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Standing Committee Debates

Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2006




 
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Sixth Standing Committee on Delegated Legislation

The Committee consisted of the following Members:

Chairman:

John Cummings

Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
Bacon, Mr. Richard (South Norfolk) (Con)
†Boswell, Mr. Tim (Daventry) (Con)
†Burden, Richard (Birmingham, Northfield) (Lab)
†Clapham, Mr. Michael (Barnsley, West and Penistone) (Lab)
†Dobbin, Jim (Heywood and Middleton) (Lab/Co-op)
†Hands, Mr. Greg (Hammersmith and Fulham) (Con)
†Heppell, Mr. John (Vice-Chamberlain of Her Majesty’s Household)
†Heyes, David (Ashton-under-Lyne) (Lab)
†Hodge, Margaret (Minister for Employment and Welfare Reform)
†Jones, Lynne (Birmingham, Selly Oak) (Lab)
†Joyce, Mr. Eric (Falkirk) (Lab)
Laws, Mr. David (Yeovil) (LD)
Leigh, Mr. Edward (Gainsborough) (Con)
†Skinner, Mr. Dennis (Bolsover) (Lab)
Smith, Geraldine (Morecambe and Lunesdale) (Lab)
†Watkinson, Angela (Upminster) (Con)
Celia Blacklock, Emily Commander, Committee Clerks

† attended the Committee


The following also attended, pursuant to Standing Order No. 118(2):

Öpik, Lembit (Montgomeryshire) (LD)

 
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Thursday 9 February 2006

[John Cummings in the Chair]

Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2006

2.30 pm

The Minister for Employment and Welfare Reform (Margaret Hodge): I beg to move,

    That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2006.

I welcome you to the Chair, Mr. Cummings. The regulations are being made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. They were laid before the House on 18 January this year and I confirm that, in my view, the provisions are compatible with the European convention on human rights. The purpose of the regulations is to increase the level of compensation paid on or after April 2006 by 2.7 per cent. The increase is based on the retail prices index of 2005 and is in line with the increases in other social security benefits.

When the scheme was transferred to my Department in 2002 from the then Department of the Environment, Transport and the Regions, we gave a commitment to increase payments under the scheme annually. The regulations help to fulfil that undertaking. I hope that the Committee will bear with me if I set out some of the background to the scheme.

Lembit Öpik (Montgomeryshire) (LD): I send apologies on behalf of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), who usually takes part in these proceedings. Does the Minister accept that Liberal Democrat Members fully support the proposal? I would have said that I fully support the Minister, but that has turned out recently to be the kiss of death, so I shall leave my support to that of the order.

Margaret Hodge: I thank the hon. Gentleman for his kind offer, which I think I shall leave on the table. However, I note the welcome that the Liberal Democrat party has given to the order. I hope that there will be similar unanimity in Committee on the matters that we are considering today.

We all understand and know about the dreadful effect that dust-related diseases can have on individuals and how the illness of one family member can impact on all members of the family. People suffering from industrial diseases have the right to take civil action against the employer or employers where exposure has taken place. However, the dust-related diseases covered by the 1979 Act might take a long time to develop. In fact, they might not be diagnosed until 20, 40 or even up to 60 years after exposure to the
 
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dust. By the time the disease is diagnosed, the responsible employer or employers may no longer exist and it might be extremely difficult to identify any specific liability. Sufferers and their dependants can therefore experience considerable difficulty in obtaining the compensation that they quite rightly deserve. Such circumstances led to the 1979 Act, which provides a measure of compensation from public funds to those who cannot claim compensation through the courts in the usual way.

While I obviously wish that there had been no need to introduce such legislation, I take great pride in the fact that it was a previous Labour Government who enacted it. Then, as now, my party showed its commitment to those who have suffered in such a terrible and tragic way as a result of poor standards of health and safety at work, and a failure by employers to safeguard properly their workers’ health. The Act provides for lump-sum payments to be made to sufferers of certain dust-related diseases or, when the sufferers have died, to their dependants. They are paid when there is no realistic chance of success through the courts as the employer is no longer carrying on business.

Three basic conditions of entitlement need to be satisfied before a payment can be made: first, that there is no relevant employer who can be sued; secondly, that no court action has been brought nor compensation received in respect of the disease; and, thirdly, that industrial injuries disablement benefit has been awarded. That last point is important. Payments under the 1979 Act are in addition to any industrial injuries disablement benefit that is awarded.

Mr. Tim Boswell (Daventry) (Con): Will the Minister confirm that the fractions for the degree of disability set out in the table reflect the assessments that have been prepared and the decisions made by her Department in relation to industrial injuries disablement benefit and are not autonomous of those decisions?

Margaret Hodge: The two are connected. The decision maker will consider awarding the higher rate, corresponding to the medical assessment that has been made. To receive the higher rate, the claimant has to have an award that equates to being totally disabled by the disease in question. I hope that that helps the hon. Gentleman.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): A few years ago there used to be duality of examination. For example, if a person suffering from mesothelioma was diagnosed in hospital, that had to be verified by the Benefits Agency doctor. Since then, of course, the Government have moved on that and ended the duality. Presumably, we will be able to move to the last table, which refers to mesothelioma, on the basis of the consultant’s report.

Margaret Hodge: That depends on whether the decision maker is satisfied with the judgment made by the medical professional. I should like to take this opportunity to congratulate my hon. Friend on being the defender of much of this work and the Member
 
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who does most to promote this important work and the compensation scheme. I often enjoy the benefit of his great experience in this regard, and I am sure that all hon. Members and all those who benefit from the compensation scheme are grateful for the work that he does.

The fact that people must have claimed industrial injuries disablement benefit as well as applying for this scheme shows that there is a considerable package of financial assistance for those who have suffered. The 1979 Act covers five main respiratory diseases, most of which are directly related to asbestos exposure: mesothelioma; pneumoconiosis; diffuse pleural thickening; primary carcinoma of the lung, if it is accompanied by diffuse pleural thickening or asbestos; and bisinosis, to do with cotton, which I gather is less common today.

I do not need to tell hon. Members that asbestos is still one of the most serious occupational health problems facing this country. The death toll from asbestos-related diseases remains extremely disturbing. The annual number of mesothelioma deaths in Great Britain has risen steadily over the past 30 years. In 2003, there were 1,874 deaths, compared with 1,631 in 2000. Going back to 1968, there were 153 deaths. Virtually all those deaths are associated with exposure to asbestos fibres. The latest statistical modelling in the Department suggests that the number of mesothelioma deaths is expected to peak at between 2,000 and 2,500 a year at some point between 2011 and 2015.

Today, around 70 per cent. of compensation claims paid under the schemes are for those suffering from mesothelioma, a extremely severe and highly unpleasant form of cancer affecting the lung lining and the chest wall. The disease can take up to 60 years or more to develop, but once it is diagnosed it is invariably terminal within 12 to 18 months.

In Committee last year, my predecessor made a commitment to continue to review the current provisions, in order to make them as effective as they can be. Since arriving in the Department in May, I have continued her work. I have carefully considered much of the literature and knowledge that we have on the subject. I have met a number of representatives of asbestos support groups, such as the Asbestos Victims Support Groups’ Forum, Clydeside Action on Asbestos and, in my constituency, the Barking and Dagenham asbestos group, because we have our share of asbestos-related problems as well. I have of course also spoken to many hon. Members, particularly my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham).

A large number of suggestions have been put forward for improving this scheme and the other industrial injuries schemes. They include: disregarding the industrial injuries disablement benefit when calculating other means-tested benefits; changing the structure of the lump-sum payments made under the 1979 scheme; preventing the courts from reducing the amount of damages awarded to claimants under civil claims by the amounts paid under 1979 Act; ignoring lump-sum payments under the 1979 Act when
 
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calculating means-tested benefits; and making compulsory the recording of historical and current insurance policies with Companies House, to help asbestos victims in their claims for damages under common law.

I have listened to those arguments carefully and, obviously, I have sympathy for those campaigning for better compensation for sufferers of asbestos-related diseases, with a speedier resolution of claims and a fair assessment of cases. I have come to the conclusion that now is the right time to carry out a full and fundamental review of the support that we provide such sufferers. Indeed, I said as much earlier in the week in answer to a written question tabled by the hon. Member for Yeovil (Mr. Laws), who cannot be with us today.

The main industrial injuries scheme was introduced in 1948, when working conditions were very different to today and there was much less in the way of employees’ rights. The pattern of work-related injuries has also changed, and the scheme might have to change to meet the needs of our modern society. Also, the ongoing and somewhat piecemeal development of the scheme might have resulted in its being less efficient and less equitable than we would like. It is therefore right that we review the scheme and all the associated schemes, including that in the 1979 Act, which we are discussing today.

We will look at all aspects of the schemes and consider all possible options for the future. I hope to publish a discussion document later this year and will engage fully with all stakeholders and interested parties. We will engage in a real and full consultation.

Jim Dobbin (Heywood and Middleton) (Lab/ Co-op): On the consideration of future reviews, a number of sites throughout the country are the subject of redevelopment plans, where developers might build another factory or housing. It is reported that 650 properties are to be built in a constituency neighbouring mine, on a site very close to where I live, which was formerly the largest asbestos-producing factory in the UK. Will future Government plans consider the monitoring of trends from such dangerous sites?

Margaret Hodge: Yes, indeed. If we get things right, I hope that we will be able to respond more fairly and quickly to claims that could arise from any future industrial injuries in that instance.

Mr. Clapham: I have been prompted to intervene again by the question asked by my hon. Friend the Member for Heywood and Middleton (Jim Dobbin). The wife of a man who had been exposed to asbestos at work could catch the disease by washing his overalls; there have been a number of instances of that. However, there is an anomaly, because that situation is not covered by industrial injuries legislation. Will the Minister look towards bringing that issue into the review and covering it in the legislation?

Margaret Hodge: That issue has been raised with me and I shall consider it. I think it very difficult, because industrial injuries benefits apparatus is there to
 
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support those who have incurred an industrial injury. Other people—whether family members or neighbours—may be affected by breathing in the air in the community, but it would be complicated to cover them under the scheme. However, the issue has been legitimately raised, and my hon. Friend has raised it again. We shall certainly consider it carefully, although I do not want to raise his hopes too much.

I hope to publish the discussion document later this year—by the summer, with a bit of luck—and I shall engage fully with everybody. However, I reassure the Committee now that existing claimants’ rights will not be affected by any long-term changes to any of our schemes. That assurance is important.

Members will appreciate that, although I shall endeavour to answer their questions, I do not want to pre-empt the outcome of the review that we are carrying out, and I want to listen to the consultation that will follow our discussion document. I shall, of course, consider carefully all comments made in this debate as we take the review forward.

In conclusion, all of us recognise that no amount of money will ever compensate individuals and their families for their suffering and loss. However, the regulations allow us to ensure that the compensation provided for in the original Act maintains its value. I commend the uprating of the payment scales to the Committee.

2.48 pm

Mr. Boswell: It is a real pleasure to welcome you to the Chair, Mr. Cummings.

I thank the Minister both for her careful explanation of what is proposed in the regulations and the important statement that she made about her future intentions. I say straight off without messing about that I think the inquiry welcome and timely; we shall want to play a constructive part in it. It is in everyone’s interests—not least those of the people who have a direct personal interest—that it should proceed, if possible, with an all-party understanding on how it is to take place. Of course there will be difficulties, some of which have already been rehearsed. There are implications for resources. Nevertheless, it is right to consider the issue afresh.

In that spirit, I say to the Minister—I hope that she is as relieved as I am—that I read these as straightforward uprating regulations. I have not re-checked each cell in the matrix by multiplying the numbers by 2.7 per cent.; I freely confess that that may be a deficiency in my ability to scrutinise and hold the Government to account. I have left such things to the wisdom of officials, as I suspect the Minister has done.

I have no reason to object to the details of the regulations and have no questions in terms about them. However, as the Minister has already indicated, they raise important, wider issues.

For the avoidance of doubt and in the spirit of what I have already said, I echo the Minister’s words: these diseases are very unpleasant and there is a very poor prognosis in many cases. When mesothelioma is
 
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involved, it is certain that the condition will be terminal. As with any condition of such seriousness, families are affected as well—hence the lump-sum provision and the slightly sad arrangements that have to be made in respect of the payments in vivo and those after death to the dependants of the family. We understand that; it is a dreadful situation for anyone to find themselves in.

I suppose that, as has been said, the conditions tend to be concentrated in particular areas where the handling of asbestos has been prevalent—for example, where there has been a factory. As we debated last week in a different context, cases are a little more dispersed for people such as plumbers and those making alterations in houses or carrying out maintenance work, and that causes concern. My own family involvement is that a kinsman of my wife’s had a rather similar problem from the flour-milling industry. All those illnesses are extremely unpleasant, and there is no point in messing about or equivocating on that point.

Such diseases have a very long onset, as the Minister said. It is difficult to predict a disease, or to pin it to an incident or the conditions of exposure, which may well have taken place half a lifetime or more before. Exposures that were a long way in the past often reflect poor, or simply ignorant, industrial practices; they were regarded as acceptable at the time, but would be far from acceptable now, and I would not condone them now. We rightly expect higher standards.

As the Minister said, the purpose of a statutory scheme is not to remove people’s right under common law to sue, or to get trade unions to sue on their behalf, but to provide an alternative route for those for whom there is no one obvious to sue. The typical case is that in which the employer is out of business. In certain cases, as the Minister will be aware, it is difficult to pin the blame on a specific employer because it is impossible to log the exposure. Those are difficult cases, and it is incumbent on all of us to remember that, whatever happened, there is a problem for that family; there is a potentially unequal contest. Rightly, in practice both Governments since 1979 have stood in and taken responsibility for providing some measure of fairness for those individuals.

Beyond that, I make two comments. First—I had it in my notes to make a comment on this, but the Minister anticipated my point satisfactorily—I am sure that the Minister is right to want us to consider the problem together, and to look into the other statutory compensation schemes. Frankly, the interaction of these difficult schemes becomes confusing—even to specialists, I suspect. How the schemes are to be interpreted is not immediately obvious to someone who gets involved in the subject.

There is also the issue of the possible extension to other conditions, or of other exposures that may have developed at the same place of work. There may also be a difference between people working underground or on the surface. Those are difficult issues. A fresh look at the matter from the top, as it were, and then proper consultation would be the right way to approach the problem. It would also be helpful if the
 
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Minister could say a word or two about the cost of the scheme before us and its likely course of development; she has not yet mentioned that. She suggested—and most Committee members will know—that because of its long onset, the number of cases of mesothelioma tends to go up, even if the exposure was a long time ago. I presume that the cost will continue to rise annually and will peak at a certain point, but it would be useful to have a current estimate.

In welcoming what the Minister said, I tell the Committee that the three strongest arguments for proceeding with a strategic review along the lines suggested are as follows. First, it should provide a measure of equity, if suffering is equivalent. That needs to be looked into. However, as the hon. Member for Barnsley, West and Penistone knows, there are some real sensitivities in trying to bring the issues together. We have to consider how the scheme can be contained, in terms of cost and what is sensible for the public purse. We would not expect penny-pinching in this area; we would expect a fair deal for people.

Secondly, the administrative cost should be kept at a minimum. From my experience in government, it is more economical to have one scheme or approach than various different packets and having to bring separate orders to the House to uprate them annually. If would be better if we could get a more coherent approach.

Thirdly, and perhaps most importantly, if there is a common approach that is updated, there is an opportunity to explain to people, when these tragic circumstances arise, how they slot into such a scheme—how they make applications and how the benefits are to be paid—without their feeling that they are being passed from one point to another and have to game the different options, saying, “Do we apply under the statutory scheme, or go for compensation?” Those are not easy choices to make when people are vulnerable. The more we can do to bring coherence to this fairly traditional approach and ensure that it works and delivers for the people who need it, the better. That would be welcomed by all Committee members.

2.56 pm

Mr. Dennis Skinner (Bolsover) (Lab): I have been prompted to speak mainly because of what I have heard about a review and what the spokesman for the Tories, the hon. Member for Daventry (Mr. Boswell), said. You know a lot about this subject, Mr. Cummings. There is not a scheme that has been devised to deal with people with problems from working in the pit, or anywhere else, that is perfect. There are imperfections in every system. However, one thing is outstandingly clear to those of us who worked down the pit and knew about the original pneumoconiosis scheme and, subsequently, the one introduced in 1979: it avoided and averted the possibility of a multitude of claims and a multitude of solicitors making a small fortune working for people in different areas.


 
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In 1974 and 1979 we introduced a system that was not spot on for everybody, but which cut down the solicitors and all their fees. That scheme kept the argument out of court. Way back in 1974 and 1979, we said to all the unions involved, “Don’t take a case to court. We are fighting for something in Parliament from which we will be able to get a settlement and divide the payments in blocks, according to the percentages involved. It is slightly imperfect, but the result will be that you’ll not get fly-by-night solicitors making a small fortune.”

It is important in the review to consider these remarks and their history. In 1998, some people who were too impetuous—the Welsh National Association of Colliery Overmen, Deputies and Shotfirers—splintered away from the main union, decided to have their 15 minutes of glory and went to court. We all know what followed. Several thousand solicitors—some are real and genuine, but others are fly-by-nights—are making money out of the taxpayer for every case. That has gone on since 1998. We should compare that with the pneumoconiosis settlements of 1974 and 1979, which were done by the state; decisions were made as to what the percentages would be and the net result was that we saved the state a lot of money. Although people argued at the margins as to whether they got the right amount, the truth was that it was a much better system.

In addition to the points made by the hon. Gentleman, there is a fourth point. My right hon. Friend the Minister will have a wide-ranging review. However wide-ranging that review is, I ask her please not to allow this kind of system to disappear from view on the basis of choice—that word “choice” again. We had choice in the 1998 settlement for chronic obstructive pulmonary disease and vibration white finger, and look what it brought us: chaos. I hope that the review will be wide-ranging, but will not go so far as to say, “Let’s have chaos.” We need the state system, as exemplified and embodied in the schemes of 1974 and 1979.

As for the rest, if we can bring in some of the other categories that my hon. Friend the Member for Barnsley, West and Penistone brought to our attention, that would be good. The review will add to what we are doing now, but please, let us not go anywhere near what we had in 1998 with COPD and vibration white finger.

3.1 pm

Margaret Hodge: I shall first deal with the issues raised by my hon. Friend the Member for Bolsover (Mr. Skinner). I do not have the history with the issue that he and my hon. Friend the Member for Barnsley, West and Penistone have, but I have dealt with it in detail during the past six months. I have a constituency interest, in that Cape Industries had a long-standing presence in my constituency and I am dealing with its impact on a lot of my constituents and their families.

However, one of the things that led to the review is that a lot of public money goes into all the schemes as a piece: about £800 million a year. A lot of that money still goes into the hands of lawyers, because things are
 
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contested in the courts. One of my objectives in trying to modernise the scheme and bring it into the 21st century is to ensure that these moneys, which will always be constrained in Government, are used for individuals and their families who have suffered from an industrial injury and that they are not wasted on unnecessary litigation in the courts.

Achieving the objective that my hon. Friend the Member for Bolsover believes underpinned the 1979 Act is one of the motivating factors for the review. He can be assured that this is a genuine review that will simplify the system. That is another thing that has come my way in the individual cases that reach my desk: it is an incredibly complicated system that is very difficult for individuals and their families to navigate. I find it difficult to get my head around the system, although I think that I am there now, but people suddenly hit by illness arising from an industrial disease, or hit by the possibility of their death and the fact that their family will have to deal with the system while in mourning in order to get compensation, are not in the same objective frame of mind.

We need a simpler scheme that gets money up front to those suffering, and a scheme that is seen to be consistent and fair. Many of the cases that have been brought to my attention challenge the consistency of the scheme throughout the country. For example, when considering the findings in Kent and up in the Barnsley area, we find that different discussions took place.

I know that you have a deep interest in this issue, Mr. Cummings, and I urge hon. Members to understand that this is a consultative process and we want it to be better. I look forward once we publish our consultation document to engaging with right hon. and hon. Members to ensure that we get it right. I am glad that the hon. Member for Daventry has welcomed the scheme and I assure him that there will be proper consultation. I have checked the matrix, I am sure that my officials have got it right and we have full confidence in what they have done.


 
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The anticipated cost of this year’s scheme, from April 2005 to April 2006, is £25 million. It is interesting that when miners entered the scheme in 2003–04, 348 of the 487 claims from them were successful, and that that cost £1,816,999. Therefore, a considerable amount of money is being spent on the scheme. I agree with the hon. Member for Daventry that the administrative costs must be contained. I hope that I dealt in part with that point when responding to my hon. Friend the Member for Bolsover. The whole purpose is to try to focus the money directly on the individuals.

The point about better information and easier signposting raised by the hon. Member for Daventry was also well made. We must modernise the schemes and bring them together. The original schemes go back to the post-war era, so it is time that we reviewed the whole lot. It will make them easier for individuals to navigate as they pursue their legitimate rights.

A state scheme is utterly central to ensuring fairness to individuals. Equally, employers must be held to account if they fail to provide a safe working environment for their employees. That is another issue that I want to pursue with vigour during our review of the schemes.

We all believe that the Act is important. The draft regulations on uprating the amounts paid are very important. In addition to people’s entitlement to social security benefits, the amounts provided by the scheme offer some assistance to those who are affected by the diseases and who cannot obtain compensation by other means through the courts. We will continue to review the amount of payments to keep them in line with the value of money, as we have undertaken. We are determined to ensure that risks to health are properly addressed, so that future generations do not have to suffer as some people have had to. With those closing remarks, I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

    That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2006.

Committee rose at eight minutes past Three o’clock.

 
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