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Lords amendment agreed to.
Lords amendments Nos. 47 to 50 agreed to.
After Clause 41
Lords amendment No. 51.
Mr. Sutcliffe: I beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 52, 53 and 55.
Mr. Sutcliffe: One always seeks to take note of instructions from the Whips, but I shall not speak for an hour on these amendments. This package of amendments improves the procedures for enforcing the minimum wage. The purpose of the amendments is straightforward. Under the National Minimum Wage Act 1998 as presently drafted, compliance officers are unable to withdraw enforcement notices, which set out the arrears due to workers, even if they realise they have made an error or new evidence has come to light. The position is the same for penalty notices, which are issued when employers refuse to comply with enforcement notices. That means that tribunal hearings are the only way to rectify notices that both sides know to be incorrect, and that then delays the process and wastes the time of the tribunals.
The amendments therefore allow officers to withdraw enforcement and penalty notices and replace them with corrected notices where necessary. That area of enforcement is technically extremely complex and that is why the clause is so long, but that is the essence of it. The amendments are uncontroversial and were accepted as sensible by both sides in the other place.
In asking the House to support the amendments, I wish to encourage other hon. Members to take part in this debate.
Mr. Bellingham: I thought that amendment No. 51 was on union modernisation. Can the Minister clarify the position?
Mr. Sutcliffe: Union modernisation is the subject of amendment No. 54.
Mr. Bellingham:
I thank the Minister for explaining that. He sent me a helpful note, but it is possible that the numbering of the amendments has changed. On the
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basis of what he said about the amendments we are considering, I endorse the Government's actions on this matter.
Sir Robert Smith: It is common sense not to have to go to a tribunal if both sides recognise that something is wrong. Therefore, the amendments are eminently sensible.
Mr. Sutcliffe: I do not wish to be accused of racing through the amendments and I wish to be sure that hon. Members fully understand the implications of the amendments before us.
The minimum wage was a major piece of legislation for this Government and it is important that it is effectively enforced. On rare occasions, employers are not prepared to pay the minimum wage, and enforcement activity is required. The purpose of the amendments is to try to simplify the procedure and make clear the circumstances in which enforcement will be used. I know that most good employers pay well above the national minimum wage. Concerns were expressed that the national minimum wage would have an impact on the number of jobs created. That was not the case, and I welcome the belated acknowledgement from the Conservatives about the impact it had. I hope that the way in which we have outlined the amendments, and the overall implementation and enforcement of the national minimum wage, will mean that it will reach all those who deserve it.
Lords amendment agreed to.
Lords amendments Nos. 52 and 53 agreed to.
Clause 51
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
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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
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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.
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