Draft Trade Union (Levy Payable to the Certification Officer) Regulations 2022 Draft Trade Union (Power of the Certification Officer to impose Financial Penalties) Regulations 2022

Debate between Paul Scully and Imran Hussain

Tuesday 25th January 2022 General Committees

[Paul Scully]

I will go through the structure in a little more detail shortly.

To make the levy equitable, the certification officer will be able to broadly apportion the levy between the different types of organisations according to how much time she spends on them.

Secondly, I know that many hon. Members and unions are concerned about the affordability of the levy. That is why the certification officer must exempt lower-income organisations from the levy entirely. No organisation will pay more than 2.5% of its annual income, as set out in its annual return to the certification officer.

Thirdly, it is important that a levy is predictable, so the Government will continue to fund the cost of any internal inspectors that the certification officer hires, as the use and cost of those can vary significantly. That was discussed during consideration of the Trade Union Act 2016. For the same reason, the Government will also fund the cost of any external legal advice that the certification officer may seek. That was not identified during consideration of the Act, but the Government believe that that approach will allow for a fairer levy.

Finally, the Government have taken steps to ensure that the levy is simple and transparent. The certification officer will need to aim to ensure that income from the levy matches expenditure over a three-year period, as well as explain how she calculated the amount of levy each organisation is charged. A number of the certification officer’s existing fees will be abolished and subsumed into the levy. That will be the subject of separate regulations, which will be made under the negative procedure, and we intend them to come into force at the same time as the levy.

[Imran Hussain (Bradford East) (Lab)]

Does the Minister accept that as the instrument stands there will be no cap on the amount of the levy and it could well run into millions of pounds?

--- Later in debate ---

[Paul Scully]

The amount of levy paid will be capped to 2.5% of the union’s income, and it is the certification officer’s work that is being paid for—

[Imran Hussain]

Sorry, perhaps the Minister did not understand the point I am making. Does he accept that there is no cap in the instrument on the overall levy that the certification officer can charge and it could well run into millions of pounds? It will be completely at the discretion of the certification officer.

[Paul Scully]

The certification officer’s work will be charged accordingly, and the levy will be distributed at a level that is capped for each union and employers’ association. It will be for the certification officer to demonstrate what she has been doing in that regard and how those costs are broken down.

In response to requests by trade unions during consultation, two fees will be preserved—the fee for listing as an organisation and the fee for a union to be granted a certificate of independence. The costs of dealing with those applications will not be recoverable under the levy.

I recognise that these are significant changes for the organisations involved, albeit that they are the clear and required implementation of the Trade Union Act 2016. That is why we announced the reforms in June 2021, to allow trade unions and employers’ associations time to prepare before they are implemented in April 2022. That also allowed the certification officer time to put the systems in place to determine and charge the levy.