REDUNDANT WORKERS (SEVERANCE PAY) BILL

HC Deb 14 February 1964 vol 689 cc695-795

Order for Second Reading read.

11.5 a.m.

Mr. Julius Silverman (Birmingham, Aston)

I beg to move, That the Bill be now read a Second time.

This Bill is not a stranger to the House. A Bill which was similar in many respects was introduced by my hon. Friend the Member for Gloucester (Mr. Diamond) on two occasions, in 1962 and 1963, and I am grateful for the assistance and advice which he has given me on this Bill. It conforms to his draft with the exception of certain items which I shall mention, and which are contained in Clause 3(a).

I shall go briefly through the Bill's provisions. It is intended to provide compensation for workers who are declared redundant, and it is particularly valuable for those who have been employed for a long time and who then suddenly find themselves without a job and having to rely for many weeks, or even longer, on inadequate unemployment pay to tide them over.

The Bill does not apply to local authorities, but in their case the question of redundancy is not an important one. It does not apply to workers who are on pension or superannuation. I have adopted this part of my hon. Friend's Bill with some misgivings, but, on the whole, it is within the logic of the Bill that it should apply to workers who are in transition from one job to another while not being a sort of gold watch which is given as a supplement to superannuation or retirement pay.

Captain Walter Elliot (Carshalton)

Will the hon. Member expand his argument that the Bill should not apply to local authorities' employees? I have here an extract from the Ministry of Labour Gazette, and as I see it only the established staffs in local government service are covered in the way the hon. Member referred to. Many local authority employees are not established, and I should have thought that the Bill ought to apply to them as much as to employees in private industry.

Mr. Silverman

I am grateful to the hon. and gallant Gentleman for his intervention. I had thought of that point. In Committee, we can consider the question of non-established municipal officers, some of whom may be serving short terms of employment. Generally, speaking, however, it is not a great problem, because on most occasions a municipal officer who loses his job in one department obtains a job in another. Anyway, the matter can be considered in Committee. The Bill is intended mainly for those who are employed in industry.

Clause (2,c) provides a qualifying period of 12 months. I believe that the Government and several other people think in terms of a qualifying period of five years. Frankly, I do not like the longer qualifying period, because a man with short terms of employment of, say, three or four years, and who then goes to another firm, may find himself without any compensation whatsoever. It seems to me that he should get some compensation for the period of transition. To leave a man who has been employed for three or four years entirely without compensation would be unjust.

Of course, the main beneficiaries under the Bill would be those with very long terms of employment in the same firm and who are declared redundant. They would receive very substantial sums under the Bill. I think that that is right. I believe that a man who has spent his lifetime working for one firm should not be discharged with a mere pittance of, say, one or two weeks' pay as compensation, which not infrequently happens. This is a gross injustice to the man and gross ingratitude on the part of the employer. It is a bad thing that this should happen in any industry.

I now come to the provisions of the Bill concerning the amount of compensation to be paid, and in this matter I have departed from the draft of my hon. Friend's Bill in two respects. First, the calculation of the weekly earnings of the employee in my Bill are based upon a five-year average, or less if it is less than a five-year period of employment. It may be remembered that my hon. Friend's draft included an average for the whole period of employment which would be rather difficult to assess if we are thinking in terms of a 20-year or 30-year period of employment.

There is now introduced a system of weightage for the years when a man is aged 45 to 60. Those are the difficult years, when a man is more in need of compensation and when he usually has family and other obligations. Moreover, it is frequently more difficult for a man of that age to obtain fresh employment. For that reason, there is a system of weightage, and for every one of those years it is proposed that compensation should be assessed at two weeks' earnings instead of one, based upon the same average.

I will give the House an example. Suppose that a man has been in employment from the age of 40 to 50 with one firm and then is declared redundant. Under the Bill it is proposed that he should receive an average of one week's earnings for the first five years up to the age of 45 and thereafter an average of two weeks' earnings, which means that he would receive 15 weeks' pay in all. I hope that that example will make the situation fairly clear.

As far as I understand, the principle of weightage has been accepted by the Government, and is obviously a very desirable principle as far as those in that age group are concerned.

Sir Spencer Summers (Aylesbury)

When the hon. Gentleman says that the principle has been accepted by the Government, could he make himself a little clearer?

Mr. John Rankin (Glasgow, Govan)

The Contracts of Employment Bill.

Mr. Silverman

This, I understand, is a principle which has not only been put into operation by some Government Departments and agencies but has, I believe—in this, of course, I rely on indirect information—been accepted, although they did not accept the same amount of weightage as I propose in the Bill.

Clause 4—Treatment of severance pay where due—states, as the House will notice: severance pay shall be treated as preferential debts, ranking equally with all other preferential debts, for all purposes of the Bankruptcy and Companies Acts. Whilst that may not always meet the case of the small firm which goes bankrupt, I am afraid that it is the best that I can do in a Private Member's Bill.

That brings me to one of the objections that may be made to the Bill—that it ought to be a Government Measure. As far as my colleagues and I are concerned, we entirely agree with that view. If the Government are prepared to give a categorical assurance to us today that they will introduce legislation on this point during the present Session we shall be quite happy. When my hon. Friend introduced his Bill during the last few minutes on a Friday the Measure was talked out by the Minister on the basis that the Government were going to introduce legislation this Session. That has not happened. We were told in the Queen's Speech that negotiations were proceeding. That is not good enough. We do not think that these people should have to wait another year for such legislation, and that it ought to be introduced during the present Session. I repeat that if the Government will give such an assurance it would certainly not be our intention to divide upon the Bill.

I agree that this ought to be a Government Measure and that there are certain matters which only the Government can introduce into a Bill and which a private member cannot. I have introduced my Bill because Government legislation has not been introduced. I do not think that the worker who is being declared redundant today should have to wait until all parties are entirely agreed 100 per cent. on the principle and the details on which such provisions should be applied. I think that the Government should proceed with legislation on the matter forthwith.

The question of severance pay and the principle of the Bill are, of course, not new. There are a number of places in the world where such provisions already operate. I understand that in Italy such a scheme has been in operation for some time and that the benefits were increased in 1960. It is a statutory scheme of severance pay. There is a similar scheme in Belgium. The Italian scheme has been operative since 1924 and in 1960 further legislation was introduced which increased the compensation for salaried employees to one month's pay for every year's service.

In Belgium, the manual worker on an indefinite basis of employment, according to the law of 10th March, 1954, receives compensation in lieu of notice. This generally means that if the worker has been employed for less than six months he receives 14 days' pay; if he has been with the firm for 10 years he receives 28 days' pay, and if he has been with the firm for 20 years he receives 56 days' pay.

In 1957, an Act was passed in Yugoslavia which prescribed that workers with 15 years' service in the same undertaking or with 20 years' employment in general should be entitled to a leaving indemnity equivalent to four months' remuneration. In Luxembourg in 1937 legislation provided that salaried employees dismissed for reasons other than misconduct should be paid the equivalent of two weeks' pay after two years, four after 20 years and six after 25 years. Austria and Greece also have statutory provisions in this respect. It is true that in West Germany and France no such provisions exist, but they have others relating to redundancy which limit the power of an employer at his own whim or discretion to declare a worker redundant. In the United States there is no statutory provision for redundancy or severance pay. But, as in this country, many American firms have agreements providing for severance pay in the case of redundancy.

Mr. R. Gresham Cooke (Twickenham)

To complete the European picture, which the hon. Gentleman has very fairly set out, would not it be correct to say that in Sweden, where there is a vast amount of labour legislation, there also is no statutory provision for severance pay?

Mr. Silverman

That is correct. But there has been a policy of full employment in Sweden. I do not know whether that is a justification for having no pro vision for severance pay. But there is no unemployment in Sweden, even as we know it in this country, and presumably that is a reason why such a provision has not been introduced.

According to the Ministry of Labour Gazette for February, 1963, the Ministry was aware about three years ago of agreements dealing with redundancy and severance pay entered into by firms in this country and involving 1,105,000 persons. That figure may not be complete, but it constitutes the vast majority of the firms and employees involved. More recently this number has increased and now involves firms employing 1¾ million people. This means that there has been an increase of about 600,000 in a period of three years, which indicates that industry is moving in the direction of severance pay provisions; but the figures also make clear that this movement is not fast enough. Moreover, a large number of these agreements provide for amounts of severance pay which are unquestionably inadequate.

The agreement involving a very big employer of labour, the British Motor Corporation, relates to a severance pay rate based on a consolidated time rate of £10 11s. 8d. for a 42-hour week. After three years there is a payment amounting to one week and after 10 years a payment amounting to three weeks pay at an appropriate time rate. This means that a man who, after 20 or 30 years' service, was made redundant would receive about three weeks severance pay, which is quite inadequate. This money would soon be exhausted and for a man aged 45 or 50 this would present an extremely serious problem.

There are some agreements which are adequate and indicate what may be done. The B.O.A.C. severance pay agreement for employees in its E. & M. department provides for four weeks' pay in respect of three years' service; five weeks for four years and on on until after 24 years' service an employee would receive 48 weeks' pay. That is a more generous provision than appears in this Bill.

I know that it may be said that such payments would constitute a serious charge on industry and I appreciate that. But I feel that not merely in the long-run but in the short-run too, it would pay industry to incur this charge. It would be in the interests of industry as well as of the workers in this these changing and dynamic times that these provisions for transition should be made. It has been suggested to me that a man who was employed for 20 or 30 years would cost a company many hundreds of pounds and that this would be a hardship on the firm. Perhaps it would be. It is a difficult problem for the firm. But the circumstances for a man who has spent his life working for a firm, and then finds himself thrown on the scrap heap, may be much more difficult, if he is expected to manage either with no compensation or with an inadequate amount of compensation.

It has been suggested that this problem could be dealt with by increasing unemployment pay, but I do not agree. However much we increased unemployment pay within what either side would consider reasonable limits, we should be unable to cope with this sort of contingency. This problem is something quite different from the situation which is met by unemployment pay and superannuation.

This provision would not be a substitute for a policy of full employment. It would not absolve the Government, or any succeeding Government, from the duty of maintaining full employment. The provisions relate to transitions which must take place in a changing society. It is not anticipated that we shall have many hundreds of thousands continuously unemployed. The main object of the Bill is to deal with the era in which we live. New industries are being born and old ones are dying. Whatever we may think of mergers which take place, they frequently indicate the birth of a new industry and new technologies and the passing of the old.

This is something with which industry has to cope and it must be done in a humane fashion. We must provide for automation, not by throwing the worker on the scrap heap, as has frequently been done in the United States, but by providing a transitional period for adjustment, by providing the necessary retraining and, above all, by providing a new job. We must not create a new race of Luddites. We must bear in mind that the Luddites, who have sometimes been condemned as stupid and silly men who stood out against the forces of change, were not objecting to change, but to the harsh impact of events upon themselves caused by change in a society which never considered that human beings were being dealt with, but believed in the use of economic forces, the brutal force of economics, in order to drive people into new forms of employment or to create new forms of industry.

We cannot afford to have this in this country in the latter part of this century. Therefore, in dealing with these transitions and changes, it is essential that we apply a human yardstick and human methods, and to do that we should introduce a Measure like this which must increasingly become an essential part of the society in which we live.

There are many of my hon. Friends present who will speak about different aspects of the Bill. I would simply say this. I know that the Bill is not perfect by any means. In fact, as I have gone into the problems related to the Bill, I have come to realise more and more the difficulties and some of the pros and cons of various provisions. One or two hon. Members have mentioned certain points this morning which I am sure should be taken up when the Bill is fully discussed in Committee. I hope that the Bill, which, I think, serves a valuable purpose, will commend itself to the House and that it will be given a Second Reading so that, with the assistance of hon. Members, it may be improved upstairs.

11.31 a.m.

Sir Spencer Summers (Aylesbury)

I think that we should all be glad that this Bill has been brought forward today if only for the reason that it enables us to exchange ideas on this very important topic in the context of the changing world to which the hon. Member for Birmingham, Aston (Mr. J. Silverman) referred.

I cannot support the Bill on Second Reading, but I welcome the opportunity to exchange views on this topic. Those of us who spent many hours on the Contracts of Employment Bill will recall that an attempt was made to introduce this aspect of the problem into that Measure and that the Minister made it plain that he thought that that was no place to deal with it. He therefore can be hardly surprised if other opportunities are taken, such as the Bill we are discussing, to focus attention upon it.

It is a very welcome change to hear such emphatic language as that used by the hon. Member for Aston condemning the Luddites and to hear such language coming from the benches opposite. I do not know whether such language would have sparked off indignation on the benches opposite if it had been made 10 or 15 years ago. However, the fact that it now passes without any comment is very welcome.

Mr. Rankin

The hon. Member is making the comment.

Sir S. Summers

I do not think that that will help us much.

The problem has been somewhat oversimplified by the comment that a contribution to the solution of this problem should not come from a change in unemployment pay but that it should be confined, as the Bill attempts to confine it, to help from the employer. As I see it, there are two relatively distinct aspects of the position of the man rendered redundant, and because they are distinct they should be dealt with separately. There is the national aspect that if a man has a cushion upon which he can rely when one job is lost before he gets the next this will increase mobility of labour. It will facilitate changing methods of manufacture and changing areas of industrial life. Clearly, from the general economy's point of view, it is helpful if change can be encouraged by a national system as opposed to one concerned solely with the employer.

There is clearly an element of hardship if a middle-aged man, through no fault of his, finds his employment brought to an end and is forced to look elsewhere. These twin considerations of individual hardship and the need for mobility of labour suggest to me that we should look for help in dealing with this aspect not solely to the employer but also to the unemployment payment. Nevertheless, this inevitably introduces a complication, because hitherto money paid against the hazard of unemployment has also always been paid against the hazard of sickness and pension. Clearly it would be out of order to develop this point at great length. The relevant considerations in these three hazards are dealt with through the National Insurance stamp. But we have broken away from the universal pension. We have graduated pensions and benefits related to earnings.

If the time comes—and I hope that it will—when we relate unemployment benefit to earnings we may depart from the universality which has been in force since the Beveridge Report. If we have to do the same in respect of sickness, that may be, but I think that once we depart from a flat-rate benefit we open up the possibility of differential treatment between beneficiaries in respect of these three separate risks.

I would therefore hope that we would not drag our feet in the unemployment sphere in dealing with this problem by having to look over our shoulder at the effect of a change upon the sickness benefit situation. I do not want to elaborate at length how the change in the unemployment benefit should be used to make a contribution to this problem. because I think that it requires more study than I have been able to give it. All I want to do is to express the view that some part of the solution should be sought in the unemployment benefit and that the solution should not be confined to payments made compulsorily by law through the employer.

Mr. J. Silverman

I am sure that all hon. Members will entirely agree that there should be an increase in unemployment pay, which would make a contribution to solving the problem.

Sir S. Summers

I understood the hon. Member to say that he did not wish the National Insurance stamp to form part of the solution of the problem with which the Bill deals. I thought that he wished the Bill to be confined solely to employers. What I am saying is not that there should be a flat-rate increase in unemployment pay, because many men are liable to be thrown out of work for a short period at some time, but that we should consider a different unemployment rate for a period to deal with such men, without necessarily making it a long period such as a year or more, to deal with those who are thrown out of work.

Mr. John Page (Harrow, West)

I am trying to follow my hon. Friend's argument. Is he saying that there should be higher unemployment pay, graduated for the longer the man is unemployed, or that he should receive a larger amount of unemployment pay in the early stages of his unemployment?

Sir S. Summers

I am saying that any departure from the same weekly rate so long as a man is entitled to benefit should be on the lines of a larger payment for the earlier period to take care of the situation with which we are here dealing, and then falling back to whatever level is thought proper in the light of various national and relevant considerations.

I turn now to the other source from which I agree that a solution should be sought, namely, the employer. It is right to look to the employer for a contribution, for two reasons. One is that if an employer is saddled with responsibility in connection with men in his employment who are rendered redundant an incentive is automatically provided for him to find other work for them in another factory or type of occupation, thus enabling him to avoid the payment which otherwise he would be obliged to make. Therefore, an obligation on grounds of incentive can properly be placed upon the employer.

There is also the point that if a man has worked a long time for one firm, he deserves a larger severance payment than the man who works a short time in a job. But I see no reason why through the stamp, largely financed by the taxpayer, the taxpayer himself should be asked to recognise the increased claim of a man who has worked a long time in a job as against a man who has worked a short time. It is the employer who has had the benefit of the continuity and it is the long-service recognition which should be given by the employer rather than through the stamp, because the taxpayer has no justiable reason to take note of the higher claim which such people have.

Therefore, to my way of thinking, quite distinct considerations are appropriate to the circumstances of the men about whom we are talking; and be cause they are different, because they are allied in the one case to the national consideration and in the other to local and company-wise considerations, this establishes a case for saying that there should be two sources from which help is given and that when comprehensive legislation is produced, it should deal with both spheres simultaneously, and not only with one sphere, as the Bill seeks to do

Mention was made of the fact that if only the Government would give encouraging assurances of their intention to legislate during this Session, the sponsor of the Bill would be happy to withdraw it, because a more comprehensive alternative would be forthcoming. I do not know whether we should interpret this hint as meaning that the hon. Member for Aston would like the pre sent Session to be prolonged to the very last moment and the election deferred as long as possible to enable this legislation to be brought forward. Is might be an interesting way of conveying the view of the Opposition about the time which suits them best for the election.

Mr. J. Silverman

The sooner the better.

Sir S. Summers

If the General Election is deferred until practically the last minute, I hope that those who would wish more time for such legislation to be introduced will not be those who complain that the Government are outstaying their welcome.

There is only one other aspect to which I wish to refer. That is the element in the Bill which weights the payments to men over 45 for a given period of service as compared with those under 45. The illustration which was given clearly highlights and explains the intentions of the Bill. While I understand the reasons why men over 45 are thought to have a greater problem, my view is that the degree of weighting which is suggested spoils the case.

For example, a man who joins his firm at the age of 45, and is made redundant at 55 with 10 years' service clocks up 20 weeks' pay claim. The younger man must work for 20 years, not 10, to be in a comparable position. That gives far too little consideration to the number of years that a man works in a job compared with his claims under the scheme by virtue of his age. Therefore, it is much better to assume that the elder man is most likely to have a higher claim by virtue of his length of years' service with the firm. According to my earlier argument, this should properly be placed upon the employer as a responsibility which he should discharge. It would be better to deal with the problem that way and get the weighting that is sought by this method implemented by the dual source of help for the problem. I may not be expressing myself clearly, but I consider that if there is help from both sources, both the stamp and the employer, the weighting could come in a more satisfactory way than is sought in the Bill, which might well create serious anomalies.

The man who works for 15 years under the age of 45 would get, for instance, substantially less money than the man who works ten years over the age of 45, because the multiplier is so forceful. I hope, therefore, that if in any legislation which is introduced thought is given to weight for age—if that is not too much of a racing expression—the weights will not be too heavily weighted, otherwise there will be anomalies which to the individuals concerned will cause more friction than a sense of justice in the process.

I hope that those who are interested in getting something on to the Statute Book will not press the Bill to a Division today. We should he glad to have had this opportunity to discuss the problem. Whatever the nature of any promise which is made by my right hon. Friend the Minister, I hope that hon. Members opposite will not feel it necessary to press this matter to a Division.

11.48 a.m.

Mr. Robert Edwards (Bilston)

We would all desire to congratulate my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) on selecting this subject for his Private Member's Bill. As one who has been fortunate in the Ballot, and has had the opportunity of submitting three Bills to the House, I know the great temptation which one has to submit Bills of a more spectacular nature than the one we are discussing this morning. It is to my hon. Friend's credit that he has selected this modest but practical Bill.

The hon. Member for Aylesbury (Sir S. Summers) reminded me of the speech of Anthony. He seemed to come to praise Caesar and not to bury him. The hon. Member seemed to think that there was a lot of goodness in the Bill, but that he would have to vote against it. I was astounded to hear his remarks that my hon. Friend's comments about Luddism stimulated no spark of protest from these benches and that had that speech been made a few years ago, there would have been protests.

For half a century, this side of the House has always welcomed every improvement in the means of producing wealth. It has never interfered with the application of science and technological processes which have increased productivity. It is the monopolists who have sabotaged science and prevented the operation of new methods of production if they involve great capital expenditure. The trade unions, on the other hand, have actively co-operated with industry in introducing every new labour-saving device of basic importance, because these new methods have reduced human toil and have increased the volume of wealth.

Sir S. Summers

Will the hon. Member take a little time to examine the printing industry, where he will find that what he is saying is quite untrue?

Mr. Edwards

Hon. Members opposite always take minor examples—

Mr. Gresham Cooke

What about the docks?

Mr. Edwards

Well, what about the printing industry? The dispute in the printing industry, in Odhams Press, is precisely about the problem which we are discussing this morning.

Mr. Rankin

It is the same in the docks.

Mr. Edwards

It is the problem of the absence of social security. The dispute with the Daily Mirror employees and the Daily Herald is because these workers are not sure of their future. In the reorganisation and development of a new paper, they rightly want to know in advance whether they have job security. That is what this is all about. Who can blame them? A man works only for wages. He works only because he needs an income to keep body and soul together and to give him a little extra for a cultured life. If this is threatened he is a slave—he has no future. This Bill seeks to deal with this very problem.

Sir S. Summers

The hon. Gentleman cannot say in one breath that the trade unionists welcome the advent of science and in the next breath tell us that for want of proper consideration for those thrown out of work there is trouble in using new machines.

Mr. Edwards

The dispute is not because of the introduction of new machines into the printing industry. The dispute is about the future of these employees arising out of possible reorganisation. We want plenty of consultation. This is not an official dispute. It is a dispute arising out of the fears of men on the spot, and most of the disputes in British industry arise out of a lack of understanding and consultation at factory level or at dock level. Fundamentally, they do not arise out of the breakdown of national negotiations.

A point was raised by an hon. Member—who just shouted it out and did not stand up—about the implied restrictive practices of the trade unions. That has not a lot to do with this Bill, but I suppose that it is part of the general discussion that we shall have this morning. Ninety-eight per cent. of British industry has never been involved in major industrial disputes. In the chemical industry—forgive me saying so as general secretary of the Chemical Workers' Union—we have never had a national strike. No industry in Britain is more highly mechanised than the chemical industry. We have great new plans for the industry. Where 700 or 800 workers were employed five years ago, there are now only 70.

Mr. Speaker

I think that to argue that industrial difficulties arise because of the fear of insecurity is just admissible within the rules of order on the Second Reading of the Bill, but that these other matters go beyond that.

Mr. Edwards

I beg your pardon, Mr. Speaker, but I was led to take up points thrown into this debate by hon. Members opposite.

I think that the point of security is vital to what we are discussing this morning. The question of security arises today and will rise increasingly in the future because of the changes in the whole pattern of British industry and agriculture. We are moving into an era based on a technical revolution. This great technical revolution will be as basic as the first industrial revolution. Indeed, it may bring forward problems for the industrial workers and technicians much greater—magnified tenfold—than were created by the first industrial revolution.

When the power machines were first introduced hundreds and thousands of our forebears were thrown on to the streets. They were destitute with no future whatever. When a man has no future because he is not allowed to work, he becomes an outcast, a slave, he loses his dignity, and this modest Bill is aimed at giving married men who have worked constructively for a firm security and dignity.

It is suggested that when men have contributed to the production of wealth in any firm, and, due to the introduction of new methods of production, their services are no longer required, they are entitled to some compensation. They are not entitled to that compensation today, apart from the negotiations that take place through the trade unions.

If a director is found redundant through the merger of a firm he gets very substantial compensation. I have the facts here arising out of mergers. The chairman of F. Perkins, Limited got £30,000 in severance pay. Two other members on the board received £4,375 and £2,500 respectively. This is severance pay for loss of earnings. The chairman of Ely Brewery Company received £30,000 compensation. The chairman of British Aluminium got £30,000 compensation. The deputy-chairman and managing director of British Aluminium got £58,000 between them, and so we could go on. The principle of payment arising out of loss of earnings through loss of employment for top executives in business is established.

Mr. John H. Osborn (Sheffield, Hallam)

On the particular information he has quoted, does it state whether or not it is possible for the managers and directors concerned to leave of their own volition or are they tied to the company? Is there a reciprocal agreement both ways? I think that he will find that is the case.

Mr. Edwards

It is compensation for loss of office arising out of mergers or reorganisation. This modest Bill is designed to establish a similar principle for industrial workers. It should not be a debatable issue at all.

There are in British industry today many such agreements negotiated by the trade unions and managements. The trade unions prefer a long period of notice before redundancy. They prefer six, eight or 10 weeks' notice to a worker who is likely to lose his job, and they try, during the period which is given, to set up schemes for training so that workers may take alternative occupations. The good firms in this country give plenty of notice and, more than that, they establish little training schools within their factories, and a pool or labour, so that, if a worker loses his specialised job, he is trained to take another.

But we are not dealing here with the best firms. If all firms in all industries were willing to operate according to the standards of the best, there would be very little industrial trouble and little need for a Bill like this. However, there is a great danger that. in different parts of the country, we are creating groups of highly privileged workers who, because of their skill and the special prosperity of their industries and because they are organised in strong trade unions, are able to make great advances in extra fringe benefits and extra social services.

In other parts of the country which are plagued by unemployment, particularly those which have been dependent on the older industries now being swept aside by the development of new techniques and entirely new industries, the workers are under-privileged. It is essential that we have a plan to give something nearer equity in all these matters. We must advance our social policies in line with the development of new methods of production. If we do not, we shall be in serious trouble.

On television last night, there was a dreadful film about the unemployed miners of Kentucky in the United States. A million miners in that area have no incomes whatever and no possibility of alternative employment. We do things a little better in Britain, and we do not envisage that kind of situation. But we can have a situation in which an increasingly large number of workers lose their security of employment because of the introduction of automation and electronic devices and receive no compensation whatever, although they may have worked in a firm for very many years.

What we are asking for is a. simple act of social justice. It has been recognised as such in all the countries of the European Economic Community. In the Coal and Steel Community miners who lost their jobs in the pits as a result of the operations of the Community received as much as one year's pay while they were being retrained, and a special fund was set up for this very purpose. The same was true of the steel workers who were guaranteed basic wages for one year until they were retrained to take up other occupations or to move to another part of Europe.

In Italy, a relatively poor country, in Belgium, in France and in Holland the principle of severance payment is recognised. There was a time when we led the world in the matter of social rights. There was a time when we were ahead of almost all countries in looking after the social needs of our people. But we are not now keeping pace with the times. We are not moving ahead with the development of British industry.

The Bill will not solve all the vast problems of social insecurity, but at least it will give workers some feeling that their interests are being looked after and that we are beginning to think in terms of full employment or full maintenance. This used to be one of the policies of the Labour movement in its earlier days. If a man could not be found a job, he was entitled to full maintenance. He was not out of work because he wanted to be unemployed; he was the victim of a system and, therefore, he was entitled to complete security to satisfy at least the major physical needs of himself and his family.

I have spoken much longer than I had intended. I hope that this modest but very important Bill will be received favourably by the House and be given a Second Reading.

12.6 p.m.

Mr. Aidan Crawley (Derbyshire, West)

This is an unlucky Bill. Whoever begets it never sees it born, whether it be the hon. Member for Gloucester (Mr. Diamond) or the hon. Member for Birmingham, Aston (Mr. J. Silverman), who has put it before us today. If it is pressed to a Second Reading, I shall not be able to assist at its birth. Nevertheless, I say to my hon. Friend the Parliamentary Secretary that, had I been in the House when the hon. Member for Gloucester first introduced his Bill two years ago, and had I waited for action all that time until now, I might have been tempted to support it.

We know that negotiations have been going on and surveys have been made into the whole question of redundancy and severance payments, which are only a part of the problem, and the time has now come for action. However, I have confidence that my right hon. Friend, who has not been very long in office, intends to take action, and much more comprehensive action than this, by the introduction of a Measure which will provide not just severance payments on redundancy but which will, I hope—this seems to be what we are all struggling to do—transform the whole notion of redundancy and, indeed, eradicate it, establishing instead the idea that change is normal and must be prepared and provided for and made welcome.

From my reading of what has been said on this subject, particularly by the hon. Member for Gloucester in introducing his earlier Bill, I gather that this is what is in the minds of hon. Members opposite, too. They want to take the element of chance out of employment, to remove the feeling that the life-work of any workers, men or women, is at the mercy of events outside their control and ensure that, if their work does come to an end, they do not feel discarded. I agree with those who have said that we have now learned enough about how to organise our economic society to make this possible. But, of course, severance payments by themselves do not really go very far to eradicate the feeling of uncertainty. They are a cushion, but a very small cushion, against the shock of redundancy if it is allowed to come. Although we may need that cushion, I do not want to see it introduced in isolation.

I want the Minister gradually to remove the possibility of the shock and to make the probability of change normal. After all is said and done, change ought to enrich people's lives, not impoverish them. To my mind, what matters most in dealing with the problem of redundancy and drastic change is what precedes the change and what comes after it rather than what happens actually at the moment.

How inadequate our present provisions are has been brought home to me recently. Last week a decision was taken in my constituency by British Railways. It was announced that a small marshalling yard, at Rowsley, in West Derbyshire, is to be closed and that the full procedures for closures and redundancies will come into operation. By general standards it can be claimed that the British Railways' procedures are fairly good. They include a scheme of extended notice, not severance pay but resettlement pay not unlike that envisaged in the Bill, and elaborate and, I believe, excellent retraining schemes.

Despite all this, and the knowledge that these schemes exist, the closure of this marshalling yard has come as a tremendous shock directly to 600 men and to many more connected with them because of the way, even under the procedure of British Railways, it has been done. Despite the plans in hand by British Railways the men are already feeling redundant, unwanted and terribly anxious about their future. This is because the preparation for this decision was wholly inadequate.

Rumours about the possible closure of this marshalling yard have been circulating since Dr. Beeching's Report. I am told, although even at this stage I have not been able to get detailed information, that railways experts have felt that such a move was inevitable. Instead of explaining this to the men immediately the possibility became apparent of what might happen—and I am not saying that there is not a good case why this marshalling yard should not be closed—a straightforward announcement was made. Had the matter been fully explained to the men they might have been persuaded that the closure was in the interests of the railways generally. Had earlier consultations taken place the question of finding new jobs in the area and so on could have been considered. Instead, consultations did not even take place with the local council, which is vitally concerned in this matter and which, had it been consulted, might have taken steps to attract other industries into the area.

Instead of taking these steps British Railways made the announcement and stated what would happen within two months. This may seem adequate notice to some people, but certainly not to men who have been employed for 25 or 30 years in the one job. To them this sort of fiat decision is extremely worrying. Even now, nearly a fortnight after the announcement was made, I have not been able to get any detailed information about why the closure and other arrangements are to be made.

In this case a whole valley is dependent on the railways and hundreds, probably thousands, of people are feeling uncertain about the future. Severance benefits cannot wholly cushion the shock of redundancy, for it is the shock that matters. What has happened in my constituency is an excellent example of the circumstances my right hon. Friend should bear in mind when taking action. We need proper consultation well before these things happen and a new attitude towards the men, who are, after all, the industry.

Many people say that advance consultation creates more trouble than it solves, but that is not true. There are many examples both in private and nationalised industries—the Coal Board and so on—where changes have been anticipated not by two months, as happened in my constituency, but by two years. I can think of one firm where about 4,000 men were likely to become redundant within two years. The unions were consulted and had two years in which to make arrangements. In that case, in spite of the changes proposed, the men were not as worried as they might have been about redundancy because of the preparations being made and the fact that they had received a full explanation.

There should be sufficient preparation in advance to eradicate the idea of redundancy and to get people to realise that a change is inevitable—even that it can be exciting and profitable when it comes. These things are possible, but I do not believe that these fears will be eradicated merely by endless conversations. As in other countries, the Government must act.

Mr. Rankin

Since the hon. Gentleman wants action, can we take it that he will support the Bill, which asks for action?

Mr. Crawley

I have already said that I am sure that my right hon. Friend will take much more comprehensive action in which severance pay in its proper context will be dealt with as a part of the main problem.

As has happened in other countries, my right hon. Friend will, I believe, be obliged to take action about consultation in general. He will be obliged to set a basic pattern of consultation and to see what size of firm must have works and consultation committees to ensure that information is disseminated to the men and that the responsibility is shared. This has been done in many countries with considerable success. One is often told, "You cannot legislate for consultation you cannot impose that on anyone because it must grow", but in other countries legislation has been passed insisting on consultation with excellent results.

It is staggering to discover the number of firms, particularly those with fewer than 500 employees, which have no form of consultation and in which the most extraordinary changes—about bonus schemes and so on—are introduced without any notice whatever being given to the men. This still applies in the London area where, one would imagine, any firm can have access to the latest information that is available.

I also believe that my right hon. Friend will be forced to legislate for a standard procedure for dismissals. In France, Germany and Holland the sort of announcement and arrangements made by British Railways last week in my constituency would not have been permissible. A representative of a Department similar to that of my right hon. Friend's would have been called in long beforehand. The views of the local authority and its assistance would have been sought, the local employment situation considered and other arrangements made long before the announcement was made. Had such machinery existed in this case the question of whether short-time working could prevent redundancy would have been considered in consultation with the men.

In other countries where this machinery exists appeals are possible to labour courts against such decisions. Although we may not want to introduce labour courts here, I am sure that when any great change in employment or risk of redundancy occurs the objections and views of the men should be publicly heard.

I hope that in the Measure which my right hon. Friend is bound to introduce severance pay will be included, although not in the way it is dealt with in this Bill, which is drawn too widely, for it would include a man or organisation employing one, 100 or 20,000 men. There is the danger that by including extremely small employers a lot of dismissals might take place.

I can think of small concerns and shops in villages and small towns where employees who may have been with the firms for many years are kept on, even if they are not efficient, mainly through feelings of humanity, even to the extent of paying them more than they are really worth. If such employers were told that they had to make severance pay arrangements and so on, many of these employees might be dismissed.

I think that all employers and employees should be included, but I would hope that the smaller employers—those with, perhaps, fewer than ten employees—would be able to contribute to a central pool, while those with more employees could pay direct.

Some of the phraseology employed in this Bill is too vague. I read: …severance pay for workers dismissed through redundancy or other causes beyond their control. We all agree that controls are what we are trying to get, but these words would have to be more exactly defined. In my constituency, for instance, and I am sure that the same applies in the constituencies of other hon. Members, there are haulage contractors who—I think quite wrongly—may be expecting a victory by the Opposition in the coming General Election, and are getting very anxious about whether or not they will have to close down their firms—[HON. MEMBERS: "Really."] They think of what happened on the previous nationalisation of road transport. This is a valid point. Is nationalisation that causes a small contractor to close down his firm something beyond the control of employer or employee, or is it not?

Mr. J. Silverman

I think that the hon. Member is somewhat off the beat. The haulage contractor will not close down his firm but will, presumably, wait for it to be taken over, and receive his compensation. He would be very foolish to close down, and the question then is whether the employee is taken over by the nationalised concern.

Mr. Crawley

But he will have terminated his employee's contract.

Mr. Silverman

Oh, no.

Mr. Crawley

Of course he will. He may get compensation if the firm goes out of existence but many men would not wish to be taken over. Would the men be entitled to severance payment or not? I suppose that one could argue that, if they voted Labour, the event was not beyond their control so they should not get the payment, but we will not go into that.

Although I think that severance payment should be included, I support what was said by my hon. Friend the Member for Aylesbury (Sir S. Summers) about unemployment pay. Far more important than severance payments—and this is true of several continental schemes, too—are payments during unemployment and during retraining. From such conversations as I have heard here, it would seem that we are still planning at too low a level about pay for men who are unemployed or undergoing retraining.

Probably the most advanced of the continental systems is the French one, in which there is both State payment and payment that can be drawn from a pool provided by employers and trade unions. In the case of the lowest-paid workers, it can mean that a man thrown out of work and needing retraining gets between 80 per cent. and 95 per cent. of what his wage was.

I know that my right hon. Friend is studying the question of relating unemployment payments or payments during retraining to income, and I hope that he will think boldly. I do not believe that payments even as high as the French make would be either difficult or too expensive. In the first place, the object is to make a change normal, and to prevent it meaning a real break in the standard of living and way of life of men thrown out of work. If we are to pay the man thrown out of work only two-thirds of his previous average earnings, we cannot prevent a very sudden drop in his standard of living; probably the return of goods that were being bought on hire purchase, and, therefore, a real check on his way of life.

Secondly, the higher and the longer we can keep up unemployment payments the less chance there is of unemployment spreading. It is probably fair to say that no large-scale unemployment is likely to come to this country now except as the result of events in other countries—political upheavals in or fiscal policies of other large industrial countries. The danger is that when these events happen abroad, a chain reaction sets in through anxiety and lack of confidence on the part of our industrialists, but provided we can prevent any catastrophic fall in demand here, and provided we keep up our unemployment payments and demand here, we should always be able to ride storms coming from outside and, by maintenance of these payments, should be able to recover more quickly.

I do not think that this would be as expensive as is feared. We must plan on the assumption that full employment is normal. If full employment is normal, the sort of fund the French have, and the sort of fund I would like to see here to add to unemployment payments, would soon be in a healthy state, and it would be possible to make contributions flexible, enabling them to be reduced once the reserves were high enough. Such an event, removing the main anxieties about change of job, would also so change the climate of opinion in industry that a great many other things that would help our productivity and prosperity, and prevent unemployment and the danger of slump, would become possible.

As I have said, I am in full sympathy with the motives of those who support this Bill, but I believe that my right hon. Friend the Minister will introduce something better. For that reason, if a Second Reading is pressed to a Division, I should vote against it.

12.27 p.m.

Mr. John Rankin (Glasgow, Govan)

Those hon. Members on the Government side are playing the old game. They are full of sympathy and want to see something done, but, at the same time, they are starting several hares that have no right to take part in the race at all.

The hon. Member for Derbyshire, West (Mr. Crawley) from time to time showed glimmerings of his past, but every time he saw the gleam he bolted from it. He wanted to eradicate redundancy—as if we did not! We have been trying to do just that all the time the Tories have been sitting about and not bothering their heads over the subject. The hon. Gentleman knows that redundancy may increase further because of developments that lie ahead.

I thought for one moment that the hon. Gentleman would be captured by his past, and tell us that he wanted to eradicate redundancy and introduce a planned economy, but he fled from those last two words, and stumbled on to get into even deeper confusion than the hon. Member for Aylesbury (Sir S. Summers), who has just left the Chamber. I am sorry that the hon. Gentleman has left, because he reminded us of the Contracts of Employment Bill, which went through its Committee stage last spring.

Never in my experience in this House did I sit in front of such a progressive bunch of Tories as then. There was nothing that we suggested that they did not want to do. They even supported a new Clause on severance tabled by my hon. Friend the Member for Gloucester (Mr. Diamond). There were no opponents to that—nobody said a word against it. Indeed, the Minister in charge of the Bill, who has now gone to another sphere of operations, gave his blessing to my hon. Friend's endeavours to introduce severance pay, and assured him and both sides of that Standing Committee that he himself would do something far better.

Now the Minister has had 10 months to do it and today his aide-de-camp, the Parliamentary Secretary, is here to tell us what has been achieved in those 10 months. I suspect that as usual it is nothing. [An HON. MEMBER: "They are thinking."] I hope that they have been thinking enough to produce something more than a miscarriage; as they have done time and time again in the months past.

The hon. Member for Derbyshire, West said that the Bill was only a small cushion, and would not do much good. I wish that he would go to my constituency and say that to the boilermakers, the engineers and other industrial workers in Govan. Today, it being Friday, at five o'clock, 15, 20 or 30 boilermakers in Govan may be told, "You need not come back on Monday morning." If I were in my consulting rooms tonight they would be coming along to ask me what I was going to do about it.

We suggest in this little Bill that something could be done about it, and that instead of being told they need not return on Monday they would be informed, "Go along to the office and you will get a redundancy payment which you deserve and have earned because of the good service you have done for years in helping to build the magnificent ships that sail out of Govan."

They get nothing. They are kicked out. There is no golden handshake for them, only a cold, fishy grip. At the end of 30 years' service, they may receive a gold watch and a handshake and a nice little speech, and then go on to the dole. These men have given a lifetime to industry in this country and to building its wealth. All we ask is that the House should give a Second Reading to this simple Bill, which says that we must try to end that way of treating them and give them something more substantial when the days of their employment come to an end.

The hon. Member for Aylesbury has ducked out of the way. He started by telling the House that it was a good thing to discuss the problem which the Bill epitomises, and he then said that he proposed to vote against the Bill to throttle discussion which at the start he said he had wanted to promote. The hon. Member for Derbyshire, West said that the Bill had faults. I do not say that it is a perfect instrument for expressing w-pat we want done, but it is a good Bill and I welcome it.

The hon. Member for Derbyshire, West at least seemed to agree with its principle, because he tried to do something similar in Committee on the Contracts of Employment Bill, as it then was, and we applauded him. Again, there was a trace of the hon. Member's past. Even the Minister said that his ideas were all right, but his methods of organising them were not adequate. If we believe in discussing these important problems we at least ought to give the Bill a Second Reading so that we can get down to the details in Committee.

I am fortified in my attitude this morning, because just before I came into the House I was reading one of our great daily newspapers. I had only two or three minutes to do so, and, therefore, I captured merely the arresting opening paragraph of its chief item of news. I quote the Daily Express, which said: Britain's industrialists are racing optimistically towards new business peaks.

Mr. Gresham Cooke

Good for Scotland.

Mr. Rankin

I ignore that, because I do not want to speak too long and sometimes the opposition—that is, the future Oplosition—eneourages me to carry on for a little longer than I had intended.

Every newspaper in Britain this morning will have carried similar news. Millions of British workers will be reading it and will be saying, "What will we get out of it? Will we left behind in the race towards the greater prosperity which the newspapers are broadcasting throughout the land?" They are broadcasting it on the assurance of the Prime Minister. More wealth is to be created. In the race to produce it, do we intend to leave behind the men on whom for the most part its creation depends and on whom the speed with which we progress towards its creation most certainly depends? There has been little encouragement for these workers this morning from the Govern ment benches. Neither of the two speeches made so far from the benches opposite appear to offer much hope.

As a result of what happened during the passage of the Contracts of Employment Act, 1963, I think that I may hope for support on both sides of the House for one or two points. First, on both sides of the Committee it was agreed that there was a need for better labour relations in Britain. No one quarrelled about that. This Bill will try to promote better industrial relations. Then, why oppose the Second Reading?

Both sides of the Committee also agreed that in an age when modernisation and automation were advancing more and more rapidly throughout our industrial life there was a possibility that in this period of revolutionary change more people might be flung out of work and that that would react against the idea of better industrial relations. Both sides of the Committee agreed that we must ensure that if men suffered because of industrial progress, they ought not to be penalised at a time when greater wealth was being created. Nobody opposed that idea on the Committee, and I hope that no one will oppose it today. I hope that, because they still support those two ideas, hon. Members will give the Bill a Second Reading.

We have been asked this morning whether we can afford to do what the Bill seeks to do. I have instanced the Daily Express and other newspapers in proving that we are racing ahead to greater and greater peaks of prosperity. I should like to remind right hon. and hon. Members opposite that in 1952 Britain's gross national product was £18,000 million, a tremendous sum. It is expressed in all sorts of ways in our method of living. Since 1952, the gross national product has increased steadily every year, and in 1962 it reached £24,000 million. That is vast wealth, and it is ours. According to the Prime Minister, it will increase still further.

Are we going to adopt a niggardly attitude towards the men who are the fundamental props in building that vast increase in wealth? I hope that we shall not behave in a mean fashion towards them, and that when the time for decision comes today the House will give this very welcome Bill a Second Reading. It deals with a very big problem and seeks to remedy it along lines which are being employed in other industries and professions. If we can do it for some, we ought to be able to do it for all.

I plead for a Second Reading for the Bill. If it has faults and deficiencies, then let us settle down in our wisdom, in Committee, to try to remedy the faults and strengthen the Bill. I ask the House to give us a chance of taking the second step by supporting the first step today and giving the Bill a Second Reading.

12.45 p.m.

Mr. John H. Osborn (Sheffield, Hallam)

One of my principles is never to be here on Fridays, and I mentioned that two weeks ago. But Fate, by way of the Ballot Box, has brought me to the House for the first three Fridays on which we have discussed Private Members' Bills.

The first occasion was that of the Resale Price Maintenance Bill of the hon. Member for Wednesbury (Mr. Stone-house). I had hoped to catch Mr. Speaker's eye on that occasion; I have a contribution to make on that subject, and I hope that I shall be able to make it on another occasion. The second occasion was my own Measure, the Trading Stamps Bill, and I am aware that I spoke for much too long then. The third occasion is today, when we are dealing with the Redundant Workers (Severance) Bill, and my aim will be to be somewhat briefer than I was a fortnight ago.

In all these three events there has been a common factor—the rapid rate of change in commerce and industry. Not only is it affecting our way of distribution, which was pointed out in the first two debates on Private Members' Bills, but it has its impact on industry and the organisation of industry.

I congratulate the hon. Member for Birmingham, Aston (Mr. J. Silverman) on his fortune in the Ballot, and also on the subject of this Bill, but I cannot quite extend full congratulations in respect of its substance, and I hope to justify that remark in due course. At all events, I thank the hon. Member for Aston for giving us this opportunity to discuss what I regard as an important and urgent matter, and that view has been supported on both sides of the House.

I am grateful that the immediate urgency, in view of the remarks of the hon. Member for Glasgow, Govan (Mr. Rankin) when quoting from a newspaper, is not as great as it was last year. But it still means that when we have prosperity we must take advantage of the period to advance in this field.

I would express with some deference to my right hon. Friend the Minister some disappointment that the Government have not been able to advance specific proposals to deal with the whole question of change, redundancy and severance pay, but I should also like to express understanding of the complexity of the problem which the Government have to face. There are two clear responsibilities, in my view. There is a responsibility which has to be carried by the Government and a responsibility which has to be faced by both sides of industry.

There is a fundamental problem here, and that is the demand that we have for an increasing standard of living. We achieve that by higher productivity; in other words, more output in fewer hours. But we have already said that change is something that we should welcome rather than resist, and Measures in this field would overcome the inevitable resistance to technical change.

I could give examples. There is the question of transport. We have the competition—between sea and air for passenger transport. There has been rationalisation of ship building. There has been expansion in air travel; between road and rail there has been rationalisation—on the railways; there has been compensating expansion in passenger traffic in the form of private cars—this was the subject of a debate earlier this week—and the transport of goods in vehicles.

There has been a change in the structure of our power industry. Old mines have become exhausted. There has now been expansion in some of our new mines in the coal industry. There has been rationalisation in coal but expansion in oil and perhaps in the field of natural gas. There have been changes in products. It is simple to talk about the change from the steam engine to the internal combustion engine and to the gas turbine, but that means changes in the structure of whole factories and the acquisition of new skills. The impact of new designs and new products, which is bringing about a revolution in light engineering in particular, is felt by human beings—people—An the factories, and hon. Members are very conscious of this.

In addition, there is the impact of automation. We have just discussed Luddism and changes of attitude. All these things mean that there will be drastic changes in the next decade in the whole structure and pattern of employment. Attitudes are changing towards redundancy and employment.

About four months ago I had the advantage of going to the United States which, indirectly, brought me here two weeks ago when I told of the American attitude to this very problem. Outside this House, one of my interests has been connected with a group activity started by the Duke of Edinburgh. It held its first conference at Oxford in 1956 and its second in Canada in 1962.

At one of this group's discussions during the Canada visit we learned of the experience of a group of managers and trade unionists attending the conference—not only from this country, but from the Commonwealth. They were brought up against the contrast between the attitudes adopted on either side of the Atlantic. I will distort this particular story, because I do not want the company concerned to be involved in the debate today.

The group of managers and trade unionists visited a Canadian mine and saw how new machinery had doubled the output. But it had also reduced the labour requirement. This was in an isolated part of Canada. The group saw houses empty and boarded up. They had been sold to the employees of this company. But with the coming of mechanisation these men had had to board up their homes and leave because there was no work for them. They had lost their whole life savings in those houses.

I described this story to an American audience and I found that it accepted the inevitability of this type of change and hardship—a direct contrast with the attitude which has developed in Europe and in this country. We are conscious of social responsibility, but awareness of it is not so great in the United States.

What are the attitudes of employers and trade union leaders in this country? Who are they? What are the differences between the big companies and the small ones? Who are those who sit on the B.E.C. and other industrial organisations? Are they the people who negotiate wages round the table? We must have a clear idea of what we mean when we talk of employers. New managers are now coming forward and they are imbued with professional standards undoubtedly different from those of their forebears.

I was disappointed to find no provision for redundancy payments in the Gracious Speech. In July, there was a meeting which was attended by Lord Blakenham, who was then Minister of Labour—it was with the National Joint Advisory Council, and it was agreed that workers with long service, whether or not there was hardship, should have severance payments. Lord Blakenham went on to relate this to the context of the National Insurance scheme. It was recognised generally that the principle of severance payments for long service workers who became redundant was socially just and desirable.

Even before then, Lord Blakenham had taken part in a conference organised by the Industrial Welfare Society, which was also attended by one or two hon. Members opposite. Those taking part were concerned with industry. That is why I asked, "Who are the employers?". Naturally, there are various types. The modern managers are specialists—some in personnel and welfare, some in training, some in technology. But they are all conscious of the sentiments which have been expressed on both sides of the House today.

The Industrial Welfare Society, with which I have had a close connection and which has representatives on its council from both employers and trade unions, has done a very creditable job in pointing out to managements their responsibilities in this new concept of human relations. I commend its work and congratulate it on its activity in this field.

During this conference, various conclusions were reached. I will not elaborate on them now but the questions raised were all part of the problem of change. Will the trade unions accept retrained dilutees? Are the present methods of early retirement and "last in, first out" adequate in cases of redundancy? Should a small company wait for legislation or go ahead with its own redundancy scheme? Where should retraining centres be located? All these questions have been discussed by new managers in industry, who are very much concerned with these problems.

There has been considerable advance since the Government paper "Security and Change" in 1961. It quoted some interesting figures and there has been an improvement on them since. A total of 371 companies were involved in the redundancy figures quoted. Table 5 dealt with the scale of severance payments. Many more companies are now giving reasonable severance payments where redundancy takes place after long service. This is not, however, the general pattern.

There are many comments one could make about the Bill in detail—why exclude the local authorities, for instance? My main criticism, however, is that it tells industry what to do. I shall try to clarify what I consider to be the responsibility of industry and the responsibility of the Government in this matter.

In Clauses 3 and 4 we come up against the problem of how to finance these agreements. If a large company is involved there will always be funds to meet the commitment. It is the larger companies which now contemplate reasonable redundancy schemes. But what of the smaller companies?

A smaller company may have a very confident management which feels that it has markets ahead for five or 10 years. It may consider that it need not worry about redundancy agreements. But supposing the management decides to have such an agreement, and then there may be a sudden change of trade. Two or three companies in my area have suddenly found that trade which they thought would last has shrunk due to various factors in the market, and they are now faced with the problem of redundancy. A company might go bankrupt. It might set up a trust fund, as many do for pension purposes. But if only a small contribution is made to the fund every year, there might still not be enough money to meet these liabilities.

That is why, although when the matter was first discussed by employers it was thought that redundancy was essentially a matter between a company and a trade union, on second thoughts it was decided that a two-tier scheme was needed and that the base should be provided by the Government and the second tier by the company itself. My criticism of the Bill is that it tells management what to do, something which should be outside legislation. Certain conditions must be fulfilled however, and there is some sense in contemplating an extension of the graduated pension scheme to cover not only sickness, but unemployment as the bottom tier.

I wish to quote from a publication which came from the Birmingham area in 1961: If one company absorbs another, it is usual for any active director whose services are no longer required to receive compensation for loss of office— to receive a golden handshake. That is thought natural and reasonable. On the other hand, social conscience has hitherto only been lightly touched by the thought of a much larger number of employees being given two weeks' notice of termination of employment because of a rationalisation programme or a fall in activity…In a technological civilisation…the moral argument for treating the man on the shop floor on the same principle as the managing director seems to us irresistible. This is an extract from a report prepared by a joint group of managers and trade unionists many of whom were associated with the 1956 conference presided over by the Duke of Edinburgh.

Since then, this concept has been studied by different groups, with which I have been associated, in London and throughout the country. The views which I now express have arisen out of the production of a model redundancy scheme as a basis of discussion. A considerable body of men and women with practical experience in industry as managers and employers and at every level of trade union work have taken part in these discussions. One of the advantages has been the frank discussion of the principles involved to try to find a solution to the very complex problem facing the House today.

The negotiation and introduction of redundancy agreements is one of the most urgent and outstanding things facing managements and trade unions today, but low are employees to know what such an agreement is to be like? Perhaps the best thing would be to follow the example of the Contracts of Employment Act and have the agreement published in booklet form for the benefit of employees. What should be laid down [...]n such an agreement? As this is to be a matter between management and employees, what is to be the definition of redundancy? A great deal of work has been put into finding a definition and it has been suggested that redundant employees should be defined as employees whose work has ceased to exist through no fault of their own and for whom no suitable work is available in the particular plant, factory or place of employment.

Should the agreement contain any reference to forward planning, which is the responsibility of management? Good management can plan its trade and forward requirements and this responsibility might be written into a redundancy agreement. But there may be exceptions to this responsibility for forward planning. The classic example is our requirements for power. This concerns a nationalised industry. It was realised that the power stations lagged behind the country's requirements and that resulted in an upsurge of trade. However, in the reverse there might be a subsequent contraction. Going a stage further, should we require management to have policies for building up stocks in flat periods, during times of poor trade? If there are changes in demand, in what way are employees to be notified?

There is the problem of communications. Is this something between management or employees, or must it be written into the agreement? For instance, what happens if redundancy is foreseen? Obviously, the company will cease to recruit new people, but how are potentially redundant workers transferred'' Should there be specific arrangements in an agreement to transfer workers from one factory to another? Should the work load be shed by eliminating overtime, and should that be included in the agreement? Should there be specific agreement about the introduction of short-time working? This type of redundancy agreement must be outside legislation.

Then we come to the question of compensation. My own Member of Parliament, my hon. Friend the Member for Derbyshire, West (Mr. Crawley), spoke of the shock of the closure at Rowsley. The railways have sought to deal with this very important issue, but in cases like this the shock and the fear have to be dealt with.

How much notice should be given outside the Contracts of Employment Act? Should there be resettlement allowances and what do we mean by them and should there be a gratuitous payment? This is something to be agreed between employers and employees. The Bill suggests giving one week's pay for each year of service, possibly with weighting for older employees. Nevertheless, this is something which must be done outside legislation, although there must be a ground tier, perhaps of a graduated unemployment scheme.

If a resettlement allowance is introduced, how are we to deal with the person who is unemployed? Is he to be paid when he goes to the employment exchange where he has registered and should the allowance be stopped if he gets new employment? Those are the difficulties which have to be tackled. There is also the problem of average weekly earnings. Another problem is defining the responsibility of Government and the responsibility of industry.

This Bill goes beyond what should be the concern of Government. This is a matter which should be settled by negotiation and increasingly by agreement by employers and trade unions. One day this may ultimately take the form of legislation. Meanwhile, the Government should concentrate on the pension side and on some graduated form of unemployment allowance, leaving the other side of the matter outside the scope of legislation.

On previous occasions I have discussed the Bill with the hon. Members who are sponsoring it and I think that they will agree that I have been sympathetic towards their motives, but not been able to agree that it is a Bill which we would be wise to accept at this time. I hope that they will understand my view that this is a Bill to which we should not give a Second Reading today.

1.10 p.m.

Mr. John Stonehouse (Wednesbury)

We enjoyed the intelligent speech of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), but it was marred by his last statement that he would not support the Bill. In that respect he joined many of his colleagues who damned the Bill with faint praise. They support in principle, but not in practice. Although for many years they and Government Front Bench spokesmen have given support to the principle of the Bill, now that there is an opportunity to do something, they shy away.

The hon. Member for Derbyshire (Mr. Crawley) said the Bill raised a lot of Committee points. As there are these detailed points of view that are seriously and honestly held about the Bill, I think that the best course for the House to adopt is to give the Bill a Second Reading, and then amend it in Committee so that we can get urgent and early action on this important subject.

We are discussing a problem which will become increasingly important as automation and technical changes in industry take place more rapidly than ever in the next few years. Within the next 35 years there are likely to be greater changes in industry in this country than we have seen in the last 150 years. If we can apply the new techniques of manufacture, we are likely to be able to treble or even quadruple our total national income by 1970. We face the exciting prospect of eliminating poverty completely from this country, and of making a tremendous contribution to destroying it in the newly developing countries as well.

But new scientific techniques must not be applied at the expense of men who will be made redundant by their application. These men must be able to feel some security in the future. They must have security of employment, and, as the Bill attempts to provide, some compensation for the years that they have spent with a particular firm.

I regard the Bill as providing the minimum of what should be done. I hope that when the next Labour Administration comes into power men with a sense of urgency and dynamism will deal with this subject and bring in more comprehensive legislation to give the security which is needed in these changing industrial times.

In my constituency these industrial changes are taking place all the time, but they are not always felt in terms of redundancy and unemployment, because, fortunately, the Midlands are enjoying boom conditions. But there are fears that those boom conditions will not be with us for all time, and it may be that the engineers in my constituency will be reluctant to install new machines which will throw them out of work. This is particularly important for the older men, those over 55 or 60, who are not so welcome when new machines are installed. After 30 or 40 years in employment they face the prospect of being thrown on the scrap heap without any fair compensation.

In my Division, during the last few months, a nut and bolt industry has been taken over by a larger competitor. Many of the workers in this industry are to be aborbed elsewhere, but in nuts and bolts, as in many other examples which I could quote, these amalgamations are taking place because of the necessity for large organisations to bring these new industrial processes into operation. The director of the firm that is absorbed gets a golden handshake, the shareholders make a profit because their shares have appreciated in value, but the workers who sustained the firm for many years, and who had no idea that a take-over bid was on the horizon, get no guarantee of future employment and are thrown on the scrap heap with a week's or, perhaps two weeks' pay as compensation.

This problem cannot be left merely to negotiation between workers and employers, because very often the workers cannot know what is coming in their industry, and their directors, the men who took them on in the first place, may themselves be no longer responsible for the operation of the firm if it is the subject of a take-over bid.

Yesterday, we received a visit from the workers of a firm which used to be publicly owned, and against the de-nationalisation of which hon. Members on this side of the House objected some time ago. I am referring to the firm of S. G. Brown Ltd., of Watford. What has happened there is an example of a shocking lack of consultation between the new owners of the company and the men who are likely to be made redundant within a week or two.

We are told that 120 employees of that firm face the prospect of becoming redundant within the next few weeks. They have no idea what redundancy payments they will receive. They have no idea of their employment prospects elsewhere in the complex of the Hawker Siddeley Group which has taken over the company. After many years of service with the firm, these workers face the prospect of being out of work and of having no security.

The Bill would help to deal with that sort of situation, and I hope, therefore, that the House will give it a Second Reading this afternoon. As I said earlier, the industrial changes which will take place in the next few years make the need for security all the more important. We do not want workers to feel that they are putting in new machines which will put them out of work and give them no security for the future.

I have been reading about some of the new processes which have been developed in America. One process presents an almost frightening picture of what could happen in Britain's factories during the next few years. A machine has been developed with a so-called "magic arm". It is called the "Versatran," and it is operated by tape. It can automatically complete complex jobs involving up to 16 different steps, such as wrist and grip actions, drilling, loading and unloading, and paint spraying in any desired sequence. The machine has also been used to pick up boxes from a conveyor belt and pack each box into crates for shipping. It has been used to spray paint where parts were required to be covered from every angle. It has also been used to operate various hand tools and machines. If the Versatran is put into operation in our factories, we may need no workers and no engineers except the few men who supervise it

There is another system which has been developed in America. We have computers which can do all the calcula tions that one wants to do, and which have the effect of cutting out waste in industry, but now computers have been developed which can "talk" to each other to solve complex problems.

This system has recently been developed by the Argonne National Laboratory, near Chicago. Two computers discuss between themselves and settle problems, and so come out with the solution. As a result of these new techniques enormous economies in manpower are possible. There is an enormous cutting out of waste in all sorts of processes. If these new techniques are developed in Britain we shall face the prospect of many industries being able to operate not with 50 per cent. of their present manpower, but with 25, 10 or even 5 per cent. It is all the more urgent, therefore, that those who are displaced by these new processes must be given some security.

I agree that the Bill deals with only part of the problem. We need comprehensive legislation which will give overall security to all those employed in industry and commerce, I have been much impressed by what has been done in Sweden. I should like to refer to a pamphlet, written by Mr. Jack Cooper, the general secretary of the National Union of General and Municipal Workers, entitled "Industrial Relations: Sweden shows the Way", in which Mr. Cooper describes what has been done in Sweden to give the sort of security that we have in mind.

There a National Labour Market Board has been established, on the basis of the policy of full employment which has been maintained for many years in Sweden. The board has power to promote mobility by granting allowances in respect of transport to new jobs and accommodation for families, and further allowances are made to cover all costs up to the first pay day in the new job. In some cases new housing is built by the board. During 1957–58 no fewer than 5,000 persons were moved every month to new jobs at a total cost of £700,000. The board consists of representatives of both trade unions and employers. That is the sort of pattern that we need in Britain to help us deal with the industrial changes which are coming in the next 10 or 20 years.

Two objections can be raised to the Bill. The first is that severance payments could act as a disincentive to firms which are considering installing new machinery which would displace some established employees. It is said that these firms may find that the cost of the severance payments is too much for them to bear, because it will make the installation of the new machinery uneconomic.

This difficulty could be overcome by the provision of proper capital allowances for such new machinery. An incentive must be provided for firms to install the new machinery and not to hold back new developments. If severance payments are introduced the whole burden should not fall on the firms; they should be able to get back at least part of the severance payments by way of allowances for the installation of the new machinery. In that way the country or a particular industry as a whole would help to compensate firms in return for making severance payments.

The second objection is that the Bill gives an overwhelming advantage to the employee who has stayed with one firm for many years, as opposed to the man who has tried to improve himself by going from one firm to another, in that redundancy payments will be related only to the number of years spent in the last employment. I believe that this snag could be dealt with by introducing the type of overall security plan which operates so well in Sweden.

Although some Committee points have been raised, I hope that the House will allow the Bill to have a Second Reading. In Committee upstairs we can then thrash out those points, and try to make some advance on this front by providing more security to the men in our factories and elsewhere who, in the next few years, will face tremendous changes in the environment in which they live and work.

1.25 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

I join with those hon. Members who have congratulated the hon. Member for Birmingham, Aston (Mr. J. Silverman) on his good fortune in the Ballot and also for his introduction of this subject. It is one which obviously has an appeal to hon. Members on both sides of the House, since this is the second Bill of its kind to be introduced, the previous one having been presented by the hon. Member for Gloucester (Mr. Diamond).

The Queen's Speech contained phrases which indicated that the Government, too, intended to consider the whole problem of redundancy. It is amusing to note, as we come nearer to the time of the next General Election, that Members of Parliament are concerning themselves with the problems of redundancy. It may be that the hon. Member for Aston is a little concerned about what might happen to him, or to some of his colleagues, after the election.

Mr. J. Silverman

I am concerned about what will happen to hon. Members opposite.

Mr. Lewis

We are quite happy about that.

This new term "redundancy payments" is itself a conception of prosperity, and not one that arises out of mass unemployment. We had a great deal of redundancy before the war. We had deserts of it in various parts of the country but no redundancy pay. It is interesting to note that, as usual, industry has anticipated the problem. It is in advance of the Government. This applies not only to free enterprise industry, but to the nationalised industries, some of which have provided very good redundancy schemes.

I understand that 17 per cent. of our manufacturing industry is now covered by some system or another. That is not a very large percentage, but bearing in mind that arises wholly from voluntary effort it provides a good basis for the introduction of a wider scheme. There has been a 50 per cent. increase in the number of redundancy schemes introduced during the last three years: this at least gives us some reason to believe that things are on the move.

But what is redundancy? It is not defined in the Bill. Nor can it be defined as unemployment in a slack economy. It is the laying off of full-time and long-term employees when old industries disappear in order to make way for new ones, or when there is the introduction of automation.

Although redundancy can be pinpointed as arising out of prosperity and change, it is important to make sure that any Government scheme, or any scheme which is run partly by the Government and partly by industry, will be effective and can be carried out if there is a turndown in the economy. It would be wrong to introduce a scheme which would founder if there were less palmy days ahead—assuming that the Party opposite get in at the election, or a similar contingency arises. That is an added reason why whichever Government are returned at the next election must take part in such a scheme. It cannot be left wholly to industry or to voluntary organisations.

Earlier in the debate the hon. Member for Bilston (Mr. R. Edwards) said that redundancy was not easily acceptable, and there were some brief exchanges across the Floor about what has happened at the Daily Mirror, where some workers have been holding up the production of the newspaper because of fears of redundancy. My hon. Friend the Member for Derbyshire, West (Mr. Crawley), again in the terms of the kind of upsets that we can get when redundancy is not anticipated, pinpointed the need for good industrial relations. He gave a clear indication that what was wanted here were good industrial relations and foresight.

There is no doubt that when any firm is involved in a changeover, either through the introduction of automation, the taking on of new products or—increasing its productivity in some way or other—it should look ahead and advise the workers. They must be informed right down the line.

One ho[...] Member said that this would simply create trouble ahead. I think that one must agree that when workers are informed well ahead that something is likely to happen which could cause redundancy there will be a reaction to it, and, possibly, trouble. This is understandable, but we have to accept the fact that early warning would cause less trouble than leaving the matter to the last minute and throwing out the information without warning.

The fact that we are going to have a certain amount of dispute, argument and uncertainty because of stating in advance what the policy is going to be should not deter us. It is better to do that than to wait and then tell the workers that a great amount of re dundancy will be involved next week or next month, or at too short notice.

I am against the Bill as it stands for a number of reasons, and I think that even the hon. Member for Aston accepted some of those reasons. The Bill, in so far as it brings this subject to the notice of the Government and to the Opposition Front Bench, is serving a very good purpose, but I do not believe that any Labour Government or any Conservative Government would introduce a Bill to deal with redundancy. Therefore, I do not see why, if a Labour Government would not accept the Bill, the present Government should accept it.

Mr. J. Silverman

Why?

Mr. Lewis

Because it deals with redundancy in a narrow way and imposes upon industry the whole of the burden. It does not bring the Government into the whole question of redundancy for the future as it should.

One phrase in the Bill says, in effect, that the employee should not be laid off because of circumstances outside his control. This is a very nice conception, but it may be that employees have got to be laid off because of circumstances outside the control of the employer as well. It may be that there is a strike in another industry or that some act of God, some weather condition, has created this kind of situation.

Mr. Silverman

That would be a temporary laying off; something entirely different from what is provided by the Bill—something which finally comes to an end.

Mr. Lewis

Yes, it could be a temporary laying off, but there are situations, for example such as a heavy turn-down in the export trade, which would have permanent consequences. There are a number of other situations which are not under the control of the employer, and, therefore, I think that that phrase is one which if included in any Bill would make it difficult for it to work.

There are, however, a number of possible alternative schemes which I am sure that my right hon. Friend is going to look at and about which, indeed, he has probably been involved in dis cussions during the last few months. I should like to discuss one or two of those possibilities. First, the Government could provide for redundancy without bringing in industry at all. They could simply initiate a new system of wage-related unemployment benefit or the Government, having initiated through my right hon. Friend the Minister of National Insurance, working in conjunction with my right hon. Friend the Minister of Labour, could, as well as introducing a system of wage-related unemployment benefit, also introduce a system of lump sum payments paid entirely by the Government.

No. 2 possibility is that industry should make itself responsible for paying lump sums after a period of years to employees who become redundant. No. 3 possibility, the one that I think we ought to go for, is that there should be some system evolved whereby the Government take part of the burden and industry itself takes part of the burden. The Government should introduce some form of increased unemployment pay and should initiate separate discussions with industry to deal with the question of lump sum payments. Certainly a scheme of this kind has got to come in the future.

I do not think that this is an urgent matter or a matter on which we certainly say to the Government, "You ought to have done this years ago." It may be that this will be said by the Opposition Front Bench, but I do not accept it. I do not believe that there is any great redundancy urgency at the moment. I think that the timing of the discussions on the matter is about right. However, I believe that if we do not do something within the next year or two we shall be in considerable trouble after that. Therefore, I would hope that these discussions would be brought to some sort of conclusion very soon so that in the next Parliament action could be taken.

I repeat that I am in favour of a joint effort being made by Government and industry in the matter. The Government have the machinery for dealing with unemployment benefit. Industry has already started the payment of lump sums, so that there is a beginning on which we can build. But within this joint Government-industry scheme, I believe that there have to be certain variations applying to different sections of the community. This is where there is going to be dispute, and it may well be that my right hon. Friend will have to make up his own mind and tell the parties concerned that this is what they have to do.

For ex ample, I do not believe that all the young men in industry should be covered by the granting of lump sums. The National Economic Development Council said in one of its Reports that what is wanted is a scheme of redundancy payments coupled with mobility, Young men should be mobile. In the interests of the nation our young men must be mobile. If young men are encouraged to sit waiting on lump sums coming to them, this will completely destroy the kind of advantage we ought to get from redundancy payments. It will stultify a broad section of our most active work-people who should give us the mobility which the N.E.D.C. has said we need.

At the opposite extreme to the young men, it would obviously be unfair and, I think, impractical to expect that men nearing retirement should move from one industry to another and, particularly, from one end of the country to another. We do not expect the older workers who are nearing retirement age to be mobile. Therefore, as far as they are concerned, it seems to me that they require both a lump sum and also some form of graduated unemployment pay if they happen to become redundant. This will bridge the gap between redundancy and retirement.

The young man is at one extreme and the older man is at the other extreme, but in the middle, the most important of all, is the man who is going to be affected most, the middle-aged man. He is the greatest problem and he deserves, both in his own interest and in the national interest, the greatest consideration. It is the middle-aged man who will be in difficulties if he has to be retrained, and he may have to be retrained. He may have to move house and he may have a young family.

At the same time, very often it is the middle-aged man who is more receptive to change. He is at a time of life when change may prove exciting. This man should have the greatest benefit which could be provided by any scheme my right hon. Friend may introduce; increasing unemployment pay, training allowances and a lump sum. This, I believe, will provide us with enthusiastic mobile workers from that group of the community.

How are we to get this combination of Government and industrial aid equitably and effectively applied? Obviously, it will be a complicated exercise and involve two or more Ministers. Unemployment pay can be quite easily adjusted upwards, but we have to meet the bill. There has been little said this afternoon about the cost. If we start pushing up unemployment pay, it will result in a considerable charge on the taxpayer in certain circumstances where redundancy grows. Therefore both sides of industry must be prepared to pay for it in one way or another. The Government do not pay, they have to get the money, either through increased industrial taxation, or by the managements and workers accepting the need for increased contributions.

There is also the need to consider at what point increases should be introduced. I know that in certain quarters there is a feeling that if unemployment pay is increased, this should take place in the early weeks of unemployment. It may, of course, be increased right through the period. But if we weight it at any particular time, some people argue that this should be in the earlier weeks. That is because a man who is put out of a job today may have commitments in the form of hire-purchase payments, or other debts, and find himself in difficulty.

But in the context of redundancy I do not believe that to be the right time to introduce increases. The man out of work for the longest period is the man who is most likely to be a redundant worker, and not the man who finds himself unemployed for two or three weeks before getting another job. This man is simply temporarily unemployed while looking round. It seems to me that the man who is out of work for a considerable period should have the increase in unemployment pay in the later weeks of his period of unemployment. This is a matter which my right hon. Friend will have to consider seriously if he is to relate unemploy ment pay to wages, or use the unemployment pay system for making redundancy payments.

What about lump sum payments? Obviously, these have to be agreed by industry. But I think that it may well be that agreement on this point would be so slow that the Minister would find himself in difficulties, and because it was not possible to get agreement sufficiently early, he might have to introduce some form of legislation on the subject. Any such legislation would have to provide for a minimum amount. One would hope that some of the companies which already operate redundancy payment schemes with lump sum payments would pay over and above the figure laid down in the legislation.

We must expect that the same difficulty would be experienced over redundancy payments as was encountered in respect of the legislation dealing with industrial training. Many small firms cannot afford the kind of lump sum payment which bigger firms could make. If we are to finance a system of lump-sum payments in respect of redundancy we shall have to do it on the basis of some form of pool or insurance scheme; some system whereby industry provides most of the money. But, to help smaller firms, the Minister and the Treasury would have to be involved. I do not think that any lump sum payment should be related to a period of service as such, in one firm or industry. This again would destroy our desire to get mobility of labour generally. What is wanted is that service of any worker in industry as a whole should count towards his lump sum payment and not service with one particular firm in one area.

Neither do I think that any young man should be susceptible to a lump sum payment. No man below the age of 30, or even 35, should get this payment. If we cut out that section of the working population, which is the section we want to be changing and moving into different jobs, we should have more money available to increase the lump sum payments from industry available to the middle-aged worker and the worker approaching retirement. In other words, to the over-40 group.

A number of firms have profit-sharing schemes. It seems to me that it would be possible to marry a profit-sharing scheme with the payment of lump sums. Profit-sharing in itself is a means of accumulating funds for the benefit of the workpeople and of giving them an interest in the business. Firms which operate such schemes, as well as my right hon. Friend, might well examine how such schemes could be matched with some scheme of redundancy payment which they might think desirable to introduce in the future.

The problem of redundancy arises not only because of change but also because of prosperity. It is good that we should look at it and that we should get industry and the Government working on it. Whatever we introduce must result in a system which will not fail if the great prosperity which we are at present enjoying should in some way lessen, and we find ourselves unable to sell our exports as we are selling them in the world today. If we bear in mind, therefore, the long-term effect of introducing a redundancy scheme, if we bear in mind the cost and that it may be a continuing cost, I think that it is well worth while for my right hon. Friend or for the party opposite seriously to consider introducing a scheme. And even if it is not exactly in the lines of the how Member's Bill would at least it should be in the spirit of it.

1.48 p.m.

Miss Jennie Lee (Cannock)

We have listened to a most thoughtful and knowledgeable speech from the hon. Member for Rutland and Stamford (Mr. K. Lewis). I very much hope that in the not distant future we may have the benefit of his experience during our Committee stage discussions on a Bill, introduced by a Labour Government, to deal with the problem of redundancy.

At this stage in today's debate it is quite clear that the Government are rejecting, not the case presented by the Bill introduced by my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman), but the principle. Hon. Members who go into the Division Lobby in support of my hon. Friend's Bill are not being asked to vote for a detailed Clause. Two things are involved. One is the acceptance of the principle and the other the acceptance of the fact that this issue must be dealt with by the Government as well as by industry.

I only wish that some hon. Members opposite who have excused themselves from voting against the Bill had heard the hon. Member's speech because he answered completely the case made out for this House doing nothing in this matter and leaving it entirely to the trade unions and industry. Obviously, this issue cannot be left simply to the trade unions and industry. It needs cooperation between all three partners.

When I heard some of the arguments used about how some firms would be too small or too poor or for other reasons could not possibly run a severance pay scheme, I was reminded of the story of how my own grandfather ceased to be a Liberal and became a Socialist. It concerns the early days of building up the miners' union in Scotland. The miners were on strike against starvation wages. My grandfather, as a trade union leader, was taken into consultation with the local owner of the pit.

It was the sort of situation which hon. Members opposite like—a cosy relationship in which everybody was on Christian name terms with each other. He said to my grandfather, "Come into the office. I will show you the books. It is not that we do not want to give you the increase for which you are asking. We cannot give it to you; the money is not there. We are not making enough profit." My grandfather went in and looked at the books, and it was perfectly true that this small colliery did not have the money; it was not making such profits that it could give other than starvation wages.

The logic of that situation was, "If that small colliery could not do it, the country as a whole must do it". That is how some of us became Socialists. We must plan and we must have priorities when thinking in terms of wages, pensions and this problem of redundancy. We are not saying for a second that every firm can work out schemes for itself, but I think it worth emphasising that it is too hard a job trying to thrust the party opposite into the second half of the twentieth century. Again and again we are up against this problem. Hon. Members opposite do not believe in building houses which people can afford. They say, "No matter how expensive they are, there can be no Government help". They do not believe that it is essential that the whole community must cooperate in seeing that the sick are looked after, whether they can pay individually to be looked after or not. Again and again, either in the social services or in the development of industry, we have to waste precious years and nation it resources and we have to darken individual lives because the philosophy of the party opposite prevents it from seeing the obvious truth of the situation until it is forced on it.

There is no excuse for any hon. Member voting against the Second Reading of the Bill. The Government could vote for it. In doing so they would be doing only one thing, namely, accepting the principle of compensation for redundancy. They would be agreeing with us that the main problem is that of men and women who are growing old and who have been in industry for most of their lives. Again, I agree with the hon. Member for Rutland and Stamford that it is important to take care of the men and women who have been in different jobs and not to give special advantage to workers who have been in the same job all their lives. Every one of these problems could be dealt with in Committee.

I know that when the Minister replies he will repeat the arguments used by many of his hon. Friends already. He will state the reasons why we should have this kind of legislation and then, at the end, he will tell us that he pro-proposes to do nothing in this matter. It is good that the electorate should understand this point, that no hon. Member can run away from the proposition before us because he disagrees with any individual point in the Bill. Those who do not support the Bill today will be running away not from any detailed point but from the admitted difficulties and complexities of bringing in legislation which would combine the resources of industry and the trade unions.

Earlier this week it was a sad sight to see the bright faces of teen-agers who came to this House because some of them had left school at 15 years of age but lad not started work. Many of them had been in work for six months or a year and were already unemployed. This is a great tragedy and a reproach to us, and the country and the Government must do their utmost to deal with this problem.

Another great tragedy is when men and women who have given many years of their life, skill, service, hope and love in building up a great concern are thrown on the scrap heap with no provision made to carry them over the difficulties which lie ahead of them.

I should like to hope that enough Members are here today to give the Bill a Second Reading. However, I am not so optimistic as to believe that even hon. Members opposite who in their hearts agree with us will come into the Lobby with us. I hope that they enjoy themselves if they go into the Lobby against us, but I cannot believe that they will.

1.57 p.m.

Mr. Charles Curran (Uxbridge)

It is always a pleasure to listen to the hon. Lady the Member for Cannock (Miss Lee). Listening to her has cleared my mind a good deal. She has defined with considerable precision and admirable clarity exactly why people like myself should vote against the Bill. I appreciate the speech which she has made, because she has made the matter clearer than any other hon. Member opposite who has spoken.

I suggest that the Bill is an attempt to do the right thing in the wrong way. I wish first to make clear that I am in complete agreement with the purpose of the hon. Member for Birmingham, Aston (Mr. J. Silverman) and the people who support the Bill. I agree with them completely when they say, as they have said, that it is entirely wrong that a man who has invested years of his life in a job and under one boss should run the risk of being tossed on the scrap heap at a week's notice. I do not defend that. There is no need for any hon. Member opposite to use any adjectives in convincing me that this is utterly and totally wrong. I regard it as a piece of industrial barbarism, and I would not utter one word in defence of any industry or employer who treated workers in that fashion.

I make it abundantly clear that I am not seeking to palliate it when it happens. This is the great grievance in England—this glaring contrast between the upper and lower classes in the factory. We have this in a wide area of British industry—one law for the board room and another law for the factory floor. This is wrong. I shall come presently to the question of what we should do about it, but let me make it plain that I recognise that it is totally wrong.

There is absolutely no reason why a worker who invests his energies and skill in a particular job should not be entitled to compensation, paid in the fashion that is paid to the executives and directors, if he becomes redundant or superfluous through technological advance or a take-over bid or for any other reason. I know that there are contrasts, and I am not surprised that they cause bitterness. If I may relate the sort of thing which causes bitterness, someone told me that he had a job as an executive on a three-year contract at £5,000 a year. After doing the job for 12 months he was fired and was paid £10,000 compensation tax-free. Within a week of being fired he got another contract, again for three years at £5,000 a year. He lasted in the second job for two years. There was then a take-over bid and he was paid for the remainder of the contract. In three years, therefore, he collected £15,000 tax-free. He told me the story and asked what I thought about it. The only comment which occurred to me was to tell him that he had been born with a silver knife in his back.

People say, quite rightly, that if it is right to give an executive or a director treatment of that kind, why should there be no parallel treatment for the worker? That is a fair question. It is the question which we have been discussing today, and I want to answer it. This is the point at which I disagree with the hon. Lady the Member for Cannock and her supporters. The question is not whether it is right that any workman should be treated in their present fashion; that is not what we are talking about. I agree that that is wrong. The question is, what should be done to prevent this happening? This is the point at which I quarrel with the Bill.

The Bill—and the hon. Lady's speech made this clearer than anybody else's speech from the other side of the House—is an attempt once more to apply the Socialist nostrum, the universal pill, the only remedy which the Labour Party ever has for anything. It applies this whenever it sees any hardship, any injustice, any grievance. The Labour Party's automatic response is always the same; to put more power into the hands of the State. The hon. Lady made this abundantly clear. This is the point on which we disagree.

I recognise the existence of grievance and injustice. I do not agree that the remedy for it is the universal pill of putting still more power into the hands of the State, putting still more power into the hands of the politicians, the civil servants and the judges.

Therefore, I must now face the question, what course do I suggest should be taken? I repeat that I do not share the belief in the universal pill that the hon. Lady has peddled once more in her speech. I do not share her belief in the paternal omnipotence of Parliament. I believe in a free society. When I face the question, as I must, "Why is it that we are now discussing the Bill?" I reply that the primary reason why we are debating it today is that the British trade union movement has fallen down on its job.

It is the business of any trade union movement to ensure that its members labour power is sold upon terms which cover the risks of technological change. The trouble with the British trade union movement is that it has forgotten Sidney Webb. Webb's definition of a trade union was a continuous association of wage earners for the purpose of maintaining or improving the conditions of their working lives. That is what it is for.

Ever since the war, there has been a sellers' market for labour. The trade unions have been operating in an economic climate which would have enabled them long ago to put an end to the scandal of men being sacked after a lifetime of work with a week's pay. The unions could have exploited the sellers' market for labour to end this state of affairs long ago. But they have not done so. For two decades, they have allowed this matter to go on instead of quite properly and legitimately using their bargaining power to put an end to it.

The place to tackle this scandal is not primarily the House of Commons—and I am astonished that any trade unionist supposes that it is. The proper way to tackle this scandal is at the bargaining table and the point of production. The trade unions themselves should do this.

Miss Lee

Does the hon. Member think that in the years immediately following the Second World War the miners should have exerted their bargaining power to have got the full economic price for the commodity which they were producing rather than keep in mind the country's overall need and allow the coal to be sold at a social rather than an economic price?

Mr. Curran

That is easy to answer. Obviously, the miners have to consider the economic welfare of the country, not as a matter of philanthropy, but as a matter of self-interest. They have nothing to gain, either as miners or as citizens, from pursuing a policy which would involve the country in economic collapse. That is what the unions have to consider, and they do not deserve compliments for doing so, because it is simply the policy of enlightened self-interest.

In pursuing a policy of enlightened self-interest, which is what a trade union is entitled to do, it should keep in mind not only the general economic condition of the country, but also the need for selling its members' labour power upon terms which enable those men to escape the dangers and risks which we are debating today. My criticism of the unions is that they have not done it. The Bill is an epitaph to 20 wasted years of British trade unionism. The unions should have started to do this two decades ago. They have not done so and now we are invited, in the House of Commons to make up for the negligence of the British union leadership.

Let me point that by making a contrast. What has been happening in this country since the war is not peculiar to this country. The problems created by automation and redundancy and the tremendous continuous challenge pre sented by the sweep of technological change face the workers on both sides of the Atlantic. To see how trade unionism should tackle these problems, one has only to look to the other side of the Atlantic to find the answer. The American and Canadian trade unions, unlike ours, have not leaned upon the politicians. They have not gone to politicians and asked that laws be passed to protect the worker from the menace presented by technological change. On the contrary, they have done the job themselves as trade unions should do it.

Let me give an example. There is in the United States a trade union called the International Association of Longshoremen, "longshoreman" being the American work for a docker. Let us see how that union has tackled the problems presented by automation. On the Pacific Coast, this union is controlled by a union leader named Harry Bridges, an Australian, who holds sway in San Francisco. Acting on behalf of the dockers in his union on the Pacific Coast, Mr. Harry Bridges recently made an agreement with the employers, the Pacific Maritime Association.

I wish to quote from Time of 27th December last a summary of what that agreement did. This is the agreement which the union made with the employers, and it covers, I add, every one of the American ports all the way from Seatle down to San Diego. The agreement states that the employers may introduce all the labour-saving machinery they like in every United States port on the Pacific Ocean but that they can do so only on the union terms. The union terms, converting dollars into pounds, are a payment of £1½ million a year in redundancy and retirement benefits for members of the union. The agreement provides that union men can retire at the age of 62 and that if they do they can draw a pension paid by the employers of £70 a month for three years. This carries them on to 65, when the American equivalent of our retirement pension comes into force. The union pensioner can then draw the State pension for the rest of his life and he can also draw for the rest of his life a pension of £35 a month from his employers.

Mr. J. Silverman

The hon. Member will, I am sure, bear in mind that the Longshoremen's Union is an extremely powerful and exceptional one. However, as to United States industry in general, where there is no statutory provision and where, it is true, some individual unions have obtained fairly powerful concessions concerning severance pay, according to the Ministry of Labour Gazette, in 1953 only 16 per cent. of existing collective agreements covering 1,000 or more workers provided for dismissal pay. The A.F.L.C.I.O.—the American Federation of Labour and Congress of Industrial Organisations—estimates that only 25 per cent. of current agreements provide for severance pay and that they cover 35 per cent. of all workers covered by collective agreements. I think, therefore, that the hon. Member will agree that the case he is quoting is art exceptional one and that even in America statutory provision will be necessary to cover ail the workers.

Mr. Curran

I appreciate the hon. Gentleman's intervention, but he is not doing full justice to the case I am making. He is trying to argue that the agreement I have quoted is an exception. Let me try to persuade him that it is not an exception.

I quoted the bargain that has been made to cover automation and redundancy in the docks on the Pacific Coast of the United States. Let me quote the position, not in 1953, as I understood the hon. Gentleman to say—

Mr. Silverman

1963.

Mr. Curran

Let me quote the figures given only a few weeks back. Again I am quoting from Time It gives a detailed breakdown of the position of capitalist-supported redundancy payments and other benefits provided not by the State but by the employers. It says that: more than 90 per cent. of the nation's blue collar workers that is the American word for the manual or factory worker now enjoy company supported health and welfare plans. Besides paying for unemployment insurance and slipping in their share of social security, hundreds of companies now pay up to half of employee life assurance and medical-plan costs. Also common among the fringe benefits are regular three week vacations, eight or more paid holidays a year, severance pay, company financed college courses, moving allowances for transferred employees, and lay-off benefits which bring the payments up to 80 per cent. of base wages. Even more liberal extras range from the country clubs for workers provided by the Burroughs Corporation and I.B.M. There is even one fringe benefit agreement covering the Retail Clerks' Union of California, which I take to be the equivalent of a shop assistants union.

Under this agreement the unions have insisted that the employers shall pay the cost of giving the union members psychiatric treatment. Not only does the union get free psychiatric treatment for its members from the employers, but it also gets free psychiatric treatment for the members' wives. I do not know what it is about being a shop assistant in California that exposes a worker to the risks of nervous breakdown, but whatever they are the union has been prepared to cope with them and to extract from the employers this agreement to look after nervous breakdowns.

It would be very easy, indeed, to elaborate my argument still further. Full details about the bargains that have been driven by American trade unions faced with the menace of automation and redundancy would take up a great deal of time if I recited them here. Briefly I would say this: if we look at any of the American industries where the challenge of automation and mechanisation is serious, we find that in each of those industries the unions concerned have taken action—John L. Lewis has done it in coal, Phil Murray and Dave McDonald have done it in steel, Walter Reuther in motor vehicles, and David Dubinsky in clothing.

In the industries where automation and mechanisation challenge the workers the American trade unions take up the challenge not by going to the politicians but by going to the bargaining table. The unions in America extract from the employers—not from the politicians—compensation on a scale which enables their members to meet this challenge without the risk of economic exposure from which workers often enough suffer in this country.

Some of the American unions not only extract job pensions and redun dancy payments but job pensions on the basis that they shall be portable—men can draw them and then move into other industries. It strikes me that the American trade unions have shown the lines along which in a free society the problems presented by automation and mechanisation ought to be tackled.

I suggest that in this country, for reasons that can be understood, but which I do not accept, the trade unions have tended all the time to look to Parliament rather than to themselves to solve their problems. They have tended for years to offload the problems which they ought to cope with and to expect the politicians to deal with them instead. This Bill is an example—not by any means the first, and probably not the last, of the way in which the trade unions in this country have tried to offload their problems.

It was only in 1962, less than 18 months ago, that the Trades Union Congress at the Blackpool conference authorised the General Council to carry out an inquiry into fringe benefits. There was only one thing wrong with that decision. It came years too late. The T.U.C. ought long before then to have tackled seriously the problems presented by the technological revolution in which we are living; problems that have been perfectly visible on both sides of the Atlantic since the end of the war.

For these 20 wasted years the trade union leaders in this country have been running away from reality. They have run away from automation, from mechanisation, from job pensions and even from fringe benefits. Face them with any problem you like and their automatic response is: "It is a grave matter. It brooks no delay. Let us leave it to somebody else. Let us pass the buck to the politicians".

It is not the business of Parliament to take over the duty of coping with problems which should be dealt with, in our free society, at the bargaining table. I do not for a moment assert that Parliament has no rôle or duty in this matter. Of course it has. But I do not believe that it is the business or duty of the House of Commons to turn itself into a sort of national wages board, to set out to fix the wages and terms of employment of every worker in the land. This is no part of the function of Parliament in our kind of society. I do not believe that we shall make our society any better if we continue the process of transferring more and more power to the State, transferring more and more decisions and more and more decision-making power from the hands of groups of citizens to the Government.

I am all in favour of collective bargaining. I do not want Parliament to become a national wages board. We in the Tory Party do not believe that, whenever there is a hardship, a grievance, or an injustice in this country, the automatic universal remedy is to pass a law giving more power to the State. The trade unions ought to be told to do their own job, the job they have neglected for 20 years, the job of coping directly, not by proxy, with the problems now facing their members.

I invite the hon. Lady the Member for Cannock to look to the end of the road along which she wants us to travel. The more we continue the process which she applauds, the more we transfer decision-making power to the State, the nearer we move towards turning our society into a corporate State. The corporate State lies at the end of the road along which Signposts for the Sixties points the way. That is where we are going, creating the kind of society in which the State makes the decisions, not groups of citizens in bargaining, in tension, and in competition.

I do not care whether the hon. Lady calls it Socialism or uses the more accurate label, the corporate State. Whatever the label, the citizen in a free society does not want the medicine. Yet the Bill, if we press it, will take us another step in that direction, a step towards the goal which, rather curiously, seems now to fascinate so many people in the Labour movement. They are moving towards the sort of society in which decisions are taken out of the hands of the citizen and transferred to a ruling stratum, which then transmits them beck to the masses below.

I do not want that kind of society. I know that it has its attractions. It is easy to argue the case for paternalism. It is easy to say that the ordinary citizen and groups of citizens want to shed responsibility, and let the State look after them. But I suggest that the whole process is highly dangerous.

The kind of approach which we on this side make to the problems created by technological change is radically different from the approach embodied in the Bill. I shall now glance at the lines along which I think we should tackle the problem. I recognise that there is a rôle and duty for Parliament here, and I do not for a moment suggest that we can leave everything to be dealt with entirely at the bargaining table. Of course not. Parliament cannot wash its hands and say, "It is nothing to do with us; nidustry must settle it." But Parliament must not take the view that this is something entirely for us alone. It is not.

What we need now in the technological revolution through which we are passing, which will become still more dramatic in a few years, is a combination of State action and industrial action. Those who support the Bill seek to put the power of decision entirely in the hands of the State. I am not prepared to do that. I believe that, if we are to make our technological revolution one which the workers will find tolerable, we must accept that there will have to be an enormous degree of mobility of labour. There will have to be a much greater willingness than there is now to accept transfer. People will have to accept the need for very great changes in our social pattern. In order to make them willing to accept these things, I suggest, first, that industry should be required to provide compensation for the worker on a scale which he will regard as satisfactory, a scale worked out at the bargaining table by means open to the trade unions, and, second, that the State should seek to supplement it, not to override it.

To some extent, the State can set a pattern since it is now the largest single employer. The policy which the State pursues in its capacity as employer can set the pattern. I want the State to do that, but I do not want it to take over the whole job. The State should limit itself (a) to behaving as a good employer and (b) to supplementing what can be achieved by means of collective bargaining in industry.

I hope that, when he replies, my right hon. Friend will indicate in some detail the lines along which Government thinking is proceeding in this connection. I hope that he will make clear to us what rôle he sees the State playing in this process and what rôle he sees the workers and employers playing in it. There is an important rôle to be played both by the workers and by the employers. It is not something which can be left entirely to us or to any other collection of politicians who may succeed us in this House.

2.27 p.m.

Mr. R. E. Prentice (East Ham, North)

I regret that, having made certain promises not to take too long, I cannot follow the hon. Member for Uxbridge (Mr. Curran) very far. I was intrigued by his passionate appeal for trade union militancy. I can only suggest that he makes a summary of it and adds it as an addendum to the Motion, in an anti-trade union vein, which has been put on the Order Paper by some of his hon. Friends.

I was intrigued also by the picture of the hon. Gentleman sitting at the feet of Harry Bridges. Having myself had a conversation with Harry Bridges some months ago, I can only say that I think that he would make "Ted" Hill look like an advocate for Aims of Industry. It is a fascinating development to have a Conservative Member of Parliament recommending his tactics.

The hon. Gentleman talked about the tactics of the American trade unions. In many ways, they have been very successful in this matter, but he will recognise, I hope, that, increasingly in recent years, the American unions have been demanding more and more legislation, whether at State or Federal level, because they recognise that they organise only about 25 per cent, of the labour force and they recognise also that the interests of their members as well as of other workers lies in the field of legislation on many aspects of these problems.

In this country, similarly, we have had some very good agreements negotiated by the trade unions, the nationalised industries and the private sector, but it is recognised that the spread of these agreements, although they are spreading, is far too slow to cope with the problem. Here, we come to the main difference between the two sides of the House in the debate. Nearly everyone who spoke welcomed the Bill, but hon. Members opposite, alter welcoming it, went on to say that, for one reason or another, they did not intend to support it on Second Reading.

The difference between us lies in our sense of urgency. Indeed, the hon. Member for Rutland and Stamford (Mr. K. Lewis) said that he saw no great need for urgency We do see the urgency.

Mr. K. Lewis

I must correct that. I said that there was no urgency within a matter of months, but I went on to say that, within a year or two, it would have to be tackled.

Mr. Prentice

This illustrates the lack of a sense of urgency on the part of hon. Members opposite. The hon. Gentleman's intervention reveals it again.

We cannot postpone tackling the problem from one Session to another. We must pay attention to the fact that any Bill which is taken to a Standing Committee, which becomes a Government Bill, subject to Amendment and all the rest, will take many months to pass through the House. There will then have to be a starting date, which will be some months later still. The tone of the hon. Gentleman's remarks and those of his hon. Friends shows a failure to appreciate how urgent the whole matter is.

It is not good enough for hon. Members opposite to say that they support the Bill if they are not prepared to support it effectively and help it obtain a Second Reading. If they are against it they should say so clearly. That is why I welcomed the speech of the hon. Member for Uxbridge, for at least he said that he was against it. Some of his hon. Friends, on the other hand, have said that although they support it, they would not be prepared to vote for its Second Reading.

If they vote against it they will be judged by the country as being against the State doing anything about this problem now. If they try to talk it out their action will have the same effect. Talking things out has become a habit lately, so much so that hon. Members opposite are inclined to talk things out when they do not intend to do so. They must face up to making a clear decision on this important matter.

The reason why I stress the urgency of the matter is that in the period of technological change through which we are passing we must recognise the way in which the pace of this change is increasing. All hon. Members talk about living in a time of change and this trend is clear to everyone. My hon. Friends and I have recognised the way in which the pace has been increasing and, in this connection, references to the situation in the United States—and several hon. Members have referred to this—are relevant because what we have seen in that country in recent years is the growth of the highest level of prosperity the world has ever seen.

Along with that growing prosperity has been a growing level of unemployment, due to technological change. There has been the growing crisis of youth unemployment—about 18 per cent. of teenagers being unemployed—and the growth of artificial unemployment; where, for example, electricians in New York have been able to negotiate a 25-hour working week. Along with those trends we have had the position of people who, because of the jobs they are doing, are overworked and under great pressure. We must adapt our social system to coping with these problems.

If these changes are to be expedited we must make the necessary social changes in time to match them. The Bill is an important contribution towards that, although it is by no means a contribution that should stand alone. Side by side with it we need a vast expansion of retraining programmes. We need a more dynamic full employment policy, better unemployment benefits and a number of other changes.

Severance pay is not an alternative to these things. I support hon. Members who say that it is not a question of either improving the unemployment benefits or introducing severance pay, but that there is a strong case for both. The case for severance pay exists even if the worker made redundant can quickly get another job because he is interested not only in having a job of a sort but that he may have invested a great deal of his life in his job. I have in mind the man with long service. He will have worked for his firm for many years, some of them spent in training for his job. He will have acquired skills and experience which are often not transferable to another job. Thus, when he loses his job, he also loses the assets he has derived from his skills and experience.

Men in this situation not only lose these assets, but also the friendship and respect of their colleagues, along with a degree of status. They have probably acquired roots in the neighbourhood, having made their homes in the area for many years. AB these things are a personal loss to a man who becomes redundant and who has worked for a firm for a long time.

We believe that such a man is entitled to severance pay and that this should be something over and above any improvement in unemployment benefits. We say that it is right to put this obligation firmly on the employer; and I do not believe that this is an obligation for the State. It is a logical extension of the employer-employee relationship and something that should be written into our law. It should particularly be written in because one of the developments we are seeing to a greater extent is that of the take-over bid.

When an employee has been with a firm for a long time and is known to the management there is often a personal relationship between the two—unhappily not always, but often—and this relationship can help to take care of the man when redundancy arises, for the firm will feel a sense of obligation to him. When a take-over occurs, however, and when a new owner takes over, such a worker is just one more name on the roll of employees and this sort of relationship may disappear.

There is nothing in our law at present to compel firms to take care of people who become redundant in this situation. This is an additional reason why doing something about this is becoming urgent. Any scheme should be related to the length of service and special weight should be given to service from the age of 45 to 60; and here I disagree with the hon. Member for Aylesbury (Sir S. Summers) who thought that too much weight was given to it in the Bill.

One of the major differences between a man in his fifties and a man in his thirties is that the older man has great difficulty in being retrained for a new job. Sometimes he can be retrained, but we must consider the whole concept of retraining boldly. It will be difficult, whatever happens, for the older man to retrain and get a new job. Thus the man who was skilled in his old job, even if he finds a new one, will find that his new job is probably unskilled, lower paid and that he has a lower status. This presents the special problem which must be faced of people in middle age and older. They must be taken care of in a scheme of this sort, but there must be generous weighting in their favour.

The hon. Member for Rutland and Stamford spoke of the difficulty of putting this responsibility on the employer because, he said, a man will sometimes become redundant for reasons outside the control of his firm. Again, the obligation is a clear one. If there is a loss of trade, and if the firm suffers a bad patch, it is unjust for the brunt of that to be put entirely on the shoulders of the workers concerned. There should be a clear obligation on the firm and it should take priority over every other consideration.

Even in the case of a firm going bankrupt we should accept that this is a preferential debt. In cases where firms cannot meet even that preferential debt, only then should the State come into the picture. I do not think that many such cases would arise and, in any case, they would probably become a burden on the National Insurance Fund. An Amendment of this sort might be made to the Bill if it reaches the Committee stage.

There should be no doubt anywhere about the record of my hon. and right hon. Friends in this matter. Many of us have for years been advocating a reform of the law along these lines. My hon. Friend the Member for Gloucester (Mr. Diamond) has twice produced a Private Member's Bill on this issue. To look forward a little, to the time of a future Government, I hope that we will legislate properly along these lines and that these benefits will become standard practice. I hope that as well as talking about a "golden handshake" we will also talk about a "diamond handshake", and thus pay tribute to my hon. Friend the Member for Gloucester for the pioneering work that he has done in this connection.

When we debated the Contracts of Employment Act last year my hon. Friend tried, with the support of many hon. Members on this side of the House, to amend it to provide for severance payments. Now my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) [...]s trying to achieve that end. We have time and again shown initiative on this issue, but the Government continue to drag their feet.

The Minister has a case to answer today. We were given to understand that something concrete would be done by now. There was an indication that legislation would be forthcoming in the early part of this Session, but that has not teen fulfilled. I expect that the right hon. Gentleman will say something about the difficulties he has had in getting agreement with the British Employers' Confederation and the T.U.C. on the type of scheme. A certain amount about this has become public because, although the talks have been confidential, there have been some leaks. I have with me a cutting from The Times of 31st October last, in which various details are given. I am not sure from where the information came, but by keeping our ears to the ground we have found out a certain amount.

The attitude of the British Employers' Confederation is one that the Government must over-ride, because the Confederation has said that it is against a statutory scheme, and that this is something that is better done voluntarily. I can only say that employers generally have been rather slow in coming forward with voluntary schemes, and we know that only comparatively small numbers of people outside the nationalised sector of industry are covered by such schemes. If there is no legislation to deal with the matter, it is safe to say that in five, 10 or 15 years' time, no matter what efforts the trade unions may make the employers will in many cases have resisted these schemes.

The one serious point put forward by the B.E.C., and it has been repeated here today by more than one hon. Mem ber opposite, is that a statutory scheme would hamper mobility of labour. It is said that there are certain circumstances in which firms should get rid of labour but are hoarding it, and that, if made to pay generous severance payments, they will hang on to that labour, which is bad for the economy. That is wrong, because the obligation placed on them would be very small in regard to most workers. It would become a large obligation only in respect of those men who had been employed for a very long time, and in whose case the mobility argument should be set on one side. In that case, we want the firm to redeploy the man, if it can. We want to encourage the firm not to get rid of the man, but to plan ahead so that he can be absorbed in another job. I therefore do not think that the mobility of labour argument should apply.

The general attitude of the T.U.C. was clearly defined when the annual conference last autumn accepted the report of the General Council, from which I quote the following: All employers should provide severance payments or compensation for loss of office or prospects when workers are discharged because work is no longer available …". It is, therefore, clear that the T.U.C. wants a scheme, although I must say frankly that there are differences of opinion on the General Council about the type of scheme, and the extent to which legislation should apply.

The difficulty that has arisen between the Minister and the T.U.C. is of the Minister's own making. The Minister has got himself into trouble by trying to set out a narrow definition of redundancy, and the important feature of my hon. Friend's Bill is that it gives a wider definition. We exclude the man who is on the way to his retirement pension. We exclude the man who leaves his employment voluntarily, and we exclude the man who is dismissed for misconduct, but, having done that, we say that everyone who has worked for an employer, for whatever may be the minimum period, and who is then rendered unemployed by the employer, should be covered by the scheme. Why not? Why attempt to define redundancy more narrowly, and run in into difficulties of consequent anomalies.

Something should also be done in those industries in which there is very frequent change of employment, and it could be dealt with by amending this Bill in Committee, if it is permitted to get as far as that, or in some other Bill. In the building industry, a man can change his employer every few months although, at the same time, he relies on a regular pattern of work. If he becomes redundant because of age, it is surely the responsibility of the industry to look after him rather than that of the firm for whom he was working when he became redundant. The building industry has already dealt with its holiday difficulties by means of a holiday staff scheme, and there is no reason why the industry, and some others, could not he subject to a special regulation enabling a wide obligation to be placed on it rather than a specific obligation on one firm.

Another difficulty has arisen between the T.U.C. and the Minister as a result of the very low scale of benefits under the Minister's scheme—and The Times has told us what those benefits are. The right hon. Gentleman's scheme falls very far short of what is in the Bill. His five-year qualifying period is much too long, and he should attempt now to justify it. The fact that no account whatever is taken of service up to age 26 is apparently another feature of the Minister's draft scheme, and for those over 45 there is severance pay for only one and a half weeks instead of the two weeks in the Bill. Those conditions are worse than those in many negotiated schemes, and worse than the Government provide for non-established civil servants. So much so that trade union leaders were suspicious of the proposals.

A further difficulty arises from the fact that the T.U.C. can rightly say that priority should be given to improving unemployment benefits. I gather that part of this problem has been hived off to the Minister of National Insurance, but that Minister has had the matter under consideration for a long time and it is time that we heard from him as well as from the Minister of Labour. The Labour Party has been on record for a long time as standing for substantial improvement in unemployment payments, and wage-related improvements in unemployment. I was glad that more than one hon. Member opposite seemed to be converted to our arguments in New Frontiers for Social Security—which I recommend to those hon. Members opposite who have not yet read it.

The fact is that this is the larger problem, and must be dealt with. The T.U.C., understandably, regards it as a problem of priorities, but I hope that my friends in the T.U.C. will recognise that it is only a problem of priorities as long as the present Government are in office and that a more progressive Government, dedicated to improvements in unemployment pay, could be expected to do something about severance pay as well, because both are required.

I would to some extent accept what the hon. Member for Uxbridge said, which was that the trade unions ought to give more attention than they have been giving to this kind of problem in dealing with unemployment. If this House legislates, there is still scope for that. What the House should do is to legislate for a decent standard applicable everywhere, but there is no reason why voluntary agreements should not build on that and improve on that. There is still scope for that, but I think that we are entering on a period when, in this as in some other matters, legislation will be required in fields that previously were entirely dealt with by joint negotiation. An example is equal pay for equal work for which, for the first time, the T.U.C. last autumn demanded legislation, where previously it had relied on voluntary arrangements.

The pace of change at the moment, and for the future, is such that there will have to be legislation not only on this issue, but on similar issues to provide a framework of security within which men and women are not afraid of technological change, in which we can make changes to improve overall prosperity, and still have a situation in which certain people do not become the victims of unemployment without having proper provision made for them. For the second year running, an initiative forward has come from this side, and for the second year running the Government are still dragging their feet on this important subject.

2.48 p.m.

The Minister of Labour (Mr. J. B. Godber)

I am glad to be able to explain the Government's attitude to this Bill, and I particularly wanted to intervene in this debate as I recognise the importance of the subject. In particular, I wanted to hear what the hon. Member for Birmingham, Aston (Mr. J. Silverman) had to say. I congratulate the hon. Member on bringing forward this subject today, and we have had a very useful discussion.

I would also commend the hon. Member for Gloucester (Mr. Diamond), to whom so many references have been made, for his long interest in the subject and the steps he has previously taken to bring it to the attention of the House. In the same way, I would commend the work of my hon. Friend the Member for Rutland and Stamford (Mr. K. Lewis) and some of his colleagues in producing a booklet—Industrial Change—The Human Aspect— which deals with the subject at some length. Again, my hon. Friend the Member for Aylesbury (Sir S. Summers), who has long taken a great interest in the subject, gave us a very carefully thought out speech on which we shall all want to ponder. There are many aspects of the problem, and what we have heard today has shown what deep interest there is in it on both sides of the House.

The Government entirely sympathise with the desire to make progress in this field. Since the war, as has been made clear in a number of speeches today, the whole pace of economic and technical change has continually accelerated. In the coming years we must expect a further intensification of this process, and we must expect it to throw up more problems of redeployment of labour and probably on a greater scale than we have hitherto experienced. It is clear that as a country we cannot opt out of such a process if we are to maintain, let alone increase, our living standards and pay our way in the world.

The processes of change do affect traditional patterns of employment, and they must continue to do so, but I share the general view in the House that it is imperative that the interests of the individual workers affected should be adequately safeguarded. I accept this as a major social problem. If a man's job disappears, the blow may be as great as a serious accident or illness. It may be particularly severe, as has been stressed several times today, if the worker has given long years of service in his job and has built his life around it, or if, as has been mentioned by several hon. Members, he has made special friends and has a special position in the society in which he has worked.

In addition to the social aspect, this is also an economic problem. The continual adjustment and change in our economic structure is bound to bring decline to some industries while it brings expansion to others. There must be redeployment of the labour force to match the changing requirements of new processes and methods of production. These changes need the ready co-operation of workers, but they must and often do involve redundancy, and co-operation can hardly be expected if those directly affected are left to bear the whole brunt of economic change.

Redundancy presents in the most acute form the impact of industrial change on the security of the worker, but the effects of change go much wider than this. They are not confined to those who find themselves out of a job. There are those—and this is a real difficulty—who may find that their skills are obsolete, and although they are able to switch to different work, sometimes with the same employer, the content of the job will change and sometimes there is a different status and different rewards. This has already thrown up industrial problems and is bound to continue to do so. Redundancy does not simply affect those who actually lose their job. The prospect of redundancy can cast a shadow of uncertainty over the workers in whole firms and, indeed, in whole industries. This could have an incalculable effect on the whole climate of our industrial relations and on our productive effort.

The hon. Member for Aston said that the main object of the Bill was to deal with the era in which we live. I agree very largely with what the hon. Member said, and what I have said so far ties up with what he said in this context. How can we counteract this factor of increased uncertainty and in security in our industrial life? The Government see specific provision for redundant workers as only one aspect of what needs to be done. I wish to put the position before the House and tell hon. Members what I think are some of the other aspects which are a necessary complement to what the hon. Member seeks to do in the Bill.

The first need, not only in the context of redundancy but generally, is for better communications between management and workers. Hon. Members may say that this is a well-worn subject, but I make no apology for mentioning it. The worker of today is more alert, more sophisticated and more interested in the problems around him than was the worker in the past. We are a long way from the days of "factory hands" and all that that phrase implied. But not all managements have woken up to this. There is still too much remoteness between management, and particularly top management, and the shop floor. How many senior executives ever actually meet their factory workers? How many company chairmen make a point of regularly visiting their factory floors?

I feel very strongly that in a large organisation there is a great deal of value in some personal contact. I should like to quote the remark of a senior manager during a recent survey by my Ministry of communications methods in his firm. He said: The biggest problem is to get people to appreciate the value of informal communication; to have a meeting or to write a publication is not enough; you need to talk informally about the business and the job to the men. There is an awful lot of good sense in that, and I wish that it were more widely followed in industry today.

It is no good beginning consultations only when an emergency has developed and redundancy is imminent. Too many firms are content to sweep the problem under the carpet until the trouble is upon them. They may be willing then to do the right thing and make reasonable provision for those concerned, but this is not enough. The worker should know where he stands beforehand, and the company should prepare a redundancy scheme in advance, in consultation with the workers or their representatives. Here I do not go as far as my hon. Friend the Member for Uxbridge, but I recognise that there is importance in very close consultation with the trade unions. The preparation of a redundancy scheme in advance, I suggest, should be regarded as the normal responsibility of managements, even in firms which may never have to operate a redundancy procedure.

I do not want to imply that once a redundancy scheme has been introduced it is all plain sailing. There will be a need for further consultation, if redundancy arises, before decisions are taken on how the scheme should be applied and which workers are to be discharged. It is important that the criteria for selecting workers for discharge should be well understood by all concerned and that there should be some provision for giving proper consideration to appeals against discharge.

There is another direction in which we need to make more progress if the labour problems thrown up by change and redundancy are not to binder economic growth. We need to go further than we have yet gone in improving the status of the worker. In the past, there has been a great gulf—it has been seen by all of us—dividing "staff" employees from "works" employees. In my view, there is no foundation in equity for many of these distinctions and they are becoming increasingly out of tune with the present times.

It is no good expecting to have full co-operation from workers in an age of rapid change as long as the feeling of "they" and "us" continues to dominate the attitude of the shop floor. This feeling is bound to be fostered by wide differences of treatment between staff and manual employees in such matters as security of employment and fringe benefits. Provision for redundancy is one of the matters where there has often been more favourable treatment of staff employees. Other examples are with sick pay, pension provision and guaranteed earnings.

In some firms and industries a start has been made on narrowing these differences. I hope this will go on, and the Government will certainly encourage this tendency. We have already taken action on length of notice and also on the provision to employees of a written statement of their terms and conditions of employment in the Contracts of Employment Act which will come into force formally in July. The Act lays down only minimum standards, upon which good employers will want to improve. But it represents a real advance for large numbers of workers and a significant step in reducing the gap between the status of manual and white-collar workers. That is why I stress it in this context.

In other fields there is room for much progress en a voluntary basis. I am discussing at the present time with both sides of industry on my National Joint Advisory Council how we can best promote this.

Mr. Austen Albu (Edmonton)

Is not the best way of promoting it to start some of the changes in Government establishments themselves?

Mr. Godber

I think that we have a fairly good record in a number of fields in this context.

I have so far been discussing the action needed to create the sort of climate in industrial relations in which redundancy will be more readily and more freely accepted.

I now go on to deal more specifically with the ways in which redundancy should be provided for. Perhaps I could give four major objectives in this field as I see it. I have already discussed one of them—the importance of laying redundancy plans in advance and of early consultation with the representatives of workers.

Secondly, when plans are laid, everything should be done to see that they have to be brought into operation as rarely as possible. This means better manpower planning to cut redundancy to the minimum. Thirdly, when redundancy has to be declared, workers must be enabled to find fresh work with the minimum of delay. Fourthly, there should be reasonable financial provision for those who lose their jobs.

I should like to take each of these objectives separately and to examine the role to be played by industry and the Government in achieving them. This will perhaps explain clearly what the Government's position is, because various views have been put forward from different quarters of the House during the debate on the position of the Government in this field.

Redundancy can often be minimised or avoided entirely if it is foreseen well in advance. Intelligent forward planning by employers of their future manpower requirements is more than desirable; it is an urgent necessity if scarce labour is to be put to good use. This is not asking the impossible. There are many practical steps which employers can properly be expected to take. Any businessman must from time to time review the state of his concern, and its future prospects. For effective management these reviews should be regular and systematic. Then is the time to look at the manpower budget as well as the balance sheet, and to adjust policies for recruitment if there is a prospect of redundancy.

Whenever redundancy can be spread out over a period, normal wastage will help to reduce the number of those who have to be discharged. One has seen how this principle has been applied very successfully by a number of employers in recent years. If redundancy in a particular section of the firm cannot be avoided, the employer should try to provide suitable alternative work elsewhere whenever he can economically do so.

If no work of the same type is available, the next move is that he should consider moving redundant workers to different types of work, if they are willing to do this, and arranging for their re-training, either within the firm or, where necessary, by going outside. Where there are associated groups of firms, it will often be possible to offer alternative employment elsewhere within the group. It is not always practicable for a man to take such employment, because he may have ties in the locality where he is. But this is an opportunity which should be explored. These are all practical steps which should be considered first and as a matter of course by any good employer.

It is easy enough to preach systematic planning, but employers may quite fairly point to the limitations on their ability, as individual employers, to obtain the information about future trends in their industry upon which it must be based. I accept that. There fore, I should like to remind the House of two important developments at national level which will, I think, do much to strengthen and underpin the planning resources of firms in this sphere.

First, I would mention the inquiries carried out under the auspices of the National Economic Development Council into the economic prospects for particular industries, as these provide already a most useful setting within which the individual employer can plan his own manpower requirements. I draw particular attention to this. I hope that those employers' associations which have not already done so will take full advantage of this source of information and make it easily available for the benefit of their members. They can do a real service here.

This work will, of course, be carried a stage further, and will be made more useful, with the setting up by the National Economic Development Office of Economic Development Committees for particular industries with the active participation of representatives of employers and workers in the industries concerned. The Government warmly welcome these developments and hope that they will continue to receive the full co-operation of both sides of industry. This is an important aspect of the problem.

In addition to this, my predecessor, Lord Blakenham, set up in March last year the Manpower Research Unit in the Ministry, to which a number of hon. Members have referred, in order to study the likely future manpower requirements of each sector of the economy—and of particular industries—in the light of past trends and probable developments, including the effects of automation and other types of technological change.

The unit, which keeps closely in touch with academic research workers engaged in related fields, will study the effect of these changes on the occupational structure of the labour force as between broad categories—"white collar", skilled, semi-skilled and unskilled—and as between particular types of skill.

The unit's current programme consists, first, of studies of the general distribution of manpower between industries and, secondly, of special surveys of certain industries or sectors of employment which are thought likely to undergo important developments. These special studies are concentrating initially on the future requirements for skilled labour in the metals and construction industries and on office employment. I will publish the results of some of these studies in due course.

Mr. Tam Dalyell (West Lothian)

When the Industrial Training Bill was going through the House, we considered this aspect. What regional studies are now going on? Have there been any developments since then?

Mr. Godber

The present position is that the studies are largely on a national basis. I think that we must get them done first and then we can decide which regional studies would be most useful. But I lake the point put by the hon. Gentleman.

I come now to measures that can help the redundant worker to find a new job quickly. This is what matters most of all to the man whose services are no longer required by his employer. The first requirement is the maintenance of a high and stable level of employment throughout the country as a whole. This continues to be a major aim of the Government's general economic policy. Our determination to achieve it is shown by, amongst other things, the series of measures taken, particularly in the last 12 months, to assist less prosperous parts of the country, such as free depreciation, improved and extended benefits under the Local Employment Acts, the proposals in the White Papers on Central Scotland and North-East England, and the furtherance of policies of regional development.

Getting another job quickly may also mean for many a change of occupation. In the interests of a modernised economy, adequate arrangements for equipping our labour force with up-to-date skills are a first priority. Government policy here is a vigorous two-pronged attack on the problem of retraining.

For those redundant workers who would benefit from a course of training—those whose existing skill is no longer in demand and who are suitable for training and want it—the opportunity of learning a skill or adapting the skill they have is increasingly being provided in the Government training centres. The progromme of expansion of those centres which was announced by my predecessor last April is now well under way. Six of the 18 new centres are now open—Dunfermline, Motherwell, Tursdale, Hull, Sheffield and Long Eaton—and additions have been made to most of the existing centres.

The rest of our new centres should open at intervals in the course of the year. I am trying to get them open as soon as I can. We have, in fact, more people in training in our centres today—just over 2,500—than at any time since 1955, and the number is increasing steadily. When the programme is complete, we shall have capacity to train over 10,000 persons annually. I accept that this does not compare with the figure given for Sweden but it is a substantial improvement and I am going into the position at the present time with a view to expansion.

Mr. Prentice

In the N.E.D.C. Report on conditions favourable to growth it was said that, if we had figures comparable with those of Sweden and the United States, two of our principal competitors, we would retrain 100,000 people a year. We now retrain 2,500 and the right hon. Gentleman speaks of 10,000 as our maximum capacity after all his plans have come into effect.

Mr. Godber

At the moment, we have just over 2,500 in training, which means an output of about 5,000 a year. We are working up to 10,000 persons a year. I acknowledge that that is not as high as it is suggested it should be, but I remind hon. Members that there are certain limitations. It is very important that one gets the good will and support of both sides of industry in this retraining and that people who are retrained in this way shall be accepted by both sides of industry and places readily made available for them so that they are assisted in getting back into industry. I am sure that the hon. Member must be aware that, in certain parts of the country, there are difficulties in this regard. One has to take both sides of industry with one and it is unwise to try to go too fast, for in that way one can merely stir up industrial difficulties.

Our second approach to this problem of training has bean through the Industrial Training Bill, now under consideration in another place. We have been discussing it so recently that I need not comment on it now. I would say only that while I expect the initial impetus of the industrial training boards to be directed to apprentices and other youth training, I believe that, as they get into their stride, they will wish to turn their attention more and more to adult training and retraining; and perhaps this is where the long-term expansion will take place, as required and as appropriate. It will do so with the co-operation of both sides of industry, because the boards will be so constituted that they will take the views of both sides into account.

I now come to the question of financial provision for redundant workers with which the Bill is especially concerned. In the Queen's Speech at the beginning of the Session, it was said that Ministers were engaged in discussions with both sides of industry about severance payments to employees becoming redundant. These discussions were initiated with my National Joint Advisory Council, consisting of representatives of the British Employers' Confederation, the T.U.C. and the nationalised industries, and a special sub-committee was set up last year to study this problem.

The sub-committee agreed that two main issues could be distinguished. First, there was the problem of alleviating financial hardship during any spell of unemployment following redundancy. The second problem was that of compensation for redundant workers who lost their jobs after long service whether or not they experienced a spell of unemployment before finding fresh work. The sub-committee agreed that the first problem—that of alleviating hardship during unemployment—had to be considered in the context of the National Insurance Scheme and that it called for consideration of the possibility of introducing an element of graduation into unemployment benefit so as to relate the level of benefit to the level of earnings. On the question of compensation, there was general acceptance in principle of the view that severance payments for long service workers who became redundant were socially just and desirable. The sub-committee went on to consider the general principles which would be involved in any statutory minimum requirement for severance pay.

Following the sub-committee's discussion, my predecessor initiated more detailed consultations, not only with the organisations represented on the National Joint Advisory Council, but also with other interested bodies in industry, commerce and services. These organisations were told that the Government considered that the most appropriate provision at the present time for workers who lost their employment through being made redundant after long service would be likely to take the form of lump sum payments made by their employers at the time they lost their employment. Schemes embodying these provisions had already been adopted by a number of industries and individual firms.

The Government welcomed the development of these schemes and asked for the views of the organisations consulted on the points which would have to be settled before a final assessment could be made of the desirability and practicability of legislating for come minimum provision on these lines. I emphasise the word "minimum" in the light of what the hon. Member for East Ham, North (Mr. Prentice) said in relation to the terms of this as he has learnt them through the columns of The Times. The Government have to establish minimum provisions, but they would encourage employers to go beyond those.

These points were set out in a memorandum which put forward tentative ideas on the sort of minimum provisions which may be required. I should emphasise that these were in no sense cut and dried proposals, but were simply suggestions, possibilities, or alternatives, which were intended to focus discussion and to get both sides of industry to think realistically about the difficulties involved and how they could be overcome.

The memorandum suggested that the workers who might need to be covered by any statutory minimum provision were those whose employment was terminated because of closure or transfer of the establishment where they were working, or because of changes in production methods, or because of a fall in demand for the firm's products or services. It went on to discuss the difficulties involved in administering a definition on these lines, about which I shall have something to say in a moment or two. This problem of definition is a real one.

The memorandum also put forward an example of a possible scale of minimum entitlement to severance pay. This would have provided, broadly, for a week's pay for each year of service, subject to some weighting for age—we have had a good deal of talk about weighting in the debate today and a good deal of variation in the suggestions put forward—up to a maximum of 15 years' service. It was suggested, as the hon. Member for East Ham, North said, that there might be a five-year minimum qualifying period of service with the employer before a severance payment would become payable, and that bearing in mind the greater mobility of younger workers, service under the age of 21 should not count. Workers might continue to be eligible for severance pay up to the age of 65, and where a redundant worker was retired on pension below that age, the employer might be allowed to off-set the pension against the severance payment due. That was the scheme as put forward to both sides.

The memorandum evoked widely divergent views. The B.E.C. was opposed to legislation for minimum lump sum payments by employers. It thought that provision for such payments should be left on a voluntary basis. While employers who could afford to make severance payments should be encouraged to do so voluntarily, these payments could not be expected to encourage mobility and might even discourage it. That point has been made in the House today. It is a point of which one must take some notice. One must consider the possible discouragement of mobility. I do not over-emphasise it; I merely repeat it as it has been put forward.

The Confederation considered that a more effective way to facilitate industrial mobility and reduce resistance to change would be by changes in unemployment benefit. It thought that consideration should be given to a scheme of supplements to unemploy ment benefit, to be paid to workers with a good insurance record who were prepared to undergo training or move to another locality where employment was available.

The B.E.C. indicated that if, nevertheless, the Government proposed to proceed with legislation on severance payments, it would be right, in its view, to confine these payments to workers with a long record of service whose placement in a new job might be difficult, and not to extend them to younger workers.

The Confederation also considered that it would be inequitable, and possibly unworkable in cases of major redundancies or closures of firms, to impose full responsibility for redundancy payments on the individual employer. The redistribution of labour following redundancy in particular industries was of benefit to industry as a whole, and the Confederation therefore felt that all industry—and the cornmunity—should bear part of the cost, which it pointed out could bear heavily on firms in declining industries. That was the view taken by the B.E.C.

The T.U.C., for its part, was also opposed to any legislation on the lines suggested in the memorandum, but for different reasons. The T.U.C. reminded me of the view that it had previously expressed on financial provision for redundancy, namely, that, first, there should be an increase in existing National Insurance benefits, and that if this were achieved, then further improvements in unemployment and sickness benefit might be by means of the introduction of a wage related element.

Secondly, it said that employers should make severance payments to workers which should not be aimed merely at helping to bridge the gap between two spells of employment, but should compensate for loss of office or prospects. As for severance payments, it considered that the memorandum did not offer a suitable basis on which the financial problems of workers who lose their jobs could be solved with fairness. It felt that the aim of the proposals was too narrow, in that only a small number of redundant workers would be eligible for severance payments, and that the amounts of compensation suggested were inadequate.

The T.U.C. informed me that its General Council was to have further discussion about compensation for loss of employment, but that it was already agreed that no arrangements satisfactory to it could be obtained by seeking amendments to the proposals in the Ministry's memorandum.

The T.U.C. has subsequently told me that its General Council have completed its consideration of the Ministry's proposals. It reiterated its view that improvements in National Insurance benefits should have priority over any legislation about severance payments. In the meantime it intended to encourage unions to negotiate procedures to govern redundancies.

That is the position of the T.U.C., I would point out here that it has specifically said that improvements in the National Insurance benefits should have priority over legislation on severance payments. The hon. Lady the Member for Cannock (Miss Lee) and the hon. Member for East Ham, North, referred to priorities in this context. The hon. Member for East Ham, North, went on to say that there is a problem of priorities only while the present Government are in office. From this I assume that everything has priority in the view of his party—as it did when the Labour Party was in power before. That is what got it into real trouble then. Its economic policy was to do everything at the same time. I hope that the country will take the warning that the hon. Member has given it on this occasion, and will react accordingly.

Mr. Prentice

The Minister will be aware that for a long time the Labour Party has been in favour of substantial improvements in National Insurance benefit, including wage-related unemployment benefit. We are committed to that now, whereas in relation to the present Government the T.U.C. has to argue a case, because of the way in which the right hon. Gentleman and his colleagues have kept National Insurance benefits at an inadequate level.

Mr. Godber

The hon. Gentleman says that there were no priorities, but there must be some priorities, however one deals with these matters. However socially desirable some things may be, we must have priorities, and the T.U.C. clearly says that National Insurance benefits should have priority over severance payments.

Among the other organisations consulted there was much divergence of view. Some supported the idea of legislation on severance payments, though there was wide diversity of views on the detailed provisions that might be made. Others were opposed to legislation. The nationalised industries, whose representatives were party to the discussions on the National Joint Advisory Council, while not opposed in principle to a national scheme for minimum lump sum payments, took the view that it should not be introduced in advance of any action taken in the context of National Insurance benefits towards the alleviation of financial hardship.

In the light of the views of industry, the Government have given most earnest consideration as to the best way forward in this very difficult and complex problem. The reactions of both the British Employers' Confederation and the T.U.C. have underlined the relation between provision for severance pay and National Insurance provision for the unemployed worker. The Government have always accepted that these are related problems which must both be considered in the context of provision for redundancy.

This was the view taken from the outset in the discussions with the National Joint Advisory Council. It was recognised in those discussions that a distinction can be drawn between the purposes served by unemployment benefit and lump sum severance payments respectively. The primary purpose of unemployment benefit in the context of redundancy is to alleviate financial hardship during any unemployment which the redundant worker may experience following dismissal.

The main object of severance pay, on the other hand, is to compensate the redundant worker for loss of his job and of his reasonable expectation of continuing employment. It provides some recompense for the loss of security, and for the possible need to accept lower earnings. It helps to compensate for a move to another area or for the need to undergo retraining, and for the general anxiety and disturbance which accompany loss of employment, particularly where the worker has been settled in his job for many years. Lump sum compensation is not designed to prevent financial hardship during unemployment, but, of course, it may help to do this in the case of the long-service worker. Nor can any system of unemployment benefit entirely compensate the long-service worker for loss of employment with all that that involves.

Nevertheless, these two issues of improved arrangements for severance pay and changes in unemployment benefit are related. Both would involve financial charges upon industry, and in the Government's view it would be wrong to consider either of them in isolation from the other. My right hon. Friend the Minister of Pensions and National Insurance is now engaged in discussions with the two sides of industry about the problems which would be posed by any move to introduce an element of graduation according to earnings into unemployment benefit. There are many major problems involved.

The main structure of the National Insurance scheme is based on the Beveridge concept of standard rates of benefit with supplements related not to previous earnings but to family responsibilities. Provision on this basis is already an important factor in meeting the financial consequences of redundancy. If one is to build on this foundation by introducing an element of benefit computed on the different basis of relation to earnings, this is clearly going to present many difficulties. Moreover, the desirability of moving in this direction cannot be determined solely by considerations arising from study of the redundancy problem and affecting only unemployment benefit. The provision for the different contingencies covered by the National Insurance scheme, including retirement for which an element of earnings-related benefit has already been introduced, cannot be considered in isolation.

I think that it is very important to consider just what we are going to do when we are moving from the Beveridge concept. As my hon. Friend the Member for Aylesbury (Sir S. Summers) made clear today, we have done this in relation lo pensions for which an element of earnings-related benefit has been brought in. But we have not done so in the other fields, and it would mean, if it were done, building something on a different basis on top of the Beveridge concept. I think that hon. Members must face the complications of this if we are to get a successful outcome in the way I lave indicated. Hon. Members should not, therefore, imagine that the introduction of earnings-related National Insurance benefits would be a quick or simple operation.

When the National Economic Development Council, in its Report "Conditions Favourable to Faster Growth," expressed the view that there was much to be said for the replacement of the existing National Insurance scheme by a comprehensive wage-related contribution and benefit scheme, it recognised that such a fundamental reorganisation must take time.

Some of the complex problems both of policy and of practice involved in any such development can usefully be studied in the context of unemployment benefit and are currently being explored by my right hon. Friend with the British Employers' Confederation and with the T.U.C. I think that it was my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) who said earlier that he was somewhat disappointed that the Government were not ready with comprehensive legislation. However, I assure him that there are very real complications and that we are pressing ahead with our consideration of these.

Mr. John Page (Harrow, West)

Before my right hon. Friend leaves that point, can he say whether he and his Department are continuing discussions on this matter, or is he awaiting the results of the talks of his right hon. Friend?

Mr. Godber

My right hon. Friend is dealing with these matters at the moment, but, of course, he and I keep closely in touch on them so that I get fully posted on the discussions which he is having.

The Government have concluded that it would be wrong in all the circumstances which I have set out to proceed now with legislation related only to severance pay. We must wait until a clearer picture has emerged of the possibilities on the National Insurance side before we can properly assess what would be the right course. The Government will then review the whole question of financial provision for redundant workers and will do so in consultation with both sides of industry. It therefore follows that the Government could not support legislation on severance pay at the present time, and it is for that reason that I cannot support the Bill.

In moving his Motion the hon. Member for Aston said that the Government should not wait until all parties are 100 per cent. in agreement. I accept that absolutely. I do not think that it would be tolerable or reasonable to hope for 100 per cent. agreement. But we shall have to go a little further along the road before I am in a position to seek to impose any legislation.

Mr. Prentice

The right hon. Gentleman, apparently, is saying that further consideration by the Government of the question of severance pay must await the conclusion of the investigation into the question of unemployment benefit. He has told the House that that should take some time, because it is not a simple or a quick operation. Is not the right hon. Gentleman, in fact, saying that there will be no legislation regarding severance pay in this Session and that, in the unlikely event of this Government being returned to office after the General Election, there would be no legislation then—the Government having promised that there would be legislation this year—so that we are faced with a delay of some years?

Mr. Godber

I do not accept that at all. No promise was given that there would be legislation this year. It was said that in certain circumstances it was hoped to go ahead. But I do not accept the hon. Gentleman's revised time table. I thought it fair to tell the House of the difficulties, because it is no use trying to cloak the fact that there are real problems. But I do not want to give the impression that this means that the matter will be put off indefinitely. That is not my intention. When we are returned, as returned we shall be, at the next General Election, we shall be putting a programme into operation at an early stage—

Mr. Prentice

How early?

Mr. Godber

That will depend on the time table. I cannot now tell the hon. Member when the election will be. But I can assure him that this is a matter with which we wish to make progress. I have explained the difficulties, but that does not mean that we are not determined to get ahead with it. I hope that it will not be very long before we are in a position to go ahead.

Having said that, I think that I ought to make one or two comments on the Bill. I wish to draw attention to the level of financial liability which the Bill seeks to impose on employers. Any statutory provision, I suggest, must be at a level which it would be reasonable to impose on all employers small and large, and in all industries, those contracting as well as those expanding. We must remember that these charges would often fall most heavily on employers at times when they are least able to pay—when they are likely to be in general financial difficulties. Individual employers with the resources to do so would remain free to make provisions on a more generous scale. I indicated that our suggestions were on a minimum basis.

The scale of payments envisaged in the Bill provides for one week's pay for each year of service and an additional week's pay for each year of service between the ages of 45 and 60. Hon. Gentlemen have objected to the idea of weighting. I must point out that under this basis payments of upwards of 50 weeks could be involved in the case of a long-service worker. The general level of commitments envisaged would go substantially beyond the average provision of existing voluntary schemes and could constitute a severe burden for many employers.

Then again, the Bill does not deal satisfactorily with a number of practical difficulties which emerged clearly in my recent consultation with industry. There is the question of definition, of defining redundancy, and the circumstances in which severance payments should be made. I do not think that the Bill offers a satisfactory solution to this difficulty. It provides for payments to workers who are either declared redundant or who cease to be employed as a result of circumstances beyond the employee's control". I suggest that this latter condition, in par ticular, would be very difficult to interpret and world be likely to open up a wide field for disputed claims which would not help to foster good relations between employers and workers.

This is a factor which has occupied the minds of some trade union people with whom I have discussed the matter off the record. They made the point more than once that they do not want provisions in a Bill which would promote discord between one worker and another. The question of definition is a real difficulty and it will take a little solving.

Other problems with which the Bill does not apparently seek to deal at all are the position of workers laid off for perhaps an indefinite period—this happens from time to time—and of the worker who is redundant in his present job and is then offered alternative work by his employer but declines to accept it. One must make some provision in this respect. These are among the complex problems of detail to which careful thought must be given in planning any legislation on this subject.

There is also the question of how to provide some assurance to the long-service worker that, if he becomes redundant, his employer will be in a position to make a severance payment to him. Several hon. Members have recognised this difficulty today and there have been several suggestions on how it could be overcome. Clause 4 provides for sums due in respect of severance pay to be preferential debts in the event of the employer's insolvency. But this offers only a limited degree of protection to the employees who have worked for such an employer. Even so, this Clause would mean a major extension of the debts which at present enjoy preferential status in the event of insolvency.

I have said enough to illustrate some of the detailed practical problems of seeking to legislate in this field. However, I must return to the fact that my objection to this Bill is not because of these questions of detail. As I explained earlier, the Government are satisfied that it would be wrong to proceed now with legislation related to severance payments until we have cleared up these other matters and our discussions have gone further. That is why I cannot commend the Bill to the House.

However, nothing that I have said should be taken as detracting from the importance of the development by employers, in consultation with trade unions, of provision for severance payments on a voluntary basis. Legislation would, in any case, never remove the opportunity for voluntary arrangements which can of course, be moulded to suit the needs and circumstances of different firms.

I welcome the support for such arrangements expressed by both employers and unions during our recent consultations. An increase in the number of redundancy schemes embodying compensation provisions has taken place in recent years. A survey carried out by my Department a year ago showed that the coverage of such schemes in private manufacturing industry had roughly doubled during the preceding three years and at that time extended to 15 per cent. of the total labour force in manufacturing industry. That increase has continued steadily during the past year.

Taking the working population as a whole, about one worker in five is now covered by a redundancy scheme. The Government look to industry to continue to expand the development of schemes which will give the worker assurance beforehand of adequate compensation in the event of redundancy. I have no doubt that this will make a significant contribution not only to achieving our economic objectives but also to fostering better and closer relations between employers and workers.

I cannot commend the Bill to the House for the reasons which I have given. We must give further consideration to these matters, but I hope that it will not be long before the Conservative Party is in a position to bring forward positive legislation on this subject.

3.39 p.m.

Mr. Austen Albu (Edmonton)

As we expected, the Minister has told us that, although there are some criticisms in detail, he is opposed to the principle of the Bill at this time. If anyone doubted where the Government stood, we have only to look at the extraordinary attendance on the benches opposite for a Friday.

We are always told that it is a question of time. The Minister gave us a very interesting and helpful description of the problems involved in the discussions which are going on. In considerably widening the debate, he gave us his views—perhaps not very original but interesting views—on the future of industrial relations. But, when all is said and done, one wonders why all this was not started some time before. If this is not an appropriate time to introduce the Bill because of the complications, and because such a Bill would have repercussions on other aspects of our social services, surely the discussions which the Minister and his colleagues are having should have been started many years ago.

The truth is that the problems with which the Bill attempts to deal—and only partially—are not new. It is a Bill which only partly redresses the personal grievances of many workers over a long period—the personal grievance due to the sudden loss not only of their income, but also of the employment to which they have been accustomed, very often over many years; a shock which is not only financial, although it is financial, but which also has many other complications.

The Bill also attempts to deal, however, with a serious economic problem with which many of us have been concerned for some time: that is, the problem of making more easy the technical and economic changes in the structure of industry without which the country's economic survival is impossible.

Of course, the Bill does not attempt—some hon. Members opposite have made the criticism that it does not—to cover all the problems of old-age and retirement after a lifetime of work, often in a number of different firms in a number of different industries. This is something which must be dealt with by legislation in other fields. The Bill is limited to one thing only: to the problem of the man or woman who, after a lengthy period of service in a firm, suddenly finds, for reasons outside his control, that his employment is finished. It is frequently the case that the country never wakes up or takes serious account of problems which cause hardship to individual people until there are other reasons affecting the nation as a whole which draw attention to them.

In the past, it was possible for people to lose their jobs, to become unemployed or be declared redundant—that is a new word which never existed in my young days, when people were simply "unemployed"—and little notice was taken of it. The main reason was that in those days there was little power on the part of workers in trade unions or organised, as they are today, through the party on this side of the House to bring their grievances to the attention of Governments. It is only since the growth of power of the unions and of the Labour Party supported by the unions that attention has been given at all seriously to the problems of poverty, unemployment and misery among the people. Since those days, since this pressure and the growth of this party, there have been substantial changes in the conditions of the workers.

Apart from the political pressures which have been brought upon Governments, the other pressure which has brought the problem to their attention is economic change. The country and the Government have now begun to realise that economic change is made much more difficult if every time the change takes place, it calls forth resistance from those who will be affected most by it.

The economic advance of the country was nearly always made at the expense of certain classes of workers. I do not deny that the national economy gained, that there was economic advance and that there was expansion in the gross national product. There were substantial improvements in our industrial production, and so on, but they nearly always took place at the expense of particular groups of workers. We need go back only to the days which called forth the Luddite rebellion to realise that in those days a certain class of workers sought their remedy by trying to prevent the changes taking place, or, at least, they used the Luddite methods to draw attention to their grievances.

Examples of this were the hand-loom weavers, the stocking weavers and all the various types of textile workers. Strangely enough, it is the textile industry, in which these changes have taken place over the last century and a half or so, which has frequently been the anvil on which the hammer of economic change has been beaten and the workers of which have suffered most.

In more recent years, it has been the coal industry, but here, thanks to the fact that the industry is in the hands of a public-spirited national corporation, the redundancies that have had to be introduced have been carried out with an extraordinary degree of humanity. It is extraordinary how little we have heard in the past year or two about this problem in the coal industry, which, with one of the most progressive managements in the country, has a progressive attitude towards the problem. It is in the self-interest of Lord Robens and of the National Coal Board to have a policy of this sort because they would never have succeeded in carrying through the changes which are now making the industry profitable if they had not adopted in the industry policies to deal with these problems of the economic and technical changes which were coming.

I am sure that the same thing will happen with Dr. Beeching. Whatever we think about the closing of railway lines, and so forth, it is interesting that we have not lately heard quite so much about the closure of railway workshops and the like, because I believe that at last Dr. Beeching and his staff and members of the Railways Board have realised—they did not realise it at first and were about to make the same sort of mistake—that they will never get ready acceptance of change unless they provide first-class compensation for redundancy and take the very greatest care of those who have to change their jobs.

These things are matters for the Government and for Parliament. I do not agree with the hon. Member forUxbridge (Mr. Curran) in his very interesting but provocative speech, which we all enjoyed, and which, I hope, will be read by the unions. There was some point in what he said, but I do not agree that these are not matters for Government and for Parliament. At least, they are certainly matters for a Government and a Parliament which wishes to see this country proceeding peacefully along the road of economic expansion.

Mr. Curran

Do not the examples which the hon. Gentleman has given of the coal industry and of nationalised transport on his own argument support the case that we are making and not the case that he is making? Do not they demonstrate that these argreements can be and are being made in industry without Government intervention?

Mr. Albu

These are arguments which could be used about introducing any legislation where some primary provision has been made. We would not have a public education system at all if the hon. Member's arguments were valid. We would not have the Industrial Training Bill because there are some firms that have first-class schemes of industrial training. I do not think that we would have any social services, because there has always been some private provision. Some firms have provided benefits for sickness, pensions, and so forth. His argument is that, because some people have done something that is an advance, we should not go further and make it a national provision.

Mr. Curran

That is a travesty of the argument. None of us is arguing that the State has not a rôle to play here and a very import ant one. We are urging that the State should play its rôle and define it. But surely the fact that the State is playing its rôle does not exclude the kind of development which the hon. Gentleman has quoted. Does he not applaud the developments which he has quoted? Does he not think that we ought to extend then, and if we do extend them will that not to a large extent make the kind of action that he is now demanding unnecessary?

Mr. Albu

Obviously, the hon. Member has never had to deal with British employers, is the Minister of Labour has had to do recently, or he would have found how much more difficult it is to get them to accept, by and large—I am not talking of the more progressive employers—some of these necessary changes.

The revolution in attitudes which is taking place of course, is to be seen on the other side of the House. There has been no change in our view about these matters on this side. We have been putting forward these ideas for years. I am glad that hon. Members opposite now accept them, and realise that their attitude has changed very considerably during the past two years or three years. I do not know whether this is the result of an approaching General Election. In fact, I think that their attitude began to change a little while ago. But, at last, they are beginning to realise that there are problems here.

Something else indicating the change in the thinking of hon. and right hon. Members opposite was the speech of the Minister himself. The right hon. Gentleman referred to economic planning, to the setting up of the National Economic Development Council, the setting up by that body of a number of separate industry bodies, the attempt to estimate requirements in skilled and other classes of manpower, the work of his own Department through its Manpower Research Unit. These are all developments at national level which represent a revolutionary change in the attitude of the party opposite. The very introduction of the Industrial Training Bill, a Measure which Ministers resisted for a very long time, shows that the Government now realise that in the modern age, with the changes now taking place in our economy, some sort of industrial training and retraining legislation is needed.

Turning from the national level to company level, the Minister read us a very interesting lecture about industrial relations. It was all quite excellent. I think that my hon. Friends would agree with almost every word of it. But, of course, some of us have been saying it for years and years. I remember making just this sort of speech when I first came to the House in 1948.

This sort of lecture to private employers was being delivered years ago, advising them how to treat their workers, about communications, about keeping the worker in the picture, and so on. The right hon. Gentleman referred to the research which was going on into industrial relations and human relations between workers and employers, but, of course, I can remember all this sort of thing going on under my noble Friend who is now Lord Morrison of Lambeth, who set up a committee to study these very matters a long time ago. Many of us at that time made speech after speech about the need to improve industrial relations. It is a very good thing that the Government should now have picked up all these ideas about what is good management and, particularly, what is good personnel management, and should be trying to persuade private employers who are not good managers how to behave.

I particularly welcome the support which the Minister gave to his hon. Friend the Member for Uxbridge, who in this part of his speech was very outspoken and quite first class, on the distinction between staff and worker employees. I am very glad that in one nationalised industry at least, the electricity industry, an effort is being made to break down the distinction. Nevertheless, if it is such a good thing as the right hon. Gentleman says it is—he wants a lot of study done about it and an effort made to persuade firms how important it is to break down the distinction—I cannot see why the Government do not do something about it themselves. They are a very large employer in the Royal Ordnance factories and the dockyards. Why not start in their own establishments? They would in that way start a process which could break down this completely outmoded and outdated difference, a difference which, I believe, is to some extent at the back of a good deal of bad industrial relations.

Of course, the difference goes a good deal further than the ways which the right hon. Gentleman mentioned. It extends to canteen facilities, starting times, whether one clocks on and off or does not, holidays, and all manner of other ways in which, for one reason or another, the manual worker and the staff worker are treated as quite separate.

At the management level, of course, the distinction is nowhere greater than it is in the very respect which we are discussing today. At the management level, there is the golden handshake. At the worker level there is the sack. We must not forget that only in recent years—it may not be entirely universal now—has the manual worker ceased to be on one hour's notice. He certainly was when I started in industry, and he could be given his cards at one hour's notice, without any argument whatever. Few industries today would sack a man at one hour's notice. However, some firms may discharge workers at one day's notice and certainly one week's notice is common. I say this to show that these changes and improvements alone are not enough.

One of the purposes of the Bill is to assist technical and economic change. One of the greatest obstacles to economic and technical change is the fear of workers that they will become redundant. The argument put by some employers to the Minister—that the Bill would in some way interfere with the mobility of labour in respect of the granting of reasonable levels of severance pay—fails to see the wood for the trees.

The real truth is that, taking industry as a whole, there must be a much greater resistance in general to movement because of the fear of redundancy than would ever be caused by the employer not wishing to discharge men for fear of having to pay so much money. By far the greatest effect of such a Bill would be to make the movement of workers from one job and industry to another much easier.

I was glad to hear from the Minister that the National Joint Advisory Council accepts the principle of severance pay and that the Government welcome schemes of lump sum payments, but it is not good enough that they should continually fall back on the opposition of the employers because, sooner or later, the Government must

make up their own mind. The Government have to say the least, had plenty of time in which to discuss these matters. My hon. Friend the Member for Gloucester (Mr. Diamond) introduced a Bill two years ago on this issue and there is no reason why Ministers should not have had the discussions they are now having about these problems—problems, for example, between the Minister of Labour and the Minister of Pensions and National Insurance about the relationship between the problems of National Insurance, unemployment pay and severance pay.

The Minster said that the T.U.C. considered that improvements in National Insurance benefits should have the first priority. I do not somehow believe that the T.U.C. would object to the passage of a Bill in this sort. Apparently the Government are unwilling to do anything along these lines and I suppose that we must accept that, while they are in office, it is unlikely that we will get any legislation dealing with this serious problem.

3.59 p.m.

Mr. John Page

Streams of scorn have—

Mr. J. Silverman

rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 19, Noes 102.

Division No. 23.]	AYES	[4.0 p.m.
Albu, Austen	Hunter, A. E.	Owen, Will
Brookway, A. Fenner	Leo, Miss Jennie (Cannock)	Prentice, R. E.
Cronin, John	Lubbock, Eric	Rankin, John
Dalyell, Tam	MacColl, James	Redhead, E. C.
Edwards, Robert (Bilston)	McLeavy, Frank	Stonehouse, John
Fletcher, Eric	Mendelson, J. J.
Holman, Percy	Mitchison, G. R.	TELLERS FOR THE AYES:
		Mr. J. Silverman and Mr. Lipton.
NOES
Allason, James	Costain, A. P.	Fraser, Ian (Plymouth, Sutton)
Batsford, Brian	Coulson, Michael	Freeth, Denzil
Belt, Ronald	Courtney, Cdr. Anthony	Gammans, Lady
Biffen, John	Crawley, Aldan	Godber, Rt. Hon. J. B.
Biggs-Davison, John	Cunningham, Sir Knox	Goodhart, Philip
Bishop, Sir Patrick	Dance, James	Goodhew, Victor
Boyd-Carpenter, Rt. Hon. John	d'Avigdor-Goldsmid, Sir Henry	Green, Alan
Braine, Bernard	Doughty, Charles	Gresham Cooke, R.
Brown, Alan (Tottenham)	Elliot, Capt. Walter (Carshalton)	Grosvenor, Lord Robert
Campbell, Gordon (Moray & Nairn)	Elliott, R.W. (Newc'tle-upon-Tyne, N.)	Hall, John (Wycombe)
Channon, H. P. G.	Errington, Sir Eric	Harris, Reader (Heston)
Chataway, Christopher	Erroll, Rt. Hon. F. J.	Hill, J. E. B. (S. Norfolk)
Chichester-Clark, R.	Favey-Jones, F. W.	Hobson, Rt. Hon. Sir John
Cordeaux, Lt.-Col. J. K.	Fletcher-Cooke, Charles	Hocking, Philip N.
Hogg. Rt. Hon. Quintin	Marten, Neil	Roots, William
Holland, Philip	Mathew, Robert (Honiton)	Russell, Sir Ronald
Hornby, R. P.	Maudling, Rt. Hon. Reginald	Sharples, Richard
Hornsby-Smith, Rt. Hon. Dame P.	Maydon, Lt.-Cmdr. S. L. C.	Shepherd, William
Hughes Hallett, Vice-Admiral John	Moore, Sir Thomas (Ayr)	Smith, Dudley (Br'ntf'd & Chiswick)
Hughes-Young, Michael	Nugent, Rt. Hon. Sir Richard	Summers, Sir Spencer
Hulbert, Sir Norman	Orr-Ewing, Sir Ian (Hendon, North)	Talbot, John E.
Iremonger, T. L.	Page, John (Harrow, West)	Teeling, Sir William
Irvine, Bryant Godman (Rye)	Partridge, E.	Thatcher Mrs. Margaret
Kirk, Peter	Pearson, Frank (Clitheroe)	Thompson, Sir Kenneth (Walton)
Lagden, Godfrey	Peel, John	Thompson, Sir Richard (Croydon, S.)
		Thorneycroft, Rt. Hon. Peter
Lindsay, Sir Martin	Percival, Ian	Turner, Colin
Lloyd, Rt. Hn. Geoffrey(Sut 'nC' dfield)	Pickthorn, Sir Kenneth	Whitelaw, William
Lloyd, Rt. Hon. Selwyn (Wirral)	Pitman, Sir James	Williams, Dudley (Exeter)
Loveys, Walter H.	Powell, Rt. Hon. J. Enoch	Wise, A. R.
Lucas, Sir Jocelyn	Pym, Francis	Wood, Rt. Hon. Richard
McAdden, Sir Stephen	Rawlinson, Rt. Hon. Sir Peter	Woodhouse, C. M.
MacArthur, Ian	Redmayne, Rt. Hon. Martin
McLaren, Martin	Rees-Davies, W. R. (Isle of Thanet)	TELLERS FOR THE NOES:
Maddan, Martin	Ridsdale, Julian	Mr. K. Lewis and Mr. Curran.

It being after Four o'clock, the debate stood adjourned.

Debate to be resumed upon Friday next.