The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): I beg to move,

I am delighted to be present under your chairmanship, Mr. Martlew. This is the first time that you and I have met in this forum and on behalf of the Committee I welcome you to the Chair.

It is a requirement that I confirm to the Committee that the provisions are compatible with the European convention on human rights and I am happy so to do.

The regulations have been made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and their purpose is to increase by 3.9 per cent. compensation paid under the Act to those who satisfy all the conditions of entitlement on or after 1 April 2008. That fulfils the Government’s previous undertaking to increase the payments annually, following the transfer of responsibility for the scheme to the Department for Work and Pensions in 2002.

Although Ministers in previous debates have outlined the history and purpose of the Act, I will do so again briefly, for the record. An employer can be sued by someone suffering from an industrial disease where that disease was contracted as a result of working for that employer. However, the diseases covered by the Act can take a long time to develop and may not be diagnosed until 20, 40 or even more years after exposure to the dust. By that time the employer or employers responsible may no longer exist; consequently sufferers and their dependants can experience great difficulty in obtaining compensation. That is not surprising.

The Act was introduced in 1979 to help those who have no realistic chance of success in suing through the courts as their employers are no longer in business.

Joan Walley (Stoke-on-Trent, North) (Lab): Will my hon. Friend share with the Committee the circumstances that led the Government to ensure that there is compensation in cases where employers no longer exist? The concerns that many of us have when dealing with the miners’ compensation scheme is that there is no similar recourse to compensation for the many miners and ex-miners who are now suffering and who previously worked in private mines which are now closed. I realise that that is not pertinent, strictly speaking, to the debate.

The Chairman: If the hon. Lady realises that she is out of order, I need say no more.

Joan Walley: I am grateful for your advice, Mr. Martlew, but the issue that I wish to raise is of employers that no longer exist.

The Chairman: The intervention was out of order and will not need a response, Minister.

Mrs. McGuire: I undertake to respond to the concern that my hon. Friend raised outwith the Committee because I want to concentrate—as do you, Mr. Martlew— on the business in front of us.

The Act provides for a lump sum payment for sufferers, and payments are in addition to any award of weekly industrial injuries disablement benefit in relation to the same disease. A claim can also be made by the dependants after the death of the sufferer. In order to receive such a payment a person must have been awarded industrial injuries disablement benefit. Two further conditions have to be met before any payment can be made. First, there must be no relevant employer who can be sued and, secondly, court action must not have been brought nor any compensation received in respect of any of the diseases for which a person is claiming.

In outline, the Act covers five respiratory diseases, most of which are directly related to asbestos exposure. They are mesothelioma, diffused pleural thickening, primary carcinoma of the lung, bisinosis and pneumoconiosis, which includes asbestosis. The amount to be paid is based on a simple calculation cross-referencing the age of the sufferer and the level of disability. The higher amounts are paid to people with higher levels of disability and whose disability arises at an early age. The average payment to sufferers is around £18,000 a year. A lower amount is paid to dependants who claim after the sufferer has died, and the average payment in such circumstances is around £6,000.

Mr. Peter Bone (Wellingborough) (Con): Am I right to understand that pleural plaque is included in these compensation awards, only I have been told that it is not.

Mrs. McGuire: I did not say pleural plaque. The hon. Gentleman may have misheard. I said “diffused pleural thickening”.

Dr. Ian Gibson (Norwich, North) (Lab): I wish it was. What is the difference?

Mrs. McGuire: That is an issue for another day. I will not engage in a medical discussion with somebody—

The Chairman: Order. The Minister is encouraging the Committee to stray from the regulations, and I should be grateful if she would be more specific?

Mrs. McGuire: I apologise, Mr. Martlew. I was distracted by some well-targeted heckling.

Since the Act was introduced, payments amounting to a total of £226 million have been paid out, with payments of £17.8 million made in this year alone. Although not the prime reason for the creation of the scheme, claims in respect of mesothelioma are now the major component. Almost 80 per cent. of compensation claims are now paid to those suffering from mesothelioma, an extremely severe form of cancer, which is invariably terminal, with a short time scale.

This is a stand-alone scheme. However, the Minister of State last year reaffirmed the Department’s commitment to look at all aspects of the current industrial injuries disablement benefit schemes. As a result, a consultation document was published on 29 January 2007, and this consultation gave people the opportunity to help to shape future provision for those who are injured or made ill by their work.

The Chairman: Order. The regulations are about the uprating of payments.

Mrs. McGuire: Given that not everybody is aware of the circumstances of the Act, I thought that it might be helpful to deal with some of the issues, but I will take your advice, Mr. Martlew. I accept that a Committee such as this, with so many members with significant experience, will recognise that no amount of money will ever compensate the sufferers and their families for the disablement that they have encountered as a result of the conditions that I have identified. I commend the uprating of the payment scheme to the Committee, and ask for approval to implement the regulations.

Mr. Mark Harper (Forest of Dean) (Con): Having listened very carefully to your guidance, Mr.Martlew, I will keep my remarks in order, as the Minister’s were, and hopefully as brief. The official Opposition welcome the regulations, and very much support the uprating in line with the retail prices index. However, it is interesting to note that when the Government update the level of benefits they accept that the appropriate level of inflation to use is the RPI, when on other occasions they use the much lower level of the consumer prices index. The RPI probably gives us a more accurate representation of the level of inflation. I should say for completeness that I have not been through every single cell in the table to check that the maths are correct. I assume that officials have done that appropriately, and we support the regulations.

As the Minister has outlined, these diseases are very unpleasant. Representing a former mining area myself, and an area where there was a lot of heavy industry, I have constituents who benefit under this scheme and one or two others that have been mentioned, and I very much welcome them. It would be helpful if the Minister would outline the forecast cost of the scheme and the number of people the Department forecasts might benefit from it in the year to which these upratings will be relevant. It would also be helpful if the Minister could outline the administrative costs of the scheme. That has been a concern of previous Committees, and the hon. Member for Bolsover has mentioned the importance of that on a number of occasions.

Finally, without straying into the detail, I hope that it will not be too long before we hear from the Minister in another forum about the results of the consultation on the Government’s policies on the industrial injuries disablement benefit scheme, but that, as you have correctly said, Mr. Martlew, is for another day. We welcome the regulations and look forward to hearing the answers to the one or two questions that I have asked.

John Barrett (Edinburgh, West) (LD): I thank the Minister for her introduction. The Liberal Democrats welcome the uprating. It is sad that the number of new cases continues to rise. People might think that such compensation relates to a large degree to work done in days gone by, but the number of new cases every year is of great concern to the individuals affected and their families, so we welcome the uprating.

Mr. Peter Bone (Wellingborough) (Con): I obviously welcome the instrument, but wonder whether the Minister might have an opportunity to explain why the asbestos-related diseases have been put into the scheme. I think that she said that the average pay-out was £18,000 a year, but of course people with those diseases tend not to live long, so their total compensation would be pretty low. Had the employer still been in existence, they could have expected to recover more money, so would not the instrument have been an opportunity to have a separate category for asbestos-related illnesses with a much higher rate that would include pleural plaque?

The Chairman: Order. I am not being pedantic, but that matter is outside the scope of the regulations.

Mr. Bone: I apologise, Mr. Martlew. I was simply sought to argue that this was an opportunity missed and to comment on the omission. I understand that one of the problems with statutory instruments is that we cannot amend them, but I think that I have made my point.

Tony Baldry (Banbury) (Con): The more you intervene, Mr. Martlew, the more I am moved to oppose the regulations, because they are wholly inadequate for reasons that I will explain to the Committee. The more you intervene to say that we are out of order, Mr. Martlew, the more I will feel inclined to see how long I might speak on the instrument and remain in order.

I have two interests in the regulations. First, my first job in Government some time ago was as a junior Minister in the Department of Energy. One of the matters that we had to consider when privatising the electricity industry was miners’ pension schemes, and I was shocked at the short period of time many miners lived after retiring. We had to sort that matter out with Brussels because it was a state aid. The average miner survived a very short period of time after retiring from the pits.

Secondly, my father was a consultant chest and heart physician and sat on the appeal boards for those who appealed against the amount that they had been given under the scheme. Dad, being a fairly soft touch, probably allowed most of the appeals, because pneumoconiosis, as the Minster explained, is a particularly crippling disease and takes years to display itself after people have ingested silicate, and it is incurable. Therefore, we go back to a piece of legislation in 1979, under which the payouts seem to be quite low.

The Chairman: Order. The hon. Gentleman is experienced enough to make his comments relevant to the regulations.

Tony Baldry: The payments are quite low and the upgrading of 3.9 per cent. seems, therefore, to be pathetic. We are reaching the situation where, although the number of ex-miners must by definition be reducing, they are getting older, and so those who are suffering from the condition will be more in need of support. I hope that both sides of the Committee will consider my proposal to be a sensible approach. This is a piece of legislation that goes back to 1979 when the number of people working in the coal-mining industry was much greater than it is today.

Mr. Dennis Skinner (Bolsover) (Lab): Why is that?

Tony Baldry: Honourable Members know why it is. It is a mixture of pits being worked through, and so on. It is an industry where many pits were exhausted. The fact of the matter is that there are far fewer people working in the coal-mining industry today than there were 20 years ago, and I should have thought it would be sensible to revisit the 1979 legislation because for those who are suffering, an annual uprating simply in line with the rate of inflation does not do justice to their needs.

I am sorry if that suggestion does not command favour in the Committee, Mr. Martlew, and I am sorry if trying to get decent compensation for those who through no fault of their own have incurred industrial injury seems to be such a revolutionary idea. But I commend to the Committee the proposal that the Government—indeed both parties—ought to be considering how to ensure that those who suffer from industrial injuries in this way get a better deal.

Mr. Skinner: One of the problems that we face today in discussing this uprating is that some people, sadly, are at cross-purposes on the matter.

In 1979 the Act was passed in a different manner from what has taken place in recent years, and that is because those of us in the mining industry at the time took a clear-headed decision to keep the cases out of court. When the Pneumoconiosis etc. (Workers’ Compensation) Act was introduced, we in the National Union of Mineworkers had to fight in order to keep individual cases from going to court. Had they gone to court, every case would have been dealt with in court just like the chronic obstructive pulmonary disease and vibration white finger cases today. That is why we took this deliberate decision to say to other unions, including the Amalgamated Engineering Union which had a case pending, “For God’s sake settle on the steps of the court”—

The Chairman: Order. Again, Mr. Skinner, you are very experienced. I am sure you can stay in order.

Mr. Skinner: I am trying to help some other members of the Committee who are thinking in terms of what is happening today and the individual cases taking place. The same is true of pleural plaques that were mentioned. But I shall not mention that any more; I just use it as an example to try to explain why there is this dilemma. The dilemma is simply because we were smart enough then in the NUM to get the matter settled on a collective action.

We have to know the history of the uprating, Mr. Martlew. The history was that we kept the matter out of the law courts and the Labour Government then introduced a scheme on a sliding scale, so we did not have hundreds of thousands of settlements. We had a sliding scale. It was a classic settlement. It is a sad commentary on our times that today people are so anxious to say, “Let’s go to court and settle my case,” whereas this was settled collectively. It is a collective settlement and that is why it has been uprated at 3.9 per cent. It is a settlement for everyone.

The most important ingredient is that each individual case of pneumoconiosis or asbestosis and so on, did not have its own individual lawyer and a middleman who could take a cut. It would have settled the problem that my hon. Friend the Member for Stoke-on-Trent, North raised at the beginning of the old coal mines where payment cannot be obtained because no one knows who owned them any more. We were able to work in a collective fashion, and I hope that in the future that will be a lesson to all the lawyers out there that we can have a classic settlement with an uprating every year and we can save literally millions of pounds from going into the pockets of lawyers.

Tony Baldry rose—

Mr. Skinner: I think that the hon. Gentleman wants to intervene. For God’s sake, keep in order.

Tony Baldry: I think that everyone welcomes this provision. There is no question but that this is a good scheme because it does not waste costs on litigation. However, does the hon. Gentleman think that the amounts—the quantum—being given under this scheme are adequate?

Mr. Skinner: I am very pleased that it is 3.9 per cent., not the 2 per cent. that the police got. If somebody says, “Let’s try and get it to 5 per cent.,” I will be on their side. I have no problem with that. I worked in the industry for 21 years and I was lucky. Whether someone develops pneumoconiosis is a matter of their genes and the area in which they worked. There is no doubt that in south Wales where anthracite was mined, there were more cases per head of the population in the pits than in other areas. The sky is the limit for the amounts. However, I do not take very kindly to the hon. Gentleman, who was a Minister in the last Tory Government, who we had to drag crawling through the hedge backwards to get these payments, and then they shut the pits as well. There are a few crocodile tears.

Joan Walley: Does my hon. Friend agree that there might be a real opportunity to return to the collective approach to deal with the issue of private mines and COPD?

Mr. Skinner: Mr. Martlew is indicating that the question has strayed from the point, but I will answer it in a fashion that ought to keep it in order.

The Chairman: I knew that this would not be an easy Committee.

Mr. Skinner: As we discussed, there is a 3.9 per cent. increase. I will just say, en passant, that in the course of discussing uprating orders and many other matters, we in the National Union of Mineworkers approached Mr. Justice Turner, who decided the settlement in 1998 on COPD. We said, “Will you now have a collective settlement?” Sadly, he refused. We have to educate ourselves to ensure that we get these kinds of agreements in the future with even bigger up-ratings.

Mrs. McGuire: I will try to address the points that have been made and move swiftly to a conclusion. The estimated cost of the 1979 scheme to January 2008, which the hon. Member for Forest of Dean asked about, is £226.8 million. The total claims received to March 2007 were 27,101. The total claims that have been paid are 19,214 and the average payments, as I indicated earlier, are £6,000 to a dependant and £18,000 to a sufferer. The estimated future costs of the scheme, which he also asked about, are £37.6 million for 2008-09, £35.5 million for 2009-10 and £39.1 million for 2010-11. The administrative costs, if I understand the position correctly, are 2 per cent. of the total benefit costs. A very small team of eight staff deals with that, which I hope gives some comfort to the hon. Gentleman that the scheme is not overburdened with administrative charges.

I thank my hon. Friend the Member for Bolsover because he answered very succinctly the comments made by the hon. Member for Wellingborough about the importance of the Act in trying to get financial relief for sufferers of a terrible condition as quickly as possible. The court process would not necessarily have delivered that. Of course, under this Act, the employers may not be in trade any longer, and it is incredibly difficult for people to put together the whole case for compensation when employers do not exist, when records may not be there and when they are trying to cope with a terminal condition. I think that was the rationale, and a very fine rationale it was.

I understand the sympathy of the hon. Member for Banbury for the uprating. I do not want to be too party political about this, but in the last three of four years of the previous Conservative Government, the uprating over 13 months was 2.5 per cent. in May 1993. In April 1994, there was no increase. In July 1995, it was 2.2 per cent.; in March 1996, it was 2.1 per cent. It is easy to raise these issues, and I do not underestimate the hon. Gentleman’s concern, but we are committed to increasing this particular compensation annually basis, and the index is the same used for other social security benefits.

I welcome the support of the official Opposition and the Liberal Democrats, and I hope that I summarise the views of all of us when I say that compensation for people in these circumstances will never be adequate. But this is a scheme that, as my hon. Friend the Member for Bolsover recognised, was meant to get compensation to people as quickly as possible, without their have to go through all of the bureaucracy and paraphernalia that is sometimes associated with obtaining financial resources, at a point in their lives when they need it most. I hope that the Committee will endorse the uprating of 3.9 per cent. as proposed in the regulations.

Question put and agreed to.

Resolved,

Committee rose at three minutes to Eleven o’clock.