In view of that response, it seemed that paragraph 3 of Schedule 1 was unnecessary, and I wrote accordingly to the noble and learned Lord. I received a reply dated 9 January, in which he confirmed that communications from foreign Governments,

“will not be captured by the definition of consultant lobbying outlined in clause 2”.

However, he added that paragraph 3 of Schedule 1,

“provides helpful clarity, especially to international colleagues, in relation to the application of the register and it is not our intention to remove it by amendment at Report stage”.

It seems to me that Clause 2 should be sufficient assurance to sovereign powers, and the addition of paragraph 3 may have the unintended consequence of causing concern for foreign states that are not sovereign powers. For that reason, the amendment seeks the removal of this paragraph.

13 Jan 2014 : Column 50

In moving the amendment, I seek clarification from the noble and learned Lord as to what is meant by the term “sovereign power” in the Bill. Sovereignty would seem to me to include such issues as control over a geographical area whose citizens are governed by its rulers, whether they have been democratically elected or not. Taiwan is a democracy whose citizens enjoy universal suffrage from the age of 20. There are elections for the President and the legislature every four years. The President can hold office only for two successive terms. The Government pass legislation and govern their citizens, and Taiwan has diplomatic relations with a number of countries, including the United States of America. Does the noble and learned Lord accept that sovereignty does not depend upon membership of the United Nations or having diplomatic relations with the United Kingdom? In those circumstances, will he confirm that Taiwan would satisfy the test of sovereignty for the purpose of this provision? Even if Taiwan does satisfy that test, what about countries which do not? Which ones are they? Does the inclusion of sovereign states not cause concern for those countries which do not come within that category? I beg to move.

Lord Wallace of Tankerness: My Lords, the noble and learned Lord, Lord Hardie, has moved an amendment which would delete paragraph 3 of Schedule 1 and, as such, remove the explicit exemption from the requirement to register for members of staff and officials of sovereign powers and international organisations.

As the noble and learned Lord very fairly explained in moving his amendment, we have been in correspondence over the past week on this matter. The Government believe that, by establishing a statutory register of consultant lobbyists, this part of the Bill aims to make clear whose interests are represented by consultant lobbyists when they meet Ministers and Permanent Secretaries. It is not our intention that the register should capture international or diplomatic communications by representatives of foreign Governments or authorities or of international organisations. Communications made by representatives of foreign Governments or authorities will not be captured by the definition of consultant lobbying, as the noble and learned Lord has said, as they will not meet the criteria outlined in Clause 2 and the associated schedule. Those include, among other things, that lobbying must be done,

“in the course of a business and in return for payment”,

and,

“on behalf of another person”.

However, out of an abundance of caution, the Bill also includes a specific exemption in paragraph 3 that explicitly excludes officials or members of staff of sovereign powers and international organisations from the requirement to register in respect of their communications to UK Ministers and Permanent Secretaries.

Noble Lords will recall that Schedule 1 provides a number of explicit exemptions that are designed to provide absolute clarity regarding the application of Part 1 provisions. Those exemptions include one specifically excluding parliamentarians from the scope of the register. Although the Government have been

13 Jan 2014 : Column 51

absolutely clear that communications made by parliamentarians to the Government will not be captured by the Clause 2 provision, I understand that, none the less, noble Lords and Members of the other place have been particularly grateful for the extra clarity and reiteration provided by paragraph 4. Paragraph 3 is intended to provide equivalent clarity to sovereign powers and international organisations and the Government are not persuaded that it should be removed.

The noble and learned Lord asked specific questions regarding Taiwan. I am sure that he and perhaps other Members of your Lordships’ House would agree that the Report stage of the transparency Bill is perhaps not the most appropriate forum in which to discuss matters of international diplomacy. Indeed, if the noble and learned Lord wishes to pursue the issue, he may wish to take it up with my colleagues in the Foreign and Commonwealth Office. In these circumstances, I ask him to withdraw his amendment.

Lord Hardie: I am grateful to the noble and learned Lord for putting those remarks on the record and, in the circumstances, I seek leave to withdraw the amendment.

Amendment 7 withdrawn.

Amendments 8 and 9 agreed.

Schedule 2: The Registrar of Consultant Lobbyists

Amendment 10 agreed.

Clause 4: The register

Amendment 11 not moved.

13 Jan 2014 : Column 52

(i) whether there is in place an undertaking by the person to comply with a relevant code of conduct, and

(ii) if so, where a copy of the code may be inspected;”

Lord Wallace of Tankerness: My Lords, in moving the amendment standing in the name of my noble friend Lord Wallace of Saltaire, I will also speak to Amendments 15, 16 and 22. As the Government have made clear throughout the debates on this part of the Bill, the statutory register of consultant lobbyists is designed to address a specific problem—that it is not always clear whose interests are represented by consultant lobbyists. Our objective is to ensure increased transparency without disrupting in any way the fluency of the dialogue between government decision-makers and those who will be affected by policy and legislative decisions.

It is not, nor has it been, the Government’s intention to attempt to regulate comprehensively all those who communicate with government, and the register will not, therefore, be associated with a statutory code of conduct. Instead, the Government are committed to ensuring that the statutory register complements the existing self-regulatory regime by which the industry promotes the ethical behaviour that is essential to the integrity and reputation of the lobbying industry.

We have been very grateful to those Members of your Lordships’ House for their thoughtful suggestions as to how this might best be achieved. After careful consideration of the debates both in this House and in the other place, and discussion with the industry and transparency groups, we have concluded that the most effective option is to provide for a statutory link between the statutory register and the industry-hosted voluntary codes of conduct. As such, Amendments 12, 15 and 16 will require consultant lobbyists to state in their register entries whether or not they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed. Such a provision will enhance both the transparency and the scrutiny of registered lobbyists, and the Government hope that the measure will therefore be welcomed.

Additionally, the Government have tabled an amendment to clarify that the registrar can both revise and replace the guidance that he or she has published. I appreciate that this group also includes amendments in the name of the noble Baroness, and I will perhaps respond to these after she has moved them.

Lord Campbell-Savours: What are the circumstances in which a lobbying firm would not wish to sign up to the code of conduct?

Lord Wallace of Tankerness: I am not sure that this should be addressed to me as opposed to the lobbying firms, since it is sincerely hoped that they would sign up to a code of conduct. What we seek through these amendments is for them to indicate that they have signed up to a code of conduct and for there also to be a link as to where that code of conduct can be found.

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Baroness Hayter of Kentish Town: My Lords, Amendment 13 stands in my name and that of my noble friend Lady Royall. I shall also speak to Amendments 14 and 23. This Bill should be about raising standards within the lobbying industry, not least to provide reassurance for the public about the behaviour of lobbyists. While we therefore welcome the Government’s amendments, which build on the arguments that we made in Committee—because they at least recognise the existence of a code of conduct—it is extremely regrettable that the Government have not gone one step further and made it a requirement for registered lobbyists to undertake to abide by a code of conduct. Without something which makes a code of conduct obligatory, there will be absolutely no qualification as to who can get on to the register. Yet once someone is on a register, they will put it on the bottom of their headed notepaper and it will look as though there is some sort of approval for being on that register. That, of course, will not be the case.

I raised this question in Committee and as a result, the noble Lord, Lord Wallace of Saltaire, kindly wrote and clarified to me that even if someone was convicted under the Bribery Act, that would not prohibit them registering as a consultant lobbyist. As the noble Lord wrote in the letter, the register is not an accreditation system and anyone on it will not be considered to be “approved”. In other words, regrettably, this does nothing about raising standards or changing behaviour and nothing about giving assurance to the public that the lobbying of their elected Government is legitimate and above board.

Without any such a requirement to comply with a code, it will also be impossible to remove even the worst offenders from the register—the “slightly dodgy” lobbyists which were described by the noble Baroness, Lady Williams, in the earlier debate. Our amendment to the Government’s Amendment 12 makes the voluntary adherence to a code a requirement.

Our lesser amendment, Amendment 23, would permit the registrar at some time in the future to publish a code of conduct. This might simply be a best practice code, an indication of expected behaviour or an indication against which any allegation to a professional body might be judged. However, it would keep in play the idea that the register should be about behaviour and not simply a list of lobbying companies. I beg to move.

5.45 pm

Lord Tyler: My Lords, in Committee I moved an amendment to deal with the linkage between the registration process and existing codes of conduct in the lobbying industry. I warmly welcome the movement that the Government have now undertaken. If I recall rightly, we were given encouraging noises on that particular point in Committee. Therefore I very much support Amendments 12, 15 and 16. I shall listen with interest to what my noble and learned friend has to say about the stiffening of that resolve—if I may put it like that—incorporated in Amendments 13 and 14.

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Amendment 23 is, almost by definition, premature. I want to see how this works. I do not want to put more responsibilities on the statutory register than it can easily undertake at the outset. The noble Baroness was quite right to talk about the future. In this particular case, we legislate for the future when it arrives, rather than put more responsibilities on the registrar at this stage. I will listen with interest to what my noble and learned friend has to say about Amendments 13 and 14, to see if there seems to be a practical way in which these could be incorporated and therefore give an even stronger statutory link between the register and the existing codes.

Lord Campbell-Savours: My Lords, as I understand the present arrangement—and I am only going by memory from what was said in Committee—the Public Relations Consultants Association already has a code of conduct. If it is correct that the professional organisations may over the longer term actually wind up—and in the period between Committee and Report we were led to believe that this is the case—then I presume that no code of conduct will necessarily apply. That is unless the Government introduce a model code on the basis that my noble friend on the Front Bench has just argued for. I asked the Minister in what circumstances an organisation that registered would not wish to introduce a code of conduct. I presume that during the consultation to which the Minister referred when he moved his amendment, they made clear what those circumstances would be. I wonder if we can be told what Ministers were told. There must be some explanation for why they resist. If there is an explanation—perhaps it is in the written brief or something—maybe we could see it prior to Third Reading. I simply cannot understand what they are objecting to, and we need to know during the course of the debate what it is.

Lord Hardie: Perhaps I can answer the noble Lord, Lord Campbell-Savours. In the debate about the first amendment today, I referred to how the PRCA requires people who sign up to the voluntary register to sign up to the code of conduct, which has strong enforcement of regulations or provisions. My point earlier was that if that disappears and there is to be a statutory register in place, it would be appropriate that we have something which is at least as good, not something that detracts from the current position.

Lord Wallace of Tankerness: My Lords, I appreciate the welcome given to the government amendments by the noble Baroness, Lady Hayter, and my noble friend Lord Tyler. As I indicated, we listened carefully to the debate in Committee. We have responded by tabling these amendments, which will require consultant lobbyists to state in their register entries whether they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed.

The Opposition’s amendments, spoken to by the noble Baroness, Lady Hayter, would require that lobbyists declare on their register entry which publicly available code of conduct they subscribe to, implicitly requiring such a subscription in order to register. The

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Government are not persuaded that the amendment is appropriate. Moreover, there is no provision that would require compliance with such codes or provide for enforcement.

The objective of the Part 1 provisions is to enhance transparency and scrutiny. We are not seeking to regulate behaviour. The noble Baroness mentioned the exchanges she had in Committee with my noble friend Lord Wallace of Saltaire about lobbyists who breach the Bribery Act. Of course, breaches of the Bribery Act are punishable by unlimited fines and up to 10 years’ imprisonment, or both. The Government do not consider it appropriate for a Bill to contain separate sanctions in addition to those already included in the Bribery Act, which are clearly very substantial indeed. It is quite proper that the Bribery Act includes serious and proportionate sanctions but it would not be appropriate for the transparency Bill to duplicate those sanctions. The Government considered the option of including a penalty whereby a person could be removed from the register but concluded that imposing a limitless prohibition on someone conducting their profession was too extreme a penalty.

Requiring lobbyists to declare whether they subscribe to a code will expose those who do not abide by the ethical principles that are so essential to the integrity of the industry. It is not the Government’s intention, however, to introduce a high-regulation regime whereby the registrar is responsible for monitoring and enforcing subscription to, and compliance with, codes of conduct. The Opposition also suggest that the registrar should be responsible for publishing a code of conduct. As my noble friend indicated, that is premature. The Government’s amendments are intended to complement the existing self-regulatory regime, not to replace or undermine it.

To pick up the point made by the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Campbell-Savours, we do not anticipate that lobbying associations such as the PRCA, CIPR and APPC will withdraw their codes. Indeed, the industry has welcomed the link between its codes and the proposed register, which it recognises will enhance the existing self-regulatory regime. That was the feedback we got during the consultation. I heard the noble Lord’s inquiry but I am not aware that any explanation or example was given of circumstances in which a firm would not register. Rather, the industry anticipates that it will continue with its codes and that the proposed register—and the government amendment—will enhance the existing self-regulatory regime.

Lord Campbell-Savours: Would Ministers be happy to meet a lobbying company that did not subscribe to the ethical standards that have been set down, either by the association or any code that the Government might wish to introduce at some stage in the future? Indeed, are there circumstances in which Ministers would refuse to meet them?

Lord Wallace of Tankerness: My Lords, I do not think the noble Lord can reasonably expect a blanket application. There may be reasons—I do not know what they might be—that are not malign as to why a particular group has not signed up. We already

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know that a majority of lobbying firms sign up to and adhere to the respective codes of conduct, but we believe that making it a statutory requirement would lead to unnecessary pressure and that what we are proposing has struck the right balance.

I have a lot of sympathy for the point the noble Lord is making but it would not be appropriate to make a sweeping general obligation on all future Ministers when you cannot foresee particular circumstances that would occur at any time or place. I believe we have struck the right balance. I urge the House to support the Government’s amendments and I urge the noble Baroness not to press the amendment in her name.

Baroness Hayter of Kentish Town: My Lords, I thank the noble Lord, Lord Tyler, for what I think is his support for the approach we are taking on this.

Of course, Amendment 23 would be only permissive. It does not require the registrar to publish a code of conduct; it simply permits the registrar, should at some time in the future he or she feel the need to, to be able to do so. I am slightly surprised that the Government cannot even allow a registrar at some time in the future to be able to publish a code of conduct. They seem to be turning their back on any interest in raising standards.

The Minister spoke about the Bribery Act. Of course, the issue is that nobody will be able to be removed from this register for any criminal offence. We could have people convicted all sorts of tax evasion—anything—still on the register. I and others think that this would be very misleading as it will appear that they are on a statutory register and therefore have some stamp of approval.

As to the question of who would not sign up to it, I am sure that your Lordships’ House is well aware that the Association of Professional Political Consultants is supporting our amendment. It very much feels that it will be only the bad boy who does not bother signing up and that this really undermines the code of conduct.

I am not going to test the opinion of the House on this amendment. But in withdrawing it, I will say two things. First, it was very sad to read in the paper yesterday that the UN special rapporteur called this Bill,

“a stain on British democracy”.

Secondly, my fear is that, as per the warning of the Prime Minister, the next scandal waiting to happen will be from a consultant lobbyist, it will be behaviour that would have been caught by this code and it will be this Government who said they did not want to make signing up to a code mandatory. With those words, I withdraw the amendment.

Amendment 13 (to Amendment 12) withdrawn.

Amendment 14 (to Amendment 12) not moved.

Amendment 12 agreed.

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“(b) a “relevant code of conduct” (in subsection (2)(fa)) is a code of conduct which governs the carrying on of the business of consultant lobbying (whether or not it also governs other activities) and is open to inspection by members of the public.”

Amendments 15 and 16 agreed.

Clause 6: Duty to update register

Lord Hardie: My Lords, this amendment seeks to give a right of appeal to someone whom the registrar has removed from the register. Clause 6(6) says:

“If the Registrar has reasonable grounds for believing that a registered person is not (or is no longer) a consultant lobbyist, the Registrar may decide that—

(a) the person’s entry should include a statement to that effect, or

(b) the person’s entry should be removed from the register”.

If the latter course is taken, the consequence is that the person—although of course we may be talking about a company—who is operating the business of a consultant lobbyist, once he has been removed from the register, can no longer operate as a consultant lobbyist. Clearly, that will have implications for not only the business itself but its employees.

Moreover, this measure has implications for the criminal law. Clause 12 provides that it is a criminal offence to act as a consultant lobbyist if you are not registered: once you are removed you can no longer act as a consultant lobbyist, but if you choose to do so it will be an offence. What is worse is that Clause 12(1) states:

“If a person carries on the business of consultant lobbying in breach of section 1(1) (lobbying whilst unregistered), an offence is committed by … the person”—

that is understandable, because the person will presumably know—

“and … any employee of the person who engages in lobbying in the course of that business”.

So if an employee of the company is not told that their registration has been removed, he or she will be guilty of an offence. It is strict liability; there is no statutory defence for the employee in that situation, so the consequences for the person and for the employees are quite significant. This decision to deregister a person is at the instigation of the registrar, if he has reasonable grounds for suspecting that they are no longer trading or what have you. There is no right of appeal against that. I am suggesting that there ought to be a right of appeal to the tribunal. There is a tribunal in existence in terms of the provision. If the employee accepts that he or she should be deregistered, there is no issue; but if he considers that the registrar has made a mistake, that would enable an aggrieved employee to have the right of appeal.

The Minister’s answer in Committee was that the registrar will act in a bona fide way and will not make mistakes. I am not questioning the bona fides of the

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registrar, but we all know that people make mistakes and there ought to be a remedy for someone in that position. In those circumstances I beg to move.

6 pm

Lord Wallace of Tankerness: My Lords, I thank the noble and learned Lord for his amendment. It might be helpful if in response I indicate the Government’s thinking on sanctions and appeals. When considering the most appropriate sanctions in respect of non-compliance with the register, Ministers did consider the option of removing a person from the register, thereby prohibiting them or the company from continuing to operate as a lobbyist. We concluded, however, that such a sanction would represent a disproportionate penalty as it would essentially take away their livelihood. There are very few industries where, unless one is imprisoned, one is prevented from carrying out one’s professional activities if one has made errors in the course of doing so, and the Government are not persuaded that the lobbying industry should be singled out for such treatment. The sanctions regime that we have designed is therefore a proportionate one, designed to provide appropriate deterrent against, and punishment for, non-compliance with the provisions of the register.

Clause 6(6) does, however—as the noble and learned Lord has pointed out—provide the registrar with the ability to remove a person from the register. That provision is not drafted as a sanction, but rather as an administrative housekeeping measure to enable the registrar to maintain the accessibility and relevance of the register. The registrar may, for example, wish to remove individuals who have retired, passed away, chosen a change of career, or who work for a company that has been wound up. The noble and learned Lord’s amendment would enable a person to appeal against the registrar’s decision to remove them from the register, as under Clause 6(6).

We do not envisage that the registrar would remove any person from the register unless they were confident that the person no longer engaged, or no longer wished to engage in future, in consultant lobbying. I take the noble and learned Lord’s point that there are potential criminal sanctions attached to it. Obviously, as a former distinguished Lord Advocate, he will know that there is a discretion. Indeed, Clause 12(9) indicates that proceedings for an offence under this part in England and Wales may be instituted only by, or with the consent of, the Director of Public Prosecutions, and in Northern Ireland by or with the consent of the Director of Public Prosecutions for Northern Ireland.

Therefore, if a person was to find that they had been wrongly removed, if they wished to object, they could immediately advise the registrar that they were still living, or that they had not given up consultant lobbying, and accordingly the registrar could reregister that person without the need for an appeal and without any difficulty. If they remained dissatisfied in spite of the fact that they could prove that they were still living and consulting, it would be possible to judicially review a decision, although that is very unlikely given the much simpler course of reregistering.

The important point is that this is not intended as a sanction or a penalty, but rather one of administration where the company or the individual is no longer

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believed to be performing the role of consultant lobbyist. Therefore in those circumstances, if a person becomes aware of that and wishes to challenge it, the best and most simple thing to do is to ask to be reregistered rather than to go to some expense in seeking an appeal to a tribunal.

I hope that the noble and learned Lord is reassured by that explanation. This provision is not intended as a sanction and I invite him to withdraw his amendment.

Lord Hardie: I thank the noble and learned Lord for that explanation. I simply comment in passing that if it got the stage of having to have a judicial review, then that is a sledgehammer to crack a nut. But in all the circumstances I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Clause 9: Notice to supply information

Amendment 18 agreed.

Clause 12: Offences

Amendment 19 agreed.

Clause 16: Imposition of penalty

Amendment 20 agreed.

Clause 20: Further provision about civil penalties

Amendment 21 agreed.

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Clause 21: Guidance

Amendment 22 agreed.

Amendment 23 not moved.

Clause 22: Charges

Amendments 24 and 25 agreed.

Lord Norton of Louth: My Lords, my amendment gets, I think, to the heart of Part 1 of the Bill. The purported purpose of Part 1, as we have heard, is embodied in the first three words of the title “Transparency of Lobbying”. The problem, or rather problems, is that Part 1 does not deliver transparency—it adds little, if anything, to what is already known—and it is not concerned primarily with lobbying. It covers lobbyists rather than lobbying. It registers those who engage in the activity, or rather some of those who engage in the activity, but does not enlighten us as to the particular activity. We may know who some of the lobbyists are, but not necessarily what they are doing in respect of individual measures. As has been argued throughout the stages of this Bill it will not capture the totality of those who are professional lobbyists. Indeed, given the exemptions, it will catch very few. Precisely how many is a matter for conjecture as the Government admit they do not know. The Bill introduces a new bureaucracy for the purpose of registration but achieves nothing substantial in terms of enhancing the transparency of lobbying.

My amendment is designed to ensure that the Bill does what it says on the tin, or rather what it says in the title. It shifts the emphasis from those who lobby to those who are lobbied. It is also comprehensive. By requiring Ministers at the time they make a statement

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on policy or any of the matters listed in Clause 2 to publish details of those who lobbied them on the matter, one ensures public awareness of who has sought to influence the outcome. Any representation made to anyone in the department would be within the scope of the provision, thus ensuring that those lobbying are not able to avoid their activity being made public. It would capture lobbying, whether direct to the Minister or indirect through someone else in the department. It would not matter whether the lobbyist was a consultant lobbyist, an in-house lobbyist or a part-time lobbyist: all would be caught by the provisions of the clause.

The clause therefore delivers transparency of lobbying. The principal case for the amendment is compelling. What are the arguments against? In Committee, the Minister argued that the objection was essentially practical. I do not accept that; I do not think that it is impractical. Under my amendment, transparency would be achieved through developing existing practices. There is already the quarterly publication of details of ministerial meetings. Ensuring publication of details of those who have lobbied at the point of a policy statement is thus not a paradigmatic departure from what is done already. As my noble friend Lord Tyler explained in Committee, it is achievable. Much information is already published, but it is a case, as he said, of being hidden in plain sight. As he went on to say:

“Indeed, by the time that department does publish that information, the influence that has been exerted over important legislation might have come and gone, right through Parliament. There is simply no opportunity to see what has happened … a simple and searchable central database for all their meeting data would mean that we could take the sting out of the calls, here and elsewhere, for an enormous lobbying register. We would have immediate access”.—[Official Report, 5/11/13; col. 164.]

As he mentioned, his office managed to draw together material from different departments, so it would hardly be beyond the wit or the limited resources of government to achieve. Indeed, I think that the case for that has been made today by my noble and learned friend Lord Wallace of Tankerness in what he said about the further publication of details. We are already moving in that direction, so I believe that it is achievable. It is a step—it might be more than a small step, but it is none the less a step—from what my noble friend developed to what is encompassed in my amendment.

The problem, as I argued in Committee, is not one of resources but one of political will. The Government have produced a mechanistic and very limited provision in order to be seen to be doing something. They have sought to hide just how limited it is by the use of the term “Transparency of Lobbying”, when, as I have said, it does not deliver transparency and it is not about lobbying. If the Government are serious about delivering on what the Bill says in the title and ensuring that the public can see who has lobbied government on a particular policy, they have to change the emphasis from lobbyists to lobbying, from status to activity.

Accepting this amendment would ensure that we are making a great stride towards transparency. As the Bill stands, it is not so much a great step forward as a faltering tip-toe. If the Government are keen, and have the political will, to deliver transparency, they should embrace this amendment. I beg to move.

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Lord Aberdare: My Lords, the amendment proposed by the noble Lord, Lord Norton, seems to me an elegant and efficient way of achieving the principal aims of this part of the Bill and enhancing the transparency of lobbying, which is what it claims to be all about. I see it as a much more effective and less bureaucratic approach than the very limited transparency offered by the Bill.

The noble and learned Lord, Lord Wallace of Tankerness, has argued on a number of occasions that when Ministers and Permanent Secretaries are lobbied by consultant lobbyists, it is sometimes not clear on whose behalf that lobbying is being done. I find it hard to imagine such circumstances but, in any event, it seems to me that the amendment proposed by the noble Lord, Lord Norton, would fully address them.

Meanwhile, the register proposed looks to me increasingly like a Potemkin village: elaborately constructed to persuade the public that an effective process of regulating lobbying is in place. I very much fear that the public, not to mention the media, will not be fooled and that this Bill may only increase their appetite for a proper, comprehensive system to be put in place, as already exists in other jurisdictions, designed not only to enhance the transparency of lobbying but also to assure and improve the standards of conduct of the lobbying industry.

6.15 pm

Lord Campbell-Savours: My Lords, about five or six years ago, I sat on a pre-legislative scrutiny committee dealing with the bribery and corruption Bill. During consideration of the draft Bill, there was a realisation within the committee that the Government were going into the issue from completely the wrong position. That was the view right across the committee. I always remember the civil servants sitting at the back of the committee wriggling in their seats as they saw their case being destroyed along with all the work that they had done in the production of the Bill. I tell that story because I believe that that is precisely what would have happened here if this Bill had gone into pre-legislative scrutiny. If it had done so, a very different approach would have been taken and I think that there would have been agreement on the way forward across the House. We would not have been going down this particular route; we would have taken the route set out by the noble Lord, Lord Norton, in moving this amendment. His is the right approach. The approach that the Government are taking is the wrong approach. His solution is cheaper; it is more efficient; it provides for a greater level of transparency; and it is what the public have expected of Ministers in the introduction of legislation. In the end, we will probably end up where the noble Lord is starting when we find, particularly in the light of the previous amendment, that there are problems in the way in which the system is operating. I know at this late stage that we will not see a change in the minds of Ministers, but I am really sorry that they missed a cue given by the noble Lord, Lord Norton of Louth, when he moved his amendment in Committee and gave the Government the opportunity of at least changing their approach.

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Baroness Royall of Blaisdon: My Lords, I have little to add. Like my noble friend, I deeply regret that this Bill was not subject to pre-legislative scrutiny. I still do not see the urgency for this Bill. It would have been better if pre-legislative scrutiny had been undertaken now and we could have adopted the Bill in the next Session. Notwithstanding that, I strongly support this amendment from the noble Lord, Lord Norton of Louth, which, as he said, would enhance transparency. The Government have moved today in terms of improving the reporting in ministerial diaries of when lobbying takes place, but that is still a very narrow measure. This amendment is so clever but so simple in that all it does is develop existing procedures. It is not about a new bureaucratic mechanism; it is a very simple means of moving forward. I hope that, even at this late stage, the Minister will consider either adopting this amendment or coming back at Third Reading with the Government’s own. That would not only hold the Government in good stead but improve the governance of our parliamentary system and of government.

Lord Wallace of Tankerness: My Lords, I thank my noble friend Lord Norton for moving his new clause, which would require the Government to publish alongside any statement on a matter of policy, legislation or a contract or grant records of any oral or written communication directed to a Minister, the Minister’s Parliamentary Private Secretary or special adviser, and any departmental civil servants concerned with that matter. This is an issue in which my noble friend has long taken an interest. His amendment would also provide exemptions from the requirement to publish for commercial or security-sensitive material.

I do not think that this is a simple proposition, although I certainly think it is an intriguing one. However, at a time when we seek to ensure more efficient and effective government, one should pause to reflect that a statutory requirement that every oral or written communication received by every civil servant, special adviser, Parliamentary Private Secretary or Minister be recorded, collated and published in parallel with any relevant statement is not as easy and simple as was perhaps suggested.

Not only would the system impose a considerable bureaucratic burden on the public sector but one would wish to consider whether it would lead in turn to an information overload. Publishing information in relation to a very small public policy statement may well have some merit, but the volume of information that the Government would be likely to be required to publish in relation to, let us say, the Budget, the Autumn Statement or the Queen’s Speech could be so overwhelming that any transparency value would be undermined by the inaccessibility and quantity of the information.

The Government’s objective is to provide the public with valuable information which they can utilise to scrutinise our actions and hold us to account. The focus should be on the value of information and the insight it can provide, not on the volume. As I have already indicated, this Government have taken exceptional steps to publicise information about decision-making, and the register is intended to extend that transparency to those who seek to influence decision-makers. It is

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already standard practice that responses to government consultations are published in full or in summary, and if the public require further information about certain policies or decisions, then they have the right to request that information under the Freedom of Information Act.

I recognise that my noble friend is urging the Government to extend or improve their information publication regime, and I know that this view is shared. However, I hope that the commitments to the improvement of transparency that I made on behalf of the Government during the debate on the first group of amendments will show that not only have we already taken unprecedented steps, but we are furthering them. I recognise and acknowledge that they fall short of what my noble friend is seeking, but I hope he will reflect that to publish the volume which he is suggesting—particularly in circumstances such as the Budget—might not enhance transparency, but could lead to an overload that might not assist those he seeks to help with his amendment. I hope that it will be acknowledged that the Government have already taken steps and are committed to more steps; and that what we are doing will increase the level of transparency more than any previous Administration have done. In these circumstances, I urge my noble friend to withdraw his amendment.

Lord Hardie: My Lords, I seek a point of clarification. In light of the decision of the House to accept the amendment of the noble Lord, Lord Tyler, on special advisers, will the Minister tell the House whether it is the Government’s position that, notwithstanding that decision, the Government have no intention of adding information relative to special advisers’ meetings with lobbyists when the Minister makes his or her return?

Lord Wallace of Tankerness: My Lords, I stand by what I said when I replied to the question asked by my noble friend Lord Tyler in the first group of amendments. Obviously, the Government have not had an opportunity to discuss the matter, as I have been here since my noble friend’s amendment was passed. I have had no opportunity to discuss with ministerial colleagues and others how we will respond.

Lord Norton of Louth: My Lords, I agree with my noble and learned friend in that I certainly welcome what he announced earlier about the Government moving towards greater provision of information. However, I disagree with him on all the other points. I am inclined to ask, “What price transparency?”. I am not persuaded by the argument that, “Oh dear, this is all too much trouble”. The body of policymakers is a relatively small number of people who would actually be affected. The Minister seems to envisage some great body of civil servants that would be brought within this provision—they would not. It is doable and it is a fundamental point of principle. We have to go down that route. Either we are going to have transparency or we are not really going to do very much at all as far as this Bill is concerned. This is absolutely fundamental to Part 1 and this is the last chance we have to get it in

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order. Given the support that has been expressed for the amendment, I would like to test the opinion of the House.

6.23 pm

Division on Amendment 26

Contents 175; Not-Contents 226.

Amendment 26 disagreed.

Division No.  4

CONTENTS

Aberdare, L. [Teller]

Adonis, L.

Ahmed, L.

Anderson of Swansea, L.

Andrews, B.

Bakewell, B.

Bassam of Brighton, L.

Berkeley, L.

Best, L.

Bichard, L.

Birt, L.

Blood, B.

Boateng, L.

Borrie, L.

Bragg, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Belmont, L.

Browne of Ladyton, L.

Campbell-Savours, L.

Carter of Coles, L.

Chandos, V.

Clancarty, E.

Clark of Windermere, L.

Clinton-Davis, L.

Collins of Highbury, L.

Corston, B.

Craigavon, V.

Curry of Kirkharle, L.

Davies of Coity, L.

Davies of Oldham, L.

Davies of Stamford, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Elder, L.

Elystan-Morgan, L.

Evans of Temple Guiting, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foster of Bishop Auckland, L.

Freyberg, L.

Gale, B.

Gavron, L.

Gibson of Market Rasen, B.

Giddens, L.

Glasman, L.

Golding, B.

Graham of Edmonton, L.

Grantchester, L.

Greenway, L.

Grenfell, L.

Griffiths of Burry Port, L.

Grocott, L.

Hanworth, V.

Hardie, L.

Harries of Pentregarth, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollick, L.

Hollins, B.

Hollis of Heigham, B.

Hope of Craighead, L.

Howarth of Breckland, B.

Howarth of Newport, L.

Howe of Idlicote, B.

Howells of St Davids, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Chesterton, L.

Hunt of Kings Heath, L.

Irvine of Lairg, L.

Jay of Paddington, B.

Jones of Moulsecoomb, B.

Jones of Whitchurch, B.

Jones, L.

Jordan, L.

Kakkar, L.

Kennedy of Cradley, B.

Kennedy of Southwark, L.

Kerr of Kinlochard, L.

Kestenbaum, L.

Kilclooney, L.

Kingsmill, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Knight of Weymouth, L.

Laming, L.

Layard, L.

Lea of Crondall, L.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

McAvoy, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mallalieu, B.

Martin of Springburn, L.

Masham of Ilton, B.

Massey of Darwen, B.

Maxton, L.

Monks, L.

Moonie, L.

Morgan of Drefelin, B.

Morgan of Ely, B.

Morgan of Huyton, B.

Morris of Aberavon, L.

Morris of Handsworth, L.

Morris of Yardley, B.

Newcastle, Bp.

Norton of Louth, L. [Teller]

O'Neill of Clackmannan, L.

13 Jan 2014 : Column 66

Patel of Bradford, L.

Pitkeathley, B.

Plant of Highfield, L.

Ponsonby of Shulbrede, L.

Prescott, L.

Prosser, B.

Quin, B.

Ramsay of Cartvale, B.

Rea, L.

Rees of Ludlow, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Rooker, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Sawyer, L.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Snape, L.

Soley, L.

Stern, B.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Bolton, B.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Truscott, L.

Tunnicliffe, L.

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warwick of Undercliffe, B.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Wills, L.

Winston, L.

Worthington, B.

Young of Norwood Green, L.

NOT CONTENTS

Addington, L.

Ahmad of Wimbledon, L.

Allan of Hallam, L.

Anelay of St Johns, B. [Teller]

Arran, E.

Ashdown of Norton-sub-Hamdon, L.

Astor of Hever, L.

Attlee, E.

Bakewell of Hardington Mandeville, B.

Balfe, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Black of Brentwood, L.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Borwick, L.

Bottomley of Nettlestone, B.

Bourne of Aberystwyth, L.

Bowness, L.

Bridgeman, V.

Brooke of Sutton Mandeville, L.

Brookeborough, V.

Brougham and Vaux, L.

Browning, B.

Burnett, L.

Buscombe, B.

Byford, B.

Caithness, E.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chalker of Wallasey, B.

Chidgey, L.

Clement-Jones, L.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Crickhowell, L.

Cumberlege, B.

De Mauley, L.

Deben, L.

Deighton, L.

Denham, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eaton, B.

Eccles of Moulton, B.

Eccles, V.

Eden of Winton, L.

Edmiston, L.

Falkner of Margravine, B.

Faulks, L.

Feldman of Elstree, L.

Fink, L.

Finkelstein, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Framlingham, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

Gold, L.

Goodlad, L.

Goschen, V.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Grender, B.

Grey-Thompson, B.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harris of Peckham, L.

Harris of Richmond, B.

Higgins, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Holmes of Richmond, L.

Hooper, B.

Horam, L.

Howe of Aberavon, L.

Howe, E.

Howell of Guildford, L.

Humphreys, B.

13 Jan 2014 : Column 67

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Kirkham, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Kramer, B.

Lamont of Lerwick, L.

Lang of Monkton, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Leigh of Hurley, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Livingston of Parkhead, L.

Loomba, L.

Lothian, M.

Lucas, L.

Luke, L.

Lyell, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Magan of Castletown, L.

Mancroft, L.

Manzoor, B.

Marland, L.

Marlesford, L.

Mawson, L.

Mayhew of Twysden, L.

Miller of Chilthorne Domer, B.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

Nash, L.

Neville-Jones, B.

Neville-Rolfe, B.

Newby, L. [Teller]

Newlove, B.

Nicholson of Winterbourne, B.

Noakes, B.

Northover, B.

O'Cathain, B.

O'Loan, B.

O'Neill of Bengarve, B.

Paddick, L.

Palmer of Childs Hill, L.

Parminter, B.

Patten, L.

Perry of Southwark, B.

Popat, L.

Purvis of Tweed, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Redesdale, L.

Rennard, L.

Ridley, V.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Rogan, L.

Roper, L.

Rowe-Beddoe, L.

Ryder of Wensum, L.

Sassoon, L.

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sharkey, L.

Sharman, L.

Sharp of Guildford, B.

Shaw of Northstead, L.

Sheikh, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Stewartby, L.

Stoneham of Droxford, L.

Stowell of Beeston, B.

Strasburger, L.

Suttie, B.

Taverne, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Teverson, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tonge, B.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

Tugendhat, L.

Tyler of Enfield, B.

Tyler, L.

Verma, B.

Waddington, L.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warsi, B.

Wasserman, L.

Wei, L.

Wheatcroft, B.

Wilcox, B.

Williams of Crosby, B.

Williams of Trafford, B.

Willis of Knaresborough, L.

Wrigglesworth, L.

Younger of Leckie, V.

6.36 pm

Clause 24: Regulations

13 Jan 2014 : Column 68

“( ) A statutory instrument containing any of the following regulations may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament—

(a) regulations under section 4(5)(a) or 5(4);

(b) the first regulations to be made under each of sections 11(3) and 17(3);

(c) regulations under this Part which amend or modify the provisions of this Part.”

Amendment 27 agreed.

Amendment 28 had been withdrawn from the Marshalled List.

Clause 37: Duty to appoint an assurer etc

Lord Monks (Lab): My Lords, I shall speak also to Amendments 28B, 28C, 28D and 31A, standing in my name and that of my noble friend Lord Stevenson.

To give some brief context to those who are new to this subject, we have moved from Part 1 of the Bill to Part 3, which is concerned with trade union administration. It seeks to strengthen the public supervision of union membership records, with a duty on unions to produce a membership audit certificate annually. Unions with more than 10,000 members would have additionally to appoint an assurer—a new term to me in public life—whose job would be to check the veracity of union records. Perhaps this is a precedent, and perhaps we could do with assurers to be appointed to check some companies’ tax affairs from time to time.

Why is union membership being singled out? Are there are a lot of complaints? Is there widespread public concern? Is there a lobby around to say that there are some scandals in this area? Let us have a look at the facts: between 2000 and 2004, the last time that any records were taken, six complaints had been received by the certification officer, and there has been only one since, which is current. Is there public pressure for this intrusion into internal union affairs? No one knows who has been asking for it because the Government have never been able to provide any information about that.

This provision seems to be the product of a fevered imagination, convinced that it is quite legitimate to pile a load of red tape on to unions when generally the policy is against red tape and overregulation. In today’s Conservative Party it does not actually seem necessary to have a reason to make union lives more expensive and complex; it is almost a reflex action that they wish to perform from time to time.

It is not just about the expense and trouble that this part of the Bill is likely to cause. The measures have only one parallel in the EU: in Malta, in connection

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with a specific circumstance of rivalry between unions, a public official got involved in checking membership records. Every other country keeps the state and employers out of union membership records.

This is not a theoretical discussion about what might happen. There are 2,000 cases currently in procedure over allegations of blacklisting, and the people being accused—some of them have admitted it—are eight of the major blue-chip construction companies in this country. This involves sites as huge as the Olympic site, which of course is being regenerated for other purposes, and the Crossrail site, which we are all aware of if we travel around central London. There is a risk of information falling into the wrong hands and becoming available to people who should not see it. We know that the more people get hold of records and information of this kind, the more likely it is to fall into the wrong hands and be used to people’s detriment.

That is what this series of amendments is about. They would strengthen protection for the individuals. The Data Protection Act 1998 classed trade union membership as “sensitive personal data”, and was quite correct to do so. A specifically protected category under the EU data directive is a derogation for unions. Unions should be affected only where there is a substantial public interest. Where is the substantial public interest in this measure? There have been hardly any complaints, and very few people have spoken on this subject.

Amendment 28A would make clear that the assurer, this new creature, would have a duty of confidentiality to the union and its members, and a duty at all times to abide by the trade union’s own obligations under the Data Protection Act to protect the personal information and data of members. It is important that we recognise that this information is very sensitive and the assurer should have a duty of care and proper responsibility. I hope that the Minister will be able to accept these rather simple points. After all, if you reverse the situation, will he be saying that there is no duty of confidentiality to the union and its members and no duty to help a union maintain its obligations under the Data Protection Act?

Amendment 28B would strengthen the hand of the union to get rid of an assurer who breaches confidentiality or some other statutory duty, or for some other justifiable reason. In the Bill, the only way in which an assurer can be sacked is by a resolution at a general meeting of members or delegates—an annual conference, if you like. That is limited scope indeed for termination of this position. Surely, a union, which will be paying the assurer, should be able to discharge a person who is unsuitable, just as it can an accountant, an auditor or its solicitor. The Bill’s assumption here is somehow that the assurer will be in conflict—an investigating officer looking into the affairs of a miscreant union and an adversary who must be protected. The Bill gives the game away on the Government’s rather hostile approach to what unions are doing and how they are administering their affairs.

Amendment 28C reinforces the point about the assurer complying with the Data Protection Act, and reminds us that information can easily be obtained nowadays by people who should not have it, particularly if it becomes too widely available.

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Amendment 28D would narrow the circumstances under which the names and addresses of members can be disclosed. It would specifically remove requests from the certification officer, the government registrar, who already has significant powers over trade unions in this area but not normally to get personal data. We are trying to stop him from being able to ask for personal, individual data. There is an inspector in addition to the assurer in this cast list of new people who will be rolling around union administration. We also want to stop an inspector, appointed by the certification officer, getting this individual, personal information. In effect, we are seeking to establish the principle that the disclosure of an individual’s name and address is done only with the individual’s consent, and not with some blanket power given to the assurer, the assurer’s officials and the certification officer. In this way, we are trying to help to protect against breaches of the Data Protection Act.

6.45 pm

Amendment 31A would impose a penalty on an assurer who has breached the confidentiality obligations. There can be serious implications for the individuals whose information is misused; I mentioned the 2,000 blacklisting cases, and others are being investigated by the Scottish Affairs Committee. Individuals can be out of work for years if they find themselves on one of these lists. For an assurer who is inefficient or incontinent with the trust that has been given, it seems only right that they should feel that they too could be at risk if they get this area wrong. I beg to move.

Lord Morris of Handsworth (Lab): My Lords, I support this group of amendments in the name of my noble friend Lord Monks. My reason for doing so is the hope that, in his response, the Minister will spell out clearly the duties of the trade union assurer, particularly—a point made by my noble friend Lord Monks—the duties of confidentiality.

Confidentiality is of the utmost importance. We have all read about the blacklist constructed by the consulting association. It is a subversive list which can damage the individual both financially and in terms of their reputation. I have read nothing in the Bill, and have heard nothing at Second Reading or anywhere else, which gives any protection at all to the possible victims of this new office of assurer. I ask myself why the trade union is a target, because it has much less information than, say, the CBI, the IoD or the Federation of Small Businesses. Those organisations have information which is relevant to the whole notion of behaviour within the context of the workplace. Now, however, the trade unions are at the sharp end.

I will not rehearse here the names of the consulting association; I do not want to pollute the debate. If the organisations involved were not in the category of trade unions or any other membership association, I suspect that the consulting association’s behaviour would be the subject of criminal investigation. However, that is not a matter which we decide here. What we decide here is how to ensure that the new office carries with it the responsibility and obligation which it owes to the people who can be impacted by its decisions.

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The assurer’s task will be an onerous one, in so far as it relies on the co-operation not just of individual trade unions but of employers. I therefore hope that when the Minister replies he will make absolutely clear that this particular office carries with it the highest notion of responsibility because it has the propensity to ruin so many lives and so many reputations. For those reasons I support the amendments tabled by the noble Lord, Lord Monks, and look forward to hearing the Minister’s reply.

Lord Lea of Crondall (Lab): The whole philosophy of Part 3 seems quite astonishingly inequitable between what you might call the TUC family on one side of industry and the CBI or the employers’ associations on the other. Now, the counterpart to a trade union—as set down by the famous Donovan royal commission in 1965-68—is an employers’ association, but it has no responsibilities, no obligations of transparency or membership finances or anything else. So this is a purely political measure. It was no doubt agreed by the quad over the heads of people in the department of business, but we are never going to be told that. This is going to be another trophy on the mantelpiece of the Conservative Party and other people will have their attention drawn to this trophy on that mantelpiece in due course.

Lord Cormack (Con): I had not intended to say anything but I have listened with care and sympathy to what has been said. I hope that when my noble friend comes to reply he will be able to give at least some of the assurances which have been sought by the noble Lords, Lord Morris, Lord Monks and Lord Lea of Crondall. Every man or woman is entitled to privacy. It is more and more difficult in this modern age for them to have it but it is something we all cherish and prize. No one should be put into a position where it is in jeopardy. What has been said by the noble Lords on the other side during this very brief debate has convinced me that there is at least a case to answer and I very much hope that my noble friend, for whom I have very real regard, will be able to give at least some of the assurances that have been sought when he replies to this debate.

Lord Martin of Springburn (CB): I support the noble Lord, Lord Monks, and others who have spoken regarding these amendments. At one time it went without saying that anyone who had private information or was privy to it would not divulge that information except when obliged to do so in legal circumstances. Recent matters have come up in the media—I will not stray into the sub judice area—exposing people who have been involved and pleaded guilty to misconduct in public office where they have handed over private and confidential information to those who are not entitled to that information and received payment for it. We need assurances from the noble Lord the Minister that things are going to be kept very tight indeed.

I notice in the Bill that the removal of the officer concerned has to be carried out either by a meeting of the whole membership or of the delegates. That can be a very cumbersome area. If the executive of a trade union found that such an officer was wanting in his or

13 Jan 2014 : Column 72

her behaviour, it would take a long time to get all the delegates together, find a venue for them and check their credentials before they met. If it was going to be the membership, bear this in mind: it used to be the cry of the employers and the Conservative Party—a cry they were entitled to make—that there were too many small unions. I belonged to a small union, the metalworkers’ union, which was only a few thousand members and everyone said, no, we should have larger trade unions. As a result, my own circumstances changed and I now belong to the union called Unite, which is an amalgamation of many other unions. I have got to be careful because perhaps next week the name might change—I have to keep track of the name of the union to which I belong. The downside of all those amalgamations means larger membership and if we carried out the legislation to the letter by saying we should have an aggregate membership meeting, it would be some venue that we would have to create.

The important thing is that sadly we have people in confidential situations who have divulged information, and some sides have done it in what we in Scotland call a very sleekit way because they put out information by e-mail. If an e-mail goes out in a certain way, you have a trail of other e-mails which divulges a great deal of information. This matter has got to be looked at.

Baroness Williams of Crosby: I very strongly support the amendments tabled by the noble Lords, Lord Monks and Lord Stevenson of Balmacara. Since we have seen some of the troubling issues—for example, the keeping of a blacklist in the construction industry—it is clear that somebody whose personal details have been revealed can be at risk in a way that should not be acceptable. It is very sound and sensible to propose that there should be very stringent sanctions against any inspector who fails to recognise that confidentiality of individuals. It is accepted in this country that very strong and good relations should exist between responsible employers and responsible trade unionists. An amendment like this should be supported by the House.

Lord Stevenson of Balmacara (Lab): I declare an interest as a retired member of a large union. As the noble Baroness has just said, it is common ground that the unions in Britain play a significant part in the modern economy. They should be cherished, not castigated. As has been mentioned, if the Government had brought forward such a burdensome set of duties on any other section of civil society, there would have been an outcry. Well, there is an outcry and the Government should listen.

For many employees, their membership or lack of membership of a trade union is a private choice, and one which they desire to keep confidential for what may be very legitimate reasons. The knowledge that under these new powers, trade unions could be required to provide their membership register to a government-approved official for “good reason” may act as a disincentive for workers to join unions, particularly in light of the current concern over union blacklisting. As my noble friend Lord Monks said, the Government are introducing this series of measures at the same time as the full extent of the scandal of blacklisting in

13 Jan 2014 : Column 73

the construction industry is gradually coming to light. This is by no means the only industry in which members of a union may wish to keep their membership confidential for fear of being subject to discrimination.

These measures clearly go beyond what is necessary and they are certainly not proportionate if they are to achieve any legitimate aim behind the proposals, if indeed there is one.

Viscount Younger of Leckie (Con): Before I address the amendments I would like to say a few words about blacklisting, which was raised by the noble Lords, Lord Monks and Lord Morris, and my noble friend Lady Williams, because at each stage of this Bill we have sought to emphasise how seriously this Government take any allegations of blacklisting. The Trade Union and Labour Relations (Consolidation) Act 1992 makes it unlawful to refuse to employ a person because they are a member or not a member of a trade union or because they refuse to join or leave a trade union. This position was strengthened in 2010, when in response to the Consulting Association blacklist uncovered in 2009, the Government introduced anti-blacklisting regulations and increased the penalties for unlawful processing of data. Data controllers can now be fined up to £500,000 for serious offences. There have been several allegations of new evidence of blacklisting to date, but no evidence of this practice recurring. The Scottish Affairs Select Committee and Information Commissioner are both currently investigating the potential for ongoing offences, and the Government continue to take a close interest in this issue. Therefore, the provisions that we are considering today do not increase the risk of blacklisting, because of the protections in place around the treatment of membership data.

7 pm

Noble Lords have tabled a number of amendments, which I understand seek greater assurance that the confidentiality of union membership data will be protected. That is entirely understandable. Information about who is a union member is sensitive, as the noble Lords, Lord Monks and Lord Morris, have already eloquently pointed out, and it is right that it should be protected. However, existing data protection rules are sufficient for those purposes. I hope to be able to explain how the data will be protected and to reassure noble Lords that their concerns are unfounded.

I will begin by speaking to Amendments 28A, 28B and 28C, which are all concerned with the protections around the way the assurer handles membership data. Amendment 28A would place on the assurer a duty of confidentiality to the union and its members, and would require the assurer to comply with the union’s obligations in the Data Protection Act. Amendment 28B would prevent the appointment or reappointment of an assurer in the case of a breach of the union’s confidentiality, of its statutory duties or of its terms of appointment, or where there are reasonable circumstances not to appoint. Amendment 28C states that the assurer must comply with the Data Protection Act. Amendment 28D seeks to prevent the disclosure of member data in any circumstances, except with their consent or where required as part of criminal proceedings.

13 Jan 2014 : Column 74

The intention behind all those amendments is already achieved by the Bill and the application of the Data Protection Act. I will explain that. The Bill explicitly states that the assurer will owe a duty of confidentiality to the union, which will be incorporated into the assurer’s appointment. Breach of that duty would mean that the union would have a remedy for breach of contract. The union may also choose, if it wishes, to include additional protections as part of its contract with the assurer. In addition, the assurer must comply with the Data Protection Act, because in performing their statutory functions they will be a data controller. Should the assurer breach data protection rules, the union may engage the Information Commissioner, who enforces the Data Protection Act. The Information Commissioner has a range of powers at his disposal, including imposing a fine of up to £500,000. Finally, the assurer is prohibited in the Bill from disclosing member data unless in specific permitted circumstances. Noble Lords also raised the issue of whether an assurer who breaches their obligations should be prevented from reappointment. I am happy to confirm that that is entirely within the control of the union. The Secretary of State will set out in an order who is qualified to be an assurer, but who the union chooses from that list is entirely at its discretion. If, for any reason, the union has doubts about the assurer’s suitability, including their handling of sensitive member data, it can pass a resolution to remove the assurer on agreement of the members.

On Amendment 28D, the intention seems to be to prevent the disclosure of member data in any circumstances except with member consent or where required as part of criminal proceedings. That would in practice prohibit a certification officer, inspector or assurer having the necessary access to the register, as they would be unable to identify the member in order to seek their consent. It would defeat the Government’s policy intention of giving assurance of union compliance with the duties to maintain a membership register. We believe that this amendment is unnecessary. The existing contractual and statutory arrangements surrounding use of membership data will be sufficient to ensure that membership data are protected.

I have already explained the protections with regard to the assurer and will now say something about the protections with regard to the treatment of membership data by the certification officer and the inspector. As part of that I will therefore deal with Amendments 31, 31A and 32. Amendment 31 would remove the explicit statement that the certification officer may require an explanation of documents from the assurer. In practice, that may interfere with the effective application of the new enforcement regime. It may be important for the certification officer to engage with the assurer in a particular case in order to make an informed assessment of a union’s compliance with Section 24 of TULRCA. Amendment 31A deals with the appointed inspector and seems intended to ensure that there are appropriate protections to ensure that they handle sensitive membership data properly. I reassure noble Lords that a range of safeguards are already in place to achieve that. That includes, for example, that first of all, the certification officer will have discretion to appoint an inspector as he does currently for inspectors of a

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union’s financial affairs. It will be for the certification officer to ensure that he appoints someone capable of fulfilling their responsibilities. Secondly, the inspector will owe a duty of confidentiality to the certification officer. Should the inspector breach that duty, it will be for the certification officer to decide the appropriate remedy, considering the circumstances and severity of the breach. A third party appointed as an inspector is likely to be someone in a professional firm. It would seem unnecessarily restrictive to require that the certification officer could never appoint that firm again, no matter what had happened to the individual concerned. A further example is that if the appointed inspector—or any other individual, for that matter—has breached data protection rules, they will be liable to the Information Commissioner taking action, including imposing a fine of up to £500,000.

I infer that the intention of Amendment 32 is to obtain explicit, cast-iron assurance that sensitive union member data will be adequately protected under the new investigatory powers introduced by the Bill. The amendment intends to prohibit the disclosure of data to third parties, but there is already provision in law to prevent the disclosure of documents to third parties, except as necessary for the performance of functions set out in the Bill, where the member consents or, of course, for criminal proceedings. In any event, as I have already explained, member data will be well protected by both existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union, as stipulated in the Bill. The Data Protection Act will also continue to apply whenever the assurer, certification officer or inspector handle union membership data, because in doing so they will be data controllers. Furthermore, the certification officer is obliged to act in concordance with the European Convention on Human Rights, which includes the individual’s right to privacy. We are confident that the certification officer is well placed to deal with sensitive data, and I can reassure noble Lords that the Government will not have access to member data through those provisions.

Finally, Amendment 33 changes the heading to new Section 24B. We do not think that that would have a substantive effect, but have assumed that the intention is that provisions relating to the appointment of the assurer would not be enforceable. We will come to the role of the assurer in the next group of amendments, but it is key to the achievement of the Government’s policy objective. I understand the desire to ensure that the Bill poses no risk to the confidentiality of union membership, and I have been listening this afternoon. I am sure that there are adequate safeguards in current data protection legislation and introduced by the Bill, to ensure that not only the assurer but also the certification officer and the certification officer’s inspector properly protect the confidentiality of union member data.

The noble Lord, Lord Monks, questioned why the legislation is needed, because the certification officer has had only a limited number of complaints. However, the current statute does not automatically provide assurance that the register is up to date for all members. The certification officer can investigate only in response to a complaint, and then only, as I mentioned in

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Committee, in response to a complaint from a union member. Not all members will be proactive about checking the register. A member who checks it may not see the register in its entirety. In any case, they cannot know whether the names and addresses of other members are accurate. Members cannot tell whether the register is accurate in recording all new joiners and leavers. We believe that those measures are an appropriate way to give greater confidence to union members and, importantly, to the public, so that unions know who their members are and can contact them.

The noble Lord, Lord Martin of Springburn, raised concerns because there has been some misuse of sensitive data by some public authorities. I assure him that the certification officer is subject to duties under the Human Rights Act 1998 to comply with the European Convention on Human Rights, including a person’s right to his private and family life and his correspondence. We are confident that the certification officer is well placed to deal with sensitive data. One respondent to the consultation conceded that, although they thought this was a risk, they had,

“no reason to believe the CO’s office has poor systems”.

The noble Lord, Lord Morris of Handsworth, stated that unions were more harshly regulated than other organisations. Noble Lords are sometimes fond of drawing analogies between trade unions and other membership organisations, but trade unions are unique in both purpose and design. They are explicitly defined by legislation, and in practice regulation is tailored to each type of organisation, to fit its role and function. Again, we believe that these measures are appropriate to the function of trade unions. I therefore ask noble Lords not to press their amendments.

Lord Monks: My Lords, I thank the Minister for that reply. I admired his straight bat, which could have been used down under, against the Australians, in the last few weeks.

I hope that noble Lords have noticed the complex web of officials who are going to be busying themselves around the union world. There is quite a cast list of people for unions to deal with. First there is the certification officer, whom they are used to dealing with, but now he has extra powers. Then there is the new assurer, who is unique in British public life. Nobody else has an assurer. No political party has an assurer. Do we have assurers to check the electoral roles in some inner city areas? Of course we do not. People do their best, and we get 80% accuracy, on average, in this area.

Why are we appointing this network of officials, who will no doubt be passing the buck if problems really do arise? I know that at the end of the day it will be the trade union that ends up in breach of the data protection legislation in the event of any complaints, despite the fact that it will all have passed through the hands of the certification officer, the assurer and an inspector. And of course, there have been no complaints—I remind people of that.

One of the problems with this debate is that the Committee stage was truncated. These measures were brought forward quickly. Because Part 2 of the Bill was paused, Part 3 was rushed forward to fill the

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timetable gap. So we have not had a chance to get many people interested in this particular issue. This is perhaps the best attended debate that we have had. I hope that people who are listening with an open mind—I know that that is the position of many in this House—will reflect on this complex, bureaucratic, red-tape way of spinning some kind of web around unions, causing expense, difficulty and possible problems where no problems exist.

Union members want to be confident that their information is not misused. Contrary to what the Minister said about confidence, they will be less confident with this measure than they would be on the ground that the union accountants are doing their job properly. They are reasonably confident about that now—as confident as they can be. I am not saying that union membership administration is perfect; of course it is not. But it is in the unions’ interest to make it perfect, and the certification officer keeps an eye on what is going on.

I appreciate the Minister’s straight bat, but I would like to test the opinion of the House.

7.13 pm

Division on Amendment 28A

Contents 157; Not-Contents 216.

Amendment 28A disagreed.

Division No.  5

CONTENTS

Adonis, L.

Anderson of Swansea, L.

Andrews, B.

Bach, L.

Bassam of Brighton, L. [Teller]

Beecham, L.

Berkeley of Knighton, L.

Berkeley, L.

Blood, B.

Boateng, L.

Borrie, L.

Bragg, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Belmont, L.

Browne of Ladyton, L.

Campbell-Savours, L.

Carter of Coles, L.

Clancarty, E.

Clark of Windermere, L.

Clinton-Davis, L.

Collins of Highbury, L.

Corston, B.

Davies of Coity, L.

Davies of Oldham, L.

Davies of Stamford, L.

Dear, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Elder, L.

Elystan-Morgan, L.

Evans of Temple Guiting, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foster of Bishop Auckland, L.

Foulkes of Cumnock, L.

Gale, B.

Gavron, L.

Gibson of Market Rasen, B.

Glasman, L.

Golding, B.

Graham of Edmonton, L.

Grantchester, L.

Grenfell, L.

Grocott, L.

Hanworth, V.

Hardie, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haworth, L.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollins, B.

Hollis of Heigham, B.

Howarth of Newport, L.

Howe of Idlicote, B.

Howells of St Davids, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Chesterton, L.

Hunt of Kings Heath, L.

Irvine of Lairg, L.

Jay of Paddington, B.

Jones of Moulsecoomb, B.

Jones of Whitchurch, B.

Jones, L.

Jordan, L.

Kennedy of Cradley, B.

Kennedy of Southwark, L.

Kerr of Kinlochard, L.

Kilclooney, L.

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Kingsmill, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Knight of Weymouth, L.

Layard, L.

Lea of Crondall, L.

Liddle, L.

Lister of Burtersett, B.

McAvoy, L.

McDonagh, B.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mallalieu, B.

Martin of Springburn, L.

Massey of Darwen, B.

Maxton, L.

Meacher, B.

Mendelsohn, L.

Monks, L.

Moonie, L.

Morgan of Drefelin, B.

Morgan of Ely, B.

Morgan of Huyton, B.

Morris of Handsworth, L.

Morris of Yardley, B.

Newcastle, Bp.

O'Loan, B.

O'Neill of Clackmannan, L.

Patel of Bradford, L.

Pendry, L.

Pitkeathley, B.

Plant of Highfield, L.

Ponsonby of Shulbrede, L.

Prescott, L.

Prosser, B.

Quin, B.

Ramsay of Cartvale, B.

Rea, L.

Rees of Ludlow, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Rooker, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Sawyer, L.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Snape, L.

Soley, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Bolton, B.

Temple-Morris, L.

Thornton, B.

Tunnicliffe, L. [Teller]

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Warwick of Undercliffe, B.

Watson of Invergowrie, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Wills, L.

Winston, L.

Wood of Anfield, L.

Worthington, B.

Young of Norwood Green, L.

NOT CONTENTS

Aberdare, L.

Addington, L.

Ahmad of Wimbledon, L.

Allan of Hallam, L.

Anelay of St Johns, B. [Teller]

Arran, E.

Ashdown of Norton-sub-Hamdon, L.

Astor of Hever, L.

Attlee, E.

Bakewell of Hardington Mandeville, B.

Balfe, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Black of Brentwood, L.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Borwick, L.

Bottomley of Nettlestone, B.

Bourne of Aberystwyth, L.

Bowness, L.

Bridgeman, V.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Burnett, L.

Buscombe, B.

Byford, B.

Caithness, E.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chalker of Wallasey, B.

Chidgey, L.

Clement-Jones, L.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Courtown, E.

Craigavon, V.

Crickhowell, L.

Cumberlege, B.

De Mauley, L.

Deben, L.

Deighton, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Dykes, L.

Eaton, B.

Eccles of Moulton, B.

Eccles, V.

Eden of Winton, L.

Edmiston, L.

Elton, L.

Empey, L.

Falkner of Margravine, B.

Faulks, L.

Feldman of Elstree, L.

Fink, L.

Finkelstein, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Framlingham, L.

13 Jan 2014 : Column 79

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

Gold, L.

Goodlad, L.

Goschen, V.

Grade of Yarmouth, L.

Greenway, L.

Grender, B.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harris of Peckham, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Holmes of Richmond, L.

Hooper, B.

Hope of Craighead, L.

Horam, L.

Howarth of Breckland, B.

Howe of Aberavon, L.

Howe, E.

Howell of Guildford, L.

Humphreys, B.

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Kirkham, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Kramer, B.

Lamont of Lerwick, L.

Lang of Monkton, L.

Lawson of Blaby, L.

Leigh of Hurley, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Livingston of Parkhead, L.

Loomba, L.

Lothian, M.

Lucas, L.

Luke, L.

Lyell, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

McNally, L.

Maddock, B.

Magan of Castletown, L.

Mancroft, L.

Manzoor, B.

Marks of Henley-on-Thames, L.

Marland, L.

Marlesford, L.

Masham of Ilton, B.

Mawson, L.

Mayhew of Twysden, L.

Miller of Chilthorne Domer, B.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

Nash, L.

Neville-Jones, B.

Neville-Rolfe, B.

Newby, L. [Teller]

Newlove, B.

Nicholson of Winterbourne, B.

Noakes, B.

Northbrook, L.

Northover, B.

Norton of Louth, L.

Oakeshott of Seagrove Bay, L.

O'Cathain, B.

Paddick, L.

Palmer of Childs Hill, L.

Parminter, B.

Patten, L.

Perry of Southwark, B.

Popat, L.

Purvis of Tweed, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Rennard, L.

Ridley, V.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Roper, L.

Rowe-Beddoe, L.

St John of Bletso, L.

Sassoon, L.

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sharkey, L.

Sharp of Guildford, B.

Shaw of Northstead, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Steel of Aikwood, L.

Stephen, L.

Stewartby, L.

Stoneham of Droxford, L.

Stowell of Beeston, B.

Strasburger, L.

Suttie, B.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Teverson, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tonge, B.

Tope, L.

Trefgarne, L.

Trenchard, V.

Trimble, L.

True, L.

Tugendhat, L.

Tyler of Enfield, B.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Walpole, L.

Warsi, B.

Wasserman, L.

Wei, L.

Wilcox, B.

Williams of Trafford, B.

Willis of Knaresborough, L.

Wrigglesworth, L.

Younger of Leckie, V.

13 Jan 2014 : Column 80

7.24 pm

Amendments 28B to 28D not moved.

Lord Whitty (Lab): My Lords, Amendment 29 would deal with the problem that was alluded to in the previous debate. A number of my noble friends referred to the new office of assurer and queried why we needed it, what exactly the role of the officeholder would be and suggested that it was an additional level of red tape and bureaucracy for trade union administration. In replying to the previous debate, the Minister did not address this point but rather sought to reassure the House in relation to confidentiality. However, in seeking to leave out Clause 37, my amendment suggests that there is no point whatever in inventing this new role. The oversight of trade union administration is clearly in the hands of the certification officer, and has been so for many years.

The Government may feel that the certification officer needs new powers—they are contained in the Bill to a limited extent—or that he needs new resources to carry out his job, but the relevant apparatus for doing that is already in place. They have invented a new officer without defining that officer’s qualifications, which will be defined in technical regulations at a later stage. The Minister referred to a list from which trade unions could choose but, presumably, the list is drawn up by the Government. The House does not have before it the qualifications that are required for someone to be on the list, the details of how you get on to it or what professional standards the assurer should meet.

As my noble friend Lord Lea asked, why is no other body in society having an assurer imposed upon it? No reason has been given for that by the Minister so far; perhaps he will do so when he replies to this debate. The only reason given in the impact assessment for not moving entirely down this road is because, as he says, assurers are an important part of society and the public and union members need to be assured that their membership records are in order. As far as the rest of society is concerned—I include in that employers and the Government—clearly the membership records of a union are most important at times of possible industrial strife. The list of members taking part in a ballot on a potential industrial dispute must accord with the union membership covered by the issue under dispute. There are reams of case law in that area, so the assurer has not been invented in order to monitor strike ballots more rigorously as that issue is already covered.

The full union membership list, excluding members’ personal details, is an important document when union elections are held. We need to ensure that internal elections are proper and fair, that members who are given a vote in those elections have the right to vote in them and that everybody who falls into that category has a vote. However, that issue is also covered in

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existing legislation and there are already complaint mechanisms and potentially draconian sanctions for a union which breaches those rules. Therefore, I see no reason to invent another officer.

Unions, through their own rules and through legislation more generally, are already required to audit their financial records. A significant part of those financial records comprises the receipt of membership dues and the recording of those receipts. The auditor of a trade union already has to do that. The oversight of that process is already there with the certification officer, who has substantial powers to intervene. Where in this does the assurer rest? He is not an auditor, a lawyer or an officer of the certification office. No standards of professional attainment exist for such a creature. In the previous debate, the Minister failed to reply to my noble friends Lord Lea and Lord Morris of Handsworth as to why such a person was necessary.

7.30 pm

Amendment 29 deletes the whole reference to the assurer. There would have to be other consequential amendments but the simplest and cleanest way to deal with it is to delete the whole of Clause 37. The other toughening up of the requirements on unions to keep a membership list is there, and the powers of the certification officer would remain. However, the role of this specious, unnecessary and, to use a House of Lords’ term, otiose officer is not spelt out in anything that the Minister has yet said or in any of the documentation that we have received. I therefore think that it would be more sensible for the Government, instead of engaging in the creation of more layers of red tape in this area, just to drop the idea of this new level of bureaucracy and to let the existing requirements and the existing regulator perform their jobs—if necessary, to tighter standards than they previously consider that they have done. To do so probably would require the certification officer to have more resources, which I am sure the Government have in mind, but it would be cheaper to give those resources to the certification officer than to invent a whole new and unnecessary profession. I therefore hope that the Government could either give us more cogent reasons than they have so far given as to why the assurer has been invented or that they will take the issue away and look at it again.

My other amendment in this group basically deals with the powers of the certification officer and when they require documentation from the union over and above that which is supplied to the certification officer in the normal course of events. My amendment refers to “if” the certification officer considers it necessary after receipt of a complaint. Otherwise, it is a very open-ended power to require a lot of very delicate documentation. The trigger for requiring that additional documentation needs to be the receipt of a valid complaint. That would amend the following clause accordingly.

My main point in these amendments is: why on earth do we need this new officer, if officer is the word, this new profession, if profession is the word, this new bureaucratic measure—I was trying to think of another word—to be imposed within the trade union structure but not in any other part of civic or economic society? I beg to move.

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Lord Lea of Crondall: My Lords, I think the word that my noble friend Lord Whitty could not quite conjure up, because it is not often used in this House, is hypocrisy, and it has to do with red tape. My noble friend Lord Monks reminded us that, not only because of Christmas and the new year but also because of the pause, we are between Parts 1 and 2 of the Bill, and now are dealing with Part 3. It is all rather confusing. There is overkill of all these lists of people who have some sort of role. We mentioned the electoral roll and how 80% might be up to date. I think that 50% would be a very good score for a candidate examined on this set-up even when it has been a year in use. It is quite remarkable. I will not go through the whole list.

It reminds us of the point made by a number of colleagues at Second Reading to do with the famous impact assessment and the enormous costs falling on the trade unions and many other people as well, which requires some justification. In particular, some justification is required of a Government whose raison d’être seems at some times to be to cut out red tape. If this is not red tape, what is it? The Government are clearly are going to be obstinate and will stick to their guns, whether the bowling is fast bowling, a googly or whatever else. We know that they have been taken over by dogma on everything to do with industrial relations.

Finally, I have here the report about which my noble friend Lord Monks and I have had a conversation. We asked people in the international departments of European countries to tell us, in answer to a questionnaire, what goes on in these successful democratic countries on these sorts of questions. No one remotely has a top-heavy superstructure such as this. I have little doubt that the only reason why a Labour Government might not repeal this on day one is that they would have very much bigger fish to fry, no doubt, in some respects.

I have little doubt that the life of this legislation will be very short, which is the only saving grace I can think of to mention in support of my noble friend Lord Whitty on this amendment.

Lord Stevenson of Balmacara: My Lords, it is interesting that the questions we are left with keep coming back and keep being unanswered. What is the serious public policy issue behind this proposal? What exactly is the problem? What will this Bill achieve that current legislation does not achieve? Will the measures being proposed do more than simply increase the regulatory burdens on trade unions? We have all those questions and very few answers.

We know that union membership is already regulated by the Trade Union and Labour Relations (Consolidation) Act. Section 24(1) puts a duty on unions to maintain an up-to-date register of members’ names and addresses so far as reasonably practicable. This legislation has stood the test of time since the days of Mrs Thatcher. As has been said already, we are not aware of any calls having been made to the Government to extend this provision. BIS, the certification officer and ACAS have confirmed under freedom of information requests that they have received no representations for such a measure.

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As my noble friend Lord Whitty said, it may be that a better self-certification system could be an advantage. I say “it may be” because we do not know what the problem is but cloaking the issue in some spurious idea that there is some public concern out there that would be remedied by having an additional checking arrangement is simply not sufficient.

Viscount Younger of Leckie: My Lords, I turn to two amendments which seek to drastically reduce the effect and extent of the provisions as drafted. This would in practice undermine the Government’s key policy objective, which is to introduce a proportionate and effective reporting and enforcement mechanism alongside the existing duty of unions to maintain an up-to-date membership register so far as is reasonably practicable.

Amendment 29 would remove Clause 37 and the role of the independent assurer from the Bill altogether. Clause 37 gives credibility to the assurance process by requiring independent scrutiny, which is in line with the Government’s overarching aim to provide greater assurance of the maintenance of trade union membership registers for the benefit of members, employers and, importantly, the wider public. As some unions become large organisations representing members across a variety of employers and workplaces, their administrative requirements become more complex. As a consequence of the prevalence of very large unions in recent years, there is also now an increased public perception of a union’s scope of influence.

This may be an appropriate moment for me to restate what I said in Committee: I am not minded to comment on the media coverage of particular industrial disputes, such as the Grangemouth refinery or, more recently, the issue affecting Howdens. Instead, as I should, I will focus on the separate issue at hand relating to the obligation of unions to maintain up-to-date membership registers. Perhaps this can also be described as playing a straight bat. I hope so.

The nature of union membership data means that they decay easily—for example, addresses can quickly become out of date. About 2 million people move in and out of union membership every year, which equates to around one in four union members. The register for a union which has a 25% turnover in membership could theoretically be entirely out of date in four years. Unions are already required by statute to maintain a register of the names and addresses of their members. What we are introducing is annual reporting on the compliance of unions with this duty where currently there is none. I believe—

Lord Lea of Crondall: I am most grateful to the Minister for giving way. This must be about the fourth time that he has said that, on the one hand, of course there is “churn”, as the word is now fashionably used, in trade union membership—20% or something like that. That is where I suggest the figure of 80% comes from; there is always churn going on. There is then a huge leap of logic, and the word “proportionate” in this context strikes me as astonishing. It is straight out of Alice in Wonderland—words mean what I say they mean, no more and no less. It cannot be proportionate

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to say that, because of churn, there is only 80% accuracy at any moment in time, therefore we will make it accurate by saying we will make it more accurate because we will have inspectors running around the country making it accurate. They will not make it accurate. In terms of what we have described as the problem with churn, how can they make it accurate? So the punishment will not fit the crime, even if there were a crime in the first place. Can the Minister give a more reasonable justification for an extraordinary lack of logic in his pronouncements?

Viscount Younger of Leckie: My Lords, the reasoning behind this is simply to look at the bigger picture in relation to unions. The noble Lord, Lord Lea, needs to be reminded that unions with 10,000 members or fewer will be self-certificating. We are looking at those unions which have large membership lists. Many colleagues of the noble Lord—certainly in Committee—acknowledged that it is a challenge to keep membership lists up to date. This is why—in a very light-touch way—we are bringing in an assurer so that we can be sure that the lists are up to date, so far as is reasonably practicable.

I believe that the membership audit certificate will be credible for larger unions only if it is independent, and this is because larger unions often represent workers across a range of different job types and employers. They have complicated branch structures—I am sure that the noble Lord, Lord Lea, would agree with that. They often have different IT systems and there may be greater time delays for updating information. A union official or rep would not, therefore, have the same credibility as an independent expert in ensuring that the systems used across the entire union are fit for purpose. This is the essence of what we are aiming to do. That may also be helpful in response to the comments made by the noble Lord, Lord Whitty.

Clause 37 requires trade unions with more than 10,000 members to appoint a qualified, independent person, called an assurer, who has a duty to provide an annual membership audit certificate to the union. The membership audit certificate must state whether, in the opinion of the assurer, the union’s system—and please note this word “system”—for compiling and maintaining the register is satisfactory to comply with the duties in Section 24. This is analogous with the regime in place for financial reporting, where all unions are required to appoint an independent auditor to approve their accounts. An assurer has the right to access the membership register and other relevant documents at all reasonable times, and to require information and explanations from the union. This is necessary for the assurers to be able to meet their duties and carry out their functions. However, as I mentioned in a previous debate, they will be subject to the obligations of the Data Protection Act when handling union membership data.

The assurer may request access only to documents which may be relevant to the union’s duties in Section 24. At the outset, when the assurer is appointed, the union and the assurer could agree terms as to the relevant documents to which the assurer should have access. If, after making inquiries, the assurer’s opinion is that the union’s system for maintaining the register is not

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satisfactory, or the assurer is unable to obtain the information necessary to provide the certificate, they must state this on the certificate and give reasons for doing so. If the certificate is not satisfactory, the assurer is required to send it to the certification officer as soon as is reasonably practicable but after submitting it to the union. Again, as part of the contractual arrangements, it would be possible for the union and the assurer to agree that the assurer must alert the union of any possible issues before the certificate is finalised.

7.45 pm

Clause 37 also provides an order-making power for the Secretary of State to set out who is qualified to be an assurer. A person is not qualified if their independence is questionable, or if the union believes that they would not carry out their duties competently. An officer or employee of a union, or their partners or employers, may not perform the role of assurer for that union. In order to carry out their duties, the assurer is likely to want to understand how records are compiled and maintained. This could include looking at whether the union has mechanisms in place to ensure that it collects and records data accurately from new members, reminds members to keep their addresses up to date, and updates the register promptly once changes are notified. Unions will set out in their individual rules the provisions for appointing and removing an assurer, although certain provisions will have effect, notwithstanding this flexibility. The union retains ultimate control, however, because it can always remove an assurer from office by passing a resolution. As I have explained, Clause 37 is crucial to the credibility and effectiveness of the reporting regime introduced by the Bill in order to demonstrate the unions’ compliance with their existing duty to maintain an up-to-date register of members.

I now turn to Amendment 30. This would alter Clause 38 to make the certification officer’s powers to require the production of documents contingent on receiving a formal and qualifying complaint. As drafted, the amendment is difficult to follow, as there is no explanation of what would constitute such a complaint. The intended change seeks to undermine the key policy objective of Part 3 of the Bill, which is to give union members, employers and the public greater assurance that unions are complying with their existing duties to keep an up-to-date register of their members’ names and addresses. The amendment would make it more difficult for the certification officer to exercise the investigatory powers introduced by the Bill.

The principle underlying the existing duties has not been questioned. However, evidence from BIS’s consultation and from debate in this House and in the other place has indicated that unions face difficulties in keeping their records updated and that there is not always confidence in their compliance with the duties. As the noble Lord, Lord Monks, acknowledged in Committee, union membership records are not perfect. The noble Lord has a wealth of experience in this field, which I recognise and as has been demonstrated by his contributions to these debates. As he explained to the House, unions collect subscriptions in a variety of methods. He said:

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“The record keeping could sometimes slip”.

Moreover, he said that high turnover in some sectors means that,

“a third of the members of USDAW, the main retail union, have to be replaced each year just for membership numbers to stand still”.—[

Official Report,

11/11/13; col. 529.]

Current statute does not provide—

Lord Monks: I am grateful to the Minister for giving way. I just wonder how the assurer can help a union in a situation where there is very rapid labour turnover, lots of short-term contracts and great difficulty in keeping membership rolls up to date. What possible value can the assurer add to that situation, except to confuse it?

Viscount Younger of Leckie: It is certainly not to confuse, my Lords. As I explained, the role of the assurer is to provide that element of credibility which is not there at present. The assurer will also be working closely with the union and a contract will be drawn up with the union, notwithstanding the core powers that the assurer must have. That is why we believe this is necessary, in particular for the larger unions with 10,000 members and above.

The current statute does not provide an assurance of the union’s compliance as there is no sufficient enforcement mechanism. The Bill addresses this shortcoming by allowing the certification officer to investigate instances of possible non-compliance where there is good reason to do so. The certification officer will require access to the register and other relevant documents in order to determine whether a union is diligent in maintaining a register that is up to date so far as is reasonably practicable. The current system relies on individual members making formal complaints to the certification officer before he can investigate. As members can have no way of knowing the state of the register as a whole, the route for the certification officer to determine whether a union is compliant with its statutory obligations is not that effective to ensure that the existing duties are complied with. There may be a good reason for the certification officer to investigate a union’s compliance with the overarching duties even in the absence of a complaint including, for example, where a membership audit certificate has not been provided by the union or it is unsatisfactory.

We want to give members and the wider public an assurance that all unions are complying with their existing statutory duties. If the measure is applied only when the certification officer receives a complaint, we will not achieve this objective. Just because there are few formal complaints that we are aware of, it does not mean that there is no problem and this is an important point to make bearing in mind the comments that were made earlier by the noble Lords, Lord Whitty and Lord Monks. The access to and handling of union data is a concern that has occupied a great deal of time and debate. The Government understand the sensitivity of union membership data and agree with the importance of protecting them. However, for the reasons discussed at length previously, I reassure noble Lords that this amendment is unnecessary. Membership data will be well protected by both the existing and new legal safeguards. The assurer will owe a contractual

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duty of confidentiality to the union as set out in the Bill. The assurer, the certification officer and the inspector will be subject to the obligations of the Data Protection Act whenever they handle union membership data. Furthermore, the certification officer is obliged to act in accordance with the European Convention on Human Rights, which includes the individual’s right to privacy.

These two amendments between them would undermine the Government’s policy objective in Part 3 of the Bill. Amendment 29 would remove the independent scrutiny that is fundamental to the credibility of large unions’ annual reporting on duties. Amendment 30 would remove the provision for the certification officer to proactively investigate and assess a union’s compliance with Section 24 of TULRCA where there is good reason to believe that there may be an issue. For these reasons I cannot accept the amendments.

Just before I ask the noble Lord, Lord Whitty, to withdraw his amendment, I want to respond to a question he put to me. He raised the important issue of who would be appointed to be an assurer. We have already said that we will consult on who will be eligible to be an assurer, and further to this consultation the Secretary of State will make an order setting out who is eligible. They are likely to be qualified professionals such as solicitors and lawyers, which was alluded to by the noble Lord, Lord Whitty, auditors or independent scrutineers. This is similar to the system in place for independent scrutineers, and furthermore the unions will have discretion over whom to appoint from the list of eligible assurers and to remove them from the role on agreement with their members. Unions will be able to define the detailed terms of contract and their relationship with the assurer. I ask the noble Lord to withdraw his amendment.

Lord Whitty: My Lords, I thank the Minister for that lengthy reply, in which he repeatedly referred to the Government’s key policy objective. However, it is not clear to me what the policy objective of the whole of Part 3 is, and in particular the invention of this new category of assurer. I am glad that there is to be a consultation on it, but I do not see that anything is likely to emerge at the end of that consultation which could not be written into the terms of the annual audited return from the trade unions, whereby the external auditor would be required to certify that their membership system complied with the requirements. Why we have to invent a whole new structure is creating grave suspicion among the unions. The whole of Part 3 is very difficult to understand, but its effect will be a significant cost on union administration. The creation of an intermediate level between them and the certification officer is bound to increase distrust, and there is a suspicion that the Government’s motive in this is, at the very least, suspect.

Some of the motives that we have to tried to impugn have been denied by the Minister. It is not about tightening up on strike ballots. It is not about assurances on internal elections. It is not about the political fund. It is about imposing a cost and a bureaucracy on trade unions that will increase the likelihood of conflict between them and their regulator. I do not think that that is in the interests of trade union members and I

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cannot see that it is in the interests of wider society. The suspicion therefore has to be that other, sinister motives are involved here—that the Government wish to impose someone right in the heart of the administration of the trade unions, someone employed or contracted theoretically by the trade unions but who is actually a different type of person. I do not want to go too far down the paranoid road but I am quite a long way down it.

It seems to me that all the objectives that the Minister has mentioned can be achieved by a tightening up of the audit and by the certification officer and his or her powers. This intrusion of an assurer has not been justified. Had we not been voting so much today and we are all getting very tired, I would have asked the opinion of the House. I think that this is a bad part of the Bill and this is the worst part of that bad part. Before they put it into operation, the Minister and the Government need to think about this very carefully again. In the mean time, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Clause 38: Investigatory powers

Amendments 30 to 32 not moved.

Clause 39: Enforcement

Amendment 33 not moved.

Lord Monks: My Lords, Amendment 33A concerns the commencement of Part 3. We have already debated the purposes of the Bill and I must say that I am still in a state of some mystery about exactly what it is supposed to do, other than give trade unions a provocative prod, and it is certainly doing that. For the Government to act in this way without any clear justification for doing so other than through some sense of confidence and assurance—for whom, I am not sure—is a dangerous road to go down. We will be watching other developments in this area, if there are any, very carefully.

I am not going to go through the speeches and points that have been made already. This amendment seeks to ease the regulatory burden by extending the period before the Act is brought into force. The Minister has learnt about union administrative procedures. To change the rules, which would have to be done to allow the assurer access to this kind of information, is a time-consuming, complicated and expensive prospect. The kind of costs we are talking about are those for a union with, say, 1 million members that holds a rules revision conference every two or three years of 1,000 delegates. If, because of the timing, a union has to

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hold a special conference, that will cost another £500,000. The Government’s estimate that the cost to unions collectively will be around £460,000 pales into insignificance against the costs of union conferences and administration. We debated earlier that the assurer can be got rid of only by the decision of a delegate conference, and again you can see the kind of costs that are beginning to stack up; they go way beyond where the impact assessment took us. In Committee, the Minister indicated some scope for flexibility about this aspect and I know that there have been talks about it. The TUC has been involved and some noble Lords have had contact with the Minister as well.

Let me emphasise that there does not seem to be any great urgency about the need to bring this in. It is not a matter of widespread public concern. There are no current, or indeed historical, problems screaming for attention and for the early implementation of this legislation. It would very much help unions, which would obviously have to comply with the law, if they had adequate time to prepare the necessary changes to their rules without the need to have special conferences and rules revision processes that are exceptional rather than in their mainstream work. It would be cost effective, economical and practical, and would minimise some—not enough but at least some—of the red tape that has been dolloped on the administrations of trade unions. Therefore, I ask the Minister if there can be an adequate period of digestion that avoids unnecessary costs and administrative complexities.

This is a probing amendment, so I wonder whether the Minister can say something about what talks he has had on this issue and whether he has been able to give any more thought to it that he could disclose today in addition to what was said in Committee. I hope that if there is a chance for further dialogue, he will agree to come back to the House on Third Reading to give a report about where we are. However, this is a plea for a road map of where the unions go in relation to full implementation, for some additional time and maybe even for a scintilla of sympathy for the union position as we are forced into this particular corset, which is unwelcome in so many aspects.

8 pm

Lord Balfe (Con): My Lords, let me first apologise for not taking part in the earlier stages of the Bill. As a new Peer I had not made my maiden speech and therefore under the conventions of the House could not intervene.

There is a common misconception in many parts of the United Kingdom that trade union membership equals Labour Party support. This is not true. Setting aside the fact that voter turnout among trade unionists is not dissimilar to that of the rest of the population, of those who do vote around one third of TU members vote for the Conservative Party—may that grow in the future.

Unions are already firmly regulated in two ways, first by provisions in the Trade Unions and Labour Relations (Consolidation) Act 1992, passed by the last Conservative Government and left on the statute book by the Labour Government. I noticed the noble Lord, Lord Lea, mentioned the life of legislation as being

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short, but that is not the precedent we have from the party opposite when it was in government—indeed, it left most trade union legislation firmly in place. Secondly, the contractual relationship between unions and their members is set out in each union rule book, which is a legal document that governs how unions operate. In order to change its rules, a union must obtain support from its members. Having received that support, the rule changes can be made only within the context of statutory legislation.

In order to ensure—and I am sure we all support this—that small and unrepresentative groups of members cannot change the rules of unions without fully consulting the members, unions all have democratic procedures in their rule books which must be followed if changes are to be made. In order to give effect to the provisions of the Bill, many unions will have to hold special rules revision conferences where members vote to change their union rule book to comply with the new provisions. This is, of course, especially and usually the case with larger unions.

Tonight I ask the Minister to consider two points: first, to raise the exemption limit in Clause 37 from the present 10,000 members to a figure of around 40,000. Mention has been made of turnover in big unions. Small unions often face a very different situation. Many are professional unions, such as the radiographers or the physiotherapists, who will be caught by this Act, but have a very low turnover indeed, as do many of the others. If we went from 10,000 to 40,000, we would go from 22 to 37 unions but we would exempt all the unions that traditionally have a low turnover and a highly professional membership.

The noble Lord, Lord Martin, who is not presently with us, earlier mentioned small unions. I had the privilege for many years to belong to a very good small union called AUEW-TASS. I must say that since TASS merged, it has got more and more out of touch. Now I am almost ashamed to say I am a member of Unite, as I remain a member of Unite. I still look forward to the day when we might have an engineering section in Unite that could compare with AUEW-TASS. None the less that is a digression. Even if this change were accepted, 90% of union members would remain within the assurer provisions of the Bill.

Secondly and finally, no doubt the Government and the certification officer will want to ensure that unions are able to make these changes following the agreed procedures. This will mean giving notice to members of a special conference. Good administration—which I am sure we all support—would indicate that a transition period of at least 17 months would be helpful. I would welcome an assurance from the Minister that the transition period after commencement will at least accommodate the 17 months, because it is in all our interests that this is done properly and competently.

Lord Stevenson of Balmacara: My Lords, I have never in my long life met a Conservative member of a trade union. It is very nice to be introduced to one and to hear him speak. It has been very evident from the speeches we have heard, both in this small debate and previously, that if the Bill is to progress and be brought into law it must operate with the best chance of

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success otherwise it will not have been worth a candle doing it. As my noble friend Lord Monks said in an earlier intervention, the right way to do this is to give the unions—particularly the larger unions—adequate time to comply with the Act in a way that is cost effective, economical and practical, but also from their point of view. Unions are, after all, independent self-governing bodies. As the noble Lord, Lord Balfe, said, they rightly have procedures for making complex changes in their constitutions and it will be necessary, as the Bill recognises, that the unions will make some changes through rules conferences and the like. This is not to say in any sense that there is not anything wrong with what is currently in the Bill, but I detect in some of the comments made that we are still not absolutely clear about how the procedures will operate and the timescales that will be on and that will interfere a little bit with transparency.

When he responded to this point in Committee, the Minister said that he shared the sentiment that,

“trade unions should be given sufficient time to prepare”,

and he hoped he could,

“offer a positive and emollient answer”,—[

Official Report

, 11/11/13; col. 596.]

to allow time for the bedding down of the new legislation. I take it from that that he is still interested in trying to make sure that this works well. Picking up on what has just been said, I get to 17 months from the comments that were made during Committee if I follow two tracks. The first is that a union whose reporting year ends on a fiscal basis—that is, 31 March—would not need to submit a report for the year ending 31 March until the end of August 2015, which I think is 17 months if I do my maths correctly. However, a union that reports on a calendar-year basis would have a little more time. It would not have to submit its report for the year ending 31 December 2015 until the end of May 2016.

That is the sort of level of complexity which we are operating on. If we are going to fit a 17-month period, which I think was mentioned earlier as being appropriate, combining it with a Royal Assent, possibly by March 2014, and a period of consultation on the question of how assurers are going to be both defined and appointed, that suggests that it would be sensible to have one further round of discussions before it is finalised. Will the Minister consider having a short meeting with me and a few colleagues to try to run over this so that we can get some absolute clarity on it? Thereafter, we can all work together, not in any sense to shake the principles which are part of this part of the Bill, but to make sure that they work effectively.

Viscount Younger of Leckie: My Lords, Amendment 33A could delay commencement of the provisions in Part 3, as they would not come into effect until the certification officer knows that all trade unions with more than 10,000 members have changed their rules to provide for the appointment and removal of an assurer. I know that noble Lords have been concerned that unions should have sufficient time to prepare for these new arrangements. In particular, we have been told that many unions do not routinely have an opportunity to make rule changes—I think the

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noble Lord, Lord Monks, alluded to that earlier. I am happy to offer reassurance to the noble Lord, Lord Stevenson, and other noble Lords that unions will have the time that they need. They will have at least 17 months to comply from the point at which the legislation takes effect, because the provisions will not apply retrospectively.

Unions will be required to submit a membership audit certificate alongside their annual return for the first full reporting year after the changes become law. The 17 months is the combination of the 12-month reporting period plus the five months that is allowed after that period to submit the annual return. The earliest that the provisions will take effect is October this year, which would depend on Parliament granting Royal Assent next month. That being the case, unions would have a minimum of 25 months from Royal Assent. In practice, many unions will have much longer.

Unions have different reporting years: many work on either a calendar or a financial year, which the noble Lord, Lord Stevenson, mentioned. Were the legislation to take effect in October 2014, a union with a calendar reporting year would first provide the membership audit certificate by the end of May 2016; for a union with a financial reporting year, it would be the end of August 2016. The noble Lord, Lord Monks, raised the issue of allowing unions sufficient time to meet the new requirement. I entirely sympathise with that and have said something about it just now. I have to confess that this is not the most straightforward of timetables to set out and I would be very happy to meet the noble Lords, Lord Stevenson and Lord Monks, and any other noble Lords to clarify the timings and state why we think this would be sufficient for trade unions to make the transition. That reflects the discussions that we have had with the TUC and others.

I take this opportunity to warmly welcome the noble Lord, Lord Balfe, and the experience that he brings on union matters, something I mentioned earlier in respect of the noble Lord, Lord Monks; it is only fair to acknowledge the experience that the noble Lord, Lord Balfe, has as well. I have had some discussions with him, at his request, on the question of whether the £10,000 threshold is set at the right level. Our primary objective is to supply assurance to union members, and to the wider public, about the existing statutory requirement to maintain an up-to-date register of members. The requirement to maintain a register applies to all unions, no matter what size. However, at the same time, the Government do not want to unnecessarily prohibit the creation of trade unions or undermine their ability to operate. We believe that it is possible for a union to be confident in the accuracy of all its records where its membership is small. We also believe that the wider public will think it reasonable that special provision is made for the smaller union and accept that where numbers are smaller it is reasonable to rely on the union’s own assessment.

Self-certification means a union officer assuring that every individual record is up to date, so far as is reasonably practicable. We think that this is achievable for unions with 10,000 members or fewer, but it becomes much more challenging where there are more members than that, which was part of the debate that we had

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earlier. The union official would have to be confident of the position and union members and the wider public would have to have trust that this was reasonable—a point, again, that I made earlier. By contrast, independent assurance focuses on whether the system in place for monitoring records is satisfactory, as opposed to making a statement about the accuracy of individual records. I therefore believe that this amendment is unnecessary and I ask the noble Lord to withdraw it.

Lord Monks: My Lords, it was a pleasure to hear the noble Lord, Lord Balfe. I welcome him to this House. It was a pleasure to hear him praising TASS, which, as its chosen acronym suggests, was not exactly aligned with the Conservative Party—nor, from time to time, with the Labour Party either. However, we all change and I am interested in what his views were when he was an active member of that union.

We appreciate the way in which the Minister responded on the timetable point. It will be useful to just see if we can tie this matter down in the next couple of weeks and see where the different positions that we hold meet, so that unions comply in a way which is sympathetic to the necessary costs and timetables. On that basis, I beg leave to withdraw the amendment.

Amendment 33A withdrawn.

Consideration on Report adjourned.

Co-operative and Community Benefit Societies Bill [HL]

Second Reading

8.16 pm

Moved by Lord Newby

That the Bill be read a second time.

Lord Newby (LD): My Lords, it is a pleasure to open the debate on the Bill. This is a consolidation Bill which brings together and modernises the law relating to co-operatives and community benefit societies, and other societies registered or treated as registered under the Industrial and Provident Societies Act 1965, with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission.

As a consolidation Bill, the Bill aims to remove ambiguities but does not seek to introduce any new policy or make substantial changes to law. It is still, however, an important step in reducing legal complexity for new and existing societies. In January 2012, the Prime Minister announced that, in support of the co-operative movement, the legislation dealing with co-operatives and other mutual societies would be consolidated into one co-operatives Bill. This Bill represents the Government’s delivery of that commitment.

The industrial and provident society sector forms a major part of the mutuals landscape, with a diverse mix of over 7,000 independent societies in the UK. Given their clear importance to the diversity and strength of the UK economy, the Government are

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keen to continue their support for the sector. This consolidation Bill is one element of the key reforms we are making to help ensure that industrial and provident societies are well placed to play a central role in the UK economy for years to come.

As part of the Government’s continued efforts to simplify and modernise legislation, the Law Commissions made a number of recommendations for modifications which have been incorporated into the Bill. For example, the language regarding the conditions for registration as a community benefit society has proved problematic. The Bill now clarifies this position and provides that a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community.

The Law Commissions also identified areas where some of the language used in the legislation was unnecessarily complicated. For example, there is no reason to distinguish between documents in electronic format and those in other forms. The approach has been harmonised in the Bill, with relevant sections applying to all of a society’s business correspondence and other business documentation in any form. The Bill has been warmly welcomed by sector trade bodies, particularly Co-operatives UK.

In addition to the consolidation Bill, we are taking further steps to modernise industrial and provident society legislation by commencing various sections of the Co-operative and Community Benefit Societies and Credit Unions Act 2010. The Government are also introducing a package of measures in support of co-operative societies through secondary legislation, and the consolidation Bill takes account of these measures. These are due to come into force in August 2014 and are: first, increasing the cap on the amount of withdrawable share capital that an individual can put into a society, which will increase from £20,000 to £100,000; secondly, allowing for troubled societies to enter insolvency rescue proceedings; thirdly, giving the FCA additional powers to investigate societies; and, fourthly, making electronic submission of registration documents simpler.

Following a public consultation earlier last year, all of these measures have been warmly welcomed by sector representatives. Co-operatives UK, the main industry trade body, has welcomed the changes, saying that:

“The appetite and commitment to do business the co-operative way has not waned”,

and that this is,

“a massive vote of confidence in the strength of the co-operative sector and recognises the movement’s ambitions for growth and development”.

This is a useful and overdue Bill.

Lord Tunnicliffe (Lab): Will the measures that the Minister has just described come before Parliament, either as affirmative orders or as negative orders?

Lord Newby: My Lords, I believe that they will. I will confirm that to the noble Lord, but that is my understanding.

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As I was saying, this is a useful and overdue Bill, which will allow the Government to continue their support for the mutuals sector, as underpinned in the coalition agreement where it sets out their commitment to foster diversity and promote mutuals. The Bill is a key part of wider legislative reforms aimed at strengthening the sector and encouraging increased investment in the country’s co-operative sector, allowing it to thrive. In short, this Bill is good for the mutuals sector, and I commend it to the House.

8.21 pm

Lord Hodgson of Astley Abbotts (Con): My Lords, I am grateful for an opportunity to speak briefly in the gap. I am afraid that I was away on business in the United States last week and I arrived back at Heathrow only at 10 o’clock last night. By the time I got my mind into gear, I am afraid that the speakers list had closed.

My two simple points refer to the point made by my noble friend in his opening comments. The heavy type on page 3 of the Law Commissions’ report, which is the first recommendation, says that,

“a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community”.

I would like to explore with my noble friend some of the practical implications of this. First, who defines “benefit of the community”, where is it defined, who judges whether the definition has been met and who hears appeals against judgments perceived to be unfair? Secondly, does the test precisely match the public benefit test applied by the Charity Commission, which is the key to charitable status? If not, is there not a danger that the unscrupulous will game the system to take advantage of whichever regime is laxer? As far as the charitable sector is concerned, which is under pressure with the Cup Trust and executive pay, further adverse publicity would be surely unwelcome.

My second point concerns the question of “to the FCA’s satisfaction”. Is my noble friend convinced that the FCA will devote sufficient resource to ensuring that the benefit to the community test is met? When I reviewed this as part of my charity review, it was clearly low on its agenda. At paragraph 10.29 of my report I said:

“Only a small proportion of IPS are charities; all of those are community benefit societies. Charitable IPS are exempt from registration with the Charity Commission and, although they are registered with the Financial Services Authority … the FSA undertakes no regulation in respect of any type of IPS. This, then, is essentially an unregulated sector”.

It needs to be a test that is not just a nod-through. It needs to be a test that is reapplied from time to time; it should not be the case that, once a society is through the hoops, it is in the pen for ever.

I appreciate that these are detailed comments made in very short order. I have not been able to give my noble friend any advance warning, and I apologise for that. I would be happy if he wanted to write to me, but these are potentially very important issues, which deserve a public response and airing.

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8.24 pm

Lord Tunnicliffe: My Lords, before I commence, I wonder if the Minister has some information from the Box that he might share with me in response to my question.

Lord Newby: My Lords, I am extremely pleased to be able to reassure the noble Lord that the four measures that I referred to will be brought before Parliament shortly. One will be brought forward in an affirmative resolution and the other three in a negative resolution.

Lord Tunnicliffe: I thank the Minister for that response, which will make my brief speech even shorter.

At somewhat short notice we were asked if we would take this consolidation Bill and it fell to me as the sort of second tier on our team—because we have only two now—to look at it. I thought, “What is a consolidation Bill?”, so I looked it up and it seemed that the first role of the Opposition was to have a reasonable confidence that it was a consolidation Bill. The test is in the Companion at 8.205 and there are five reasons, (a) through (e), and it is fair to say that the Bill seems to fall among (a), (b) and (c).

The first thing I did was to get a copy of the Bill. I was just about to start reading it when I got another document, the table of origins, which convinced me that I should not read it. Almost fortuitously, the Printed Paper Office offered me a copy of the Law Commission report, and I have read that. I take the point that these Bills have to be looked at very carefully to ensure they pass the test for a consolidation Bill but, reading the Law Commission’s report a little bit carefully, its recommendations seem to fall within the overall requirement.

Certainly, when one goes on to read how this Bill will now proceed, to the Joint Committee on Consolidation Bills, where there will be detailed scrutiny of the origins of the parts of the Bill and the Government, through their witnesses, will have to assure the committee that it meets the test, we can be comfortable that this is a proper consolidation Bill and serves a useful purpose.

The thing about consolidation Bills is that no parliamentarian—except when you are in government, I suppose—can be other than joyful about their arrival. I cannot think of parliamentary language to describe much of our legislation but, having sat through so many variations of financial services Bills—FiSMA and so on—in the sure and certain knowledge that no reasonable human being using the source document could possibly understand it, consolidation Bills are a joy to the eye.

However, one has to ask: why this one? The Government’s response to the consultation offers the rather nice words that it will,

“consolidate existing IPS legislation in one place, and is an important step in reducing legal complexity for new and existing societies”.

I agree that it is an important step but I ask the Minister: why this Bill and not many others? Do the Government have a plan for a programme of consolidation Bills? I particularly hark back to the travail that he and I and others have been through with the various

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financial services Bills. I have to say that the Treasury did a splendid job of producing Keeling schedules and such things to help us but even with all that help it was an uphill battle. Will the Government bring forward further consolidation Bills?

The next area I was going to venture into concerns the merits of the other actions that stand alongside the consolidation Bill and are set out in the consultation document. Because of the Minister’s assurance that they will come in front of Parliament as either negative or affirmative instruments, I will not waste the time of the House on those issues now and will not ask the Minister questions he would have to promise to write to me about.

Accordingly, we broadly support the concept of a consolidation Bill. We wish it well and I wish the members of the Joint Committee who have to go through all this paperwork all the luck in the world.

8.30 pm

Lord Newby: My Lords, I am grateful to noble Lords who have spoken in this pleasingly short debate at this time of the evening.

The noble Lord, Lord Hodgson, asked me some very technical points and I will of course write to him as he suggested. He asked about the extent to which the FCA will prioritise looking at IPSs. The FCA is committed to maintaining the registration requirements of being a bona fide co-operative or community benefit society. One of the measures that the Government will bring forward will give the FCA additional powers to investigate these societies for irregular activities, as well as disqualifying directors where appropriate. There has been a long-held view that the FSA has devoted very little attention to this sector, but there is a logic in the regulators putting in more effort to make sure that, as the sector grows both in size and prominence, it is

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well regulated. However, I will certainly pass on his view that this is a sector which the FCA certainly cannot afford to ignore.