Third Standing Committee on Statutory Instruments, &c.


Thursday 14 March 1991


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The Committee consisted of the following Members:



Bowis, Mr. John (Battersea)

Forth, Mr. Eric (Parliamentary Under-Secretary of State for Employment)

Garrett, Mr. Ted (Wallsend)

Hayes, Mr. Jerry (Harlow)

Howarth, Mr. Gerald (Cannock and Burntwood)

Howells, Dr. Kim (Pontypridd)

King, Mr. Roger (Birmingham, Northfield)

Knight, Mr. Greg (Derby, North)

Knowles, Mr. Michael (Nottingham, East)

Lloyd, Mr. Tony (Stretford)

Lord, Mr. Michael (Suffolk, Central)

Meale, Mr. Alan (Mansfield)

Miller, Sir Hal (Bromsgrove)

Redmond, Mr. Martin (Don Valley)

Thurnham, Mr. Peter (Bolton, North-East)

Wallace, Mr. James (Orkney and Shetland)

Welsh, Mr. Michale (Doncaster, North)

Mr. A. Y. A. Azad, Committee Clerk

3 Third Standing Committee on Statutory Instruments, &c. Thursday 14 March 1991

[MR. JAMES LAMOND in the Chair]


10.30 am

Mr. Eric Forth Parliamentary Under-Secretary of State for Employment): I beg to move, That the Committee has considered the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 1991. The regulations are being made under the Pneumoconiosis etc. (Workers' Compensation) Act 1979. Their purpose is to increase by 9 per cent the amounts of compensation that are paid under the Act to those who satisfy all the conditions of entitlement on or after 1 April 1991. The 1979 Act set up a scheme to provide lump sum payments to sufferers from dust related diseases, or, if the sufferers have died, to their dependants. Payments can be made only when there is no former employer remaining in business against whom a claim for damages could be made. The two other basic conditions of entitlement are, first, that no court action has been brought or compensation received in respect of the disease and, second, that disablement benefits have been awarded. Payments under the Act are in addition to any social security benefits that might have been awarded. Compensation is provided by the Act because the diseases develop slowly and are often not identified in the sufferers until long after the employer in whose employment the disease developed has ceased to carry on business. It has never been the intention of the Act to provide an alternative to taking civil action in the courts, and my officials must be satisfied that there are no relevant employers still in business who could be taken to court. The Act did not provide for any particular payment or for automatic or regular uprating, but the Government have given an undertaking to Parliament to review the amounts each year. The original payment regulations, setting out a scale of payments by age and percentage disability, came into operation on the 1 January 1980. This is the eighth occasion on which the Government have asked Parliament to increase the rates of payment. In 1990, Parliament approved an increase of 8 per cent from April, to take account of the rise in the index of retail prices during the preceding 12 months. The proposed increase for 1991 is 9 per cent, again to keep the payments in line with inflation. I am sure that hon. Members on both sides of the Committee will agree that the circumstances that lead to the payments are regrettable. Nevertheless, I welcome the opportunity that the amending regulations provide to maintain the value of the compensation. All of us recognise 4 that no amount of money could ever compensate individuals and families for their pain, suffering and loss, but the regulations at least allow us to give practical and material help. Since the Act came into force in 1980, 6,653 people have made claims; 75 per cent of those people have received payment. The total cost to date has been £29.8 million. Sadly, claims are still being received by my Department. Although the claims for dust diseases that are covered by the Act are far fewer that when it was introduced, present claims are mainly from those who are suffering from the asbestos-related disease, mesothelioma. Medical statistical projections indicate that male deaths from this disease will not peak until early next century. That reflects the poor conditions of some workplaces a generation or more ago, and the long time span between exposure to the harmful dust and the onset of symptoms. The dangers of asbestos are today well recognised, and extensive legislation is in place to prevent such exposure. My Department does all that it can to administer the Act sympathetically. Each case is an individual disaster and we are as generous as the statute allows. However, it must be remembered that it is not the intention of the Act for the Government to take on employers' liabilities. I am sure that the Committee will agree that it is right to maintain the value of compensation payments to those who are entitled to them under the scheme.

Mr. Gerald Howarth (Cannock and Burntwood): Do I take it from what my hon. Friend has said that any claims made by miners, either working or retired, would not qualify under the legislation because British Coal still exists?

Mr. Forth: Yes, indeed. I have made it clear that this scheme is designed specifically to deal with cases where there is no employer against whom a claim can be made and established. The scheme was designed as a safety net and that is how it operates. My hon. Friend is correct. I hope that the Committee will agree that it is right to maintain the value of the amounts of compensation to those entitled to payments under the scheme. I commend the uprating of the payment scales to the Committee and ask its approval to implement them.

10.35 am

Mr. Tony Lloyd (Stretford): It is not my usual pattern to say that I welcome the Minister's comments, but on this occasion the regulations are non-controversial and I welcome the uprating which will keep the payments in line with retail prices. There is always a question about the appropriate amount by which to uprate benefits. Most people would agree that the payments made under this compensation scheme modest, as many of the claimants are severely handicapped by their conditions. The average award is about £7,000. Will the Minister consider using the increase in average wages, instead of the retail prices index, to decide on the level of uprating when that is to the advantage of claimants? I shall raise two more issues, one of which has been raised by my esteemed colleague, the hon. Member for Oldham, Central and Royton (Mr. Lamond). He told the House during consideration of the regulations in 1990 that, in the Oldham area and other textile areas in the north of England, byssinosis is a common industrial condition, One 5 of the problems that arises, especially among workers who have had many employers, is that one of those employers, technically, may be liable. Therefore, in theory, a case could be brought against an employer, but in practice it could be very difficult to prove at what stage in their employment employees contracted the condition. The Minister's predecessor made sympathetic noises about that problem, but I do not know whether any progress has been made. I hope that the Minister will consider that point and put his response on the record either now or in the future. My other point concerns the nature of the progression of the various industrial diseases covered by the regulations. The Minister was right to say that the diseases often develop slowly. It can take many years before it is apparent that somebody suffers from a disease that is covered by the regulations. Once a condition is diagnosed, the sufferer's health may deteriorate further. Someone might be diagnosed as being 10 per cent incapacitated and awarded an appropriate level of compensation but, within a short time, perhaps two or three years, the condition might worsen. If the condition had been assessed at that time the compensation would have been much higher. Will the Minister reconsider whether it is possible to devise a system that allows for people suffering from this condition to have their case reviewed as the illness takes its course? I do not know whether there have been any attempts to cost the introduction of a system that includes periodic review, but any information that the Minister can provide will be helpful. The scheme that operates in the coal mining industry, or used to, allows the disease to be periodically reviewed in order to assess whether compensation should be varied. I should be grateful if the Minister would answer those points of detail, although, as I have said, the Opposition welcome the introduction of uprating and will support the regulations.

10.41 am

Mr. Forth: I am grateful for the support of the hon. Member for Stretford (Mr. Lloyd) for our genuine efforts to maintain the scheme in the form in which it was introduced by statute several years ago. He raised the perennial question whether uprating should be based on the retail prices index or on some average earnings indicator. The Government have consistently maintained that the RPI is the correct basis for uprating because it guarantees the effectiveness of awards against general economic movements. Relating awards to average earnings increases—were the Government tempted to do so—could reduce their value if average earnings increases were less than those shown in the RPI. That would be unusual given events during the past few years, but it is possible —more than possible considering present economic trends. There is anxiety in my Department that earnings increases are running at a level that the economy cannot sustain. In part, the impact of that on the labour market is highly adverse. Therefore, I would be cautious about taking the route suggested by the hon. Gentleman. By retaining the link with the RPI, we are guaranteeing that the real value of compensation is maintained, although circumstances are changing. It is difficult to deal with the problem outlined by the hon. Gentleman on behalf of the hon. Member for Oldham, Central and Royton (Mr. Lamond). For example, 6 I think, although I stand to be corrected, that to change it in the way that he suggested we should have to introduce primary legislation. At present, the basis of the provision is that if there is an employer against whom a complaint can be made, he is the first port of call for the person with a claim. I understand that that can be complicated if someone has had several employers, which can make proof of connection more difficult. However, to depart from the basis on which the scheme has always worked would lead us into completely new territory and, if I am right, primary legislation would be required to change the basis of uprating. The Government would be reluctant to do that. It could give rise to a series of other questions and difficulties. In addition, with respect to the hon. Member for Oldham, Central and Royton, I have not been aware, since taking up this ministerial post, of any difficulties being caused to individuals for the reasons that he suggested. If there are any difficulties, I will want to examine them—that is certainly true of the problem that the hon. Member for Stretford raised. I say that with great caution and deference—for various reasons. If there are difficulties, we may have to reconsider the basis of the scheme. However, I am unaware of such difficulties, so that undertaking is the best that I can do for the Committee. The progression of the disease raises a different set of problems. The scales were altered when the Pneumoconiosis etc. (Workers' Compensation) Act 1979 was introduced, to take account of the progression factor refered to by the learned Member for Stretford. If there is evidence of widespread or significant, difficulty because the level of compensation is set on an assessment of disability at a particular time and then the individual's condition changes dramatically so the compensation awarded is out of line with the development of the condition, we shall want to examine the matter. I am not aware that that is a problem which is undermining the credibility or the effectiveness of the scheme. I discussed the matter carefully with my officials before I came here this morning. We believe that, broadly, the scheme is operating satisfactorily. We are not aware of any significant difficulties or shortcomings in it, but if such evidence is brought to us we will of course examine it carefully. If that requires a change to the scheme —dare I say, even if it requires primary legislation—we will not shrink from that so that we might ensure that the scheme works as it was intended to work and is altered if that is necessary to take account of major changes in circumstances which may have occurred in the past 10 or 11 years.

Question put and agreed to.

Resolved, Thai the Committee has considered the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 1991.

Committee rose at thirteen minutes to Eleven o'clock.



Lamond, M. James (Chairman)

Arnold, Sir Thomas

Bowis, Mr.

Forth, Mr.

Hayes, Mr.

Howarth, Mr. Gerald

Knight, Mr. Greg

Lloyd, Mr. Tony

Redmond, Mr.

Thurnham, Mr.