Government spent more on red tape than sick miners

South Norfolk MP Richard Bacon has said that the government's scheme to compensate coal workers was badly botched, as a new report finds that more was  spent on red tape than it has helping miners suffering with lung disease.

Mr Bacon, a member of the Commons public accounts committee, said: “The planning of the Coal Health Compensation Schemes was badly botched.  As a result, two-thirds of miners suffering with lung disease got less in compensation than the government spent on processing their claims”. 

“The planning of the Coal Health Compensation Schemes was badly botched.  As a result, two-thirds of miners suffering with lung disease got less in compensation than the government spent on processing their claims.  The government also underestimated the number of claims it would get by more than 300 per cent.  What’s more, some sick and elderly miners have been kept waiting more than a decade for compensation”. 

“This scheme is costing far too much to run and has kept miners waiting too long for compensation.  The remaining claims should be settled as quickly and cost-effectively as possible”.     

Mr. Bacon, MP for South Norfolk, was speaking as the Commons public accounts committee published its report on the Coal Health Compensation Schemes.  In 1998, the courts found the British Coal Corporation negligent in respect to lung disease caused by coal dust (Chronic Obstructive Pulmonary Disease or COPD) and hand injuries caused by using vibrating equipment (Vibration White Finger or VWF).  The former Department of Trade and Industry (DTI) had already taken responsibility for the Corporation’s accumulated personal injury liabilities and, under the courts and in negotiation with claimant’s solicitors, established two schemes to pay compensation. 

The report finds that, for the COPD scheme, around 69 per cent of claimants receiving compensation got less than the average cost of administering a claim.  The DTI also failed to seek actuarial advice during the planning phase. As a result, it underestimated the likely volume of claims by over 300 per cent and allocated an insufficient number of staff to manage the liability.  Consequently some claimants have had to wait as long as ten years or more.

The successor to the DTI, the Department for Business, Enterprise and Regulatory Reform (DBERR) estimates that it will have paid some £4.1 billion in compensation, plus £2.3 billion in administration costs, by the time the schemes are completed.  This means that for every £2 paid out to miners, over £1 will have been spent on administration.

4 March 2008