HC Deb 03 March 1970 vol 797 cc354-61

7.45 p.m.

The Joint Under-Secretary of State for the Department of Health and Social Security (Mr. Brian O'Malley)

I beg to move, That the National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment and Consolidation Order, 1970, a draft of which was laid before this House on 5th February, be approved. The hon. Member for Liverpool, Garston (Mr. Fortescue) and I face each other on many occasions on matters of this kind, and I therefore once again welcome him to a debate which involves my Department. I am also glad to see my hon. Friend the Minister of State at the Ministry of Technology. I know of his continued interest in the industry in which he worked before coming to the House.

The Order amends the Colliery Workers Supplementary Scheme which was introduced in 1948 at the request of the coalmining industry. The Scheme has provided supplementary benefit for colliery workers and their dependants who receive benefit under the Industrial Injuries Acts for colliery accidents and diseases. It is administered by a national committee comprising equal numbers of representatives drawn from both sides of the industry and the Scheme's fund has been built up by contributions made from employers and employees only—there has been no charge on the Exchequer or the Industrial Injuries Fund.

Hon. Members may recall that over the past three years several amending Orders have been brought before this House which have had the effect of holding the rates of supplementary benefit paid under the Scheme at the pre-October, 1967, level whilst negotiations about the Scheme's future were under discussion in the industry. These negotiations have been between the employers and unions in the industry and have concerned not only this Scheme but other benefit schemes in the coalmining industry. Hon. Members may also recall that when in November last I brought the last of these "standstill" Orders before the House I indicated that agreement had been reached in principle on substantial changes to the various schemes.

The loose ends have now all been tied up, the detailed amendments to the various schemes have been drafted, and the agreement as a whole has been ratified by the unions concerned; in the case of the National Union of Mineworkers by a ballot of its areas, and in the case of the National Association of Colliery Over-men, Deputies and Shotfirers by a special delegate conference. The Order is designed to give effect to that agreement as it affects the colliery workers' scheme.

The agreement between the unions and the National Coal Board provides for improvements in the industry's sick pay and pension schemes, and for the future, those who have accidents or contract diseases will rely on the improved benefits of those schemes and not on the Colliery Workers Supplementary Scheme to supplement the benefits provided by the State scheme. In the main, however, the Colliery Workers Supplementary Scheme will continue to provide for existing beneficiaries and for those who in future become entitled to its benefits as a result of past accidents.

The Order now before the House therefore amends the Scheme so that accidents occurring or prescribed diseases developing on or after 30th March, 1970, will not be covered by the Scheme—hence no awards of colliery workers' supplementary benefits will arise in respect of such future accidents or diseases. Where the accident occurred or the disease developed before 30th March this year the Order provides that supplementary disablement benefit and the supplementary benefits payable under the Scheme following the death of a colliery worker will continue to be paid at the current rates. But supplementary injury benefit will not be paid after 28th March, 1970.

Because the Scheme will not apply to future cases the agreed amendments provide that the present contributions by the Coal Board, other employers and the workers will cease—the workers will pay increased contributions to the industry's pension schemes. In place of the present contribution arrangements the Order provides for the Coal Board to pay, from 29th March, 1970, £125,000 for each of its " accounting periods "—and there will be 12 accounting periods in any one year —which amounts to about £l½ million a year. This is the amount which the Government Actuary, who is also the Scheme's Actuary, has advised is cur- rently needed to enable the fund to meet its continuing liabilities to existing beneficiaries. Provision is made, however, for this sum to be replaced by such other sum as the Actuary from time to time may certify is required.

The National Committee's powers to invest the fund are revised so that the Scheme's investment policy is in line with those of the Mineworkers' Pension Scheme and the National Coal Board Staff Superannuation Scheme.

The other amendments in the Order are of a minor character or are a consequence of the changes I have mentioned. As I have indicated, the Order now before the House has been asked for by both sides of the National Committee administering the Scheme and the amendments it makes stem from a comprehensive revision of the coal industry's sick pay and pension schemes agreed following detailed negotiations between the employers and the unions concerned. I commend the Order to the House.

7.55 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

I am grateful to the Joint Under-Secretary of State for the welcome he gave me. We are constantly encountering each other, and indeed we faced each other in Committee this morning. However, I am always pleased to see him across the Dispatch Box. It is not often that we have the opportunity in this House of discussing an Order which is so universally commended to us by all sides of the industry, and also an Order that will cost us nothing at all. It would be churlish for anybody to oppose such an arrangement.

We are assured in the Explanatory Memorandum that no part of this fund is derived from the Industrial Injuries Fund or from moneys provided by Parliament. We are further assured that the agreement has been ratified by the National Union of Mineworkers and by the National Association of Colliery Over-men, Deputies and Shotfirers. And since we also know that the Order has the approval of the National Coal Board, who are we to put up any opposition to it?

There are, however, one or two small questions I should like to ask, which are not clear to me. Paragraph 3(5) of the Order says, in page 3: …if any report of the Actuary pursuant to this Article shall have disclosed a surplus or a deficiency in the Fund then in any such case the National Committee shall review the Scheme… There is almost bound to be either a surplus or a deficiency in the Fund. It is highly unlikely that the Fund will balance exactly every year. This seems to be putting a rather extensive duty on the National Committee to review the scheme every time there is either a surplus or a deficiency. Would the hon. Gentleman comment on that point?

Secondly, I am surprised, although I am sure there is good reason for it, that both sides of the coal industry have agreed to the abolition of the local committees under the Scheme. These local committees in the past have proved very valuable. Instead of sending everything to London, it has been possible to get the answer locally. Yet both sides of the industry seem happy to abandon them. May we have a word of explanation? Are the local committees out of date, have they not been referred to recently, or is it becoming a much more centralised scheme and therefore is reference to the National Committee thought to be sufficient in future?

My last question relates to paragraph 5, in Schedule 1, which sets out the scheme as it will be once the two Houses of Parliament have approved the Order. On page 13, in paragraph 5, one sees that certain payments shall be made not by the Secretary of State but by the National Coal Board at a rate calculated in accordance with Article 4 hereof. It is not clear whether the payments shall be made by the Board from these general funds or from the fund created under the Scheme. I imagine that in fact it is from the fund created under the Scheme, but it does not say so. I should be glad to have the reassurance of the Under-Secretary on the point.

My main point relates to the financing of the new Scheme. It is clear from the Memorandum and from what the hon. Gentleman has said that the National Coal Board will pay £1½ million a year in order to meet its obligations to the already existing cases after the present scheme is wound up. This is understand- able. The existing cases cannot just be abandoned and I have no possible objection to the Board taking this step. But from what I am informed the position is not as simple as that.

Figures I have obtained show that in the last accounting year 1967–68—we do not yet have the 1969 figures—the Board's annual contribution to the Scheme was £3.45 million and the contribution to sick pay schemes amounted to £3.4 million. But when this Scheme is introduced the Board's contribution will be million. as the Under-Secretary has said. It would, therefore, appear that there is a considerable reduction in the obligations of the Board to colliery workers for sickness and injury benefit.

What is not said in the Order or in the Memorandum is that the Board will also have to provide £800,000 a year for what is called the Old Cases Scheme and that their obligation for sick pay will go up from £3.4 million a year in the last accounting year to an estimated £5.4 million in future, that is to say an extra £2 million. The Mineworkers' Pension Scheme will have to meet an extra cost of £250,000 on long-term benefits and for the long-term benefits for under-officials the obligation will amount to an extra £50,000 a year. Thus, the total obligation of the Board under the scheme as now proposed will amount to £8 million per year instead of £l½ million a year indicated both in the Order and in the accompanying memorandum.

Since the existing obligation of the Board is £6.85 million, this will mean an additional expenditure by the Board of £1.15 million, which is not so far away from the£1½ million indicated in the Scheme. But I thought it right to point out that it is not simply a payment by the Board of £1½ million in order to look after the existing cases under the scheme. When the Scheme is wound up, the Board will have considerable additional financial obligations for sick pay and old cases which have not been referred to in the Order. That means, therefore, that the financial position will be somewhat more complicated than has been indicated to us.

With those few observations, I welcome the Order.

8.0 p.m.

Miss Margaret Herbison (Lanarkshire, North)

This Order will cause to come to an end in March, 1970, benefits which only the mining industry has enjoyed. No other industry and no other group of workers have had such a scheme. It is one of which the miners have been proud. Time and time again it brought great relief to the miner who was injured.

I would be interested to know a little of the consultations which took place between the miners' representatives and the National Coal Board. Although the State has greatly improved the benefits which are now paid, it is probably because of earnings-related benefits and improvements in the basic scales of industrial injuries benefit that the N.U.M. has been ready to accept the ending of this scheme.

However, under the earnings-related benefits, no payment is made until after the first two weeks of sickness and, after 26 weeks, there is no further payment of earnings-related benefits. Knowing the kind of accidents which miners have, where sometimes they are not able to work for the rest of their lives, it occurs to me to wonder what the National Coal Board has offered to the N.U.M. in order to get the agreement which apparently has been reached between the two sides of the industry.

I can remember having discussions on some other matters, and at that time, as a quid pro quo for certain proposals which the N.C.B. was making, it said that it would put the same money in but would increase the mineworker's pension. For far too long that pension remained at 20s. a week, and those of us who represent mining constituencies were continually having representations made to us about the long delay in improving that pension. It is now 30s. a week, and my hon. Friend has told us in presenting this Order that the National Coal Board will pay extra money for improvements in the sick pay and pension schemes.

Can my hon. Friend say what the improvements will be in the sick pay scheme and the pension scheme? I know that my constituents will want to know that, if they do not already know. So often they come to me at weekends with their questions on these matters. When I report to them this weekend on this Order, I should like to be in a position to tell them what was given by the N.C.B. to get this agreement with the N.U.M. to end a Scheme for which the miners were always grateful and of which, over the years, they have been extremely proud.

8.5 p.m.

Mr. O'Malley

With the leave of the House, I will reply briefly to the debate.

The hon. Member for Liverpool, Garston (Mr. Fortescue) asked about the part played by local committees and why the Scheme was being amended in this respect. My understanding is that the local committees have not been required to play any part in the administration of the Scheme for some time past, and so the new draft rules bring the de facto situation up to date.

The hon. Gentleman then asked about the position of the Government Actuary, and he referred the House to paragraph (5) in page 3. The position is a simple one. The National Committee will look at the situation on a running basis. It will seek the advice of the Government Actuary. If he advises the Committee that there is a need for a revision upwards or downwards in the amount of money that it needs, obviously it will consider whether it is necessary to act on that.

Thirdly, the hon. Gentleman asked a question arising from the last paragraph on page 13 of the Order. He wanted to know from which source the money will be paid. The answer is that it will be paid from the fund created by the scheme.

Finally, the hon. Gentleman noted that the result of this package deal, involving not only the supplementary benefits scheme but the sick pay scheme and the pension scheme, will result in additional expenditure for the National Coal Board. As he knows, this has been a very complicated and comprehensive package deal.

My right hon. Friend the Member for Lanarkshire, North (Miss Herbison) raised a number of points which I will try and answer briefly. I welcome her to this debate. We all recognise the very significant contribution that she made when she was the Minister responsible for pensions and social security, and I can only answer from my position with a great deal of humility.

My right hon. Friend asked what had been offered by the N.C.B. and what in general terms had been agreed between the Board and the unions concerned. The position is that, in future, the Mineworkers' Pension Scheme will pay pensions to severely disabled men who have to retire from the Board's employment because of incapacity, and a supplementary pension to widows who receive the industrial death benefit. The employee's contribution to the Colliery Workers Supplementary Scheme is transferred to the Mineworkers Pension Scheme, so that some of the payments made out of the supplementary scheme are now being taken over by what is an expanded pension scheme.

The unions concerned, specifically the N.U.M. and the Association of Colliery Overmen, Deputies and Shotfirers, have agreed with the N.C.B. that there should be an improved wage-related sick pay scheme for all industrial workers, with a longer duration of benefit related to service in the coal industry in place of the present sick pay scheme, which is mainly a flat rate scheme, and the supplementary injury benefit paid under the Colliery Workers Supplementary Scheme. Basically, this has been a tidying-up operation.

One other feature is that the industry is providing the same benefits for sickness as those provided for industrial injury. The net result of the package and of the agreement has been the transference of some of the functions of this scheme into the pension scheme and the sick pay scheme rather than the supplementary benefits scheme, and generally, because of the expenditure on the pension scheme, there are real improvements for people in the industry. If my right hon. Friend would like details of the Scheme before the weekend—she referred to speaking to her constituents then—I shall be pleased to let her have a copy.

Question put and agreed to.

Resolved, That the National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment and Consolidation Order, 1970, a draft of which was laid before this House on 5th February, be approved.