HL Deb 20 July 1976 vol 373 cc832-5

10.16 p.m.

Lord WELLS-PESTELL rose to move, That the draft Workmen's Compensation (Supplementation) (Amendment) Scheme 1976, laid before the House on 5th June, be approved. The noble Lord said: My Lords, I think it would be helpful if, first, I said a little about the Scheme in general and how it fits in with the overall pattern of provisions for industrial injury. The scheme is made under what has now become the Industrial Injuries and Diseases (Old Cases) Act 1975. It provides supplements out of the National Insurance Fund for those who suffered industrial accidents and diseases before 5th July 1948 and who are still receiving weekly payments under the old Workmen's Compensation Acts. Those Acts continue in force for accidents and diseases suffered before 5th July 1948; for accidents and diseases from that date the benefits of the industrial injuries scheme replace workmen's compensation.

Workmen's compensation is not itself affected by the Supplementation Scheme. Its maximum rates have not been increased since 1948. The purpose of the supplementary allowances is to raise the level of payment made to those receiving compensation so that it is very broadly in line with that made to their counterparts under the industrial injuries provisions of the Social Security Act. In the great majority of cases the supplementary allowances continue for life. The Scheme's main benefit is called the "lesser incapacity allowance" which is based on earnings lost as a result of the accident or disease—and that is what we are dealing with now. The allowance is calculated after comparing the claimant's earnings before the accident with those he can command after it. The maximum rate of the allowance is at present £8. It will he going up, as part of the social security uprating in November next, to £9.20.

Most beneficiaries are now retired; the majority of them are indeed over 70. The accidents for which they are being compensated go back as far as the beginning of the 1920s or earlier in some cases and we are still dealing with quite large numbers dating from the 1930s. The time-span means that comparisons between earnings in various occupations, though we do our best to bring them up to date, are frequently artificial; and the longer this old scheme runs, the more artificial they become. For instance, a man may have been looking after pit ponies in the 1920s, when he had his accident, and been a warehouseman when he retired in the 1950s. We have to try to calculate what he is losing now by way of reduced earning capacity as a result of changing occupations.

It is this system of repeated earnings comparisons which we propose, in the Amendment Scheme, should come to an end. Subject to the approval of both Houses, what will happen will be that where earnings losses have already been determined they will be set out in a table in the regulations; and the table will show the appropriate rate of benefit for a particular rate of earnings lost. We have set the levels in the tables so as to ensure that, taken by and large, beneficiaries as a group achieve a level comparable with that of their counterparts in the industrial injuries scheme. The Government's intention is that the table will be regularly amended so as to reflect upratings in other social security benefits.

Let me illustrate what this means by an example. A man's earning loss has been settled at, say, £11. That qualifies him, as will be seen from the schedule to the regulations, for a lesser incapacity allowance of £7.25, with effect from November. In future, the Department will not attempt to make further earnings comparisons at periodic intervals. Instead, the individual will have that £7.25 uprated automatically like other comparable social security benefits in line with earnings or prices, whichever is the more favourable. For the trickle of new claims there will still be a need for an initial earnings comparison, but once the claim is properly established they too will look to the table for their benefits.

The change will affect some 5,000 recipients of the lesser incapacity allowance, who will have future upratings of their benefit made automatic. For some of them the new procedure will be marginally more generous. This is because it will reflect general increases in prices and earnings more readily than the existing somewhat cumbersome method can take account of individual increases in earnings. The additional benefit cost, which will be something like £16,000 in the first full year, is, however, more than outweighed by administrative savings. In view of that, I commend the Amendment Scheme, and I hope that your Lordships will give it your approval.

10.22 p.m.

Lord SANDYS

My Lords, very briefly at this late hour, we on this side of the House welcome this measure which the Government have brought before us. The level of compensation for old cases, especially those which have been detailed by the noble Lord, of which, as he has mentioned, there are 5,000, has been without the benefit of uprating since 1948 and, although the numbers of cases may be minimal, in these particular instances this will be of enormous benefit. Never let it be said that a minority group is too small to receive special attention within the system if this can be arranged for a reasonable cost. We therefore strongly support the measure, if it can be put into effect.

On Question, Motion agreed to.