§ 10.3 p.m.
§ The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt)
I beg to move,That the National Health Service (Superannuation) (Amendment) Regulations, 1960, a draft of which was laid before this House on 22nd June, be approved.These Regulations amend the National Health Service (Superannuation) Regulations, 1955, and their main purpose is to deal with the position which has arisen following the Report of the Government Actuary on the National Health Service Superannuation Scheme for the period 1948 to 31st March, 1955.
The Report revealed a deficiency in the Scheme of £79.5 million, and on 9th November last my right hon. and learned Friend the Minister made a statement, in answer to a Question in the House, outlining the proposals for meeting the deficiency. These were first, £34 million, representing an initial deficiency attributable to the recognition of rights and expectations of those transferred to the National Health Service when it was set up and to the entry into the Superannuation Scheme then of persons above the normal age of entry, would be liquidated by the Exchequer crediting the Superannuation Account with this amount.
Secondly, an accounting adjustment would be made to meet the deficiency of £4.1 million arising from payments to 834 practitioners who, as an alternative to contributing to the Scheme, maintain individual assurance policies. Thirdly, a saving of £0.9 million would be made by ceasing to pay interest on returned contributions in the case of voluntary withdrawal from the Scheme. Fourthly, the remainder of the deficiency, estimated at £40.5 million, would be met by payment of a special supplementary employer's contribution of 1½ per cent. of remuneration.
On 17th March last, in Answer to a Question, my right hon. and learned Friend gave an undertaking to the House that withdrawal of the right of Health Service staffs to receive interest when their contributions are returned to them on voluntary resignation would be applied only to staff who join after the date on which the new arrangements came into operation, and that staff in post before that date would retain their present right to interest, so that on this occasion no part of the deficit would, in fact, be met by the staffs. At the same time, my right hon. and learned Friend made it clear that if, in future, any further adjustments were to become necessary to meet actuarial deficits which might arise, it must not be assumed that the pattern followed this time in making adjustments would necessarily be followed again.
It is the implementation of the proposal for a supplementary employer's contribution and the new arrangements for the payment of interest on returned contributions that entail amendment of the 1955 Regulations. The opportunity has been taken to provide also for other amendments arising from the actuarial, investigation of the Scheme.
Briefly, the Regulations provide as follows. Regulations 1 and 2 deal with citation, commencement and interpretation. The definition of "excepted officer"—that is, the person affected by my right hon. and learned Friend's undertaking of 17th March—covers, in general, those who, 835 having been in the Health Service Superannuation Scheme before the date of operation of these Regulations remain in it without loss of their earlier service in the Scheme, and also those coming from the Health Service of Scotland, Northern Ireland or the Isle of Man with the right to interest on returned contributions.
Regulation 3 provides for the payment by every Health Service employing authority in respect of every officer for whom the authority is already liable to make a contribution, of an additional contribution of 1½ per cent. of the remuneration on which present contributions are based. The rates of employee contribution are not affected by this Amendment. The additional contribution was designed to achieve liquidation within twenty years of that part of the deficiency estimated at £40.5 million.
Regulation 4 provides that in respect of any person who is not an "excepted officer" a new regulation shall be substituted for Regulation 35 of the 1955 Regulations, which relates to the return of superannuation contributions. The existing Regulation 35 will continue to apply to "excepted officers". The new Regulation no longer makes provision for the payment of interest on contributions returned in the case of voluntary withdrawal from the Scheme, or where the cessation of employment is on account of inefficiency or misconduct.
While the special arrangements made for "excepted officers" mean that the staffs will not now be making even the small contribution originally contemplated towards the deficit revealed by the valuation and that the Exchequer is accepting responsibility for meeting, in one way or another, the whole of the deficit, it is the fact that the Scheme as it now stands is more generous than the local government and certain other superannuation schemes in its provision for the payment of interest on returned contributions. The modification made, for future entrants, in the new Regulation will serve slightly to reduce the charge falling in future upon the superannuation account.
Regulation 5 is concerned mainly with amending the Second Schedule to the 1955 Regulations and replacing the tables contained in it by revised tables.
This Schedule contains provision for the making of payments by persons 836 desiring to reckon periods of noncontributing service as contributing service. The Regulation provides for the rate of interest chargeable where such payments are made by instalments to be increased from 2½ per cent. to 3¼per cents. The need for this revision arises from the increase in the rate of interest to be credited to the Superannuation Account from 2½ per cent. to 3¼ per cent.
Regulation 5 also amends paragraph (4) of Regulation 36 of the 1955 Regulations by increasing from 2½ per cent. to 3¼ per cent. the rate of interest where interest is payable on repayment of sums paid in respect of accrued superannuation rights by persons seeking to reckon noncontributing service as contributing service. These Amendments are designed to apply to all officers who notify their intention to make additional contributory payments on or after the date on which the Amendment Regulations come into operation.
Regulation 6 is mainly concerned with amending the Fourth Schedule to the 1955 Regulations and replacing the tables there by revised tables. This Schedule provides for the calculation of transfer payments in respect of persons who leave the National Health Service and, on transfer to another superannuation scheme, apply to have a payment made in respect of their National Health Service to that scheme.
Regulation 6 also provides for the method of calculating service for the purpose of computing transfer values to be revised to bring it into line with that used in the Local Government Superannuation (Transfer Value) Regulations, 1954. The revised arrangements are designed to apply to all applications for transfer values received on or after the date on which the amendment Regulations come into operation.
This is a rather technical piece of business that I have to put before the House, but I think that hon. Members understand that we had this Report from the Actuary which showed this quite considerable deficit. The Government are prepared to accept responsibility for the deficit. I hope that the House will now be prepared to accept the Regulations.
§ 10.19 p.m.
§ Dr. Edith Summerskill (Warrington)
I agree with the Parliamentary Secretary 837 that quite a large part of these Regulations is technical, but there is one aspect of this matter which, I am sure, the House is anxious about. We should like to have an assurance from her about it.
When I looked at the Explanatory Note to the Regulations, I found that the most welcome part of it was in the penultimate paragraph which said:Subject to certain limitations, officers who before the regulations would have received interest on their contributions will continue to enjoy that right.I agree that these Regulations have certainly removed a strongly voiced grievance. The hon. Lady will have read the whole, or at least the salient parts, of the Memorandum of the Minister on this subject. Surely she will agree that the announcement on 9th November, 1959, shocked employees of the National Health Service. I have received many deputations in my Parliamentary life, but I received one of the most powerful from the National Health Service on these Regulations. It is clear to me that this proposal to make a saving of £0.9 million by ceasing to pay interest on returned contributions in the event of voluntary withdrawal from the Scheme could not possibly be accepted by the employees.
Those people who came to see me, and particularly one man who was concerned with the employment of staff, reminded me that when these young women—probably 70 per cent. of the staff of the National Health Service are women—were engaged, they were given a specific undertaking by the officers who engaged them before they took the employment that in the event of their leaving, not only would their contributions be returned, but that they would get accrued interest on them.
Many of these young women are in the marriageable ages. They are delightful, attractive young women and they have marriage in mind. The officer engaging them gave a specific undertaking that in the event of marriage, they would have this amount returned. Indeed, he said that it would be a nice little nest egg. That is done in the Ministry of Health to a large number of young women.
Then, to our astonishment, the Minister announced on 9th November that to meet the shortage in the fund, he proposed not to honour the agreement 838 Which he had with his employees. The hon. Lady has come here tonight and read through rapidly what she calls the technicalities. Surely, she should have come here and apologised to her employees through this House. She should have given an undertaking that in no circumstances would the Minister go back on his word in the Regulations.
When one has to administer a large Department, it is important to maintain harmony among the employees. When I think of the talk and the anxiety of all these young women on hearing that announcement, I find it extremely difficult to understand how the hon. Lady can come here tonight and not take this opportunity to reassure them. Had I been in her place at the Box, I would have apologised to them. An apology should be forthcoming.
Now, we have the Regulations. Nevertheless, my confidence in the Minister has been absolutely shaken. Regulations of this kind would have come to the Minister and to the Parliametary Secretary. They read them and then decided that this economy should be made at the expense of some of those with the lowest incomes in the National Health Service. It shakes one's confidence. I should like to hear from the hon. Lady how there was this gross oversight in the Ministry of what the repercussions would be.
In the future, we shall have to read Statutory Instruments of this kind very carefully and be more vigilant than we have been in the past. It is not we, perhaps, who have been unjustly treated —although I must confess that Statutory Instruments sometimes go through the House very easily—but this large number of chiefly young women in the National Health Service whom it was proposed to treat so unjustly. We should have an explanation of how it came about.
§ 10.25 p.m.
§ Mr. Douglas Houghton (Sowereby)
I apologise for not hearing the first few minutes of the statement made by the hon. Lady the Parliamentary Secretary to the Ministry of Health. It may be that she referred to what I now wish to say. If so, I apologise further for not having heard her. Naturally, the House is interested in the machinery of negotiation and consultation which has been set up in the National Health Service, as 839 in other branches of the public service, for the discussion of matters bearing on staff conditions.
I think that I am clear about discussions on pay, hours, leave and other day-to-day conditions of service. I am not so clear about matters concerning superannuation. I am very familiar, of course, with the Civil Service position, but the National Health Service to the civil servant is somewhat strange territory. They do things differently. For one thing, there is a contributory pension scheme over a wide area in the National Health Service whereas there is not in the Civil Service, and these questions of deficiency in the fund and variations in contribution do not arise in the Civil Service. They do in the Health Service.
I know also that questions of superannuation are excluded from the scope of negotiations on the Whitley Council in the Civil Service, because superannuation has to be the subject of legislation and Parliament properly will not delegate its powers and responsibilities to a negotiating body when it has to be responsible for legislation. Nevertheless, discussions take place between the official and staff sides on the Civil Service National Whitley Council on contemplated changes in superannuation law before the matter comes to the House. That again is very proper.
Representatives of the staff side are entitled to be consulted on contemplated changes in superannuation conditions, although within the framework of the Whitley Council it is not possible to reach formal agreement between staff and official sides on these matters because they are subject to legislation which must be passed by Parliament. Nevertheless, an understanding can be reached and each side can know where the other stands. Indeed, the official side can get the assent of the staff side to any course of action, which puts the official side and the Government in a strong position when they come to the House. They can say if asked, "We have consulted representatives of the staff and we are in a position to say that these proposals meet with their approval." That puts any Minister and the Government in a strong position and it conveys an assurance to the House that suitable forms of consultation have been observed.
840 What puzzles me about the matter before the House at the moment is to what extent it has been discussed and with whom. I have seen both sides of the story and I cannot easily bring the two together. There is presumably a body of trade unions, some perhaps covering workers outside the Health Service, some perhaps covering workers exclusively in the Health Service, but there must be a body of staff associations which are recognised as representative of the staff interested in the Health Service. They probably formed a joint committee or a staff side or some other form of collective representation which the Minister consults. What is that body? Has it been consulted and where does it stand in the matter now before the House? This is what I want to know.
I have received representations, as have many of my hon. and right hon. Friends, from individuals in our constituencies and from persons purporting to represent a substantial interest on the staff side who dissented from the Minister's first proposal. I really could not tell how representative this body and these people were. I think the House has to be on its guard against listening to dissident elements who have broken away, or have dissociated themselves from, or are not members of, the appropriate collective body of trade unions. Is there such a body? Is it that body that has been kicking up the fuss, or what? That is what I want to know. I think we are entitled to be fully informed.
I am not prepared to associate myself with the grumbles of representatives of a body who have no representative capacity or who, having representative capacity, have been overruled by a majority who believe that what they are doing is in the interests of all concerned. I want to know whether proper trade union forms have been gone through. We cannot be satisfied to pass these Regulations until we know. I have no hostility to anyone or to any body of persons. I am anxious to see justice done. But I am a keen trade unionist. I want to see the proper forms of trade union discussion and negotiation observed, and I want to see the majority decisions prevail.
This House should not interfere in matters which have been dealt with through proper machinery unless it is 841 satisfied in its own judgment that notwithstanding assent which may have been given, notwithstanding forms of consultation which may have been gone through, there is still an injustice being done. The House is entitled to a final verdict on questions of justice and equity in all matters in the public sector, notwithstanding the fact that they may have gone through the proper machinery of trade union negotiation.
The substantial issue here is whether the interest paid on voluntary withdrawal from the Scheme should be withdrawn or whether, as in the modified Regulations before us, the concession should be withdrawn in the case of future entrants and existing rights preserved. It is a fairly firm principle in these matters that existing rights should not be disturbed. In some negotiations with which I was personally concerned the question of contract or implied contract between the State and the employee was raised, even though representative staff associations were acting in the name of individual members.
For example, at the time of the Royal Commission on the Civil Service recommendation for variations in annual leave conditions of civil servants, and when representative staff bodies were willing to consider such variations as part of a package deal, individual civil servants raised this question: "Can anybody sign my rights away, however representative he may be? Has anybody the power to injure my personal conditions of service in the name of representative capacity? I have not conceded to anyone the right to vary my individual contract."
That raised an important question. In this case it did not prove a stumbling block in the end, because existing rights were preserved in the changes which were made under that agreement. I think the surprising part about the proposal made last year is that it did vary individual rights without the consent of the individuals concerned, even though someone may have purported to speak in their name, or alternatively other organisations having a different slant on this matter altogether were willing to sacrifice their own interests for what they believed to be the greater cause.
These complexities arise in trade union life, especially when trade union organisations have to band together to represent a variety of interests and where there 842 may be a conflict between particular sections of individuals.
I ask the Parliamentary Secretary, or whoever is to reply, please to tell the House quite frankly how this arose, what was done, whether representative opinion was sought, whether it was obtained, and how it came about that Members of the House of Commons were approached by means of one union, so far as I know almost to the exclusion of all the others concerned, and what was their position in this matter.
Until we are satisfied that everything is working properly and that this question was dealt with according to approved methods of consultation and negotiation we cannot feel happy about passing these Regulations.
Finally, what about the implied contract which my right hon. Friend stressed so strongly? Whether individuals were assured when they were recruited that such and such would be so, the fact was that it was written into their terms of service at the time of their entry. Under what conditions, therefore, was it thought that that right should be destroyed? In what circumstances was the acquiescence of the trade union concerned sought to destroy the individual right embodied in their contract of service when they entered the National Health Service?
I hope that this will bring out what has worried me greatly, because I have not got to the bottom of this, not being directly concerned in it. Otherwise I jolly well should have done. But, having such a close interest in allied matters, where things proceed in such an orderly fashion and with full approval and confidence on both sides, I am concerned and worried if things seem to be going awry in a sister service of equal importance where the responsibilities of both the trade union and the Government are also equally important. Therefore, I ask that we should be given answers to these questions.
§ 10.37 p.m.
§ Miss Pitt
The right hon. Lady the Member for Warrington (Dr. Summer-skill) said that she thought I ought to apologise to the House because of the arrangements which were previously contemplated when staffs who voluntarily left the Service might forgo interest on their contributions and thus make 843 some very modest contribution in turn to this deficit; but I do not think an apology is called for. The Exchequer, the taxpayer of this country, is being asked to find an extra nearly £80 million to meet the deficit arising on superannuation in the National Health Service. About half of the deficit is due to the fact that wages have tended to increase in recent years, hence the deficit in superannuation, and it was felt last November to be not unreasonable to ask the staffs who left the Service, who had been enjoying those high wages, of course, to make a small contribution. It was small: less than £1 million. So I do not think an apology is called for.
§ Miss Pitt
Because the taxpayer is in turn accepting responsibility for £80 million.
The right hon. Lady, instead of accepting the fact that we have now agreed to meet the whole of the deficit from the Exchequer, was rather grudging about it. I should have thought that she would have gone on to say that she was glad we have now accepted this responsibility.
§ Mr. Harold Steward (Stockport, South)
Would it not be true to say that in any scheme of a contributory nature usually enjoyed by people in industry, as distinct from the Civil Service or the National Health Service, where a deficit is found, it has generally got to be met by contributions by participants in the scheme?
§ Miss Pitt
I think that that is so in schemes outside the Civil Service and the National Health Service about which we are now talking.
844 However, the right hon. Lady went on to ask me to give a complete reassurance to staffs. In fact I did so in my speech. Perhaps I had better repeat it. I said that on this occasion no part of the deficit would in fact be met by the staffs. That assurance I am glad to repeat to the right hon. Lady and to the hon. Member for Sowerby (Mr. Houghton). The hon. Gentleman asked me what consultation had taken place, and I am very glad to tell him that all interested staff bodies, 25 in all, are invariably consulted on any proposal to change superannuation provisions. Those 25 bodies include the Royal College of Nursing, the Chartered Society of Physiotherapists, the Royal College of Midwives, the British Medical Association, the British Dental Association, the Trades Union Congress, the Whitley Council staff side or functional council and the Prison Officers' Association.
There was the consultation and it was the fact of consultation in November with these bodies which brought forth the protests to which the right hon. Lady and the hon. Gentleman referred. Having considered the protests made to us as a result of consultation, the Government decided to preserve that thing to which the hon. Gentleman attaches so much importance—existing rights for existing officers.
I repeat that existing officers will enjoy the preservation of their rights and I hope that the House may now be able to accept the Regulations.
§ Question put and agreed to.
That the National Health Service (Superannuation) (Amendment) Regulations, 1960, a draft of which was laid before this House on 22nd June, be approved.