HL Deb 30 March 1983 vol 440 cc1603-20

5.46 p.m.

Lord Harris of High Cross

My Lords, I beg to move that this Bill be now read a second time. In bringing this Bill before your Lordships from the Cross-Benches, I have been encouraged by the non-party repeal group. It has three purposes: first, by the simple device of repeal to slim the statute book which has become grossly inflated until, like a fat man, we can no longer see where we are putting our feet. Secondly, we wish to reinforce Her Majesty's Government on the urgent need to set limits to endless talk and to speed action. Our third substantive aim is to remove an obsolete barrier to spreading payment of wages by a variety of more modern, economic and safe methods than by carting £1,000 million of notes and coin around the country every pay day.

The origins of the Truck Acts take us back to a vanished world peopled by such ghosts as the bagmen, the petty foggers, the butties and other middlemen who paid workers in goods or in tommy tickets that could be exchanged only at the company store or truck shop which belonged to their employer. "Truck" apparently comes from a French word "troc" meaning barter, and it sometimes served a useful purpose in earlier centuries when people lived and worked in remote districts away from towns or markets. But it was open to the obvious abuse of any monopoly and became the target of public policy as early as 1411 when a local ordinance required Colchester weavers to be paid in gold and silver rather than in merchandise or victuals.

The Truck Acts (Repeal) Bill would decently bury the carcases of five outdated laws listed in the schedule. The 1831 Act in its time replaced no fewer than 19 statutes by a wide prohibition against contracts for artificers' wages being specified in other than "current coin of the realm". Its 27 clauses applied to a dozen specified trades and excluded agriculture and domestic service. The 1887 Truck Amendment Act extended protection to all manual workers covered by the Employer and Workmen Act 1875. The 1896 Act strengthened protection against deduction from wages. In 1940 a further Act was necessary to protect employers against some of the resulting anomalies—for example, where meals were served at work. Finally, the 1960 Payment of Wages Act permitted payment in postal orders, money orders, cheques or direct bank credit in place of cash. But it allowed these alternatives to cash subject to three conditions: first, that the employee agrees in writing to forgo cash; secondly, that he can withdraw that agreement at four weeks' notice; and thirdly, that the employer provides a full statement of gross wages and deductions.

Reflecting on the amendment in the name of the noble Lord, Lord Rochester, I imagine that at some Liberal seminar on the theme of "Forward from 1831" this legal outline might be puffed up to sound a progressive and satisfying development. The reality is less flattering to our parliamentary forbears. As was made clear by the American scholar Professor Hilton in his standard work entitled The Truck System, most of these laws were out of date before they were enacted. Thus the practice of truck has been extinct for more than a century and the only patchy remnants of any value in this legal rag-bag relate to deductions from wages.

It is central to my case that deductions from wages could be far better dealt with under the quite separate Contract of Employment Act 1963 and the Employment Protection (Consolidation) Act 1978. In the contemporary world of written contracts of employment, it should be straightforward to protect everyone, not just manual workers, against unauthorised deductions by extending the right of appeal to industrial tribunals. In this way we can satisfy what matters in our obligations under the International Labour Organisation and the European Social Charter.

The Truck Acts are not merely an historical curiosity and therefore apparently beloved by the Liberal Party as the museum for lost causes. The law as it now stands has become a positive nuisance. It is like the decayed remnants of some long dead corpse that has been resurrected to serve a purpose wholly different from its original intention. As a non-lawyer, I hope to make clear what is the central fallacy in the modern interpretation of the Truck Acts and the resulting error, as I see it, that was embodied in the Payment of Wages Act 1960.

The plain purpose of the historical campaign against truck was to ensure that workers were not paid in goods. The aim was never to guarantee that they were paid in some specified form of money. Indeed, the 1831 Act said that the contract was to be made in cash. Of course, in the 19th century coins were the standard medium of exchange, just as today cheques, bank cards, Giro, and direct debit are the predominant means of payment. Even so, in 1831 Section 8 of that Act provided that workers could be paid by a cheque drawn on the Bank of England or on any other note-issuing bank within 15 miles of their place of work.

This neglected provision completely explodes the case of those TUC Luddites who want to go on discussing and negotiating for ever to delay action on the switch from cash to credit transfer. The key safeguard of the 1831 Act and subsequent Acts, was not cash in the form of coins but generalised purchasing power in place of payment in unwanted goods. It was only the accident of the 1844 monopoly of the Bank of England over the issuing of notes that invalidated Section 8 of the 1831 Act and made the Payment of Wages Act 1960 necessary. Yet this latest Act now works to slow down the development of those very modem means of payment through the banks that were its original justification.

In 1983 the chief obstacle to progress in various forms of credit transfer is the unjustified requirement that not only must every worker give written permission to be paid by cheque, but that he can at any time change his mind and at four weeks' notice insist on cash. Thus, we find that a complex system of law evolved over 400 years to prevent a forgotten abuse can, 150 years later, be brandished to obstruct developments beneficial to workers no less than to the economy and to society.

Is it any wonder that we lag so far behind America and Europe, with 13 million British earners still paid by the week and over 10 million paid in dangerous, clumsy and inefficient cash? The Central Policy Review Staff in 1981 doubted whether the Trucks Acts were high on the list of obstacles to further progress. With rather more direct knowledge, employers have called for repeal of the Truck Acts as a barrier to modern methods of payment. Among the leading supporters of this Bill I am pleased to quote the Confederation of British Industry, the National Federation of Building Trades Employers, the Engineering Employers Federation, and the Federation of Civil Engineering Contractors. No less impressive, the Institute of Personnel Management has supported repeal of the Truck Acts as an overdue step towards obliterating the increasingly meaningless distinction between wages and salaries, as between workers and staff.

More than 20 years ago the Karmel Committee urged repeal. Since then the banks have improved their services, including more flexible opening hours and wider access to cash dispensers. Further developments are already on the way. I believe that few initiatives would give stronger encouragement to the rapid extension of an efficient, modern banking network serving the entire population than the repeal of these backward-looking statutes. My Lords, I beg to move.

Moved, That the Bill be now read a second time.—(Lord Harris of High Cross.)

5.55 p.m.

Lord Rochester rose to move, as an amendment to the Motion, That the Bill be now read a second time; to leave out all the words after "That" and insert "this House declines to give the Bill a Second reading until consultations on the document published by the Department of Employment entitled "Proposals for updating the law relating to the payment of wages," have been completed.".

The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Order Paper. I am sorry that the noble Lord, Lord Harris of High Cross, should have allowed his imagination to roam, as it did, in the direction of way-out Liberal seminars that I might have attended. The truth is really very different. I simply want to suggest to your Lordships that at a time when the Secretary of State has only recently issued a consultative document setting out proposals aimed at bringing the law on the payment of wages up to date—and interested parties have 10 more weeks in which to respond—it is better that the House should have the benefit of knowing the views of those concerned and, indeed, the Government's response to those views before it reaches any conclusion on this matter.

In my opinion, the Government have been wise to seek the widest possible measure of agreement before proceeding further in the matter. The consultative document makes plain that there is already a general consensus that the payment of wages by cheque or by direct credit transfer rather than in cash brings, as the noble Lord, Lord Harris, also said, benefits to employers, to employees and to the community. The responses to an earlier document issued by the Central Policy Review staff in 1981 showed that there was also general agreement on the need for faster progress to be made in this direction. Therefore it seems to me that it is entirely understandable that the Government should now consider that changes in existing legislation are desirable.

For my part, I believe that the distinction made in the Truck Acts in the last century between manual workers and others is now altogether out of date, and that every opportunity should be taken to bring the conditions of employment of weekly wage earners more closely into line with those of salaried staff. In this I heartily agree with what I understood the noble Lord, Lord Harris, to say. Such harmonisation is, in my view, badly needed and would contribute greatly to the improvement of industrial relations in this country. So for that reason alone—and I am sure that there are many others, as those of your Lordships who have read the consultative document will no doubt agree—there is a strong case for reforming the law.

At the same time it is surely important to ensure that as far as possible any legislation which is introduced to take the place of the Truck Acts should be up to date and should provide adequate safeguards for all employees, whatever their status, and it should not be arbitrarily imposed on the very substantial numbers of people in this country who are still paid in cash. As I understand it, it is the purpose of the current consultative exercise to meet just those criteria. The process may well reveal points that none of us has yet thought of but which bodies like the TUC and the CBI are in the best position to uncover. It is surely pointless—this is the point on which I feel very keenly—for consultation to be undertaken, unless there is the intention, before reaching a conclusion, at least to take account of the views that are then expressed. Yet in this Bill, as the noble Lord, Lord Harris of High Cross, has made plain, we are being asked to accept in principle that the Truck Acts should be repealed without any suggestion that something might be put in their place. With the greatest respect to him, I do not think that it will do this House a service if we acquiesce in that now.

Finally, I noticed in the Official Report of the proceedings in another place last Friday, at col. 1254, that objections were raised to the Second Reading of a Bill couched in almost exactly the same terms as this one. Indeed, as far as I have been able to establish there is only one difference, and that is the substitution in this Bill of the word "repeal" for the word "abolition" in the other one. I therefore very much hope that in the light of the objections raised in another place for what I have felt obliged to say, for reasons which I trust your Lordships will think sound, the noble Lord, Lord Harris of High Cross, having moved his Bill, will, at the end of the debate, agree to withdraw it so that it will not be necessary for my amendment to be pressed.

Moved, That the bill be now read a second time; to leave out all the words after "That" and insert "this House declines to give the bill a Second Reading until consultations on the Document published by the Department of Employment entitled 'Proposals for updating the law relating to the payment of wages,' have been completed.".—(Lord Rochester.)

6.2 p.m.

Lord Orr-Ewing

My Lords, I think we owe a debt of gratitude and sincere thanks to Lord Harris of High Cross for the trouble and very moderate way in which he has moved this Bill. I shall, quite shortly I hope, recommend that this House gives it a fair wind. I shall also deal to some extent with the amendment.

There is general agreement that in this field Britain lags very sadly behind many other of her industrial competitors. This is an Act which has stood on the statute book since 1831; Judge Karmel commented on it and recommended that it should be abolished more than 20 years ago, but it still stands there. I hope that we can decide that we have a task, therefore, to nibble at the restrictions and overcome the difficulties and abolish this Act.

Everyone would agree, whether he is a wage earner or not, that we have an obligation to do anything to change the law which will discourage thugs from snatching and grabbing wages and often, in doing so, committing violences against those who are dealing with the cash. I think also that it is important, too, that we improve industrial relations by removing hurdles. One of the hurdles is the difference between the manual and the non-manual worker. Everyone who works in industry, as I still do, is hoping that we should move progressively to staff status. This is happening, but one of the difficulties and delays is the Truck Act, and the differentiation between the non-manual workers, of whom there are increasing numbers, to whom the Truck Act does not apply, and the manual earners, to whom it does. Therefore, we are advocating one small reform, to get rid of this undesirable 1831 Act.

I go along with all those who say that it must be made easier to convert from a cheque, if that is the way of paying, or from paper into cash for those who need that to be done. People going on holiday—of course we have staggered holidays now in industry to a very large extent—and certain other people may need cash at short notice on Thursday evenings; and therefore it will be for local negotiation, if such a freedom were provided, to make sure that arrangements were made for those who wanted cash for special purposes to be able to convert their wages into cash and take it away for their needs.

This would put pressure on the banks, which I always think deserve to have pressure put on them, to have longer opening hours or to have dispensers more easily available, so that cash is convenient not just for the wage earners but for a host of other people in this country who find it difficult sometimes to go shopping on Saturday mornings because they have not been able to get to the banks on Friday. The Co-op sets an example in this and I hope the other banks will follow. Of course, the building societies also are increasingly offering facilities which are better and have longer hours of access, so that again would be an encouragement which would not affect just the wage earners but other people as well.

I recomend the IDS report which I have been studying. It is a very thorough report. It is the Incomes Data Services Limited report, Study 260, which was published in February 1982. It summarises the rather slow progress we are making to date and also the pros and cons of getting rid of the Act.

Now I come very briefly to the amendment of the noble Lord, Lord Rochester. Of course, there are always the arguments, which I suppose I have heard since 1950—which makes 33 years' political life—that, "This is the wrong time" or that, "This is the wrong way" of making a reform or that, "It ought to be delayed until someone has been consulted". These are all the standard formulae of which I am sure my noble friend is aware—and I call him that because he is a friend, although I may disagree with him about this. It is the standard formula for delay.

I do not know how the Government will do this as they have put out a consultative document asking for comments and they have given until June for these recommendations to be put in. I do not know whether they will include this in the general employment Act which is coming along, which may be called an industrial relations Act, but clearly Mr. Tebbit as the Minister responsible is framing Acts while consultations are going on. Why include this small reform in a great omnibus Act, in view of the convoy principle that if one has enough ships in a convoy one will always travel at half the speed compared with taking a direct route? I would have thought we should follow the principle of, "Let us get on with this small reform". Let us show that this House is not just a House set for debating and initiating debates; not just a House for delaying, though it has those powers; not just a House for amending, though it often has to do this because of the use of the guillotine in the other place. Many Bills and clauses in Bills would go undebated, undiscussed altogether, on to the statute book if we did not have the ability to amend Bills when they come to our House. But let us show that we are a reforming House.

It may well be that the Front Bench will plead that all this has to go through the ILO in Geneva. If it does we can give notice now that we do not want to be bound by this. I think we have to give a year's notice. That is not an insufferable objection. Every other country has overcome it—France, West Germany, the Netherlands. Scandinavia, the USA; all our competitors have overcome it and they are all members of the ILO, so we might just as well overcome it, too.

I hope that this House will not brook the delay, however reasonable were the terms the noble Lord, Lord Rochester, used and however logical it all seemed. I hope that as a reforming House we will make this small but important reform, and the great balance of advantage is now to get rid of the 1831 Truck Act. I hope the House will support my noble friend Lord Harris of High Cross and will discard and defeat the amendment, should we vote upon it.

6.10 p.m.

The Earl of Selkirk

My Lords, I should like to copy the noble Lord, Lord Orr-Ewing, and congratulate the noble Lord, Lord Harris of High Cross, for drawing attention to this subject, which, after all, has hung fire since the Karmel Report some 20 years ago. Clearly, successive Governments have hesitated about dealing with this subject. It is a complete anachronism and it is almost entirely obsolete. Indeed, it might almost be said to be spent in many respects.

The problem of manual workers has been mentioned. I am told that a hairdresser is a non-manual worker and a bus conductor is a non-manual worker, whereas a tram conductor is a manual worker. This is an example of how anomaly apparently spreads through the whole system. It is necessary to take a step forward, and I believe that the Government want encouragement. I asked a question which touched on this, I think the week before last, and I was glad that the Government recognised that something had to be done, as indeed did the noble Lord, Lord Cledwyn, and that progress had to be made in this respect. This is important.

There is an argument about the speed with which it should be done, I quite agree, but there are urgent problems of security, and I understand from the report of the CPRS that something like 200 cases of wage snatching took place last year. This is a serious risk which every firm has to face, and there are ways of getting round it. A change would lead to considerable economy in administration. It would greatly aid the saving habits of people. If you have an account, you do not necessarily save, but some of your Lordships may remember that money in the pocket tends to cause the hole in the pocket, and perhaps the money in the bank does not do that quite so forcibly.

There are few more sensitive subjects than that of the payment of wages. I realise that. Indeed, there is not one of us who is not concerned that he should receive some money from time to time. I recognise that there are real difficulties in some cases, and they are not simple. There are remote areas where it is not so easy to get to the banks and banking houses, but I can see no reason why a range of other institutions, whether it be the Post Office, savings banks, building societies, or others, should not be brought in so as to make it much easier for anyone who wished to cash cheques of any sort or kind.

I rather feel that the noble Lord, Lord Rochester, is exercising a delaying tactic. Of course, no Government are really going to take action on this—and it will be a Government that will have to take action eventually—until they have had their consultative paper properly examined. There will be a lack of complete agreement as to what should be done. However, what is important is that we should encourage the Government—if necessary dividing the House, which I do not greatly believe in doing—and should say to the Government that something has to be done. They are sitting back—I shall not say doing nothing—and they only produced the consultative document last December, 20 years after the report was made. I hope that this will be an encouragement to them to take a further step.

What will happen will be that those who get accustomed to using banks will find it a great benefit. I can quite understand some people thinking that these great institutions, made of huge blocks of stone, are rather terrifying organisations which do not want to deal with people with small accounts. The bankers have to take a step forward, and have to show themselves more willing, ready and anxious to help people who are in this position. A great burden rests on them to make themselves available both in time and in services to people in this position. I hope, therefore, that the Government will regard this step by the noble Lord, Lord Harris, as a real encouragement to take urgently and quickly steps which will be of benefit to British industry.

6.14 p.m.

Baroness Platt of Writtle

My Lords, I, too, am grateful to the noble Lord, Lord Harris of High Cross, for raising this matter, as I agree with him that the Truck Acts need substantial updating. They were originally enacted in the 19th century for very good reason in order to prevent exploitation of workers by prohibiting payment in kind or illegal deductions from wages. At that time, this meant ensuring payment of wages in cash, on a weekly basis, to manual workers.

Times have changed considerably since those days, and indeed the pace of change accelerates, as we all know. Employers today are removing, where possible, distinctions between manual and non-manual employees. This division will become increasingly irrelevant as production becomes more and more automated. People will be operating keyboards from manager level through the offices and on to the shop floor. Pay depends far more on usefulness to the firm than the type of work that people do. The emphasis today must increasingly be on efficiency so that we can sell our goods in highly competitive world markets. In those circumstances, we need to consider the best and most efficient method of paying people, and indeed one that suits them. There are bound to be negotiations locally to find a system that suits individual firms and their employees. People need protection from exploitation, but apart from that there should be as much freedom from Government interference as possible so that the best local solution can be achieved.

It is important to everybody to move towards cashless pay. Thieves are the only people who benefit from large amounts of money being carried about, whether it be the highly organised wages snatcher, the pickpocket or the burglar. More and more in the coming years money is bound to be transferred in a cashless manner by cheques, giro, bank cards and the computer. It is going to take time to get used to this idea, but it is bound to come. Already children in schools are learning about computers and how to make them serve their needs. Schools, too, are often operating their own banks so that children can save for outings, holidays and equipment. Children themselves act as bank clerks, under supervision, to get used to the idea of handling money efficiently and economically. These schemes need to be expanded.

Families, too, operate differently. They pay a great many more of their bills, rent, rates, mortgage repayments, gas and electricity, on a monthly basis. They shop, too, on a bulk buying basis, perhaps weekly, more often monthly. They know the cash advantage of buying goods in large packets. The most expensive way of buying anything is the 100 gram packet. You spend your money on cardboard and packaging and not tea, coffee, or soap powder.

Families can achieve more economical budgets on a monthly basis. They need to be helped by the banks. If people are to be paid by cheque on a monthly basis, they need to be able to draw money easily. Cash points, some building societies, Co-op handy banks in their stores, Post Office Giro, all help, but the high street banks need to get back to Saturday opening. It does not need to mean longer working hours for employees unless they wish it. Shops, hairdressers, and restaurants all open at weekends with different arrangements for staff working hours. I am tempted to say that Saturday morning opening could help qualified women bank clerks to keep their hand in one day a week while they are bringing up their families. There are many ways of solving that problem. The Barclays Bank experiment was, I understand, a success, and I hope it will spread.

If alteration can be made to the Truck Acts, we can move away from pay in cash. We can also move towards four-weekly pay. I deliberately say four-weekly, because that is better than monthly pay for the wage earner and the employer. Monthly pay means irregular payments for both. Months are of diflerent lengths, and the five-week month presents budgetary problems for the employee. Thirteen four-weekly periods is better for both, and can iron out pay anomalies, especially for part-time rota workers, so that they know what to expect in their regular pay packets and can budget their outgoings on a more convenient and regular basis. We in Essex County Council have negotiated cashless pay for all but 10 per cent. of our manual employees. However, it is still costing us nearly two-and-a-half times as much to pay our manual, compared with our non-manual, employees. A large amount of money could be either saved completely or put to better use in providing services if four-weekly pay could be negotiated and accepted. That is equally true in industry and commerce, and it would, I hope, improve out prosperity as a nation.

It is clear that the system of the payment of wages needs modernising to meet the needs of the 21st century. The Department of Employment appreciated that in their proposals in Updating the Law Relating to the Payment of Wages. I understand from that document that we are a party to the ILO Convention No. 95 and must give notice this summer if we wish to make changes. In those circumstances, and being very much behind the spirit of today's debate, I would seek an unequivocal assurance from the Government that they will, while retaining necessary safeguards, make changes in the law as soon as possible to allow a thorough modernisation of the payment of wages for the benefit of the employer and employee, while not breaching our international commitments.

6.22 p.m.

Lord Mottistone

My Lords, three main reasons were advanced by the noble Lord, Lord Harris, who is to be congratulated for bringing this matter before the House. The first was that it would make for greater efficiency, and we have just heard from my noble friend Lady Plan some interesting figures, including Essex County Council's experience of having only 10 per cent. of their manual employees remaining who are paid weekly in cash, and how much that costs. I understand from the CBI that, in Britain, 59 per cent. of employees are paid in cash weekly, whereas in Germany, France and Australia, which are among our major competitors, it is only 5 per cent., and in the United States it is only 1 per cent. That is an indication that this change must happen, and I think that all who have spoken so far, including the noble Lord, Lord Rochester, would agree that it is only a question of how to go about achieving it.

The second important point—it was advanced by the noble Lord, Lord Harris, and touched on by my noble friend Lord Orr-Ewing—is the question of achieving a reduction in security risks. That is an important point in view of recent occurrences, not only for the companies but the employees, and I should have thought it was very much in their interests to join the banking system for that reason alone. The third important point which greatly struck me—it was mentioned by the noble Lord, Lord Rochester, and others—is the question of the harmonisation of terms and conditions for staff and shop floor employees. At present an anomaly exists there, and I have been battling against it for some time. It divides people, and we must overcome it. I am sure that the TUC would agree with that in principle. The question therefore is whether people should be forced to make a change.

I suggest that if this Bill were given a Second Reading, as I hope it will be, and if it suddenly achieved a speedy enactment—which is highly unlikely, even if the Government were right behind it; they do not seem to go very fast in another place with Private Members' Bills, particularly those which start here, and therefore I do not hold out much hope for the measure—it would not immediately mean everybody being forced to be paid monthly (or fortnightly, as has also been suggested) through the banks. It would merely become possible. As my noble friend Lord Orr-Ewing said, whatever changes there might be, they must first be negotiated, and I agree strongly with him on that. It seems remarkable that anybody should think that that would not be the case.

It would enable people to have the alternative choice of being paid monthly through a bank account, with all the advantages that flow from that. As others have said, the whole proposal will not be a runner unless the banks are open on a Saturday, and the banks should be able to do that. There is rather an anomaly in that connection, anyway, these days. I am sorry that my noble friend Lady Trumpington, with her Shops Act, was not going to free the banks as well on Saturdays, but that is by the way. The banks would make a great deal of money out of this, because they would get many more customers; so there should be every inducement to them to make all sorts of investments to enable them to open on Saturdays.

There is everything to be said for the Bill. No harm would be done by accepting it. I am sympathetic towards elderly people, for example, who have become accustomed to weekly payments, and it would be a pity if they were not encouraged to change as quickly as possible, though they should not be forced to do so. I do not believe the Bill would force them, and one hopes that the Government would bring forward any ameliorating legislation in parallel with the Bill, if it became an Act quickly, so as to underline whatever they thought was important. I get the impression from having read the Government's proposals that their ideas are in the right direction. It is just a matter of getting on with it, as Judge Karmel said over 20 years ago. I hope the Bill will be given every encouragement and that the noble Lord, Lord Rochester, will withdraw his amendment. However, if it comes to a vote, let us all vote for the Bill and against the amendment.

The Earl of Halsbury

My Lords, with the indulgence of the House—I apologise for not having added my name to the list of speakers—I rise to add a few words to emphasise the point made by the noble Earl, Lord Selkirk. If I failed to take my share of putting the maximum pressure on the Government, as adumbrated by the noble Earl, Lord Selkirk, to accelerate an improvement in personal security in money handling, I should feel that the death of anyone involved in a bank robbery would in part lie—that is my share of it—at my door. To maximise that pressure, I shall vote against the amendment

6.28 p.m.

Lord Gisborough

There is no doubting the fact that the Bill is desirable, my Lords. None of the advantages that have been mentioned can be denied. Equally, there are many arguments for concern. Many people do not want to lose their pay packets, and it would not be right to force them to do so. Indeed, there are people who would find it extremely difficult to manage with a bank account rather than cash. While my noble friend Lady Platt talked about bulk-buying, and while she was correct in what she said, many people live on a knife edge and are not capable of buying forward. Many people live a long way from banks—in the depths of Scotland, for example—and there are the elderly who cannot get out to visit the bank. They present, not necessarily insuperable problems but problems which must be considered.

We must also remember that while the banks would gain many more customers they would include many who would not want to be customers. I do not believe the banks would be keen to have customers forced on them, especially when it would mean them collecting a great deal of money simply to pay it all out the following day to people who do not want to be there anyway.

What is being proposed is happening naturally already. There is a great increase in the number of people who are prepared to be paid by cheque. The development, therefore, is going ahead on its own account. I am not particularly against the Bill, and, whether or not it goes through, greater encouragement could be given to people to persuade them to be paid by cheque rather than in cash. That should be the case, Bill or no Bill. However, if the various considerations are taken into account, the Bill represents a move in the right direction.

6.30 p.m.

Lord Brooks of Tremorfa

My Lords, the Bill of the noble Lord, Lord Harris of High Cross, to repeal the Truck Acts is, in our view, premature. The need for the Truck Acts arose out of the unsatisfactory and, in many cases, inhuman conditions of employees during the last century. The abuses which led to the passing of the 1831 Truck Act and the subsequent Truck Acts are, mercifully, no longer present, but before agreeing to the wholesale abolition of the five Acts which Lord Harris's Bill proposes, we should satisfy ourselves that no employee will be worse off by the passage of this Bill. As has been said by many noble Lords, there are very good reasons why employers would want to make payment by cheque instead of by cash. The security problem has been mentioned on a number of occasions and it is clear that in moving substantial amounts of money great cost is involved and it can be potentially dangerous to those concerned; but this must be weighed against the factors affecting the position of those in receipt of cheques instead of cash wages.

The noble Lord, Lord Rochester, has tabled an amendment to the effect that the House declines to give the Bill a Second Reading until consultations on the document entitled Proposals for Updating the Law Relating to the Payment of Wages, published by the Deparment of Employment, has been completed; and it would seem to me that this would be the correct way for the House to proceed this evening. Some 40 per cent. of employees are still paid in cash and we need to ensure that they will not find themselves incurring bank charges if they are paid by cheque; although I should say at this point that if they bank with the Co-operative Bank and keep their accounts in credit they will not incur any charges at all. I have no doubt that in many cases employees will find themselves having to bank with the most convenient High Street bank and not with the Co-operative Bank, and this will involve them in charges if they do not keep more than a minimum amount of money in their account. We must be certain that nobody will be worse off as the result of the repeal of these Acts. These are matters which I am sure, given good sense and reason, we can get round; but I repeat that the Bill of the noble Lord, Lord Harris, is premature.

6.32 p.m.

Earl Ferrers

My Lords, I do not know whether there are any Standing Orders about advertising in this House during speeches, but, if there were, I am sure that the noble Lord, Lord Brooks of Tremorfa, would have contravened them. However, he did that with very good reason. As this is a Private Member's Bill I shall try to restrict myself to giving, so far as I am able, an unbiased view of the effect which this Bill, if passed, would have; and I shall try so far as possible not to get involved with the merits of the Bill itself. I should like to congratulate the noble Lord, Lord Harris of High Cross, upon the simplicity and the brevity of his Bill. Even I can understand it. The areas covered by the Bill range wide. It has implications for all manual employees in the United Kingdom—75 per cent. of those are paid in cash—and for the ability of the United Kingdom to honour specific international obligations which have the force of a treaty.

I think that the question which surrounds the whole area of Truck Act legislation is how much of that law should be reformed and when, given our need to abide by our international obligations. The international dimension, if one may so put it, is that before a law removing the right to be paid in cash is enacted, we would have to denounce the ILO Convention 95 to which we are a party. My noble friend Lord Orr-Ewing disposes of that rather like swatting a fly on his jacket; but that is a fact. But another ILO Convention, No. 144, says that before denunciation from any ILO Convention it is necessary to consult first on the proposal for denunciation. Therefore, we are at present in the position of having two consultations: one with the TUC and CBI on whether we should denounce the ILO Convention; and the other with interested parties to determine how the law should be improved. It so happens that the closing date for both these consultations is 7th June.

My Lords, perhaps I could deal with the substance of the noble Lord's Bill. My noble friend Lord Selkirk said the Government must not just sit down and do nothing. I can assure him that we are not doing nothing—as I think he slightly grudgingly admitted. The Secretary of State for Employment has initiated a consultative document entitled Updating the Law on the Payment of Wages. This has been issued to a wide range of organisations and employers, not only throughout the country but also throughout various sectors of the economy, and it has been made freely available from his department to any who ask for it.

I think that I should make this clear, particularly to my noble friend Lord Gisborough, whose short speech was, indeed, penetrating. The Government have no intention of introducing legislation which would compel anyone to be paid in a particular way; we are simply looking at the operation of some very old legislation to see whether it has any relevance to modern circumstances. If that results in any change being made to the way in which wages are paid, it would do no more than leave it to employers and employees, or their representatives, to decide what is best in their circumstances. The Government accept the need for effective change to legislation which is both archaic and complex and would make their decision as to how this should be achieved in the light of representations they receive from the consultative document.

The options for reform certainly include those of the noble Lord, Lord Harris. But the Government must also consider—and this will emerge as a result of the discussions—whether they should continue to make provision, for example, for deductions from pay, for fines and for payments in kind. The options must, therefore, include repeal, partial repeal, repeal with the re-enactment of particular provisions or amendment, or amendment of the existing legislation.

The Bill in front of your Lordships in fact makes no provision for dealing with other, similarly anachronistic, legislation all relating to pay. For example, there are the Hosiery Manufacture (Wages) Act 1874, which prohibits employers from letting frames and machinery to workers or from making any form of deductions for such purposes; also the Payment of Wages in Public House Prohibition Act 1883, which prohibits the payment of wages to any workman in a public house or other place used for the sale of alcoholic drinks; also, the Stannaries Act 1887, which applies to miners of tinworks in the Stanneries of Devon and Cornwall; not to mention the Coal Mines Regulations Act 1887; the Checkweighting in Various Industries Act 1919, the Mines and Quarries Act 1954, or the Wages Councils Act 1979, which contains provisions similar to those of the Truck Acts. All of this legislation really needs to be considered together, and to be reformed together.

My Lords, what ought, therefore, to be the timetable for reform? The Government are doing the correct thing, in our view, in consulting the TUC and CBI about denouncing ILO Convention 95. They will have completed those consultations on 7th June of this year. Under the terms of the Convention it is possible for the states who have ratified the Convention to denounce it during a 12-month period which recurs only once every 10 years. This period happened to begin on 24th September, 1982. So the United Kingdom can denounce the convention at any time before 24th September, 1983. A denunciation will take effect 12 months after its registration by the International Labour Office. Therefore, under the consultation processes which are at present being undertaken, the Government will have from 8th June until 23rd September of this year to decide whether we should denounce that convention. So, my Lords, the fact is that we are bound by this international obligation—which has the force of a treaty—until at least the end of the summer, or early autumn of next year. If the noble Lord's Bill were passed, it would, therefore, put the United Kingdom in contravention of its treaty obligations under the ILO Convention.

That is not all. The United Kingdom is also bound by Article 4 of the European Social Charter of the Council of Europe, which requires Governments, to permit deductions from wages only under conditions and to the extent prescribed by national laws or regulations or fixed by collective agreements or arbitration awards. The present Truck Acts, with all their faults, provide the vehicle by which the United Kingdom complies with this particular requirement, and if we proceed with the Bill of the noble Lord, Lord Harris, we shall put the United Kingdom in breach of the European Social Charter, because his Bill removes all the safeguards regarding deductions which are in the Truck Acts.

As I have said, and as your Lordships know, the two International Labour Conventions and the European Social Charter have the force of international treaties, and they are legally binding obligations. So, even if we were enthusiastic about the merits of the noble Lord's Bill, I do not see how we could pass it because to do so would put us out of line with our international obligations. The noble Lord, Lord Rochester, seeing this problem, then comes out with his amendment—an extraordinary one, if I might say so. If his amendment had been (which it is not) to move, "That the Bill be read six months hence", that would effectively kill the Bill, and I assume that the Liberal Party did not wish to be seen to kill what was essentially a liberalising Bill.

So the noble Lord puts this amendment down, declining to give a Second Reading to the Bill until the consultations have been completed. In other words, the noble Lord could have phrased his amendment to say, "This House declines to give the Bill a Second Reading until 8th June". My researches have not discovered whether this form of amendment is unique, but my guess is that it is. It is certainly extraordinary and, I would suggest, totally confusing. We cannot, as it were, "stop the clock" on the Bill. Either it gets a Second Reading or it does not. If the noble Lord, Lord Rochester, thinks it wrong for the Bill to pass now, then he should vote against it. If he wants the Bill to pass, then he should vote for it. But he really cannot sit like Humpty Dumpty on top of the wall and wobble—and hope to fall both ways.

So the problems are: first, how much reform should there be; and, secondly, when should it be? I really do think, with the greatest respect to noble Lords who have spoken, that the Government's way forward is the correct one: to have consultations, then to reform all this old legislation rather than just parts of it, and to reform it in a way which enables us to do so in accord with our international obligations.

Having been, I fear, somewhat of a wet blanket to the noble Lord, Lord Harris of High Cross, I can assure him that the Govenment share his view that the law on the payment of wages is overdue for reform. The Government would like to be sympathetic to the noble Lord, Lord Harris, but for the reasons which I have explained the Bill, if enacted, would be neither suitable for our international commitments nor necessarily appropriate for our domestic requirements.

I therefore hope that the noble Lord will consider, with his customary courtesy and fairness, whether it is in the best interests of all those who are affected to pursue this particular Bill at this particular time. I would advise the noble Lord that it would not be. That is my advice to the noble Lord. Whether or not he takes it is, of course, entirely a matter for him.

6.43 p.m.

Lord Harris of High Cross

My Lords, I should like to thank all the speakers who have taken part in this, I think, admirable and brief debate. I do not think that a good case has been made out for the amendment, and I do not think the noble Lord, Lord Rochester, gave any reference to the merits of the present Truck legislation. Nothing I have heard suggests the least difficulty about giving the Bill a Second Reading and continuing at Committee stage the discussions about the single issue of deductions. In view of the Minister's most amiable advice on these matters, and also in view of his splendid attack on the pretext of the Liberal amendment, I want, if I may, to offer him a warning, if it is not impertinent. My warning is that he may find that his advisers are making rather heavy weather of the international conventions and charters. Having poured over these stupefyingly mundane documents in recent weeks, I find them to be mountains of bureaucratic pomposity, signifying very little indeed.

For example, let us come to the ILO Convention No. 95, the date of which is 1949. We discover that its key article (Article 8) is partly reproduced as Article 4, Section 5, of the European Social Charter, about which we heard a good deal from the noble Earl. Both these remarkable documents that we are in danger of violating say nothing more than that deductions from wages shall be permitted only to the extent allowed by national laws, regulations, collective agreements or arbitration awards. If I may say so, it is difficult to see how such solemn trivia could be taken seriously by anyone who is not paid a fat fee to keep a straight face when he reads it. In Britain, we already have written agreements of terms of employment, and we have put on employers the duty to itemise deductions from wages. We have appeals to industrial tribunals for unnotified deductions, and we have civil remedies before the county court. If more is necessary, it should not be diffcult to graft it on to the Employment Protection (Consolidation) Act, so long as that inflated statute survives.

Certainly a coherent solution to these problems cannot be cobbled together from the scraps of Truck Acts concerned with quite different and now wholly extinct practices. These Acts will have to be abolished—there is no question of that. They will have to be obliterated and repealed before there can be new reconstruction. So why not call the bureaucratic bluff and repeal these old Acts? In the alarming jargon of international bureaucracy, I would urge the Government to "denounce" the ILO Convention No. 95 and, for all I know, Conventions 1 to 94 at the same time, in order to save postage. If we do inadvertently put the Government offside in terms of international obligations, we should simply be generating more pressure to get onside again, with up-to-date and relevant legislation.

Earl Ferrers

My Lords, perhaps I might interrupt the noble Lord only to correct him, because he is always totally fair. It would not be inadvertently that we were putting the Government off-side.

Lord Harris of High Cross

My Lords, in sober truth I believe that too much is being made of all that, and of course the Minister's advisers and the international bureaucrats have a great interest in mystifying us all and alarming us if we appear to be wanting to take what seem to be quite sensible steps. As the noble Lord, Lord Orr-Ewing and the noble Earl, Lord Selkirk, said so forcefully, 20 years after the Karmel Committee urged the repeal this amendment seeks to prolong further delays. I have noticed before this tendency on the Liberal Benches to shield behind caution and compromise as a pretext for indecision and inactivity. If we are serious in wanting progress, there are few better ways of encouraging the Government than by resisting this amendment and giving the Bill a Second Reading.

I should like to say to the Minister, with my customary fairness, that it is to the credit of a Conservative Government that on Truck, as on other issues, they show signs of awakening to the advantages of radical change. It is notable from the speeches we have had that the case for radical action came from the Conservative Benches and the case for the dragging of feet from the Liberal and Labour speakers.

We are still paying a high price for our tardiness in adapting to new needs and new opportunities. I suggest that our attitude to this Bill and to this amendment should be taken as a measure of our readiness to turn our backs on nostalgia for the past and to rise to the challenge of still glittering prospects for economic and social progress. Unless the noble Lord, Lord Rochester, is so gracious and well-advised as to withdraw, I shall urge all those who do not owe him some loyalty to vote against his equivocating amendment.

6.51 p.m.

Lord Rochester

My Lords, I am sorry that I should have been accused of exercising sinister delaying tactics. I had hoped that in my opening speech I had made it sufficiently plain that I think there is need for the law in relation to the payment of wages to be changed. It simply is the case that I do not think it right, as I also hope I made plain, that, a consultative exercise having been embarked upon, the House should today agree in principle to the repeal of the Truck Acts without thought of there possibly being need for something to replace them and before taking account of the views expressed during the course of consultation.

There seems to me to be little between what I was trying to say and that which the noble Earl, Lord Ferrers, speaking for the Government, himself said, until he came to his closing remarks, and I should have thought in some sense that he would feel that my amendment would provide a means for the Government, in the light of what their representative said, as it were, to get off the hook. He has not seen it in that light. I understand what it is that he has said. I do not want there to be a difference between us in this House simply on grounds of procedure and I am perfectly willing, that being the case, to withdraw my amendment.

But in so doing, I must make it plain to the House that I see no other way of making the point that I wish most strongly to make again; namely, that it would be quite wrong for this decision to be taken in principle now by the House, before the results of consultation have been established. There is no other way, if I withdraw this amendment, to make that point than to vote against the Bill. So, in withdrawing this amendment, I must make it plain that that is the only alternative left open to me and I would advise the House, in that situation, to take that alternative.

Amendment, by leave, withdrawn.

6.54 p.m.

On Question, Whether the Bill shall be now read a second time?

Their Lordships divided: Contents, 39; Not-Contents, 36.

Ampthill, L. Mancroft, L.
Auckland, L. Massereene and Ferrard, V.
Beloff, L. Molson, L.
Brougham and Vaux. L. Monson, L.
Cathcart, E. Montagu of Beaulieu, L.
Colgrain, L. Mottistone, L.
Colwyn, L. Napier and Ettrick, L.
Cork and Orrery, E. Onslow, E.
Craigton, L. Orr-Ewing, L.
Crathorne, L. Platt of Writtle, B.
Dormer, L. Rugby, L.
Gisborough, L. St. John of Bletso, L.
Glanusk, L. Salisbury, M.
Greenway, L. Selkirk, E.
Halsbury, E. Slim, V.
Harris of High Cross, L. [Teller.] Somers, L.
Spens, L.
Ironside, L. Swinfen, L.
Killearn, L. Thomas of Swynnerton, L.
Lindsey and Abingdon, E. Trumpington, B. [Teller.]
Ardwick, L. Marley, L.
Aylestone, L. Mayhew, L.
Bishopston, L. Merrivale, L.
Boston of Faversham, L. Mersey, V.
Broadbridge, L. Oram, L.
Brooks of Tremorfa, L. Peart, L.
Collison, L. Phillips, B.
Elwyn-Jones, L. Ponsonby of Shulbrede, L.
Evans of Claughton, L. Rea, L.
Ferrier, L. Rochester, L. [Teller.]
Fisher of Rednal, B. [Teller.] Shackleton, L.
Stone, L.
George-Brown, L. Strabolgi, L.
Houghton of Sowerby, L. Tordoff, L.
Jenkins of Putney, L. Underhill, L.
Kilbracken, L. Wallace of Coslany, L.
Kirkhill, L. Wells-Pestell, L.
Lloyd of Kilgerran, L. Young of Dartington, L.
Mackie of Benshie, L.

Resolved in the affirmative; Bill read a second time accordingly, and committed to a Committee of the Whole House.