§ The Under-Secretary of State for Employment (Mr. David Waddington)
I beg to move,That the draft National Dock Labour Board (Increase of Loans Limit) Order 1981, which was laid before this House on 19th October, be approved.
As hon. Members will be aware, severance of registered dock workers takes place normally under the industry's national voluntary severance scheme, which is financed by a payroll levy on employers. Like their predecessors, however, the Government have made loans to the National Dock Labour Board, which administers the industry's severance arrangements, to enable the cost to be spread over a reasonable period.
Changes in cargo handling methods and in the pattern of port traffic in the last decade have contributed to a massive adjustment in the operations of our major ports and their manpower needs. The number of registered dock workers has fallen from 54,000 in 1965 to below 20,000 today, and this reduction has taken place without serious industrial trouble. I doubt whether this could have happened without the national voluntary severance scheme.
In spite of the scheme, however, surplus manpower, both registered and non-registered, has remained a recurrent problem. Changes in methods of cargo handling—in particular, containerisation—have reduced drastically manpower requirements. The year 1981 has proved to be particularly difficult for most United Kingdom ports and the NDLB has therefore had to revise its earlier estimates of the number of severances likely to be needed in the current financial year to some 4,750—an increase of 1,500 on the central estimate that it made in January. The outlook for next year and beyond remains uncertain, but it is reasonable to expect that there will be a need to make further reductions in the labour force.
The Ports (Financial Assistance) Act 1981 fixed the amount which the NDLB is permitted to borrow at £50 million, but provided for that amount to be increased by order to —90 million. An increase to £90 million is what is sought in the draft order now before the House. Its sole purpose is to enable the Government to help the industry, through the NDLB, to continue to finance the severances needed to bring its labour force more closely into line with its needs.
Hon. Members will want to know why it has proved necessary to come to the House and ask for an increase in the ceiling on borrowing so soon, and perhaps why the 1981 Act did not provide for a larger sum to be borrowed without the need for an order.
Part of the answer lies in the very success of the special scheme to help the ports of London and Liverpool. Government moneys were made available to allow larger severance payments to be made to dockers in London and Liverpool who accepted severance between 1 March and 30 April 1981. Although extra payments of up to £5,500 were funded by grant, however, the basic severance scales of up to ?10,500 were funded through the national voluntary severance scheme in the normal way. The special scheme for London and Liverpool achieved its targets and some 1,900 registered dock workers left the two ports under its terms. Obviously, however, this also meant a very large increase in the number of basic 838 severance payments under the voluntary scheme, increasing the deficit on the scheme by some £18 million to £30 million.
In addition, at the time of the passage of the Act it was not clear that an increase in the scales throughout the country would soon be thought necessary, but hon. Members will know that the National Association of Port Employers has now introduced a special scheme which offers on a national basis payments up to maximum of £16,000 under the NVSS to dock workers applying for severance between 1 September and 31 October.
The employers have estimated that they need if possible to achieve 2,750 severances under the special scheme, mainly in ports other than London and Liverpool. Meeting the cost of severances of this order is likely to push up the NVSS deficit by a further £35 million to £65 million. A third of this extra £35 million will be the result of the increase in the scales. The other two-thirds would have occurred if there had been an increase in the number of severances to the figures thought desirable under the old scales.
Clearly, loans of this size cannot be made without a substantial burden being placed on the industry. Interest has to be paid and arrangements have to be made for repayment. This inevitably means an increase in levies, and the employers have agreed to increase the national levy on 1 January next year by 2 per cent. , bringing it to 7½ per cent. of payroll. This is in addition to local severance levies which currently range from 0.5 per cent. to 4 per cent. Unwelcome as this must be to port employers, one must remember that in 1965 they made the decision to stay out of the statutory redundancy payments scheme and make their own arrangements, and this is a consequence of those arrangements. But the Government will continue to do what they can to help and to this end have agreed to extend the repayment period for current loans from five to 10 years.
The whole purpose of the current severance programme in the industry is to achieve a more efficient ports industry. There is no doubt that to achieve that greater efficiency changes in working practices are needed. Indeed, if the Government are expected to provide financial help, they are entitled to expect such changes in return. I was therefore pleased to learn some weeks ago that substantial changes in manning and other practices had been agreed between the management of the Mersey Docks and Harbour Company and the trade unions. Only through agreements of this kind can we hope to maintain a viable ports industry.
I ask the House to approve the draft order.
§ Mr. Harold Walker (Doncaster)
I shall try to earn the gratitude and appreciation of the House by not detaining hon. Members for too long. However, it is less than a year ago—3 November 1980—that we discussed a similar order to raise the borrowing powers of the National Dock Labour Board from £10 million to the then maximum permitted figure under the 1976 Act of £30 million. Within months, that £30 million which the then Minister described as a "prudent figure", was raised on a side-wind through the provisions of the Ports (Financial Assistance) Act to £50 million.
Tonight, just a few months on, we are asked to approve the rather impressive sum of £90 million. We have no intention of challenging the order. We entirely understand 839 and accept the reasons that make it necessary. However, the order illustrates the Government's lack of judgment and foresight. It shows their sheer inability to get even the shortest of short-term forecasts anywhere near a target, even for situations as predictable as this.
As recently as March£my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) will remember it well, as he was very much involved£in introducing the enabling legislation the Secretary of State for Transport said that the Secretary of State for Employmentdoes not envisage that the higher figure will be needed in the foreseeable future,"—?[Official Report, 25 March 1981; Vol. 1, c. 994.]However, today, only a few months later, the threefold increase in the sum described as "prudent" only a year ago is upon us. It has risen from ?10 million to £90 million in less than 12 months. Apparently, the foreseeable future for the Government does not go much beyond six months.
I cannot help recalling that even the modest sum—as it seems now—of £10 million provided in the 1976 Act was furiously attacked and denounced by Conservative Members. What they said then is well illustrated by quoting the hon. Member for Cirencester and Tewkesbury, (Mr. Ridley), who is now a Minister. I was a Minister at the time and was present when he stated:I ask the Government to justify the £10 million, let alone the £30 million … I propose that the power to go to £30 million be deleted from the Bill, because I cannot conceive of circumstances in which £30 million would be needed, or would be right or proper.—[Official Report, Standing Committee G,9 March 1976; c. 307.]He went on to propose that the sum be reduced to ?2 million.
§ Mr. Walker
I hear hon. Members on the Tory Benches below the Gangway saying "Hear, hear". It appears that they share that outdated view, so they still misunderstand the situation facing dock workers.
The hon. Friends of the hon. Member for Cirencester and Tewkesbury went into the Lobby in support of his proposition. The Tory Party, whether in office or opposition, gets its sums wrong again and again. Can the Minister assure us that the Government have it right this time?
As I said, I do not wish to detain the House and nor do I wish to incite opposition to the order. However, can the Minister say a little more about present manpower levels compared with recent levels? Can he give a forecast of future employment in the ports industry? I understand that the present register for scheme ports stands at about 20,000, which appears to be about 3,500 or 4,000 down on about a year ago. At what number does the Minister expect the level to bottom out? 840 I do not ask for precise figures, as they may not be obtainable, but to what extent is the decline in the labour force in scheme ports due to a fall off in dock work generally and to what extent to work going from scheme ports to non-scheme ports or inland groupage depots and so on? Considering our experience since 1976—indeed, since 1969—it is important to assess the problems that the Government will face in demands for financial support, particularly for the unfortunate men who are to lose their employment.
I assume that the financial requirement is based on an arithmetical assessment. We hope that the decline in manpower will reach a plateau. How long will it be before the plateau is reached? What rate of take-up of severance is expected? Does the Minister expect the entire borrowing ceiling proposed in the order to be taken up?
Will the Minister also say something about the long- overdue implementation of the Dock Work Regulation Act 1976, which requires the Secretary of State to introduce a new dock work scheme? A mandatory obligation is placed on the Secretary of State, though it is qualified by words such as "as soon as may be". However, from 1976 to 1981 is stretching what was meant by those words more than a little.
May I finally echo some remarks that I made on a similar order last year? The House and people outside should be aware of some facts when Parliament is asked to vote large sums to the ports industry. I was glad that the Minister reminded us that dock workers are excluded from the statutory redundancy payments scheme. They will not get the amounts provided by the voluntary severance scheme in addition, or as an alternative, to the sums that might have been provided by the statutory scheme. They are not entitled to those sums. It would be inappropriate for me to go into the reasons for that, but it is a factor that we need to bear in mind.
For most, not all, dock workers, severance from dock work means severance from employment permanently. It is inevitable that men who are contemplating the prospect of joining the 3 million on the dole queue should put a high price on their jobs.
It would be helpful if the Minister had said something about the employment prospects of redundant dock workers and what steps the Government are taking to help them with retraining for other employment. But perhaps the Secretary of State wants them to join his cycling club.
I hope that the Minister will consider the questions that I have put and will respond positively. We support the order and we will not divide the House against it.
Question put and agreed to.
Resolved,That the draft National Dock Labour Board (Increase of Loans Limit) Order 1981, which was laid before this House on 19 October, be approved.