My Lords, the regulations are known as the check-off regulations and stem from
Section 15 of the Trade Union Act 2016. This is the last secondary legislation to be brought into force as part of that Act; each aimed at modernising industrial relations in the UK. I am pleased to take this final piece of legislation through, as I had the honour of taking the Act through the House some years ago.
The regulations define a relevant public sector employer for the purposes of Section 15 of the Trade Union Act. That provision requires relevant public sector employers, which allow employees to pay union subscriptions directly through payroll, to charge trade unions a cost substantially equivalent to the cost that they incur for providing the service. In addition, public sector employers must be satisfied that there is an alternative way of union members paying their subscriptions aside from check-off, such as through direct debit.
Should employers not be able to secure payment substantially equivalent to the costs of providing check-off, or should there not be an alternative payment available to employees, employers must cease to provide check-off. The Government believe that this will ensure that check-off services are provided by public sector employers only where there is no cost burden to the taxpayer and to guarantee members have choices about subscription payment methods.
The regulations will not come into force until a reasonable transition period has taken place to allow everyone adequate time to make arrangements to comply with the regulations. To this end, they will come into force on 9 May 2024, six months after laying. This is a generous transition period, considering that the regulations were previously due to be laid in 2017. Therefore, employers have had a significant awareness of the impending changes.
The Government have also provided to the House the Explanatory Memorandum and a full impact assessment, and we will publish guidance on GOV.UK to be issued to public sector employers to help them to familiarise themselves and comply with the regulations.
I will remind noble Lords why the Act’s reforms to check-off in the public sector are significant. The Government are committed to the responsible and transparent use of taxpayers’ money and so believe that the administration of payment of union subscriptions for public sector workers should not be carried out at the expense of the taxpayer.
During the passage of the Trade Union Act 2016, the House debated the original drafting of Section 15 at length. It suggested that check-off services should not be provided by public sector organisations on behalf of their unions, owing to the cost burden on the taxpayer. However, through the legislative scrutiny and amendments made in this House, Section 15 of the Act was revised to no longer require public sector employers to remove check-off services, but rather that the costs associated with doing so should be recharged to trade unions and alternative options should be available to trade union members. The Government were grateful for the scrutiny of the House in refining the provision and continue to believe that this strikes a fair and appropriate balance between providing value for money and fostering good and modern industrial relations in the UK.
The regulations will apply across the public sector to those bodies listed in the Schedule. There was significant engagement in this House on the organisations in scope, resulting in the Government considering the ONS definition of “public authority” too broad. As a result, the Government decided to use the list of bodies from the Freedom of Information Act and its Scottish equivalent as the starting point to define the scope of the regulations, making it clear that the intention was to include only organisations that are funded wholly or mainly from public funds.
Of that list, the Government have removed organisations that do not routinely employ staff, are an advisory body or expert panel, are funded by a levy on a finite or discrete group, or are predominantly commercially focused, to ensure that the scope is proportionate to the aims of the regulations.
The Cabinet Office has also engaged each Secretary of State on the proposed scope, seeking their confirmation that the regulations capture all bodies necessary to deliver the policy aim. In addition, a two-week consultation was undertaken with the Scottish Government to ensure that Scottish bodies were appropriately captured.
The check-off regulations will deliver benefits to the taxpayer. The impact assessment has identified that the intervention will equate to a present benefit saving of approximately £1.5 million per year and just over £12 million over the next 10 years. These benefits arise as the regulations seek to alleviate the burden for public sector employers that offer check-off services but do not yet charge trade unions for the cost of administering them.
I wish to be clear that the regulations we are considering stem from the Trade Union Act 2016, which was introduced, as noble Lords will remember, as a 2015 manifesto commitment. Despite delays owing to other government priorities relevant to the UK’s exit from the European Union and the coronavirus pandemic, this has been a long-term ambition of the Government in our aim to modernise industrial relations in the UK.
The purpose of these regulations is to deliver value for money for the taxpayer and choice for individuals in a balanced way that reflects the discussion in this Committee. They do just that, and I beg to move.