REDUNDANT WORKERS (SEVERANCE PAY) (Hansard, 6 February 1963)

§ Mr. John Diamond (Gloucester)

I beg to move, That leave be given to bring in a Bill to provide minimum terms for severance pay for workers dismissed through redundancy or other causes beyond their control. In ten short minutes may I explain why it is that I seek to trespass on the patience of the House for a second time and, in effect, to reintroduce this Measure? In the circumstances of the day, I think that we are all fully satisfied that the right to work is fundamental, that the right to make a contribution to the society to which he belongs is a fundamental right of a worker.

But there are two other rights to which I wish to refer. There is the right to seek an increased standard of living, and the right for the worker and his wife to spend their earnings in the way they wish, and to change the pattern of their spending from time to time. To increase the standard of living inevitably means that there will have to be increased efficiency, and that means that there will have to be technological developments, of which we are all aware. That inevitably means some dislocation of employment. Furthermore, if we are to be free to change our pattern of spending, there will inevitably be a change in the pattern of supply. That means workers moving from one production to another, and that again means some dislocation of employment.

Both these fundamental rights mean change. Both mean temporary unemployment and in present circumstances—and I underline that it is in present circumstances—both mean great hardship for the individual. Both encourage a great sense of insecurity among the workers. We cannot escape the conclusion that for a prosperous and free society an element of mobility of labour is required, but for a just society we require that the worker involved should not suffer. Indeed, he is the person whom we should consider first and not last.

The Bill is intended to meet these very circumstances. As the House may remember, its terms provide for redundancy 448 payment, severance payment, as it is called, based on one week's pay for every full year of service given to an employer, in respect of the loss of a job through no fault of the employee. This would tend to remove the hardship which I have just mentioned in a way which nothing else does. It would provide a sum of money, not very large, but at the very time it was most needed, when the worker was suffering what might be a catastrophic drop in wages on being declared redundant in a job in which he was highly skilled and well paid. It provides that sense of security which we seek to establish.

It demonstrates to the worker that society is saying to him, "We need the product of your work: you need the work; we need you. If we need you to change from one job to another, we, society, will look after you in that period of change. We will train you"—I hope—"and we will see that you do not suffer hardship in the period of change, so far as we can avoid it." That is the way to improve labour relations. It is the way to encourage a sense of loyalty in the worker, who will reciprocate when he knows that his employer is taking this attitude and that if the worker is unfortunate enough to be declared redundant, it does not mean he is being put on the scrapheap.

Cost is not an argument against the Bill at this time. Even in present circumstances—I repeat what I said on the subject last year—the Bill would not cost more than 2s. per£100 of wages, 2s. per cent., the minimum cost of an ordinary fire insurance policy. As the House will remember, compared with what exists among the best employers in this and comparable countries, this little Bill provides less than the best. I seek to provide a minimum, not a maximum.

The best employers, the nationalised industries, the Civil Service, local government, and so on, all provide something in the form of severance pay when a man is declared redundant. All comparable countries on the Continent, and the United States, provide, either by legislation or by agreement, that there shall be compensation greater than that provided in the Bill. We cannot but recognise that we are far behind what is done in comparable circumstances in 449 similar countries which have higher standards for the treatment of redundant workers.

It is necessary to deal with this matter by legislation because negotiation has been shown to be far too slow. I estimate that there are now only approximately 15 per cent. of the country's employees who are provided with satisfactory redundancy agreements. What I seek to do is to provide a minimum and the figures I have suggested enable negotiations for increases to take place in appropriate cases, and in other cases to provide a floor for the employee.

It may be asked why I trespass on the patience of the House to introduce the Bill a second time. There are two reasons. The first time the House was good enough, and gracious enough, to give me leave to bring in the Bill, which meant that the House felt that, given time, there should be an opportunity to discuss some of the principles, was on May Day last year. That was clearly too late in the Session for adequate time to be provided for this kind of discussion. Recognising that, I have sought leave to introduce it again about three months earlier in order to give a better opportunity for the discussion which the unopposed leave which I was given last year seemed to indicate that the House thought appropriate.

Furthermore, everything which has happened since last May Day has underlined the need for a Bill of this kind. I have had an enormous correspondence indicating the state of opinion outside the House, and all of it has been in support of the Bill. I have not had one letter opposing it. I have been glad to read many interesting suggestions by employers, including, in particular, a well-known Scottish employer, including proposals almost identical with those of the Bill.

The Press, without exception, has been kind enough to comment favourably on the introduction of this Bill last year. Particular papers which might be thought to have a political affiliation, such as the Daily Telegraph, the Guardian and the Daily Herald, have all had very approving leaders on this topic.

450 Finally, there have been two comments from party spokesmen with which I must trouble the House in detail. It will be recollected that during the debate on the Queen's Speech last year, Hugh Gaitskell, our much loved leader at the time, referred to this very Bill and to me and said that there should be provision for redundancy payments, especially for those whose had served an enterprise for many years".—[OFFICE. REPORT, 30th October, 1962; Vol. 664, c. 27.] On Monday of this week the Minister of Labour said these important words during the debate on unemployment: Next, we must adjust ourselves to more rapid and industrial technical advance and the consequent changes this must have on employment. We should not and cannot allow this to take place at the expense of the individual. The fear of change and what it can mean is a powerful incentive to resist change and to slow it down by all possible means. We have to ensure that the need for change is accepted and that there is cooperation in creating an efficient and more flexible economy. The problem of security of helping the worker to face change with confidence—is basic to our industrial efficiency."——[OFICAL REPORT, 4th February, 1963; Vol. 671, c. 65.] I end with the words of Thomas Carlyle: The progress of human society consists…in…the better and better apportioning of wages to work. I feel that this society is ready for this step forward.