Pneumoconiosis etc. (Workers Compensation) (Payment of Claims) (Amendment) Regulations 2001

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Adam Price (East Carmarthen and Dinefwr): Thank you, Mr. Cummings. It is a pleasure to serve under your chairmanship in my first Standing Committee. I am still uninitiated in the ways of this House, which is why I almost ended up in the Public Gallery. It is a particular pleasure for me as a Plaid Cymru Member to speak on the regulations, because they are based on one of the Callaghan Government's last Acts, which resulted from the agreement between that Labour Government and the Plaid Cymru group.

I do not know whether it is a declarable interest, but I should point out that my father worked in the private mines, which are covered by this agreement, although there is a separate British Coal—formerly National Coal Board—pneumoconiosis scheme. I should like to concentrate on that issue later.

The rationale for the 1979 legislation was clear. At that time, the matter was of particular concern to members of my party from north Wales in respect of diseases related to the slate quarrying industry, which, as in other contexts, take a long time to develop and may not be diagnosed until 20 or 30 years after exposure, at which point the company may have ceased to exist and its insurance details may not be available. That is why the 1979 legislation was introduced.

It is heartening to hear that more than £80 million in compensation has rightfully been paid out, not only to slate quarry workers and to mineworkers in the private sector, but to jute industry workers in Scotland and asbestosis sufferers in a wide range of industries.

The review comes before the House annually so as to ensure that we maintain the value of the lump sum payment. We all agree on the importance of that principle, which has been affected by the mechanism of the retail prices index. Therein lies the rub, because although payments have maintained their value in relation to average prices, they have declined dramatically in relation to average earnings. Members of the Committee will be familiar with a parallel debate, to which the same principle applies, in relation to the state pension earnings link.

As the legislation was aimed at compensation for work-related diseases, and is in part intended to compensate sufferers and their dependants for loss of earnings due to disablement and early retirement, it is not unreasonable to suggest that the link should be with average earnings. Indeed, the Act was intended to compensate for that. Over time, the disparity grows deeper and deeper because its effect is cumulative. When the Labour party was in opposition, it also called for the uprating of specific lump-sum payments above the rate of inflation. Will the Minister say whether that is still broadly the Government's position? If not, perhaps he would enlighten me as to what has changed?

By way of illustration, I dug out the 1979 figures in the original schedule. In effect, a 50 per cent. award to a man aged 50 at that time would have been equal to 2.6 times average earnings in 1979. The figure under today's schedule is equal to 1.6 times average earnings, which is a considerable decline in lump-sum payments in relation to average earnings. If that is allowed to continue, in another 10 years lump-sum payments will be more than 50 per cent. below where they were in relation to average earnings at the time of the legislation.

Will the Minister consider uprating this year, and in future years, in accordance with the increase in average earnings? The latest figures, which are out today, show an annual increase in earnings of 4.5 per cent. during the past three months. We should apply the principle of indexation to average earnings to prevent further defraying in the relative value of lump-sum payments. We should also make a one-off increase to realign the scheme to where it should be in terms of its original relationship with average earnings.

I look forward to the Minister's response because, as he rightly said, new cases, particularly in relation to asbestosis, are continually being diagnosed. It is vital for those workers who will unfortunately have to rely upon lump-sum payments that we protect their real value in relation to average earnings.

The question of reassessment bears directly on the issue of schedule payments and indexation. The scheme operates through a fairly complex—I am sure that members of the Committee would agree—sliding scale based on age and the degree of debilitation of the claimant. We are all aware of the progressive chronic nature of these types of lung diseases. A claimant may easily go from a position of relatively minor difficulties to severe breathing problems in a short space of time. For that reason, the British Coal scheme—the sister scheme—allows for medical reassessment. For instance, a man or woman presenting with a 10 per cent. disability who goes on to develop 60 or 70 per cent. disablement is not prevented from making a further claim. Again, the Labour party in opposition, I think through the right hon. Member for Makerfield (Mr. McCartney), called for such a re-assessment procedure to be instituted in the sister scheme for those who were not British Coal workers, but who were working in other industries. I can see no reason why the same principle cannot be applied to workers covered by this scheme working in other industries.

I welcome the statement on the extent of compensation paid out, but can the Minister issue any guidance on how much of that £85 million has been clawed back by the compensation recovery unit? As the Minister knows, that has been a serious issue in the parallel debate on chronic bronchitis and emphysema in the mining industry. As I understand it, there has been a greater degree of latitude in recent months in the way in which the compensation recovery unit has been dealing with those claims. Will we see the same flexibility and sensitivity applied to claimants who will receive lump-sum payments under this scheme?

The issue of private mineworkers is, as I have said, close to my heart, and is very important in my constituency, where more than 1,000 people worked in the private licensed mines on the anthracite coalfield. I note that section 1(3) of the Pneumoconiosis etc. (Workers' Compensation) Act 1979, as amended by the Social Security Act 1985, states:

    ``The diseases to which this Act applies''—

as the Minister said—

    ``are pneumoconiosis, byssinosis and diffuse mesothelioma [and any other disease which is specified by the Secretary of State for the purposes of this Act by order made by statutory instrument]''.

The Transport and General Workers Union and the mining unions have been calling on the Secretary of State to list emphysema, chronic bronchitis and asthma under the terms of this regulation. There is a good reason for doing that. Without going into the complex arguments, which are not appropriate in this debate, about evidence for the medical relationship between chronic bronchitis and emphysema in other industries, it is clear that they are compensatory diseases for mineworkers working in private mines.

Those mineworkers face exactly the same situation as they did before the Act: they have a rightful claim for compensation, but many private mines are no longer in operation and no longer traceable, with insurance records unavailable. Is it possible to ensure parity between mineworkers who worked in licensed mines in the private sector and those who worked for British Coal and the National Coal Board? Could the statutory instruments available under the Act be used to provide some degree of recompense to private mineworkers who are suffering acutely, as many hon. Members know, and have the same breathing problems as their colleagues who worked in the nationalised industry?

I agree with the comments made on weighting. It struck my perhaps uneducated eyes that the scale is heavily weighted against those in the older age groups. Is it possible to look at that again? Fortunately, we are not talking about a huge number of people under this scheme—God forbid—but if we can do anything to increase the scale of payments, especially to the older workers, it would be very gratefully received in our communities.

4.59 pm

Dr. Whitehead: We have had what I trust was a serious presentation of the issues surrounding what is a tragedy for many families, stretching over many years. In many instances, problems do not become evident to the family and the wage earner until many years after exposure to dust in mines, to cotton dust in cotton mills, as the hon. Member for Daventry (Mr. Boswell) mentioned, or, as I have mentioned more recently, to blue and brown asbestos and the tragic long-term consequences of that.

We have had a measured, thoughtful debate, which reflected the gravity of the issues and the difficulty of making decisions about how one brings about a compensation scheme when, in reality, it is not possible easily to put a price on the suffering and difficulties that have been experienced by people exposed to such agents and by their families. I am grateful to the hon. Member for Daventry for indicating the official Opposition's strong support for the measure and for the need to ensure not only that the measure is uprated in the way that we are suggesting, but that we continue to ensure that we are as generous as possible to people who have been diagnosed with these diseases. That generosity is not just a question of thinking about it and being generous but, because of the rapid onset of such diseases, it is a question of ensuring that help and benefits can get to the sufferer quickly once the disease has been diagnosed.

The hon. Member for Daventry raised several issues that I will attempt to address, as did the hon. Member for East Carmarthen and Dinefwr (Adam Price), who, I believe, is making his first appearance in a Standing Committee. I am sure that there will be many more such appearances and, if the depth and thoughtfulness of his contribution are repeated on other occasions, he will indeed be a great asset to the House. If I do not cover all the detailed questions that were raised, I am sure that it will be possible to write to hon. Members. However, I will attempt to put some of the issues clearly on the record in the short time that we have available this afternoon.

The reason for the period during which payments are uplifted is precisely that suggested by the hon. Member for Daventry. The decision to uprate was made in June 2001, but the general election and summer recess intervened. Therefore, the debate today means that the proposals will become effective from 1 December 2001. Indeed, the uprating of 3.8 per cent. represents the retail prices index increase over the complete period from 1 June 2000 to the period on which the regulations will become effective.

It is certainly true that that is not a neat annual increase. It is also true that the last three or four increases have not been uprated annually. Hon. Members might think that an annual uprating method would be a better way of doing things. In fact, our officials are currently examining the operation of the 1979 Act to see whether administrative or legislative changes are necessary with a view to making proposals, one of which might be that of an automatic increase in payment rates at a set point each year without going through the parliamentary process. That would mirror the procedures for most social security benefits and the force of the suggestion is not lost on those who are considering it.

It is difficult to answer the question asked by the hon. Member for Daventry about the expenditure that would be incurred by uprating because one does not know how many claims are likely to be made during the year. Numbers will vary, but we are confident that the increase is likely to be within preset limits. I can inform the hon. Gentleman, and we can do the arithmetic from this, that 1,352 claims were received in the last complete year—from 1 April 2000 to 31 March 2001—of which 587 were refused. Payments totalled 928, which meant that total expenditure was £11.885 million. The average payment was £12,000, which is lower than the amount that one would expect to be awarded for a 100 per cent. disability to a living claimant. That reflects the fact that many payments are being made to dependants after a claimant has passed away, not necessarily that payments are being made at the 20 per cent. level. That relates to the point made by the hon. Member for East Carmarthen and Dinefwr that the majority of claimants, particularly for mesothelioma, are at the 100 per cent. rate, because of the virulent onset of the disease.

The hon. Member for Daventry asked whether we are confident that modern working practices will ensure that such episodes do not reoccur? Is our work force properly protected from a repetition of that tragic episode in our industrial history and has the health and safety accorded to the people taking part in industrial processes improved? The Government are determined that strong and effective measures continue to be taken to minimise the risks posed by asbestos. The import and use of blue, white and brown asbestos is, as I mentioned, no longer permitted, with only a few exceptions. All work with asbestos is subject to the Control of Asbestos at Work Regulations 1987, while work with asbestos coating, insulation and insulating board requires the possession of a licence from the Health and Safety Executive. The issue of new working with existing asbestos coatings and insulation does not now arise because new uses of asbestos in industry have been banned. I believe that that reflects the strong view taken by the Government about the need to ensure that people in industry are protected from the consequences of working with asbestos now and in the future.

In addition, the Health and Safety Commission consulted in 2000 on new proposals that will explicitly require those in charge of workplace buildings to identify and better manage the risk from asbestos in their premises.A further round of consultations on the revised proposals, which will take those initial comments into account, is expected to take place this autumn.

The proposed legislation, which will amend the Control of Asbestos at Work Regulations 1987, includes requirements for the occupiers, and anyone else who has maintenance and repair responsibilities for the premises, to take reasonable steps to determine the location and condition of materials likely to contain asbestos, to make and maintain a written record of the location of the asbestos or of materials presumed to be asbestos and to assess and document the risks of exposure.

The hon. Member for Daventry also mentioned miners' compensation claims on a more widespread basis. He will be aware that the scheme we are discussing arose from an NCB scheme in 1974 and was effectively brought into legislation in 1979. Other schemes relating to the effects on miners do not come within this scheme. They include the British Coal pneumoconiosis compensation scheme, which IRISC now manages on behalf of the DTI following the agreement to do so in 1998. It has calculated that the arrears due to individuals and total payments made to the end of the last financial year were £3 million.

There has been a delay in putting in place the complex procedures for assessing respiratory claims by former miners, as the scheme must necessarily reflect the High Court judgment that brought about those procedures. I understand that more than £200 million has been paid out by the Department of Trade and Industry. The situation is improving and more than 50,000 payments have been made in final and interim settlements. Miners who continue to suffer from emphysema and related diseases can make claims under industrial injuries disablement benefit schemes.

The hon. Member for East Carmarthen and Dinefwr asked why it is not possible to uprate the scheme in line with earnings rather than prices. The short answer is that the Government take the view that the uprating is in line with other social security benefits based on the RPI. One can take a view as to whether it is a straightforward compensation for loss of earnings during working life or recognition, however inadequate, of the suffering caused by industrial practices that this country no longer permits. In general, these payments are made in later life and, therefore, the Government believe that considering the RPI is the best way to decide how these payments can be uprated.

The hon. Gentleman mentioned the question of reassessment. This is a lump sum scheme because it inherited the original NCB scheme, which itself was a lump sum scheme. That scheme was effectively in full and final settlement of a claim and therefore did not permit the claim to be revisited. As I have said, that does not mean that individuals who qualify for such lump sum payments should previously have made a successful claim for industrial disablement benefit. That benefit obviously continues—one does not stand against the other.

Virtually all claims these days, where the individual is alive, are 100 per cent., because mesothelioma is the predominant disease to which they relate.

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