§ 4.18 p.m.
§ Debate resumed.
§ LORD SHACKLETON
My Lords, in case your Lordships have forgotten, we were discussing the Payment of Wages Bill, which perhaps seems insignificant besides the momentous topics about which we have just been hearing. I think that the speech of the noble Earl, Lord Dundee, showed that he himself did not feel that it was a very important measure. The main reason given for this Bill in another place was that it was for the convenience of manual workers. It is striking that no demand whatsoever has come from the trade unions and organised workers, and it is a little surprising, in this delicate field, that this Bill should have been introduced at a moment when the Karmel Committee are looking into the whole question of the Truck Acts.
As the noble Earl said, this Bill springs from the 1831 Truck Act, and there is no question that there is need for reform. Despite the lack of enthusiasm for the Bill, so far as it goes it is a moderately good measure. It puts right and improves upon a situation which has arisen purely by chance, the chance that in England banks do not issue their own bank notes any more. In Scotland this disability has not existed. I am a little surprised that the argument has not been put forward in support of the Bill that the situation in Scotland has been to that extent much more favourable. In fact, no evidence, so far as I know, has been given that 209 any material or significant difference exists in Scotland in regard to the payment of wages. I shall be interested, when the noble Earl comes to reply, to hear from him, with his knowledge of Scotland, whether there is in fact a much more frequent use of cheques.
The truth of the matter is that this particular Bill, now and in the short run, will make comparatively little difference; I entirely agree with the noble Earl about that. But that is not to say that it will not be of importance in the future. The time may well come when it will be necessary for payments to be made, as they have long been made to the monthly paid worker, by means other than wage packets in which the money is placed. I think it should be borne in mind also that there are a large number of workers who are not, in fact, prevented from receiving their wages by cheque now, in the shops, for instance; and there are many large firms who are entirely untroubled by the Truck Acts in this matter and still pay their workers in cash because it is far more convenient for them. And it is the sort of service that, on the whole, the employer ought reasonably to be prepared to provide for his employees. There is not much advantage in providing a cheque which the individual worker immediately has to go and cash—indeed, it would be an absurdity, particularly in a big department store, for an employee to be given a cheque and then for him or her to go to the main cash desk and turn it into cash. The fact is that it will not make for much change in that direction. Nor will it make much change among many of the manual workers. I am sure that those who have been accustomed to receiving their wages in cash, whether they be miners or other workers, will regard pay as cash and will continue to exercise their right to receive wages in that form.
The real value of this measure lies in the future. It will be of value where the firm, particularly the big firm, is able to send a single cheque to its own bank and then, through clearing house arrangements, as they do with their salaried employees, have the individual accounts of their employees credited with the appropriate amount. It is common practice among all responsible employers—indeed, I should have thought it was general—for them to include a pay state- 210 ment showing deductions made. Any noble Lords who have been in a salaried position will be accustomed to receiving a little monthly note, which can now be made available to the manual worker, who usually receives in his pay packet a pay slip saying what he has received and what the deductions are.
As this reform comes into effect there will be a need for the banks to give rather better service to the public at large. I am not suggesting in any way that the banks are failing at the moment, but there will be a need for them, as there will be for other service sections of the community, including shops, I believe, to provide services of a kind that will be convenient to the general public. However, I am now getting on to dangerous ground, more dangerous even than the Truck Acts, and I will not pursue it much further. At the moment, some of the banks are a little nervous about this reform. It could become quite a serious thing for them if they were now to receive and have to deal with a large number of weekly cheques, as opposed to monthly cheques, to which they are accustomed. There would be no advantage to the community if we merely, so to speak, shift the work from one section to another; in the long run, the community will have to pay for it. Despite these observations, I think it is desirable that the banking habit should be more widely extended, and I believe that it will continue to develop. It is already increasing. We know that the number of depositors and people with accounts with banks is going up all the time, and this Bill removes an obstacle to that natural development.
The noble Earl referred to one or two particular items in the Bill. I am sorry that he did not say anything about the fact that the Post Office Savings Bank is unable to provide the sort of facilities which I think it ought, if possible, to provide in the course of time. It is not reasonable to expect banks to open branches, and to have them continuously open, in every small hamlet and village; but there is practically always a post office or sub-post office of some kind. I hope that the Government will give attention to this point—and an undertaking was given in another place that, if necessary, some Amendment to this Bill relating to the Post Office Savings system might be brought about.
211 There are two other small points to which I would refer. The noble Earl said that it will be an advantage to pay workers who are away sick by order, rather than by pay packet. Here again, the practice in many large firms is to send the pay packet by registered post, and it may prove to be just as convenient. After all, in many cases they are not required to do so, because some of their workers are not covered by the Truck Acts. There is a reference in the Bill to the Wages Councils Act. I take it that this particular Bill makes no alteration to the Wages Councils Act, 1945 (which I think is now consolidated in the 1959 Act), with regard to the payment of wages of those workers who are not covered by the Truck Acts and are covered by Wages Council Orders. It will not be necessary, I take it, to get agreement in writing of those workers to the payment of their wages, as they may be paid now in some cases, either by cheque or into a bank account. I raise this matter because the Wages Council Orders are a little blurred in their interpretation at the margin. It may affect managers drawing quite high pay, who may come within the ambit of the Wages Councils Act, and one would hope that it would not be necessary to alter the present perfectly satisfactory arrangements. I should also like to know whether in Scotland, where this system is already working, it will now be necessary to get the written permission which hitherto has not been necessary. Although these are really Committee points, I do not expect we shall spend much time on this Bill in Committee, and it would be of interest if the noble Earl could comment on them.
It is clear that the purposes of this Bill and the intentions of the Government are of the highest, and there is no deliberate trick; that it is designed, on the whole, to suit people's convenience; and that there will be no compulsion. I hope that in the instructions the Minister may issue steps will be taken to prevent any improper pressure of a kind that might be made by the occasional employer on the worker to receive his wages by cheque in preference to cash, if he prefers them in cash.
The other point that I think I should mention before sitting down is that this Bill again makes a contribution perhaps 212 to abolishing the wholly unjustified, what one might call class distinction between the white-collar worker and the manual worker. I should be interested to hear if the noble Earl, Lord Courtown, with his tremendous experience of business administration, can find something better to say about the Bill than I have already said. With these rather lukewarm remarks, I none the less welcome the Bill, and I am sure that my noble friends on this side of the House will facilitate its passage into law.
§ 4.30 p.m.
§ THE EARL OF COURTOWN
My Lords, first I had better declare an interest, in that I am connected with a concern which is a large employer of labour in the country, and is one which has made an experiment on a provisional basis of this payment through the bank over the last two years. I would agree with what the noble Lord, Lord Shackleton, said: that this Bill will not have any great immediate effect. It will legalise certain things which have been going on already, and I think it will have a long-term effect. It has always seemed to me illogical that a large proportion of the working population of the country should be deprived of the facilities which many of us enjoy by being paid through a bank. When one gets used to being paid through a bank, one realises the great advantages of it and the many facilities which the banks provide.
I should like to disagree with the noble Lord in his statement that there was no evidence of any wish from the workers for this system to be tried, because in fact the experiment which was conducted in a place of which I know was done at the suggestion of the works council, which is an elected representation of the employees in that works. It was done, of course, on a voluntary basis. It started in a small way, and now about 2,000 people, about one-quarter of the people in that works, are paid through the bank. Very few have withdrawn from it, although they could easily do so if they wished. I understand that those few who have withdrawn have done so because there was no bank within their immediate neighbourhood.
From the point of view of the employer, it does not seem to me that there are any great financial advantages in 213 making payment through the bank: and the main advantage, from the employer's point of view, is the fact that he does not have to move large quantities of cash about the country. I am sure that the police would welcome that. From the point of view of the work which is saved, the work of actually putting pay into pay packets has been highly systemized and does not amount to much. It is largely offset by the inconvenience of having to have two systems—one for those men who are being paid in the orthodox way and one for those who are being paid through the bank. There is also the problem created by the fact that the pay roll has to be prepared earlier, because one has to allow the banking organisation to take its course, so that the money is in the man's bank account when pay day comes. The acceleration of the pay roll by a day is something that may be difficult with existing machinery.
I should like to emphasise, too, what the noble Earl, Lord Dundee, said: that this is primarily a payment-through-the-bank Bill. I cannot conceive of any purpose in having payment by cheque. There may be a particular purpose in particular conditions, but in the main I see no advantage in it. It is inconvenient for the man receiving the money, as has already been said; it is inconvenient for the traders who may have cheques presented to them for cashing, and it is also inconvenient for the employer, because, without going into detail, it costs him quite a bit more to prepare cheques than to use the system of payment through the bank. I would appeal, too, to the banks to look at the long-term view of payment through the bank. I am afraid that some of them may look at the immediate prospect and see a great number of what they may think are unremunerative clients. But I believe that in the long run people will get used to being paid through the bank; they will realise the services which the bank can provide and the great conveniences it can mean.
The noble Lord, Lord Shackleton, also made reference to the Post Office Savings Bank. I think that point has to be looked at in relation to this scheme, and I would also include the Trustee Savings Banks. I suggest that the whole position 214 of those banks should be looked at in relation to present-clay needs. The Truck Acts were originally introduced to prevent exploitation of the worker by unscrupulous employers. The Truck Acts have become largely obsolete, and in parts they form a fossilised incubus of progress. They have done in this particular respect and also, I think, in some other respects. Let us make sure that in this Bill we are now discussing we do not do something of the same sort.
I was glad to hear something which had escaped me when I read the Bill, which is that the Schedule attached to it can be varied at the instigation of the Minister. As it stands at present, it appears that there are one or two snags attached to it. For instance, a common system which is allowed in general in the Schedule is for standard deductions to be shown to each worker on a card issued to him annually, only variable deductions being shown weekly. Such a system is quite common and, at any rate, to my knowledge in one place the works council have asked for it to be adopted, as against the presentation of the separate figures each week. It is also a common practice in industry for employees to have regular deductions made of, say, £1 a week for payment into their savings bank account. It seems to me that that is a desirable practice, and one that should continue. But under the Schedule as it is at present—at least, as it is interpreted to me, because with my inexperience I have difficulty in understanding some of these things—I am informed that if a regular deduction is made for a deposit in a savings bank it is necessary to show that figure each week to the man on his pay slip or whatever is given to him. If that is so, it seems to me that it merely involves endless repetition which the man probably does not want, and may in fact be difficult to provide in an existing mechanised system. I hope the Minister will look at that point before the Bill actually comes into operation.
To sum up, my Lords, I welcome this Bill. I do not think that it will have any startling effects immediately, but I believe that in the long run it will have great effects, both on industry and, in particular, on the welfare of the people working in it.
§ 4.38 p.m.
§ THE EARL OF DUNDEE
My Lords, I am grateful to the noble Earl, Lord Courtown, for his most well-informed and valuable speech, with all of which I am in full agreement. I will certainly inquire further into the detailed suggestions which he has made, some of which I think he may find are covered by the Bill already. The noble Lord, Lord Shackleton, asked a few questions. He wanted to know why the Wages Council Act has been brought into this Bill. It is mentioned at page 7, Clause 6 (4). The only reason for that is exactly the same reason as that for which the Truck Acts are mentioned. I have not got the Wages Council Act with me, but it does somewhere identify remuneration with cash, and the provision here is simply to make sure that anyone who is subject to the Wages Council Act and who may want to avail himself of the facilities provided in Clause 1 of this Bill shall not be prevented from doing so by the wording of the Wages Council Act.
With regard to Post Office and Trustee Savings Banks, which the noble Earl, Lord Courtown, also asked about, in the interpretation clause (Clause 7) it is made clear that Trustee Savings Banks are included in the definition of the word "bank", and that the provision of Clause 1 (3) authorising payment into an account at a bank, et cetera, therefore can apply to Trustee Savings Banks. With regard to the Post Office Savings Bank, inquiries were of course made to see whether it was possible to include it, but the Post Office Savings Bank did not feel it could undertake this kind of business. They do, of course, cash money orders and postal orders at post offices but they do not feel they could undertake the banking business envisaged in Clause 1 (3) (a).
With regard to Scotland, the noble Lord, Lord Shackleton, asked me whether there was any practical difference in Scotland. I only mentioned the legal difference as a matter of interest under the Truck Act of 1831 as it would apply to modern conditions, but in practice the difference is non-existent. Wages in Scotland are paid exactly as in England; normally they are paid in cash; and I do not know that there are any examples of wages being paid by cheque to people who go and cash them less than fifteen miles away. The position in practice is the same, because that 216 particular part of the Truck Act has one of those provisions in it which are really now out of date. I do not know whether the noble Lord meant to give that impression, but it seemed to me from his speech that he thought the main purpose of the Bill was to authorise payment by cheque. Of course it is not. That is only a very minor provision which is brought in incidentally. As I took the trouble to explain in my opening remarks—and the noble Earl, Lord Courtown also said the same thing—it is very unlikely that a great number will want to be paid by cheque, because if they have got to cash the cheque it is far better they should be paid in cash. We do not contemplate much use will be made of this provision. Money orders and postal orders we think will be of much greater convenience than cheques, but the main purpose of the Bill is to enable wages to be paid into bank account.
§ LORD SHACKLETON
My Lords, if the noble Earl will permit me to say so, I think he is doing me a slight injustice. I said that this was the main advantage of the Bill, and gave examples how it would then work.
§ THE EARL OF DUNDEE
I am very glad the noble Lord has said that, but he did spend some little time in talking about the comparative uselessness of paying wages by cheque, which I think I had already done myself. The noble Lord rightly said that there had been no great demand for this on the part of wage-earners. I hardly think it is the kind of thing on which you would expect any great demand; to get paid your wages by an order to put it into your bank account, instead of being paid in notes, is not the kind of thing which impels people to send deputations to London or organise marches or anything of that kind; it is not the kind of thing you would expect agitation about. But the trade unions have agreed to it. Their representatives on the National Joint Advisory Council have co-operated in preparing this Bill, and the fact that there has been no strong or universal demand for this to be done does not mean it may not be a great convenience.
I am told in the United States of America the proportion of workers comparable to those under the Truck Acts here who prefer to have their wages paid 217 by a credit to a bank account and not in cash is about 40 per cent. That is quite a high proportion. Of course, the general level of wages in America is a bit higher than here and it is reasonable to assume the higher wages you earn the more convenient it will be to have them paid in credit and not cash. But some wage earners here are now earning pretty high wages compared with what used to be the case not many years ago, and I do not think it is only in the remote future, but, I think we may expect, in the imme- 218 diate future, that a considerable number of them will benefit by the convenience provided under this Bill. I am grateful to both noble Lords who have spoken for the support which they have given to the Bill and I thank them for the speeches which they have made about it.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.
§ House adjourned at thirteen minutes before five o'clock.