HC Deb 16 September 2004 vol 424 cc1483-7


Lords amendment No. 54.

Mr. Sutcliffe

I beg to move, That this House agrees with the Lords in the said amendment.

When the Government announced their intention to establish the union modernisation fund earlier this year, I made it clear that money received from the fund by unions should not be spent for political purposes. As I explained in this House, that is in accordance with the provisions of the Trade Union Labour Relations (Consolidation) Act 1992, which set out that all union expenditure on "political objects" must be made from a separate political fund, which is subject to the approval of all members. Those rules prevent unions from transferring money from their general funds into political funds.

During the passage of the Bill through the other place, there was some consensus that, despite the safeguards, there remained a risk that some people would perceive the fund as a means of injecting money into trade union political funds, from which the Labour party might benefit. Such misperceptions are dangerous and detract from the excellent reasons for the establishment of the fund, which is intended to assist unions in better performing their valuable role in contributing to productive employment relations to the benefit of the economy as a whole.

In order to put the matter completely beyond doubt, the amendment therefore clearly sets out on the face of the Bill a clear prohibition on any payment from the union modernisation fund into the political fund of a trade union. In conjunction with the rules on union political funds in the 1992 Act, the amendment categorically rules out the use of the fund to bolster union political funds, either directly or indirectly. It also ensures that the Secretary of State must take all reasonably practicable steps to recover money that is illegally added to a political fund. In addition, it makes it clear that the Secretary of State may impose contractual obligations on unions that receive money from the fund that provide for additional sanctions in cases of abuse. The amendment therefore removes all scope for misunderstandings about the purpose of the union modernisation fund. It achieves its purpose by prohibiting money provided by the Secretary of State under new clause 116A from being added to the political funds of unions. It also entitles the Secretary of State to recover money that has been used by unions in contravention of the prohibition, while ensuring that the Secretary of State may still provide money from the fund on terms providing for additional sanctions where such a contravention occurs.

The fund has been much misunderstood. The unions look to the Government for help in the same way that the Government support businesses in developing new structures and modern procedures. In the past few years, the number of trade unions has diminished as more amalgamations have taken place. That has meant a fall in the number of full-time trade union officers, and the gender balance and age profile of those officers need to be considered.

There was never any intention that the unions could use the fund to contribute to their political work. Indeed, when we debated the issue, many Conservative Members described it as a bung to the trade unions in return for political favours. I resented such remarks then, and I resent them now. In a modern economy, all parties need to be able to work together to meet the challenges of globalisation and maintain the level of employment in the UK. We have more people in work than ever before and the lowest level of unemployment.

We must also meet the changing needs of the work force, whether due to demographic change or people's perception of the world of work nowadays.

We have seen and continue to see the trade unions as a force for good. We want trade unions and employers' organisations to meet the challenges of a modern economy and we believe that the union modernisation fund, with clear rules on governance—we shall consult about governance—will be viewed in the same way as the partnership fund, which provided many excellent opportunities for employers and unions to work together.

The fund is vital and I hope that hon. Members take the opportunity to move away from yah-boo politics and support the principle of the fund. The Government will ensure that it is used appropriately.

Mr. Bellingham

The Minister said that the fund was important. He pointed out that the unions needed to modernise and that they required Government money to do that. When the Bill was first discussed, we took a tough line and made it clear that we did not believe that the fund was a good use of public money. We emphasised that we believed that the scope of clause 51 was far too wide. Indeed, it provides that the Secretary of State can give a trade union money to enable it to do many different things, such as improve the carrying out of any of its existing functions; prepare to carry out any new function; increase the range of services and so on. Furthermore, there is no cap on the fund.

We had a bust-up over the clause. We believed that it was one of the provisions about which the Government were wrong, not least because they introduced it at the last moment. We believed that they should have included it at the beginning of our proceedings and consulted employers much more widely. The Minister said that unions need the money for modernisation just as employers' organisations receive money. However, organisations such as the Confederation of British Industry, the Federation of Small Businesses and the Institute of Directors do not receive money from the Government to modernise or communicate better with their members.

I expressed my concern in Committee, on Second Reading and in discussing the programme motion. Let us assume that the Government make public funds available to the trade unions for modernising, increasing their membership and communicating better with their members, and a specific trade union receives £250,000 or £400,000 for those purposes. It is possible that the money will be used in that way, but what about the rest of the union's money? If Government money had not been made available, the other money, which would otherwise be allocated for the tasks that I outlined, would be available for a political fund. The Minister knows that if the amount of cash in a trade union's coffer is topped up, it will have scope to do all sorts of different things. Although the safeguard in the Lords amendment is welcome, it will not completely prevent abuse.

The fact that the House of Lords had to amend the measure is a vindication of the concern that we expressed. We shall continue to express that anxiety. Although I have made it clear that there is much in the Bill that the official Opposition support, we are committed to reviewing the union modernisation fund because we do not believe that it is a good use of public money and we feel that it is unfairly weighted to one side of the industrial equation. I congratulate the Minister on the small improvement to prevent abuses, but we believe that the clause is fundamentally wrong.

Sir Robert Smith

I must welcome the amendment because it was tabled in another place in response to an amendment from my colleagues in the House of Lords. It was designed to place on the face of the Bill the assurance that money that went into the modernisation fund would not go into a political fund. As the hon. Member for North-West Norfolk (Mr. Bellingham) said, it is sad that the Government could not recognise the importance of that from the start and that it took the Bill's passage through another place to provide that reassurance. It shows that it is dangerous for a Government to introduce such a controversial provision at a late stage. If it had been included at the outset, progress might have been smoother and more measured.

When the fund is allocated, it will be important to ensure that it is properly audited and policed to ensure compliance with the clause. Perhaps the Minister can make clear the way in which the Government envisage policing the clause and implementing the assurance on the face of the Bill.

2.15 pm
Mr. Sutcliffe

It is sad at the end of the process to have discord about the fund. On that subject, the objectives and motivations of the parties are different. Although I acknowledge that the hon. Member for North-West Norfolk (Mr. Bellingham) has tried through his discussions with Brendan Barber and his positive consideration of many aspects of the Bill in the new culture of industrial relations that the Government are trying to engender, the deep-rooted suspicion of the role of trade unions remains. He could not help himself; he could not say that trade unions are or could be a force for good in a modern society. I suspect that he could not say that because the Conservative party took great delight in trying to destroy the trade union movement, which it described as "the enemy within". Government Communications Headquarters was a prime example of that.

I hope that we have moved on from those days and that we all want a modern, vibrant economy. There was a furore in the House when the clause was introduced but the Government were not trying to hide something at the last minute. We used the same procedure when we established the partnership fund, which produced good work between employers and employees. We used the same method then. However, we listened to the debate and were surprised when not only the Conservative party—for, I am sure, understandable reasons from its past—but the Liberal Democrats objected to the union modernisation fund. They said that it was a step too far. Again, there was the suspicion that the trade unions would not use the money appropriately. Yet all hon. Members should know from experience in their constituencies and elsewhere that trade unionism locally, regionally and nationally can enhance the country's productivity. We have only to consider the union learning representatives and the union learning fund to understand that.

Let me deal with the points about safeguards. The fund will go out to consultation, which will include employer organisations, trade unions and any other stakeholder who believes that there is a need to consider the projects. I personally believe that the outcome will be a board that is similar to the partnership board and comprises trade unions and employers who will evaluate the bids as they are made. I believe that that will provide the safeguards and answer hon. Members' concerns.

The union modernisation fund is a major part of what we are trying to achieve in a different culture of industrial relations. It is not true that business organisations are not funded. They are funded through the way in which we deal with projects; I envisage dealing with projects through the fund in the same way. I hope that Conservative Members will view the matter positively and support the principles of the fund in the context of trying to change industrial relations in the United Kingdom. We have already achieved that in the legislation that has been passed since 1997 to ensure that the Government can set minimum standards. However, the best way to resolve industrial relations issues is in the workplace. We need to equip people to carry out that job.

We are reaching the end of our deliberations. I want to place on record my thanks to all hon. Members who have taken part in the debates and the evaluation of the Bill and, of course, all the officials who have worked so hard throughout to ensure that we have a credible and important measure.

Mr. Bellingham


Mr. Deputy Speaker

Order. The hon. Gentleman will have to take his comments as read. I am sure that he has expressed them on a previous occasion. However polite his contribution was intended to be, it would be out of order.

Lords amendment agreed to.

Lords amendments Nos. 55 to 71 agreed to.