§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]
§ 10.2 p.m.
§ Mr. David Griffiths (Rother Valley)
I am raising this debate on the Adjournment because of the reply I received from the Minister of Pensions and National Insurance on 26th March, namely, that when a person resumes work after a period of unemployment or sickness he has to work a fortnight before he receives any remuneration, particularly in industries which keep a week's wages in hand.
Under the Act of 1948, and previous Acts, we have remedied the ill effects and removed the taint of the old Poor Law, but I am still concerned with the method which is being applied by the National Assistance Board when a man resumes work in these circumstances. The Board gives the man a note to take to his employer to receive an amount of money on loan to tide him over until he receives his week's wages. In other words, he has a fortnight's wait before he receives any money. A fully capable man is not entitled to assistance, but he can get it for his wife and family.
I ask the Minister to reconsider this matter. I am worried about our lower-paid men. Much more consideration ought to be given to this matter than is being given at the moment. When replying to my Question, the Minister said:The arrangement which the hon. Member has in mind operates only in cases where the men concerned have wages already due to them. No question of a loan therefore arises."—[OFFICIAL REPORT, 26th March, 1956; Vol. 550, c. 1754.]That is a contradiction in terms. He has to wait a fortnight for his wages, and they are not wages until he receives them.
1580 A man on low wages may have been out of employment through sickness or infirmity for a considerable time, and at the very time he wants extra nourishment he has to go to his employer for a loan of £3 and then has £3 deducted from his first week's wages. His National Assistance ceases immediately he starts work and he has about £3 to carry him over the first week and until he draws wages on the second Friday after commencing work. That applies in the majority of cases where men are employed on a week-to-week basis and wages are kept a week in hand. It means that a man on a low rate of wages works for two weeks for little more, if any more, than he had been getting from National Assistance.
I accept that this is a very old and difficult problem. It still has the taint of pauperism. The Minister may say that this arises under an Act of the Labour Government, but I respectfully suggest that if we made a mistake it is up to the Minister to rectify the anomaly when he sees it. This is an injustice which could be put right by the Minister and the Assistance Board through regulations, and I beg the Parliamentary Secretary to ask her right hon. Friend to reconsider the matter and allow it to be investigated.
I realise that many men are getting good wages and I am not appealing for them, but I submit that for ordinary labourers working for local authorities, or agricultural workers or colliery surface workers, all on a very low rate of wages, it is unreasonable to expect them to maintain themselves for two weeks on one week's wages. I hope that the Minister will reconsider the question.
§ 10.8 p.m.
§ Mr. J. K. Vaughan-Morgan (Reigate)
The hon. Member for Rother Valley (Mr. D. Griffiths) has raised this difficult matter in a very restrained manner and I will certainly endeavour to follow that manner, although I take entirely the opposite view—a point of view which, I think, is equally reasonable.
This is a long-standing difficulty in industry. In a way, I speak from the other side of industry. The custom has grown up, now that wage calculations are so complicated, that a week's wages are held in hand to the end of the second week of a man's employment. That is inevitable 1581 with complicated wage rates and the various calculations which are necessary. But the fact still remains that the wages which are kept in hand are that man's own money. It may be that by agreement it is necessary to hold it back for a week so that when his employment eventually ceases he has two weeks' wages to draw, but I still maintain that when a man has been employed for a week it is wrong that he should be forced to go to National Assistance instead of receiving from his employer a substantial sum in subvention of what is his own money.
§ Mr. D. Griffiths
Do I take it that the hon. Member agrees that the man should be penalised in the first fortnight? It is true that a week's wages are kept in hand, but on this basis the man has to wait a fortnight. He is, therefore, suffering an injury at the commencement of illness and inconvenience when he begins work.
§ Mr. Vaughan-Morgan
I see the point that the hon. Member has in mind, but the principle is still the same. What matters is that the lower the wage, the higher the proportion the man ought to be able to receive in subvention, so that the sooner he can be taken off Assistance the better.
I hope that when my hon. Friend replies, she might be able to give facts and figures as to the amount involved. I looked into this question some years ago and was astonished at the amount of money which was being spent on Assistance, in my view wrongly and unnecessarily, because there are still—more shame for them—some employers who are not prepared to hand out to a man at the end of his first week's work what I call his own money.
§ 10.11 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Pensions and National insurance (Miss Edith Pitt)
As the hon. Member for Rother Valley (Mr. D. Griffiths) said, this is not a new problem. It has been going on for some years. I should not mind a shilling for every note I have signed authorising a man to draw a "sub" on the week's wages held in hand for him. It is, however, an advance on wages due to him. That is the first point that we ought to get quite clear.
The hon. Member has referred again tonight to a loan, as he did when my right hon. Friend replied to his Question on 1582 26th March, but it is not a loan. When a man has done a week's work, and his employers hold a week's wages in hand, the money is that man's due. The "sub" that he asks for is against pay which is due to him. We ought to be quite clear that we are not talking in terms of a loan from the employer.
§ Mr. D. Griffiths
The hon. Lady is splitting hairs. What is the difference between a loan and a "sub"? Is the "sub" not a loan?
§ Miss Pitt
No. A "sub" is a subvention against money due, and the man concerned is entitled to that money.
As my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) has just said, when a man leaves work, if he has been working for a firm which holds a week's wages in hand, he will have two weeks' money to come. To pursue it to its logical conclusion, when the man eventually retires from work, he has two weeks' pay to come—despite the fact that he gets his retirement pension at once. It cannot, therefore, be described as anything other than an asset, an amount of money in hand, to which the man is rightly entitled, and upon which he draws by way of subvention when he resumes work.
§ Mr. Griffiths
The hon. Lady is mentioning an entirely different case. The person who will draw an old-age pension applies for it months ahead. The man of whom I was speaking, who is either unemployed or sick, is in an entirely different category.
§ Miss Pitt
The hon. Member, I think, is still not clear about the point I am making. Money in hand can never be described as other than money in hand. Whether a man draws it at the end of his first week's work, or goes on working for another forty years until he draws retirement pension, it is still his money. Eventually, he will receive the whole of it. The employer has no claim to it. When the man himself asks for a "sub," he knows that he is claiming against money due to him. We should not talk about a loan, but about an advance on wages due.
The hon. Member is concerned about the necessity for National Assistance at the end of the first week in which a man starts work after sickness, unemployment or strike action. In industry, it is fairly 1583 common for employers, particularly large employers, to hold a week's wages in hand. For this reason the wages earned in the first week are often not paid until the end of the second week.
It has always seemed wrong to the National Assistance Board that public funds should be expended solely because a man cannot get the money he has undoubtedly earned. This does not arise where payment of wages is made in the same week. Small employers can usually do that because it is administratively easier for them, as they have no big wage accounting machine. It does not arise where a man starts work with a firm which pays at the end of the same week. That is a point which we ought to bear in mind. So there is no question of calling upon public funds to help a man in such an instance, if he is drawing his money at the end of the first week.
Even allowing for all the complications of modern wage accounting, to which my hon. Friend the Member for Reigate referred, the Board has not been able to see why an employer who follows the practice of paying wages in arrears, should not be ready, when necessary, to make advances against wages already earned.
Briefly, that is the history of this situation. The Board first expressed concern publicly about this matter in its annual Report for 1949. The Comptroller and Auditor General also drew attention to it in his Report on the Board's Appropriation Account for 1952, and there have been other criticisms about the amounts paid in that way. In 1952, the then Minister of Labour and National Service agreed to the position being discussed by his National Joint Advisory Council, which comprises representatives of employers and trade unions. The Council supported the view of the Board, that the solution lay in persuading employers to make advances in appropriate cases, and it agreed to the British Employers' Confederation advising its constituent bodies to do so. Since then, I am glad to say, there has been an increasing readiness on the part of employers to make such advances.
It is my own experience—I have had some experience as a factory welfare officer in Birmingham—that most 1584 employers are willing to give a "sub" when a man genuinely wants it. It is quite often discussed—this is my personal experience when a man is signed on at work. He asks the question, "What shall I do at the end of a week?" or the employer makes a statement saying that he will keep the money in hand. Then it is immediately agreed, usually on the Monday morning when the man begins work, that if he calls at the personnel department on the Friday he can have a "sub" against wages due to him at the end of the first week's work.
I know that many employers had such a system in operation long before the official approach was made in 1952. The extent to which it has grown since is shown by these figures, which, I hope, will answer the point made by my hon. Friend. A count taken in a week in November last showed that 2,900 payments of Assistance were being made in these circumstances at a cost of £6,700. That compares with nearly 7,000 payments at a cost of £10,000 in a week of 1949.
I want to make quite clear the fact that the Board and its officers always endeavour to be reasonable in the application of this system. An advance is never suggested except against wages actually earned. The Board's officers know that the man has money due to him. To remove any difficulties about asking for a "sub," the Board's own officers usually take the initiative in approaching employers to make such an arrangement where it is known not to exist. Where it does exist, there is no need for the Board's officers continually to get in touch with a particular firm. If, in fact, they find a firm not issuing "subs," they make the approach themselves, thus relieving the man of any difficulty.
If it is argued that hardship may be caused in the second week by not having a full week's pay—and I think that that is part of the argument the hon. Member has advanced—I would say that that is not often the case in these days of very high wages. In any event, many employers spread the adjustment over two weeks or more. I am referring here to "subs", that being the regular expression, though "subventions" is, I suppose, the proper word. As I say, the "sub" does not have to be deducted from the 1585 end of the second week's pay packet; quite often the adjustment is spread over two or more weeks. Certainly, from my own experience, the usual period in the company for whom I used to work was four weeks. That was fairly general in the Midlands. Surely that removes any suggestion of hardship where the wage packet is not very high.
If the hon. Member for Rother Valley knows of any case where the payment for the second week is so small that the man would be worse off than when drawing National Assistance, as I remember he suggested in his supplementary question on 26th March, perhaps he would let my right hon. Friend have the details so that the Board can look into it. That applies equally to any other case where hardship may be caused by this procedure, although in fact it is believed to be working well. I think it is not unfair to suggest that a man should seek advances on his wages in this way.
Since the hon. Member referred to an anomaly, I think that here is one, and an occasion where unfairness could arise. A man who starts work with a firm which pays at the end of the first week has no title to National Assistance. He would not even apply for it. Yet, compared with a man who draws National Assistance after his first week at work because his firm keeps a week's wages in hand, he is less well off. The latter is, in effect, drawing two payments. I think we should be quite clear on that, because that is where an anomaly and a certain unfairness could arise between one workman and another.
We ought also to remember that National Assistance is public money which is generally not recoverable. There are always those, fortunately a minority—and I expect the hon. Member is in accord with me here—who try to claim on public funds rather than help themselves.
§ Miss Pitt
That is my own experience. I am sorry to say that it applies especially to immigrants from various countries. They come to the personnel department at the end of the first week and ask for a note to the Assistance Board so that they may be given a grant. It is explained to 1586 them—I have often done it myself—that there is no need for that. They are reminded that when they started they were told that the firm was perfectly willing to give them a "sub" against the week's wages held in hand. That would carry them on and pay their lodging money and other expenses until they drew their full pay. But the answer comes, "Oh, no; the 'sub' has to be repayed, but National Assistance is a grant". Some people who come to this country are extremely well versed in the operation of our social services. They give no thought to the fact that it is their mates—the men they work alongside—who contribute through taxation to the maintenance of these public funds. Indeed, that is, I suggest, a point which we all ought to have in mind.
It is my experience also that the majority of workmen prefer to stand on their own feet. If they cannot manage on what they have in hand, they would rather claim what is rightly theirs, by means of a "sub" from employers on wages in hand than go on National Assistance. In fact, it does not occur to them to claim National Assistance, though I am sure that they would not grudge it to those really in need.
I repeat that the Assistance Board believes, and I believe, that the principle that workmen should draw on wages which they have earned, rather than on public funds, commends itself to public opinion. But the Board wants to emphasise that it does not apply this principle rigidly or lay down hard-and-fast rules. Where, for any reason, an advance cannot be made of a sufficient amount to meet a man's needs, or where his wages are not likely to be substantially in excess of his needs by Assistance standards—and this I think would take care of the lower-paid men who are the concern of the hon. Member for Rother Valley—Assistance would not be refused.
The Board endeavours to be reasonable, and to administer fairly the public funds for which it is responsible. The figures quoted earlier show the success it has achieved and answer criticism from two entirely opposed points of view. The fact that there has been a reduction from 7,000 payments a week in 1949 to 2,900 a week in November last year—a quite considerable reduction—should answer those who say that there should be no payments in 1587 these circumstances and that money is disbursed too easily.
Equally, I believe, the same figure of 2,900 payments still being made should remove any doubt that real hardship is not being met. I think that the Board administers this matter with common sense. If the hon. Member for Rother Valley knows of cases where he feels hardship is caused, my right hon. Friend 1588 or I would be very glad to look into them for him, but I believe that both the hon. Member, and my right hon. Friend the Member for Reigate will agree that the Board is endeavouring to be reasonable and fair in this matter.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-eight minutes past Ten o'clock.