I was trying to respond to the noble Baroness, Lady Donaghy, about contractual rights. Amendment 95A seeks to allow check-off to remain where employees have a contractual right or where there is a collective agreement in force which guarantees it. I do not think that that applies in many areas but there are some examples in local government. The prohibition would of course not be fully effective if we could not ensure that it applied consistently to all public sector employees. However, any modification would apply only retrospectively, from when the regulations came into force. It relates only to those very specific aspects of what has been collectively bargained. This is entirely reasonable and proportionate.

Amendments 123A and 124A seek to delay the removal of check-off so that Clause 14 would not come into force for five years. As I commented earlier, we have doubled the amount of time members would have to bring in the changes. This should be more than enough time for unions and members who have not already done so to transition to direct debit.

Finally, I turn to the comments made by the noble Lord, Lord Kerslake, and to his amendment. I am not sure that I should say this but as an ex-civil servant, I was rather shocked to hear of private exchanges between him and the recent former Minister on this matter. However, his amendment is not quite what we are looking for, because it allows for check-off effectively to be put on a statutory footing. This would prolong this method of payment, preserving the status quo and delaying the modernisation that we seek to provide, so I cannot agree to it. In fact, requiring all employers to do this could be seen to be anti-localism, in effect. It does not seem to fit the bill today.

I have covered the main amendments. We have had a long and useful debate and I am grateful for the opportunity to address some of the concerns. I ask that the amendment be withdrawn.

Baroness Wheeler: My Lords, I thank the Minister for her response. This has been a powerful, detailed and consensual debate. She says that she is in listening mode and I will carefully read her comments in Hansard, although I am sorry that she has not felt able to respond to the consensual nature of the debate. In fact, the only thing she has listened to is the issue concerning the implementation date, and she has not

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moved on that because we knew that the Government were moving implementation from six months to a year anyway. Therefore, there has not been any movement. I seriously struggle to detect any real change in the Government’s fundamental understanding of the role and work of trade unions in a modern society, or their simplistic consideration of the two options only approach in their check-off ban.

As speaker after speaker has demonstrated, the proposals are unfair, unjustified and unworkable. They have simply not been thought through. The Government have failed to address the Joint Committee on Human Rights’ call for objective justification of the proposals. The Minister simply has not addressed the arguments that have been made across in the House. We have had support from throughout the House: from the Lib Dems, from the Cross Benches—from my own Benches, obviously—from all noble Lords. I thank them, particularly the noble Lords opposite for the range of support and opinion that they reflect. It is a particular first for me to have such unequivocal support from the noble Lord, Lord Forsyth. His analogy regarding the Conservatives’ reaction if they sought to ban contributions to private health insurance was telling and appropriate. He mentioned the review of the noble Lord, Lord Strathclyde. I draw his attention to the debate we had on Tuesday on facility time. Clause 13 seeks reserved powers over capping facility time, which the Government say they will not use unless they have to. The Minister observed that the affirmative procedure would be used in that case. Therefore, we are in quite a bit of difficulty.

I will not go into all the arguments again. It is frustrating that the Minister has not been able to address the consensual nature of the debate, for which I am certainly very grateful. This is about fairness and justice. Amendments 92 and 93 provide the reassurances that are needed if the Government’s agenda is openness, transparency in procedures and costs and no burden on the taxpayer. If these amendments are supported in principle, the Government could succeed in achieving their objectives. They would in fact be regulating a system that regulates itself pretty well already, which is an interesting position for a Government who declare an abhorrence of red tape to be in. However, aside from that issue, if they do not support the amendments or move towards accepting them in principle, the only conclusion to draw is that they want to destroy effective trade union organisation, to prevent unions representing their members in the workplace and to attack and seriously weaken their finances. This issue is vital to the future of industrial relations, trade unions and their members, and as noble Lords across the House have said, it is about members’ choice. The Government are offering a top-down solution to a problem that does not exist. We will pursue the issues raised today with vigour and determination on Report, and with that I beg leave to withdraw the amendment.

Amendment 92 withdrawn.

Amendments 93 to 97ZA not moved.

Clause 14 agreed.

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2.07 pm

House resumed. Committee to begin again not before 3.07 pm.

Flooding: EU Solidarity Fund


2.07 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, with the leave of the House I will now repeat a Statement made earlier today in the other place by the Minister of State for Local Growth and the Northern Powerhouse. The Statement is as follows.

“I want to pay tribute to all those who have in whatever way supported the many places that were flooded in December and early January. The whole House will want to recognise the enormous amount of effort that has gone into supporting households and businesses, not just in the initial response to the floods but also in the ongoing work to get residents back into homes and businesses open.

The Government recognise that the immediate priority is to respond to the urgent needs of those affected. That is why we have already provided over £200 million to help those affected by the floods to support recovery and repair. A key feature of our package of support is the Communities and Business Recovery Scheme. It is designed to provide ready support to local authorities affected by Storm Desmond and Storm Eva to in turn help individuals, small and medium-sized businesses and communities to return to normality. Additionally, it provides property level resilience grants of up to £5,000 so that people can protect their homes and businesses against future floods by putting in place resilient repairs. To date under the Communities and Business Recovery Scheme, government has paid out a total of £21 million for Storm Desmond and £26 million for Storm Eva. Further payments will follow. We are also supporting farmers with grants worth up to £20,000 to help restore damaged agricultural land and farm vehicle access, repair boundaries and carry out field drainage.

Having set out what the Government have already done, I want to turn now to what more we can do. Today, I would like to announce our intention to make an application to the European Union Solidarity Fund. The fund was set up to respond to major natural disasters and to express European solidarity with disaster-stricken regions within Europe. The fund was created as a reaction to the severe floods in central Europe in the summer of 2002. Since then, it has been used for 70 disasters covering a range of catastrophic events, including floods, forest fires, earthquakes, storms and drought. The only time the UK applied to the fund was following the flooding of 2007, which saw widespread and significant damage across large swathes of England.

Member states have 12 weeks from the start of an incident to register their intention to claim. Once we have confirmed our intent, there is time to consider with the Commission the elements of assessment. Following this process, the Commission assesses the

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application and, if it is accepted, proposes an amount of aid to the European Parliament. Once the appropriations become available in the EU budget, the Commission adopts a decision awarding the aid to the affected state, following which the aid is paid out in a single instalment. When the aid is paid out, the affected state is responsible for the implementation, including the selection of operations and their audit and control. Emergency measures may be financed retrospectively from day one of the disaster. The EUSF is not, and nor is it designed to be, a rapid response instrument for dealing with the effects of a natural disaster. Financial aid can be granted to the applying state only following an application and the budgetary process, which can take several months to complete”.

2.11 pm

Baroness Jones of Whitchurch (Lab): My Lords, I thank the Minister for repeating that Statement. However, it seems perverse that the Government are only now announcing that an application is being made—four days before the deadline—when it could have been made in early December, when the first evidence of the devastation in the flood areas became apparent. During that time, communities have been left in the dark about whether an application to the fund would be made, despite the fact that it was established to respond precisely to natural disasters such as those experienced in the north and north-east of the UK.

Can the noble Baroness clarify why this unnecessary delay has occurred? Can she say what scope there is to make multiple applications to reflect the wide geographical spread of communities affected over this time? Can she guarantee that all the aid received will be channelled directly into the affected communities rather than being used to refill the Government’s coffers for the financial support already provided? Finally, can she clarify whether part of the fund will be used to assist residents who have not yet been able to return to their properties, where the need is very urgent? I look forward to her response.

Baroness Williams of Trafford: My Lords, in response to the point about the time taken, thresholds have to be met and the damage assessed, so these things necessarily take time. We will be making a regional claim. I am sure that under the rules of the structural fund the money would not be able to be diverted into anything other than repairs following the flood damage, and there is no intention to do so. Therefore, I can confirm that the funds will not be used for anything other than the purposes for which they are intended. I remind the noble Baroness that back in 2007, when an application was made by the then Labour Government, they took eight weeks to signal their intention and to make the application. That was a recognition that these things take time.

Baroness Parminter (LD): My Lords, I am delighted that the Government have now decided to apply. I asked them to do so in this Chamber on two occasions—on 7 December and 14 January, when I was very grateful to the Defra Minister for the reply that I received. This scheme is yet another example of why we are better off being in Europe. The funding

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could make a huge difference—for example, in repairing the damage to the A591, which I know is known to many Members of this House. Its closure has been disastrous for local people, local businesses and tourism. Therefore, I ask the Minister to confirm that the inevitable time lag in receiving any funding will not delay the plans for reconstruction of the critical infrastructure and that the Government will guarantee those funds.

Baroness Williams of Trafford: The noble Baroness is absolutely right about the A591 and indeed about some of the more local infrastructure repairs that need to be done. In fact, I drove up the A591 as far as I could only last week when I was in Grasmere. Work is under way to repair that road, which is vital not just for businesses but for tourism in the region. I am glad that the noble Baroness was grateful for the reply that she received. Following the floods, on a couple of occasions at this Dispatch Box I signalled that we were considering making an application, and today it is good to say that we are intending to do so.

Lord Liddle (Lab): My Lords, as a member of Cumbria County Council, perhaps I may say that the Minister’s announcement will be very welcome in the county, even if she has had to spend several months arguing with the Secretary of State for Justice that this does not represent a terrible affront to national sovereignty. It is vital that we proceed—as the Minister knows, there is a huge problem. The Government have been helpful so far but the infrastructure costs to the public sector alone amount to not many tens of millions but possibly hundreds of millions in the county of Cumbria alone. Does the Minister accept that there needs to be the quickest possible analysis of the total costs so that a proper application can be submitted and we can try to get as much of this money into the county and into other affected areas as quickly as possible?

Baroness Williams of Trafford: The noble Lord is absolutely right: the devastation in Cumbria has been quite significant. He and I have talked both across the Dispatch Box and privately about the needs of Cumbria, and I hope that the flood envoy, as well as Ministers, have been useful in their visits there. The Government are doing everything they can to work with the flood-affected areas to make right the damage. However, they were very keen to make an immediate response and moved very quickly to remedy some of the immediate problems. This is a much longer-term payment—back in 2007, it took months to come through—so we need to separate the immediate recovery operation from some of the more long-term funding that will come through.

Lord Shutt of Greetland (LD): My Lords, I witnessed the Boxing Day floods from my front-room window and am aware of the damage that has been done in the Calder Valley between Brighouse and Todmorden, and beyond. Liz Truss has been to the Calder Valley and has made certain promises, particularly to Mytholmroyd, where a great wall is to be built and other work is to be carried out. Can the Minister confirm that none of those promises will be contingent on this European money, that the promises will be

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honoured, and that the European money that we are talking about will be used to fund other very important work that is still required?

Baroness Williams of Trafford: I can confirm that any obligations or promises that the Government have made will be fulfilled. I can say that quite firmly from this Dispatch Box today. Unlike the noble Lord, I did not see the flooding from my front window on Boxing Day, but when I went up to some of the affected communities in Greater Manchester a couple of days afterwards, I saw that it was really quite devastating—the noble Lord is absolutely right about that. In fact, it is difficult to appreciate the devastation that communities feel until you actually see it for yourself.

Lord Knight of Weymouth (Lab): My Lords, I warmly welcome the Minister’s statement, and I particularly warmly welcome hearing a Conservative Minister say “EU” and “solidarity” in the same breath. I accept what she said about it taking some time to put an application together, but I do not think it takes that much time to state an intent to put an application together. The Government could have come forward and provided that reassurance sooner. Can I press the Minister on the point made by my noble friend from the Dispatch Box around an assurance that this money will not be used to back-fill what the Treasury has already promised and is already spending? There must be new money from the Treasury, if new money is needed, to match the very welcome money from the European Union.

Baroness Williams of Trafford: My Lords, in terms of what is expected from the European Union Solidarity Fund, the Government will fulfil their obligations under what they have already committed to. This will not be a sly way to circumvent what we have already promised, and I can confirm that a lot of the money has already gone out of the £200 million that we committed. As for the time it takes to make an application, the noble Lord will appreciate that certain thresholds have to be met. It is in analysing those thresholds that the Government know whether they can make an application. These things take time, and there was no intention of delay on our part.

Lord Campbell-Savours (Lab): My Lords, I want to place on record the appreciation of my former constituency in Keswick, a place where I have spent much of my life, for the work done by Julie Ward, the Member of the European Parliament, in pressing the Government here and working in Brussels to ensure that this process would work. She has been campaigning extensively on the very issue of this fund. Does the Minister have any idea of how much this will actually mean for areas such as the county of Cumbria? Can we have some numbers, please?

Baroness Williams of Trafford: I am sorry to say that those numbers have not been finalised at this stage. I do not know the noble Lord’s colleague, but I believe him when he says that she has been working hard. In fact, Keswick is another place that I passed the other day. Perhaps, at this point, the House will

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indulge me in commending businesses in Keswick, Windermere and Grasmere, where I stayed, for having the grit and determination to get back up and running. Coming into Grasmere, I saw a sign that read, “Grasmere is open for business”, and it certainly was full of tourists. I congratulate people who have gone there, and also the businesses for being so warmly welcoming of tourists so quickly after such devastating events.

Immigration: Students

Question for Short Debate

2.23 pm

Asked by Baroness Sharp of Guildford

To ask Her Majesty’s Government what consideration they have given to removing international students from the net migration figures by including them as non-immigrant admissions, as is done in the United States.

Baroness Sharp of Guildford (LD): My Lords, in introducing this short debate I declare two interests: I am an honorary fellow of Birkbeck College and I am the treasurer of the All-Party Parliamentary University Group. I should also say that I am looking forward enormously to hearing the maiden speech of the noble Baroness, Lady Brown of Cambridge, whose very distinguished record in science, technology and universities precedes her.

Net migration figures into the United Kingdom quite rightly reflect the flow of all those who come into the United Kingdom within a certain period of time—usually a year—minus the flow of those who leave. The Office for National Statistics, which is responsible for compiling these figures, uses the UN definition of “migrant”, which includes all people who move into the country for a period of 12 months or more, regardless of the purpose or permanence of their stay. On that basis, all students coming to study in the UK for more than one year are counted as immigrants. Likewise, all those who leave at the end of their studies are counted as emigrants.

International students are of very considerable benefit to the United Kingdom. They pay fees for their university tuition and accommodation, and UUK reckons that, together with off-campus spending, each student brings something like £26,000 a year to the United Kingdom economy. Indeed, the Government reckon that export earnings from overseas students amount to currently something like £25 billion, and the Autumn Statement suggested an ambition that this should grow by 20% to £30 billion by 2020.

There are also longer-term benefits. For example, a recent study from the Department for Business, Innovation and Skills found that more than 80% of the students who had studied here retained personal and professional links and had an increased appreciation for, and trust of, the United Kingdom. In other words, that soft power is very important as well as the actual money that they bring in. For all these reasons, it is very much to the UK’s advantage to encourage as many international students as possible to come to this country.

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Problems, however, arise on two scores. First, in so far as the number of students coming to this country from overseas is increasing, we would expect that over that period more would come in than would leave, and that this would be reflected as a rise in net migration. Indeed, given the 20% increase in non-EU students projected in the Autumn Statement, the estimates written into the detailed documents accompanying the Statement projected an increase of 7% in student numbers for 2016-17 and 2017-18. This would amount to an extra 20,000 students each year, adding potentially an extra 40,000 to the net migration figures over these two years.

This, in itself, would not matter, if the Government had not at the same time set themselves a target for reducing net migration to below 100,000 from its current total of more than 300,000. In pursuit of this target, the Government have been tightening up the regulations on student visas, and many universities are complaining that, far from increasing, the number of new entrants is actually falling. Indeed, according to the latest figures, there has been a drop of 3% in new entrants for courses and, in particular, the number of students from west Africa and the Indian subcontinent is down.

The universities are particularly unhappy with the regime of “credibility interviews” instituted by the Home Office since 2012, whereby students, having applied for and received their certificate of acceptance by the universities, and then having to apply for a visa, are further interviewed by Home Office officials, often by Skype, to assess whether they are bona fide students. This is far from a small, random sample; in 2014, 125,000 credibility interviews took place and the total number of entrants was 174,000. There was also a sizeable increase in the number of visa refusals.

Research by the UK Council for International Student Affairs reveals that Home Office officials are making judgments well beyond the agreed terms of such interviews, often countering the university’s own assessment of academic potential on a seemingly random and inconsistent basis. But since those who conduct the interviews are not required to keep records of their reasons for turning down a visa, there is, at present, no recourse on these judgements. The overall result, far from encouraging overseas applicants to apply to our universities, drives them into the arms of our competitors, the USA, Canada and Australia, all of which, like the UK, are seeking to increase applicants from abroad.

On the face of it, there are two wholly incompatible strands of government policy: on the one hand seeking to increase overseas student numbers and, on the other, seeking all possible ways to cut net migration numbers. Universities are keen to expand the intake of students from non-EU countries—they bring, as I have said, substantial income both to the university and to local business, and many taught graduate programmes are dependent on recruiting overseas students. But inevitably, expansion in overseas student numbers increases net migration and results in tighter and tighter controls over the issuing of student visas, with the UK appearing more and more unwelcoming to overseas students. The one policy totally contradicts the other.

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Others besides me have suggested treating students as temporary migrants and separating them from the net migration figures. The Government have resisted that on three grounds. In the first place, the ONS is obliged to use the UN definition of migrant. Secondly, students, even if temporary migrants, use public services and in this sense are in no way different from other migrants. Thirdly, the International Passenger Survey suggests that many students do not return when their visas expire and are therefore not temporary migrants.

I will return to the first of those, the UN definition, in a moment, but I will deal briefly with the other two issues. Most students are young people who make relatively little demand on public services and are in any case now required to pay an NHS surcharge. As we saw earlier, far from being a burden, they contribute substantially to the UK economy and in the long run very substantially.

In relation to the IPS, there is much controversy over its validity. There are good figures because of visas and university registrations for new entrants, but although attempts are being made to collate exit records, these are as yet in their infancy, which is why reliance has to be placed on the IPS. Even the Oxford-based Migration Observatory concluded that the statistics were unreliable and that the temporariness of international students remains uncertain.

That brings me to my final point—the UN definition of migrant. I suggest that the answer is to copy the Americans. The US gets over the problem by issuing two different sets of statistics on net immigration. The first, issued by the US Census Bureau uses the same UN definition of migrant and, like the UK ONS, measures overall flows of people, including students, in and out of the country on an annual basis. The second set of statistics, produced for the Department of Homeland Security, makes the distinction between permanent immigrants and those classed as non-immigrant admissions, which includes students alongside tourists, business travellers and those involved in cultural exchanges. Canada and Australia make a similar distinction. It seems such a simple solution to a problem that has caused the Government a good deal of grief.

I end by posing two questions to the Minister. Why cannot this country be more pragmatic like the Americans and use two sets of statistics, thereby complying with the UN requirements in measuring overall migration flows, but having a sensible set of statistics on which to base their net immigration targets? Secondly, why does the Home Office think it necessary to best-guess university admissions systems and run such a heavy-handed programme of credibility interviews? Random sampling is one thing; interviewing and often in the process upsetting and putting off two-thirds of potential entrants is another. Is this really necessary?

2.33 pm

Lord Hodgson of Astley Abbotts (Con): I thank the noble Baroness for giving us the chance once again to debate this rather vexed issue. I have listened carefully to what she said and I understand the force of her arguments, but I am afraid for me they are trumped by other and wider considerations. I therefore think that the Government should resist calls to change the categorisation at this time. I will explain why.

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In the year ending in March 2015, 216,000 student visas were issued—roughly the same number as in the prior year. But also in that year, 73,000 applications to extend the student visa were made and granted. One-third of the total of students asked for an extension: some to continue to study, some to work and some for family reasons. There lies my concern. This could be the beginning of a process whereby individuals who have come here as students slowly morph into becoming members of the settled population of the country.

The extent of this leakage is hotly disputed, and indeed, the excellent briefing pack from the Library for the debate today contains some important figures. Perhaps my noble friend can update us in his reply on the Government’s latest estimates of what this leakage is. Whatever the figure, an integral part of this morphing and transition is that the person becomes an immigrant, not a student, and should therefore be classified as such.

Noble Lords will have heard me before express my concern at the very rapid rate of increase in the population of this country and the implications for the entire settled population. Our population is now growing by 1,153 people per day, and of that about half comes from immigration. This is a small and increasingly crowded island. England is now more densely populated than the Netherlands. That is also why, with respect to the noble Baroness, I must say that using the example of the United States, with its massive geographical extent, is not a fair one in a debate such as this.

That takes me to my final point and a question for my noble friend. What gives this debate its edge is that we still have inadequate control over our borders. We cannot ensure that everybody who is here is entitled to be here. Though launched in 2003, the e-Borders system appears some way from completion. I understand that in the past four years, between 2011 and 2015, my noble friend’s department spent nearly £90 million on improving systems that the e-Borders system would have replaced, and information about travellers is still being processed on two systems that do not share data or analysis effectively. An update from my noble friend on the e-Borders progress would be much appreciated.

2.36 pm

Baroness Bakewell (Lab): My Lords, I commend the noble Baroness, Lady Sharp, on once again championing the interests of higher education in this country. Universities and academic bodies appreciate her dedication and expertise; I speak as the president of Birkbeck in saying as much. I also look forward to the maiden speech of the noble Baroness, Lady Brown, on such an important topic.

This subject of international students being moved from immigration figures keeps on coming up. We have had debates, Written Questions and Oral Questions. Why has there been so little movement from the Government on this? There seems to be something of a tabloid-driven policy here. Statistics from the International Passenger Survey show a gap between the numbers of immigrants arriving and emigrants returning. The number hovers around 93,000 a year.

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What a fine UK headline that would make: bogus student immigrants come to stay. We do not want that—do we?

But such fears need to be faced. We need further data and an examination of who these overstayers are. Will the Government consider a post-study work visa? Statistics in this area are limited and the methodology crude. George Osborne told the Treasury Select Committee as much. There seems to be a tension, in that the Home Office planned to increase the amount of cash in the bank that foreign postgraduates must have before they are allowed into this country and insist that they must past tougher language tests, but reports tell me that George Osborne shot down those suggestions. He clearly has a more welcoming agenda.

Will the Government now please give some nuanced thinking as to how to turn what is a ham-fisted ruling into a success story in its own right? At this very moment, the country could use an upbeat immigration story and this could be it. Students come here bringing their wealth and skills, our universities offer them levels of study that they cannot find anywhere else and some of them, just some of them, overstay. For the most part, the vast majority of those returning home have a good story to tell of our academic standards, our outstanding university life and the nature of life in this country in general. That is a huge plus in the soft power that we exercise around the world. That success story needs to be celebrated. Can we have some plausible lateral thinking from this Government to make it so?

2.39 pm

Lord Clement-Jones (LD): My Lords, I too congratulate my noble friend Lady Sharp on instituting this debate and on her powerfully argued opening speech. I declare an interest as a member of the UCL Council. Like my noble friend and the noble Baroness, Lady Bakewell, I look forward to hearing the maiden speech of the noble Baroness, Lady Brown.

The Minister knows that from these Benches we have consistently pursued issues relating to overseas students for several years now. However, the Home Office seems to be oblivious to the overwhelming arguments for excluding students from the net migration figures. Higher education is one of the most important and successful sectors for the UK, contributing £11 billion in overseas earnings, added to which are the continuing personal and professional links that are created—the soft power referred to by the noble Baroness, Lady Bakewell. The Chancellor and the Foreign Secretary, to their credit, now seem to be at odds with the Home Secretary on this issue. No wonder, because to adopt policies which reduce overseas student numbers is economic madness.

The International Passenger Survey figures are estimates. It is clear that there is no reliable measurement of net migration at all, so how can there be reliable evidence of abuse and overstaying, as alleged? Frankly, when is the Home Office going to be able to produce decent figures for net migration?

In Oral Questions last December I raised the issue of the credibility test introduced in 2013, which has led to so many visa refusals for students from countries such as Nigeria and Pakistan, to which my noble

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friend referred. But it appears that the Home Office does not even collect statistics on the reasons for visa removal. The Minister tried to reassure me in his response, but there is clear evidence of the over-zealous application by the Home Office of the visa rules on overseas students which is potentially chilling, both in respect of applications and expiry. Even completely blameless students are now being improperly detained. I cite the arrest of Paul Hamilton, an American postdoctoral student, as a “flight risk” and the US doctoral student, Sabine Parrish, who was detained for eight hours on no grounds whatever. Will the Minister condemn these abuses? As the

Times Higher Education


“This game makes no economic or educational sense, and will drive international applicants into the arms of US, Canadian and Australian universities”.

The number of overseas students coming here is understandably beginning to stall, in contrast to the growth in competitor countries. Our clear aim must now be to restore our attractiveness as a destination for overseas students. Along with putting other policies into place, we should, as so many have consistently called for, including my noble friend, exclude these students from the net migration figures.

2.42 pm

Baroness Brown of Cambridge (CB) (Maiden): My Lords, it is an honour and a privilege to join your Lordships’ House. I am looking forward to the opportunity to contribute in areas where I have expertise: engineering, universities, innovation and climate change. I am very grateful to all the staff here, especially of course the Doorkeepers and the police, as well as to all noble Lords for being both welcoming, as is evidenced here today, and tolerant. I thank my supporters, the noble Lords, Lord Baker of Dorking and Lord Turner of Ecchinswell, and my mentor, the noble Baroness, Lady Deech. I must declare an interest, in that I am the vice-chancellor of Aston University in Birmingham.

We have heard from other noble Lords how international students contribute to the UK in many ways. Overseas student fees subsidise education for home students. At Aston, 18% of my student population is from overseas, providing more than 30% of my fee income. Overseas students are critical to maintaining engineering provision in UK universities. Engineering UK reports that 25% to 40% of undergraduates on engineering courses are from overseas. At Aston, half our overseas students are on science, engineering and maths courses.

The inclusion of overseas students in net migration figures—that is, within a population we are seeking to reduce—while simultaneously targeting an increase in their numbers, is illogical. It affects the behaviour of our agencies, as we have heard, and contributes to the feeling that these students are less welcome in the UK than they would be in the USA, Australia, Canada or New Zealand.

While UK employment levels have been much less sensitive to the recent recession than those of our competitors, UK productivity is falling behind. The productivity deficit is particularly associated with small and medium-sized enterprises. That is critical because SMEs account for 60% of UK jobs. Research published

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last week by the Enterprise Research Centre at Warwick and Aston business schools highlights the need for innovation and access to global markets in order to improve SME productivity. But there is clearly a challenge in recruiting the right people to enable this. The CBI

Inspiring Growth

report last year highlighted that while 40% of employers prefer graduates with technical skills, the proportion having problems recruiting scientists and engineers has more than doubled in the past two years.

I ask the Minister that the Government consider not only taking overseas students out of the net migration figures, but make it easier for companies, in particular SMEs, to recruit overseas graduates from UK universities by, for example, reducing or removing the minimum starting salary for a tier 2 visa, a restriction that does not exist in the USA, Canada, Australia or New Zealand. Data for the West Midlands suggest that average graduate starting salaries are below the minimum figure of £20,800 required for tier 2 visas, and starting salaries that are affordable for SMEs and spin-outs are often lower still. Allowing ambitious SMEs in our regions easier access to an affordable international talent pool should be part of our regional growth strategy, supporting business innovation, global reach and the health of our great universities.

2.46 pm

Lord Bilimoria (CB): My Lords, I congratulate the noble Baroness, Lady Brown of Cambridge, on her excellent maiden speech. I have known her for almost a decade, since I was the founder of the UK-India Business Council. Now she is the vice-chancellor of Aston University in Birmingham and I am the Chancellor of the University of Birmingham; we are neighbours. She has taken her title as Cambridge because she is a staunch alumna of Murray Edwards College, known in our day as New Hall, which is one of only three women-only colleges remaining in Cambridge. Her career in the field of engineering is outstanding—from working at Rolls-Royce to heading the engineering faculty at Imperial College in London, to her famous King review in 2008 on carbon emissions from road transport. Not content with being a world-renowned expert in the field of engineering and science, with awards too numerous for me to list, she is also married to Dr Colin Brown, the engineering director at the Institution of Mechanical Engineers. We look forward very much to her contributions in the years to come.

Aung San Suu Kyi, Bill Clinton, Desmond Tutu and Mahatma Gandhi all studied at UK universities. They are the finest universities on this planet along with those of the United States of America, and yet the Government continue to classify international students as immigrants when calculating the net immigration figures, as well as having a target to reduce net immigration to fewer than 100,000. Then, hypocritically, the Government say that there are no limits to international students. Logically, there is no way the Government will meet their targets unless they reduce international student numbers. They have done the right thing in closing down bogus colleges and we all agree with that, but now their policies are damaging genuine international students at our world-class universities. I see this every day in my role as president of UKCISA.

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At the University of Birmingham, 20% of our student body is made up of international students and 33% of our academic staff are from overseas. BIS itself states that international students bring in more than £13 billion a year in overseas earnings, and yet, in the words of Professor Leszek Borysiewicz, vice-chancellor of the University of Cambridge,

“the potential economic gains for the UK for recruiting more overseas students are being sacrificed at the altar of political expediency”.

He went on to say that said it is “ludicrous” to include overseas students in UK immigration targets. Our competitor countries do not categorise international students as immigrants. In the US they are included as non-immigration admissions, while in Australia they are reported as net temporary arrivals. In Canada they are placed in the temporary resident category. I ask the Minister this: why can we not do the same? In fact, the Prime Minister himself has said to me that he would be open to this idea.

The Government are unnecessarily creating a rod for their own back. Furthermore, our competitor countries have ambitious targets to grow international student numbers, accompanied by government action to help them do so. For example, Canada wants to double its number of international students to 450,000 by 2020. In 2014-15 the number of Indian students increased by 32% in the United States, while the number of Indian students coming to the UK has fallen drastically. Does the Minister agree that we should have specific targets to increase the number of international students?

As we have heard, removing our post-study work visa route has also been hugely damaging. An NUS survey found that 51% of students think that the Government are not welcoming towards international students. Universities UK research shows that 22% of the British public considers overseas students not to be immigrants, yet the Government keep relying on international passenger survey data, which are completely unreliable. I have repeatedly said that the Government need to reintroduce exit checks at our borders and that all passports, EU and non-EU, need to be scanned in and out of the country. Then, we would have proper control of our borders and we would know the international students coming in and going out.

This year I was appointed chair of the advisory board at Cambridge Judge Business School. Christoph Loch, our director, said that the Government’s current policies,

“not only are ineffective … but outright hostile and unfair toward a population of highly talented people who collectively do have an influence on the reputation of the UK in the world”.

The Government keep talking about the United Nations’ definition of migrants but, as the noble Baroness, Lady Sharp, said—I thank her for the debate—no one is suggesting that the UK should stop reporting to the UN or recording student migrant numbers. There is no reason why the UN definition should be used for the particular domestic policy objective of the net migration target. UUK, the Russell group, London First and the NUS all independently agree with what I have said. International students are not only one of our biggest export earners, but one of the strongest elements of our soft power.

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The Government have sent a strong message about their intention to keep out migrants who will bring no value to the UK, but they must be equally clear that the UK still wants to attract economically valuable groups, such as genuine international students. Removing this group from the net migration target would send a clear international message that the UK is open to all the amazing benefits that international students provide to our country and to British universities, which are the jewel in our crown.

2.51 pm

Lord Holmes of Richmond (Con): My Lords, I congratulate the noble Baroness, Lady Sharp, on securing this timely and important debate. I also congratulate the noble Baroness, Lady Brown of Cambridge, on her excellent maiden speech. I note that her PhD was on fracture mechanisms in embrittled alloy steels. I am sure we all agree that her performance was copper-bottomed and I look forward to her contributions to further debates in the House.

I declare an interest as deputy chancellor of BPP University. We attract thousands of international students each year, 96% of whom attain employment within six months of completing their studies. Some stay; some return home. Either way, Britain benefits.

The leaders of Australia, Belgium, Brunei, Botswana, Bahrain—I could go on. Those are just the As and the Bs of world leaders who have studied as international students in the United Kingdom—55 at last count. That is a good enough reason to celebrate international students coming to UK institutions.

On top of that, they bring billions for British business. We just heard from the noble Lord, Lord Bilimoria, the king of Cobra Beer. I ask my noble friend the Minister: can he imagine a curry without Cobra? Unimaginable, yet a reality had the noble Lord, Lord Bilimoria, not come to this country as an international student.

To turn to the data, the IPS statistics are mainly meaningless. That 90,000 is a nonsense number. We can know nothing from those statistics. If we are going to argue on the numbers, we need to have decent data on which to base this debate. I ask my noble friend the Minister: if the system is working and we are open for business, how is it that in the last year we have had a 10% fall in students from India coming to Britain and an 8% fall in students from Nigeria, while Canada has had an 11% increase in international students, the United States 10% and Australia 8%? If we do not get this right, the rest of the world will make a better offer and those international students will go somewhere else.

If we are to have a northern powerhouse, we need international students. If we are to revive our railways, we need international students. If we are to have fully enriched artistic, cultural leisure pursuits in this nation, international students are critical. In short, we need to get the message out there: there is good migration and there is less good migration.

In conclusion, we need to end this visa vapidity. We need counsels of prudence, not of prevention, and we need to warmly welcome the brightest and the best to come and study in Britain.

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2.54 pm

Lord Hannay of Chiswick (CB): My Lords, this is far from the first time that the House has debated the Government’s policy of treating overseas students as economic migrants. Nevertheless, it is good that the noble Baroness, Lady Sharp, has brought the matter up again, and even better that my noble friend Lady Brown has joined the ranks of those who have been breaking their teeth on the Government’s policy for as long as I can remember. This issue is one of the black swans of today’s policy agenda—a policy without much support even in the Cabinet and none at all outside it. It is one with no serious justification.

I have five questions to which I would like the Minister to try to find a reply. First, does the system help the Government to reach their target of reducing overall migration to the tens of thousands? Certainly not. Since there are 180,000-plus students coming in and the number is tending to rise, it makes that target impossible to achieve.

Secondly, does it assist the Government’s policy of expanding the higher education sector’s contribution to our invisible exports, which are substantial, by attracting the brightest and the best? Certainly not, again. It discourages them. The most recent 2014-15 figures are pretty sobering, since we are losing market share to all our main competitors.

Thirdly, are students properly regarded as economic migrants? The answer to that, too, must be negative. They pay fees—often higher fees than our own students—generate employment and pump resources into towns and cities where they study, while making disproportionately small demands on the National Health Service and other benefits.

Fourthly, are we compelled to classify them in this way? No, we are not. The UN classification, to which the Home Office clings like a drowning man to the smallest of planks, is not legally binding. We already have separate statistics for students. We can submit them as the United States does and stop treating them as economic migrants.

Fifthly, does the student issue drive the general concern, which certainly does exist, about immigration? There is not the slightest evidence that it does. If you asked most people whether they regard students as economic migrants, they would look at you in great puzzlement and think that it was a pretty silly question, particularly now that the Government have clamped down on dodgy language schools.

If the Government cannot provide answers to those questions, could they please just change the policy?

2.57 pm

Lord Kennedy of Southwark (Lab): My Lords, I start by thanking the noble Baroness, Lady Sharp of Guildford, for securing this question for short debate. I also congratulate the noble Baroness, Lady Brown of Cambridge, on an excellent maiden speech. She brings a wealth of experience from the higher education, engineering and science fields. I hope that this is the first of very many contributions she will make to your Lordships’ House.

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It is not possible in the short time that I have to do this subject justice. I find myself agreeing with almost all the remarks made by noble Lords in this debate. The UK attracts a large number of international students coming to study here for a year or more. We have some of the best universities in the world, offering fantastic courses, leading to highly sought-after qualifications. We are, though, in a very competitive marketplace and it is the duty of the Government to do everything in their power to make the UK an even more attractive destination for international students.

I am not asking the Government to change how the net migration figures are reported as this is an internationally recognised definition, but they can do more. Looking at the net migration target that they have set themselves is one example. The Government have created a conflict for themselves entirely of their own making—it does not have to be there—by wanting to boost international student numbers while reducing their net migration targets. As the noble Baroness, Lady Sharp of Guildford, said, that is wholly incompatible. I also agree with her suggestion that we should consider adopting the US system of recording these data.

The Government’s ambition for growth in this sector is not as ambitious as that of our competitors. Our visa system is more restrictive and the UK is losing out needlessly. Shortly, I am sure that the noble Lord, Lord Bates, will tell us that there is no cap on the number of bona fide international students coming to study in the UK, but the fact is that our numbers have been relatively stagnant in recent years compared to our competitors, which have seen significant growth. The United States has seen an increase of 10% and Australia 8.9% in international student numbers, in comparison to growth of 0.6% in the UK over the same period.

We need to make our system for getting international students into the UK more welcoming and streamlined like our competitors, particularly the United States of America, as the noble Baroness, Lady Brown of Cambridge, said. People need to feel more welcome. The fall by 50% in the number of Indian students coming to study in the UK is of particular concern. Surveys have shown that the general public do not perceive international students as immigrants, and they bring a significant boost to our economy measured in billions of pounds. International students who study here and have a good experience return home with a very favourable view of the UK. That is of enormous benefit to us, as my noble friend Lady Bakewell said. She rightly pointed how important that is in terms of our soft power influence in the world.

My time is nearly up so I again thank the noble Baroness, Lady Sharp of Guildford, for enabling us to have this debate. I hope that we can return to the subject very soon as we need to keep impressing upon the Government that it is in our country’s interest that it acts on this sooner rather than later.

3 pm

The Minister of State, Home Office (Lord Bates) (Con): My Lords, I add my thanks to the noble Baroness, Lady Sharp, for securing this debate. Although we are very familiar with our respective positions as we have

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debated this issue so often, I suggest that there is a great deal more common ground than may at first appear. Of course, we are all grateful to the noble Baroness, Lady Sharp, for the way she introduced the debate. I listened carefully as she set out in precise terms how the current system works and the terms, methodologies and calculations used, which match the Government’s exactly, as one would expect from a distinguished academic. There is common ground on the analysis to that extent. However, there may be divergence over some of the conclusions. The noble Baroness, Lady Brown, made an outstanding contribution to the debate in her maiden speech. More importantly, given her distinguished background in academia, particularly in science, technology and engineering, she brings an immensely valuable perspective to your Lordships’ House. We very much look forward to her further contributions.

Another area on which we can agree is that Britain is blessed with some of the greatest universities in the world. Any table will show that we have perhaps four out of 10 or six out of 20 of the top universities in the world. The UK is widely admired and respected in that field. It is not by accident therefore that we are the second largest attractor of foreign students in the world. That is a very important point for us to remember.

Nor is there any disagreement over the fact that the Government have set out in their own financial strategy that we want to see the number of students continue to increase, as was said. We have set targets for the contributions we want to see universities make because this is a great export earner. As a number of noble Lords said, the soft power that this process brings to this country is immensely valuable as we move forward. As the noble Lord, Lord Holmes, said, there is no doubt that we want to continue to attract the brightest and the best. That is common ground. We want to see an increase in foreign students—we are proud of them and we recognise their value—so where is the point of difference? I shall try distil that down to a question about whether the means by which we calculate the number of students coming into this country and those leaving this country acts as a deterrent to people thinking of coming to study here.

As regards the point touched on by the noble Lord, Lord Bilimoria, I think there is a problem. When you look at the overall statistics, there is some encouraging news. The number of overseas students coming to Russell group universities is up by 39% since 2010. However, when you break down the figures and start looking at them country by country, you see differences. You see numbers from China increasing but India’s economy is also growing strongly now and yet we see a different pattern there. We have looked at differences in the way British universities welcome these students who are effectively investing in this country, and how the latter perceive that welcome. Having discussed the matter with Jo Johnson, our Universities Minister, James Brokenshire went to India just last week with the specific purpose of busting some of the myths that surround the welcome that awaits genuine students who have the relevant qualifications and have been offered places at our world-class universities. There is a great deal to do in that regard. We need to get across

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the message that there is no limit on the number of students who can come to genuine universities here and that there is no limit on the number of people who can switch from tier 4 visas to tier 2 graduate programmes, particularly in the types of disciplines to which the noble Baroness, Lady Brown, referred. The level of the salary is, of course, something that we need to examine. If we want to attract the brightest and the best, then, of course, £20,800 as a starting salary is about NVQ level 3 or 4, or about A-level.

Lord Clement-Jones: My Lords, does the Minister accept that that is above the average graduate salary in places such as the north of England?

Lord Bates: That may be so. I would have to look into that point in relation to the north of England, and I am happy to do so. However, the point is that there is no limit on the number of graduate opportunities available. We have special programmes for PhD students and for post-doctoral study. Therefore, we need to get that message out into the wider world much more effectively that Britain welcomes these students and that a range of opportunities exists for students, post-study, to continue to work and gain experience. They can continue on tier 5 with approved internships and training programmes. Twenty-eight thousand organisations have approval to sponsor tier 2 graduate employment opportunities. There is also the PhD entrepreneur route on tier 1. There is a wealth of opportunities for these students.

The noble Lord, Lord Hannay, asked five very pertinent questions and then answered them, albeit not entirely to the Government’s satisfaction. We recognise that our country is experiencing growing pressures from inward migration and its effect on the fabric of society. As a result, we need to take steps to bring net migration down. Of course, you cannot do that simply by changing the figures. It would be very easy to change the figures and, by waving a magic wand, halve net migration. That would be very comfortable but it would not be true. Often people come to this country to study and then stay on. That is why there is a discrepancy between the figure of 117,000 coming in and 40,000 leaving. We need to understand better why we have the 77,000 discrepancy and we need to better understand the data.

The noble Lord, Lord Hodgson, asked for an update on e-borders. Exit checks, which were introduced last year, will give us a better picture of where those people are going. We will publish an update report in May on the progress of e-borders and the exit checks. That will give us greater confidence in this regard.

Lord Bilimoria: My Lords, we know that e-borders are not reliable. We have a migration problem with the EU as well. Why do we not institute scanning of all passports—EU and non-EU—at our borders? Then we will have total control. It is easy technology and is available right now.

Lord Bates: We will continue to look at these things. The exit checks are the first step to something we hope will help us get a better handle on flows in and out of the country.

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I am aware that there is a great deal of expertise in the House, particularly in the higher education sector. We keep debating the numbers, but I urge noble Lords to think that our message should be to sell the incredible opportunities people have when they come to study in some of the greatest universities in the world. As graduates, they will then have the opportunity to work in some of the greatest companies in world. That is a fantastic offer that we can all come together to sell.

Lord Clement-Jones: I apologise for interrupting the Minister again, but he has time to answer a couple of questions. The two cases I mentioned were quite egregious, because neither postgraduate student had breached any visa rules. That gives Britain an enormously bad name among that community.

Lord Bates: I am very happy to look into those two cases for the noble Lord to ensure we get this right. The message has to be clear, and we have to recognise that we have a duty to welcome people coming in to contribute to our economy and to show them the appropriate respect.

I am happy, should the noble Baroness, Lady Sharp, think it an offer worth accepting, to convene a meeting of interested peers and colleagues with our people from the Department for Business, Innovation and Skills, who have ownership of the universities sector and the tier 2 and tier 4 issues, along with people from the Home Office and immigration enforcement, to discuss how we can tackle these problems and the reasons we are not getting the right message out. We can work together to ensure that our fantastic offer on the world stage is communicated loud and clear: that people from around the world with genuine qualifications and places at great British universities are very welcome and that we are very grateful to them; that, post-study, they will have immense opportunities in this country; and that we would like them to stay and contribute, if they are qualified to do so.

Lord Bilimoria: We have all asked for one thing. We are all great ambassadors for British universities—we are their greatest fans—and we will continue to be, but we are asking for one thing. The Prime Minister has said he is open to the idea, and I am sure the Chancellor would be. We are asking the Government to categorise international students separately, in the way that, as we have shown, the USA, Canada and Australia do. That one move would send out a message. The Minister talked about perception. It would remove that perception once and for all. Why can the Government not do it?

Lord Bates: The noble Lord, who knows this area inside out, knows that we looked at that very carefully. It is true that the United States separates that category out, but when it calculates net migration, it adds it back in. The United States behaves differently because it does not have a net migration target. We do, and therefore we have chosen to include students in the numbers.

Baroness Sharp of Guildford: Would the noble Lord not consider publishing the two statistics side by side, as the Americans do? We could have the net migration

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figures, but let us also have the figures excluding the students, so that the population can judge for themselves whether the targets have been met.

Lord Bates: Given the gap in the numbers, which we do not yet fully understand, the Government are not comfortable enough to take the heat from our heels—as it were—on the immigration statistics by providing a potentially sharp change in the net migration numbers. It might give us a degree of comfort that is not borne out in reality. The better our data and intelligence, the better able we will be to say to universities, “Listen, your responsibility is not just to attract people here, to ensure they are qualified to come and to give them a great education, but to ensure that, when their time is up and their visa is expired, they go home and use that education to build another career”. There are many ways we can all work together, and I am simply extending the opportunity to continue the dialogue—I am sure it will continue on the Floor of the House, but such dialogue can sometimes be engaged in more constructively with officials from different departments off the Floor—should it be helpful to the noble Baroness. I am grateful to her for raising this matter.

Trade Union Bill

Committee (4th Day) (Continued)

3.14 pm

Amendment 97A

Moved by Baroness Prosser

97A: After Clause 14, insert the following new Clause—

“Codes of practice: employee engagement

In section 203 of the 1992 Act (issue of Codes of Practice by the Secretary of State), after subsection (1) insert—

“The Codes of Practice issued by the Secretary of State for the purpose of promoting the improvement of industrial relations must encourage all employers, in both the private and public sectors, to establish mechanisms via trade unions that encourage and enable effective employee engagement in industrial relations.””

Baroness Prosser (Lab): My Lords, I am pleased to speak to the amendment because it is about the only part of the Bill that strikes a truly positive note. The Bill itself is entirely negative, and the other amendments—those we have heard already and those yet to come—are designed as a damage-limitation exercise to stop the Government making a complete hash of industrial relations and complete fools of themselves.

As a trade union organiser over many years, I met many ordinary workers who had great ideas about ways to improve work processes or systems. Even the humble road sweeper—in the days when we had them—could make suggestions about bettering route arrangements, for example. I will not, however, rely simply on anecdotal points; there is ample evidence regarding the link between employee engagement and morale, and employee engagement and productivity.

The Involvement and Participation Association, in which I declare an interest as a board director, has recently produced a report entitled Involvement and Productivity—the Missing Piece of the Puzzle?, in which it looks at the influence on productivity in

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workplaces that have good levels of employee engagement. This is not small beer. We in this country have a very poor record on productivity. We are 17% less productive than the rest of the G7, while the average worker in France and Germany produces more in four days than does the average worker in the UK in five. The report examines evidence from large surveys, behavioural experiments, academic studies and employers themselves, and shows that when employees have a voice in the decision-making process over their jobs and the wider organisation, productivity is higher.

The report also looks at how employees feel about involvement in their workplaces. Just one in three workers felt that managers allowed them to influence, or have a say in, decisions, and employers in the UK are less likely than global competitors to encourage workplace involvement. In many EU countries, for example, solid trade union agreements run alongside works councils. Matters are not helped in the UK by the decline in collective bargaining and the fact that mechanisms for employee voices to be heard are few and far between.

A concrete example of a successful exercise may help to persuade Ministers of the sense of this case. For many years, Royal Mail was renowned for its poor industrial relations. From my six years of experience as a non-executive director of the Royal Mail holdings board, I can say categorically that the problem lay with both management and the union, neither of which for a very long time had any knowledge or experience of workplaces outside Royal Mail. However, a programme was introduced under the then chairmanship of Allan Leighton entitled Great Place to Work. This involved various strands, such as First Line Fix, which enabled local managers to take decisions about local issues, rather than having to send everything to national level for a decision.

For example, when a local clothes dryer broke down and was not repaired for months—meaning that posties had no means of drying their soaked uniforms—it made everyone very fed up and resentful of the company. What was the matter with it? First Line Fix got the dryer mended within a week.

A Great Place to Work also involved work-time listening and learning sessions, discussing ideas from all in a section about ways in which things could work better—ordinary employees advising managers on improving workplace systems. Listening and learning has continued and was felt to be extremely important during the difficult period of privatisation of the company. Engagement scores have improved significantly even through the privatisation process.

Employee engagement is about not only productivity but morale. How do any of us feel if we have no control over what goes on in our lives? Does what we think have no value? Can we be engaged in a process or a subject matter over years and years and still have nothing to say about it? It does not make sense, for either the morale of the worker or the future of the employment, be that big or small.

The world of work is made up of workers and employers—managers. But there is no mention of managers in the Bill. How are we to develop and grow and compete in the wider world when we pay so little

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attention to the role of the manager? Quite often, even senior managers pay no attention to the behaviour, training, ability—or whatever—of their junior managers. According to the Chartered Management Institute, only 13% of managers in this country have any management training. That is shocking. Here we are, spending our time arguing about problems with trade unions that mostly do not even exist.

Finally, I ask the Minister not to cite the Government’s view of red tape and their dislike of it. Please do not say that the Government cannot be doing with the nanny state, because everything about the Bill is about unwanted red tape by the mile and the Government poking into areas about which they are shamefully ignorant and where neither workers nor employers want them to.

Lord Young of Norwood Green (Lab): My Lords, I congratulate my noble friend Lady Prosser on her amendment. I can pay her no higher compliment than I wish I had thought of it myself. I was a junior Minister in the previous Labour Government, who supported the concept of employee engagement. As I understand it, the present Government continue to support that concept. The amendment gives the Government an opportunity to put something positive into the Bill that is direly needed.

As it stands, the Bill is really a lost opportunity. It does not address the real problems facing British industry: low productivity, which has already been referred to by my noble friend; skill shortages; and a lack of management training, which she also referred to. There are so many examples of the value of constructive engagement between employers and employees involving trade unions. Unionlearn was referred to in a previous debate. Health and safety was given a thorough airing on a previous day in Committee. There are examples of where industries have been in serious trouble, as the automotive industry was, where the trade union movement has shown itself more than capable of being involved in very constructive engagement. My noble friend referred to Royal Mail. I could give your Lordships numerous examples from British Telecom, where I was involved. I declare my interest as a lifelong trade unionist. Unions can make a really positive contribution to government policy.

I will quote a couple of examples that do not involve trade unions because we know that there are plenty of workplaces where they are not involved. There was an article in the Evening Standard on 11 September last year about Sacha Romanovitch. It said:

“Sacha Romanovitch is a breath of fresh air. It’s not only that she’s the first female boss of a major City accountancy firm”,

it is the things that she has introduced. It continues:

“The new chief executive of Grant Thornton, in effect their senior partner … has already announced a John Lewis-style profit sharing scheme and a cap on her own salary. Her pay will be limited to 20 times the firm’s average salary—compared with the average FTSE 100 chief executive on 149 times”—

whether they are all worth it is a moot point. The article goes on to say that,

“profits will be shared among all 4500 staff instead of the most senior, and the profit share will come from boosted profits generated by more collaborative working”.

I stress that last phrase because that shows the benefit of it.

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Another example, which I saw in the Times in April last year, is a company called Gripple, which makes agricultural wire joiners in Sheffield. It is an interesting company. According to the article,

“it employs 500 people and has a turnover of more than £50 million. Hugh Facey, the entrepreneur behind the business, is as original as his invention. He doesn’t run the business to make money for himself, he claims”—

I have not had a chance to check that out but I will give him the benefit of the doubt for the rest of the things he does—

“but to provide jobs to local workers”.

Goodness knows we need that in British industry. The article continues:

“Rewards are shared throughout the company, because every employee has to own shares in the business, giving them a collective stake of 36 per cent—and a say in how it is run”.

It is that last point that I want to emphasise: another good example of employee engagement.

Some of the Government’s policies are right. I am with them on their approach to apprenticeships. We might argue about the detail but their drive to increase the number of apprenticeships is a very worthy objective. It would be much easier if, instead of discussing this Bill, we had a Bill that talked about involving trade unions in that campaign to increase the number of apprenticeships, which is why I talk about a lost opportunity.

I cannot help reflecting on my experience of negotiating with senior management in BT—and this applies to many companies throughout the UK—and their love of employing external consultants. They would think nothing of employing McKinsey for a few million pounds. I said to them on many occasions, “I am not going to tell you that you should not do it—I know you won’t take any notice—but while you are doing that it just might occur to you that you have about 140,000 consultants, and you are paying them anyway. If anybody can tell you what’s wrong with various parts of the company and how to improve productivity and profits, it is your employees. You ought to start listening to them far more than you do at the moment”, and I gave them many practical examples. My noble friend Lady Prosser pointed out a significant fact in British industry: the level of management training is really abysmal. We still have a long way to go on that. The need for employee engagement is paramount.

I am sure that we will have some comments from the Minister about the wording of the amendment. I do not think that my noble friend Lady Prosser or I say that everything is perfect. The amendment has been pitched at the fact that this is a Trade Union Bill and we know that there are significant areas of interest where trade unions are not involved. The core principle of the amendment is valid. It says:

“The Codes of Practice issued by the Secretary of State for the purpose of promoting the improvement of industrial relations must encourage all employers”—

I stress “encourage”—

“in both the private and public sectors, to establish mechanisms via trade unions that encourage and enable effective employee engagement in industrial relations”.

There is a real opportunity for the Minister to prove that the Government are in fact in listening mode and to inject something positive into the Bill.

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I will end on a quote. I cannot match the intellectual capacity of my noble friend who quoted Chekhov—or at least I could not find a quote that was apposite—but I thought this one would do. It comes from a song written by a couple of my favourites, Harold Arlen and Johnny Mercer:

“You’ve got to accentuate the positive

Eliminate the negative”.

That is my advice to the Minister and I look forward to her response.

3.30 pm

Baroness Donaghy (Lab): My Lords, I thank my noble friend Lady Prosser for moving this amendment. After the rest of the Bill, which was like trudging through a freezing Arctic wilderness, this is like relaxing in a warm bath and savouring the moment. The subject of Royal Mail was raised earlier. When I first got to ACAS and tried to book the best rooms in the building for a meeting I was told, “No, you can’t have those rooms. They are set aside for six weeks”. I said, “Why on earth are you setting aside those three best rooms for six weeks?”. I was told, “Well, that’ll be the Royal Mail dispute”. So the job, as I saw it, was to eliminate the recidivists and accentuate good employment relations. I know that ACAS saw that as its job. I should say that I am in receipt of a small pension from ACAS before I go on to praise it.

This amendment sums up what ACAS is about. Without going into detail, because I am going to take only two minutes, it produces high-quality reports on employment relations and how to improve productivity and employee engagement. It has a helpline which took 1 million calls a year when I was the chair—it is probably more now—assisting both employers and employees, while its website was consistently praised by HR managers in every industry. ACAS knows the value of good employment relations and about the important work of trade unions.

My noble friend Lady Prosser mentioned the Involvement and Participation Association, of which I am very proud to be a vice-president. It encourages partnership working and employee/trade union engagement, produces reports and promulgates examples of good practice to encourage others. Finally, as a fellow of the CIPD, which also promotes good employment relations as a route to improving productivity, attendance and staff morale, I say that this amendment acts as a welcome contrast to the rest of the Bill, which is such a lost opportunity, as my noble friend Lord Young said. We could have been discussing how to improve our productivity and provide a skilled workforce. Every study from the organisations that I have mentioned, including the workplace employment relations study that ACAS always supported and helped to finance, proves time and again the importance of positive employment relations. I very much hope that the Minister will take this amendment on board in the spirit in which it is intended.

Lord Brooke of Alverthorpe (Lab): My Lords, I too am grateful to my noble friends Lady Prosser, Lord Young of Norwood Green and Lord Mendelsohn, who have put their names to this amendment. I spoke at some length at Second Reading and I will not repeat that today, as much of what I wish to say has already been said. However, at Second Reading I talked about

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not just trade unions but the millions of workers who are as yet not members of a union. A series of analyses indicate that many of them lead unhappy lives at work. They do not make the contribution at work that they would like to, while the benefit of what they could add to companies’ quality and output is not taken into account. I said that we needed to think in a more positive frame of mind about how we can engage people in unions, and those who are as yet not in unions, to better our economic performance and well-being in this country.

At the end of that speech, I pleaded with the Minister to go back and look at the information and consultative council regulations introduced back in 2005 by Tony Blair’s Government. At the end of Second Reading, she had a lot of people to respond to and she did not address that issue—in fairness to her, it was probably because she saw that she needed to speak on other topics. When she responded to me she spoke on something else—check-off, which we were dealing with earlier in the day. But like my colleagues I hope that I can urge her or her Whip, who may be looking at the subject with a fresh pair of eyes, to take this part of the debate away and look carefully at what we have had to say. It is about progress and making a better life for employers and employees.

Following my noble friend Lady Donaghy, I have had a look at some recent documents issued by ACAS. It says:

“Information and consultation are the basic building blocks of every effective organisation. These concepts are as crucial to the relationship between the individual workers and their line manager as they are to”,

any other parties. It continues:

“Whatever the size or type of your organisation people need to talk to each other. They need to … exchange views and ideas … issue and receive instructions … discuss problems … consider developments”.

ACAS goes on to list a range of topics that are worthy of joint consultation between employees and their managers, including organisational performance, management performance and decision-making, employees’ performance and commitment, levels of trust, job satisfaction and work/life balance. The list goes on and on.

In many workplaces, unions are there but such discussions are not taking place in the way that they should. There are even more workplaces around the country where the voiceless have no means whereby they can engage properly with their managers to the overall improvement of the operation of those businesses and companies. That is to the detriment of not only the individuals in and owners of businesses but the company at large. My noble friend Lady Prosser has been extraordinarily agile in finding a way to bring an amendment to a Bill whose primary focus is on what I would see as negatives relating to trade unions. However, this amendment gives the Government a chance to put a positive there, as my colleagues have been pleading, and this time around I hope that we will get a positive response to our points

Lord Stoneham of Droxford (LD): My Lords, I too hope that this session provides a little light relief for the Minister, who has had quite a hard time through various sessions of the Bill. It has been a bit like a

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series of one-sided OK Corrals. Over lunch, I thought I might ask the Minister whether she has any genes from Stonewall Jackson, that great Confederate general. The other metaphorical point I would make is that he ended up being shot by his own side—accidentally. I hope the Government at least allow the Minister to make the concessions in the Bill which will be her salvation.

Amendment 97A is welcome in providing a wider debate on where we are going and I would like to make a number of points. Employment engagement is very important to improving the country’s competitive position, and to improving services in the public sector. As someone who has been in industry, I certainly feel that we have far too much dependence on adversarial systems and processes—I sense this in our politics as well—when engagement and working together on problems normally provides much better solutions.

I am certainly one of those who welcomes unions and sees their important role in society and industry but, sadly, the reality is that although the unions remain strong in the public sector they have become weak in the private sector. However we may regret that, we have to make the point that although unions are important there has also to be a diversity of systems that can work well. We see that in companies such as Marks & Spencer and John Lewis, and many foreign-owned companies where processes have been developed not necessarily strictly through recognised trade unions. This is very important in the public sector, where we in this country will no longer have a great and dominant manufacturing sector—although we might like to aspire to that—but will be much more dependent on services. That requires the motivation of employees and will be especially important in the public sector; it is certainly important in the private sector. That is why an adversarial system is no longer totally relevant to improving industrial relations.

I welcome the spirit of this amendment, the thinking behind it and the opportunity to have a general debate, however briefly, on this important subject.

Lord Mendelsohn (Lab): I congratulate and thank my noble friend Lady Prosser for introducing this amendment and will set out why it is particularly important. It was a sheer pleasure in the previous debate to listen to the contribution of the noble Lord, Lord Balfe, and to the good sense that came from all parts of the Chamber. I hope that the Government are very much in listening mode and can perhaps hear a case for change. I will set out why the Bill merits some sort of change.

An interesting feature of the coalition Government was that every year, we would read in the papers and in blogs that Conservative Ministers would present this very Bill to Liberal Democrat Ministers. Each year, they would say, “Together, we could do in the Labour Party, which would undoubtedly be to our benefit”. Each year, to their considerable credit, the Liberal Democrats would block the Bill. I am sure that some noble Lords present today were witnesses to this annual event. It was no surprise that the Government, given the opportunity, chose to use a huge legislative

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sledgehammer to target—and in some ways to torture and weaken—their perceived enemies or to make life a little difficult.

This is unfortunate, not just for the well-being of those who are perceived to be the enemies but because it highlights that the Bill has yet to pass a strong public interest test. During our debates, we looked at the “will the sky fall in?” test. It probably will not, but we have certainly not met the “unattractive consequences” test. We have had a good debate about the impact on the regions and on devolution, and whether or not this will weaken the union; I do not think it has met the test that it will not. We also had a debate about what the point of this is, and looked at whether it passes the test of minimising the harm it might cause.

However, the Bill does need to pass the “making a positive difference” test—not just to trade union members but to the public and the national interest. This is what this amendment is about: the role and work of trade unions in a modern society. As a businessman, I would say that this is also about the massive opportunity we have to use workforces and trade unions for better purposes. The Bill has a stunning lack of meaningful objectives, such as targets, goals or definable and provable outcomes. We have seen repeatedly that there is no evidence to establish that there is a problem to justify the solutions. There is no cost-benefit analysis and no meaningful consideration of the consequences of its measures. It lays regulation on obligation on cost on restriction on complication on Whitehall centralisation. It really is time for a bit of light.

The amendment also passes a very important legislative test, which is that it tempers the Bill with proportionality, purpose, principle and practicality. I strongly believe that Government Front Benchers in this House have clean fingerprints on the design of this Bill. They are respected in this House and do credit to a tradition in their political party and to our country’s political culture and traditions—the debate we had earlier attests to that. I have been very encouraged by the debates during Committee and the strong consensus for changes to the Bill in so many areas, but I fear that the dull hand of the other House will compress the capacity of our House to ameliorate the Bill and that the power of the arguments made so ably by so many will not receive the proper response. I hope Members there are listening not just to what we say about the measures they have introduced, but to this very welcome addition.

In that capacity, I am very pleased to see the noble Baroness, Lady Finn, in her place. She of course plays a very important role as a special adviser with a particular responsibility, supporting the Minister of State for Skills in the Department for Business, Innovation and Skills on trade union reform—a kind of facility time for the Conservative Party. It is very important for the message to be conveyed to the Minister and to those who have held the debates in the other House that there is an opportunity here to do something which restores a bit of balance and addresses the great tragedy of the Bill, which is that it is not about reform for a great purpose.

3.45 pm

I hope the Government will take a moment to reflect, through this amendment, on the shape of the

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Bill and will consider it a very useful addition. The Bill has been designed to address the issues of the past. As someone who has been a long-standing advocate and sponsor of reform of the Civil Service and public sector performance, I think we will miss a great opportunity to define a forward-looking approach in keeping with our current condition and with what we know will work well for today and the years ahead—where maximising the performance of the workforce is our central purpose and where we can successfully address the challenges ahead with the sensible involvement of employees.

Ministers may not trust trade unions, but employees have trust and confidence issues with employers. In the most recent Edelman Trust Barometer, just over half of UK employees say they trust their own employer. This is the crucial area we have to deal with. Employees are a company’s greatest asset, and effective organisations are able to maximise performance by optimising employees’ performance. But this needs great managers and great leaders, which is a crucial part of the Bill that is missing. Especially in the public sector, employees are the greatest route to the solutions that Ministers want, as opposed to delivering diktats from Whitehall.

I draw the attention of all noble Lords to my noble friend Lord Carter’s magnificent report on achieving efficiencies and the benefits of economies of scale in the NHS. It is a masterly report, which makes this argument completely. In it, he states that the NHS has,

“arguably the greatest concentration of intellect and talent of any UK business, but there is little evidence it has been fully engaged to solve the efficiency and productivity issues”.

Commenting on his report, the Financial Timessaid that “the key” is what management does to recognise what employees,

“already know, or can find”,

in terms of,

“the answers to poor performance and high costs, if only managers will let them”.

A modern approach is to build engagement, maximise skills and adaptability, create purpose and direction and make people feel part of something that properly lives up to the values it claims to espouse.

I congratulate my noble friend Lady Prosser on another element of her elegant amendment. Its drafting should be commended for two reasons: it is workable and it is within scope. Regrettably, the attempts that I and other members of the Front Bench made to provide the House with a workable amendment fell foul of the clerks, who felt that anything that addressed management was outside the scope of the Bill. What more perfect a metaphor could there be for the Bill’s flaws? Getting engagement right is in the private sector a source of competitive advantage and should in the public sector be a source of collaborative advantage.

I congratulate ACAS on its work in developing and pioneering ways for manager and industrial relations to develop; I regret that some of its role was weakened and taken away. The Bill does little to move us forward or even to encourage and incentivise trade unions towards what our modern economy needs. Our long-standing poor productivity owes more to the performance and tasking of management than any other single indicator. Getting that right unleashes huge potential

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gains in individual productive capacity: we have the evidence in industries across the UK. There is so much potential for a forward-looking approach to provide considerable benefits in the public sector, in which our acute problems of productivity, sickness, absence and disputes take two, three or even five times longer to resolve than they do in the private sector.

The Government always want to get more for less. Engagement, not coercion, is the only way. I urge them to restore some balance to the Bill, to embrace the future and to support the only thing that has been debated that is proven to improve workplace relations and has economic and productive benefits. I hope that they take this opportunity to do so.

The Earl of Courtown (Con): My Lords, I thank the noble Baroness, Lady Prosser, as well as my noble friend, for giving me the opportunity to respond to this debate, a fascinating debate covering many different aspects of the great relationship.

The Government recognise the positive role that trade unions can play in the workplace. In a debate last November brought by the noble Lord, Lord Foulkes, the House debated that positive role. During that debate, the noble Baroness, Lady Prosser, highlighted from her personal experience some of the important contributions that trade unions can make. Having read the debate and looked carefully at what she said, in the last paragraph of her speech, she mentioned the partnership between workforce and management and how important it was that that worked efficiently for all concerned. I could not agree more.

My experience in this field, apart from a brief period in the 1970s when I was working on the shop floor in an engineering firm in the West Midlands—which was an interesting experience for someone from my background—was up until 2010, when I was a contract manager in the construction industry. I worked for an SME, the backbone of the British economy. We employed 25 to 30 people. I was involved in sending people out to work, finding them work and such like. It was so important that those relationships worked and that there was the engagement mentioned by many noble Lords. It was a non-unionised workforce, but it still worked very well, whether on health and safety or training, but then we were a committed organisation. We worked well with the workforce and it was mutually beneficial.

The noble Lords, Lord Stoneham and Lord Brooke, talked about the importance of employee engagement. I recognise that, and we know that businesses understand it too. The CBI 2015 employment trends survey highlighted that the top priorities for businesses in the coming year are better leadership and employee engagement to foster productive workforces. The noble Lord, Lord Brooke, also referred to information and consultation regulations and said that employees are voiceless in some organisations. Under the information and consultation regulations, employees have a right to request a formal workplace agreement for engagement. That does not apply to workplaces of less than 50 employees—the sort of organisation I was involved with—but employees have greater influences in those workplaces anyway. Also, as we have heard, many

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employers involve employees in decision-making processes because it makes good business sense.

We have acknowledged that unions can play an important role in the workplace and have heard many examples in many debates in your Lordships’ House. However, productivity, which was mentioned by the noble Baronesses, Lady Prosser and Lady Donaghy, is not influenced solely by the presence of unions, but by capital investment, innovation, and dynamism of markets—they all have potential to increase productivity, given current record high employment levels. Data from the OECD do not directly indicate a link between trade union density and productivity, but I realise that there are different figures from a wide range of sources. We are very conscious that productivity has to rise, and we are doing a great deal in this area, which I will not go into at present. We also understand the importance of a well-motivated workforce.

The noble Lord, Lord Young of Norwood Green, mentioned apprenticeships, as I suspected he might. The Government accept that apprenticeships and training are key to improving productivity; that is why we are committed to the 3 million apprenticeship starts in England over this Parliament, and making sure that they are of the highest quality possible. We know that the trade union movement will play its part in helping us to deliver this commitment. For example, last year the TUC and the CBI signed a joint commitment to support and promote apprenticeships and traineeships for young people.

It is not right that we restrict how employee engagement can happen. The current approach is flexible and means that businesses have a variety of ways in which to engage with and involve their employers in their businesses. Currently, employers and employees can decide the best mechanisms for engagement and tailor this to address individual workplace needs. This may or may not involve representation through a trade union. The choice for individuals to join or not join a trade union is important. Many workplaces and sectors are not as heavily unionised, and alternative or additional methods have been created for engaging with employers effectively. Therefore, we do not believe that we should restrict the type of engagement that we promote. I do not believe that this amendment will improve industrial relations or employee engagement. But we will take careful note of what has been said.

Baroness Prosser: I thank the Minister for giving way. I am not sure that I made it clear in my speech that employee engagement is conducted in workplaces that are unionised and in those that are not unionised. It is not something that sits separately from trade unionism or can only sit alongside trade unionism; it works in companies where there are good union relations but insufficient attention is paid to ways in which employees can participate and contribute to a debate and in places where there are no mechanisms for engagement. So it is not one or t’other; it goes across both kinds of workplaces.

The Earl of Courtown: I thank the noble Baroness for that intervention. I shall read carefully what she said. Having taken all that into account, I ask her to withdraw her amendment.

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Lord Young of Norwood Green: I made the point in my contribution that we did not think that the wording was initially absolutely perfect, but there were constraints on the wording, as we have already heard, given the nature of the Bill. It would be useful to hear from the Minister that they would be willing to meet us to discuss the potential of improving employee engagement.

The Earl of Courtown: I am always willing to listen and to hold a meeting.

Baroness Prosser: I beg leave to withdraw the amendment.

Amendment 97A withdrawn.

Clause 15: Investigatory powers etc

Amendment 98

Moved by Lord Mendelsohn

98: Clause 15, page 12, line 15, leave out subsection (2)

Lord Mendelsohn (Lab): My Lords, I cannot resist making one point on employee engagement. As we move on to the Certification Officer, the measures that we are about to debate would certainly have hugely benefited from some form of employee engagement. I noted in the evidence of the Certification Officer of 9 February to the Select Committee on Trade Union Political Funds and Political Party Funding that he was asked whether he was consulted about the measures that related to party funding. He said:

“No, I was not consulted”.

He was asked a broader question on whether he was consulted at all and he said, “Not before the Bill”. These measures have the hallmark of something that would have greatly benefited from being examined carefully, and if advice, experience and evidence had been sought from the Certification Officer.

The Trade Union and Labour Relations (Consolidation) Act 1992 clearly intended that the Certification Officer should be accountable primarily to trade union members and that he was to codify reports on compliance, have powers of investigation and intervention and deal with complaints. With the breaches of any rules, remedies were underpinned by law. Indeed, the noble Lord, Lord Forsyth, in the previous debate, gave us a very good understanding of how this was to deal with the issue of a significant foundation about how members felt about the unions and where the unions were. We can certainly agree with that. But we now move on to something where we are substantially and almost completely changing the role and function of the Certification Officer and muddying the waters tremendously.

In his evidence, the Certification Officer was asked about whether the problems about complaints were consistent with his understanding. He said:

“All rules can be improved. No one has complained to me at any time that they have been impaired in making a complaint or pursuing what they want to do. Of course, that does not mean that they do not feel that way—it is just that it has not been reported to me. The answer to the first part of your question is that I am not sure; there is no evidence of that”.

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He went on to say:

“The Bill approaches it from a totally different perspective. They are not trying to tinker with what exists; they want a new model. I do not think it is fair to say that it is successful or not successful in perfecting the existing model”.

4 pm

I find it strange to be debating the expansion of a role like this with the Minister after our discussions on the Small Business Commissioner in a previous Bill, where there was such an apparent case for the extension of the role, which was so narrow as just to be about collating data. There has to be a significant case for why this Bill widens the current role of the Certification Officer. The Bill seeks to extend his role, accountability, reporting and data collection duties and turn him into an inquisitor. Trade unions are being exposed to a vastly different and colossal burden of regulation, which breaks new ground constitutionally and legally and is out of all proportion to any conceivable mischief the Government have conspicuously failed to identify.

Indeed, there is a rationale for the intervention suggested, as outlined in the impact assessment. There are three legs to it. The first is a market-failure argument that suggests that the regulator needs significant change not because members have a detriment but because,

“The actions of unions can have wider impacts beyond their membership and their operations may not always be transparent to the wider public”.

This completely transforms the nature of what we are talking about and puts in a burden which is impossible to meet for almost any institution or organisation. In fact, in regulatory principles, this is by far the largest extension that we have had, even if we consider what happens in other industries that are heavily regulated.

Secondly, the impact assessment suggests:

“The regulator must have available sufficiently robust enforcement powers and sanctions to deter breaches”.

We have evidence of what the potential breaches are in the role, work and reports of the Certification Officer, and I will come to that later. However, there is no current sense of where there is an identifiable market failure to suggest these measures. The impact assessment also states:

“The Trade Union Bill is modernising and reforming trade union law. Therefore, we will need a regulator that has the right tools to deter breaches with this updated framework, and in a proportionate manner. It is only fair that trade union members, employers and the public can rely on robust regulation of trade unions.”

Again, there is no evidence about why any of these things suggest that there are any particular failures in the regulation of trade unions in relation to their members or other activities. The case is just not made.

Finally, the impact assessment makes the point that:

“The Bill provides for recovery of the costs of running the regulator”.

It establishes the principle that the trade unions should pay in regard to protecting their members. Whether or not that is the case—I am not hugely sympathetic to that view, given the Charity Commission and others—I think the Government could make a case, but if they were to make such a case, there has to be proportionality in the costs, but the costs have no proportionality whatever.

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What was also interesting in the evidence of the Certification Officer was the huge difference in his prediction of the costs and consequences of these activities on the Certification Officer and on trade unions. He made the point that, from calculating what he estimates to be the changes required to the Certifications Officer’s costs, there would be significantly greater costs on trade unions. The impact assessment, without any basis, notion, thought, breakdown or anything covering the Certification Officer’s report, suggests that there may be 50 more declarations over five years. This does not bear serious consideration, given the report of the Certification Officer and the data that have already been published.

I suggest that all Members spend time reading the annual report of the Certification Officer, which is significant and comprehensive, covering all sorts of requirements and obligations on trade unions, including superannuation schemes, membership information, data and all sorts of other things. There is a considerable section on where there have been complaints and breaches of trade union rules. It talks about the number of people who made complaints and says that in the year from 1 April 2014 to 31 March a total of 542 inquiries were received: 42 on general advice on the role of the Certification Officer; 96 on issues related to the listing of trade unions and employers’ associations; 21 on annual returns and financial issues; 20 on certificates of independence; 11 on appointment, election or dismissal from any office in the union; and a very few about disciplinary proceedings, balloting and political funds. These are small numbers of inquiries only, which did not lead to complaints. There is no sense that there is either a particular hurdle to raising complaints so that issues are not addressed or that the complaints are drifting in a particular direction. In fact, the only thing that is identified is that the number of inquiries is down, as it has been consistently over a period of time, which is testament to the particularly good job that the Certification Officer has been doing—I hope that by saying that I have not sealed his early termination.

I stress that 11 applications for consideration remained to be determined. The report goes through the series of complaints and issues and how they were dealt with. I have to say that the Certification Officer deals with them very well in the report. Given the number of issues that were raised, I have not calculated the percentage but I think that the unions are broadly running at an average of 80-20 in their favour on how they have dealt with them.

I just cannot see an evidential base for this provision. It is yet another measure with no problem to solve, no justification in the impact assessment and no arguments that bear scrutiny, with no balance of fairness and with the intention of, at best, making life difficult and, at worst, allowing the most malevolent in our society a licence to cause mischief. At heart, this is a detriment to members, not least because of the massive costs involved. We are opening up the examination of trade unions to anyone, even if they harbour ill will with no grounds or justification. The measure creates the ability to frustrate any dispute by means of egregious complaints to the Certification Officer, and allows the Certification Officer to start being involved in any sort of issues that

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he feels there are grounds for. The costs of this falls on the members. Without a sensible estimate or principle for how the proper costs of this could be established, this is an open-ended burden on members of trade unions.

Our amendments seek to probe, and propose some mitigating factors. The first amendment in the group seeks to prevent the insertion into the 1992 Act of Schedule 1 to the Bill, which provides for the Certification Officer’s extended investigatory powers. The extent of those proposed new powers is wide-ranging; they sweep far beyond what is wholly necessary. This proposed remit should be of concern to all, but of particular concern is the potential impact on the privacy of individual trade union members. As it stands, the Certification Officer or other persons can request detailed information from all trade unions on the personal data of their members, including the names and addresses. The BMA has said that these,

“New powers for the Certification Officer threaten to intrude into union activities and affairs and presents a potential invasion of trade union members’ rights to privacy”.

The sentiment shown by the BMA has been echoed by many other trade unions and human rights groups. It should lead us to question why this level of data is required at all by the Certification Officer. Many workers and trade union members quite legitimately do not wish their employers to know that they belong to a union, and it should remain their right to keep such personal information private. The Bill removes any guarantee that details of trade union membership and names and addresses of individuals will remain private. Given the sensitive history around blacklisting—I am not even sure we can call it “history”, since it still happens today—how can the Government assure trade union members that these new investigatory powers will guarantee individual privacy and the safety of personal information in relation to trade union membership and current or future employers? It is for that reason and many others that the Equality and Human Rights Commission concluded that the proposed new investigatory enforcement powers do not comply with the European Convention on Human Rights.

In addition to the type of personal data which could be collected by the Certification Officer, the question remains as to what purpose this data on individual trade union members will serve to the aim of the Bill or the work of the Certification Officer itself. The answer is: very little. At best this is overkill and at worst it could seriously infringe the privacy rights of 6.5 million trade union members. However, I do not ask noble Lords to take my word for it. The Certification Officer himself in giving evidence to the Select Committee was asked by my noble friend Lord Whitty whether he believed that there were any administrative reasons for the Government’s proposals and whether there was any obvious need for improvement in current legislation or requirements of union rules, and said very clearly that no one has made such a complaint.

At the very heart of our amendment to remove these new investigatory powers is the notion that there are no grounds for change. No one—neither trade union members, employers or businesses nor even the Certification Officer himself—is calling for more powers

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of investigation. With seemingly no call from any involved parties to change the investigatory powers of the Certification Officer, how and why have the Government identified the need to do so?

The second set of amendments deal with changes to the Certification Officer’s powers, which would allow him to instigate an investigation without the need for a complaint, as well as complaints no longer having to be made by a member of the trade union they are complaining about. These amendments state the need for a complainant or applicant to be a member of the union which is the subject of the complaint or application. This is just common sense. There is a real need to protect unions, their members, employers and the Certification Officer from wasted time on malicious complaints. As it currently stands, the Bill allows any third party to instigate a complaint. Anyone from aggrieved employers or employees, any campaign group or even a rival trade union from within the same workplace could become complainants without having ever been in direct contact or personally affected by the actions of the union which is the subject of the complaint. It is just an unnecessary series of complications.

Putting aside the very real threat of leaving the Certification Officer open to malicious complaints, the post may also be subject to an increase in workload due to non-malicious complaints which are still not valid. Complainants could unwittingly instigate unfounded complaints because they are so far removed from the trade union that is the subject of a complaint that they lack the adequate knowledge about a situation or practices of a trade union that they are not a member of.

As it stands, the Bill leaves the investigations of the Certification Office vulnerable to misuse, adding to the time and costs of the Certification Officer’s investigations. Amendments 100 and 108 simply seek to offer the protection that is needed to both trade unions and the Certification Officer against any unnecessary additional investigations and a further strain on resources. The Bill proposes an extension of power which places the Certification Officer in the almost unprecedented position of becoming the investigator, the prosecutor and the adjudicator.

During the Select Committee evidence session, the Certification Officer confirmed that he had raised concerns about this drastic change in role and responsibilities with the Government. He said:

“We have explained the difficulties of the investigator/prosecutor/adjudicator role. I have tried to find, and have asked for, an example of a body, such as the Financial Conduct Authority, that investigates and adjudicates, as you read in the press, to see how it does that. There is nearly always an independent body. The FCA has an independent body that makes recommendations, and the decision is made by the board. The only example we have been given is that of the groceries adjudicator, who apparently does the same thing”.

Bodies such as the Financial Conduct Authority ensure that there is a clear division, and that independence is maintained, between any decision to investigate, the investigation itself, the decision whether disciplinary action may be merited and the decision whether there has been a breach. Why, then, has no such guarantee been provided for trade unions and the Certification Officer within the Bill?

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On the last amendment in this group, Amendment 117A seeks to address this very problem by probing the Government’s attitude to the case for establishing an independent adjudication panel to adjudicate cases where the Certification Officer considers exercising his new powers in the Bill. Very much like the FCA panels, the panel would publish an annual report and might comment on the work of the CO, which the CO would respond to within six months of the publishing of the report. This important probing amendment tries to understand deeply what the Government’s objections are to any other form which separates those roles and makes it more sensible.

I must say in this regard that it is very important to place on record the serious concerns presented by the Equality and Human Rights Commission. It has provided a very clear statement on this measure, which is worth addressing at length because it makes the point better than anyone else could. Its analysis says:

“Article 6(1) of the ECHR provides that, in the determining of their civil rights and obligations, everyone is entitled to a fair hearing by an independent and impartial tribunal. In our assessment, the new proactive character of the CO’s functions (i.e. the power to instigate, investigate and then adjudicate the same complaint) compromises the impartiality of the CO. In particular, the new power to instigate a complaint implies that the CO may have already decided that there is something worth looking into further and taken a view of its merits. This is inconsistent with the Article 6 requirement that a complaint should be impartially determined by an independent body. The Government has argued that the right of appeal to the Employment Appeal Tribunal … would remedy any such breach of Article 6. However, in our assessment this would not be a sufficient answer where the CO makes findings of fact and an appeal to the EAT lies only on a point of law, as is the case with current appeals against CO decisions under,”

the 1992 Act. It continues:

“The provisions of Clause 15 and related Schedules are also relevant to the UK’s other international legal obligations, in particular, under the ILO Convention 87 on Freedom of Association and Protection of the Right to Organise. Although they cannot be directly enforced through our domestic courts, international human rights treaties (conventions and charters) are legally binding in international law and have mechanisms to hold States to account. The Commission notes that the ILO Committee of Experts, a body which provides advice to the bodies which are responsible for enforcing ILO Conventions, has asked the UK Government to review a number of the provisions in the Bill and to provide comments on the proposals to extend the powers of the CO”.

That is a particularly dramatic and significant statement. It is very important that the Government try to meet the test of answering those questions. I do not think that they can, but I look forward to hearing from the Minister.

4.15 pm

In looking at this part of the Bill, I have asked: for whom and to what benefit are the Government extending the powers of the Certification Officer? Throughout the evidence sessions with the trade unions and the Certification Officer, no one expressed an explicit need for the extended powers within the Bill. I keep on reinforcing the point that these are the words of the Certification Officer himself:

“No one has complained to me at any time that they have been impaired in making a complaint or pursuing what they want to do”—

no one except this Government.

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In my view, these extensions of the Certification Officer’s investigatory powers reveal the real intention behind the Bill. What this Government are pursuing is motivated more by the want to suppress trade unions and their members than by the need to improve openness and transparency. I beg to move.

Lord Flight (Con): My Lords, I have a great deal of sympathy with long-standing trade union members on the other side of the Committee. First, who really likes change, and, secondly, who really wants more regulation? Our whole economy is tied up in string with regulation. It was a delight to hear Labour shadow Ministers arguing against more regulation and complaining about regulators being investigators, prosecutors and adjudicators, which I assure him they are in practice across most areas of regulation, whatever little committees might exist to alleviate it.

We are in a world where institutions that serve the public and with which the public has dealings are regulated, and increasingly so. I am afraid that I do not really see any logic as to why the trade union movement should have special exemption from regulation. Trade unions have the scope to break the law, they have the scope to do things that they should not do and they have the scope to cause inconvenience to the public. Therefore, to argue that they are a world unto themselves is not valid. Some regulation may be needed to protect members from being overlorded by their trade union leaders.

Under the provisions of the Bill, the enhanced powers of the Certification Officer are meek and mild. They are extraordinarily modest in comparison with the powers of regulators in other sectors. The noble Lord should just try working in the financial services sector if he has not done so already. Everyone spends their whole time looking over their shoulder for fear that they are going to break a regulation. There are so many regulations, comprising something like 4 million words and I have forgotten how many tomes.

Lord Mendelsohn: I do work in the financial services sector. I operate under the FCA and am a regulated individual.

Lord Flight: I am glad to hear that; the noble Lord will know all about it then. But he is probably about to enter the new senior managers’ regime where he will find that the extent of his regulation will increase substantially.

If really heavy-handed regulation was being imposed on trade unions, there would be a fair argument. However, what is in the Bill is very meek.

Lord Monks (Lab): Is not the real case that there was a massive problem in the financial and banking sector? There was a huge crash that led to lots of people having very serious troubles, and we are still not fully recovered from that to this day. The number of abuses is enormous. In the small world of trade unions, however, there are hardly any abuses, and those that do happen are dealt with by the Certification Officer on behalf of any member who wishes to apply. Opening the door to say that they can take a complaint

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from anybody and demand this and demand that, and to charge the union for the privilege, involve employer consultants and so on, is no equivalent at all. What the banks did rocked this society to its roots. The unions have not done that.

Lord Flight: I would dearly love to embark on a long debate with the noble Lord on the banking crash, but it was essentially caused in America and not in this country. I do not think that the regulations that have come in since have done very much to prevent another financial crisis arising in the future. They always arise and there is nothing new about them—just look at economic history. But I am glad to have livened the Committee up a little, perhaps.

Lord Collins of Highbury (Lab): The other issue that is constantly reported on the radio is that of mis-selling, which created a huge crisis across the financial sector. I do not understand how that equates to breaches of trade union rules.

Lord Flight: I will dig myself in deeper and say that, to my mind, a great deal of the mis-selling issue is unjustified. First, if you go out and buy a new or second-hand car, you buy what you see. Individuals have some personal responsibility for determining what they buy. Secondly, and more specific to the whole area of mortgages, it was largely about inflation reducing dramatically and returns differing substantially. The simple point is that financial services are at one end of the spectrum and, arguably, trade unions are at the other. It is unreasonable not to accept that the behaviour of trade unions can be extremely inconvenient, if not damaging, to the public at large. Therefore, there is a public interest here.

This group of amendments is about cancelling or dumbing down some parts of the Certification Officer’s modest new powers. It seems to me that the powers in question are really not of the substantial importance that the noble Lord suggested. Specifically, the amendments are to remove the new investigatory powers in the Bill and remove the power to investigate in the absence of a complaint by a member. Surely the public have some right to complain if they feel that they have a complaint, and surely a regulator—even a modest regulator—ought to be there to investigate. To say that the trade union itself can investigate does not comply with the government standards of our times, which require some degree of individual investigation.

As we are all aware, the Bill provides the Certification Officer with additional powers he can use proactively to investigate breaches of trade union statutory requirements in relation to political funds, union mergers, internal leadership elections and appointing to, or failing to remove from, a union a person convicted of certain financial offences. It does not seem unreasonable that a very modest regulator should have the power to look at those territories. The Certification Officer ought to be able to investigate formal complaints, not just when lodged by a member but in response to information raised by third parties. Again, his powers beyond investigating are not that great. I do not see why the trade union sector should not be as transparent as any other.

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There is a key addition in principle behind what is in the Bill, which is regulation on behalf of the public. The wider public has an interest in trade union conduct where, as I said, unions can by industrial action and in other ways inconvenience the public and damage the economy. Likewise, the investigatory powers cover areas relating to statutory requirements that are of relevance to the public as well as to trade union members.

I note that the Electoral Commission, which is somewhat, if not entirely, analogous to the trade union movement, can impose larger financial penalties. While the Certification Officer has only the discipline of civil penalties, the Electoral Commission can escalate an issue to a criminal offence. I do not propose that that should be the case in trade union regulation, but it illustrates that these measures are pretty modest. On the issue of bearing the costs, again, the industries affected invariably bear the cost of regulation, but I cannot see that what is envisaged here will cost very much at all. I repeat the key point: at present, what exists is purely to protect the interests of members and what is proposed is to protect the interests of the public. That is not an unreasonable change.

I close by saying that I cannot see that there is much in these provisions that is at all inherently damaging to trade unions if they are conducting their affairs in a proper manner. I would have thought, therefore, that it would be a wise strategy to accept the measures, comply with them and make them as unonerous as possible.

Baroness O’Neill of Bengarve (CB): I declare an interest as chair of the Equality and Human Rights Commission. I return to a point that I made at Second Reading, which is that we are talking here about restrictions on Article 11 rights—the right to freedom of assembly. That is a right that I believe all parties are committed to.

The European Convention on Human Rights sets out the permissible purposes for which a restriction may be placed on the right. It is only those permissible purposes that count. They include, for example, the protection of public health, the protection of other liberty rights and the protection of privacy. But the idea that they include general protection of the public and consumer rights, as the noble Lord, Lord Flight, has suggested—not merely today but on earlier occasions—is mistaken. Consumer rights are extremely important, but they are the creature of statute; they are not fundamental rights. I do not believe—and from letters that the Minister has written, that she believes— that those would constitute a sufficient reason for restricting freedom of assembly.

Freedom of assembly is very precious not just for trade unions but for many other groups, including, as I suggested at Second Reading, churches and other faith groups. We must be extremely careful that, when we start thinking about what is proportionate, we remember that it has to be necessary and proportionate for a permitted purpose and not for any old purpose. As the Minister has already said, administrative convenience would not be a sufficient purpose. I suggest that consumer protection and some generic idea about the public are also not sufficient purposes.

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4.30 pm

Baroness Donaghy: My Lords, I want to make some general points about the Government’s proposal on the Certification Officer in addition to the amendments, but first I thank my noble friend Lord Mendelsohn for such a comprehensive coverage of this subject. In my view the TUC summed it up: this is a disproportionate response to an unidentified problem, and I fully agree. The Minister will be pleased to know that although I am going to take slightly longer on this amendment, I will be as brief as possible on my technical and probing amendments later, which may give her an opportunity to think about the exit door and her throat; certainly before 7 pm and I hope a lot sooner.

My first point is one that I am sure everyone understands, but it needs to be put on the record. The Certification Officer is a public servant who carries out his work with diligence and integrity, and I am sure that all future postholders will do the same. We are not and should not be discussing the role of the individual CO. The officeholder will carry out whatever function the Government of the day give them, and I have no doubt that they will do that to the best of their ability. Secondly, I do not question the right of any Government to promote policies that change the nature of a post or a role, no matter how unnecessary and churlish those policies might be. Thirdly, I do not challenge the right of a Government to increase expenditure without providing the direct means to fund it. One could challenge the wisdom, but not the right.

However, I do challenge on the following matters: unfairness, lack of evidence, the one-sided nature of the proposals, the politicisation of the role of the Certification Officer, the necessity for any substantial change and, finally, the Kafkaesque proposal to make trade unions pay for unnecessary government-imposed red tape. On the issue of unfairness, I am grateful to the Equality and Human Rights Commission for supporting these amendments. Others will no doubt deal in more detail with the EHRC’s evidence, and indeed have already done so, but I shall just repeat the quotation given by my noble friend Lord Mendelsohn because it bears repeating. It states that,

“the new proactive character of the CO’s functions (i.e. the power to instigate, investigate and then adjudicate the same complaint) compromises the impartiality of the CO”.

The commission has dealt comprehensively with the problems caused by Clause 15 and I thank it for doing so.

The clause is one-sided because it will have very little impact on employers’ associations. According to the impact assessment, the familiarisation costs will be £2,400 to be met by 93 employer organisations. That represents 26p per employer organisation, although no doubt that will vary depending on the size of the employers’ association. So we are talking of an average of 26p per employer organisation. The estimated cost of familiarisation to the trade unions is £525,000. The actual levy of £1.9 million per year will be covered in secondary legislation, and there may be variations depending on the size of the trade union, any exemptions or other issues about which we have absolutely no knowledge. We will not be able to change it, and yet it

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will be of considerable importance to at least 7 million people. But if we look at the division of the cost of the levy between the trade unions and the employers’ associations based on the same division as the familiarisation costs, it comes out as 0.5% of the £1.9 million levy for employers’ associations and 99.5% of it to be met by the trade unions. That is why it is one-sided. I accept that the impact assessment may be completely wrong in its calculations, and I know that there is to be some consultation with employers and trade unions about the levy in the future. I ask that Cabinet guidelines be adhered to and that this will not be yet just another appearance at the August-fest.

The trade unions will have less money because of the ban on deduction from salaries and will be now levied for the bulk of expenditure that, up to now, has been paid from public funds. That is unfair. It will politicise the role of the CO because any third party will be able to ask for an investigation. The purpose of my amendments, and the probing amendments in the following groups, is to ensure that it is trade union members who can complain, not a daily newspaper or Conservative Central Office.

While I am on the subject, I ask the Minister whether there is a typing error on page 77 paragraph 280 of the impact assessment. Under “Rationale for Intervention”—it is “rationale” used in its loosest sense—it says:

“The main market failure arguments which underpin the existence of a regulator are externalities which occur because of union behaviour and imperfect information between employers and trade unions”.

That has to be a typo. If it is not, it reveals a worrying ignorance of the role of the CO. Surely it should read “employees and trade unions”. I hope that I can be reassured on this.

The impact assessment also comes out with the admirable understatement:

“It is likely that the Certification Officer may receive more representations from 3rd parties”.

There is an attempt to reassure us that the representations would need to meet the two tests that,

“the Certification Officer can only require documents if there is good cause to do so and can only investigate where there are circumstances to suggest that a union could be in breach of a duty”.

The impact assessment calculates that the increase in investigations as a result of these changes is likely to be limited. That may well be true of formal investigations, but that does not take into account the actual work involved processing any representations short of a formal investigation. This creates an unnecessary industry. There is no evidence whatever that anybody wants it, and, to add insult to injury, the trade unions will be picking up the tab for something that nobody wants.

Lord Oates (LD): My Lords, I shall speak to the amendments in this group, in particular Amendments 98 and 99, and to the question that the clause stand part of the Bill. If I ever wondered why I joined a liberal party, almost every day that we have discussed the Bill I have been given a clear and stark reminder. Today is no different. Clause 15 goes to the heart of the role of free trade unions in a free and liberal society. State

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interference in the organisation of freely associated people should be contemplated only where there is compelling and overwhelming evidence that it is required.

The comparison between what is proposed here and the financial services industry, which the noble Lord, Lord Flight, made, is entirely specious. The banks beggared our economy and it was millions of trade unionists and other workers who paid the price. What was the first action of the Tory party in government freed from coalition? It was to let the bankers off the hook by reversing the change we had made in the coalition of reversing the burden of proof, and it was to go after the trade unions with this Bill. It says everything we need to know about the Tory party.

Returning to the amendments, a regulator exists in the form of the Certification Officer with a modest and proportional role. The powers and obligations on the regulator will be massively increased if the Government have their way and the grubby and grasping hand of state interference and control will have been further extended. A sensible, modest and proportionate regulator will have been turned into a monster capable—if not intent on—suffocating democratic trade unions in red tape. There will be a vast expansion of the powers and obligations of the Certification Officer. As noble Lords have said, he or she will now be investigator, prosecutor and adjudicator, compelled to investigate the complaints not of trade union members but of any third-party complainant. An array of right-wing organisations and individuals are doubtless preparing their vexatious complaints, led—I have no doubt—by the TaxPayers’ Alliance. Why is this happening? What evidence has been brought forward to justify this unwarranted new interference in the operation of free trade unions? The Government proffer none. The current Certification Officer says that there is none.

In the Select Committee, my noble friend Lord Wrigglesworth asked the Certification Officer where he thought the pressure had come from. He replied that he had no evidence of pressure for change—although, to be fair to the Government, they would have had no way of knowing that prior to the Bill being published. Why would they not have known? Because, as the noble Lord, Lord Mendelsohn, noted, at the same Select Committee hearing the noble Lord, Lord Richard, asked the Certification Officer whether he had been consulted, and he replied that he had not been consulted. The transcript shows that the noble Lord, Lord Richard, then asked him again—one assumes incredulously—“You were not consulted at all?”. The answer was no. The Certification Officer—the person you assume would have been the first port of call to whom any Government actually interested in the evidence before them would have gone before even considering legislation—had not been consulted at all. That is astonishing—or at least it would be if we had the slightest thought that the Government’s intentions in this Bill were to address a genuine problem. Those are not their intentions. Every clause after those relating to the thresholds—the merits of which you could argue one way or the other; personally, I think they are unnecessary—is a nakedly partisan attack on free trade unions and the main opposition party. Although those trade unions and the main opposition party

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have often done no favours to the Liberal Democrats, there is something more important at stake here—the nature of our democracy.

Clause 15 will significantly increase the burdens on the regulator and on trade unions. The Certification Officer made clear in the evidence he gave that, in his opinion, as far as he could judge, the costs of the regulator would rise at least fourfold. Can the Minister explain to us how that can be justified? And can she explain on what basis she thinks it right that such a stark increase in the costs should be passed on to the trade unions instead of the Exchequer? For example, does she think that the Conservative Party should pay the costs of the Electoral Commission, or MPs pay the costs of IPSA? These are the relevant comparators. It might be reasonable to charge a levy on trade unions when the regulator was simply looking at members’ complaints, but it is most certainly not in the circumstances we are discussing.

The impact assessment is very weak on justification. It can claim only this justification:

“The actions of unions can have wider impacts beyond their membership and their operations may not always be transparent to the wider public”.

I could as easily substitute the word “unions” for the words “Conservative Party”. Given the number of times we have heard the Government justify their position on this Bill by the claim that they have a mandate provided by the Conservative manifesto, might the public not have a legitimate interest in knowing how the content of that manifesto is decided? Should it, for example, be determined by an all-postal ballot of its members? Should there be a 50% threshold, and perhaps an additional threshold requirement that at least 40% of eligible members vote on any section determined to be nakedly partisan?

Given that less than 25% of eligible voters supported the Conservative manifesto at the last election, should the public not at least know that it was properly considered and voted on by Conservative members? Perhaps we should introduce amendments to that effect. But no, of course not. The state should not interfere in the operations of a voluntary association of citizens, unless there is a compelling and overwhelming need to do so. The Conservative Party used to believe that. Indeed, many on the Conservative Benches still do, as evidenced by their contributions in our previous discussion, but Ministers seem to have forgotten it. I appeal to my friends in the Government—if I still have any left after the Bill—to recall that traditional Conservative belief and to drop this obnoxious clause.

4.45 pm

Lord Stoneham of Droxford (LD): My Lords, I am reluctant to detain the Committee longer than is necessary, but I would like to complement the remarks of my colleague, my noble friend Lord Oates, and will therefore contain my remarks on subsequent amendments.

We need to get to the root of the issue about why this reform, particularly this clause, is necessary. In evidence, as we have heard, the Certification Officer said that there was no evidence of pressure for change. The impact assessment contains some clever drafting. It says:

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“At present there is scope to broaden the powers and sanctions available to the Certification Officer”.

But there is no real mention of what the need is and why it is so essential. It says that there is a need to do this to “ensure greater union compliance” and that the Certification Officer should have “more powerful sanctions” and extended powers to investigate. Why is that necessary?

I have also read the Certification Officer’s report. It was 10 years since I read the last one, so I read it twice: once to understand it, and then again to analyse the complaints made to the Certification Officer. And what I found was quite remarkable—this is where it differs from the financial sector. The sector has a turnover of £1 billion and 7 million members, which is not unsubstantial, yet what did we see in the Certification Officer’s report last year? We saw 57 complaints, 47 of which were on union rules and were made by 19 applicants. This is a mere handful of complaints.

I also analysed the costs. I am surprised that a Conservative Government do not respect an organisation that, since 2007-08, has reduced its expenditure—now at £560,000—by 16.5%. Of that expenditure, only £150,000 was spent on complaints. So where is this great build-up of complaints that makes necessary these additions to legislation to further control and examine and provide for extra sanctions?

On the rule of law, I think we can take issue with what has been said about the financial sector. Are trade unions a part of our society that does not believe in the rule of law in terms of the Certification Officer? Great detail is required in the submission of returns, in dealing with inquiries and, when dealing with complaints, in providing extra information. According to the analysis, 98.8% of all returns to this body come in on time. These are not organisations that are disregarding the rule of law in the current situation. So you have to ask why these extra powers are now required.

It is not easy for people who have been in the trade union movement to argue against third-party complainants but in any political organisation, there are cranks. The Conservative Party will have them as much as every other political party, and the trade unions have a number of cranks as well. If you open up complaints to third parties you open up to the world of cranks, and you have to ask: is there any sign of a build-up of complaints from third parties that needs to be answered? According to the Certification Officer, he had only 500 inquiries in the year of his last report, and 200 of those were probably just asking to see the accounts. They were not complaints, they were just general inquiries. There is absolutely no reason for this increased bureaucracy to be imposed on the trade unions. Frankly, in pretty much every other business sector the Conservative Government would totally reject this incursion.

The 1992 Trade Union and Labour Relations (Consolidation) Bill had 303 clauses. Since then we have heard from the Certification Officer, and I have given the level of complaints and issues. It is actually working very well. Reading the evidence of the Certification Officer to the Select Committee, he seems a very honourable public servant of long standing and

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we should listen to his experience. As I say, this Bill has only 25 clauses yet the Government seem to think that it is required to further add to powers to investigate, enforce and so on with regard to the trade unions. There is no justification for this and we need an explanation of why the Government think it is necessary.

Lord Ouseley (CB): My Lords, I want to make a very short contribution. The noble Lord, Lord Mendelsohn, has said virtually everything I was going to say, far better than I would be able to, and I am pleased about that. However, it is important to stress that Clause 15 represents an affront to fairness, justice and proportionality.

The Certification Officer’s independence, impartiality and integrity will be compromised by Clause 15. The new expansive investigatory powers and sanctions being vested in the Certification Officer, from the position of reasonableness, as we have heard, would in effect be likely to result in uncontrolled, unaccountable and non-independent interventions in trade unions’ reasonable and legitimate activities. There is no evidential basis to suggest that the expansion of powers is justified.

I will not repeat the assessment by the Equality and Human Rights Commission, which has been alluded to already, with regard to contraventions of the European Convention on Human Rights. I would like to reiterate one point raised by the noble Lord, Lord Mendelsohn, about Clause 15 and related schedules being relevant to the UK’s other legal obligations, particularly the International Labour Organization’s Convention 87 on the Freedom of Association and Protection of the Right to Organise. Will the Minister please indicate how the Government intend to respond to the ILO committee of experts’ request that the Government review a number of provisions in the Bill and provide comments on the proposals to extend the powers of the Certification Officer?

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con): My Lords, the sore throat that I have been keeping at bay all week overwhelmed me earlier so I apologise to the House. I thank the noble Baroness, Lady Donaghy, for what I think I should call solidarity because she presented me with some Fisherman’s Friends so that I can get through the rest of today. I also congratulate my noble friend Lord Courtown on his interesting contribution to the Committee’s proceedings, and all noble Lords who have spoken in this important debate.

In our manifesto, we said that we would reform the role of the Certification Officer and we are doing just that with, it is fair to say, a great deal of scrutiny in this House. The Certification Officer has responsibility to consider complaints relating to important union processes. It is vital that we have confidence that those processes are conducted properly. For example, the Certification Officer can consider complaints in relation to union leadership elections, union mergers or the accuracy of trade union membership registers—which matter a lot if there is a ballot—or to ensuring the removal from a union office of a person who has been convicted of certain financial offences.

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I would argue that there is a legitimate public interest in trade unions running their affairs according to what is required of them. It is not always the case that union members will know their union’s regulatory duties. That is why a responsive and diligent regulator is necessary. I hope that is agreed.

Lord Collins of Highbury: If I may interrupt, it is a shame that the noble Lord, Lord Forsyth, is not here because it is important to remember that the reforms of the 1980s, if I am to believe him, were about ensuring that trade unions were representative of and controlled by their members. That is what those reforms were about. I am happy to place it on record that I do not want to see us ever go back on some of those laws. It is a real shame that the Minister is confusing those obligations of a free association, which are to be guaranteed, and then saying that there are other interests which need to be regulated. Can we not go back to what Margaret Thatcher said and ensure that we have free and fair trade unions, controlled by their members?

Baroness Neville-Rolfe: My Lords, I do not think that I have a great deal to add on that point now but I have some observations which, with the noble Lord’s agreement, I will move on to. Before doing so, I will comment on the question which the noble Baroness, Lady Donaghy, rightly asked about whether we got the impact assessment wrong. My understanding is that it was not a mistake. The point is that the public in general have an interest in good regulation—in employers, in employees, in families and in the wider public. That is perhaps what we should have said. We are scrutinising this but I am not seeking to change the impact assessment, which has obviously been looked at carefully in the usual way.

Of course the provisions in the Bill have to be proportionate and give effective regulation. As I see it, we are bringing the current powers of the Certification Officer up to date with the accepted normal situation in other sectors. I shall leave the financial services sector on one side, because I want to get through the debate this evening, but perhaps I could give some other examples. There is the Information Commissioner’s Office and the Groceries Code Adjudicator, which has been mentioned. The Charity Commission, the Electoral Commission, the Gambling Commission, Ofcom, the Food Standards Agency, the Environment Agency, Natural England, and Ofwat—it is a long list—can all consider representations from third parties and undertake investigations if appropriate.

I am not sure whether I agree with the noble Lords, Lord Mendelsohn and Lord Oates, on the subject of the costs. The Certification Officer has given views on the potential costs necessary to undertake the new regulatory function and I understand that his comments were consistent with the estimates we have set out in the Bill’s impact assessment. I think he said, rightly in my view, “I do not want to employ rafts of people only for them to be underused. I want to see what happens and increase numbers as appropriate”. My understanding is that we agree that the annual cost will be around £2 million. However, to respond to the point made by the noble Lord, Lord Oates, although I can confirm that the Certification Officer was not consulted before the Bill entered Parliament, we have engaged with him

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and will continue to do so as we move towards implementing the reform. As the noble Lord, Lord Stoneham, suggested, we want to continue a tradition of good compliance.

5 pm

Amendments 98, 99, 100, 106, 107 and 108 relate to the new investigatory powers which would prevent the Certification Officer acting in the absence of a complaint from a member. As I have said, the Certification Officer’s powers to investigate or take action to ensure compliance are limited unless he receives an application from a member, and I see no reason to treat unions differently from other organisations in other sectors. Furthermore, the powers we are giving the Certification Officer to request documents and information are not new. He has had these powers to investigate the financial affairs of trade unions for many years. Similar powers of investigation are also available to a range of regulators and bodies.

In response to a point made by the noble Lord, Lord Mendelsohn, as with other regulators, deterrence is an important aspect. As the impact assessment says, we expect only a modest increase in complaints. The current system relies on union members being aware of the union’s obligation, which is not what most other sectors rely on as the sole source of a regulator’s activity.

Lord Stoneham of Droxford: I am very reluctant to test the Minister’s voice, as I understand it is wavering a little, but she is proposing to increase the regulator’s costs by four times, and yet we are only going to see a modest increase in complaints. Is that a good use of money?

Baroness Neville-Rolfe: I think so. It is important that we have an up-to-date regulator. The £2 million that I mentioned is the upper end of the range in the impact assessment. Obviously, we do not know the figure for certain, and as we have said, we are going to continue to consult the Certification Office. Under a later amendment, we will come on to discuss the levy that will meet the cost.