Clause 9.—(FURTHER PROVISIONS AS TO PAYMENTS IN LIEU OF CONTRIBUTIONS.) (Hansard, 8 June 1959)

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. W. M. F. Vane)
I beg to move, in page 15, line 25, to leave out "under the same employer".

§ The Chairman
It seems to me that all the Amendments referred to in the recommittal Motion concern one point, and that it might be for the convenience of the Committee if they were all discussed together.

Mr. Vane
I was glad to hear you say, Sir Charles, that we might discuss all these Amendments together. No great principles are involved in the Amendments and they make no great changes. They are concerned with two administrative points which make the preservation of rights in relation to contracting out for two groups work smoothly and it would be very difficult to disentangle the two. The groups concerned may not be very numerous but at the same time this seems to be a worthwhile change and I hope that the Committee will support what we propose.
Where an employee in a contracted-out employment leaves that employment and no other arrangements are made for the satisfactory preservation of rights, 636 the employer makes what is called a payment in lieu which, in simpler language, buys the employee into the State scheme at the maximum. We are concerned here with where the employee leaves one non-participating employment and enters another under the same employer or under a different employer with no long interval between the two. The second group with which we are concerned is closely related to the first; the case is that of a man who is concurrently in two non-participating employments, again under the same employer or under different employers.
If hon. Members will look at the Bill as drafted, they will see, in relation to the first group, that if the two nonparticipating employments—the first and the succeeding one—are under the same employer and there is no great interval of time between the two, they are treated for our purpose as continuing employment, and the same can follow in the case of employment under different employers provided that a payment passes from the first scheme to the second.
In practice, this may work hardly in a few cases. It may mean that some moves in the private sector and in the public sector, but particularly in the public sector, may be made difficult because the employers already have some arrangements on a knock-for-knock principle working and that by so doing they achieve the same results as we want to see but no payment passes exactly in the way provided under this subsection. This, in particular, operates in the case of teachers, who are, of course, a very important group, and the Bill as drafted may make it rather harder for teachers to move in and out of Scotland, for instance, than it will be if the Committee will accept the small Amendment that we propose.
Clause 9 (5) would, therefore, seem to be be better if worded less precisely, if instead of reference to a payment being made, the Minister were given regulation-making powers to cover this point. I do not think that it would be reasonable to suggest that he should now be able to say exactly what words he would like to use, because only in the light of experience shall we know what cases will emerge in this small group and exactly what we shall have to meet.
637 The Amendments to Clause 10 are consequential on what I have been explaining. If a question should arise of a recovery from a refund due to the employee at the time when his employer has to make a payment in lieu, the provision will now have to be extended to cover possible recovery from part of two separate refunds, in respect of the first employment and the second employment, which would not have happened if, instead of a knock-for-knock provision, we had seen a payment passing in the first place.
The second group with which we are concerned is those employees who are in two different employments concurrently under the same employer, two different contracted-out employments. Under the Bill a payment in lieu becomes payable when such an employee leaves either employment, and if he were in the course of his working life to leave both employments at one time or another, then two payments in lieu would come to be paid, and these would overlap or, in some circumstances, exactly cover the same period.
In these circumstances the man does not stand to gain; he cannot, because two payments in lieu if translated into terms of graduated benefit would carry him above the limit. The fund is, in fact, the gainer. Where the two employments are tinder different employers, neither is any more the loser than he would have been had the other employment not been a non-participating employment.
But where in the very rare cases it may happen that an employee is in two non-participating employments concurrently, and he leaves first one and then the other, the employer will be buying that man into the State scheme twice over for exactly the same period, and that would not seem to be fair. Therefore, we suggest a new subsection (5) to Clause 9 which widens the Minister's regulation-making powers so that he can spare an employer under these circumstances having to pay virtually twice over for exactly the same thing without the employee benefiting therefrom, because in any case he is being bought into the State scheme at the maximum, which is the simple test of equivalency in all cases.
I hope that the Committee will see that these proposals, rather complicated 638 though they may be at first hearing, and although not of very large application, may in the end be important to two small groups whose needs we should like to meet.

§ Mr. H. A. Marquand (Middlesbrough, East)
We are very grateful to the Parliamentary Secretary for his clear explanation of what I must confess at first sight looked rather like Greek to me; and it is a long time since I studied any Greek. He also had the courtesy to speak very slowly, so that we could follow the explanation as he went along, although I must confess that if I endeavoured to repeat it now, I might find myself at fault.
The explanation which the hon. Gentleman gave completely convinced me, and I am sure that my hon. Friends will have no objection to accepting the Amendment that he moved. It is, however, a very remarkable thing that, although we have had about two dozen sittings in Committee on the Bill, it is still possible to discover at this rather late hour a complication of this kind, arising, I gather, principally from representations which have been made by local education authorities or teachers' organisations.
I am not, of course, complaining that the hon. Gentleman seeks this opportunity to remove an obscurity and put the matter in order. It does, however, illustrate the very complicated nature of the scheme which is now being constructed, and particularly the complicated nature of the provisions concerning contracting out. Indeed we have had vividly illustrated how complicated and difficult the provisions concerning contracting out can be and I hope that when later Amendments on the Notice Paper are moved from this side of the Committee they will be received with the same sympathetic consideration that we have accorded to the Amendment which the hon. Gentleman has moved.
I am glad to see that my hon. Friend the Member for Lanarkshire, North (Miss Herbison) has entered the Chamber, because we rejoice to hear that this series of Amendments will facilitate the movement of teachers from and into Scotland. I am more interested in the movement of teachers from Scotland and am grateful for the very great 639 help rendered during the Committee stage by the hon. Member for Lanarkshire, North and the hon. Member for Motherwell (Mr. Lawson), both of whom were once teachers in Scotland. When they come here they undoubtedly strengthen our teaching and debating capacity. I hope that the Committee will accept the Amendment.