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Trade Union Bill (Ninth sitting)

Debated on Tuesday 27 October 2015

The Committee consisted of the following Members:

Chairs: Sir Edward Leigh, † Sir Alan Meale

† Argar, Edward (Charnwood) (Con)

† Barclay, Stephen (North East Cambridgeshire) (Con)

† Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab)

† Boles, Nick (Minister for Skills)

† Cameron, Dr Lisa (East Kilbride, Strathaven and Lesmahagow) (SNP)

† Cartlidge, James (South Suffolk) (Con)

† Doughty, Stephen (Cardiff South and Penarth) (Lab/Co-op)

† Elliott, Julie (Sunderland Central) (Lab)

† Ghani, Nusrat (Wealden) (Con)

† Howell, John (Henley) (Con)

† Kennedy, Seema (South Ribble) (Con)

† Mearns, Ian (Gateshead) (Lab)

† Morden, Jessica (Newport East) (Lab)

† Morris, Anne Marie (Newton Abbot) (Con)

† Prentis, Victoria (Banbury) (Con)

† Stephens, Chris (Glasgow South West) (SNP)

† Stevens, Jo (Cardiff Central) (Lab)

† Sunak, Rishi (Richmond (Yorks)) (Con)

Glenn McKee, Fergus Reid, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 27 October 2015


[Sir Alan Meale in the Chair]

Trade Union Bill

Before we begin, may I ask everybody to ensure that all electronic devices are switched off or in silent mode? We will now continue line-by-line consideration of the Bill.

On a point of order, Sir Alan. I apologise to the shadow Minister for intervening at this stage. The Standing Orders of the House were changed on Thursday in terms of what is referred to as English votes for English laws. Can you advise, Sir Alan, if those Standing Orders apply to any clauses of the Bill or any amendments to it?

I have to inform the hon. Gentleman that the changes are not in being yet. It is a proposal that is not as yet completed, so it therefore does not apply in this case and certainly not to this legislation.

Clause 13

Reserve powers

I beg to move amendment 101, in clause 13, page 9, line 31, at end insert—

‘(c) Save that no such regulation shall have the effect of altering, in respect of any of the matters to which the reserve powers may be directed, any provision of a contract of employment or a collective agreement or of limiting an employer’s discretion as to the contents of contracts of employment or collective agreements to which the employer is a party”.

It is good to be back under your chairmanship, Sir Alan, for what I hope is the last day of our line-by-line consideration of the Bill. I am sure, given the number of inconsistencies and problems that have been exposed during the course of our debates, that we are all looking forward to coming back to the Bill on Report to raise those concerns again.

Clause 13 proposes further regulation of facility time by the extension of a very wide-ranging reserve power of Ministers of the Crown. I do not wish to detain the Committee unnecessarily by repeating the fundamental arguments for why facility time is so important; I simply draw the Committee’s attention to my previous remarks. I believe there is a serious problem with the nature of the power proposed in clause 13 and how it cuts across the devolution settlement, as was touched on in the point of order from the hon. Member for Glasgow South West.

Under current legislation, trade union workplace representatives have a right to reasonable paid time off to perform certain duties. As we have previously discussed, that has huge benefits for employees and employers alike. The clause could allow the Government to cap the percentage of the employer’s pay bill that is invested in facility time. It will give the Government the power to impose an arbitrary limit on the amount of time that public sector union officials can spend on facility work during working hours. That might be time spent on negotiating improved pay and conditions; training, as outlined in section 168 of the Trade Union and Labour Relations (Consolidation) Act 1992; promoting learning opportunities as union learning reps under section 168A of the 1992 Act, which the Minister said he was very supportive of; accompanying individuals in grievance and disciplinary hearings, under section 10 of the Employment Relations Act 1999, which is a very important function that I have been involved in; or on health and safety duties and training, under the regulations made under section 2 of the Health and Safety at Work etc. Act 1974.

The potential consequences of this are deeply concerning. The Government have not set out exactly which of those duties they seek to cap or which particular sectors the clause will apply to. They are leaving themselves a very wide-ranging power for intervening. They say, as they have so often told us, “Trust us, we’re the Ministers,” but that is simply not good enough when it comes to such important matters.

The clause is particularly troubling to Opposition Members because it establishes a clear democratic deficit in three main areas. First, the provisions will mean that Government Ministers can use as yet unseen secondary legislation to push through restrictions or repeal trade union rights contained in primary legislation. While hon. Members on both sides of the Committee recognise the important role that secondary legislation plays, many would also accept that it gives Parliament less opportunity to debate and amend such regulations than would otherwise be the case.

Secondly, the provisions could prevent public sector employers, including in Scotland and Wales who have responsibility for a number of wholly devolved areas of public service provision and who have their own democratic mandate, from deciding how to manage employment relations in their workplace and how to engage with their staff.

Thirdly, the provisions mean that the Government can be selective as to which public and local authorities may be forced to impose a cap, introducing an element of significant discrimination on quite wide-ranging powers to behave in a very partisan and nakedly political way over these matters.

There are significant questions about the legality of such a change. We heard during the oral evidence stage from Professor Ewing, the Welsh and Scottish Governments and others, about the potential contraventions that the Bill provides. There is a risk that the proposal for a cap could conflict with EU law which protects the rights of health and safety representatives to paid time for their duties and training; the rights of trade union representatives to paid time off and office facilities during consultations on collective redundancies and outsourcing under their TUPE rights; and even under general information and consultation arrangements covered by the Information and Consultation of Employees Regulations.

The measures also represent a significant attack on rights that are protected by the European convention on human rights and ILO conventions. We have many questions about the clause. I hope that the Minister can explain what legal advice he has taken on the question of whether the proposal for a cap conflicts with EU law, with TUPE rights and with the Information and Consultation of Employees Regulations 2004. I would like him to be very specific on those three points.

We had a partial debate about the clause in our discussion of clause 12, and I was intrigued by some of the Minister’s comments. He promised that he would write to the Committee and he has done so. He reiterated the point he made in line-by-line consideration and said:

“I promised to write to the Committee before we debate Clause 13 to indicate who will exercise the powers in Clause 12 to require the publication of information about facility time and who may exercise the reserve powers in Clause 13 having regard to that information…It is right that Ministers have the flexibility to propose and, as a last resort, set caps on paid facility time…This will allow the relevant Minister to make regulations tailored to that. So, for example, the Secretary of State for Health will make regulations imposing publication requirements on NHS and other health employers and may exercise the reserve powers in relation to them if he considers appropriate to do so taking account of the information relating to facility time that they are required to publish.”

I am extremely concerned that this cuts across the devolution settlement. It cuts across the powers of Welsh and Scottish Ministers to make arrangements in their own sectors. The Welsh First Minister, on hearing the Minister’s comments in our sitting on Thursday and learning of the contents of the letter, has made it clear publicly that he believes it would require the consent of the Welsh Government.

Will the Minister to clarify the position because it seems to be matter of considerable debate? There are clearly conflicting legal opinions—I know which side I am on—and this is a serious matter, given the wider constitutional debates that we are having at the moment. It appears that the Secretary of State for Health or the Secretary of State for Education would use the powers in the clause to intervene in the day-to-day running of the Scottish or Welsh health services.

My reading of the letter indicates that there would also be interference in local government. There will be an impact, given the devolved Administrations’ funding arrangements and agreements with local government.

Indeed, and the Minister skirted round this issue when we discussed it briefly. Will this power on facility time and, more broadly, the powers in the Bill apply retrospectively and therefore affect existing employment contracts up and down the land, whether in local government or devolved public authorities or in other agreements? The measure could lead to the extensive unwinding of contracts that have been entered into in good faith by individuals, employers and public sector authorities.

Furthermore, when we look at public sector contracts going forward, should Welsh and Scottish Government Ministers and local authority cabinet members engaged in discussions with their employers about the nature of the contracts and the balance of responsibilities and rights expect those contracts to be undermined at any time at the whim of a Minister of the Crown, who could strike out clauses or imply that they are not valid because of some arbitrary decision taken about facility time? I fear that this poses an extraordinarily dangerous precedent, where Ministers will be able to act in a partisan and political way to attack, for example, a local authority or a devolved Government of different political persuasion, to intervene in their powers and democratic mandate to run public services in the way they see fit.

Amendment 101 is intended specifically to prevent a breach of article 11 of the European convention, which precludes a state from negating the provisions of a collective agreement. It would prevent the Government from using regulations and powers under the clause to rewrite existing collective agreements and contracts, which is that retrospective point I made. Those contracts of employment had been voluntarily agreed by public sector employers, employees and unions, and provided union reps with time off to represent their members.

The provision would also mean that public sector employers could agree new collective agreements and contracts of employment providing union reps with time off for union duties, effectively setting aside any arbitrary cap imposed by the Government. I draw the Minister’s attention to the case of Demir and Baykara v. Turkey in 2008 in which the ECHR affirmed the fundamental right of workers to engage in collective bargaining and take collective action to achieve that end.

The power in the clause falls foul not only of legal precedents but of decisions, conventions and standards that we are party to. It would fundamentally cut across the country’s constitutional arrangements and the devolution settlements. It is extraordinarily unwise for the Government to do that, given precedents. I hope the Minister can give a fuller explanation, given the nature of those concerns.

I reiterate the comments I made on clause 9. This is a bad Bill and this is a bad clause. As the shadow Minister has outlined, we now know the wider implications.

I wish to confine my observations to the comments made by the Minister on Thursday, which he has followed up in writing. First, it appeals to my dry sense of humour that, having rejected amendments on publishing percentages, the Minister writes to us with percentages, in the letter on spending. I am encouraged by that and I hope the Minister will go back and consider publishing percentages on facility time.

The Committee owes a debt of gratitude to the shadow Minister for skilfully wheedling out of the Minister the prospect of the Secretary of State for Health dictating to devolved Administrations on the level of facility time. Presumably the same applies to local government. I am willing to wager that the Minister has not thought through the implications for local governments that have agreements with devolved Administrations on funding and powers through agreements or concordats. It leaves the public with the impression of a Government who conduct first-rate bullying, only days after they declared some Members second class, by a third-rate Administration whose casual approach to legislation does not even provide them with the foresight to realise the constitutional crisis they are sprinting towards.

In no other case do the UK Government have such powers to interfere or dictate to a devolved Administration how to conduct their affairs. The fact that the Government do not consider a legislative consent motion to be appropriate in these circumstances is either remarkable ignorance, gross incompetence or simply the act of a bully. This is dangerous terrain for the Government. I hope the Minister declares what discussions he has had with the devolved Administrations surrounding the reserve powers in the clause, and how they will be enacted.

These proposals are being made in the context of the Scotland and Wales Bills, which have still to conclude their parliamentary journey. It seems extraordinary that the Government can reveal their intentions at the last stages of this process. As the shadow Minister said on Thursday, creating reserve powers signals the intent to use them. The Minister must tell us what, if any, discussions he has had in that regard.

I signal our support for amendment 101. There are clear contractual obligations, and there will be clear costs to public sector employers, which will have to issue new statements of particulars or new contracts to public sector employees.

The proportion of spending on facility time is extremely low, as the Minister confirmed in his letter. Will the Government consider democratic mandates? The Conservative share of the vote at the general election in Scotland was the lowest since universal suffrage. The Conservatives have no mandate in that regard. I was considering whether to press amendment 85 to a Division but, because of the correspondence that we have received, I now feel obliged to do so.

It is a pleasure to serve again under your chairmanship, Sir Alan. In the context of clauses 12 and 13, I have been remiss in not declaring a non-financial interest in as much as I am a vice-president of the Local Government Association, which is the umbrella body for local authorities in England and Wales.

Clause 13 includes a Henry VIII power whereby Ministers will be able to use secondary legislation to push through restrictions on or to repeal the right to paid time off for trade union duties in the public sector contained in primary legislation, and Parliament will have very limited opportunity to debate or amend such regulations. It is worrying that Ministers are taking such powers unto themselves and, in essence, sidelining Parliament from effective overview and scrutiny of their actions.

The clause demonstrates the Government’s total lack of understanding of the practice of good industrial relations. First, the clause is, in effect, a blank cheque for the Government: if passed, it would give Ministers the power to limit facilities for trade union officials. It contains no explanation of how or why that power would be exercised, and it certainly provides no logic or justification.

Secondly, the provision applies only to the public sector, just like the provision to record time off for facility time, and we need to ask ourselves why that is. First and foremost, like bad employers, this Government feel it is appropriate to threaten and intimidate their own workforce. Of course, the other people who will be affected by the measure are not directly the Government’s workforce but people who work for other public bodies such as local authorities, local government and the emergency services—public servants. The main reason why the provision does not apply to the private sector is because private sector employers do not really want it.

Good employers know and understand the value of working together with their workers and with trade unions. Good employers know and understand that their greatest assets are the good people who work for them. Good employers invest in their workers—they pay them well, train them and reward them; they do all they can to encourage loyalty and dedication. They try to retain their workforce because it costs a lot of money to train staff in a range of different skills and professions. That is why the best employers work in partnership with their workers, and it is why they encourage independent trade unions.

Trade union officials are an integral part of the best companies, working tirelessly to improve relations, productivity and profits. Trade unions know and understand that workers prosper only in growing, profitable firms.

Is the hon. Gentleman aware of the review of facilities and facility time conducted by the Department for Business, Enterprise and Regulatory Reform in 2007? The report concluded that the work of union representatives actually reduces the number of cases proceeding to an employment tribunal and the number of working days lost due to workplace injury and workplace-related illness, and that such reductions result in significant financial savings.

Yes, I was aware of that, but I thank the hon. Lady for bringing it to the Committee’s attention, because it certainly helps to make the point that I am pursuing.

Clearly, there is a vision of trade unions that this Government do not understand, and that vision is shared by many private sector employers. Unfortunately, this Government see trade unions as the enemy within. They still hark back to the miners’ strike of 1984-85 and to the 1970s, when, we all accept, industrial relations in this country could have been a lot better. However, we are not in the 1970s; it is 2015, and the landscape of industrial relations is very different.

I have been a trade unionist all my adult life. On my second day of employment with British Gas I asked the personnel department how I could see a union official to sign up for my union membership, and I joined the National and Local Government Officers’ Association—NALGO—which is now part of Unison. I think that NALGO was an acronym for “Not A Lot Going On”—[Laughter.] I have been a trade unionist all my adult life, and I had the honour of working with many very decent and honourable union officers, both full-time officials and lay officials who were elected by their peers in the workplace.

I have also been an employer; I was deputy leader of Gateshead Council. Back in the days before we had the severe and harsh cuts that we currently have to go through, we had something like 11,000 employees in Gateshead. They covered a whole spectrum of different professions, providing public services for the people of the borough and the constituency that I represent. We prided ourselves on having good industrial relations and having good dialogue with our workforce on a regular basis. There were of course times when there were problems, but we managed to talk through the vast majority of those problems through good, robust and—on occasion—friendly industrial relations.

I have been above that as well; I have also chaired a national negotiating committee of the LGA called the Soulbury committee. We looked after the interests of advisers for schools, educational psychologists and other professionals of that nature. I therefore have an understanding of the strategic role that employers play in good industrial relations.

The Government need to understand why business is not that keen on these provisions. For instance, they should read Personnel Today, the journal for human resources professionals and practitioners. An article in that journal states that:

“You can have the most sophisticated industrial relations structures, follow all the rules and negotiate ad infinitum, but you will get nowhere if your relationships with staff and their union reps aren’t based on trust”.

It continues:

“This was abundantly clear during the recent civil service industrial action and the narrowly averted strike at British Airways (BA). We see this time and again. An organisation might call us in because it can’t get an agreement signed off, or the process has become too uncomfortable for both sides. What we frequently find when we get there is a climate of mistrust, entrenched ideas, and even outright hostility between union and management, employer and worker.

It doesn’t have to be this way. Look at Co-operative Financial Services, where we recently facilitated a management/union agreement over outsourcing—one of the most sensitive industrial relations issues over the past five years. Similarly at Gillette where, faced with redundancies, the business consulted with employees at the earliest opportunity and asked the staff representatives for alternative proposals, how to approach the situation and what the final redundancy package should contain. Larger, more complex organisations can learn from these successes”.

The UK Government need to learn lessons from the real world. Instead of fighting the ideological battles of the last century, they need to start equipping this country with legislation that fosters and supports good practice, and supports workers and their representatives. The legislation needs to recognise not only that it is right and fair to support the weakest and the most vulnerable but that, ultimately, as the best employers have repeatedly demonstrated, it is good for business too.

It is a pleasure to be starting what I hope will be the final day under your chairmanship, Sir Alan. Sometimes during this debate it strikes me that the two sides of the Committee are discussing completely different pieces of legislation. Both Opposition parties portray the Bill as one of the most egregious attacks on fundamental human rights since King John, whereas I would describe it as, to borrow a phrase from the previous speaker, a NALGO Bill, in that there is not a lot going on.

What the Government are proposing here is nothing more than a set of provisions that seek to change behaviour within the public sector. After all, the public sector is funded by taxpayers: they go out to work to earn money and they pay taxes, so they have a right to see that money spent responsibly. We hope that, in the light of public scrutiny of the information relating to facility time that public sector employers will be required to publish under clause 12, public sector employers will voluntarily renegotiate their existing facility time arrangements with trade unions and bring their spending on taxpayer-funded facility time under control.

We could, of course, have legislated now for a cap, so the idea that the clause, to cite another famous monarch, is a Henry VIII measure, an egregious attack, is false. We have heard a lot about the constitution in recent hours. We could have legislated for a cap now and no doubt the Opposition would have attacked that. We have taken the more modest route of suggesting reserve powers, which—the clue is in the name—will be kept in reserve and used only as the last resort. Only if transparency shows unacceptable inefficiencies in relevant employer spending on facility time and poor value for money for taxpayers from existing facility time arrangements with trade unions will Ministers set a cap on the time and money spent on facility time.

Amendment 101 would prevent the reserve powers being exercised so as to effect changes to a contract of employment or collective agreement, or limit the relevant employer’s discretion as to the contents of the contract or agreement concerned. The amendment would, in effect, neuter any consequential provision that regulations could make amending or otherwise modifying contracts of employment or collective agreements. As I have said, it is by no means certain that the reserve powers will ever be exercised and, should they be exercised, it is also by no means certain that this would interfere with, or override, existing contractual rights and rights under collective agreements. Most union representatives do not have contractual rights to facility time over and above their statutory rights, which we are not seeking to change.

What legal advice has the Minister received as to whether this proposal for a cap conflicts with EU law, with TUPE law or with the Information and Consultation of Employees Regulations?

We keep going around this merry-go-round. The Government receive a great deal of legal advice from their own officers and sometimes they seek other advice. We do not publish that advice; we are satisfied with the compatibility of all our proposals with all the laws and treaties to which we are signed up. Any cap on facility time will only apply prospectively. It is, on the other hand, possible in theory—though, as I have said, unlikely in practice—that a cap may apply to ongoing, legally-binding relationships; either legally enforceable terms in a collective agreement, or in the contractual rights of individual employees. This is what is flagged in the European convention on human rights memorandum to the Bill. The Government acknowledge, however, that even the potential impacts upon pre-existing contractual arrangements should be fully debated. That is why we considered the affirmative procedure to be necessary to provide the correct level of parliamentary scrutiny.

Before asking hon. Members to withdraw their amendment I want to respond to a question, which is not specific to this amendment, about the devolution settlement. The devolution settlement does not define which individual Ministers in the Government can do things. It defines which areas of policy are devolved and which are not. We have established, and there is general consent—although it might well be wished otherwise—that employment law is not a devolved policy but a reserved policy, and therefore Ministers in the UK Government are entitled to exercise those reserved powers in relation to their responsibilities. That does not imply that, say, the Secretary of State for Health, would be breaching the devolution of health to the Scottish and Welsh Governments by exercising the reserve powers under employment law in the way that we have outlined.

First, can the Minister confirm that the Scotland Bill has still to reach the end of its parliamentary journey and so the issue of devolving employment law has still to be settled? The Secretary of State for Scotland is considering that matter, as I moved the devolving of employment law in Committee.

Secondly, can he confirm which Government Ministers will have the reserve power to dictate facility time for local government and health in Scotland?

It is very clear. First, we are following the Smith commission recommendations. It may be the case that a particular Bill has not yet received Royal Assent and anything is possible, as we are in the process of discovering in our vibrant parliamentary democracy. No doubt, if there is an unexpected result, future legislation will be adjusted to reflect it. The Government’s intention to follow the Smith commission recommendations that employment law remains a reserved policy is very clear. It would be odd if we brought forward a Bill that conflicted with another Bill that we were trying to take through Parliament at the same time by presuming that that Bill was going to fail. We are presuming that the Bill will succeed, because we are following the Smith commission.

I have been clear that Ministers of the Crown can exercise the reserve powers that are reserved to the United Kingdom Government. There is no detailing that this Minister can do this and that Minister can do that. We are all Ministers of the Crown and the reserve powers of the UK Government are clearly set out in the Bill.

What the Minister is admitting is quite extraordinary. The hon. Member for Glasgow South West mentioned the Scotland Bill. There is also a debate about a draft Wales Bill, which many Members of this House and the Welsh Government consider rolls back the devolution settlement. This seems to be a further rolling back. I draw the Minister’s attention to the comment from the Minister for Public Services who, on hearing the Minister’s claims on Thursday, said:

“This confirms our assertion that the UK Government cannot impose these regressive changes on Wales and any change will require our consent.”

Is the Minister proposing to take the Welsh Government to the Supreme Court if they refuse to implement the Bill?

He would say that, wouldn’t he? He is a member of the hon. Gentleman’s party and he disagrees with the Bill. I entirely respect that, but the fact remains that employment law—to which all these provisions relate—is a reserve matter in the Smith commission proposals that all parties and certainly his party signed up to. We are currently taking Bills through Parliament which will implement the Smith commission proposals in full, therefore all our proposals, including proposals on facility time are entirely consistent with the devolution settlement. On that basis, I ask him to withdraw the amendment.

I did not expect the Minister to do anything other than stick to his guns, but I find it extraordinary. There are very serious questions, not only about how the measure cuts across existing conventions and legal treaties and provisions that we are party to. I hope the Government’s legal advice is very good because I suspect there may be a number of significant challenges to the Bill.

I remain astonished at the admission that the executive powers that have been devolved since 1999 to the Welsh and Scottish Governments are being exposed as limited by the Bill. On top of the debates on the Scotland Bill and the draft Wales Bill, that is extremely revealing. Has the Minister had consultations with the Secretaries of State for Scotland and Wales about this?

Does the shadow Minister take the same view as I do, given the Minister’s answer, that there has been no discussion with devolved Administrations as to how this would be enacted? It should require a legislative consent motion—a point that the Minister omitted from his remarks.

It is certainly the view of the Welsh and Scottish Governments that they may well require a legislative consent motion to be passed in order for the legislation to go forward. The level of consultation at a whole series of stages of the Bill, before and during the process, has been very weak. I think that is reflected in the potential undermining of the clause in many respects by existing provisions to which we are party.

I want to draw the Committee’s attention to a couple of other things that the Minister said. He talked as if this was a “nothing to see here” clause, but it is drafted in an extremely wide-ranging way, stating:

“If a Minister of the Crown considers it appropriate to do so, having regard to information”.

It does not even say that a Minister might exercise the powers if a particular percentage of time is hit. It is basically a matter of saying to a Minister, “Have a look at this information. It doesn’t really matter what it says, but if you fancy intervening in local government or devolved Government across the UK, you can do it if you consider ‘it appropriate’.”

Although this Minister might be clear that the powers should be only reserve powers, I can think of many others who would be happy to use them in an extraordinarily partisan way to attack individual local authorities or devolved Governments that they do not like due to the nature of their political arrangements. They might consider it “appropriate” to use those powers without having any regard to the information provided one way or the other. That is extraordinarily serious, especially given that we are dealing with vital time used for things such as health and safety, helping to find solutions and settlements to disputes and, indeed, helping the public sector to achieve changes in a time of constrained finances and beyond.

I was pleased that the Minister made clear his view that the provisions should apply prospectively rather than retrospectively—I had a little hope for a moment—but he then admitted that they could apply to ongoing legally binding regulations, which is why they are flagged in the ECHR memorandums. I worry that this will cost the Government an awful lot of money—taxpayers’ money—due to lengthy legal proceedings with individuals, local authorities or devolved Governments whose ongoing contractual arrangements are undermined and unwound by the Bill. As I said, I hope that the Minister has deep pockets, because the Government will face significant challenges over the measures and their implementation, which is why I will press the amendment to a Division.

Question put, That the amendment be made.

Amendment proposed: 85, in clause 13, page 10, line 44, at end insert—

‘(14) For the avoidance of doubt, the powers in this section shall only apply with the consent of the Scottish Government, Welsh Government, Northern Ireland Executive, the Mayor of London and Local Authorities in England in their areas of responsibility.”—(Chris Stephens.)

Question put, That the amendment be made.

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

Clause 13 ordered to stand part of the Bill.

Clause 14

Investigatory powers etc

With this it will be convenient to discuss the following:

Amendment 69, in schedule 1, page 18, line 4, at end insert—

‘(b) to take representations from the trade union or unions who are the subject of such an investigation”

The amendment would require a person investigating a breach of an obligation by a union to take representations from the union concerned.

Amendment 70, in schedule 1, page 19, line 4, after “Certification Officer”, insert

“and the trade union or unions who are the subject of such an investigation”

The amendment would require the interim report of the person investigating a breach of an obligation by a union to be sent to the union concerned.

Amendment 71, in schedule 1, page 19, line 7, after “Officer”, insert

“and the trade union or unions who are the subject of such an investigation”

The amendment would require the final report of the person investigating a breach of an obligation by a union to be sent to the union concerned.

After a lively start to the Committee, we now come to the provisions of the Bill that deal with the certification officer. Although the position of certification officer is familiar to many members of the Committee, it does not normally get a lot of attention, although it will in this debate because of the huge extension and change to its remit proposed by the Government.

When we debated clause 6, we discussed how the certification officer will be given powers to gather information on industrial action taken by trade union members, and how trade unions will be required to publish details of all industrial action and ballots in their annual return to the certification officer. When read in isolation, clause 6 poses a risk to the neutrality of the certification officer in the regulation of trade unions. When read alongside other clauses in the Bill, however, and particularly clause 14, it amounts to a vast extension to the role, remit and powers of that position. The clause will insert into the 1992 Act new schedule A3, which is schedule 1 to this Bill, and give effect to schedule 2, which also amends the 1992 Act. As a result of those changes, trade unions will face significant new obligations and further blue tape, as we have discussed, because they will have to report to the certification officer annually on when industrial action takes place and on political fund expenditure.

The provisions will give the certification officer new, wide-ranging investigatory powers on matters such as the register of members, elections, the political fund and union mergers. For example, if the certification officer thinks that there is good reason to do so, they will have the power to demand the production of any documents relevant to their investigation. Furthermore, if they believe that a union has failed to comply with its duty, they may appoint inspectors who can require the production of documents, as well as the attendance and assistance of any persons believed to have information relevant to the investigation. Failure to comply may lead to the certification officer imposing an enforcement order, which carries punitive sanctions.

The TUC believes that those new powers represent a major new intrusion by the state into union affairs and union members’ rights to privacy. The certification officer will—I find this quite extraordinary—be able to initiate an investigation against a trade union even though they have not received a complaint from a member of that union. That power applies to rules governing elections, political funds and union mergers. The TUC is concerned that the certification officer will be expected to act on complaints and intelligence provided by third parties, including employers. We need to discuss that in detail because it provides wide grounds for fishing expeditions, sabotage actions and engagement by people who are not involved in a dispute, but simply want to cause problems, and to provoke legal proceedings and investigation or action by the certification officer.

We have heard from many people who are concerned about the provisions, and such concerns were reaffirmed in oral evidence by legal experts including Thompsons Solicitors. The United Kingdom’s judicial system is lauded by many around the world, and the Minister should note how its founding principles stand in complete contrast to how the certification officer will be able to act. It is important for the Committee to understand that the certification officer will have the power to bring a complaint against a trade union, to investigate the issue, to decide which witnesses will be called, to cross-examine them, to make a decision on the matter, and then to impose a fine on the union that they have investigated and on which they have adjudicated. I cannot overemphasise the point, which was also made by many of our witnesses, that this is simply not consistent with the principles of natural justice or the founding principles of our legal system, which include many checks and balances, not least the separation of powers.

It is quite extraordinary that this is taking place in an era when we have finally done away with some of the anachronisms of our constitutional arrangements. As the Minister mentioned, we have been having many discussions about this—I am sure that we could have a lengthy one about the other House if we wished to—and the fact is that in recent years we have moved forward. We have separated out the roles, and we no longer have the head of the judiciary sitting as the Chair of proceedings in the other place, as a member of the Executive and of the Cabinet, while that Chamber also acted as the highest court of appeal in this land. That was separated out, and we now have the Supreme Court, the independent Judicial Appointments Commission, a Lord Chancellor who is a member of the Cabinet but not of the other place, and so on and so forth. We have taken that step, and rightfully so, to separate the Executive from the judiciary and to remove the blurring of powers, yet the Government are now effectively merging all those powers together in the role of someone who, I am pretty sure, would not want those powers in the first place, and has had a very limited role until this point.

This seems to be an attempt to politicise a position so that it can be used in a very wide-ranging way, and to interfere fundamentally with the rights of trade union members up and down this country. When the provisions are considered alongside other clauses in the Bill, they do look very sinister. I am sure that the Minister will say, “Oh don’t worry, it will be fine. The certification officer will only engage once in a while if something really terrible happens,” and so on and so forth, yet he is proposing to grant huge, wide-ranging powers which, given the previous clauses we have debated, are deeply sinister. We believe that this clause and the relevant schedules are excessive, so we shall oppose them.

I turn briefly to our amendments. Amendment 53 would prevent the insertion into the 1992 Act of schedule 1, which provides for the certification officer’s new investigatory powers. Amendment 69 would provide that any person investigating a breach of an obligation by a union must allow that union to make representations before any decision is taken, which would be absolutely consistent with the principles of natural justice. I find it extraordinary that it is the certification officer who will decide which witnesses to call and to whom they will speak before making a decision. If we are talking about powers that affect the rights of trade unions, it is crucial that, at the very least, those involved should be allowed to make representations that are relevant to the matter at hand.

Amendment 70 would require any person carrying out an investigation to send the union a copy of the interim report at the same time that it is sent to the certification officer. Again, that is only fair. If such decisions are being made, at the very least the parties to the dispute should receive a copy of the report. Amendment 71 would require that the final report relating to an investigation would also be sent to a relevant union.

I hope that the Minister can explain both the intent behind these wide-ranging changes—we will come on to other parts of the role shortly—and how the process sits with the principles of natural justice in this country. I hope that he will also set out whether there will be any safeguards to prevent the officer from interfering unwillingly, or from being forced to interfere in the affairs of unions without just cause.

It is a pleasure to serve under your chairmanship, Sir Alan.

The Bill would, if enacted, fundamentally change the role of the certification officer from a neutral arbiter of disputes to a state snooper and enforcer. We have heard the concerns of legal experts, Liberty and others about the implications of these changes for civil liberties, and about the likelihood that they infringe article 6 of the European convention on human rights, on the right to a free trial, and well-established principles in common law on natural justice. No one should sit as a judge in their own cause.

I repeat those concerns today, for the record, in the light of the Government’s changes to the ministerial code, which were quietly sneaked out last Thursday via a ministerial statement in the other place. Until the code was changed last week, it used to refer in its opening paragraphs to an

“overarching duty on ministers to comply with the law including international law and treaty obligations and to uphold the administration of justice and to protect the integrity of public life”.

That duty to comply with international law and treaty obligations, and to uphold the administration of justice, has just been deleted from the ministerial code. It may be a complete coincidence that, at the very point when this Bill is coming under a barrage of expert criticism for its breaches of international law and treaty obligations, the Government have decided to do away with the requirement for Ministers to uphold those laws. Will the Minister explain what possible justification there is for such a change to the standards against which Ministers are held accountable? Why was not Parliament consulted on the change?

In returning to the clause and our amendments, let me be clear that I make no criticism whatsoever of the current incumbent of the post of certification officer. He has served with distinction since 2001; prior to his appointment, he was a partner in a firm of solicitors. He is respected for his impartiality and knowledge. I see from the certification officer’s website that he was last reappointed in 2012, but I do not know for what period. There is no suggestion that he asked for these wider powers, so I have a number of questions for the Minister about what consultation has been carried out with the certification officer about the transformation of his powers. Does he support the changes? What assurances can the Minister give us about the continued independence of certification officers? When will the current certification officer’s term of office expire? What safeguards will cover the appointment of his successor?

Section 254 of the Trade Union and Labour Relations (Consolidation) Act 1992 provides:

“The Certification Officer shall be appointed by the Secretary of State after consultation with ACAS.”

The Secretary of State has made his views on trade unions clear, as have Ministers. What confidence can trade unions possibly have in the independence of a certification officer who is appointed by a Government with a clear ideological agenda against trade unions, as is demonstrated by their Bill?

In reply to my question about who asked for the provision, the Minister said that the Government were acting on

“a clear proposal in their manifesto. That clear proposal was to reform the role of the certification officer.” ––[Official Report, Trade Union Public Bill Committee, 20 October 2015; c. 259.]

That shows the ideological origin of these proposals. No one knew what that manifesto statement meant, and what we now see goes far beyond any reform by completely recasting the role of the certification officer and transforming it into something entirely different.

I was interested to see a TV interview this morning in which the former editor of Conservative Home suggested that the provisions with which the Government are having problems in the House of Lords were in their manifesto, but that as they did not expect to win the election, they did not expect to have to enact many things that were in that manifesto. That theory is very interesting, as it is possible that the Government did not expect to have to enact the Bill.

My hon. Friend makes a valid point. I think that we will see more of that during this Parliament.

What was the inspiration for the changes? The Government propose to give the certification officer a whole armoury of weapons. They will be able to investigate, demand documents, demand explanations and start proceedings, which they themselves will hear, acting as prosecutor and judge, before giving a verdict and delivering a sentence. They will be able to impose a fine and, as we heard in evidence, a quasi-criminal sanction. This is an extraordinary attack on the rule of law.

Certification officers’ powers will be extended into areas that have historically been way outside the remit of the role. The CO’s role is to regulate the internal workings of unions and their relationship with their members. That is clear from the existing jurisdictions and procedures involving complaints by union members. The certification officer’s website states that his role is to

“maintain a list of trade unions…ensure compliance with statutory requirements for annual returns…determine complaints concerning trade union elections…rules”

and trade union mergers,

“oversee the political funds”


“certify the independence of trade unions”.

That work involves seven staff, and the net cost of the certification officer’s office, according to his most recent annual report of July this year, was £560,232. That represents a 3.7% decrease. Hon. Members might think that that is good value for money, yet the Government want to increase massively bureaucracy, cost and intrusion.

I also note from the annual report that in March 2015, the certification officer’s premises were found to be structurally unsafe. I fear that the proposals in the Bill are equally structurally unsafe. No longer will the CO’s role be confined to legitimate complaints that are not ruled out as scandalous, vexatious, hopeless or misconceived. The real purpose of the proposals was revealed in the questions from the hon. Member for Banbury to Professor Ewing in Committee on the afternoon of 15 October. The hon. Lady envisaged the certification officer being required to take action at the behest of

“someone with a legitimate cause for complaint—someone who is affected by strike action…The certification officer himself might be able to take a view that it was appropriate to investigate non-compliance.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 131, Q352-354.]

Professor Ewing was understandably perplexed by that question, as even the certification officer’s expanded role would not encompass non-compliance with industrial action requirements, yet it is clear that Government Members believe that it should, and that the certification officer should act as a state enforcer who steps in at the behest of any individual to interfere in the workings of trade unions. One can imagine that the Conservative party’s friends in the TaxPayers Alliance will be keen to waste more public money and resources by pestering the certification officer on all manner of issues and seeking enforcement orders on unions, especially in the light of the oppressive reporting requirements on industrial action and political funds.

The situation shows that the Government and Conservative Members are proceeding on the basis of a fundamental misunderstanding of the law and of the role of a certification officer. They are creating a bloated and distorted role that undermines the independence of the office and offends universally accepted legal principles. As a final insult, they will require trade unions to pay for the privilege. Under the Conservatives, we are used to attacks on trade unions, but now we will have an open-ended tax on trade unions—a blank cheque—on which unions will have no say and no control. It is taxation without representation at its most extreme, enabling ideologically motivated complaints to target union resources. It is another direct, politically driven attack on the finances of unions and their capacity to represent their members.

The hon. Lady is making an excellent speech. Is it not ironic that trade unions are being asked to contribute to the costs of a certification officer, but will be prohibited from contributing to employers administering check-off?

The hon. Gentleman makes a valid point that shows the inconsistencies throughout the Bill.

I hope that the Government will rethink their proposals on the certification officer. I believe that they should be withdrawn, as they are pernicious, and that the current role of the certification officer, which is widely respected, should be retained. To do otherwise betrays a disdain for independence, impartiality, fairness and, most importantly, the rule of law.

I rise to support the amendments. The clause will increase substantially the investigation powers of the certification officer, giving him or her powers to investigate the activities of a union even when a complaint has not been received from a member of that union, or from any trade union member at all. Surely the provision completely misses the point of a trade union certification officer’s role. Trade unions are independent organisations whose function is to represent the interests of their members. Whether or not this Government approve of trade unions, the fact remains that they perform a legitimate—some would say essential—role within a free society.

The certification officer performs a vital role, but that role does not and should not involve attacking the rights of trade unions and their members who, after all—apologies to my colleagues from north of the border—are citizens of the United Kingdom. The role of the certification officer is to protect the rights of trade union members by ensuring that unions operate openly, democratically and at all times in the interests of their members. The guidance on the Bill describes the provision as giving the certification officer new enforcement powers so that action can be taken without the need for an application or complaint from a member to be received first. The certification officer will therefore be able to investigate and take enforcement action in a number of areas where that is currently not possible or appropriate. In particular, the guidance states:

“For example the Certification Officer could act upon information or concerns he had received from a third party or on his own initiative.”

That provision is totally unacceptable in a free society.

There are more than 6 million trade union members in the UK. They are all intelligent and fully capable of raising a complaint or concern with the certification officer if they have a problem with their trade union. Why does the certification officer need powers to act when not one single trade union member raises a concern? On whose complaint or on whose authority will the certification officer act? We all know on exactly whose authority that will be. Every scare story and sensationalist headline in the “Daily Wail” or the “Daily Hexpress” will be followed up. Six million members may be completely content and satisfied, but the editor of the “Daily Wail” screaming about Len McCluskey, Sir Paul Kenny or Dave Prentis having the bare-faced audacity to stand up for their members will in future be the subject of a full investigation. That is a total waste of time, and the costs of such investigations will be passed on to the trade unions, which will have no alternative but to pay.

Does the hon. Gentleman agree that the provision could lead to more malicious complaints being sent to the certification officer? It could lead to fascist organisations making complaints about the funding of anti-racist groups.

The hon. Gentleman makes a valid point. Once enacted, the provision will give the certification officer the right, or possibly even the duty, to act on any complaint, no matter its source. That is a matter of grave concern. The provision is concerning and an expensive waste of time for trade unions.

As a means of restricting the rights of trade unions and their members, the provision is nothing short of disgraceful, and that has been borne out by the evidence from a whole range of international organisations and lawyers representing many interests. The provision will turn the certification officer’s role from one of protecting trade union members into one that is highly political. They may be forced to react to politicians and newspaper editors, instead of members. Where the certification officer becomes the investigating power, they will become judge and jury over trade unions, their members and officials. Trade union members—the ones we are all concerned about with the Bill—will have to foot the bill while having no easy mechanism to hold the certification officer to account for their actions.

The Government believe that it is entirely appropriate for a modern regulator to be able to investigate properly when non-compliance with statutory requirements is suspected. The idea is nothing new, as the Electoral Commission and the Charity Commission have investigation powers that can be used proactively when they suspect a breach.

The powers are important because we want the certification officer to be able to determine as quickly and efficiently as possible whether there is a problem so that that can be swiftly remedied. If no problem is found, the quicker the doubts, representations and complaints can be dismissed, which is better for everyone concerned, including unions, employers and the public. The Bill therefore extends the certification officer’s investigatory powers into a number of areas: political funds; union mergers; union leadership elections; and the appointment of a person to, or the failure to remove a person from, a union office when they have been convicted of certain financial offences. To ensure that all the certification officer’s investigatory powers are set out in one place in statute, the Bill also replicates not-yet-commenced investigatory powers in relation to statutory requirements to maintain an accurate register of members’ names and addresses.

We want the certification officer to have investigatory powers in those areas because they relate to statutory requirements that are not only of concern to union members, but of wider relevance to the general public. Members of the public need the assurance that unions are complying with statutory requirements, and they will be given that assurance if the certification officer is able to investigate of his own volition. The investigatory powers will also allow the officer to bring in additional resources or specialist knowledge, should an investigation prove complex and technical. That will give them flexibility when choosing an appropriate inspector, including a third party, to deal with such investigations and then resolve them swiftly and effectively. It will also assist their ability to manage the certification office’s workload, should there be a sudden spike in cases.

The enhanced investigatory powers that we are giving to the certification officer are not entirely new; they are based on those that he already has in relation to a union’s financial affairs. The powers have been exercised fairly and proportionately in the past, and there is no reason to believe that that would not continue to be the case for the certification officer’s enhanced investigatory powers. We believe that the investigatory powers are necessary to ensure that there is robust and effective regulation of trade unions. Effective regulation promotes public confidence.

The Minister seems to be implying that there is zero chance of the certification officer being a political appointment in future.

There is no proposal to change the appointment procedure for the certification officer. As the hon. Member for Cardiff Central reminded us, the appointment is made in consultation with ACAS. I remind the Committee that ACAS is currently run by Brendan Barber, the former general secretary of the Trades Union Congress. The idea that we are going to be able to stuff in some political stooge is somewhat far-fetched, like almost everything that Opposition Members have said during the Committee.

On amendments 69, 70 and 71, I am happy to reassure Members that a union will continue to have the opportunity to present its case in written representations to the certification officer before a declaration is made. The officer may also allow the union to make oral representations. That right will also apply before the certification officer issues a financial penalty or conditional financial penalty. In practice, a union may have several chances to reply to any allegations and put forward a defence. Any inspector appointed is likely to make a series of enquiries, which will include dealing with the union directly, before providing their report to the certification officer.

Finally, the union will be able to appeal a certification officer’s decision to the Employment Appeal Tribunal. That will ensure that a union has the opportunity to make further representations to an independent tribunal should it believe a decision made by the certification officer was unlawful. I therefore urge the hon. Gentleman to withdraw the amendments.

I welcome the Minister’s clarification on those last points. Given that, I am content to withdraw the amendments, but I hope that when we discuss the subsequent groups of amendments the Minister will explain what other position in Government has the same range of investigatory, adjudication and enforcement powers in the hands of one individual. It would be useful to understand the sort of comparisons we are looking at. The powers are very wide-ranging and the situation is very blurred.

The Minister has given assurances that the position will remain independent and so on, but he mentioned a spike in cases: perhaps he suspects that there might be such a spike. Opposition Members have expressed concerns about the malfeasance that might be attempted by, for example, a fascist group or someone else who wanted to tie up the certification officer’s time or, indeed, a union’s finances in dealing with a bunch of illegitimate cases in order to disrupt and cause problems. That would be of great concern. I hope that the Minister can explain that in subsequent debates, but for now I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

With this it will be convenient to discuss the following:

Amendment 55, in clause 14, page 11, line 11, at end insert—

‘(4) For the purposes of this section and the Schedules to which it gives effect complainant and applicant must be—

(a) a member of the union which is the subject of the complaint or application.”

Amendment 66, in schedule 1, page 17, line 7, leave out “or any other person”.

The amendment would restrict the power to require the production of documents to the Certification Officer and his or her staff.

Amendment 67, in schedule 1, page 17, line 47, after “obligation,”, insert

“where a complaint has been received from a member of the relevant trade union, and where there the Certification Officer reasonably believes there is evidence that indicates a breach of a relevant obligation”.

The amendment would require a complaint to be made by a union member and for the Certification Officer to reasonably believe there was evidence of a breach of an obligation before the Certification Officer initiated an investigation.

Amendment 68, in schedule 1, page 18, line 1, leave out “or other persons”.

The amendment would require a person investigating a breach of an obligation by a union to be a member of staff of the Certification Officer.

Amendment 56, in clause 15, page 11, line 16, after “32ZB”, insert

“and where a valid complaint has been made by a member of the trade union or unions relevant”.

The amendment would provide that only after a valid complaint from a union member can the Certification Officer make a declaration that he is satisfied that a union has failed to comply with the requirements for the annual return in respect of industrial action or political expenditure.

Amendment 57, in clause 15, page 12, leave out lines 16 to 19.

The amendment would prevent a union member who was not party to a complaint giving rise to an enforcement order implementing the order.

Amendment 58, in clause 16, page 13, line 3, leave out

“the applicant or a person mentioned in subsection (5B)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 59, in clause 16, page 13, line 6, leave out “or the applicant”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 60, in clause 16, page 13, line 9, leave out

“the applicant or a person mentioned in subsection (6)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 61, in clause 16, page 13, line 12, leave out

“the applicant or a person mentioned in subsection (5C)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 62, in clause 16, page 13, line 15, leave out

“the applicant or a person mentioned in subsection (8)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 63, in clause 16, page 13, line 18, leave out

“the applicant or a person mentioned in subsection (5C)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 64, in clause 16, page 13, line 21, leave out

“the complainant or a person mentioned in subsection (4A)”.

The amendment would limit enforcement powers to the Certification Officer.

Amendment 65, in clause 16, page 13, line 25, leave out

“the applicant or a person mentioned in subsection (7)”.

The amendment would limit enforcement powers to the Certification Officer.

The Bill needs so many amendments because of its complex nature. A lot of information and important detail is contained in the relevant schedules, and it is necessary to apply the changes that we want to make to all the relevant parts of the Bill. I will go through the amendments briefly without repeating our arguments and overall concerns about this part of the Bill.

Amendment 54 would remove schedule 2, which includes provisions permitting the certification officer to carry out investigations, even though no complaint has been made by a union member. Amendment 55 seeks to ensure that the certification officer only carries out an investigation against a union where a complaint or application has been received either from a union member or an employer who employs union members. The amendment aims to tease out our concern about who might bring investigations or complaints.

Amendment 66 would mean that only the certification officer or his or her staff—and not inspectors—would have the power to require the production of documents from unions during an investigation. This is an important point because the Minister made a case in his comments on the preceding group about a potential spike in cases and the need for additional inspectors to help the certification officers conduct their work. That is a very worrying suggestion. While the Minister might give us assurances about the independence and conduct of the certification officer under the new role, appointing a legion of inspectors under them who have some sort of quasi-judicial role separate from existing legal authorities or police does not reassure me about the way in which they would conduct themselves. Will the Minister explain how he sees their role and what constraints they would operate under?

Amendment 67 would mean that the certification officer could only initiate an investigation if they have received a complaint from a member of the relevant union and if they believe there is evidence that the union has breached one of its statutory duties. The aim is to ensure that the certification officer—or one of the inspectors—does not initiate investigations on their own volition or go on fishing expeditions through union records when they have not received a complaint from union members. Does the Minister believe that the certification officer would be allowed to undertake such investigations without complaints being made by a relevant party, particularly where a complaint from the union member involved has not been received? In my view, certification officers should not have the ability to wander around initiating investigations here, there and everywhere without any just cause.

Amendment 68 would mean that only the certification officer or members of his or her staff could investigate a union. Amendment 56 would mean that the certification officer could only make a declaration that a union has failed to comply with the new reporting requirements if they had received a valid complaint from a member of the relevant union. Again, this is to ensure that the certification officer does not initiate investigations on their own volition if no one has complained. Amendment 57 would prevent a union member who was not a party to the relevant complaint seeking to enforce an order made by the certification officer.

It is a very odd set-up where, on our reading of the legislation, somebody who is not involved at all could look at a decision that has been made and then seek to enforce the order. If that is not the case, can the Minister confirm that on the record? The role of organisations such as the TaxPayers Alliance has already been commented on. Many individuals and organisations would attempt to undertake vexatious expeditions, perhaps on the back of fishing, to attempt to enforce orders against trade unions, which would already have spent quite a lot of their own funds in dealing with the complaints. They would potentially then have to fight attempts by another individual who was not even involved to try to enforce the orders made under this clause and the schedules.

Amendments 58 to 65 would further limit the enforcement powers of the certification officer and define their role rather than that of others who might be involved in potential enforcement. The amendments are designed to tease out various concerns we have about the way in which the legislation is drafted and would be applied in practice. I will be interested to hear what the Minister has to say and whether we seek to press any of the amendments to a vote.

On amendments 54, 55, 56 and 67, the current enforcement regime is limited. With the exception of statutory duties in relation to financial records and as of next year the membership register, the certification officer may only make inquiries and take action following a complaint from a union member. That is not satisfactory. A modern regulator should be able to take action as appropriate where they suspect that there has been a potential breach of statutory duties or obligations. That is not new: the Electoral Commission and the Charity Commission both have such powers. The powers will enable a certification officer to take enforcement action once he has made inquiries and only if satisfied that there has been a breach of statutory duties or obligations in relation to the new reporting requirements. It would be wrong to restrict the exercise of the certification officer’s powers simply to responding to a complaint as the amendments seek to do, so the Government cannot support them.

Amendment 67 additionally seeks to change the test for the use of the officer’s powers of investigation. Currently, the officer may request documents when it is believed there is good reason to do so and appoint an inspector in circumstances that suggest a trade union has breached a duty. The amendment would require the certification officer reasonably to believe that evidence indicates a breach of duty.

It is important to note that the amendment relates to the test of the use of investigatory powers, not the basis on which the certification offer can make a determination that there has been a breach. Of course, there must be evidence and investigatory powers are about gathering that evidence. The tests we propose for the use of the investigatory powers are essentially the same as those that apply to the officer’s long-standing powers to investigate potential breaches of financial affairs under the 1992 Act. Those tests have been in place for a long time.

The investigatory powers are intended to assist with determining whether there has been a breach. The officer will still have to give the union the chance to make representations and then be satisfied that a breach has actually occurred before taking any enforcement action. If a trade union believes that the certification officer has acted beyond his powers or that the officer has made a mistake in applying the law when reaching a decision, it can still appeal to the Employment Appeal Tribunal. I therefore believe that adequate safeguards are already in place.

I turn to the enforcement of the certification officer’s orders. Amendments 57 to 65 aim to restrict the enforcement of orders to the officer exclusively. In tabling the amendments, the hon. Gentleman seems to be under the impression that we are trying to subcontract enforcement of the officer’s orders to individual union members. I assure him that that is not the intention. We simply seek to reflect the current situation in which complainants and other members of the relevant trade union are entitled to apply to a court to enforce obedience with the officer’s orders. That is nothing new; indeed the 1992 Act is clear on that point.

Will the Minister clarify whether he believes it would be reasonable for someone who was not a party to a dispute—the TaxPayers Alliance, for example—to attempt to enforce an order or be involved in such an enforcement?

As I think I just explained, it is currently the case under the 1992 Act that complainants as well as other members of the relevant trade union are entitled to apply to a court to enforce obedience with the certification officer’s orders. If such a body had been a complainant, there had been a process and the certification officer had made an order, under the provisions of the 1992 Act it is entitled to apply for enforcement of that order. There is nothing new in that; that has been in place since 1992 and, needless to say, throughout the period of the previous Labour Government.

Amendments 66 and 68 seek to restrict investigation activities, including the power to demand documents from a trade union, to the certification officer’s own staff. I understand concerns in relation to data protection and confidentiality, but the ability to appoint a third party gives the officer discretion to identify an inspector with specific expertise or simply to bring in additional resource should that be necessary.

Some investigations might be complex, technical and lengthy, so the officer’s permanent team may not have the time to carry them out. The amendment would reduce the officer’s flexibility in choosing an appropriate inspector to appoint, should such a case arise. It is important to note that the ability to authorise or appoint people to assist with investigations in that way is not new. It is exactly the same as the options currently available as part of the certification officer’s long-standing powers to investigate financial affairs. All the Bill does is to provide similar powers of investigation in relation to other potential breaches.

I want to test the Minister a little more on inspectors. He says that there is nothing new, but he spoke previously about a potential spike in cases leading to an increased need for inspectors to help the certification officer carry out their duties. Will he tell the Committee—if he cannot do so now, perhaps he could write to us—how many inspectors would be required, whether there would be a cap on the number of inspectors that the certification officer could appoint, where those costs would be met from, whether there would be any cap on the cost and what sort of qualities would be required in the recruitment and employment of those inspectors by the certification officer?

I am happy to write to the Committee with that information. I would like to correct something that I said previously, in case I created a false impression. I had not understood that a complainant has to be a member of the trade union. Under the 1992 Act, any member, whether a complainant or another member, can enforce the certification officer’s orders. That is what we propose to replicate for these other powers. Except in the unlikely event that the TaxPayers Alliance decided to join all the trade unions that it wanted to complain about, it is unlikely that it would be in a position to enforce those orders.

So just to clarify, it would not be appropriate for vexatious individuals outside the dispute, who were not members, to attempt to involve themselves in the enforcement of orders or the investigations.

Just so I am clear, is the Minister indicating that he is amenable to amendment 55, which would provide that the complainant must be a trade union member? He said earlier that he was going away to consider some aspects of picketing, in relation to what could be defined as outside interference.

No, I am not indicating that, but we believe that the Bill already makes it clear who has the power to complain and who has the power to enforce. Moving on, I have explained that the appointment of investigators is not new; it happens under existing powers regarding the investigation of financial matters, and the Bill simply extends it to other potential breaches. The new investigatory powers contain specific provisions to impose a duty of confidentiality on any inspector that the certification officer appoints to prevent the unauthorised disclosure of personal information about union members. I therefore ask Opposition Members to withdraw the amendment.

The Minister has provided helpful clarification on a number of points, but I am still not convinced that there are enough safeguards built into the Bill concerning the role and extent of investigations, and the basis on which they are made. He has said that the Bill does not change what was there before, but it will massively extend the powers of the certification officer, so I think it is only right that we look at defining limitations to those investigations, adjudications and enforcements. We may table other amendments at later stages and I would like, at the appropriate point, to press to a vote amendment 67, which would establish limits to ensure that the certification officer does not go on fishing expeditions where they have not received complaints.

Amendment, by leave, withdrawn.

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

With this it will be convenient to discuss the following:

New clause 7—Certification Officer

“For subsections (2) to (4) of section 254 of the 1992 Act substitute—

“(2) The Certification Officer shall be appointed by the Judicial Appointments Commission, and the person appointed shall have expertise in trade union law.

(3) There shall be a Certification Officer for Scotland, equal in status to the Certification Officer in subsections (1) and (2) above.

(4) The Certification Officer for Scotland shall be appointed by the Judicial Appointments Board for Scotland, and the person appointed shall have expertise in trade union law.””

New clause 10—The Certification Officer

“In section 254 of the 1992 Act (The Certification Officer) for subsections (2), (3) and (4) substitute—

“(2) The Certification Officer shall be appointed by the Judicial Appointments Commission, and the person appointed shall have expertise in trade union law.””

The previous two groups of amendments afforded us the opportunity for extensive debate on clause 14, so I do not propose to speak at length about it. It extends the certification officer’s investigatory powers and enables the officer to exercise a number of those powers without a complaint from a trade union member. It is entirely appropriate for a modern regulator to be able to investigate properly where non-compliance is suspected.

I turn to new clauses 7 and 10, and I remind the Committee that the provisions in the Bill, including those that relate to the certification officer, concern employment law and industrial relations matters. They are about how trade unions act and how they should be regulated. Those remain reserved matters for Westminster and are not devolved to Scotland or Wales. In my view, the provisions should apply across the whole of Great Britain, and I do not propose to rehearse devolution arguments here. I note, however, that section 254 of the 1992 Act requires the certification officer to appoint an assistant certification officer for Scotland and allows for the delegation of functions relating to trade unions based in Scotland to that assistant certification officer for Scotland. I believe, therefore, that the 1992 Act sufficiently caters for Scotland’s needs and that appointing a separate certification officer for Scotland is not necessary, especially since the 1992 Act provides a regulatory framework for the whole of Great Britain.

Turning to the proposal that the Judicial Appointments Commission should be responsible for the selection and appointment of the certification officer, I do not agree that the certification officer is a judicial office. Currently, the certification officer has a range of functions—administrative, investigatory, regulatory and adjudicatory —all of which are important aspects of the office. Hon. Members will note that the Bill further increases those investigatory and regulatory functions. It would not be correct, therefore, to describe the certification officer as a judge or other holder of judicial office.

It has been long-standing practice that the certification officer should be a ministerial appointment; a practice not, I believe, challenged or questioned by the previous Labour Government. Such appointments are typically made following Department for Business, Innovation and Skills public appointments practice: a panel, which includes an independent panel member, as well as representatives from the CBI and the TUC, considers applications and makes recommendations to BIS Ministers. In making its recommendations, the panel must only put forward names of candidates that are appointable—that is, who have demonstrated competence to perform the role. It is then for the Secretary of State to make the final decision on whom to appoint. This is nothing new and certainly nothing unusual.

I am keen to stress that the certification officer is, and always has been, independent of Governments of whichever party. Ministers have never directed what the certification officer does. Indeed, no one has suggested otherwise since 1975, when the office was set up. The certification officer is appointed by the Secretary of State after consultation with ACAS, but as his annual report, deposited in the Libraries of both Houses of Parliament, points out, he is independent from both ACAS and the Secretary of State for Business, Innovation and Skills. As the Committee knows, we want to enhance the role of the certification officer to ensure robust and effective regulation of trade unions. We want to modernise this regulatory role to bring it up to date with a new, modern system for industrial relations. Our changes increase the regulatory aspects of the role. The Government do not therefore think that appointment of the certification officer by the Judicial Appointments Commission is appropriate.

Turning to the proposal that the certification officer should have expertise in trade union law, I agree, of course, that the certification officer should have knowledge of trade union law, but I do not believe that it is necessary to prescribe this in legislation, primarily because to do so risks limiting the range of candidates that could perform the role in future. In any case, the recruitment panel will only recommend to Ministers appointable candidates for the role of certification officer and those candidates will need to demonstrate to the panel that they have full competency for the role. For these reasons, I ask hon. Members to withdraw the new clauses.

I am somewhat bemused by the Minister’s comment that the certification officer is not a judicial officer. He has explained the wide powers that the certification officer has, so I am very interested to know what positions the Government consider to be comparable. Most people would consider the certification officer to have a quasi-judicial role, at the very least, and therefore we need some very strict controls about how it is regulated. The crucial point is that we are moving well beyond the original role set out for the certification officer. As my hon. Friend the Member for Cardiff Central said, this is not to comment on the suitability or the work that has been done by the current certification officer, who, from all my experience and that of the stakeholders I have engaged with, has done a very good job, but this is a complete change in the role and its powers. That change requires a fresh look at how the certification officer is appointed.

Our new clause would provide that the certification officer in Great Britain would be appointed by the Judicial Appointments Commission. Currently, as we have heard, the role is appointed by the Secretary of State for Business, Innovation and Skills in consultation with ACAS. The Minister went through the process of shortlisting and so on, and obviously, it is great that a number of stakeholders are involved. However, of course the final decision rests with the Secretary of State and that, again, gives wide latitude to a Secretary of State to veto or to appoint someone partisan or political. Given the nature of the rest of the Bill, many of us might strongly suspect that that would happen.

The Secretary of State for Business, Innovation and Skills of course regularly consults many different stakeholders, but as we saw in debates about the steel industry he seems willing to ignore all the advice and carry on regardless. I have no faith as to whether things would continue in that vein, when I consider the intent and purpose of the Bill.

We all agree that the certification officer should be independent of Government and required to have expertise in trade union law rather than just knowledge of it. Demonstrable knowledge could be an ability to list by rote the clauses of the Bill. Someone who takes such a wide range of powers needs a detailed understanding of the provisions. The 1992 Act does not specify the qualifications required, but the Bill gives the certification officer extensive new powers and remits, and it is only reasonable to expect the person appointed to have expertise in that regard, particularly given the various aspects of the role.

If the Minister intends to reject the new clause, will he explain what consultation, as a minimum, he would expect for the new role? Will things just carry on as they do under the old system, with the limited involvement of the TUC, CBI and so on at the shortlisting stage, or does he envisage a wider range of people being involved? Will he give wider assurances about the type of qualifications and other requirements? Given the nature of the proposed role, we believe that the certification officer should be appointed by the Judicial Appointments Commission—that is only right—and that there should be a clear requirement for expertise in trade union law.

New clause 7 is essentially similar to our new clause in its purpose; I understand why the hon. Member for Glasgow South West and his hon. Friends have tabled it, in relation to Scotland. As I have said before in similar debates, we want the fairest settlement in the Bill for workers and trade union members across the UK, and I hope the hon. Gentleman understands that that is what we intend with our new clause. It would deal with the whole of Great Britain, not just Scotland.

As the shadow Minister said, the new clauses really deal with who should be the certification officer. If the powers are being enhanced, the new role needs to be reconsidered, because—the shadow Minister is correct—it is at the very least quasi-judicial. The aim of new clause 7 is to ensure that the holder of the post has adequate qualifications and expertise.

The Minister has said he expects the person appointed to have expertise in trade union law, but his successors may not. An adequate provision would make it clear, as the new clause does, that the certification officer should have expertise in trade union law. It cannot be someone we met down the pub, who may be able to recite all the clauses of the Bill. It needs to be someone of a very high standard, with expertise in trade union law, who knows the intricacies of that law. More importantly, the person should be independent of Government, and that is why it is appropriate in the circumstances to involve the Judicial Appointments Commission.

The new clause has another purpose. As the Minister pointed out, there is currently an assistant for Scotland. The enhanced role will have an impact on elections where they are now devolved to the Scottish Parliament, in terms of Scottish parliamentary and local government elections. If there are questions about election funding, that will be a Scottish issue and we believe it would require a certification officer in Scotland to consider it.

Also, there are differences between the legal jurisdictions. There is different civil and criminal law in Scotland, and we believe the new provisions about the certification officer can only impinge on the consideration of civil and criminal law in relation to complaints and so on. The effect of the certification officer provisions will be that Scotland will need not an assistant but a certification officer of equal status to the certification officer for Great Britain.

We have no issue with new clause 10 and we will support it in a vote, but we are seeking a Scottish provision of equal status due to the impacts that the new role of a certification officer will have.

We do not accept that the Bill would dramatically expand the certification officer’s role. We are simply replicating the investigatory powers that he already has in relation to financial matters with regard to the new matters that he will have the power to investigate, so we certainly do not see any basis for changing how he is appointed. Previous Governments who were happy for him to have those investigatory and regulatory powers in relation to financial matters thought the arrangements for appointment were adequate. I commend clause 14 to the Committee and ask Members to resist new clauses 7 and 10.

To clarify, we will press new clause 10 to a vote at the appropriate point.

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

Clause 14 ordered to stand part of the Bill.

Schedule 1

Certification Officer: investigatory powers: Schedule to be inserted into the 1992 Act

Amendment moved: 67, in schedule 1, page 17, line 47, after “obligation,”, insert

“where a complaint has been received from a member of the relevant trade union, and where there the Certification Officer reasonably believes there is evidence that indicates a breach of a relevant obligation”.—(Stephen Doughty.)

The amendment would require a complaint to be made by a union member and for the Certification Officer to reasonably believe there was evidence of a breach of an obligation before the Certification Officer initiated an investigation.

Question put, That the amendment be made.

Question put, That the schedule be the First schedule to the Bill.

Schedule 1 agreed to.

Schedule 2

Certification Officer: exercise of powers without application etc

Question put, That the schedule be the Second schedule to the Bill.

Schedule 2 agreed to.

Clause 15

Enforcement by Certification Officer of new annual return requirements

I beg to move amendment 94, in clause 15, page 12, line 23, at end insert—

‘( ) In section 45D of that Act (appeals from Certification Officer), after “31” insert “, 32ZC”.’

The amendment adds a reference to the new section 32ZC (inserted by clause 15) in section 45D of the 1992 Act. The effect is that decisions made by the Certification Officer in relation to the enforcement of the new annual return requirements provided for by clause 15 are subject to a right of appeal.

The amendment rectifies a small omission in the clause relating to appeal rights. Where a union fails to comply with the new annual reporting requirements, the certification officer will have the power under the clause to make a declaration to that effect. If the certification officer makes a declaration, he will have the power to make an enforcement order unless it is in inappropriate to do so; he will also, under clause 16 and schedule 3, have the power to issue a financial penalty.

It has always been our intention that if the certification officer makes such a declaration or order, the union will have a route of appeal to the Employment Appeal Tribunal on a point of law. That is consistent with the approach taken elsewhere in the 1992 Act. However, the clause as it stands will not provide for such rights unless a reference to the new provisions is inserted into the correct place in the 1992 Act. The amendment corrects that oversight. I trust that hon. Members will be content to accept this minor amendment.

I appreciate the comments the Minister made. Given that this is a rare chink in the cloud that allows trade unions some rights to challenge use of the draconian powers provided for elsewhere in the Bill and in the clause, I do not intend to oppose the amendment. However, we will oppose the clause to which it relates.

Amendment 94 agreed to.

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

Clause 15, as amended, ordered to stand part of the Bill.

Clause 16

Further powers of Certification Officer where enforcement order made

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

I want to ask the Minister a few questions. The clause inserts new section 32ZC into the 1992 Act and gives effect to schedule 3, which we will come to shortly. The certification officer will have a new power to impose financial penalties on unions when an enforcement order has been made, and the Government will have the power to set the level of penalties in regulations. Paragraph 6 of schedule 3 states that penalties will range from £200 to £20,000. The clause also extends the ability of individual members of a union to enforce the certification officer’s orders even if that order was no concern of theirs.

Will the Minister explain a little more about the penalties—how they will be applied, the different gradings and so on? Do the Government plan to increase the limit at any point? How often does he expect them to be used in the different categories? What size of penalty does he expect to be applied?

I also want clarification on the individual member’s ability to enforce orders. Thankfully, we had clarification from the Minister that individuals outside a dispute cannot be involved, but there is a possibility that members of the union that was party to the dispute who were not personally involved could attempt to enforce orders.

The Committee might wonder why I am worried about that, but there are circumstances in which a couple of individuals who are members of a union may be involved in malicious activity and attempt to undermine others who have taken a wider, collective decision that was endorsed by other members. I want to understand who can be involved in attempting to enforce a certification officer’s orders. Can that be any member of the union involved whether or not they were personally involved in the case? I would be grateful if the Minister would clarify those points.

New schedule A4 to the 1992 Act will enable the certification officer to issue financial penalties or conditional financial penalties in those areas where he has existing powers to issue declarations and enforcement orders, which will provide a consistent approach. He will also be able to issue those penalties for breaches of the new annual reporting requirements on trade unions in relation to details of industrial action and political fund expenditure. Those areas are all listed in paragraph 1 of the new schedule.

Paragraph 4 of the new schedule requires the certification officer, before issuing a penalty, to provide written reasons for his decision, which will allow the union to know why the certification officer has found against it. The union will also have the opportunity to make written representations and may be given the opportunity to make oral representations.

Paragraph 5 of the new schedule provides for appeals to the Employment Appeal Tribunal based on an error of fact or a point of law, or on the grounds that the decision to impose a financial penalty or conditional financial penalty is unreasonable. The appeal grounds are similar to those provided for in other financial penalty regimes and will ensure that a wrong decision can be challenged.

Paragraph 3 of the new schedule provides for enforcement of conditional penalties. In cases of non-compliance, the certification officer will issue a further order requiring that a penalty be paid immediately or by a certain date. Where a union has provided evidence of partial compliance, the certification officer will have flexibility to reduce the amount of the penalty should he choose to do so. That will encourage unions to comply with conditional penalty orders while punishing those that take no steps towards compliance.

The hon. Member for Cardiff South and Penarth asked whether any member of the union about which a complaint has been made, including members who were not themselves complainants, can apply to court for the enforcement of the certification officer’s orders. My understanding is that currently, under the 1992 Act, it is possible for any union member to apply for enforcement of such orders, but I am happy to write to him with the full detail if that is helpful.

Are there any cumulative limits on the number of financial penalties or the total amount that can be imposed on any one subject in the legislation within a year, or could numerous orders of up to £20,000 be imposed, with no limit on the overall amount sought? Obviously, due to vexatious actions or fishing expeditions and so on, a union could be subject to hundreds of thousands of pounds in penalties in a year as a result of investigations, without any kind of limit.

There is no limit, but as the hon. Gentleman points out, if a union is subject to vexatious complaints, the certification officer will not find in favour of the complainant or impose a penalty. As I have explained, the union will have every opportunity to appeal any penalty imposed improperly. Although I understand the drift of his concern, the provisions already protect unions from vexatious complaints that might lead to an accumulation of penalties.

There is, of course, a downside for the trade unions even in that situation, in that it is the trade union that will have to pay for the investigation.

We will move on, I believe, to the question of how the costs of the certification officer will be paid for. It is absolutely right that the Government are proposing that, in common with other regulators, the certification officer will be paid for by the regulated. However, again, if vexatious complaints are made, we have every reason to expect the certification officer, who has all the powers necessary to do so, simply to dismiss them and not to pursue them to the detriment of union finances.

On that basis, I commend the clause to the Committee.

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

Clause 16 ordered to stand part of the Bill.

Schedule 3

Certification Officer: power to impose financial penalties: Schedule to be inserted into the 1992 Act

Question put, That the schedule be the Third schedule to the Bill.

Schedule 3 agreed to.

Clause 17

Power to impose levy

I beg to move amendment 95, in clause 17, page 14, line 1, leave out

“(b) payments made by ACAS under section 254(6),”.

Section 254(6) of the 1992 Act is spent: it depends on section 115 of that Act, which has been repealed. The reference to section 254(6) in the new section inserted by clause 17(1) was included in error, and this amendment removes it. Amendment 97 repeals section 254(6) itself and the reference to it in section 254(5A).

Clause 17 inserts new section 257A into the Trade Union and Labour Relations (Consolidation) Act 1992, to provide the Secretary of State with the power to make regulations requiring the certification officer to charge a levy on trade unions and employer associations to recover the cost of the certification officer’s expenses. New subsection 257A(3) sets out the sorts of expenses that the regulations might specify are recoverable by the levy; this includes payments made by ACAS under section 256(6).

The payments under section 256(6) were intended to enable the certification officer to make payments towards expenditure in connection with secret ballots. However, the provision to make those payments—section 115 of the 1992 Act—was repealed more than 20 years ago by the Trade Union Reform and Employment Rights Act 1993. That in turn means that section 256(6) is not required—in fact, it should have been repealed when section 115 was repealed back in 1993. Amendment 95 corrects that oversight and repeals section 256(6). Amendment 97 completes that tidying up. It removes reference to those sums being included in the expenses of the certification officer that the regulations could require the levy to recover. I commend Government amendment 95 to the Committee.

I accept the Minister’s point about the two Government amendments being technical in nature, so we do not intend to oppose them, but I do want to explain briefly our concern about clause 17.

As we have discussed at length, the Bill imposes significant new administrative obligations on unions in a range of matters. They face a major increase in regulation that the Government simply would not apply to other sectors in society—certainly not to business. They will also be expected to pay for the pleasure of the enforcement of the new obligations.

As discussed, clause 17 contains a power permitting the Government to levy a charge on trade unions to cover the running costs of the certification officer, which currently stand at approximately £1 million but are expected to rise. I suspect that they will rise under the new regime, given the wide expansion of powers. The levy looks set to apply to employers’ organisations—I hope the Minister can clarify this point—including the Engineering Employers’ Federation, the Electrical Contractors’ Association, the Federation of Master Builders and the National Farmers Union. The measure will apply not only to trade unions but to a whole range of employers’ organisations.

We understand that the Government are consulting on how much should be levied, but, like on so many areas of the Bill, they have not published their consultation responses, so we are in the dark on this matter. We are expected to vote on the Bill without knowing what will happen. Will the Minister explain a little more about how the levy is expected to work, whom it will be levied on and whether it will apply to the organisations I mentioned? What level can we expect it to be at? Will it rise in the future? What provisions will there be to review it? How will it be put into operation? It is not acceptable that a Committee considering matters of this nature is making its decisions largely in the dark.

Trade unions and employer associations, like many other organisations, should be regulated. Proportionate regulation helps to improve confidence in the way such institutions are run, which can only be a good thing. It is only fair that the cost of such regulation falls not on the taxpayer, but on those who are regulated. I note that the previous Labour Government introduced an almost identical provision, which I believe all members of the Committee support, in the financial services industry, whereby the costs of financial regulation and the regulator fall on the members of that industry.

I ran a small financial services business and remember paying high fees, which went up steeply, to the Financial Services Authority. I recall no consultation, about which we were unhappy, but the key issue was that the regulator failed rather substantially in the credit crunch. If such payments are made here, can we have assurances that we will have a good quality system for all those affected?

I am certainly trying my best to ensure that the regulation of trade unions is more effective than the regulation of the financial services industry preceding the 2008 crash. I do not think that the risks are as great, and I have been the first to point out that it is unlikely that the trade unions, which mostly do an excellent job, will crash the economy in the way that the under-regulated financial services industry did under the previous Labour Government. Sir Alan, I think you are going to say that I am moving away from the point, so I will return to it.

The clause enables regulations to be made so that the certification officer can charge a levy on trade unions and employer associations.

I am going to make some progress.

It is important to understand that employer associations are also subject to the levy. The Bill does not prescribe the amount of the levy because the certification officer is independent. It is for the certification officer to decide each year how much they need to charge to cover the costs of performing their functions. We have taken the approach of providing a regulation-making power, rather than setting out in the Bill exactly how the certification officer is to determine the amount of the levy, because the Bill expands the certification officer’s role. It is only once this new expanded role is established that it will be possible to determine precisely how the regime should work. Having said that, we also recognise that Parliament and those directly affected rightly expect to see how the regime will work when Parliament is being asked to agree the detail of the legislation. That is why the Bill sets out specific parameters for the content of the regulations. It is also why the regulations will be subject to the affirmative procedure. The clause also requires consultation before any regulations are made.

To meet our objective of cost recovery, the levy must be enough to cover the cost of the certification officer’s functions, but it cannot be any more than the certification officer needs. The certification officer cannot make a profit from their activities, nor undertake spurious activities to generate funds. That is only right as the certification officer is an independent public appointment and not a commercial enterprise.

I can understand the need for the certification officer to have a role in identifying the costs of their operations, but the Minister and the Government must have a ballpark figure. Are we expecting a doubling of the £1 million figure or an increase by a factor of 10? What sort of ballpark are we in? The people affected by the levy need to have an idea, remembering that it will apply not only to trade unions, but to the employer associations that I have listed.

The hon. Gentleman is entitled to speculate on any figure he likes, but we are going to leave it to the independent certification officer to assess the additional requirement and to set an appropriate levy.

We recognise that trade unions can vary greatly in size and that employers associations are often small, meaning that the size of the regulatory functions provided by the certification officer to such organisations may vary greatly. Smaller unions and employer associations may require less of the certification officer’s time and resources.

I am pleased to hear that clarification about employers organisations. Will the Minister tell us whether federated employers organisations, such as the CBI, will be covered by the measure?

My understanding is that federated employers associations will not be covered, but all other employers associations will be.

We want to be able to consider whether organisations that use more of the certification officer’s time should bear more of the cost. We will need to consult before determining whether that is the right way to proceed and will only take that approach if we find during consultation that it costs more for the certification officer to regulate larger organisations that it does for smaller ones.

Let me conclude by summarising the safeguards in the Bill on the way the levy is to operate: the amount of the levy will be limited to covering the cost of the certification officer functions; ACAS, unions and employer associations will be consulted before regulations are made; the regulations will be subject to the affirmative procedure, allowing a full debate in Parliament before they are brought into force; and the certification officer will be required to report annually on the amount levied and how that was determined, which will be published and laid before both Houses, ensuring transparency.

Question put, That the amendment be made.

Amendment 95 agreed to.

Order. Mr Stephens asked a question about EVEL earlier on, so I want to clarify that the EVEL procedures are invoked by the Speaker. The certification process takes place before the Second Reading of Bills or before something is considered as a statutory instrument, so Bills in Committee are not eligible for the use of EVEL procedures. I hope that that is helpful.

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.