Second Standing Committee on Statutory Instruments, &c.


Thursday 21 April 1988



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The Committee consisted of the following Members:

Stradling Thomas, Sir John (Chairman)

Bonsor, Sir Nicholas (Upminster)

Bowden, Mr. Andrew (Brighton, Kemptown)

Buck, Sir Antony (Colchester, North)

Clay, Mr. Bob (Sunderland, North)

Couchman, Mr. James (Gillingham)

Fearn, Mr. Ronnie (Southport)

Franks, Mr. Cecil (Barrow and Furness)

Fyfe, Maria (Glasgow, Maryhill)

Gardiner, Mr. George (Reigate)

Gorst, Mr. John (Hendon, North)

Grant, Mr. Bernie (Tottenham)

Howell, Mr. David (Guildford)

Lightbown, Mr. David (Staffordshire, South-East)

McCartney, Mr. Ian (Makerfield)

Mans, Mr. Keith (Wyre)

Nicholls, Mr. Patrick (The Parliamentary Under-Secretary of State for Employment)

Strang, Mr. Gavin (Edinburgh, East)

Vaz, Mr. Keith (Leicester, East)

Jack, Dr. M. R. (Committee Clerk)

3 Second Standing Committee on Statutory Instruments, &c. Thursday 21 April 1988


Draft Redundancy Payments (Local Government) (Modification) (Amendment) Order 1988

10.30 a.m.

The Parliamentary Under-Secretary of State for Employment (Mr Patrick Nicholls): I beg to move, That the Committee has considered the draft Redundancy Payments (Local Government) (Modification) (Amendment) Order 1988. This Order, which is being made under powers in sections 149 and 153 of the Employment Protection (Consolidation) Act 1978, is concerned with the basis on which redundancy payments are calculated in local government service. It amends the Redundancy Payments (local government) (Modification) Order which the House approved in July 1983. The 1983 Order was previously amended in 1985, primarily to take account of changes arising from the Local Government Act 1985. I should explain that under the provisions of Part VI of the 1978 Act, an employee who is dismissed as redundant after at least two years continuous service is entitled to be paid a redundancy payment, calculated, among other things, according to his period of continuous service. Local authorities and related institutions are legally distinct employers, so that on the strict basis of the statutory scheme on its own, an employee would be entitled to a payment every time he was dismissed as redundant, even though he intended to move on to a post elsewhere in local government. However, that situation would not correctly reflect the realities of local government service, in which a normal career progression commonly involves moving from one authority to another, perhaps several times during an individual's working life. Local government collective agreements, therefore, provide for local authorities to base their redundancy payments on total aggregated service in local government, and the 1983 Order secures a similar effect in the statutory redundancy scheme, by replacing service with one employer with total "relevant local government service". Because there is not convenient and comprehensive definition of what constitutes local government employment, it is necessary to list in the Order all the employing authorities and bodies with which service counts as local government service. Two lists are necessary. Before the right to a redundancy payment can arise, an employee must first be made redundant by the authority which employs him, and which must of course be one of those local authority or related bodies currently in existence. Those are listed in schedule 1. Secondly, it 4 is necessary to consider the total period of service on which the payment will be based. This may be service with the current employer, or another employer still in existence, or an authority which has ceaed to exist as a result of past reorganisations. The appendix to schedule 2, therefore, lists all those employers with whom employment may constitute "relevant local government service". This amending Order simply adds to the lists in schedule 1 and the appendix to schedule 2 of the 1983 Order a number of bodies which were omitted in 1983 and 1985 or have come into existence since the last amendment was made. It is essentially a tidying-up measure. The number of employees likely to be affected is small. Without detaining hon. Members much longer, I hope that I have said enough to satisfy the Committee that these are necessary and desirable amendments. I commend the Order to the Committee.

10.35 a.m.

Mr. Gavin Strang (Edinburgh, East): As the Minister has explained, the Order extends redundancy provisions for local government employees and employees of other local government related organisations. The Order was last amended in 1985. We support the narrow principle, because it makes sense. If people who are employed by a number of local authorities take redundancy, they should be able to aggregate their service with all those authorities as well as with local government related bodies. The provision which made that possible in local government service also operates in some groups of private companies, which allow employees to aggregate their service for the purpose of redundancy. On that narrow objective, therefore, we do not oppose the Order. However, we must acknowledge that the issue of redundancy in the public service, and especially in local government service, has been sharpened by the Government's policies. It is deplorable that in many areas of high unemployment, local councils are judged by the Government on the extent to which they can cut jobs and reduce services. Sadly, that has sometimes involved voluntary redundancy. We hope that that phase will soon come to an end. We believe that local government plays an enormously important role in the local economy, both in urban and rural areas. We want an improvement in services, especially in municipal housing in Scotland, and also in more general services such as cleansing and education. Those services enhance the quality of life for our people. We want an end to the situation where the Government judge how well local government operates not by the quality of service that it provides, but by the extent to which it has been able to cut the number of people working to provide that service. It is sad that that also seems to have been the standard by which the Government have judged the service provided by the Civil Service. The aim has been to reduce the head count. It seems that the 5 Prime Minister has judged Ministers by how fast they have been able to cut the number of civil servants in their Departments. That has led to the ridiculous situation where they have created quasi-public quangos and thereby achieved a nominal reduction in the number of Civil Service employees. Schedule 1 lists organisations in which employees will qualify for redundancy provisions under the Order. One of the institutions to be added to the list is Newbattle Abbey college. I cannot adequately express my sense of outrage or that felt throughout Scotland when I learned that the Scottish Education Department had informed Newbattle Abbey college by letter on 10 December 1987, that its funds were to be withdrawn from June 1989. That 18 month period of notice is less than the period that would be required in England. Newbattle Abbey college is the only residential college in Scotland and it has an excellent record. I know several people whose lives have been changed by attending the college. It caters specially for people who did not have the privilege of entering higher education immediately after school, as I did and, no doubt, as other Committee members did. People who have moved directly into unskilled work may have had the innate ability to lead a fuller intellectual life. Many such people have attended the college, which is situated outside Edinburgh. It is an outrage that the Government have decided that Newbattle Abbey college should close. Has it been added to the list as a consequence of the decision taken at the end of last year to eliminate Government funding to the college? Has a Scottish Office official communicated within the Government machine and said, "We are trying to shut the college. Some of the college employees worked in local government or in other public organisations that are listed. We want to make things easier by giving those people enhanced redundancy payments if they are eligible as a consequence of earlier employment—for example, in higher education or in local government. We therefore want to add the college to the list." The campaign to save Newbattle Abbey college is just getting off the ground. I hope that the Government will reconsider the position and agree that Scotland should have one residential college. If there is greater effort from the private sector to provide support and assistance for the college—and there is still a long way to go—I hope that the Government will give Scotland an opportunity to save its only residential college. It is ironic that the Government will continue to fund Scots to attend English residential colleges of which there are seven. There is no sugestion that those colleges will be closed. It is most important that Newbattle Abbey college is allowed to make the valuable contribution that it has made over the years. Will the Minister assure us that, by including Newbattle Abbey college in the list, that does not give credence to the idea that the Government have taken a final and irrevocable decision to end all support for that college? 6 As I have said, other organisations are involved. In 1985, when the subject was last debated, the Welsh Development Agency and the Scottish Development Agency were added to the list. No one suggested that those agencies would be shut down, although some rationalisation has taken place. The Scottish Examination Board is no. 67 in the list, but I do not suppose that the Government propose to close it down. I should be grateful if the Minister would assure us that the inclusion of Newbattle Abbey college in the list does not follow a Government decision not to give careful consideration to the enormous representations made right across the board—for example, from the churches—which reflect the great breadth of Scottish life and show that Scotland should retain one adult residential college. I mentioned all those factors because redundancy cannot simply be discussed in a mechanistic way. Nevertheless, we recognise the importance of people's pension and redundancy entitlements. We wish to provide good conditions of employment in the public service. We believe in the public service, but we also want better conditions for employees in the private sector. We support the Order.

10.43 a.m.

Mr. Ronnie Fearn (Southport): My point is relatively simple and short. It relates to what the Minister said about two years' service. What does that mean? I have received one or two letters on the subject when a dispute has arisen over the definition of the two years service. Are they calendar years? What does "service" mean? Has the Minister received letters about abuses of the system, for example, when people have been dismissed one day short of the two years? I believe that such a practice is prevalent. Who, if anyone, made such representations? Moreover, who would decide in the case of a dispute?

10.44 a.m.

Mr. Nicholls: First, I shall respond to the matters raised by the honourable Member for Edinburgh, East (Mr. Strang). The honourable Gentleman will understand that details of any planned closure, or whatever, for Newbattle Abbey college would be a matter for my right honourable and learned Friend the Secretary of State for Scotland. I appreciate the great concern and passion with which the honourable Gentleman spoke. Therefore, I undertake to draw our discussions to my right honourable and learned Friend's attention. As to my remit, the motive behind the Order is simply to ensure proper continuity of employment for those in local government service or service which is essentially local government. If we omitted bodies which have a local government side to them, that would mean, as no doubt the honourable Gentleman would acknowledge, that in some cases there would be a gap in a person's reckonable service. That would go to the heart of the question about whether such a person would be entitled to qualify for redundancy pay. 7 I appreciate the honourable Gentleman's concern and the ingenuity with which he has introduced that aspect into our debate and I shall draw that point to the attention of my right honourable and learned Friend the Secretary of State for Scotland. In response to the honourable Member for Southport (Mr. Fearn), I must state that if he tabled a parliamentary question asking me whether I had received representations, I suspect that I would reply that I receive representations on every subject. The essential consideration is that, in default of agreement, the question of what is reckonable service is ultimately dealt with in accordance with the Employment Protection (Consolidation) Act 1978. The difficulty is whether a person has the requisite years of service on the one hand and related periods 8 of hours on the other. The honourable Gentleman is aware of the basic rules, but if he wishes to write to me about specific cases I shall be more than happy to deal with them in my correspondence. Even if he has had correspondence with my predecessor, he may wish to come and see me, and my door is always open to colleagues. Essentially the matter is to be dealt with under the 1978 Act or ultimately by the courts in default.

Question put and agreed to.

Resolved, That the Committee has considered the draft Redundancy Payments (Local Government) (Modification) (Amendment) Order 1988.

Committee rose at fourteen minutes to Eleven o'clock.


Stradling Thomas, Sir John (Chairman)

Buck, Sir Antony

Clay, Mr.

Fearn, Mr.

Franks, Mr.

Gardiner, Mr.

Gorst, Mr.

Lightbown, Mr.

Mans, Mr.

Nicholls, Mr.

Strang, Mr.