Draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017

Stephen Doughty Excerpts

Wednesday 25th January 2017 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I beg to move,

That the Committee has considered the draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017.

It is a pleasure to serve under your chairmanship, Mr Stringer. During the passage of the Trade Union Act 2016, the House debated at length the principle that union members should make an active choice to contribute to a trade union’s political fund. The other place established the Select Committee on Trade Union Political Funds and Political Party Funding, under the chairmanship of Lord Burns. I would like to start by thanking Lord Burns and all the peers who sat on that cross-party Committee for their work.

I want first to remind hon. Members why the Act’s reforms to political funds are important. Under current legislation, a union member automatically contributes to a union’s political fund as part of their union subscription, unless they notify the union that they do not wish to do so. We have debated at length the principle of those rights of union members. The Select Committee also assessed the extent to which unions were, in practice, transparent to their members about the existing choice to opt out of contributing to their union’s political fund.

The Select Committee concluded that there is significant variation in how different unions convey opt-out information to their members. The Government’s analysis of online union subscription forms—the point at which an individual makes their first financial commitment to the union—found that nearly half of unions that have a political fund make no mention of its existence.

The provisions in sections 11 and 12 of the Act meet our manifesto aim to provide a transparent, active choice for union members by allowing new members joining a union to opt into making payments to a political fund. As required by the Act, we consulted the TUC, 24 unions with political funds and the certification officer to seek their views on the length of the transition period.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

First, I declare my proud membership of the GMB. I worked on the Trade Union Act in its early stages in Committee and on Second Reading, along with other Opposition Members. The Minister mentioned the consultation period and the TUC. Of course, the TUC and many individual unions have expressed concerns about the length of the transition period. Though willing to try to comply with the legislation, they have raised very reasonable concerns about the timeframe. Why has that not been taken into account?

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[Margot James]

The hon. Gentleman quibbles about weeks and months. We are approaching the end of January and the measure will not come into force until 1 March, from which point the unions will have 12 months in which to comply.

[Stephen Doughty]

The Minister is being generous in giving way. Unfortunately, she has mischaracterised what many unions have done with regard to planning. The Union of Shop, Distributive and Allied Workers will hold its annual conference on the last Sunday in April. It booked the venue many years in advance and informed the delegates, and they have had to book time off work. USDAW and other unions want to agree the changes in order to comply with the legislation, but they will not be able to do so because the Minister is not willing to move the deadline by a few months. That is absurd.

[Margot James]

I am sorry about the situation that the hon. Gentleman describes at USDAW. Perhaps it could make some progress at the end of April, if that is when its conference will take place. If it is not scheduled to take place until next April, I concede that that is a disadvantage for USDAW. It may have to take other measures, which I have outlined, to consult its members on the necessary rule changes.

The Secondary Legislation Scrutiny Committee noted that the Government had not published a summary of responses to their consultation with unions and the certification officer on the length of the transition period covered by the regulations. I apologise that we were unable to publish a summary of responses when the regulations were laid. We accept that we should have done so. The Committee advised us that it is best practice to publish a summary of consultation responses and we have now done so on gov.uk. The Government believe that the regulations are proportionate and strike the correct balance between the interests of unions and members of the public.

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[Gill Furniss]

Thank you, Mr Stringer. When the Bill went to the other place, the Government had initially proposed a transition period of 12 weeks, but the House of Lords Select Committee on Trade Union Political Funds and Party Political Funding recommended a minimum of 12 months.

On 16 March, the first day of the Bill’s Report stage in the other place, the Government suffered several defeats, including on the transition period. By a majority of 148, the other House voted for an amendment restricting the new political fund opt-in to new members; extending the transition period from 12 weeks to 12 months; removing the need to renew opt-ins every five years; and allowing unions to use methods other than postal for the purposes of opting in.

During the Bill’s passage through the other House, clause 11 was added and ensured that, before beginning the transition period, the Secretary of State must consult the certification officer and all trade unions that have a political fund. The Government claim that they have satisfied that clause, with the Department for Business, Energy and Industrial Strategy conducting an informal consultation with trade unions and the certification officer. It seems, however, that that lightweight bit of research was more focused on coming up with a transition cost than actually listening to trade union concerns; the Government heard concerns and objections, but then did exactly what they wanted to do in the first place.

It seems to me that a consultation process implies actually taking into account the concerns and objections that stakeholders might have. The proposed 12-month transition period is completely inadequate and fails to take into account the complexity involved in making the required changes. Many of my hon. Friends have made that point very well today, and I will outline some of the reasons why that period is insufficient. For example, I note as others have that retailers were granted two years to prepare for new charges on plastic bags, which was far less complicated than what is envisaged under the regulations.

Unions are democratic organisations, with established procedures and hierarchies designed to support their democratic operation. To change the rules is a lengthy process; branches must be consulted before a final change can be approved at a conference.

It has been suggested that rule changes could be agreed through a majority vote at a meeting of a union’s executive committee, under section 92 of the Trade Union and Labour Relations (Consolidation) Act 1992. However, the proposed process is not consistent with most union rules or practices. The Government have previously argued that the Trade Union Act was designed to increase transparency and to encourage participation in union democracy. Under the terms of this statutory instrument, unions will be forced to act in a way that could damage or undermine their democratic structures in order to comply with the Act. That position is not exactly consistent.

If the Government were actually concerned about increasing democratic engagement by union members, they would not have delayed the implementation of electronic balloting—a proposal on which they were defeated in the other place and which was included in the Act through a cross-party amendment.

[Stephen Doughty]

My hon. Friend is making a strong point. During the evidence sessions on the Trade Union Bill we heard many times from Conservative Members about alleged undemocratic structures operating in unions and decisions being taken by small groups of people. Does she agree that it is absurd that in reality the Government are asking us to override those long-established democratic structures of unions?

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[Chris Stephens]

The hon. Gentleman is more than welcome to read my entry in the Register of Members’ Financial Interests, and he will then have that information. All hon. Members of this House can see by looking at my entry what that interest means and how much it is worth.

[Stephen Doughty]

Does the hon. Gentleman agree that one of the reasons why we are all pleased to declare our membership of a trade union is that we are proud of it and proud of our association with the trade union movement? We are entirely transparent regarding donations and other matters. If the hon. Member for Shrewsbury and Atcham wants to go down that route, I am sure we would be interested to hear about all the donations and declarations of interest of Government Members, including him.

[Chris Stephens]

It comes as no surprise to me when we are discussing a piece of legislation that has an impact on trade unions that Members declare their membership of a trade union, and that they are all proud to do that. I notice that not one Government Member has yet declared that they are a member of a trade union, which I think is quite interesting.

I have a sense of déjà vu as I stand in this room, as I served on the Trade Union Bill Committee with Conservative Members including the hon. Member for North East Cambridgeshire, who I see in his usual place, and the hon. Member for Cardiff South and Penarth. The then Minister for Skills, the hon. Member for Grantham and Stamford (Nick Boles), who I hope is recovering well, said that the purpose of this part of the Bill was not to punish trade unions in terms of costs, nor was it designed to trip people up. Unfortunately, that is exactly what the proposal before us is designed to do. The Government appear to be ignoring the quite reasonable submissions by trade unions regarding the practical difficulties, some of which have been mentioned. I am aware that Unison traditionally has its annual conference by June. It is not really good enough to say that trade unions should be preparing when they submitted to a Government period on how to implement the measures. The answer on that point is not good enough.

This is not just a Labour party issue. It is about political funds, which have funded some great campaigning work on equal pay, health and safety, anti-racism and anti-austerity, as the hon. Member for City of Chester pointed out.

[Stephen Doughty]

The hon. Gentleman is listing the important types of campaign that have been funded. We were talking earlier about the campaign by USDAW—the Union of Shop, Distributive and Allied Workers—against violence against shop workers, which I have been proud to promote in shops in my constituency. Does he agree that such campaigns are vital?

[Chris Stephens]

They are vital. The political funds help trade unions to raise public awareness, and stopping violence against shop workers is an important issue. That does not just affect trade unions; there is a wider society awareness role for that sort of campaign, which is welcome.

Another practical question is: why are we discussing this now, when the check-off arrangement statutory instrument has still to come before us? The two are related. Trade union branches will have to discuss with employers how to facilitate the changes to subscription rates that this legislation will require. It seems to me rather foolish of the Government to introduce the SI before us today but not the associated check-off arrangements SI. It seems to me that the date of 1 March 2018 has been set deliberately either to trip up the trade unions, or to burden them with additional costs.

The Government are all for deregulation in every other part of the economy, but not in relation to the trade union and labour movement. Mr Stringer, I too will seek to divide the Committee. I urge all hon. Members to vote against the statutory instrument.

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[Stephen Doughty]

It is a pleasure to serve under your chairmanship, Mr Stringer. I joked with the hon. Member for Glasgow South West that this has been almost like getting the band back together, to quote “The Blues Brothers”. We have been joined, thankfully, by hon. Friends who have made excellent contributions, including of course the shadow Minister, who has clearly set out the unreasonableness of the statutory instrument and some of the wider issues around it. Unfortunately, as has been said, it reflects the pattern of the Government’s shabby behaviour to not only trade unions but civil society and alternative voices more generally. We saw what the Government attempted to do during the progress of the gagging Act, and their attempt to shut down the arguments of charities and lobbying organisations. We have seen attempts to reduce judicial reviews and many attempts to diminish the reasonable work of trade unions, which act as a voice for many millions of working people up and down the country.

This is not just about unions that have a close relationship with the Labour party. This is about the TUC expressing serious concerns about this statutory instrument and about the Trade Union Act more generally, yet those very reasonable concerns have been ignored, as have the voices of devolved Administrations. I am pleased that the Welsh Labour Government have introduced the Trade Union (Wales) Bill to repeal the parts of the Trade Union Act that they believe go far too far and cross into the devolution settlement and their rights as a devolved Administration. I am proud that we have a Government in Wales who are standing up for trade unions and working people.

As I have said, there is a pattern of behaviour here. Yesterday, we saw an attempt by Conservative Members to restrict the rights of workers massively. The attempt was defeated, but the measure was supported by many Government Members, including some who have in the past burnished their alleged working-class credentials. I am very pleased that the measure was defeated.

We can talk about the politics, and the ideological games that the Government are playing—that would underline the intent behind this statutory instrument and other legislation that they have introduced—but in the end, this comes down to reasonableness. The question is whether it is reasonable for trade unions to comply with a law that has been passed, whether I agree with that law or not—and it is very clear that I do not. We were told all the way through the passage of the Trade Union Bill and in many other discussions around it that it was all about listening and improving democracy and transparency, yet the Government have made attempts to ignore the democratic structures in trade unions and frustrate their operation.

[Chris Stephens]

The hon. Gentleman was on the Trade Union Bill Committee and would have heard the then Minister for Skills, the hon. Member for Grantham and Stamford, saying that the measures were not about passing on additional costs to trade unions. Does he think that claim is fulfilled in this statutory instrument?

[Stephen Doughty]

No, I do not. Indeed, I fear that costs are a consequence of many other parts of the legislation. Fines can be introduced for non-compliance, and there are many other restrictions. Many of the unions we have talked about, particularly USDAW, have been clear that they are trying to comply with the legislation within a reasonable time, yet the Government are not listening to their very reasonable concerns. The unions are suggesting that this be delayed not by years or decades, but by months, given their pre-existing and very reasonable democratic structures and processes.

I go back to the TUC’s key concerns about this statutory instrument. It has been clear that it believes that the proposed 12-month transition period is inadequate and fails to take into account the complexity involved. As I have said, a financial penalty of up to £20,000 can be imposed by a certification officer.

On revising the rulebooks, the changes need to be agreed through union democratic structures—a lengthy process that differs greatly from union to union. They need to consult branches, as has been mentioned several times, and there are rule-making conferences where union democracy can be conducted, with full transparency for the public and members. Why would we want to undermine that by suggesting that unions could go through a secondary process and have a little meeting of the executive committee under the Trade Union and Labour Relations (Consolidation) Act 1992?

[Ms Eagle]

Does my hon. Friend, who has been active in a union, think that if union rules could in future be changed through a quick meeting of the executive, without its telling anyone, it would be a good thing, or a bad thing? In my experience, it would cause chaos.

[Stephen Doughty]

Indeed. It sets a dangerous precedent. Labour Members want to promote democracy and transparency in trade unions and in all civil society organisations, so that their members can see what is going on, how decisions are made and how money is spent. We support such transparency. We support the transparency around the funding relationships between affiliated unions and the Labour party. Unfortunate comments have been made by the hon. Member for Shrewsbury and Atcham. We are clear about our support; the Labour party registers donations. We are not just talking about trade unions affiliated to the Labour party; we are talking about all trade unions and the impact this will have.

As the hon. Member for Glasgow South West pointed out, a month is effectively taken out of the period by the need to secure approval from the certification officer. That seems to be another attempt on the side to curtail this period and reduce the time the trade unions have to deal with this, making things even more difficult.

We talked about the complexity of the process. Renegotiating check-off agreements with employers is not straightforward, particularly if you have a disaggregated workforce across many different locations. This is a particular problem for unions such as USDAW, which has many branches and represents many employees, including in small retail outlets and companies. That could require the renegotiation of check-off arrangements with hundreds and, in some cases, thousands of employers across both the public and private sectors. That is an incredibly complex enterprise. If trade unions are required to do this by law, they will do their very best to comply, but they have to be given a reasonable amount of time to do so.

There was a mention of the plastic bags legislation, but the argument applies to any new legislation; it would apply if we were imposing new regulations on businesses around tax reporting or introducing new regulations around health and safety. I sat on the Consumer Rights Public Bill Committee. Complex changes take a long time to bring in. This is about what is reasonable, when it comes to insuring that those involved can comply with a new legislative framework.

We talked about the practical operational impact on, say, membership databases. There will be a need to redesign membership forms and distribute them across the country, and to train shop stewards and union officials on how to implement the new legislation. Some of those changes have to be deferred until a rule-making conference, because they link into other decisions. That is the crucial point.

What surprises me is that although these concerns have been raised multiple times by unions and the TUC, and the Minister accepts that those representations have been made, this statutory instrument makes no attempt to deal with any of those concerns. That smacks not of reasonableness but of the ideological approach that we have repeatedly seen the Government take towards the trade union movement and society.

We have heard about the particular challenges that USDAW faces; its conference is due to take place. The Minister seemed almost to give a grudging apology. It would be interesting to hear further from her on that. It is not asking for the moon; it is asking for a reasonable period in which to comply. It wants to comply—it made that clear—but its conference has been booked years in advance at a venue that has been paid for. It has to inform its members of conferences, and those members have to get time off work. The changes are being rushed in on 1 March 2018, just weeks before USDAW holds its conference, at which it would be able to decide to implement the legislation. It seems to me—and I think it would to many members of the public, whether they are politically minded or not—an unreasonable measure. I appeal to Government Members to look at that.

Take the politics out of this and look at what is reasonable. Would hon. Members expect businesses and other civil society organisations suddenly to have to comply with measures when they have processes in place to deal with the changes and have indicated a willingness to comply? I will oppose this statutory instrument. The Government’s whole approach to this legislation from day one has been deeply unfortunate and smacks of its real agenda, which is to shut down the voice of working people up and down this country and, indeed, wider civil society.

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[Margot James]

Not yet. There are 13 months to go before the due date. The hon. Member for Sheffield, Brightside and Hillsborough talked about “wholly irresponsible” regulations, and many hon. Members challenged the basis of what we are doing, not just the length of time that we are allowing unions before they must comply with the law. We Government Members feel that if people’s money is directed into a fund that is used for political purposes, they should at least know that, and have a say in whether they want that to happen. There may be a divide between the two parties on this, but I am afraid that we Government Members feel strongly that if people have money taken off them, they should have a say in where it goes, and that is all that the measure ensures.

Mr Stringer, you rightly allowed Members a degree of liberty in going beyond the confines of what we are debating; I shall take advantage of that and challenge the idea that we have taken an ideological position on this matter. I do not for one instant believe that. In fact, our research showed that almost half of the money raised through donations to political funds is, as the hon. Member for Glasgow South West pointed out, devoted to other campaigns, and not Labour party funds. Almost half goes on the sort of good campaigns that he mentioned. It is a complete myth that this is some sort of political attack on the way that the Labour party is funded.

[Stephen Doughty]

The Minister is generous in giving way. She makes the argument that a lot of money goes to other important campaigns, such as the USDAW campaign on stopping violence against shop workers. Let us take the politics out of this for a moment; will she listen to the very reasonable concerns felt by a number of unions about the length of the transition—points echoed by the right hon. Member for West Dorset, a former Cabinet Minister who sits on her party’s Back Benches? He made an important point about the timing, and the impact that the transition period will have on some very reasonable unions that are trying to comply with the legislation.

[Margot James]

I thank the hon. Gentleman for his intervention; he made a powerful speech earlier. Of course I noted the comments of my right hon. Friend the Member for West Dorset, and I will give them consideration, but I have made the case—I will not repeat myself—for why we feel that 12 months is acceptable. This comes on the back of an Act that was passed almost a year ago.