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Blacklisting (Construction Industry)

Volume 490: debated on Monday 23 March 2009

Motion made, and Question proposed, That this House do now adjourn.—(Ian Lucas.)

I am pleased to have secured this Adjournment debate on blacklisting, because the practice impacts on the health of the construction industry and is accordingly a matter of public concern. The Government are the sector’s largest client, so they have some responsibility to ensure that the working practices of the 1930s have no place in our modern construction industry. I hope that the Minister will take action to encourage the industry to change.

I want to make four brief points. The first is about the impact on the health and safety culture of the industry, and the second is about the climate of fear that discrimination creates. My third point is about the fact that many of the companies using the list kept by the Consulting Association were major companies working on publicly procured projects. Finally, I want to suggest to the Minister that, along with other measures, section 3 of the Employment Relations Act 1999 should now be implemented.

The construction industry is important. Before the recession, it provided employment for more than 2.8 million people. It contributed 8.7 per cent. of the UK economy’s gross value added in 2006; to put that into perspective, I should say that that is twice that produced by the energy, automotive and aerospace industries combined. Construction has a huge impact on the UK economy. It is vital, and that is why we need a world-class construction sector that uses the best employment practices.

The health and safety record of the industry is worrying. Construction, for example, accounts for almost one third of workplace fatalities in the UK. The year 2006-07 saw an increase in the number of fatalities from 60 to 77, and in 2007-08 there were 72 fatal injuries. More than half those deaths resulted from a fall or from a worker’s being struck by a falling object.

Workplace safety representatives are an essential tool in helping to improve the health and safety culture on site, but the blacklisting of people who take on the job militates against that. The Government have an important role to play in the issue, and workplace safety representatives will need to be reassured that they will not be blacklisted if they do their job properly. I shall return to that issue later.

Does my hon. Friend agree that health and safety should be part of the criteria when construction companies bid for Government contracts? The Government should look at the companies’ track records on health and safety to flush out those that do not regard the issue as important.

I thank my hon. Friend for that comment, which I agree with. The Construction (Design and Management) Regulations 2007 place an onus on the client to include health and safety in its criteria, and given that the Government are the biggest client in the public sector, they have a responsibility to take on and ensure health and safety.

Between 2004 and 2007, a health and safety advisory scheme operated in the construction industry, run jointly by the Union of Construction, Allied Trades and Technicians and employers. That scheme, which included the Health and Safety Executive, was considered a success, but it has run into the sand because no more funding is available. Clearly, getting it up and running again is important for safety in construction. Bearing in mind that the 2007 regulations place a responsibility on Government, it is definitely something that they should pick up and put in place.

I recently spoke with a construction worker whose name is on the blacklist; I do not want to use his name for obvious reasons. He told me that he believed that the blacklisting was much more insidious than merely a list being kept by the Consulting Association. He had worked all his life in the industry and had been blacklisted for 35 years, basically for standing up for trade union rights, particularly in health and safety. In his view, what happens in the industry is that lists are exchanged from company to company. He came to that conclusion having been moved from one job to another. When he had been on site for only two or three days, he would be visited by the site agent and told that there was no work there for him. That caused him and his family enormous hardship, because he was continually moving from job to job and never having long-stay employment. He told me that the first time that he ever had any security was when he moved into the mining industry to work with construction companies such as Thyssen and Cementation that he had been working with on sites, because in mining they came under the framework of the Mines and Quarries Act 1954 and had to adhere to that. That gave him much more of a feeling of certainty than he had ever had on sites. The fact that he had to move from site to site, taking all his family, shows the kind of hardship that is imposed on a person in the position of being blacklisted by companies involved in construction.

An article in The Times on 7 March 2009 indicates the kinds of companies—household names—that are involved in blacklisting. It says:

“Sir Robert McAlpine is one of more than 40 companies accused by Richard Thomas, the Information Commissioner, of breaching data protection laws after an investigation by his office sparked fears that many workers were being unfairly ‘blacklisted’.

The commissioner alleges that Ian Kerr, of Droitwich, Worcestershire, charged companies £3,000 a year to consult his database of 3,213 workers, whose names were accompanied by notes such as ‘poor timekeeper, will cause trouble’ and ‘Irish ex-army bad egg’.”

It goes on to say that from invoices that have been obtained,

“‘It would appear that Sir Robert McAlpine and other companies made thousands of requests a year’, a spokesman for the Information Commissioner said. He said that each request for information on a specific employee cost about £2.20 on top of the yearly subscription. That suggests that Sir Robert McAlpine made more than 10,000 requests”

for information on individuals in the past year.

I understand that sentiment, and we need to ensure that companies engaged in publicly procured projects adhere to the law, which means that we need the regulations set out in the 1999 Act, the safety advisory schemes and the 2007 regulations.

When the 1999 legislation was introduced and debated in this House, we were ecstatic that the provisions in question were included. When I raised the matter in 2004 or 2005, and asked why that element of the legislation had not been implemented, the argument was that there was insufficient evidence to justify implementation—there was no evidence of blacklisting. The published evidence referred to by my hon. Friend clearly blows that argument out of the water. We now need swift implementation of that legislation.

I agree totally with my hon. Friend’s comments.

The fact that many of the companies making use of the Consulting Association are some of the country’s largest construction companies is a worry. The fact that the public sector was the client in just over 31 per cent. of construction output in 2006, making it the industry’s largest customer, suggests that the Government, as a major client, have some responsibility to use the powerful lever that exists to ensure that companies who use blacklists are not engaged on projects, which brings us to the point made by my hon. Friend the Member for Livingston (Mr. Devine). Still more could be done to change the behaviour of construction companies working on publicly procured projects by strict use of the 2007 regulations and the use of workers health and safety advisers, which together could start to change the culture.

The Minister may have seen my early-day motion 1020, which does not demand new primary legislation. There is no need for such legislation because the power is already in the statute book and available to the Secretary of State—it just needs to be enabled. Section 3 of the 1999 Act provides that the Secretary of State may make regulations prohibiting the compilation of lists that contain details of members’ trade unions or persons who have taken part in the activities of trade unions, and lists which are compiled with a view to being used by employers or employment agencies for the purpose of discrimination in relation to recruitment or to the treatment of workers. The Minister will know that in 2003, the Government consulted on the regulations. A number of trade unions and trade union law firms responded to say that rather than wait for evidence of blacklisting, the Government should enact the regulations immediately. They did not. But now that evidence has emerged that blacklisting is taking place, it is time to bring them into effect.

If the Information Commissioner is to prosecute the Consulting Association and is considering what action to take against the construction companies to which information has been supplied, the Government must use their powers under the regulations to ensure that structures are in place to prevent it from reoccurring. That is an important point that must be emphasised. We need to ensure sustainability for those working in the industry.

Obviously, the Government have to take action on this matter, but in the absence of immediate action, would my hon. Friend arrange for other Members throughout the House to be informed of the list of construction companies that have been operating the blacklist so that we can take it up with housing associations, councils and other organisations in our constituencies?

I hear what my hon. Friend says, and his point is well made. The Minister will have heard it, and no doubt other Members will be thinking of tackling the issue in that way.

There was a consultation in 2003, and as far as I am aware, only two bodies—the CBI and the Engineering Employers Federation—said that they hoped that the regulations would not need to be introduced. Given that we have shown that there clearly is evidence that they need to be introduced, I would think that those two bodies would accept the points that were made at the time of the consultation and agree that the regulations should be brought into force.

Does my hon. Friend agree that those two bodies epitomise what is wrong with this country? There is absolutely no level playing field. If this had been the other way round, and trade unions were restricting their trade, they would have been up before a High Court judge.

I could not agree more with my hon. Friend’s point.

I welcome the Department’s statement of intention to review whether to use its powers if there were compelling evidence that blacklisting were being used. What could be more compelling than the evidence produced by the Information Commissioner? It has shown clearly that bodies such as the Consulting Association are involved in blacklisting. Some time ago, we thought that the Economic League and the Freedom Association had disappeared and that this kind of thing no longer happened, but the evidence clearly shows that it is happening.

Is it not clear to my hon. Friend and all those who have worked in the industry that blacklisting went on all the time? Anyone with any experience of the industry knew that scores and scores of people were driven not just out of work but out of the industry. They effectively had their trade stolen and were sent to work in other places. That has been common practice for very many years.

I agree that anybody who has worked around the construction industry, and talked to people such as those I have talked to in preparing for the debate, gets the feeling that blacklisting has been around for many years, and that it is not just the large organisations that we have mentioned that organise it but the construction companies themselves. They prepare blacklists and exchange them among themselves.

As the Minister will be aware, the Information Commissioner is considering regulatory action against the firms involved. That is welcome, but the Government must move positively to bring into force section 3 of the 1999 Act to stop this outdated practice that has blighted many lives. I hope that he will say this evening that he is willing to act.

I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing the debate. I begin with something of an apology to you, Mr. Speaker, and to him for the slightly weak nature of my voice tonight. I hope that I manage to get through my response.

This subject is important and topical. The Government believe that people have a right to join a trade union if they so wish. That is a free choice and should not result in their being denied employment, so I share my hon. Friend’s concerns about the recent revelations in the construction industry. He is right that that industry is of particular concern, because the safety of workers can be at stake as well as their employment.

The freedom to belong to a trade union is a key human right set out in many international treaties, including the European convention on human rights. Trade union representatives and activists—we should not forget that they are mostly unpaid volunteers—perform an important and valuable role in the workplace. For the most part they work in partnership with employers, but of course sometimes they challenge them. That can be when tensions arise, but it is important that trade union representatives are not subject to victimisation.

The practice of blacklisting should be anathema in today’s Britain. It is a relic of the past, and if what has occurred recently in the construction industry is blacklisting rearing its head again, of course we will take that seriously. I shall come to what we are doing to address that, but first I shall briefly set out some of the protections that currently exist.

Sections 137, 146 and 152 of the Trade Union and Labour Relations (Consolidation) Act 1992 make it unlawful for an employer to refuse employment, cause someone to lose out at work or dismiss someone on the ground of trade union membership or activities. Those rights have been in place for decades, although we made some modifications in, for example, the Employment Relations Acts 1999 and 2004, providing more protection against victimising workers for using a union’s services.

My hon. Friend the Member for Barnsley, West and Penistone also referred to the Data Protection Act 1998. To run any system, an organisation needs to manage a large amount of data, and organisations or persons managing such data are classed under the Act as data controllers. That means that they must register with the Information Commissioner—failure to do that is a criminal offence. In accordance with the Act’s data protection principles, data controllers must make proportionate and fair use of data.

Trade union membership is classified as “sensitive personal data”. According to the Act, it is unlawful, save for a few exceptions, to process such data without the subject’s explicit consent. Since blacklisting is, by its nature, a covert activity, it is impossible to operate a blacklist successfully and stay within the provisions of the Act. The Information Commissioner has strong powers to investigate cases in which he thinks the Act is being breached. He used them extensively during his investigation into the affairs of the Consulting Association, which I will call TCA. He secured two search warrants and confiscated a large amount of material. One prosecution has begun. He can also issue enforcement notices, which require persons to act in accordance with the 1998 Act by taking, or refraining from taking steps. One enforcement notice has so far been issued.

My hon. Friend mentioned section 3 of the Employment Relations Act 1999, which provides a power for making regulations to outlaw blacklisting. As he said, we have produced draft regulations, on which we consulted in 2003. They would allow individuals to obtain compensation for being refused employment or for suffering discrimination by their employer because of their inclusion on a trade union blacklist. Those complaints would be determined by the employment tribunal.

In addition, people, including trade unions, could claim damages from the compilers, disseminators and users of the blacklists for financial loss.

Why do we not just tell the companies on the list that they will not get Government contracts?

I have already received a letter from one of the companies that have been mentioned, dissociating itself from the activity and claiming that it did not realise that it was buying into it. I will revert to that.

We reiterated our position that we would not consider implementing the regulations until clear evidence arose. That was the position in 2003. The investigation began in the middle of last year, when my Department learned that the Information Commissioner was investigating allegations of blacklisting. My officials were involved at an early stage and worked with the Information Commissioner’s office. I pay tribute to those in that office for their diligence in pursuing a complex investigation.

As my hon. Friend the Member for Barnsley, West and Penistone described, significant abuse of the data protection principles and data protection law was uncovered. TCA has secretly listed more than 3,300 individuals and kept more detailed information on 1,600 of them.

The compilers of the list can be prosecuted under the Data Protection Act and one such prosecution is pending. I believe that a fine can be imposed in a lower court, or a higher fine can be imposed in a higher court.

The critical question that my hon. Friend the Member for Barnsley, West and Penistone asked is what our response is. Around 25 construction companies appear to have been subscribers to the services of TCA and about 18 of them appear to have used the system recently. The information relates to the employment histories of individuals and in some cases it refers to their involvement in trade unions or their participation in industrial action.

The Government need to decide whether those activities fall within the definition of blacklisting found in section 3 of the 1999 Act. Earlier this month my officials spent two days at the offices of the Information Commissioner and they have examined much of the material that he has taken from TCA. My noble Friend the Secretary of State and I will closely examine their findings on the material and decide what action to take.

Briefly, it is 10 years since we put the legislation through and we now have evidence of blacklisting, which the Government were unsure of before. We urgently require the implementation of the regulations, but we need to make them retrospective, so that those people who have suffered, particularly over the past 10 years, can gain proper compensation.

I will come to how we are dealing with the problem.

Procurement has been mentioned. Any company, whether it works on public contracts or not, should comply with the law of the land. We expect companies not to break either data protection law or trade union law when planning or undertaking work for the public sector. Of course we recognise that construction companies need to ensure that they recruit the right calibre of person for the job, but there is no need to undertake covert and unfair vetting of the kind that TCA appears to have performed.

The Information Commissioner is following up his investigation in various ways. First, TCA is to be prosecuted, as I have said. I understand that the case will be heard towards the end of April. I also understand that the Information Commissioner is making further inquiries with the subscriber companies to determine the extent of their involvement with TCA. Those inquiries could lead to further action by the Information Commissioner. My Department will stay in close touch with the Information Commissioner and, as I have said, BERR officials have already inspected many of the records held by the Information Commissioner.

It is not the weakness of your voice that concerns me, but the weakness of the response that our Government are making. Will you not unreservedly condemn the activities—

Order. The traditions of the House are such that if the word “you” is used, it means me, the occupant of the Chair, and we cannot have that, can we?

I unreservedly apologise, Mr. Speaker. Would my right hon. Friend unreservedly condemn the activities of that company and others that produce such lists, which result in the exclusion of workers from their proper and reasonable trade?

I have said that blacklisting is anathema and it should have been left in the past.

My officials have already inspected many records. Our objective is to assess precisely whether the activities undertaken represent the kind of blacklisting activity that section 3 of the 1999 Act was designed to cover. The Secretary of State and I will examine the evidence in the case and we will examine the papers. We will take the matter seriously and the Government will make a decision on how to proceed. Let me reiterate that I share the deep concern that my hon. Friend the Member for Barnsley, West and Penistone has expressed about the revelations that have been made. We need to address the matter diligently and speedily. I assure him that we share his concern about the reports. We will examine the papers and the evidence and we will come to a conclusion in the near future.

Question put and agreed to.

House adjourned.