REDUNDANT MINEWORKERS AND CONCESSIONARY COAL (PAYMENTS SCHEMES) (AMENDMENT) ORDER 1977

HL Deb 21 March 1977 vol 381 cc243-8

3.2 p.m.

Lord STRABOLGI rose to move, That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1977, laid before the House on 2nd March, be approved. The noble Lord said: My Lords, the origins of the Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1977 lie in the Coal Industry Act 1967, where power to make redundancy payment schemes was first provided. Subsequently the power was extended by the Coal Industry Acts of 1971 and 1973 and by various orders, the latest of which the Coal Industry (Redundancy Payments Schemes) (Extension) Order 1976, takes the powers up to March 1978. The Coal Industry Bill 1977 at present before another place seeks to extend these powers further, but in considering this draft order we are concerned only, I suggest, with the existing scheme up to 26th March 1978.

The current Scheme is contained in the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1973 as amended by the 1975 and 1976 Amendment Orders. Under this, for the first three years of redundancy the man receives 95 per cent. of his previous take-home pay—that is after tax and other deductions. This payment is made up of two elements, "basic benefit" and unemployment benefit. During the first year of redundancy the man receives unemployment benefit in the normal way from the Department of Health and Social Security; for the next two years he gets the equivalent of unemployment benefit from the Scheme. It is obvious from this that whenever the level of unemployment benefit changes it is necessary to change the basic benefit accordingly so that in total the man continues to receive the same amount as before. So having regard to the increase in unemployment benefit which took place in November last year, it is necessary to change the basic benefit. The "basic benefit" to which men are entitled at each level of gross income is shown in the table of benefits at Appendix 4 of the Scheme Order.

The new table of benefit is annexed to the draft order now under consideration and this will apply from 6th April. Noble Lords will note that this follows the pattern of the 1975 and 1976 Amendment Orders where the table of benefit was amended for similar reasons. In addition to this necessary adjustment of basic benefit, the Government are proposing three improvements. The first is to increase the maximum amount of pre-redundancy earnings which can be taken into account in calculating the corresponding basic benefit. Since 1975 this has been £70 per week so that any redundant man who had been earning more than that received basic benefit as if he were earning only £70 per week. In order to take some account of the increase in the general level of earnings that has taken place, the maximum is being increased to £80 per week and noble Lords will find that the table in the Schedule to the draft order now goes up to that figure.

The second improvement is this. As I have said, for the first three years men receive basic benefit plus unemployment benefit or an equivalent sum. At the end of three years basic benefit ceases, but men continue to receive from the Scheme a sum equivalent to unemployment benefit until they reach the age of 65. In addition, they receive their mineworkers' pension paid prematurely. Article 6(1) of the Scheme allows certain State benefits to be deducted from the basic benefit which is payable subject to a minimum of £3. The draft order raises this minimum from £3 to £5.23 which is the present level of the mineworkers pension, so that a man's income will not be lower during the first three years of benefit than it will be subsequent to that period.

The third change is to Article 8(3) of the Scheme and concerns the level of pension which may be retained by members of the Staff Superannuation Scheme in the period after the first three years of benefit. Officials and weekly paid industrial staff are members of the Staff Superannuation Scheme and most of them would receive a pension which is higher than the mineworkers pension since it is earnings related, whereas it will be some years before the earnings-related element in the new Mineworkers Pension Scheme which was established in 1975 begins to work through. Under the present redundancy scheme the amount of any pension over £5 per week from the Staff Superannuation Scheme is offset against the redundancy payments. We are now proposing to raise this limit to £8 having regard to inflation and to the fact that the mineworkers pension, which is received without offset, is now £523. In addition to these three improvements there is an amendment contained in Article 3(b)(iii) of the order to update the method of calculating the benefit to he paid to a man who is re-employed in the industry, and is then made redundant a second time. All these changes will apply from 6th April.

While useful and, I understand, very acceptable to the unions and the men concerned, these are, I suggest, amendments of detail, and the draft order, I should like to stress, makes no fundamental changes in the arrangements which have operated smoothly and successfully for many years since their introduction through the Coal Industry Act 1967, which was extended and brought up to date by the Conservative Government in their 1973 Coal Industry Act to give assistance to miners who lose their jobs. I hope it will have your Lordships' approval, and I beg to move.

Moved, That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1977, laid before the House on 2nd March, be approved.—(Lord Strabolgi.)

3.10 p.m.

Viscount LONG

My Lords, we on this side are grateful to the noble Lord, Lord Strabolgi, for the information he has given about the order. I am glad to note that this matter has again been reviewed and is continuing to be reviewed, because since 1967, when the then Labour Government introduced the scheme, we have welcomed it, and indeed when we were in power we reviewed it. It is of course a most horrible and difficult job in the coal mining industry, and all of us have always had the greatest sympathy for those who do this work. We can therefore understand the reason for these severe and strong pensions which, as I say, we reviewed, and which have been reviewed again this year.

I would not wish to criticise the scheme in any way. As one listened to the noble Lord one might think that the figures of wages were large, but in fact they are not. The miner today can be without a job because his mine has been closed down. He may find himself redundant and it is bound to take time before he can be rehoused or rehabilitated in another mine. Bearing this mind, I have four questions to put to Lord Strabolgi and I hope he will be able to give some information on them. First, how many in the coal mining industry today are unemployed? Secondly, from what fund does this money come? Knowing that the Government have to subscribe at times to the National Coal Board, I believe there is a separate fund to deal with this. Thirdly, what is the cost of this scheme to the NCB? The answer to that question might help us realise how difficult the NCB is finding it to obtain money to go ahead with new mines. Fourthly, can the noble Lord elaborate a little on what the total effect of early retirement is likely to be? We are glad to see that the pension has risen from £3 to £5 and that we in Parliament are continuing to look after the miner.

Lord STRABOLGI

My Lords, I am grateful to the noble Viscount, Lord Long, for the welcome he gave to the order, and wish to associate myself with what he said about the work done by miners, often in very difficult and exhausting conditions, and of their great importance to the economy. Lord Long asked a number of questions and I will do my best to answer them. He asked, first, how many men have been entering the scheme through redundancy. It might be best if I gave him the figures for the last four or five years. From 1972 to 1973 there were 6,300; from 1973 to 1974 the number went up to 16,000, chiefly through the closures of exhausted pits; in 1974–75 it went down to 4,000; and in 1975–76, the last period for which figures are available, it was 6,100.

The noble Lord then asked from what fund the amounts were paid. The costs of the scheme are met from the Consolidated Fund through the Department of Energy Vote; the cost does not fall on the National Coal Board. Each week the NCB informs the Department how much money is to be paid out, the Treasury deposits this amount in a special giro account and the NCB makes out cheques on that account which are sent to the individual beneficiaries who cash them at their local post offices. Thus, the money does not in any way go through the Board's accounts. The Government pay the Board an agency fee for managing the scheme. Lord Long then asked the costs of it. For the weekly benefit, in 1975–76 the cost was nearly £13 million and in 1976–77 it was nearly £15 million. For the early pensions, the figure was £3 million for 1975–76 and £3,300,000 for 1976–77.

The noble Viscount also asked about the effects of early retirement at 62. This of course will conic into effect on 1st August —this has been agreed—if allowed by the pay policy, but I should like to stress that early retirement will have no basic effect on the structure of the Redundancy Payments Scheme. The reason of course is that early retirement payments, although calculated on the same basis as redundancy payments, will be paid by the NCB and not by the Redundancy Scheme in the rather complicated way I have explained. Early retirement should also reduce the numbers who may be declared redundant. I hope that that answers the noble Viscount's questions, which he properly raised, and I am grateful to him for his remarks.

Lord DAVIES of LEEK

My Lords, I feel it right that somebody from this side should welcome my noble friend's announcement and the comments of the noble Viscount, Lord Long. Lord Long spoke of the 1973 Act which was introduced by the then Conservative Government. That made some quite important changes. In the few seconds I wish to take up of your Lordships' time to pay tribute to those who work in the coal mining industry, I want to point out the vital contribution to our energy requirements they make, and for this reason we need to recruit miners to the industry. There is no doubt that whatever progress we may make with other sources of energy, coal will be of paramount importance, so far as the scientists can see, for at least another century. If we do not give youth the opportunity of good conditions in mining—remembering that after pitting their strength against nature underground they face the possibility of pneumconiosis, emphyzema and other diseases—we will not get the recruitment we want. Nor must we forget that in Britain our miners work far longer underground than any others in Europe.

On Question, Motion agreed to.