Truck Acts (Abolition) (Hansard, 16 February 1983)

§ Mr. Peter Viggers (Gosport)

I beg to move, That leave be given to bring in a Bill to facilitate the payment of wages other than in cash by repealing the Truck Acts. The purpose of my Bill is to remove one obstacle which currently prevents a move to cashless pay—the payment of wages other than in cash by way of cheque or monthly credit transfer through a bank. This is an area in which we lag behind our western competitors. The costs of payment in cash are great and our competitive position is weakened because such costs are unproductive.

The size of the problem is illustrated by the fact that in 1979, 13.5 million workers were paid in cash—55 per cent. of all workers, 78 per cent. of manual workers and 35 per cent. of non-manual workers. The number of workers paid in cash has been falling and it is estimated that during 1981 some 44 per cent. were paid in cash. That contrasts with our competitors—in the United States 1 per cent. only of workers are paid in cash; in Canada and Germany some 5 per cent.; in France the number is under 25 per cent. and in Holland, after a determined campaign by the Government, some 15 per cent. are paid in cash.

There are various advantages in cashless pay. The employer gains in various ways. First, he gains in efficiency and reduced costs. He does not have to make up pay packets. There is no queueing for pay and no leaving work to queue for pay. It has been estimated that about £30 a year per worker would be saved by a move from cash pay to monthly credit transfer, and good employers share that benefit with their employees. Employees gain from cashless pay. The employer becomes more competitive. One company has been able to give a special incentive of £50 per worker switching to cashless pay, and arrangements have been made through banks for employees to be given special banking facilities.

There are clear advantages for employees. They have access to banking facilities; and bills, which are increasingly paid monthly, can be paid through banks. There is no need to make special arrangements with colleagues to collect wages during holidays or illness. There is less risk of mistake. Security is helped. In 1979, there were 187 robberies or attempted robberies from security vans which involved some 33 injuries.

There are advantages for banks. They obtain new customers. There are advantages particularly for the national giro and more business will be available for sub-post offices.

What are the obstacles to cashless pay? First, there is the innate conservatism of the British worker. He is unwilling to trust banks. He does not know a bank and has no reason to move to one, having been quite happy with cash in the past. An example of regional differences in the payment of wages was put before me recently. One is of 298 a miner going home and throwing his pay packet in his wife's apron. That still exists in certain parts of the country. The wife takes the pay packet and returns some to the husband. There are other practices. Part of the wage packet belongs to the wife, but overtime and bonus payments are the husband's. He is not keen that she should know what he has for his drinks in the club. That is not my example. It was given by Mr. David Basnett at a colloquium on cashless pay in June 1981. I do not underestimate the British worker's innate conservatism and distrust of institutions.

A major job must be done to improve communications and information on this subject. Employers and banks realise that any move to cashless pay needs careful planning and sympathetic understanding of problems that inevitably arise. They are doing their bit with some success and so are union leaders, who are also generally behind this campaign.

However, obstacles to cashless pay exist, and one that is within Parliament's control is the legislation known as the Truck Acts. That legislation, which dates from 1464, has protected workers against exploitation, was codified during the 19th century and is now codified by the Payment of Wages Act 1960. Manual workers other than domestic workers must receive their pay in cash. All wages must be paid in cash unless otherwise requested, and a cheque does not count as cash. The agreement to receive wages other than in cash can be withdrawn at any time, and that is a major disincentive to switching to cashless pay.

Clearly, the protection given by the Truck Acts is anachronistic. I hasten to add that I wish workers to be properly protected against exploitation, and nothing that I intend would prevent that. Therefore, I urge the repeal of the Truck Acts. They are divisive and outdated. Their removal will help to encourage the move to a standard means of payment for all employees. Nothing in my Bill will force change. I intend to remove one obstacle to single staff status for all workers and I hope that it will be supported as such.