Blacklisting in Employment: Interim Report - Scottish Affairs Committee Contents

2  The Consulting Association

9.  Ian Kerr worked for the Economic League from 1969 until its demise in 1993. In the latter stages of the League's life, he was responsible for the Services Group, an association of construction companies who collated data on potentially disruptive individuals and which was physically housed on the premises of the Economic League. Jack Winder, formerly Director of Research at the League, explained:

The Services Group companies therefore provided the information and added to it. It was put into the Services Group file, which was separate from the League file, and then regurgitated only to those companies.[1]

10.  Mr Kerr expanded on the purpose of the Services Group:

Within the Economic League there was a group known as the Services Group, which was composed of the construction company members who were already, for the most part, members of the Economic League. Because of the problems that the industry perceived it had—I am going back to the early '70s, before my involvement in these matters—the industry decided it wanted to take steps to cover itself because of the national strike it had had in the early '70s, so that it would not be caught in that way again. Subsequently, for a further subscription, those companies wished to form what was called the Services Group. That was operated within the Economic League on behalf of the construction companies. Economic League staff were given an additional role—or a role—which was to look after the construction companies' needs, which were very wide- ranging.[2]

11.  When the Economic League was wound down in 1993, many of the companies which had been involved in the Services Group decided that the purpose of the group was still valid and sought to carry it on in another form. Mr Kerr told us that he was approached to become 'Chief Officer' of a new organisation, which became the Consulting Association, and that a number of construction companies were involved in its inception. He named them as Amey, Balfour Beatty Civil Engineering, Balfour Beatty Construction, Ballast Wiltshier, Edmund Nuttall, Higgs and Hill, John Laing, John Mowlem, Kier Group, Morrison Construction, Norwest Holst, Sir Robert McAlpine Ltd, Tarmac, Taylor Woodrow, Trafalgar House, Walter Llewellyn and Willmott Dixon.[3] In the early days of TCA, Mr Kerr told us that Bovis and G. Percy Trentham were also involved, but quickly dropped out.[4]

12.  The Consulting Association was set up with a Chairman and a Vice-Chairman, drawn from the subscriber companies. The first Chairman was Cullum McAlpine, a director of Sir Robert McAlpine Ltd, and the Vice-Chairman was Tony Jennings, of John Laing.[5] The main purpose of TCA was to provide 'reference checks' on individuals. Cullum McAlpine confirmed to us that the motive behind TCA was that "It was going to provide a reference service to and from the members."[6] For this, subscriber companies paid an annual fee, initially £3,500, and paid an additional charge for each name they submitted for checking.[7] The transaction in information was two-way: as well as submitting names for checking to TCA's database, the subscriber companies would also supply information on individuals to be added to the database.

13.  Mr Kerr also drew our attention to two other functions which TCA performed. The first was organising meetings for subscriber companies to discuss areas of mutual interest. The second was the monitoring of journals and newspapers to keep members of TCA aware of developments among the 'radical' or 'disruptive' elements that concerned them. Mr Kerr explained:

I read—I obtained—I made it my business either by subscription or trawling around a lot of the very interesting, I have to say, radical bookshops that existed in London. There used to be a very good one in Camden, which closed, the Compendium. There was another one in Charing Cross and in Caledonian Road called Housmans. They used to be helpful. There was one in Leamington […] I had a subscription to the Socialist Worker, The Socialist, Labour Research, which was a very good radical and statistical magazine, and to a lot of anarchist magazines, which kept coming and going by the nature of anarchy and anarchists. There was a whole range of fringe publications around then.[8]

14.  The origin of the database from which TCA drew its information is still unclear to us. Mr Kerr told us that TCA inherited a core collection of files and reference cards from the Services Group and the Economic League.

At the time that the Consulting Association was being thought about, set up and considered, I was charged with finding officers, putting phone lines in and all that at this point. At that point, the construction names and cards were moved into the Birmingham offices of the Economic League, which is where I was based when I was with the company. The rest of the stuff, to the best of my memory, was still kept in London, or whatever else the League dealt with, be it cards or references. It was my job to go and take those to bring them across once the new offices had been set up, which was the old construction stuff that the companies which were then called the Services Group were party to and helped to generate, I suppose, in principle.[9]

15.  Mr Cullum McAlpine, of Sir Robert McAlpine Ltd, confirmed that the information held by the Services Group, under the auspices of the Economic League, was purchased on behalf of TCA for £10,000. This was a controversial decision, according to Mr McAlpine; several of the subscriber companies had become sceptical of the purpose of the by then-defunct Economic League and regarded association with it as potentially damaging in reputational terms. Mr McAlpine told us:

Just as I became chairman, Ian Kerr told us that the construction databank from the Services Group had to be paid for and was going to cost £10,000. A number of the members were not happy about that, because they believed that some of the information in that databank was not the kind of information that they would have put on to their own references to various people. They were very mindful—concerned—that there were political and other references that were not part of what the Consulting Association wished to be involved with, so there was quite a discussion about whether this list should be purchased from the rump of the Economic League. At the end of the day, Mr Kerr persuaded us that it was the only potential database that was available at that time and that it would be under his guidance; he would edit it so that it would become reflective of what the members of the Consulting Association would expect to have contributed into the association themselves.[10]

16.  It is logical that a database of information compiled on individuals regarded as 'troublesome' to the construction industry would be transferred by the Services Group to the Consulting Association. We note that Mr McAlpine confirmed that his company paid £10,000 for the information which had been held by the Services Group, to form the nucleus of the database from which TCA would operate.[11] Sir Robert McAlpine Ltd. also provided an additional £10,000 to cover the start-up costs of TCA, the money for the information from the Services Group having been a loan, which was paid back.[12]

17.  However, at this point, the involvement of Sir Robert McAlpine Ltd. becomes somewhat more complex. If the information held by the Services Group was transferred to TCA, we heard that information on individuals held by the Economic League itself was destroyed when the League was disbanded in 1993. Mr Winder told us that the League's records were destroyed by Securicor.

It was decreed by the chairman of the League that all these records should be destroyed. Securicor came to the Birmingham office and took away all the stuff for secure destruction. Stan [Hardy] and I had to sign a statement to that effect for the central council. [13]

There is a distinction to be drawn between information held by the Economic League and the files held by the Services Group. Mr Winder told us that, while the information he had collated for the League was destroyed, the database maintained by the Services Group was taken away by Mr Kerr, to form the core records of the Consulting Association.[14]

18.  Mr Stan Hardy, the last Director-General of the Economic League, professed bafflement as to why there would have had to have been payment for the records of the Services Group. When we put to him that McAlpine had paid £10,000 for the intellectual property rights to the Services Group's database, he responded, "Hang on—to purchase from the Services Group? They were theirs. It was theirs to throw out."[15] The argument was that the Services Group member companies had submitted the information contained on the database, and therefore owned it already. It is not at all clear to us, under those circumstances, why they would have had to pay any sum, let alone £10,000, for ownership of the data.

19.  Mr Winder, who had been Director of Information and Research at the Economic League, and Mr Hardy then formed a company called CAPRiM (Corporate Asset Protection and Risk Management) in May 1993. Mr Winder told us that this company was created essentially to provide employment for himself and Mr Hardy.[16] Both Mr Winder and Mr Hardy invested their own money in CAPRiM, but they also received £10,000 from Sir Robert McAlpine Ltd. Mr Winder characterised this payment as being "partly as a good-will gesture and partly to say, "Keep clear of Ian Kerr and all his works"".[17] He went on to explain that the subscribers to TCA did not want the organisation to be tainted by association with former employees of the Economic League. Mr Hardy confirmed that, while the £10,000 was ostensibly a retainer from McAlpine, it was in essence an inducement to stay away from Ian Kerr and TCA.[18]

20.  We are not satisfied with the explanations we have received about the creation of TCA and the parallel development of CAPRiM. It is not at all clear to us why any money would have had to have been paid for the files of the Services Group, since it was a membership organisation and therefore its property was, presumably, that of its members, who went on to be the founding members of TCA.

21.  Mr Kerr explained to us how TCA operated. Apart from the subscription, members of TCA paid a fee for every name they submitted for checking against the database. He said, "It was a cost per name that was put through to the office from a member to access their own information."[19] The amount of the individual charge varied between £1.00 and £2.20 over TCA's life.[20] Mr Kerr noted that there was a clearly fixed routine by which subscriber companies accessed the database.

Each company had a main contact. Their details were kept in what was called a red binder—a red book—per company. It was by company reference number and by name. There was sometimes a second contact should that first contact not have been there for any reason. In addition to that, there was a blue book, which consisted of the personnel departments' users, who were the day-to-day clerical users, who would be in charge of amassing those names for whichever trades the company was putting together for a particular project. Say they wanted 100 names or, say, 20 people; they would probably put an advert in and accept an application from 50, out of which they would probably eventually take 20. Part of the process of deciding who to take was to put those names through the Consulting Association.[21]

He went on to explain that each company's main contact, which would be a senior person at HR director level, controlled a very small number of other contacts at the company, typically two or three at most. Each company would also have a reference number to be used in dealing with TCA. They would then fax to TCA a list of people whom they were considering employing, and Mr Kerr would check these names against the database which TCA held. After this, Mr Kerr told us:

Most of the time we would go back, by telephone, identify the list and say to the HR department girl or man, "All clear." If there was a name that we had information on, we would say to them, "All clear, except a certain name", and that would be the end of the conversation. I would then speak to the main contact.[22]

22.  It was clear from the evidence Mr Kerr gave to us that there was a degree of secrecy in the relationship between TCA and construction companies. He told us that the information on names submitted, if any, did not go back to the HR department of the company, and was in fact "deliberately withheld"; instead it would only go to the appointed main contact.[23] The explanation for this was that the main contact would be experienced and would know the specific circumstances of the site on which the proposed employees were to work, and would therefore be best placed to judge what to do with the information. Mr Kerr stressed that TCA did not in any sense editorialise the information they provided, and that the judgement was left entirely to the companies. "I gave him [the main contact] the information as it was on a card, pure and simple, with no suggestion as to what he should do with it, no comment and no interpretation."[24]

23.  Mr Kerr was reluctant to concede that this process made TCA a blacklisting organisation, because he argued that a person's presence on the files did not automatically exclude them from employment; a decision was made by someone else (and it is only fair to note that the service TCA was providing was not illegal when it was established nor for a significant portion of its lifetime). He argued that the service was "to bring these names to their attention. It wasn't to facilitate them not employing."[25] However, when it was put to him that he was involved in a process which was used by subscriber companies to weed out individuals who would then most likely not be employed, he agreed, "Certain people, yes".[26]

24.  It is very clear to us that the service which the Consulting Association offered was a blacklisting one: that is, subscriber companies put information into and took information out of a database, and they used the information on that database to make decisions about whether or not to employ certain individuals. We concede that the legislative framework meant this was not initially illegal, and it was a service which the Economic League had performed for many years—but by the end of TCA's life it certainly was illegal and all those involved should have know that. We consider it unethical, and to be condemned. We do not accept the argument made in self-justification that blacklisting did not occur because people were not automatically excluded from employment. This is evasive wordplay.

25.  The Information Commissioner's Office (ICO) became aware of the activities of TCA in 2008, after an article was published in The Guardian.[27] The Deputy Information Commissioner, David Smith, told us that, subsequent to that article, the ICO traced TCA to Droitwich and sought and obtained a search warrant for the premises.[28] He went on to explain that scanning the media was one of the ways that his organisation looked for possible breaches of data protection law.[29] The ICO obtained the search warrant from Manchester Crown Court, then searched TCA's premises in February 2009. The investigation was led by David Clancy. He said:

We identified the Consulting Association database-the card index system that operated the blacklist. With this was an index system that clearly indicated A-Z who the workers were within the database. We quickly identified the construction companies that were using the database.[30]

Mr Clancy added that the warrant issued by the court had not given the ICO carte blanche; it allowed the ICO team to search for a blacklist of workers in the construction industry. What other information was held by TCA is an issue which we discuss below.

26.  The database held by TCA comprised 3,200 names.[31] It was used by more than 40 construction firms, and contained a wide variety of information, including trade union activities, employment history and personal and relationship details. The database was confiscated by the ICO, who still hold it, and have allowed the Chair of this Committee access to it under the condition of confidentiality. We are grateful to the ICO for allowing this access, but we believe that, in the public interest, the contents of the database, suitably redacted, should be made public. We continue to discuss this matter with the ICO.

27.  Mr Kerr was fined £5,000 for breach of the Data Protection Act. The money was in fact paid by Sir Robert McAlpine Ltd, on the grounds that, in Mr Kerr's words, he had "put [himself] at the front and took the flak".[32] In addition, 14 of the subscriber companies to TCA were issued with enforcement notices. Mr Smith told us: "They [the enforcement notices] basically said, "You must stop supplying information and you must stop using this database."" To have continued to use the services of TCA after being served with an enforcement notice would have been a criminal offence.[33] The ICO contacted all of the subscribers and received a variety of responses; some denied using the reference service of TCA; some claimed to have been previous users but to have ceased using it; some had changed ownership and identity since TCA was founded; some claimed to have been mistaken for other entities.[34] Mr Smith said that the ICO did not use its powers to pursue the matter further with any of the construction companies because it was satisfied that the confiscation of the blacklist had closed down the practice and the activities of TCA.[35]

28.  Having confiscated the material from TCA, the ICO then publicised this fact and invited those who suspected they might have been included on the blacklist to contact it. 2,400 individuals contacted the ICO by telephone, of whom 620 then wrote in because they were possible matches with individuals on the blacklist. Of those, 198 were positively identified as being on TCA's files.[36] This is a small proportion of the number of people on the blacklist. Mr Smith said that the ICO had not been more proactive because in many cases the information on individuals was incomplete or out of date, and he did not feel that writing to addresses which might no longer be applicable was a good use of resources. He noted that the GMB and Liberty had criticised the ICO for not doing more to alert individuals to the fact that they were on a blacklist. He conceded that perhaps more could have been done, but argued that the ICO had taken the action which was deemed proportionate at the time.[37]

29.  Mr Smith did tell us that the ICO was now working with the GMB and UCATT to try to coordinate an attempt to match union members with names on the TCA blacklist. He also revealed that his organisation was looking at a pilot of using the services of a commercial organisation to contact the people whose details were held by TCA.

We are likely to do a trial run of, say, 100 or 200 and write out to them to see what response we get. That will provide evidence, Chair, for the points you are making as to whether there really is a pent-up demand or people are not interested.[38]

30.  We are not satisfied that sufficient action has been taken to alert individuals to the fact that information was improperly held about them by the Consulting Association, and that checks were made against this database by construction companies. The ICO has relied too much on individuals to take the initiative and contact it, rather than trying to identify the people who were on TCA's blacklist. Many may be unaware that they were being systematically discriminated against in employment. They deserve to know. We acknowledge that the ICO is now doing more to contact those whose names and details were held by TCA, and we welcome this direction of travel, but encourage the ICO to go further and to work closely with trade unions who have been active in this field. We recommend that the ICO write to us to update us on their progress.

31.  We heard from several former construction workers who believed they had been blacklisted. One, Dave Smith, pursued a claim against Carillion through an employment tribunal. Although Carillion accepted that Mr Smith had been blacklisted, his claim was unsuccessful on the grounds that he had not been directly employed by Carillion but had been employed through a sub-contractor, and therefore Carillion was not legally responsible for him. We also heard from Alan Wainwright, who had formerly been employed by Tarmac, then Carillion, then Haden Young, a subsidiary of Balfour Beatty. He had raised concerns with the last named about their use of the services of TCA. He told us that he had then found himself on a blacklist for that reason and had been unable to find work.[39] We also took evidence from Francis Graham and Steuart Merchant, two electricians from Dundee, who believed they had been blacklisted and are among a group pursuing a claim in the High Court. We are grateful to all of those who shared their personal experiences, and encourage readers to look at the transcripts of their evidence.

32.  When TCA was wound up in 2009, it had various outstanding costs. These were met by Sir Robert McAlpine Ltd. Mr Kerr said:

We had a surplus of £58,000 from which we were not able to cover all the winding-up costs, including statutory redundancies to the staff and to me. They covered the shortfall on that and the contract we got out of with rent and rates on copiers and all that sort of thing—that we had to get out of and cancel. We covered as much of that as we could out of the £58,000 and there was still a shortfall. There was also a payment made to a solicitor for the costs of representing me at one of the IT cases as a further payment.[40]

He indicated that the shortfall was of the order of £20,000.[41] Cullum McAlpine, a Director of Sir Robert McAlpine Ltd who was the first Chairman of TCA, claimed that his company had not been obliged to cover the winding-up costs of TCA, but had felt it was the right thing to do. "We did not have to do it, but it was sensible to do it. Mr Kerr was an officer of the organisation and had incurred costs because of his role in the organisation."[42] He added that it was "humanitarian, fair and reasonable" to pay Mr Kerr's fine.[43]

33.  Mr McAlpine also explained that his company suggested to other members of TCA that they might help cover the costs. "We did approach a couple of the members, one of which was sympathetic. Then I think everybody ran for the hills."[44] BAM and Vinci had initially been supportive, but in the end the total costs were covered by McAlpine.[45]

34.  One issue on which we still do not have clarity is the full extent of the information held by TCA, and how much of it remains. David Clancy, of the ICO, told us that his team took away only a small proportion of the documentation which was held in TCA's office in Droitwich. "We are talking of between 5% and 10% of what was in the office. What the other 90% or 95% was I can't comment on because we didn't go through lots of it. We just took the information that was relevant to our inquiry."[46] He insisted that it had not been necessary to look at anything else, because he had been certain that he had found the blacklist, which was all that was within the scope of the warrant. "We didn't go through all the other information. We looked and said, "We are satisfied that that is the information. That is the blacklist that operates within the construction industry.""[47] However, Ian Kerr confirmed to us that other information was held, including some files on environmental activists.[48] These were not taken away by the ICO and were subsequently destroyed. The only evidence that remains is the names of individuals.

35.  Mr Kerr also explained that the ICO had returned to him photocopies of the documents they had confiscated. The vast majority of these were burned[49], and after his death Mrs Kerr passed to us some documentation which he had left in his possession. However, it is not clear to us what happened to the alleged 95% of the papers that the ICO claim to have left behind. It may be that these were among the items Mr Kerr told us he destroyed.

36.  We find the ICO's justification for leaving behind the vast majority of documents at TCA's office unconvincing. We accept that the ICO was concerned that the warrant which it had obtained was limited in scope, but we regret that more documents were not seized. Even if the Consulting Association is now defunct, there remains the possibility that its activities could have been more widespread than has so far come to light. A greater degree of curiosity on the ICO's part might have demonstrated this one way or the other.

1   Q 1724 Back

2   Q 1045 Back

3   Qq 1054-55 Back

4   Q 1065 Back

5   Q 1048 Back

6   Q 1440 Back

7   Q 1068 Back

8   Qq 1089-91 Back

9   Q 1299 Back

10   Q 1444 Back

11   Qq 1050 and 1490 Back

12   Qq 1490-91 Back

13   Q 1717 Back

14   Q 1723 Back

15   Q 1914 Back

16   Q 1692 Back

17   Q 1707 Back

18   Qq 1924-26 Back

19   Q 1072 Back

20   Qq 1074 & 1076 Back

21   Q 1077 Back

22   Q 1079 Back

23   Q 1080 Back

24   ibid. Back

25   Q 1094 Back

26   Q 1100 Back

27   "Enemy at the gates", The Guardian, 28 June 2008 Back

28   Q 673 Back

29   Q 674 Back

30   Q 720 Back

31   Q 754 Back

32   Q 1413 Back

33   Q 685 Back

34   Q 713 Back

35   Q 715 Back

36   Q 759 Back

37   Q 758 Back

38   Q 766 Back

39   More information about Mr Wainwright's case can be found at Back

40   Q 1415 Back

41   Q 1416 Back

42   Q 1577 Back

43   Q 1581 Back

44   Q 1587 Back

45   Q 1588 Back

46   Q 726 Back

47   Q 729 Back

48   Q 1132 Back

49   Q 1058 Back

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© Parliamentary copyright 2013
Prepared 16 April 2013