HL Deb 20 June 1968 vol 293 cc995-1002

10.21 p.m.


My Lords, I beg to move, That the Redundant Mineworkers (Payments Scheme) Order, a Draft of which was laid before your Lordships' House on May 28, be approved. This Order establishes the scheme provided for by Section 3 of the Coal Industry Act 1967 for making payments out of public funds to mineworkers aged 55 or over and made redundant between July 17, 1967, and March 28, 1971. It is an important Order affecting as it does the interests of a large number of mineworkers. The need to make such provision arises out of the fact that the coal industry is currently undergoing a programme of reorganisation and contraction. We are confident that this contraction, carried out by the National Coal Board with the co-operation of the unions concerned, will result in a highly productive, economic and competitive industry concentrated on low-cost pits.

However, certain social consequences inevitably stem from such a contraction as considerable numbers of men leave the industry. So far the rundown in manpower has been managed by the Board with marked success, but the time had to come when we were faced with some degree of redundancy. Since the majority of redundant workers are, or will be, aged 55 and over, living in development areas where the prospects of further employment are not all we should wish, it was felt that special measures were needed to alleviate the difficulties they might experience.

It is impossible to forecast precisely the number of workers over 55 years of age who may become redundant during the period from 1967 to 1971, which will be the period of greatest difficulty. The original estimate of 26,000 has now been raised to 33,000. It is equally hard to forecast the cost to the Exchequer of the measures to be taken, since this will obviously depend, among other things, on how many redundant workers find new employment. However, a figure of £28 million has been calculated, with some possibility of upward revision. That is a large sum of money, of course, but it does not in fact represent a gross additional cost to the Exchequer. Since many of the men who will receive benefit under this scheme would otherwise have been in receipt of State supplementary allowance, the net cost to the Exchequer will probably fall between £11 million and £12 million.

In brief outline, my Lords, the provisions of the Scheme are as follows. It will apply to workers made redundant between July 17, 1967 and March 28, 1971, who are aged between 55 and 65 years, have been employed in coal mining or certain related occupations and have a record of ten years' service, the last two being continuous. The aim of the Scheme is to build up a worker's post-redundancy income to about 90 per cent. of pre-redundancy take-home pay, including overtime. This aim is achieved by supplementing those State benefits such as unemployment benefit or sickness benefit to which the worker is entitled. When those benefits cease the Scheme supplement is increased to offset the loss. The table which makes up Appendix 4 of the Order shows the scale of supplementary payments.

However, where certain other State or industry benefits are increased because of the redundancy—for instance, a special hardship allowance—these will be offset against the supplement. Scheme benefit will be payable for three years from the date of redundancy, or until age 65 if sooner. It will cease on re-entry into the coal industry (though it will recommence if the worker once again becomes redundant), but will be payable at a reduced rate if the worker enters outside employment. The object of this, of course, is to encourage men to seek new jobs. Payments will in any event cease in March, 1974.

Scheme benefit is taxable but not State benefits, and allowance has been made for this in calculating a worker's post-redundancy income. Due to the fact that the composition of this income, although not its total, will fluctuate over the three-year period, there will also be fluctuation in the incidence of tax.

During the drafting of this Scheme it was necessary to consider the position of workers as regards their entitlement to pension. Normally, those workers who have the necessary contribution record under the Mineworkers' Scheme receive their pension at the rate of £1 a week at the age of 65. However, it has been decided that workers declared reundant at age 60 or over may receive at once the pension to which they are entitled, although it will be deducted from their Scheme benefit while they are in receipt of this. As for the men in superannuable grades, they may opt either for immediate lump sum and pension on redundancy, or for Scheme benefit first followed afterwards by lump sum and pension. There are special arrangements for those who may already have taken pension on redundancy without having this option put to them.

Certain workers declared redundant before this Order is made may have been in receipt of State supplementary allowance, due to the fact that Scheme benefit was not available to them. Such supplementary payments will be offset against their arrears of Scheme benefit. There is a rather special benefit for the occupiers of coal-industry houses whose rent may be increased when they cease to be connected with the industry. Generally speaking, payment of benefit under the Scheme will cease where there is (apart from the fact of its exhaustion) no entitlement to State benefit. Claims for Scheme benefit must he put in within 26 weeks of the Order taking effect or of the date of the redundancy, whichever is the later. However, my right honourable friend the Minister of Power is empowered to extend the claim period if he considers that there are good grounds for so doing.

The National Coal Board, who have agreed to administer the Scheme, have done a tremendous amount of preliminary work for which we are most grateful. In the preparation of this Scheme there has been close and frequent consultation with the unions concerned and the welfare departments. I may say that the Board and unions have each prepared a simple "Question and Answer" guide to the scheme, which I am sure claimants will find of great assistance to them in what is inevitably rather a complicated matter.

Many technical problems have had to be overcome to achieve this apparently simple objective of supplementing the pay of elderly redundant mineworkers, and there has been some quite unavoidable delay between the first announcement of this Scheme and its laying before Parliament. However, now that we have finally reached our goal I trust that your Lordships will agree that we are making generous provision to relieve the plight of a group of workers who well merit both our sympathy, because they now find themselves deprived of the work which has been their life as well as their livelihood, and our gratitude for their great contribution towards our country's economy. I have pleasure in asking your Lordships to approve this Order.

Moved, That the Draft Redundant Mineworkers (Payments Scheme) Order 1968, laid before the House on May 28 last, be approved.—(Lord Winterbottom.)


My Lords, as I had to speak technically, critically and at length on the last Order, I am delighted to be able to say that we welcome this Order. As a general rule it is better to pay generous redundancy payments than to keep mines open to produce coal which we cannot sell.

10.31 p.m.


My Lords, I cannot let this Order pass without saying a few words, although the hour is somewhat late. It is a complicated Order but it is more than that; it is unique and unprecedented in that for the first time, so far as I know, in the coal industry it seeks to cushion the effects of the social consequences arising from pit closures and the contraction of the industry. I am very grateful to my noble friend for his explanation of the provisions of the Order, which arises from the Coal Industry Act passed in 1967, almost a year ago.

There has been some delay in the preparation of the Scheme to make these payments. I am informed that there has been consultation between the interested parties to get the greatest measure of agreement and satisfaction, so far as the payments of these benefits are concerned. Even so, it seems an unconscionably long time that twelve months should elapse from the passing of the Act and the announcement by the Minister of Power before the Order comes before both Houses of Parliament, and it is my information that as a result of this delay there has been a lot of irritation in the coalfield among the miners who have been made redundant since July, 1967, although it is the case that the operative date is from that particular date of July.

However, I welcome this Order and I congratulate the Government on the action proposed to alleviate the social consequences for some of the persons who have been made, or will be made, redundant consequent upon the closure of collieries. My only regret is that this process of contraction began at least twelve years ago, and in that period of time many pits have been closed and many miners made redundant, many of them of such an age that there is no hope, or very little hope, of their getting any kind of employment at all. Because this Order makes not only some provision but, as my noble friend said, generous provision for those who find themselves in these particular circumstances, I congratulate the Government most sincerely on this Order.

There are only three matters that I want to mention very briefly. One could say a good deal about them, but I think my noble friend may well have anticipated the three points I want to put to him. The first concerns payments in kind. He mentioned that, in addition to the cash benefits that will be paid, an allowance of up to 20s. will be paid to those whose rent is likely to be increased. There is a long story to that matter; it has been going on for generations—perhaps more than a century. In some areas, miners have lived in houses rent-free, or at a much reduced rent, and the point has been conceded that, in addition to the cash benefit of 90 per cent. of their pre-redundancy earnings, they will be given an allowance to meet any increase which may take place in their rent as a consequence of the fact that they are no longer employees.

There is another payment in kind which I must mention, and that is the question of concessionary coal. The question of rents applies more in the older areas, but so far as this payment in kind is concerned, I would remind your Lordships that those who have had some connection with mining for many years have always regarded both rents and concessionary coal as part of their wages. While the point of rents has been conceded in the Order, there is no mention of concessionary coal. I will leave the matter there, because the Minister might like to make some comment upon it.

Then there is the question of pensions. Clause 4 of the Coal Industry Act provides that moneys can be paid into coal industry pension funds to reimburse them for any pensions paid before normal retirement age to men who have been in receipt of benefit under the Redundant Mineworkers Payments Scheme. That is this Order. The only question I want to put, without elaborating upon it, is this. Does this mean that everybody who gets a payment under this Scheme is entitled to premature pension? Because it will be the case that if some men come on to this redundancy payment at 55 it is limited to three years. That will bring them to 58, which is two years below the normal retirement age so far as a claim for a pension from the Coal Board is concerned. My noble friend may like to make some observations on that particular point.

The only other matter I want to raise is: Will there be any appeal procedure? I think this is most necessary. My noble friend said that the administration would be carried out by the National Coal Board. One can have confidence in that system, confidence that the right thing will be done at the right time; but in view of the generous nature of these payments—there has never been anything like this in the Coal Industry before, so far as benefits for redundancy is concerned—I think that an appeal procedure is essential for the reason that I have just mentioned. Further, it is well within the realms of possibility that disputes may arise over the calculation of pre-redundancy earnings. There may be a question as to whether a particular place is a "prescribed" place. The prescribed places are all set out in the Order. There may be some dispute about that; or about whether a man, redundant at a prescribed place, is redundant as a result of a colliery closure or as a result of rundown.

I respectfully submit to my noble friend that in the administration of a Scheme of this kind, it is necessary not only to give justice but that justice should appear to be done; and that it would be advisable for some procedure so far as appeals is concerned. With those few remarks, I welcome this Order, and say once again that I congratulate the Government on the steps they have taken in this field.

10.38 p.m.


My Lords, I am grateful to the noble Lord, Lord Denham, for his generous acceptance of this Order. May I now turn briefly to the points made by my noble friend? As he realises, this is a most complicated measure. The objectives of the Order are quite simple, but carrying them into effect is most difficult. The hard fact is that after the decision to carry through such a Scheme, which needs legislation, it was only six months before we got the law on the Statute Book, by the end of last year; and it has taken hard work by all concerned up to Whitsun to get the Order "licked into shape".

I think we are all as anxious as my noble friend to get this Scheme into effect, and I tell your Lordships frankly that the whole thing is not yet "run in". A great many elements are still under discussion. One of these is, of course, the question of mineworkers' pensions, the pension for the three years running from age 55 leaving a gap of two years up to 60. This is one of the things that are not yet settled and still under discussion. There is still dispute over the position of the men aged between 55 and 59 whose contribution record will be rather small. This is being discussed within the framework of this Order, but, as I have said, it is not yet settled.

My noble friend mentioned appeal procedure. I think it is a tribute to the good labour relations existing within the Coal Industry that it has not been considered necessary to start any statutory appeals procedure. What has happened is that the unions have agreed to non-statutory arrangements, such as those which exist in disputed cases under the Fatal Accidents Scheme. We also hope that, if the Department of Employment and Productivity agree, members of the industrial tribunals will consent to act in a non-statutory capacity. Their statutory duty is in relation to the Redundancy Payments Act, and the Minister will act as the final arbiter. On those two points I hope that my noble friend will now feel reassured.

I cannot reassure him, however, over concessionary coal. The National Coal Board have conceded that redundants aged 60 or over may continue to receive their coal, with the Minister paying two-thirds and the National Coal Board one-third of its cost. But the Coal Board have firmly resisted the suggestion that the concession may be extended to men aged 55 to 59. Therefore I regret that in this field I cannot give my noble friend any reassurance. In the main operations of the scheme, as set out in the Order, however, I think he will in the end receive satisfaction.

On Question, Motion agreed to.