HC Deb 12 May 1948 vol 450 cc2141-55

Order for Second Reading read.

4.10 p.m.

The Minister of National Insurance (Mr. James Griffiths)

I beg to move," That the Bill be now read a Second time."

This small but important Bill is intended to remedy what we regard as a defect in the main Act. The defect was brought to light in the course of the discussion of the Act and in working out the details of it in order to bring it into force on 5th July. We thought that an amending Bill was desirable.

Hon. Members may recall that in Committee on the main Act I introduced a new Clause to make Fuller provision for Persons assessed for Partial disability who were prevented by their injuries from returning to their old occupation. When introducing the Clause I said that we had had a number of very hard cases cited to us, discussed matters such as the engineman's eye. The problem is a difficult one. We gave it the best consideration we could and we discussed the matter with the T.U.C. and other people interested. We hoped that the proposals which we put forward at the time would meet the case.

Those proposals eventually became Section 14 of the Act. It is a fairly long Section but the essence of it is to provide for increasing the weekly rates of a disablement pension by us. 3d. if two conditions are fulfilled. The first condition is that as a result of loss of faculties arising from his injury, the man is incapable, and likely to remain permanently incapable, of following his regular occupation. The second condition is that he is incapable of following employment of an equivalent standard suitable in his case. There are various provisions dealing with what is meant by "regular occupation," and for a provision for a ceiling of 45s. The points to which I wish to direct special attention concerns the 11s. 3d., and the conditions governing the grant of allowances, especially the first condition with its reference to the man's being likely to remain permanently incapable. The Bill proposes to increase the amount of that allowance.

First, as regards the amount. In the course of our examination of the problems relating to the introduction of the new scheme, we have examined a number of cases in which workmen's compensation has been granted for what might be regarded as minor injuries but of a kind which prevent a man from returning to his old job. We hoped, on the basis of information available at the time when we introduced the Clause, that the allowance of us. 3d. would prove sufficient to deal fairly with such cases. We find now that that amount might not be enough in an important number of cases. We propose to substitute for us. 3d. an amount not exceeding 20s. According to information we have gained now, we think that that sum is about the right amount.

Hon. Members may ask: "Why not as flat rate of 20s.? "Perhaps I might explain why we propose to make an adjust-persons to make an adjust able scale up to a maximum of 20s. Where the injured man is unable to get anything like an equivalent job, the amount will be 20s., but with an allowance of as much as £1 per week we feel that if it was a flat rate in every case, there might be cases in which the hardship allowance would give the man a total sum which would be more than his earnings in his old job. We think that might create anomalies. As this allowance is designed to prevent hardship, we believe that having regard to the information which has come to our knowledge, it is better to provide for it to be adjustable. There are really two stages in deciding a claim to hardship allowance. First of all, to decide whether an allowance is payable or not, and to do that we have to compare the general standard of the claimant's regular job before the accident and the standard of the job which he is doing or is capable of doing after the accident. In particular, we have to compare the standards of remuneration of the two jobs. If the new standard is lower than the old, he will get the allowance and the amount of the allowance must not exceed the difference between the two.

I can best explain this by giving an example. Let us assume that a man has been in a job where the standard rate was £6 a week, and that after the accident he is capable of doing a job for which the standard rate is £5 10s. a week. The hardship would be a hardship as expressed by the difference of 10s., and the allowance would be 10s. If the alternative job is worth £5, whereas the regular job before the accident is worth £6, the allowance will be 20s. That is a simple example. I am sure hon. Members in every part of the House will appreciate that it is wise to make it an adjustable amount up to a maximum of 20s. From the information which we have got, we believe that an adjustable scale of that kind will fill the need.

I now come to the conditions for granting the allowance. The Clause as amended will still deal, as did the original Clause, with hardship suffered by a man who as the result of the accident is unable to return to his old job. It is still open to the criticism that was made by many hon. Members opposite, and notably the right hon. Member for North Leeds (Mr. Peake) to the original Clause, namely, that it impairs one of the main features of the new scheme which was to get away from all considerations of earning capacity and replace it by loss of faculty. I think, we air recognise that the change-over from the old to the new scheme will not be easy. I am sure we all want to do what we can to make the change as smooth as possible. The main condition of the existing Section is that a man should not only be incapable of following his regular occupation—that is a matter which will not be difficult to determine—but also that he is likely to remain permanently incapable of doing so. It is about this requirement that the man must be permanently incapable of following his job, that our further inquiries have given rise to some doubts with which we thought it was desirable to deal before the new scheme begins on 5th July.

Rehabilitation, I am thankful to say, is making very great strides in this country. Nowadays, as we have all seen, men are being restored to full capability for work after sustaining injuries which only a few years ago would have left them crippled for life. We are very glad that this is so, because to get men fit and well again to do their old job is the greatest service that we can render them. I hope that on and after 5th July when the new scheme comes into operation, my Department, by the use of the powers which are vested in us by the Act to promote research into the causes and prevention of accidents, will be able to link up with the rehabilitation work that is going on, and thus make a real contribution towards getting rid of the causes and results of industrial accidents and disease.

In the meantime, improvements in methods of rehabilitation are likely to have the effect of making doctors, quite naturally, reluctant to certify that a man is likely to be permanently incapable of following his old occupation—at any rate, not until all the possibilities of rehabilitation have been fully tried and have failed. Therefore, unless we make this amendment, there is a real risk that rehabilitation schemes may make the Section a dead letter by making it too difficult for a doctor to certify that a man is permanently incapacitated. A doctor would say, "Send the man to the rehabilitation centre and see whether something can be done to assist him." There have been many successes, and I appreciate that doctors will become increasingly reluctant to pronounce that a man is permanently unfit. If we reached the stage where we could not get doctors to pronounce that a man was permanently incapable of going back to his old job, it would mean that the Section would become a dead letter.

We are adding in this new Bill an alternative condition to the condition of permanent incapacity, to provide that if a man at the end of the injury benefit period—that is, the first six months during which he will get his injury benefit —is for the time being incapable of resuming his regular job, a claim will lie under the Section. This will enable us to grant an allowance for the period while the possibilities of treatment are being considered. Once a man has been found capable of rehabilitation, resuming his old occupation or taking up one of equivalent standard, he will cease to be entitled to the allowance. We realise, however, that many people will have to try themselves out after an accident and, by practical experience, find out if they have recovered sufficiently to carry on or not.

I know how important it is to say to a man "Go and try your old job. If you feel you cannot do it, come back to us." As the Section was originally constructed, we found that if a man went back to his old job and did it for a week or two, it would have been impossible for us to restore the hardship allowance to him. Accordingly we provide in Subsection (2, a) for regulations to be made to disregard periods of trial or training in deciding whether the man has been incapable at all times, since the end of the injury benefit period, of doing his old job or one of equivalent standard.

The regulations which I will make under this provision will have to be submitted in due course to the Industrial Injuries Advisory Council. In a case of this kind it is wise for the Minister to seek the advice and assistance of an experienced body of men, such as I have been fortunate indeed to get together on the Council, who can work out the best arrangements for carrying out the new provision. I therefore propose to make this a regulation-making Clause, and to submit the regulations to the Industrial Injuries Advisory Council and get their help. A man who is likely to remain permanently incapable without any question will still be entitled to an allowance under the original provision, which we are preserving, in paragraph (1) (a) of the Schedule.

I do not think I need say much about the remaining provisions of the Bill. The new wording at the beginning of paragraph (3) of the Schedule is necessary, because while at the old rate of IIs. 3d. an unemployability supplement would always have been better than the hardship allowance, and it was therefore right to say the unemployability supplement would always be paid instead of an allowance under this section; with the new rate of 20s. a juvenile might be better off with the hardship allowance than with the unemployability supplement. He will, of course, get the more favourable of the two.

This, as I have said, is a small Bill. It deals with a difficult problem which I realise is one to which we shall have to give a good deal of time and thought, especially in the early days of the new scheme before men get accustomed to the advantages of a permanent pension payable irrespective of earning capacity, as compared with workmen's compensation, and partial payments in particular, which are liable at any time to be withdrawn or reduced a?, soon as a man is found to be capable of work. It will be very difficult for the ordinary man to make up his mind which is best—£2 partial compensation subject to the whims of the Workmen's Compensation Act, or a disablement pension of perhaps less than that. It is essential to have a provision of this kind in this difficult transition stage. This Clause is something betwixt and between the old and the new plans, and I hope and believe that it will prove a useful bridge, and will enable us to make the change from one to the other more smoothly than we could hope to do without it.

Now for a word as to the cost. The Actuary has not been able to give an accurate estimate of the ultimate cost of the new provision; he has advised me that in the early days of the scheme it will be unlikely to exceed £500,000 a year, but that it may ultimately rise to £1 million or £2 million a year. In the circumstances, it is not thought necessary to increase the contribution in order to make this new provision.

Mr. Osbert Peake (Leeds, North)

Could the right hon. Gentlemen tell us what relation this figure of £1 million or £2 million per annum which this Bill may cost the Fund, bears to the total annual outgoings of the Fund?

Mr. Griffiths

It will be about £1 million or £2 million to about £30 million to £32 million. There are only about eight weeks left before we introduce this new scheme, the National Insurance (Industrial Injuries) Act. We shall be introducing it with the National Insurance Act and the National Health Service Act. May I mention one point? In many respects, the National Insurance (Industrial Injuries) Act is—I use the word in its technical sense—the most revolutionary of all these Measures, and makes the biggest break with the past. We believe it is right to break with the past. We think it will be to the advantage of everybody. We are all very anxious that this new scheme shall work. It is because I fear that without a provision of this kind that there may be difficulties in the transitional period that I thought it was desirable that I should bring this Bill before the House and ask the House to agree to it and make it a part of the main Act so that it can come into operation on 5th July. I believe that this small but important Bill will help us to bridge the transitional stage and make it a smooth one, and will help to make the industrial injuries scheme a success which we all want. For those reasons, I ask the House to give this Bill a Second Reading.

4.28 p.m.

Mr. Peake

Having spent more than half of my working time as a junior Minister for something like three years in working on both the principles and the details of the new scheme of industrial injuries insurance, I can well appreciate the difficulty which the right hon. Gentleman has had in dealing with this problem. Believing as we did that in practically every respect the new scheme would be immensely superior to the old scheme of workmen's compensation, we always realised that there would be a comparatively small number of cases where a man might fare worse financially when his pension was assessed in terms of percentage disability than he would have fared under the old Workmen's Compensation Acts when his pension was measured in terms of loss of earning capacity. That is one of the points which, I think, made certain Members of the right hon. Gentleman's party a little dubious about the new scheme when it was discussed in this House in 1944.

During the Committee stage of the Bill in 1945, the right hon. Gentleman introduced Section 14, which had not been contemplated in the proposals set out by the Coalition Government earlier, in an attempt to deal with this special problem. The provisions were that there should be a hardship allowance, where the loss of earnings was greater than it would have been under the Workmen's Compensation Acts, of a fixed sum of us. 3d. a week in the case of the adult employee. I cannot remember, but I imagine that that was to be scaled down in the case of juveniles.

Mr. J. Griffiths

No, that is one of the reasons we have to make the adjustment now. It is us. 3d. for all classes and for juveniles.

Mr. Peake

I thank the right hon. Member; my mind was not clear on that point. It was experimental in character, and certain conditions had to be imposed. In the first place, a condition had to be imposed that the addition would not bring up the amount to more than 45s. and that the hardship allowance and the unem-ployability allowance should be mutually exclusive. I am inclined to think that the modifications of Section 14 which are now proposed are necessary and desirable. I am a little doubtful, however, about the drafting of Subsection (1) of Section 14 as it will be after it has been amended by this Bill. Subsection (1) in the reprint in the Schedule says: The weekly rate of a disablement pension shall, subject to the following provisions of this Section, be increased by an amount not exceeding twenty shillings, if as the result of the relevant loss of faculty the beneficiary—

  1. (a) is incapable and likely to remain permanently incapable of following his regular occupation; and
  2. (b) is incapable of following employment of an equivalent standard which is suitable in his case;"
Then we get the new provision: or if as the result of the relevant loss of faculty the beneficiary is and has at all times since the end of the injury benefit period been incapable of following the said occupation or any such employment as aforesaid. What is intended is that this new alternative shall be alternative to the two conditions which have been fulfilled in the Clause as originally set out; that is to say, the claimant has either to fulfil both conditions (a) and (b), or to fulfil the conditions in the new alternative. I am not at all sure that anyone reading this as it now stands might not read the new alternative as an alternative only to the words contained in condition (b). I suggest that the right hon. Gentleman might consider inserting after the word "beneficiary" in the fourth line "either," which would make it perfectly clear that the new alternative was an alternative to the two conditions which had to be fulfilled as the Clause originally stood.

There is another new feature to which the right hon. Gentleman drew attention. Whereas the old hardship allowance was a fixed sum in all cases of us. 3d., the new hardship allowance is to be a sum not exceeding 20s. Therefore, we get back, in a very limited field of cases, to a relationship between benefit on the one hand and loss of earning capacity on the other. It was one of the great advantages of the new plan, as compared with the old, that we got away altogether from the calculation of loss of earning capacity. I appreciate that it might have been difficult for the right hon. Gentleman to have made the 20s. hardship allowance a fixed sum in all cases. That would have led to serious anomalies, particularly in the case of juvenile workers and, no doubt for that reason, he has introduced this element of the calculation of loss of earning capacity. I am not disposed to quarrel with the right hon. Gentleman on that score, but I think it is right that the attention of the House should be drawn to the point that, to a limited extent, we are going back to a calculation of the loss of earning capacity.

There is another point with which I would like the right hon. Gentleman or the Parliamentary Secretary to deal. We on this side of the House have always attached the greatest importance to Service casualties being treated no worse than persons disabled in the course of industrial employment. Many of my hon. Friends think there is a strong case for a man disabled in the service of the Crown, whether in the Army, Air Force or Navy, being treated to some extent better than the industrial casualty. One thing that is quite certain is that no one would tolerate industrial casualties being treated more generously than those who have been disabled in the service of their country. I would like the right hon. Gentleman or the Parliamentary Secretary to make clear that a corresponding provision to this has been, or will be, made—

Mr. J. Griffiths

It has been made already.

Mr. Peake

—in the Royal Warrant which governs the payment of pensions to Service cases. With that assurance, we will give the Second Reading of this Bill an unobstructed passage.

4.37 p.m.

Mr. Thomas Brown (Ince)

I wish to express thanks to the Minister and his Department for the discovery of this anomaly before the Act became fully operative. There will, however, still be a large number of cases to which we shall have to give some thought, and I am sure the Minister knows what is in my mind. I refer to the pre-1924 cases. I want to know whether the improvement in this Bill will be applicable to the pre-1924 cases. If the hardship allowance does not apply to them, I am afraid that a large number of persons who were injured in industry prior to the passing of the 1925 Act will remain dissatisfied.

Under the principal Act, which becomes operative on 5th July, only two benefits will be applicable to the pre-1924 cases. They will be entitled, if they sustain their claim, to the unemployability allowance and the constant medical attention allowance. They have to prove their cases before they get the benefit of the Act which becomes operative on 5th July. I want to know whether the improvement which is the object of this Bill will be applicable to them. Those of us who have spent a lifetime in dealing with such cases, particularly in the mining industry, know full well that men who met with accidents before 1924 have never had advances on their pensions since that date. In my constituency, as I pointed out in an earlier Debate, there are two such men. One is totally blind, and the amount of compensation he has received since his accident is 21s. 11d. I know that he will get the benefit of the unemployability allowance, which is a step in the right direction, but there are many other cases in which no advance has been given. I am concerned that the objective of this Bill shall be applicable to the pre-1924 cases and I wish to have an assurance from the Minister or the Parliamentary Secretary on that matter.

While the Bill does not go as far as I would like it to go, it makes a tremendous step towards improving the conditions of those who have suffered great hardship, although, as the right hon. Member for North Leeds (Mr. Peake) said, it is going very near to the old system for the calculation of compensation. In the Act, which this Bill seeks to amend, we have gone a long way, but unfortunately it was difficult to escape some of the complexities of the old Compensation Acts, 1893 to 1925. As I have spent a great deal of my lifetime in dealing with compensation, I express gratitude to the Minister and his Department for having discovered this anomaly before the Act becomes operative, but I hope he will pay serious regard to the position of the pre-1924 cases.

4.43 p.m.

Mr. Blyton (Houghton-le-Spring)

I wish to add my congratulations to the Minister on having brought forward this Bill on his own initiative. It has been said by the right hon. Member for North Leeds (Mr. Peake) that this is the resurrection, in a limited sense, of the loss of earning capacity fixed in the 1944 Act. There is, however, a marked difference. If a man gets the 20s. hardship allowance suggested in the Bill and his wages are higher than his pre-accident wages, he will still have the disability pension under the Act, which he did not enjoy under the old Compensation Acts. There is a tremendous difference in comparing the new with the old. I would like to see the pre-1924 cases covered, but that is not part of this Bill. I hope the employers of this country, who will get no insurance for the liability they carry, will come to an agreement with the Treasury so that all these things can be brought within the ambit of the new Measure.

This Bill is an improvement to the Bill which we discussed in Standing Committee "A." In the discussion that took place in the Standing Committee, many of us on this side were very much disturbed by the figure of us. 3d. in the Bill, and we were disturbed because of the fact that the loss of earning capacity in the Bill where wages are high will now act to the benefit of compensation cases. We remember 1926, when it acted the other way, when wages were low, and when a man who had lost an arm, an eye, or a leg and who happened to go to another job, found that he had no compensation because there was no loss of earning capacity. If they did get anything, it was a very small amount, because the disparity in wages between the pre-accident and post-accident earnings was very small.

Under the rule about the loss of earning capacity, some men got no compensation at all, and the reason was that, after a certain period of total disability, they went back to their pre-accident employment, and after a few weeks there came out again. The fact that they had been back to their pre-accident employment after their accident prevented them from ever coming back into compensation again. This Bill will mean that these people will get a much better chance in regard to that situation. If a man suffers an accident and cannot follow his pre-accident employment, he will have 38s. a week on top of his post-accident employment earnings, and that makes a considerable difference to his compensation.

The greatest feature in this Bill, in my opinion, is the fact that, after 26 weeks of disability, a man can go to another job with a view to recovering his strength in order to go back to his pre-accident employment. If a man has a fractured pelvis or a broken leg, we cannot expect him, at the end of 26 weeks' disability, immediately to go back to the coalface unless he has had a period in which to get accustomed, in his worsened condition, to conditions in the pit. This Bill will provide that, during the period when he is regaining his strength after his period of total incapacity, and until he actually regains his strength, he will get his hardship allowance and his income will not be diminished to such an extent at it would have been if this provision had not been made. Because this provision affects rehabilitation, particularly in the mining industry, we extend our grateful thanks and compliment the Minister on this Bill.

4.48 p.m.

Mr. Bowles (Nuneaton)

I wish to support my hon. Friends the Members for Ince (Mr. T. Brown) and Houghton-le-Spring (Mr. Blyton) in one thing—the request which they made to the Minister about the pre-1924 cases. I have the honour to represent a mining division, and, at every meeting, as we explain the new terms of the law which will come into force on 5th July next, we get questions on these matters. I do not know if the Minister has any idea how many people are still suffering from that anomaly with which he has not managed to catch up in this Bill. It may be outside the Title of this Bill, but, at meetings which my hon. Friend the Member for Broxtowe (Mr. Cocks) and I attended recently, we were cross-examined on this matter. I have been busy on other Bills, and I must confess that I am not aware why there is this discrimination between men injured before 1924 and those who have sustained injuries since. Perhaps the Minister, when he is replying, will speak about this discrimination, and will also say whether he can hold out any prospect of it being removed soon.

4.50 p.m.

Mr. J. Griffiths

May I thank those hon. Members who have spoken in this Debate for their very kind references to the Bill, to myself and to my Department? Let me deal first with the detailed points that have been made. In regard to the point made by the right hon. Gentleman the Member for North Leeds (Mr. Peake) about the wording, I shall make sure that the construction which he has placed upon it is not the right one. I will look up the matter, and, if his fears are well-founded, I will take steps to see that the words are changed. It has been announced already —and this is a Government that works together, not in compartments—that similar provisions will apply to Service casualties. When we make provisions for one section, we do it for others as well.

May I explain the position about the old cases? The Act enables us to make two payments to those who are injured and are rendered unemployable by injury or disease, even though the injury or disablement takes place before 5th July. First, there is a condition that must be fulfilled. They must be in receipt of weekly compensation. If they have commuted their weekly compensation for a lump sum, the case has been finally settled, and that disposes of it. If, however, they are in receipt of weekly payments, and if as a result of injury or disease they are rendered unemployable, they can apply to us for the unemployability supplement, and we can give them a supplement of 20s. from the new indus- trial injuries fund, in addition to their weekly compensation, whatever it is.

Mr. Harrison (Nottingham, East)

Would the means test be a part of that?

Mr. Griffiths

No, there is no means test. If a man is injured by accident or disabled by disease and rendered unemployable as a consequence, and he is in receipt of weekly compensation, we will pay him 20s. unemployability supplement in addition to the weekly compensation which he receives. Furthermore, if the man, in addition to being rendered unemployable, sustains injuries which are of such a character that he needs constant attendance, we can pay him an additional allowance up to 20s. a week, and, in very serious cases, up to 40s. a week. These two provisions apply to those in receipt of weekly compensation on 5th July and who satisfy these conditions, and they apply to the pre-1924 cases as well.

I expressed the view two years ago that it was my desire and that of the Government, if we could, before 5th July, when the new Act comes into operation, to make arrangements by which the old cases could be brought entirely within the scope of the new Measure. That involves two things—the responsibility for the old cases and the responsibilities of the employers. I am sure that no hon. Member or the House would ask me to accept responsibility for paying old cases out of the industrial injuries fund when the employers discharge their liability by means of a lump sum. Many people after an accident have decided to take a lump sum settlement, and that is not the difficulty in one case, but in thousands of cases. That is the first problem, and experts have been working on it for some time, but there is also another. If we bring all the old cases into the new scheme, on what terms are we to convert their workmen's compensation payments into a proper disablement pension? I am very anxious that, when we do bring it forward, we shall bring it forward in such a way as to provide general satisfaction. The problem is that of the weekly payments, and the difficulty of getting over the loss of earning capacity is not an easy one.

It is most desirable, before we come to to a final statement on this matter, that we shall have had experience of the working of the new scheme. I therefore met representatives of the workers in the trade unions, and put to them the view that we ought to wait until we have had a few months' experience of the new scheme and then examine the problem still further to see whether, in the light of the experience of the new scheme, it would be possible for us to arrive at a method by which we could arrange to take over the old cases. I have given a further undertaking that we shall come to a final conclusion one way or the other within 12 months of the operative date of 5th July. In the very near future, we shall be inviting the old cases—the people who believe they are entitled to the unemployability allowance—to make application, and we shall deal with them as soon as we can and make these payments available to them.

Mr. Bowles

I imagine that the great mass of employers are insured against workmen's compensation claims. When 5th July comes along, what happens to their funds, which they have kept against unsettled claims under the Compensation Acts? Are they to be allowed to keep them, or is the Ministry entitled to them? Could we have some consultation in order to arrive at some figure at which to commute the lot?

Mr. Griffiths

That is one of the difficulties. When I entered negotiations, I thought there was a nest-egg, but, as a matter of fact, the growing practice has been to finance workmen's compensation payments, not on a day-to-day basis, but on a fortnightly basis. It is difficult to arrive at any arrangements in a way that is fair to all. It is very difficult for a man to make up his mind what is the best for him—whether to accept x pounds, subject to deduction and withdrawal as a result of post-accident earnings, or a fixed sum to be paid to him for the rest of his life without having any effect on his earnings. That is the problem we have to face, and, when we have had experience of the new scheme, we shall be in a better position to face it. I am just as anxious as anyone to do it, but I am also anxious to do it in the right way.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the Whole House for Tomorrow.—[Mr. Richard Adams.]