Redundancy Payments

HC Deb 19 February 1968 vol 759 cc23-5

44. Mr. Ridley

asked the Minister of Labour if he will amend the redundancy pay scheme, in view of the fact that the fund is now£8 million in deficit.

Mr. Hattersley

We have no current plans for amending the Redundancy Payments Act, but we are consulting with industry about the financial position of the fund.

Mr. Ridley

Does the hon. Gentleman realise that, every time he tells us that he is putting up the contributions or something like that, the fund goes more into deficit? Does he realise that this happens because he is being taken for a ride—it is a sort of bonanza for anyone lucky enough to get a bogus sacking—and he must do something about it soon? Will he do it now?

Mr. Hattersley

The hon. Gentleman is quite wrong. It is not when announcements of increased contributions are made that the fund goes further into deficit but when I come to the House and ask for permission to allow the fund to go further into deficit. Moreover, he is absolutely wrong in that part of his supplementary question when he described the fund as a sort of bonanza. That is totally out of line with the facts.

Mr. Dunn

Will my hon. Friend take note of the one or two instances where it has appeared that the fund is being abused, namely, where there is a transfer of the name and occupation of an employer, and, very often, golden handshakes being given out in the main to executive grades?

Mr. Hattersley

With a scheme of this complexity and magnitude, there will be individual occasions when unscrupulous advantage is taken of the fund, but these are by no means frequent. I think I know the example to which my hon. Friend refers, and my information is that it is a very peculiar one depending entirely on the firm in question being set up after a franchise and the franchise running out at a specific time.

Mr. R. Carr

Will the Minister bear in mind that, while there is universal support for the purpose of this scheme, there is some doubt, in the light of experience as to whether it is quite the best way of achieving that purpose?

Mr. Hattersley

I know that feeling very well, and the right hon. Gentleman and some of his hon. Friends have expressed it for some time. All I can tell the House is that the financial stability of the fund is under consideration. I am sure that we all want to ensure that it continues on a sound financial basis.