REDUNDANT MINEWORKERS (PAYMENTS SCHEME) ORDER 1972 (Hansard, 2 March 1972)

§ THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)
My Lords, I beg to move That the Draft Redundant Mineworkers (Payments Scheme) Order 1972, laid before the House on the 1st February, be approved. The purpose of the Order is to continue for a further two years the arrangements which were established five years ago for providing financial benefits to mineworkers who become 1244 redundant. The arrangements stem from the recognition that difficulties following redundancy are especially acute in the case of older miners who have spent all or most of their working lives in the mines. They arise out of the contraction of the industry and the exhaustion of mines. Between 1960 and 1970 the number of men working in the mines was exactly halved. It is not possible to forecast from these figures what the contraction is likely to be in the next two years. But whatever happens, the fact remains—and this is our concern today—that any mineworkers who become redundant face particular difficulties because of the generally below average prospects of alternative employment in mining districts and because of the extremely specialised character of their training and experience. The introduction of this Order recognises the claim of those men for special consideration.
The Coal Industry Act 1967 gave power to establish a scheme for making payments to mineworkers made redundant between July 17, 1967, and March 28, 1971, and the scheme was established by the Redundant Mineworkers Payments Scheme Order 1968. The Coal Industry Act 1971 extended the power to make schemes up to March 31, 1974. This is being done in two stages: first the existing scheme was extended to cover men redundant up to March 25, 1972, and a revised scheme has now been drawn up to cover men redundant between March 25, 1972, and March 31, 1974. It is this revised scheme, which has been laid before the House as the draft Redundant Mineworkers Payments Scheme Order 1972, that we are now considering. During the Committee stage of the 1971 Coal Industry Bill, the Minister for Industry undertook to bring in a new scheme as soon as he had completed the requisite consultations. In the preparation of the new scheme the National Union of Mineworkers were fully consulted. They submitted a memorandum setting out the changes which they wished to see made and they had two meetings with Ministers and a number of meetings with officials during which they put their views orally. The National Association of Colliery Overmen, Deputies and Shot-firers, the other union most concerned with the scheme, were informed of the proposed changes and their comments invited. The National Coal Board were 1245 consulted at all stages in the re-drafting of the scheme.
The purpose of the scheme was clearly stated by the Labour Minister of Power in July, 1967, when he said:
We are, therefore, preparing a scheme whereby mineworkers who become redundant and have to leave the industry at or after the age of 55 will have their income supplemented by the Board for a period so that they can adjust themselves to their new circumstances". The House will note from this that the scheme was intended, not to provide indefinite financial help, but to tide over a difficult period in a man's life if he should find himself redundant. The present Government accept that this is the right objective. We have now had some four and a half years' experience of the working of the scheme. A total of 37,000 men have benefited at a cost of about £30 million, and I think I can safely say that, on the whole, the scheme has worked well; it has been welcomed by the men concerned, and it has helped to cushion the hardships inherent in redundancy.
A number of suggestions have been put forward for changing the basis of the scheme, and we have considered these very sympathetically, but it still seems to us that for a scheme of this type a starting age for benefit of 55, a duration of three years, and a level of benefit of 90 per cent. of previous net pay is the best combination we can achieve. We have therefore preserved the basic shape of the scheme and have endeavoured to improve it as much as possible in detail.
There arc two major changes. The first is the introduction of a cost-of-living increment, and the second is the increase from £3 per week to £6 per week of the level of benefit which a man may keep if he finds another job. The cost-of-living increment takes account of the union's claim that the real value of benefit should be preserved. The method of making the cost-of-living adjustment perhaps needs explaining. The House will appreciate that total benefit consists of two elements, unemployment benefit and basic scheme benefit. Now that the Government have announced their intention of adjusting unemployment benefit annually, that element of total benefit will automatically be taken care of. The basic benefit will be adjusted by adding to it an increment based on the rise in the cost of living. 1246 This will be done to each man's account at the end of his first and second years of benefit. These arrangements are detailed in Article 5(2) of the Schedule.
Under present arrangements a man who finds himself another job is allowed to keep up to £3 of scheme benefit. But with his new job a man will probably find that lie has to pay income tax, possibly some union dues and travelling expenses and certainly National Insurance contributions. He could well find himself no better off with a job than without one. For this reason we are putting up the sum that he may retain from £3 to £6 per week. We hope this will be an added inducement to redundant men to try to find other employment. This change is contained in Article 7, paragraph 4.
There are also other ways in which the scheme has been made more advantageous, in addition to the introduction of a cost-of-living adjustment and the increase in the value of benefit during re-employment. There has been strong pressure from the Union and other people to ensure that if a man has engaged in trade union duties or useful social work such as a councillor, or if he has lost an occasional day's work through sickness, allowance should be made for this in calculating his pre-redundancy payments, so that he shall not lose thereby. We have agreed to this, and administrative instructions have been given so as to ensure that these factors will be taken into account in calculating pre-redundancy earnings. No change is therefore required under the scheme itself.
Under the present scheme a rent allowance is tied to the house in which a man was living when he became redundant. We are now proposing that he should keep the allowance once he has established the right to it, even if he changes house. We have greatly eased the rules regarding the off-setting of various State and industry benefits against scheme benefit. We have also introduced a provision which allows a man who is re-employable in the industry and who becomes redundant for a second time to have his wages before his second redundancy taken into account in assessing the level of benefit he should receive. We are arranging that these provisions covering rent off-sets and reemployment in the coal industry should 1247 also apply to men in the present scheme. We have also removed a number of minor anomalies which have caused difficulties in the present scheme.
To summarise, therefore, in framing the new scheme the Government have consulted with the unions principally concerned and have accepted much of what they have proposed. We consider that no change is necessary in the broad outline of the scheme, which has worked well. We have introduced two major improvements: an annual cost-of-living increase and an increase in the amount of benefit which a man may retain if he finds alternative work. We have also made a number of other detailed improvements, and we believe that these are welcomed by the unions. Finally, we have also arranged that, where appropriate, provisions for the new scheme will apply to men now in benefit under the present scheme. My Lords, I beg to move.

§ LORD DIAMOND
My Lords it is certainly not my intention on this, the third occasion on which I have risen to address your Lordships this afternoon, to make a long speech, but I must thank the noble Lord for what he has said and the care with which he has explained this Order. Indeed, if it will not embarrass him, I should like to thank his Government for the care with which they have negotiated with the National Union of Mineworkers and also the relevant parties concerned, before putting this Order before your Lordships' House. As the noble Lord said. this is based on an earlier Scheme, with which those of us in the previous Government were very familiar. I recognise immediately that there have been certain improvements, mainly stemming from the negotiations which have taken place. So far as this Order is concerned, I have nothing but appreciation and gratitude to extend to the Government and to the noble Lord. I would merely underline what he said and draw two short conclusions from it.
1248 I should like to underline that this is a scheme for redundancy payments and not a premature retirement scheme. The noble Lord was good enough to underline that point himself. That being the case, what is of equal or even greater importance for a redundant miner is the prospect of work. Therefore the obvious point to be made here is that of the very large numbers who have been affected by redundancy, who have benefited from this scheme and who get their situation alleviated, as the noble Lord said, as a result of these payments but whose main concern is to find new jobs, something less than 5 per cent. as I understand it, have been successful. This illustrates that the Government should spend much greater effort in trying to devise, both in terms of the background of economic climate and in the particular circumstances affecting mining areas which, as we all know, bring very special problems, the means of introducing possibilities of work for miners who are declared redundant. That is one conclusion which one draws from the nature of this scheme.
The second point I should like the Government to look at—though of course I do not expect a reply this afternoon, nor indeed this year—are the new circumstances which are developing in relation to the volume of work required of most of the working population. Here you have what is admitted to be a very special case, a special working community, special not only in terms of the recent decision, but special in terms of the nature of the work that they do and also in terms of the economic climate in which they work and the restricted areas of alternative opportunities in which they work. I am referring now to the possibility of earlier retirement. I know this is not provided for in this Statutory Instrument, but nevertheless an alternative approach would be that of earlier retirement: for example, retirement at 60. I know the immediate answer which any Government would give is, "This is not the only industry which has problems, and one does not want to set up special precedents." My answer to that is that the miner is a special case, and if we want to give consideration to this very real social problem of earlier retirement which is developing—and by earlier 1249 retirement I am thinking only of retirement at the same date as that at which the civil servant retires—

§ LORD DRUMALBYN
May retire.

§ LORD DIAMOND
Yes, may retire. If we want the opportunity of considering that and having a kind of pilot experiment in our social development where we can have a possibility of retiring at 60, surely this would be the ideal case, because although we have an Instrument here of which we, certainly on this side, join in approving and which does alleviate hardship, it does not solve the problem. Less than 5 per cent. finding work in a situation of redundancy does not solve the problem. Therefore, I hope that the noble Lord will be good enough to tuck away in his mind, and perhaps mention to some of his colleagues on a future occasion, the possibility of moving forward in our thinking in this way. I repeat my gratitude to him.

§ LORD DRUMALBYN
My Lords, I think that in reply I need only thank the noble Lord for what he has just said. He certainly does not embarrass me when his words are agreeable—and they are generally agreeable, even though they are not always in agreement with my view. He raised two very important points, and they are both points of which we are well aware. Of course we fully accept the importance of the prospect of work, but the noble Lord knows as well as I do the difficulties here, especially in places which really have their sole raison d'être in the fact that there is a coalmine there. These are matters which even in my old constituency have been very successfully overcome. It certainly requires a great deal of careful preparation and a good deal of patience as well.
May I say this with regard to the noble Lord's observations on earlier retirement? He is absolutely right; this Order is essentially a redundancy scheme. That being so, the character of the benefits are rather different from what they would have been if we had been providing for earlier retirement. Obviously, if at any time we were to consider this the two schemes would require careful marrying; we should have to bring them together in some way that was considered fair. That would have to be carried out if we were to adopt what the noble 1250 Lord described as a "pilot experiment" of retirement at sixty for miners. As he said, this has nothing to do with the scheme that we are laying before your Lordships at the present time. Like most of the suggestions the noble Lord makes, it is well worth considering. I imagine that it is already being considered, and I shall certainly make certain that this is so. With those few words I hope that the House will now he prepared to give us this Order.