HC Deb 01 December 1980 vol 995 cc101-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

10 pm

Mr. Michael Meacher (Oldham, West)

I want to begin by making clear how grateful I am for the Pneumoconiosis Etc. (Workers' Compensation) Act 1979, which has given substantial amounts in lump sum compensation to many thousands of byssinosis victims in textile towns, particularly in the North-West, such as Oldham. A considerable measure of thanks is due to the last Government fur bringing the Act forward. I also give credit to the present Government for what I think has in general been a liberal interpretation of the Act in its implementation.

If I am critical of the Act tonight, it is not through lack of gratitude or any desire to make partisan points. Nothing that I shall say reflects on past Labour or present Conservative Ministers, but I believe that the Act contains in particular one serious flaw, and perhaps some other flaws, which should be remedied.

My figures come from the Department of Employment. I understand that to date 2,566 applications have been made for benefit for byssinosis, of which 799 have been refused. Of those rejected claims, which are what concern me tonight, 735 were refused because not all the relevant employers had gone out of business.

I understand that a further 45 claims have been refused because the applicants were not entitled to disablement benefit or because the relative applying for benefit was not eligible. It is to the first category of rejected claims, overwhelmingly the largest category, that I shall turn my attention tonight. I believe that the average claim has been of the order of £6,600, which in a town such as Oldham is considerable. It would probably be considered large anywhere in the country, but it certainly seems large in a place such as Oldham, which is quite poor. In one case, the sum of £14,000 was awarded there, and there have possibly been even greater awards.

My main complaint is that it is anomalous to withhold lump sum compensation where there is an employer still in business, which is what the Act provides. Most claimants have worked for at least three employers. That is about the average, but I know many who have worked for six or seven, and some for even more. In other words, there will be many cases in which persons are caught out on the trip wire of having one employer—possibly more than one—who is still operating.

Many cases have come to me in which five employers have gone out of business and only one still operates. The claimant may have worked for him 20 or even 30 years previously, yet that single fact disqualifies him from receiving compensation. That is clearly grossly unfair as a way of distinguishing between different applicants. Whether a person's past employer continues in business decades later is entirely arbitrary.

As a riposte to the unfairness—for which the present Government are not responsible — it is possible that claimants do not reveal their full employment record in order to conceal that they have worked for an employer who is still in business. I do not say that that happens, I have no evidence that it does, but it is a possibility. If it happens, it is wrong to penalise truthful claimants for their honesty.

I shall give the House two examples. In clinic after clinic I hear of a trickle of cases involving failed applicants who are distressed and angry. The first example involves Mrs. Mullins of 9 Nelson Way, Washbrook, Chadderton. She was employed by Werneth Spinning Co. Ltd. in the 1950s, as were half a dozen other constituents who have come to me. In 1959 the name of the company was changed to Werneth Ring Mill Ltd. At a much later date a majority of the shares of Werneth Ring Mill Ltd. were acquired by Oxley Threads. The company now known as Werneth Ring Mill Ltd. continues to trade under that name, so Mrs. Mullins receives no compensation. The position is extraordinary. If Oxley Threads had acquired 100 per cent. of the Werneth Ring Mill Ltd. shares, Mrs. Mullins would have received her compensation.

In a helpful and long letter dated 31 May, the Minister told me: If a company buys a mill from a different company, then there can be no question of the purchasing company being a relevant employer in respect of work carried out at that mill prior to its purchase by them. Oxley Threads acquired only 70 per cent. of the shares, so Mrs. Mullins is deprived of her compensation because the minority of the shares retained preserves the title of the company. That is an intolerably arbitrary way of awarding compensation. The Minister is liberal-minded and I am sure that he accepts that view.

The second case involves Mrs. Anderson of 53 Raymond Avenue, Chadderton. In the course of a lengthy employment, she worked in six mills, five of which have closed, The sixth was Butterworth's, which sold out two years ago to Bright's. Because Butterworth's continues to exist, even though it has changed its business and might not operate in the textile field any more, Mrs. Anderson is disqualified from receiving compensation. I find it difficult to believe that that is fair.

The Government have sought to interpret the Act with a measure of favourable discretion. I give credit to the Minister for that. The discretion applies in particular when there is only a short period of employment with the relevant employer, when there is a long period between the termination of employment and receiving industrial disablement benefit — that is, when the disease is contracted — and when there is only a short period between the start of the employment and the contraction of the disease.

I am grateful for the way in which that system has included some dozens of cases within the scheme. That is helpful and I express my gratitude. However, the concessions do not overcome the central anomaly of an employer still being in business. I presume that the rationale of the surviving employer is that a case for compensation could be brought before the courts. That was why the exemption was written into the Act. It must be obvious that any such possibility is in practice out of the question. I have seen breathless and wheezing constituents in their sixties and seventies for whom any such course of action would be inconceivable. I do not think that anyone has ever successfully pursued any such claim in the courts.

There is the problem of persuading a court, even if a case were entered — there may have been several relevant employers over a period of, for example, 20 years — that the employer who is still in business is the employer at the time byssinosis was contracted. How does one know that it was during that period of employment as opposed to the preceding or succeeding periods?

I am well aware that the Minister has an answer to that question. I shall quote it at length because it is important. He wrote to me as follows: There is no question of our assuming that byssinosis was contracted in the employment of the employer who is still in business, and certainly not that that employer is liable to pay compensation. I think it is clear that, where a byssinosis sufferer has worked at a number of mills, it is generally impossible to determine which period of work gave rise to the disease; the effects of exposure to cotton dust are cumulative. What the Act requires us to do"— this is the important point— is to consider whether an applicant might have or might have had a claim against a particular employer. Unless the period of work involved was very short, or was of a kind which cannot have contributed to byssinosis (for example, work with manmade fibres), we can reasonably conclude that the applicant might have or might have had such a claim. Even if we take the facade of a private court case seriously, it is clear that it provides no serious practicable alternative to the State scheme. It might satisfy a Minister to hide behind the legislative exemption that company X is an employer against which an applicant might have a claim, but that would satisfy no court of law that company X might be a relevant employer. It would want a degree of proof that it must have been company X rather than companies Y or Z. By quoting the statute, the Under-Secretary of State is pushing the applicant into a no-man's-land where effectively he is denied help both by the State and by private litigation.

Another anomaly it is unfortunate — I want to mention it because it serves to heighten the acute sense of grievance that the inequity of the present working of the Act produces—is that a few payments have been made in error. The Government admit that and the Minister makes it clear in his letter to me of 2 June. These payments have been made to persons when one of their previous employers was still in business. I recognise that the desire to make payments quickly led to errors being made. The identity of these persons is widely known and it has caused consternation and a great deal of discontent, especially because of the size of the sums involved.

What should be done about the problems that I have raised? I appeal to the Minister again to consider the introduction of compensation for all byssinosis sufferers as of right irrespective of the continuation in business of previous employers. I am well aware of the objections to that. The most obvious objection is that of cost. The immediate cost of including byssinosis sufferers who have been excluded under the scheme would be about £5 million compared with the approximately £11 million that has been paid out. However, there is no other means of restoring equity given the present arbitrary division between byssinosis sufferers.

It is said that similar conditions would have to be included in any such extended compensation scheme. The Minister wrote: It would…be impossible to justify confining such fault-free compensation to sufferers from the diseases covered by the Pneumoconiosis … Act—the special justification for which was that the diseases in question are very slow to develop and that all relevant employers may therefore have ceased to carry on business before the disease is even diagnosed. The consequence would be a very large additional financial burden on the State". However, I put it to the Minister that the cost could be considerably restricted by extending the extension of fault-free compensation solely to cases of cumulative and insidious onset of, for instance, Raynaud's disease and industrial deafness. The cost of including only those cases would be supportable.

The only other alternative is an industry-based levy. The possibility of some form of voluntary industry-financed scheme was considered before the 1979 Act was passed, but the Minister is on record as saying that the objections to it are formidable. If the Government believe that the alternative of a levy on employers would not be practicable, it is incumbent on the Government—and I am well aware of the Minister's difficulties over public expenditure —to pursue the only equitable alternative through an extended State scheme. I strongly emphasise that, and I hope that the Minister will give it serious consideration.

10.16 pm
The Under-Secretary of State for Employment (Mr. Patrick Mayhew)

I am glad that the hon. Member for Oldham. West (Mr. Meacher) has been able to raise this important matter on the Adjournment. He has had substantial correspondence with me, most of which he has quoted tonight, as well as private meetings. I am grateful to him for the appreciation that he expressed for the way in which the Government have sought to implement an Act passed in the last days of the previous Government.

I must begin by reminding the House of the background to the Pneumoconiosis, etc. (Workers' Compensation) Act 1979, under which these payments are made. Pneumoconiosis and byssinosis are diseases which develop gradually, and often continue to do so after contact with the dust which is their cause has ceased. The diseases may not manifest themselves until.' some years after the sufferer ceased doing the work which gave rise to it. Following a court decision in 1968, which effectively widened the circumstances in which sufferers might seek damages in the courts, the National Coal Board voluntarily and by agreement with the unions introduced in 1974 a compensation scheme for those sufferers from pneumoconiosis for whom it was responsible — the majority of all those in the country.

This led to representations on behalf of other sufferers from these diseases, particularly slate quarry workers, many of whom had no former employer still in business against whom they might take action in the courts. At that time, be Pearson Commission on civil liability and compensation for personal injury was sitting and was known to have this problem in mind, and it was thought right to await its conclusions. When the commission reported in early 1978, however, it felt unable to recommend that a special compensation scheme should be set up. This led to further representations and the establishment by the previous Government of an inter-departmental working group to look at the whole question.

In the light of the working group's report, the then Labour Government introduced, very shortly indeed before the end of the last Parliament, a Bill designed to provide State compensation specifically for sufferers from these diseases—and dependants of deceased sufferers—who were prevented from claiming compensation in the courts because all those who had employed them on work which could have caused or contributed to the disease had ceased to carry on business.

That was the problem that was identified. The sole reason for the introduction was that employers did not exist who could be sued in the civil courts under the principles of tort liability. When the Government were shortly thereafter defeated on a vote of confidence, there was agreement to allow the Bill to pass without opposition before the Dissolution of Parliament.

It is quite clear, therefore that not merely does the Act not provide for payments to all pneumoconiosis and byssinosis sufferers, irrespective of whether they have an employer still in business against whom an action might be brought, but there was never any intention on the part of the previous Government that it should do so. That Government made the reason for this perfectly clear. If provision were to have been made for payments irrespective of whether there was a relevant employer still in business, this would in some cases have provided specific State compensation, notwithstanding that an employer who could be sued in the civil courts was still in business. It would, in effect, have provided special "fault-free" compensation for all sufferers from these diseases, separate from industrial injury benefit, thus departing radically from the principles of liability in tort.

That would have been a perfectly possible intellectual formula to devise and follow, provided that the Government were prepared to accept fault-free compensation right across the board, but the last Government concluded that there would be no sustainable case for introducing fault-free compensation in respect of these specific injuries or diseases alone. They made it clear that they did not intend that, because there could be no good grounds for confining such fault-free compensation to sufferers from these particular diseases.

It is worth quoting a passage from the speech made by the right hon. Member for Doncaster (Mr. Walker), then my predecessor at the Department of Employment, on 2 April 1979. He said that the Government concluded that it would be right to introduce a Bill at the earliest possible moment to provide State compensation specifically for sufferers from pneumoconiosis, byssinosis and the closely associated but more acute disease of diffuse mesothelioma, or to the dependants of deceased sufferers, provided that there was no employer for whom the sufferer worked in work where he could have developed the disease who was still in business and therefore capable of being sued for damages, and that no claim for damages had been brought in the past against any such employer. The effect of these restrictions is to limit compensation to those who have no employer to sue and to avoid a situation in which the State would, in effect, be shouldering the responsibilities of existing employers as an alternative to their facing action in the courts. Later, in his winding-up speech, the right hon. Gentleman said: It is no part of our responsibility to take on those matters which are properly the responsibility of an employer. To do so is indeed unjust to those who would be outside the scope of the scheme precisely because they are in occupations where they would be able to take legal action."—[Official Report, 2 April 1979; Vol. 965. c. 1081–1118.] The last Government's sole reason for introducing the Bill, with its special provision for dust disease sufferers and their dependants, was that because of the gradual development of these diseases, in some cases over many years, employers had often gone out of business by the time sufferers knew they had the disease. A claim in the civil courts is, therefore, precluded.

The hon. Member asked me to consider what really amounted to making ex gratia payments outside the Act to take account of those byssinosis sufferers—and there are, unhappily, several hundred of them — who have made claims, but whom we have, however reluctantly, been obliged to hold fall outside the confines of the Act. The sorts of circumstances in which an ex gratia payment may be appropriate are those where a particular individual—or, at most, a very small number of people—has been accidentally excluded from an entitlement under a scheme which was clearly intended to cover him. Ex gratia payments would certainly be quite inappropriate in circumstances such as these, where several hundred people are affected, and it was the clear intention of the legislation that they should not be entitled to a payment.

I recognise that the way in which the Act operates in practice—this is particularly true for byssinosis sufferers —leads to some applicants finding that they are not entitled to a payment, while payments have been made to others whose employment records may appear to be very similar. I understand the resentment and stress of which the hon. Gentleman has spoken among his constituents, who know that certain people have received compensation whereas others have not. I realise that that has caused resentment and a belief that the Act is not being administered consistently. The explanation is partly that many workers in the cotton industry worked for relatively short periods at a number of different mills. Some of the employing companies, as distinct from the mills, ceased to carry on business while mills at which they were the employer continued in business. Other employing companies have remained in business and, therefore, remain able to be sued, even though their names and ownership may have changed and they no longer operate any cotton mills.

The hon. Gentleman raised a case relating to Werneth Ring Mills Ltd. That company remains in business and, therefore, it remains able to be sued. That was the point behind the previous Government's framing of this legislation. If the employer remains in business and is able to be sued, that precludes a claim for compensation under the Act.

Mr. Meacher

The Under-Secretary of State has made it clear that it was the intention of the previous Government to act in that way, and intentionally so, but how far does he seriously regard the option of pursuing a case in court as an alternative way of getting comparable compensation?

Mr. Mayhew

I shall come to that later, and I shall explain that we have taken into account those cases where, in all the circumstances, it seems that although a relevant employer, within the precise meaning of the Act, is still in business, in practical terms it would be impossible even to argue a claim. I shall deal with that in a moment.

The hon. Gentleman has suggested that we have been too rigorous in determining whether a particular employer is a "relevant employer". A "relevant employer" is defined in the Act as any person by whom the disabled person was employed at any time during the period during which he was developing the disease and against whom he might have or might have had a claim for damages in respect of the disablement". It is, however, quite clear that the intention and effect of the words might have had a claim for damages is, and was intended to be, very much more rigorous than the effect of words providing that any such claim, if brought, would be, or would have been, likely to succeed. The Secretary of State should not be required to reach a decision as to that. The previous Government expressly said as much. On the other hand, in implementing the Act, we have within the confines of that principle thought it proper, on advice, to consider whether there is, or was, any real possibility in all the circumstances of a particular case that a claim against an employer still in business would be at least arguable.

As the hon. Gentleman knows from our discussions and correspondence, in reaching this decision we take into account such factors as the period for which the sufferer worked for the employer in question and how long ago or how long before the sufferer was diagnosed as suffering from the disease that period of work ended.

Where, by what is, in effect, an application of the de minimis principle, we have answered in the negative the question whether the claim would be, or would have been, arguable, we have regarded the employer in question as not being a "relevant employer" and have paid compensation accordingly. But the wording of the Act has certainly not permitted us to pay compensation in the case of every claim.

The hon. Gentleman referred to the hopelessness of breathless, wheezing constituents ever being able to pursue a claim. That is not the case. Legal aid exists, and where legal aid is awarded it does not matter how incapacitated the claimant might be.

When the Bill was introduced, the Labour Government estimated that total payments to the initial batch of claimants might be about £4½ million and that about 1,300 sufferers plus a much smaller, though uncertain, number of dependants would benefit. In the event, this Government have made payments totalling about £17 million to over 2,900 applicants who would otherwise have stood no chance of obtaining anything by way of compensation. That is compelling evidence of the spirit in which the Government have administered difficult legislation, not of their making, conscientiously observing the confines of the language of the statute but striving to apply it in a manner as fair as possible to those who suffer from these cruel diseases.

I cannot hold out any hope to the hon. Gentleman of amending legislation. We believe that there is little in addition that the previous Government could have done and that the alternative really lay between legislating along the lines of the Act that they passed at the end of their period in office and doing nothing to help those who suffer from these sad and cruel diseases.

The question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.