HC Deb 04 June 1965 vol 713 cc2176-92

1.34 p.m.

Mr. Peter Blaker (Blackpool, South)

The subject which I wish to raise is that of compensation for civil servants transferred under Government dispersal schemes. The particular aspect of that problem which I wish to draw to the atention of the Financial Secretary is the transfer of part of the Customs and Excise department from Lytham in Lancashire to Southend in Essex.

The office concerned is at present in Lytham, and many of its officers live in my constituency of Blackpool, next door, and representations have been made to me on behalf of those concerned by officers of the Society of Civil Servants and the Civil Service Clerical Association.

The history of this branch is rather unusual. It was evacuated from London in 1940. That was true of many departments, but unlike most evacuated offices it was not transferred back to London after the war, because it was included in the general dispersal plan which the then Government drew up in 1947. For this office that dispersal plan did not become a live issue until about 1959 when the Customs and Excise Department indicated that it was proposing to proceed to move to Southend, and in 1962 and 1963 about 100 of the officers at that branch were transferred to Southend, and the intention is that the rest, numbering about 170 officers, will be transferred to Southend early next year. I want to make it clear that the case which I am presenting concerns both groups of officers, those who have been transferred and those whom it is intended should be.

The result of this history is that those officers who are members of this branch in Lytham, who were members in 1940, have spent some 20 to 25 years of their working life in the Lytham and Blackpool area, and even those who have joined since that time, have tended to regard the Lytham office as virtually a permanent office. It is, perhaps, not a surprising thing, in view of the length of time it has been there. They have consequently adapted their way of life to that which prevails in that area.

But this branch is in a special position not only because of its history, but also—I believe, perhaps a unique position—in one other respect, because the move which is taking place and which will continue to take place is a move from a low-cost area of the country to what now—whatever may have been the position in 1947 Or 1948, of which I shall talk in a moment—is undoubtedly a high-cost area. This is, of course, the reverse of the usual trend. The normal dispersal move is a move from a high-cost area to a low-cost one.

This is obvious, because the whole object of the dispersal plan was to move staff out of London, which is clearly the highest-cost area in the country, to other parts. Moves have taken place to Guildford, Newcastle, Liverpool, Bath and many other towns, all of them lower-cost towns than London, the place from which the offices were transferrd. Other moves have taken place from one provincial town to another, for example, from Morecambe to Durham. I know, however, of no other move which is so clearly a move from a low-cost to a high-cost area, as this one is. Perhaps if the Financial Secretary knows of another such case he will tell the House about it.

Let me give one or two examples of the difference in cost. The most striking is that of house purchase. It is a fact that nearly all the officers at the Lytham office, those who have moved or those who will move, are house owners, and I believe that those who are house owners should be put in the position that after the move they can sell their houses in Lytham or the Blackpool area and buy other houses of a similar kind in Southend, without having to suffer hardship. Now the plain fact is that the cost of buying in the Southend area houses of a kind similar to those which these officers own in the Lytham and Blackpool area is between £1,500 and £2,000 more.

Understandably enough, none of these officers could provide that sort of money from his own resources. Even if 100 per cent. mortgages were available to them, they would clearly be paying a very much higher amount of mortgage interest than they have been paying heretofore. The rate of mortgage interest is now 6¾ per cent., and on £1,500 that is about £100 a year. That, of course, assumes that these officers are paying 6¾ per cent. on their existing mortgages in the Lytham-Blackpool area, which is not the case, because many of them have mortgages on which they have been paying a fixed interest of between 3¼ per cent. and 5 per cent., so they will be faced with an even greater difficulty.

The second example of extra cost is that of rates. Last year the average rate paid per domestic dwelling in Southend was £9 a year higher than in Blackpool. This year the rate in Southend has gone up by 9d. and that in Blackpool by only 5d. This is one of the figures which tends to show not only that the difference in the cost of living between the two areas is substantial, but that it is widening all the time.

Had this move taken place in 1947 or 1948, when the original plan was drawn up, it would not have been a move from a low-cost to a high-cost area. For one thing, in 1948 the cost of housing in the Blackpool-Lytham area was high. It had been inflated by the presence of 50,000 soldiers who have been billeted in the area during the war, by the evacuation of many firms and families from the South-East to the North-West, and also by the fact that it was impossible to take holidays abroad at that time, and, therefore, those who took holidays away from home went to that area in unusually large numbers. It is a very important fact that the cost of a freehold house in the Blackpool-Lytham area now is no higher than it was in 1948, and if the Financial Secretary is interested in following up that point, he might care to look at an interesting article in the Sunday Telegraph of 2nd May this year. In contrast, there is no doubt that the cost of housing in the Southend area has gone up by leaps and bounds.

What about the general cost of living in the two areas? Unfortunately, apparently no precise statistics are available which relate particularly to the two areas in which I am interested, but I have come across some figures which compare average household expenditure in the north-west region with that in the eastern region—the two regions in which the towns about which I am concerned are situated—in 1953–54 and in 1963–64.

They show that in 1953, that is 12 years ago, average weekly expenditure in the north-west was higher than in the eastern region. In 1963, the position was the other way round, and I would hazard a guess that the Blackpool-Lytham area is now about the least expensive part of the north-west area, and that Southend is one of the most expensive places in the eastern area. Thus, those figures, so far as they go, confirm my case, but in any event I would be surprised if the Financial Secretary were to contest my case on the ground that this was not a move from a low cost to a high cost area.

The Treasury argument in refusing compensation so far is that the comprehensive agreement which was signed in 1948 between the staff side and the official side of the National Whitley Council makes no provision for compensation in a case of this kind, so I should like briefly to mention what the 1948 agreement does.

First, the whole document deals with moves out of London into the provinces. This is not surprising because that, after all, was the object of the exercise. The object of the agreement was to obtain the consent of the staff side to the principle of dispersal from London. Secondly, the agreement recognised that moves of this kind of Government officers would create disturbances in family and social life for the officers concerned, and in order to persuade the staff side to accept the plan, the official side agreed that everything practicable should be done "to mitigate hardship".

Thirdly, as an inducement to the staff in London to move from London, the official side agreed that when staff were transferred to the provinces they would continue to receive their London rates of pay, which were higher than the provincial rates, until they were promoted. That is what is being done, for staff who are moved out of London.

What about the Lytham-Blackpool staff? Unfortunately, nothing comparable is being done, or, as far as I know, is intended to be done, for them. They will be repaid the actual costs of moving. They will be paid the transport costs, and the legal costs involved in selling one house and buying another, but the only help which they will receive which will aid them at all with the higher cost of living, and of housing, is something called an excess rent allowance, which, in my view, provides them with a sum which is derisory in relation to the extra expense in which they will be involved in Southend.

This excess rent allowance is generally available in the case of all moves where the officer is involved in additional expenditure, for example on rent, but it is intended to be only temporary. It diminishes rapidly over a maximum period of seven years, and my hon. Friend the Member for Essex, South-East (Mr. Braine), if he is fortunate enough to catch the eye of the Chair, will deal with that point in more detail. But even in the first year the maximum which this allowance provides is substantially below even the extra cost of mortgage interest and rates in which these officers will be involved, and, as I say, the allowance diminishes very rapidly thereafter.

The result of this situation is that officers transferred to Southend from the Blackpool area will suffer a double disadvantage in comparison with officers transferred to the same office from London. They will not be adequately compensated for the extra cost of living in Southend, nor will they get the added inducement to move which is provided for the London staff by the 1948 agreement. Officers from the Blackpool area and from the London area will be working side by side in the same office, and one can imagine the sort of effect on staff morale which that situation is likely to have.

This is a case in which the Government have a clear duty to provide special compensation, and I hope that the Financial Secretary will say that they will, but in the correspondence that I have had with him so far he has been reluctant to do so, and I must therefore face the prospect that he may still need to be persuaded. I should like, therefore, to deal briefly with a number of points which I expect he will put forward.

The right hon. and learned Gentleman may say that compensation in this case is not provided for in the 1948 agreement. That is true, but to rely on that argument is simply to go by the book, and to ignore the merits of the case. The reason it did not provide for compensation was that the possibility of a move from a low-cost area to a high-cost area in the provinces was at that stage not foreseen. I believe that had it been foreseen at the time of the 1948 agreement there is little doubt that the official side would have agreed that proper compensation should be provided. Simply to rely on the letter of an agreement signed 17 years ago is not a very satisfactory posture for any Ministry to adopt, least of all one which claims to have so much at heart the welfare of employees.

The Financial Secretary might say that the cost would be too great for the Treasury to bear. I do not think that that is an argument which would be tenable. According to my information, the cost of paying outer London rates of pay to the staff concerned until they are promoted would be less than £40,000, in total—not per annum. I am not suggesting that the solution of paying outer London rates of pay is necessarily the one that should be adopted, but I mention it to give an indication of the order of magnitude of the sum involved. The Financial Secretary might say that this would set a precedent. I do not believe that there is anything in that argument, because this case is a very special one. If the hon. and learned Gentleman knows of comparable cases, no doubt he will mention them.

The hon. and learned Gentleman might also say that any of these officers can have council houses when they get to Southend and need not incur the cost of buying a freehold property. My hon. Friend the Member for Essex, South-East will deal with that point also. However, I would point out that the 1948 agreement provides that before carrying out a transfer a Department must assure itself of the existence of reasonable accommodation of an appropriate kind. I suggest that "of an appropriate kind" must mean of a kind to which the officer is accustomed.

The Financial Secretary may say that, apart from this block move, there are many individual moves of civil servants from low-cost to high-cost areas happening all the time. I suggest that most cases are nearly all covered by one or other of the following categories. The first category is those who are being transferred as individuals on promotion, and in that case hardship does not arise because there is an inducement in the form of extra salary. The second category is young officers who are appointed from the provinces soon after they are recruited to serve in London for a brief time for training and experience, or young officers without family ties who are moved about the country to acquire experience. The third category is people, such as many in the Customs and Excise branch, who are moved from a low-cost to a high-cost area for a short time and then moved back from the high-cost to a low-cost area, thus making up on the swings what they lost on the roundabout.

The point about the move in question is that it is a move permanently to a high-cost area. I ask the Financial Secretary to accept that this is a special case and agree that the Government should act like a good employer. I have made some inquiries of private firms, and it is clear that a responsible private firm faced with this situation would feel it necessary to make some special arrangements to avoid hardship. I believe that the Government should not do less well than a private employer. I ask the Financial Secretary to consult his officials, if necessary, and come forward with a new offer to the staff side which will remove the legitimate anxieties from which these loyal civil servants are suffering and also the hardship which will be inflicted on them if nothing is done.

1.55 p.m.

Mr. Bernard Braine (Essex, South-East)

I support my hon. Friend the Member for Blackpool, South (Mr. Blaker) in his representations on behalf of the Customs and Excise staff who either have been transferred from Lytham St. Anne's to Southend or are under notice to move there before long.

Perhaps I might explain my interest in the matter, since Southend is not in my constituency. Some weeks ago representations were made to me by the local secretaries of the two staff associations concerned—the Civil Service Clerical Association and the Society of Civil Servants—both of whom are constituents of mine. In addition, while the new Customs and Excise offices are in the County Borough of Southend, a number of the officers already live in my constituency or are seeking to do so.

It goes without saying that civil servants must move wherever their duties take them. Individual officers moving on promotion get some recompense for any disturbance or discomfort that a move may cause them. For those moving en bloc, as in this case, the situation is different. But it is a happy tradition of the Civil Service that the staff side always co-operates with the official side when the public interest requires that either a whole department or some part of it makes a move of this kind.

Everyone to whom I have talked is generally agreed that the plan drawn up in 1947 for the movement of Government Departments from London to the provinces was fair to all concerned in the circumstances of the time. Indeed, there was some advantage to the civil servants involved, because of the arrangements which allowed them to retain London rates of pay and hours of work in their existing grades when moving to areas where the cost of living was lower than in London.

Of course, there is good social and economic sense in the policy of dispersal. In the memorandum of agreement drawn up between the official and staff sides of the Civil Service National Whitley Council in June, 1948, it was stated: The Government are concerned with the tendency for London to expand disproportionately and to attract employment and population at the expense of other parts of the country. Such a trend is detrimental to the best interests of London as well as of the country at large, and in the view of the Government, therefore, it is necessary that steps should be taken to check such developments by diverting to other parts of the country a proportion of the establishments which would otherwise or do now employ industrial and non-industrial workers in London. By such transfers of activity opportunities of employment outside London will be increased and diversified and a better social and economic balance in the country at large will be secured. Developments in recent years have lent even greater emphasis to this sensible view.

The official side said in the agreement that it understood the natural reluctance and misgiving of the Staff side in regard to a plan which will inevitably create disturbance in the family and social life of a large number of civil servants". And for its part the staff side recognised the necessity in the interests of the country as a whole of proceeding with a plan for dispersing part of the population of London to the provinces". The official side agreed that everything practicable should be done to mitigate these hardships. That was the agreement drawn up all those years ago. But the situation which my hon. Friend has described is in an important sense a reversal of what was envisaged in the dispersal agreement. It is a situation which I submit runs counter to the whole spirit of that agreement. I make no comment on the decision to move the Accountant-General's Office back from Lytham to Southend—an area which in terms of the cost of living might just as well be said to be in London itself—except to say that since 1947–48 the whole area of south-east Essex, not merely the County Borough of Southend, has changed enormously. The population has at least doubled. I have been faced with three Parliamentary constituency redistributions during that period.

House prices have risen substantially. As my hon. Friend said, about 100 staff were transferred about two years ago from Lytham and I understand that about 170 more are to move to Southend early next year. Unlike the moves envisaged in the dispersal agreement, this is one from a low-cost to a high-cost area. The implications of that for the staff concerned have been described by my hon. Friend and I shall not go over the ground again. He has accurately described the plight of those who have already moved and the anxiety of those who are to follow.

Some of those who moved in 1962 or 1963 are still in temporary accommodation. Some who understood that they were to get council houses are still in council flats, and it seems likely that they will stay there for a very long time to come. But the majority of these officers have been and wish to continue to be house owners. They are that sort of people. Those who have moved are finding it extremely difficult—I would say that it is now impossible—to obtain houses within the scope of their resources.

Accordingly, I wrote to the Financial Secretary on 14th April: I understand that this is the first time a move has been ordered which will oblige civil servants to sell their homes in a relatively low-cost area and to find new ones in a high-cost area, as mine appears to be. … It seems to me that there is an unanswerable case for granting the civil servants involved some compensatory allowance to make up for the considerable difference in house prices. The Financial Secretary replied: So far as the people who prefer to purchase their own houses are concerned, it is true that prices in Southend are higher than in Lytham."— This is an important admission— But establishing a home wherever his duty takes him is essentially an officer's personal responsibility, although under standing arrangements for compulsory transfers in the Civil Service generally, a substantial contribution to the extra costs involved is made in the form of legal expenses of house purchase, a lump sum 'transfer grant' and an 'excess rent allowance' which tapers off over 7 years, as well as payment of removal expenses. When one examines what this substantial contribution is, the picture is quite alarming. The differentiation in house prices between the two areas in 1963 was about £1,000. That was large enough. Today it is between £1,500 and £2,000. Moreover, the TSR2 affair, which has had quite a savage effect on the prospects of many people living in Lytham St. Anne's and Blackpool has made the selling of homes there very difficult indeed. In Lytham, I am told, 12 or so terraced houses with two or three bedrooms, central heating and garage priced from £3,100 upwards were completed about two months ago. To date only one has been sold. In our area, houses are sold before they are built. Selling is as difficult in Lytham St. Anne's as it is easy in south-east Essex.

The additional mortgage interest, as my hon. Friend pointed out, means that a man will have to pay in excess of £100 a year, without taking into account the repayment of the additional capital involved. The Treasury contribution is based on a formula which falls far short of meeting this extra cost. The maximum in the first year will be £75, tapering off very rapidly and ending after seven years. The formula assumes no difference at all in local authority rates, whereas, as my hon. Friend pointed out, there is a difference. By no stretch of the imagination can this be described as a substantial contribution to officers disadvantaged in this way.

The Financial Secretary said in his letter: Establishing a home wherever his duty takes him is essentially an officer's personal reponsibility. … Quite so. Nobody quarrels with that, but there is also a clear obligation on the Government to ensure that hardship is avoided. Let me quote the Whitley Council agreement of January, 1959, which said: Bulk movements of staff should only be undertaken when there are compelling reasons, and it should be the objective of Departments in planning and implementing such moves to minimise dislocation and avoid hardship for staff affected. The words used are not to "mitigate hardship", but to "avoid hardship", for the staff affected.

Clearly, this move is an exceptional one. The Financial Secretary said in his correspondence with me that he did not consider it so. I was astonished to find him saying that he did not think that it was an exceptional one. Is such a move contemplated anywhere else? This is, as I have said, a unique case. It is not one of moving officers from a high-cost to a low-cost area, but the reverse. It is not a case of officers being moved on promotion, but a move en bloc of people whose homes must be uprooted because of considerations of public policy. The decision here, if the Treasury has its way, is to inflict great loss on faithful public servants, and to cover it up on grounds of public necessity. This is an attitude—I am not mincing my words—which is mean and short-sighted. I cannot believe that the official side of the Customs and Excise approve.

I invite the Financial Secretary to say whether the Treasury has been asked by the Customs and Excise to treat its staff more favourably. I beg him, therefore, not to bring forward the usual argument, about creating precedents. After all the recent discussion about congestion in the South-East, I cannot envisage that a move of this kind will ever be contemplated again. I ask him to treat this case on its merits, and to let justice be done. I am sure that, on reflection, the Financial Secretary, who is a fair-minded man—we all recognise that—will see the justice of the case and that the very least he will do today is say that he is prepared to look at this matter again.

2.6 p.m.

The Financial Secretary to the Treasury (Mr. Niall MacDermot)

I am sure that the hon. Member for Essex, South-East (Mr. Braine) did not want to misrepresent the contents of my letter. I did not say that this case was not exceptional. I said that it was not so exceptional that I would be justified in departing from the established practice.

Perhaps we can go back to the beginning. I would say a word about that. We have this somewhat surprising situation where staff are being moved as part of a dispersal arrangement, from Lytham to Southend, which is the reverse of the normal direction of removal and dispersal which this Government, at least, are trying to achieve. I should explain that it is part and parcel of a major operation to move well over 1,000 of the Customs headquarters staff from London to Southend. These are the staff of the Accountant and Controller General's Department. In the interest of efficiency that part of that Department which was transferred to Lytham from London in 1940 is being reunited at Southend with the remainder of that Department. This is the reason for it.

If I am asked why there is a dispersal move from London to Southend in the south-east area, I can only say that it was a decision of the previous Government, who, in their dispersal policy at that time, were concerned only to relieve the pressure on London. Some may think that they adopted a somewhat passive attitude towards the drift to the South-East. We are endeavouring, wherever we can—it is not always possible, of course, when there is a question of a dispersal from London—to try to get the dispersal right out of the south-east area. We are bound by the decision which has already been made. There can be no question of altering this dispersal move which has been agreed for a long time—

Mr. Braine

rose—

Mr. MacDermot

I am sorry. The hon. Member left me very little time—

Mr. Braine

We started late.

Mr. MacDermot

I know we started late, but I have been left only 10 minutes.

As I was saying, we could not alter these dispersal arrangements. They involve lengthy and complicated negotiations with the staff side. Agreements are reached, people make arrangements based on these agreements, and there can be no question of altering that now. As has been said, a considerable part of the move has taken place already, including the removal of one hundred people from Lytham to Southend.

I am asked why, since this is a somewhat exceptional operation, we cannot give special treatment to these civil servants. We must see these removals in perspective. For the reasons I shall explain, the numbers involved who are faced with the housing difficulties to which reference has been made—and I do not wish to minimise the difficulties—have been reduced to about 40 out of a total staff of about 70, not 170, who, at the maximum, may yet have to remove from Lytham to Southend. These 40, one must realise, are from a total of about 15,000 civil servants who are moved every year from one part of the country to another. This is a regular, well known and accepted aspect of life of civil servants; that they may from time to time be required to move.

This affects some Departments more than others and perhaps the Customs and Excise is one Department in which these moves are more frequent. Unfortunately, there are considerable differences in the cost of housing and the cost of living between different parts of the country. Consequently, it is by no means exceptional that there are large numbers of people who are obliged to move from low cost to high cost areas every year, including people who are not in the three categories referred to by the hon. Member for Blackpool, South (Mr. Blaker). There are family men who are moved without promotion and on a permanent basis, from low-cost to high-cost areas.

There are the most detailed arrangements to assist officers in these circumstances. They have been the subject of long and detailed negotiations with the staff side of the National Whitley Council and are the subject of agreements.

I come to the specific case of the move from Lytham. The Customs and Excise has done, and will continue to do, everything it can, in conjunction with other Departments in the area and with the Treasury, to keep to the minimum the number who have to move their households. Every effort has been made to find comparable jobs elsewhere in the area for those who do not want to move and some of those who have been appointed more recently have houses in the Southend area and are now serving temporarily in Lytham in anticipation of the transfer to Southend.

By means of these and other expedients, and excluding single people who do not have the same housing problem, the number involved with these housing difficulties has, as I say, already been reduced to about 40 out of the total complement yet to be moved, and 100 have already gone.

We recognise that some householders will have to move if we are to achieve this reunion of the Department at Southend with the gain in efficiency which that will achieve. It must not be thought that these people are objecting to moving in principle. The great majority of them have expressed their willingness to move but have expressed considerable worry and anxiety about the extra housing costs with which they will be faced.

I realise that people who have been home owners generally want to remain home owners. I accept that and I do not wish to make any false points about it. However, the Southend Corporation has been co-operative in this matter and any people who must make the move, and who are unable to find or who do not wish to embark on the responsibilities of buying a new house in the Southend area, will be able to obtain either a flat or a house to rent from the Council. There is adequate accommodation available.

The main question I am asked is why we cannot give these people exceptional compensation. The prime reason is that essentially they are not in a different position from a great many other civil servants who must move their houses in the ordinary course of everyday transfers. Many of these moves are taking place from less expensive to higher cost areas, just as many are moving the other way, from high-cost to low-cost areas, and are, therefore, benefiting from that.

Reference has been made to what is available in the way of assistance. It includes not only assistance with legal expenses and house agents' fees relating to the sale of the old house, the costs of removal and storage charges for furniture until a new house is available, but also there are allowances for the extra cost of temporary accommodation until a permanent home can be found and lump sum transfer payments and miscellaneous expenses over and above the ordinary costs of removal ranging from £60 to £165, depending on salary and size of family.

Legal expenses are paid relating to the purchase of a new house and, in addition, there is the rent allowance which is something of a misnomer because it covers not only the rent but the equivalent of mortgage payments at the new station. This will, broadly speaking, make up the difference, to a maximum of £75, for the first two years, after which it tapers off, being reduced by one-sixth, until the final payment is made in the seventh year. This affords, certainly in the initial stages, a substantial contribution to the additional costs of the housing. We were given the figure of £1,500 as the sort of difference that there is between Lytham and Southend and I would not challenge that figure. But the assistance which is given will go a long way towards meeting that difference, certainly in the early years.

It is said that these people will be working side by side with ex-London staff who will retain the London rates under the 1948 agreement. This is something which arises in many cases as a result of that special dispersal agreement which was reached with the staff side covering dispersals from London. In almost every case where staff are transferred they will be working side by side with locally recruited staff or staff moved from elsewhere other than London, who do not enjoy this privilege and who will be getting less pay.

I was asked for specific examples where this could occur. There is a removal about to take place. It is the dispersal of the Ministry of Public Building and Works from London to Hastings. They will be working together with staff who have been moved across the country from Portsmouth as well as some staff from from other regional offices. If it is said that Portsmouth is still in the South and that higher prices prevail there, I could quote the example of the General Register Office, where staff were moved from London to Titchfield, which is between Fareham and Southampton, retaining their London pay and hours. Others were moved from Southport, which is near Lytham, and are working side by side with the dispersed staffs from London without alteration in their preferential rate of pay and hours.

I could not, therefore, accept that we are considering an exceptional situation. If one considers the civil servants in the same town, though not in the same office, it would be a very frequent situation. In any place where one has dispersed staffs from London there will be many civil servants in the same town of the same grade with different rates of pay. These are the reasons why I do not feel I can make a special exception in the case of these officers.

I do not want to give any impression that I am insensitive to their problem. I realise that they are faced with a real problem which, unfortunately, occurs to many people in the Civil Service when they are moved from low cost to high cost areas, and it is one which we make every effort to minimise and mitigate. We have tried to reduce the number of such cases to the minimum and that has been done. Great efforts have been made in this case, but I do not think it would be right for me to intervene in these circumstances and authorise a special compensation payment which would not be available to other Civil Servants in a like situation.

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