HC Deb 06 March 1986 vol 93 cc543-58 10.10 pm
Mr. Roland Boyes (Houghton and Washington)

I beg to move,

That an humble Address be presented to Her Majesty, praying that the Local Government Re-organisation (Compensation) Regulations 1986 (S.I., 1986, No. 151), dated 31st January 1986, a copy of which was laid before this House on 7th February, be annulled. The regulations are concerned with compensation for the loss of employment and for diminution of emoluments for members of staff of the Greater London council and the six metropolitan counties. An early release scheme, supposedly designed to create vacancies in other authorities to make way for metropolitan county staff, completes the package of measures put forward by the Government for dealing with the staffing consequences of abolition. However, there are several problems about the package.

It is no consolation to say that it could have been worse. The initial proposals of the Government were very unsatisfactory. It was only following pressure from the Association of Metropolitan Authorities and the Trades Union Congress local government committee that improvements were made. The package of measures has done little to assist the management of change, it has produced inequity and disparity of treatment in different metropolitan county council areas, and it is too late. The early release scheme, which might have helped by reducing the number of compulsory redundancies, has only been made operative through a circular dated 26 February 1986, just five weeks before abolition.

About a week ago I talked at some length in the Chamber about the problems created by only five weeks' notice of the regulations being given. This evening I shall let Sir Philip Woodfield, chairman of the staff commission, speak on my behalf. In the Municipal Journal of 28 February 1986 he wrote:

The uncertainty has been added to by Government delays. Only recently has it laid before Parliament the main transfer order and the compensation regulations and promulgated the early release scheme. It is not sufficient to say that the main outlines of the proposals were announced some time ago. The delay in putting out detailed arrangements for the early release scheme in particular has much reduced its value and anyway people ought not to be expected to make crucial decisions affecting the rest of their lives without seeing exactly how they would be affected. I should like to consider the circumstances of those who leave the employment of a metropolitan county council to take a lower-paid job in another local authority. That move is itself a blow, but it could become a permanent feature for many. The Government's initial proposals were for a lump sum payment which would have led to greater unfairness for some people. The scheme in the present regulation, although better, has some drawbacks, which the Government could remedy even at this late stage.

An employee will get up to £5,000 a year. The cash for compensation is calculated according to a formula in the regulations, which is arrived at, roughly, by subtracting the contractual wages paid in the new job from the contractual wages, overtime payments and bonus payments paid in the original job.

Payments are to be made one year in arrears, so the first is not due until 1 April 1987 for many staff. However, it is possible for residuary bodies to make certain interim payments. I hope that other residuary bodies will follow the example of one in the west midlands that has determined to make monthly payments. That will help to reduce the hardship experienced by loyal officers of local authorities who will suffer from a much reduced income.

The compensation lasts for seven years, but half payment is made in the eighth year. The Government might like to extend the period of time during which compensation is payable. There are important conditions for eligibility spelt out in regulation 3(7)(2)(a) to (e). Regulation 3(7)(2)(b) states that "an employee must have had three years continuous local government service by 1 April 1986 to qualify for compensation. I have been approached by several representatives of the metropolitan counties who suggest that the requirement should be for no more than two years. I should be glad if the Minister would consider that carefully. Such a reduction would bring eligibility into line with eligibility for payment for compulsory redundancy. The choice of three years is quite arbitrary.

Redundancy payments are a less straightforward matter. There is a problem, because there are two schemes for calculating redundancy payments — a national scheme and locally agreed schemes. Three metropolitan county councils—South Yorkshire, Tyne and Wear and West Midlands—have been prevented from implementing local schemes by the undoubted sharp practice of the previous Secretary of State. I refer to the use of retrospective legislation in March 1984 to prevent them from establishing their own severance schemes. On 1 March 1984, the then Secretary of State said in a written reply: The second will ensure that any terms which are incorporated into existing or future contracts of employment after 1 March 1984 and which relate to compensation for redundancy or detriment will have no effect where they would entitle an employee to an amount greater than that provided for, in due course, in the main abolition legislation." — [Official Report, 1 March 1984; Vol. 55, c. 276–277.] It will be noted that the date I mentioned in the former Secretary of State's reply is 1 March. He actually gave the written answer in the Official Report on 1 March 1984. I find that an unacceptable practice.

As the Minister is aware, my constituency is part of the metropolitan county of Tyne and Wear. I shall use Tyne and Wear as a illustration of the iniquitous situation that has arisen as a consequence of the decision of the former Secretary of State. Officers will claim that it is the first time in the history of industrial relations, both inside and outside the public sector, that two different sets of conditions have applied to people being made redundant in the same industry. It is not good enough. It is unfair and unjust. Many of the staff concerned—in fact I would say all of the staff—have given many years of loyal service to the Tyne and Wear metropolitan county and they feel that the Government are using them as political pawns. Even if the abolition of the metropolitan county was a political battle between Members of Parliament at Westminster and councillors on local authorities that is no excuse for the fact that the officers, who were not a part of that political process, will be the ones who will suffer. I find that totally unacceptable. Staff are dismayed at the treatment after serving for many years to the best of their ability.

It is not the wish of the local authority that this problem has arisen. Well before 1 March 1984 my local authority is on record giving a public commitment to a local scheme that provided a safety net, vital in the north east, an area of extremely high unemployment. It is part of the northern region, as you know well, Mr. Deputy Speaker, which has the highest unemployment level in Britain.

Those people who are aged over 50 will find it particularly difficult to find another job if they are made redundant when the abolition day is reached. It has been suggested in a most disgraceful front page of the Daily Express that the schemes are "gravy trains". I cannot understand the Daily Express. I knew that it was a backward newspaper but for it to print a front page lead now about a scheme that was announced on 1 March 1984 is taking things too far. The article, by Mr. Don Coolican talks about a "gravy train". I know that hon. Members on both sides of the House have worked in local Government, as I did for many years. We know that some of the directors—I was an assistant director of social services —could be considered to be well paid, but many of the clerical staff, typists and other people who work for local authorities are far from well paid. To describe what some people in a local authority will obtain as a redundancy payment as a "gravy train" is downright misrepresentation of the true facts and it is a disgrace. It is an insult to the workers, who will already suffer badly by being made unemployed, without having such scandalous and scurrilous material written about them.

The people who face this uncertain future would have been quite happy to have given more years of their lives to serve the people of Tyne and Wear diligently. Tyne and Wear has been used to illustrate the problem but it also affects the staff of two other metropolitan counties, South Yorkshire and the West Midlands. I received a letter from three members of staff of the South Yorkshire county council, with a detailed argument supporting the case for better redundancy pay. They wrote: It seems totally wrong that officers employed by South Yorkshire, and by Tyne and Wear and West Midlands and made redundant by abolition should be treated differently from colleagues in the GLC, Merseyside, Greater Manchester and West Yorkshire on the basis of virtual accidents"— I think that that is a good phrase—

of timing; accidents relating to the timing of approval of severance schemes in relation to government deadlines. It may be argued that the GLC, Merseyside, Greater Manchester and West Yorkshire simply eluded the government's efforts and behaved irresponsibly in adopting over-generous severance schemes. This is just not true; it is the scheme proposed to be imposed on South Yorkshire, Tyne and Wear and the West Midlands which is the exception. The scheme is the worst ever applied in the public sector. It compares badly with schemes operated by other public bodies such as the NCB, British Gas and Water Authorities. It is understood that it also compares badly with private schemes such as those operated by ICI, GEC, Courtaulds and Marks and Spencer. Certain rights were acquired by the GLC and the metropolitan counties — Greater Manchester, West Yorkshire and Merseyside — and in general their contractual schemes give employees a higher level of compensation entitlement than the scheme that is set out in the regulations. Under the present arrangements, and excluding superannuation benefits, a person aged 58 with 34 years' service earning £15,000 a year would receive the following amounts if he worked for the following authorities: Greater Manchester, £20,193; West Yorkshire, £17,163; south Yorkshire, only £8,221. By luck, or by choosing a certain geographical area in which to live and work, an individual may receive almost £21,000 while someone living in another area such as south Yorkshire would receive only £8,000. That cannot be right and it is not right.

After representations to the Government by the Association of Metropolitan Authorities and the Trades Union Congress, the scheme was improved for staff within the 40–50-year age group. However, there are other disparities that are worth mentioning. For example, a local authority worker is treated differently from a civil servant. The following example shows how payment will be calculated for a local authority worker as against a non-mobile civil servant. I do not criticise those who receive more than others. My contention is that metropolitan county staff should receive the same as civil servants.

On abolition, a member of staff of a metropolitan council aged 40 years with 20 years' service will receive 40 weeks' pay. A non-mobile civil servant would receive 65 weeks' pay. A member of staff of a metropolitan county aged 50 years with 30 year' service would be given 82 weeks' pay and the non-mobile civil servant would receive 104 weeks' pay. These are examples — I could give many more — that we would like the Minister to consider.

It is disgraceful that only five weeks remain in which to consider these matters. I hope that the Minister will bring the arrangements for the staff of the metropolitan counties into line with those for civil servants.

The Government's main objective was to abolish the GLC and the metropolitan counties. I cannot be sure, but I hope that it was not part of their policy to create two different tiers of redundancy payments and to pay some staff more or less than others. I hope that the Minister will consider carefully the following questions. First, will the hon. Gentleman allow a scheme to operate which was agreed in detail after 1 March 1984, which is now available and which was declared publicly before 1 March 1984? In other words, it can be demonstrated unequivocally that there is no sharp practice.

Secondly, if the Minister cannot agree to that, will he consider closing the gap between the payments that are made under the two schemes for those aged over 50 years who will experience the greatest difficulty in the job market? We would like to see a closing of the gap between the better paid local schemes and non-local schemes. I stress that by closing the gap I mean bringing upwards the scheme we are discussing and certainly not bringing it down from any of the schemes that have been agreed locally. I ask the Minister seriously to consider closing the gap.

Thirdly, will the Minister take a generous attitude to the problem? The numbers involved will be relatively small When we spent 200 hours on the Bill, the Government talked of possibly 8,000 or 9,000 people being made redundant. We know that, although too many will be made redundant, the numbers will not be of that magnitude. In view of this the Minister has a chance to take a genereous attitude to the problem.

Fourthly, will the Minister agree to look specifically at the compensation that will be obtained by those people, many under 60, who have contributed for over 40 years to a superannuation fund? I understand from a letter from the chief executive of the West Midlands county council, Mr. Hender, that

such officers should be compensated by having redundancy compensation payments on the same scale as that provided under Clause 4(1); that is, two weeks' pay for each year of service. Fifthly, will the Minister confirm that, as regards reorganisation under the Local Government Act 1985, section 84(1) of the Employment Protection (Consolidation) Act 1978 applies to persons who are affected by local public holiday arrangements? I can see that there could be difficulty here where public holidays, associated extra-statutory holidays and concessionary holidays, interrupt continuity of service. Mr. Hender says, giving an example: we have situations where people have left say, Walsall corporation on a Maundy Thursday and have commenced work with the West Midlands County on Wednesday after Easter, the first day of their new contract of employment. Before anyone thinks that that does not sound serious, let me say that normally I am dealing with a different industry, with a miner with 40 years' service, who receives only 10 years' redundancy pay after 40 years down a lousy, stinking, dirty mine, all because there was a few days' gap between the final part of his employment for the last 10 years and the main part of his employment.

The legislation ensures that staff on maternity leave at 31 March who are not transferred to a successor authority will be entitled to receive from the appropriate Residuary Body any outstanding statutory maternity pay even though their employers cease to exist. However, women employees of the GLC and metropolitan counties also have contractual rights to maternity pay in excess of the statutory provisions, which under present regulations they will lose. We believe that it is completely unfair that the staff concerned should lose such contractual entitlements, which could easily be met by the Residuary Bodies. Women on maternity leave will be unable to make themselves available for other employment or to compete effectively for other jobs, because of their pregnancy or their recent confinement. They will be in a disadvantaged position compared with their colleagues. A continuing entitlement to contractual maternity pay will at least help to provide some compensation. I hope the Minister will take this on board.

Another problem that could well arise is when some people have worked for local government up to 1 April 1974 and then were compulsorily transferred on that date to employment with a water authority or health authority. Then, on various dates since April 1974 they have voluntarily left their water authority or health authority employers and rejoined local government, without any break in service. In effect they could be considered as returning to their natural local government service. However, it would be considered that there had been a break in service for the purpose of redundancy payments under the present scheme. Will the Minister consider a move from local government to a health or water authority not as a break in service but as continuous service for redundancy pay purposes?

Finally, there are implications for the Inner London education authority. There has been no indication so far that the powers of section 31 of the London County Council (General Powers) Act 1921 will be applied to any of the new bodies set up under the Local Goverment Act 1985. If those powers are not applied to the new ILEA, the provisions referred to in paragraph 5(a) of a letter which I have received from the GLC— to provide better compensation terms generally than those available to redundant local government employees elsewhere in the country mainly in the area of lump sum redundancy payments and particularly for those under the age of 50 years"— —will be applicable only to those employees who are transferred to the new ILEA under a statutory transfer order, and will not be applicable to many employees recruited by the new authority after 31 March 1986. The protection will be secured under the Act because the terms are contractual.

Moreover, the powers will not be available for use in the way described in paragraph 5(b) and (c) of the GLC's letter, that is: to provide better compensation terms for specified groups of employees in special circumstances (eg for certain professional staff under 50 years at the time of the 'Cutler cuts' exercise in 1978)", and to enable improved early retirement terms to be offered in individual cases, (particularly senior officers) where there has been political pressure for the individual's services to be terminated. Therefore, it is vital that the powers in respect of those employees are applied to the new ILEA.

The Government face a test tonight. Can they give the reward that loyal, hard-working, conscientious staff of the metropolitan county councils and the GLC deserve? Abolition day is coming far too quickly, but the Government still have time to reconsider the proposals, and to consider all the disparities that have been created by the announcement of the former Secretary of State on 1 March 1984. Will the Minister consider my questions and arguments carefully so that on the dreadful date all members of staff will be properly compensated for the many dedicated years of service that they have given to the metropolitan county councils?

10.37 pm
Mr. John Whitfield (Dewsbury)

I have listened carefully to the remarks of the hon. Member for Houghton and Washington (Mr. Boyes) about the regulations. I do not purport to understand them as closely as he obviously does. However, I know that they are extremely beneficial to the employees of the bodies to which they relate. We as caring Conservatives would not have it any other way, provided those many benefits accrue to those who are genuinely made redundant as a result of the abolition of the county councils and the GLC.

I understand the expression "to be made redundant" to be without work for a period. However, from my experience in west and south Yorkshire, where many of my constituents work and live, many of the employees of the authorities are having their cake and eating it. The gravy train, to which the hon. Gentleman referred and which appalled us all in 1984, has indeed come out of the sidings once again and is up and running in 1986. A considerable number of officers and others who work for these authorities have three choices before them. First, they can calculate what benefits and other payments would be due to them under the regulations, such as those we are considering tonight.

Many people have spoken to me at my surgery complaining that the regulations were not available early enough. In that point, at least, I would agree with the hon. Member for Houghton and Washington. The second choice that these people have is whether to join the district's successor authority or the joint boards to which the functions which they have been administering have been transferred. Their third choice is to consider what other jobs are available in the private or other sectors as an alternative to local government service.

What a marvellous choice that is. It is a "no lose" situation. It is certainly a choice which the many unemployed people in my constituency who have not had the benefit of working in local government would give their right arms to have.

The hon. Member for Houghton and Washington referred at length to the situation—which he thinks is a poor one—involving the officers of the South Yorkshire county council. I draw to the attention of the House a particular case, that of the chief executive of the South Yorkshire county council, Mr. Harris.

I make it clear that none of the remarks that I wish to make tonight are in criticism of Mr. Harris. He was an excellent chief executive of that authority and a much sought-after individual for his skills in administration. However, in October 1985, because of his undoubted skills, he was head-hunted and offered a job running a very successful barrister's chambers in London. The job was so attractive—it must be like my job here—that he was prepared to take it and commute weekly from west Yorkshire, where he lives, to London.

One would have thought that his employers, the county council, and those involved would have commented on Mr. Harris's stroke of luck and wished him all the best in his new career. However, there was a certain possible redundancy payment and certain pension implications of Mr. Harris's situation, which meant that it was important that he remained in local government for some further months until, I believe, April 1986. Mr. Harris has a job one day a week with the residuary body which will deal with the winding up of the council and for that I am told he is paid at the rate of £10,000 per annum. He works for the residuary body on one day a week and for the rest of the week he is in London conducting the affairs of a successful set of chambers.

The Minister should be aware that it is this type of thing —I would not like to use the word exploitation, rather it is the opportunity available to the poor, long-suffering hard-working, underpaid officers of the local authorities which are being abolished under the Local Government Act 1985 — which is bringing this legislation into disrepute. The Government were unfortunately very much party to the implementation of the reorganisation of local government in 1974 and we received a lot of just criticism from what flowed from that.

We are now engaged in a similar, though very much better, operation which will bring the administration of local government that much nearer to the people and I am in favour and support this measure. However, we are attaching to this radical legislation benefit packages which are far too beneficial for certain individuals and which are bringing the whole legislation into disrepute.

Mr. Simon Hughes (Southwark and Bermondsey)

This is an important point, but some clarification is needed. I know nothing about the individual in question. The hon. Gentleman appeares to be saying that that individual is being retained by the residuary body at a salary of £10,000 a year for an unknown period. The hon. Gentleman will be aware that the residuary body has nothing to do with local government because it is the body appointed to wind up. I hope that the hon. Gentleman is not drawing from the facts which he has put to the House the conclusion that local government schemes — past, present and future—are to blame. The residuary body is simply a body brought in by the Government which has total discretion as to who to employ and which appears to be the subject of the hon. Gentleman's criticism. That criticism appears therefore to be wrongly directed at local government and its excesses.

Mr. Whitfield

The regulations apply to people who have been employed by the metropolitan county councils, by the new authority or by the residuary bodies.

Will my hon. Friend the Under-Secretary of State assure the House that he and the officials in his Department will give detailed scrutiny to this type of case? Will my hon. Friend do everything in his power to ensure that the people who benefit under the regulations — there are many—will receive only their absolute entitlement? If measures are used in this way, the implementation of the Local Government Act 1985 is brought into disrepute.

10.46 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I am grateful for the opportunity to raise a matter that comes within the context of the regulations. I hope that the Under-Secretary of State will be able to give me some assurance. It undermines some of the intentions of the regulations which may be generous but which need to be tidied up. Many people will be scrurrying around furiously in the next few weeks trying to work out where their future lies when the authorities for which they work are abolished.

The problem relates specifically to a discrepancy and inconsistency and, therefore, to inequality between the two sorts of people who will be working in similar jobs and similar relationships after 1 April to the ones in which they are now working yet whose terms and conditions of service will not remain the same as they are now. They are affected in the context of ILEA.

The old education authority is coming to an end and the new one is starting. The new authority is taking on people in two ways. It is taking on people who are designated for transfer who, to all intents and purposes, will continue in the service of one authority with, therefore, unbroken terms and conditions of service. It is also recruiting people who will start a new period of employment. Inevitably, many of these people are, as of today, ILEA employees.

ILEA has been technically a committee of the Greater London council, which will be abolished at the end of March. Many of the functions carried out by ILEA staff are, in other departments, carried out by staff paid for and managed by the GLC but effectively seconded on an agency basis to work for ILEA, as has been done for weeks, months or years.

There were endless debates in Committee on the Local Government Bill in which various examples of departments were given. Among the common service departments, the engineers' department has many people within it who are employed by the GLC but are working permanently for ILEA on specific projects with people from other departments who perhaps are ILEA employees.

The Minister will be aware of the problem that I raise because there has been correspondence about it between county hall and the various departments. Taking engineers as an example, those who at the end of this month cannot be designated—because they are not working for ILEA now—will have to apply to and be appointed by the new ILEA. Although they may then have the same salaries and terms and conditions of employment as they have now, should they be made redundant in two or three years' time, they will not have the same benefits as those who have already been designated and transferred across to the new ILEA or who have worked for the authority all the time.

It is interesting to consider those working in the architects' department. I understand that the staff in that section were en bloc attributed to ILEA, so they will have continuing terms and conditions of employment. Accordingly, should they face a service variation, in particular redundancy, they will not be prejudiced. In other words, from 1 April there will be a difference of benefit between two people who are today in the same team doing the same job. Through no fault of theirs, they may be treated differently at a future date. That could make for bad relationships. If the Minister replies, "I appreciate that, but it has nothing to do with us," that will be totally unsatisfactory because it is only because of the abolition of the authority and the creation of the new ILEA that the situation arises.

If the Minister replies, "They could have opted out, applied for the new jobs and thereby gained," we shall remind him that there is a cut-off point after which people cannot be designated across. In other words, there is no individual or collective option for people such as engineers to benefit from parallel conditions and terms of employment.

Will the Minister undertake to do something about this problem between now and the cut-off point in a few weeks' time? For example, will the Department, with the Department of Education and Science, consult those affected to ensure that the relatively minor adjustment that is needed to solve the problem is made? I appreciate that that cannot be done tonight; this instrument must be accepted or rejected and cannot be amended. The necessary amending regulations could be laid under section 53 of the Local Government Act 1985. This is not a technical matter. It affects the professional lives, working relationships and potential career prospects of people, many of whom are extremely senior, widely experienced and highly competent staff, whom nobody has criticised for their back-up service, given over many years, to ILEA or the GLC, or both.

I look to the Minister for a strong assurance that we can make some progress to remedy the severe anomalies that affect the education authority for our capital city.

10.55 pm
Mr. Allen McKay (Barnsley, West and Penistone)

The Minister will know the point that I am about to raise, as I speak in support of my hon. Friend the Member for Houghton and Washington (Mr. Boyes). There is no need to go over the points that he made, because he adduced a powerful argument against the problems that have been caused by the abolition of the metropolitan counties. The Minister knows that I feel that they should never have been abolished. If they had to be, many of the problems that have, and will occur, could have been prevented. The services should have been run side by side, and gradually the responsibilities should have been transferred from the metropolitan authorities, just as happened in 1974.

The hon. Member for Dewsbury (Mr. Whitfield) talked about the gravy train in 1974, but that was not for those made redundant but for those in work. Many officers, because they were going into areas with larger populations, received great salary increases because all salaries were based on those of the chief executive, who was in charge of a greater area. That was quite in accordance with procedures, so there was nothing wrong with it, except that, finally, the cost was far in excess of what anybody expected.

I am concerned about those who are being made redundant, particularly those in South Yorkshire, who, through no fault of theirs, have found themselves being treated differently from others in the same grade. I worked for a long time with the NCB, and, sadly, one of my duties was to make people redundant. However, we never treated people in the same grades differently. They were treated alike throughout the length and breadth of the country. There were times when legislation changed, and cut-off points had to be adhered to, but they were not on any particular body but spread throughout the country. In its rundown of the industry, the board has always treated everybody in the same grade alike. That is why the board's redundancy scheme was successful. When enhanced payments were introduced, everybody enjoyed them.

Those involved in the redundancy in the metropolitan counties are not on a gravy train. They are facing the most traumatic experience in their working lives. Sometimes for the first time, they are realising that they are vulnerable to the problems of the system. People who thought that they would be working until they were 60 or 65 are suddenly finding themselves unwanted.

I listened carefully to the hon. Member for Dewsbury, who talked about the choice of working for the metropolitan counties, but these people have no choice. They have no job. That is what abolition was about—savings in public expenditure. Those savings were talked about in Committee, and it was shown that the only saving that could be made were through the loss of jobs and staff.

My area has a 20 per cent. unemployment, and a male unemployment rate of 25 to 26 per cent., so what choice is there? In my area, where unemployment is 21 per cent. and male unemployment is 25 or 26 per cent. what other jobs are available? The people know full well that in some cases they will never work again. It is no gravy train. This will be compensation for losing a job and having to bring up a family in the atmosphere of having lost that job.

We are not talking about statistics. This House talks too often of statistics, without realising that people are behind those statistics. Sometimes they are single people, or they may have a family. This is not a gravy train. Most people would continue with their jobs rather than be made redundant if they had the choice. Let us forget that gravy train and concentrate on what will happen on abolition. I did not want abolition. I have said that. But it has come about and we have to face the problems when they confront us. When we consider the problem of abolition, we can treat people alike.

I always fear, especially with this Government, that all this talk of levelling tends to level down rather than up. I hope that will not happen in this case. In many industries, those who receive redundancy payments under statutory provisons have always received enhanced payments. That has occurred in mining and steel, as well as in private industries. When we talk of the running-down of private steel works in our area, we know that redundant workers always receive enhanced payments. When directors are made redundant, they do not receive statutory industrial payments but what used to be called a golden handshake. Whatever it is called now, it is compensation for losing a job. That covers all of us. We are not talking of anything that is different for anybody else.

Our system tries to treat people differently. I accept that there will be a cut-off date now. The date does not affect everybody equally; it affects everybody unequally. We ask the Government to consider that situation tonight and to recognise the anomalies that will be caused by putting the date into the Act.

I argued at the time that it should never have been there. The problem is that on 31 March those working for Metropolitan counties will be affected by the same legislation throughout the length and breath of the country. They will be made redundant by that legislation.

We say that they must be treated alike. The Government must ensure that the enhanced payments available to some authorities will be available to the three authorities caught in the trap. It will not cost much or lose any credibility for the Government. It will prove that there is some feeling left in this Government for the effects of their legislation. People will be affected. The Government should consider now those who will be affected by the measure. Let us consider it and bring it in, and make sure that of all the Government's follies this will not be another one.

11.3 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)

I much appreciate — indeed, I share — the Opposition's view of the importance of the debate, and of the compensation regulations.

The hon. Member for Houghton and Washington (Mr. Boyes) has spoken warmly of the staff of the Greater London council and of the metropolitan councils. The Government share that warmth towards the staff, if the Government do not share the Opposition's view of the authorities for which those staff work.

It is slightly ironic that Oppostion Members should pray against the compensation regulations. It would be most unfair on the staff if at the eleventh hour Parliament were to reject the regulations. That would be the logical result of granting the prayer.

Mr. Simon Hughes

The Minister knows that the only way to debate this matter is by using the technical device of praying against the regulations. I hope that he will accept that nobody wishes the beneficial effects of the regulations to be prevented. However, we want to make sure that what has not been covered is dealt with by having it debated and answered in the House.

Mr. Tracey

I shall try to answer the points that have been raised, among others, by the hon. Member for Southwark and Bermondsey (Mr. Hughes).

The need for the regulations is urgent. There are 25 days to abolition day. Already the staff of the Greater London council and the metropolitan county councils are rearranging their lives either to fit into the new structure or to find new pastures. Although the contents of the regulations are, as I shall show, widely known and although their effect is retrospective to Royal Assent to the Local Government Act 1985, it is right that the staff of the GLC and the metropolitan county councils should know exactly what Parliament is to make available to them by way of compensation for redundancy or for financial detriment.

For that reason, we on this side of the House would have been keen to see the regulations approved by Parliament many months ago. Part of this debate has focussed upon an apparent delay by the Government. However, it has proved to be impossible to ask Parliament to approve them earlier than this, principally because we were determined to give the Trades Union Congress and the unions what might be described as a last gasp opportunity to put their views to us before we took our final decisions. We had persistently tried to talk to them, but they had rejected all of our many invitations to them to talk to us about the way that abolition would affect their members' interests.

I understand that the refusal of the TUC and the unions to talk to us was determined by a Labour party national executive council resolution which banned anyone from talking to the Government about abolition. It is up to them to deny that fact, but that is what we have always understood and that was fairly apparent during the debates in this House on the legislation. This matter fell under the same umbrella.

Our first invitation to the unions and to the Association of Metropolitan Authorities, representing the employers, followed upon our White Paper in October 1983, two and a half years ago. We said then that we would talk to them about all staffing issues, including our proposal to base the compensation terms for redundant staff on those generally available to local government and also our proposal that we would provide compensation for staff who suffered detriment because they had to move to jobs at lower rates of pay.

The TUC and the AMA refused to discuss these matters with us. Only the Federation of Managerial and Professional Officers' Unions—now FUMPO—had the courage and the common sense to take up our invitation, while making their opposition to the principle of abolition clear.

We repeated our invitation on subsequent occasions. One such occasion of great significance for the issues before us tonight was in March 1984. On 1 March 1984, the Government announced to Parliament that we would take steps to disallow compensation terms other than those to be set in the abolition legislation. We did this because we believed it to be right to set nationally applicable terms for a reorganisation of this kind and of this scope and scale.

The steps that we took were to place two provisions in what became section 53 of the Act. The first one requires compensation to be paid only in accordance with regulations to be made for the purpose — these regulations. The second — implementing our promise that we would not take away, retrospectively, anyone's legal rights established before our announcement — protected contractual rights to better compensation which any officer had obtained on or before the day of our announcement. Indeed, there has been some discussion of those very terms tonight.

In doing this, we followed well-established precedents for Governments to protect forthcoming legislation against pre-emptive action by interested parties. It was, as subsequent events have underlined, a very important step, both for the staff and for the abolition authorities. We again invited the representation of both to discuss such matters with us. But still the TUC and AMA stayed away from the negotiating table.

We repeated our invitation late in 1984. We had introduced the Bill with many clauses relating to staff. We had published our proposed terms for redundancy compensation, including the possiblity of some enhancements for the 41 to 49 age group. We had secured majorities on the floor of the House not only for the principle of abolition but for the date of 1 April 1986. We invited the TUC and AMA to talk. Once again, they sat on their hands.

The TUC stayed put until 14 July 1985— that is, eight months ago. Then, only two days before the Royal Assent to the 1985 Act and nearly two years after our first invitation, it sat down to discuss with us staffing aspects of abolition.

I suggest that we would have been well within our rights to say, there and then, that it had come too late to discuss compensation issues. We could reasonably have decided to get on with the complex task of making the regulations. That would have minimised the uncertainties facing staff.

But we chose not to. We gave the TUC the opportunity to negotiate in earnest. We also included the AMA, which came hurrying along to see us on the coat tails of the TUC, a mere three months after, in October 1985; and still asking for more time! During those negotiations, we published consultation papers on detriment compensation and on an early release scheme, and we provided the TUC and AMA with all the help and guidance we could about the staffing provisions of the new Act.

Finally, after four months of tough negotiations—I will say that for those across the table from us— we made our final decisions, which were announced by my noble Friend the Minister of State on 13 November. Knowing how important the terms were to the staff, we gave our decisions full publicity so that, during the time it would take to transform the terms into a statutory instrument, everyone concerned — old and new employers, individual officers and union officials— would know precisely what the terms were.

Even before our final decisions were made we had, of course, made considerable strides in drafting the necessary regulations. We were offered help by the TUC, the AMA, FUMPO, NALGO and the staff commission with the technicalities of drafting. This we accepted, and I can readily say that we are very grateful for that help. The regulations are the better for it, in our view. But the process of consultation, responses, and redrafting took us into this year, when we laid the regulations at the earliest practicable opportunity.

Given the late hour, and given that the House has known the substance of the terms—since well-publicised terms—since 13 November last, I do not intend to go through the terms in detail. We have indeed, placed a memorandum in the Library which does this.

I should like, if I may, in the time remaining to me to deal with the points which have been raised by hon. Members on both sides of the House, most particularly by the hon. Member for Houghton and Washington, who spoke from the Opposition Front Bench. The hon. Gentleman talked about the terms and why, indeed, the terms applying to the staff of the GLC and the metropolitan counties were not the same as those applying to the Civil Service.

We made it clear as long ago as 1980 that the Crombie terms were no longer appropriate. In deciding on the terms set out in the regulations we started with the existing local government provisions but we took account of the unique circumstances which have come about as a result of abolition. We took account of the priorities that the unions in particular identified for improving those terms.

We have set terms which are fair for people who through no fault of their own have had their working lives disrupted by the legislation which they could not have anticipated up to three years ago; legislation which, I must tell the hon. Member for Barnsley, West and Penistone (Mr. McKay), we agree with and feel strongly about. But we fully accept that the staff could not have anticipated it entirely up to three years ago. We still say that the terms which have been set are fair on the ratepayers who will foot the bill.

We have been asked why we set three years as the qualifying period. Initially we proposed a qualifying period of five years' continuous local government service, including, in the case of the GLC and the metropolitan counties employees only, two years' service with that employer. But in the light of consultations we decided to relax both requirements. We decided that the appropriate qualifying period for compensation lasting as long as eight years could not be set at less than three years. I remind hon. Members that the Crombie code, the sort of code that has been discussed for Civil Service workers, and indeed the Crombie code used in the 1974 reorganisation of local government, prescribed the qualifying period of five years.

The hon. Member for Houghton and Washington also talked about the timing of detriment payments. He is correct to say that entitlement to compensation for detriment will arise at the end of each 12-month period. He is also right to say that each compensating authority can make payments on account before the end of each period. That is a fair and flexible approach. It reflects the reality that detriment can only be based on comparing year with year, but at the same time it allows the compensating authority to make timely payments during each year.

The hon. Gentleman compared local government staff with those who had been transferred compulsorily out of local government to the water authorities in 1974 and who subsequently rejoined local government. Such staff are not able to reckon either their water authority service or the local government service which preceded it in calculating their entitlement to a statutory redundancy payment. That is not the direct result of the regulations in relation to abolition. The point here applies generally.

Mr. Boyes

Tell the people who are affected who have worked in the water industry or the Health Service why. Explain in detail why they will not get the compensation for that period when they worked in local government before 1974 and were compulsorily transferred into those other industries.

Mr. Tracey

The difference was made clear at the lime when the original transfer was made. It was not a question of being transferred from one area of local government to another. This was a quite different matter. Indeed, that point is well known now. That is a perfectly fair answer to the hon. Gentleman. I think that it is well known to people who were transferred into the water authorities.

The hon. Gentleman asked why an employee who already had 40 years' service would not have his pension enhanced by added years. The abolition compensation terms are based on the general local government superannuation and compensation arrangements which provide that such a person cannot accrue more than 40 years' service by the age of 60. Therefore, a person who already has 40 years' service when he reaches 60 does not receive added years.

Many of us will have sympathy with what the hon. Member for Houghton and Washington said about maternity rights. Any woman who has by the time of abolition established her right to maternity pay under employment legislation will be able to get from the appropriate residuary body any part of her entitlement which is outstanding when the GLC and the metropolitan counties are abolished. However, the position of any contractual entitlements is less clear. If such entitlements survive termination of a contract of employment they will be met by the appropriate residuary body, but it is far from clear why that group should be specifically compensated if such entitlements are lost and compensation for redundancy is available. Other groups, such as the long-term sick and people on compassionate leave, are equally deserving. It would be invidious to make distinctions. The point about maternity rights has been raised with my right hon. Friend by my hon. Friend the Member for Crosby (Mr. Thornton) and it will be explored in the Department.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) pinpointed anomalies affecting staff who work for the Inner London education authority. Staff transferred by order will retain their existing contractual rights. Staff transferred to ILEA will retain London Local Act terms, but recruited staff will be offered normal local government terms. We do not consider that the difference is a sufficient reason for extending the London Local Act terms generally to new London bodies.

The hon. Gentleman made some fair points about what he described as extraordinary anomalies. I undertake to consider them. I do not want to raise his hopes too high, but as we are a compassionate Government we shall examine the anomalies again before we reach our decision at the end of the 25 days.

Mr. Simon Hughes

I am grateful to the Minister. I shall forward the correspondence and the documents to him almost immediately. He and I appreciate the great urgency, because time is short. Perhaps the matter can be pursued with the Government outside the House in a matter of days so that we can try to overcome what may seem to be a small problem but which is a big one for the people concerned.

Mr. Tracey

I am grateful to the hon. Gentleman, we shall read the correspondence with interest.

The hon. Member for Houghton and Washington referred critically to the article in the Daily Express about gravy trains. My hon. Friend the Member for Dewsbury (Mr. Whitfield) spoke passionately about examples that concern his constituents and others in the north of England. I cannot comment on schemes as raised by the Daily Express and my hon. Friend as I am not aware of the terms, and to comment would be unfair to individuals. My hon. Friend reflected deep-seated anger at excessively generous terms being worked out. We have felt that some of the terms are extremely excessive if that is possible.

Mr. Boyes

Surely the Minister will not now base a case on one example given by the hon. Member for Dewsbury (Mr. Whitfield). The Minister is about to generalise from one individual. I tried to explain, as the Daily Express concedes about the GLC: most of his 4,000 staff will get between £1,000 and £3,000. The hon. Member for Dewsbury is a director of Cullingworth Textiles Ltd. and of Caldaire Independent Hospital plc and has the trade of solicitor and notary public, and he is objecting to some people from the GLC and the metropolitan counties getting compensation of between £1,000 and £3,000. That really is hypocritical.

Mr. Tracey

The hon. Gentleman is wrong to say that I am generalising. I do not want to make general points but, as he has mentioned the commercial world in regard to my hon. Friend, perhaps I ought to read some of the Daily Express leader of 3 March which said: private companies use money freely raised in the market place. Local authorities use money extorted from their hapless ratepayers. There is a world of difference. I do not subscribe to the precise language, but the sentiments are not entirely unreasonable and are shared by a good many people. We have not tried to change the terms which were established before 1 March 1984. I am afraid, however, that we cannot level up in local authorities that did not negotiate deals before that date as those terms would impose a completely unacceptable burden on ratepayers. No Government could accept that decisions taken by each authority should determine the terms to be set nationally in a statutory reorganisation.

The Government have worked the regulations out fairly and patiently, given the amount of vacillation, time wasting and, indeed obstructive behaviour, of the Trades Union Congress and some of the local government unions. I commend the regulations to the House.

Question put and negatived.