House of Lords - Delegated Powers and Deregulation

Select Committee on Delegated Powers and Deregulation Thirteenth Report

THIRTEENTH REPORT

25 February 1998

By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.

PROPOSAL FOR THE DRAFT DEREGULATION (DEDUCTION FROM PAY OF
UNION SUBSCRIPTIONS) ORDER 1998

Introduction

1. "Check-off" is an arrangement whereby workers who are union members pay their union subscriptions by deduction from their pay at source and the money is passed direct to the union by their employer. Under the Trade Union and Labour Relations (Consolidation) Act 1992 an employer may deduct from an employee's pay his trade union subscription for transmission to the union only if he has within the previous three years given a written authority for the deduction and, if the subscription has increased since the date of the authority, the employer has notified him of the increase at least one month before the deduction is made. The Government see these restrictions as a burden on the employer which can be removed without losing any necessary protection for the employee. The proposal[1] which was laid before the House of Lords on 18 December 1997 is to amend the legislation so that an employee's authorisation will allow the deduction of the union subscriptions (at whatever rate may be fixed for the current year) to continue until such time, if any, as the employee cancels the authorisation.[2]

Burden

2. Employers are not obliged by law to operate check-off[3] but many do so voluntarily, thereby avoiding the need for union representatives to collect subscriptions from individual workers at the workplace. Check-off arrangements mostly exist where employers recognise unions for collective bargaining purposes.[4] The proposal would remove the requirements:

3. The Government's consultation produced clear evidence of the burden which further re-authorisations place on employers. The Confederation of British Industry (CBI) and the Engineering Employers Federation considered that the requirement was a significant and unnecessary burden on them.[5] The explanatory memorandum also pointed out that the burden on employers of the requirement to notify workers of an increase in deductions could be greater in situations where the workforce included members of several different unions. The Government therefore considered that this requirement complicated the legal obligations on employers unnecessarily and added to the cost and complexity of operating check-off systems.[6]

4. The cost savings which the proposal would entail are difficult to estimate, but are likely to be significant because of the large numbers of employers and workers involved. In 1990, 73 per cent of workplaces with some union members had a check-off system. There is a higher incidence of check-off in the public than the private sector. Moreover, many unions share the costs of administering the re-authorisation exercise with employers, and thus predicted cost savings to themselves. The explanatory memorandum therefore argues that "given the scale of the system, the Government's proposals could lead in aggregate to significant savings across the economy."[7]

5. The Committee is satisfied that the proposal would reduce a burden.

Consultation

6. A consultation paper was issued on 29 August 1997 and responses were requested by 31 October 1997. The list of those consulted is impressive and over 760 copies of the consultation paper were sent to interested parties. In the light of the difficulty of consulting individual workers, the consultation of "independent" bodies to act as guardians of workers' interests is particularly important. The list of names under the heading "Other" on pages 15 and 16 of the explanatory memorandum is encouraging on this issue.

7. A copy of the consultation paper was also placed on the Department of Trade and Industry's Internet web-site. The Committee particularly welcomes this practice, and would like to see it extended to all future deregulation proposals. A further development of this use of the Internet would be for Government Departments which are consulting on deregulation proposals to set up Internet links with the Cabinet Office Better Regulation Unit's Internet home page.[8]

8. A total of 106 responses to the consultation paper were received: 33 from individual employers, 26 from employers' organisations; 31 from trade unions; 4 from legal organisations; 2 from consumer bodies and 10 from other bodies. 95 of the responses supported the two main proposals for repealing legislation.[9]

9. The Committee is satisfied that there was adequate consultation on the proposal.

Necessary protection

10. The consultation led to some changes in the original proposal to meet some of the criticisms made. The explanatory memorandum argues clearly and persuasively that no necessary protection is lost by making the proposed amendments. In short, the employee remains in control of his pay packet as he can withdraw his authorisation at any time and so end the deduction of subscriptions.

11. The argument against this case could be that it relies on the individual to look after his own interests. Inertia leads to continued payment of union subscriptions, even though these may have increased. The answer to this is that it is the responsibility of the unions themselves to notify their members of any increases in subscriptions. In any event, the employer has to give the employee details of the amounts deducted from his pay and so he will then discover that his union subscription has increased, if he had not discovered this earlier from the union or his fellow workers. If he does not wish to pay the increased rate, he can then take action and all that he has lost is one deduction.

12. Any potential difficulty in individuals unwittingly paying increased subscriptions is likely to be less than that recorded in paragraph 31 of the explanatory memorandum where workers fall out of union membership by inadvertence, thereby losing benefits which are linked to continuity of membership, such as death benefit, incapacity benefits and grants for education. This problem is not a negligible one. Unison stated that 15,000 of its members had suffered interrupted membership in this way.

13. The Committee does not consider that the proposal raises any difficulties in the maintenance of necessary protection, and indeed that it may increase protection in the case of members who inadvertently fall out of union membership.

Transitional arrangements

14. The consultation process raised issues about the best way to change from the present system of triennial authorisations and notification of subscription increases to the proposed system where an authorisation lasts until revoked and covers any changes in subscription rates. The proposal adopts transitional arrangements which appear to be as fair as any which could be devised. Existing authorisations will remain effective and the old law will continue to apply to them. When they cease to be effective any new authorisation will be governed by the new law. There is, however, provision for an employer to give notice (in the form set out in the Schedule to the Order) that he proposes to treat the existing authorisation as unlimited in time and as covering subscriptions at any rate in force at the time of a deduction. If the employer does not receive written notice to the contrary from the employee within 14 days of the day on which he received the notice, the existing authorisation takes effect as proposed.

15. The House of Commons Deregulation Committee, which requested evidence from a number of unions on this proposal, was concerned that the prescribed notice (contained in the schedule to the proposal) to be sent to workers under the transitional arrangements was excessively complicated. This point was also made in evidence to the Commons Committee by the Trades Union Congress (TUC), which considered that the proposed form was neither "simple" nor written in "ordinary language". The TUC's view was that "to proceed in this way would disastrously undermine the whole purpose of the order which is to simplify these arrangements and remove unnecessary administrative burdens on employers and unions."

16. As the Department's own explanatory memorandum states, workers who are illiterate or partially literate in English might face particular difficulties in completing forms and documents under the existing system.[10] It is therefore important that the prescribed notice should be no more complicated than it needs to be. The Commons Committee sent a suggested simplified draft of the notice to the Department for comments and the Department, having made further amendments to the draft, has agreed to amend the prescribed notice.

17. We agree that the form of notice to be given under Article 3(2) should be amended along the lines of the draft included in Annex 2 to this report.

Recommendations

18. The Committee is satisfied that the proposal for the Draft Deregulation (Deduction from Pay of Union Subscriptions) Order 1998 meets the requirements of the Deregulation and Contracting Out Act 1994 and is appropriate to be made under it, subject to the amendment of the form of notice to be given under Article 3(2) along the lines of the draft included in Annex 2 to this report.

19. We also draw attention to our recommendations in paragraph 7 of this report that all future deregulation proposals should be published on the Internet, and that Government Departments which are consulting on deregulation proposals should set up Internet links with the Cabinet Office Better Regulation Unit's home page.

PROPOSAL FOR THE DRAFT DEREGULATION (METHYLATED SPIRITS SALE
BY RETAIL) (SCOTLAND) ORDER 1998

Introduction

20. In Scotland the sale of methylated spirits and surgical spirit is closely regulated (this is not the case in England and Wales). The Methylated Spirits (Sale by Retail) (Scotland) Act 1937 forbids retail sale except by a registered retailer who must keep a record of individual sales. Sales to under 14s are prohibited unless the seller is an authorised seller of poisons or the spirits are supplied by a medical practitioner. The proposal,[11] which was laid before the House of Lords on 26 January 1998, is for a partial repeal of the Act, which would remove these restrictions apart from the prohibition on sales to under 14s.

Burden

21. The proposal would remove the requirements for:

(ii) each sale of methylated/surgical spirits to be entered in a book kept by the retailer for this purpose; and

(iii) all bottles or other vessels in which the methylated/surgical spirits are sold to bear a label specifying the name of the seller and the premises on which they are sold, and containing the words "methylated spirits" or "surgical spirit" as the case may be.

22. In response to the consultation exercise a number of responses - from Dundee City Council, Inverclyde Council, North Ayrshire Council and Tayside Alcohol Mis-Use Co-ordinating Committee - considered that the provisions of the 1937 Act did not impose an undue burden on business.[12] The Committee disagrees with this view. The current system subjects the sale in Scotland of methylated and surgical spirits, which are widely used south of the border for a variety of domestic purposes, to a number of bureaucratic restrictions. We consider that there can be no dispute about the burden the 1937 Act places on businesses and on those who wish to buy methylated spirits in Scotland.

23. We have also noted the Scottish Office's statement that the proposal would enable cost savings, since "both local authorities and retailers will benefit from the lifting of the present recording and registration requirements as these practices are time consuming and unnecessarily bureaucratic."[13] In the light of these potential cost savings, the opposition of some local authorities to the proposal on grounds of loss of necessary protection has added weight, and we therefore considered the question of necessary protection with particular care.

24. The Committee is satisfied that the proposal would reduce a burden.

Consultation

25. Consultations on the issues began as long ago as 1988. Formal consultation on the proposal was in 1996. The consultation letter went out on 25 October 1996 and replies were requested by 29 November. This was an unnecessarily short period but it is a simple proposal and late responses were considered. Just over 100 organisations were consulted and the list seems entirely satisfactory. Forty-three responses to the 1996 consultation were received. Of these;

8 respondents supported full repeal of the 1937 Act, including the prohibition on sales to children under 14; and

7 respondents were opposed to any change.[15]

26. The Committee is satisfied that there was adequate consultation on the proposal.

Necessary protection

27. The minority of respondents who opposed any change to the 1937 Act were mainly concerned to avoid any return of the misuse of methylated and surgical spirits.[16] North Ayrshire Council also suggested that repealing the legislation could lead to people experimenting with methylated spirits by diluting them with other intoxicating substances. Inverclyde Council wanted to see similar restrictions being placed on the sale of other substances, such as solvents.[17]

28. The explanatory memorandum argues that no necessary protection will be lost. As it says, the Act was introduced to address a specific social problem of the 1930s, when the drinking of crude spirits in Scotland was a considerable social problem and methylated spirits in particular were a cheap alternative to more expensive forms of alcohol.

29. It could be further argued that the absence of equivalent restrictions in England and Wales has not led to complaints about the lack of protection in those parts of the United Kingdom.

30. The explanatory memorandum by the Scottish Office contended that "the problem of drinking methylated spirits has disappeared in Scotland over the years".[18] The Committee asked the Scottish Office to confirm, if this was possible, that this problem had indeed disappeared in the urban areas where it had hitherto been such a problem, such as the Grassmarket area of Edinburgh, rather more recently than the "20s and 30s", the period referred to in paragraph 15 of the memorandum.

31. In response, the Scottish Office stated that the Association of Chief Police Officers in Scotland had confirmed that it was not aware of any problems associated with the drinking of crude spirits of this type in any part of Scotland. This view was supported by Lothian and Borders Police who had also confirmed that there was no longer a problem with the drinking of crude spirits in the area it covered.

32. The Committee also asked whether any of the minority of respondents who opposed any change to the 1937 Act considered that this form of substance abuse was still a problem in Scotland. The Scottish Office replied that the minority of respondents who opposed any change to the 1937 Act did not appear to consider that drinking methylated spirits was still a problem in Scotland and although most felt that lifting the restrictions might encourage a return to this sort of substance abuse, no evidence in support of that theory was produced.

33. The Committee considers that the proposal would not remove any necessary protection.

Recommendation

34. The Committee is satisfied that the proposal for the Draft Deregulation (Methylated Spirits Sale by Retail)(Scotland) Order 1998 meets the requirements of the Deregulation and Contracting Out Act 1994 and is appropriate to be made under it, without amendment.

1 The proposal was laid before Parliament in the form of a draft of the Order and an explanatory memorandum from the Department of Trade and Industry. Back

2 This report is also published on the Internet at the House of Lords Select Committees Home Page (http://www.parliament.uk), where further information about the work of the Committee is also available. Back