Clause 11 - Publication requirements

Trade Union Bill – in a Public Bill Committee at 3:30 pm on 22 October 2015.

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Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills) 3:30, 22 October 2015

I beg to move amendment 44, in clause 11, page 7, line 16, leave out “£2,000” and insert “£100,000”.

The amendment would raise the threshold for providing details of items of political expenditure in a union’s annual return to the Certification Officer from £2,000 to £100,000.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

With this it will be convenient to discuss the following:

Amendment 45, in clause 11, page 7, leave out lines 18 to 24 and insert

“shall report the overall amount of expenditure in a year to any one organisation.”

The amendment would require a union’s annual return on political expenditure to the Certification Officer to report the overall amount of expenditure.

Amendment 98, in clause 11, page 7, line 25, leave out sub-paragraph (3).

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

I do not intend to detain the Committee long on this clause, but it concerns an important matter. Despite what the Minister might think, trade unions play a vital role in a dynamic British economy and are an integral stitch in the treasured patchwork of society. Whether they are standing up for workers’ jobs in Redcar or trying to save British steel making, trade unions are more important now than ever before. They play a pivotal role right across the UK in the work of organisations such as HOPE not hate,  which has done incredible work in my constituency on electoral registration and tackling extremism. Clause 11 seeks to interfere with and limit that role.

One might conclude that clause 11 on its own sounds reasonable and simply ensures increased transparency. However, alongside the changes the Government made in the previous Parliament in the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014—we call it the gagging Act—it forms part of a wider attack on our democracy. The 2014 Act has hit charities and campaigners hard, limiting their right to fight for important causes while allowing professional lobbyists and their funding to escape scrutiny. Expert organisations that have a vital contribution to make have been left unsure whether they are allowed to speak out, use funds and so on. The Government should not be afraid of criticism or lively debate. As I have said before, the Trade Union Bill is simply a dodgy sequel to the gagging Act.

Clause 11 provides the certification officer with new, wide-ranging powers to investigate how unions’ political funds are used and where the money goes. If the clause is accepted, a union will be required as part of its annual return to report to the certification officer on how all the expenditure from its political fund has been used, who it was paid to and for what purpose. The categories of spending include contributions to or the payment of expenses for a political party, provision of services or property for use by or on behalf of any political party, funding of a ballot by a union in connection with election to political office, the funding of conferences or meetings by or on behalf of a political party and party political electioneering material or products.

This clause, alongside so many other measures, will simply create significant new administrative burdens for trade unions, wrapping them further up in the blue tape that we have mentioned many times previously. It will also enable the Government to monitor how trade unions spend their resources and will invite additional public scrutiny, as political fund expenditure is likely to be published on the certification officer’s website alongside a union’s annual membership return. Therefore, will the rules apply to not only unions, but employers associations?

I want the Minister to explain the clause’s purpose, because much of the information is already out there in the public domain. I have referred to my entry in the Register of Members’ Financial Interests before, and it is clear where donations have been made. Trade union money is extremely transparent. The Labour party reports on it and the Electoral Commission looks at it. To comply with the other Acts that I have referred to, trade unions often make what they are spending very clear. USDAW’s “Freedom from Fear” campaign was captured by that last year because it was in the long period running up to a general election. I want to understand the real purpose behind the clause.

Let me turn to amendment 44. The new requirement to report to the certification officer on political fund expenditure will apply to unions spending more than £2,000 a year from a political fund. Clause 11, which will insert new section 32ZB(3) in the 1992 Act, will permit the Government to increase, but not to reduce, the threshold through regulations. Again, as with so many other examples in the Bill, we have not seen those regulations. Amendment 44 would increase the minimum threshold over which unions are required to report on  items of political expenditure from £2,000 to £100,000. It is about reasonableness and balance. It is about allowing as much scrutiny as possible, but not overly intrusively interfering in the operation of these organisations.

Amendment 45 would provide that unions report only on the overall amount of expenditure in any one year to any one organisation, rather than in extreme detail on the purposes of each individual contribution. The amendment highlights how the Government’s proposals mean that political expenditure by unions will be subject to much higher levels of scrutiny than that of other political donors. Again, the question is: why this rule for one but not for others? If the Government were producing a wide set of changes to political party funding transparency or to political funding in general—changes that applied, for example, to corporate donors and others—and if the unions were part of that, I think the public would understand more, but they are not doing that. This is a pernicious measure designed specifically to target trade unions.

Amendment 98 would remove the Government’s power to increase the minimum threshold over which unions are required to report on items of political expenditure from £2,000. Given that we have not seen the regulations and that this is one of the “Trust us, we’re the Government” clauses of the Bill, I want to understand whether—and, if so, when—they plan to increase the threshold, because the power could be used to compound even further the effects of this discriminatory clause, which affects only trade unions and not other political donors.

Photo of Julie Elliott Julie Elliott Labour, Sunderland Central 3:45, 22 October 2015

I have two brief points to make, because I know we are short of time. I want to speak in support of our amendments. The proposals in the clause are over-bureaucratic and, quite frankly, over-intrusive into the workings of trade unions.

The money raised in political funds is the most regulated money in politics anywhere in the world. It is transparent. If anyone looks at trade unions’ returns, they will see where the money has come from and where it is spent. To get to the level of declaring exactly what under £2,000 is spent on is absolutely ridiculous. Trade unions make other declarations and people make declarations about where trade union money is spent, and that links into the political funds. It is not just the political funds that have to make declarations; the Electoral Commission also gets spending declarations from trade unions.

A candidate who gets support from a trade union over a certain amount of money has to declare that to the commission. Election returns to returning officers throughout the country will also clearly state when trade unions have spent money on specific campaigns. What the clause asks for is already in the public domain, so I think it is nothing but politically motivated.

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

As my hon. Friend stated, information on all the funds that go directly from trade unions to political parties for campaigning is already open and transparent. What this clause does is put a fetter on trade unions’ other political spending for campaigns that will be imposed on no other part of civil society.  I do not understand what is special about trade unions as membership organisations as opposed to organisations such as the women’s institute or the Mothers’ Union. It is an odd situation where a trade union has to be fettered to the extent that it has to release detail about every single campaign that it is involved in.

Photo of Julie Elliott Julie Elliott Labour, Sunderland Central

I thank my hon. Friend for his intervention. As I have said, there is no reason for this clause other than political motivation. If the Conservative party in government wants to look at how political parties are funded, I urge it to use the system of all-party talks that has worked for decades.

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)

I will try to reassure Opposition Members on a few points. They seem to be suggesting that this is somehow an egregious singling out of trade unions to require a level of transparency that does not apply to anyone else.

First, let me assure the hon. Member for Cardiff South and Penarth that employers associations will be covered by the provisions in clause 11. Even more importantly, companies are already required to declare the details of spending on political activity above £2,000 per annum and have been for a long time. To require the same of trade unions therefore does not seem unfair or unreasonable.

There is currently inconsistency in the level of detail provided in union returns on political expenditure. Some unions are transparent and provide detailed information in their annual returns to the certification officer. We want the example of those unions that provide clear information to be followed by all. That is why we propose that where political expenditure is more than £2,000 per annum, expenditure should be broken down to detail the different items of spending. An equivalent provision applies to companies.

Photo of Jo Stevens Jo Stevens Labour, Cardiff Central

It seems implicit from what the Minister has just said that the Government believe that some trade unions are not being transparent in their declarations. Is there any evidence to back up that assertion?

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 want to ensure that all unions are declaring everything above £2,000, which is what the provision states, and currently not all unions do so. Amendments 44 and 45 would undermine the transparency that the clause seeks to achieve.

Let me turn to amendment 98. We propose that the Secretary of State may make regulations to increase the amount from £2,000. That will ensure the legislation is future-proofed. The regulations will not allow the amount to be decreased, which would make the provisions more onerous; it can only be increased. I am a little puzzled by the shadow Minister’s concerns, because all that would do is change the level of granularity required in trade unions’ declarations to reflect either inflation or changing circumstances in society. I therefore him urge hon. Members not to press their amendments.

Amendment, by leave, withdrawn.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 9, Noes 7.

Division number 23 Decision Time — Clause 11 - Publication requirements

Aye: 9 MPs

No: 7 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly agreed to.

Clause 11 ordered to stand part of the Bill.

Sitting suspended for Divisions in the House.

On resuming—