HC Deb 22 July 1985 vol 83 cc741-3

Lords amendment: No. 1, in page 11, line 36, leave out "below" and insert of the Social Security Act 1975

4.21 pm
The Minister for Social Security (Mr. Tony Newton)

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

Mr. Speaker

With this we may take Lords amendment No. 2, in page 12, line 9, leave out "below" and insert of the Social Security Act 1975

Mr. Newton

These are drafting amendments, which correct a mistake in the present wording.

Question put and agreed to.

Lords amendment No. 2 agreed to.

Lords amendment: No. 3, after clause 9, insert the following new clause—Voluntary redundancy entitlement to unemployment benefitIn section 20 of the Social Security Act 1975 (disqualifications for receipt of benefit). the following subsection shall be inserted after subsection (3)— (3A) For the purposes of this section, a person who has been dismissed by his employer by reason of redundancy within the meaning of section 81(2) of the Employment Protection (Consolidation) Act 1978 after volunteering or agreeing so to be dismissed shall not be deemed to have left his employment voluntarily.".

Mr. Newton

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

Mr. Speaker

With this we may take Lords amendment No. 9, in clause 29, page 27, line 10, at end insert— section (Voluntary redundancy—entitlement to unemployment benefit);

Mr. Newton

This is more than a technical amendment, but I hope that it will command ready support on both sides of the House. It amends section 20 of the Social Security Act 1975 and has been proposed to maintain the Government's policy that people who are made redundant, even though they may have agreed to take voluntary redundancy, should not be regarded as having left employment voluntarily, which would mean that they would incur up to six weeks disqualification from unemployment benefit.

Until recently it was understood to be the case—and it was certainly the Government's intention—that people taking voluntary redundancy would not be disqualified from receiving unemployment benefit for up to six weeks. However, the chief adjudication officer, who is independent of Ministers—for once I have proof of that fact, which hon. Members have been known to doubt—issued new guidance based on recent case law suggesting that those who had volunteered for redundancy should normally be regarded as having left employment voluntarily, with the consequences that I have described.

That would have had serious implications for redundancy schemes in a number of industries, not lease the mining industry, and was most unwelcome to the Government. Faced with that advice, which we could not overturn and for which we could not substitute Minister's views, we decided that the proper course was to change the law to make sure that it clearly achieved what Ministers wished to achieve.

Happily, we had before Parliament at the time that flexible instrument the Social Security Bill—it has proved to be an almost infinitely flexible instrument—and we took the opportunity to insert the amendment and amendment No. 9, which is consequential, to establish the position as we and, I believe, the whole House want it to be.

Mrs. Margaret Beckett (Derby, South)

I welcome the amendment and the speed with which the Government have acted. I am only sorry that I have not been able to give the Minister more notice of a question that I wish to put to him. The circular that gives rise to the question has come to my notice in only the past few days.

Can the Minister tell us now—if he cannot, will he check the matter—whether the amendment covers all the cases raised in the circular, which refers not only to the case being changed by the amendment, but to similar action being taken where a claimant is participating in an early retirement scheme or has retired at the normal retiring age but had the option of remaining in the job?

I am as horrified by the assumption that people should be forced to stay on after the normal retirement age or risk losing unemployment benefit as I am by the chief adjudication officer's original proposal. Will the Minister confirm that he is under the impression that both areas are covered by the new clause and that, if not, the Government will consider my question with the same speed as they considered the earlier proposal?

Mr. Newton

There may be some misunderstanding here, but I shall check on the matter raised by the hon. Member for Derby, South (Mrs. Beckett).

However, I can make it clear that the amendment is related to voluntary redundancy and not to voluntary retirement, which is a different issue. Although the chief adjudication officer has issued fresh and clearer guidance on early retirement, it did not significantly change the position from what it was understood to be. I hope the hon. Lady will agree that a decision to remove oneself from the labour market early is not the same as a voluntary redundancy under an agreed redundancy scheme. The same considerations would not necessarily apply.

There may be some misunderstanding about those who retire early. If a person retires after he is entitled to the national insurance retirement benefit, that is a matter for him. If he has the relevant contribution record, we shall pay the national insurance retirement pension. The point at issue is whether people should be entitled to unemployment benefit.

A person who retires voluntarily, whether before or after retirement age, cannot be regarded as unemployed in the normal sense. If he retires after retirement age and has the relevant contribution record, he will be entitled to retirement pension, in which case he would not be entitled to unemployment benefit.

Mrs. Beckett

I confess that I had to read the circular several times before I could understand what it could be getting at. I do not see how it could be dealing with someone who retires after the normal pension age. Presumably it refers to people in jobs where the normal retirement age is earlier than, say, 65 for men.

We all know that people have been said to be retiring voluntarily when, in effect, they are taking redundancy. The two things are not interwoven in pay terms, but they become interwoven in moving people on from their jobs. Will the Minister consider my question?

Mr. Newton

I shall certainly look at the matter raised by the hon. Lady, but I do not think that we face the difficulty that she suggests might exist.

There are provisions for those who retire on an occupational pension after the age of 60, but before 65. Those provisions govern their entitlement to unemployment benefit and the extent to which their occupational pension is taken into account against benefit. However, that is a different point from that raised by the hon. Lady.

I think that the position is fair and that it is right to maintain a distinction between voluntary redundancy and voluntary retirement. However, I shall crawl over the circular and over the hon. Lady's words to make sure that she does not have a valid point—she has been right before—and that I am right to offer her reassurances.

Question put and agreed to.

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