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Second Reading

Part of Trade Union Bill – in the House of Lords at 8:40 pm on 11th January 2016.

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Photo of Lord Flight Lord Flight Conservative 8:40 pm, 11th January 2016

My Lords, notwithstanding all that has been said, this legislation is not intended to be hostile to the trade union movement but rather to modernise and address practices that are now outdated and sometimes inappropriate, particularly in the public sector and particularly with regard to the interests of consumers and taxpayers. My perception was that the Labour Party broadly accepted this, and hence in the other place did not table any amendments addressing the key elements of the Bill, but rather initiated a debate on conducting ballots in the workplace by electronic communication, which is important and which I personally support.

I support the important elements of the Bill: the ballot reforms in Clauses 2 and 3; the requirements for an opt-in for union members paying the political levy in Clauses 10 and 11; addressing facility time in Clauses 12 and 13; check-off arrangements in the public sector in Clause 14; and beefing up the powers of the Certification Officer in Clauses 15 to 17.

As we are all aware, the Bill requires that at least 50% of union members entitled to vote on industrial action should cast their vote for the ballot to be valid, and that, in addition, in important public services affecting the public, at least 40% of those entitled to vote should vote in favour of industrial action. The present arrangements, where only a simple majority of those voting is required, have led to abuse by militants, largely in the public sector and frequently inconveniencing the public. Trade unionists should accept that many members of the public are fed up with public sector strikes. Candidly, it is a disgrace that doctors are threatening to go on strike.

Of the days lost from strikes in 2014, 91% were in the public sector, which represents less than 30% of those in work and has both higher pay and better pensions than the private sector. Indeed, reform is needed more in the public sector than in the private sector.

Clause 10 provides that union members must make an active decision to contribute to political funds. Some unions, such as Unison, I understand, already have a tick-box. Clause 11 requires unions to include in their returns to the Certification Officer greater detail on what the political fund is spent on where expenditure exceeds £2,000. My reading of the legislation, however, is that failing to opt in to the levy will not necessarily mean that a member’s union contribution will be reduced by the amount of the political contribution. This could provide for a hidden increase in members’ subscriptions. However, of more moment, statute already requires an annual shareholders’ vote for companies to make political contributions, which should reasonably be matched by union members’ political levies similarly being voted on annually. Contrary to assertions made this evening, no banks or public listed companies make party-political contributions to any of the parties.

There has been a growing lack of distinction between trade union duties and trade union activities that qualify for facility time where there is no statutory requirement to pay union representatives for time spent on union activities. In practice, some union representatives are paid for undertaking activities as well as duties. It is surely reasonable that trade unions should pay for activity representation within the public sector organisations themselves, rather than the taxpayer shouldering this burden. In 2012-13, trade unions received £108 million in subsidies from taxpayers, plus a further £85 million in paid staff time and £23 million in direct payments. In 2013, at least 2,841 full-time equivalent public sector staff worked on trade union activities and duties at taxpayers’ expense. Out of 1,074 public sector organisations, 344 did not formally record facility time. This area needs tidying up and cleaning.

As noble Lords are aware, historically employers have deducted trade union subscriptions from a member’s pay and passed them on to the union. With direct debit facilities more easily available, there is no longer any real need for this practice. Some 972 public sector organisations—91% of public bodies—still provide check-off facilities. Only 213—22%—charge for this service. In 2012-13, these 213 bodies charged £1.77 million. If the other 759 public sector bodies were to charge, this would equate to £6.3 million—effectively another taxpayer subsidy. In today’s world, it is surely not the business of public sector employers to be processing staff dues. But if they do so, they should charge appropriately for the service.

Most legal services, including litigation, are reserved activities and can be provided only by a regulated person. However, the Legal Services Act 2007 was amended, for no particularly valid reason, to provide that trade unions—not other not-for-profit organisations—would be wholly exempt from regulation in the provision of legal services to their members. Experience with compensation claims suggests that trade unions need greater, not less, regulation in related territories.

At present, the Certification Officer, although called a regulator, has little more power than Companies House: in other words, they check that accounts have been received but not what is in them. So beefing up the powers of the Certification Officer in Clauses 15 to 17 is an important aspect of the Bill. It would be interesting to have more detail on what is intended here. For example, where there are potential frauds, the Bill needs to provide the mechanism for action and the Certification Officer needs to be adequately funded to act. The relationship of the Certification Officer to the Electoral Commission as regards the monitoring of union elections and the registration of political donations also needs to be considered. The provisions in the Bill regarding the Certification Officer need further consideration.