§ 5.14 p.m.
§ LORD BOWLES
My Lords, the purpose of these Mariners Regulations, now submitted to your Lordships in draft for approval, is to amend the main National Insurance (Mariners) Regulations to take account of the changes in the National Insurance scheme made by the National Insurance Act 1966. As your Lordships will recall, this introduced earnings-related supplements for unemployment and sickness benefit and widows' allowance, and provided for the increased graduated contributions needed to pay for these supplements.
Perhaps I may begin by reminding your Lordships that Regulations of this kind arise from the special characteristics of a seafarer's working life. Because of these, special modifications are needed in the National Insurance schemes in their application to seafarers, and the National Insurance Acts therefore give the Minister wide powers to make Regulations in this respect. Your Lordships will note that the draft Regulations refer to the Minister of Social Security, as she is now known.
Regulation 1 of the draft is formal.
Regulation 2 deals with the special position of seafarers attending training courses. A provision in the existing Regulations enables seafarers who undertake such courses (which are to enable them to obtain higher qualifications) to become entitled to unemployment benefit even though they do not satisfy the usual conditions as to unemployment and availability for work. This concession, which does not apply to any other group on training courses, has become increasingly anomalous, particularly as many seafarers have their pay made up to them, and the draft Regulation provides that it shall not be extended to provide the new earnings-related supplement to unemployment benefit. The Minister will be considering, in consultation with both sides of the industry, what the position on flat-rate benefit should be. The remaining Regulations deal with graduated contributions. Special rules are necessary on these for seafarers because their pay arrangements vary from those of workers on shore, being 1729 normally related to the voyages they undertake rather than to calendar weeks or months. Accordingly their income tax and graduated contributions are assessed at the end of a voyage on average earnings throughout the voyage. Although the rules of assessment differ from those applicable to insured persons in general, the range of earnings on which contributions are paid and the percentage payable as contributions are the same.
Regulation 3 and Schedules 1 and 2 prescribe the new graduated contributions payable according to whether the employments are contracted out of the graduated pension scheme or not. The tables are identical to those for ordinary contributors in the National Insurance (Assessment of Graduated Contributions) Regulations, as amended. The provision in paragraph 4 of Regulation 3, which introduces a new paragraph 7 into the main Regulations, is to permit an employer to calculate graduated contributions on an exact percentage basis (to the nearest penny) if he finds this preferable to using the tables which set out contributions for bands of earnings. This alternative method is already available to employers generally, and its extension to seafarers' contributions will asist shipping companies with automated payroll systems.
Regulation 4 and Schedule 3 deal with the situation where overtime for the last days of a voyage is paid later than the main payment of wages for the voyage, and so involves a separate and late assessment of contributions. The existing rule that the ship-owners and seafarers each pay 10d. in the £(about 4 per cent.) on this balance of wages when it is paid, is replaced by a new rule fixing a charge of 11d. in the £(about 4¼ per cent.) for seafarers not contracted out, and ld. in the £(about ½ per cent.) for those contracted out. This is, of course, again in line with the new levels of graduated contributions under the 1966 Act.
Regulation 5 deals with the annual maximum of graduated contributions. The existing Mariners Regulations, like the Regulations applying to other contributors, provide that a person with more than one employment can apply for a refund if he pays more than a prescribed amount of graduated contributions. The "prescribed amount" is the maximum normally payable in one employment for 1730 a whole year. This Regulation fixes the new amounts consequential on the 1966 Act. The Regulation preserves the existing arrangement that a refund can only arise if graduated contributions are 10s. or more above this limit; this prevents refunds of very small amounts which would be disproportionately costly in administrative terms, though amounts which are not refunded do of course count for graduated pension.
Regulation 6 makes transitional provision for cases where a voyage starts before October 5, 1966—the appointed day for the new graduated contributions—and continues after that day. Paragraph (a) provides that the old contribution rates shall apply to the whole voyage if it ends before January 5, 1967; this is to prevent the ship's master from having to calculate graduated contributions at two rates for such voyages. Paragraph (b) ensures that where a voyage starting before October 5 lasts beyond January 5, only the period after October 5 will attract the new rate of contributions. This is on the same basis as was done in 1961 when graduated contributions were first payable, and in 1963 when the scales were extended. My right honourable friend the Minister has consulted the National Maritime Board, which represents both sides of the shipping industry, and the Board have expressed their agreement with the changes proposed in the regulations. My Lords, therefore I beg to move that these Regulations be now approved.
§ Moved, That the Draft National Insurance (Mariners) Amendment Regulations 1966, laid before the House on July 27, 1966, be approved.—(Lord Bowles.)
§ 5.20 p.m.
§ LORD DRUMALBYN
My Lords, I should like to thank the noble Lord, Lord Bowles, for his explanation of a sector of National Insurance which, if my memory serves me right—and it has been confirmed by his explanation—is one of the most complicated of all. There is one small question that I should like to ask the noble Lord. He referred to the fact that unemployment benefit is drawn during the period when mariners are attending courses on shore.
§ LORD DRUMALBYN
The courses to which the noble Lord referred are actually courses attended on board ship, and I gather that those who attend them at present draw National Insurance benefit.
§ LORD DRUMALBYN
Unemployment benefit. I am much obliged. May I take it, then, that unemployment benefit is still paid to those attending courses on shore who are not actually in employment; that these unemployment benefits will not be affected in any way by the present regulations; and that the people concerned will receive their earnings-related unemployment benefit during the period when they are attending courses on shore, if they are not at that time employed? Perhaps I could go on for a moment while the reply is being obtained.
This is, of course, quite a different question. I appreciate that officers who attend such courses are normally in employment. They remain in the employment of the various shipping companies. But that may not be so with other ranks and that is the point to which my question is directed. I understand that, so far as courses attended on board ship are concerned, the position now will be that those who attend such courses will not receive their earnings-related addition, but that for the time being, until consultations are completed, they will continue to receive their flat-rate unemployment benefit. I am asking now about the courses on shore, and I wonder whether the noble Lord, Lord Bowles, can now give me an answer.
§ LORD BOWLES
My Lords, I think that the noble Lord, Lord Drumalbyn, has got this matter wrong. The anomalous position which we are trying to correct has been in existence, I think, from 1955; and it may be even longer than that. When a sailor wants to become more than a sailor, when he wants to become a petty officer or an officer, he can, when he is on board his ship, get some instruction, and it is anomalous that he should get paid unemployment benefit; after all, he is still employed. Nevertheless, that has been the policy of the Ministry, even in the time when the noble Lord, Lord Drumalbyn, was Minister; and he did nothing about this. I am sure that he is not complaining that we are now trying 1732 to put this matter right. The position is that on shore an ordinary young engineer may take a course at, say, Coventry Technical Institute. The great majority of employers, I think, these days, try to encourage their workers to improve their knowledge and efficiency in industry, and make a contribution to the cost. I am not sure, but I believe that the Government impose a levy on the employers, so that the fees of students taking the courses of this kind to improve themselves will be met.
§ LORD DRUMALBYN
My Lords, may I ask the noble Lord about this? Obviously, one is concerned with those mariners who sign off and take courses, and who have no employer. I am wondering how their normal wages are made up.
§ LORD BOWLES
My Lords, I think the simple answer to the noble Lord is that this Regulation does not apply to anyone who is not a mariner, and a mariner is a person who is under a contract of service during a voyage; so that this point is not relevant to the Order which I am submitting to the House.
§ On Question, Motion agreed to.