Orders of the Day — Unemployment Benefits (Isle of Grain)

– in the House of Commons at 12:00 am on 3rd February 1977.

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Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Ann Taylor.]

11.30 p.m.

Photo of Mr John Ovenden Mr John Ovenden , Gravesend

I am grateful to you Mr. Speaker, for the opportunity to raise the problem of the hardship caused to my constituents in this dispute. I am grateful to the House for giving me the opportunity of raising the issue at a relatively civilised hour; I have fared much better than have many of my hon. Friends in recent weeks.

It is my intention to try to demonstrate how the unemployment benefit system can, on occasions, be cumbersome and inefficient, and how its shortcomings can lead to considerable hardship for the people involved.

The events at the Isle of Grain power station, involving the employees of the sub-contractor Babcock and Wilcox, clearly demonstrate the failings of the system and the serious circumstances that have caused tremendous suffering to my constituents and those of hon. Members for neighbouring areas.

I do not intend to deal with the merits of the dispute or of the unemployment claims, but in order to put the issue in perspective, I must go over the timetable and the facts.

In April, at the Isle of Grain, there was a dispute between Babcock and Wilcox and its employees over the firm's refusal to supply protective clothing for employees working with a substance known as Rocksil. Between 27th May and 15th June, 28 men were dismissed for refusing to work with the substance without protective clothing. On 15th June, there was a general withdrawal of labour by the trade unions involved with the firm.

On 30th June, the firm dismissed all 928 men employed on the site. In the meantime, an investigation by the Factory Inspectorate concluded, on 13th May, that Rocksil was an irritant, and, following a visit by the industrial hygiene unit on 21st June, an order was made on 1st July that overalls should be provided for workers engaged in dealing with Rocksil. Despite that, the dispute continued; first, over the payment for the overalls and, secondly, on a much wider issue.

Claims for unemployment benefit were submitted by the men almost immediately and they were refused on 6th July because then it was claimed that they had been involved in an industrial dispute. Appeals were lodged within 21 days of that decision by solicitors acting on behalf of the men and a local tribunal was held on 22nd September—eight weeks after the original claims had been made. That inquiry was adjourned because it was impossible to arrive at a decision and hear all the evidence on one day. It was not reconvened until 10th November—one month and three weeks later. This is one point on which the people involved deserve an explanation. As far as I can ascertain, the people who served on that tribunal were not involved with any other tribunals during those free weeks, so I can see no reason for the delay.

The tribunal eventually upheld the claim for benefit on the ground that the men were involved in a safety dispute and not an industrial dispute. The decision was notified by the tribunal on 17th November and it was not until 8th December—the last possible day for an appeal to be made—that the insurance officer submitted an appeal to the National Insurance Commissioners. The hearing has been fixed for 24th February—eight months after the claims were originally made. During that time, the men have received no unemployment benefit.

I have been told that the hearing was fixed for 24th February because this is a special and urgent case. Can the Minister tell me how much longer we should have had to wait if it had not been a special case? What is the general delay in such appeals?

There is another aspect to the appeal; 170 men who submitted claims did not have them dealt with by the union solicitors and were not advised of the decision on the claim until 10 December. Can the Minister explain why that happened?

The dispute was resolved eventually and there was an agreement on a return to work between Babcock and Wilcox and the trade unions involved. That agreement was reached on 17th December, but, unfortunately, a power station site is not the same as a factory. If it were, the men could have returned to work that day, or after the weekend, but when a power station site has been closed for a long period a lot of safety work has to be done before the men can go back. There has to be a phased return to work, and this was achieved between 4th and 17th January.

The fact that the delay was due solely to the physical conditions on the site seems to have been ignored by the insurance officer, who maintained his refusal to grant unemployment benefit up to 15th January and informed the men that they could submit claims from 17th January—the day by which all the men who were returning had gone back. I would have thought that in the circumstances there was a case for arriving at some compromise in the case of these men, who were no longer involved in the dispute but were not entitled to benefit.

Whatever the merits of the dispute and whatever the argument whether or not it was an industrial dispute, it can be claimed that by 17th December the dispute was over. But there were 400 men who were not re-employed because there was an agreement that the labour force employed by Babcock and Wilcox would be reduced. But they were denied benefit payment up to 17th January, despite the fact that they were in receipt of dismissal notices from the company dated 10th January. That is one of the most farcical parts of this fiasco.

It is not possible in a short debate to deal with all the cases that have come to my attention and to the attention of other hon. Members involving hardship for these people, but I am sure that we can supply the Minister with quite a few cases of suffering and hardship. These men were denied not only unemployment benefit but social security, except at a reduced level for their dependants. For those living alone there was no benefit. In cases where both the father and the son were employed by the same firm and the mother was engaged in part-time work which took her above the supplementary benefit level the family were denied any extra benefit, and all three adults had to live on the part-time earnings of the mother. That was a situation more reminiscent of the family means test of the 1920s and 1930s than of a sophisticated social security system that we claim to have today.

We cannot ignore the fact that in this dispute, unlike many industrial disputes, the period involved was not very short. People can be asked to make sacrifices over a couple of weeks, when they are living on reduced benefits. They can defer the purchase of certain items and draw on their savings. But this situation lasted for seven months, for which time the people concerned could not, by any stretch of the imagination, maintain a decent standard of living. They were forced to live at a level below that which the State has decreed is the minimum subsistence level.

There is in the Social Security Act a certain Section 11, which deals with hardship and which gives power to the Supplementary Benefits Commission to make payments to people on grounds of hardship, notwithstanding anything else contained in that Act which disqualifies them. It appears that that section was hardly used in the case of the men to whom I am referring. At no time was any effort made to advise them of their rights under Section 11. I want the Minister to tell us not only how that section of the Act is used but how it can be applied in cases such as this.

Those who received supplementary benefit in respect of their relatives were in many cases disqualified from benefit for six weeks partly because their earnings had been paid by the firm, but those earnings included a large measure of holiday pay, which in the construction industry is a form of enforced savings. Had that money been saved by the men it would have been regarded by the DHSS as capital and would not have been taken into account in the calculations for supplementary benefit. We need to make a fairer dividing line between capital and income than seems to have been the case in this dispute.

In this dispute the national insurance system has failed in its role of providing financial support for those in need. It has proved a cumbersome and ineffective fiasco, which has condemned hundreds of men and their families, in my constituency and other constituencies, to a long period of hardship. It has made them, understandably, feel bitter and resentful.

On 11th January, at Question Time, I raised the question of delays in settling appeals for unemployment benefit in hardship cases and I received the following reply: In general, I am not aware of any delay in settling appeals which is causing people to suffer unduly."—[Official Report, 11th January 1977; Vol. 923, c. 1241–2.] Those words will have a very hollow ring for the 900 men involved in the dispute.

I believe that there were unacceptable and unjustifiable delays, first, in reconvening the adjourned local tribunal—which took many weeks from the date of the adjournment—secondly, in the time taken by the insurance officer to decide on his appeal—he waited until the last possible day to lodge it—and, thirdly, in the time up to the hearing before the Commissioners—eight months.

I do not believe that the degree of urgency justified by the number of people involved and the hardship that they were suffering was properly recognised. If it was, I dread to think of what happens in cases where no urgency is applied.

The decision to withhold benefit after the agreement to return to work on 17th December was a cruel and unjustifiable addition to the men's problems, and one in which the appeal machinery was not really relevant, because of the time factors involved. Since the men were involved in a dispute over their original claim, they could hardly be expected to lodge another appeal and go through all the machinery over the extra two weeks for which they were denied benefit.

The delay in return to work was, as I said, due entirely to the site conditions, and, irrespective of what view was taken of the nature of the dispute, the dispute was over by that time.

It seems to me that the regulations fail to define clearly when a dispute is ended. It may be difficult to arrive at a clear definition applicable in all cases. If it is, I believe that the responsibility for deciding when a dispute is over should be transferred from the insurance officer to the Secretary of State for Employment, who has within his Department resources to make a proper analysis of these situations.

The present national insurance system seems to me to place too much power in the hands of the insurance officer and too little in the hands of Ministers accountable to Parliament. This seems to leave Members of Parliament powerless to represent the interests of their constituents, and can only lead to disillusionment and cynicism towards democratic politics.

I urge my hon. Friend to investigate the possibility of changes in the regulations which would give the Government and Parliament real power to help the people whom we are supposed to represent. First, there should be power for the Secretary of State to take a direct role in speeding up the hearing of appeals where delays occur and where his intervention is requested. Second, I believe that claimants affected by excessive delays in settlement of their claims should have a right of appeal direct to the Secretary of State where they prefer the Secretary of State to determine the matter.

Third, the system must be speeded up generally by a reduction in the 21 days allowed to the insurance officer to appeal against tribunal decisions. Since the decision to appeal can cause severe hardship to people awaiting benefit, there is a powerful case for restricting appeals by the insurance officer against local tribunal decisions. There may be a strong case made for laying down certain criteria upon which the insurance officer may appeal and saying that on no other criteria may an appeal be lodged.

There may be a strong case also for saying that the approval of the Secretary of State should have to be sought and obtained by the insurance officer before an appeal is lodged. If every decision of the local appeal tribunal is to be open to challenge by the insurance officer, the system of local tribunals can become farcical.

I trust that my hon. Friend can supply answers to some of the points that I have raised tonight, and perhaps answer me by letter on others. I want him to give an assurance that he will look closely at the whole system and the way that unemployment benefit and the appeal machinery functions, bearing in mind the hardship which is caused. I hope also that he can give an assurance that the Government will closely investigate the delays in the machine and, together with the National Insurance Commissioners, try to improve a system which has proved to be ramshackle, inefficient and a cause of major suffering to many people in disputes.

11.44 p.m.

Photo of Mr Eric Deakins Mr Eric Deakins , Waltham Forest Walthamstow

I am grateful to my hon. Friend the Member for Gravesend (Mr. Ovenden) for the way in which he has put his case. I can well understand the forcefulness with which he spoke. For some considerable time, my right hon. Friend the Minister for Social Security and I have been well aware of the concern that is felt by my hon. Friend in particular and by other hon. Members on behalf of those of their constituents who have been adversely affected by the dispute at the Isle of Grain power station site.

My hon. Friend has raised this matter previously with my right hon. Friend in correspondence in November. There was a meeting between him, my hon. Friend the Member for Thurrock (Dr. McDonald) and my right hon. Friend the Minister for Social Security towards the end of November, and my right hon. Friend wrote him a further letter of explanation shortly afterwards. I can therefore tell the House and my hon. Friend's constituents that my hon. Friend has been assiduous in working on their behalf.

I welcome this opportunity to explain the working of the unemployment benefit system in this rather difficult and complex case. On 15th June 1976 about 950 workers employed on the site by Babcock and Wilcox Ltd. withdrew their labour following a dispute over the provision of, and payment for, protective overalls for those working in excessively dusty conditions. These workers were later issued with dismissal notices, to take effect from 30th June 1976, and many subsequently claimed unemployment benefit. Claims were also made by employees of other firms affected by the stoppage, and I shall come to those later.

On 7th July 1976—three weeks after the original dispute started—the insurance officer concerned, operating as the first of the independent adjudicating authorities, considered test claims covering all types of worker affected by the dispute. He decided in each case to disqualify the claimants from receiving unemployment benefit. Whatever one might think about that decision, it was taken in good faith and in good time. No one can complain about the time. This was done under Section 19 of the Social Security Act 1975, which at that time provided that a person was disqualified from receiving unemployment benefit if he had lost employment because of stoppage of work due to a trade dispute at his place of employment unless he could prove that he himself was not participating in, or financing, or directly interested in, the dispute and, further, that he did not belong to a grade or class of workers any of whom were so participating, financing or directly interested. Several of the test claimants subsequently appealed against the insurance officer's decision, and appeal cases were prepared and forwarded to the Chatham local tribunal on 13th August 1976.

Nobody could say that there was any undue delay there. It takes time to prepare an appeal. The unions involved had to consult their legal advisers.

I now come to the crux of my hon. Friend's case. Four test case claimants and four individual claimants, were involved. The main unions involved were the Amalgamated Union of Engineering Workers (Engineering and Construction Branch) and the Amalgamated Society of Boilermakers, Shipwrights, Blacksmiths and Structural Workers. Other people affected were members of the Union of Construction, Allied Trades and Technicians; the Transport and General Workers' Union; General and Municipal Workers' Union; Electrical, Electronic, Telecommunications and Plumbing Union and the National Association of Sheet Metal Workers, Coppersmiths and Heating and Domestic Engineers. Others may also have been involved.

Because of the number of parties involved in the appeal—a solicitor was also involved—and the difficulty of finding a date that was convenient for all con-concerned, the hearing, which would normally have been convened within two or three weeks, was not held until 22nd September 1976. On that date the local tribunal sat from 2.15 p.m. to 6.20 p.m., when proceedings were adjourned.

In view of the complexity of the case, it was clearly necessary to recall the same tribunal for the resumed hearing, and this together with the recurrent problem of finding a mutually convenient date for all the parties involved in the appeal, led to the hearing not being re convened until 10th November 1976. That was a delay of about eight weeks after the first part of the appeal was taken.

On this occasion the local tribunal completed its work and gave decisions allowing the appeals in every case, on the ground that the stoppage of work was due not to a trade dispute but to a dispute concerning the Health and Safety at Work, etc. Act, 1974.

Payment of the unemployment benefit to which the appeals related was, however, suspended under the Social Security (General Benefit) Regulations 1974, as the insurance officer had, within the required space of 21 days, given notice of appeal to the National Insurance Commissioner against the decision of the local tribunal.

My hon. Friend has criticised the insurance officer because he left it, so to speak, until the last day before entering his appeal. With respect to my hon. Friend and those who may share his views, this was a very complicated legal matter, involving not merely the normal legislation, namely, the Social Security Act 1975 and the regulations associated therewith, but also the Health and Safety at Work etc. Act 1974.

The insurance officer had to prepare the grounds of the appeal. I have with me the case that the insurance officer stated for the benefit of the commissioner. My hon. Friend may have seen it. There is no secret about it. I have read it through. Many cases are quoted. It is rather like a legal case stated. In fact, it is a legal case stated, basically, under the terms of the National Insurance Acts. It is very complicated, and obviously it took some time to prepare. I do not think that we should in any way hold the insurance officer to be at fault for having taken time fully to prepare his case, because of the complications involved.

This was not the normal case of a trade dispute. It was a complicated case, involving considerations of whether there was a trade dispute and whether the Health and Safety at Work, etc. Act 1974 was involved, as the original appeal tribunal had held.

The Chief Commissioner's hearing of this appeal has been set for 24th February 1977.

I come to my hon. Friend's point about the ending of the stoppage. Although the original dispute over protective clothing was settled at about the end of November 1976, normal working at the site could not be resumed for a considerable time, and the adjudicating authorities did not adjudge the stoppage of work to have ended until 15th January 1977.

My hon. Friend said that there seemed to have been a great delay, because the dispute had stopped before. Paragraph 17 of the insurance officer's case to the Chief Commissioner states: A stoppage of work at a place of employment ends, I submit, when there is a general resumption of work, or"— as in this case— if the return to work is gradual, when a sufficient number of employees are back at work or are replaced so that the work is no longer being stopped or hindered to any significant extent. Section 19 of the principal Act provides that the disqualification for benefit applies throughout the duration of the stoppage, notwithstanding that the dispute which caused that stoppage may already have been resolved. Thus, although the local tribunal's decision was to remove the disqualification, the effect of the insurance officer's appeal, made within 21 days, was to suspend the payment of benefit, arid this suspension continued until the stoppage ended on 15th January.

If the commissioner upholds the insurance officer's appeal, benefit previously suspended will not be due at all. If however the commissioner agrees with the local tribunal that disqualification is not appropriate, benefit that was claimed during the stoppage and which is otherwise found to be payable will of course be paid. The appeal is, as I have said, shortly to be heard by the Chief Commissioner, and I cannot comment on the merits of the case.

I now turn to those workers on the Isle of Grain site who, although not employed by Babcock and Wilcox, had to be laid off as a result of the original dispute. Unemployment benefit claims from such workers were received during June and July and the insurance officer gave decisions on test claims so that on 22nd July 1976 a memorandum was sent to the unemployment benefit officers concerned advising them to treat as straightforward all claims from employees of firms other than Babcock and Wilcox in certain occupations. Those in other occupations, however, were deemed to be in the same grade or class as the Babcock and Wilcox workers and hence disqualified from receiving unemployment benefit.

Lay-offs from the site continued to increase but, in early November, the insurance officer decided that the non-Babcock and Wilcox employees did not have the same place of employment as the disputants and therefore escaped disqualification. Review decisions on all those already disqualified were given on 22nd November 1976. Those people will have had their unemployment benefit duly paid to them.

I hope that I have given the House and my hon. Friend an idea of the complexity of this case and the working of the unemployment benefit system in relation to it. I think I should add that those claimants who have been denied benefit, pending the outcome of the adjudication procedure, will have been able to claim supplementary benefit for their families although not for themselves. I accept that in that situation there may be hardship. I do not seek to minimise that. The crux of the matter is that the unemployment benefit system, with its three-stage independent adjudication procedure giving scope for appeal and counter-appeal, is fair to the interests of both claimants and contributors generally. Sometimes, however, there is unavoidable delay in finally settling disputed claims, a delay which, in a case as involved as the Isle of Grain dispute—which is the most involved case that I have known in my 10 months in the Department—can last several months.

The adjudicating authorities are, of course, quite independent and could in no way be made subject to ministerial or departmental pressure to expedite procedures. I gear in mind what my hon. Friend has said about examining this aspect. I undertake to give some consideration to the matter and to write to him on the suggestion he has made. The adjudicating authorities try, however, to deal with cases involving possible hardship as speedily as possible.

My hon. Friend will also be aware that, from the first of this month, a person who becomes unemployed because of a trade dispute will no longer have to prove that he is not financing the dispute, and the further provision relating to the grade or class of worker has been abolished. These easements in the disqualification provision have been brought into effect by amendments included in the Employment Protection Act 1975. Whether these changes would have affected the decisions taken in the Isle of Grain dispute, had they been in operation at the time, is something that I would prefer not to discuss so long as the matter is sub judice.

Although I can understand my hon. Friend's concern, I very much hope that the hearing set down for 24th February will finalise the matter and satisfactorily resolve this complex problem.

Question put and agreed to.

Adjourned accordingly at two minutes to Twelve o'clock.