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Unemployment Benefit (Mr D D Williams)

Volume 640: debated on Thursday 11 May 1961

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Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Chichester-Clark.]

10.1 p.m.

During the last half hour I have been feeling very sorry indeed for my Scottish colleagues.

The case which I wish to raise tonight, although a personal case, is an important one in that it introduces grave issues on the position of the courts of law vis-à-vis tribunals and Ministries. It concerns unemployment benefit received by a constituent of mine, Mr. David Dai Williams, two years ago, in 1959. Mr. Williams is aged 33, is living in Wales, and until 1958 had never had any unemployment benefit whatsoever. He worked from leaving school until 1958 and was never unemployed. I say that to show that he is not a man who was continually out of work, but one who had worked since leaving school at the age of 14 until he was over 30.

Mr. Williams is a very quiet man and, in my opinion, essentiality an honest man, one not seeking the publicity which is given to him because of this case, and who has now been in steady employment since March of last year. His only concern at the moment, apart from the question of the money which he is being asked to repay, and his good name, is that he is afraid that the publicity will affect his present job.

What are the facts of the case? Mr. Williams lived in North Wales until March, 1958, when he became out of work, as I say, for the first time during his working life. He had a good many relatives in Leeds, including brothers, and one brother got him a job in the firm where he was working. So Mr. Williams, leaving his wife and two children in North Wales for the time being, went to Leeds to take this job.

When Mr. Williams got there he found that the job had fallen through, but another brother, a Mr. William Evan Williams, who appears in this case a good deal, said that Mr. David Williams could live with him while he found work in Leeds. This brother, Mr. William Evan Williams, from time to time gave Mr. David Williams money which he sent home to his wife and children. This varied in amount. Sometimes there was none and sometimes there were a few pounds. But there is no law against unemployed people accepting gifts of this kind.

The brother with whom Mr. David Williams lived, Mr. William Evan Williams, had a small business concerning the buying and selling of motor cars and lorries, and Mr. David Dai Williams, my constituent, took to helping his brother from time to time, sometimes driving a lorry or a car from place to place. At all times he was available for work and trying to find work. None was ever offered him. He never got any work except on one day, 18th June, 1959, and significantly when he worked on that one day he went to the employment exchange to tell the officials there that he was working, and that he would not be signing on or receiving any unemployment benefit for that day.

In September, 1959, there was some kind of family quarrel. What happened I do not know. But acting on information, a National Insurance officer visited Mr. David Dai Williams. The insurance officer said that Mr. Williams was, in fact, working for his brother and charged him with falsely obtaining unemployment and sickness benefit. It was alleged that Mr. David Williams obtained unemployment benefit to the amount of£89 17s. 10d. from February to July, 1959, and£5 4s. 2d. sickness benefit from 9th July to 20th July, 1959. The Ministry took Mr. David Dai Williams to court and the case was heard at Leeds Quarter Sessions on 11th April, 1960.

I should mention here one small point which does not materially affect the main case, but which comes in a little later. At the time when the court case was pending, the Ministry sent to Mr. David Williams a claim for the repayment of the money, with the usual notice that if he wished to appeal he would have to appeal within 21 days. Unfortunately, Mr. Williams did not ask for that appeal to the tribunal. Naturally, he was upset about the pending court case, and he thought, as anyone would think, that the court case would supersede everything else and that it was not necessary to send in notice of appeal.

At the quarter sessions, the evidence for the prosecution, given by Ministry officials, was quite formal, proving that the man had drawn unemployment benefit. The material evidence for the prosecution was given by one person and one person only. This was Mr. David Williams' brother, Mr. Williams Evan Williams. No defence evidence was called, and the brother—I have said that there had been some kind of family quarrel—was the only material witness.

The jury saw and heard Mr. Williams Evan Williams. The whole case rested on the prosecution establishing its case. No defence witnesses whatever were called. After hearing the case, the jury acquitted Mr. David Williams on both charges. They found him not guilty and he stepped from the court a free man.

I will not go into the inept way in which the case was handled and presented by the Ministry—the fact that there was no solicitor there during the morning and the case was postponed until the afternoon, the fact that witnesses were not available, the fact that the dates were wrong, and the fact—though I suppose this was fair to my constituent—that the material week taken for the case included the date in June when he had worked on one day and notified the employment exchange about it.

Mr. William Evan Williams gave completely conflicting answers in his evidence. His answers in response to counsel for the prosecution were quite different from the answers he gave in cross-examination by counsel for the defence. He admitted, in the end, that his brother had not been employed by him, that his brother had not been his partner, that there were no P.A.Y.E. returns on behalf of his brother and no insurance stamps had been taken on behalf of his brother, that there were no written transactions of any kind and no records of any amounts given to his brother.

There were no tax deductions for the amounts given, although it is worth noting that Mr. William Evan Williams put down for tax purposes£3 a week to his wife for answering the telephone at his home in respect of his business. He said quite specifically in his evidence that he would have given money in any case whether his brother had been doing anything for him or not, and, in fact, he did so, because for some weeks the money was given in that way.

I will read from the transcript of evidence to show the kind of answers which Mr. Williams Evan Williams gave in cross-examination.
"Q. With regard to the amount of money that you paid your brother, did that bear any relation to the amount of work he did? A. No, Sir.
"Q. Had he stopped working and doing odd jobs for you and driving cars for you, would you still have given him something? A. Do you mean if he went looking for work?
"Q. Yes? A. Yes.
"Q. Had he stopped helping you out, would you still have given him a payment so long as he remained out of work? A. Yes.
"Q. You never regarded him as a partner at all, did you? A. No, Sir.
"Q. Not even as an employee, either? A. No.
"Q. It was a brotherly arrangement? He was out of work; you were giving him money to tide him over, and he was doing odd jobs for you until such time as he got a job? A. Yes."
At the end of the case the jury retired. On its return to court this is what was said:
"The Clerk of the Peace: Members of the jury, are you agreed upon your verdict?
The Foreman of the Jury: Yes.
The Clerk of the Peace: Do you find David Dai Williams guilty or not guilty on the first count of the indictment?
The Foreman of the Jury: Not guilty.
The Clerk of the Peace: Do you find him guilty or not guilty on the second count of the indictment?
The Foreman of the Jury: Not guilty.
The Clerk of the Peace: And that is the verdict of you all?
The Foreman of the Jury: It is, Sir".
That is quite clear. Up to this point, I would not blame the Ministry too much. After all, it is the taxpayers' and contributors' money which is paid in unemployment benefit. If there is a prima facie case of fraud, the Ministry has every right to do everything it can about it. The case was presented rather weakly and it was rather inept, but if the Ministry thinks that fraud has been committed then it has every right to prosecute.

However, after the court case on 11th April, 1960, I find the actions of the Ministry extraordinary and inexcusable. I believe that the Ministry said, "We have lost the case in court, but we will show him who is boss and what will happen in the end". Mr. David Williams was acquitted by a jury on 11th April, 1960. He heard nothing from the Ministry for four months until August, 1960, when he was flabbergasted to receive a demand to refund the money which he had obtained, namely, the£89 17s. unemployment benefit and the£5 4s. 2d. sickness benefit.

Mr. David Williams immediately contacted the solicitor who had represented him in the court case. The solicitor wrote to the Ministry in August, 1960, and followed this up with a further letter in October. It was not until February this year, six months after the first letter of the solicitor, that a reply was received, which was to the effect that, because Mr. David Williams had not replied to the Ministry's request in 1959 within 21 days of his intention to appeal to a tribunal, he could not appeal. It took the Ministry six months to say that he ought to have replied within 21 days.

At this point, I took up the case and sent a letter to the Ministry. The reply to it was very unsatisfactory and, therefore, I put a Question to the right hon. Gentleman the Minister of Pensions and National Insurance. As a result of that Question, the man was allowed to appeal to a tribunal, although, in my opinion, it is not the tribunal but the Ministry which should never have asked for this money after the man had been acquitted. In answer to my Question the right hon. Gentleman said that there was a difference between entitlement to benefit and fraud.

I recognise that difference and, therefore, we need not labour that point tonight. I have known of retirement pensioners obtain a retirement pension quite accidentally and without any intention of fraud, but in this case, as I shall show, this does not apply because the grounds on which the man was acquitted in the court were the same grounds on which the Ministry was asking for the return of the money.

I now come to the tribunal in March, when Mr. William Evan Williams was asked to appear to give evidence against his brother, as he originally intended to do when he went to court. Mr. William Evan Williams did not appear at the tribunal and, therefore, it was adjourned until April, when he still did not appear. The tribunal then used the transcript of the evidence of the court case of a year ago on which the man was acquitted and found that he must repay the£89 17s. unemployment benefit, though it said that the£5 4s. 2d. sickness benefit had been obtained quite legally. Therefore, on the same evidence the tribunal came to a quite different conclusion.

It is no use the right hon. Lady saying tonight that fraud is one thing, but a mistake is another. It is clear from the report of what the chairman of the tribunal said, as reported in the Yorkshire Evening Post and from a letter which the right hon. Lady has sent to me, that the tribunal considers that this man got the money knowingly.

The chairman said that the tribunal had to decide whether Mr. Williams acted in good faith when drawing money from his brother while, at the same time, getting unemployment benefit. The tribunal had to decide what was in Mr. Williams' mind when he was drawing unemployment benefit knowing that he was getting money weekly or fortnightly from his brother, whether he regarded it as payment for work which he did for his brother or whether he attributed it to brotherly love.

The right hon. Lady sent me a letter on 3rd May explaining how the tribunal had come to its decision by using the transcript of evidence. She said:
"At the hearing, the tribunal decided unanimously that the insurance officer's decision that Mr. Williams was not entitled to unemployment benefit during the period from 2nd February to 8th July was correct, that his good faith had not been established and that he must be required to pay the unemployment benefit which he had received."
It is clear that the tribunal based its decision not on the fact that the man might have made a mistake over these months that he was drawing the unemployment benefit, but that his good faith had not been established. If I went to court and was acquitted by a jury, one thing above all else which I should consider had been established was my good faith. In this case, however, Mr. David Williams having been acquitted by the court—unanimously, by the jury—the right hon. Lady and the tribunal now say that his good faith has not been established.

Perhaps the Ministry was right to take the case in the first place, but, having lost the case so decisively in court, the Ministry should have accepted that decision. It was bad enough for an honest man to be dragged through the courts in this way. He has suffered not only because of the money that he is now required to pay, but his good name and his good faith are at stake. In addition, he has lost financially, too, because he did not sign on while the court case was pending and he is now out of benefit and his wife will not be able to get maternity benefit.

This has been going on for two years. Mr. David Dai Williams has suffered enough with this case. The Minister will say tonight that she has no power to vary the decision of a tribunal. It seems to me that while Ministers have no powers over tribunals, they have power to vary the decisions of a court of law. Great issues are involved here. The Ministry ought now to drop the demand against Mr. David Dai Williams and call it a day. Having been defeated in court, the Ministry should let the man continue in the work that he is now doing without this threat of having to pay the money and without having his good name smeared in the way in which it has been.

10.18 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance
(Miss Patricia Hornsby-Smith)

I am grateful to the hon. Lady the Member for Leeds, South-East (Miss Bacon) for the clear and forthright manner in which she has put her case. In this matter there are important considerations which the hon. Lady has not appreciated clearly in relation to the authority which comes under the National Insurance Acts and which it is our duty to operate.

At the outset, I must make one point clear. Questions as to the right to benefit under the National Insurance schemes are not matters for decision by the Minister. Under the provisions of those schemes, Parliament has decreed, in the 1946 and subsequent Acts, that these questions are to be decided by independent statutory authorities appointed for this purpose—the insurance officer in the first instance; on appeal, the local tribunal; and thereafter the Commissioner.

It is not within the power of my right hon. Friend the Minister to override these authorities. Where they find that a claimant was not entitled to benefit which he has received, the question whether he should be required to repay the sum which has been overpaid is also one entirely for decision by these authorities and not by my right hon. Friend.

It is due to this fact that I am able to reply at all to the hon. Lady tonight. Had my right hon. Friend the authority in this matter that the hon. Lady seemed to imply, and if the appeal had lain with him, I would have had to seek your guidance, Mr. Speaker, whether it would be in order to discuss the facts of the matter. As the hon. Lady rightly said Mr. Williams has lodged an appeal to the Commissioner, and I must confine myself to the facts of the case as they are known to date.

I apologise for going over some of the ground that the hon. Lady has covered, but our interpretation and hers vary on certain points, and I think that it would be clearer if I set it out in this way. Mr. Williams claimed and received unemployment benefit at the Leeds local employment exchange from 21st October, 1958, until 8th July, 1959, with one short break. He then submitted a claim for sickness benefit to the local office of the Ministry of Pensions and National Insurance and that benefit was paid to him until 20th July, 1959. While he was receiving sickness benefit, information was received at the Ministry's local office suggesting that he was then working with his brother in the business of buying and selling second-hand motor cars and that he had been so working in his brother's business since October, 1958.

It is, of course, a primary condition for the receipt of unemployment benefit that the claimant is unemployed on any day for which that benefit is claimed.

The information received, alleging that Mr. Williams had been working in his brother's business during the nine months during which unemployment and sickness benefit had been paid to him, therefore raised the question whether Mr. Williams had been entitled to the benefit, and the Ministry, quite rightly, as the hon. Lady fairly agreed, investigated these allegations.

Mr. Williams's brother was interviewed on 21st August, 1959, and again on 3rd September, 1959, when he made a statement that the claimant had been working with him in his second-hand car business in various parts of the town from February, 1959, to July, 1959, and that during that time he had paid the claimant in all£183.

He stated that the claimant had worked in his business as a driver and mechanic. The claimant was interviewed on 16th September, 1959. His statement was that he thought that he was unemployed during this period and that if anyone had offered him a job he would have started at once. At no time did Mr. Williams deny, as he put it, helping his brother or being paid by him.

This evidence was submitted to the independent statutory authority. On the same day, the insurance officer concerned with unemployment benefit decided, on the evidence before him that Mr. Williams had not been entitled to the unemployment benefit. His decision was that benefit was not payable for the period in question on the ground that the claimant was then in full-time paid employment in the capacity of driver-mechanic in association with his brother, Mr. W. Williams, and that an overpayment of unemployment benefit amounting to£89 17s. 10d. had been made to Mr. Williams.

The officer interviewed him on 16th September, 1959, and wrote to him on 18th September, 1959.

It then became the statutory duty of the insurance officer to require repayment of the benefit overpaid, unless he was satisfied that the claimant had acted in good faith in all respects as to the obtaining and receipt of the benefit in question. The insurance officer was not so satisfied and accordingly required repayment. Mr. Williams was so informed by a letter on 18th September, and he was then advised, long before the court case arose—the hon. Lady said that he was told of his right of appeal after the court case—of his right of appeal. He was advised that such an appeal should be lodged within twenty-one days.

He was asked, if he did not propose to appeal, to repay the sum overpaid as soon as possible. A warning was included that this demand for repayment was made without prejudice to any other action that might be taken in his case. The insurance officer concerned with sickness benefit made a similar decision in relation to£5 4s. 2d. sickness benefit and that decision, in similar terms, was conveyed to Mr. Williams by letter on 9th October, 1959. Mr. Williams did not lodge any appeal within the prescribed period of three weeks, nor did he make any attempt to repay. The insurance office therefore sent him reminders by letter in October and November. Again he did not reply, or repay.

In the public interest we could not leave the matter there. After further investigations summonses were taken out on 1st January, 1960, charging Mr. Williams with offences under the Larceny Act, 1916. He appeared before the magistrates' court on 3rd March, 1960, charged with two offences under Section 32 (1) of the Larceny Act, 1916, that, with intent to defraud, he obtained from the Ministry of Pensions and National Insurance sums by falsely pretending that he was unemployed whereas, in fact, he had been working as an assistant to or in partnership with his brother, William Evan Williams, trading in motor vehicles. He elected to be tried by jury. After the prosecution's case had been heard, which included evidence by his brother, he was committed for trial at Quarter Sessions. He appeared before Leeds Quarter Sessions on the same charges on 11th April, 1960, and was acquitted, as the hon. Lady rightly said, of a charge of fraud.

There are two distinct issues in cases such as this, and this is the point of conflict with the hon. Lady. The first question is whether he was unemployed or not. If not, the second question is whether he pretended that he was unemployed in an attempt to defraud. While the court acquitted him of the charges it did not, as the hon. Lady infers, rule that he was unemployed at the material time and therefore entitled to benefit.

The charges heard at Quarter Sessions were of obtaining money by false pretences, of which he was acquitted, but in summing up, the Recorder used these words, and I quote from the transcript of the proceedings:
"I have already decided on the submission which was made to you that 'employed' meant doing work for somebody else and getting paid for it. So that if my definition is right—and you must accept it from me—he was doing work for somebody else—his brother."
His acquittal by the court on the criminal charges of false pretences did not in any way effect the decisions given by the insurance officers requiring him to repay to the National Insurance Fund the amount of benefit which they had found he had not been entitled to receive. That debt stood and continued to be recorded as an outstanding overpayment of benefit yet to be recovered.

Nothing further was heard from Mr. Williams and the employment exchange wrote to him again in August, 1960, reminding him of the debt and asking him what arrangements he proposed to make to pay it. Solicitors acting for Mr. Williams then wrote to the Ministry on 24th August, 1960, pointing out that he had been acquitted of the criminal charges and disputing his liability for the debt. The Ministry replied pointing out that the debt arose from the insurance officers' decisions against which Mr. Williams had made no appeal, and again proposals for repayments were invited.

Under the law the position is that the decision of an insurance officer can be varied on appeal by the local tribunal or the Commissioner. The insurance officer may also review an earlier decision that he has given if he is satisfied that that decision was given in ignorance of or was based on a mistake as to a material fact, or he may refer the question of review to the local tribunal. In Mr. Williams's case the time limit for making an appeal had expired but the regulations empower the chairman of the local tribunal to accept a late appeal if he is satisfied that there is good reason for its being made late.

A further letter from Mr. Williams's solicitors dated 28th October, 1960, was, in the first instance, treated as an appeal, in order to help Mr. Williams, and it was submitted to the chairman of the local tribunal whose decision, however, was that it could not be accepted as a late appeal. This is entirely a matter for decision by the chairman of the local tribunal and is not one in which the Minister can intervene. The solicitors' letter was then referred to the insurance officers as an application for review of their decisions in which they had found that Mr. Williams was not entitled to unemployment and sickness benefit during the period in question and had required him to repay the benefit which he had received. The insurance officers concerned decided, as it is open to them to do, not to deal with the application themselves but to refer to the local tribunal for decision the question whether their decisions should be reviewed.

The local tribunal first considered the question referred to them at a hearing on 17th March, 1961. This hearing was adjourned for Mr. Williams's brother to attend and give evidence but he was not willing to do so. A transcript of the proceedings at Leeds Quarter Sessions was obtained, however, and was before the tribunal when they resumed the hearing of the case on 24th April. The transcript included a record of the evidence given on oath by Mr. Williams's brother. At this hearing the tribunal decided unanimously on the evidence before it that the insurance officer's decision on entitlement to sickness benefit should be reviewed and that Mr. Williams was entitled to the sickness benefit received for the period from 9th to 20th July, 1959.

Following this decision, the insurance officer concerned has decided that Mr. Williams was entitled to sickness benefit for a further period from 21st July, 1959, to 4th August, 1959, but at the same hearing the tribunal decided unanimously that the insurance officer's decision that Mr. Williams was not entitled to unemployment benefit during the period from 2nd February to 8th July, 1959, was correct, that his good faith had not been established——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-nine minutes to Eleven o'clock.