Ministers discover 'serious errors' in compensation for trawlermen

Business Minister Ed Davey has pledged to check payments made to 600 men, many of them based in Hull and Grimsby, after the errors were discovered when the men appealed against the amount they received from a second compensation scheme – which was, ironically, designed to resolve flaws in the original round of payouts.

Alan Johnson, MP for Hull West and Hessle and the Shadow Home Secretary, has now urged Ministers to reconsider the entire scheme – which he says is "deeply flawed" and "badly administered" – amid fears the rules will still unfairly penalise some men.

The admission by Mr Davey that mistakes have been made processing claims is the latest in a series of problems endured by men who lost their livelihoods as the fishing industry collapsed after the 1970s Cod Wars and spent years fighting for compensation.

It is all the more embarrassing for the Government given its declaration only weeks ago that the scheme had been brought to a "successful close".

A first payment scheme set up in 2000 was criticised by the Ombudsman for penalising men who had breaks in their service, but a second scheme supposed to iron out the flaws has been widely condemned because it imposes far tougher qualifying criteria.

Now officials are preparing to write to some of those who claimed under the second scheme – which has paid 3.7m to 600 claimants – offering additional money. Some whose claim had been turned down will also now be offered compensation.

Mr Davey has admitted that "significant errors" have been found in a small proportion of cases which have gone to appeal, with trawlermen losing out on up to 550.

"We are determined to ensure that everyone received the payments that they are due under the scheme and I can assure you that the audit will cover all of the claims where errors of this scale could have made a difference to the outcome, " said Mr Davey in a letter to Mr Johnson.

Mr Johnson wants a fresh investigation by the Ombudsman into the handling of the scheme.