Trade Union Act 2015: Further Government engagement on the Certification Officer’s levy
The General Federation has supported trade unions for 121 years. We play a particular role in helping new trade unions form and develop and register with the Certification Officer’s (CO) register of trade unions. We assist unions in remaining independent and strong able to focus on their profession and occupation area.
All of our affiliates, whether in sport, the NHS, transport, education, shipping, probation, prison services, arts and culture, finance, civil service, across the whole economy have played an essential role during the pandemic. Our affiliated Trade unions’ roles in health and safety, furlough arrangements, pharmaceuticals and vaccination programmes has been central to keeping people safe and protected and out of absolute destitution.
To have this vital trade union role now penalised with a totally unnecessary levy is a disgrace and the GFTU is opposed to it in principle. Many unions resources are depleted because of their work during the pandemic and many others start from a low income base anyway. Demands on unions in the workplace as a new period of Covid spreading and management and lifting of restrictions takes place are already increasing and union resources are being dedicated to essential work to keep members safe and ensure fundamental employment and other rights are protected.
While we are opposed in principle we also note that many details are unclear regarding implementation and this uncertainty makes any financial and other planning difficult.
We are unaware of any logical rationale for the cap at 2.5% and it is unaffordable in any event for many unions and ourselves. We note too that this additional tax on unions exceeds those imposed on giant multinational corporations. Unlike companies of course trade unions do not make profit and reinvest their income into benefits and services for members. It should be borne in mind also that the overwhelming majority of work undertaken by trade unions is voluntary. Unpaid elected representatives are engaged in representational, negotiating, health and safety and campaigning activities that have huge cost effective contributions to social and economic welfare. Other organisations in civil society such as charities and political parties do not pay levies to their regulatory bodies. We can see no evidence that the CO Is exercised by a vast workload as say for example to Electoral Commission regularly is.
- Following the 2017 consultation, the Government proposes excluding both the costs of external inspectors and the cost of external legal advice from the levy. Do you agree with this approach? Yes/No Are there any other significantly variable costs that should be excluded and why?
Commitments were given in Parliament in 2016 to exclude the costs of external inspectors and legal advisors and this should be upheld. Any levy is unacceptable but an unpredictable and variable one even more so.
Ways and means should be found to enable the CO and indeed unions from recovering costs in relation to demonstrably frivolous and vexatious claims that can be made by third parties. The CO should appropriately really only be able to consider complaints from within trade unions.
- The Government proposes keeping the existing fees for listing and certificates of independence, instead of subsuming them into the levy. Do you have any comments on this approach? Does this create any unintended consequences?
There should be no levy therefore the existing registration fee should be retained. In supporting some unions through registration we have considered that the fee is high and a disincentive to some
- These existing statutory fees have not changed since 2005, and no longer represent the cost to the Certification Officer of providing the function. Do you believe the Government should consider the level these fees are set at?
Yes/No Do you have any views on how such a review should be conducted?
The government originally established the Certification Office and should retain fees at the current level and should not undertake a review, there are other much more pressing priorities on public expenditure.
- Do you agree with the principle of having exemptions and a limited subsidy regime? Yes/No
Yes their should be exemptions. At a time of 26 million workers not being in unions, the development of new unions should be encouraged and this will entail from time to time exemptions. No there should not be in effect inter union subsidies.
- The Government proposes setting the affordability cap at 2.5% of annual income. Do you agree with this level? Yes/No Please give reasons for your answer.
The cap of 2.5% proposed is extremely high, disproportionate and excessive. It would generate income far beyond the current level of operation of the CO. It is blatantly therefore unnecessary. It would generate a large profit for the CO and potentially, given the amount of work involved, carry over surpluses each year. This is not the purpose of the CO to generate surplus funds. There are safeguards in regulatory regimes in other sectors to prevent a regulatory body recovering costs which are larger than expenditure. No such safeguards appear here. Fees and any charges in most regimes are linked to consultation with stakeholders given annually fluctuating workloads.
- Do you agree that this approach meets our objectives as set out on page 3 of this document? Yes/No Are there any unintended consequences or potential risks we should consider?
No, the proposals do not match up to the objectives set out on page three. These objectives say the proposals should be predictable and affordable. They are neither. Most of our affiliates and ourselves work on longer planning cycles than a year and no budget provision has been made for this increase. Our payments to other regulatory bodies, for example in relation to pensions where we have multi million pound responsibilities and investments are proportionally infinitesimal when compared with his levy on subscription income. We would in effect be paying the CO on this levy far more proportionally on our £200,000 affiliation fee as we do another regulator on their oversight of our management of £13m. In comparison this would be a fraction of the levy.
For any further contact on this response please contact, Doug Nicholls, GFTU General Secretary, firstname.lastname@example.org.