HC Deb 21 July 1965 vol 716 cc1684-90

(1) Where the Minister is satisfied that, in accordance with any such arrangements as are mentioned in the next following subsection, a payment has been, or will be, made in respect of the termination of a person's employment in any capacity under the Government of an overseas territory (in this section referred to as "the relevant Government"), and that employer's contributions within the meaning of the National Insurance Act 1946 were paid in respect of the whole or part of the period during which that person was in that employment, the Minister shall pay the appropriate sum out of the Redundancy Fund to such fund or authority as may be designated in that behalf by the relevant Government.

(2) The arrangements referred to in the preceding subsection are any arrangements made by or on behalf of the relevant Government for securing that payments by way of compensation for loss of employment in the capacity in question will be made—

  1. (a) in circumstances which in the opinion of the Minister correspond (subject to the appropriate modifications) to those in which a right to a redundancy payment would have accrued if section 1 of this Act had applied, and
  2. (b) on a scale which in the opinion of the Minister corresponds (subject to the appropriate modifications) to that on which a redundancy payment would have been payable if that section had applied.

(3) For the purposes of subsection (1) of this section the appropriate sum (subject to the next following subsection) is the sum appearing to the Minister to be equal to the amount of the rebate which would have been payable under Part II of this Act if such a right as is mentioned in paragraph (a) of the last preceding subsection had accrued, and such a redundancy payment as is mentioned in paragraph (b) of the last preceding subsection had been payable and had been paid.

(4) Where it appears to the Minister that such contributions as are mentioned in subsection (1) of this section were paid in respect of part (but not the whole) of the period of employment in question, the rebate which would have been payable as mentioned in the last preceding subsection shall be calculated as if the employment had been limited to that part of the period.

(5) Any accounts prepared by the Minister under section 23(2) of this Act shall show as a separate item the aggregate amount of sums paid under subsection (1) of this section during the period to which the accounts relate.

(6) In this Act "overseas territory" means any territory or country outside the United Kingdom; and any reference to the Government of an overseas territory includes a reference to a Government constituted for two or more overseas territories and to any authority established for the purpose of providing or administering services which are common to, or relate to matter of common interest to, two or more such territories.—[Mr. Thornton.]

Brought up, and read the First time.

Mr. Thornton

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

Perhaps we might discuss, at the same time, Amendments Nos. 40, 41 and 80. These Amendments are consequential on the new Clause.

This provision relates to employees in the United Kingdom of foreign and Commonwealth Governments—not, I must emphasise, to diplomatic staff but to the other employees of embassies or high commissions—for example, secretaries, chauffeurs, gardeners or cleaners. The provisions of the Clause are broadly parallel to those which relate to Crown servants—that is, to employees of our own Government. This is as it should be. They say, in effect, that where in circumstances equivalent to redundancy Governments make payments to employees equivalent to those under the Bill the Minister shall pay the employing Government a rebate on the payment made. The Minister has to be satisfied before doing so, however, that the case is one of redundancy and that the payment is on the scale of the Bill.

This is also the general pattern of the provisions of Clause 36 relating to Crown servants. The main difference from that Clause is that we have said in subsection (1) that the provision will be limited to employees in respect of whom employers' National Insurance contributions are paid. As I have said, we are aiming to cover people in this country employed by Governments in non-diplomatic capacities. This is a convenient way of distinguishing them from the diplomatic staff who are exempt from contribution liability. It also enables us to relate the payments, and so the rebates, to the period in respect of which Governments have been contributing to our social security scheme. This is fair and right as a measure of protection for the Redundancy fund.

Mr. Ronald Bell

I am not quite sure that I understand the nevi Clause. That sounds almost presumptuous, because some of these Clauses are so complicated that even to think that one understands them is quite an achievement. Will the Parliamentary Secretary explain which provision in the Clause confines its effect to employees in the United Kingdom? I may have missed the operative words—and I make no apology for that, because there are 39 pages of operative words, and one does the best one can.

On the face of it, the Clause seems to apply quite generally and not to be confined to the United Kingdom. Am I right? Basing myself on what the hon. Member said, I assume that it applies to employees of foreign Governments who are not covered by diplomatic immunity—am I right in thinking that?—and in respect of whom their employer makes a contribution through National Insurance stamps. If so, why do not these people receive redundancy payment in the ordinary way? Why is this special provision for them needed? If they become redundant after a qualifying period of employment, why will they not simply collect their redundancy payment?

The Clause seems to be aimed at the case in which the employing Government have their own redundancy scheme under their own law and make a redundancy payment under that scheme to this employee, and then in respect of that payment the Redundancy Fund makes a contribution to that foreign Government, that contribution. however, being limited by the number of contribution weeks in respect of which National Insurance stamps have been affixed in respect of that employee. I hope that I have that right. It is rather complicated. Is it not rather unusual that a foreign Government employing people in a non-diplomatic capacity in this country should have applying to them their own redundancy scheme in this country? Surely that is unusual. No doubt the hon. Member has more information about it than I have.

Is there any reason why in respect of our scheme they should not simply take the payment under our scheme which may be due to them and in respect of which contributions will have been paid? In that way we should leave the foreign employing Government to make the setoff arrangement under their own scheme, no doubt deducting the amount which, on average, would be 28 per cent. which the employing Government would have to pay. On principle this is surely the way to do it rather than arrange for these payments to be made out of the Redundancy Fund to foreign Governments. I would welcome further elucidation of these points from the Parliamentary Secretary.

8.45 p.m.

Mr. Thornton

One of the problems is that Class I National Insurance contributions are paid in respect of Crown servants and our own Government employees, but we cannot compel foreign Governments represented in this country to pay the National Insurance contributions. Therefore, some of these employees—non-diplomatic staff—will not be covered by the National Insurance contributions. On the other hand, there will be some Governments who pay the National Insurance contribution and who also have schemes which are not less favourable than our own scheme.

In those circumstances we think it only right and proper, seeing that the contributors are employers to the Redundancy Fund, that they should have equal rights to draw on it, in so far as they have contributed to the fund through the National Insurance contributions. I hope that that meets the doubt raised by the hon. Gentleman.

Mr. Ronald Bell: By leave of the House, may I just ask the hon. Gentleman this? Is it the effect of the Clause, really, to make a provision, in respect of a foreign employing Government, in respect of such a man for a rebate under the Third Schedule to the Bill—a payment in the nature of a rebate under the Third Schedule? If this is the case, may I ask—it is, perhaps, self-evident, and it may be that I should know the answer—why is it that the foreign employing Government who have affixed National Insurance stamps in respect of this person, and in every way made the payments, are not in a position under the Schedule as it now stands as of right to claim that rebate? Why, in fact, is the Clause necessary?

Mr. Thornton

I could not give all the legal reasons, but I am advised that this Clause is necessary to enable us to make these payments. I have a note here that it is confined to employment in Great Britain. The Clause can only have effect in relation to services for which National Insurance contributions have been made and services which include a spell of employment abroad which began in this country. We cannot make foreign Governments liable to make redundancy payments. Therefore, we cannot pay them rebate under the ordinary mechanism of the Bill. Perhaps that meets the point.

Mr. Hale

It may meet the hon. Gentleman's point, but may I just ask my hon. Friend a question? I thought that the point put originally by the hon. Gentleman the Member for Buckinghamshire, South (Mr. Ronald Bell) was a very clear and a very fair one. Frankly, I have not had my apprehensions removed at all.

To start with, when we were discussing diplomatic privileges in a Committee Room upstairs comparatively recently it was made clear that diplomatic privilege covered almost anybody anywhere near a foreign Government and a lot of other people, including the fellow sweeping the yard and the lady with the 36,24,36, or whatever it is, in the outer office, and that they could claim diplomatic immunity and could break our criminal law with complete impunity.

Now, there are some curious employees in respect of whom some Governments pay a contribution under our National Insurance Act and some do not, according to their will and pleasure. We have no power to enforce the provisions of the Act and our laws do not apply to persons even if they have not got diplomatic privilege; and even if they are remote from a Government they cannot establish a claim.

I confess that this is news to me. It is a rare contribution to international law and understanding to attach to a foreign Government immunity complete, not only in respect of those persons they employ in their embassy, but of anybody they may employ for the purpose of repairing the roof of the embassy. They can contract out of the Act of 1946 and fail to pay employment contributions.

I may be wrong. Maybe I have misheard. I am frequently wrong. In any case, my psychiatrist told me that I should not get excited, but should consider things slowly and carefully. But I am puzzled that we are now saying that a Government may say, "We are having the roof repaired. These are our employees. We are paying them by the week. We shall pay National Insurance contributions, but we shall not pay contributions under the Redundancy Payments Bill", and when these foreign Governments qualify as employers who do provide a scheme but do not qualify under the Bill for payment except very limited payments which are specified in the various circumstances in the various relevant Schedules.

It may be that this is an effort by the Parliamentary draftsman—for whom I have the utmost respect; I hope that I would not be discourteous to anyone I do not know, but I suspect that he is paid by the word and not by the Bill—to provide for future possible reciprocity in which balances will be paid in this country and made good in Vladivostok? Perhaps I should not have introduced Vladivostok, because that has a high political connotation. Shall we say Nairobi? Is this merely a legislative provision for a rare, almost unprecedented and unforeseen event? If so, I would remind my hon. Friend that the Bill makes no provision whatsoever for the imminent occupation of Mars.

Mr. Kenneth Lewis

I intervene for only a moment to ask the hon. Gentleman a question arising out of new Clause No. 7, which applies to the Isle of Man. Apparently there are to be reciprocal arrangements with the Isle of Man. Subsection (6) of the Clause that we are now discussing says that "overseas territory" means any territory or country outside the United Kingdom… Does this Clause apply to the Isle of Man, or is to be exempted? Will it complicate matters if the Isle of Man is not exempted?

Mr. Thornton

This Clause does not refer to the Isle of Man but to foreign Governments, their embassies and their high commissions in this country in respect of their non-diplomatic staff. As I said earlier, we cannot compel a foreign Government or a Commonwealth high commission to have a redundancy fund or to pay National Insurance contributions in respect of the people whom they employ. The Clause is, therefore, necessary if we are to have the authority to make redundancy payments to foreign Governments and high commissions in this country who operate their own redundancy schemes on a scale not less generous than our own.

Question put and agreed to.

Clause read a Second time, and added to the Bill.