HC Deb 11 June 1974 vol 874 cc1409-16
The Secretary of State for Social Services (Mrs. Barbara Castle)

With permission, Mr. Speaker, I should like to make a statement about the settlement of the staff dispute in my Department.

The House knows that the preparatory work required to be done in local and central offices of my Department to ensure the payment of increases in retirement pensions and other social security benefits by 22nd July, as announced in the Budget, has been delayed by a dispute involving staff associations repre- senting the staff of those offices. This matter has now, happily, been settled. The CPSA, representing the clerical grades, reached agreement with my Department yesterday; the Society of Civil Servants, representing the executive grades, had done so, and had removed its ban on overtime, on 28th May. I have myself met representatives of both associations on a number of occasions during the negotiations. The dispute derived from the Government's anxiety to carry out their election pledge to increase benefits at the earliest possible date and the conviction of the DHSS staff associations that the shortened programme proposed for doing so would require a considerable extra effort of their members in local offices, which effort, they claimed, should be recognised by the offer of some form of incentive.

The staff associations have contended throughout the dispute that successive Governments have tended to place increasing burdens on their members as a result of changes in social policy without making sufficient provision to enable them to discharge those tasks without excessive overtime or strain. In particular, relationships with staff in my Department have worsened in the past three years, partly because of attempts by the previous Government, later abandoned, to hold down necessary increases in staff numbers, and partly because of strong feeling about the rigidity of phases 1 and 2 of the Pay Code—though this of course affected the whole Civil Service. Although these anomalies have since been corrected, they have left a legacy of bitterness which has led to this dispute.

I fully accept that the staff have always been in favour of pensioners, widows and others receiving their increases as quickly as possible. I also accept that the programme I have proposed for the uprating, as I explained to the House at the time, will call for greater effort by the staff than we should normally demand.

Recognising the real problems involved, I have undertaken that everyone in the Department—Ministers and officials alike —will do their utmost so to plan future programmes of major social security operations that peaks and troughs of activity are, as far as is possible, avoided and that any necessary additional staff are recruited and trained in time to take a share of the additional load. I have also agreed to have an immediate joint examination to see how far the pay, grading and structure within the Department matches the needs of the work. A report will be prepared by the end of the year. To the extent that this examination shows an agreed requirement for the pay of any group to be redetermined, this would be done within the framework of the national pay agreement current at the time. As an earnest of my intention to see that progress is made in both these directions I shall be meeting representatives of the staff side from time to time to review progress, and this will include a whole-day conference in the autumn.

These measures are designed to bring about fundamental, longer-term improvements. In relation to the current exercise, as the incentive which the staff associations have been seeking, and in recognition of the pressure imposed by the up-rating, the Government have agreed to a bonus in the form of additional leave to be earned in relation to overtime worked on the uprating. This bonus for this particular operation, though not in the form of cash as the staff side would have liked, will be additional to payment at normal overtime rates in respect of the same hours worked, which rates have themselves been substantially increased for the Civil Service as a whole with retrospective effect to the beginning of the year. Coupled with this are immediate improvements to local office complements and complementing procedures, and an undertaking of ministerial involvement in discussions on accommodation problems. The career structure of the Department will also be improved by the provision of more senior management posts and the consideration for promotion, at an earlier stage in their careers than happens at present, of clerical officers with promotion potential.

I have accepted from the outset the expressions of willingness by the staff associations, given proper recognition of what was being required of those employed in local offices, to encourage their members to do their utmost to put through the benefit increases by 22nd July. I know that the House will have been pleased to read in this morning's papers that such encouragement has been forthcoming.

The House will want to know what might now be expected with regard to the uprating programme. Given the determination of all concerned to make up as much lost time as possible, I hope that the great majority of retirement and widow pensioners, whose order books are prepared in Newcastle, will receive their higher rate of pension as from 22nd July, although a comparatively small minority may suffer delays of a week or two. With the best will in the world, the uprating for supplementary beneficiaries, which has to be done individually in local offices, will in some cases be delayed. My Department will, however, issue guidance on this before 22nd July, when we see how this programme is going. I hope, however, that national insurance beneficiaries, such as those on sickness benefit paid from local offices, will in the main get their higher payments on time.

Sir Geoffrey Howe

Will the Secretary of State accept that we welcome the settlement of this protracted dispute, though we cannot accept that she is right in laying the blame for the underlying grievances on circumstances arising under the previous Government when she acknowledges that the anomalies to which she referred have been corrected, and when she told the House on 28th March, when she was deciding on an early uprating, that she was taking a calculated risk and that the responsibility would be not that of the DHSS staff but her own? Will she also accept that the House appreciates the substantial burden of work and responsibility that lies upon the staff of her Department?

Can the right hon. Lady give any indication of the additional costs in public expenditure or staff equivalents of the settlement she has arrived at, if it can be put in those terms? Can she also say for how long the payment of supplementary benefit to beneficiaries is to be delayed so far as she can estimate that? Is family income supplement likely to be paid at the increased rate on time? What proportion of sickness and National Insurance beneficiaries are likely to have their payments deferred?

Mrs. Castle

I would not expect the right hon. and learned Member for Surrey, East (Sir G. Howe) to accept any share of the responsibility for the low state of morale in my Department among the staff which I inherited. None the less, history is history and facts are facts.

I welcome that the right hon. and learned Gentleman recognises, unlike The Times in a disgraceful leader last weekend, that the staff in my Department discharge a hard, onerous and responsible task. I said when I announced the uprating that I was deeply conscious of the extra burdens I was putting upon them. I ask the House to unite in paying a tribute to the work they do so that we may all express the hope that we can now proceed with the uprating with all possible speed.

I cannot give the right hon. and learned Gentleman any estimate at this stage of the cost of the arrangements we have agreed upon. Improvements in accommodation, for instance, might be hard to quantify. We have agreed to 500 additional staff to improve the complement in local offices, and we are working on improvements in the career structure, the cost of which is difficult to quantify. However, if the right hon. and learned Gentleman would like me to pursue the matter and get him some figures, I would be glad to write to him, or he may care to put down a Question.

I am afraid that I cannot give the House any estimate at this stage of the extent of the delay likely to be experienced in the payment of supplementary benefits. It is absolutely too early to say; it depends on the response that the staff now give and on how much overtime they find it physically possible to work. I have said that I will be making another statement about this before 22nd July, and if I have any information in the future I shall certainly make it available to the House.

Mr. loan Evans

Is my right hon. Friend aware that there will be general satisfaction in the country that she has succeeded in settling this dispute and that she is now to meet the target date for giving increases—the highest increases that there have ever been in the minimum of time? However, there is anxiety among pensioners and other beneficiaries. Does she agree that she should provide the maximum publicity to assure them that at the earliest possible moment they will receive benefit?

Mrs. Castle

I am grateful to my hon. Friend. I will certainly do all I can to reassure pensioners of three things. The first is that the vast majority, the retirement and widow pensioners whose order books come from Newcastle, will get their increases on time. I also hope that National Insurance beneficiaries paid from local offices, such as those on sickness benefit, will also get paid on time.

The second assurance I give is that, of course, we shall do everything in our power to speed up payment of supplementary benefit. My third assurance is that in all cases entitlement to the increases in payments starts on 22nd July and, therefore, all arrears will be paid in full.

Sir Brandon Rhys Williams

Does the right hon. Lady agree that all this turmoil and uncertainty could have been avoided if the National Insurance system employed a modern data-processing system of the kind which has been in use in other countries for a number of years, and that, instead of coming to a complex arrangement to perpetuate the National Insurance Scheme under the present system of administration, it would have been better to try to modernise the whole apparatus— [HON. MEMBERS: "After three months?"] —to start the job of modernising the whole apparatus so that we can get rid of the administrative difficulties as well as the many deep unfairnesses and anomalies in the National Insurance system?

Mrs. Castle

I cannot accept what the hon. Gentleman said. I had one simple priority—to deal as quickly as I could with the legitimate grievances of the staff so as to ensure that we got this uprating in payment by 22nd July, or as near to that date as possible.

Mr. Bidwell

Is my right hon. Friend aware that the whole of the Labour movement will be delighted to know that she and the Civil Service unions concerned have come to an arrangement whereby it looks as if all pensioners will be paid on time by 22nd July? May I remind her, however, that already the £10 for a single person and the £16 for a married couple have been eroded a little by events of the past few months— inflation and so on? This seems to be a world problem. I hope that she will stick firmly to the task of relating pensions in future to national average earnings and will not be thwarted or side-tracked from that purpose.

Mrs. Castle

Yes, I can certainly give that assurance. As my hon. Friend knows, it is an integral part of the legislation on the uprating that the pensions review shall in future be linked to average national earnings, and we shall stick by that.

Dr. Winstanley

I welcome the news that the dispute has been settled, but I ask the right hon. Lady to do everything she can to make absolutely certain that pensioners, particularly supplementary pensioners, understand what is happening and that they especially understand that late payments will be backdated. Many elderly people are still not clear on that point. Can she comment on the possible effect of the date of payment on rent and rate rebate applications? I understand from Age Concern that there is a great deal of confusion over whether the date of payment of new benefits will affect entitlement to rebates for certain people?

Mrs. Castle

With regard to publicity, I will so far as it lies within my power get the message across through the media, through the local offices of my Department and by means of the usual publicity. I appreciate that there has been concern and anxiety but I hope that such bodies as the National Federation of Old-age Pensions Associations will help us get the news across.

Yes, I confirm that everyone who would have got an increase on 22nd July will be entitled to the full arrears on any increase that may not have been put into payment by that date, and the effect of the delay will not disadvantage anyone in any way, for instance in relation to rent or rate rebates.

Mr. Ian Lloyd

The right hon. Lady will doubtless have seen the grave warning by the Bank of International Settlements on inflation either yesterday afternoon or this morning. Can she suggest to the House that there has been in any way in the United Kingdom an increase in real resources to meet this relatively modest and deserving claim? It seems to many of us that every time a settlement is announced in financial terms the person responsible for it should indicate in some way that there is an increase in real resources to meet it, oherwise the effect will be purely redistributive.

Mrs. Castle

I would have thought that the settlement we have reached was a settlement of sheer common sense. If the House of Commons is to pass complicated social legislation to uprate and change benefits from time to time, it is not enough for us just to make policy statements and then leave the overburdened staff, who are badly accommodated, to deal with the public as best they can. Therefore, we have reached an agreement that we will by increasing the staff, by looking at the grading structure and by improving accommodation enable our staff to work more efficiently.

Several Hon. Members rose—

Mr. Speaker

We must now move on. I have a list of about 40 hon. Members who wish to speak in the debate on Europe.