Orders of the Day — Miners' Compensation (South Wales)

– in the House of Commons at 2:02 am on 13th March 2001.

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Motion made, and Question proposed, That this House do now adjourn.[Mrs. McGuire.]

Photo of Dr Alan Williams Dr Alan Williams Labour, Carmarthen East and Dinefwr 2:04 am, 13th March 2001

I apologise to my hon. Friend the Minister for calling him to the House at this very late hour, but the circumstances were well beyond my control and that of other Labour Members.

I am grateful to Mr. Speaker and the authorities here for allowing me the opportunity of an Adjournment debate on the levy imposed on miners' compensation settlements by the south Wales area of the National Association of Colliery Overmen, Deputies and ShotfirersNACODS. When the High Court found in favour of the miners in its historic decision of January 1998, I was delighted for the hundreds of thousands of former miners across Britain. I represent a coal mining area, so I am fully aware of the lung disease and ill health of former miners and I was delighted by the immediate acceptance of Government responsibility by our then Minister for Energy and Industry, who is now the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leeds, West (Mr. Battle).

The legal action had been brought by the south Wales area of NACODs and, over the succeeding weeks and months, I had every regard for Bleddyn Hancock, its general secretary, for his work and achievements despite his active support for Plaid Cymru, the Welsh nationalist party.

On 24 September 1999, a constituent, Mr. Tommy Williams of Glanamman, came to see my in my surgery. Now aged 70, he is a former miner and has been an active member of NACODs since 1958. He told me that, along with about 200 other members of the south Wales area, in the early 1990s, he had volunteered £800 to finance the legal action and to be screened to be one of the eventual test cases. Now that the legal action is over and costs have been reimbursed, he wants his £800 refunded as was originally promised.

Mr. Williams had attended a recent branch meeting about his own compensation claim and was asked to sign a form to pay a levy for his eventual settlement. The declaration concerned NACODS acting on his behalf in all matters involving the claim and the agreement concluded: I further agree to contribute 5 per cent. as a paid up member and 10 per cent. as a non-paid up member of any settlement figure that I may receive to NACODS to assist with the costs of settling my claim. Mr. Williams refused to sign and felt that the union was wrong in imposing the levy. The legal action was over, and there was no new major cost in processing his claim.

Mr. Williams was also bitterly critical of Mr. Bleddyn Hancock. I had not met Mr. Williams previously, but he is a member of the Labour party and deeply resented Mr. Hancock's incessant attacks on the Labour Government, accusing them at every juncture of bad faith in processing the miners' claims. I raised these matters with NACODS nationally in a letter to Peter McNestry and I was very surprised to learn that the south Wales area had ceded from the national union in June 1998. NACODS nationally had no levy, but charged £50 administrative costs for successful claims in industrial injury actions.

I then took up Mr. Williams's case with Mr. Bleddyn Hancock. After three or four robust exchanges of correspondence, there was no progress. Mr. Hancock vigorously defended his union's right to impose a levy on every individual that it helped, despite the fact that it was a class action involving thousands of claimants.

In a conversation on 13 January 2000, Mr. Williams quoted a settlement just agreed for a fellow NACODS member. The award was for £150,000 less a clawback of £5,000, giving £145,000. The levy of 5 per cent. would then give the union £7,250.

On 29 March 2000, I wrote to the certification office for trade unions and employer associations, asking it to investigate the above matters and for copies of recent annual reports for the NACODS south Wales area. In those reports, the membership from 1994 to the present is listed as 45, 45, 45, 854, 45, 40 in 1999 and about 30 today. I was staggered to find that the south Wales area of NACODS is such a tiny trade union. Mr. Bleddyn Hancock is regularly described as a south Wales miners' leader, as if he were the equivalent of Dai Francis or Will Paynter. The army that he represents is a mere shell of a trade union, with just 30 working members. The anomalous figure of 854 members for 1997 may represent retired miners.

Over the next six months, the certification office conducted a detailed informal investigation under the powers of section 37A of the Trade Union and Labour Relations (Consolidation) Act 1992, as amended. As a result of its investigation, the £800 initially paid by Mr. Williams was reimbursed last May. On the more general question of the NACODS levy, the certification officer, Mr. Whybrew, took a fairly dispassionate view and decided not to appoint inspectors for a formal investigation. In his last letter to me, dated 19 October 2000, he said: In passing I note the Association accepts that members seeking compensation need not make use of the union services to claim that compensation. I understand that where members, including lapsed members, are unwilling to give an undertaking to pay the levy, they are free to seek such support from elsewhere or to process the claim themselves. Sadly, that is the position of my constituent, Mr. Williams. On 16 May 2000, Mr. Hancock wrote to him, restating the arguments for the levy and inviting him to leave the association. After 40 years as a loyal and active member of NACODS, that is Mr. Williams's decision.

I turn now to a 25-minute television programme, "Dragon's Eye", shown on BBC 2 Wales on Thursday 8 February this year. I had discussions with one of the presenters, Mr. Guto Thomas, during preparation of the programme. It contained considerable new material on NACODS south Wales area and the role of Mr. Bleddyn Hancock. I have the programme on video and I have carefully studied a transcript. Most of the time is taken up with a searching interview with Mr. Hancock by the presenter, Mr. David Williams.

As regards the levy, the point is put repeatedly that all the legal costs are being reimbursed by the Government, so why should members have to pay a 5 or 10 per cent. levy from their settlements? Mr. Hancock concedes that the union could raise millions of pounds from the levy, argues that it has always been union policy and says that the money will be used to finance future legal actions.

The programme contained material, which was new to me, on the South Wales Occupational Health Project, a limited company set up by Mr. Hancock and others which involved the recruitment of thousands of miners from Yorkshire, Lancashire and south Wales for legal claims against the Government. A voluntary contribution of 7 per cent. of compensation settlements was involved, although Mr. Hancock says that the contributions were never collected, as the case was won before they were required.

The programme concluded with a lengthy cross-examination of Mr. Hancock's personal terms of employment and how decisions on his salary were reached. A study of the annual reports for 1998 and 1999 show that the general secretary's salary in 1997 was £12,158; in 1998, it was £26,950; and in 1999, it was £47,612. It doubled in 1998, increased by 80 per cent. in 1999 and increased fourfold over two years. That is for a part-time job, three days a week. I should add that Mr. Hancock receives £8,500 a year for one day a week as trustee of the miners' pension funds. In addition, form AR 21 on page 17 of the 1999 annual report gives a car allowance of £18,000. The programme also revealed an exceptional figure of a £70,000 salary for the general secretary in 1995. Those are highly eccentric salary changes, and the exchanges on those matters raised more questions than they answered.

Following transmission of the programme, the South Wales Argus, a vocal supporter of Mr. Hancock throughout the years, published an editorial on 9 February headed "End the levy, Mr. Hancock". It said: Unfortunately, we have to disagree with Mr. Hancock about the levy. We feel it is now unreasonable.Its original purpose was to finance the court battle—a cause bravely fought and rightly won.But since the government has picked up the legal bill for NACODS' High Court victory we feel it is no longer justified for the union to be taking a slice of the compensation cake. It concluded: his union is still doing something that even his national president Sean O'Neill has described as an irregular practice adding that their function was to win compensation, not make money out of it. I want the Department of Trade and Industry to consider the matters carefully and the Minister to ask the certification officer to appoint inspectors to conduct an investigation under powers in section 37(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992.

Let me summarise my concerns. First, is it right that NACODS south Wales area charges a 5 or 10 per cent. levy on compensation settlements when NACODS nationally and the National Union of Mineworkers have no such levy? I understand that a levy may be reasonable at an individual level if there is an accident or injury at work, but this is a class action involving 100,000 claimants. The union is not involved in further litigation; it is merely helping solicitors to process individual claims, the costs of which are fully reimbursed. The levy is simply being used for a windfall gain. It is immoral to take money from miners' pockets.

Secondly, how were decisions reached on the 5 and 10 per cent. levy? Mr. Hancock claims that the levy has always been union policy, but south Wales area NACODS only ceded from the national union in June 1998. Why did the south Wales area split from the national union? The 5 or 10 per cent. formula was introduced for individual personal injury claims. There should have been fresh discussions on its application to something as uniquely large as the chest disease settlement.

I understand that only working members have a vote; retired members have no vote. Is it right that a small handful of people—just 30 working members—impose the 5 per cent. levy on 1,000 to 2,000 retired members who have no vote? Lapsed members also have no vote, but are asked to contribute 10 per cent. of their settlements. Should not the old maxim "no taxation without representation" apply?

Thirdly, what is the role of solicitors in the administration of the levy? At my surgery on 24 September 1999, my constituent, Mr. Williams, told me that he had received an interim payment of £2,000 from his solicitors, Hugh James and Co of Merthyr Tydfil. Before they made payment, he was required to send a cheque for £100—the 5 per cent. levy—to NACODS. It appears that Hugh James was acting in such a way as to enforce the levy. Is that the company's general practice? If so, it is effectively aiding and abetting the enforcement of the levy. Is that ethical? I thought that a solicitor was meant to act directly on someone's behalf, but it appears that there is an odd arrangement between that firm of solicitors and south Wales area NACODS in the collection of the levy. Is that legal and proper?

Fourthly, what is the money for? South Wales area NACODS has only 30 working members, but has about 2,000 retired and lapsed members. It is expected that compensation settlements may average £20,000 each. If there is a 5 or 10 per cent. levy, the total income will be a windfall of more than £1 million. Indeed, Mr. Hancock concedes that order of magnitude in the television programme. What is the money for when there are only 30 working members and two members of staff?

Fifthly, the salary arrangements for the general secretary have given eccentric results. Are there proper accountable procedures? If there is a windfall of revenue due to that tiny trade union, the certification officer must be satisfied that there is proper decision-making apparatus.

Finally, south Wales area NACODS and Mr. Bleddyn Hancock, its general secretary, have rendered a terrific service to all miners through their High Court action. That action is now behind us. The Government are delivering due and proper compensation to miners and their widows, and reimbursing solicitors and trade unions for all their legal costs. The levy is therefore improper and cannot be justified. As the South Wales Argus said on 9 February, "End the levy, Mr. Hancock".

Photo of Peter Hain Peter Hain Minister of State (Energy and Competitiveness in Europe) 2:22 am, 13th March 2001

May I congratulate my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) on securing this debate? He is an excellent Member of Parliament and I hope that he will be rewarded at the next election with re-election with a good vote from his constituents. He has carried the torch of justice for miners and is now shining a bright light on what we both believe is an indefensible irregularity.

I agree that we should all acknowledge the part that south Wales area National Association of Colliery Overmen, Deputies and Shotfirers played in achieving justice for miners in winning compensation for respiratory disease through the courts. It was a long battle against the previous Conservative Government and British Coal, and south Wales area NACODS deserves credit for spearheading it. The association certainly incurred legal costs in that fight, but they have been and are being met in full by the Government.

I want to see all the compensation due to miners going to them. The elderly, the seriously ill and the widows should get their money in full. That is their right; justice for all of their suffering demands nothing less. I must make it clear to the House that the Department of Trade and Industry, since we assumed the liabilities of British Coal, has been responsible for meeting all the trial costs not only for respiratory disease litigation, but for vibration white finger as well. The House may not be aware that, to date, the Department has paid out over £14 million in trial costs alone to the six firms of solicitors that brought proceedings against British Coal, one of which was funded by NACODS. That firm alone received a significant proportion of the £14 million paid out in costs. Discussions are continuing with the solicitors and we anticipate making further post-trial costs payments shortly. There should be no significant on-going risk to NACODS of having to meet costs in individual claims. The Department has agreed with the miners' solicitors fixed rates of payments for all successful claims, which are intended to cover all solicitors costs.

The agreed costs for most successful vibration white finger claims will be in the region of £600 plus VAT and reasonable disbursements, although in some cases the costs are dealt with on the merits of each case. For respiratory disease, the agreed costs per successful claim range from £500 for chronic bronchitis-only claims to more than £2,000 for chronic bronchitis and emphysema claims that have gone through the full medical assessment procedure.

The level of costs will also depend on the complexity of the case. For example, where the disputes procedures have been invoked or where complex special damages are being claimed, extra solicitors fees have been agreed. A full breakdown of the costs paid to solicitors is available in the handling agreements for both diseases, copies of which are in the Library.

So far, £31.8 million has been paid to solicitors handling these claims. The total bill could be in excess of £250 million. Nobody has suggested that solicitors are short-changed. No one has complained to me about the level of the fees. We have also agreed to pay costs towards the care and maintenance of all claims that were registered before June 1999, regardless of whether they are ultimately successful. In addition, the Department is meeting all the costs of the medical assessment process, including spirometry testing, records collection and the respiratory specialists' time.

We have made it clear that we do not intend to recover any of these costs where the claimant is unsuccessful. Recovery of such costs by defendants is usual in personal injury litigation. The risks to the costs of solicitors and other legal representatives in handling claims under the claims handling agreements is therefore low, and covers only the administrative work that they need to complete for claims that are ultimately unsuccessful.

I know that claims handlers will charge a success fee—a fixed percentage of the total compensation—much as NACODS does, for handling claims. The Department has been keen to ensure that claimants know that they can pursue their case through a solicitor without such a success fee being taken from them. Solicitors are not able to do that, as the cases are still proceedings before the court. Claimants should not have to pay success fees to anybody.

I firmly believe that the compensation paid by the Department should go to the claimants, without any third party taking a slice of the compensation. Of course, if claimants want to give some of their compensation as a donation to their union in recognition of the support that they have received in pursuing their claim, that is up to them.

The south Wales region of NACODS needs to examine its conscience if it is taking what could be substantial sums intended as compensation for the suffering miners. I understand that no other British region of NACODS takes such a slice of the compensation. The south Wales National Union of Mineworkers certainly does not, and I pay tribute to its general secretary, Wayne Thomas, for the work that he has done in securing justice for retired miners and their widows.

As my hon. Friend mentioned, the Trade Union and Labour Relations (Consolidation) Act 1992 provides powers for the certification officer to investigate the financial affairs of unions. However, the certification officer is an independent statutory authority and it would be wrong for the Government to interfere in his handling of individual cases. I cannot therefore write to the certification officer on this matter.

However, if any claimant wishes to make a complaint about a union financial matter, the certification officer is required to consider whether to appoint an inspector. I would therefore encourage any claimants who are experiencing difficulties to contact their solicitor or, if they do not wish to do so, their local citizens advice bureau in the first instance.

I have spent the past six weeks questioning and re-examining previous decisions and proposals, and I was delighted on 2 March when the Prime Minister announced in Swansea that we were extending fast-track and interim offers to more than 6,000 claimants. That will mean that £30 million of compensation for widows and asthma victims will be brought forward and offered quickly. That is, of course, on top of the 33,000 payments already made, totalling more than £125 million. In fact, we have now paid out more than £360 million in vibration white finger compensation throughout Britain. In Wales, £60 million has been paid. Those figures are significantly greater than the recent coal subsidy and the regeneration money paid by the previous Conservative Government at the time of the 1992 pit closures. Some £1 million is already being paid out each day on those two major schemes, but it does not stop there. I am continuing to explore ways in which we can extend interim payments even further.

Progress is being made, but it is not good enough and not quick enough for those who have suffered the tragic loss of loved ones. In the past two weeks, we have agreed with miners' solicitors on the handling of compensation for pension loss. That was one of the first matters that Bleddyn Hancock of south Wales NACODS raised with me, and £400 million in funding is available for that purpose. That is the last piece in the jigsaw, which means that full and final offers of compensation will be made in the next few months.

Of course, compensation can never be released quickly enough when people are suffering as many miners are. We need to bear in mind the fact that, with fresh claims coming all the time, there could be significantly more than 150,000 claims to settle. About l,000 claims a week are still being received. We will continue to seek every means we can of reducing further delays, but that will require the co-operation of all parties. For my part, I shall ensure that the elderly and most injured are seen first. We are also prioritising widows who are claiming on behalf of their late husbands.

On vibration white finger, progress continues to be good. To date, we have settled nearly 21,500 claims and made a further 25,350 interim payments. In total, we have paid more than £235 million in compensation on vibration white finger. In Carmarthenshire, almost £2 million has been paid to 500 people. That is increasing week by week. I am delighted that claimants will see further progress in the next few months. They have a right to expect it.

As my hon. Friend rightly said, it is the Labour Government who are delivering, while others—I refer especially to Plaid Cymru—try to exploit the suffering of miners' families, widows and communities. We are delivering the programme and we expect all parties, including Plaid Cymru, to co-operate, to provide constructive criticism where it is appropriate and to make positive suggestions, which will be taken on board, as they have been previously. What matters is justice to miners and their families, widows and communities, which is why the Government have made available more than £2 billion to fund justice for miners who have suffered long years of ill health.

I have seen the need for such help. My constituent, Mr. Ken Herdman of Seven Sisters in the Dulais valley, Neath, is trapped at home. He is stuck in his front room, his bathroom, his living room and where he sleeps. He cannot go outside for walks like the rest of us. When he walks the few yards from his front room to his bathroom—something that we would do without even thinking about it—he has to stop to catch his breath. After he has returned from the bathroom, he takes up to half an hour to recover. All the time, his wife cares for him and is hovering in the background. It is to such long-suffering miners that the Government owe a debt. We are repaying that debt and will continue to do so.

Photo of Dr Alan Williams Dr Alan Williams Labour, Carmarthen East and Dinefwr

My hon. Friend vividly described a miner in Seven Sisters in his constituency. In the light of that description, does he agree that it is unjust that the miners' own trade union is clawing back 5 per cent. of the compensation settlement as a levy? We have heard Mr. Hancock say a lot about clawback and how wrong it is that it applies to some individuals. However, with regard to the union, all individuals are required to pay 5 per cent. of their settlement as a sort of compulsory clawback.

Photo of Peter Hain Peter Hain Minister of State (Energy and Competitiveness in Europe)

I regard that as unjust. The justice and full compensation should go to the people concerned, such as those whom my hon. Friend represents so ably in his constituency.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Three o'clock.