§ 10.8 pm
§ Mr. Jack Straw (Blackburn)I beg to move,
That an humble Address be presented to Her Majesty, praying that the Local Government Superannuation (Amendment) Regulations 1984 (S.I., 1984, No. 201), dated 23rd February 1984, a copy of which was laid before this House on 7th March, be annulled.I understand that it will be for the convenience of the House also to take the second motion:That an humble Address be presented to Her Majesty, praying that the Local Government Superannuation (Scotland) Amendment Regulations 1984 (S I., 1984, No. 254), dated 29th February 1984, a copy of which was laid before this House on 9th March, be annulled.I wish to raise two points—first, what is contained in the regulations and, secondly, what is not. The Government have put forward the regulations which make the sickness benefit that a potential beneficiary may receive under the Local Government Superannuation Regulations subject to superannuation contributions. Since the advent of statutory sick pay, this arises only in respect of somebody who has been off sick for more than eight weeks. I am sure that the Government will argue that this is simply to correct an anomaly and to bring the schemes into line with the other public service schemes.The change adversely affects existing local government employees. For a married employee in receipt of sickness benefit at the rate of £41.95, it will lead to a loss of up to £2.52 a week, this at a time when such a person will be incurring additional expenses in what, by definition, at that stage will be long-term sickness because, as I say, this arises only when a person has been off sick for eight weeks; before that time that person would not have been able to claim sick pay.
This was to have been justified on the grounds that it cured an anomaly. If there is to be parity or consistency with other public service schemes, it must cut both ways. While it is true that other public service schemes already take into account sickness benefit received under the regulations proposed for local government schemes, other public service schemes are better than the local government ones in many respects.
That raises the question of the regulations for part-timers. Local authority trade unions with, I understand, the assent of most local authority employers, proposed as long ago as 1980 that certain part-time employees should be brought within the ambit of the local government superannuation schemes. I understand that that has been the subject of much discussion at ministerial level but, for reasons which are becoming less and less explicable, Ministers have not so far seen fit to bring forward regulations to the House.
This would have been an ideal opportunity to have brought forward those regulations, and if that had happened I would be making an even briefer speech. I hope that when he replies to the debate the Minister will deal in some detail with why the part-time regulations have not been brought forward at the same time as this change is being made.
§ The Under-Secretary of State for the Environment (Sir George Young)Like the hon. Member for 630 Blackburn (Mr. Straw), I have performed some swift surgery to the remarks which I had prepared for this debate.
In a nutshell, the issue is that a large number of local government employees are better off when they are sick than when they are at work. Their total income, in terms of remuneration paid by their employer and sickness benefits paid by the DHSS, remains unchanged, and the level of superannuation benefit to which they are entitled is not affected by their absence from duty.
Because of a technicality in the regulations, which comprise the local government pension scheme, they have been required to pay contributions only on that part of their income which is paid by their employer, and the benefit paid by the DHSS has not been similarly liable.
§ Mr. Norman Hogg (Cumbernauld and Kilsyth)For how long has this anomaly existed? Is it new, or has it been in existence for a long time?
§ Sir George YoungThe situation was exacerbated by the introduction of SSP on 6 April 1983. Our original intention was to put the anomaly right at that date, but because of consultations that were necessary with the people involved, we were not able to do so at that time.
§ Sir George YoungIt reflects badly on the hon. Gentleman that he does not know what statutory sick pay is. It was an important social security measure introduced last year, on which there was a substantial debate in the House. The hon. Gentleman voted several times on the issue. I regret that he did not inform himself on the matters on which he was dividing.
The superannuation contributions in the circumstances I have outlined fall by between £1.50 and £2.50 per week according to the domestic circumstances of the persons concerned. Sooner or later, their employers would be required to compensate for this shortfall; so there have also been public expenditure implications.
As the hon. Member for Blackburn conceded, this is not the case with teachers, firemen or police officers. They are employed by local authorities in one guise or another, but they contribute to different pension schemes. If a teacher is sick, his superannuation contributions are based on his full salary, and the same should be true of local government employees as a whole. We are seeking to rectify an anomaly and to bring one group of local government employees into line with other groups.
The hon. Member for Blackburn raised another issue, which he conceded was not actually before the House. He asked what my right hon. Friend intended to do about part-timers. It is taking a long time to reach a decision on that—the public expenditure implications are notoriously difficult to unravel. I cannot accept the proposition that the proposals for part-timers are relevant to the regulations that we are now debating, or that the case for one depends on making a case for the other. I commend the orders to the House.
§ Mr. Norman Hogg (Cumbernauld and Kilsyth)I am rather sorry that this is a short debate. It deals with a matter that is important to local government officers. I wish to place on record some of the points that the National Local and Government Officers Association—with which I have some connection—wants to make known.
631 The primary legislation under which the regulations are made is section 7 of the Superannuation Act 1972 which enables the Secretary of State to make regulations after consulting the parties concerned—the employers and the employees in local government.
The history of local government superannuation arrangements is that until 1953 direct and comprehensive provision was made by public general Acts. The first enabling act was the Local Government Superannuation Act 1953, with Parliament delegating the making of non-contentious legislation to Ministers. From that time until August 1980, the practice of legislating by regulation was satisfactory and acceptable to both parties. Reasonable requests from both parties for legislation were responded to and no attempt was made to impose provisions not acceptable to both parties.
In August 1980, for the first time since the regulatory process was introduced, the then Secretary of State refused to sign regulations intended to admit part-time staff to the scheme, despite agreement by both parties and regardless of the fact that his Department, by drafting the regulations, had approved the provision in principle many years before.
The Secretary of State has also refused to comply with requests from both sides of local government to introduce regulations for low-cost short-term pensions for the widows of employees who retired before 1 April 1972. Despite protests by the unions representing the interests of staff, he made a statutory instrument in 1983, No. 1270, widening the investment powers of local authority. Similarly, in 1984 he made statutory instruments Nos. 201 and 254, although fully aware of opposition to them.
Although Parliament has delegated powers to the Secretary of State, and we are acting within the letter of the law, I submit that the regulatory powers were introduced to avoid using parliamentary time on non-controversial matters. It was never intended to be a vehicle whereby Government could ride roughshod over the wishes of either or both sides of local government and impose their will in a wholly arbitrary manner.
When employees are sick, they are entitled to a period of full pay—usually for a maximum of six weeks, followed by a period of half pay for a similar period. Deductible from full pay is the amount of national insurance sickness benefit.
Prior to the introduction of the 1984 statutory instruments Nos. 201 and 254 superannuation contributions were payable on the amount paid by the employer. The overall position changed from April 1983, when all employers were required to pay statutory sick pay for the first eight weeks of illness. The unions did not object to the continuation of superannuation deductions, even though that represented a worsening of their conditions of service.
§ Mr. Marcus Fox (Shipley)I am trying to follow the hon. Gentleman's point, but he is reading too quickly for me. Will he speak more slowly?
§ Mr. HoggCertainly, I shall read even more slowly. Taking advantage of the introduction of statutory sick pay, central Government and local government employers determined, regardless of the opposition of staff interests, to enforce payment of normal superannuation contributions on full pay after the expiration of statutory sick pay. In other words, they were determined to collect 632 superannuation contributions on sickness benefit payable directly by the state until the entitlement of full pay expired. The unions regarded that action as an unjustifiable deprivation of a service condition enjoyed for 36 years and one that penalised the chronically sick. In essence, that is the unions' point. I do not feel that that point has been answered by the Parliamentary Under-Secretary of State.
The case put forward by central Government and local government employers is that, unless superannuation contributions are deducted from full pay—including sickness benefits received direct from the state—employees are better off while they are sick than while they are working. That is the point the Minister made. The introduction of statutory sick pay presents an opportunity to regularise the contributions payable by an employee on sick leave. There is a need to secure uniformity with other public service schemes.
The union argument against the case put forward by central Government and local government employers is that at all times the union side wishes to be co-operative. It has never sought to stand in the way of reasonable measures. With every justification, the unions could have opposed the deduction of contributions from statutory sick pay on the ground that it would have represented a deprivation of a service condition that had operated for 36 years from 1947 to 1983. The unions did not do so because the introduction of statutory sick pay per se occasioned no amendment to the scheme. It was not thought unreasonable that employees on short-term sickness should pay contributions on the full pay received direct from their employers.
It was recognised also that a failure to agree would have involved the employers in substantial and hurried adjustments to their computer programmes, and that always worries them. Any argument about securing uniformity in the public service rings hollow to local government employees after prolonged and, so far, abortive efforts to obtain the entrance of part-time staff to the scheme. Local government has the only public service scheme that does not make provision for part-time staff. It is blatent hypocrisy for the Government to seek to justify the statutory instruments on the ground of clarity. In view of their attitude to part-time staff.
For those reasons, we tabled the prayer, and I hope that the Government will display a better attitude to this matter than they have shown this evening.
§ Question put and negatived.