NATIONAL INSURANCE SCHEME (Hansard, 15 December 1970)

§ Mr. Joseph Hiley (Pudsey)

You will be relieved to hear, Mr. Deputy Speaker, that the case that I have to state relies entirely on facts, and will not require any embroidery from me.

Unfortunately, over the last few years, many wool textile mills have closed down because of shortage of demand or rationalisation and mergers. The story that I have to tell is sad and almost incredible. One of my constituents had been an executive director in a worsted spinning mill for about 17 years, and became redundant as a result of a merger in the group. He registered at the local office of the Department of Employment, but soon realised that that was unlikely to find him a suitable job, partly because he was unemployed.

Because of his graduated pension and his children, he was entitled to benefit of £17-plus a week, but, as an industrious Yorkshireman, he was not content to wait for something to turn up. Learning that there was on the market an old-established export business in Bradford engaged in the sale of woollen and worsted yarns, he considered acquiring it. It would have meant a job for him, and would have saved the taxpayer £17-plus every week. To complete his investigations, he thought it wise to go abroad to investigate the conditions in which the firm operated and what the prospects were for the export of yarns to the Continent.

He reported his intentions to the manager of the local office of the Department, who told him, promptly and correctly, that if he were absent from Great Britain he could not continue to receive the benefit which he had enjoyed for a few weeks after he became redundant in May. This regulation is one of the original ones concerning unemployment problems and was intended for a category of unskilled labour. It said that those who continued to enjoy the benefit must be capable of and available for work.

Conditions have changed, as it was made clear to me when I considered this 1308 case. Had this man gone to the North of Scotland or the West of England, where there are considerable wool textile interests, it would have taken him longer to return to Yorkshire than from Copenhagen or wherever he went on the Continent to investigate the possibility of making a go of this exporting business.

In the knowledge that he would be deprived of his £17 or more a week, my constituent decided to go to Scandinavia to look into this matter. He spent 14 days there, and I imagine that that cost him about £280, at £20 a day—plus, of course, the £34 or so he lost by leaving the country. He also decided to visit prospective customers in Germany, where he was involved in a similar expense.

Instead of being deprived of benefit, this man should have been encouraged to help himself, particularly at a time when he was suffering financial hardship. I doubt whether the countries he visited treat their nationals in the same way.

I sought an explanation of the attitude that was adopted towards my constituent, and I was told that the strict rules governing people being absent where necessary because of the number of people who were ready to abuse the system. But in this case one could not possibly imagine that my constituent wanted to go abroad to, say, enjoy the winter sports. In any event, if that had been his intention, there are ample ways of getting round the regulations.

In the old days a man, particularly if unskilled, was asked to explain what steps he had taken to secure employment, what firms he had visited and to whom he had applied for a job. A man in the position of my constituent could similarly be invited to explain where he had been, and in this case there would have been ample evidence from the names of the firms he visited and his passport. If necessary, the Department could always call on our resident consul in the country concerned.

I have thought a lot about this case and I am ashamed that a Tory Minister should have been prepared to stand by and see a man of this excellent type being discouraged from helping himself. He should not have needed to make additional sacrifices while many are prepared to wait for something to turn up. I submit that it is not in the national 1309 interest that a regulation such as the one I have described should be allowed to operate, taking account of the changed circumstances.

Apart from the national interest, there is clearly a human problem here. I urge my hon. Friend to assist in order to sustain ambitious and industrious individuals. I feel very deeply about this case because I fear that in the present state of the wool textile industry this problem may arise again and again. Our entry into the Common Market may or may not come about, but increasingly one can see opportunities for our own people in various parts of the Continent. For these reasons, I urge a more sympathetic consideration of the problem of my hon. Friend.

§ The Under-Secretary of State for the Department of Health and Social Security (Mr. Paul Dean)

I am grateful to my hon. Friend the Member for Pudsey (Mr. Hiley) for raising this important point in regard to the administration of our National Insurance Scheme. It enables me to say to him at once that this Government certainly do intend in every possible way to encourage initiative—to encourage people who wish to stand on their own feet—and that applies as much to social policy as to economic policy. But there are difficulties with regard to the case my hon. Friend has mentioned with which I shall briefly deal.

My hon Friend said that here was the case of an industrious Yorkshireman—and there are many such in that great county, as I know from personal experience—who, unfortunately, lost his job after a comparatively long period of activity and, therefore, looked round for possibilities of continuing in the type of work to which he was used—wool textiles. Finding no possibilities of similar employment here, he decided to look abroad. I fully understand my hon. Friend when he says that while at home his constituent was able to draw unemployment benefit at the rate of £17 plus, whereas when he went abroad seeking opportunities there he was not able to draw it. I fully understand how my hon. Friend feels about that, but I must remind him and the House of the way in which the regulations, which are all we can now discuss, operate, and the reasons for the control mechanism.

1310 My hon. Friend is concerned about the effects of Section 49(1) of the National Insurance Act, 1965, which lays down, among other things, that, except where regulations otherwise provide, a person shall be disqualified from receiving any benefit for any period during which that person is absent from Great Britain. No exceptions have been made for unemployment benefit, and disqualification is absolute for periods spent abroad. General exceptions have been made in regard to long-term benefits—as, for example, widows' benefit and retirement pension—and certain limited exemptions in the case of sickness benefit if the absence is for a specific period and for treatment of the incapacity.

Let me now tell my hon. Friend and the House how the system works in regard to unemployment benefit and why these restrictions exist at present. First, let me make it clear that all claims are decided by independent adjudicating authorities in strict accordance with the Act and the regulations. The first of these authorities is the insurance officer, and there is right of appeal to the local tribunal and, finally, to the National Insurance Commissioner. Neither the Secretary of State nor anyone else has power to vary their decisions in any way, and the benefit decisions are based on insurance principles and apply equally to all claimants within broad categories of contributors.

Unemployment benefit is payable only to people with a recent record of work for an employer. Self-employed people are not covered against the risk of unemployment, partly because of the difficulty of control of claims, as my hon. Friend mentioned, and they do not qualify for unemployment benefit.

A key condition for getting benefit is availability for suitable employment on each day for which benefit is claimed. Availability means more than just being without a job and hence available in the physical sense. The condition calls for a subjective assessment of the claimant's attitude of mind and is difficult to administer even when claimants are in this country and can be contacted quickly should a suitable vacancy occur. The disqualification in Section 49(1) is based on the fact that while abroad a claimant cannot in any real sense be available for employment in this country, because he is not on the spot to take advantage 1311 of jobs that may be notified to the employment exchange, attend interviews or otherwise further his employment prospects. The essence of the present system is being available for work and for interview in this country.

The system is administered through the local offices of the Department of Employment. My hon. Friend said that it is quicker nowadays to get to France than it is to the South-West of England or the North of England. I accept that. I also accept that conditions have changed. Equally, we have even in the remoter parts of these islands our local employment exchanges which are available to do the policing work and to ensure that benefit goes only to those who are entitled to it, whereas we do not have this type of machinery in other countries. This is one of the main reasons why the regulations are as they are.

My hon. Friend mentioned the question of abuse and made some suggestions which he thought would enable us to ensure that changed regulations would prevent abuse. I assure my hon. Friend that I will carefully consider his suggestions, but he will agree that we should be careful in these days when there is natural concern about the abuse and 1312 misuse of social security benefits that we do not introduce changes which, however right they may appear in individual cases, would be either very difficult to police or could be policed only at the price of substantial additional cost and substantial additional staff. We must be very careful that any changes have adequate checks against abuse and misuse.

I hope that my hon. Friend will think that those are very sound reasons why the receipt of unemployment benefit under present arrangements is restricted to those who are readily available for work and, therefore, are in this country.

However, I accept that conditions have changed since this provision was introduced. The Government are engaged in examining the whole of the National Insurance arrangements. Although I cannot hold out any firm commitment that it will be possible to make changes in this direction, I can certainly assure my hon. Friend that this will be one of the aspects of the arrangements which we shall be examining. I am grateful to my hon. Friend for raising this question and for the suggestions that he has made.