§ 12.0 noon.
§ The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Norman Pentland)
I beg to move,That the National Insurance (Mariners) Amendment Regulations 1966, a draft of which was laid before this House on 27th July, be approved.The purpose of the Regulations is to amend the National Insurance (Mariners) Regulations to take account of the change in the National Insurance Scheme made by the National Insurance Act, 1966. This introduced earnings-related supplements for unemployment and sickness benefit and widow's allowance, and provided for the increased graduated contributions needed to pay for these supplements. Regulations of this kind are needed, because it is not possible to apply the National Insurance Scheme to seafarers without some modifications. Accordingly, the National Insurance Acts give the Minister wide powers to make special provisions for them.
I now turn to the individual Regulations. Regulation 1 is formal. Regulation 2 deals with seafarers attending training courses. A provision in the existing Regulations enables those who undertake such courses, which are to enable them to obtain higher qualifications, to receive unemployment benefit even though they do not satisfy the usual conditions as to unemployment and availability for work.
This concession, which does not apply to the training of workers in any other industry, has become increasingly anomalous in the National Insurance Scheme, particularly as many of the men concerned have their pay made up, and the Regulation provides that the concession shall not be extended to provide the new earnings-related supplement to unemployment benefit. These Regulations do not affect the position on flat-rate benefit, but my right hon. Friend the Minister is considering, in consultation with both sides of the industry, what the future position on flat-rate benefit should be.
The remaining Regulations deal with graduated contributions. Special rules are 902 necessary on these for seafarers, because their pay arrangements vary from those of workers on shore, normally being related to the voyages they undertake. This being so, their Income Tax and graduated contributions are assessed at the end of a voyage on average earnings throughout that voyage. Although the rules of assessment differ from those applicable to insured persons in general, the range of earnings on which contributions are paid and the percentage payable as contributions are the same.
Regulation 3 and Schedules 1 and 2 prescribe new graduated contributions payable, Schedule 1 containing the rates for employments which are not contracted out of the graduated pension scheme, and Schedule 2 containing the rates for employments which are contracted out. The tables are identical to those set out for ordinary contributors in the National Insurance (Assessment of Graduated Contributions) Regulations, as amended.
The provision in paragraph (4) of Regulation No. 3, which introduces a new paragraph (7) into the main Regulation No. 18, is to permit an employer to calculate the graduated contributions payable on an exact percentage basis to the nearest penny, if he finds that this is preferable to using the tables which set out contributions for bands of earnings. This alternative method is already available for employers generally under Regulation No. 3(3) of the National Insurance (Assessment of Graduated Contributions) Regulations, and its extension to mariners' contributions will assist shipping companies with computerised payroll systems.
Regulation No. 4 and Schedule 3 deal with the situation where overtime for the last days of a voyage is paid later than the main payment of wages for the voyage, thus involving a separate and late assessment of contributions. The existing rule that the shipowners and seafarers each pay 10d. in the £, about 4½ per cent., of this balance of wages due when it is paid, is now replaced by a new rule fixing a charge of 11d. in the £, about 4¾ per cent., for seamen not contracted out, and 1d. in the £, about ½ per cent., for those contracted out. This is in line with the new levels of graduated contributions under the 1966 Act.
Regulation No. 5 deals with the annual maximum of graduated contributions. The existing mariners' Regulations, like 903 the Regulations applying to other contributors, provide that a person with more than one employment can apply for a refund if he pays more than a prescribed amount of graduated contributions. The prescribed amount is the maximum normally payable in one employment for a whole year. This Regulation fixes the new amounts consequential on the 1966 Act.
The Regulations preserve the existing arrangement that a refund can arise only if graduated contributions are 10s. or more above this prescribed limit; this prevents refunds of very small amounts which would be disproportionately costly in administrative terms. But amounts which are not refunded count for graduated pension.
Regulation No. 6 makes transitional provision for cases where a voyage starts before 5th October, 1966, which is the appointed day for the new graduated contributions, and continues after the 5th October, 1966. Paragraph (a) provides that the old contribution rates shall apply to the whole voyage if it ends before 5th January, 1967, that is, within three months of the date that the new contributions become payable in general. This is to prevent the ship's master from having to calculate graduated contributions at two rates for such voyages.
Paragraph (b) ensures that where a voyage starting before 5th October lasts beyond 5th January, only the period after 5th October will attract the new rate of contributions. This is on the same basis as in 1961, when graduated contributions were first payable, and in 1963, when the scales were extended. My right hon. Friend has consulted the National Maritime Board, which represents both sides of the shipping industry, and the Board expressed its agreement with the changes proposed in these Regulations.
§ 12.8 p.m.
§ Mr. W. R. van Straubenzee (Wokingham)
The House is grateful to the hon. Gentleman for his explanation. We clearly understand that special arrangements are necessary, consequent upon the new arrangements of the 1966 Act, for those in employment of this kind. One remembers recent events when a very graphic description was given of the particular 904 problems of employment in this industry, which illustrate the difficulty when a very large percentage of people are away at any one time from their base. Therefore, there is no criticism about the Regulations in so far as they refer to mariners and particularly in so far as they deal with the transitional arrangements consequent upon the introduction of the new arrangements in October.
I have only one comment to make, which is, admittedly, a slight criticism. It is based on Regulation No. 2, the modification of the arrangements for the payment of unemployment benefit for a mariner undergoing an approved course of training. Until these Regulations came before the House I had not properly appreciated that in this industry it was possible to draw unemployment benefit while undergoing an approved course of training. I do not know whether there are any other examples of this kind. As the hon. Gentleman said, this is plainly an anachronism, and even more of an anachronism when, as here, and as with so many other industries, the necessary pay is made up. For this reason I do not quite follow why the Minister has not introduced these Regulations on the basis of putting the thing right completely.
Unless I have got my facts wrong—but I think I followed the hon. Gentleman in what was necessarily an elaborate explanation—the mariner remains entitled to his flat-rate unemployment benefit, but he gets no title to the earnings-related supplement.
§ Mr. Pentland indicated assent.
§ Mr. van Straubenzee
I am glad that I have understood the position correctly. The hon. Gentleman went on to say that his right hon. Friend was looking further into this, and the inference was that the right hon. Lady was looking critically at it. By critical I mean with a view to getting rid of the anomaly entirely. The right hon. Lady has not permitted the anomaly to extend into the earnings-related aspect of the matter. She has yet to act with regard to flat-rate benefits.
I think that it would be helpful if the hon. Gentleman could say why his right hon. Friend has not felt it possible in these Regulations to do the complete job. Plainly the right hon. Lady will have to 905 come back to the House with new Regulations, though of course this is a perfectly simple matter. I do not quite follow why it was not possible to take one bite at the cherry, instead of two.
I appreciate that recent events in the maritime world have not made consultation any easier, and that there have been other matters which have engaged the attention of the shipping industry, and which it would not be in order for me to go into now. It may be that that is the root cause of the right hon. Lady's difficulties, and if so we shall understand that, but I think that it would be helpful to know, because at first blush it seems that it would have been a much tidier operation to get rid of the whole thing at one time, particularly as the Minister has decided, as I think rightly, that it is an anomaly which does not fit in with our industrial thinking in the 'sixties and 'seventies. With that one reservation I hope, as before, that the House will be disposed to agree to this proposal.
§ 12.13 p.m.
§ Mr. Pentland
Perhaps I might briefly reply to what the hon. Gentleman has said. I first thank him for his usual courtesy, and for the very helpful attitude which he always adopts to matters of this kind.
If the hon. Gentleman looks at paragraph 5 of the Explanatory Memorandum, he will see that the flat-rate benefit is not being withdrawn at the moment, because the seamen's strike made it impossible to complete the negotiations with the industry in time. I therefore have to make it clear that further Regulations will be necessary to secure the cessation of flat-rate unemployment benefit.
The hon. Gentleman suggested that it would have been better not to have made any special provision about earnings-related supplement in these Regulations.
§ Mr. van Straubenzee
I am sorry, but I obviously did not make myself clear. What I had in mind was that it might have been wiser to have delayed the introduction of these Regulations in order to do the two jobs at one time.
§ Mr. Pentland
It would have been inappropriate to allow the new earnings-related supplement to become payable for a limited period. That is what it would have meant in this case. We would have 906 been extending the range of the present anomaly, because, as the hon. Gentleman knows, the earnings-related supplement will be payable as from 6th October next, and the present Regulations afford the only opportunity which the Government have—and indeed this is the only obvious occasion—to prevent the payment of supplements to mariners on training courses.
§ Question put and agreed to.
That the National Insurance (Mariners) Amendment Regulations, 1966, a draft of which was laid before this House on 27th July, be approved.