Motion made, and Question proposed,
That the Draft Electricity (Commissioners and Others) (Compensation) Regulations, 1950, a copy of which was laid before this House on 16th December, 1949, in the last Parliament, be approved."—[Mr. Thomas Williams.]
§ 6.53 p.m.
§ Sir Herbert Williams (Croydon, East)
I know some of the gentlemen who may be beneficiaries under these Regulations, and I have no malice against any of them. At Question time today the Chancellor of the Exchequer was asked one or two questions about the significance of lump sum payments, and whether lump sum payments did not attract taxation. I asked him a supplementary, and he seemed quite unaware of the fact that these Regulations were coming on tonight. I think we ought to be clear about these matters. The other day we were debating a Resolution about certain payments which were legal at the time when the contracts were entered into, but which retrospective legislation made illegal. Though I do not very much approve of these transactions, involving large sums of money, I oppose retrospective legislation. Here, we are not dealing with retrospective legislation but with a proposal to make payments to certain people.
These Regulations are not easy to understand, but there are references to lump sum payments to certain people and not to others. I want to know whether the Regulations contemplate that these people are to have, as a condition of their retirement, payments which are free of tax. Now we have a Minister who is in a position to reply, but we did not even have a Minister to move the Regulations to begin the Debate. There was some confusion on the matter. The Government were slow in acting. In fact, I had to prompt them and tell them what they ought to do. I want to know the significance of the Regulations and I hope that we shall have an adequate explanation. We ought to start a Debate on this very important subject so that the Government might make clear their position in regard to compensation to the people who have lost their jobs.
§ Mr. Geoffrey Lloyd (Birmingham, King's Norton)
May I ask the Parliamentary Secretary whether we are to have a statement on this matter from the Government?
§ 6.58 p.m.
§ The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens)
Yes, Sir. The Regulations before us are in two parts: one part deals with the Central Electricity Board and the Electricity Commissioners. The other part deals with compensation to officers of the Electricity Commission. I ought to say that under Section 55 (2) of the Electricity Act it is mandatory upon the Minister to make these Regulations because these people are mentioned by name in that Act. As a matter of fact, during all the stages of the passage of the Bill Clause 55 (2) was never debated in any way. Apparently all sides of the House agreed that it would be necessary to make Regulations specifically for these two groups of persons.
In Part I, we deal with members of the Central Electricity Board and of the Electricity Commission. The Central Electricity Board had one full-time chairman and five part-time members. The chairman retired at the dissolution in accordance with an ad hoc arrangement in advance of dissolution. The five part-time members have no rights to pension or gratuity, so that their claims can be related only to loss of employment. We felt, therefore, that the limit that we have made, of three years' emoluments as a maximum, was reasonable in the circumstances, particularly in view of the conditions which are laid down in Part I. I will not weary the House by reading them, but will merely ask hon. Members to look at Regulation 1 (2), in (a), (b), (c) and (d), which lay lown a number of conditions that have to be satisfied. Three years' emoluments as the maximum I think hon. Members would agree is not an unreasonable attitude to take up.
Of the five part-time members, two died shortly after the dissolution of the Board. With the remaining three, the amount of unexpired period of office ranged from about 10 months to 2 years 8 months. Incidentally, in view of the conditions laid down in the Regulations it is germane to mention that these persons are elderly.
§ Colonel Crosthwaite-Eyre (New Forest)
The hon. Gentleman has quoted paragraph 2. As I understand it, the consideration is not only the unexpired term but whether they might be expected to be re-appointed?
§ Mr. Robens
There are other considerations, but the hon. and gallant Gentleman is quite right. Some consideration is to be given as to whether they would be likely to be re-appointed and that is why I mentioned that they were elderly persons. I do not want at this stage to say whether they would or would not be appointed, but I just make the point that, being elderly persons, they would probably have less prospect of reappointment—I put it no greater than that—than if they had been younger persons.
I now turn to the Electricity Commissioners. There are three. One has already been made the chairman of an electricity board, one is retained by the Minister in a consultative capacity and one is a part-time member of an electricity board, so it will be seen that certain conditions as laid down in Part I (1, 2) have already been fulfilled in view of the fact that they are in some form of employment.
The second part of the Regulations deals with compensation to officers of the Electricity Commissioners. It might be useful if at this stage I were to say that 128 officers are involved. Of those officers 103 were transferred to the Ministry of Fuel and Power and are on the staff there at the present time, and the other 25 were transferred to the electricity industry. All those people are, therefore, in employment and in no case are they working under conditions or at emoluments worse than they had previously as officers of the Electricity Commission. These Regulations are thus merely a safeguard against what might happen to any of these persons in the future, and the safeguard which has been given to them under the Regulations is identical with the safeguard given to every other person of this standing in the electricity industry.
If, within 10 years, their position is worsened it is automatically deemed to have been as a result of the Act and therefore the onus of proof as to whether it was the operation of the Act which worsened their conditions lies with the electricity boards Thus these persons 278 are now no worse off and, indeed, no better off but in exactly the same position as any other officer of any undertaking which was taken over when the industry was nationalised.
When I say they are covered in the same way I ought at the same time to remind the House that we had a very long discussion—if my memory serves me right it was something like three hours—in this House on the Electricity Regulations in March of last year. I thought we dealt very extensively with those Regulations. Therefore, if what I say is true, that these Regulations put these officers in the same position as officers of electricity undertakings, as the House has already dealt with those Regulations and agreed them—I think it was agreed on a Division, but nevertheless the House did agree—it will be seen that in providing these Regulations we are treating everybody equitably and fairly. For those reasons I hope that the House will approve the Regulations.
§ 7.5 p.m.
§ Colonel Crosthwaite-Eyre (New Forest)
Before I come to what I want to say I would correct the Parliamentary Secretary about one point on which he has laid stress tonight, and that is that he has safeguarded the people in this industry for 10 years to come because, as he put it, the onus is automatically on the Board to prove that somebody has not suffered. Perhaps he would care to refresh his memory by looking at the main Electricity Regulations where he will see that it is quite definitely laid down that it is up to the person lodging a claim to produce all the documentation to satisfy the Board that his claim lies.
He may also care to look at the Debates on 9th and 10th March, 1949, where he will again see that a great deal was said about the point as to how on earth, when all the documents have been lodged with the shareholders' representative and subsequently with the B.E.A., an unfortunate individual can get hold of those documents in order to submit them in support of his claim to the authorities, I suggest to the Parliamentary Secretary that the onus of proof is quite clearly laid for the next 10 years not on the Board but on the individual who tries to make his case. That is a very important distinction, particularly when we come to consider the many other matters 279 which the Parliamentary Secretary brushed aside so lightly in the few remarks he made.
These Regulations fall into two parts. One side deals with the Commissioners, using that word in the sense in which it is set out in the Order to cover both members of the Central Electricity Board and members of the Electricity Commission. The other deals with the officers of both bodies. They are very different. Again, the Parliamentary Secretary skated gracefully over most of these differences without advancing any justification for their introduction, but merely saying, in his usual hopeful manner, that the House would appreciate them and leaving it at that. I shall have to come back later to those differences and to ask the Parliamentary Secretary how he justifies them.
For a moment I want to try to emphasise what we have so often said, that the only thing that counts when we have a Regulation introducing compensation is that there should be nobody who can say that the compensation is unfair. It is no good advancing figures and saying that three people are elderly and that 100 or so have been taken into alternative employment or any of the other facile get-outs; what we have to do is to see that Regulations approved and passed by this House represent fair compensation no matter what test is applied to them.
It is no good taking the majority and saying that rough justice has been done. We have heard that often from the Ministry to which the hon. Gentleman belongs. They seem to pride themselves on having covered the vast generality and to think that if a few people happen to suffer it is just bad luck. This is much the same kind of principle as in the case of a person who has a piece of explosive in the slate which is termed "coal" and finds that his fireplace his disappeared. I would say to the Parliamentary Secretary that justice is never done by condoning injustice and that the only true test of justice is as I have stated. [Interruption.] If any hon. Member opposite wishes to challenge that, I hope he will speak later in the Debate. I believe that the Front Bench opposite, at any rate accept, that as a fairly good maxim of how this House should proceed.
280 Before the Socialist Government came into office we had some 40 Acts governing compensation. They covered from coroners to midwives and included big concerns like the London Passenger Transport Board, but in none of them has the House ever tried to limit or assess the compensation that should be paid to anyone. We have always taken the view—rightly, I think—that if we invade the sphere of private life and if because of what we happen to do in an Act of Parliament some people might suffer, it is not for us to try to judge or to assess that suffering; we should merely see that machinery is established which, quite independently of any view which we may take, can impartially assess that damage or loss and deal with it on the merits of the case. Only since the Socialists have come into office have we taken the line that now we can make regulations to try to limit compensation, to try to set down loss, and perhaps brush it all aside, and to say in the words of the Parliamentary Secretary which he has used so often, on the whole this will meet the case.
I suggest that whatever view we may take on this, the one thing we cannot do is to accept a statement of that kind on this matter. It is our job to see that where in the case of an Act like the one nationalising electricity there are cases which certainly in the next 10 years may prove hard, we set up some other body than ourselves to judge what that loss should be. How can the Parliamentary Secretary foretell what will happen in the next 10 years? He says that everybody has been taken into employment, but be cannot say that over 10 years that will be so.
§ Colonel Crosthwaite-Eyre
Exactly, but I understood the argument of the hon. Gentleman to be that no one would come under these Regulations because everybody had been re-employed, and therefore it was a waste of time to argue——
§ Mr. Robens
The hon. and gallant Member should have this correctly. What I said was that everybody who had been an officer was now fully employed either by the Ministry of Fuel and Power or by the Electricity Authority, and therefore at 281 this stage there was no case for any compensation. I went on to say that if within 10 years any of those people lose then-jobs, provided it is not due to misconduct, they are automatically deemed to come within the terms of the Regulations, to have lost their job as a result of nationalisation, and will be compensated accordingly. The hon. and gallant Gentleman tried to suggest that was not correct but when I reply, if later I have the permission of the House to do so, I will show that he has not yet read the Regulations about which he is talking.
§ Colonel Crosthwaite-Eyre
I shall be only too grateful for any correction the Parliamentary Secretary may give me later on the interpretation I have made, and I will accept it, but I say now that his case falls to the ground for the following reasons. He is saying that everybody is in employment, therefore we need not worry at the moment, but that if, on the other hand, anybody should become unemployed then there are these Regulations. If the hon. Gentleman will look carefully at the Regulations he will see that there is nothing to safeguard a man who is offered a worse job than the one he has and who is faced with the problem of accepting that worse job or submitting his case under these Regulations.
§ Mr. Robens
I am sure the hon. and gallant Member would not want to put this incorrectly. If there is any worsening of employment the man is compensated under the Regulations.
§ Colonel Crosthwaite-Eyre
I am sorry, but the Parliamentary Secretary has not got my point. If the hon. Gentleman will look at Paragraph 6 of the original Regulation, he will see that in assessing compensation account has to be taken of various things which include any other job the man may have been offered. As these Regulations stand, I must ask the House to think of the whole argument I have developed and not this one point—[Laughter.] Hon. Members opposite may laugh but if they cannot appreciate the argument I am sorry. It has been a fairly concise argument directed to one end only, and that is to show that under these Regulations a man can be penalised unless he accepts whatever decision the British Electricity Authority may care to make in his case.
§ Mr. Robensindicated dissent.282
§ Colonel Crosthwaite-Eyre
If the Parliamentary Secretary disagrees he can contradict me when he replies, but I have read the Regulations—and I have quoted Paragraph 15 (1) and Paragraph 6—and that is the case I have tried to make out. Therefore I say that on two broad grounds of present injustice and of possible future injustice, these Regulations are inadequate.
Again, coming down to minor points, there is the question of the eight years qualifying period. We have still to hear from the Parliamentary Secretary why, for the first time, under a Socialist Government it has been thought necessary to introduce a qualifying period into Regulations such as these.
§ Colonel Crosthwaite-Eyre
Then if he has, perhaps the hon. Member will be generous enough to tell me the seventh time.
§ Colonel Crosthwaite-Eyre
I have HANSARD too, but I ask the hon. Member why it is thought necessary to have this qualifying period which is outside anything that has been the standard of this House previously. I would ask him again to remember that by this question of war service he is, in fact, saying that of two prospective entrants to the Industry the man who volunteered to go straight into the Forces when he was 18 will lose everything, but the man who waited for his call up and perhaps served only two weeks in the electricity industry will qualify for compensation. That is the kind of injustice that is being done under these Regulations. Over and above all these things, the Minister reserves the right to himself under Paragraph 6 (1, f) of the main Regulations to take consideration of other circumstances which he considers affect the case. It is that sort of over-riding power which makes these Regulations, which the Minister says are designed for the safety of the individual, a complete farce in many instances.
I come now to the second cause of our complaint, the difference between officers and members of the boards, and about this I hope the Parliamentary Secretary 283 will have something more to say. Why are members to be compensated by a lump sum whereas the officers can only draw between 75 per cent. and 100 per cent. of the total award of compensation that may be made to them? On the one hand, the officers, who are the little men, will get an annuity on which they have to pay Income Tax; on the other hand, the Commissioners, who are the big boys, will get a lump sum on which no Income Tax is paid. That seems to me a slightly extraordinary state of affairs for a Socialist Government, particularly a Government which is so hot against Mr. Lord and Sir John Black. Yet here they are, under their own Regulations, doing exactly the same thing, promoting the tax-free grant of a lump sum compensation.
I have talked about the qualifying period. The officers, the small men, must be in for eight years; the Commissioners need have no qualifying period. Even if, for the purposes of argument, a man has only a week's service, he can still draw up to the full sum of three years. The Parliamentary Secretary has been good enough to remind us of our previous discussions. How hot he was that nobody should be compensated for doing nothing. We have had a great many arguments on previous occasions as to what constituted sufficient time in a specific job to justify compensation. We have accused the Government on many occasion of having broken the promise they gave in regard to the electricity industry, particularly that given by the present Minister of Defence when he gave the undertaking that… if there are any directors, as no doubt there are, of undertakings who occupy a fair part of their time. …"—[OFFICIAL REPORT, Standing Committee E, 15th May, 1947; c. 1421.]they would be compensated. The Minister was in the unfortunate position, in view of that undertaking, of having to come down and say, "We now interpret that as meaning 30 hours a week." Indeed that is still the interpretation as far as the officers of these two bodies are concerned. But not so the Commissioners. They need never have been through their offices at all under the terms of the Regulations, yet at the same time they would be entitled to draw full compensation.
Again, it was laid down for the directors and officers of private companies 284 under the main regulations that they had to be restricted as to other work which they had undertaken, that if the Electricity Board said, "It may have been that you were working 30 hours a week but at the same time you were accepting other emoluments from other interests," they could then say to a man that he should have either no compensation or a very much lesser amount. But this does not apply to the Commissioners; there are no such restrictions against them. They could have been indulging in other occupations and earning two or three times as much as they received as Electricity Commissioners, and still they would be entitled to full compensation under these regulations.
The Parliamentary Secretary was often most vehement about the iniquity of compensating people for more than £4,000 a year, but this does not apply to the Commissioners.
§ Mr. Robens indicated dissent.
§ Colonel Crosthwaite-Eyre
If the Parliamentary Secretary can show me anything in the Regulations which stipulates that the £4,000 limit applies to the Commissioners, I should be very grateful. It applies to the officers, I agree, but not to the Commissioners. We have now, therefore, this wonderful privileged body of people who have been introduced by the Government. I must admit that many of the things which have been done for the Commissioners we should welcome, but what we cannot understand, in view of all the statements by the Government about fair shares and the rest, is that they still are penalising the small people, the clerks and so on in the offices, while the Commissioners are allowed to get away with all these things.
Perhaps the most noticeable feature of the lot is that if a clerk makes an appeal for compensation the Electricity Board may say, "This is our estimate of what that compensation shall be," and their decision is final; that clerk has no appeal whatsoever. But not so one of the Commissioners. If hon. Members will look at the Regulations, they will see that a special tribunal is to be set up whose sole job is to decide any appeal which a Commissioner may make. What a difference there is between the people at the top of this particular section of the industry and those who serve it in lesser capacities.
285 I feel that there is only one reason for this differentiation. It is not because the Government have a soft place in their hearts for these Commissioners but because they want to set a line of conduct which is to apply to people who are appointed by the Government—that "Where private industries are concerned, no restrictions are too bad." But when Government bodies are concerned, we have to accept a very different standard, Then, nothing is too good for those people who go on to nationalised boards. They can have the cake with the icing, whereas the unfortunate people in private industry and who built it up are to be penalised on every single occasion.
Of the many Regulations which we have had before the House, very few have so little justification as these which we are now considering, either in terms of equity or, above all, in terms of equity between the various sections of people which they cover. These are Regulations which safeguard the man at the top, but they leave the man at the bottom under every disadvantage that can be conceived.
§ 7.24 p.m.
§ Lieut.-Colonel Lipton (Brixton)
I was not quite sure to what final conclusion the arguments that have been put forward by the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) would lead, but the hon. and gallant Member referred to one aspect on which, I think, my hon. Friend the Parliamentary Secretary might provide some further enlightenment. These Regulations form part of a general structure of compensation for loss of office and emoluments. In this connection, I put a Question the other day to the Lord President of the Council, from which it is apparent that up to 31st March something like £600,000 has been paid by the nationalised industries for loss of employment and emoluments. It is, of course, quite impossible for my hon. Friend the Parliamentary Secretary to give the House any idea of how much expenditure these Regulations which he is now asking us to approve will involve from the Exchequer.
The second point, which, I submit, is of some importance, is, to what extent do these compensation payments by nationalised industries attract Income 286 Tax? In a Question which I put this afternoon to the Chancellor of the Exchequer, my right hon. and learned Friend said, in his reply, that in some cases these payments were subject to Income Tax and that in other cases they were not. If, as the hon. and gallant Member for the New Forest has pointed out, two categories of payments are now under consideration—one, payments which are subject to Income Tax, and the other, payments which are not subject to tax—then I think that the House is entitled to ask for the same treatment in all cases.
I do not know whether the hon. and gallant Member will agree with me when I submit that all payments whether in the form of lump sums, annuities or anything else which are paid by nationalised industries to persons who were entitled to some form of compensation ought to be subject to Income Tax. If the hon. and gallant Member will take up that line perhaps he will find in me an unexpected supporter; but he did not make that point very clear, and I hope that subsequent speakers from his side of the House will follow the line that there should be no class distinction as far as liability to Income Tax is concerned. All these people who receive payments by way of compensation should be subject to tax.
I hope that the Parliamentary Secretary will be able to set a good example to the other nationalised industries for which he or his Ministry are not responsible. He has an opportunity tonight of establishing a very useful precedent as a result of which the Exchequer would gain and there would be no further continuance of these distinctions, for which, in my view and, apparently, in the view of at least one hon. Member opposite, there is no justification.
§ 7.28 p.m.
§ Colonel Clarke (East Grinstead)
I agree with the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) that there should be no discrimination in respect of taxation, but I do not agree with another view which, I think, he holds, that it is permissible to make taxation retrospective. I will not follow him further because his questions were addressed to the Parliamentary Secretary, as was his criticism, with which I fully sympathise.
287 The Parliamentary Secretary said, in opening, that the Section in the Electricity Act which gave the Minister power to settle compensation by Regulations was never discussed. I was on the Standing Committee which considered the Electricity Bill, and I know that that statement of the Parliamentary Secretary is perfectly true. The reason why that Section was not discussed was because of the circumstances in which the latter part of the Committee stage took place. The hon. Gentleman will remember, however, that in the corresponding Bill which dealt with the gas industry, when more time was taken over the Standing Committee and these things were discussed in detail, this point was considered and dealt with in very great detail and we on this side took the strongest exception to the whole method of the settlement of compensation by Regulations.
My hon. and gallant Friend the Member for New Forest (Colonel Crosthwaite-Eyre) made a very comprehensive survey of these Regulations. I will do my best not to be repetitive in the few remarks I want to add, but I cannot go very far in this matter without raising one point on the Regulations themselves. I think the only test of such Regulations is whether compensation is really being given. There is very often a certain amount of misunderstanding of what compensation really is. I hold it to be simply an effort to make good the loss of future earnings. That is how I would define it. I say "an effort" because I believe it is an almost impossible thing to obtain. I do not believe that when a man is disturbed in the early stages of his career and deflected from one job to another that we could really adequately make up for the time he loses and cash emoluments he eventually also loses.
We can only make an effort and the acid test is whether the effort which is being made is substantial and really meeting the case. I feel that our modern legislation is not doing so. Up to the early days of this Government something was being done in that direction. They started on the right road in the Water Act of 1945. In Section 44 of that Act they took advantage of the provisions of an earlier Act, the Local Government Act, 1933, which, in subsections (2), (3) and (6) of Section 150 and the Fourth 288 Schedule, codified the long-standing arrangements that had obtained for generations in the public service for compensation for those who were redundant.
It was a very comprehensive and excellent code, and I think it a great pity that it has not been followed since. The principle of that code was that where a reform in the public interest causes a loss to an individual that loss should be made good, wholly or in part although it was recognised that one can never make it good altogether. That method has another advantage. If we put the substance of the Regulations in the Act, they are not only debatable, but also amendable. The trouble with this method of working by Regulations is that they are not amendable. We have to accept or reject them altogether, and that is a cumbersome procedure. Unfortunately, the method of using that excellent code went by the board in the mad race to force nationalisation Measures through the House in the early days of the last Parliament. As a result, a degeneration set in and compensation was to be given by Regulations dictated by a Minister and, I would remind the House, alterable by a later Minister, which is an important point.
I am certain that this had bad results. In the first place it has led to delays. We have an example here. The Electricity Bill was introduced in January, 1947, but it was more than three years before the Regulations were published when those concerned could know exactly their position. That was bound to cause anxiety and annoyance. It is possible that some interim payment may have been made to them, and I hope that later we shall be told that that was the case. Otherwise, they will have been very hardly treated. The old method was simple; the basis af assessment was the earnings lost and there was no discrimination. A man could claim a proportion of what was lost. I will not go into examples of discrimination, as my hon. and gallant Friend has dealt with some, but they are very substantial. I think the present system, as typified by these Regulations, is retrograde, cumbersome and unfair.
I am amazed that in the title of this Regulation two wholly different bodies of persons are lumped together as "Commissioners and others." The officers and members of two highly responsible and 289 much respected public bodies are put together, the Electricity Commissioners and the Central Electricity Board. The title is misleading because it suggests that those two bodies had virtually the same functions and the same organisation, which is entirely wrong. I also think it belittles their importance. They were people who, in their day, did a great deal of good and were very valuable and important. May I distinguish between them, because I do not think the distinction has been made clear in this Debate? The Electricity Commissioners were appointed by the Electricity Supply Act, 1919, which said:… there shall be established for promoting, regulating, and supervising the supply of electricity, a body called the Electricity Commissioners consisting of not exceeding five members to be appointed by the Minister of Transport with the concurrence of the Board of Trade.They were to beResponsible to … and acting under the Minister of Transport. …who was to make use of them as agents to carry out legislation and other powers and duties he wished to place upon them.
The Commissioners had various duties. They could make schemes to constitute electricity districts. Many of us believe that they had and could have used powers which would have done more than has been done by nationalisation, without all the disturbance which nationalisation caused. We think that instead of doing away with them we would have been better off today if they had been constituted as the British Electricity Authority. They could form joint electricity authorities and they could conduct experiments in distribution. I think those gentlemen did their job very well indeed. On one occasion I went to see them as a result of a question I asked. I was most courteously received and given a most satisfactory answer. I have a great respect for them.
The other body, the Central Electricity Board, were totally different. They were constituted by a later Act, the Electricity Supply Act, 1926. They consisted of a chairman and seven other members appointed by the Minister of Transport,charged with the duty of supplying electricity to authorised undertakers …Any of us who remember the grid and the grid system will remember what their 290 function was. They really ran the grid and were, in the terms of the Actdeemed, subject to the provisions of this Act to be authorised undertakers within the meaning of the Electricity (Supply) Acts, 1882–1922 …That is putting them in the same category as the big supply companies. To me, there was very little difference between the Central Electricity Board and one of the power companies, such as the London Electricity Supply Corporation, for example, which, until 1928, supplied electricity in bulk and then handed over its powers to the Central Electricity Board, but still sold some of the current it took from the Board to big undertakings like the Southern Railway.
The Central Electricity Board was a body which appeared in the Stock Exchange Official Year Book. Stocks were quoted under those of public boards. Their directors were, I believe, substantially the same as directors of public companies, with the exception of the chairman, who was full-time. One or two members may have been full-time—I could not say for certain—but I know that a number of them were engaged as directors in a great many other industries and were able to bring valuable help and advice to the Board through their knowledge of other industries. They were in exactly the same category as directors of other companies. As my hon. and gallant Friend has said, there was no question of the directors doing 30 hours a week. A great many of them attended their regular board meetings and no more.
The difference is really that whereas the Electricity Commissioners were virtually civil servants, members of the Central Electricity Board, with the exception of the chairman, were virtually directors. Here they are lumped together as if they were exactly the same. At the beginning of the Debate the Parliamentary Secretary did not make that distinction, but an important principle is involved.
In the past we have always been told that directors could not be given any compensation unless they were whole-time or practically whole-time directors. Here we have directors, who were by no means whole-time, receiving compensation. I am delighted. I hope that this shows a change of heart in the new Minister and that in future, when any other cases arise, 291 the old principle will be abandoned. This is a step forward and an indication that the proper status of directors and their value to the community will be recognised. It is a recognition that they will not be thrown out of work, as many good men have been during the nationalisation of the fuel and power industry. Many men who were virtually full-time directors of a number of companies are now out of work because of the way in which they have been treated.
I feel that at present it is unfair that directors appointed by Ministries should be given compensation when directors of bodies which are virtually the same, who have been appointed by their shareholders, are not. But if it is to mean that in future all directors, whether elected by shareholders or by Ministries, are to receive compensation when deprived of office then we are progressing. My hon. and gallant Friend dealt fully with the discrimination that is shown between members and officers, and I will not go over that ground again except to say that there is no improvement on what was shown in the actual terms given to members. There is no improvement on the Electricity (Staff Compensation) Regulations, 1949, against which we protested vigorously at the time.
I wish to ask the Parliamentary Secretary a question. In a Regulation, S.I., 1949, No. 460, Reg. 8 (4), the authority was entitled to take into account the income from any alternative employment subsequently obtained. I wish to ask the Parliamentary Secretary whether similar treatment will be maintained under the Regulations which we are discussing, because from my reading of them it does not appear that such provisions are extended to members of the Central Electricity Board and the Electricity Commissioners?
I repeat that on a number of counts we do not think that the Regulations are satisfactory. We feel that they are discriminatory as between officers and members. We feel that they are giving an advantage to directors nationally appointed as against those appointed by shareholders, and that no progress has been made on the early editions of all such Regulations as have been tabled.
§ 7.45 p.m.
§ Mr. Blyton (Houghton-le-Spring)
I have listened to the hon. and gallant 292 Member for East Grinstead (Colonel Clarke) speaking about directors. I take the view that we are paying far too much compensation to them in the nationalised industries that we are taking over, and that we are carrying an unfair burden. I suggest that under the Regulations these people have been very generously dealt with indeed. The provision dealing with when they are to get compensation, says:The amount of the compensation to which any such person is entitled, shall not exceed a sum equal to three times the amount of the emoluments received by him in any one year as a member of the Board or as one of the Commissioners. …It means that any man covered by these Regulations who is displaced, will clear out with a large sum.
We find that in the compensation provisions dealing with the top end of the scale, it is possible for huge sums to be paid out, whereas at the other end of the scale those who are affected are paid off with "washers," as we say in Durham. I ask the Minister to take good care that we shall not have any more High Court cases in which someone is awarded £42,000 lump sum from a nationalised industry. I hope that the Regulations will be framed so that scandals of that character will be eradicated from our nationalised industries. These people are a thousand times better off than a displaced workman in a nationalised industry. I know that in my own industry men now get only a certain sum less than their wages for three or six months, whereas, before nationalisation, a man could have worked for 40 years and not get a penny when he had finished. I advise the Opposition to take with both hands what is offered in these Regulations instead of offering carping criticism of them. It is time the Minister stopped large fortunes being given to people such as we have seen in court cases affecting nationalised industries recently.
§ 7.48 p.m.
§ Mr. Brendan Bracken (Bournemouth, East and Christchurch)
The hon. Member for Houghton-le-Spring (Mr. Blyton) is likely to have created a certain amount of animosity in the minds of those former trade unionists who now sit on regional coal boards. He has tonight laid down the doctrine that they can be displaced in the same way as an ordinary miner. 293 I think that some of those gentlemen will strongly object.
I make an appeal to the Parliamentary Secretary to give us a clearer explanation of these Regulations. His explanation passes all understanding. It was inadequate and inaccurate, and was one of the most casual statements to which this House has ever been treated by a Minister. The Minister did not even arrive in time; it was left to the Lord President to fulfil his functions. If the Parliamentary Secretary was not prepared to do so at the beginning of the Debate I really think he ought to make some further effort to deal with the points raised by my hon. and gallant Friends.
These Regulations are very badly drafted, and it is very difficult indeed to interpret them, but I think I am right in saying that there is an odd difference made between part-time Commissioners and full-time officers. The Minister agrees with that? The Commissioner is apparently compensated by a tax-free payment. What was wicked in Sir John Black and Mr. Lord is virtuous in an Electricity Commissioner. What a strange change of attitude there is in the Government's approach to compensation. What is the cause? Are the boys in the jobs now wanting compensation as well as salaries?
§ Mr. Bracken
Why not! That is an admission. The hon. Member asks, "Why not?" I can say this, that the British public will not approve of high salaries and big pensions for the boys in the jobs—more especially as many of the boys in the jobs are now receiving four to five times the salaries they received in their previous occupations, whether as trade union leaders or in other capacities.
Throughout the 18th century, there were the most furious rows in this House about the patronage that the Whigs tried to get in order to reward their followers. But now the rapacity of this Government for patronage is greater than that of Charles James Fox. They not only want to give their boys immense salaries, but through this type of Regulation, they are also trying to endow them with pensions. Meanwhile, the small people are disregarded or as the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) 294 would say, they get no lump sums. We all know how bitterly he is opposed to the payment of lump sums. We know how much he feels the wickedness of Sir John Black and Mr. Lord. But, nevertheless, he is prepared to support the Government in granting lump sums to their pets. The hon. and gallant Gentleman really ought to choose his position; he cannot sway to and fro in the way he does——
§ Lieut.-Colonel Lipton
I think the right hon. Gentleman is doing me an injustice. Perhaps he did not listen when I was speaking, and I do not blame him for that. But what I did object to was the constitution of a category of "compensatees"—if I may coin such a word——
§ Mr. Bracken
The explanation of the hon. and gallant Gentleman reminds me of a jingle which I heard when I was a little boy:I've seen diamonds in AmsterdamAnd I've seen spiders in Lipton's jam.[HON. MEMBERS: "So what?"] Yes, so what? Nobody can understand that jingle or the explanation of the hon. and gallant Gentleman. Let us now sum up what this Government—a Socialist Government, believe it or not—intend to do under these Regulations. They mean to penalise, or at any rate not to do justice to the clerks, the small people. They may be thrown on the labour market. They must not get any compensation, oh no. These displaced persons, if I may so describe them—and they are so in many cases—are not to be given any real scope in the new posts that have been offered to them without any security of tenure by the Ministry. The hon. Gentleman told us: "Don't bother about these people; they have been taken care of by the beneficent Ministry of Fuel and Power." Are they established civil servants?
§ Mr. Bracken
I can tell the hon. Gentleman that they are not, and there will be some hon. Members behind me who will later have a word or two to say about these matters. I say they are not. Furthermore—and this is a very serious matter—why were not these unfortunates treated with the same generosity as was shown to the Commissioners? Just because they are small persons. It is only too obvious that the greatest patrons of privilege in this country are the present Socialist Government—[HON. MEMBERS: "Oh! "] What, under these Regulations, is offered to a man who has spent most of his life in a full-time job in the Electricity Commission? In certain cases he has been offered a post in the Ministry of Fuel and Power. His training may have fitted him for something better; and the experience he has garnered in a life-time may be thrown away.
What sort of post has been offered to a long-time servant of the Electricity Commissioners? For all I know he may rank little above the lowest officers employed by the Minister. An argument is put forward by the Minister, by way of interruption—he is more clear when he is sitting down than when he is standing at that Box—that a man may get compensation. Such a man is not getting compensation for expectation. Certainly not. He is getting no compensation for that. A man who has served the Electricity Commissioners well—and the Commissioners were a sensible body—may prove to be a great failure in that mess and muddle called the Ministry of Fuel and Power. Nevertheless, he is "drafted," as the Americans say, into a new occupation, or put in a job which may not in any way give him a chance of using his past experience; and according to the Minister, if he is thrown out all he will get will be the most meagre compensation.
I must say that it ill-becomes hon. Gentlemen opposite, who spend so much time talking about privilege, to penalise the small man in the way they are doing through these Regulations. What are they doing now? They are standing up for capital payments to persons that the Government fancy; letting the small clerk, the small engineer—what one might call members of the lower middle classes—suffer the full blast of adversity when, sooner or later, the Ministry have to cut 296 down their over-padded ranks. It is amazing to anyone on this side of the House to find that this Government, of all Governments, is favouring the privileged——
§ Mr. Bracken
They treated them very well indeed. We are not talking about the Commissioner class. They, also, have been treated very well indeed. We were never the friends of the privileged in the same—[Laughter]—it would be well worth lisening to the end of my sentence. We were never the friends of the privileged on the same scale as is the Government. All I need add is this: I have beard a rumour, and I hope it is true, that the Chairman of the Coal Board is to resign. It seems to me that somebody on the other side of the House, or elsewhere, may wish to occupy his office, and wants to make absolutely certain that not only is there a salary with the job, but a fat pension as well. I must say to the Minister that these Regulations are utterly unworthy of him.
§ 7.58 p.m.
§ Sir Richard Acland (Gravesend)
I have listened to the right hon. Member for Bournemouth East and Christchurch (Mr. Bracken) making his little jokes which he himself applauds with little cries which remind me of one of the characters in "Much Binding in the Marsh" to which I listen now and then; and I feel that he has brought this Debate down to a level in which I can intervene. I have been waiting for 17 years for an opportunity of mentioning an unobtrusive little Act of Parliament which was passed by the Conservative Government of 1933 and which involves a very important principle. I refer to the Act for prohibiting trading in certain caged wild birds.
I mention this Act now, because it casts a light on the Conservative doctrine of compensation. The hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) was contradicted by right hon. Gentleman the Member for Bournemouth East and Christchurch. I think they will have to make their peace between themselves; because one was telling us we were giving far too much compensation and the other was blaming us because we were not paying every farthing which could be paid to anybody.
297 The Conservative Party are always ready to compensate and act as the guardians of anybody who suffers any loss in his official position as the result of any Act passed by this House. But, of course, that was not observed by the Conservative Party when they passed the Act to prohibit the trade in caged wild birds which, up to that moment, was quite legal. The fact is that the Conservative Party did not approve of the kind of gentlemen who, at that time, were engaged in trading in caged blackbirds, blackcaps, bluethroats, bramblings, bullfinches, buntings, chaffinches and so on.
§ Mr. Bracken
If we deprived the hon. Baronet of his business as a caged bird exploiter, we left him with his broad acres, at any rate.
§ Sir R. Acland
That personal interruption does not advance the principle much further. In 1933, until the passage of this Act by the Conservative Government, there were certain gentlemen who were legally entitled to make their living, to draw emoluments, from what was a perfectly legal trade. The Conservative Party made that trade illegal, and they did not offer a penny in compensation to people who were deprived of their legitimate business. I think that was scandalous and I am very glad that the right hon. Gentleman the Member for Bournemouth, East and Christchurch brought the Debate to a level at which I had the opportunity of saying so.
§ Mr. Henry Strauss (Norwich, South)
Before the hon. Baronet sits down, would he devote his mind for one moment to the Regulations which are before the House? Would he say on what principle he justifies quite different conditions being applied to those gentlemen who fall under Part I and those gentlemen who fall under Part II?
§ Sir R. Acland
At least, these gentlemen get some compensation of some kind. I do not quite know how the hon. and learned Member justifies asking me that question when he belongs to the party which, in 1933, did not give any compensation whatever to gentlemen dealing in wild birds.
§ 8.2 p.m.
§ Mr. Robens
Perhaps, with the permission of the House, I might reply to some of the points raised, not on the 298 question of bullfinches, chaffinches or bullfrogs, but on the Regulations.
§ Mr. Robens
The right hon. Gentleman the Member for Bournemouth, East and Christchurch (Mr. Bracken), waxing indignant once again in that special way of his when he comes down to entertain and delight us in this House, made a number of gross errors. All were most apparent to the House and not really worth bothering about in great detail, but he challenged me when he asked whether these people were established. I said that they were established. He said that they were not. Perhaps at this stage, he might tell us who are and who are not.
§ Mr. Bracken
The hon. Gentleman had no right to say that these dispossessed people are established, because a number, on his own confession, work for B.E.A. now. Have they got full compensation and a guarantee of life employment from B.E.A.? The hon. Gentleman should send his diligent Parliamentary Private Secretary to consult the officials below the Gallery before he answers that question.
§ Mr. Robens
He does not need to do that, because he happens to know what he is talking about. That is rather different from the right hon. Gentleman. The fact is that all these persons, who were established with the Electricity Commissioners came into the Civil Service as established civil servants.
§ Several Hon. Members rose——
§ Colonel Clarke
On a point of Order. Do you think, Mr. Deputy-Speaker, that the Parliamentary Secretary is still rather confused in his mind, as he was when he first spoke, between the members of the British Electricity Authority and the Electricity Commission? I do not think that he is clear about the difference between the two.
§ Mr. Robens
I am perfectly clear, but I doubt very much if hon. Gentlemen opposite are very clear about anything 299 connected with these Regulations. I am trying to cast a little light upon their darkness. The right hon. Member for King's Norton (Mr. Geoffrey Lloyd) apparently wants to prepare a speech. I will give him time to do that, but it would seem to me that I might as well wait until we have had these speeches because I cannot intervene continuously.
§ Mr. Robens
I was saying that those who were established officers of the Electricity Commission who came over to the Civil Service became established civil servants. From there a number went over to the B.E.A., and they have gone on approved service and are established.
§ Mr. Brackenindicated dissent.
§ Mr. Robens
It is no use the right hon. Gentleman shaking his head. These people are established. I know that that does not agree with what he said. Nevertheless, those are the facts. I do not know where he is getting his information from, but clearly it does not show the truth of the situation. A suggestion was made that there was nothing to safeguard the man who is offered a worse job. I think the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) said that. What surprises me when we have a Debate on Regulations is that nobody opposite seems to take the trouble to read them.
§ Mr. Robens
It sounds very odd for the right hon. Gentleman to say that. He starts by being offensive from the very beginning and he ends offensively. Simply because he has a broad smile on his face, that does not mean that we should stand for all this.
§ Mr. Bracken
The hon. Gentleman really must not make such a statement, as that we have not read the Regulations. It is within the knowledge of the House that he had not done his homework as a Minister when he appeared here this afternoon. It was left to the Lord President of the Council whose information about these Regulations is a little better than the Minister's, to get up and take his place. The hon. Gentleman struck a 300 misfortune. His colleague in a previous Debate sat down too soon. He had not got the resource to carry on. The hon. Gentleman knows that he had not read the Regulations. He was mugging them up, and he was caught short. It ill becomes the Minister so casually to accuse this party which is so devoted to duty, of not understanding these Regulations. I could pass an examination——
§ Mr. David Jones
On a point of Order. Is it in order for the right hon. Gentleman to make a second speech without asking permission of the House?
§ Mr. Robens
I was saying that it would be better if hon. Gentlemen opposite really read the Regulations. Then we should probably have a Debate on the Regulations. So far, we have covered many aspects which are clearly not within the Regulations at all. A suggestion was made that there was nothing in the Regulations to safeguard a man who was offered a worse job. The hon. and gallant Member for New Forest made that statement. Clearly, the Regulations provide for that. The offer, if it is to be relevant at all, must be an offer of suitable and reasonable employment. That is specified in the main Regulations. Therefore, there is no question of offering any job to an individual. It must be suitable and reasonable.
§ Mr. Robens
Hon. and right hon. Gentlemen keep crying out like parrots, repeating one another, "Who are the judges?" Again, if they had read and understood the Regulations, they would know that an independent tribunal under the Minister of Labour is the judge who will decide on questions of fairness.
§ Mr. Robens
I am sorry if the right hon. Gentleman does not believe in independent tribunals set up by the Ministry of Labour. I cannot help that. I can only hope that, as time goes on, his ideas on these tribunals will improve. My own 301 experience, as a trade union official, of tribunals under the Minister of Labour is that they have been very fair and impartial, and that they have done a lot of good work. No man who felt that he had not been treated fairly under the Regulations would hesitate about going before a tribunal of that character to have his case dealt with. The answer to the question, "Who is to decide?" is that ultimately if there is not agreement, an independent tribunal will decide.
§ Mr. Robens
I will not pursue these odd bits of interruption. Some reference was made to the very large sums, to the court cases and to the £42,000 which some individual had got. Those are not payments under Regulations such as these. They are matters in relation to the breaking of contracts, and they are matters for the court to decide. They are not at all matters which these Regulations attempt to cover. If anybody has a specific and legal contract and that contract is broken, then the breaking of that contract must be paid for, and if the parties do not reach agreement on the amount to be paid for the broken contract, the courts are there to decide the matter.
The hon. and gallant Gentleman the Member for New Forest disputed my statement that, in the event of a man losing his job or suffering a worsening of his conditions in 10 years, provided it was not due to misconduct, the onus of responsibility for proving that it was not due to nationalisation was upon the boards. I am surprised that he did dispute it, although again I ought to say that, if he had read the Regulations, he would have known perfectly well that he was wrong when he did dispute it. While he quoted one section of the main Regulations, he completely missed Regulation 10, which lays down quite clearly that, unless the contrary be proved, he shall be deemed to have lost his employment. What I said in regard to the onus of responsibility is therefore perfectly true.
The hon. and gallant Gentleman again raised the question of the eight years' service. I thought I had said at the beginning of the Debate that we had had a discussion in this House for three hours on this question of part-time directors, the 30 hours in relation to them and the eight years' service which an individual 302 must have had. If the hon. and gallant Gentleman would care to read HANSARD for 9th March, 1949, he will see all these arguments reproduced there. The column references are 1299–1300 in respect of directors, and 1300 in respect of the number of years, and, if the hon. and gallant Gentleman refers to them, he will be reminded of the contribution which he himself made, as did some of his hon. Friends. We have gone over that ground time and time again, and I do not think there is any point in pursuing it further.
The hon. and gallant Gentleman did however, say that, if an individual went into the employment of an electricity undertaking two weeks before he went for his military service, when he came back his military service was in fact counted. That is true, and I think it is right and proper—[Interruption.] I understood the hon. and gallant Gentleman to say that he was drawing a distinction between the man who had some short period of service in the electricity undertaking before going to do his military service and the man who had no such service at all.
§ Colonel Crosthwaite-Eyre
Will the hon. Gentleman give way? It was simply the case of two people, let us say, aged 18, one a volunteer in, say 1940, who went straight into the Services, while the other had a week with B.E.A. or a private company before he did his military service. The first one, because he was a volunteer, gets no compensation, while the second man, called up after a week's service, gets full compensation.
§ Mr. Robens
That is exactly the case that I was making. It is quite right that the man who entered the service of the electricity industry and then went to take his military service, no matter what time elapsed after he joined the electricity industry, should have his military service counted in his eight years. But when it is suggested that a man who joins the electricity industry after his military service should have his period of military service counted, I do not think that is a reasonable thing. How does one know where a man is going to work after he has done his military service? There can be no obligation on the electricity industry for the period of time occupied by his military service. He may not have made up his mind to go into the electricity industry until he has come out of the Service.
303 Therefore, the hon. and gallant Gentleman would be asking the electricity industry, or any other industry to which similar regulations apply, to take on a liability the size of which they could not possibly know beforehand. While it is right that military service should be taken into consideration once a man has started work with an undertaking, I cannot see the logic of saying that anybody who joins an electricity undertaking after doing their military service should have that period of miliary service regarded as part of their employment. It seems to me that that would be an almost impossible position.
The hon. and gallant Gentleman also made fairly great play of the different treatment accorded to members of the Central Electricity Board and Electricity Commissioners and the officers of the Electricity Commissioners. I thought I had made the matter fairly clear in my opening speech. I made the point—and hon. Gentlemen can read it tomorrow in HANSARD—that the Central Electricity Board members have no pension rights at all. They are appointed for a limited time, sometimes for a period of three years, and I thought I had indicated that there are five part-time members, none of whom had any rights or gratuities, so that any claim they had must be one for loss of employment.
When we look at loss of employment, we find that we are not dealing with the possibility of employment, say, of a man of 30 until he retires at the age of 60 or 65, but something quite different. The loss of employment in this case will be limited to three years, and it goes no further at all. Indeed, the age of the individual must be taken into consideration even when determining how much of the three years he shall have, because, as I have already indicated, since they are elderly people, it would be reasonable to say that a man of 70 could not normally expect to be re-appointed.
§ Mr. Robens
If I were the Minister, I should not be looking for people of 70 in order to re-appoint them. I should say that a man of 70 would have less chance of being re-appointed than a man of 50, and I think that is reasonable.
304 Therefore, there is a very great difference between the two cases, and I want to say that we are dealing here with a very small number of specific people, and not with hypothetical cases. There are only three people involved, as two of them died after the dissolution and therefore they do not enter into the picture to any great extent. Indeed, they could only enter into it for the period up to the time of death. Therefore, we have these three people involved, and that is what all this great shout is about. The difference in treatment is because of the different circumstances of the case.
One has to try not to treat one section of the community unfairly at the expense of the rest, but we have genuinely and honestly tried in these Regulations to carry out the requirement which was laid upon the Minister in the Act itself specifically to bring in Regulations that are fair and honest, and which, in relation to all other people covered by similar conditions. I therefore hope that the House will at this stage now agree to these Regulations.
§ Mr. Geoffrey Lloyd
Before the hon. Gentleman sits down, may I remind him that he has not touched on the question of the lump sum, which was raised by some of my hon. Friends on this side of the House? Can he tell us whether these lump sums will in fact be tax-free payments or not? Will he also say if the cases of Sir John Kennedy and Mr. Nimmo will in due course be accorded such treatment, and whether he would explain the difference in principle between their cases and those of Sir John Black and Mr. Lord?
§ Mr. Robens
In the first place, the question of taxation on any compensation is not covered by the Regulations, and I have no doubt that Mr. Deputy-Speaker would rule a discussion on taxation out of order. Indeed, I am surprised that many hon. Members have been able to introduce it. Therefore, it would appear to me to be a question which might suitably be addressed to the Chancellor of the Exchequer, and I have no doubt that, in view of the great interest which the right hon. Gentleman has in this matter, he will do that.
§ Mr. Robens
I am not prepared as a junior Minister to deal with a Treasury question on a matter which we are not even discussing.
§ 8.21 p.m.
§ Mr. Pickthorn (Carlton)
I will do my best not to be more repetitive than I think necessary, but I shall be as repetitive as I think necessary within the discretion of the Chair. I do not think that right hon. and hon. Gentlemen opposite will accuse me of not having read the Regulations, although I would by no means boast that I have understood them. They are not always easy to understand, and hon. Gentlemen who have the benefit of having their attention called to them continuously and not being wrenched back to them once every 18 months, and who also have the advantage of the most expert coaching, ought not to be too superior and condemnatory if they think they have understood the Regulations better than their critics.
I do not propose to do more than try to make plain to the hon. Gentleman what are the questions which rather worry us, and which I do not think he still has straight in his head. I will begin by saying that I thought the hon. Gentleman was a little indiscreet in the vote of censure which we passed upon his colleagues and superiors who appointed Sir Ben Smith at the age of 72, and the effects which his remarks may have had on Sir Ben Smith at the age of 75 will not, I hope, be serious, but they can hardly fail to be less than considerable.
§ Mr. Pickthorn
The hon. Gentleman and I seemed to be agreed—the only two who are on that point.
The only thing he has got at is this point of the apparent distinction in treatment between those who might be likened to directors and those who might be likened to head technicians or administrators in the employment of a firm. The hon. Gentleman made no attempt at all to explain that in his opening remarks. He has now made an attempt to explain it, and perhaps he will forgive me if I try to put the explanation back again in order to make sure where we are going now.
I understand that, in the first place, the directorial category is represented by 306 very few people, and, in the second place, that those people are all men who have no pension rights. That is why the compensation in their case is something different from what it is in the case of the people in the rank just below. I think that was the explanation we were given, and I shall be grateful if the Minister will correct me if I have not now got it, because it is to that view, if I have it right, that I shall address myself.
§ Mr. Robens
Will the hon. Gentleman also add the other important point about the short term that these people might expect to serve in their present office, because a director might be expected, according to his age, to go on for a long time?
§ Mr. Pickthorn
I hope hon. Members will not think me funny if I add also the Ben Smith point. Those are the distinctions between the one class and the other. I would suggest that those distinctions do not really comport the consequences that the Minister desired to draw from them. The whole of this business really goes wrong when Governments start using words in senses different from those which they have hitherto borne. Compensation should mean compensation, that is to say, giving to somebody from whom one is taking something, something else which will be as nearly as one can manage equivalent. I have not looked it up, but I will make a small bet that that is pretty accurately the proper, traditional dictionary sense of the word "compensation." But when Governments begin to sophisticate with that and say, for instance, "We must make sure that they do not get more than £4,000 a year or that they do not get more than the taxpayer can afford," then compensation ceases to mean what it always has meant, and means such ex gratia payment as from time to time may be politically convenient. That is what this Government have caused compensation to mean, because the fact that these men have or have not pension rights cannot really affect what we are talking of here, which is what should be the basis of compensation for loss of earnings. I invite the hon. Gentleman to explain whether that reasoning is mistaken.
Secondly, the argument will not do that these are very few persons. If, in fact, these Regulations are directed wholly to specific, known persons, then I think the 307 better way would have been to give the name of the persons in the body of the Regulations, or, if they are readily put into three or four categories, in the Schedule. Otherwise, see what is going to happen. Supposing he were to say, "As a matter of fact, under these Regulations, no money is going to pass at all. Almost if not all of them are civil servants, established, very many of them, and those at the highest level are in the Ben Smith age group, and all the rest are already being better employed than they were before." That is the argument—these Regulations do not matter.
If the House accepts that argument, mark what follows. The next time Regulations of this sort have to be brought in, we are going to be told, as we were this evening with respect to the main Regulations, "We have had a long Debate on this before. The House accepted it. We cannot go back on this now. This is the way the thing ought to be done." That will be the conclusion, if the hon. Gentleman's last speech were left without some comment, and that is why I rise to my feet again. Perhaps it is not worth going on with the thing, but I think it is on the whole. Hon. and right hon. Gentlemen opposite do not wish us always to mark our dissent by dividing, with the House composed as it is, and we do not wish always to be forced to divide the House.
§ Mr. Pickthorn
Certainly not; and if not, the duty is the greater upon them to make sure that they have answered any questions and removed any doubts that we have put, as long as we have not unreasonably or factiously put them.
These are distinctions for which we still do not see the reasons. If a man is a member—that is to say, if he corresponds to a director in a great private enterprise concern—he receives a lump sum. Let me pause on that to ask some questions. It will not do to say, "Whether the lump sum is taxable or not is a matter for the Treasury." Of course, in so far as in saying so the hon. Gentleman was rebuking his supporters, the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) and the hon. Member for Houghton-le-Spring (Mr. Blyton), in so 308 far as he was indicating to them that he cannot by Statutory Instrument make something to be taxable or not taxable, as they begged him to do, in so far as that is what he means the constitutional lesson may be useful—though I am sorry to see that neither of the two hon. Gentlemen concerned is here to hear my re-emphasising of the constitutional lesson which the Parliamentary Secretary gave them.
But for any purpose, that argument really will not do. We really should be told now: Does the Ministry of Fuel and Power or does it not, think that in giving these lump sums it is giving sums not liable to taxation? Or does it not know? It is perfectly plain that whether or not this is proper compensation must turn on the question whether it is taxable or not. That is quite plain, and it simply will not do for the Minister in charge to say, "That is a Treasury question which I cannot answer." Of course, he might make a mistaken answer. The Attorney-General might. We know that the Attorney-General habitually gives legal advice to the House, and no doubt nine times out of ten it is right. But it is not binding; it is not legislative; the courts may decide the contrary. I say it is quite ridiculous for a Minister to come down to the House and say, "This is the right compensation, and I cannot tell you whether or not every pound of this compensation is worth a 'quid' or whether it is only worth 11s., or what it is worth." That really will not do, and I think we ought to have an answer to this question. Whichever way the answer is, we ought to be told: Is the result an advantage to members of these boards as contrasted with the officers in their employ? Is it an advantage or is it not? We ought to be told.
Similarly, members need have no qualifying period of service. On the other side there must be at least eight years. Why eight years? Today, the Parliamentary Secretary told us that that was a question which ought not to be asked because it had been settled by him ex cathedra nearly a year ago. But when he settled it ex cathedra nearly a year ago the only argument he gave for saying that it ought to be eight years was that the day before yesterday he thought it ought to be ten years. There was no 309 other argument at all given to us. Perhaps eight years is the right amount, but what we want to know is: Why the distinction? Why eight years on the one side and none on the other? Why on the one side is there to be compensation whether the work was whole-time or part-time, when on the other side the work must have been whole-time? These are things, many of them I think right in themselves, which in the main Regulations were asked for for what were called working directors—I think rather offensively to other directors—of the private enterprise companies. I want to know what is the distinction between the two.
I do not know that I need take the thing further. [HON. MEMBERS: "Hear, hear."] Well, if hon. Gentlemen are facetious I shall take it further. I do not quite understand what hon. Gentlemen opposite do want. Do they think it is wrong and wicked for the Opposition to divide against a Government which has so obvious a mandate? Apparently they think that it is trifling for the Opposition to try to argue with a Government so ably represented as it is at this moment. What do they think we are to do? We must be allowed to do one or the other, and if they are not polite when we try to do one, we shall more frequently do the other.
I hope that I have put plainly to the Parliamentary Secretary what are the things we have not understood about these regulations. I do not for a moment suggest that the want of understanding may not partly be our fault. But I do say that it is certainly partly the fault of his original explanation, which was quite useless. His original explanation told us nothing at all which anybody could be expected to gather in the time; and I do not think his second explanation was as lucid an exposition as it might have been. In any case, these are questions which clearly the House of Commons ought to understand before it passes these regulations, and I make this challenge: That there are not two hon. Gentlemen sitting behind the Parliamentary Secretary who could make the answers to those questions. There ought always to be some considerable number of Members of this House who have really understood them before Regulations of this sort go through, which certainly will be prayed in aid in the future by the hon. Gentleman or his successors. 310 That is why I have ventured, even at so comparatively late a stage, to make the intervention I have made.
§ 8.36 p.m.
§ Mr. John Foster (Northwich)
I want to support the plea made by my hon. Friend the Member for Carlton (Mr. Pickthorn) that the Parliamentary Secretary should answer the question about Income Tax. Let us look at the position. On the one side, we have the members compensated by a lump sum, and, on the other, the officers who are compensated by annual sums. The Parliamentary Secretary brought forward a number of arguments to justify that distinction. I am not concerned to say at this moment whether those arguments were justified or not, but implicit in them must be the consideration of whether a lump sum is subject to Income Tax or not.
The Parliamentary Secretary will remember that he said that one of the reasons for the lump sum was that the members were serving only for a short time, perhaps for only two or three years, and that therefore it was apposite to compensate them with a lump sum. If we have to compare that lump sum with the annual payments, we have to know whether the Minister of Fuel and Power thinks that it is subject to Income Tax or not.
I ask hon. Members opposite to put themselves in the position of a member who is listening to this Debate and who is wondering whether the compensation is adequate or not. He is told that the officers are compensated by an annual sum worked out on certain principles which are contained in the 1949 Regulations, and then he turns to the compensation provisions in these Regulations, and he sees that a lump sum is provided. He listens to the arguments of the Parliamentary Secretary and, assuming for the moment that he is willing to compare the two compensations in the light of those arguments, how is he to get on unless he knows whether he is subject to tax or not? How is he to compare the amounts? That is what the House has to do. The member whom I am imagining as listening to this Debate cannot intervene, and it is the duty of hon. Members on both sides to see that the Regulations are fair.
In judging whether these Regulations should be passed or not, we have to 311 judge whether they are fair or not, and how can we judge that if we do not know the answer to the most important practical matter—practical because if we do tax it, it comes out of the member's pocket—of whether he has to pay the tax or not.
§ Mr. Blackburn (Birmingham, Northfield)
The hon. and learned Gentleman is himself, I hope, frequently paid large sums of money for advising on this very matter, and surely, in general, it is accepted that lump sums are not liable to tax and annual sums are. Whatever the position may be, surely it is not within the province of the Minister of Fuel and Power to make a statement on that.
§ Mr. Foster
That was the point I was trying to make. Surely if he comes to the House and says that these two lots of compensation are fair—and I am assuming for a moment that he may be right—annually in the case of officers for reasons A, B and C and a lump sum for members because of reasons X, Y and Z, we cannot compare the two until we know whether it is subject to tax or not.
§ Mr. Foster
The hon. Gentleman says that I know. I would agree with the hon. Gentleman as to whether they are subject to tax or not if it had not been for the principle introduced in the Finance Bill. I agree that it may be an awkward question for the Parliamentary Secretary, and I do not blame him for trying to ride it off by an answer which, as my hon. Friend said, "Won't do." I do not blame him. It is worth trying and it is Parliamentary tactics to say, "I have nothing to do with taxation; put that to the Chancellor of the Exchequer." It is not an answer, however, if one of the factors he has to lay before the House is whether the compensation is fair or not. That is the point. He should find out from his colleagues, and he can obviously quite easily find out. He may now have found out, I do not know. For instance, if there is some information to come from another Ministry to decide whether the compensation is fair or not, the Parliamentary Secretary has to find out and tell the House, because the House has 312 to know in deciding whether the compensation is fair or not.
§ Mr. Blackburn
Was not the only point on this matter that retrospective legislation might at some subsequent stage be introduced, so that whatever the Minister says now will not affect the position?
§ Mr. Foster
Let me sketch the sort of answer the Parliamentary Secretary might have to make. He might have to say that as the law is at present the lump sum is not subject to taxation, that he has asked the Chancellor of the Exchequer and has found out that the Clause, as drafted, would probably or certainly, according to the information given him, make these lump sums subject to taxation. In the light of that, he would say, having had that answer, that he still thinks this is fair, or, having had that answer which he did not know in the drafting of the Regulations, he is going to withdraw and alter them. That is the sort of area in which he ought to make his answer.
Does he realise that if it is subject to taxation, as I expect it is under the new Finance Bill, he deprives certain members, if they have a large individual income, of the whole of the compensation? Does he realise that when he pays a lump sum by way of compensation and it is subject to taxation, he is penalising a person because, even if he has no other income, he is making his bracket larger in that year? Does he realise that if it is subject to taxation, he is saying that members on the one hand are to get larger compensation, but on the other hand that they are to be deprived of it by taxation?
Does he think that if the House is not told, it cap judge whether it is fair, or that it is right for the Parliamentary Secretary not to disclose the information which he must know by now? I can see why it is embarrassing, namely, because he said that he was not going to say so. I judge that when he will not say something that he must know, it is embarrassing. Does not the Parliamentary Secretary see that if it is subject to taxation, it destroys his argument? If he says sotto voce, as I think he does, that he does not think so, he ought to have told the House that compensation for the officers is obviously subject to tax and so is that for the lump sum members. I appreciate he should 313 have added that if a member has an income in the high Surtax bracket, he will not get any compensation at all because the Government think he should not get any, which is why they have given the compensation in a lump sum.
He ought to have told the House what is his idea of justice in compensating these members, and on what basis he justifies paying them a big sum one year, instead of in three years, so that it attracts the larger taxation. If it is subject to taxation, our argument might also have been different. We might have said that we do not want these members to be penalised by being paid a high sum in immediate compensation so that they lose more money, and that we think it fair that it should be spread over the three years they would have been in office, therefore bringing them into line with the officers. On the other hand, if it is not subject to taxation, our argument might be that the officers are not being well enough treated. It is impossible for the House to decide which argument is right until it knows the basic fact whether these amounts are subject to taxation or not. Surely the Parliamentary Secretary sees——
§ Mr. Foster
Surely the Parliamentary Secretary sees that if a lump sum is subject to taxation it makes a difference to the man who receives it.
§ Mr. Foster
He sees that. If we do not know whether this is subject to taxation we do not know whether it will make a difference to the man who receives it or not. The hon. Gentleman refuses to tell us and the House does not know. Does he think it is fair to carry on this matter on the basis that the man who is going to get compensation does not know whether he is going to have it taken away in taxation or not? The compensation is given under the existing law, and we must know what the law is before we can judge of the fairness of the compensation. The hon. Gentleman pretends not to understand because he does not want to 314 give the answer. I challenge him to tell the House whether he knows the answer. He can get up and say, "I know the answer," or "I do not know the answer."
§ Mr. Robens
The simple answer would be that any lump sum would not be subject to taxation unless it falls within the provisions of the Finance Bill.
§ Mr. Foster
The next question is, does it fall within the provisions of the Finance Bill? Will he say whether he knows or whether he does not know? Obviously that is the preliminary matter which we have to go through, but the answer we want now is whether the hon. Gentleman can inform us if this comes within the provision of the Finance Bill as drafted. Can he give us the answer? Again I challenge him to get up and say, "I know the answer to that," or "I do not know the answer."
§ Mr. Foster
The Parliamentary Secretary thinks that that question is like "Have you finished beating your wife?" It is quite a simple question. The Parliamentary Secretary reminds me of the boy who came home and said, "I have got into the police force," and the father said, "It is incredible, you never passed an examination in your life." "Oh yes, I did," replied the boy, "and I got 50 per cent." "That is extraordinary," answered the father, "how did you do it?" The boy replied, "They only asked me two questions." "How lucky you were," said the father. "What were they?" The lad answered, "They asked me what was the capital of England, and I said 'Paris' and that was wrong. I lost that one. The next question they asked me was, 'Where is Bristol.' I said, 'I do not know,' and that was right, so I got 50 per cent."
The Parliamentary Secretary is asked a simple question and he does not know the answer, or he does not want to tell us whether this compensation will come or will not come within the provisions of the Finance Bill as drafted. That question is vital to the man who is going 315 to get compensation, and very vital to the House, which has to try to see whether compensation is fair or not. Hon. Members opposite are surely concerned with whether compensation is fair. [HON. MEMBERS: "No."] But I assume they are. In deciding that they must have regard to the law as it is intended by the Government at this moment. Of course, they say, "We will never bring in legislation to make similar things taxable." We hope so. We hope that although it is not taxable now they will not tax it in five years' time retrospectively. I do not put that past them.
It is for the Parliamentary Secretary to say, "In my opinion and upon my information the lump sum does—or does not—come under the provisions of the present Finance Bill." I say that he must either know or have heard the answer, or he has not. He will not say so. He could get up easily and tell us. I do ask the Parliamentary Secretary—[An HON. MEMBER: "Repetition."] I agree that to a certain extent it is repetition, but it is needed in the interests of fairness.
§ Mr. Blackburn
On a point of Order, Mr. Deputy-Speaker. The hon. and learned Member for Northwich (Mr. Foster) is most distinguished for his advocacy. I am sure he knows perfectly well that he has been repeating his argument for about 20 minutes. Is it in Order for him to challenge us to answer a question in the way that he is doing?
§ Mr. Deputy-Speaker (Major Milner)
I did not gather that from the hon. and gallant Gentleman, but I did gather that he was drawing to a close.
§ Mr. Foster
You are quite right, Sir. I was saying that I admit that there has been a certain amount of repetition. I do not apologise for it, because the Parliamentary Secretary ought to have got up. It is in the interests of the House that he should give us a clear answer.
§ 8.51 p.m.
§ Mr. Henry Strauss (Norwich, South)
I have no desire whatsoever to continue this Debate if the Parliamentary Secretary will get up and give a reply to a question to which it is vital that the House should have an answer before it 316 comes to a conclusion on the merits of these Regulations. I imagine that if he does not get up there will be several Members who will wish to address the House. I wish merely to put a question to him in a slightly different form from that in which it was put by my hon. and learned Friend the Member for Northwich (Mr. Foster). Perhaps it will make it slightly easier for the Parliamentary Secretary, whose mind we do not wish unnecessarily to strain.
It is clear that the proposed sum cannot be fair as compensation, both if it is subject to taxation and if it is not subject to taxation. It cannot be fair in both cases because taxation will make an enormous difference to the compensation. I ask the Minister to answer this simple question: Will the sum provided under these Regulations be fair compensation on the assumption that it is to be taxed, or on the assumption that it is not to be taxed? If I yield, will the Minister answer that question?
§ Mr. Robens
I should think that any arrangements made under these Regulations, whether they are for lump sums or not lump sums, will be fair and equitable ones.
§ Mr. Strauss
I am grateful to the Parliamentary Secretary for attempting to answer the question, but he will have to try again. If he will think over his answer a little he will see that it is not quite good enough. While the sum awarded as compensation will no doubt be intended to be fair, it cannot be fair both on the assumption that it is taxable and on the assumption that it is not taxable. It can only be fair on one of those two assumptions, the assumptions being contradictory.
§ Mr. Robens
On a point of Order. I would submit at this stage, with great respect, that this Debate is becoming a farce. [Interruption.] Don't pull it; it's long enough already. In my view the Debate is not reflecting credit on the House. [HON. MEMBERS: "Oh," and "Breach of Privilege."] I would like to put this point to you, Major Milner, that all the discussion about the effect of taxation upon the arrangements made under these Regulations is out of order. I suggest that the argument that the incidence of taxation makes the compensation fair or unfair is also as out of Order as it 317 would be to argue that the salary of a Member of Parliament—the salaries are equal for all of us at £1,000—is either the right or the wrong salary according to the amount of Income Tax which we pay, and which is determined by other things. I suggest that the incidence of taxation upon the Regulations, which are only aimed at assessing a sum, has nothing whatever to do with the question.
§ Mr. Geoffrey Lloyd
May I suggest, Mr. Deputy-Speaker, with respect, that you do not require the advice of the hon. Gentleman on a point of this nature—[HON. MEMBERS: "It was a point of Order."]—and that this incident would not have been necessary if the hon. Gentleman had conducted the business of his Department in a less provocative manner.
§ Mr. Deputy-Speaker
I do not think that I can rule a reference to taxation in a matter of this sort out of order, but I would point out that there is a Standing Order which refers to tedious repetition and that the Chair might feel it necessary to bring that into operation if there is such repetition.
§ Mr. Strauss
I respectfully submit to your Ruling, Mr. Deputy-Speaker. That was the very submission that I was about to make. Before the hon. Gentleman put his point of Order I was thanking him for having intervened and for saying that the compensation to be awarded would be fair, but I was saying that his intervention was not good enough to allay our anxiety.
We are not debating any question of taxation. What we want to know is the meaning of something in these Regulations. However much he may desire—I give him credit for desiring—that the compensation shall be fair, it is quite impossible for him or anybody else to know whether it is fair unless he knows the vitally important fact, whether it is to be taxed or not. That must be material in deciding whether it is fair. The Minister has had time to take advice and find out what the Government's intention in the 318 matter is. I do not want to repeat the question asked by my hon. and learned Friend and so I will put it differently. I ask the Minister categorically to answer this question: Does he think that the lump sum provided for under these regulations is fair on the supposition that it will be taxed or that it is fair on the supposition that it will not be taxed?
§ Mr. Bracken
Would it be in order, Mr. Deputy-Speaker, to move the Adjournment of the Debate on the ground that we might secure the attendance of the Minister? I am not accusing the Parliamentary Secretary of being mute through malice; he is merely mute through ignorance. He has told us that he does not understand these regulations. No doubt his superior does. If we could get the Minister or the Attorney-General here, it would be of great advantage to the House. I rather think, Mr. Deputy-Speaker, that you may think that this proposal for the Adjournment is not quite in Order. It is certainly not frivolous but it may not be quite in Order, so I leave myself in your hands.
§ Mr. J. Foster
On a point of Order, Mr. Deputy-Speaker. Should the Parliamentary Secretary say to one of my hon. Friends about some part of his anatomy that he should not pull it because it is long enough? Surely that is a very un-parliamentary thing to say. I am sure that the Parliamentary Secretary, instead of laughing at it, will withdraw it.
§ Question put, and agreed to.
That the Draft Electricity (Commissioners and Others) (Compensation) Regulations, 1950, a copy of which was laid before this House on 16th December, 1949, in the last Parliament, be approved.