HC Deb 25 October 1984 vol 65 cc902-10

Motion made, and question proposed, That this House do now adjourn.—[Mr. Garel Jones.]

10 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I am grateful for this opportunity to debate the effects being felt by the recipients of benefit as a result of the current industrial dispute at the DHSS centre at Newcastle. Since I intend to concentrate on the national impact of the strike, it would be churlish and wrong to deny the local Member of Parliament, the hon. Member for Newcastle upon Tyne, East (Mr. Brown), an opportunity to intervene in this brief debate if he sought to do so and was lucky enough to catch your eye, Mr. Deputy Speaker.

I am aware that the Minister will have to tread with trepidation and be extremely careful about how he words any remarks of his in response to the debate. I understand that the current negotiations between the Department and the two unions, the Civil and Public Services Association and the Society of Civil and Public Servants, are adjourned. Although a date has not been fixed for the resumption of the negotiations, I am confident that there is still an opportunity to resolve the dispute by negotiation, and certainly that is the solution sought by right hon. and hon. Members on the Liberal Bench.

I wrote to the Minister on 12 October asking a series of questions. I do not want to elaborate too much on the difficulties of the current negotiations, because they are extremely delicate. However, some elaboration of them would help, since I for one have found it difficult to make a judgment of the issues involved because of the failure to make much of the information public. This is the first chance that the Minister will have had, at least in debate, to air some of the issues, and in this debate I ask him to address his mind to a couple of the questions that I put to him in my letter. If he feels that he cannot deal with them tonight, perhaps he will be prepared to do so in due course by a written answer or in reply to my letter.

I have visited the strike centre and, although I was not there for long, it appeared to me that these were ordinary people who were worried about their working conditions. There was no evidence that I could see of any Left-wing militancy or of any other influences. It seemed to me to be a perfectly straightforward dispute.

One of the questions raised with me during my visit and one that requires an answer is why the Government set about their reorganisation on the basis of an organisation and methods report which did not involve the trade unions in its compilation. That seems to be the industrial relations of the Stone Age. If important and swingeing changes in work procedures are to be introduced, it is quite wrong that the report from which they stem should not involve the trade unions at an early stage.

I know that the details are complicated, but I should be obliged if the Minister would confirm that the new shift system, as well as having the potential of reducing shift allowances, interferes with the possibility of shift workers anticipating their work schedules week on week for the future. In the one-in-three shift system it is possible for a shift worker to say when he will be at work and when he will not be. I understand that in a one-in-five shift system it is impossible for him to say what shifts in the near future he will be asked to work.

I have not seen the Government's response to the union's claim that there are other ways of making substantial savings—almost the £700,000 that the Minister is looking for with his shift rota changes. The unions seem to think that they can save £610,000 by making savings outside the proposed changes in the shift allowance. Before trying to make any objective judgment I should like to hear the Government's view. These are fairly low-paid workers, and if there were a change in the shift allowance it would require a reduction in the wage packets of some of them of about £10 to £14 a week. That is a considerable sum in their terms.

There is confusion in regard to the cost to the public purse, which is an important factor in the dispute. The official spokesman for the Opposition, with his characteristic hyperbole, suggested that the dispute was costing £100 million a year. I do not know whether that is a correct figure. He said that it had cost £43 million to date and that it would continue to cost a further £2 million a week.

Apart form the cost of the additional post office staff, there must be additional overtime and bonus payments to the DHSS staff at Newcastle. The cost must be extensive, although I am prepared to believe that it is a good deal less than £100 million. The Minister is hoping to make savings. If one believes the union, the figure is about £50,000; according to the Department, it is about £700,000. The saving is relatively small in relation to the large sums of money being spent in the course of a long and intractable dispute.

The dispute started in November 1983. As soon as the organisation and management report was produced, there was a work to rule, and a full strike began on 14 May 1984. Clearly, the Government have been guilty, prima facie, of ham-fisted industrial relations. However, I do not know the details and I accept that it may be sensible for the Minister to reply at a later stage to the points raised.

The social services correspondent of The Guardian estimates that it may take until the year 2014 before there are any savings to be made over and above the additional costs, if the dispute is not ended soon.

The effect of the dispute on the Post Office was made clear to all hon. Members in a letter dated 9 October from the managing director of the counter services of the Post Office. He made several cogent points to which I should like to refer. The Post Office, whom I consulted today on the matter, said that the current price for the emergency payment for each stamp has not yet been negotiated between the Post Office and the DHSS. Some press reports say that the price is 38p and some say it is 50p. The Post Office, if I understood correctly this afternoon, said that the fee had not yet been negotiated. Therefore, it may well be that the Government do not yet know what the cost will prove to be in the fullness of time.

There are 20,600 post offices and at the end of last week they were processing manually 4.65 million pension books. That is producing intolerable strains on the post office network. I am sure that the Minister is aware that the Post Office is required to take action to keep on stream some of the sub-post offices and other Crown offices that it was intended to close. The Post Office is now having to go back to sub-postmasters and others and ask them to stay on until they can cope with the damage caused by the dispute. I am in favour of keeping sub-post offices open but not in the way that the Government are operating.

I was told by the Post Office that, even if the dispute were to be resolved tomorrow, it would take until February 1986 before the mess was sorted out at the post office level. That is a very long time.

The most worrying aspect is the effect on the people who are suffering as a result of the dispute. I am sure that the Minister will confirm that the dispute is affecting retirement pensions, national insurance, widows' benefit, child benefit, and child special allowance. The worst effects are being felt by people in those categories, particularly in relation to the procedures for claiming pensions for those who are overseas, ill or on holiday.

The Government have undertaken a fairly extensive campaign of press advertising, and I agree that it was the only way to handle the situation in the prevailing circumstances.

I have had correspondence in my postbag, particularly from Scotland—I am sure that other hon. Members have heard similar stories—about the difficulties and distress caused by some of the emergency procedures. That is happening willy nilly. It is inevitable that if we operate emergency procedures there will be difficulties. I am told by Age Concern that some pensioners have not received benefits for many weeks. I have not been able to corroborate any cases myself, but there are difficulties. I am told that in Scotland about 3,500 new pensioners are also in difficulties because they must go through the emergency procedure of going to the DHSS office. Even some dead pensioners are still getting books. All those anomalies and difficulties are being thrown up as a result of the manual emergency payment procedure.

The real difficulty is that only one payment per week can be made through the emergency procedure so that people who have been accustomed to storing up three or four payments and collecting them every month are no longer able to do so while the strike continues. That is causing a great deal of distress and hardship. Evidence of that has been sent to me through my constituency and contacts up and down the country as I am the spokeman for my party.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

I thank the hon. Gentleman for giving way. I agree with all the points that he has raised so far. I also thank him for raising this important matter on the Adjournment.

The hon. Gentleman is right to stress the hardship that the dispute is causing. I should like to make a point on behalf of the constituents whom I represent, as the dispute is taking place in my constituency. It was caused by a management review of the shift working of computer operators at Washington and Longbenton, the Newcastle branch of the DHSS. It particularly affected the automatic process workers. The key recommendations of the management review are contained in paragraph 24 of its very full report. The crux of the recommendations was that the shift times be altered, particularly so that the computer operators finished before 12.30. That has a peculiar effect on Civil Service terms and conditions—it claws back part of the bonus that forms part of the remuneration of the employees. I should like to give the House an example of what that would mean in practice to a constituent of mine. A junior data processor who is paid £120 a week top line—his gross wage—would suffer a reduction by 9.5 per cent. to £110.50. My constituents, not unreasonably, and like everybody else in the world, do not want to take a reduction in their wages.

Like the hon. Gentleman, I have visited the workers at the strike centre. They are not on high wages or a group of people noted for their industrial militancy. Some have told me rather bitterly that they voted Conservative at the last election and will not do so again. They do not want to cause all the difficulties that are being caused by the dispute. They feel strongly that they want to help pensioners and those in receipt of child benefit, but—this is the crucial point—they do not want to take a wage cut. The industrial action that they are taking is symptomatic of the increasing resentment and desperation that are being felt not just by the workers at Longbenton but by the whole community in the north-east of England. They feel that their community is being killed off by several aspects of Government policy and that the Government's behaviour is mean and irrational.

Mr. Kirkwood

I am grateful for that constructive intervention, which adds positively to my argument.

The purpose of the debate for all Opposition Members is basically to seek two assurances from the Minister. First, will he give a categorical assurance that the upratings due on 26 November will be paid in full, on time and with precision? The whole country needs that assurance and should accept nothing less. Secondly, will the Minister take charge of the negotiations as soon as possible, personally if need be, to bring this intractable dispute to a speedy conclusion?

10.15 pm
The Minister of State for Health and Social Security (Mr. Tony Newton)

I am grateful to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) not just for choosing this important subject for debate but perhaps even more, in the present circumstances, for the very moderate, reasonable and sensible way in which he recognised the difficulties that I face while negotiations are going on.

There is no doubt that this is an important matter which has given rise to a good deal of anxiety among pensioners. If nothing else, today's debate gives me the opportunity to convey to the two hon. Members who have spoken and to the House in general the best assurance that I can give—that we expect the uprating to be carried out on time and accurately in the vast majority of cases. Clearly I cannot give a 100 per cent. guarantee about this uprating or indeed any uprating because the size of the problem means that there are bound to be errors in almost any circumstances. Nevertheless, we are confident that for the vast majority the uprating will be accurate and on time.

Mr. Nicholas Brown

And the Christmas bonus.

Mr. Newton

And the Christmas bonus. I shall have more to say about that in a moment.

Before dealing with the specific details of the uprating, it is appropriate for me to say something about the background to the dispute, although my comments will naturally be cautious in the context of the current negotiations.

As has been pointed out, the dispute arose due to management plans to change the shift working arrangements in the computer operations area so as to improve efficiency, make better use of equipment and meet current and emerging operational requirements. The need for change was brought to notice in a report by a routine internal audit which questioned the arrangements which then existed. In response to the auditor's questioning, management initiated a review which found that the arrangements that had been in operation since the early 1970s were no longer appropriate to current operational needs. At this stage, I merely say that, in my view, no responsible Government could or should ignore evidence that such an important complex in the social security system was not being run as efficiently and economically as possible.

Briefly, the proposed changes involved the introduction in some areas of a rotating night shift to meet changing operational requirements arising, for example, from the increasing number of pensioners and to do so in a way which made the fullest use of very expensive computer equipment. In other areas, an existing night shift which had proved unnecessary in the light of experience with new equipment would be discontinued. Some shift starting and finishing times would also be adjusted so as to end the situation in which staff on evening shifts receive a full night shift allowance although working only until shortly after 12.30 am.

The total effect of the changes would be to save the taxpayer an estimated £700,000 per year as well as ensuring a fully efficient service to beneficiaries. Those savings would derive from three main elements. The work would be done by fewer staff, expensive overtime working would be eliminated in some areas and reduced in others—an objective that we share with the unions—and there would be less expenditure on shift allowances.

On the subject of union involvement at the outset, I should add that there are procedures governing this. They involved notification to the unions that the examination by the management services people was to begin and copies of the report were supplied to the unions before any communication was made to the individual staff involved. That was both sensible and fulfilled our obligations.

We commenced negotiations with the unions in January this year. They were continuing when the unions broke them off and called for a strike from 14 May. The numbers on strike have varied a little over the intervening period, but there are currently 379 of the computer operations staff in the shift working areas on strike, together with 114 staff who are in associated areas but not affected directly by the shift working proposals. To put that into perspective, that total of fewer than 500 is only a tiny minority of the overall staff at Newcastle central office which numbers some 10,500 in all.

I can tell the hon. Member for Newcastle upon Tyne, East (Mr. Brown), that we have always been aware that for a small minority of the shift workers the changes would mean, other things being equal, a loss of take-home pay. Throughout we have been anxious to negotiate transitional arrangements which would safeguard those shift workers' earnings. The offer that has been on the table for months means that no existing shift worker who accepted the new arrangements need lose any take-home pay. I cannot emphasise that too strongly. We are and have been concerned about the position of our staff and shift workers need not lose any take-home pay as a result of our proposals.

Indeed, in our efforts to achieve a negotiated settlement we have always been more than willing to talk to the unions. Perhaps the most striking evidence of that was the previously unprecedented step in the Civil Service of involving the Advisory, Conciliation and Arbitration Service when our officials spent some 15 hours attempting to find a way to settle the dispute.

Those proposals which have been on the table for many months concerning transitional protection, the need for which we have consistently recognised, go significantly further than the existing negotiated arrangements nationally for transitional protection in such circumstances. I do not accept that management and Ministers have been intransigent either in what we have offered or in the way in which we have been willing to talk, in particular by being willing to accept conciliation through ACAS.

We have reaffirmed our willingness to resume negotiations on many occasions since the ACAS discussions. We have demonstrated that again by our response to the unions' recent request for further talks. Those negotiations started yesterday, as has been recognised, and are continuing. Therefore, the House will understand that in the circumstances it is not right to say more tonight about the points which are themselves issued in those negotiations.

The hon. Member for Roxburgh and Berwickshire referred to costs. It is difficult at the moment to be sure about precisely what the costs are, for reasons which he touched on. First, the exact arrangements with the Post Office for the emergency arrangements remain to be fully negotiated. Therefore, I cannot be certain what those costs will be. Secondly, quite a lot of overtime is being worked. One of the ironies of the dispute is that the pay of DHSS staff is operated by the computers which are not operating—indeed, the pay of DHSS Ministers as well. Because the computer is not working normally we have had to make emergency arrangements for pay and therefore we are also in a difficult position to estimate precisely the cost of the dispute. There are inescapable uncertainties. I can only say that on the best estimates that we can make at the moment the figure of £100 million which has been quoted is about three times higher than what we would estimate.

Sir John Page (Harrow, West)

I apologise for not being here for the beginning of my hon. Friend's speech, but I was otherwise engaged. If by any chance those who are paying themselves what they hope is too little are paying themselves too much, will the Minister be gentle in asking them to pay back what they have overpaid themselves over, say, six months or a year? I know that this is a matter of great concern to DHSS employees who are having to assess themselves.

Mr. Newton

I hope that I shall not find myself in that position. We shall wish to be as helpful as possible in dealing with any difficulties which may emerge after the dispute. We would need to deal with the matter case by case. However, I believe that our handling of the dispute has been very reasonable, and I can assure my hon. Friend that we would seek to be reasonable in any such problems which may affect our own staff, or indeed social security beneficiaries, in the afterrnath of the dispute.

Even if the dispute ended now, it would be long past the stage when the uprating could be carried out by normal methods. I shall explain how the main categories concerned will be dealt with.

There are 7 million pensioners and 7 million recipients of child benefit whose payments are normally made by order book issued from Newcastle, and who are currently being paid by the Post Office on the stub of an expired order book. For those cases, new covers have been prepared showing the new rates coming into operation during the week beginning 26 November. Those covers have all been printed. Most of them have been enveloped, and they will be sent out to post offices and attached to the stubs of the old books between now and mid-November. Anyone who holds the stub of an old order book which does not show the new rate and had not has a new cover attached to it by 19 November should get in touch with the local DHSS office. Those arrangements are being publicised by advertisements in the press and posters in post offices. Hon. Members may have seen the first advertisements which appeared just over a week ago.

Secondly, there are 1.6 million supplementary pensioners paid on order books issued manually by local DHSS offices. They will continue to get their new books in the normal way, and in their case the uprating will proceed as usual. We have been able to issue the necessary information from Newcastle to make sure that the retirement pension element of their payments can be accurately calculated.

Thirdly, there is a substantial group of beneficiaries who are paid either by automatic credit transfer through the banks or by payable orders sent out from Newcastle. There are about 600,000 to 700,000 on ACT, about 430,000 on payable orders in Britain and about another 300,000 overseas. Those are the cases for which it is most difficult for us to make adequate emergency arrangements, because we have had no reliable means of identifying the beneficiaries being paid by that means.

We remain confident that in most cases we will be able to carry out the uprating: effectively. Most of the pensioners involved have been in touch with us, and we have been paying about four fifths of the pensioners in this country and a similar proportion of those abroad by manual means from Newcastle. Of those, all who are entitled to an uprating increase will receive it on time, and I hope that by the time the uprating is due we shall have been able to identify from the computer the remainder of those who have not yet been in touch with us direct and thus put the emergency procedures into operation for them. If we are successful in identifying the remainder, they too will get the uprating increase due to them, together with the benefit owing to them since the dispute started. Similarly, we hope to be able to make the necessary arrangements for those on automatic credit transfer. At the same time, I hope to be able to eliminate those distressing cases where payment has continued automatically from banks to pensioners who have died.

There has been much interest in the payment of the Christmas bonus. We expect that this, too, will be paid on time, in the first week of December, in the vast majority of cases. Locally issued order books will contain the appropriate voucher. For stub payments—the re-covered Newcastle books—the post offices will pay out an additional £10 that week, and £10 will be added to the payable orders or ACT payments relating to that period.

Although there have been difficulties, a remarkable job has been done by the vast majority of DHSS staff both in coping with the emergency arrangements and in making sure that the uprating should proceed successfully. I hope that the whole House will join me in expressing our heartfelt thanks for the dedicated work of the vast majority of officials at Newcastle and the tens of thousands of DHSS officials in local offices who have done a first-class job in very difficult circumstances.

Question put and agreed to.

Adjourned accordingly at half-past Ten o'clock.