HC Deb 30 November 1964 vol 703 cc195-202

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

11.40 p.m.

Brigadier Terence Clarke (Portsmouth, West)

I am grateful for this opportunity of raising the question of refunds by Ministry of Works employees—not, as the Order Paper says, refunds for Ministry of Works employees. I want to see Ministry of Works employees not have their pay cut.

After speaking at Portsmouth Dockyard gates on 9th October, a week before polling day, I was approached by Ministry of Works employees who worked in the dockyards, although they are not dockyard employees, with the grievance that they were being asked to repay a sum of money. They had been overpaid weekly for the last 18 months—a long time to be overpaid. One man has been overpaid 3s. a week for many weeks, and he was told that from the following week he would have to repay 15s. a week.

I regard that in itself as an imposition. If he had been overpaid 3s. a week, why should he be called upon to repay 15s. a week? This would cause great hardship. First, the man would get 3s. a week less pay and, in addition, he would have to pay back 15s. a week, so that he would be 18s. a week worse off until the debt had been repaid to the Ministry of Works.

I reacted very quickly and wrote to the then Minister of Works. I also telephoned unsuccessfully on the Friday, Saturday and Sunday. On the Monday morning I managed to get through on the telephone to the Minister's secretary. By lunchtime, after threatening him very severely, I received an assurance that the employees could appeal up to 23rd October and that no deduction would be made before 30th October. This caused a certain amount of satisfaction, because up to then my constituents had believed that they would be asked to pay back a lot of money. I conveyed this information to the employees through the Portsmouth Evening News, and I also put down Questions to the Minister of Public Building and Works as soon as the election was over. I received a very unsatisfactory answer to the Questions, and I was, therefore, forced to raise the matter tonight.

I should like to ask the Minister a few questions, and I hope that I shall give him plenty of time to answer them. Would he say how this overpayment was allowed to continue from September. 1963, to August, 1964? He may well say that he was not in charge at the time. I am not bringing party politics into this. I merely want to know why the machinery of the Department which he has taken over was so rusty that for one year they did not discover that these men were being overpaid. I hope that the Minister agrees that overpayment over such a long period and to so many men could lead to genuine hardship. I should like to know why an overpayment of 3s. a week led to a demand for repayment of 15s. a week. That seems to me very unfair indeed. Subsequently, this 15s. was reduced to 5s. a week.

I would ask the Minister to examine the terms of employment of these men, because I understand that these weekly paid men are under no agreement to refund the mistakes made by the Minister's Department. I understand that there are in law two points: finding of facts, or findings of law. In the one case one keeps the money; the other does not allow one to claim back the money. The Minister, I understand, has no right whatever to reclaim this money. I hope, and I believe, that later he will say that he has no intention of claiming back this money.

I have already quoted in the House, when I put a Question to the Minister a few weeks ago, the case of a schoolmaster who was overpaid £1 3s. a week for three years. The local education committee decided to write off the money. It said that it had in law no right to demand the money back, and would ask for it back, but did not expect to get it, and was writing it off.

I have already said that these overpayments were made through no fault of the employees. On 12th October a letter was written on behalf of the industrial staff of H.M.S. "Mercury" through the proper channels to the works officer at Fareham. I will read it: Reference the suggested recovery of moneys from M.P.B.W. industrial staff at H. M. S. "Mercury" I.C. No. 46 of 1963 dated was displayed on the notice board in the appropriate manner in October of 1963, and we were informed that the suggested deductions were not applicable to ourselves. Early in November, 1963, a J.P.C. was paid and as no deduction was made inquiries were instigated by contacting the then Foreman of Works, Mr. Large, who instructed his writer, Mr. Goodchild, to verify that the deductions would be made. After inquiries we were informed that the deductions would not be made, or rather were not applicable to ourselves, as we were an M rated station. I understand this applies to most of these people in my constituency.

The letter continues: It is pointed out that these inquiries were instigated to avoid a large repayment at some later date. These men, in order to avoid repaying this money at a later date, and suspecting they might be overpaid, brought it to the notice of their superior. Nothing was done, and they were told: We are now informed, some twelve months later, that we are presumed liable to these deductions, the basis of the argument being I.C. No. 28/64 … which ordered these deductions to be implemented from pay week commencing 1st April, 1964. We are not convinced that this directive is applicable and also we consider that there is a good basis for non payment of these arrears in view of the time lag and the obvious chronic lapses in the administration of these matters. It is further pointed out that I.C. 28/64 was not displayed on the notice board and has not been seen by ourselves until today October 12th, and in our opinion any liability that we might have should not commence before the date of this directive. That letter was written on 12th October, through the normal channels to their own boss, and they have not had an answer to this day. They did say that they did not think they should be paid this money. They were told that they were wrong. They continued to be paid the money. They could not possibly have done more than they did to draw this matter to the attention of their superiors.

I hope that the Minister will say that this is a matter which is very regrettable, but, nevertheless, he is capable of seeing that the people—very poor people, I might say—in my constituency do not have to suffer because somebody has made a really serious mess-up.

I could go on for a long time on this subject, and I have just one or two more things to say. The Minister, in my view, is bound to waive these deductions. The employees could not have done more to avoid being overpaid. Ending on a personal matter, I would like to draw the attention of the Minister to his inaccuracies in reply to my letter of 3rd November. I wrote to the Minister during the election, when the present incumbent of the seat was not in office, and drew his attention to the serious situation in the dockyard.

I received next day, or two days later, from the secretary who is the same secretary as the Minister now enjoys, a letter saying that he was taking every notice of this matter, that they were not going to charge anyone any money at all until they had had an opportunity to appeal, that the appeal would have to be in by 23rd October, and by 30th October they would consider whether they were going to charge anyone anything at all. The Minister's secretary went on to say: The Ministry sought a meeting with the Unions to discuss the terms of the recovery, but the Unions would not discuss the terms. Well, in my constituency they have very little confidence in the unions at all. When they are in trouble they go to their Member of Parliament, and I do everything I can for them. They regard a "bob" to the local association as giving them a far better dividend than they will get by paying sixpence or a shilling a week to the union.

I hope that I shall have a very satisfactory answer from the Minister tonight. I will sit down now because I have promised my hon. Friend the Member for Portsmouth, South (Sir Jocelyn Lucas), who, I know, has this matter at heart, that I will give him the opportunity of saving a few words before the Minister replies.

11.54 p.m.

The Minister of Public Building and Works (Mr. Charles Pannell)

I think that I had better reply straight away, but I will try to leave the hon. Member for Portsmouth, South (Sir Jocelyn Lucas) a minute or two at the end. First, I want to make it perfectly clear, on the question of dates, that these were letters written in my predecessor's time. When the hon. and gallant Member for Portsmouth, West (Brigadier Clarke), wrote to my predecessor, he was not a Member of this House. He was a candidate. I had previously had a letter from the Labour candidate for Portsmouth, West, presumably on the prognosis that I would be the prospective Minister.

This was actually the first thing I took up in my Department when I walked into the office. It is completely true—and the hon. and gallant Gentleman will believe me when I say it—that I was not aware even of the background of the circumstances of which he has spoken when I got a reply out to the letter he had written. I want to make it clear at the beginning that my Ministry will not seek to recover the moneys which have been overpaid.

Brigadier Clarke

All is forgiven.

Mr. Pannell

I think that I had better put this right, and then the hon. Member for Portsmouth, South will be able to make his speech all the better.

I think that the House is entitled to an explanation of all this which, as the hon. and gallant Gentleman said, has nothing political in it. His case had nothing political in it, except that he thought that he gave better value than the trade unions did. Having looked at all the files, it seems that the trade union has played its part.

The overpayment of wages to the Ministry's industrial employees in Portsmouth Dockyard occurred between 13th September, 1963, and 14th August, 1964. It did not come to the notice of my Ministry's London headquarters until last month. On 9th October, while he was a candidate for Portsmouth, West, the hon. and gallant Gentleman wrote to my predecessor about this matter, and received a reply from my predecessor's private secretary on 12th October informing him of the position as it then was. I heard about it a day or two before polling day from the Labour candidate for Portsmouth, West, who wrote to me in Leeds on 13th October.

I began to look into this complex and difficult matter as soon as I was appointed Minister. I have now completed my inquiries and have reached my conclusion on the basis of the most careful consideration and after going into the matter exhaustively.

The Government's policy on matters of this kind was explained by my hon. and learned Friend the Financial Secretary to the Treasury, in a Written Answer to the hon. Member for Portsmouth, South on 26th November, when he said: It is a long established principle that recovery should be attempted whenever the Exchequer suffers loss through overpayments. In order to avoid hardship, departments may, with Treasury authority, waive recovery of all or part of the overpayment. I am satisfied that this discretionary approach is more likely to do justice both to the individual and to the Exchequer than a more rigid rule."—[OFFICIAL REPORT, 26th November, Vol. 702, c. 211.] The employees who were overpaid were employed by the Navy Works Department of the Admiralty until 1st April, 1963. At that date they were transferred to the Ministry of Public Building and Works as part of the merger of the works organisations of the three former Service Departments with the former Ministry of Public Building and Works. As this merger took place at rather short notice, the previous administrative arrangements for paying the employees in the Portsmouth Dockyard continued for the time being.

At that time the dockyard management had just made a new agreement with the trade unions to reduce the gap between the earnings of men paid on time rates, and the earnings of men on job rates, that is, those who received additions to their normal rate for any job price contracts they worked on, if they completed certain jobs faster than a given norm. The gap in earnings was to be reduced in two ways. First, there was to be an increase in the time rate. Secondly, there were to be greater deductions from the pay of the men on job rates.

The new agreement came into force on 1st August, 1963. The necessary administrative arrangements for paying the new rates under this agreement were not completed until 13th September, 1963. At that point there was a misunderstanding between the staff in the Admiralty and the staff in my Ministry who were responsible for calculating the pay due to men working on job price contracts. The Ministry staff thought that the Admiralty would make the agreed deductions in the pay of men on job rates, when, in fact, the Admiralty was not making these deductions at all. This was a pure error, made in good faith. As a result, 1,337 men on job rates were overpaid between 13th September, 1963, and 14th August, 1964, by varying amounts, depending on how far they were engaged on job price contracts during the period in question. The total overpaid amounted to about £6,700.

The error did not come to light until August, 1964. After some discussion the position was reached whereby the Ministry asked the men to repay at a rate not exceeding 5s. a week unless anyone preferred to pay more. The men were told that if anyone represented that this rate of repayment would cause hardship we would consider a lower rate of repayment. Some of the men have objected to the proposed repayment. The trade unions took the view that the overpayments were primarily a matter between the Ministry and each employee and that they should be brought in only over cases where difficulties arose. The trade unions have also suggested that we should consider waiving recovery altogether, as the overpayments arose from an error on the part of the employer, and as recovery might involve hardship for some employees and would undoubtedly give much trouble and expense to the Ministry.

Coercion has been out of the question, and it has never been in my mind to resort to legal action. In addition, it would be unfair to treat different employees differently. Finally, we do not want to get into the position whereby we spend more money in recovering a debt than the amount of the debt itself. We would find it difficult to recover these 1,337 separate debts, and I do not think that we should do so.

I want to make it clear that I have taken this decision on the merits of the case, employing that discretionary approach which my hon. Friend the Financial Secretary mentioned in his reply. This is not a precedent. There cannot be much case law in this kind of matter. Every case has to be judged according to its circumstances, and this is what I have done.

In so far as the hon. and gallant Gentleman went outside that and mentioned other matters—of which he will agree that I had no notice—which make any allegations about what was done by my Department, I can only say that I will make inquiries. I hope that he will acquit me of any discourtesy in this matter. I am not making the excuse because I came fresh to the Ministry, but I did deal with the matter and made the best inquiries that I could at the time.

There was a slight confusion in the hon. and gallant Gentleman's letter. Reading it one would not entirely have understood the date at which one Minister left and another took over. The hon. and gallant Gentleman himself was no doubt moved by great sympathy with these men—but the letter was written in the middle of the election, and there were some electoral considerations in mind. But as the letter was written to my predecessor I can hardly deal with it now. I would only ask the hon. and gallant Gentleman and the House to believe that I have addressed myself to this matter and have acted throughout in good faith, both to the House and to the hon. and gallant Gentleman individually. I hope that the House will consider this a satisfactory settlement.

12.4 a.m.

Sir Jocelyn Lucas (Portsmouth, South)

I wanted to support my hon. and gallant Friend by quoting one case—the case of Bombardier Harris of the Reserve of the Royal Horse Artillery, who, in the Boer War, was sued by the War Office for an overpayment. He won his case and did not have to pay. That is just a precedent. Perhaps the Minister would like to have the details.

Brigadier Clarke

I thank the Minister for his excellent reply, which we shall be very grateful to receive in Portsmouth. I thank him very much and I hope that we shall have long and happy relations in the future.

Sir Douglas Glover (Ormskirk)

As I did not have an opportunity at Question Time today, but as I seconded the Motion to put you back in the Chair, Mr. Speaker, may I say that I was very happy to see you back in the Chair. I hope that you will take things as easily as you can, because yours is a very onerous duty.

Mr. Speaker

I support the gross irregularity of the hon. Member by saying that I did not have a chance today of thanking hon. Members for the many kind messages that I have received. I particularly thank the Chairman of Ways and Means for taking over at absolutely nil notice the duties of the Chair, and performing them magnificently.

Question put and agreed to.

Adjourned accordingly at five minutes past Twelve o'clock.