that. We acknowledge that these lists cannot and will not necessarily be 100% accurate. In addition, the larger the organisation, the more probable that communication between the union and its members relies on being written rather than oral. Branch secretaries are unlikely to know all their members and may not even have met some of them. It is therefore appropriate that there is independent assurance for larger unions.

This amendment could also have the unintended consequence of placing additional burdens on larger unions. In defining the independent assurance, we have focused on the assurer awarding the membership audit certificate to larger unions on the basis that they have adequate systems in place to allow them to comply with Section 24. That is because we considered it unduly burdensome and unreasonable to expect the assurance to be an audit of every individual record. The effect of the amendment, however, would be to require these unions to give assurance that they have complied with Section 24 to the best of the union officer’s knowledge and belief. That means that the officer who signs the certificate essentially guarantees, to the best of their knowledge, that the register is accurate and up to date—again, so far as is reasonably practicable. We believe that this could be much more onerous for larger unions than what the Government propose. The annual assurance of unions’ compliance with this duty will demonstrate to members, employers and the public that unions are diligent in their maintenance of such complex records. It will also provide greater confidence that union activity is accountable to the membership.

[Lord Lea of Crondall]

Will the Minister address the point made by many of us about the report of the business advisory committee, which reached the conclusion that the so-called cost-benefit analysis carried out by the department and the impact assessment are not fit for purpose?

[Viscount Younger of Leckie]

I was about to attempt to answer the many questions that were put to me. However, before I come to answer the noble Lord’s question, I wanted to say that the noble Lords, Lord Monks and Lord Beecham, and the noble Baroness, Lady Turner of Camden, basically said that they considered Part 3 to be a politically motivated attack on the unions. I think the noble Lord, Lord Monks, used the expression “vindictive attack”. Perhaps I should not be surprised at their reactions, as we are perhaps being accused of placing our tanks on their lawn. That is just not the case; if anything, it may be only the front of the front wheels. However, this is not intended to make it harder for trade unions to operate. They are membership organisations, and as such have a responsibility to their members to keep their register of members’ names and addresses accurate and up to date so far as is reasonably practical. That general principle is already a statutory obligation, and it is right that the Government should try to ensure that these requirements on unions to fulfil this responsibility are adequate. As I said earlier, trade unions are vital participants in the economy. They work with employers to maximise employee engagement and deliver practical solutions to workplace issues. This is why we currently engage with trade unions on key policy areas, much more widely than we are talking about today, such as employment rights, skills and manufacturing strategy. The Business Secretary regularly meets the general secretary of the Trades Union Congress to discuss current policy matters.

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[Baroness Turner of Camden (Lab)]

My Lords, I support the amendment moved by my noble friend. One point struck me particularly, from my recollection of my own work as a full-time official in connection with recruiting in areas where there was no trade union membership. I am referring to people who were new to the trade union movement. The lack of confidentiality implied in this part of the Bill would be a deterrent to recruitment. Obviously, if you are trying to recruit people who have never been in a union before and are not organised, the last thing they want is for their details to be made available to anybody. They want to keep things close to themselves until they have recognition. Obviously that is important to them. A number of us have raised the issue of confidentiality, which is threatened unless this provision is either removed entirely or substantially amended.

I do not see why we should have to vote for yet another official—this so-called assurer. Where is he to come from? What sort of background is he to have? What kind of voice will the ordinary members have in relation to this individual? We do not want this new individual. We do not think the role is necessary, and I personally oppose this clause altogether—although the amendments tabled by my noble friends would undermine to some extent the opposition that some of us have on grounds of confidentiality. This is very important to new members, particularly those who have not been in a union before and who need some assurance of confidentiality if they are to remain with the union and support it as it struggles for membership and recognition. I therefore completely support my noble friends in their opposition to this part of the Bill.

[Lord Lea of Crondall]

My Lords, I add my support for the amendment. Orwell has been mentioned, and I have mentioned Kafka—but now I shall give a more homely sort of picture. One of the children says, “Mummy, what does Daddy actually do?” and Mummy replies, “Well, he’s an assurer.” I think that after that Mummy might have a bit of difficulty and wonder whether she had actually answered the question.

Let me apply the provision to electoral rolls. This is one of those phantom tasks on which you could expend the whole resources of the Central Committee of the Chinese Communist Party and still not solve the problem. The Minister has said that there is a problem with churning, and people moving house and so on, so we are to have more of the Central Committee investigatory branch investigating and then doing something about it. I do not know what it would be able to do if it is true that the rationale for the action, and the analysis of why there is a problem, is the changing nature of the economy and the churning of people in the trade unions. When would you have won the game? If that is the analysis you can never win the game. To use a different metaphor, you can always move the goalposts.

I hope that the Cross-Benchers in their massed ranks, between now and Christmas or a bit after, will be able to decide whether we are right or whether the Government are right in this way of stating, or inventing, a problem and begging the question to which there is not an answer as there cannot be an answer to the problem as stated.

[Lord Tyler (LD)]

My Lords, I have to confess that my experience of the unions is obviously much less extensive than that of opposition Members. I suspect that it is also out of date and rather specialised. I was a member of the National Union of Journalists for a decade or so. I never aspired to be an officer of the chapel, although I attended regularly, so my contribution to our consideration of this part of the Bill will have to be very limited. But it is genuine. I am really interested and concerned to ensure that we get this right.

I am listening very carefully to the debate on part 3—not least the two extremely important clauses that we are now looking at—and I want to speak specifically on whether Clause 37 should stand part of the Bill. I believe that we should retain it until we have seen something better, and I am not yet persuaded by the amendments. From what noble Lords on the other side of the House have said, I am not clear whether their principal concern is with the direction of Part 3 or the detail. Is it with the principle or is it with the practice? Different Members of your Lordships’ House have touched on both. Is it the intention or is it the impact? It may be both, but it is not entirely clear to me yet whether they think that the problem does not exist or that it is not being addressed in an appropriate way. The noble Lords, Lord Monks and Lord Whitty, said that accuracy was a problem. So it is not a problem that does not exist. There is a problem; the question is whether we have the right remedy for it.

I am not yet entirely clear, either, why those opposite seem to have so much fear of what is proposed. It seems to be an effective process for auditing membership records annually and having them independently signed off. That, surely, is healthy. Is there a problem with it? Surely it is not a burden for the smaller unions either. I am not quite sure where the National Union of Journalists is these days in the league table of membership; I suspect that it is not very big. I do not think that 10,000 members is an unreasonable cut-off point in Clause 37 for the smaller members not to have to self-certificate.

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[Lord Whitty]

Indeed, my Lords. The Scottish Affairs Committee in another place have performed a very good task in bringing this issue to light, but we have not seen everything; a lot of names on those lists were destroyed. Among them were people who some of us on this side knew, including my noble friend who obviously chose a change of career at just the right point. So far, at least, he has not been blacklisted from being a Member of either House of Parliament. This matter does not affect just some lunatic subversives out there; it can potentially affect solid citizens trying to conduct their trade, such as my noble friend in his earlier existence. This is a threat to liberty and freedom of association, and a threat to the Government’s reputation in the councils of the world. Please take this seriously.

[Lord Lea of Crondall]

Perhaps I may mention in this connection the comment of the Royal College of Nursing—a union that is not normally associated with industrial difficulties. However, it states:

“Both the Government appointed Certification Officer and the Government approved Assurer would have powers to access unions’ membership records. In addition, the bill also proposes that any third party would be able to lodge a complaint about union membership—there is a potential for this to be abused during periods of industrial dispute. A complaint would be considered by investigators who would, in turn, also have access to union membership records. These proposals pose a serious risk to confidentiality of trade union membership and place undue bureaucratic and costly burdens on trade unions”.

I thought that it would be good to place on the record that comment from the Royal College of Nursing.

[Lord Stevenson of Balmacara]

My Lords, this group of amendments is different from the others we have considered this evening because it does not contain a clause stand part. The reason for that is because we think, certainly in relation to the ones in my name and that of my noble friend Lord Monks, that they are sensible safeguards and measures that we would recommend to the Government as being appropriate and proportionate in relation to the aims set out for the Bill. I gather from the remarks made by my noble friend Lord Whitty, and to a certain extent from those made by my noble friend Lord Lea that they shared this approach. So we are not, in this mode, trying to be as aggressive—as it could perhaps be considered—in relation to the Bill as we were in Clauses 36 and 37.

That does not remove from our side the feeling that these provisions are still aimed in the wrong direction, and that they lack a sensible underpinning in terms of public policy and have not been properly consulted on. However, in relation to the generality of the proposals, there is a case for the Government to move a little way towards us. I suggest that even if they cannot accept every one of the points made in this group, they might consider taking them back and reconsidering them. That would certainly give us a little more confidence that they were taking us seriously in these debates rather than simply retreating into the rather partisan approach that has been evident so far.

The underlying concerns that have been mentioned by noble Lords about blacklisting are important. It was perhaps unfortunate that my noble friend Lord Whitty referred to my noble friend Lord McAvoy as a solid citizen because that would in no sense reflect on his ability to do the work that he was no doubt being considered for before he was unfortunately blacklisted. I jest of course—I think. The point is well made. This is not something that is happening over there and far away. This is happening to real people in real time and it is affecting lives and blighting careers. Its cause is largely due to the circulation of lists, and therefore, by following back that logic, it is something that we are very concerned about. Everyone should be concerned about that and we should do everything in our power to make sure that datasets of the type that could cause solid citizens to be affected are protected in a way that allows them to be kept as close as possible to what is required and necessary so that they are not in any sense open to the risks mentioned during this debate.

We do not have any particular issues that make one point more than another, but it is important to recognise that for many years this country has been proud of its effective and well working relationships between unions and employers. We want to see them continue. As I have said, it is an important part of the contribution that can be made by industry and also by those working on the services side towards economic growth. While we object to the measure before us in general terms, we think it could be strengthened if it has to be turned into law, and these amendments are therefore recommended.

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[Lord Lea of Crondall]

Will the Minister respond to what many on this side have been driving at? Both in the retail sector and the construction industry there is widespread use of casual and agency workers. Obviously, the employer knows who the workers are. Unions, in recruiting members to represent them, have great difficulty in getting data on who is employed, who is on sick leave and so on, so the word “reasonable”, which we understand to be used for the new union audits, should be constructed on the premise that there must be a level playing field.

[Viscount Younger of Leckie]

I assume that that was a specific question relating to contractors. I hope I have got that right. If the noble Lord’s question was broader than that, I pledge to write to him to clarify the position.

It would seem unnecessarily restrictive to require that the certification officer could never appoint that firm again, no matter what happened to the individual concerned.

In addition, if the appointed inspector—or any other individual, for that matter—has breached data protection rules by mishandling personal data, the union may apply to the Information Commissioner, who enforces the Data Protection Act. The Information Commissioner has a range of powers at his disposal, including imposing a fine of up to £500,000. I therefore believe that the amendment is unnecessary.

Amendment 152 would change Clause 38 so that the inspector appointed by the certification officer to investigate discrepancies would also have to take “all steps necessary” to protect a member’s name and address, instead of “all reasonable steps”. I find it difficult to see what the amendment achieves in practice. The assumption appears to be that there are steps that might be necessary but are in practice unreasonable. I consider “all reasonable steps” to be sufficient.

I hope that the noble Lord will feel able to withdraw his amendment.