Construction Industry: Blacklisting

Chuka Umunna Excerpts

Wednesday 8th February 2017 Westminster Hall

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House has considered blacklisting in the construction industry.

This debate relates to a secretive, insidious and shoddy practice that has brought shame on our construction industry. As shadow Secretary of State for Business, I initiated a lengthy debate in the main Chamber on the issue in January 2013. I return to it publicly today because it is my strong view that those who were responsible for it have yet to be properly held to account for their actions and the matter has fallen off the radar in this place. My intention is to put it firmly back on the national agenda.

[Chris Stephens (Glasgow South West) (SNP)]

Does the hon. Gentleman support early-day motion 47, which calls for a full public inquiry into the blacklisting practice in the construction industry?

[Mr Umunna]

The hon. Gentleman must be telepathic because he pre-empts what I will come on to. I will address that issue later.

First, it is important to state that although the issue has brought shame on the construction sector, there is still much to be proud of in the sector—look at the Olympic Park venues, Heathrow Terminal 5 and the new buildings that we see springing up around us on time and on budget in so many different communities. Let us also never forget why the sector is the success it is: primarily because of its construction workers. They build the offices and factories we work in. They build the homes in which we live. As a nation, we owe them a huge debt of gratitude, particularly when we consider those who have lost their lives working on construction sites in this country.

There is also a dark side to the sector—anyone who has worked in it knows this only too well—that leads to good people being subject to the most terrible injustices. As a result, lives have been ruined, families have been torn apart and many have been forced out of the industry.

What am I talking about? What is blacklisting? For the record, it involves systematically compiling information on workers, which is then used by employers or recruiters to discriminate against them, not because of their ability to do the job, but because they have raised health and safety issues or been active trade union members. It has meant that people cannot find work and therefore cannot support their families—they cannot put food on their children’s plates—and the result is all the stress and upheaval that come with that.

[Gloria De Piero (Ashfield) (Lab)]

My hon. Friend talks about many lives being ruined by the blacklisting of workers. Does he agree that it is time we put on record the work that the Union of Construction, Allied Trades and Technicians, Unite and the GMB have done in securing settlements for the workers who were treated so badly?

[Mr Umunna]

I completely agree with my hon. Friend. She, too, must be telepathic. Not only am I a member of Unite and the GMB, and proud to be so, but UCATT, which is now part of Unite, is headquartered in the centre of the universe: my constituency. The work that the unions have done is so important. I practised for almost a decade as an employment law solicitor before being elected by my constituents and I have seen injustice in the workplace, but I have never seen injustice on this scale.

The extent of the blacklisting activity in the construction sector was exposed for all to see following the raid in 2009 by the Information Commissioner’s Office on the shadowy and secretive organisation called the Consulting Association. Further details emerged in the last Parliament, during an excellent and extensive inquiry into blacklisting carried out by the Select Committee on Scottish Affairs. My hon. Friend the Member for Ashfield (Gloria De Piero) mentioned the work of the unions, and a lot of the evidence provided to that Select Committee was provided by those trade unions, which also worked with the ICO, as well as by the blacklisting support group.

The Consulting Association was born out of a right-wing organisation called the Economic League, which was set up in 1919 to promote free enterprise and to fight left-wing thinking, to which it objected. That included Members of this House. The former Prime Minister, Gordon Brown, had information collected on him. The league, which blacklisted more than 10,000 people, was wound up in 1993, but its construction sector member companies wanted to continue this unforgivable practice and its activities, so the Consulting Association was born.

According to the Information Commissioner, 44 construction companies made up the hall of shame that was the membership of the Consulting Association at the time of the 2009 raid, including five companies in the Amec group, Amey Construction Ltd, six Balfour Beatty companies, BAM Construction Ltd, Carillion plc, Kier Ltd, Laing O’Rourke Services Ltd, Morgan Est and Morgan Ashurst, which are now known as Morgan Sindall, Sir Robert McAlpine Ltd, Skanska UK plc, Taylor Woodrow Construction, and VINCI plc —to name just a few of the companies listed. In 2009, half of the 20 biggest construction companies were all named as being involved in the association.

[Chris Elmore (Ogmore) (Lab/Co-op)]

Skanska has a base in Pencoed in my constituency. It blacklisted more than 111 workers or families. Will my hon. Friend join me in condemning that company for its actions? I echo any statement that he makes calling for a public inquiry, which I fully support.

[Mr Umunna]

I completely endorse my hon. Friend’s comments. Let us put what the Consulting Association was doing into context. It did not just maintain lists and files on thousands of construction workers; the material that it collected included personal information, such as information on workers’ private relationships, in addition to whether they had raised health and safety issues, their trade union activities and so on.

It is worth reflecting on this: member companies were charged a £3,000 annual fee to be part of the Consulting Association and then had to pay £2.20 on top of that for each blacklist check on a construction worker. For the cost of £2.20, the association would be able to dictate whether a worker got a job and whether they could put food on the table that week. Worse still, taxpayers’ money was being used to inflict that misery on people. Blacklisting checks were carried out on workers on publicly funded projects, ranging from airport runways, the Jubilee line, the millennium dome, hospitals, schools, roads and Portcullis House on the parliamentary estate—I could go on.

In addition to the blacklist checks, David Clancy, the Information Commissioner’s investigations manager, who carried out the raid in 2009 and is himself a former police officer, gave evidence to the Scottish Affairs Committee that he believed that some of the information held by the association would have come from the police or security services, because of the nature of that information. I mentioned the private information that was collected—for example, one file features an in-depth analysis of an individual’s home circumstances and what his neighbours thought about him. I have seen some of those records, and it is clear that they contained information based on the surveillance of individuals away from construction sites. It is improbable that such information came exclusively from the construction firms themselves.

What about the legal protections for construction workers and the system of redress for victims? Although it was and remains unlawful to refuse employment on the grounds of trade union membership alone, at the time of the 2009 raid on the Consultancy Association there was not a specific prohibition on blacklisting. Following the raid and the emergence of the blacklist, the Labour Government acted to outlaw blacklisting and introduced the Employment Relations Act 1999 (Blacklists) Regulations 2010, which allow individuals to bring civil claims against those found guilty of blacklisting in employment tribunals. If successful, that can lead to compensation of between £5,000 and £65,300. However, the regulations were not retrospective, and there is no criminal sanction. In truth, I believe the Labour Government should have acted much earlier, because that was too late for many victims.

Perhaps more shocking still is the fact that the firms that set up the association and supplied the information to and accessed the blacklist were neither charged with any offence nor ordered to pay compensation to the workers. To date, not one director of any of those companies has been brought to book for what happened. That is an outrage.

In October 2013—shortly after we had the debate on this issue in the main Chamber—a number of construction firms announced that they intended to establish a compensation scheme for workers who had been blacklisted. On the surface, such a move should be welcome, but there are many problems with the Construction Workers Compensation Scheme. It was brought together without reaching prior agreement with the trade unions—which, as I said, have been absolutely critical in all this—and it provides inadequate compensation. Applicants to the scheme are required to waive any future legal claims, and the companies involved do not have to admit liability or give an apology as part of the process. In fact, the workers were able to get a public apology only by dragging the construction firms kicking and screaming through the courts. I again pay tribute to the Blacklist Support Group, some of whose members are here today, which secured an apology from the firms involved in the Consulting Association in the High Court, although many victims feel that the apology was half-hearted and insincere.

Serious questions remain about the role of the police services in the collection and passing of information to the Economic League and the Consulting Association. I know that the undercover policing inquiry chaired by Sir Christopher Pitchford has said that blacklisting is potentially a matter within its scope. That is welcome, but not enough. It should be within the scope of that inquiry. There are many unanswered questions, and we cannot let this matter go.

What am I asking for from the Minister? Let me deal with the law first. As cases have progressed through the courts, it has become apparent that the blacklisting regulations need to be strengthened. For example, the extent to which it is possible for those who are not employed in the strict sense of the word but are self-employed to bring claims under the regulations if they have been refused work is unclear. That is important, because we know that full self-employment is an endemic problem and is rampant in the construction sector. Claims can be brought in employment tribunals or county courts, but the cap on compensation in a tribunal is £65,300. There is no cap in a county court, but to bring a claim in a county court there are added risks for a potential claimant because of the costs involved, and they need more resources. It is easier to do it in an employment tribunal, as there are not the costs consequences, but the claim has to be brought within three months of the alleged unlawful conduct, and sometimes people who have been blacklisted do not realise it for some time.

The upshot of all that is that the only legal remedy for some is a complaint to the European Court of Human Rights, based on the right to privacy in article 8 and the freedom of association in article 11. For all those reasons—I could go on, but I will not go back to being a lawyer and bore people—the Secretary of State needs to carry out a review of the law in this area to look at how it might be tightened up.

The second issue is public procurement. I want the Government to adopt the Scottish Affairs Committee’s recommendation that all UK Government agencies and devolved Governments must require firms that have been involved in blacklisting to demonstrate how they have “self-cleaned”, as the Committee put it, before being allowed to tender for future public contracts. Those that have not done so should not be allowed to tender. The Welsh Government have introduced that measure, and I think it should be introduced across the whole of the UK.

There are lots of unanswered questions. Pitchford does not pick up on all of them, and nor do the cases we have seen. Were the intelligence services involved? We need a full public inquiry into this issue because people have not seen justice and we do not know exactly what happened. We cannot allow a climate of fear to hang over our construction sites. No worker on any building or in any other workplace up and down this land should hesitate before reporting an unsafe site or a dangerous working situation. The bottom line is this: if people do not report their concerns and do not highlight dangers, people could lose their lives, so this issue is very serious indeed. I look forward to hearing what the Minister has to say.

--- Later in debate ---

[Margot James]

There is no further update. The Information Commissioner’s Office is undertaking such inquiries and when it reports to me I will consider the contents of what has been found.

The Information Commissioner’s Office is an independent regulatory body that was set up to investigate breaches of the Data Protection Act 1998. It has the power to take enforcement action, including searching premises and issuing enforcement notices and fines. Since April 2010, it has also had the power to issue a civil monetary penalty of up to £500,000 for serious breaches of the Act. That is a significant deterrent and a vast improvement on the previous rules, which allowed a maximum penalty of only £5,000. Data protection law is undergoing reform as a result of the general data protection regulation, which is to take effect on 25 May 2018. The powers of the Information Commissioner’s Office to impose fines will substantially increase as a result.

In 2009, the Information Commissioner’s Office established a fast-track helpline for those who thought that they might have been affected by the Consulting Association case. I congratulate the trade unions mentioned by the hon. Member for Ashfield (Gloria De Piero), which campaigned for and won compensation, and the Blacklist Support Group, members of whom are in the Public Gallery today, on their work on this matter.

When the Information Commissioner’s Office considered that a person might appear on the Consulting Association list, they were asked to provide further documentation. It has continued to run that service and to respond to written requests for information. To date, the helpline has received and responded to about 5,700 calls and 3,000 written requests. The nature of blacklisting is that it is secretive and discriminatory, however, and it can be difficult for individuals to know whether they have been affected by the practice. If people suspect that they have been blacklisted, they can report their concerns to the Information Commissioner’s Office, which will provide advice on how an individual may choose to take the matter further. The Information Commissioner has also attempted proactively to contact individuals who might have been affected, although that is only possible where up-to-date contact details are available.

[Mr Umunna]

The Minister is coughing so I will intervene to allow her to take a swig of water. While she is doing so, I will ask three questions. First, on a public inquiry, I understand what she says about the history, but the fact that events happened in the past has not stopped other big public inquiries, such as those into Bloody Sunday and Hillsborough. Will she explain why that should stand in the way of a public inquiry into blacklisting? Secondly, does she accept that it is difficult for the self-employed to use the legislative framework?

Finally, will she answer this point that has been made to me by people in the sector: there is a feeling that the Leveson inquiry into media behaviour came about in part because powerful, important people were subject to an abuse of media power and that, because we are talking about construction workers, the Government and the establishment are not taking the blacklisting matter as seriously. What does she say to people with that view?

[Margot James]

I will come back to the hon. Gentleman’s third question in a minute. On the second question, the self-employed are covered by the legislation. I accept that it may be more difficult for them to exercise any powers, but they are covered by the Data Protection Act. A self-employed individual may make a complaint to the Information Commissioner’s Office.

On the more vexed question asked by the hon. Gentleman, there have been public inquiries in the past to do with people without power who have been affected by dreadful instances. That we are talking about a group of workers who are traditionally not very powerful and perhaps do not earn huge amounts of money has nothing to do with the matter. Personally, I think that such individuals are more entitled to protection and safeguarding than the wealthy and powerful.

The compensation on offer is, absolutely, for serious amounts of money. The Information Commissioner’s Office has taken action, and approximately £100 million has been extracted from the industry for a compensation scheme and to satisfy the results of court actions. The matters we are discussing are being taken very seriously.