HC Deb 08 November 1960 vol 629 cc973-1000

10.14 p.m.

Dame Irene Ward (Tynemouth)

I beg to move, That an humble Address be presented to Her Majesty, praying that the National Insurance (Non-participation—Assurance of Equivalent Pension Benefits) Regulations, 1960 (S.I., 1960, No. 1103), dated 27th June, 1960, a copy of which was laid before this House on 4th July, in the last Session of Parliament, be annulled. I am moving the Motion on behalf of the Association of Municipal Corporations, an organisation of which I have the honour to be a vice-president. It will be within the recollection of the House that the superannuation schemes of local authorities are all statutory schemes and that by decision of Parliament taken from time to time the positions of employees in the superannuation schemes, as far as I understand, are adequately and satisfactorily protected.

The Association of Municipal Corporations is very regretful that in these Regulations so much duplication of work will be involved for the local authorities, which in the opinion of the Association are covered by the statutory schemes. Speaking on behalf of the Association, I feel that a great deal of administrative time will be wasted and a great deal of ratepayers' money will be unnecessarily spent. It is because of these factors that I move the Motion.

I want to be as conciliatory as I can, and I have a very modest request to make to my right hon. Friend the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance, who, I understand, will reply to the debate, I think it would be for the convenience of the House if I were to couch my request in the Association's terms. I therefore quote. The Association, of course, is referring to the Motion, and it says: It is not anticipated, nor indeed is it the desire of the Association, that the Motion should be accepted and the regulations annulled. What they are anxious to secure, however, is an undertaking from the Minister that this matter will be re-examined with a view to the requirements imposed on local authorities being substantially relaxed. As at present drawn, for example, the regulations will impose on local authorities requirements in regard to the sending of notices to the Ministry which will duplicate information already being supplied,"— That, of course, is under the present statutory scheme— or which for some other reason is unnecessary; they will, also, require information to be given to staffs on retirement which will be useless to anyone, but which will require detailed calculations. All this represents a waste of time and a waste of money. I think that that puts the case in a nutshell.

I understand the Association put its case, with the support of the London County Council authorities, to the National Advisory Committee to the Minister of Pensions and National Insurance. Unfortunately, that Committee did not see fit to accept any of the proposals or recommendations that were put to it. Therefore, when the Committee tendered its advice to my right hon. Friend, none of the proposals genuinely put forward by the Association of Municipal Corporations was embodied in that advice.

It is very regrettable that when a body with a reputation such as the Association has, and with wide support throughout the country, makes proposals for restricting administrative work and saving ratepayers' money, the proposals should be rather casually treated by the National Advisory Committee. Therefore, I think the proposal which I have outlined for, in the words of the Association, a re-examination of the whole problem should be welcomed and acceded to by my right hon. Friend.

I want to make one or two rather personal points on this matter. If, as I understand, my right hon. Friend's case rests on the fact that the Regulations will give protection to all employees in private and commercial firms who contract out of the graduated scheme as well as to the employees of local authorities—I understand that that will be the point of view expressed by my right hon. Friend—I should just like to say that I have been in the House of Commons a very long time, I think I can claim to be the sort of person to whom my constituents come when they feel they have a sense of grievance, whoever it may be against, and that during the time I have been in the House I have never had an employee of any local authority with whom I have been connected complain of treatment by the local authority in respect of its statutory superannuation schemes. Therefore, whatever my right hon. Friend may feel in this matter, I do not think she need be unduly alarmed that the employees of local authorities will not be properly safeguarded in the new scheme should they decide to contract out. I must ask the House to accept that.

I would say just one other thing to my right hon. Friend if she is proposing to use this argument. A long time ago when the present Secretary of State for the Colonies was the Minister of Health, the employees of the local authorities asked for some new regulations, which were to be of benefit to them, to be placed on the Statute Book. My right hon. Friend said that a place would be found for them on the Statute Book. A very long time has passed, and the local authority employees who sought certain support from this House have never been able to receive it because the Government have never found time for the necessary regulations to reach the Statute Book.

Consequently, I think I can claim that Her Majesty's Government are not always to be found in the position of being supporters of the employees of local authorities. I would say at once that this was not in connection with superannuation schemes, but I think it is a very useful illustration. I hope that in discussing the Association's application my right hon. Friend will not take the line that the Government are better able to protect or more desirous of protecting the in-tests of the employees of the constituent bodies of the Association than the Association itself is, because I should have to disagree with her on that point.

I do not intend to detain the House very long, because I know that many hon. Members would like to take part in this brief discussion. Over a long period, many people, both from the Opposition and from this side of the House, have argued for a reduction in administrative costs. We have asked for a reduction in administrative work. We have asked for a reduction in paper work. Many of my hon. Friends take a great interest in Government expendi- ture. It is true, of course, that it is ratepayers' money which is involved, but this is important to many people.

If I might put it in a not very forceful way, it is annoying, when the Association of Municipal Corporations is carrying out great schemes which are statutorily protected so far as its employees are concerned and it puts forward certain proposals, that they are not accepted. I will not go into the proposals in detail, because they are fairly complicated and I would have to read them out. Most people, like myself, would not understand them, but I hope that the House will accept the view that they were reasonable proposals designed to save work and money.

The Association of Municipal Corporations feels that the scheme may be brought into ridicule if no way is found of doing away with the duplication of work. Bearing in mind the general demand that we should reduce paper work and that we should not duplicate Government and local government forms, it is annoying to many of us that the National Advisory Committee paid no attention to the point of view expressed to it by the Association of Municipal Corporations.

When people argue about reducing Government expenditure and about reducing the necessity for filling in forms, I always find that one Government Department hopes that another Government Department will do it. When one Government Department is faced with a particular form which might be discarded, or is faced with a particular administrative action which might be destroyed, one always finds that the Government Department is reluctant to do it.

That is all I want to say because I am moving this Motion in a conciliatory tone. I suggest to my right hon. Friend that the approach made by the Association of Municipal Corporations should find favour, and that at no far-distant date the Minister should seek to meet the Association of Municipal Corporations and get down to discussing the details of the proposals that were made.

It is all very well for a National Advisory Committee which, taken by and large, has no connections with local government perhaps to be as apprehensive as I am of the details that have been put forward by the Association of Municipal Corporations, but it is regrettable—though I understand that the Minister is always co-operative in this matter—that the Minister, knowing what a powerful body the Association of Municipal Corporations is, did not seek an opportunity of meeting it and discussing the detailed proposals which it made.

I hope that on this occasion I might act as a mediator. If the requirements and the requests from the Association of Municipal Corporations which I have read out find favour in the eyes and brain of my right hon. Friend, I hope that she will be able to say that the Minister will take time to meet those who deal with the statutory superannuation claims on behalf of local authorities, and I hope that some accommodation will be arrived at.

10.30 p.m.

Dr. Horace King (Southampton, Itchen)

I wish to support the Prayer which the hon. Lady the Member for Tynemouth (Dame Irene Ward) has moved with characteristic ability and not so characteristic gentleness tonight. The hon. Lady has spoken on behalf of and representing the views of the Association of Municipal Corporations. Some of us who take part in the debate will be expressing the similar view of the County Councils Association, and those of us who know and like local government will agree that if the Association of Municipal Corporations and the County Councils Association are unanimous on any matter, theirs must be the right view.

The names which are attached to the Prayer show that no party criticisms are involved in the criticisms which we are making of the Regulations under discussion. The Minister and the Parliamentary Secretary know the views of the Opposition on the parent Act itself, but they have nothing to do with tonight's debate, and I ask the House whether we can start the debate with what we agree about.

All of us want to give the maximum protection to the non-participant in the Government's new superannuation scheme. The Regulations are devised to give that protection to anyone who is not in the new graded pensions scheme when he leaves one job and goes to another, or when there is a gap between one job and another, or even when there is a break, through illness, in otherwise continuous service under one employer. We all want to ensure that unless a person is assured in other pays of pension benefits to which his service entitles him, the employer will make a payment in lieu of contributions to the Government's own National Insurance Fund.

For that purpose, it is of vital importance that the man's period of service should be determined without peradventure. None of us can dispute that, and none of us prays against the policy which is enshrined in these Regulations.

However, local authorities are in a position different from that of any other employer. Like many of my hon. Friends, I sit on the County Councils Association, and I know the very patient and detailed work which the Association, in consultation with N.A.L.G.O., put into the very complicated task of working out relations between all its employees, those in statutory pensions scheme already and those not, in their relations with the Government's new Act.

As the House knows, the bulk of local authority employees fall into four groups, all of whom have their own superannuation schemes. All those superannuation schemes are operated under statutory authority. Without any of these Regulations, the Government already exercise full and complete control of such statutory schemes. In this, local government workers differ from other employees who will have pensions schemes offered by private employers. The latter obviously need to be subject to all the safeguards which the parent Act and these Regulations might provide, but the statutory superannuation schemes are already fully safeguarded.

The local authorities believe that many of the new provisions in these Regulations are otiose as far as they are concerned and mean unnecessary work for local authorities, work which will cost the ratepayers money, work which will give nothing to the Government which they cannot already get, and work which can give no extra protection whatever to the employee who is already fully covered by statutory provisions.

Let us take a simple case of the sickness of a local government employee. I here take the opportunity of paying tribute to the generous treatment by local authorities of their employees who are sick. I only wish that all private employers had the same ethical standards of conduct in treating their employees. The records of local authorities of absences due to sickness are complete, accurate and permanent, yet every local authority, by the Regulations that we are discussing now, will be compelled to treat any sick employee who has been away for 13 weeks as though he has terminated his employment, at least for the purpose of the record, even though he is still employed by the local authority and even if he is covered by statutory pension provisions. "Surely", say the local authorities, "the Minister can rely on the local authorities for absences due to sickness".

Again, a person who transfers from one statutory pension scheme to another carries his pension rights with him, and yet, for the purposes of the record, even such a person has to be treated as having terminated his employment, and after 13 weeks has elapsed from the ending of his last payment under his first job the local authority has to set in motion a process to ensure what is already statutorily guaranteed, namely, that the local authority will honour its obligations—even though, as a simple fact, it cannot possibly get out of them. These are just two examples which illustrate the general case which the hon. Lady and those who will take part in this debate are putting, on behalf of the local authorities, to the Joint Parliamentary Secretary.

It is true that the Regulations give the Minister power to interpret them generously in certain aspects. We understand, for example, that he recognises the general position of local authorities in that they do not really terminate the employment of an employee who is absent through sickness for more than 13 weeks if that absence is due to a number of causes, such as absence for maternity. We also know that, when a man transfers, the 26 weeks period which elapses from the time when he ends his payment under the first job to the time when the Minister demands a full account of guaranteed payments due in respect of that pensionable period can be extended, in some cases, under Regulation 18 (2), to 65 weeks.

But we are asking for more than that tonight. The Minister has no more loyal co-operators in this country than the county and borough treasurers. Many of them believe in the Government's block grant system, and I should imagine that most of them—certainly most of my colleagues on the County Councils Association—are misguided enough to support the Minister politically, and even to support the parent Act. These public servants work hard. They are willing to do all the administrative work that is necessary. This is an opportunity that the House might take of paying tribute to those local government administrators who, all through the years since the war, have seen steadily increasing the burdens of administrative work which we are placing on local government as we build the Welfare State.

But such people object—rightly, as I believe—to work which has no meaning. They object to work for which they can see no purpose; to the filling in of forms for form-filling's sake. I should imagine that the House is with them in that view tonight, and that hon. Members should, therefore, ask the Minister to take back these Regulations and redraft them in a way which, while containing everything necessary to safeguard the position of non-participants, at the same time recognises the adequate protection which already exists for local government workers covered by statutory schemes, and that in so doing the Minister will refrain from putting an unnecessary burden and expense on local authorities.

10.40 p.m.

Sir Wavell Wakefield (St. Marylebone)

I have received a letter from the town clerk of St. Marylebone setting out the arguments for reconsideration of these Regulations, which have been so well put from both sides of the House this evening. I do not want to waste the time of the House by going over arguments already made, but what I am deeply concerned about, as must be every other hon. Member who has perhaps received similar information from his local authority, is that it seems to be quite clear that the Regulations as proposed will mean a waste of time and money.

It is the duty of hon. Members, in particular, to criticise the Executive where there is expenditure of money. Form time to time hon. Members write to Government Departments drawing attention, perhaps, to unnecessary expenditure or to what they believe to be a waste of money. The reply always comes back asking for exact and precise details. Precise and definite details have been and are being given tonight, and it seems quite clear that the Government have here made a mistake.

No Government is infallible. This Government and their predecessors over the last ten years have a wonderful record of achievement in many things, but it seems that on this occasion there has been a slip up. I hope that my right hon. Friend will candidly admit this and will come clean. It would be a great thing if the Government could accept, acknowledge and realise that under these proposed Regulations there will be a waste of time and money. That really is inexcusable.

In speeches made up and down the country, members of the Government regret the high rates of taxation, whether local or national. Here we have an example of an unnecessary waste of time and money which can only mean either a raising of rates or of national taxation and not a reduction of them which everybody would like to see take place.

I therefore beg my right hon. Friend to look again at these Regulations to see what can be done in the light of the very great experience of the local authorities which really know how to run this type of business, and, having looked at them again, to see what can be done to avoid the duplication of paper work and a waste of time and money which the country simply cannot afford to have whether in private or national enterprise. I beg to support the Motion.

10.43 p.m.

Mr. G. A. Pargiter (Southall)

As Chairman of the Parliamentary Committee of the County Councils Association, I have been concerned with a good deal of work in connection with the actual way in which this machinery will work in local government. I do not think that the Minister will be able to complain that either her Department or any of the other Government Departments concerned have lacked co-operation as far as the local authority associations are concerned. These associations have gone out of their way to try to make the scheme work.

We on this side of the House said that this was not a very workable scheme. The fact is that it is a very bad scheme. I doubt whether anyone has done as much as the local authority associations to make the scheme understandable to the ordinary local government employee. Over 500,000 leaflets have been prepared and published for the benefit of authorities and their employees so that they may fully understand their rights and obligations and their safeguards regarding pensions schemes. I doubt very much whether the Government have done so much to explain their scheme. The co-operation of the local authority associations and their experts have been freely offered and have been made use of by the Departments concerned.

These objections are not altogether lay objections from people like myself. They come from the very people who have to operate the scheme and do the donkey work. They have said that the Government are bludgeoning a scheme through—I use the word bludgeoning advisedly—against the advice of local authorities simply because it will afford a certain amount of administrative convenience to the Government at the expense of considerable administrative inconvenience and cost to the local authorities.

If the Joint Parliamentary Secretary cares to say now that the Government are prepared to look at this matter again and discuss it with the local authority association officers to see whether regulations can be made which have regard to the statutory responsibility already resting on local authorities in connection with their own schemes, there will be no need to say any more tonight. But, apparently, the right hon. Lady does not care to do that.

Mr. Arthur Tiley (Bradford, West)

Would not the hon. Gentleman admit that it has been put fairly from both sides of the House that almost every Regulation is not for the protection of this or any other Government but for the protection of the employee?

Mr. Pargiter

I am grateful for the intervention. That is the burden of my case. There are cases where the Regulations are vital and necessary for the protection of employees under certain circumstances in private employment. They are totally and absolutely unnecessary in public employment, because statutory responsibility rests on local authorities with regard to their schemes. They are audited by the Ministry auditors, and so on, to ensure that the schemes are satisfactory. From time to time, deficiency payments have to be made by the authorities in order to ensure liquidity and the employee will get what he is entitled to when he is entitled to it. These safeguards exist by statue and no local authority can contract out.

Mr. Tiley

Then will the hon. Gentleman withdraw what he said in the earlier part of his speech when he said that this is to protect the Government? He has now admitted that it is not.

Mr. Pargiter

This is really nonsense and a waste of time. The burden of the case we want to make is that they are safeguarded in the statutory schemes which makes a great deal of these Regulations totally unnecessary. It will merely oblige them to engage staff to keep records which are unnecessary. Many of these records will be duplicated in the Minister's Department or other Departments. What is required is a little co-ordination in Government Departments. Is it impossible for these things to be co-ordinated? Is it necessary for local authorities to keep special records of particular cases—they will have to keep records of every one in order to apply to a specific case—in which the present record is quite adequate? By and large, when the certificates are issued, they will be compared with the Government records to make sure they compare and then everything will be all right. If they compare correctly, everything is all right.

A person who is in and out of employment may be under a non-participating scheme with a particular employer or in a branch of a particular industry. Let us take the engineering industry as an example. Some will be participating and some will be non-participating employees; there will be quite a lot mixed up in both. These people will change their employment in the course of the development of the industry, and it may well be that the records required to be kept there will have to be much more meticulous than those in local government service because a person in local government service, by and large, continues in the service.

The argument about 13 weeks sickness has been used. A man does not lose his employment or his statutory rights at the end of 13 weeks in local government employment. His statutory rights are continued for pension purposes. Why the necessity to notify the Department at the end of 13 weeks? Because of it, one has to keep the records in a form which fits every employee in the authority, not just the odd employee to whom it happens. Those records must be kept, and already they are duplicated by the Ministry of Health because of the requirements in connection with sickness benefits and so forth.

All we ask is that the Government Departments should look at the degree of co-ordination that they might employ amongst themselves. Let them look at it from that angle, not from the point of view of engaging more people in Government Departments—we do not want that—but from the point of view of seeing how far, in the case of statutory schemes of local authorities, their arrangements might be treated in not precisely the same way as those of every small employer are treated where the turnover of labour is very considerable. That is all we ask.

We recognise the need for the protection of the employee. We do not quarrel with the basis of the Regulations so far as they are necessary. They are made necessary by the half-baked scheme which the Government have introduced for pensions. Had we had the all-embracing pension scheme we wanted, of course, the amount of Regulations would have been far smaller than is required in the type of scheme which has been introduced. Much of the Regulations is made necessary for that reason; but in local government employment where those factors do not apply, it is surely reasonable that the people concerned in the local authorities should be consulted and that the Regulations should be amended or drafted in such a way as to have regard for their wishes. There is no desire to deprive employees of any of their benefits. At I have said already, they are very adequately safeguarded statutorily.

We think that the Minister has just dug in his toes. He is forcing through the Regulations at this stage, quite improperly, against the best wishes of the people who are just as much concerned for the well-being of their employees as the Government may be. Because that is our view, unless the Minister is prepared to give an assurance, the House will, I hope, give the Minister a very salutory lesson on this occasion and teach him that we do not want to employ a host of people in local government merely for the sake of employing them in order to keep records for the Government. These records are regarded by the local government officers, the experts—not by me—as quite unnecessary and a burden on the whole community in the long run. Part of the burden is borne by the Exchequer. It will involve a quite unnecessary and undesirable use of manpower. We suggest that the Regulations should be amended by the Minister in such a way as to enable us to come to a conclusion acceptable to everyone in the House.

This is not a political issue. I join issue only on whether this is a good insurance scheme. But that is not this case. The scheme has been accepted by Parliament, and we cannot deal with that now. We want it to work in the best possible way, and we suggest to the Minister that he ought to have some regard for the wishes of the local authorities which, because of the co-operation they have given already to the Departments in this matter, really deserve a little consideration here.

10.54 p.m.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

I wish to ask two quite simple questions before my hon. Friend replies. Perhaps I should say that I am not speaking on behalf of any association but on behalf of those of my electors who are serving or thinking of serving in local government. As I understand it, the main case deployed by those who object to the Regulations is that the Government already have sufficient information about how these statutory superannuation schemes work to make further reports unnecessary. If that is so, my right hon. Friend will have no difficulty in answering my first question, which is to ask whether in these schemes local authorities apply the principle of abatement in due course. Are they required to do so by law, or is it left to their discretion? If so, do the Government know whether abatement will be applied? This seems to me to go to the hub of the matter. Whether or not abatement is applied is likely to determine whether the employees will wish to contract in or contract out. It is a major consideration.

My second question is this. We have been told several times that since all these schemes are statutory, they must be fairly satisfactory. That may be so, but, surely, it does not follow that they necessarily fulfil the conditions which would make it lawful for an authority to contract out. As I understand it, the Crown pension schemes in their present form do not fulfil the conditions which permit of contracting out. I understand that the Civil Service and Fighting Services pensions will require modification owing to the fact that at present a person has to serve, I think, twenty years in the Civil Service before he can, as it were, take his pension away with him at all, which conflicts with the requirements for contracting out contained in the National Insurance Act. Does that apply to the local authority schemes? Is any modification of the schemes necessary and, if so, do the Government know what it will be?

Mr. Pargiter

I can tell the hon. and gallant Member that the precise figures concerning contracting out have already been agreed between the Department and the local authority associations.

10.57 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

I want to add one or two words to express the opinion of the Counties of Cities Association in Scotland. When the Regulations were in draft, the Association was consulted. Its opinion having been taken, it asked that certain procedures should be laid down within the Regulations. Unfortunately, however, the Association was not successful in its request and, because of that, felt that the Regulations should be opposed. The Association states clearly that together with its counterparts in England and Wales, it is utterly opposed to the Regulations in their present form because they are time consuming and wasteful of public money.

I was interested to hear the hon. Lady the Member for Tynemouth (Dame Irene Ward), who moved the Motion this evening, speaking about Members on her side of the House being interested in whether money was wasted. All I can say for myself is that, with one exception, I have spent more years than any other Member of the House on the Public Accounts Committee trying to look after public expenditure. This, therefore, is one of the things that rather appeals to me.

The Counties of Cities Association feels that the Regulations will entail a great waste of public money, which we are not entitled to do. Having regard to the existing statutory provisions in relation to local government schemes, the Association considers that the Regulations are quite unnecessary. What I want to put on record is that the Counties of Cities Association, which includes the Corporations of Edinburgh, Glasgow, Dundee and Aberdeen, is opposed to these Regulations and hopes that this House—

Mr. E. G. Willis (Edinburgh, East)

And also the County Councils Association in Scotland, too.

Mr. Hoy

Yes, indeed, the whole of them, as I was about to say. The Counties of Cities Association, including all the large cities, and the County Councils Association of Scotland are opposed to these Regulations. Unless the Minister is more conciliatory than she has been so far, my colleagues and I feel that we must divide against the Regulations tonight.

10.59 p.m.

Mr. G. W. Reynolds (Islington, North)

I am glad that we are having this debate this evening, but I am rather disappointed so far. The representations that are being made in support of the Prayer are solely on behalf of local authorities and other bodies which are operating schemes under some form of statute. I agree that the Regulations do impose upon them onerous responsibilities, but I think we should realise that at the same time they also impose an onerous responsibility on the private employers. I should have thought that once the scheme had satisfied the Regulations so far as contracting out is affected, it was in very much the same sort of cate- gory, so far as the safety of insured benefits and things of that nature are concerned, as the local authority and other statutory schemes which we are talking about; once it satisfied those conditions for contracting out which have already been approved by this House. I think that the Regulations we are discussing tonight impose an unnecessary burden not only on the local authorities but upon other employers who have contracting out arrangements as well.

Regulation 3 lays it down that when someone leaves an employer—and this applies just as much to a private employer as to a local authority employer—payment in lieu of contribution has to be made to the Ministry of National Insurance. At the Ministry's office there will be a record card for each individual, whether in a local authority contracting out scheme or in a private one, for it applies equally to both, and is equally ridiculous in both, to my mind. At Newcastle there will be a card which the Minister and his servants can look at which tells them that a man was off sick for, say, twelve weeks during the period; and that the amount to be paid out by the employer, whether a local authority or private firm, is x pounds. It is perfectly simple. The record is there. They are all there in Newcastle.

That is not what is going to happen. In future the employer has to keep special records. At the moment he stamps by machine or by licking the stamp and putting it on. In future the employer will have to keep a record which shows how many weeks' sickness the employee has had during the whole period of contracted out service with him. If and when the employee leaves his service—I say "if and when" because the chap may stay with him throughout his service—the employer has to be able to show how many weeks' sick leave the employee had during the whole period of service while contracted out. The employer has to state it in the records, duplicating those already being maintained by the Ministry for all employees, all insured persons, at Newcastle. This affects not only local authorities but also the private employers.

What exactly are we looking at? The employer has to have a certificate certifying who the person responsible for paying the pension is, who the responsible payees are, where the pension is to be collected, and how much is to be paid to every retired person.

Hon. Members may not realise that for the next five years not a single one of these employees will have an amount greater than 4s. per week. The cost of issuing the certificate would use up almost six months' benefits in many cases. Does the House realise that for someone earning £12 a week now and due for retirement in five years' time all this procedure, all this information, this special certificate and everything else, has to be furnished and done to tell him that he is entitled as of right to a pension of 2s. a week for the rest of his life? It is a nonsensical arrangement which the Ministry enforces upon employers by their ridiculous superannuation scheme which they are imposing upon unwilling contributors throughout the country at the present time.

The more I look at the Regulations and the mass of other Regulations, some of which have been prayed against, some of which have not, the more I am forced to the conclusion that this ridiculous type of scheme for ludicrously small benefits which we are talking about, the Government scheme, is a waste of time, and involves an unnecessary administrative burden, and the sooner, in the light of the Government's scheme, they pack up contracting out altogether, the better and cheaper it will be.

11.4 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Patricia Hornsby-Smith)

I am grateful to my hon. Friend the Member for Tynemouth (Dame Irene Ward) for the very restrained way in which she opened this debate. I think that we have had a very interesting and useful discussion. I hope hon. Members will not think that I am lacking in conciliation when I say to them that there are quite obviously some very genuine misunderstandings on the part of the local authorities, and indeed of hon. Members here tonight, as to what the position is in relation to our records and the schemes of the local authorities.

I should like to say a few words very generally about the Regulations as a whole and then to deal in detail with the points raised on behalf of local authorities by hon. Members. The Regulations contain provisions for determining when a person's period of service ends and for giving proper notice of that fact. They provide for the disregard of temporary interruptions and for the time for making a payment in lieu of contributions. They lay down conditions on which a person is treated as assured of equivalent pension benefits and contain special provisions for concurrent employment and for treating consecutive employments as a single continuous employment. They also make provision for delaying refunds of contributions from occupational superannuation funds in cases where the employer has a right to recover part of his payment from the amount to be refunded The remaining provisions are of a comparatively minor nature.

I should like to deal specifically with the Regulations which have given rise to the criticism expressed by the local authority associations. First, in answer to my hon. Friend the Member for Tynemouth, no request has been received by my right hon. Friend to meet the local authority associations. He would have been very ready to do so, and I think that some of their misapprehensions might have been avoided but, as these representations had been made to the National Insurance Advisory Committee and had not been accepted by that Committee, I cannot in any way permit any decision of my right hon. Friend's—

Mr. Pargiter

The right hon. Lady is saying that no representations at all have been received from the local authority associations on these Regulations.

Miss Hornsby-Smith

No, that is not what I said, with respect to the hon. Member. My hon. Friend the Member for Tynemouth complained that the Minister had not met the associations. I am saying that the associations have at no time requested my right hon. Friend to meet them although he would have been perfectly happy and prepared to do so. That is quite a different thing.

Mr. Pargiter

Has not the right hon. Lady been made aware of the representations made to the Minister at official level and of the fact that, to say the least, these representations received very short shrift from the Department? If that is not within the Minister's knowledge and he has not said, "You cannot treat local authorities like this. Let me have a look at what the complaints are", is it not time that he did?

Miss Hornsby-Smith

The hon. Member is deliberately misrepresenting what I said. My hon. Friend the Member for Tynemouth suggested that the Minister had not met the local authority associations, and the hon. Member for Southall (Mr. Pargiter) said that my right hon. Friend ought to be prepared to do so. My right hon. Friend has at all times been prepared to do so but has never received a request to receive them on this issue. The hon. Member for Southall then suggested that my right hon. Friend should instruct an independent statutory body, the National Insurance Advisory Committee, about the manner in which it should give its independent view. I am sure that the House would feel that that would be a very unconstitutional practice since the purpose of the Committee is that independent bodies should refer their points to it and that it should be able to form its own independent opinion on any regulations that the Minister has to place before it in relation to this Act.

Mr. Pargiter

My advice from the associations themselves and their principal officers is that representations have been made to the Minister and that the Ministry is not prepared to make any change in the Regulations. I believe this to be a statement of fact. I do not wish to mislead the House in any respect. I say that the Minister is aware of representations that have been made and that there is no question here that he can avoid responsibility in this respect or hide behind the Advisory Committee.

Miss Hornsby-Smith

My right hon. Friend has never sought to avoid any of his responsibilities, as I am sure all hon. Members realise. With respect, I think that the hon. Member for Southall is putting his own request and what he would like to see, as a very distinguished member of a local authority. I was answering a point made by my hon. Friend the Member for Tynemouth, which I am perfectly justified in replying to on behalf of my right hon. Friend, that at no time have the local authority associations asked the Minister to receive a deputation. That was the point that was put to me.

Dame Irene Ward

Perhaps my right hon. Friend will allow me to intervene, as I seem to be rather involved in this. I knew that my right hon. Friend had not seen the local authorities. What I was asking was whether, now that the whole thing has come out into the open, it would be possible for my right hon. Friend to meet both the Association of Municipal Corporations and the County Councils' Association to discuss the matter. That was the request that I made to my right hon. Friend, and I hope she will be able to say one simple, pleasant little word—yes.

Miss Hornsby-Smith

I am grateful to my hon. Friend for her charm. My right hon. Friend is always prepared and ready to meet the local authorities and the County Councils' Association, but that does not lessen my responsibility to answer in the House tonight the many accusations that have been made against the Regulations and to try to clear up the many misconceptions which are apparently held.

The net result of the case which the local authorities have put through my hon. Friend the Member for Tynemouth would be to impose less stringent safeguards on local authority employers than are required of either industrial employers or of those responsible for the Civil Service, both of which have accepted these very carefully thought out Regulations which are now before the House. I do not feel that it is likely to be thought that the Government would impose on themselves regulations and restrictions for the protection of employees which they thought were unnecessary. Surely, if it had been feasible to relax these Regulations because of the soundness of certain statutory schemes, the Government would have exempted themselves in relation to civil servants.

The local authorities exercised their right to place their objections before the National Insurance Advisory Committee. As hon. Members will know, this is an independent body, including representatives of both the employers and the T.U.C., which the Minister is required by Statute to consult in regard to these Regulations. It cannot, therefore, be said that the local authorities' representations have not been fully and independently considered. As hon. Members have fairly said, the Committee found itself unable to accept them, and has approved the draft Regulations with one or two minor amendments which my right hon. Friend has made in the Regulations now before the House.

In answer to my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), the hon. Member for Southall said that the local authority scheme was already approved and agreed by the Government. I am sorry, but it has not reached anything like that stage yet. There have been consultations between the local authorities and the Registrar, but the local government superannuation schemes will have to be subjected to some modification in relation to the employers who participate in the pensions scheme—the schemes have to be modified in certain minor respects—and as yet no application for registration has been made to the Registrar and we have not yet finalised the modifications that have to be made.

Mr. Barnett Janner (Leicester, North-West)

What does that mean? Is the right hon. Lady now saying that in the circumstances she is prepared to meet the Association of Municipal Corporations and the other bodies with a view to coming to a definite conclusion in respect of the matters which have been raised here tonight? If she will say that, perhaps we can come to some kind of agreement.

Miss Hornsby-Smith

That would be a very easy way of avoiding by responsibility to answer some of the erroneous points that have been raised tonight. However, with respect, I propose to answer them.

It is still open to local authorities to request to see my right hon. Friend when they want to.

Mr. Janner

rose—

Miss Hornsby-Smith

I am sorry I cannot give way to the hon. Gentleman, because his hon. Friend is anxious to say a few words and I have not much time left.

The complaint raised by hon. Members is about notifications required to maintain track of an employee's move- ments. I ask hon. Members to listen seriously to what I believe are fair answers to the points raised.

The basis of the complaint by local authorities is the notifications required. Local authorities have assumed, quite erroneously, that we have, or shall have, up-to-date records of all contracted out employees at the commencement of the scheme. We have not got them. We shall not have any kind of comprehensive record until the last of the returns for the first year's working come in in 1962. At present the Registrar is issuing certificates to contracted out employers covering certain groups of employees, but we have no individual record of the employees contracted out.

The local authorities appear to have missed the main point of the Regulations by their insistence on the soundness of the schemes. No one is disputing the soundness of the statutory local authority superannuation scheme, or of the other statutory schemes applying to local authority employees. What we are protecting are the rights of the employee, whose individual rights may from time to time be in question and dispute with his employer.

I confess that I find my hon. Friend's confident satisfaction with the statutory schemes in marked contrast to her persistent and passionate attacks on another statutory scheme, but, to make the checks which local authorities and hon. Members allege we can make, we would have to ensure that every employer returned a full list of all his contracted out employees, with appropriate details, before the start of the scheme next April, and thereafter keep us advised of any changes in it. That is the alternative to what we have put in these Regulations.

To save such a burden of work, and to save returning the names of all 750,000 local government employees, we have instead provided that employers shall be required to inform us only of the much smaller percentage of employees whose service or contracted out payments are interrupted by circumstances outlined in the Regulations.

I have read with great interest the many phrases quoted by hon. Members tonight from the paper put out by the local authorities. How great then is this "inordinate amount of administrative effort, out of all proportion to the objects to be achieved", as the local authorities describe it, likely to be?

When a man is off work, there is no certain method of calculating how long he will be away. Nor is there absolute certainty that he will return. Therefore a balance had to be struck between recording every absence, however short and temporary, which would be ridiculous, and of giving no notice at all. That balance has been struck at 13 weeks and, generally speaking, if the absence exceeds 13 weeks the employment is deemed to be terminated and the question of preserving the employee's pension rights arises. As hon. Members said, under Regulation 18 (2) this 13-week period can be extended to two and a half years.

We expect that overall something of the order of 3 million employees are likely to be contracted out. So far as local authorities are concerned, we have not the final number, but, with the teachers, policemen, firemen and their general staffs it is likely to be about 750,000. Whatever the figure may be, local authorities will have been saved that number of initial notifications, because the system of control has been devised in such a way as not to require a special notice for every member in contracted out service.

It is against that background that the complaint about having to notify sickness absences beyond 13 weeks should be considered. Our general experience with sickness benefit claims suggests that out of 750,000 employees, not more than about 15,000 a year, a much smaller number, would be likely to be away for spells of more than 13 weeks. The complaint, therefore, is based on the prospect of having to make about 15,000 notifications a year out of 750,000 employees—and that would be spread among some 1,800 local authorities, including Scottish authorities. It is likely to be a mere handful in the case of most local authorities although a larger number for the greater and more widespread authorities.

There are also about 1,500 authorities other than local authorities included in the local authority superannuation schemes. They include authorities such as the Belgrade Theatre Trust (Coventry) Limited, the Croydon Association for Moral Welfare, the White Fish Authority, the British Film Institute and the Welsh Tourist and Holidays Board. On the basis of the case put up by the local authorities as to the soundness of their schemes under local authority superannuation legislation, those bodies would be perfectly justified in claiming precisely the same exemptions as those for which the local authorities have asked.

Can it be seriously suggested that the protection of their employees as outlined in the Regulations amounts to a "considerable and exorbitant burden of work," or that, in order that we can have the records of all the employees, local authorities would prefer to return 750,000 names? Even if they did we should still have to obtain extra returns from the employers. Let us suppose that a man has a 20 weeks' gap on his card in his contracted out stamps; we shall not know whether the gap is in the same employment or not and we shall not know whether he has changed his employment or not. We should have to write to the employee and ask him and he would probably have to check as to payments and dates with his employer before we could obtain the information which we required. There would then have to be three or four communications and not one, whereas the employer terminating employment, or dealing with sickness, has the records to hand for the purpose of stamping the employee's card.

May I now deal with the question of the termination of employment? We are under an obligation to ensure that persons contracted out have pension rights at least as great as could have been obtained over the same period of employment had contributions been paid to the State on earnings of £15 or more a week. Hon. Members will know of the three methods of dealing with that—transfer to another scheme, freezing of pension or making a payment in lieu.

Local authorities have suggested that to reduce the number of separate notifications, the returns made to the Income Tax authorities could be used for this purpose. Inspectors of taxes get about 9 million changes of employment notices a year under the P.A.Y.E. scheme. It can hardly be thought that it would be an economical system for the inspectors to have to sift those 9 million notices to identify those relating to contracted out local authority or other authority employees in local government superannuation schemes, particularly as the inspector of taxes would not necessarily know, without special inquiry, whether the particular employee was currently contracted out or not. When the inspector had identified the relevant cases, he would have to send a special notice about that to the Ministry, something which could have been done more easily by the employer in the first place at the time the employment terminated and when he had up-to-date information.

Hon. Members have made a great point about the equality or the parity of the two schemes, but they are not wholly in parity. One suggestion has been that the employees' rights to pension are adequately covered on termination by the auditor's certificate. It is the duty of the auditor to satisfy himself as to the correctness of financial payments, but under the local authority scheme there may be a 10-year waiting period before a man is entitled to any payment, and the auditor's duty will be discharged by ensuring that the terms of the local authority scheme have been met.

But under the provisions of these Regulations we have to ensure that, if an employee terminates his employment and at that time would not be in a position to receive a frozen pension from the local authority, a payment in lieu is made, in relation to that employee—unless he transfers to other local authority work—to the Government fund. Therefore, the provisions are not exactly in parallel, as I am sure hon. Members appreciate, and it is necessary for us to have this information and for the employee to be aware of it. Within a local authority, if a man leaves contracted out employment he is safeguarded either by transferred rights or a payment in lieu to the Government scheme. To that extent it would be quite beyond the terms of reference of the auditor to give certificates—disregarding the fact that the employee would have to wait possibly until the end of the year before such a certificate was completed.

With regard to a local authority objecting to having to give the employee a certificate of insurance which will include a statement that he has been contracted out of the scheme, and showing details of the pension he should receive, hon. Members would agree that it is an employee's right to know where he stands, and for local authorities to suggest that this would serve no useful purpose and would involve additional calculations of no value is an oversimplification of a very necessary safeguard. The local authorities object to having to obtain employees' agreement under regulation 2 (5). Why not? It is the right of the employer to choose whether he contracts out or not. But it is surely the right of the employee to know the terms on which his pension stands when he leaves his employment.

I know that I have not dealt with every point raised, but I promised the hon. Member for Sowerby (Mr. Houghton) that I would leave a few minutes for him to speak. I know that he will appreciate my difficulty. I have had many interruptions.

Overall, I would say that local authorities are claiming preferential treatment which would avoid the necessity for their making returns which are in the interests of their employees. My right hon. Friend will closely follow the whole of the working of the Act, and it may well be that in the course of its working amendments may be found necessary. But at the moment he cannot do other than put before the House the Regulations which have been approved by N.I.A.C., which we genuinely and sincerely believe are in the interests of the employees.

11.28 p.m.

Mr. Douglas Houghton (Sowerby)

This is very difficult stuff for the House of Commons. I am surprised that such vehemence has been injected into a debate on the details of administration. In the last few minutes of the debate I want to make a suggestion. I suggest that we let these Regulations go through; they cannot come into operation before the beginning of April, and there is time enough for local authorities to approach the Minister and make whatever representations they feel suitable. He can consider them. These Regulations can be amended if the Minister, on reconsideration, feels that they should be.

My own belief is that the Minister has more on his side than this House realises at the moment. I stress that these Regulations are intended to safeguard the rights of employees. We have heard a good deal about the administrative responsibility of employers, and I must say something in defence of the employees. I am not satisfied that the

House would be justified in voting in favour of the Prayer.

Dame Irene Ward

I beg to ask leave to withdraw the Motion.

Hon. Members

No.

Question put:—

The House divided: Ayes 26, Noes 136.

Division No. 3.] AYES [11.31 p.m.
Awbery, Stan Hilton, A. V. Taylor, Bernard (Mansfield)
Beaney, Alan Hoy, James H. Thomas, Iorwerth (Rhondda, W.)
Blyton, William Jones, J. Idwal (Wrexham) Whitlock, William
Corbet, Mrs. Freda King, Dr. Horace Wilkins, W. A.
Craddock, George (Bradford, S.) MacColl, James Willis, E. G. (Edinburgh, E.)
Davies, G. Elfed (Rhondda, E.) Manuel, A. C. Yates, Victor (Ladywood)
Dodds, Norman Pargiter, G. A.
Fernyhough, E. Slater, Joseph (Sedgefield) TELLERS FOR THE AYES:
Gunter, Ray Stonehouse, John Mr. Loughlin and Mr. T. W. Jones.
Hayman, F. H. Sylvester, George
NOES
Aitken, W. T. Hall, John (Wycombe) Morrison, John
Allason, James Hamilton, Michael (Wellingborough) Nabarro, Gerald
Arbuthnot, John Harrison, Brian (Maldon) Neave, Airey
Barter, John Hiley, Joseph Noble, Michael
Baxter, Sir Beverley (Southgate) Hill, Mrs. Eveline (Wythenshawe) Nugent, Sir Richard
Bidgood, John C. Hill, J. E. B. (S. Norfolk) Oakshott, Sir Hendrie
Bingham, R. M. Hirst, Geoffrey Osborn, John (Hallam)
Bishop, F. P. Hobson, John Page, Graham
Bourne-Arton, A. Hocking, Philip N. Pannell, Norman (Kirkdale)
Bowen, Roderic (Cardigan) Holland, Philip Pearson, Frank (Clitheroe)
Box, Donald Hollingworth, John Peel, John
Boyd-Carpenter, Rt. Hon. John Hornby-Smith, Rt. Hon. Patricia Pitt, Miss Edith
Boyle, Sir Edward Howard, Gerald (Cambridgeshire) Pott, Percivall
Braine, Bernard Howard, Hon. G. R. (St. Ives) Prior, J. M. L.
Browne, Percy (Torrington) Hughes Hallett, Vice-Admiral John Redmayne, Rt. Hon. Martin
Bryan, Paul Hughes-Young, Michael Rees, Hugh
Bullard, Denys Hurd, Sir Anthony Scott-Hopkins, James
Carr, Compton (Barons Court) Hutchison, Michael Clark Shaw, M.
Carr, Robert (Mitcham) Jackson, John Skeet, T. H. H.
Chichester-Clark, R. Jenkins, Robert (Dulwich) Smith, Dudley (Br'ntfrd & Chiswick)
Clark, Henry (Antrim, N.) Johnson, Eric (Blackley) Steward, Harold (Stockport, S.)
Clark, William (Nottingham, S.) Johnson Smith, Geoffrey Stodart, J. A.
Clarke, Brig. Terence (Portsmth, W.) Kershaw, Anthony Stoddart-Scott, Col. Sir Malcolm
Cleaver, Leonard Kirk, Peter Storey, Sir Samuel
Cole, Norman Leather, E. H. C. Studholme, Sir Henry
Cooke, Robert Leburn, Gilmour Summers, Sir Spencer (Aylesbury)
Coulson, J. M. Legge-Bourke, Sir Harry Tapsell, Peter
Crosthwaite-Eyre, Col. O. E. Lewis, Kenneth (Rutland) Thomas, Leslie (Canterbury)
Cunningham, Knox Lilley, F. J. P. Thompson, Richard (Croydon, S.)
Curran, Charles Litchfield, Capt. John Tiley, Arthur (Bradford, W.)
Currie, G. B. H. Lloyd, Rt. Hon Selwyn (Wirral) Tilney, John (Wavertree)
Dalkeith, Earl of Loveys, Walter H. Turner, Colin
Deedes, W. F. Low, Rt. Hon. Sir Toby Turton, Rt. Hon. R. H.
Elliott, R. W. Lucas-Tooth, Sir Hugh van Straubenzee, W. R.
Farr, John MacArthur, Ian Wakefield, Edward (Derbyshire, W.)
Finlay, Graeme McLaren, Martin Wall, Patrick
Fraser, Ian (Plymouth, Sutton) McMaster, Stanley R. Ward, Dame Irene (Tynemouth)
Gammans, Lady Macmillan, Rt. Hn. Harold (Bromley) Watts, James
Gibson-Watt, David Maitland, Sir John Wells, John (Maidstone)
Glover, Sir Douglas Manningham-Buller, Rt. Hn. Sir R. Williams, Dudley (Exeter)
Glyn, Sir Richard (Dorset, N.) Marten, Neil Wilson, Geoffrey (Truro)
Goodhart, Philip Matthews, Gordon (Meriden) Woodnutt, Mark
Goodhew, Victor Mawby, Ray Woollam, John
Gower, Raymond Maydon, Lt.-Cmdr. S. L. C. Worsley, Marcus
Green, Alan Mills, Stratton
Gresham Cooke, R. Montgomery, Fergus TELLERS FOR THE NOES:
Mr. Whitelaw and Mr. Sharples.