HC Deb 04 May 1964 vol 694 cc1061-73

10.31 p.m.

The Minister of Power (Mr. F. J. Erroll)

I beg to move, That the Iron and Steel (Compensation to Officers and Servants) (Amendment) Regulations, 1964, a draft of which was laid before this House on 25th March, be approved. These Regulations amend the Iron and Steel (Compensation to Officers and Servants) (No. 2) Regulations, 1953. Those Regulations provided for the payment of compensation by the Iron and Steel Holding and Realisation Agency to employees of publicly-owned iron and steel companies who suffered loss of employment, pay or pension rights because of denationalisation.

The 1953 Regulations were made to meet the requirements of Section 24 of the Iron and Steel Act, 1953, relating to compensation. They provided for the payment under certain conditions of both resettlement and long-term compensation. In both cases, one of the conditions to be satisfied was that the disturbance leading to a claim must have occurred within ten years of the date on which the Regulations came into operation. This period expired on 31st December, 1963. The draft Regulations now before the House are designed to extend the period during which claims for compensation may be made, so that persons who would otherwise be eligible will not be prevented from making claims solely because of the postponement of the return of their employing company to private ownership. This extension is necessary to meet the requirements of the 1953 Act. In addition, as hon. Members, on both sides, will agree, it is desirable because it will ensure that no person is treated unfairly.

The draft Regulations amend the 1953 Regulations to provide that one of the conditions to be satisfied by a person claiming resettlement compensation for termination of employment is that the termination must have occurred not later than ten years after the relevant event instead of ten years after the coming into operation of the 1953 Regulations. The relevant event—the wording sounds tortuous, but it is important to get it right in legal terminology—is defined in those Regulations as the exercise by the Agency of their powers under the 1953 Act for the purpose of securing the return to private ownership of the undertaking…being the exercise which results in the disturbance leading to the claim". A necessary consequential extension is made to the time within which a claim for resettlement compensation must be submitted. Similarly, in the case of claimants for long-term compensation, the draft Regulations provide that the loss of employment or loss or diminution of emoluments or pension rights for which a claim is made must have occurred not later than ten years after the relevant event.

Under the powers provided in section 24 (2) of the Iron and Steel Act, 1953, the craft Regulations provide that this shall have effect retrospectively to the 1st January, 1964—that is, from the date on which the ten-year period specified in the 1953 Regulations expired. The draft Regulations, incidentally, do not alter the compensation terms of the 1953 Regulations. I hope that the House will give these Regulations its approval.

10.35 p.m.

Mr. John Morris (Aberavon)

I thank the right hon. Gentleman for his explanation of the reasons for these new Regulations. Although we are only dealing with a new measure to continue the 1953 Regulations, which rather limits our debate, I did turn back the pages of HANSARD to the debates in 1953. A great deal of controversy then arose on the rights of persons employed by the Iron and Steel Corporation, but these are matters which need not concern us now.

One of the interesting things I read was the speech of the late Jack Jones, who used to play such an important part in our debates on the steel industry. He pointed out that when steel was in public ownership there were only a maximum of 60 and a minimum of 40 people running it from the point of view of the Corporation. That figure may again become a great significance.

The object of these Regulations is to provide compensation for people who suffer loss of employment or their rights when their firms are returned to private ownership. The Regulations are in common form with those made for other parts of industry which were denationalised, such as transport undertakings. The important word was "disturbance", which, of course, meant loss of employment as a result of denationalisation.

This disturbance had to take place within ten years and, obviously, it was never contemplated by the Government in 1953 that large parts of the industry would still not have been returned to private ownership at the end of the ten years. I understand that the Regulations as amended affect not only that part of the industry which remains in public hands but also that part which has been sold back into private ownership if the event—the disturbance—occurs after the expiry of the ten years originally stipulated in 1953. Supposing a firm was sold back in 1960. This would constitute the original event causing the disturbance. Within ten years from that date, those affected would be able to claim compensation.

My understanding is that these Regulations had to be introduced because of the situation which arose at John Baker and Bessemer Ltd., sold in 1963 to the English Steel Corporation Ltd. and United Steel Companies Ltd. I am told that 1,000 men were involved and that in a very short time notice was given that the plant was to be shut down by the two big firms.

I would be out of order if I were to pursue any of the great issues which arise out of that sale. We remember the vigorous efforts of my hon. Friends at the time. I understand that the Regulations as they stood did not cover the people affected by the notices given after the John Baker and Bessemer plant was taken over. There was no provision whereby they might be able to make a claim for compensation, because the disturbance which caused them to lose their employment occurred after 31st December, 1963. Therefore, these regulations have to be introduced.

It may be difficult for the Minister to say, but we should be given some rough estimate of how many men the amended Regulations affect. Obviously, they affect that part of the industry which still remains in public hands and that part which has been sold back in recent years. But there is one significant departure from the original. Originally a fixed term of ten years was laid down as the period within which compensation had to be claimed. But now, instead of adding another period of say, one, two, or five years, or another period of ten years, the Government now say that compensation can be claimed within ten years of the event of the sale of the firm back into private ownership.

That is the change, and perhaps the Minister can give some indication of why there has been this change. Why have the Government picked on an entirely new method of calculating the period within which compensation can be claimed instead of simply adding another five or ten years to the original period?

It may be that the Government cannot. with any certainty now say what they intend to do with the rest of the industry or tell us that within the next ten years Richard Thomas and Baldwins will be sold back into the private sector. In recent years and months we have had frequent statements of the Government's intentions.

On 27th October, 1960, the Lord Privy Seal was telling us it was still the Government's firm intention and confident hope that the work of the Agency would be substantially completed by the end of this Parliament. That certainly includes Richard, Thomas and Baldwins.

Last year the Chancellor of the Exchequer was telling us, "It remains the intention of Her Majesty's Government to complete the denationalisation of the steel industry". Incidentally, in this statement the words "by the end of this Parliament" were conveniently dropped. I do not complain, but I would like to know from the Minister what his intentions are. That might well be the reason why there has been this innovation in this wording which make a difference to the calculation of the period.

There is now the third conflict. The Prime Minister told the House on 24th March that he had full confidence in the record to date and the management of Richard, Thomas and Baldwins. The impression one has is that originally the Government were short sighted or had no idea that they would be faced at the end of ten years with the present situation. They never imagined they would have failed to carry out their original object to sell back such a substantial portion of the steel industry.

The Minister said that it was desirable to ensure that no person was treated unfairly. Therefore, on behalf of the Opposition I welcome these Amended Regulations. Because of great concern of employees in the Baker and Bessemer plant, I have consulted some of the trade unions concerned, especially the Amalgamated Engineering Union. They have asked me to welcome these Regulations. Indeed, it may well provide the machinery for some of the workers to make complaints. If the Minister finds it desirable that no person should be treated unfairly—and if that is the reason for the change—then, without further ado, he should make clear the Government's intentions towards Richard Thomas and Baldwins and ensure that it is no longer treated unfairly and that it has some certainty about the Government's intentions towards this part of the industry, being sure that it will be left untouched in the life of this Parliament.

10.46 p.m.

Mrs. Eirene White (Flint, East)

I shall be very grateful if the right hon. Gentleman can give me some information about a matter which closely concerns a works with which I am concerned but which is in the constituency of the right hon. Member for Flint, West (Mr. Birch), who does not appear to be present tonight. As some of the workers live in my constituency, I am naturally very much interested in their fate. There is to be a meeting at Holywell this Friday, convened by the Holywell Rural District Council, at which the Minister of State for Welsh Affairs is expected to be present and to which have been invited representatives of the local authorities, Members of Parliament and others, to discuss what is to happen about the Mostyn Ironworks. I should like to know whether employees of this ironworks are covered by this Order.

The right hon. Gentleman will know that this works was in public ownership but was sold back to private industry as a subsidiary company of the Barrow Ironworks. After various vicissitudes under private ownership, it has now gone into voluntary liquidation. There could hardly be anything more disturbing than that. The trade union leaders concerned have said that as the company is in the hands of the Official Receiver they have no opportunity, as might have happened in the ordinary course of events, of negotiating for redundancy pay or compensation for loss of office, because the first duty of the Official Receiver is to the creditors and shareholders and not the work people.

It is, therefore, of the most acute interest locally to know what arrangements, if any, can be made under the regulations to cover these people. The numbers are not as large as those already mentioned, but in a small community 300 people matter, and although some have been found alternative employment in the last few weeks, some of it is only temporary. A number of people may be at a great disadvantage because of the closure of the works.

Had the works remained in public ownership, this would never have happened, because, whatever else might have happened, the works would not have gone into liquidation. One can therefore fairly say that this is an instance of the most violent disturbance possible and this firm could come within the compensation and pension safeguard provisions of these Regulations. The works closed down subsequent to 1st January, 1964, in other words, very recently. Although there was a temporary closure last year, this closure seems to be permanent. The furnaces have been damped down and are to be put out at any moment. Some of us have been trying to find an alternative purchaser 'or the works, but this is all still very tentative and we have no guarantees that any alternative purchaser will be found, or, if found, will employ the same or as many people.

Mr. Speaker

I am listening to the hon. Lady with the greatest attention, but I understood from what the Minister said that what we were concerned with was the statutory relevant event, which does not seem to fall within the compass of the misfortune of this firm. I do not think that we can extend the debate to every kind of misfortune.

Mrs. White

With respect, Mr. Speaker, had this firm not been denationalised, or had it not been sold to private enterprise, this situation which affects these workpeople would never have occurred.

Mr. Speaker

It would still none the less not be affected by the House accepting or not accepting these Regulations.

Mrs. White

With respect, if they came within the Regulations at all they would be very much affected, because the misfortune which has occurred has occurred subsequent to 1st January, 1964.

I think that I have made the point, and I hope very much that the Minister will be able to give me some reply, because I know that there will be the keenest interest at the meeting to which I have referred on Friday as to what may be the position of anybody in the works who may be helped by these Regulations.

10.51 p.m.

Mr. Brian O'Malley (Rotherham)

I am very pleased to see these Regulations before the House this evening, because a number of my constituents will be affected by their terms, which provide for compensation, resettlement compensation, and long-term compensation for loss of employment, for loss or diminution of emoluments and loss of pension rights.

In thanking the Minister for bringing these Regulations before the House, I hope I shall be in order in looking at the circumstances which I believe have made them necessary. I think I am right in saying—although the Minister will, no doubt, correct me if I am wrong—that the announcement to close the Baker and Bessemer works led to representations being made to the Minister and to his Department to extend the compensation arrangements provided for in the Iron and Steel (Compensation to Officers and Servants) (No. 2) Regulations 1953.

The two take-over companies acted with such delicate consideration and regard for the workpeople concerned that a large number of those who were to lose their jobs were told that their employment would terminate at these works as from 4th January, 1964. The House should know that the two takeover companies paid no regard to the terms of the existing Regulations. Therefore I am particularly grateful to the Minister for having brought forward these Regulations tonight.

I am informed that during the scant negotiations which took place when the closure of these works was announced the two take-over companies at no time intimated to the trade unions concerned that compensation could be claimed under the existing Statutory Instrument. Had it not been for the efficiency of the unions concerned, the compensation rights of the people who were affected by the closure would have gone by default.

At the weekend I saw a copy of a letter which one of the Bakers at these works wrote to one of his former work-people. He told him that a Statutory Instrument was before the House of Commons. He sent him a draft of it, and I think hon. Members will agree that it tells one very little. The Mr. Baker concerned had the gall to say that he had not the time in which to call a meeting to explain the purpose of this Statutory Instrument to his ex-workpeople. That is the measure of the regard which this firm and the take-over companies had for their employees and ex-employees.

I repeat my thanks to the Minister for bringing in this Statutory Instrument which will help my constituents, but I think that this is an opportune moment to point out what led up to this was the failure of the companies concerned to look into the possibility of compensation for those who lost their jobs, and that it was only as a result of the efforts of the unions concerned that representations were made to the Minister.

I understand that in the first instance these representations did not originate from the activities of the take-over companies. I hope I shall be in order when I say that, although there was a great deal of talk and public announcements in the Press when the Baker and Bessemer closure was announced that the reason for the closure was rationalisation of a section of the trade and that Baker and Bessemer had a works full of obsolete and obsolescent plant, the two giants have taken out a considerable part of the plant from Baker and Bessemer and moved it into their own works. What has happened is that this section of the steel industry has gone back to the jungle of laissez-faire private enterprise, sold up by two giants. Some of my constituents have suffered, and I am grateful to the Minister for having listened to representations from the unions that just compensation rates should be allowed by extending the Statutory Instrument.

10.58 p.m.

Mr. J. J. Mendelson (Penistone)

I wish to put very briefly two questions to the Minister for the purpose of clarification. The general case for the renewal of this Order has been fully made out by hon. Members from this side of the House, so there remains only the need for certain clarifications.

Can the Minister tell me the position of employees—that is officials, members of the staff and servants—of a company which might have been denationalised between 1953 and 1959 and then, as a result of denationalisation and the commercial arrangements of the larger company or a holding company, involving a complete change of policy, which occurred after several years? In some cases the consequential changes would not be immediate. Would the employees of such a firm be entitled to come under the cover of these extended Regulations?

My second question concerns pension rights. If a denationalised firm has streamlined its pension arrangements and there is a change of ownership, as in the case of the member for Rotherham (Mr. O'Malley), not immediately, but after some time—a further change of ownership where a denationalised firm is bought by a bigger consortia—would the original pension rights to which the employees were entitled continue and be fully covered under these Regulations?

11 p.m.

Mr. Erroll

I appreciate very much what has been said by hon. Members about these Regulations, having been introduced. I felt that when representations were made to me it was only right and in the interests of equity that amending Regulations should be submitted to Parliament. Whether the pressure came from the unions or the employers is not a matter into which we need go this evening. All parts of the realm have an equal right of access to the Government, and the Government have always been ready to hear a case and act upon it when there is need to do so.

I would like to emphasise one point which may have escaped the notice of those hon. Members who have taken the trouble to study this rather complicated field of regulations. The Government cannot express a view of individual cases. It is a matter for the former employees to claim, but whether or not they get compensation is a matter for the Iron and Steel Holding and Realisation Agency to decide. It would be wrong if the Government, in the person of myself at this Dispatch Box tonight, were in any way to prejudge any claim for compensation which might or might not be made in future in respect of any class of employees or any firm.

I do not want to duck any questions put to me, and those hon. Members who know me know that I always try to help hon. Members on both sides of the House, but it would be wrong for me, this evening, to reply in detail to some of the interesting points which have been put to me. The hon. Member for Aberavon (Mr. J. Morris) asked how many men are affected. It must be for the men—and perhaps the women—themselves to decide whether they are affected and whether they wish to apply for compensation. As for what the hon. Member for Flint, East (Mrs. White) said about the position of the Mostyn Works, again it must be a matter for the employees to decide whether they wish to apply for compensation, and if they do it is for I.S.H.R.A. to decide on the nature of their claim.

The hon. Member for Rotherham (Mr. O'Malley) and the hon. Member for Penistone (Mr. Mendelson) made important references to matters of detail regarding individual firms. Here again, it is for the people who think they may be affected to apply for compensation, if they wish. It is not for me to comment on the interesting examples raised, particularly those quoted by the hon. Member for Penistone about pension rights following upon one change of ownership and another. It is for those concerned to look at the Regulations and to decide whether the relevant event is the cause of their changed circumstances. If they think it is, it is then for them to make a claim. II is for I.S.H.R.A. and not the Government to examine the matter, although I should make it plain that they have the right to appeal to a tribunal in the event of their not being satisfied with the finding of I.S.H.R.A.

Mr. O'Malley

Would the right hon. Gentleman consider that if there were in the future a case where a firm was to be closed down—as with the Baker and Bessemer plant—the Agency had a responsibility to make known to the work-people of such a firm that they could make this claim, and what the nature of their claim should be?

Mr. Erroll

I do not think that that is a specific responsibility of I.S.H.R.A. It is either for the management or the representatives of the workers to look at the Regulations and see where their rights might lie.

Mr. Mendelson

If the Minister says that he cannot enunciate who might or might not be entitled, surely, in common practice, there is an obligation upon the employers to make it known to their employees. Would not the right hon. Gentleman say that this is the practice that should be applied in respect of these Regulations?

Mr. Erroll

I do not think so, because it is not the job of groups of people, whether they be employers or the Government, or others, to tell people gratuitously what their rights may be. It is for the individuals, through their own organisations—in this case, their unions—to be aware of their rights. I am sure that in view of the representations made to me about the desirability of extending these Regulations it is evident that the representatives of the workers are quite clear about the rights of those whom they represent, and that there is no practical difficulty in this matter.

It is also very important to appreciate that this is merely a right to apply for compensation. It is not a right to compensation. Therefore, it is important for me not to usurp the position of I.S.H.R.A. and to indicate in advance who is entitled to compensation and who is not. The right to apply for compensation is clearly laid down, and I should not have thought it was necessary to tell people what their rights were when they are so clear. But whether they would gain compensation or not is, of course, a matter for I.S.H.R.A. itself to decide.

Mrs. White

But could the right hon. Gentleman tell us as a matter of fact how many have ever obtained compen- sation, and is there any case law in this matter which would guide people?

Mr. Erroll

It is not a case of having obtained compensation. I have made careful inquiries, and while it is always difficult to be able to prove a negative, I am told that nobody has even applied for compensation under these Regulations. That is the information I have been given.

Mr. J. Morris

But does not that prove that there is an obligation on someone to advise and tell the people concerned that they have a right to apply? If nobody has succeeded so far in obtaining compensation, then the previous Regulations are a dead letter and the Regulations we are discussing are a dead letter.

While the right to determine whether a person is to have compensation shall remain with I.S.H.R.A., it is not an obligation on the Government to tell the people concerned that there is a right to apply?

Mr. Erroll

I think that this shows the extreme success of the denationalisation process—that compensation has been so generous and fair that nobody has felt it necessary to take advantage of the provision of these Regulations to apply for compensation to I.S.H.R.A. because they have been very well satisfied with the compensation that has been provided by the employers.

These new draft Regulations have been submitted to the House to make quite certain that nobody today would feel that they did not have the same rights as those of earlier years, although whether it would be necessary for anyone to make use of these Regulations, is problematical in view of the satisfactory record of the past.

Mr. O'Malley

The only point that I wanted to make is that I know that in the case that has been mentioned of Baker and Bessemer it was several days after the announcement of the closure that the trade union officials concerned were first aware of the 1953 Statutory Instrument, and I understand that it was almost accidental that they found this out by going back to some old files. All I would ask the Minister to consider is that in fairness there should be a responsibility on a firm which is closing down to inform its workpeople accordingly that they are entitled to claim compensation.

Mr. Erroll

Of course, it must be clearly understood that the claim to compensation is based upon what is called the relevant event, namely denationalisation, and not some other act, which would have occurred whether the company had been denationalised or not. It is important to establish that.

This short debate has been useful in illuminating a small but important facet of the denationalisation process. I hope that if any employee feels that he should apply for compensation he will know that Parliament is standing solidly behind him in his claim. I am sure that I.S.H.R.A. will deal with the claim fairly should it be made.

Question put and agreed to.

Resolved, That the Iron and Steel (Compensation to Officers and Servants) (Amendment) Regulations 1964, a draft of which was laid before this House on 25th March, be approved.