§ Order for Second Reading read.
§ 7.29 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)
I beg to move, That the Bill be now read a Second time.
This Bill is introduced to remove an anomally in water legislation to which attention was drawn by a Standing Committee of the House during last Session. The House will of course realise that the Government's frequently declared policy of achieving the regrouping of water undertakings in fewer and stronger units must lead to a number of mergers and amalgamations, which inevitably affect, to a certain extent, the position of some of the officers and servants of those undertakings.
As is well known, those mergers are often achieved by Order under Section 9 of the Water Act, 1945, or by a Bill. The amalgamations which result must in some cases mean changes of jobs, sometimes leading to promotion and sometimes leading to a worsening of the position of an individual. Most often similar employment is received by each individual in the new undertaking, but there has to be provision for those people who suffer in some way.
Section 44 of the Water Act, 1945, provides that in such cases compensation shall be paid on the code of the Local Government Act, 1933, but since 1945 Parliament has approved a more up-to-date compensation code in the Local Government (Compensation) Regulations, 1948, and Bills for regrouping have generally used that modern code. As a result, there are two different scales and systems of compensation, so that Orders under the Water Act, 1945, apply the 1933 Code, while Bills generally apply the 1948 Code, though sometimes the 1933 Code.
It was to this anomaly that a Standing Committee drew attention in the last Session and recommended that my right hon. Friend should put before Parliament a uniform code of compensation. That recommendation was accepted by the Government and my right hon. Friend announced at the same time that, 1306 as the legal position in Scotland was similar, the proposed legislation would also apply in Scotland. The Bill is the result. It gives the Ministers power to make regulations which will embody a code of compensation.
However, as it is also possible that persons in water undertakings may be affected not only by Orders under the 1945 Water Act, not only by Bills, but also by regrouping under local government reorganisation, it is sensible to reconcile the code for compensation provided in this Bill with the code of compensation which will emerge from local government reorganisation schemes. It is my right hon. Friend's intention, when the Bill is passed, to model regulations under it based on those being made under the Local Government Act, 1958. I assure the House that both those codes will be the subject of consultation with all the interests concerned. I am empowered to add that in Scotland the Regulations under the Bill will follow a similar pattern and will also be the subject of consultation with the appropriate interests there.
I will now turn to the Bill. Clause 1 gives the Minister power to make regulations and to lay down who pays the compensation. It prescribes that such regulations shall be used where cases for compensation result from Orders made under the Water Act, 1945 or the Water (Scotland) Act, 1946. Any Bills dealing with water amalgamation schemes would, of course, use the same compensation code. Clause 1 goes on to permit the regulations to set out to whom compensation is to be paid, the procedure for claiming and the means of determining questions which may arise.
The House will note that Clause 1 (2) gives a very limited power of retrospection to the regulations. This provision provides for a situation where regulations have already been made and new regulations are under discussion. In those circumstances, there might be considable advantage in being able to give an assurance that amounts soon to be paid in the current code would be made retrospective to a suitable date. The House will also note that the provision for retrospection is narrowly drawn and it will not be possible to make any claimant for compensation worse off as a result.
1307 Clause 1 (5) lays down that regulations are to be made by Statutory Instrument and Clause 1 (6) repeals Section 44 of the Water Act, 1945, which referred compensation claims resulting from orders to the 1933 Code. It also repeals Section 66 of the Water (Scotland) Act.
Clause 2 provides for bringing the Act into operation by Order. The reason for that is that the Bill may well be passed before it is possible to complete the negotiations and discussions on the proposed regulations. The provision will enable the existing codes to apply until those regulations can be made.
I should like to give the House a short description of the differences between the two codes, the 1933 and the 1948 codes, to give some idea of what the code made under these regulations may be like. Under the old code, no regard is required to be had to the availability of alternative employment, either in determining entitlement to or the amount of compensation. Compensation when awarded is payable for life and no adjustment may be made if, for example, after a few months a man gets another job, unless that job is in the public service. Nor is account taken of the fact that a reduction in income could follow retirement in the normal course. Further, the amount of compensation is on a flat rate scale dependent only on years of service, and pays insufficient regard to a man's age when he loses his job. We regard the 1933 Act as being out of tune with contemporary thought and circumstances
The post-war code, which removed these difficulties, was designed to meet present-day conditions, including developments in superannuation arrangements. It ensures that availability of other suitable employment, whether inside or outside the public service, is properly explored and taken into account when determining compensation. The scale of compensation after the normal retiring age is related to accrued pension up to the date of loss of office and both this scale and that applicable up to normal retiring age include provision to supplement compensation according to age at the date employment is lost. Provision is also made for payments to widows and other 1308 death benefits related to superannuation rights accrued at the date of loss.
I must not conceal from the House that in many circumstances the post-war code is less favourable to the individual than the old code was, primarily just because it does take into account the employability of the officer, but it tends to be more generous than the former code to older employees who would find it difficult to find another job. Examples of the post-war code, if hon. Members like to consult them in the code's detailed application, may be found in the Local Government (Compensation) Regulations, 1948, and the Town and Country Planning (Transfer of Property and Officers' and Compensation to Officers') Regulations, 1948. As has been said, the interests involved will be consulted before the regulations are made. I commend the Bill to the House.
§ 7.37 p.m.
§ Mr. James MacColl (Widnes)
I came into this story through some quite odd ways and coincidences. It so happens that when I was a very young Member, I was trapped by my friend, Arthur Blenkinsop, and encouraged to move an Amendment to the South Shields Extension Bill, which dealt with precisely this point.
As I understand it, the position is this: the Local Government Act, 1933, which is the great constitutional bulwark of local government, provided a system of compensation. After the war, the Labour Government decided that the methods of paying compensation under the 1933 Act could profitably be revised along the lines outlined by the Parliamentary Secretary. I think that the matter first arose on the National Health Service Act. At any rate, the changes were approved by the House in a number of cases and were finally included in the Clauses which one normally gets in private Bills.
When the South Shields Extension Bill, one of the earliest extension Bills dealing with local government boundary provisions, reached Committee—I think that the hon. Member for Southwark (Mr. Gunter) was the Chairman—the Committee was very upset when it found that there was no clear indication of what should be the basis of compensation. The Committee reported on the matter to the House and I moved an Amendment to include in that Bill the 1309 proposals contained in the 1948 regulations, proposals which had been used in almost all the current local government measures.
I thought that that was the end of the matter, but, to my astonishment, in the last Parliament I found myself on a Standing Committee dealing with a Water Bill. "Bill" is putting it rather mildly, because I think that we broke the world record, the British all-comers record and the British native record in the time taken to deal with those Bills in a Standing Committee.
Major H. Legge Bourke (Isle of Ely)
The hon. Member means a Select Committee.
§ Mr. MacColl
Yes, I meant a Select Committee. The Parliamentary Secretary used the term "Standing Committee" and I did not want to let him down.
The Select Committee, as we were, discovered that although this row took place as long ago as 1950, on the South Shields Bill there was still no clear provision that the arrangements being made by Private Bills in the House, following the South Shields Extension Bill, were in conformity with those being made by the Minister in Provisional Orders. That was an absurd provision, because it led to one getting a different code of compensation according to the method of grouping. Whatever one may feel about the two codes, there was nothing to be said for that. On this point the Select Committee reported to the House and as a result of that we have had these proposals.
The difficulty is that this is one of the worst bits of delegated legislation that one could find. It is impossible to tell from the Bill what will be the terms of the proposals, whether they will follow the 1948 Regulations, or how they will vary. The House is being asked to rubber stamp whatever the Minister decides to agree, subject, of course, to Prayer.
I say to my hon. Friends that in view of our past record in the Labour Party we should be the last people in the world to complain, because it is clear that we started the 1948 scheme and we must accept that that is the right scheme generally to apply for compensation.
There is one point here on which I hope the hon. and gallant Member for 1310 the Isle of Ely (Major Legge-Bourke) will help us. It is my recollection that one of the points made to us in our discussions in Committee was that water officers were in a different position from most local government officers. If one is a local government officer one can move from one council to another without much difficulty. Therefore, regulations which emphasise the importance of keeping employment are not too much of a burden. Water officers are specialist officers and as groups amalgamate the opportunities for employment are ex hypothesi, less and less.
It may be that by these regulations they will be put in an awkward position. They may have to move a long way to get a comparable job. They may be involved in removal expenses. There is, therefore, a case for saying that water officers cannot be treated for the purpose of compensation in precisely the same way as other local government officers. That is a point which the Parliamentary Secretary ought to look at in his discussions with the representatives of the interested bodies before finally presenting the regulations.
In general, I would advise my hon. Friends that this is a Bill which we ought to support because it is designed to remove an anomaly and to bring into operation a principle and a policy which has been accepted for officers in other branches of local government service and comparable services.
I have pleasure in supporting the Bill.
§ 7.43 p.m.
§ Major H. Legge-Bourke (Isle of Ely)
I should like to take this opportunity of thanking the hon. Member for Widnes (Mr. MacColl) for the help he gave us on the Select Committee on the four group Water Bills in the last Parliament. He was particularly helpful to me in making up my mind about what was the right position in the case of those four Bills.
We there had local authorities and water companies involved. As the law stands, the water companies are bound to apply the code of compensation under the 1933 Act. I think we all agreed that it would be palpably absurd to differentiate between water companies and local authorities in the case of those four Bills. For that reason, we 1311 felt that we should not make the offer of the companies less generous and we decided to give uniform compensation based on the 1933 code
I think we were all at one in saying that it was absurd that merely because water amalgamations took place as the result of the promotion of an Order by the Minister as distinct from the promotion of a Private Bill, the code should be different. I think that we are at one in the House today in saying that the principle of unifying the form of compensation is absolutely right.
There is, however, a slightly different qualification that I would make in the case that the hon. Member for Widnes put forward. He is right in saying that water officers sometimes cannot be automatically employed after an amalgamation has taken place. It is not quite so easy as in the case of the extention of boundaries. That is true, and I support him on that point, but I would take it a stage further. It is sometimes easier for the employee of a local authority to be re-employed by the same authority than it is to re-employ employees of former water companies which have disappeared. The officer may have to go to the other side of the country to find another job.
I am not asking the Minister to give an undertaking that the old code of 1933 should apply in those cases. What I am saying is that when the negotiations are carried out with the various bodies who will obviously be most interested in this recognition should be given by those carrying out negotiations on behalf of the Ministry to the difference between a former water company employee and a former local government employee. My feeling is that there is a strong case for saying that the water company employee might be justified in having slightly more generous terms, though not necessarily as generous as the 1933 code. The 1933 code was open to considerable objections, and I think that the 1948 code is a sounder one, but there is a special case for water company employees.
There is one inaccuracy in the Parliamentary Secretary's speech which I am sure he did not intend. He said that all regrouping Bills had adopted the 1948 code. That is not so. The incidence of the 1948 code has been shown almost entirely in local authority extension Bills. 1312 but only on two occasions has it been shown in the case of Water Bills up to now. One was the Kemp Water Bill, the other was the Barnsley Bill, which included water Measures in its provisions. That was an unopposed Bill, and it was never argued before the Select Committee of the House. In the Select Committee on the four group Bills in the last Session, we all agreed that this was a matter which we would have been wrong in trying to decide in one Select Committee for all time to cover all Water Bills for the future. For that reason, we made the special recommendations that we did from the Committee, that this was a matter which the Minister ought to implement as soon as possible in accordance with the wishes of Parliament as a whole.
I congratulate my right hon. Friend and the Parliamentary Secretary on having taken action so quickly on this matter. I realise that we were not the originators of the pressure, but I think that we did carry it a little bit further. It is nice to feel that from time to time a recommendation of a Select Committee can have an effect on general legislation as well.
That is really all I want to say beyond saying that my own belief is that we ought to recognise that water officers carry out a considerable public service. They do not serve merely the company for which they work. They serve the public good. Because of the importance of water in the lives of the community as a whole, I think we ought to be prepared to stretch a point in their favour if a case can be made in the course of the negotiations which are to follow.
§ 7.50 p.m.
§ Mr. G. W. Reynolds (Islington, North)
I welcome the Bill and the detailed explanation which has been given by various hon. Members. My remarks will be brief, because I am sure that many hon. Members will wish to speak upon the subject of cork stoppers.
I hope, now that this legislation has been codified and drawn together, we shall see reductions in the staffs of water undertakings when amalgamations take place. My fear is that there may be a continuation of what has happened recently, when, although there has been a reduction in the technical staff, there has been a considerable net increase in 1313 that total number of staff because of the administrative overheads which have built up upon amalgamation.
When a water undertaking has amalgamated with various local authorities, and where that water undertaking has been collecting its own rate and the local authorities have been collecting a water rate as part of their general rate, there has been a tendency to set up a board of about 50 members to look after the new water undertaking, and every authority which had even the smallest interest in the supply of water before amalgamation has required to be represented on the board. If an authority with a population of 10,000 has had one representative, another local authority with a population of 20,000 has felt that it must have two representatives.
This has meant the setting up of very large boards to run the combined water undertaking, and this, in turn, has necessitated the employment of large numbers of clerical and administrative staffs, so that, despite the fact that some technical staff have become redundant and have received compensation, extra administrative staff has had to be taken on, with no improvement in the water supply in the area.
Further, where a private company has been collecting its own water rate and a number of local authorities have been collecting their own rates, separate rate collecting organisations have usually continued in operation. This situation exists in London at present. There are 29 separate receiving offices in the Metropolitan Water Board area, collecting water rate at about £2 per house, and in the adjacent streets in each borough there are the town halls collecting a general rate at an average of £30 per house. It is obvious that the expenses incurred by the water board in respect of each pound collected are very much higher than those of local authorities.
I hope that now that the matter has been codified the Minister will use his influence with the promoters of Water Bills to get rid of the existing water rate collecting services—provided that adequate compensation is paid—when future water boards are set up, making them precepting authorities rather than separate rate collectors. I estimate that in the area of the Metropolitan Water Board ratepayers are paying about 1314 £250,000 a year to provide a separate water rate collection. Now that the schemes are being brought together I hope that we can persuade undertakings, when amalgamated, to discharge at least those officers who are concerned with the water rate collection—with suitable compensation—so that we do not continue the principle, which has operated for some years, of setting up excessively large administrative units to run comparatively small water undertakings.
§ 7.53 p.m.
§ Sir K. Joseph
With the permission of the House, I should like to deal with the points that have been made. First, I apologise to my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) for referring to the body of which he was Chairman as a Standing Committee. It was a Select Committee, and it gave valuable service on that and many other occasions. It is pleasant to find unanimity upon the value of this small Measure. I am glad that the hon. Member for Islington North (Mr. Reynolds) has made such valuable comments upon the purpose of my right hon. Friend's regrouping policy, namely, to improve the efficiency of water undertakings and the service of water to the public. It is sad to find that Parkinson's Law applies to water undertakings, just as it applies elsewhere, but I am sure that the hon. Member's comments will be useful in drawing the attention of hon. Members and the public—for whom the water services are provided—to the discrepancies and organisational indulgencies that exist.
On the point of substance, I agree that in practice it may be easier for employees of local authorities than for those of water companies to find other employment if they cannot be absorbed into the new combined undertaking. As my hon. and gallant Friend said, local authorities have other departments in which displaced officers may be employed. But we must not think that all the officers in water undertakings are highly technical specialists. There are many ordinary general officers who will find local employment with no difficulty.
I would like to reassure hon. Members on both sides of the House that in any case this point will be best discussed during the talks which will take place with the interests involved, and 1315 the emphasis which has been placed upon the point by hon. Members will ensure that the matter is not forgotten by my right hon. Friend.
§ Question put and agreed to.
§ Bill accordingly read a Second time. Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).