CLAUSE 13.—(Computation of remuneration) (Hansard, 1 February 1945)

§ The Solicitor-General
I beg to move, in page 14, line 8, after "1944," insert "or."
This Amendment anticipates a matter which is raised in a later Amendment, in the name of my right hon. Friend—in line 9, leave out from "1941," to "but," in line 12, and insert: and except deductions made, either under an enactment or at the request, in writing, of the workers, in respect of contributions under a superannuation scheme or thrift scheme"— which also cover the ground, I think, of the Amendment which is in the name of my hon. Friend the Member for Northampton (Mr. Summers) and my hon. and gallant Friend the Member for North Kensington (Captain Duncan)—in line 30, at end, insert: (3) Any benefits or advantages so provided which in the opinion of the Wages Council should continue to be provided and be reckoned as payment of wages by the employer in lieu of cash, shall be recognised as legally provided notwithstanding any provision to the contrary in the Truck Acts, 1931 to 1940. 1672 It would probably be convenient if I explained what it covers.

§ The Deputy-Chairman
That is to say, it covers four Amendments. Is the hon. and learned Gentleman dealing with the Amendment in the name of the hon. and gallant Member for Ripon (Major York) as well? I was given to understand that that might be covered by this Amendment, though I am not sure about that.

§ The Solicitor-General
I am not sure whether my hon. and gallant Friend's Amendment raises the same point as that of my right hon. Friend, but I am pretty sure that it raises the same point as that which my hon. Friend the Member for Northampton (Mr. Summers) has in mind.

§ The Deputy-Chairman
Then we had better consider the first three Amendments.

§ The Solicitor-General
The object of the two Government Amendments is to protect the position of non-statutory superannuation funds, provident funds, thrift schemes, and the like. It was thought that some doubts might be raised as to their position, and we wanted to make it perfectly clear. The effect of the two Government Amendments is to ensure that deductions made in a non-statutory scheme, at the request in writing of the worker, will not be regarded as deductions for the computation of remuneration. We have to be careful to put it in writing in order to protect a position which is raised by various well-known decisions of the House of Lords and other tribunals.

§ Mr. Summers
I appreciate the intention of the hon. and learned Gentleman, but, as one interprets his Amendment, the deductions which would be regarded still as part of the worker's remuneration are deductions in respect of contributions under a superannuation scheme or thrift scheme. Subsequent words are proposed to define "thrift." I submit that there are a number of very widespread practices, which would not be covered by the wording here proposed. I have in mind, for instance, a request made in writing by workers in many firms to deduct so much from their wages in respect of local hospital schemes—it may be a penny in the pound, or it may be threepence a week. The wording proposed, to define "thrift," would certainly not embrace schemes of 1673 that kind. There are also practices, within my knowledge, under which a worker requests that deductions should be made from his wages as payments to a building society, with which possibly his employer is associated. It may even be that he likes to have his rent collected under such a method. I submit that, provided it is perfectly clear that this is undertaken at the request of the worker, in writing, without any pressure put on him, there should be no restriction on the practice of deducting through wages any such payments that the worker would like to make in that way and which the employer is willing to deduct.
The Amendment which I propose covers a much larger number of practices than is recommended by the Minister. I submit that there should be no limit to the proper deductions, and that if the worker is willing to have them dealt with in that way and the employer is willing to deal with them in that way, those two conditions should suffice. I hope that the Minister will not ask the Committee to accept the wording proposed by him, but will consider, subsequently if necessary, different wording, which will carry the practice still further, subject to the two conditions that I have mentioned.

§ The Solicitor-General
With regard to hospital contributions, Members on this Bench, like everyone else in the House, have the greatest sympathy, and nothing we have done is intended to show anything else. But we strongly believe that we must go carefully in this line of country. I do not want to go outside the Amendment, but I want to indicate what I have in mind: that is, that the principles of the Truck Acts, we firmly believe, are of very great importance, and nothing must be done to make any inroad into them. If I indicate to my hon. Friend what I have in mind, it may meet his point. We should consider, with regard to this Clause, the wording of Sub-section (3) and especially the words: Where any benefits or advantages are provided in connection with any employment, by the employer or by some other person under arrangements with the employer, then, whether or not the benefits or advantages are authorised to be reckoned as payment of wages in lieu of payment in cash … and to make it clear that in regard to matters which are really outside the contract of employment, such as the case where a company provide a special house, 1674 or goods at cost, or cheap travel, which has nothing to do with the employment, and, therefore, nothing to do with the issue of the Truck Acts, we find words which will preserve that position; and, incidentally, we will look into the point that my hon. Friend has raised. If we reconsider that point, as we intend to do, and propose different words on the Report stage, I should have thought—I hope I am not going outside this Amendment—that that would meet the point my hon. Friend has in mind. I ask him to accept the Government's Amendment on our undertaking to look into the wider matters that he has suggested.

Captain Duncan
May I get it clear what the Solicitor-General is going to look into? The definition of a thrift scheme is: an arrangement for providing money for holidays or for other purposes under which the worker is entitled to receive in cash sums equal to or greater than his aggregate contributions. In a lot of these hospital schemes or nursing schemes people do not receive anything in cash; they receive free hospital treatment. It seems to me that hospital and nursing schemes are eminently suitable subjects for deductions, which the worker in many cases voluntarily allows the employer to make from his wages, and which the employer is willing to make. That seems an eminently desirable arrangement; and it is very desirable that, if it can be put into this Bill, that particular kind of case should be covered. The employer is willing to work the scheme, usually, for nothing, in the interests of the hospital or whatever the object happens to be, and, as I read the wording of the Solicitor-General's Amendment, such schemes would be outside the wording of this Bill because of the words "in cash." I hope that the learned Solicitor-General will look into that particular aspect of the matter.

§ Lieut.-Commander Joynson-Hicks
Would the learned Solicitor-General also look into a slightly different aspect of the same point? We have been referring to hospital savings schemes of one sort or another, but is not this actually the greatest blow the Government have yet struck at the Red Cross? Does it not make all the penny-a-week schemes illegal? I speak subject to correction, and 1675 I am asking my hon. and learned Friend to look into the matter, but it looks to me as though, by the wording of this Clause, he has put upon the employer the responsibility of making up to the employee any contribution which the latter authorises the employer to deduct under a penny-a-week scheme. Obviously the employer will not do it. I shall be grateful if my hon. and learned Friend, who I am quite sure does not want to kill the Red Cross, at any rate at the present time, will kindly consider this particular point. There is one other thing. He referred to the emphasis which he is laying upon the provisions in the Truck Acts. Is he not, in effect, removing or repealing Sections 1, 2 and 3 of the Truck Act, 1896?

§ Sir G. Mander
I hope my hon. and learned Friend will look sympathetically into the points that have been raised, because there is no doubt that it is a great convenience at the present time for employees to be able to have contributions to various schemes deducted by their employers. I have in mind such a scheme as contributions to a welfare fund, for recreation and all that sort of thing. Surely it is in the worker's interest that it should be possible to continue that? I hope my hon. and learned Friend will consider it sympathetically.

§ Mr. Rhys Davies (Westhoughton)
Perhaps hon. Gentlemen who have raised this point about deductions from wages will forgive me if I say that, so far as I understand this Bill, it will affect the distributive trades almost more than any other occupation. When hon. Gentlemen were speaking on this Amendment, I am sure they had in mind conditions of employment with which they are not very familiar. The well-organised employers, almost everywhere, whether engineering, coalmining, textiles or any of these large organisations, do not have much trouble about deductions from wages, but in regard to the thousand and one small employers, in the distributive and kindred trades, I think hon. Members would be astonished at what can happen there on occasions. Speaking with a little knowledge of the distributive trades, which employ somewhere about 2,000,000 persons in peace time, I would ask them to be good enough to allow the Minister's Amendment to be inserted in the Bill 1676 because it would safeguard those people, I am sure, from some of the doubtful practices that have crept into some of the very minor trades in the past.
I was very pleased to hear the hon. and learned Gentleman referring to the Truck Acts because, whatever Parliament does, I hope it will not do anything in this Bill to upset the well established provisions of those Acts. We are all naturally very concerned about that. I hope, therefore, in spite of what was said by the hon. Member for East Wolverhampton (Sir G. Mander)—with which I have great sympathy—that no hon. Member will oppose the Amendment set forth by the Minister because of what might happen. The hon. Gentleman assumed, I think, that the employer would not induce his employees to do certain things. That might be the case in engineering, and the coal and textile industries, but it might not be the case in some of these smaller unorganised distributive and kindred trades, and therefore I support what the hon. and learned Gentleman is trying to do in his Amendment.

§ The Solicitor-General
May I say first that I am grateful to my hon. Friend the Member for Westhoughton (Mr. Davies) for what he said just now and for his support. I feel, however, that my real duty here is to make clear what we desire to do, and I think, when I have done that, we shall find that the Committee is in general agreement. My hon. Friends are primarily concerned with the question of contributions to the Red Cross or hospital funds.

§ Mr. Summers
Yes.

§ The Solicitor-General
I think they are agreed. I am merely saying this to put it on one side, that certainly our Amendment covers the ordinary superannuation or thrift fund. With regard to the Red Cross or hospital funds, the answer I think to my hon. and gallant Friend's disquiet is that when one comes to consider the word "deduction," it must be given its strictly legal meaning, and it would certainly have been held under the Truck Acts, had the point arisen, that a contribution to the Red Cross or hospital funds, made voluntarily and at the request of the workman, would not be a deduction under the Truck Acts. That is why, really for the convenience of the Committee, I anticipated a little and brought 1677 in Sub-section 3. The difficulty here, if my hon. Friends will follow me, is first of all the initial words: Where any benefits or advantages are provided in connection with any employment. … I should be disposed to advise or hold, if the matter came before me, that the benefit obtained from the Red Cross fund or the hospital fund was not a benefit or an advantage in connection with employment. A superannuation fund is different, and therefore we have dealt with it specifically—I could not give the same opinion there—but I should say the former were not, and therefore I think they are all right. However, I do not want there to be any doubt about it, as my hon. Friends have raised the point, and I will look into it.
If my hon. Friend will bear with me, I would like to deal with the other point raised by my hon. and gallant Friend the Member for Chichester (Lieut.-Commander Joynson-Hicks) who referred to the first three Sections of the Truck Act of 1896. They are the sections which made elaborate provision for deductions in respect of fines and damaged goods and materials provided with regard to work. As the Bill stands, and as I want it to stand, that position is not altered at all. The whole of the provisions of the Truck Act stand as they are, and where that procedure is established, with all the safeguards that the Truck Act introduces, that position will still be maintained.
I hope I have answered the points because I feel that the whole of the Committee are at one here, that on the one hand we want to protect the principle—it is now 113 years since the first Truck Act was passed, and we are certainly not going back on the principle of wages being paid in the current coin of the Realm; on the other hand, I think we have covered the matters which all my hon. Friends have in mind. However, I will certainly look again at the question to see that the hospitals fund and the like are clear, as my hon. Friend the Member for East Wolverhampton suggested—

§ Sir G. Mander
And a works welfare fund—a recreation fund?

§ The Solicitor-General
It is rather difficult, as my hon. Friend will see, to say offhand because the fund may be consti- 1678 tuted in different ways, but I will look into that. I am glad my hon. Friend has introduced it, so that it will be before us in the OFFICIAL REPORT. I will also look into the wider point in Sub-section (3) which I mentioned in my earlier speech. I hope we are now agreed on the principles we want to see in this Clause, and I shall do my best with the draftsman to see that they are carried in the ultimate draft.

§ Mr. Summers
Before the hon. and learned Gentleman concludes, may I ask if he will look, not only at payments to charities and welfare funds, but at payments to building societies, or even the rent of an adjacent house owned by the company, to see whether that would be a proper case for deduction if instructed by the workmen to make it?

§ The Solicitor-General
I want to make it clear that I think there is a dividing line here. I hoped that I had made it clear. I am quite prepared to look into the protection of the sort of thing I have mentioned, that is, that when houses at cheap rents are provided by the employer, or where the employer gives cheap travelling facilities, or where he gives goods at cost, which are outside the contract of employment and bona fide removed from it, then of course no one would want the workman to get his cheaper house or cheaper travel, and then come back at the employer later on and say, "You have to pay me increased wages because you gave me cheaper travel." We all want to safeguard those because they are useful things, but I do not want my hon. Friends to misunderstand me. If it is made a condition of employment that the benefit will be given to the workman otherwise than in cash, then we are not giving way an inch, we must maintain the Truck Act position.

§ Major York
On a point of Order. Major Milner. Seeing that the remarks of the learned Solicitor-General go very much wider than the Amendments we are discussing, and include the principles embodied in the Amendment in my name and that of my hon. Friends, I am wondering whether it would be to the convenience of the Committee if I were to state my case on this Amendment?

§ The Chairman (Major Milner)
Perhaps the hon. and gallant Gentleman would 1679 explain his Amendment very shortly when we reach it.

§ Major York
I beg to move, in page 14, line 20, at end, insert: and provided that all deductions which are the subject of any local, industrial or trade custom shall be allowed as deductions from remuneration as defined in this Section. The last discussion came very near to the points which I have in mind, and what the Amendment of my hon. and gallant Friends and myself is designed to do is to protect the interests of the agricultural, estate, and rural workers generally as compared with urban workers. I find it difficult to understand how far Subsection (2) of this Clause safeguards those customary deductions from pay and those lower rates of pay which are the common practice in rural areas. We have put down this Amendment to make quite sure that people who manage estates—land agents and so forth—should know exactly where they stand, and we do not want these deductions, to become illegal practices under this Bill.
1.30 p.m.
I do not think I need fully develop the case I had in mind, because the Solicitor-General has dealt with it, but I would point out to him and the Minister of Labour that the factors which govern living conditions in rural areas are quite different from those which govern conditions in towns. One point I particularly wish to refer to, which seems to me to be outside the possibility of decision by the wages council, is where workers on agricultural estates are paid at a lower basic rate than similar workers, particularly builders, masons and plumbers and the like. There is a very strong point here in that whereas, in the trades I have mentioned, workers in urban areas are subject to wet time and changing jobs, carpenters on estates, for instance, have complete security for their jobs so long as they wish to retain them, provided they are good workmen. They are paid for a 1680 full 52-week year, for a five-day or six-day week, regardless of whether the weather is wet or fine, and so far as I can see, the wages council will have to make a complete exception in order that this category might continue with the contract which it has at the present time.
Supposing a wages council is set up for the building trade generally, the number of estate workers is very limited, indeed, and I understand that very few are actually members of a trade union. That being so, their interests are unlikely to be presented to the wages council at all, and I feel that this Clause would eliminate local customs, which are of great value in the local wage structure and are of some minor importance in good estate management because they effect a small economy. What this Amendment tries to do is to make it obligatory on the wages council to allow as local deductions items such as low house rent. I thought I understood the Solicitor-General to say that deductions for house rent would not be included among the deductions disallowed, but I am not quite clear and perhaps he will explain the matter further later. I want to emphasise this because of the effect it might have on farm and rural estate workers and so on if that were not so. At the moment, in the West Riding of Yorkshire, county wages committees allow a deduction of 3s. from wages for a house. If that deduction were not allowed, and a worker had to pay for his cottage, he would, obviously, be charged an economic rent which would probably be around 10s. and thereby he would be very much worse off if there was any change in the present system. There are other local customs, such as free or cheap garden and potato ground, and food such as pig meat and milk. These are not general deductions, but I think it would be most undesirable if this Bill should commercialise in any way those free allowances. That is what, it appears to me, is likely to happen.
I also want to bring to the notice of the Ministry of Labour the question of the single man because it is mainly, if not only, in country areas that single men live in bothies. It is generally considered to be good accommodation, and cheaper than men would have to pay if they boarded at private houses. It would be a great pity if these deductions were not allowed. I have glossed over a good 1681 many other points I wished to raise but I think I have said enough to show the Solicitor-General what is in our minds and to ask him to let us know quite clearly whether the deductions I have mentioned, and the other free allowances, are excluded from this Clause.

§ Lieut.-Commander Joynson-Hicks
I wish to support my hon. and gallant Friend the Member for Ripon (Major York) in this Amendment. It is primarily designed for the benefit of agricultural and rural workers, but when drafting the Amendment we had in mind the needs of our industrial friends, and had no desire to exclude them from the advantages which we hope to secure from the Government in regard to agricultural and rural workers. That is why the Amendment provides for certain local trade customs as well. If I might carry the illustration which my hon. and gallant Friend gave a little further, there is, for instance, the right to a cheap allocaton of coal, or any other mineral of that description. I have no hesitation in saying that I am very perturbed about this matter. The wages system in this country has very largely grown up on a traditional basis. The provisions in the Bill seem to exclude local and traditional customs which have arisen throughout generations. I am certain that it would be a great tragedy and a great disadvantage to many people if these customs, which have been of the utmost value and which are known and understood in the localities, were entirely swept away. I, therefore, earnestly hope that the Solicitor-General and the Minister will consent to an Amendment based on the principle which we are advocating, or will give us the assurance that we are seeking to include in this Bill, to ensure that the rights and privileges of employees in the countryside will be provided for in some way or other.

§ The Solicitor-General
I think it would help my hon. and gallant Friends who have spoken on this Amendment, and I hope would not be disadvantageous to the Committee as a whole, if I indicated, quite shortly, the purport of the Clause with which we are dealing. Sub-section (1) provides that wages must be paid in cash; must be considered on a cash basis, subject to certain well-known and familiar deductions like national insurance and, more recently, Income Tax, and the permitted deductions under the Truck Act. 1682 Sub-section (2) gives a right to the employer in this way: It says that where you have a benefit or advantage which is not illegal it may be considered and valuated by a wages council, which may value it at so much, and then the responsibility of the employer is to pay only the balance. Let me give a concrete case. Suppose your minimum remuneration was 80s. a week and the employer supplied a lodging or house. Supposing the wages council said that they would value that at 10s. a week. The cash responsibility of the employer would then be 70s. He would still have to pay 80s.—that would be his primary responsibility—but as the wages council had valued the accommodation at 10s. they would say that his actual cash responsibility was 70s. Sub-section (3) states that you cannot get round that by saying, "Well, we paid the money and then the man paid it back," which would be absurd and an easy way of getting round it. The Clause states that it is still a deduction if a man gets something and pays it back. I am leaving out a number of qualifications which have to be put in to cover all the circumstances.
May I now deal with the question of the estate carpenter? I am assuming that my hon. and gallant Friend the Member for Ripon (Major York) was talking about somebody who would be outside the agricultural workers wage regulations. Assuming that the carpenter has his lodging provided, we say it must come in under the procedure of Clause 2 and must be valuated by the wages council. The difficulty of the Amendment is that it would remove from the discretion of the wages council the right in these matters to make their valuation. That, again, we cannot accept but I ask my hon. and gallant Friend to consider whether that is not a reasonable method of dealing with it. If the estate owner provides accommodation then that will be taken into account, properly valued, and his financial responsibility will be for the balance of the minimum remuneration. I suggest that is the proper way of marrying the two ideas.
I have great sympathy with the attitude of mind. They want to continue in ways which are understood and appreciated in the countryside. We want to see that there is machinery for providing minimum remuneration. Surely the best way of marrying those two ideas is to say, We are at liberty to provide part 1683 of your remuneration by giving lodging but the revaluation of that must be with the independent wages council. It cannot be left to the employer to put his value on it.
1.45 p.m.
The other point which I am prepared to look into concerns matters which are really distinct from the contract of employment, that is where it is not a condition of the employment that one gets a house. If people in that employment get a chance of a cheaper house, or cheaper travel, not as a condition of employment but as something which they get outside their employment, I want to see that these benefits, which many workers appreciate, are not struck at by the Bill, and put in such a position that employers would find it difficult to continue them. I will look into the difficulty that my hon. and gallant Friend has with regard to single men, but I should like further time to consider it. My hon. and gallant Friend the Member for Chichester (Lieut.-Commander Joynson-Hicks) put the general point that the Bill was tending to stereotype things. I have given the answer to that, that we can marry traditional methods of payment with what the social conscience of to-day insists on, that there should be, under proper procedure, a minimum remuneration in suitable industries. The essence of these councils is that they should be able to regard differentiations of grading among working people. I think if my hon. and gallant Friend considers that he will find that it meets much of the difficulty in his mind.

§ Major York
I quite follow my hon. and learned Friend's argument as far as it has gone, but he did not deal with the question where the whole wages condition is on a different basis, as in the building trade, and the basic wage is lower. Will the wages councils be able and willing to make exceptions in the case of estate workmen, such as builders and carpenters?

§ The Solicitor-General
That is really what I had in mind in my last sentence, that it will be possible for the wages councils to consider the different aspects of various workers. It would be quite wrong for the Executive at this Box to prejudge the matter and say what they ought to do, but they could do it and, if they thought it a proper approach, they 1684 could give effect to what my hon. and gallant Friend says.

§ Lieut.-Commander Joynson-Hicks
The next Amendment that I was proposing to move is in page 14, line 31, to leave out Sub-section (3).

§ The Solicitor-General
If my hon. and gallant Friend will allow me, I said I would reconsider this Sub-section on the basis that I put forward and I did not intend to move the Minister's Amendment which is the next one. I thought we might leave the Sub-section for that reconsideration, and I suggest that my hon. and gallant Friend might consider whether he would not move his Amendment, unless there is some new point that he wishes to put forward, until he sees the Clause in its new form.

§ Lieut.-Commander Joynson-Hicks
In view of what my hon. and learned Friend has said, I find my task very much easier, but I would ask him to bear this point of view in mind. He has given his interpretation of the intention of the Clause.

§ The Chairman
There is no question before the Committee. Does the hon. and gallant Gentleman propose to move the Amendment or not? Would it not be better to discuss the matter on the Question that the Clause stand part?

§ Lieut.-Commander Joynson-Hicks
I do not propose now to move the Amendment.

§ Lieut.-Commander Joynson-Hicks
The objects which my hon. and learned Friend intended to attain by the provisions of Sub-section (3) are those which I thought to obtain by its deletion. I had grave doubts whether it carried out the intentions that he had in mind. I would merely ask that, in reconsidering the matter, he will pay great attention to the actual phraseology.

§ Major York
If I read the Sub-section aright, it would debar a worker whose wages are paid as to one part in cash and as to the other in board, where for instance a land girl is employed and the employer pays the person who provides the lodging, from excluding her board 1685 costs from her income for Income Tax purposes. I should like to be assured that it will not have any ill effect upon that valuable concession.

§ Mr. Gallacher (Fife, West)
I hope the Minister and his assistant will be very careful not to make any further concessions on this question of remuneration. I heard an hon. Member talk about the fine customs that exist in the countryside. Those fine customs have produced a situation where many agricultural workers are dependent and completely lacking in anything like self-respect.

§ Major York
In Scotland, perhaps, but not in England.

§ Mr. Gallacher
In England. It is England that I am concerned about. If hon. Members are prepared to contradict me I am prepared to take them to parts of the English countryside where the custom still prevails. We have had such a clever and cunning manipulation of the wealth of the countryside that the unfortunate workers think that it is the parasitic squires who are maintaining them, not realising that they are maintaining the parasitic squires. It is carefully hidden by this method of remuneration. In every case the worker in the countryside or elsewhere should get the amount of money that he is entitled to by his labour, and it is up to him to pay any commitments that he undertakes in consequence of his employment. No further concessions should be made which will allow the system to go on under which the remuneration of the workers is eaten into by this patronage of the superior persons who are living at the expense of the toil of honest men and women.

§ The Solicitor-General
I will look into the point of the land girl and the Income Tax position.