Local Government Reorganisation (Remuneration)

HC Deb 14 February 1996 vol 271 cc1073-111 7.34 pm

Mr. Frank Dobson (Holborn and St. Pancras)

I beg to move, That the Local Government Reorganisation (Compensation for Loss of Remuneration) Regulations 1995 (S.I., 1995, No. 2837), dated 3rd November 1995, a copy of which was laid before this House on 7th November, be revoked. The regulations cover local authority staff who work for shire counties or shire districts and who have been affected by local government reorganisation. In particular, they cover those whose remuneration has been reduced as a result of the reorganisation—those who lose money through no fault of their own; those who suffer detriment.

It would probably be helpful to the House to spell out the large numbers who are potentially covered by the regulations. According to my calculations, 137,000 staff are involved in those areas where unitary authorities were elected last May and which will take control of those authorities this April. There are potentially 292,000 staff covered in the unitary authorities that will be elected this May and which will take control in April 1997 and 314,000 staff will be covered by those authorities for which there have been recommendations from the Local Government Commission but which, for one reason or another, have not yet been put to the House. Their position is unlikely to be sorted out for another two years. That makes a total of almost 750,000 people. We must bear in mind the fact that we are talking about the lives and livelihoods of that huge number of people.

The object of the rules is to attempt to treat people fairly, not just as chattels who work for a certain wage for one authority and who are then shifted to another authority and paid less money or who have their pay reduced because of reorganisation in the authority for which they are working. The object is to ease the pain of the insecurity.

The Government have turned the promotion of insecurity into an art form in recent times. People feel insecure on the streets where they live, old people feel insecure about their pension prospects, young people feel insecure about their chance of finding a job, sick people feel insecure about their chance of obtaining hospital treatment and, above all, many people feel insecure about the future of their jobs. One would have thought that some Conservative Members would have given that matter some close attention because some of them are insecure in their jobs.

Mr. Roy Thomason (Bromsgrove)

If the hon. Gentleman considers this measure to be so important, will he explain why it took him and his colleagues from 28 November, when the regulations were introduced, to 10 January to lay a prayer against them?

Mr. Dobson

The hon. Gentleman is as daft as a brush, if it is not contrary to the rules of order to say so. We laid a prayer against them, but it took a long time for the Government to agree to debate it on the Floor of the House. We do not need any silly interventions like that. I do not think that many of the people whose pay has been affected will be interested in the toings and froings of this order. The Government proposed that we should debate the matter in Committee. We decided that the regulations should be debated not in Committee, but on the Floor of the House. They are now being debated on the Floor of the House; when matters are debated on the Floor of the House is decided not by the Opposition, but by the Government, as anybody should know.

Mr. Phil Gallie (Ayr)

The hon. Gentleman referred to a number of issues about which people had concerns, such as health and youth unemployment. Yet youth unemployment is going down and we are doing better than other countries in Europe. Is it not the hon. Gentleman and his party who have raised fears, quite falsely, about those matters within the community at large? Do they take responsibility for using political opportunism?

Mr. Dobson

I could apply to the hon. Gentleman's contribution what Winston Churchill said in 1909 when talking about the future of the House of Lords. He challenged any Tory supporter of the existing position of the House of Lords to make speeches defending it. He pointed out that Lord Lansdowne had delivered an essay in feudalism in Oldham and he hoped that he would speak in every part of the country because the Liberals and Labour party members, who were against the House of Lords, would then not have to make their case because he had made it for them. Every time the hon. Member for Ayr (Mr. Gallie) gets up, he makes our case for us.

Above all, people feel insecure about their jobs. If Conservative Members do not believe that many of our fellow citizens feel insecure in their jobs, they are indulging in the worst form of deception, which is self-deception.

The local government reorganisation has been a shambles from start to finish. Against virtually a promise from the then Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), that virtually everywhere would become unitary authorities, we have shadow unitary authorities in office in Hartlepool, Stockton-on-Tees, Middlesbrough, Redcar and Cleveland, Bristol, North West Somerset, South Gloucestershire, Bath and North East Somerset, York, the East Riding, North Lincolnshire, Hull, North East Lincolnshire and Selby.

Other orders have been passed by the House, but the councils concerned have not yet come into operation. Those councils are Brighton and Hove, Bournemouth, Darlington, Derby, Luton, Milton Keynes, Poole, Portsmouth, Southampton, Stoke, Thamesdown, Leicester and Rutland. There are also a host of others that have not yet got through the House. Four councils have been approved by the Secretary of State for the Environment—Nottingham, Plymouth, Torbay and Southend. There are also six in Berkshire, plus Herefordshire, Blackburn, Blackpool, Halton, Medway Towns, Peterborough, Thurrock, Warrington and The Wrekin. People in all those areas do not know what is happening to their jobs.

Mr. David Nicholson (Taunton)

I suspect that the House will find that in most authorities that are to be unitary authorities, there is substantial popular backing for those developments. I suspect that the hon. Gentleman's party backs those unitary authorities. The reason why the hon. Gentleman is so frustrated by the failure of local government reorganisation to sweep away the county tier—which, it is clear from this process, has considerable traditional, historical and popular backing—is that he hoped that the process would do the work of his party. Sweeping away that tier would mean that his party could introduce regional assemblies, which no one in England wants.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. I am feeling rather helpful tonight. I inform hon. Members that it is not permissible to discuss local government reorganisation in general. We are talking about the remuneration of people who have been affected by the reorganisation.

Mr. Dobson

I accept your ruling, Mr. Deputy Speaker, as anyone should, so I shall not be tempted by what the hon. Member for Taunton (Mr. Nicholson) has said, other than to say that when the right hon. Member for Henley, now the Deputy Prime Minister, introduced the idea of the Local Government Commission, he made it clear that he expected virtually everywhere in the country to be turned into a unitary authority. If we have had inconsistency, stupidity and a total mess, it is no good blaming the Opposition.

The problem with all this is that, as Conservatives clearly recognise—or should recognise if they are genuinely conservative—change costs money. If we are to have change in local government, whatever the merits of the end of the process of change, we must realise that the process absorbs resources, costs money and causes a lot of bother for the people involved. That is certainly happening at the moment.

For that reason, the Government have just announced that they cannot find the money to finance the process of change, some of which would be devoted to meeting the compensation under the regulations. In effect, the Government have announced that they cannot find money for the process of change in Nottingham, Plymouth, Blackpool, Peterborough, Torbay, Southend, Thurrock, Warrington, Blackburn, Halton, The Wrekin and the Medway towns, and all the changes in the whole of Berkshire.

It appears that the country is in such a mess that the Government, despite the fact that it is their policy, which has the support of the Opposition, which has been proposed by the Local Government Commission and which, as the hon. Member for Taunton has pointed out, is supported by local people in most places, cannot find the money to fund the process of change. As a result, we have an extended period of uncertainty and a likely period during which further expenses will be incurred. That uncertainty and expense will be bad for local people, bad for local purposes and bad for staff.

It is not as if the provision that is being made, either to compensate those who lose their jobs or those whose pay goes down, which is what we are dealing with tonight, is generous. Neither the provision for individuals nor the provision for funding the process of change is generous.

Humberside is being abolished, yet the new East Riding council is short of funds. The new North Lincolnshire council is short of funds. The Bristol authority is clearly short of funds; I think that one or more of my colleagues from Cleveland intend to make the same point. I am sure that the right hon. Member for Selby (Mr. Alison) will want to make the point about the difficulties faced in Selby, which has been knocked about in two ways.

First, the removal of York from North Yorkshire has led to increases in costs for the rest of North Yorkshire, which includes Selby. Secondly, Selby, in the process of change, also lost a substantial amount of the suburbs of York to the new York authority, so it has had an enormous reduction in the rateable value of its residential property. Clearly, Selby, unless the Minister comes up with some extra funds, will find it difficult to cope and even to fund the rather miserable terms of the regulations. Like the other regulations that have stemmed from the reorganisation, the best thing that we can do is to try—

Mr. Edward Leigh (Gainsborough and Horncastle)

I am not making a partisan point; I am only interested in the hon. Gentleman's view. How does he think that we shall avoid the mistakes that were clearly made in the previous major reorganisation of 1974, when there was a general view in the House that we were simply changing the deck chairs? There were enormous costs involved in that reorganisation. Despite the fact that the number of authorities was supposed to be reduced, it appeared that members of staff ensured that their jobs were preserved at their current levels. There was grave dissatisfaction throughout the country. How does the hon. Gentleman feel we can avoid that happening again?

Mr. Dobson

The best way in which to avoid having daft reorganisations of local government is not to have a Tory Government. The hon. Gentleman refers to the previous reorganisation. That reorganisation, which the present Government are now reorganising, was carried out by a Tory Government and the Labour and Liberal parties voted against it. We accept no responsibility for the chaotic mismanagement of change which has been a major characteristic of the Conservative party. Those were the people who spent £16 billion—not million, billion—introducing, trying to run and then getting rid of the poll tax.

Mr. Thomason

rose—

Mr. Deputy Speaker

Order. It will now be helpful if we can get back to the proposed remuneration for those who have suffered loss. We are going very wide of the debate, so I should be grateful if the hon. Gentleman would stick to the subject of the debate—remuneration.

Mr. Dobson

I have done my level best to do so all the way through, Mr. Deputy Speaker.

Let us compare the regulations with similar regulations pertaining to the same circumstances. The last time that similar regulations were introduced was in 1986, when another Tory Government abolished the Greater London council and the metropolitan counties. The 1995 regulations are much meaner and more miserable in their approach to staff than were those introduced at the time of the 1986 negotiation.

Mr. Thomason

Will the hon. Gentleman give way?

Mr. Dobson

No. The hon. Gentleman constantly stands up and tries to cause me to go out of order, Mr. Deputy Speaker, and I refuse to respond to the temptation any further.

The flavour of the regulations may be summarised as "meaner than Maggie", because they are meaner than the regulations that were introduced when Lady Thatcher was Prime Minister. The provisions are much meaner and more miserable than those that applied when Mrs. Thatcher abolished the Greater London council and the metropolitan counties.

The regulations are designed to compensate a person who is affected by the local government reorganisation and who, in the process of that reorganisation, is forced to take a job with pay worse than their existing pay. Under the regulations, such compensation as is given will be given for only three years. Under the 1986 Thatcherite regulations, compensation made up the full difference between the previous pay and the new pay for seven years, and half the difference for one year. Under the regulations, the difference will be made up for only three years—half as good as Mrs. T.

The compensation will not make up all the difference between the pay that people would have had and the pay that they get, because—

Mr. Thomason

Does the hon. Gentleman agree that the previous regulations had a cap imposed on them, which the 1995 regulations do not, so there is a big difference?

Mr. Dobson

The people affected by the regulations, whom I have been consulting, all tell me that if they could go "snap" on the 1986 regulations instead of the 1995 regulations, they would do so. Generally speaking, whatever the differences between the two sets of regulations, the 1986 regulations, passed 10 years ago, were more advantageous to the people covered by them than are the 1995 regulations.

People will not be fully compensated for what they lose. Even in three years, people with their high level of pay would have reasonably expected pay increases, increments, and possibly bonus payments—even performance-related pay—but they will have to forgo all that, and the benchmark used to calculate compensation will only be the pay that they receive at the time when their pay decreases.

Let us suppose that a person was due to receive a pay increase as a result of a nationally negotiated agreement, or an increment, on the day that the scheme came into operation. As compensation will he calculated on the basis of the pay that the person received the day before the scheme came into operation, they will be robbed of one year's pay increase or increment. That is miserable and mean-minded.

Compensation payments will not be pensionable, so not only will people lose their pay during the three years, but their pension will be permanently lower than it would have been if they had stayed in their old job. The Government will not make any allowance for the pension. That is unfair generally, but especially unfair to people approaching retirement, who have worked hard all their lives and whose pension entitlement will be cut as well as their pay because they have lost out in the lottery of local government reorganisation, which was set in train by the present Deputy Prime Minister. I suppose it is yet another of his unsigned cheques.

At the other end of the time scale, people will not be entitled to any compensation unless they have been in post for 12 months before the scheme comes into operation.

I do not understand why that constraint applies. It is as much a pay cut for a person who has recently started a job as for a person who has been in it for a long time.

If the Government were logical and allowed people to include the compensation for pension purposes, it might be possible to justify giving a slight advantage to people who had served an authority for a long time. A person at the lower end of the pay scale, starting their career, who may have recently married, who has just been appointed or promoted, will lose out by receiving no compensation.

An important matter arises from the due commencement date of the regulations. Previously, the Minister and I have clashed over whether we understood orders and I believe that once it could be reasonably proved that neither of us understood the part of an order that was under discussion. As I understand the regulations, however, eligibility for compensation will come into operation only on the day of the election for the shadow authority.

In the case of people in the Brighton and Hove or Southampton group of authorities—I shall not read out all the place-names—the scheme will come into operation on 2 May 1996. A substantial problem will result, however, from the Government's decision to postpone elections or not to hold elections for the other tranche of authorities—Nottingham, Plymouth, The Wrekin, Blackpool, Blackburn and so on—because it is quite possible that, reasonably, those authorities will wish to make progress with reorganisation. It would make good sense for the new unitary authorities and the counties to start the reorganisation process once they know that reorganisation will take place. Even if they start moving people about and reorganising departments before the election day, that would trigger the arrangement.

People working for Nottinghamshire, Plymouth, Southend, The Wrekin, Warrington, Halton or the Medway Towns may therefore be moved in anticipation of local government reorganisation and may have their pay cut but not be eligible for the benefits of the compensation scheme.

Mr. Thomason

You are wrong.

Mr. Dobson

The hon. Gentleman sits on his behind, saying that I am wrong, but I am not at all sure that I am wrong. Obviously, no one will move from one employer to another to his detriment during that time, but it is quite possible that forward-looking authorities will want to start reorganising their departments as quickly as possible to minimise costs and so on, and very many staff are therefore exposed to being shifted around to their detriment without being entitled to compensation. I do not think I am wrong about that. I suspect that I will be proved right—not about everything, but about some things. [Laughter.] It is all very well for people to laugh, but supposing Conservative Members were employed by these authorities and had to anticipate a change—

Mr. Patrick Nicholls (Teignbridge)

I shall explain why we are laughing as slowly and simply as I can. I am not laughing at the grief of people who find their employment disappearing. I am laughing at the spectacle of someone at the Dispatch Box admitting that he does not understand much of his brief but hoping that one day he will. That is highly insulting to those affected by the regulations.

Mr. Dobson

I made a new year's resolution two or three years ago never to give way again to the hon. Gentleman— ever since his affair with the taxi and the drink in Bournemouth. Clearly I must stick to my resolutions in future.

The other problem that arises concerns the limitation on compensation. Compensation covers only remuneration, so that any leave entitlement that may have been built up over a long, hard-working career, or the number of hours worked, can be cut with no compensation. That too shows that these arrangements are harmful to a great many hard-working people. It is one reason why we shall vote against them tonight. I repeat: these regulations are meaner than Maggie, an achievement most people would have thought quite difficult.

On top of all this, and as a result of the Government's decision not to proceed quickly with the remaining orders, there will be a massive period of unpleasant insecurity for large numbers of hard-working staff. That is bound to affect the quality of the services provided, and to lead to increased costs. We think the whole thing is a bad deal; that is why we shall vote against it tonight.

8.1 pm

The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry)

We should note, first, the touching affection displayed by the hon. Member for Holborn and St. Pancras (Mr. Dobson) for Lady Thatcher. I shall see that she is informed instantly of the hon. Gentleman's retrospective Valentine. Meanwhile, he gave us an account of recent history which I should briefly like to correct, so as to set the debate in the necessary context.

When we set up the Cooksey commission, the hon. Gentleman and I agreed that there were some areas that needed to be reviewed, and we discussed which ones should be referred to the commission. The recommendations fell due before Christmas. We then had a period of consultation that closed yesterday. Indeed, the last two delegations came to the Department on Monday. We therefore need to reflect on the consultations, because we have not yet made up our minds—if we had, the consultations would have been a charade. In fact they were real.

We then have to produce the orders implementing our decisions. Subject to consultations again, we shall consider the practical details with the local authorities concerned to make sure that they are technically correct. We must then lay the orders and vote on them, here and in another place.

Anyone who thinks that all this can be done in order to hold shadow elections in May is not being realistic. The reason for the delay, which I regret, is one of timetabling. It would be difficult to do all the necessary spadework in time to give local authorities even a sporting chance of holding shadow elections in May—

Mr. Dobson

It would be impossible not to accept some logic in what the Minister says about the authorities that were recommended for unitary status by the Cooksey commission—they are the products of the re-review. The same, however, certainly does not apply to Nottingham, Plymouth and Torbay, because the Secretary of State has made clear his decision that they are to go ahead. But they were held up while other parts of the relevant counties were reconsidered, and the propositions for reconsideration of the other parts of these counties have not been endorsed by the commission. As Nottingham, Plymouth and Torbay have been on hold all this time, it would surely be reasonable to go ahead with them. It would not be difficult, and I can guarantee that we would help to get them through.

Mr. Curry

I appreciate the hon. Gentleman's continuing intention to treat these matters, as far as possible, in a bipartisan fashion. That is only sensible. But he will know that the commission re-reviewed some new areas in places where certain arrangements had already been agreed for the creation of new unitary status. Some of the recommendations that I have received in the past few weeks have come from areas which the Cooksey commission declined to recommend for unitary status, asking me to send them back for a third time around the course. That is what has prevented us from closing out the matter and going ahead. Consultation is bound to leave options open.

Mr. David Rendel (Newbury)

Let us leave aside for a moment areas apparently decided on and agreed by the Government some time ago—including Berkshire, which has had difficulties with judicial review, and so on. It has at least been through the draft order process once, though. The Minister seems to be saying that timetabling difficulties are the sole reason for his withholding the orders dealing with the Cooksey-type recommendations. Surely he should have realised that a long time ago. He has left the authorities in ignorance of whether they are going to go ahead with May elections until the last possible moment. The Minister could have known about any timetabling difficulties last year.

Mr. Curry

When we set up the Cooksey commission it was not clear when it would make its recommendations. Had it asked for more time to consider, it would have been logical to allow it more time. When local authorities have discussed the matter with me, I have made it clear that we intend to facilitate an effective transfer of power during the reorganisation. Of course everyone wants to know what is going to happen, but we want to ensure an effective transfer of responsibilities.

Mr. Deputy Speaker

Order. The Minister's opening remarks have been helpful, but now we should get down to the regulations.

Mr. Curry

I anticipated your desire, Mr. Deputy Speaker, and was about to move to the precise subject matter of today's debate.

As the House will be aware, we intend reorganisation to bring benefits, and both sides of the House agree that reorganisation means big changes, not least for local authority staff. Some of the savings that will come from reorganisation necessarily result from changes in the staffing structure. It may be helpful to outline the three main changes to arrangements for staff that flow from reorganisation.

The first change is the redundancy compensation scheme which was debated in the House more than a year ago and which has been in place for more than a year. So that piece of the jigsaw is already in place. Secondly, there are the staff transfer orders. They will provide automatic transfer for front-line service staff, to ensure that there is no disruption to essential local services over the reorganisation period. The Welsh Office and my Department have worked closely with the authorities over recent months to prepare the staff transfer orders. The orders governing staff in Avon, Cleveland, Humberside and North Yorkshire have now all been agreed with all the relevant authorities, and will be laid, as planned, at the end of this month, in time for the reorganisation on 1 April.

The third element of the package is the scheme for compensating staff who take a lower paid job as a result of the reorganisation—the subject of tonight's debate. The regulations are the result of two extensive consultation exercises in England and Wales. There were obviously a large number of comments. We have considered them carefully, and they are reflected in the final scheme which I am about to describe.

Mr. Thomason

Will my hon. Friend confirm that, if the regulations do not make progress today, the future of authority staff will be uncertain and that it is in their interest to have the matter determined promptly?

Mr. Curry

My hon. Friend is right. If the regulations were not passed, the detriment scheme would not exist. I have no doubt that the Government would wish to look again at the detriment arrangements, but it would take many weeks, given the consultation that we have to go through. Undoubtedly, that would mean that the uncertainty would be prolonged, as he suggested

Ms Dawn Primarolo (Bristol, South)

Could the Minister explain why people in Avon are being offered a less generous detriment scheme than has been offered in any previous local government reorganisation and less generous than those currently in place for civil servants? Why are they being asked to take the penalty of the cost of reorganisation?

Mr. Curry

I am delighted that the hon. Lady is so impatient to hear what I will say. I intend to address directly the scheme before us.

Ms Primarolo

So why is it a less generous scheme?

Mr. Curry

I do not accept the premise of that remark.

The purpose of compensation for financial detriment is to encourage staff who wish to continue their careers in local government to stay rather than take redundancy. We recognise that there is a great deal of expertise in local government which new councils will not wish to lose. Employees are not prevented from taking redundancy if it arises but if they wish to stay in local government, despite a drop in pay, we need to provide a bridging mechanism. The regulations provide the bridging mechanism. By avoiding the need for redundancy payments and encouraging councils to retain existing employees in new jobs, the scheme should benefit staff, employers and the taxpayer.

The regulations do not give anything away. They do not change in any way the normal protection afforded to staff by employment law. Terms and conditions can be changed only with an employee's agreement. The detriment compensation scheme is there to give employer and employee additional options in making the transition from old to new staffing structures.

Mr. Andrew Miller (Ellesmere Port and Neston)

It is of course the case that the transfer of undertakings regulations to which the Minister alludes do not cover pensions. What specific provision is being made to build in proper protection for future service in the pension funds of those people that the Minister recognises as valuable to local government?

Mr. Curry

I am disappointed that there is so little faith among Opposition Members in my willingness to cover comprehensively the matters that arise from the regulations. The hon. Gentleman can rest assured that I intend to deal with pensions.

Detriment compensation is mandatory. That was requested by many consultees, including the local authority associations and the unions. It is available widely to staff affected by reorganisation and can arise in a number of ways. The shadow unitary authority, having decided on its staffing structure, will offer appointments to staff from an outgoing or transferring authority on the basis of the new salary structure. That may mean a reduction for some staff. Many staff will transfer by staff transfer orders or under TUPE and carry on doing the same job with no change in terms and conditions. However, in the subsequent restructuring that the authority may undertake to sort out the varying terms and conditions of the staff that it has inherited, such staff may be offered a change of terms and conditions.

Finally, staff who stay in continuing authorities may similarly be offered changed terms and conditions as a result of restructuring. The hon. Member for Ellesmere Port and Neston (Mr. Miller) will recall the occasion on which he and I fell into some terminological inexactitudes in an earlier debate over what constituted a continuing authority. The hon. Member for Bristol, South (Ms Primarolo) will recall that as well. A continuing authority is a unitary authority built on an existing district which acquires additional functions.

If a change in salary arises at any time in the period running from the date of the shadow elections to 18 months after the reorganisation date, detriment compensation will be triggered. The shadow authority may therefore pay detriment compensation and the fully operational authority may also do so up to 18 months following reorganisation. That should provide adequate time for any restructuring that flows from the reorganisation.

Whenever it is triggered, the compensation is paid for three years. Provided that they meet certain criteria, which I shall describe later, staff will receive compensation equal to three times the fall in annual remuneration. It will be payable over 36 months, thus in effect ensuring that the individual monthly total of pay and benefits will be maintained at the old level following the change in salary.

Mr. Leigh

My hon. Friend is receiving considerable flak from the Opposition about how mean he has been, but he would be the first to accept that, in the private sector, things such as detriment contributions are not available. Will he answer the question that I put to the hon. Member for Holborn and St. Pancras (Mr. Dobson) that he declined to answer? While the public are concerned about junior members of staff who lose their jobs altogether, what they are really worried about is what happened in the previous reorganisation, when senior members of staff cushioned their positions. They ensured that, where there were two directors of housing, both kept their jobs and a controller of housing was appointed on top of them. That is what the public want to hear about. Will my hon. Friend make it clear that the Government will ensure that such cheating of council tax payers does not continue?

Mr. Curry

I am grateful to my hon. Friend for reflecting a point of view that one hears widely. People wish to make sure that the reorganisation is carried out effectively and does not become a pretext for people to upgrade their jobs when a change in functions is not necessarily involved. We will examine carefully some of the increases in salary that appear to have been awarded in some authorities.

Mr. Dobson

Will the Minister give way?

Mr. Curry

I shall in a moment. I must make it clear to my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) that the regulations do not include an element of surtax on people who have received a higher salary to fund the detriment compensation scheme.

Mr. Dobson

Will the Minister comment on the eligibility of Ministers of the Crown who have lost their ministerial posts and gone to the Back Benches—

Mr. Deputy Speaker

Order. The Minister would be wise not to reply to that.

Mr. Curry

Mr. Deputy Speaker, it is with the utmost restraint that I observe your injunction not to respond, deeply conscious as I am of what the ministerial compensation would be should I suffer a mishap in my relations with the Prime Minister over the next 24 hours.

Mr. Dobson

Great Scott!

Mr. Curry

The hon. Gentleman is in characteristic form—largely unoriginal but none the less endearing for that.

The hon. Member for Holborn and St. Pancras compared this scheme with that made available in 1986. Such comparisons must be fair and take into account all aspects of the two schemes. Under the 1986 scheme, the compensation payable was limited to £5,000 a year. There is no limit in these regulations, which in that respect are more generous. That was something that the local authority associations and the unions specifically asked for during the consultation.

Secondly, in the 1986 scheme a person had to have been in employment continuously for three years before reorganisation before becoming eligible for compensation. We have taken a more liberal approach in the regulations and require people to have been in employment on 1 April in the year before reorganisation—that is, one year's service at the most.

Thirdly, in the regulations, we require employers to make monthly payments of compensation. In the 1986 scheme, they were required by law only to make annual payments in arrears, although authorities had the option of making interim payments. If the schemes are compared in their totality, recognising the need to take account of the money available, the regulations offer significant benefits when compared with the scheme available in 1986, and are better able to deliver their object. It is a better-engineered scheme.

The detriment scheme aims to ease the transition from the old to the new staffing structure. It is not salary protection. New councils will wish to set up new staffing arrangements, with a salary structure to match and staff will get the salary set by the employer as the rate for the job. That may well increase over time. The payments under the regulations are compensation, not part of that salary and there is no presumption that they should increase in line with the salary.

The underlying salary may, of course, increase, and the employee will not be denied that increase if the increase in salary is matched by a decrease in compensation. If an individual is unfortunate enough to suffer more than one reduction in remuneration during the prescribed period, the regulations allow those reductions to be considered as a separate event, and allow separate sets of detriment payments to be made in respect of each reduction.

I have used the term "salary" as a convenient form of shorthand. The regulations provide for total remuneration—that is, salary as well as other payments or benefits in kind—to be taken into account in the calculation of entitlement to compensation. The definition of remuneration is similar to that used for pension purposes, and is generally familiar.

Some consultees have been anxious about the effect on the pensions of staff who qualify for detriment compensation under the regulations, and have asked why detriment payments are not pensionable. The answer is that there is no need for them to be: pensions are protected by other means. The Local Government Pension Scheme Regulations 1995—which, no doubt, hon. Members will instantly recall—provide for staff to receive a certificate of material change enabling them to elect to have any pensions calculations based on higher previous earnings.

The certificate enables staff to choose their highest earnings in a period going back as far as 13 years. Staff are therefore protected—and, in addition, will receive a slight financial benefit through not having to pay contributions to their local government pension schemes on their detriment compensation.

Mr. Miller

rose—

Mr. Curry

No doubt the hon. Gentleman will wish to deal with the subject in his own speech. If the House gives me leave to do so, I shall try to respond to any additional points that he makes in my winding-up speech.

Mr. Miller

rose—

Mr. Curry

The hon. Gentleman seems to be rather anxious for his dinner.

Mr. Miller

In fact, the hon. Gentleman had his dinner earlier so that he could listen to the Minister.

I accept that regulations are in place to deal with the pensions certificate, but they do not provide for a notional final salary—the salary that someone within four or five years of retirement might have achieved under the previous arrangements. There is a difference between the position created by the regulations to which the Minister referred and the detriment that some people might suffer. I do not expect the Minister to make arrangements for someone who may have just joined the scheme, but those approaching pensionable age could be significantly disadvantaged by the final salary arrangements. Could not amendments be made to the existing regulations?

Mr. Curry

I shall reflect on what the hon. Gentleman has said, and hope to deal with it later if the House gives me permission. If I cannot do so, I shall write to the hon. Gentleman giving more details. Pensions are a complex issue, and I do not pretend to be conversant with every detail. The hon. Gentleman and I will have to mug up on it.

We have been asked to make the scheme widely available, and we have done so; but there are some qualifying criteria. The drop in salary must be attributable to local government reorganisation, because the regulations do not extend to more general restructuring exercises. The employee must be in the employment of a relevant council on or before 1 April of the year prior to the reorganisation; staff employed after that date must accept the job on that basis. The drop in salary must be suffered in the prescribed period, staff must be employed by councils directly affected by reorganisation, and detriment compensation will not be payable to any individual receiving redundancy compensation or retirement benefits.

In the regulations, we have set out a scheme that is widely available to local government staff affected by reorganisation. The normal protection accorded to staff by employment law is unaffected by the regulations. Detriment compensation will enable authorities and staff to make arrangements to ease the transition to the new structures. As my right hon. Friend the Member for Selby (Mr. Alison) has said, the motion to revoke the regulations will deny employers and staff that possibility. It will make it more difficult for staff to stay in local government employment, and for councils to retain experienced staff during restructuring. On that basis, I strongly advise the House to reject the motion.

8.24 pm

Mr. Frank Cook (Stockton, North)

Hon. Members will not be surprised by my speech. Over the past 15 months, I have opposed a number of measures of this kind. I am disappointed that so few hon. Members are present, because, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) pointed out, the regulations will eventually affect hundreds of thousands of people.

I suppose that the reason for the poor attendance is the piecemeal way in which the Government are introducing these measures. They have used a combination of SI—statutory instrument—and SO, or stealth and obfuscation. Many of my hon. Friends—and, I suspect, quite a few Conservative Members—will regret the scant regard that has been paid to the way in which those gradual steps have eroded the forms of local government that existed until this year.

I speak as a representative of one of the early authorities. My constituency is part of Cleveland county, where the process of transition is all but complete. It gives me no satisfaction to tell the House that all my predictions about the Government's proposals are coming true, and that the impact on staff—I am aware that that is the point of our debate—has been grave.

I intend to speak generally. Perhaps some Conservative Members will pick up a few tips on what to expect after the next general election, but I hesitate to lower the debate to the ridiculous levels to which some Conservatives have tried to lower it—

Mr. Deputy Speaker

Order. I hope that the hon. Gentleman's general comments will be within the scope of the debate.

Mr. Cook

I am trying to explain how staff will be affected by the proposals, Mr. Deputy Speaker. I hope that that will be within the scope of the debate.

We are not talking about fat cats; we are not even talking about top officers in local authorities.

Mr. Thomason

Yes, we are.

Mr. Cook

If the hon. Gentleman would listen, rather than trying to get his name on to the record—as he has tried to do throughout the debate—he might learn something, and Bromsgrove might be a better place.

We should not even be talking about top officers, many of whom have done rather nicely out of reorganisation, either through generous pay-offs—for those taking early retirement—or through enhanced salaries for those taking promotion or moving on. Conservative Members have mentioned that. We should be talking about the thousands of hard-working and frequently low-paid staff in local authorities—the many people referred to by my hon. Friend the Member for Holborn and St. Pancras—whose lives and careers have been thrown into disarray through no fault of their own.

They are the victims of a cynical and, in my view, dishonest political and bilious vendetta against authorities such as the effective and efficient Labour authority in Cleveland, whose only crime was to have the nerve to defend local services and defy the Government's unremitting drive to destroy a truly democratic local government structure, transferring its responsibilities lock, stock and barrel to a quango state. The county of Cleveland is rapidly becoming known as "quangoland".

I know, from the experience of my constituents who work in the local authority, the heartache and disruption that is being inflicted on so many local authority employees. Junior staff have had to apply for 30, 40—sometimes 50—different jobs, in the desperate hope of finding further employment. I know of highly qualified senior staff whose careers have been destroyed and who are now told that they are simply the casualties of the reorganisation. I know of examples where staff have reached such desperation about their future that they have been unable to eat or sleep. There have been reports in the local media that at least one employee was driven to the point where he took his own life. His fears over reorganisation were considered a significant factor.

Yet what happened to Cleveland county council—the current employer and which will be dismantled at the end of next month—when it offered modest counselling and support? Abuse was piled on it, not least by some hon. Members, because it had the temerity to offer a counselling service to the very people whom we are discussing, who not only were in danger of a miserly level of compensation but were thrust into the maelstrom of emotional turmoil. I wonder what those hon. Members would say if they came face to face with those workers or their families tonight.

What do the Government, who so hate public services, offer to victims of the vendetta? The regulations offer the worst compensation ever offered in any reorganisation. The offer is far worse than the terms that the Government provide for civil servants or, indeed, Ministers. Is it any wonder that morale among so many workers is at rock bottom? They are seeing the services that they have worked so hard to build up ripped apart and their future thrown into chaos and confusion. They are not only losing their employment, but seeing the structures that they have helped to build over the years dismantled as they leave.

As a former construction worker, I can tell the House that when I took redundancy at the end of a contract, I was happy to walk away and see that what had been a green-field site when I walked on to it had become an operating entity contributing to the community. The individuals we are discussing will not have that benefit.

Against such a background, what hope is there for the consumers of local services, who are being treated with precisely the same cynical disregard as the staff? Day in, day out, they are discovering that the promises made to them by Ministers and their stooges in local government were total illusions. Let us remember some of the promises. Let us remember that Sir John Banham and his commission colleagues told the people of Cleveland that, with regard to costs, they estimated that the annual savings under their proposals would be, on average, £46 a household, or the equivalent of 10 per cent. of the average council tax bill. The people of Cleveland are paying more, the services are fewer and the people who provide those services are threatened with meagre compensation.

Only last night, my local evening paper carried on its front page what it described as "the full horror" that my constituents, my council's employees and the rest of the Teesside community face. It is a horror that is likely to include drastic cuts in services to some of the most vulnerable groups—the elderly, disabled people and the mentally ill. Yet local council tax payers will face bigger bills, and local employees the prospect of unemployment.

It is a disgrace that the architects of this disastrous reorganisation are so silent and so absent. So uninterested are they that they seem to have walked away from the havoc that they have wreaked, the careers and lives that they have ruined and the services that they have wrecked. My constituents will be living with that for many years to come.

8.33 pm

Mr. Michael Alison (Selby)

The hon. Member for Stockton, North (Mr. Cook) represents a neighbouring county to my own in North Yorkshire, and nobody who lives in and represents the north of England can dispute the fact that Cleveland has been at the eye of the storm in terms of local government change and reform in recent years. I understand the points that he made. As a representative of a county with Cleveland to the north and Humberside to the south, I understand what it means to have awkward neighbours, if I can put it like that, in county terms.

The hon. Gentleman has, however, cast a pall of gloom over the regulations before us, which do not merit the negative criticism that he levelled at them. This is, after all, a compensation measure.

I am obliged to my hon. Friend the Minister for Local Government, Housing and Urban Regeneration, who pinpointed and spelled out clearly the improvements that have been made to the measure compared with what was on offer in 1986. As I understand it, local government officers who are confronted with the dilemma of having to choose between transferring to new local authorities as a result of the reorganisation and thereby having to accept lower salaried posts, and ceasing employment in local government altogether and henceforth going into retirement with a pension, or accepting redundancy, will have a real incentive as a result of my hon. Friend's measure. They will have an incentive at least to try to find a new lease of life in local government.

That is particularly relevant to the parliamentary division of Selby, which is coterminous with our local government district. The hon. Member for Holborn and St. Pancras (Mr. Dobson) was good enough to refer to Selby in his speech. Indeed, I hardly ever see him on his feet without Selby district getting a notice, and I am obliged to him tonight. He is quite right to say that Selby has been rather hard hit by the local government reorganisation—the double whammy, as he referred to it.

I remind my hon. Friend the Minister that, out of a staff provision of about 250 local government officers in the Selby district, no fewer than 65, which is a high proportion, will depart from Selby district employment. Forty-three of them will go to York. That is a relief, because they will continue in local government service. No fewer than 23 are not in local government employment, because there does not seem to be the opportunity for them at present, and early retirement or redundancy looks like the only option for them.

For the 43 or so Selby local government officers who are going to York, the compensation offered this evening, which will extend for three years and represent the difference between old and new pay, frozen at the point of reorganisation, will be a welcome incentive for the younger men in particular to continue to try to make a career in local government, even if it means an initial drop in salary.

I am grateful to my hon. Friend the Minister for giving in the regulations—it may be a standard, but it is refreshing to have it reiterated—the welcome definition of remuneration, which is set out on page 2 in the interpretation clause. There are incidental expenses in changing one's local government employer, particularly in a rural area such as Selby district, where distances are quite extensive. There are the repercussions of the increased cost of travel from one's home to the new employer, of the uprooting of home and household and so on. Those are real and measurable disincentives to moving to a new local government employing authority, but I am glad to say that they are covered in the remuneration definition. I am grateful to the Minister for that.

Unquestionably, the taxpayer and the Government will pay for the scheme. I trust that local government will not have to foot the bill for the remuneration and compensation schemes. My hon. Friend will be vividly aware that part of the purpose of the scheme is to encourage people not to take the redundancy route or to opt for early retirement but to continue to try to find work in local government.

A recurring problem that is acutely felt in the Selby district is that the cost of redundancy falls on the ratepayer, not on the taxpayer. That is why it is valuable to have a proposed scheme that will be funded by the Government, one of whose purposes is to avoid redundancy costs, which, as I say, fall directly on the shoulders of ratepayers.

The dilemma of whether to take further employment with local government or to take redundancy raises a potential problem. You, Mr. Deputy Speaker, represent a coal mining constituency. The option of redundancy or the payment of early pensions for miners causes a difficulty that I am anxious should not be repeated in the proposed scheme. I do not know whether the Minister has heard of the troubles that are occurring partly in the Department of Trade and Industry as a result of the British Coal compensation scheme, and especially its staff superannuation fund. When the coal industry was privatised, the trustees of that superannuation fund provided that those who would be made redundant should be able to draw their pension at the age of 50 instead of the normal age of 60, which was the transitional or payable date for the pension under the fund.

We are discussing a redundancy compensation package. In the British Coal scheme, some miners who were made redundant on privatisation automatically qualified under the special provision to receive a pension at the age of 50. However, those miners were rapidly employed by the new employer and worked alongside miners who would have to work to the age of 60 before they received a pension. What will happen under the proposed scheme if local government officers take the redundancy route?

Mr. Curry

rose—

Mr. Alison

My hon. Friend is prepared to advise me before I have completed the question.

Mr. Curry

I think that my right hon. Friend is asking whether it is possible for someone to get compensation for redundancy and a job with the successor authority and, in practice, walk out of one authority on, say, 31 March and into another on 1 April, pocketing the redundancy payment. I do not think that the regulations permit that, but to be sure, we are amending the staff regulations and are consulting on amendments to the redundancy compensation regulations. We shall lay them shortly.

Mr. Alison

I am obliged to the Minister for that reassuring answer. It shows that the Government have continued to keep their finger on the pulse of some of the sensitivities in this area of transferring from one employment to another. The problem is reflected in the disastrous situation in Selby. Within the coal mining industry, there is profound disenchantment because people working alongside each other are being treated differently.

I am glad that the Minister has pre-empted that recurring, because it would be deleterious for local government if there were stresses and strains between people arriving from different backgrounds of employment and with different prior entitlements. It would not be desirable for them to have to work in the same environment under the same terms of reference and have entirely different conditions of service. I am obliged to my hon. Friend for pre-empting that problem and reassuring me about it.

The Minister is manifestly following the debate closely and is ready to concede even before a point has been fully developed. That is a most disarming attitude for a Minister to adopt. Will he refresh his memory about the fundamental purpose of the provision, which is to direct local government officers who are facing redeployment in the direction of continuing employment under a compensation scheme that the taxpayer will accept? Will he remember that, although the sheep may be on the right, some goats will have to go on the left? Those goats are the unfortunate local government officers—20 or 30 of them in the Selby district—who cannot get openings in, for example, the new York unitary authority and will have to take redundancy. Selby will have to pick up the cost of that redundancy, and it will be gigantic for the officers who will not be re-employed in local government.

A few days ago, I reminded my hon. Friend about an SSA revenue support grant from his Department of more than £4 million. But the cost of redundancy in the Selby district for those who cannot go down the preferred route will be £1.5 million.

Mr. Curry

rose—

Mr. Alison

Once again my hon. Friend pre-empts my question.

Mr. Curry

I remember the debate in which the hon. Member for Holborn and St. Pancras (Mr. Dobson) urged liberality upon me and I said that I would take Selby's case seriously. I think that my right hon. Friend is speaking about SCAs, supplementary credit approvals for redundancy, rather than the normal revenue support grant payments. I think that I am right in saying that, up to the present, the only demand by Selby is for a small amount of, I think, £100,000, which is manifestly inadequate. My Department is waiting for Selby to formulate a realistic demand. It is unusual for a Minister to describe a realistic demand as one that is likely to be higher than the one that has been made.

Mr. Alison

My hon. Friend has—very conveniently, I dare say—put his head into a little noose. In fact, the point at which redundancy liabilities become operative is crucial to Selby's problem. There are two years in question—1995–96 and 1996–97. In 1995–96—the year Selby's redundancy liabilities arose—the council put in a bid for £1.5 million to the Department of the Environment, and was offered £500,000.

My hon. Friend is suggesting that, for 1996–97, the council should make up the tally by putting in for what it did not succeed in getting in its first claim. But the chief finance officer of Selby district council has told me that in order not to falsify the claim—and thus be subject to the scrutiny of the district auditor—the council cannot pretend that the liabilities arise in 1996–97, the year in which my hon. Friend is asking me to claim for more. If the council claimed for more, it would face the prospect of being faulted by the district auditor for falsifying a claim, as such claims can be made only in respect of the year in which a liability arises. It is no use my hon. Friend saying that, if the council increases the bid for the 1996–97 provision, it might get something. The council will not get it without falling foul of the district auditor.

I hope that my hon. Friend will focus his intensely perceptive and analytical mind on that relatively limited, specific problem, and decide whether he can provide a little retrospection for Selby, so that the offers that he makes of supplementary credit approvals can be unified with the council's liabilities. I do not want to bore my hon. Friend, who has been helpful. Perhaps he can bring the matter to a consummated and fruitful conclusion, so that we can get something for Selby that helps.

I remind the House that my right hon. Friend the Secretary of State said in a speech on 31 January that he announced a scheme last November to damp unacceptable increases in council taxes directly attributable to local government reorganisation".—[Official Report, 31 January 1996; Vol. 270, c. 1026.] He also talked about the special help that might be available in, for example, North Lincolnshire. I hope very much that my hon. Friend the Minister will see whether he can allow Selby to dip its ladle into that pot of soup—limited though it may be—to get the special help that is needed.

I am grateful to you, Mr. Deputy Speaker—I know of your sympathy for the coal industry—for having allowed me to digress a little. Nevertheless, I offer my warmest commendation to my hon. Friend on bringing forward this admirable and worthwhile scheme. I wish it every success.

8.52 pm

Mr. David Rendel (Newbury)

I am delighted to have the chance to take part in the debate. It is a very suitable day for the debate to take place, following the announcement yesterday that much of the local government review has been postponed for a further year. Opposition Members have accepted for a long time that the local government review is a shambles, as it leaves us with an enormous number of different situations. Councils in some parts of the country have not yet been made unitary authorities but are expecting that to happen, while others have been made unitary authorities but have not yet had their elections. All sorts of different results have emerged, and many people have been left in uncertainty as a result.

I was disappointed by the Minister's answer to my intervention, because it seemed to show that, until Sir David Cooksey produced his report, he was worried about what the timetable might be. The timetable must have been obvious to the Minister from the middle of last December, at the very latest. Staff in the authorities that have had their unitary status put off for another year have been left unnecessarily in doubt about what will happen for at least two months beyond the moment the Minister could have made things entirely clear. I was disappointed by the hon. Gentleman's answer and by the shambles of the whole process.

We are beginning to know when authorities will finally gain unitary status. The difficulties that the review has caused mean that staff have been facing uncertainty for at least four years and, in some cases, rather longer. The possibility of redundancy and loss of earnings has been hanging over people all that time, and has left them in a worrying position.

It is not surprising that morale in local government has fallen a great deal, as it has in many different jobs. People have been left in an uncertain situation, particularly in areas where it is most likely that unitary authorities will be introduced. Sadly, the compensation package under review tonight will not do very much—if anything—to restore morale to the levels that existed before the review. That is due to the uncertainty of many councils, particularly those where the orders have not yet been laid but are likely. We now know that those orders probably will not be laid for some time.

Because of that uncertainty, many councils have been losing some of their best officers. Perhaps not surprisingly—one cannot blame them—many have felt it more sensible to take a job in an authority that they know will continue for the foreseeable future, rather than risk remaining in one which, at some time in the next two or three years, could move to unitary status; such a move might leave them either without a job at all, or in a job in which their pay, for one reason or another, was lower. This completely undermines the authorities which we ought to be strengthening in the run-up to unitary authority status, as they are losing some of their best staff.

The problems with these regulations are very much the same as the problems described to us by the Minister more than a year ago when we were discussing redundancy regulations. Those regulations failed entirely to match up to previous reorganisation packages for compensation, and the same is true of the current regulations. These regulations state that compensation for loss of earnings is available for three years; yet, in 1974, open-ended compensation was available. As we have heard, in 1986 compensation was available for six years, with reduced compensation again after that. The fact that aspects of previous schemes were less generous than aspects of the current scheme does not make up for the problems caused where the current scheme is less generous than previous schemes.

Other matters add to the view that there is a lack of generosity under this scheme compared with previous schemes. There is the fact that increments that people might have been expecting will not be included in the compensation package. Staff will lose the value of any assumed increments, at least, if they move to another less well-paid job. Someone who serves for less than a year is excluded from the package altogether. I see no reason to suppose that, just because someone has served less than a year, he should be excluded from the package.

That measure has one particular danger as well. Some people who are moving into authorities are taking over from other officers who wanted to leave to assure their future. It will be particularly difficult to recruit staff to fill the positions where good officers have left early to make their future more secure. If we are to say to those very people whom we are trying to recruit to fill those vital posts that they will not get the compensation package that other officers will get, it will be even more difficult to fill those posts before unitary status arrives.

If the increments are not to be taken into account—as has been made clear, despite what the Minister said earlier—there may still be a difficulty over pension payments, as people may lose out. The fact that reductions in leave entitlement will not be taken into account is another example of how the current compensation package is not as generous as it could and should have been.

There is one important point about the regulations that has not yet been mentioned. Regulation 4(h) refers to those working variable hours who are to be excluded from the regulations, which is a significant problem. What it does not say is that those whose variable hours are reduced because of a change in their job when a new unitary authority takes over will be included. Instead, it says that all who have a contract to work variable hours will be excluded, even if that change has come about simply because of the change of authority and the need to take on a new job. That is grossly unfair to the many people on variable hours contracts.

It could mean that people who may have worked an average of 40 hours a week on a variable hours contract will in future not be given any compensation if they move to a job where, on average, their hours are reduced to only 20 hours a week.

Mr. Thomason

The hon. Gentleman seems to be suggesting that, if somebody who has been working for 40 hours has his hours reduced to 20, he should then be paid double for a period of three years for working only half the hours that he previously worked. Is the hon. Gentleman seriously suggesting that?

Mr. Rendel

I am suggesting that compensation should be due to somebody who has found that, through no fault of his own but purely because the Government have set up a new unitary authority, his pay level has been drastically reduced because of the need to change jobs, for which he cannot be blamed. I think it entirely fair that such people should get the same compensation as others who may change to jobs where they work less hard, with much better conditions of service.

Mr. Nicholas Winterton (Macclesfield)

I am following the careful and sensitive way in which the hon. Gentleman advances his case. However, as far as I can recall, he has not yet mentioned the council tax payer or the income tax payer. How does what he describes relate to the private sector, where, unfortunately, many people find themselves out of a job, through no fault of their own, because of a change in the market? How does the hon. Gentleman compare local government with other sectors of the economy? Surely they cannot be divorced.

Mr. Rendel

That is an interesting argument. There are regulations that cover redundancy in the private sector. The hon. Gentleman seems to be suggesting that this whole compensation package, which will inevitably fall on the taxpayer, should be thrown out. I shall wait with interest to see whether he will vote against it tonight. The logic behind his argument was that it was wrong for the taxpayer to have to pay any sort of compensation when someone had to change his job as a result of the Government's reorganisation of local government.

There is no reason to exclude from the compensation package people who work on variable hours contracts. We have already been told that the calculation of compensation for fees is to be based on an average amount earned over the previous five years. The same principle could easily be applied to the people I have mentioned. It would be reasonable to calculate what average hours they had been working over a previous period and allow for that level of compensation when they have to change their jobs.

It is not an insignificant problem—some 900,000 local authority employees work part-time. Of course, not all of them are affected by the change. Some will not be working in areas that will become unitary authorities, but many will. There is also an increasing trend towards variable hours contracts, so the problem is, if anything, becoming more important day by day.

Regulation 4(h) is especially likely to be important to people such as home helps, non-teaching school staff, grounds maintenance workers and many other local authority manual workers. It is poorly worded, and I fear that it will be an opening for exploitation of staff by employers. At the very least, it needs some qualification to make it clear that it should apply only to cases where there has been a genuine change of employment rather than a change of job because of the introduction of the unitary structure.

Regulation 4(h) should be deleted altogether. It is not possible, however, to make such a change, which is reason enough to throw out the regulations in their entirety and instruct the Government to introduce some new ones even though to do so would cause further delay, which would, I acknowledge, cause extra worries for local authority workers. We do not yet know what the outcome of the vote tonight will be, although it is interesting that some Conservative Members seem to think that the regulations should be thrown out. Will the Minister clarify what the Government mean by the regulation? After all, if local authority staff find themselves in conflict with their employers as a result of regulation 4(h), it will be important for the Minister to specify exactly how it should be interpreted.

I conclude on the point with which I started. The entire local government review has been an on/off affair—proposals were going through but then delayed, and the Government ducked and dived, issued guidelines beyond their legal powers and now seem to have run out of stamina altogether. People have been kept guessing and waiting to see what compensation they would receive, and will now have to wait for at least a further two years as a result of yesterday's announcement.

It is bad enough that the public have been kept waiting and guessing what would happen to their future relationship with their local authority, but it is much worse that local government staff have been kept waiting. The Government have been grossly insensitive. Finally, at the end of a long dark tunnel, staff have been offered a wholly inadequate compensation package. That shows how little the Government think of local democracy and, in particular, of the public servants who make it work on our behalf.

9.6 pm

Mr. Patrick Nicholls (Teignbridge)

There was clearly a speech to be made in support of the prayer which the Labour party tabled against the regulations. Even if one does not agree with the final analysis, there was a speech to be made—and the hon. Member for Stockton, North (Mr. Cook) made it. We do not have to agree with all his conclusions to say that he made a typically passionate and eloquent speech. It is with some sadness that I have to say that it was a speech that one might like to have heard from the Opposition Dispatch Box.

It has been my unhappy privilege to see the hon. Member for Holborn and St. Pancras (Mr. Dobson) operate a number of times. It is immensely sad to hear interventions responded to with derision, personal invective and contempt but, in the years during which it has been my misfortune to deal with him, he has been prepared to behave in that way. As I said, there was a speech to be made, and it is a pity that, not for the first time—and, I suspect, not for the last time—we did not hear it from the hon. Gentleman.

It is possible to agree with the proposition that, during the winding-up of a council and the establishment of a new unitary authority, people employed by the defunct authority, who may have been so employed for many years, will feel a certain insecurity or even bitterness at the fact that their jobs are going to disappear. The problem is that, just as parliamentary constituencies exist not for the benefit of those who represent them but as a service to the public—

Mr. Nicholas Winterton

Constituencies can disappear, too.

Mr. Nicholls

Indeed. Constituencies exist not for the benefit of those who represent, or occupy, them but as a service to the public, and the same principle applies to local government jobs.

Underpinning the speech of the hon. Member for Stockton, North and, indeed, even that of the hon. Member for Newbury (Mr. Rendel), was the assumption that what is being done to the councils that are disappearing is so wrong that we must offer levels of compensation far above what the taxpayer can afford. It is a key point because it is easy, with straightforward human sympathy, to say that we should increase the compensation package. At the end of the day, however, it is the taxpayer who pays. I am sure that the rhetoric exists whereby one can say that the rich should pay, but ultimately 89 per cent. of income tax is paid by basic rate taxpayers. Whenever one brings a compensation package before the House of Commons, one has to bear in mind who is paying for it. Such compensation packages are paid for not by the Government or the Treasury but by taxpayers.

Ms Hilary Armstrong (North-West Durham)

rose—

Mr. Nicholls

I shall give way to the hon. Lady in a moment.

It is very easy to say that, if the package were a little better, it would be okay. I do not know of any way in which one can say that a compensation package is completely correct. To use an old phrase, it is a question of balance. Subject to a point that I shall make after I have given way to the hon. Lady, the compensation package in the regulations is basically right.

Ms Armstrong

Is the hon. Gentleman saying that he refused his ministerial severance pay?

Mr. Nicholls

That is typical of the level of homework that we have come to expect from the Labour Front-Bench team. I did not qualify for ministerial redundancy pay. I should make it perfectly clear to the hon. Lady that, had I done so, I would have been extremely grateful and would not have demanded even more. I hope that that clarifies the position for the hon. Lady. If it does not, I am sorry. It was a straightforward answer to an irrelevant question.

Aspects of any compensation package need to be considered. My right hon. Friend the Member for Selby (Mr. Alison) referred to a point that concerned me and that was partly answered by my hon. Friend the Minister for Local Government, Housing and Urban Regeneration. My right hon. Friend referred to what might happen to those who receive a redundancy package and go straight into a job the following day. That is not a fanciful scenario. The most extraordinary wastage of money occurs when councils die. One has only to cast one's mind back to 1986 when the Greater London council finally went down. There was an extraordinary wastage of money on a massive fireworks display. I remember sitting on the Terrace watching all the London taxpayers' money going up into the sky.

Judging from a report in The Guardian, there was also a dispute over whether the GLC would be able to give away the £26 million left in its coffers to voluntary organisations. Such memories—

Mr. Deputy Speaker

Order. The hon. Member has been present throughout the debate and heard me advise other hon. Members on its scope. He is quite wide of that scope.

Mr. Nicholls

The only point that I was making was that the public will be concerned at the way in which money will be used by local authorities that are to disappear. It is relevant to make the point that the public will be concerned if they find that somebody can be made redundant one day and walk into a similar position—perhaps an even a better position—the following day with a successor authority. My right hon. Friend the Member for Selby and I are concerned about that.

I wonder whether that problem had been anticipated by my right hon. and hon. Friends on the Treasury Bench and whether the way in which to stop it had been anticipated in regulation 4(d). As I understood my hon. Friend the Minister, no other regulations are to be laid. It is troubling—perhaps the Under-Secretary of State for Wales, my hon. Friend the Member for Cardiff, North (Mr. Jones), will deal with the matter in his winding-up speech or write to me about it—that it was made perfectly clear that the package does not have any effect on the general operation of the law. Whatever rights and privileges exist in law at the moment remain.

At the law stands, if one is made redundant in an authority, there will not be anything wrong in taking another position the following day. Far be it from me to put difficulties in the way of my right hon. and hon. Friends, but it may be no easy task to frame the regulations so that, when true redundancies arise because a council has gone under, a person can be stopped from walking into another position right away. That must be considered.

It is easy enough to say that the package is not quite right and that there should be a little more here or there, as did the hon. Member for Newbury, who will be able to cut up his speech from Hansard and distribute different bits of it around his constituency to create a particular effect in a particular way. Even though the compensation package is fair and right, the public will take an entirely view of it if they find that, despite the efforts that have been made, it is possible for people to walk off with substantial redundancy payments and be re-employed almost at once. That would greatly discredit the regulations and should be considered, even if it cannot be dealt with entirely in this debate.

9.14 pm

Mr. Alan Simpson (Nottingham, South)

The Minister referred to the fact that the debate is taking place on St. Valentine's day. I should admit that I was so keen to be called that I took the trouble to send a Valentine to Madam Speaker. It might be helpful if I clarify that the terms of my billet doux were addressed to her rather than to you, Mr. Deputy Speaker.

Any terms of affection come to an end there, however, because I must express my great sadness and disappointment at, and disagreement with, the mean-minded regulations and the chaotic mismanagement of the transition and change into which they place us.

I should, however, express gratitude to the Minister because, in his opening remarks, he attempted to explain the regulations in the context of the transitional timetable and arrangements that he has brought forward. I shall concentrate most of my remarks on the specific problems consequently facing authorities such as Nottingham.

Nottingham is one of the authorities that is in the programme but not in the timetable. In such a situation, the regulations only add to the problems of chaos, confusion and demoralisation with which we are having to deal.

The Minister said that he wanted the programme to give local authorities a sporting chance to be ready for elections in May. I thank the Minister and his Department for the way in which they have continued with the preparatory work in Nottingham even though a re-review was taking place, not of Nottingham but of adjoining districts.

Huge progress has been made in preparation for the transition. Many of the difficult discussions about the terms of transfer of staff, the specific structure of services and the location and relocation of jobs could be addressed within the timetable. But in that context, there has been huge disappointment—and now confusion—about the situation in which the authority has been left. Nottingham is in a programme but not in a timetable, and its discussions with its staff have been thrown into absolute confusion. We are talking about staff who would legitimately like to know whether they will have a post in the new authority, and, if so, whether it will be the same post or a different one.

The city authority is preparing to assume unitary status, but has no legal authority to do so, so it is having to incur a large tranche of transitional costs—often on short or fixed-term appointments—in an attempt to develop a basis upon which a smooth transition from employment in the county to employment in the city can take place. It now lacks a timetable within which that can be delivered. Moreover, the county authority has to deliver its own services and faces serious pressures on its budget.

The staff who may be affected by the transition do not know whether they will be caught up in a game of pass the parcel—whether they will be part of a group affected by their relocation out of the city to secure their employment, but where the services that they currently deliver in the city will be run down; or whether they will be recruited into permanent employment that relates to the city, in the hope that the city will take on those posts in a framework that the city cannot yet define; or whether they will be relocated into the city in the belief that the county will have played pass the parcel with the relocation and remuneration costs.

Mr. Nicholas Winterton

The hon. Member is making a good case and is being helpful to the area that he represents. Does not the problem lie with Nottinghamshire county council, rather than Nottingham city council—which is due to become a unitary authority and, therefore, likely to take on rather than lay off staff? I presume that the hon. Gentleman supports the Government's decision that Nottingham city council should become a unitary authority.

I support Warrington borough council and Halton borough council, both in Cheshire, becoming unitary authorities—something that is supported by most Labour Members and by my borough council, which also sought unitary status but, sadly, did not get it, despite the support of the hon. Member for Warrington, North (Mr. Hoyle), the hon. Member for Warrington, South (Mr. Hall) and me. Is it not a problem for county councils rather than city councils, which as unitary authorities will provide more, rather than fewer, jobs?

Mr. Simpson

It is not as simple as that. I have always been a supporter of a unitary Nottingham, but it is not clear whether the city, when it takes over from the county, will seek to deliver services exactly as they are currently structured. It has gone to considerable lengths to offer reassurances to staff, but it cannot offer guaranteed assurances because it does not have a timetable. The staff are caught in limbo because the city cannot guarantee the nature of jobs that will be on offer or even when they will be on offer.

The staff are quite properly saying to both authorities, "You have a responsibility to treat us properly. We do a decent day's work and we make a commitment to deliver good services. We do not know whether the services that we are asked to deliver now will be the ones the city will decide to deliver or that it will deliver them as they are currently delivered. No one can give us those assurances because the Government have failed to define a timetable in which the order will be laid and a transition date." Both local authorities have to step back from proper and responsible commitments that they would want to make in relation to their staff. It is almost impossible to see how these regulations will be applied in the context of authorities such as Nottingham without a timetable in which to work.

Mr. David Jamieson (Plymouth, Devonport)

Does my hon. Friend agree that the hon. Member for Macclesfield (Mr. Winterton) has completely missed the point? In Nottingham and Plymouth, the county runs social services and education. The jobs of the officers who currently deliver those services in Nottingham and Plymouth are threatened. Although the new unitary authority is employing more people, the officers of the authority that is currently delivering many of the vital services are threatened by these proposals.

Mr. Simpson

That is exactly the case. Quite properly, the city authority is able to employ additional people only on temporary contracts. It wants to offer proper, open recruitment for the permanent jobs it is to provide. Nottingham cannot do that until it acquires the authority to do so. The county is having to look in a different direction and it is reducing its assumed commitments in relation to the city. These regulations fail to cover the circumstances affecting the staff who do the transition work.

In many ways, the problems will be compounded by the extended transitional period, because talented staff will look for an opportunity to move to a secure post, with a defined set of prospects to deliver new services—possibly in some of the new unitary authorities. The county will then find it almost impossible to recruit their replacements because of uncertainty about prospects. These regulations will mean that anyone who has only one year's service will not be covered by the terms of compensation and remuneration. Both authorities will be caught in a nightmare. It will be impossible for the county to recruit because it is refocusing, and it will be impossible for the city to recruit because it has no legitimate focus to do so. There will be a lot of staff in pursuit of secure employment elsewhere.

The staff in the two authorities are in utter confusion, as are the public in Nottingham and Nottinghamshire. They find the position in which the Government have placed them incomprehensible. They cannot understand the delay and I suspect that the same would be true in Plymouth. In a local context, they can understand it less than many other authorities because, just beyond the doorstep, there is a programme of change already under way in Rutland, which has a population of 30,000. I must say with a certain amount of deference that Rutland probably has more windsurfers than workers, but in Nottingham, which has a population of 300,000 and a large number of staff in the two local authorities, it is impossible to carry out the cautious and responsible planning that both authorities seek to do.

Mr. Nicholas Winterton

The rational way in which the hon. Gentleman is tackling the problem is helping the debate. I was a local councillor some years ago and it is my experience that there is pretty good co-operation between counties and most boroughs or districts. Is not it sensible and more than likely that Nottingham city council, as a unitary authority, will take on the majority of those who are currently employed in the city boundaries, to undertake responsibilities that currently lie in the jurisdiction of Nottinghamshire county council?

Mr. Simpson

In normal circumstances that might be correct, but there has been legitimate political disagreement—I suspect the same is true in many other areas—about whether the transfer of responsibilities should have occurred in the first place. I believe that, in Nottingham, an accord has now been worked out—although the two authorities have not always been of one mind. Those who face further delays will find that that accord will begin to break down. If the county council decides in its forward planning that it would be helpful to relocate staff that it did not want into the city to let the city deal with them on transition, it is unlikely that the city would make an open commitment to those staff. The city has a commitment to take on responsibility for delivering services, but not necessarily in the same way as the county has delivered them.

I am trying to point out that if one tries to apply the regulations to that indeterminate transition process, they simply do not work. We have a recipe for even greater chaos than we had two days ago before the Minister's non-announcement. I do not think that there is any rational basis for leaving the marooned authorities in such a position. I suspect that Plymouth has been making similar strides preparing for the change that would have happened if the shadow elections had taken place this May. Nottingham has done that with the support and help of the Department of the Environment. It is absolutely ready—the local authority is ready, the public are ready and the staff are ready. The only explanation that makes sense locally is that the Conservative party is not ready.

In the elections last year, the Conservatives had huge difficulty in getting candidates to stand and they had to dragoon the dog, the cat and the budgie to field a full team of candidates. The dog, the cat and the budgie have served notice that they are not willing to stand again, and the Conservatives are in a panic. That is how the delay is explained at local level. The public employees and the public will pay the political price of this delay and uncertainty.

Under the regulations, staff in the two authorities, especially those in the county, will have poorer protection and poorer compensation. The authorities will find it impossible to plan services and impossible to deliver job guarantees. With the absence of a timetable, there will be a haemorrhage of talented staff and a blight on the recruitment of new staff. There will be a huge increase in transitional costs as a result of wholly unnecessary delays.

The Minister and the Government should make a commitment to three things tonight. They should make a commitment to the authorities that have been left in limbo that within the next couple of weeks, they will lay the orders that will define the timetable in which transition will take place. They should make a commitment that they will extend the compensation cover for the current staff to at least the level offered in reorganisations a decade ago and they should introduce proposals for additional compensation that will cover the otherwise avoidable transitional costs incurred by those authorities as a result of recruitment blight and for the temporary contract staff whom the authorities have had to take on.

9.31 pm

Mr. Roy Thomason (Bromsgrove)

Much has been made of the reorganisation that took place in 1986 and the regulations introduced at that time. There may be a few of us in the Chamber who can remember the 1974 reorganisation and the considerable staff problems associated with that. Some of us remember the senior officers who were peeled off local authorities as the proud traditions of the county boroughs were lost and subsumed into extraordinary creations such as the county of Cleveland and the county of Avon.

How welcome it is, therefore, to see that process reversed in a manner that will give opportunities to officers who are often at the second or third tier in the current county councils to become seniors in the new authorities. We are much more likely in this reorganisation to see opportunities for career moves to be made and for greater responsibilities to be taken by local government officers than under the reverse process which occurred in 1974. We should, therefore, see this process in that historical context.

I now turn to Labour's attitude in tabling the prayer today. I find it extraordinary that a measure that was laid before the House in the middle of November and came into effect on 28 November should be the subject of a prayer that was laid on 10 January this year. I understand that Labour Members have a Christmas holiday and have all sorts of things to do over that period, such as, no doubt, choosing to which schools to send their children. However, I find it extraordinary that there should be such a delay over what we have been told this evening is an issue of great importance. It is apparently of such great importance that the Labour party could wait a couple of months before it tabled its prayer. It appeared in the Order Paper of 10 January 1996. There it is, as large as life. There is the prayer and that is the date.

I understand that it takes a little time for a prayer to be presented to the House. The fact is, however, that nearly two months went by before that action was taken in this case.

It is interesting that the Labour party appears to be joined, in some of its representations, by the local government associations. Is it possible that the fact that the cost of the regulations will be met by the general taxpayer, not the council tax payer, has something to do with their determination to bring pressure to bear to obtain what are alleged to be better terms?

Staff welfare is the most important issue, although members of the Labour party appear to be keen to ignore it. The regulations pivot around that point. Staff are entitled to some certainty about their future, yet the prayer would prevent them from having that certainty about their future because it would delay the implementation of proposals designed to help them when that reorganisation takes place—in the case of some authorities, in a few weeks' time. Surely the Labour party is not suggesting that the consultation procedure that the Government introduced previously should not be repeated for any amended proposals.

Mr. Elliot Morley (Glanford and Scunthorpe)

The hon. Gentleman said that he cared about the impact on staff and he is right to care, but he also mentioned the 1974 reorganisation, which was undertaken by a Conservative Government. The present reorganisation is being undertaken by a Conservative Government, but there are two differences. First, the scheme that we are discussing is not as generous as the scheme for the 1974 reorganisation and, secondly, the 1974 reorganisation was a reorganisation of large counties, and all staff had equal opportunities to apply for vacancies in the new authorities.

In the forthcoming reorganisation, when an authority passes to unitary status, as in the case of my authority, North Lincolnshire, the advantage lies with staff who were with county councils, because they have managed larger departments and received higher salaries. Many district council staff have been unfairly disadvantaged in the reorganisation, yet the compensation scheme is not as generous as the 1974 scheme. How can the hon. Gentleman justify that?

Mr. Thomason

I do not accept that district council staff will be, on the whole, disadvantaged by the proposals.

Mr. Morley

I have been through this—I know.

Mr. Thomason

Perhaps some extraordinary recruitment procedures are being adopted by some Labour-controlled councils, but, on the whole, district council staff should not be disadvantaged, and, where proper recruitment procedures are followed, they will not be disadvantaged. The responsibilities that they bear for district council functions will remain in the new unitary authorities. County staff will be added to district staff to form the new unitary authorities. For example, opportunities for directors of education will be created in a series of authorities. There will be new jobs throughout local government. I believe that the career prospects of many authority officers will be considerably enhanced as a result of the changes.

It is fascinating that the Labour party gets excited about the proposals at a time when the local government associations, which I criticised a few moments ago for being anxious to spend taxpayers' money, say that settlement of the proposals is essential. Their briefing, which no doubt many hon. Members have received, says: It is vital now that … staff, who face reorganisation a mere 6 weeks away, know where they stand as soon as possible. Obviously it is essential that the order receives its passage today and that the regulations are implemented.

Mr. Nicholas Winterton

Does my hon. Friend agree that the scheme that we are debating follows two separate consultation exercises and that, during those consultation exercises with all those who were interested and involved, several positive changes were made, which were fully appreciated by all authorities concerned?

Is it not the case that many authorities, especially in Cheshire—such as Halton and Warrington borough councils, which campaigned strongly with me, through their Members of Parliament, for unitary status—have had an input into the two separate consultation exercises, which obviously resulted in many changes to the original scheme?

Mr. Thomason

I am most grateful for that point. The regulations have indeed been the subject of a great deal of consultation, and many in local government have expressed their gratitude to central Government for the amendments made to the original proposals in the light of their representations.

I therefore wonder what the Labour party is up to today. Have the trade union paymasters decided that they want their puppets to speak? Is a requirement being imposed on some Labour Members to dance to their paymasters' tune? Is this an example of new Labour being operated by old unions?

I should like to close with a word about the cost implications. When the metropolitan counties were abolished and the metropolitan districts took over unitary responsibilities, there were substantial savings for the taxpayer. If the local authorities are prepared to grasp the opportunities that this reorganisation affords, they too will make substantial savings for the council tax payer and—for the purposes of grant—for the general taxpayer. These opportunities are encapsulated in the terms of the regulations in so far as they relate to staff. I commend them to the House.

9.41 pm

Mr. David Jamieson (Plymouth, Devonport)

I was interested to hear the speech of the hon. Member for Bromsgrove (Mr. Thomason). I will not join in his blistering attack on the Conservative Government of the 1970s who brought about the last local government reorganisation. It was also interesting to hear the hon. Member for Teignbridge (Mr. Nicholls) who, as usual, spread balm over our proceedings with his comments, which are always welcome for their creation of cross-party accord. It was, however, a pity that he did not deal with Devon, where his own constituency is to be found. I will endeavour to fill the gap that he left in his speech.

The regulations arise from the reorganisation of local government, and the unitary status that Plymouth and Nottingham, for instance, will enjoy is greatly welcomed. It is supported by almost all the Conservatives in my area and by all in the Labour party. There is strong feeling in Plymouth about the fact that many aspects of our local government have been controlled from Exeter, which is 40 miles away and considerably smaller than Plymouth. That has been a bone of contention in the area. Unitary status will enable local services to be delivered closer to local people.

Like the Minister, we are anxious for an effective transfer of power from the one authority to the other. Education and social services are the most important aspects in this context. I contend that, to achieve high-quality services, we need dedicated local government officers whose morale is high. To deliver services of value, the officers delivering the services must feel valued. There is thus a close relationship between the standard of services and the interests of the people who deliver them.

Unfortunately, with yesterday's announcement, the Government have inflicted on Plymouth, Nottingham and other areas subject to delay the worst possible option not just for the services but for the officers who are trying to deliver them. Reorganisation was announced, then there was equivocation over the timing and now it is to be delayed from 1997 to 1998 or possibly beyond. As he has delayed the introduction of the orders for Plymouth and Nottingham, will the Minister give a date tonight for when the Government intend to bring them in?

The regulations seek to compensate local government officers whose jobs have been reorganised. Several hon. Members have said that it is mean and poor compensation. We must think of its effect on local services. The reorganisation and the delay have created uncertainty where certainty is essential for delivering high-quality services. They have blighted services and inhibited forward planning.

There is one point that I especially want the Minister to answer. Some of the best officers in Plymouth, and I am sure in other places, working in the best interests of delivering services, have been planning in anticipation of the implementation of the orders. In Plymouth, especially on education, there has been much good work over nearly 18 months. To their great credit, several officers have taken on the role of undertaking the pre-planning that is essential to keeping services going and making sure that there is an effective transfer of power from one authority to the other.

What will happen after May this year to officers who have accepted new posts in anticipation of the changes if the changes occur in less than 12 months by May 1997? If the new jobs with the new authority were then changed, would those officers have protection under the regulations? If they have not, we will be inflicting punishment on the very officers who are doing the loyal job of trying to perform a seamless handover of powers from one authority to another. I suspect that the regulations are a recipe for non-co-operation from those officers, who will fear for their jobs. The Minister must give some reassurance on that.

There is more uncertainty where certainty is absolutely required. Local government officers who are unsure of their future, as the hon. Member for Newbury (Mr. Rendel) said, will go to other areas where there is certainty. Areas such as Plymouth will lose their better officers as they plump for authorities whose future is known rather than staying where there is uncertainty. It affects not only Plymouth but the whole county. All the authorities that are not being reorganised are strategically affected. We have the absurd prospect next year in Devon of having county council elections by which councillors will be elected to serve one year on a dying authority while at the same time we have elections for the new unitary authority for the people who will take over their functions in a year's time. I would be interested to hear the Minister's views on that.

In the interest of the services that are provided for local people, we need to protect those who are running the services. The regulations and yesterday's announcement of delay create more uncertainty where we need certainty. To achieve that certainty and high-quality services, we need a proper and sympathetic package of compensation for the staff and, in the case of Devon, an end to the delay and the early forging of a new authority in both Plymouth and Torbay.

9.48 pm

Mr. Nicholas Winterton (Macclesfield)

I shall be brief, as I know that my hon. Friend the Minister wants, 10 minutes to respond to this important debate.

I come from Cheshire, where there is some proposed, change. I wish that the change were greater than the Government have permitted. As we stand, Warrington borough, an old county borough, and Halton borough council will become unitary authorities. As the Minister knows, I made an excellent case, with the borough council, that was widely supported by the public, for unitary status for Macclesfield. We have an excellent council, super officers and a slimmed-down administration that is very competent to take over responsibility from Cheshire county council for education and social services. Moreover, we have a united council: its super Conservative leader, Mrs. Margaret Duddy, and the Liberal Democrats and Labour were united in wanting unitary status for a competent authority.

My borough council goes along with the compensation scheme, believing that in 1996 it is reasonable. Mention has been made of the 1980s and early 1970s, when there was a major reorganisation of local government. We do not live in the 1970s or the 1980s now; we live in the 1990s. As I said in an intervention on the speech by the hon. Member for Newbury (Mr. Rendel), we cannot isolate local government from the realities of business throughout the country; we cannot provide exceptional compensation schemes for those in local government if similar schemes do not exist in the commercial private sector.

Although I support the call for timetables for local government, which has come from hon. Members on both sides of the House, I believe that on balance the compensation scheme will not allow the taxpayer, and the council tax payer, to be exploited. I think that the balance is about right. My borough council supports the scheme, and—given its expertise in running local government—if it supports the scheme, its Member of Parliament does likewise.

9.51 pm

Mr. Curry

With the leave of the House, Madam Deputy Speaker, I shall reply to the debate.

A number of detailed points have been raised; I shall respond by letter to those with which I cannot deal tonight.

Fearing that there might be some confusion between my right hon. Friend the Member for Selby (Mr. Alison) and me, I sought clarification. Such is the romance of the evening that almost no one is obtainable in my Department, for reasons with which I sympathise and, indeed, have a certain empathy.

Mr. Dobson

Surely not the Secretary of State!

Mr. Curry

I shall refrain from saying anything that might open up a war on two fronts. I shall, however, ensure that the hon. Gentleman and I are at one in regard to what is possible and what is not.

Mr. Den Dover (Chorley)

Why are those covered by the Teachers Superannuation Consolidation Regulations not covered by this scheme? I take it that the reorganisation does not really affect teachers, so they should not lose out in salary terms. Is that the reason?

Mr. Curry

Teachers are transferred en bloc to the new authorities, and those regulations are transferred with them. In practice, they have new employers, but that is the only novel aspect of their position.

Let me tell the hon. Member for Plymouth, Devonport (Mr. Jamieson) that Plymouth will become a unitary authority, subject to the agreement of the House of Commons and the other place. I appreciate what he said about the extent to which the authority is valued by officials who work for it. I shall not reply in detail to his point about elections for local authorities—I shall write to him—but orders are able to defer elections or, indeed, mandates. It is possible for us to make orders that will make it unnecessary for an election that would immediately be superseded by another to take place.

Mr. Simpson

rose—

Mr. Curry

I am replying to the question posed by the hon. Member for Devonport, which may well deal with the hon. Gentleman's point.

There has been a delay in Devon because the commission had to examine the case for Exeter. We had to receive representations not really from those asking us to accept or reject the recommendation for change, but from those asking for yet another re-examination of the position.

One cannot anticipate the outcome of that consultation, although we intend to draw the threads together as soon as we possibly can, so that we may clarify the circumstances for people. I intend to bring forward the orders as soon as they have cleared the statutory processes that are required. In other words, I intend to consult on the details of the orders, because we must get the details right. It is my intention that even if the process of reorganisation in constitutional terms may not start as early as we had hoped, the certainty of what will happen will be established. In psychological terms, that will be important for everybody.

Mr. Simpson

May I direct the Minister's attention to Nottingham? The re-review that took place in Nottingham was of the adjoining boroughs, and the Minister gave his departmental staff all the time they needed to go through the preparatory stages. In the light of that, is he able to give a date for the transition of Nottingham to a unitary authority?

Mr. Curry

I have made it clear that we intend to announce the outcome of the consultation process that follows the local government commission's new review and to introduce the orders as soon as we are able to do so. I do not want it to last longer than anybody else. As the hon. Gentleman said, quite fairly, Nottinghamshire districts were involved in the re-review. One would not want reorganisations in the same county in successive years. That would be one transition too many, and I think that the hon. Gentleman understands that.

The hon. Member for Ellesmere Port and Neston (Mr. Miller) asked about pensions. I shall write to him in detail on that. I think that he was asking me to make a projection of where people's salaries would have gone had they continued in their old employment. It would have been a very difficult operation to anticipate all the circumstances. That is my off-the-cuff remark, but I shall, of course, write to him with the specific details of that matter and put the case fully.

There have been some misunderstandings. For example, it would be curious—although not illegal—if a transferring authority took the decision to regrade staff a year or more before the reorganisation took place and lost the functions and responsibilities that I presume the staff had helped to provide. We had to draw a line somewhere. That is true of all legislation. It is not the case that employees must have been in post for at least 18 months. They must have been in employment on 1 April in the year before reorganisation.

They could suffer a drop in salary a couple of months later and be entitled to detriment compensation. Equally, they could take a cut in hours and still receive detriment compensation. No one will be forced to take a worse paid job, because the normal protection afforded by employment law is unaffected and the staff cannot be forced to accept worse terms and conditions. [Interruption.]

Madam Deputy Speaker (Dame Janet Fookes)

Order. Before the Minister continues, it is increasingly difficult to hear him, largely because of background conversations on both sides of the House.

Mr. Curry

I shall try to bring some passion to the debate on the detriment compensation for local government employees who have to suffer reorganisation. I am anxious to respond to some quite detailed points, which I know are of concern to those affected, so I hope that the House will excuse me if I perhaps forgo my normal peroration to try to give more detail, which is necessary.

On compensation for the loss of variable hours pay, it is difficult to determine the changes in variable hours pay that result from reorganisation from those that result from natural fluctuations in a variable working week. By definition, that would be difficult.

I repeat that we do not intend to permit a situation whereby people can be compensated and walk out of one job and straight into another and collect a salary. We shall amend the regulations to close any door that would lead to that. An American philosopher said that the best way to leave any place was through the door. At this hour I am sure that the House will understand if I do that and respond to further points in writing.

I commend the regulations to the House. They are fair, reasonable and honourable and they will give a new and a good start to the new unitary authorities. They are worth our support.

Question put:—

The House divided: Ayes 255, Noes 293.

Division No. 55]	[10.00 pm
AYES
Abbott, Ms Diane	Chisholm, Malcolm
Ainger, Nick	Church, Judith
Ainsworth, Robert (Cov'try NE)	Clapham, Michael
Allen, Graham	Clark, Dr David (South Shields)
Anderson, Donald (Swansea E)	Clarke, Eric (Midlothian)
Anderson, Ms Janet (Ros'dale)	Clarke, Tom (Monklands W)
Armstrong, Hilary	Clwyd, Mrs Ann
Ashdown, Rt Hon Paddy	Coffey, Ann
Ashton, Joe	Cohen, Harry
Austin-Walker, John	Connarty, Michael
Banks, Tony (Newham NW)	Cook, Frank (Stockton N)
Barnes, Harry	Cook, Robin (Livingston)
Barron, Kevin	Corbett, Robin
Battle, John	Corston, Jean
Bayley, Hugh	Cousins, Jim
Beckett, Rt Hon Margaret	Cox, Tom
Beith, Rt Hon A J	Cummings, John
Bell, Stuart	Cunliffe, Lawrence
Benn, Rt Hon Tony	Cunningham, Jim (Covy SE)
Bennett, Andrew F	Dafis, Cynog
Benton, Joe	Dalyell, Tam
Bermingham, Gerald	Darling, Alistair
Berry, Roger	Davidson, Ian
Blunkett, David	Davies, Bryan (Oldham C'tral)
Boateng, Paul	Davies, Rt Hon Denzil (Llanelli)
Bradley, Keith	Davies, Ron (Caerphilly)
Bray, Dr Jeremy	Davis, Terry (B'ham, H'dge H'l)
Brown, N (N'c'tle upon Tyne E)	Denham, John
Bruce, Malcolm (Gordon)	Dewar, Donald
Burden, Richard	Dixon, Don
Byers, Stephen	Dobson, Frank
Caborn, Richard	Donohoe, Brian H
Callaghan, Jim	Dowd, Jim
Campbell, Mrs Anne (C'bridge)	Dunwoody, Mrs Gwyneth
Campbell, Menzies (Fife NE)	Eagle, Ms Angela
Campbell, Ronnie (Blyth V)	Eastham, Ken
Campbell-Savours, D N	Etherington, Bill
Canavan, Dennis	Evans, John (St Helens N)
Chidgey, David	Fatchett, Derek

Faulds, Andrew	McLeish, Henry
Field, Frank (Birkenhead)	McMaster, Gordon
Fisher, Mark	McNamara, Kevin
Flynn, Paul	McWilliam, John
Foster, Rt Hon Derek	Madden, Max
Foster, Don (Bath)	Maddock, Diana
Fyfe, Maria	Mahon, Alice
Galbraith, Sam	Mandelson, Peter
Galloway, George	Marek, Dr John
Gapes, Mike	Marshall, David (Shettleston)
Garrett, John	Marshall, Jim (Leicester, S)
George, Bruce	Martin, Michael J (Springburn)
Gerrard, Neil	Maxton, John
Gilbert, Rt Hon Dr John	Meacher, Michael
Godman, Dr Norman A	Meale, Alan
Godsiff, Roger	Michael, Alun
Golding, Mrs Llin	Michie, Bill (Sheffield Heeley)
Gordon, Mildred	Milburn, Alan
Grant, Bernie (Tottenham)	Miller, Andrew
Griffiths, Nigel (Edinburgh S)	Mitchell, Austin (Gt Grimsby)
Griffiths, Win (Bridgend)	Moonie, Dr Lewis
Grocott, Bruce	Morgan, Rhodri
Gunnell, John	Morley, Elliot
Hain, Peter	Morris, Rt Hon Alfred (Wy'nshawe)
Hall, Mike	Morris, Estelle (B'ham Yardley)
Hanson, David	Morris, Rt Hon John (Aberavon)
Hardy, Peter	Mudie, George
Harman, Ms Harriet	Mullin, Chris
Hattersley, Rt Hon Roy	Murphy, Paul
Henderson, Doug	Oakes, Rt Hon Gordon
Heppell, John	O'Brien, Mike (N W'kshire)
Hill, Keith (Streatham)	O'Brien, William (Normanton)
Hinchliffe, David	O'Hara, Edward
Hodge, Margaret	Olner, Bill
Hoey, Kate	O'Neill, Martin
Hogg, Norman (Cumbernauld)	Pearson, Ian
Home Robertson, John	Pendry, Tom
Hood, Jimmy	Pickthall, Colin
Hoon, Geoffrey	Pike, Peter L
Howarth, Alan (Strat'rd-on-A)	Pope, Greg
Howarth, George (Knowsley North)	Prentice, Bridget (Lew'm E)
Howells, Dr Kim (Pontypridd)	Prentice, Gordon (Pendle)
Hoyle, Doug	Prescott, Rt Hon John
Hughes, Kevin (Doncaster N)	Primarolo, Dawn
Hughes, Robert (Aberdeen N)	Purchase, Ken
Hughes, Roy (Newport E)	Quin, Ms Joyce
Hutton, John	Radios, Giles
Jackson, Glenda (H'stead)	Randall, Stuart
Jackson, Helen (Shef'ld, H)	Raynsford, Nick
Jamieson, David	Reid, Dr John
Janner, Greville	Rendel, David
Jones, Barry (Alyn and D'side)	Robertson, George (Hamilton)
Jones, Lynne (B'ham S O)	Roche, Mrs Barbara
Jones, Martyn (Clwyd, SW)	Rogers, Allan
Jones, Nigel (Cheltenham)	Rooker, Jeff
Jowell, Tessa	Rooney, Terry
Kaufman, Rt Hon Gerald	Ross, Ernie (Dundee W)
Keen, Alan	Rowlands, Ted
Kennedy, Charles (Ross,C&S)	Ruddock, Joan
Kennedy, Jane (L'pool Br'dg'n)	Sedgemore, Brian
Khabra, Piara S	Sheerman, Barry
Kilfoyle, Peter	Sheldon, Rt Hon Robert
Kirkwood, Archy	Shore, Rt Hon Peter
Liddell, Mrs Helen	Short, Clare
Litherland, Robert	Simpson, Alan
Livingstone, Ken	Skinner, Dennis
Lloyd, Tony (Stretford)	Smith, Andrew (Oxford E)
Loyden, Eddie	Smith, Chris (Isl'ton S & F'sbury)
Lynne, Ms Liz	Smith, Llew (Blaenau Gwent)
McAvoy, Thomas	Soley, Clive
McCartney, Ian	Spearing, Nigel
McCartney, Robert	Spellar, John
Macdonald, Calum	Squire, Rachel (Dunfermline W)
McFall, John	Steel, Rt Hon Sir David
McKelvey, William	Steinberg, Gerry
Mackinlay, Andrew	Stevenson, George

Stott, Roger	Welsh, Andrew
Strang, Dr. Gavin	Wicks, Malcolm
Taylor, Mrs Ann (Dewsbury)	Wigley, Dafydd
Thompson, Jack (Wansbeck)	Williams, Rt Hon Alan (SW'n W)
Timms, Stephen	Williams, Alan W (Carmarthen)
Touhig, Don	Winnick, David
Trickett, Jon	Wise, Audrey
Turner, Dennis	Worthington, Tony
	Wray, Jimmy
Tyler, Paul	Wright, Dr Tony
Vaz, Keith	Young, David (Bolton SE)
Walker, Rt Hon Sir Harold
Wallace, James	Tellers for the Ayes:
Wardell, Gareth (Gower)	Mr. David Clelland and
Watson, Mike	Mr. Eric Martlew.

NOES
Ainsworth, Peter (East Surrey)	Coombs, Anthony (Wyre For'st)
Aitken, Rt Hon Jonathan	Coombs, Simon (Swindon)
Alexander, Richard	Cope, Rt Hon Sir John
Alison, Rt Hon Michael (Selby)	Cormack, Sir Patrick
Allason, Rupert (Torbay)	Couchman, James
Amess, David	Cran, James
Ancram, Rt Hon Michael	Currie, Mrs Edwina (S D'by'ire)
Arbuthnot, James	Curry, David (Skipton & Ripon)
Arnold, Jacques (Gravesham)	Davies, Quentin (Stamford)
Arnold, Sir Thomas (Hazel Grv)	Davis, David (Boothferry)
Ashby, David	Day, Stephen
Atkins, Rt Hon Robert	Deva, Nirj Joseph
Atkinson, David (Bour'mouth E)	Dicks, Terry
Atkinson, Peter (Hexham)	Douglas-Hamilton, Lord James
Baker, Rt Hon Kenneth (Mole V)	Dover, Den
Baker, Nicholas (North Dorset)	Duncan, Alan
Baldry, Tony	Duncan-Smith, Iain
Banks, Matthew (Southport)	Dunn, Bob
Banks, Robert (Harrogate)	Durant, Sir Anthony
Bates, Michael	Dykes, Hugh
Bellingham, Henry	Eggar, Rt Hon Tim
Bendall, Vivian	Elletson, Harold
Beresford, Sir Paul	Emery, Rt Hon Sir Peter
Biffen, Rt Hon John	Evans, David (Welwyn Hatfield)
Body, Sir Richard	Evans, Jonathan (Brecon)
Bonsor, Sir Nicholas	Evans, Nigel (Ribble Valley)
Booth, Hartley	Evans, Roger (Monmouth)
Boswell, Tim	Evennett, David
Bottomley, Peter (Eltham)	Faber, David
Bottomley, Rt Hon Virginia	Fabricant, Michael
Bowden, Sir Andrew	Fenner, Dame Peggy
Bowis, John	Field, Barry (Isle of Wight)
Boyson, Rt Hon Sir Rhodes	Fishburn, Dudley
Brazier, Julian	Forman, Nigel
Bright, Sir Graham	Forsyth, Rt Hon Michael (Stirling)
Brooke, Rt Hon Peter	Forsythe, Clifford (S Antrim)
Brown, M (Brigg & Cl'thorpes)	Forth, Eric
Browning, Mrs Angela	Fowler, Rt Hon Sir Norman
Bruce, Ian (South Dorset)	Fox, Dr Liam (Woodspring)
Burt, Alistair	Fox, Rt Hon Sir Marcus (Shipley)
Butcher, John	Freeman, Rt Hon Roger
Butler, Peter	French, Douglas
Butterfill, John	Fry, Sir Peter
Carlisle, John (Luton North)	Gale, Roger
Carlisle, Sir Kenneth (Lincoln)	Gallie, Phil
Carrington, Matthew	Gardiner, Sir George
Carttiss, Michael	Garnier, Edward
Cash, William	Gill, Christopher
Channon, Rt Hon Paul	Gillan, Cheryl
Chapman, Sir Sydney	Goodlad, Rt Hon Alastair
Churchill, Mr	Goodson-Wickes, Dr Charles
Clappison, James	Gorman, Mrs Teresa
Clark, Dr Michael (Rochford)	Grant, Sir A (SW Cambs)
Clarke, Rt Hon Kenneth (Ru'clif)	Greenway, Harry (Ealing N)
Clifton-Brown, Geoffrey	Greenway, John (Ryedale)
Coe, Sebastian	Griffiths, Peter (Portsmouth, N)
Colvin, Michael	Grylls, Sir Michael
Congdon, David	Gummer, Rt Hon John Selwyn
Conway, Derek	Hague, Rt Hon William

Hamilton, Neil (Tatton)	Montgomery, Sir Fergus
Hampson, Dr Keith	Needham, Rt Hon Richard
Hanley, Rt Hon Jeremy	Nelson, Anthony
Hannam, Sir John	Neubert, Sir Michael
Hargreaves, Andrew	Nicholls, Patrick
Harris, David	Nicholson, David (Taunton)
Haselhurst, Sir Alan	Norris, Steve
Hawkins, Nick	Onslow, Rt Hon Sir Cranley
Hawksley, Warren	Oppenheim, Phillip
Heald, Oliver	Ottaway, Richard
Heathcoat-Amory, Rt Hon David	Page, Richard
Hendry, Charles	Paice, James
Hicks, Robert	Patnick, Sir Irvine
Higgins, Rt Hon Sir Terence	Pattie, Rt Hon Sir Geoffrey
Hill, James (Southampton Test)	Pawsey, James
Hogg, Rt Hon Douglas (G'tham)	Peacock, Mrs Elizabeth
Horam, John	Pickles, Eric
Howard, Rt Hon Michael	Porter, Barry (Wirral S)
Howell, Sir Ralph (N Norfolk)	Porter, David (Waveney)
Hughes, Robert G (Harrow W)	Portillo, Rt Hon Michael
Hunt, Rt Hon David (Wirral W)	Powell, William (Corby)
Hunt, Sir John (Ravensbourne)	Rathbone, Tim
Hunter, Andrew	Redwood, Rt Hon John
Hurd, Rt Hon Douglas	Renton, Rt Hon Tim
Jack, Michael	Richards, Rod
Jackson, Robert (Wantage)	Riddick, Graham
Jenkin, Bernard	Robathan, Andrew
Jessel, Toby	Roberts, Rt Hon Sir Wyn
Johnson Smith, Sir Geoffrey	Robertson, Raymond (Ab'd'n S)
Jones, Gwilym (Cardiff N)	Robinson, Mark (Somerton)
Jones, Robert B (W Hertfdshr)	Roe, Mrs Marion (Broxbourne)
Jopling, Rt Hon Michael	Rowe, Andrew (Mid Kent)
Key, Robert	Rumbold, Rt Hon Dame Angela
Kirkhope, Timothy	Sackville, Tom
Knapman, Roger	Sainsbury, Rt Hon Sir Timothy
Knight, Mrs Angela (Erewash)	Scott, Rt Hon Sir Nicholas
Knight, Rt Hon Greg (Derby N)	Shaw, David (Dover)
Knight, Dame Jill (Bir'm E'st'n)	Shaw, Sir Giles (Pudsey)
Knox, Sir David	Shephard, Rt Hon Gillian
Kynoch, George (Kincardine)	Shepherd, Sir Colin (Hereford)
Lait, Mrs Jacqui	Shepherd, Richard (Aldridge)
Lawrence, Sir Ivan	Shersby, Sir Michael
Legg, Barry	Sims, Roger
Leigh, Edward	Smith, Sir Dudley (Warwick)
Lennox-Boyd, Sir Mark	Smith, Tim (Beaconsfield)
Lester, Sir James (Broxtowe)	Spencer, Sir Derek
Lidington, David	Spicer, Sir James (W Dorset)
Lilley, Rt Hon Peter	Spicer, Sir Michael (S Worcs)
Lloyd, Rt Hon Sir Peter (Fareham)	Spink, Dr Robert
Lord, Michael	Spring, Richard
Luff, Peter	Sproat, Iain
Lyell, Rt Hon Sir Nicholas	Squire, Robin (Hornchurch)
MacGregor, Rt Hon John	Steen, Anthony
MacKay, Andrew	Stern, Michael
Maclean, Rt Hon David	Stewart, Allan
McLoughlin, Patrick	Sumberg, David
McNair-Wilson, Sir Patrick	Sweeney, Walter
Madel, Sir David	Sykes, John
Maitland, Lady Olga	Tapsell, Sir Peter
Major, Rt Hon John	Taylor, Ian (Esher)
Malone, Gerald	Taylor, Rt Hon John D (Strgfd)
Mans, Keith	Taylor, John M (Solihull)
Marland, Paul	Taylor, Sir Teddy (Southend, E)
Marlow, Tony	Temple-Morris, Peter
Marshall, John (Hendon S)	Thomason, Roy
Marshall, Sir Michael (Arundel)	Thompson, Sir Donald (C'er V)
Martin, David (Portsmouth S)	Thompson, Patrick (Norwich N)
Mates, Michael	Thornton, Sir Malcolm
Mawhinney, Rt Hon Dr Brian	Townend, John (Bridlington)
Mellor, Rt Hon David	Townsend, Cyril D (Bexl'yh'th)
Merchant, Piers	Tracey, Richard
Mills, Iain	Tredinnick, David
Mitchell, Andrew (Gedling)	Trend, Michael
Mitchell, Sir David (NW Hants)	Trotter, Neville
Molyneaux, Rt Hon Sir James	Twinn, Dr Ian
Monro, Rt Hon Sir Hector	Vaughan, Sir Gerard

Viggers, Peter	Wiggin, Sir Jerry
Waldegrave, Rt Hon William	Wilkinson, John
Walden, George	Willetts, David
Walker, Bill (N Tayside)	Wilshire, David
Waller, Gary	Winterton, Mrs Ann (Congleton)
Ward, John	Winterton, Nicholas (Macc'f'ld)
	Wolfson, Mark
Wardle, Charles (Bexhill)	Wood, Timothy
Waterson, Nigel	Yeo, Tim
Watts, John	Young, Rt Hon Sir George
Wells, Bowen
Whitney, Ray	Tellers for the Noes:
Whittingdale, John	Mr. Gary Streeter and
Widdecombe, Ann	Mr. Giles Brandreth.

Question accordingly negatived.