Clause 36: Duty to provide membership audit certificate
Moved by Lord Monks
118A: Clause 36, page 39, line 1, leave out “in relation to each reporting period” and insert “if—
(a) a formal complaint is received by the Certification Officer that would result in the Certification Officer requiring a membership audit in relation to the reporting period when the complaint was verified, and
(b) the Certification Officer determined that a certificate was required.”
My Lords, I shall speak also to Amendments 118B and 118D standing in my name and that of my noble friend Lord Stevenson, and shall also oppose the Question that Clause 36 stand part of the Bill. I will also speak in support of the amendments tabled by my noble friends Lord Whitty and Lord Lea of Crondall.
We are in some difficulty in dealing with Part 3. We had assumed that this was going to come up at around the end of the month because that was the original schedule. However, with the pause to Part 2 agreed here a week ago, it has all been rushed forward. Part 3 has been jinxed from the start. It was a very late addition to the Government’s programme and to the Bill. The short consultation period was in August, which is not a particularly busy month for many of us, and now, given the attention that has been given so far to Part 2, we are dealing with Part 3 on the run in this House before many people are remotely aware of its significance or of what it is about. However, our contention on this side is that this part of the Bill is very important. We hope that today we will at least be able to raise awareness of the issues at stake and appeal to fair-minded Members on all sides of the Committee for their support in looking in detail at what this part involves.
We have raised our opposition to the clause standing part as part of an attempt to persuade the Government to think again and to think further about what resembles a vindictive attempt to load on to trade unions a great new dollop of red tape—a new layer of bureaucracy that is unnecessary by any objective or fair-minded standard. Of course unions should keep accurate records. Indeed, they are already required to do so under the Trade Union and Labour Relations Act. They are required to make detailed returns on an annual basis to the certification officer. They are required to have independent scrutineers in all elections, and invariably those scrutineers check the membership registers. The certification officer—the union regulator—has the power to order a rerun if there is a complaint of sufficient importance.
I note from yesterday’s press that there are allegations by a defeated candidate about a recent election in Unite. By the way, that election was supervised by
Electoral Reform Services—the old Electoral Reform Society. I also understand from the press that a complaint has now been made to the certification officer. If it is upheld, the certification officer will have appropriate powers, if necessary, to order a rerun. He does not need new powers as foreseen in the Bill. As far as I know, the certification officer has not asked for any new powers. He does not feel that he is lacking any ability to deal with issues that are referred to him. Therefore, I do not believe that there is any basis for heaping extra requirements on to unions. Likewise, industrial action ballots can be, and occasionally are, challenged by employers on the grounds either that inappropriate people are balloted or that people are missed out of a ballot. Therefore, unions have every incentive to keep accurate records.
I should like to know from the Government why they are doing this. What is the motivation for it? Why are they incurring considerable expense on all sides—unions, employers, the Government and the taxpayer—for this particular non-event? There is no rationale for this provision, which will involve extra bureaucracy and extra costs. This Government were anti-red tape when they were on the other side of the House, but they are obviously making an exception for trade unions.
The cry has gone up that we need more assurance and more confidence. I see the noble Lord, Lord Tyler, in his place. He suggested, among other things, that this was necessary because a union has a political role. Lots of other organisations have political roles, but are their membership rolls to be supervised by a public official? Are the political parties going to be thrown into the mix? Do we need some assurance about how many members they have? That would be very interesting for some of us to read. No, it is unions, again, that are being scapegoated and picked out to be given a kick on this issue.
By the way, only a small minority of unions have anything directly to do with the Labour Party, yet many, such as the Royal College of Nursing—which is, I may say, a good way off the Labour Party—will be affected by this part of the Bill. It is a blunderbuss, aimed at just one section of society that plays a political role. If I were paranoid, I would say that we were being persecuted.
The stated intended effect of the Bill is to ensure that voting papers and other communications reach union members, and so give greater confidence that members have the chance to participate in union affairs. There will be a new statutory duty to provide the certification officer with an annual membership audit certificate that provides an opinion on the union register, with the larger unions having to appoint an independent “assurer”—I have not come across that interesting title before—and a duty for the certification officer to appoint inspectors to investigate and make orders, and for those officials to issue declarations and enforcement orders for non-compliance. Heavy-handed, or what?
That is tough administration. Again, if unions were getting a litany of great numbers of complaints, I might be able to understand the reason for it. But there is no such evidence. As I and others pointed out at Second Reading, there is absolutely no practical reason for these measures to be in the Bill.
Are union membership records defective? They are not perfect; I would be the first to acknowledge that. How can they be? Unions collect their money in one of three ways. The traditional way was through regular cash collections by voluntary officials such as branch secretaries, shop stewards and others. That is very difficult in some circumstances—in construction, for example, with a fluid workforce and many people on very short-term contracts. It is difficult in many other places, too, as anybody who has ever collected money for a political party or a voluntary organisation knows. The record keeping could sometimes slip, depending on the efficiency of the individual collector; I have no doubt about that.
The second way to collect subs is by the so-called check-off method, using deductions at source by an employer, for which the union usually pays the employer a handling charge. In one of my other roles, helping to secure auto-enrolment for pensions, we are having a lot of trouble with the quality of employer payrolls. With some of them, as many as one in four workers is not properly reflected on the payroll. I know that unions and employers together have big problems handling the check-off. In certain sectors, such as retail, there is a high turnover of labour: a third of the members of USDAW, the main retail union, have to be replaced each year just for membership numbers to stand still. Keeping those records up to date is a huge administrative job. The employer is probably paying a quarter in arrears anyway, so for a significant part of the quarter a union may be some way out with its membership register. The third method is by direct debit and standing order. They tend to be more accurate, so I shall not dwell on those.
Where are the problems with all this? It is not perfect, I agree. If I were the assurer I would not quite know how to deal with some of the sectors where unions have to collect their money and organise their members. Between 2000 and 2004, a total of six complaints were received by the certification officer, five of which were dismissed—and even for the sixth one he did not issue a declaration. He just expressed an opinion that some things could have been done differently. There had been no complaints in respect of a vast majority of unions. In fact, I did not know about another one at all until I read the Sunday Times yesterday.
I stress that there is no real problem. This is a remedy in search of a problem. I would like to think that many noble Lords on the other side of the House would be embarrassed about this waste of effort and time. The cost to unions of this part of the Bill on the Government’s own estimate is about £460,000. By the way, that is an underestimate, which fails to take into account the necessary changes to rule books. Some unions have to have rules revision conferences and some have them only every five years or so. It does not reflect the continuing cost of having the assurer and annual audit done year after year. It is not only unions that will have to pay. Business will have to pay and the estimate is about £400,000, £100,000 of which will end up on the Government’s budget, and therefore on all our budgets as taxpayers.
Some noble Lords will no doubt be thinking, “As a former general-secretary of the TUC, he would say that, wouldn’t he? It’s predictable stuff from the TUC”.
But they do not need to take my word for it on this occasion. They need only glance at the report of the Regulatory Policy Committee, a business-dominated government committee attached to the Department for Business, Innovation and Skills whose sole purpose is to curb red tape. I emphasise that the committee is composed largely of business representatives from the chambers of commerce, the Institute of Directors, and others. It has issued a rare red card to the Government on this matter—a stop notice in effect on Part 3. Unfortunately, this was not available at Second Reading. The House as a whole needs to be alerted immediately to the report, and I hope that it will be prepared to look afresh at this proposed legislation.
Some noble Lords may not care too much for trade unions; they may think that they deserve all the flak they get. But I ask the fair-minded to take a look at the report. I shall quote some points. It says that the impact assessment of the Bill,
“needs to provide a more detailed assessment of all likely costs to trade unions … supported by further evidence that was gathered … It is unclear how accurate and up-to-date a membership register will have to be for a union to be considered ‘compliant’ … or what process of investigation would be undertaken by an independent qualified assurer, or how rigorous that process would be”.
It also refers to the recurring costs. The committee illustrates that it was only after the Bill was published that the short August consultation period was started. It highlights the failure to follow appropriate better regulation processes—hence the issue of that very rare red card.
Our case today is not just about red tape. Individuals sometimes have to be careful who knows they are in a union. Countries that require a public official to know who is or is not in a union tend to be despotic tyrannies. Although I do not belabour the Government with that charge, information on union membership is very sensitive. Blacklists do exist. Eight major construction companies have recently admitted that and more than 2,000 workers are in line with legal cases against some of the biggest household names in British construction. There are worries about membership information finding its way to the unscrupulous end of employers. Worries have been expressed by parliamentary committees about breaching the confidentiality of union membership records. There are concerns, too, that Part 3, despite what is in the Bill, is not compatible with Articles 8 and 11 of the European Convention on Human Rights or with certain obligations concerning the International Labour Organisation.
The Political and Constitutional Reform Committee has asked the Government to address these concerns during the course of proceedings on the Bill. There is plenty of criticism from around the House of this part of the Bill. Part 3 in fact confers powers on state officials in relation to voluntary organisations that seem odd in a liberal democracy—organisations which, under these international obligations, are protected from too much state interference. Only if there is a proportionate need, is the theme running through them, should curbs be brought in. I have not seen anybody yet demonstrate that there is any sort of proportionate need. Therefore, in the period between now and Report stage, we will be trying to raise general awareness about Part 3 and its rather vindictive, malicious nature. The Government did listen to reason on Part 2 and I hope that they will listen again on Part 3 in this intervening period. We are looking for support for our contention that Clause 36, a keystone clause in Part 3, should not stand part of the Bill.
I hope too that there will be support for the other amendments. I refer briefly to Amendment 118A, which would adjust the reporting duties so that it would be only once a complaint was received that the process laid out in the Bill would have to kick off. Amendment 118B would introduce an appeals mechanism for unions to say, “Come on, this is ridiculous”. I leave the merits of Amendment 118C in the capable hands of my noble friends Lord Whitty and Lord Lea. On Amendment 118D, I simply point out that the amendment is part of a series that seeks to make the Bill less onerous, complicated and costly to unions and employers. It aims to probe whether the Government are really hell-bent on a Bill based on anti-union prejudice or are open to constructive ideas. It seeks to do this by deleting the requirement on a union in relation to these reporting periods—a duty to submit the membership audit certificate in relation to each reporting period—which would be at least one year. We seek to alter this to require a union to submit a membership audit certificate if the section is invoked.
At the moment the Government resemble Don Quixote, tilting by reflex at the trade union windmill, dreaming up remedies before they have identified the problems, and prodding unions with a stick, like little Albert in Stanley Holloway’s piece, to try and incite some reaction and make a rather shabby political point. Polishing up union-bashing credentials seems to be a right of passage for some on the other side of the House. Just remember this. A recent poll has shown that 78% of the population believe that,
“trade unions are essential to protect workers’ interests”.
The Government therefore should think again before Report. They should start to act in a fair-minded way and not be blinded by ill-informed prejudice. I beg to move.
I rise to support these amendments. This section of the Bill is yet more evidence of the opposition of the Government to the interests and desires of ordinary working people—to their need to organise to represent their legitimate interests at a time when employment rights are constantly under government attack. Now we have this attempted legislation, which is a direct attack on unions and their ability to represent their members and provide a service to them. There is already legislation in place as we have heard, in the 1992 Act, which requires unions to maintain a register of members with a certification officer in charge of implementation. As my noble friend has pointed out, there have been hardly any complaints under that legislation and only one with any substance requiring further examination. The Government have not produced any evidence to support the amending legislation they are now proposing.
Government spokespeople often stress the importance of voluntary organisations, but unions are among the largest voluntary organisations in the country. Although the media, most of which seek to demonise unions, refer only to union bosses, most local and workplace work is done by willing volunteers. Yet unions are the only voluntary organisations to have this kind of internal bureaucracy imposed upon them and at their expense. The CBI, employers’ organisations, organisations representing bankers and the fiscal industries do not have this; only unions are to have this additional expensive official, an allegedly independent person, who is not voted for by them but is imposed upon their internal administration.
What of the privacy of ordinary members? What of their confidentiality? It is clear that the Government are intent on making things much more difficult for a union affiliated to the Labour Party. However, not all of them are. Most are affiliated only after a ballot of those who pay the political levy, which is surely a matter for union members themselves. The TUC has made substantial criticism of the Bill, which it regards as an attack upon democracy. It believes that it would make organising a conference in advance of the general election, even its own congress in 2014, a criminal offence, because it would be in advance of an election.
The campaigning organisation, Liberty, has also opposed this section of the Bill, believing it to be a breach of Article 11 of the European employment rights legislation. The Government, of course, disagree. I regard this section as undemocratic and a further attack on the employment rights of ordinary people. The Government pretend that it is not. However, to weaken the ability of the unions to adequately do the job for which their members belong weakens those members. Strong unions mean better pay and conditions, which is one of the reasons why millionaires do not like them much.
We in this House should not be misled by media misrepresentation of unions and should recognise the contribution that they make to the support and welfare of ordinary working people. This section of the Bill should therefore be opposed. I fully support what my noble friend said in his introduction to this section.
My Lords, I declare an interest in that I have been a member of the GMB for 40 years this year and was a member of other unions prior to that. I therefore have an axe to grind—not a pecuniary one—and I share that interest with millions of our fellow citizens and with many who are not in trade unions but who, nevertheless, benefit from the way in which trade unions operate in the market.
My Amendment 118C seeks to delete from the clause the reference to this peculiar new invention of an assessor. The Government have seen fit to invent a whole new profession and office for reasons which, as my noble friend Lord Monks said, are not entirely clear. The role of the assessor is dealt with in more detail in Clause 37, and I will return to make more detailed remarks in that respect. The central point is why the Government think that they need to invent a relatively costly new bureaucratic structure when they already have the powers in the role of the certification officer, who can deal with any complaint received, intervene and censure a union if inadequate documentation is provided. As my noble friend has said, there are already substantial penalties available to certification officers if ever one of the few complaints they receive is upheld. In this section of the 1992 Act, there is also the possibility for individuals to complain, not only to the certification officer but to the courts, about the failure of trade unions to maintain proper records and many other provisions of that Act.
So why is a new structure being proposed? As my noble friend Lord Monks has said, there are problems in maintaining a register of trade unions with names and addresses and accurate records. By and large, most of the population moves every four years, and the impact assessment recognises this. People change their address every four years and tend to move job slightly more frequently than that. In some cases, they change the way in which they pay their union dues, or the name of the company for which they work changes. At any given point, it is difficult to maintain a 100% accurate register, but the Act rightly says,
“so far as is reasonably practicable”.
That is the basis on which the certification officer makes a judgment.
It is not clear in this Bill whether the Government intend to invoke more stringent principles of how to decide whether or not it is an accurate register. If they are, it is not in the Bill. Is the assessor, or whoever advises them, to develop new codes? If so, the House should be told before we proceed. I will return to the role of the assessor, which appears in the next clause.
I also strongly support the aim of the amendment of my noble friends Lord Monks and Lord Stevenson to delete this clause and this whole part of the Bill. We have looked at the impact assessment, which estimates the costs to unions, the Government and employers. For unions, it is assessed at around £400,000. I have had representations from all sorts of unions—my own, the National Union of Teachers, which is not affiliated to this party, and the Royal College of Nursing, to which my noble friend has referred and which is not affiliated either to the TUC or to the party. These indicate clearly that the cost of implementing these provisions and initiating the changes in procedure and rules that is required would be substantially more than that.
Even more interesting is that only £140,000 is allocated to additional costs to the Government, whereas if they were really trying to enforce this, they should give the certification officer significantly more powers. It is arguable that under the present rules the certification officer may need more resources, but that is not what this Bill is about. It is about an entirely new approach to this area. The even more interesting part of the impact assessment is that the benefit at one point is described as nil. That is a pretty telling internal report on a proposal from Ministers: at a cost of £400,000, which I think will be rather larger, plus £100,000 or so to the Government, the benefit is nil.
My noble friend Lord Monks has already cited the Regulatory Policy Committee, which basically says that this is one of the daftest proposals that has ever come before it, and there is no justification for it. Even the Government, who have been scraping around for supporters of this Bill during a rushed consultation period over the holiday month, could not get more than lukewarm support from the CBI, which said that it would not be its first priority. Where are the Government coming from on this? The benefit to restating and providing a bureaucratic infrastructure to enforce the requirement of unions to keep membership records effectively is not justified in anything the Government have so far said about this, either in the impact assessment or in speeches in the House of Commons, which was of course very late in the proceedings.
That has naturally given rise to various levels of paranoia from the trade union movement. I should say on behalf of me and my colleagues: “Just because you’re paranoid doesn’t mean they’re not out to get you”. There are some hints in the impact assessment that they may really be talking about strike ballots, which are not relevant, as my noble friend Lord Monks said. The issue in a strike ballot is whether the people who are balloted are those, and all those, in a particular bargaining unit. That depends on the definition by the union and the employer; it does not depend on the totality of any union’s register of members and their addresses. An alternative suggestion was that the proposal relates to internal elections within unions because the Government, in some way or other, do not like the people who are being elected. Occasionally the Labour Party leadership does not like them, either. The fact of the matter is that if something is wrong with an election, the defeated candidate can complain to the certification officer, as happened in a recent case to which my noble friend referred. If an officer finds in favour of the complainant, then the election is run again. What additional powers do the Government see coming out of these changes that would affect that situation?
My final reason is perhaps the most sinister. I see that the noble Lord, Lord Tyler, has left the Chamber, even though he made remarks at Second Reading that suggested that the Liberal Democrats in particular were on about trade union political funds, which, of course, are dealt with in entirely different legislation. I agree that decent membership records are required but political funds are not dealt with in this part of the Bill. Even if the Government were out to bankrupt the Labour Party, this proposal would not do so. I therefore have to say to Ministers that if those more Machiavellian motives were their real motives, they have got it wrong. If, however, the proposals were a reasonable and fair-minded attempt simply to improve the situation, then again they have got it wrong because the present powers are sufficient.
The Government are introducing something which, if they had imposed it on any other entity within our civic society, would have been regarded as otiose or even oppressive. We shall come later to the oppressive aspects of these proposals. We have yet to hear from the Minister today on this; we certainly did not hear from him at Second Reading. Unless he can give us a more coherent and persuasive argument as to why these matters need to be addressed and why this new structure has to be imposed, this clause—indeed, this whole section of the Bill—would be best left out and we should not proceed further with it.
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.
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.
My Lords, I do not want to repeat points which have already been made by other noble Lords, but two points do bear underlining. First, the consultation period has already been mentioned, but I am not sure that noble Lords know its exact dates. It opened on
“The impact assessment lacks a sound evidence base and is insufficiently robust to justify RPC validation of the estimated costs to civil society organisations (trade unions)”.
That is a damming indictment of the process that this Government have adopted. Even if the proposals were valid and fair, and even if we understood their motivation, I would say that the process is not just flawed but a public disgrace.
Let us look again at the impact assessment. I should emphasise that I am not criticising the civil servants who drafted it. They are magicians; they have conjured up some window dressing for this crackpot idea, which puts them on a par with Tommy Cooper. I blame the crackpot idea. The impact assessment states:
“Anecdotal evidence from a few employers provided as part of informal consultation with stakeholders suggests that some employers would benefit from being provided greater assurance that membership lists are accurate”.
“A few employers”; “suggests”; “some would benefit”: how in the name of bureaucracy are some employers going to benefit from a certificate? That is all that they are going to get. In the next paragraph the impact assessment states:
“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”.
Who says that there is a danger? Here is another quote:
“We have received views from some employers that there is a perception”— this is going further and further back—
“that trade union membership details may be inaccurate”.
Yet the impact assessment then goes on to state:
“But we have no direct evidence that unions are not complying with the existing statutory duty to maintain their list of members”.
Let me repeat that. This impact assessment—which the Government expect us to take seriously, even though it was not actually published at the same time as the Bill—acknowledges that there is no evidence that unions are not complying with the existing statutory duty to maintain their list of members. This is a shocking example of a complete failure to produce evidence to justify this dubious policy.
The finances are also way out of line. We are told that independent assurers will be appointed from professional bodies such as solicitors, auditors and scrutineers. The cost to the trade unions for these assurers is estimated by the impact assessment to vary between £5,000 and £15,000. I have never met an auditor yet who would get out of bed for those sorts of figures. I could go on. The intellectual base and the rationale for this proposal are absent, but the petty prejudice of this Government is only too obvious.
My Lords, my noble friend asked at the beginning of her speech whether the Committee thought that a 30-day period—no more than that—was adequate for consultation. It is quite clear that the committee of the noble Lord, Lord Goodlad, which has reported on consultation matters, thought that such a period is inadequate and that a six-week period ought to be regarded as a working minimum. As my noble friend pointed out, the period in question partly covered a holiday period as well. That is just one flaw in this process, which is another example of this Government’s propensity to cobble together wholly unrelated issues into a single Bill.
I said at Second Reading on the anti-social behaviour Bill that it was not so much a curate’s egg as a curate’s omelette, combining as it did a variety of different substances. I said on that occasion that there were unsavoury ingredients; I have to say in connection with this part of the Bill that these are certainly unsavoury ingredients. It is strange, is it not, that this is a Government who have taken so long to begin to do anything about the massive scandals in the banking industry, the regulation of letting agents—my noble friend Lady Hayter has been pursuing that for some years—the energy companies or payday lenders, none of which are effectively regulated but are all matters of huge public concern? Yet they do not get legislation, let alone legislation in the form in which it emerges in this Bill.
The Explanatory Notes give some justification for Part 1, the part of the Bill that was contained in the coalition agreement. I think it was also in the Conservative manifesto. It was certainly the Prime Minister’s intention to deal with the “next scandal” which he, perhaps rightly, identified as political lobbying. Three years on we get a Bill which deals with that, after a fashion, but with these additional elements thrown in—and in a quite unjustified and unexplained way.
The Explanatory Notes do not touch on the rationale for these proposals. Just as the anti-social behaviour Bill includes such matters as dangerous dogs, firearms, court fees and policing, all dragged together in a Bill which is supposed to be dealing with anti-social behaviour, in this Bill we get proposals, out of nowhere, affecting trade unions in a way that is not imposed on any other sector. It is not imposed on professional bodies or, in anything like this form, on the world of charities. It is purely a question of singling out trade unions. As others of my noble friends have said, perhaps these proposals were intended to convey the misguided view that these are all political organisations pledged to support the Labour Party, which is palpably not the case. It is an unfortunate example of recidivism on at least the Conservative part of this coalition Government that they should hark back to that kind of divisive and inaccurate view of the trade union movement, which is much broader than they would like people to think.
There is no justification for Part 3. We have yet to hear from the Government why at the last minute they have chosen to add this dubious ingredient to the legislative omelette to which I have referred. It will be interesting to hear what explanation the Minister can give over and above the flimsy grounds that have been referred to by my noble friends already, particularly my noble friend Lady Donaghy, and the handful of responses that conditionally seem to raise concerns that have not been adequately explored or explained. This is an unworthy addition to a Bill that should have dealt with the much more serious problem of the impact on our parliamentary democracy of lobbying, which the Prime Minister identified all that time ago. This is hugely important.
When it comes to compiling information, perhaps the Government should give more attention to ensuring that we have a fully complete electoral register underpinning that parliamentary democracy, while expressing their concerns in this very party-political way about the membership of trade unions organisations, which are already significantly regulated. I hope that this debate will persuade the Government to have second thoughts. I am not over-optimistic, but they really ought to have second thoughts about pushing forward a measure that is irrelevant, in this part anyway, to the needs of our country, to the role of the trade unions and to industrial relations.
It also imposes a significant financial burden on the sector. In local government, we have something called the new burdens theory, under which, if new responsibilities are laid on local authorities, the Government are supposed to make financial allowance for them. There is no indication whatever that they will do so here. Yet this is a Government who, in their legal aid provisions, scramble round to find areas for cutting back on access to justice for minimal savings. They are prepared to inflict on organisations representing millions of people costs in excess of those that they are seeking to achieve by legislative measures in that area. It is a disgrace and the Government should think again.
I support my noble friends Lord Monks and Lord Stevenson. Trade unions are a very important part of civil society. In their contribution to it they have many proud achievements: the equal treatment of part-time workers; the financial assistance scheme for pensioners whose companies go bust; and the national minimum wage, to mention just a few. These concepts were challenged at the time, but are now accepted as an integral part of a civilised and advanced society.
A free and independent collective voice for ordinary working people is also an essential ingredient for a secure democracy, whether we look back to the 20th century or to what is happening in some emerging economies. Oh, for some of the mature, stable, free, independent voices to address some of the issues that have occurred in those civil societies! In spite of that, at the moment we have a narrative that quite crudely says, “Unions bad, employers good”.
We are seeing in this Bill an opportunity to give extensive powers to part of the state to access trade union membership records, allowing third parties, whoever they may be, to make complaints. These powers are being granted in the absence of coherent reasons for the Government to make this necessary, or of a problem that they are seeking to remedy. We are struggling to understand that. This is a sizeable attack on an important, voluntary set of organisations in their contribution to civil society, and they are being subjected to potential onerous conditions.
Much mention has been made of strike ballots. I confess to having conducted quite a few in my previous existence. As my noble friend Lord Whitty commented, they are about bargaining units and who are the union members within those units. The employer wants to know exactly who is involved in the strike and which employees will be absent. Employers can readily seek injunctions if they are unhappy with the information that unions provide. I know to my cost—I have experienced those injunctions and have had to stand there and explain in detail. I do not bite ankles, but I still found myself facing an injunction.
If you have a very large employer and employees move around a lot, it can be quite difficult. You have a very good database of the members and their membership, but you do not know which operational unit members may have been moved into by that employer. There are some quite significant challenges on trade unions to keep on top of their membership records, and to keep on top of them for strike ballot purposes, which seem to be being swept away as somehow not fit for purpose and really quite trivial, as if we really needed these more onerous conditions to come into play.
The right to freedom of association should not be made too onerous or undermined too lightly if one values democratic society or if one is having difficulty with the terms of political debate, because the price is really quite high. I fear that the Bill may have unintended consequences, because it is being rushed through. It has not been thought about and there is no evidence of the compelling reason for these changes.
The Bill provides the certification officer with extensive new powers to access and retain the registers of members’ names and addresses, and several other documents that he may wish to get his hands on when he has reason to decide that he needs them. It is a fact of life—I have gone to factories in my coat when it is quite cold and spoken to employers and union members—that employees are frightened of letting their employer know that they are a trade union member. Even if there is not black-listing, it is quite scary when you feel that your company, your factory or your workplace is getting really bad, with random redundancies and wages being cut. You cannot articulate that as an individual, so you take the initiative to try to find a collective voice or some lady or man who will come to speak for you, because it is quite frightening to speak to your employer. People say, “I want to join the union, and I want the union to come, but don’t tell them I’m a member because I’m petrified of the consequences. When you’ve got enough members and you’ve got recognition, fine—but I don’t want it to be known that I’m a union member”. That is the reality in some workplaces. They are not all colossuses, striding around; a lot of it is about frightened people without a voice, and sometimes the trade union is their only prospect of getting a collective voice. I have had it said to me, and I have done it myself. You have to put their details on the central membership record, but you take action to make sure that their details are not circulated; you promise that you will not bandy around the details of their membership but will protect them. I worry that with third parties and whoever—and who knows how the provisions of the Bill could evolve, when we start getting into the granularity of challenging membership records—things might be done to vulnerable individuals that were never intended as a consequence of the Bill. We may start to undermine the freedom of association and the right to the collective voice of which, I hope, we are all so proud and which are such an essential part of an independent democracy.
My Lords, I start, as I did at Second Reading, by declaring my interest as a member of a union. I thank all noble Lords who have spoken in this debate. There have been some excellent speeches, which, taken together, have put the onus on the Government about the content, consultation, timing and purpose of the Bill in such a way as to leave one with the very strong impression that this is, in some sense, a very partisan measure.
If I were the Minister and had felt the strength of what was being said, I might want to crawl away and lick my wounds at this stage. The Minister does pick them. He has had this experience before, so perhaps he will learn from it.
We believe that Part 3 is unnecessary. It has been described as a confidentiality-breaching, red-tape-increasing solution to a problem that does not exist. So I invite the Minister to demonstrate to us that there is a serious public policy issue behind this proposal. When he responds, will he state as clearly as possible what he thinks the problem is, what this Bill will achieve that current legislation does not achieve and why the measures he is proposing will do more than simply increase regulatory burdens on trade unions? I hope he will do better than simply repeat what is in the BIS consultation which states:
“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. As a result, unions also have a responsibility to give public assurance that they are keeping up-to-date registers”.
It is motherhood and brown bread.
We agree with that, but as the Minister well knows, union membership is already regulated by the Trade Union and Labour Relations (Consolidation) Act. Section 24(1) puts a duty on unions to maintain an up-to-date register of members’ names and addresses so far as reasonably practicable. This legislation has stood the test of time since the days of Mrs Thatcher. In recent times, unions have always had a legal obligation to maintain accurate membership lists. As it happens, it is in their own interests to do so, and the certification officer already has sufficient powers to deal with inaccurate membership records, but has not needed to do so for many years. So the Minister should, in words of one syllable, explain precisely what is wrong with that legislation.
As has been said already, we are not aware of any calls having been made to the Government to extend this provision. BIS, the certification officer and ACAS have confirmed under freedom of information requests that they have received no representations for such a measure. Not even those employer and right-wing groups that consistently call for further legal restrictions on unions have ever campaigned for this change. Can the Minister explain precisely what public concern he is responding to with these proposals?
There are a number of organisations whose list of registered members is of real importance to the public; doctors, lawyers and chartered accountants come to mind. If someone wants to check whether a professional is on the list, the accuracy of that register is key to the assurance such a register provides, so one would expect that on the lines now being suggested for trade unions there must be external, independent checks and there must be certificates in place to provide comfort to patients or clients that the relevant registers are up to date. What do we find? The Library kindly carried out a survey for us of some bodies.
Chartered accountants must belong to a recognised body, such as the Institute of Chartered Accountants in England and Wales or other membership organisation which protects the quality and integrity of the accountancy profession. I am a qualified accountant with the ACCA. Our Library’s research has failed to locate any independent membership verification of its membership list. The ICAEW’s members elect members of their council but still have no independent assurer to check the list of voters, their addresses or whether the details held are accurate and complete.
The Bar Council represents barristers, but is not a trade union, although it represents the interests of the Bar on all matters relating to the profession: trade union, disciplinary et cetera. Although the Bar Council is the source of information about whether someone is a barrister, it told the Library that its membership list is not independently verified. Solicitors are represented by the Law Society, which aims to help, protect and promote them, but its list has no independent outside person to assure the public of its accuracy and completeness.
The strangest is doctors. Doctors are required by law to be registered with the GMC before they can undertake medical practice, and the GMC’s list includes details of their qualifications and their fitness to practise problems. It is the doctor’s responsibility to be on the register, and there is no independent assurer to certify the accuracy of that record. However, the trade union to which doctors belong—the BMA—will have to appoint such an assurer to confirm its records. Perhaps the Minister could explain why it is more important to have an externally verified list of BMA members than the far more significant list of medical practitioners held by the GMC.
As is now well known, this Bill was published as the summer Recess started and was rushed through the House of Commons—so rushed that the regulatory impact assessment for Part 3 was published only in September. It has only just been made available, during the Committee stage of the Bill in the other place. As we have heard, however, it has been considered by the Regulatory Policy Committee—an independent body largely composed of senior industrialists—and has been given a rare red rating by that body. The last one was in connection to “shares for rights” in a Bill that the noble Viscount might well recall, it having been debated rather vigorously in this House.
On the impact assessment, the Regulatory Policy Committee said:
“The IA is not fit for purpose. The assessment is not sufficiently robust to justify validation of the equivalent annual net cost to business figure … It is unclear how accurate and up-to-date a membership register will have to be for a union to be considered ‘compliant’ with the proposed new requirements; or what process of investigation would be undertaken by an independent qualified assurer, or how rigorous that process would be. Thus, the accuracy of a union’s register, the time costs of the assurance process, and the fee payable to the assurer, all remain highly uncertain”.
Therefore, it is not just saying that it does not believe what is there; it is saying that the way the Bill is constructed is so vague and imprecise that it is not possible to draw a conclusion as to whether the costs outweigh the benefits that have been provided. As we have heard, the benefits are rather low. As has already been mentioned, the committee notes that the very short consultation period and the failure to follow appropriate better-regulation framework processes put in place by the Government are both factors that may contribute to the lack of a sound evidence base. This is a truly shameful state of affairs.
My noble friend Lord Monks asked the Minister to explain why the department did not follow the better-regulation framework processes. On the points of substance, will more evidence be gathered? Will we get a more detailed assessment of all likely costs to the trade unions? Will there be more evidence gathered from consultation with stakeholders? All these points were made by the Regulatory Policy Committee. Will we get a figure for the estimated cost to unions of changing the rules before the Bill finishes its consideration in this House? We need this if we are to consider this measure in the round, so we really need a reworked impact study addressing the complaints made by the independent committee. Will we have this and, if so, when will it be ready?
Having said that, there is one section on the impact assessment that is positive. Again, I would like to ask the Minister what he reads into this. It says, on the question of the one-in, two-out rule:
“The measures contained in this impact assessment are in scope of the one-in, two-out rule. The Bill will impose a net annual direct cost on trade unions, which are classified as civil society organisations”.
That being so, could we please learn what the “two outs” are that will be given to the trade unions in return for the “one in” that has been proposed?
Ministers have stated, as they are required to do, that the Bill is compliant with the Human Rights Act, but the Minister will be aware that Liberty believes that the introduction of additional compliance and scrutiny measures on trade union registers of members may constitute a breach of Article 11. That article protects the right to freedom of association, including the right to form and join a trade union. As has been said, restrictions are permitted only if they pass a test of pressing social need and proportionality. Will he explain why he thinks that this additional burden of measures on trade unions does not breach the right in Article 11(2), in the light of its potentially intrusive nature into the private affairs of union members and unions’ internal affairs? Can the Minister set out the legitimate policy aims that pass the strict test expressed in that article?
Without an adequate explanation of what the Government are trying to achieve here, far better arguments about why the existing legislation is deficient and the information to judge whether the costs imposed justify the regulatory burden being introduced in the larger unions, it is hard to see why we should not proceed to oppose the clause stand part Motion, as we have proposed. As my noble friend Lady Drake said, the unions in Britain play a significant part in the modern economy. They should be cherished, not castigated. As my noble friend Lord Whitty said, if the Government had brought forward such a burdensome set of duties to any other section of civil society, there would be an outcry. There is indeed an outcry and we should listen.
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 proposes. 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.
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.
I would like to address the question raised by the noble Lord, Lord Lea of Crondall, and by the noble Lords, Lord Monks and Lord Whitty. That concerns the RPC report on the BIS impact assessment and the shortfalls and the evidence base, as it was put to me. I am aware that the RPC has argued that we have underestimated costs, particularly with regard to changing union rules. We have received no information on this from unions, despite seeking their estimates on impact. We would be pleased to take any figures into account should they wish to supply them, but we anticipate that unions will have routine written communications with members and also an annual conference and that should allow them to include those routine activities to make steps to make the necessary changes. Perhaps I can reassure noble Lords that we will continue to work with the RPC to see how we can improve the evidence base further and we will take into account any further data that unions and others can supply and choose to supply.
The noble Lord, Lord Whitty, raised the issue of whether there would be any change to the definition of the phrase “so far as is reasonably practical”. The test for unions that they maintain a membership register that is up to date and accurate so far as is reasonably practical has actually existed since 1984 and has been interpreted by the certification officer in decisions made under Section 25 of the Trade Union and Labour Relations Act. We do not intend statutorily to define it further. It is important that the legislator recognises that the duty takes account of the fact that unions of different sizes and types compile and maintain their membership data in individual and varying ways. At the moment, we anticipate that an assurer will want to check how the union collects data from new joiners, how they remind members about keeping records up to date, the ease with which members can notify changes and how quickly changes are made. We would also expect that an assurer would be interested in the data cleansing processes that larger unions use for electronic databases.
The noble Lord, Lord Monks, raised the issue of the cost to unions. I would like to say a word or two about costs. He said that they would add considerable burdens on the unions. We have assessed the average annual cost as being 6p per union member. I think the noble Lord would have read that earlier. That equates to an average of half a penny a month. However, union monthly subscriptions vary but typically they range from £1 per month to something around £35 a month. We have sought to take an approach which is proportionate and seeks to minimise the burdens on unions.
I thank the Minister for giving way. Is it not quite incredulous to use the cost in that way, breaking it down person by person in that way? We are talking about half a million pounds to be spent on a purpose which he believes gives confidence, assurance and so on but, if there is no real problem in the first place, the whole thing is built on a piece of tissue paper. That 6p becomes even more important to people like me. It is not so much that you have your tanks on our lawn, you have your hand in our pocket.
These are the figures that I have presented, and it is fairly natural to break it down on a per-head basis. I would like to focus on costs. As set out in the impact assessment, I expect the cost to the public purse of implementing the provisions to be around £150,000. The additional responsibilities of the certification officer will mean hiring two to three extra staff members in his office. Some expenses may also be incurred if a complex investigation has to be undertaken, although it is likely that those investigations will be rare. We believe that the changes we are making are relatively modest. The new powers for the certification officer are largely consistent with activities that he undertakes at present. The Government have no plans to make wider changes to the role of the certification officer.
The noble Lord, Lord Monks, raised the issue of, as he put it, state intrusion into unions. That goes back to the first question that I answered for other noble Lords. The Data Protection Act will apply to the certification officer, his inspectors or assurers and they will be required to use any personal data, including data on union members, consistent with the protections that it contains. The Information Commissioner has powers to enforce the data protection principles and can impose substantial fines for some breaches. In addition, there are confidentiality obligations contained in the Bill so that an inspector or assurer can use or disclose information only if they do so consistently with the exercise of functions in relation to the membership register or criminal investigation or proceedings or where consent has been given.
I would like to address two further questions. The noble Lord, Lord Monks, raised the issue of a perceived breach of Articles 8 and 11 of the ECHR and the report of the Political and Constitutional Reform Committee, which I believe I have answered already. The Government have responded to the committee’s report, explaining that these do not breach rights to privacy or freedom of association. That is because there are legal safeguards in place already. The Data Protection Act will continue to apply and the Bill introduces new safeguards as well.
The noble Baroness, Lady Donaghy, challenged the length of consultation. Perhaps I may address this directly. BIS published a discussion paper which received 42 written responses from a range of groups, including trade unions, legal firms, businesses and charities. The Deputy Prime Minister, BIS Ministers and BIS officials have discussed the proposals with the TUC at various points throughout the progress of the Bill to date. The evidence base in the impact assessment is based on what unions have told us and we will continue to listen. The Minister for employment relations has already said in the other place that the Government will consult further on the role of the assurer; for example, we are committed to allowing unions flexibility in the implementation of these new measures while supporting a smooth transition. We are also committed, as I said earlier, to continuing to work with the RPC as well on the evidence base for the impact assessment.
My Lords, I am grateful to those who have taken part in what has been a wide-ranging debate, at least from this side of the House, which I suppose is only to be expected on this kind of subject. I ask fair-minded Members of the House, of which there are many on all sides, to consider this measure. The case for it is extremely flimsy. Are there not better things for the people from the department and the Minister to be doing? In a period of economic difficulty, the business department is messing about getting extra confidence and extra assurance about union membership records when, over many years, the complaints have been negligible. The existing requirements, which have been put in place during and since Mrs Thatcher’s time, have proved robust and effective. In a sense we are adding something on. As I mentioned before, it is almost like a right of passage for every Conservative Minister in this place to have at least one kick at the trade union movement. I think that is very much what is happening now.
On this side of the House, we do not intend to press the amendments today but we are giving notice that, after a pause which will take place to enable Part 2 to catch up with Part 3, we will be making the point again on Report. It is an absolute waste of time.
Amendment 118A withdrawn.
Amendments 118B and 118C not moved.
Clause 36 agreed.
Clause 37: Duty to appoint an assurer etc
Amendment 118D not moved.
Moved by Lord Monks
118E: Clause 37, page 40, line 9, at end insert—
“(c) to have a duty of confidentiality to the trade union and its members; and
(d) to abide at all times by the trade union’s obligations under the Data Protection Act 1998 to protect the information of members”
I shall speak also to the other amendments in this group. They deal with confidentiality and administrative complexity, as well as some points concerning the position of the assurer. Incidentally, I rather liked the earlier comment by my noble friend Lord Stevenson that this provision amounts to job creation for chartered accountants, of whom he is one, but I believe that it will very much benefit a small part of the population.
I shall deal quickly with each of the amendments. The Bill has been much criticised by civil liberties organisations for allowing potentially significant breaches of data protection law. A legal opinion by Michael
Ford QC, acting for UNISON, points out that under the European Charter of Fundamental Rights only a substantial public interest would justify the disclosure of this membership information. As we have said before—I shall not labour the point—where is the substantial justification in this case?
Nor is it absolutely clear that the Bill contains any suitable safeguards to protect sensitive personal data. An inspector would owe a duty of confidentiality to the certification officer but not, it seems, to the union or its members, and no duty of confidentiality is placed squarely on the shoulders of the certification officer. We are advised by legal advisers that the Bill may well not be permissible under the data protection directive, and Amendment 118E seeks to remedy that.
Amendment 118F seeks to ease the requirements on the union to appoint or terminate the appointment of the assurer and to put it in line with the terms under which scrutineers are employed to oversee union elections and ballots. Currently, the Bill tells unions to alter their rules but, notwithstanding that, the Bill’s provisions override the rules. An assurer could be removed only by resolution of a general meeting or conference. Not too many people have that requirement on them as far as auditors are concerned. It is not necessary to call a special shareholders’ meeting to get rid of KPMG or Deloitte or whoever, but there would be a requirement on a union in this area if this part of the Bill went through.
Amendment 118G would improve a union’s ability to remove an assurer who had breached the confidentiality of the union or breached certain other requirements. It stresses that the obligation is to the union and its members, and there is not necessarily a general airy-fairy commitment to give confidence to the wider world. As it stands, this provision would be extremely intrusive to the union’s right to keep its information confidential. As others have said, some of that information could be quite explosive in certain industries with more unscrupulous employers.
Amendment 118H would qualify the requirement for a system to be “satisfactory” by adding,
“so far as is reasonably practicable”,
Amendment 118J is rather important for employers, and I am surprised that some of them have not made more noise about this. The check-off system operates when the employer deducts the union’s subscription from the employee’s pay and, probably on a quarterly basis, sends the payment and an administrative charge off to the union. If the assurer finds any inaccuracies in some of the information and data that a union is holding, they may well be traceable to the employer—they may well be traceable to the payroll system or the way it is administered. In a sense, under Amendment 118J, we are asking, “What about the employer having to comply with investigations in this area launched by the assurer or the certification officer or one of his proposed inspectors?”. Amendment 118L would follow that up. It would provide the assurer with the ability to seek information from an employer for the same purpose.
Amendment 118K would put the obligation regarding record-keeping squarely where it should be if this provision goes through, and that is on a union nationally, not on the officer in charge of data handling in the union. It is not fair to put the obligation on a branch secretary, who may be a lay person. It is not fair to put it on the East Anglia regional committee, for example. The responsibility for good record-keeping should be very much on the national office, and I ask the Minister to look at that.
Amendment 118M stresses the obligations under the Data Protection Act, and this is also relevant to Article 11 of the European convention.
Amendment 118N refers to the test of reasonable steps that need to be taken by an assurer in the current draft of the Bill. How about raising the bar a bit and inserting the rather stronger requirement of “necessary” rather than “reasonable” steps? It is a very important matter that he or she is handling.
The purpose of Amendment 118P is to reduce the scope for the assurer to disclose information where a member is involved in criminal activity or some kind of corruption. We are trying to limit the scope of the assurer to make information available on a wider basis. At the moment, there are too many opportunities for an assurer to disclose information and perhaps data protection requirements, and thus breach the obligation to individual union members.
Those are the key points that I wish to put before the Minister. I beg to move.
My Lords, my noble friend Lord Monks has made a sophisticated case to the Government for making this whole clause and the invention of the assurer more palatable, or at least more workable. He has had to do so in a very complicated way because of the nature of the proposition. My opposition and that of my noble friend Lord Lea to the clause standing part is a more straightforward proposition: we are basically seeking to delete the clause.
We still have not had a proper explanation of why there should be an assurer. Incidentally, I need to apologise to the Committee and to Hansard: on occasion in the previous debate, I referred to an “assessor” rather than an “assurer”. I also apologise to the Minister. It was almost certainly down to my writing. The term “assurer” has a nice touch about it; it is as though the man from the Pru is coming round to collect your life assurance every now and again. However, it is not quite like that. What qualifications and what legal requirements does the assurer have to have? He or she is going to be employed by the union but approved by the state. This person may well be somebody with auditing qualifications but he or she is not an auditor, an accountant, a lawyer or a scrutineer in the sense of the ballot scrutineer, to which my noble friend referred. The post is an entirely new invention.
I go back to my earlier point. Why do we need this new invention? If the Government’s intention is to tighten things up, why do they not do that? Can we not rationally look at a proposition saying that the certification officer should have more powers or that the requirements on the union should be clearer or more stringent? However, that is not what the Government have proposed. They have simply proposed this intermediary, which is very strange.
I do not know how the general public will take to this. What is the assurer? It sounds to me like a third-rate television series: “The Assurer—Licensed to Check Membership Records”. Even more sinisterly, as in Nineteen Eighty-Four, it could be the kind of person who meticulously took notes of the proceedings of a committee in the old Soviet Union. He sat in the corner and nobody quite knew who he was, but you knew he was reporting on you, and you knew he was reporting to the Central Committee. Such a role is not of the organisation; it is not of the state; and it is not of a recognised profession; it is a new invention. To do exactly what? I do not think that, in all their interventions so far, or in what they have done with their advisers, the Government have come up with a clear definition of what this person is to do.
For the smaller unions—those with fewer than 10,000 members—the requirements in Clause 36 relate to an audit certificate. That is slightly more understandable. It has to be signed off by senior officers of the union. That is a procedure that many organisations know about. They have to bring in external auditors to check it and, if it is complicated, they have on occasion to ensure that their lawyers have seen it.
However, this new profession is not known to science or to society—or, so far as I am aware, is it known to legislation. If the Minister can point to a precedent I would be grateful, but it is not in any part of society that I am aware of, or in any part that bears any relationship to the context in which trade unions and employers operate.
If I were the Government, I would think that that best thing would be to delete this whole new proposition and instead get around to telling us clearly what this part of the Bill is supposed to do. Then we could have a rational debate. We might still disagree, but at least we would know what we were talking about. The main proposition here is to introduce into a very delicate and sensitive area—the issues of human rights and data protection have already been touched on, and will be again—an entity and a role that is unknown to all the players and unknown to the courts. If the Government were sensible, they would approach this in a cleaner way. They would make a proposition as to how they want unions to change their behaviour and what standards they want them to meet, and we would be able to see whether those were reasonable, rather than putting things in the hands of an entirely new concoction.
I therefore propose that Clause 37 should not stand part of the Bill. I hope that by the time we have completed our consideration of the Bill the Government will either have deleted it entirely or put something much simpler and more straightforward in its place.
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.
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.
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.
It seems to be not only a reasonable, moderate approach with benefits for ensuring that the electorate for ballots and other union processes are accurate, but a measure with potential future constitutional benefits. As other Members of your Lordships’ House may recall, I recently published a draft Bill with input from a number of parliamentarians at both ends of the building, and from across parties, to reform comprehensively the whole issue of party funding, including a donation cap. Labour Members have said to me regularly and consistently that for such a cap to work it would have to exclude affiliation fees from individual trade union members. If that is the case, surely it will be essential that everyone can have confidence in exactly how many of them there are before we can know that they have consented to pay into a political fund and that they want their money to go to the Labour Party.
That, of course, is not the purpose of this clause or this part of the Bill, since the Government are not yet committed to radical reform of party funding. But since the cross-party talks on that issue concluded in June, there have been some important signs of real progress that could make real development possible. After all, Mr Ed Miliband, having had his emissaries refuse to budge on the relationship with unions during the funding talks, has now made it clear that he does want to reform that relationship. Noble Lords will recall that he courageously made an important statement to that effect in July. He said:
“I do want any individual to be paying money to the Labour Party in affiliation fees unless they have deliberately chosen to do so. Individual Trade Union members should choose to join Labour through the affiliation fee, not be automatically affiliated. In the twenty-first century it just doesn’t make sense for anyone to be affiliated to a political party unless they have chosen to do so. Men and women in Trade Unions should be able to make a more active, individual choice on whether they become part of our Party. That would be better for these individuals and better for our Party”.
Labour Members cannot want both individual choice for members of trade unions on how they contribute to any party, and at the same time resist measures to make membership records more accurate and more robust. How can anyone suggest that individuals making that choice should be confident that it will be recorded in a sensible and accurate way year by year if they do not know that those records are up to date? Like many other measures in this Bill, I think that they will pave the way to make serious reform of party funding easier and more effective in the future. I hope, therefore, that the Leader of the Opposition’s commitments earlier this year will make it easier, too.
This part of the Bill may not be perfect, but that it is potentially an extremely important part of the jigsaw that will have to be put in place if the Leader of the Opposition’s proposals for a new relationship are taken forward after the conference that he is proposing next year. To that extent, these clauses and this part of the Bill must be welcome to those of us on all sides of the House who are genuinely determined to try to take big donations out of British politics.
My Lords, I think that at Committee stage I can make a point. I think that the noble Lord, Lord Tyler, was out of the Chamber at an earlier stage when I said that I did not believe that it was the Bill’s aim to attack the funding of one political party. The Minister should respond to the noble Lord, Lord Tyler. I agree with him on most of his issues, including potential reform of party funding. However, he suggested in his intervention here that the Bill is not about better measures for trade union members and more transparency but about taking a serious step towards undermining the funding of the major opposition party. If that is indeed the case, this is an entirely different sort of Bill and one that raises even more important issues than have been raised so far. I should like to hear the Minister’s views on that.
I think the noble Lord, Lord Whitty, presaged his remarks with , “before the noble Lord sits down”, so I presume that I am still on my feet. I do not think that the noble Lord was listening entirely to what I was saying. I was saying that if the Leader of the Opposition’s proposal for a new relationship between his party and the unions is to be on solid foundations, surely one of the most essential elements of that new relationship has to be accurate membership records for the unions. This part of the Bill is important in that new relationship. I hope, therefore, that the Labour Party and its leader will think very carefully. If they want to improve this part of the Bill, I am sure that the Government would be interested—although I cannot speak for them. It is important that everybody should have confidence in the accuracy of membership of the unions.
My Lords, I do not want to prolong this but the noble Lord said that this Bill was about Parliament defining the internal constitution of an independent political party. There may be all sorts of things wrong with the constitutions of all the political parties represented in this House, and we all have views on that, but when the Government presented the Bill, that is not what they said it was about. We have now gone into huge new territory as a result of the intervention of the noble Lord, Lord Tyler, and we need the Minister to come clean. I hope that he will make it absolutely clear that the Government’s intention is not primarily to knacker a leading opposition party. If it is, it is a far more serious attack on democracy than even we supposed.
That was interesting. What have we learnt? We have made two rather important steps forward down the path of trying to understand why we are here today and why the Bill is being considered. The first is the Minister’s, I think off-the-cuff, but rather interesting comment, that he resisted the idea that he had planted tanks on our lawn—presumably the trade union lawn—but that the wheels were on the lawn, even if the whole tank was not. I know about tanks, and they can fire very large and rather dangerous weapons; they do not have to be on your lawn to do damage but, if they are on your lawn, it shows real intent. I am afraid that that cat is now out of the bag, so we have that logged.
I thank the noble Lord, Lord Tyler, so much for being present for at least part of the debate, and for being able to enlighten us as to what exactly is going on in the corridors behind the party front that we call the coalition. As my noble friend Lord Whitty said, he has given us the answers to the questions that we have been asking the Minister all evening and to which we have not had responses. I asked 14 questions in my speech and got not a single direct answer to any of them. We now know that this is the set-up for the battle still to come on the question of party funding.
Well, well, well. Here we were thinking that we were talking about important issues such as rights, civil liberties, and so on, when the real debate was about trying to establish a hegemony in terms of party activity that would perpetuate the Conservatives and possibly the Liberal Democrats—I have my doubts about that—against the opposition party as it is presently constituted. Presumably, that gives credibility to the theory that I have heard advanced around the place, which is that this part of the Bill was originally considerably longer and dealt with the question of party funding in relation to the unions, but because of the demarche by the Leader of the Opposition. Mr Edward Miliband, it had to be changed considerably, and all we have left is a warming pan in the political bed that we are addressing. It keeps the issue on the table so that, when and if the parties opposite get their act together, they will move in on party funding in a way that, as we have heard from the noble Lord, Lord Tyler, is so crucial to the future of both his party and, presumably, the Conservatives. Okay, they can change the rules—but at least that is helpful to us in knowing how to address the Bill in more detail when we come back to it on Report.
The amendments tabled in my name and that of my noble friend Lord Monks were difficult for us to frame because, like my noble friends Lord Whitty and Lord Lea, we felt very strongly that what was proposed in Clause 37 was not appropriate and did not satisfy the test of being in response to significant public concern, which we put to the Minister in Clause 36, but which he failed to answer. We felt that it was appropriate in the spirit of this House to table amendments in an attempt to ameliorate some of the harm that would be done otherwise. Our hearts are with clause stand part on Clause 37, and we will consider very deeply over the pause whether to come back to it.
As my noble friend Lord Whitty said, nobody has ever heard of an assurer. It is not a term that appears in any dictionaries that I have consulted. We do not know what it is. It is obviously important that jobs are created in our economy. We are grateful to the Treasury for thinking that they should do this, and the fact that there will be 10, 15, 20 assurers is obviously a great blow in support of the economic policies that the party opposite are trying to put forward. Really, the job is not worth the candle. As my noble friend Lord Whitty said, it would be much better if we were discussing practical things that could address a particular public policy.
It may be that a better self-certification system could be an advantage; it may be, because we do not know what the problem is. That would at least give a frame to the debates we are having. It may be that additional powers for the certification officer would also be of use. These things are matters that we could discuss. Cloaking them, as we have had already in Clause 36 debates, in some spurious idea that there is some concern out there that would be remedied by having an initial arrangement, is simply not sufficient. The Minister and the Government more generally should think again about this whole area.
During the debate, we raised questions about whether the confidentiality of the material made available to the assurer would be sufficiently robust to satisfy the points raised by my noble friend in other parts of the debate about recruitment and retaining members. I am sure that the Minister accepts that, for the confidentiality of trade union registers, these are really important issues. For many employees, their membership, or lack of membership, of a trade union is an extremely private choice, and one which they desire to keep confidential for many legitimate reasons. Indeed, the strength and legitimacy of these concerns was recently underlined by HMRC’s decision to back down in a dispute with Equity about providing personal information relating to its members following a strong response by the union, supported by Liberty, calling in aid Article 11 of the ECHR protections. The knowledge that under the new powers, trade unions could be required to provide their membership register to a Government body for any “good reason” may act as a disincentive for workers to join unions, particularly in light of the current concern over union blacklisting.
As this test is highly subjective, there is the potential for the power to be subject to abuse. For example, the Government may decide they have a good reason beyond that of ensuring public confidence in accurate records—their present argument—for wanting to know whether particular individuals have joined unions, and under proposed wording will be legally entitled to inspect registers under the guise of checking whether the register has been properly updated to include the suspected new members. Can the Minister guarantee that this will not happen? It is evident that the stated aim of ensuring public confidence in the status of union registers is already adequately addressed by the current system, which gives members the power to challenge registers at any time and requires the appointment of independent scrutineers at the key points when ensuring accuracy of the registers is important. Introducing wide-ranging powers of investigation by Government bodies and third parties that do not owe any duty of confidentiality to trade unions, coupled with a second layer of external auditing, is surely an overly intrusive measure, which will have an unwarranted detrimental effect on the members’ trust in the confidentiality of the union registers. These measures clearly go beyond what is necessary and proportionate to achieve any legitimate aim behind the proposals, if indeed there is one at all, and may constitute a breach of Article 11 of the convention.
It should be remembered that the Government are introducing this series of measures at the same time as the full extent of the scandal of blacklisting in the construction industry is gradually coming to light. This is by no means the only industry in which members of a union may wish to keep their membership confidential for fear of being subject to discrimination. On another Bill, the Minister was forthright in his condemnation of blacklisting. Does he not recognise the possibility of double standards here? Will he comment on that?
My Lords, I will now respond to the group of amendments tabled to Clause 37, focusing on the role of the independent assurer, their appointment and removal, and the assurance process. I will deal with the question that the clause stand part of the Bill at the same time.
The Bill will provide greater visible assurance of the maintenance of trade union membership registers to members, employers and the wider public. Clause 37 gives credibility to that assurance by requiring independent scrutiny. Increasingly, a number of unions have become large organisations, serving a membership that frequently covers a variety of employers and workplaces. With this comes administrative complexity, as well as increased public interest in a union’s scope of influence. The nature of union membership data means that it decays easily, as has been mentioned. It is reasonable to think that someone moving house might forget to notify their union, for example. This is recognised in the existing duty for a union to maintain an accurate membership register,
“so far as is reasonably practicable”.
Unions currently provide assurance in relation to financial matters. Their accounts are given credibility as they must be validated by an auditor. I believe that when in future a large union provides an annual membership audit certificate assurance, it should constitute a similarly independent assurance. Clause 37 therefore requires trade unions with more than 10,000 members to appoint a qualified independent person—an assurer— who will issue the annual membership audit certificate, stating whether the union’s membership system complies with the duties set out in Section 24. The assurer owes a duty to the union to provide the certificate and to carry out inquiries as necessary. They have the right to access the membership register and other relevant documents, and to require information from the union. Exactly which information may be relevant will vary between individual unions. It will be for the union to agree terms with the assurer. Clearly, the union does not have to provide information to the assurer unless it is relevant to the register of members’ names and addresses.
Amendment 118E is one of several amendments that reflect concern regarding the handling of union member data. The Government understand the sensitive nature of union membership data, and have ensured that there are legal safeguards in place, both through existing legislation and introduced by the Bill, to protect it. I therefore hope that I can reassure noble Lords that their concern here is misplaced. The assurer will not be able to provide assurance of a union’s compliance with the duty in Section 24 without access to the membership register. However, this access is subject to existing legal protections, as well as additional safeguards in the Bill.
The amendment would make the assurer owe a duty of confidentiality to the union and its members, and would require the assurer to comply with the union’s obligations in the Data Protection Act. The amendment is unnecessary. The assurer will already owe a contractual duty of confidentiality to the union, as stipulated in the Bill. The assurer is prohibited from disclosing member data unless in specific permitted circumstances. Furthermore, the Data Protection Act will apply because the assurer, in performing their statutory functions, will be a data controller under the Data Protection Act.
I know that the noble Lord, Lord Whitty, has a lively mind, as he chose to provide his own definition for the assurer. If I read him correctly, it was perhaps someone from an insurance background who came to knock at your door—or perhaps it a tea-break TV programme. However, I will attempt to clarify the role of the assurer. It is essentially to give an assurance. It is important that the assurer has widespread credibility with unions, their members and the public. They will therefore be an independent and expert third party and the Secretary of State will make an order setting out either which organisations are eligible or listing the criteria that must be met for a person to be able to act as an assurer.
At the moment we anticipate these to be recognised professionals such as solicitors, auditors, or independent scrutineers. In discussions with unions and others during the summer, there was general agreement to these professionals. This is similar to the existing system for scrutineers. Currently scrutineers, which are eligible to oversee ballots carried out by trade unions, are listed in an order made by the Secretary of State. In the other place, the Minister for Employment Relations and Consumer Affairs committed to consult on the order setting out who would be eligible to be an assurer. Clause 37 provides an order-making power for the Secretary of State to set out who is qualified to be an assurer. A person is disqualified should their independence or capability be questionable. However, beyond these conditions it is for the union to appoint an individual and define their contractual terms. Union rules will need to be amended to include provision for appointing and removing an assurer.
Amendment 118F would remove the provision for individual unions to define in their rules a process for the appointment and removal of an assurer. The intention appears to be to require unions to comply with specific requirements similar to the appointment of independent scrutineers. This would significantly limit the discretion afforded to unions in their compliance with the new requirements. The amendment would also remove some of the minimum requirements in the clause for the appointment and removal of an assurer. The Government’s approach is to allow individual unions the flexibility to identify the best process for the appointment and removal of an assurer. This reflects the unique nature of trade unions and the fact that they vary hugely in size, type and complexity.
The minimum requirements set out in the clause are to protect the longstanding principle that unions are accountable to their members—a principle which has been supported by all sides during the progress of this Bill. The Government believe that it is important that the removal of an assurer is by a resolution of the union’s membership or delegates.
The clause also provides an exemption from the requirement to appoint an assurer for newly created unions and those with 10,000 members or fewer. For larger unions, it is appropriate that a credible independent assurance is obtained. However, we are anxious not to prohibit the creation or existence of smaller unions, and this is one of the key ways in which we are ensuring an appropriate implementation of the Government’s overarching policy objective.
Amendment 118G is another that reflects concern about the handling of sensitive data by the assurer and is intended to test the strength of the provisions for protecting this. The amendment would prevent the appointment or reappointment of an assurer in the case of a breach of the union’s confidentiality, a breach of their statutory duties or terms of appointment, or where there are reasonable circumstances not to reappoint. I agree with the importance of rigorous safeguards with regards to the handling of union data and with the view that an assurer who has breached these obligations must not be reappointed. However, the amendment is unnecessary as this is already achieved by current legislation and the Bill as drafted.
First, the Secretary of State will define who is qualified to be an assurer. Secondly, the union will have discretion both to select the assurer and to define the detailed terms of their role. If for any reason the union has doubts about the assurer’s suitability for the role, including their handling of sensitive member data, it can pass a resolution to remove the assurer.
Amendment 118H examines the nature of the assurance and effectively raises the level of the test that is assessed. Instead of giving an opinion on whether the union’s systems for maintaining the register are satisfactory, it requires the assurer to state whether the union is compliant with the duty in Section 24 to maintain a register that is accurate and up-to-date.
I understand that noble Lords may be keen to explore the assurance process further. The Government, while allowing unions flexibility to define this, is also keen to support a smooth transition and will therefore produce guidance. However, I am concerned that a consequence of the amendment would be to make the assurance process far more costly and onerous to the union, both in terms of the role of the assurer and in the test that the union must meet with regards to its register. A systemic assessment is the appropriate and desirable approach. The appropriate method for assessing the maintenance of membership records will differ hugely between a narrow, sector-specific union with 15,000 members, such as the British Airline Pilots’ Association, and a union with a million members across a range of employers and job types.
In practical terms, I envisage that the assurer will need to understand how the records are compiled stored, and updated. Specifically, they may look to establish whether the union collects the data accurately from new members, reminds members to keep their addresses up-to-date, makes it easy for members to do this and updates the register promptly once changes are notified. We also expect that an assurer will be interested in the data-cleansing processes that larger unions use for electronic databases. Some assurers may also choose to undertake a number of spot checks of the accuracy of a proportion of member entries. However, we have not specified this detail in statute because the requirements will vary between individual unions.
It appears that Amendment 118J is designed to ensure that a union will not be held accountable for inaccuracies that were outside of its control. The amendment would create an additional element of the membership audit certificate, requiring the assurer to state whether, in the assurer’s opinion, the employer had shared “timely and accurate” details with the union and whether,
“any other aspects … have been out of the control of the trade union in the maintenance of the membership register”.
This amendment is unnecessary for achieving the intended outcome. The existing duty to which the new provisions relate is for unions to maintain a register that is accurate and up-to-date but only “so far as is reasonably practicable”. This reflects the fact that it is impossible for union records to be 100% accurate all of the time. I am also concerned that this amendment could potentially increase the costs of assurance for the union by adding to the role of the assurer in this way.
Amendment 118K would limit the assurer to only being able to require information from the union’s data controller rather than the union’s officers. The intention here is to ensure that only those who are required to comply with the Data Protection Act will deal directly with the assurer. This amendment is unnecessary because wherever any individual handles sensitive data they will always be required to comply with the Data Protection Act. The flexibility in the clause as drafted is necessary because the assurer may need to approach both those responsible for handling member data and those who have experience of the processes by which this is maintained in providing the assurance.
The purpose of Amendment 118L appears to be to allow the assurer to approach the employer to request information, presumably to allow for instances where the employer may hold more recently updated information than the union. As I have already stated, the union is already sufficiently protected from being penalised for errors that are outside of its control by the wording of the original duty in the 1992 Act. I therefore consider this amendment unnecessary. I am also concerned about the assurer directly approaching an employer requesting information and the risk that this allows the employer a level of knowledge about union membership that the individuals may not be comfortable with. This matter was raised earlier by the noble Baroness, Lady Drake, who is not in her place.
Amendment 118M is another example of seeking assurance that sensitive union member data will not be placed at risk. The amendment states that the assurer must comply with the Data Protection Act. As I have set out already, this is unnecessary because the assurer will already have to comply with the Data Protection Act by virtue of their role. The assurer will also be subject to the additional confidentiality provisions that are introduced by the Bill and may be subject to other contractual terms that are agreed with the union.
Amendment 118N appears intended to strengthen the steps an assurer must take to prevent the disclosure of union member details. However, I cannot see how the amendment would work in practice. It would require the assurer to take “all steps necessary” rather than “all reasonable steps”, which seems to suggest that there are some steps which would be necessary but would not be reasonable.
Amendment 118P seeks to amend these permitted circumstances by preventing the disclosure of member data in any circumstances except with their consent or where required as part of criminal proceedings. The effect would be to defeat the Government’s policy intention of giving assurance of unions’ compliance with the existing duty in Section 24. The amendment as drafted would, in practice, prohibit the certification officer, inspector or assurer having the necessary access to the register as they would be unable to identify the member in order to seek their consent.
The additional protection of member privacy that is sought by this amendment, and by many others discussed today, is unnecessary. There has been broad speculation that the provisions in this part of the Bill present a potential risk to sensitive membership data. I wish to reassure the House that this concern is misplaced. The changes that we are making are modest.
The powers of investigation introduced for the certification officer are consistent with those he already exercises in other areas, and there is no evidence of a problem here. The certification officer, the inspector and assurer will all be bound by a set of strict obligations in their treatment of union member data. Furthermore, the proposals in the Bill will not allow other parts of government or employers unauthorised access to member data.
The noble Lord, Lord Monks, raised the issue of how the new regime could be justified on human rights grounds, and I would like to answer his question. As I have said before, the existing duty to maintain an up-to-date membership register has been around since 1984. Having agreed that a membership register is necessary, it follows that there should be an appropriate and effective enforcement regime. These provisions deal with inadequacies in the existing regime. At the moment a member cannot know whether there are widespread inaccuracies in the register, and the certification officer cannot know if there are inaccuracies because the union is under no obligation to disclose documents. If there is good reason to believe that a union may not be complying with Section 24 duties, it is important that this can be properly investigated. This investigation offers protection for union members. If the union is not complying with the overarching duty in Section 24, there is also the possibility that it is not complying with other obligations regarding the handling of sensitive data.
The noble Lord, Lord Whitty, and my noble friend Lord Tyler discussed the political affiliation of trade union members. The Government’s position is very clear. We have no current plans to look at trade union legislation more widely. We have offered to assist the Leader of the Opposition with his planned reforms of union member participation in trade union political levies, if he wishes. I just wanted to make our position extremely clear on that point.
The noble Baroness, Lady Turner, said that these provisions will act as a deterrent to prospective new union members due to the concerns about confidentiality. I do not believe that the certification officer’s access to the membership register will interfere with the individual’s right to join a union. The certification officer already handles membership data under the current regime and there is no evidence of a problem with his handling of sensitive data; nor is there evidence that this has acted as a deterrent to joining a union. Protections in the European Convention on Human Rights and in the Data Protection Act will continue to apply as they do now.
I hope that in my rather lengthy response I have answered all or nearly all of the questions that were raised. I may owe the noble Lord, Lord Stevenson, some answers to his questions. I ask the noble Lord, Lord Monks, to withdraw the amendment.
I want to ask the noble Viscount two questions. He has been slightly more explicit about the role of the assurer, but why is it not possible just to add it to the role of the auditor for the trade union? I am grateful for the offer of help to sort out the Labour Party’s internal constitutional matters, but the Minister did not reply explicitly to the point I was making. I would like to have it on the record that the Government do not intend this Bill to be the paving stone for reforming political funding; that is, an attack on the funding arrangements of the major opposition party. Can we have it made clear that that is not the motivation behind this part of the Bill?
In answer to the noble Lord’s first question, I went some way forward in attempting to define what the role of the assurer will be. We have made it clear that the assurer is a new role and we should stick with that. The noble Lord’s point was that it should be commuted in with the role of an auditor, but they have distinctly different roles. The best thing is for me to write to the noble Lord to clarify the position of the assurer. I should re-emphasise that the union has a say in choosing the assurer from the approved list, which is originally approved by the Secretary of State. The role is currently being drafted and put together. We have some clear key powers and safeguards that are laid out as part of that role, but it is work in progress and I owe the noble Lord a letter to provide further clarification.
On his second question, I do not wish to go any further—and there is no need to go any further—other than the reply that I have given him. I hope that it has reassured not only the noble Lord but noble Lords opposite in terms of the position.
We have had a very clear statement from the noble Lord, Lord Tyler, about what he thought this Bill was about. If the Minister cannot give a specific answer to the question of the noble Lord, Lord Whitty, will he turn to the noble Lord, Lord Tyler, and give him a straight rebuttal of what the noble Lord alleges?
I apologise to my noble friend for quoting at such length the comments in the summer of the leader of the Labour Party. The Labour Party and its leader will benefit considerably if this part of the Bill, in whatever form, is enacted as there will then be a much more secure and robust form of record of all the membership of the unions. That is the point I was making.
I thank the Minister for that disappointing reply and the noble Lord, Lord Tyler, for introducing an element which has not calmed or reassured anybody on this side of the House about the Bill. We thought that landing extra red tape on the unions was just an administrative muddle with a bit of political spite. Clearly, at least some on that side of the House have other motives in mind. It is rather difficult to follow the track. The Minister shakes his head, but that is not what he said. He had the chance to rebut the noble Lord, Lord Tyler, who introduced the party political funding item into this debate, and he has not done so. He had a chance to play the role of an assurer: he could have been a pioneer, but he blew it when he had that chance.
The Minister may have reassured some people. Employers must be fairly pleased. They will not be asked for any information. A big firm employing lots of people can screw up a payroll and so on. I see the noble Baroness, Lady Neville-Rolfe, in her place. Tesco has 140,000 USDAW members. I am not saying that Tesco would have screwed up a payroll, but if it did and somebody went to the assurer, it could not even be asked to provide information. The union will be the one in the dock.
Let us not pretend that this is some sort of friendly exercise, just tweaking the quality of union administration and helping people to get their records rather better when they are organising a construction site or when they are at the rough end of the retail industry. This is not about that at all, as the terms, to which we have drawn attention, on which an assurer can be got rid of involve going to the annual general meeting or a conference. It is almost as though this is a conflict and the assurer needs to be protected against what a normal auditor would be subject to, which is being fired by the decision of the board or, in the union case, the executive. The assurer is being protected on the suspicion that this person will be in conflict with the union.
That might be a reasonable assumption to make. The noble Lord, Lord Tyler, asked why people should be worried about it. It is because it will mean the job having to be done twice. Furthermore, he is an outside person who will get access to union membership records. The union prizes those records as well as their confidentiality. I will not press my amendment today. I will withdraw it, but noble Lords have not heard the last of this.
Amendment 118E withdrawn.
Amendments 118F to 118P not moved.
Clause 37 agreed.
Amendments 119 to 137 had been renumbered starting at Amendment 157.
Amendments 138 to 140 had been withdrawn from the Marshalled List..
Amendments 141 to 143 had been renumbered starting at Amendment 181.
Clause 38: Investigatory powers
Moved by Lord Monks
144: Clause 38, page 43, line 18, leave out from “union” to first “to” in line 19
My Lords, this group of amendments covers similar territory to the previous debate, so I shall not go over all that ground again. The amendments continue to emphasise the extent to which the Bill engages with both Articles 8 and 11 of the European Convention on Human Rights and EU and UK data protection requirements. Amendment 144 limits who can be directed to comply with requests from the assurer. We emphasise the need to do that centrally rather than it being done by some voluntary branch secretary or district office. The responsibility should be at head office with the person who controls data.
Amendments 147 and 150 would allow an inspector to request information from employers. We have just been debating that important issue, which employers are hiding from. I do not see how an assurer could do his job properly without that kind of right. Amendment 151 aims to ensure that the inspector owes a duty to the trade union that is employing him or her, as well as to the certification officer, especially not to breach confidentiality. The amendment seeks to disqualify from acting in this role an inspector who commits breaches. Amendment 152 again tightens the parameters of what an inspector has to do to maintain confidentiality—not just to take all reasonable steps but to take all steps necessary. Without being repetitious, I beg to move.
My Lords, I have four amendments in this group that relate to roughly the same territory—Amendments 145, 146, 148 and 149. In the previous clause we were concerned about the access of the assurer and those who approach the assurer to the membership records of a trade union. My amendments relate to the certification officer and the inspectors, or staff, of the certification officer.
Obviously, when there is a complaint from a member about the way in which his records have been dealt with, the certification officer or his agent needs to be able to look at that part of the records. However, the totality of the records of the trade union needs to be protected in almost all circumstances. My amendments propose that the documents that can be demanded by the enforcement authorities will not normally include the complete register of members.
On earlier amendments, my noble friend Lady Drake and others emphasised how important this is to civil liberties. When you are organising a trade union against employer hostility and the employer can go to the authorities to find out who in his workforce, or which potential recruits into his workforce, are members of a trade union, that is a serious restriction on the right to join a trade union with no detriment.
Taken one stage further, this relates to the issue of blacklisting. It has probably been a serious underestimate that some 2,000 people have been blacklisted over the years through the mechanisms established by certain companies in the construction industry. If all that the employers needed to do was get sight of a list of registered members of a trade union, or if there was a requirement after a third-party complaint for the certification officer to produce that list, the incidence of blacklisting would go well beyond the confines of the construction industry and the other areas where historically it has applied.
There is an important civil liberties, human rights and data protection issue here. I seriously counsel the Government to look again at the provisions here and to build in some safeguards themselves. The last thing that they want to do, I should have thought, would be to transgress data protection provisions. I hope that they would not wish to transgress the European Convention on Human Rights or the ILO conventions on the freedom to organise, join or not join a trade union. Yet these provisions in this part of the Bill and the role of the assurer move in that direction, and we need far firmer protections than are in the Bill to ensure that that is not exactly what will happen.
I know that the Government sometimes appear to be pretty nonchalant about international obligations to the EU and the convention on human rights. However,
I hope that in the area of employee protection this is not a policy emanating from the heart of government that states that these things do not matter. Protection from abusive employers and others over the right to choose whether to be a member of a trade union must be stated clearly in law. If the law is moving in a different direction to a new form of regulation, as this Bill purports to try to do, those protections need explicitly to be built into the legislation.
As my noble friend Lord Monks said, there are lawyers who say that the form of words in the Bill runs into difficulties on both the human rights side and the ILO convention side. I have no doubt that the Government could find a lawyer who would say the opposite. You can always find another lawyer, but as this is grey territory in which the Government could find themselves, instead of being a beacon for democratic and human rights, condemned in the councils of the world for breaching them, given that we are preaching democracy and freedom of association to less well favoured regimes in other countries.
I am not saying that the Government have yet got into that territory, but they are pretty close to it, and I hope that before the Bill disappears from this House we can see—from the Government preferably—some protections in this regard, not simply airy-fairy assertions that the Bill does not conflict with human rights legislation.
Will my noble friend comment on the dangers of blacklisting? An investigation carried out in Scotland by the former MP for Maryhill, Maria Fyfe, uncovered a list of people who were blacklisted. Among them was my name. I know that that might sound a bit ridiculous now, but that could have affected my employment and public record. Does my noble friend accept that it is quite right to emphasise the dangers of blacklisting?
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.
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.
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.
My Lords, at the outset I want to address the issue of blacklisting that was raised by the noble Lords, Lord Whitty and Lord McAvoy, as we take any allegations of blacklisting very seriously. It is unlawful under the Trade Union and Labour Relations (Consolidation) Act 1992 to refuse to employ a person because they are a member or not a member of a trade union or because they refuse to join or leave a trade union. It is equally unlawful for an agency to refuse employment services on those grounds.
In 2010, in response to the Consulting Association blacklist uncovered in 2009, the Government strengthened anti-blacklisting legislation and increased the penalties for unlawful processing of data. Data controllers can now be fined up to £500,000 for serious offences. Despite several allegations of new evidence of blacklisting, to date we have seen no evidence of this practice recurring. As noble Lords will know, the Scottish Affairs Select Committee and the Information Commissioner are both currently investigating the potential for ongoing offences, and the Government continue to take a close interest in this issue. I thank noble Lords for raising this particular point.
Let me now turn to the individual amendments that have been proposed. Amendment 144 seems intended to prevent the certification officer and any authorised person from being able to require any branch or section of a trade union from supplying relevant documents. Even if the amendment had the desired effect, I do not believe such a change would be necessary or desirable. The phrase,
“a trade union, or a branch or section of a trade union”,
is used elsewhere in the Trade Union and Labour Relations (Consolidation) Act 1992, for example in the context of financial investigations. I would imagine that a union would want the certification officer to make every effort possible to obtain relevant documents. If its record keeping is decentralised, a union’s head office may not know if there is a problem.
Amendments 145, 146, 148 and 149 are probing the protections for unions with regard to the new investigatory powers of the certification officer and any inspectors he may appoint. These amendments all seek to restrict access to a union’s register of member names and addresses. Clause 38 gives the certification officer the power to require a union to produce relevant documents where he believes there is good reason to do so. If the certification officer has appointed an inspector to investigate, the inspector can also require documents relevant to the investigation. In both cases, “relevant documents” is defined as including a union’s register of members’ names and addresses.
Noble Lords are proposing instead that “relevant documents” should “not normally include” the register. They go on to propose that production of the register may be required by the certification officer only where the High Court has concluded there has been a criminal offence, a breach of human rights, or substantial danger or damage to third parties or to national security. The noble Lords also state that the registers shall not be available to third parties. This represents a significant set of constraints. I fully understand the concerns driving the amendments. Sensitive data on who is a member of a trade union must not be treated lightly, but I hope that I can offer reassurance about the legislative protections already in place, as well as those included in the Bill.
In the first place, however, I need to be clear that access to the register by the certification officer or his inspector is an essential requirement of providing assurance. Establishing compliance with the legislation would be impossible without either the certification officer or the inspector being able to exercise a right to access the register itself. Without this, they are wholly reliant on what the union tells them. This is inadequate in circumstances where there is reason to believe there is a problem. Access to union membership data by third parties is something that already occurs. Both the certification officer and independent scrutineers, who are responsible for ensuring the propriety of ballot processes, often need access to membership data, but there is no suggestion this has led to any misuse.
Let me explain what protections are in place. The certification officer is an independent officeholder. He is also under a duty to exercise his powers consistent with rights conferred by the European Convention on Human Rights, including the rights to privacy and freedom of association. The certification officer is well placed to deal with sensitive data and there have been no problems in the history of the office of which we are aware. The Data Protection Act also applies to the certification officer and his inspectors so that they will be required to use any personal data, including data on union members, consistently with the protections it contains. The Information Commissioner has powers to enforce the data protection principles and can impose substantial fines for some breaches.
Amendments 147 and 150 would specifically allow the certification officer or his inspector to require names, dates of birth and national insurance numbers held by the employer to allow for cross-referencing to complete an investigation. It is not clear why the certification officer would need to request this information or why the inspector would require it. None of the comments we received during our targeted consultation over the summer suggested that this information was necessary. In practice, the duties under Section 24 of the 1992 Act do not require the union to keep members’ dates of birth or, indeed, national insurance numbers. More importantly, this could have the unintended consequence of widening the scope of sensitive information handled by the certification officer and the inspector for no particular reason. There is no reason why they should automatically have access to dates of birth and national insurance numbers during an investigation. Nor is there any reason why they should be able to require it from an employer.
Amendments 151 and 153 share a common goal of ensuring that there are appropriate protections to ensure that the inspector handles sensitive membership data properly. I will therefore speak to them together. I would like to reassure noble Lords that there are already strong safeguards in place to ensure that union membership data will not be compromised by an inspector’s investigation. The certification officer will use his discretion to appoint an inspector—as he does at the moment for inspectors appointed to investigate a union’s financial affairs. It will be for the certification officer to ensure that he appoints someone capable of fulfilling their responsibilities. The inspector will owe a duty of confidentiality to the certification officer. Extending that duty of confidentiality to the trade union could have the unintended consequence of interfering with the independence of the investigation.
Should the inspector breach the duty of confidentiality owed to the certification officer, it will be for the certification officer to decide how to deal with this. The officer will want to consider the circumstances and severity of the breach to decide what is appropriate. For example, if the inspector is a member of the certification officer’s staff—as they could be—the certification officer will have a range of options, from retraining to dismissal.
A third party appointed as an inspector is likely to be someone in a professional firm. 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.
Will the Minister respond to what many of 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.
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.
My Lords, I thank all noble Lords who took part in the debate. As the Minister gave his assurances about how seriously the Government take blacklisting, which has been so interestingly revealed recently, not least by my noble friend Lord McAvoy, I was minded that we might have found an actual role for an assurer. That is an assurer whose job it is to try to make sure that people in the construction industry are not blacklisted. Despite the increase in fines, the issue is finding out what people are doing. Somebody who went in to have a look at payrolls, private e-mails, and so on, could probably find that out.
That is a problem that the Minister acknowledges exists. We have not got a problem in the area of union membership and union membership records—or not one that is easy to do very much about, particularly in industries that are casualised. I will just say that the nature of the assurer in the union context is almost, “I’ve got to be reassured that your systems are okay”. That will be a rather adversarial position; not a consensual one, as the Minister is presenting it. It will be adversarial, especially when people are not exactly sure what will happen to the information. Why do they need that information if there is no trouble and no complaints?
The Minister’s point is that the certification officer and the scrutineer have access, so why not an assurer? The difference is in the nature of the relationship. The assurer would have a much more adversarial position than the one that those two have. Essentially, the assurer is saying, “I don’t really trust your records until I have had a very good look”. That is our major problem with it.
I will withdraw the amendment, but we will no doubt return to the matter later in our proceedings.
Amendment 144 withdrawn.
Amendments 145 to 153 not moved.
House resumed. Committee to begin again not before 8.36 pm.