HC Deb 01 August 1961 vol 645 cc1433-42

Motion made, and Question proposed, That this House do now adjourn.—[Mr. G. Campbell.]

6.51 a.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

I desire to raise the question of entitlement to unemployment benefit in cases involving the trade dispute provisions. I am grateful to the right hon. Lady for being here to attend to this matter at this curious hour.

The matter which I am raising has points in common with the issue raised on the Adjournment about a fortnight ago by my hon. Friend the Member for Hammersmith, North (Mr. Tomney). At column 845 of the OFFICIAL REPORT for 14th July he raised a point similar to that which I wish to raise. I hope that the right hon. Lady will regard it as a measure of the anxiety felt about this part of the administration of social insurance that two hon. Members should raise similar points within a comparatively short period of time.

This matter was brought to my notice by the case of a constituent of mine, Mr. R. Morrison of 8, Botanic Place, Liverpool, 7. He found himself out of work in February of this year as a consequence of a strike in which he has claimed that he had no concern. The question arose whether he was disqualified from receiving unemployment benefit by virtue of section 13 (1) of the National Insurance Act, 1946, or whether he could take advantage of the proviso to that section. I will read what the proviso says: Provided that this subsection shall not apply in the case of a person who proves:

  1. (a) that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work; and
  2. (b) that he does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at his place of employment any of whom are participating in or financing or directly interested in the dispute."
The test claim covering Mr. Morrison's case was allowed by the local tribunal. My first letter from the right hon. Lady's Department, dated 22nd March of this year, informed me that payment of unemployment benefit was suspended while the question of an appeal in the test case was under consideration. On 20th April, I was told that the insurance officer had appealed to the National Insurance Commissioner, and that I would be informed when the Commissioner's decision was known. It is now 2nd August, and I still have not heard the result.

The position is that for five months the question of this man's entitlement to unemployment benefit has remained undetermined. Mr. Morrison had over twelve weeks of unemployment and in that time he had no income of his own whatsoever. His wife was earning a wage which brought him outside the ambit of National Assistance. This was his condition at a time when he was out of work as a result of a strike in which he claims that he was not concerned and when a decision of the local tribunal had been made that he was entitled to the benefit of the proviso to which I have referred. In my view, this constituted a hardship to this man which it should have been within the capacity of intelligent administration to avoid.

It may be that the right hon. Lady and I are, on this occasion, both somewhat inhibited in our consideration of this matter. I should not be surprised to hear from her that she feels that she cannot intervene in the process of adjudication in the appeal now current in the claim covering Mr. Morrison's case. And I should be out of order were I to adumbrate anything which might call for legislation to deal with this problem. Let it be clear, therefore, in the context of what I have said, that what I seek is administrative action which within the existing law would avoid the hardship that this man has suffered and which men in his situation and circumstances are suffering.

It is for the Department to find a way out of or round this difficulty. I did my best to help them. On 19th June this year I put down a Question in which I asked the Minister of Pensions and National Insurance: whether, in the case of a man who claims to be unemployed due to a trade dispute in which neither he nor anyone else in his grade or class is participating and where a test claim covering his case has been allowed by the local tribunal, arrangements can be made for the payment of unemployment benefit whilst the relevant test claim is subject to appeal to the National Insurance Commissioner, on the basis, if need be, that there will be a liability for repayment after his resumption of work if the National Insurance Commissioner allows the appeal. I got the reply; No. To introduce a liability for repayment of insurance benefit paid in accordance with a decision of the statutory authorities, and obtained and received in good faith by the claimant, but which is found on appeal not to be payable, would have far-reaching implications throughout the insurance schemes. The rule governing suspension of unemployment benefit in trade dispute cases is needed to secure uniform treatment of all claims made during the dispute, and like the trade dispute disqualification itself, has stood unchanged for over thirty years."—[OFFICIAL REPORT, 19th June, 1961; Vol. 642, c. 90.] I can see the force of the first half of that Answer, though I was not impressed by the second half. My purpose now is to press the Ministry to try again to discover an answer to this administrative problem which, I think, is causing unnecessary anxiety and concern to the people affected. I cannot believe that it is outside the wit, ingenuity and skill of the Department to find a way of overcoming this.

I should like to add one further point. The proviso to Section 13 of the National Insurance Act, 1946, to which I referred appears also in Section 9 of the National Assistance Act, 1948. I invite the right hon. Lady to consider the question whether it would be practicable, and perhaps involve no illegality, if a man in Mr. Morrison's position, with a test claim in his favour, albeit the subject of appeal, were given the benefit of the proviso of that Section of the National Assistance Act. Would she consider, if she took a favourable view of it, making the appropriate representations to the National Assistance Board?

I want her to bear in mind that because this man with whom I am concerned had, as I have mentioned, a wife who was earning a wage and was regarded as not eligible, he was treated as not eligible for any National Assistance payments at all. That meant applying a very rigid, perhaps too rigid, interpretation of Section 9.

It was wrong, in my view, that Mr. Morrison should be out of work because of a strike in which he claimed that he was not concerned and that even when his test claim was successful before the tribunal he should be deprived of all income. He makes his protest. I voice it for him here and associate myself with it. I venture to say that it is for the right hon. Lady's Department to solve and overcome the administrative difficulty which causes, not only in this case but in others, keen and unjustifiable distress.

7.3 a.m.

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

As the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) said, a similar question concerning benefit for unemployment resulting from a stoppage due to a trade dispute on Merseyside was raised on the Adjournment recently by his hon. Friend the Member for Hammersmith, North (Mr. Tomney) and, inevitably, I must go substantially over many of the same points.

The hon. Member also kindly pointed out that both he and I are somewhat inhibited in our comments as this case is still before the Commissioner. Once an insured person has lodged his claim and has used the machinery for appeal against the decision of an insurance officer, the case is right out of my right hon. Friend's hands and he cannot—it would not be proper for him to—attempt to intervene in it. I cannot, therefore, comment on the merits of these cases. They are before the Commissioner, and it is for him to decide. Whatever that decision may be, it is binding on my right hon. Friend. I can only outline the general history so far of the cases which affect the hon. and learned Member's constituent and others in his position.

Mr. Morrison was stood off from his employment as a blacksmith's striker on 8th February in consequence of the Merseyside dispute. The test case governing his claim was referred by the insurance officer to the local tribunal who allowed it on 16th March. The insurance officer appealed to the Commissioner within the prescribed 21 days, and, therefore, the payment of benefit was suspended. Mr. Morrison's claim is only one of several arising out of the dispute which are before the Commissioner.

There is always difficulty in a trade dispute case where several unions may be concerned, where different classifications of workers may be involved and where the difficulty of getting the required information from unions and sometimes from employers makes the case more complicated and protracted than if it were a single, straightforward issue.

This stoppage, which arose over a pay dispute between the Amalgamated Engineering Union and the Merseyside Ship Repairers Association, began on 13th January and ended on 6th May. About 3,500 men comprising various categories of workers with differing circumstances were involved. A substantial number of claims were made from 17th January onwards by men made redundant by the stoppage of work, and a large number of these were allowed straightaway and benefit paid. Doubt arose on about 330 claims made by men affected by the stoppage. Of these, about 120 were disallowed by the insurance officer or local tribunal, and no appeals to the Commissioner against these disallowances have been lodged. Benefit was paid to about 150 claimants whose claims were allowed because they were able to take advantage of the escape clauses in the trade dispute disqualification provisions.

The insurance officer made 14 appeals to the Commissioner covering the remaining 50 cases. Three of these appeals, which covered 19 claimants, were decided by the Commissioner on 15th June. The Commissioner upheld the insurance officer's appeals, thus reversing the local tribunal's decision, and disallowed the claims. Nine appeals covering 29 claimants are now with the Commissioner.

As the hon. and learned Gentleman rightly said, the rules governing the payment of or disqualification for benefit during trade disputes are laid down in Section 13 (1) of the National Insurance Act, 1946. The general rule is that unemployment benefit cannot be paid to a person whose unemployment is due to a stoppage of work caused by a trade dispute at his place of employment. Benefit can, however, be paid to those who show that they have become bona fide employed elsewhere or regularly engaged in some other occupation, or that they are not participating in or financing or directly interested in the dispute, and do not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at their place of employment any of whom are participating in or financing or directly interested in the dispute". The hon. and learned Gentleman was a little scornful of my right hon. Friend's reply to him that these provisions had stood the test of time since 1927, in other words, for over thirty years. That does not mean that they have not been looked at during that period and constantly reconsidered.

Mr. A. J. Irvine

I did not intend to be scornful. That expression describes over-severely what I said.

Miss Hornsby-Smith

I am delighted that the hon. and learned Gentleman was not as critical as I understood him to be. We have not done nothing about the provisions for thirty years. Successive Governments, of both parties, have found that it was not practicable to alter them in a way which would prove as satisfactory all round as does the present method. No question was raised on them during the debates on the 1946 Act.

These particular provisions for disqualification are quite erroneously but, I readily admit, very widely regarded as a penal measure directed against strike action. Representations are sometimes made on behalf of people like Mr. Morrison who have not withdrawn their labour and, on the face of it, have no sympathy with the strikers, to the effect that the insurance provisions are being used as a penal measure. But this is a complete misconception. The disqualification is not concerned with the merits of the dispute. The principle behind it is that loss of work due to a trade dispute is not the kind of unemployment for which provision should be made in a national insurance scheme.

The provisions which enable certain claimants out of work as a result of a trade dispute to escape disqualification for unemployment benefit have been examined many times without any acceptable alternative being found. The present rule is straightforwardly based on the assumption of a community of interest among the members of a grade or class: if any one member is concerned in a dispute, all, whether members of that man's union, or of another union. or not members of any union, are assumed also to be concerned. It has never proved possible to find any other formula which would be fair to contributors generally, which would be administratively workable and which would, at the same time, not cut right across fundamental trade union interests.

The rule governing the suspension of benefit has, like the trade dispute disqualification, stood unchanged since 1927. The object—and this is the main point of the hon. and learned Member's criticism—is to secure uniform treatment of all claimants. It is, therefore, clearly desirable that during a trade dispute, the question of entitlement to unemployment benefit should, as far as possible, be kept clear of the controversy surrounding the dispute. If some men were paid benefit and others similarly placed were refused it on the strength of conflicting tribunal decisions, it would add to the difficulties of the situation and would tend to embroil the National Insurance Scheme in the dispute.

A dispute may cause stoppages at widely separated places all over the country. Uniformity of treatment can only be secured in these circumstances by suspension pending the Commissioner's decision or, as is usual in circumstances involving a large-scale dispute, Commissioner's decisions and, particularly, test case decisions.

The hon. and learned Member has suggested that benefit should be paid in accordance with the tribunal award, with a liability to repay if the Commissioner later reverses the tribunal's decision. There is great difficulty about that. It would be entirely contrary to the principles underlying the present position on the treatment of over-payments of insurance benefits. As the hon. and learned Member knows, throughout the whole insurance scheme there is no liability on a claimant to repay benefit obtained in good faith and properly paid to him in accordance with the decision on his claim given by one of the statutory authorities.

Liability for payment can arise only where an award is reviewed and varied and the statutory authority is not satisfied that the claimant had acted in good faith in all respects as to the obtaining and receipt of the money. In this in- stance, it would be asking someone to repay money which he had obviously accepted in good faith after a tribunal decision. It has been found that in only a very small proportion of cases in which a decision has been reversed. can repayment be reclaimed on the basis that it was not obtained in good faith. Thus, where there is no doubt about the good faith of the claimant, there is no power for the recovery of benefit paid on a tribunal award which is subsequently overthrown by the Commissioner.

It would hardly be possible to find grounds for confining any provision—again, I must not trespass into the sphere of legislation—requiring repayment of benefit which was found, on appeal, not to be payable solely to people who were paid as a result of an escape clause, such as the hon. and learn Member suggested, appertaining exclusively to trade disputes.

A general provision of this kind would have to cover the whole field of insurance. In that circumstance, it would bear heavily on insured persons who had claimed and received benefit in all good faith, but whose right to it was upset on appeal. It would certainly be quite contrary to the spirit of the present provisions, which require repayment only where the statutory authorities are not satisfied as to the good faith of the claimant.

I should like to say a word on the question of delay. Bearing in mind that the conduct and the timing of these appeals rests entirely with the independent authorities, in fairness one must point out why such operations are sometimes protracted. Generally, under agreed procedure on these trade dispute claims, with the assistance of the trade unions we try to deal with them on the basis of test cases which are selected to cover certain groups of applicants, although this in no way debars individuals from pursuing their own claims if they so wish.

This procedure involves the selection of one case representative of each grade or class of work involved in the dispute. This has considerable advantages for claimants, and the unions, and employers; for the departments concerned, the Ministry of Labour and the Ministry of Pensions and National Insurance and also, of course, for the statutory authorities themselves.

Four test claims from blacksmiths' strikers who lost work as a result of this dispute were taken and, with four individual claims, were referred to the local tribunal. One of the test claims covers the claim of Mr. Morrison, who is a blacksmith's striker. The claims were considered by the tribunal at two sittings—on 1st March and 16th March—and all the claims were allowed. Appeals against the allowances were made by the insurance officer on 21st and 30th March, and payment of benefit was accordingly suspended.

Following the submission of the appeals it became necessary to make further inquiries in order that the full facts could be got together for submission to the Commissioner, and the insurance officer's detailed submissions to the Commissioner were made on 1st June. With the withdrawal by the insurance officer of two of his appeals, there are now before the Commissioner four appeals on individual claims and four appeals on test claims covering 19 other claimants. In all, 27 blacksmiths' strikers are covered and, in addition, there is an appeal by a blacksmith which also covers a fellow blacksmith. The number of claims now covered by appeals before the Commissioner is, therefore, 29.

The circumstances surrounding a trade dispute make it difficult to get all the facts, for union officials and employers may well be preoccupied at the time with other aspects of the dispute. At this time, and in this area, there was a dispute on pay, and another on demarcation, with complications which made the task even more difficult. It is therefore hardly surprising that, by the time the appeal had reached the stage of being prepared for the Commissioner, new facts and contentions were brought forward which needed to be verified and investigated before detailed submissions could be made to the Commissioner. While these difficulties explain why it sometimes takes time to get so many appeals arising out of the same dispute ready for the Commissioner, neither those responsible for preparing the cases for submission to him, nor the Ministry are complacent about the present situation.

With the full co-operation of the Ministry, experiments are now being made to find out whether the preparation for the Commissioner, not only of trade dispute cases, but of appeals generally, can be speeded up. There is good reason to hope that these experiments will be successful and effective, not least in the trade dispute cases where the need for adjudication as speedily as is consistent with justice is specially recognised by the Minister and by the adjudicating authorities.

It is understood that the oral hearings of all the appeals arising out of the pay dispute have been fixed for 23rd and 24th August. It would not be proper for the Minister, or anyone on his behalf, to intervene in the consideration of appeals by the Commissioner, but there is no reason to suppose that the Commissioner is not seized of the undesirability of any avoidable delay. I can give the assurance that, so far as the Minister is concerned, and the members of each department in any way in which we may be concerned, we shall do all in our power to expedite such proceedings.

Mr. A. J. Irvine

May I thank the right hon. Lady for the thoroughness with which she has dealt with the matter. Can I have an assurance that she will, in the light of what I ventured to say, reconsider the possibility of seeking again a way over the main difficulty of suspension of unemployment benefit in these cases. And will she also be good enough to consider the point which I made with reference to eligibility for National Assistance which, I think she will agree, has a connection with matters which are her responsibility?

Miss Hornsby-Smith

indicated assent.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Seven o'clock a.m.