Trade Union Officials (Refund of Pay to Employers)
Oral Answers to Questions — Prime Minister
12:35 pm

Motion for leave to introduce a Bill (Standing Order No. 23)

1:38 pm
Photo of Jesse Norman

Jesse Norman (Hereford and South Herefordshire, Conservative)

I beg to move,

That leave be given to bring in a Bill to provide that pay for hours worked on behalf of trade unions by trade union officials during hours when they are paid by an employer should be refunded to the employer by the trade union;
and for connected purposes.

The Bill addresses an issue that has recently attracted great public attention: the funding by the taxpayer of public sector employees who in fact work not as nurses, teachers, social workers, local government officers or civil servants but as trade union representatives. It was raised in an Adjournment debate last year by my hon. Friend Mr Burley and I pay tribute to him for that, to my hon. Friend Priti Patel for her work in the area and to other colleagues for their support today. The number of my colleagues in the Chamber attests to the importance of this issue.

This is not an area where definitive information is available, because adequate records have not been kept. The facts so far, taken from freedom of information requests to some 1,300 public sector organisations, are as follows. In 2010-11, trade unions received £113 million from public sector organisations. If extended over the lifetime of a Parliament, that would amount to the extraordinary sum of more than half a billion pounds in payments. An estimated 2,840 full-time equivalent public sector employees worked for the trade unions in 2010-11, paid for by taxpayers. That is equivalent to 2,840 public servants whose work has to be done by others: teachers who are not teaching, nurses who are not nursing and social workers who are not assisting their clients. The Department for Work and Pensions alone has 308 full-time equivalent staff working on trade union activities paid for by taxpayers, while Her Majesty’s Revenue and Customs has 181, to give just two examples. These facts are quite unknown to most people in this country and they deserve much wider publicity. It will be a source of huge anger to my constituents in Herefordshire, who must fill in their tax forms this month in very difficult economic times, to learn that they are subsidising nearly 200 tax officials who do no tax work at all—all the more so as under the previous Government the Revenue drastically cut back its office in Hereford.

It is important to be clear about one thing, however. The Bill is not about attacking the unions. The trade union movement in this country has an often distinguished history of supporting and protecting working men and women and their families. Many unions do very good work for their members today. I recognise these things and I welcome them. In a similar spirit, the House will know that I am a great supporter of co-ops, mutuals, credit unions and other organisations whose purpose is to empower and support people who are often on very modest incomes. The issue here is one of basic principle: is it appropriate for the taxpayer to subsidise any such large-scale activity by private organisations? If it is,

should it be allowed without proper processes of competitive tender and public accountability? My own answer to these questions would be, in general, a resounding no.

Taxpayers’ money should be spent, as far as possible, on the front line of public services. In general, private organisations should not be subsidised by the state. Moreover, the fundamental principle of no payment without accountability is already observed throughout the public sector in other areas. Public procurement is supposed to be competitive and transparent, and so is commissioning of services in the NHS and across local government. In exactly the same way, there should be proper transparency and accountability in public funding for trade unions.

I myself have just waged a long campaign to recover some £1.5 billion for the taxpayer on the private finance initiative—only a small portion, so far, of the money overspent by the previous government on PFI. In effect, PFI included a massive subsidy to the financial and construction sectors. The principle is exactly the same here: taxpayers’ money should not be used to subsidise private organisations without proper transparency and accountability. Why should the unions be any different?

There is an important further argument. Subsidising the unions with taxpayers’ money is not ultimately in the interests even of their own members. Indeed, it will tend to undermine the services those unions provide. All subsidies distort incentives. This subsidy encourages union leaders to lobby politicians for hand-outs, rather than focus on doing the jobs their members pay them to do.

Finally, taxpayer funding creates huge conflicts of interest. Inevitably, some union reps will be tempted to engage in political activity during time funded by the taxpayer. That was the problem with Ms Jane Pilgrim, the former nurse turned union rep at St George’s hospital, Tooting, who denounced the Secretary of State for Health on the basis of a meeting she had never attended. That was politicking pure and simple, but the conflict between political activity and taxpayer funding would be removed if unions were required to refund public money received, as this Bill would demand.

Various defences have been made of such payments. It has been suggested that they actually save money, that union reps are needed for pay negotiations and that union reps must be employees, but those arguments entirely miss the point. The issue is not whether the unions provide valuable services, whether they should be paid for doing so or whether public servants may not also be union reps; the issue is why they should be paid in that role by the taxpayer.

There is a wider point as well, which is that of transparency itself. Last week, my office called seven of the biggest unions, asking for their latest financial reports and accounts as background research. The response was extraordinary. Some unions, such as the National Union of Rail, Maritime and Transport Workers and the Union of Shop, Distributive and Allied Workers, do not put this information online at all—USDAW kindly invited me to write to its treasurer with a request. Others, such as the NASUWT, make it available only to members. Unison had its 2009 statements online, and the National Union of Teachers had a summary. Only the Public and Commercial Services Union had a full recent report and accounts online.

Matters only become murkier on further investigation. The unions are regulated by the relatively little-known certification officer, who requires them to file an annual return. In the case of Unite, that reveals that the union had income in 2010 of £141 million and made a pay-off of more than half a million pounds to its outgoing joint general secretary, Derek Simpson

Photo of John Bercow

John Bercow (Speaker)

Order. Stop the clock. Mr MacShane should behave not like a trainee rabble-rouser but rather like the elder statesman that at his best he can be.

Photo of Jesse Norman

Jesse Norman (Hereford and South Herefordshire, Conservative)

Astonishingly, there is no management report in Unite’s annual return, no historical comparison of income and expenditure, no discussion of the year’s activities, no analysis of the current environment or future prospects, no biographies of senior officials and not even any photographs. The impression given by that annual return is one of contempt for the union’s membership. Members should ask themselves what would be required if Unite were a charity like, to choose an example at random, the Sheffield Hospitals Charity. Its annual report and accounts is a model of detailed and clear presentation, full of information about the organisation, its people and its work. There is a very clear sense of public commitment and purpose. Its page on the Charity Commission’s website is packed with accessible information and graphics, but there is nothing especially unusual about that report and accounts or that disclosure. It is simply that the standards for public disclosure and the standards of treatment for donors are much higher for charities than for unions.

The Sheffield Hospitals Charity had income last year of just £2 million; Unite is seventy times larger. It is Britain’s biggest union, with more than 1.5 million members, and wields enormous political power. If this is how it treats its membership and the taxpayer, the case for greater union accountability and for more transparent regulation could hardly be clearer. I commend the Bill to the House.

1:48 pm
Photo of John Healey

John Healey (Wentworth and Dearne, Labour)

This Bill attacks the most basic and most benign feature of trade union work—the day-to-day support for staff at work by their colleagues who are prepared to volunteer as trade union representatives.

Last time, the attack was led by Mr Burley in this Chamber. I had thought he might be detained elsewhere. I have to say to Jesse Norman that I am surprised to hear him attempt to bring in this Bill. He is gaining a growing reputation for hard work and intelligent comment, but his speech was a cheap-shot speech based on ignorance, ideology and inaccurate briefings from the TaxPayers Alliance. He talks about trade union accounts and public service, but the Bill is a broadside against trade union organising in both the public and the private sectors. It is a personal attack on around 200,000 people who are ready to help

their colleagues by giving advice, by supporting them at grievances and discplinaries and by negotiating with managers. That is difficult and demanding work, but many of those representatives are also ready to take on extra, special responsibilities for improving health and safety, equality, training and environmental standards.

The Bill is a personal attack on people such as Kevin Maggs, a GMB learning representative at A & P ship repairers in Cornwall. He organised open learning days for his colleagues at work and encouraged them on to courses. He says that some of them have been able to gain qualifications for a job they have done for years, whereas others have been able to understand their pay slip for the first time because of their improved literacy and numeracy. The hon. Member for Hereford and South Herefordshire might not be able to understand that, but Ministers do. Let me quote the Minister for Further Education, Skills and Lifelong Learning, who said last year:

“I want to pay tribute to union learning reps, who have made so much difference to so many lives, and to such effect. Trade unions can play an invaluable and immeasurable role in improving skills in the workplace.”

That is why the Government are rightly investing £33 million to support union learning. It is part of the £110 million condemned by the TaxPayers Alliance.

Many trade union reps rightly receive paid time off from their other work to carry out those duties. Many also devote much of their own time to that work. A recent Government survey showed that reps in the public sector contribute up to 100,000 unpaid hours each week to carry out their duties. Our union reps are the unsung heroes of the long, proud British tradition of volunteering. They are the workplace wing of the Prime Minister’s big society. There should be receptions in Downing street to pay tribute to their work. They support their colleagues and they save employers and the Exchequer millions of pounds each year by reducing the number of employment tribunals and days lost through illness and injury. By improving productivity and training, they help organisations to get through periods of great pressure and great change. I looked at the new year’s honours list this year and saw there were hundreds of civil servants, charity workers and business people on it—especially civil servants—but I found only one person, Mr Charles James from Leeds, who was honoured for the service he has given to his union and to his community. We should see many more ordinary workplace reps being honoured in future like Mr James.

I think that the House will have recognised that the hon. Gentleman did not quote one single employer. Employers are not calling for this attack; it does not even feature on the CBI’s 11-point checklist of curbs it wants to see on trade unions. Many of our biggest and best British companies work with trade unions and recognise them—Rolls-Royce, Tesco, Virgin Media, Odeon cinemas, the HSBC bank and Jaguar Land Rover. Those names are known worldwide and those companies know the benefit of working with trade unions and know the benefit of trade union representation.

If we accept that employers as well as employees benefit from union representation, it is entirely right to expect employers to make a contribution towards the cost. That is why the hon. Gentleman’s Bill is wrong. Let me say one final thing to him and his colleagues. Many trade unionists voted Conservative at the last

general election—too many—and some even voted Lib Dem. They do not deserve this and the Bill does not deserve support from any part of this House.

Question put (Standing Order No. 23).

The House divided:

Ayes 132, Noes 211.

Division number 419

See full list of votes (From The Public Whip)

Question accordingly negatived.