Examination of Witness

Trade Union Bill – in a Public Bill Committee at 12:00 pm on 15 October 2015.

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Byron Taylor gave evidence.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough 12:30, 15 October 2015

Our last witness this morning is Byron Taylor of the national office of the Trade Union and Labour Party Liaison Organisation.

Q 316

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

For the avoidance of doubt, I have already declared an interest, but obviously, I am a member of the Labour party and of the GMB, which is a member of TULO. Byron, could you tell us why you believe the provisions in the Bill break the established conventions on arrangements for political party funding?

Byron Taylor: The Bill is a fairly partisan attack on Her Majesty’s Opposition. It does significant damage to the funding of the Labour party, and I think that is in breach of existing parliamentary convention.

There is a long history here. Back in 1948, Winston Churchill said:

“It has become a well-established custom that matters affecting the interests of rival parties should not be settled by the imposition of the will of one side over the other, but by an agreement reached  either between the leaders of the main parties or by conferences under the impartial guidance of Mr. Speaker.”—[Official Report, 16 February 1948; Vol. 447, c. 859.]

That was reinforced by Margaret Thatcher in a Cabinet meeting on 9 February 1984, when she said:

“legislation on this subject, which would affect the funding of the Labour party, would create great unease and should not be entered into lightly.”

There is a fairly well-established history of parliamentary convention that says parties should not interfere in matters affecting the Opposition. Even as recently as 1998, the Conservative party’s submission to the Committee on Standards in Public Life stated:

“The Conservative Party does not believe that it is illegitimate for the trade union movement to provide support for political parties.”

The Bill, in its current format, is designed to do exactly that and to stop the trade union movement being involved in political parties. That is a really important concern, because there is not only an established parliamentary convention.

There are very solid grounds about the freedom of association: article 11 of the Human Rights Act 1998, the European charter of fundamental rights and, dating right back to 1948, the universal declaration of human rights, to which this country is a signatory, which says:

“Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society”.

Q 317

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

May I ask a specific question? There is an important point here about the distinction being made between the rules governing company donations and corporate donations to political parties and trade union donations to political parties. Could you say a little bit about the difference between the conditions that will be brought about by this Bill and what applies to, for example, companies making political donations—for example, the ability of shareholders to opt out of those decisions?

Byron Taylor: Indeed. There is no right for shareholders to opt out of political donations. A company is required to make a political resolution once every four years. A private company can do it by simple resolution. A public company does it at the annual general meeting, but the reality is that a single political resolution is made every four years.

If you contrast that with the requirements upon a trade union, there are significant differences. The trade union membership here in the UK already enjoys fairly substantial protection. We call it the triple lock. In the first instance, a trade union member can opt in or opt out of the political fund at any time, and that has been the case here in the UK since the 1940s. In addition, they can participate in the representative democracy of their trade union if they are unhappy with how a trade union is operating their political activity. They can participate in the structures of the union and seek to change how that activity is conducted. Finally, there are political fund review ballots, which operate once every 10 years. That is a simple one member, one vote ballot on the membership. The membership, should it so wish, can choose to disestablish any existing political funds,  so there are several safeguards for trade union members in the operation of political funds that are not comparable with those upon companies.

This is a critical point. If you look at some of the donations that come in from companies—the one I draw reference to is Bearwood Corporate Services, which made 177 donations to the Conservative party, totalling £5.3 million. If you look at the ownership structure, it goes back to two faceless companies in the British Virgin Islands. We have no idea who is behind those donations.

Q 318

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

Can you give us some practical examples of how trade unions are transparent about their funding—the amounts that are given and so on—at the moment, and why the provisions in the Bill simply are not required?

Byron Taylor: Trade unions are already required to publish any donations to a political party under the auspices of the Political Parties, Elections and Referendums Act 2000. In addition, they are already required to provide significant information to the certification officer about the number of members in the fund and the amounts paid into the fund and so on. There are already significant reporting requirements on the trade union movement about how political funds are expended. That is an important and clear point. What is proposed in the Bill represents a serious change to the way in which trade unions operate without any basis in evidence to do so.

Q 319

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

The Bill’s provisions would have to be adhered to within three months of Royal Assent and its commencement. Do you think that is a fair amount of time for any organisation to comply with such significant changes to law?

Byron Taylor: No, I really do not. Three months is an extremely short timescale. Let us bear in mind that trade unions are, primarily, industrial organisations; politics is very much a secondary function for them. If the Bill is passed unamended, we will be asking 4.9 million people to opt back into the political fund in a three-month period. To set that against a couple of other examples, the recent changes relating to plastic bags supplied by retailers were enacted in Ireland in 2002, in Wales in 2011 and in Scotland in 2012. The coalition Government initiated the change in the UK in 2013 when they conducted the regulatory impact assessment and the Deputy Prime Minister announced the policy in October 2013. Companies have had a significant time to be aware that the changes are likely to happen, and as of 2013 they had two years to prepare for that.

Another example is self-assessment; everyone who completes a self-assessment is required to submit their returns by the end of January each year. They have a clear 12-month notice period that they must effect that change, and a significant Government-sponsored media campaign is run to inform people that they need to get their returns in by 31 January. If they fail to do so, a fine of £100 is imposed. Despite all those safeguards, this year alone, 890,000 people failed to fill in their self-assessments. We are asking 4.9 million trade unionists to opt into the political fund in a three-month period dated from Royal Assent, and I think that is unacceptable. There is also the issue of retrospection. Those people  joined a collective organisation and opted, as part of their decision to join a trade union, to become part of the political fund. I see no clear public interest test that requires trade unionists to opt in to the political fund of their trade union when they have already joined that trade union in the past, and I fail to see what reference the Government are making to human rights on this matter. In 2002, the Solicitor General referred to the public interest and human rights when he spoke of retrospective legislation, and I believe that the Bill is such legislation.

Photo of Nicholas Boles Nicholas Boles The Minister for Universities and Science, Minister of State (Department for Business, Innovation and Skills) (Jointly with the Department for Education)

We do not intend to intrude upon the conversation among members of the Labour party, who seem to be having a very good time.

Q 320

Photo of Chris Stephens Chris Stephens Scottish National Party, Glasgow South West

Just a couple of questions, Mr Taylor. Can you confirm that, in many cases, the workplace will be multi-union and that some unions will be affiliated to the Labour party, and some will not? Therefore, many people already have the choice, because they can choose which trade union to join depending on whether they want to fund the Labour party or not. I should have congratulated you on the fact that you separated Scotland from the UK when you referred to plastic bags, and I welcome that.

I must emphasise to you, as someone who is a trade union activist, that if trade union members are uncomfortable with the trade unions’ relationship with the Labour party, it is up to them to raise that, and there are plenty of democratic opportunities for them to do so. It is also up to the Labour party to justify to the trade unions why it should be funded. The political funds are not just about the Labour party; there are many organisations that receive money from political funds, such as HOPE not hate, so what impact would there be on them?

Byron Taylor: Multi-union representation in the workplace is a reality. I used to organise British Bakeries down in Avonmouth docks, where we had seven trade unions on site. There are a clear number of trade unions, and members can join the appropriate one as they see fit. As for the political fund and its use, it is important to recognise that trade unions do not simply use the political fund for the purposes of the Labour party. There are 52 trade unions here in the UK, 13 of which are affiliated to the Labour party. In the other trade unions, there are a good couple of million people out there paying the political levy to allow their union to conduct political activity. That is what the political fund is for; it is for the conducting of political activity.

There is a proud history for the trade union movement of political activity: the campaign for the eight-hour day, the minimum wage, universal suffrage, campaigns for the NHS, campaigns for housing, peace movements after the second world war—all those things have been supported out of the political fund, and they are appropriate uses for it. What is being proposed is to strip trade unions of that political voice to a great extent. My real fear about this Bill is that it is designed to reduce participation in political activity. Such activity is well established. The European Court ruled just eight years ago that it is perfectly legitimate for trade unions to conduct political activity. The Court said:

“They are not bodies solely devoted to politically-neutral aspects of the wellbeing of their members, but are often ideological, with strongly held views on social and political issues.”

That is a legitimate role for trade unions.

Q 321

Photo of Jo Stevens Jo Stevens Labour, Cardiff Central

Can I ask you a question about clause 10? Some people are arguing—wrongly, in my view—that clause 10 equalises the arrangements, mirroring the situation in Northern Ireland. Do you agree that the provisions in the Bill go well beyond the current practices in Northern Ireland, which require trade union members on one occasion to contract into paying into the political fund—I repeat, on one occasion—and they are not required to renew their opt-in?

Byron Taylor: Sorry, can you just repeat the last bit?

Photo of Jo Stevens Jo Stevens Labour, Cardiff Central

There is a suggestion that clause 10 mirrors the arrangements currently in place in Northern Ireland about opting in. The question I am asking is: do you agree that the provisions in this Bill go well beyond what is currently in operation in Northern Ireland? Trade union members there only have to opt in on one occasion.

Byron Taylor: Indeed. The Northern Ireland situation is a leftover from the 1920 provision that moved towards an opt-in. Given the unique historical and political circumstances of the Province of Ulster and Northern Ireland, I think there are particular reasons why that exists in the current format.

The Bill, as it is currently proposing to change the law here in the UK, is significant. When people join a trade union, they will have to opt in. If they are already members of a trade union and already paying the political levy, they will have to re-opt back in. We will find ourselves in a situation where people have to renew that every five years. I fail to see why that is required in a fund where you can opt in or opt out at any time, where you have the representative democracy of the union and where you have a 10-yearly political fund review ballot. It seems to be another over-extension. We are going to be in a situation where you can opt in or opt out when you first join the union, you can opt in or opt out at any time, you have to renew every five years, and you have to renew through a political fund ballot every 10 years.

What level of regulation is required on trade union political funds, because they clearly are the most highly regulated political funds in the western world? If you compare them to some of the transparency arrangements that apply to companies, I think they are overbearing. For example, there are unincorporated associations that donate to the Conservative party—one that springs to mind is the Carlton Club, which has donated £1 million to the Conservative party in the last five years—and there is no clarity over who those people are who are paying those moneys and raising those kinds of sums. That is just one example.

Q 322

Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice)

From your comments earlier, it sounded to me—I do not want to put words in your mouth—as though you were basically saying that the opt-in system that has been proposed within the time period is effectively unworkable. I would be interested in your comments on that.

Byron Taylor: I think it would be very difficult for the trade union movement to conduct those kinds of operations in a three-month time scale.

Q 323

Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice)

What would be the impact of that if it were implemented?

Byron Taylor: There are questions about what is actually being proposed and the format. For example, on the face of it, the Bill requires written communication, but I am not sure if that is what the Bill actually means. One of the things I would particularly like clarity on in the coming weeks is what is the requirement. If it is implemented in the format that is suggested in the Bill, I think you are going to see a significant drop in political fund payers in the trade union movement. The net effect of that will be to remove a whole series of people from the political process in the UK. At a time when we are talking about declining engagement and how we can encourage people to be more engaged in the political process, what we are doing is reducing the number of people who actively engage in politics in some format. That is very bad for democracy in terms of participation and in terms of the funding gap it will create in British politics.

Returning to the Churchill convention, which requires parties not to interfere in matters of other parties without consent, we are going to find ourselves in a situation where the Labour party struggles to compete in electoral terms with the Conservative party.

Q 324

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

I am intrigued that the Government Minister and the Whip have been going round gagging their Members from asking questions about what is a significant part of the Bill. Mr Taylor, why do you think Government Members are unwilling to ask questions about a significant part of their own Bill?

Photo of Steve Barclay Steve Barclay Assistant Whip (HM Treasury)

On a point of order, Sir Edward. It would be completely unparliamentary for any Member to seek to gag another Member. I assure the Chair that no such attempt to gag Members has taken place. I request the hon. Gentleman to withdraw that suggestion.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

The point has been made. Let us just live in peace and harmony.

James Cartlidge rose—

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

I see a Conservative Member wants to be ungagged.

Q 325

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

May I finish my question? Mr Taylor, are you surprised that there appears to be very little Government interest in what is a significant part of their own legislation? What do you think the reasons for that might possibly be?

Byron Taylor: That is a very interesting question. As I said at the start of my evidence, as far as I am concerned, this is a partisan attack on Her Majesty’s Opposition and forms part of a broader attack on civil society. If you look at the concerns being raised about charities’ political campaigning or what is being said about the BBC—it is a deeply partisan attack. It is deeply damaging to our society, and I have real concerns.

I return to the Committee on Standards in Public Life hearings in 2011. Those of you who have read the transcripts will know I gave evidence to that Committee. The argument put forward by the Conservative party and the Liberal Democrat party at that point was that there should be individualisation of political fund payments. The Committee took the majority view that

“such a condition would be a disproportionate intrusion into the constitution of the relevant trade unions”.

That is a really important principle to me—freedom of association and the right of trade union members to come together, form a trade union and determine their own rules and constitution. The Bill is interfering directly in that human right, which I think Amnesty and Liberty made reference to yesterday.

Q 326

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

I want to raise a specific technical point. Mr Taylor, you said this is an attack on funding and that funding will go down. Surely, if people have to opt in, funding will only go down if they had not wanted to opt in in the first place.

Byron Taylor: Funding will go down because people have busy lives and the trade union movement is then required to contact every single member to require an opt-in, when many people already believe they are opted in.

Q 327

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

But if they have been happy with that donation, your donation levels will not be affected.

Byron Taylor: Many people are happy to contribute to the political work of their trade union. It is a fairly well-established principle among trade union members that they pay to the union, and in return they expect good advice and representation.

Q 328

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

But you seem to be saying, “If we actually ask people whether they want to contribute, we’re worried we’re going to find out some of them didn’t want to.” You are admitting that.

Byron Taylor: No, I am absolutely not, because we have not put it to the test yet.

Q 329

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

Then funding will not go down, on that basis. If they are all happy punters and happy to contribute to the Labour party, your funding will not go down.

Byron Taylor: You are saying this is not about the Labour party, and that is your immediate problem, because what we are talking about is the opt-in to the political fund of the trade union movement. What is going to happen is that trade unions are going to have to spend an excessive amount of time and resources re-contacting all of their members to ask them to sign back into the political fund in written form. This is a really important point: it is being proposed that everybody will have to do this in writing. In an electronic age when people should be allowed to communicate via telephone, internet or other forms of communication, this Bill is proposing that everybody has to sign a piece of paper. That will drive down participation; we know that for a fact.

Q 330

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

Forgive me. You talk about people’s rights. You are suggesting that your funds are going to go down. That must mean that some people who are currently contributing would not want to be contributing. In other words, by defending that, you are defending the fact that someone should involuntarily be contributing to a political party against their rights. You are talking about rights; you should surely accept that point.

Byron Taylor: When people join a trade union, there are things that go with being a member of a trade union, including its political work. Let us go back to the history of the opt-out, and 1913, and the legislation and  why it was primarily introduced. The opt-out was introduced in 1913 to ensure that those workers who were working in closed-shop arrangements, who did not want to participate in the political activity of the union, had a chance not to do so. In a closed-shop arrangement, union membership was part of the contract of employment, and therefore, they had to join the union, so it was always seen as a way of protecting a very small minority of people who did not want to participate in the political activity of their trade union. We are now in a situation where the Government are trying to change that and say that everyone has to opt in. When people join a trade union, they join the collective and they participate by the rules of the collective. I am unaware of any other membership organisation that an individual can join where they can opt out of a portion of the rules of the organisation they are joining. This is really strange.

Q 331

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

For my last point, I will simply repeat the point that I made, because it is fundamental. If they are all happy donating, you will not be losing any funds when they are asked whether they wish to opt in to making a donation.

Byron Taylor: Do you mean a donation or a contribution to political funds?

Q 332

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

We all know what we are talking about.

Byron Taylor: I am not sure I do, but I would like to come back to what happened in 2008 with the Office of Fair Trading. The Conservative party lodged a complaint on this very matter with the OFT through Jonathan Djanogly MP. The OFT ruled:

“In the present case, we do not consider that trade union members are obviously vulnerable to deceit resulting from the way in which unions collect contributions to the levy. The levy has featured prominently in political discourse and news reporting for a very long time. We would expect to take action if we had evidence that large numbers of consumers are unknowingly entering into an unwanted financial commitment from which they are subsequently unable to extricate themselves. We do not at present possess evidence to this effect in relation to the political levy on trade union members.”

This has been a feature of political debate since the late 1940s. There was the Donovan commission in the 1960s. Look at the reviews of party funding that occurred in the 1990s and in 2004, or the Hayden Phillips review in 2006, or the Committee on Standards in Public Life in 2011. The question that comes back is always, “Where is the evidence that some kind of deceit is being practised?”, because it simply is not there.

If we are going to question the purpose of the legislation, may I draw reference to the Conservative Minister of Labour from 1924?

Byron Taylor: You may have been minus 50, but this legislation was produced in 1913, so it is totally relevant. He said, in a private memorandum, that the

“major part of the outcry against the political levy is not motivated by a burning indignation for the trade unionist, who is forced to subscribe to the furtherance of political principles which he abhors. It is based on a desire to hit the Socialist party through their pocket…we should not delude ourselves as to our intent.”

My question is: what has changed for the Conservative party?

Q 333

Photo of Julie Elliott Julie Elliott Labour, Sunderland Central

I have referred to my entry in the Register of Members’ Financial Interests as a member of the GMB and the Labour party, but, in the interests of complete clarity, I was also an officer of the TULO organisation in the northern region for many years before becoming a Member of Parliament.

Byron, can I take us back to the practical impact of this proposed legislation on trade unions and, indeed, the Labour party? Logistically, can you outline how you think this proposed legislation will impact on trade unions, in terms of getting repeated sign-up and collections of moneys, and particularly on the smaller trade unions, which often have very few members of staff? Can you outline what you think the implications of the Bill will be for those people?

Byron Taylor: The implications of the Bill are significant. It is going to impose a great burden of bureaucracy and red tape on the trade union movement. As I have alluded to, trade unions are primarily industrial organisations and focus the majority of their work on industrial activity and dealing with industrial complaints. As for the idea that trade unions will have to divert massive resources—and it will be massive resources—to try to conduct the operations in the way that the Bill envisages, in writing, that is going to be a substantial drain on trade union resources and activities. That will impact heavily and introduce inefficiencies into wider industry, because trade unions are the bodies that are there to negotiate and to ensure that the industry works properly. To introduce this will divert union resources substantially.

If you look at the smaller affiliates of the Labour party or of any small trade union that is now forced to operate in this fashion, they will find themselves caught up in an endless cycle of bureaucracy, seeking people to opt into the political fund, renewing the opt-in and then conducting the political fund ballot. Looking back at the Better Regulation Task Force in 2002, it ruled that trade unions were already over-regulated in the field of political fund activity.

Q 334

Photo of Julie Elliott Julie Elliott Labour, Sunderland Central

May I just follow that up with one quick, straightforward question? In the legislation that trade unions operate under, in particular employment law legislation, “reasonableness” is applied everywhere. Would you regard this proposed legislation as reasonable?

Byron Taylor: Would I regard it as reasonable? I come back to the point made by Mr Stephens, and my question would be, is it proportionate, is it reasonable? No, it is not. If there is really some concern about how political funds are being operated in the UK—although there is no evidence to show that there is any concern—is it a proportionate response to ask 4.9 million people to re-opt back into the political fund of their trade union? The answer is no, this is not a proportionate or reasonable response. On that basis, it is clearly a partisan attack on Her Majesty’s Opposition, designed to reduce funding and participation. I fail to see how the Bill increases participation at any level, both in the industrial elements, which I do not intend to speak about, and in the political elements—this Bill seems determined to drive down participation. Where are the means of communication that allow trade unions to talk to their members electronically or via telephone? What we are doing is enforcing a 19th-century form of communication on a 21st-century industry, which is bad for business and bad for the trade union movement.

Q 335

Photo of Ian Mearns Ian Mearns Chair, Backbench Business Committee, Chair, Backbench Business Committee

Mr Taylor, have you ever made a contribution to the Conservative party by means of buying a good or service from a company whose profits from that transaction were then used to make a donation to the Conservative party?

Byron Taylor: I have, and I had no opt-out from that.

Q 336

Photo of Chris Stephens Chris Stephens Scottish National Party, Glasgow South West

Just one quick question, Mr Taylor. When it comes to legislation affecting elections, party political administration and funding, or trade union political funding, do you agree with me that it should have the agreement of either all the political parties represented in the House of Commons or a majority of the political parties represented in the House of Commons?

Byron Taylor: Yes. This comes back to my initial point about the Churchill convention, which has existed in UK law for the best part of 80 years, and I will say it again:

“It is a well-established custom that matters affecting the interests of rival parties should not be settled by the imposition of the will of one side over another, but an agreement reached either  between the leaders of the main parties or by conferences under the impartial guidance of Mr Speaker.”—[Official Report, 16 February 1948; Vol. 447, c. 859.]

Even Margaret Thatcher realised the danger of interfering in the affairs of other parties. What is being created here is a circumstance in which the party of government is seeking to undermine the party of opposition. That is a very dangerous place to go in our democracy. It is deeply concerning that we find ourselves here, discussing a matter of this kind, when there is no clear agreement between the main parties.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

I think that is it. Thank you very much, Mr Taylor, for your evidence.

Ordered, That further consideration be now adjourned. —(Stephen Barclay.)

Adjourned till this day at Two o’clock.