REDUNDANCY PAYMENTS (VARIATION OF REBATES) ORDER 1977 (Hansard, 28 July 1977)

Lord WALLACE of COSLANY
My Lords, I beg to move that the Redundancy Payments (Variation of Rebates) Order 1977, a draft of which was laid before this House on 25th July, 1977 be approved. I do not think that any noble Lord present here today will be unfamiliar with the purpose of this order, which is to reduce the rebate payable to employers from the Redundancy Fund from 50 per cent. to 41 per cent. During the course of debate on the Redundancy Rebates Bill which receive the Royal Assent on 22nd July 1977, it was clearly stated that it was intended to use the enabling power in this way. The reasons for doing so were fully covered, and I do not propose to presume upon the indulgence of the House by going over the same ground again in depth.
I feel bound, however, at least to remind noble Lords that this order, when made, will produce savings to the Redundancy 1190 Fund estimated at approximately £1.35 million a month. As I have said earlier, these savings may appear small, but in no way can they be described as insignificant. Neither can there be any question about the effect they will have in reducing the public sector borrowing requirement.
I fully appreciate that strong views have been expressed to the contrary by noble Lords on all Benches opposite, and these were reflected in the Amendments made in this House and referred back to another place. I hope that, having made these views abundantly clear, your Lordships can now accept with your customary grace and understanding that it is right for this House to accept the proposed change.

§ Baroness ELLES
My Lords, we may have a customary grace, but we certainly do not always show customary understanding of the words of the noble Lord, with which we totally disagree. We on this side have consistently opposed the contents of this draft order as they were originally proposed in the enabling Bill. I should like to say a few words before we conclude this business. The possibility of this draft order being laid before your Lordships' House was, of course, envisaged right from the beginning of our initial discussions during the Second Reading of the Bill under which the order is now laid. As the noble Lord quite rightly says, the matter has been fully debated, and I am certainly not going to go over the same ground again. But there are four points I should like to make.
The first one is this. When the first Bill was originally introduced in another place, in order to reduce the rebate from 50 per cent. to 41 per cent., it was rejected in another place; the Bill, therefore, had to be withdrawn after Second Reading. When we sought successfully to introduce an Amendment in this House, following the failure of that Amendment or a similar Amendment in another place, the Minister in the other place, in disagreeing with our Amendment, made the extraordinary statement in column 1120 of the Official Report of 5th July: 1191 We cannot now accept from another place a principle which has already been rejected by this House.". It seems to me an extraordinary statement to make, considering that the draft order is introducing a principle which had been totally rejected by another place on its first introduction. It seems to me that a new constitutional principle creeps into this; that is, that a Minister apparently is not bound either by his previous performance or by his own words. To give as a reason for rejecting an Amendment from this House, that because it has already been rejected in another place we have no right to introduce the Amendment here, seems to be an extraordinary way of going about things to say the least of it.
Secondly, I should like to comment on the question of the savings to which the noble Lord has referred. I must draw to the attention of the House the fact that the Redundancy Fund is now standing, as I understand it, at something like £15 million. When the original statement was made on 22nd July by the Chancellor, it was, of course, a negative sum; but it had already reached £5 million by the end of December. I do not quite see where the noble Lord gets his figure of £1.35 million savings a month, when I understand that the sum paid out—this is the last figure I have—was something like £22,000 for the last week. I am not expecting the noble Lord to go into these figures at great length at this time of the day and at this stage in the Parliamentary year. Nevertheless, I should like to put it on record that it seems rather surprising that it has achieved a saving of £1.35 million when the only sum paid out is £22,000 and the Fund is increasing monthly on the credit side.
Thirdly, I should like to state formally that we on this side of the House very much regret the principle that the Government should tamper with funds contributed solely by employers for a specific purpose, in order to help those employers who are faced with redundancy payments. In our view, there can be no possible justification for the statement by the Minister in another place—column 1119 of the Official Report of 5th July—that the reduction in the level of the rebate will have the direct effect of reducing the public sector borrowing requirement and will contribute in 1192 a small way to the restoration of the economic health of the country. The reduction in the rebate will, in our view, be of no benefit to the economy. It does not contribute to solving any of the major economic problems with which the country is faced—overmanning, lack of creation of new jobs, increasing pressures on small businesses which are the backbone of the private sector of the economy of this country. The draft order, in our view, does nothing to contribute to the improvement of the economy, but is evidence of a shortsighted attempt by the Government to relieve their own appalling economic mess and their massive public expenditure, to help in some small way to increase their borrowing capacity.
Finally, in view of the statements of the Minister in another place about the kind of power we are expected to have in this House, it is perhaps extraordinary that we are having to introduce this order in this House today, because of the incompetence and inefficiency of the Government yesterday in not having a printed Act available for another place to debate last night. I, therefore, very much regret that we in your Lordships' House have to debate this order before another place. I hope very much that the debate in another place which will follow will have satisfactory conclusions—to which side I will not say. I leave it at that.

§ Lord ROCHESTER
My Lords, I think we on these Benches must associate ourselves with the general tenor of the remarks just made by the noble Baroness, Lady Elles. We, too, have opposed this Bill in principle from the beginning, not least because, at a time when, as we see it, the Government should be doing all they can, on the basis of their own avowed strategy, to help industry, more particularly in the matter of mobility of labour, through this Bill they are doing exactly the reverse. However, as the noble Lord, Lord Wallace, said in his opening remarks, the Government have at least made plain from the beginning that it was their intention, as soon as the Bill had been passed or shortly thereafter, to bring in an order of the kind that is now before us. Having acquiesced, however reluctantly, in the passage of that Bill on that basis, we do not think that we can now do anything else but reluctantly accept the order.

Lord WALLACE of COSLANY
My Lords, I think I should at least gracefully reply to the noble Baroness and to the noble Lord. The noble Baroness referred to the Act not being available. Well, with their usual efficiency, the Government took very quick action to put that unfortunate oversight right. This House has had the distinction of dealing with it first, before another place. Therefore, we pass it back to another place, for them to act with the same grace and understanding with which your Lordships have dealt with the order.