UNEMPLOYMENT BENEFIT (Hansard, 29 October 1975)

§ Mr. John Fraser
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
With this we may take Lords Amendments No. 78, No. 118—after Clause 101, in page 86, line 44, 1655 insert the following new Clause "L" (Entitlement to unemployment benefit and recoupment of that benefit and supplementary benefit): .—(1) Section 139(1) of the Social Security Act 1975 (submission of regulations in draft to the National Insurance Advisory Committee) shall not apply to regulations made under that Act and contained in a statutory instrument which states that the regulations provide only that a day in respect of which there is payable a particular description of any payment to which this section applies shall not be treated as a day of unemployment for the purposes of entitlement to unemployment benefit. (2) The Secretary of State may by regulations make provision for all or any of the purposes mentioned in this subsection with respect to payments to which this section applies and which are subject of proceedings before, an industrial tribunal, that is to say—

(a) enabling the Secretary of State to recover from an employer, by way of total or partial recoupment of unemployment benefit or supplementary benefit, a sum not exceeding the amount of the prescribed element of the monetary award;

(b) requiring or authorising the tribunal to order the payment of such a sum, by way of total or partial recoupment of either benefit, to the Secretary of State instead of to the employee;

(c) requiring the tribunal to order the payment to the employee of only the excess of the prescribed element of the monetary award over the amount of any unemployment benefit or supplementary benefit shown to the tribunal to have been paid to the employee, and enabling the Secretary of State to recover from the employer, by way of total or partial recoupment of the benefit, a sum not exceeding that amount.

(3) Without prjudice to subsection (2) above, regulations under that subsection may—

(a) be so framed as to apply to all payments to which this section applies or one or more classes of those payments and so as to apply both to unemployment benefit and supplementary benefit or only to one of those benefits;

(b) confer powers and impose duties on industrial tribunals, on the Supplementary Benefits Commission and on insurance officers and other persons;

(c) confer on an employee who is aggrieved by any decision of the Commission as to the total or partial recoupment of supplementary benefit in pursuance of the regulations (including any decision as to the amount of benefit) a right to appeal against the decision to an Appeal Tribunal constituted under the Supplementary Benefit Act 1966 and for that purpose apply section 18(2) and (3) of that Act (appeals) with or without modifications;

(d) provide for the proof in proceedings before industrial tribunals (whether by certificate or in any other manner) of any 1656 amount of unemployment benefit or supplementary benefit paid to an employee; and

(e) make different provision for different cases.

(4) It is hereby declared for the avoidance of doubt that the power to make regulations under section 114 of the Social Security Act 1975 for the determination of questions arising in connection with that Act includes power to make regulations for the determination of any question arising as to the total or partial recoupment of unemployment benefit in pursuance of regulations under subsection (2) above (including any decision as to the amount of benefit). (5) Where in pursuance of any regulations under that subsection a sum has been recovered by or paid to the Secretary of State by way of total or partial recoupment of unemployment benefit or supplementary benefit—

(a) section 119(1) and (2) of the Social Security Act 1975 (repayment of benefit revised on review) shall not apply to the unemployment benefit recouped; and

(b) the following provisions of the Supplementary Benefit Act 1966, that is to say, section 23 (recovery of cost of supplementary benefit from persons liable for maintenance) and section 26 (recovery of benefit and other sums in cases of misrepresentation and non-disclosure), shall not apply to the supplementary benefit recouped.

(6) Any amount found to have been duly recovered by or paid to the Secretary of State in pursuance of regulations under subsection (2) above by way of total or partial recoupment of unemployment benefit shall be paid into the National Insurance Fund. (7) This section applies—

(a) to a payment of wages or compensation for loss of wages;

(b) to any payment under this Act by an employer to an employee or a payment by an employer to an employee of a nature similar to, or for a purpose corresponding to the purpose of, any payment under this Act.

(8) In this section— monetary award", in relation to an industrial tribunal, means the amount which is awarded, or ordered to be paid, to the employee by the tribunal or would be so awarded or ordered apart from any provision of regulations under this section; the prescribed element", in relation to any monetary award, means so much of that award as is attributable to such matters as may be prescribed by regulations under subsection (2) above; supplementary benefit" means benefit under the Supplementary Benefit Act 1966; and unemployment benefit" means unemployment benefit under the Social Security Act 1975. —No. 233 and No. 234

§ Mr. Fraser
The first two amendments are paving amendments for the substantial one in this group, namely No. 118. The need for the new clause and the consequential amendments arises because the Bill establishes entitlement to a number of payments equivalent to wages which can be awarded by a tribunal in respect of a past period for which unemployment or supplementary benefit may have been paid. In such cases the tribunal award would have the effect retroactively to disqualify the employee for receipt of benefit. It would obviously be against public policy to allow the employee to retain the money paid in benefit on top of the other payment, for example, guarantee pay, arrears of wages and so on.
The new clause gives the Secretary of State power to make regulations which will enable the benefit in these cases to be recovered from the employer, so that the employee will receive from the employer the amount awarded by the tribunal less the benefit he has received. The details of the procedure for recovery will be laid down in the regulations.

§ Mr. Brittan
We do not have any objection in principle to what these amendments seek to do. We strongly support that principle.
I want to raise one or two queries about the machinery set out in Lords Amendment No. 118. As the Minister will recall, this matter was put for the first time in another place and was not in any sense debated there. The noble Lord who dealt with the matter said that it would be reconsidered, but I do not believe that it was. Why is it that the regulations that will have to be laid to give effect to this amendment will not be put before the National Insurance Advisory Committee? I do not understand why this exemption is called for. There may be some reason, but it is not clear and it has not been explained.
The more important point is that the machinery that is envisaged is one whereby the payments that have been made are collected back from the employer. That is all very well as long as there is an appropriate limitation on the amount that can be obtained at an industrial tribunal. It is laid down in subsection (2)(c) that the regulations may require: the tribunal to order the payment to the employee of only the excess of the prescribed 1658 element of the monetary award over the amount of any unemployment benefit or supplementary benefit shown to the tribunal to have been paid to the employee". Why is it necessary to have (a) and (b)? Is not (c) what is really required? If (a) and (b) are included, there is a risk that the employer will be required to pay back the benefit that has been paid to the employee and that none the less the award which has been made by the tribunal will not have the corresponding diminution. Perhaps the Minister will say that the point will be taken care of by the regulations.
It is fundamental to the whole scheme that an employee should not be able to claim twice over. Similarly, to the extent that the employer has to account to the Secretary of State for any payments that have been made or has to pay back any payments that have been made, it should be made clear that the employer should not be made to pay back the social security benefits and that there should not be a corresponding offset in the award that is subsequently made by a tribunal. It may be that that is made clear somewhere in this rather complicated proviso. I should appreciate guidance on this.
Alternatively, would it not be preferable for the phrase "prescribed element", which is not defined, to be defined in a way that would make it clear that the effect is intended to be as the Minister has stated and that there would be no risk of the hazard to which I have alluded occurring.
I shall be grateful if the Minister can answer those points. Subject to that, we have no objection to the principle of the amendment.

§ Mr. John Fraser
The hon. Member for Cleveland and Whitby (Mr. Brittan) referred to the exclusion of submissions to the NIAC. That Committee's considerations can take a long time, perhaps several months, and this would present practical difficulties when new regulations were urgently needed. I understand that it is not by any means unprecedented when one has this situation to exclude the otherwise mandatory consultation with the NIAC.
6.30 p.m.
The answer to the hon. Gentleman's question about the amount that can be 1659 recovered is that that is something that will have to be dealt with by regulations. We certainly take note of the point that the hon. Gentleman had raised.
The clause gives enabling powers for various methods of recovery, if possible, and it is advisable to keep all the alternatives open. That is why there is this number of choices, (a), (b), and (c), in that part of the clause to which the hon. Gentleman has referred.
I do not pretend that drawing up the regulations will not be without some difficulty. It was felt best to have wide enabling powers in regulations rather than to have them restrictive.

§ Mr. Brittan
Will the Minister undertake to ensure that the regulations incorporate the principle that if an employer is required to pay back benefits that have been paid to the employee, there should be a corresponding offset to any entitlement that the employee may have in industrial tribunal proceedings?

§ Mr. Fraser
I do not think that I could given an undertaking in the terms for which the hon. Gentleman asks, because it may well be that the recoupment will take place after the tribunal has sat and made its award. There would be considerable difficulties if there were to be a further recoupment after the award by the tribunal. I appreciate the point that the hon. Gentleman has in mind, but I certainly could not give such an undertaking.

§ Mr. Brittan
I appreciate the point that the Minister has made about subsesequent events occurring. However, will he undertake to deal with the point in some alternative way if it cannot be dealt with in that way?
In other words, will he undertake to ensure that the employer is not out of pocket more than he ought to be and does not have to pay more than the entitlement because of some obligation to pay social security benefits?

§ Mr. Fraser
I can give the assurance that the award would normally be made on that basis.