IRON AND STEEL (COMPENSATION TO EMPLOYEES) (Hansard, 19 July 1968)

§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
I beg to move, That the Iron and Steel (Compensation to Employees) Regulations, 1968, a draft of which was laid before this House on 1st July, be approved. These Regulations require the British Steel Corporation to pay compensation to those staff, or former staff, of the Iron and Steel Board and the nationalised companies who suffer loss of employment or loss or diminution of emoluments or pension rights in consequence of nationalisation or subsequent organisational changes giving effect to conclusions reported by the Corporation to the Minister in a report on organisation, or to a direction by the Minister to the Corporation on organisation. The pattern of compensation embodied in them is based on the pattern for statutory redundancy which, has been applied by successive Governments over the last twenty years. The most recent example is the Harbour Reorganisation (Compensation to Employees) Regulations, 1967.
As the Act requires, we have consulted the British Steel Corporation and the trade unions in the preparation of these Regulations. The Regulations will have effect from 28th July, 1967—that is, vesting day for the B.S.C. If the House 1931 wishes, I will gladly give a fuller explanation of the Regulations and answer points and questions asked by hon. Members, but, as they give effect to well established policy, what I have said may be sufficient.

§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)
The general level of compensation proposed in these Regulations is acceptable and so is the general tenor of the Regulations. There are points which one could make about them but, under the circumstances, they seem to be generally reasonable.
I make only one point in relation to the Regulations in general. That is the rather mean provision that income over £8,000 per annum should be disregarded. The Socialist Government have to get used to the fact that higher salaries will have to be paid because they themselves are beginning to turn to this in their own policies. The idea that they can keep salaries down by means of this sort of provision is hardly worthy of the Government.
The terms of the Regulations apply only to ex-members of the Iron and Steel Board or the Iron and Steel Holding and Realisation Authority or any of the scheduled companies which were nationalised. This leaves out those who worked in the Iron and Steel Federation. This matter was debated at length in Committee on the Bill and I have no intention of going over that ground again.
The reason why these people were excluded was the precedent that wherever a Measure of this sort was brought in, the provisions in relation to pensions and compensation related only to those directly affected and not to those indirectly affected, but the then Parliamentary Secretary, the hon. Member for Middlesbrough, West (Dr. Bray) gave an assurance which I bring to the notice of the present Parliamentary Secretary. The hon. Gentleman said: The whole question of the withdrawal of scheduled companies from the Federation is a complex matter, and the rôle of the staff is an integral part of it. If hon. Gentlemen think of the necessity of retaining the good will of the staff who will return to the Corporation, they will see that these negotiations are not likely to be in any way unfavourable to the staff of the Federation." 1932 —[OFFICIAL REPORT, Standing Committee D, 13th December, 1966; c. 2266.] The hon. Gentleman went on to say that, provided that the negotiations were carried on in good faith and concluded satisfactorily, he saw no reason why the members of the staff of the Federation should not be treated just as well as anybody else concerned.
The negotiations over the ending of the Federation have been concluded. The Parliamentary Secretary said this last week in our debate on the Corporation's borrowing powers: The speedy success of these complicated negotiations is a tribute to the good sense of the leaders of the Federation in realising that nationalisation had now come to stay…."— [OFFICIAL REPORT, 12th July 1968; Vol. 768. c. 941.] This being so, and there having been good sense and reasonableness in the negotiations, the position remains that members of the staff of the Federation are in a much less favourable position at law than members of the staffs of the Boards, the Holding and Realisation Authority, or of the companies. We realise that this not a deliberate attempt to exclude them from the provisions, but it puts them in the position where they, and they alone, are not able to claim compensation if they are dismissed, or if in any other way their employment prospects are impaired.
For instance, those who worked in the steel industry before nationalisation all found themselves in the Federation, in the Steel Board or in one of the companies. There were frequent changes of the higher members of the staff from one to another. It is palpably unfair that those who happened to be in the Steel Board or one of the companies at the time of nationalisation should be treated in an entirely different way from those who were in any of the other organisations.
The agreement has been made. The vast bulk of the members of the Federation have been taken on by the British Steel Corporation. So far, everything has gone well. All that I ask now from the Parliamentary Secretary is that he should give an undertaking, as far as he can, that it is the intention of the Corporation to treat those who were in the Federation on no less favourable terms, if it should come to compensation, than those who were in the Boards, or the companies, etc. 1933 Though there is no legal force to the hon. Gentleman's undertaking, I can assure him that to a very small, but quite important, number of people it will be valuable. Such an assurance would clear up the Opposition's few and remaining doubts about the whole subject. If the Parliamentary Secretary could give that undertaking, there would be no need to detain the House on these Regulations.

§ Mr. Freeson
With the permission of the House, Mr. Speaker. Although I do not think that I can give an undertaking in precisely the terms in which the question was put to me, I can say that all of the staff of the British Iron and Steel Federation were offered employment by the British Steel Corporation on the same terms as those employed directly by the Corporation. As I understand the position, those who accepted are being treated in precisely the same way as all the rest of the Corporation's employees.
I have no reason to doubt that the B.S.C. will treat this matter fairly and properly, but at the end of the day it must be recognised that the Corporation will not be judge in its own cause, although it will have to decide the compensation in the first instance, because there will be a right of appeal to the industrial tribunals set up by my right hon. Friend the Secretary of State for Employment and Productivity under the Industrial Training Act, 1964.
As I understand it, there will be cases where the position of some people might be uncertain; but, in so far as it is possible to be fair and just, the Corporation will do its duty properly. However, at the end of the day it will be possible for people to go to a form of arbitration to get their position clarified and, if they are entitled in the end to compensation, they will be granted it.