HC Deb 22 March 1956 vol 550 cc1549-56
Sir D. Eccles

I beg to move, in page 2, line 12, at the end to add: (3) For the purpose of calculating the amount to be added as aforesaid, regard shall be had to any future increase in the scales of remuneration of teachers for which provision Is made by any order in force under section eighty-nine of the Education Act, 1944, on the thirty-first day of March, nineteen hundred and fifty-six, or which has been approved by the Minister before that date in accordance with regulations made under section one hundred of that Act, but subject as aforesaid the scales of remuneration shall be taken to be those in force on that date. The Clause, which relates to the calculation of the accumulated deficiency on the Account, is complicated. As part of the bargain that the Government made with the local authorities, we undertook to meet that deficiency entirely from the Exchequer. There then arose the question of how to calculate the deficiency. In the Bill, we started from the proposition that we would select 31st March of this year as the dividing line between the past and the future and that the accumulated deficiency as calculated by the Actuary at that date should fall entirely upon the Exchequer.

During those discussions, by "old deficiency" we meant the gap between the prospective income coming into the account after 31st March next, together with the credit balance on the Account, and the known liabilities on the Account. We also knew that if the Burnham Report, which would come into effect on 1st April, 1957, resulted in an increase in teachers' salaries, and since teachers' pensions and benefits are calculated on the last years of their service, a new deficiency on the Account would arise. It was part of our settlement that the post-31st March deficiency, should one be revealed by the next actuarial valuation—which, under the terms of the Bill, will be five years from now—should be borne by the employers, that is, 40 per cent. by the ratepayers and 60 per cent. by the taxpayers.

At the time of those discussions, nobody assumed that in the calculation of the old deficiency, which was falling solely upon the Exchequer, the changes in the liabilities on the Account due to the next Burnham Report, then eighteen months ahead, would affect the calculation. There was never the slightest hint that anybody thought that was so. Indeed, one of the reasons why we advanced the great necessity for getting Clause 4 firmly into the Bill was that we said constantly that the next Burnham Report would within a very short time create a new deficiency and it was of the greatest importance to the teachers that they should be relieved of any responsibility for meeting the fresh deficiency that would arise when their salaries went up. That was the whole essence of the bargain whereby the employers undertook to meet the new deficiency and the employers said, as part of that bargain, that they must have 12 per cent. coming into the Account as from the date of operation of the Bill, and that they must have it equally divided.

We find that the practice of actuaries when they make a calculation of this kind is to take into consideration all the facts known to them while they are making their calculations, which may easily run for a year before they finally tell us the state of the Account on 31st March next. Their normal practice is to take in everything.

7.30 p.m.

I can give the House an example. They will, of course, take in the effects of equal pay; and the Amendment allows for the whole of the effects of equal pay, although the women teachers are to get full equality with the men only by instalments. The whole of the effects of equal pay will be taken into the calculation of this deficiency, but as it was never part of our bargain that the next Burnham award should be brought into the calculation and we did not explicitly exclude that when we drafted Clause 1, I have to ask the House to make that change in the Bill.

I am quite clear in my own mind that nobody at the time ever expected the Exchequer to meet the "new" deficiency. We were in complete agreement on that. The changing of the date of the Bill, from 1st April next to 1st October, which we made in Committee, does not in any way harm the local authorities, because the actuary will know, when he makes his calculation, that as a result of changing the date of the Bill by six months the combined contributions coming into the account will be 10 per cent, and not 12 per cent. Therefore, he will have to add a sum to the deficiency which falls on the Exchequer in respect of lost contributions, of 2 per cent. over six months, which is the result of postponing the date of the Bill.

This means that our partners in the employment of teachers—the local authorities—are not damaged in any way by postponement of the Bill and, of course, we would have had to move this Amendment whether the Bill had been postponed or not. I have looked at the records of Standing Committee D and I see that as early as 20th December I gave an indication that I was going to ask the House to amend the Clause, because we very soon discovered that there was a faint possibility of an interim increase.

The Secretary of State for Scotland, of course, has given an interim increase to the Scottish teachers, but we have not. The matter has been put right already for the Scots, with exactly the same effect as that of my Amendment. That was done in Committee. All I am asking the House to do is to bring the English and Welsh calculations into line with what was done by the Scots, who in this matter had more foresight.

Dr. King

Those of us who tried to protect the local authorities from the Minister regret very much this final stage of what we attempted to fight against in Standing Committee. The Amendment finalises the Government's liability and adds to the liability of the local authorities any actuarial liability which will arise from the new Burnham award when it is made. It is because of that, and because I believe that the Minister might have accepted this actuarial liability as part of the Government's share, that I regret very much that the right hon. Gentleman is writing this date into the Bill so that he transfers what I think ought to be his own liability to the local authorities who have a great deal to carry under the Bill.

Mr. K. Thompson

It is one of the fortunate circumstances of education in this country that it is worked in harmonious partnership between the Department of Education and the local authorities. At almost every stage there is consultation and discussion between the two partners to secure agreement and provide a basis upon which the education system can proceed. All the provisions of the Bill are evidence of the way in which these negotiations can be carried on between responsible partners in an operation to provide some means whereby the future can be harmonious and successful. All the original purposes of the Bill are the results of discussions which have gone on for a long time, the teachers' organisations expressing their quite clear but very specialist interest in what the Bill provides, and the Ministry and local authorities arguing as to who is to stand which part of the burden.

When the discussions originally took place, the Exchequer was to provide a sum of money into the fund to balance off the deficiency which would be shown by an actuarial calculation as on what the Minister has called the "dividing date"—before and after 31st March. In the discussions between my right hon. Friend and local authority representatives, that was clearly understood. I entirely concur with what my right hon. Friend has said. The 31st March, 1956, was the date upon which the division was to fall. Before that date, the burden was to be borne by the Exchequer and after that date by the local authorities. That agreement was reached in the light of all the circumstances which both parties could see at that time.

One of those circumstances was that there was going to be a new Burnham award, probably in April, 1957. One of the things which the parties could see was that the actuary, in making his calculation, would behave as Government actuaries have been bred or certainly trained to behave. The parties could see that in making his calculation he would take into account all the factors known to him at the time. When the local authorities reached the agreement, which is sometimes referred to as the "package deal," they saw the new salary awards coming into effect in April, 1957, and not before. They agreed that that was a reasonable thing for them to accept and understood that the actuary would take into account all he could foresee.

Agreement was reached, but since then the rules of the game have been changed while the game has been in progress. My right hon. Friend has changed April, 1957, to October, 1956. It is a great pity that this process of discussion, consultation and negotiation did not take place between the Department and the local authority representatives about the change in date, but I should probably be out of order if I pursued the rights and wrongs of that rather narrow point. One of the vitally interested parties in the "package deal" negotiations was going to be seriously affected by this change.

My right hon. Friend has said that the change in the date is very slight or means nothing to the local authorities, but it brings nearer and closer within the purview of the Government Actuary a known factor which he has to take into account if he behaves as Government actuaries always do, short of the kind of instruction that is written into the Amendment. If it were only a speculative change in 1957, by October, 1956, it is a very real and immediate and calculable change. It would have been a very naughty Government Actuary who did not account and allow for it unless he had the kind of instruction written into the Bill by this Amendment.

I say with great sorrow that I cannot escape the feeling that the local authorities, as partners in this operation and as probably the most interested party in the results of what is now happening, have had rather a shabby deal. They have not been carried along with my right hon. Friend in this matter as I know he has tried to do in other respects.

I am not authorised to speak as an official representative of any local authorities, but, for example, I know that the county boroughs, who employ a large number of teachers, feel this sense of grievance. I know also that the county councils share the feeling that it would have been much better had they been consulted and brought into this operation at an earlier stage. Both the A.M.C., representing the county boroughs, and the C.C.A., representing the county councils, feel that what is now being done is, in some measure at any rate, a breach of their understanding of the agreement.

My right hon. Friend has told the House that he feels that he has been clear in his mind from the beginning that his understanding of the situation was the correct one. We all have sufficiently intimate knowledge of my right bon. Friend to know that he would not have expressed that opinion had he not held it sincerely and after examination of all that has happened.

Nevertheless, it is true that all the other parties to the agreement have held a contrary view. It is not for me to judge who is right and who is wrong except to say that I view this change, in the circumstances in which the local authorities will be called upon to operate this Bill when it becomes law, with a good deal of unhappiness. I hope very much that if between now and the return of this Measure from another place, my right hon. Friend has time to search his conscience and apply his generosity to the local authorities, he will do so. If he does, I know that he will receive the support of the great part of the House.

Mr. Ede

What we have just heard seems to me to be the most unkindest cut of all when I think of the way in which, in Committee, every time the hon. Member for Walton (Mr. K. Thompson) moved an Amendment, the right hon. Gentleman jumped to his feet to accept it before anyone had an opportunity of examining it at all carefully. This final reproof, delivered apparently by one who must be used to delivering admonitions, so complete and typical was it, seems to me to represent the final opinion of the local authorities on the attitude of the Minister.

I am the President of the County Councils Association, a body which was mentioned by the hon. Gentleman. Throughout the discussions on this Bill I have taken no part in the deliberations of the County Councils Association This was because, before I was a member of a local authority, I was a teacher. Therefore, in any conflict of interest I always become primeval. So I took no part in any of the discussions on this matter which affected the local authorities.

What I said when we were in Committee, and what I repeat now, is that 31st March, 1956, or 1st April, 1956, were not in the report of the Working Party. What was there was the appointed day. That was varied without consultation with the local authorities, when the Minister, finding that he could not get his Bill through both Houses by 31st March, 1956, moved the appointed day to 1st October in the hope that between now and then some other negotiations might reach a satisfactory conclusion. My view is that he should have gone to the local authorities and said, "We propose to alter the appointed day. Does this lead in your minds to any alteration in any of the terms which we have hitherto agreed?"

That seems to me to be an indispensable preliminary to making so fundamental an alteration. I am not surprised at the hon. Gentleman was obviously addressing his admonition to his right hon. Friend more in sorrow than in anger. I have long ceased sorrowing for the right hon. Gentleman. He is not worth it.

7.45 p.m.

Sir D. Eccles

I must clear up two points. The first is that it is really very bad of my hon. Friend the Member for Liverpool, Walton (Mr. K. Thompson) to suggest that the change in the date of the Burnham Award had anything to do with me. The action came from the Burnham Committee and the local authorities without any consultation with me—quite rightly. It is time, however, that the local authorities took their share of the blame. They never came near me.

It was their action which brought forward the date of the next Burnham increase. They must have known what they were doing, but nobody complained to me from the County Councils' Association. It has been known for two months that we were going to amend the Bill in this way. In fact, for what it is worth, the Secretary of the Association of Education Committees considered that the Amendment was strictly in accordance with the bargain.

As the local authority representatives know perfectly well—and it would be a good thing if my hon. Friend reminded them of it—we constantly held out to the teachers that it was worth their while to pay 6 per cent. because in a year or two the local authorities would be forced to pay more than 6 per cent. on account of the next Burnham Award. That was the basis of the whole bargain.

Of course this Amendment has nothing to do with the teachers. It is a dispute about the financial burden on the local authorities. When, however, my hon. Friend asks me to search my conscience, I can tell him that where the search has to go on is in the conscience of the Association of Municipal Corporations.

Mr. R. Moss (Meriden)

Will the Minister allow me to put a question? This point, which may be one of substance, is the possibility not of an earlier Burnham Award but of an interim increase of salary. Was that taken into account by the local authorities, because that would have postponed the major Burnham award to its proper date in 1957, but would have brought earlier, in October, 1956, an interim increase in salaries?

Sir D. Eccles

As far as I know, any of the suggestions made for an increase of salary were all made on the basis of 1st April next, one day after 31st March, which was our dividing line. I do not believe that either side discussed an interim increase during the month of March.

Amendment agreed to.