The
Committee consisted of the following
Members:
Chairman:
Mr.
David
Wilshire
Alexander,
Danny
(Inverness, Nairn, Badenoch and Strathspey)
(LD)
Battle,
John
(Leeds, West)
(Lab)
Campbell,
Mr. Ronnie
(Blyth Valley)
(Lab)
Ennis,
Jeff
(Barnsley, East and Mexborough)
(Lab)
Gummer,
Mr. John
(Suffolk, Coastal)
(Con)
Heppell,
Mr. John
(Vice-Chamberlain of Her Majesty's
Household)
Keeley,
Barbara
(Worsley)
(Lab)
Kemp,
Mr. Fraser
(Houghton and Washington, East)
(Lab)
Lancaster,
Mr. Mark
(North-East Milton Keynes)
(Con)
Laws,
Mr. David
(Yeovil)
(LD)
Murphy,
Mr. Jim
(Minister for Employment and Welfare
Reform)
Neill,
Robert
(Bromley and Chislehurst)
(Con)
Penrose,
John
(Weston-super-Mare)
(Con)
Prosser,
Gwyn
(Dover)
(Lab)
Selous,
Andrew
(South-West Bedfordshire)
(Con)
Skinner,
Mr. Dennis
(Bolsover)
(Lab)
Strang,
Dr. Gavin
(Edinburgh, East)
(Lab)
Hannah
Weston, Committee
Clerk
attended the Committee
Third
Delegated Legislation
Committee
Thursday 22
February
2007
[Mr.
David Wilshire
in the
Chair]
Draft Pneumoconiosis etc. (Workers Compensation) (Payment of Claims) (Amendment) Regulations 2007
8.55
am
The
Minister for Employment and Welfare Reform (Mr. Jim
Murphy):
I beg to
move,
That
the Committee has considered the draft Pneumoconiosis etc.
(Workers Compensation) (Payment of Claims) (Amendment)
Regulations 2007.
Good
morning to you, Mr. Wilshire, and to members of the
Committee. I am delighted to serve under your chairmanship. This is the
closest proximity in which we have been since we both served in the
armed forces parliamentary scheme, which was one of the most enjoyable
events in my nine or so years in Parliament, and not simply because it
involved throwing you off HMS Newcastle into the
Caribbean
The
Chairman:
The trouble is that I got back
on.
Mr.
Murphy:
That was not my
fault.
I confirm that
the provisions of the regulations are compatible with the European
convention on human rights. They are being made under the
Pneumoconiosis etc. (Workers' Compensation) Act 1979, which was
designed to pay compensation to sufferers from certain dust-related
diseases when there is no recourse to legal action against their former
employers. The purpose of the regulations is to increase by 3.6 per
cent. the amount of compensation paid to those who first satisfy all
qualifying conditions on or after 1 April 2007. The increase is based
on the retail prices index, which is the indicator for increasing most
social security benefits, at September
2006.
The 1979 Act has
been administered by the Department for Work and Pensions since
responsibility was transferred from the Department for Transport in
2002. Following the transfer, the Government gave a commitment to
increase the payments annually alongside increases to other social
security benefits. I am pleased to keep that promise by bringing
forward these
regulations.
It may
help if I mention briefly the history and purpose of the Act. People
suffering from industrial diseases have the right to sue their employer
or employers at whose workplace exposure took place. However, the
dust-related diseases covered by the Act take a long time to develop,
as my hon. Friends are only too aware from cases in their
constituencies, and might not be diagnosed until 20, 40 or even more
than 60 years after exposure to dust. By that time, not surprisingly,
the employer or employers responsible may no longer exist, which means
that sufferers and
their dependants might find it difficult, if not impossible, to secure
compensation through civil
action.
To give a
simple example, the use of asbestos was widespread in shipyards, and
many of the asbestos-related diseases that now exist were caused by
exposure in the 1960s. Many of the shipbuilding and ship-repairing
companies that traded then are no longer in business and people who
have a disease caused by working for them are unable to pursue a claim
for damages. To remedy that, Parliament enacted the 1979 Act
to provide a measure of compensation to those who cannot claim through
the courts. It provides for lump-sum payments to sufferers from certain
industrial-related diseases or, if the sufferers have died, to their
dependants.
There are
three basic conditions of entitlement that must be satisfied before a
payment can be made: first, that every relevant employer has ceased to
carry on business; secondly, that no court action has been brought nor
compensation received in respect of the disease and, finally, that
industrial injuries disablement benefit is payable to the disabled
person. The Act covers five main diseases: diffuse mesothelioma;
pneumoconiosis, which of course includes asbestosis; bilateral diffuse
pleural thickening; primary carcinoma of the lung where there is
evidence of asbestosis and/or bilateral diffuse pleural thickening, and
byssinosis.
The vast
majority of claims under the scheme, in fact more than 70 per cent.,
are for mesothelioma, which is, as my hon. Friends know, a particularly
unpleasant, terminal condition caused by asbestos fibres. In a moment I
shall mention ongoing work to improve support for sufferers. I am glad
to record that the scheme has successfully fulfilled its role, which is
best illustrated by giving figures that show how much it has helped
those most in
need.
From the time
the 1979 Act came into force until January 2007, more than 16,490
claims have been received. Of that number, 10,874 people have been
paid, resulting in payments totalling £183 million. In the
current financial year to January 2007, we have made 1,582 payments to
individuals, amounting to £21 million, in compensation
under the Act; 87 per cent. of claims made under the Act are
successful. Following the increase set out in this order, the maximum
amount payablethat for a person aged 37 or under with 100 per
cent. assessmentis £67,890, but such large payments are
seldom made. On average, sufferers receive about £14,000 and
dependants £6,000.
The number of people
successfully claiming under the scheme is a reflection of the number
who suffer and of its success. I am very pleased with the major
contribution that it makes to the support provided for people suffering
from those distressing diseases. Lump sums paid under the Act are made
in addition to weekly payments under the industrial injuries
disablement benefit scheme. Together, they form a significant package
of financial assistance for people suffering from mesothelioma and
other diseases covered by the
Act.
Last year, my
predecessor, the right hon. Member for Barking (Margaret
Hodge)now the Minister for Industry and the
Regionsannounced that the Government had asked officials to
carry out a review of the current industrial injuries scheme. I
therefore
published a consultation document on 29 January to gather views from all
stakeholders on how best the scheme can address the future needs of
society. The consultation period does not end until April this year, so
it is too early to say much about the planned reform, but we will
consider all aspects of the scheme and all options for the future. More
specifically, we are considering current civil compensation and state
support for mesothelioma sufferers to gauge whether they receive the
right amount of support and whether the claims process can be speeded
up.
I am looking
forward to seeing the replies of all stakeholders, including the
Industrial Injuries Advisory Council, which has been fully involved in
both reviews. We particularly value its input. A mesothelioma
consultation exercise took place at the end of 2006, and a mesothelioma
summit is planned for 13 March, when a wide variety of stakeholders
will discuss options for future action. I look forward to hearing the
proposals that arise from that event. Hon. Members are welcome to offer
observations as part of both those consultations.
To conclude, we all recognise
that each case is a disaster, not only for the individual who suffers
from one of the diseases but for members of that persons
family. The Government are committed to maintaining the value of the
compensation that people receive through the scheme. It cannot ever
come close to compensating families for the loss of a life or for
severe ill health, but it does provide financial help at a time of
crisis for sufferers and their
families.
9.4
am
Andrew
Selous (South-West Bedfordshire) (Con): Thank you, Mr
Wilshire. We were briefly together in the Whips Office, and it is a
pleasure to serve under your chairmanship again this morning.
The official Opposition welcome
the order. As the Minister has said, it increases lump sums by
about 3.6 per cent., in line with other social security
benefits that were uprated a few days ago on the Floor of the House.
Last year, the increase was only 2.7 per cent. but it is higher this
year because the retail prices index is higher.
I congratulate the Minister on
bringing out the industrial injuries disablement benefit consultation
paper, which includes the Act under which the order is made. Looking at
the record of debates on this matter, I see that the Ministers
predecessors in both the past two years said that they would produce a
consultation paper. This Minister has done so.
My hon. Friend the Member for
Daventry (Mr. Boswell) dealt with the relevant order last
year and the year before that. He hoped that the consultation would
have three outcomes. First, he hoped that it would produce equity among
sufferers, so that the amount of compensation from the different
schemes was equivalent to the level of suffering, and that is
absolutely right. Secondly, he hoped that the administrative costs of
paying out the money would be the lowest possible, which is something
we all like to seeI know that the hon. Member for Bolsover made
that point last year. Thirdly, my hon. Friend hoped that the new system
would be simpler and easier for claimants, who are often in great
personal distress
when they have to approach such schemes, and also for dependants, when
there has sadly been a bereavement from either pneumoconiosis,
mesothelioma or any of the other three diseases that the Minister
mentioned.
Sadly, the
problem will get more serious over the next three years. The figures
are as follows: in 1968, there were 153 deaths from mesothelioma and
the numbers rose to 1,631 in 2000 and to 1,874 in 2003. I understand
that the Department expects the number of deaths to peak between 2011
and 2015 at a figure somewhere between 2,000 and 2,500. I would be
grateful if the Minister could confirm that that is still the
Departments expectation.
I would like to put six
questions to the Minister; he grimaces a little, but I am sure that his
able officials will be able to help him if he does not have the answers
to hand despite his extensive preparation for the order. First, I
understand that last year, 2005-06, just under £25 million was
paid out and that the Department has allocated total funding for the
scheme of £37 million this year. In the unlikely event that the
total number of claims were to exceed that £37 million, would
additional claimants not be paid, or would the Department find the
extra funds that would be necessary?
Secondly, I would be grateful
if the Minister would explain the easement that will be introduced in
the Welfare Reform Bill, which relates to the condition that every
relevant employer must have ceased to carry on business before
compensation can be claimed. We can all imagine a situation in which an
employer continued to exist in some legal form, yet was unable to make
a payment. However, none of us on the Committee wants sufferers to be
unable to claim, so it seems that the provision in the Bill will be
welcome, but I would be grateful if the Minister could explain exactly
what it entails.
I
was pleased that the Minister touched on my third point in his opening
remarks. We all understand that the assumption behind both the 1979 Act
and the order is that people whose employers are still in business will
be compensated, and it is absolutely right that they should beI
am sure we all support that. However, it would be useful for the
Committee if the Minister could tell us how quickly that process of
compensation is happening in practice. It will be deeply unfair if
people whose employers have gone out of business have access to a fast
and fairly sure remedy under the state scheme, while those whose
employers are still in existence may have to wait years; as we all
know, justice delayed is, in effect, justice denied, particularly when
people are suffering from terminal illnesses.
The consultation that the
Minister brought out on 29 January referred a little to the
balance of rights and responsibilities. Can he clarify whether in
future years the payments will still be regarded as
compensationalbeit compensation that, of course, can never
adequately compensate for the damage to health and the foreshortening
of lifeor will they be regarded in some way as rehabilitation
measures? I fully accept that those who are compensated deserve to be
rehabilitated, but will the compensation to be paid be contingent on
rehabilitation, or will the rehabilitation be additional to the
compensation that will, quite rightly, be paid under the
Act?
Last year a member of the
equivalent Committee mentioned wives who may have contracted asbestosis
from washing their husbands overallsnormally, it was in
that order, with far more men suffering than women. Children, too,
could have suffered; a constituent who visited my surgery recently told
me that her mother used to wash her fathers overalls in the
bath. My constituent and her siblings would then use the same bath.
People in the immediate environment can also be affected; for example,
those next to an asbestos factory. That point is mentioned briefly in
paragraph 4.14 of the consultation paper. I should be grateful if the
Minister could tell us whether he intends to expand the scope of
eligibility under the
scheme.
Finally, the
Ministers predecessor made the point, at column 10 of the
Official Report of the Statutory Instrument Committee on the
equivalent order last year, that much of the £800 million
paid out under both the industrial injuries disablement benefit scheme
and the 1979 Act went to lawyers. I am not sure what the right hon.
Lady meant by that. My understanding was that lawyers fees
would be paid by the employers who were still in existence when their
former employees went to court for compensation. I should be grateful
if the Minister could clarify that point. We support the uprating and
are pleased to see it come before the
House.
9.11
am
Mr.
David Laws (Yeovil) (LD): Thank you, Mr.
Wilshire. I welcome you to the Chair and thank the Minister for his
introduction to the regulations. We also support the regulations, which
are not among the more controversial that we debate. The explanatory
memorandum that helpfully goes with the regulations has a section
entitled Matters of special interest to the Joint Committee on
Statutory Instruments, which, with admirable brevity, contains
the single word None. In some ways that reflects my
feeling about the controversies surrounding the
regulations.
Nevertheless,
the regulations relate to the important issue of compensation for
individuals who have experienced the medical conditions that the
Minister has described. I commend the hon. Member for South-West
Bedfordshire on squeezing six questions out of this rather thin gruel.
I have only three, which will make the Ministers life a bit
easier. My first question is a rather obvious one: why is it necessary
for us to keep on meeting every year to discuss this, when hon. Members
could be using their time valuably elsewhere? There are also the
excellent officials who have been derailed from other activities, the
Hansard reporters and, of course, you, Mr.
Wilshire.
The
explanatory memorandum, which I always look at before considering
regulations,
states:
There
is no statutory obligation to increase payments in line with inflation
under the Act. However, previous Governments have given an undertaking
to Parliament to regularly review the rates of payment in order to
maintain their value broadly in line with
inflation
whatever
that means. It
continues:
This
review is normally conducted annually using the Retail Price Index: the
same indicator of inflation for social security
benefits.
Obviously,
those arrangements reflect the proposals in the original 1979 Act,
which came into force some time ago. One wonders whether at some stage
the Government will take the opportunity to tidy this up and save a
huge amount of time. Later today, we will discuss the cost of pensions
compensation, and the Government intend to add up 50 years of
compensation and discount it back to today. If we were to add up the
costs of dealing with this regulation for many years into the future,
we might discover that it was worth our while getting rid of these
annual debates.
It was
interesting that at the end of his comments the Minister said that the
Government are committed to maintaining the value of these payments.
That appears to put on the record that although there is discretion in
the 1979 Act, the Governments policy is always to uprate the
payments at the value of the RPI. That relates to my second question:
are there any circumstances in which we would not want to uprate these
benefits? I cannot think of any reason why the Government would not
want to uprate them by the RPI, but perhaps a future Government might
do so. Who knows?
However unlikely it is that a
Government would not wish to uprate these payments by inflation, would
it not be better just to be done with these wretched debates and
uncertainty and put the uprating on the face of the legislation? In an
average year in which the Government succeed in hitting their inflation
targets, we are talking about a cost for the inflation uprating based
on the figures that the Minister has given us today of about
£750,000 a year, which will hardly break the bank. I would have
thought that we could save time and avoid future uncertainty by taking
the opportunity to include RPI uprating in the
Bill.
The Minister has
indicated that peoples success in claiming the money under the
provisions is quite highI think that he said that 87 per cent.
of claimants were successful in the most recent year. There has been
some concern about the impact of delays on claimants. Does he have any
information about the time lags between claims being submitted and
being accepted? Are there hold-ups, or are the claims dealt with quite
successfully?
The
Minister helpfully gave us some updated information about the cost of
the measure and the number of people involved, which is not in the
Library note. He charged through it at such speed, however, that he
sounded like the Chancellor of the Exchequer reading out undesirable
Budget numbers so quickly that nobody can note them down. The Minister
moved beyond my powers of annotation, but I think that he gave a figure
of £21 million for the most recent year with 1,582 claims. I am
trying to work out how those figures relate to those mentioned by the
hon. Member for South-West Bedfordshire, who talked about
£35 million for the past year and £37 million for this
year. Will the Minister give us the total number of fresh claims each
year, the total number of outstanding claims and the total expenditure
for the past few years and perhaps for next year? If he does not have
those figures now, will he send us a note containing them? I could not
tally the figures that he gave with those in the Library note.
Otherwise, however, we welcome these uncontroversial
regulations.
9.17
am
Jeff
Ennis (Barnsley, East and Mexborough) (Lab): It is a
pleasure to serve under your chairmanship, Mr. Wilshire. I
am delighted to rise in support of uprating the compensation
payments.
I do not
want to detain the Committee for too long, but I would like to put a
personal perspective on the meaning of these regulations for the lives
of certain families. My granddad, Oliver Ennis, suffered from
pneumoconiosis and had to retire from Grimethorpe colliery at the age
of 42, although he lived until his mid-70s. Pneumoconiosis does not
kill individuals, but it ruins their livesit is known as
lingering death in mining constituencies such as the
one that I represent. The Government have done a fantastic job in
compensating people for that type of injury. For example, my
constituency is now a former mining constituency, but before Christmas
we broke the £100 million mark for compensation
payments for chronic bronchitis, emphysema and vibration white finger,
which is staggering. That is a tribute to the present Government, as is
the scheme that we are discussing.
I remember going to my
granddads house in Grimethorpe. He had an oxygen cylinder at
the side of his chair when he was watching television and one at the
side of his bed. His quality of life was limited to going to the Coal
Industry Social Welfare Organisation centre in Pontefract once a week,
when the bus came to pick him up. The story has an added twist which
provides a personal perspective. He was one of the first claimants
under the original scheme, which I think at that time paid about
£1,000 for every 10 per cent of the condition. He had suffered
from the age of 42 with 100 per cent. pneumoconiosis, but he
received a cheque for £9,000. Obviously, he should have received
£10,000, so he took up the issue with the secretary of the
National Union of Mineworkers, a gentleman called Arthur Scargill, whom
some people in the Room might remember. Mr. Scargill took up
my granddads claim, and within four to six weeks my granddad
received a cheque for £10,000, not for the £1,000 that he
should have received to top up his original payment. Obviously, the
Department thought that it was a claim for 100 per cent.
pneumoconiosis. If my granddad had cashed that cheque, he would
probably have got away with it. Being a miner and an honest type of
guy, however, he sent back the cheque and said, I am not
entitled to £10,000. I am entitled to an additional
£1,000. So he was sent another cheque for
£1,000.
I told
that tale because it underlines the honesty of miners and working
people in this country. I have been joined in Committee by hon. Friends
who also represent mining constituencies. Miners do not want a penny
more than they are entitled to; they want only their just desserts
under the law. As I have said, I am very proud to represent a mining
constituency and of my family history, and I therefore support the
regulations and the uprating of the
scheme.
9.21
am
Mr.
Dennis Skinner (Bolsover) (Lab): I rise briefly to comment
on the remarks that have been made, and, in particular, on those made
by my hon. Friend the Member for Barnsley, East and Mexborough
about
Barnsley. I was a Member of Parliament when we introduced the relevant
ordersthis is not the only oneand those were very
important
decisions.
In light of
the current claims involving chronic obstructive pulmonary disease, to
which my hon. Friend has referred, the tragedy is that the courts, not
the Government, took a decision on bronchitis and emphysema cases based
on the instant gratification of those involved, as is the way in
society nowadaysWe want it now and for
ourselveswhereas the pneumoconiosis settlements between
1974 and 1979 were based on something much more sensible. I am speaking
in order to send a message to the courts and judges that it is time
that they understood that there is another way besides the instant
gratification of victims and
lawyers.
Lawyers were
referred to earlier. Under the scheme before us, the amount of money
going to lawyersfly-by-night or otherwiseis very small
compared with what happens in COPD and vibration white finger cases
today, which is principally the result of Justice Turner saying, when
he decided on COPD cases, that everybody could have their own little
share, so everybody finished up with their own solicitor. It is a
tragedy!
We
are witnessing today something that was accepted as sensible in the
past. To each areaYorkshire, Derbyshire, Lancashire and all the
restthe NUM and other associated unions could say, We
will get together and ensure that we come to a collective
agreement. Back then, there was no Union of Democratic
Mineworkers or fly-by-night representatives of the National Association
of Colliery Overmen, Deputies and Shotfirers from Wales, who started
off the other procedure. Whereas the current payments have been
extended over many years and have not yet been concluded, the
pneumoconiosis agreements under the 1974 to 1979 Government were all
paid out within 12 to 18 months. We decided on the sliding scale, which
has been in existence ever since and which was the template for all
payments. Is it not a tragedy that in 1998 Justice Turner chucked all
that to one side and enabled all these tinpot lawyers to make their
money? I agree that there are a few exceptions, and perhaps I am going
too far. I do not doubt that there are exceptions somewhereI
had to use some to defend myself against the Tories and Mrs.
Thatcher.
The point
that I am trying to make is that there is a lesson to be learned from
what we did back then. I hope that my hon. Friend the Minister will pay
attention to that during the consultation, to which he referred in his
opening remarks, and impress, not on the Government or the Opposition,
but on the courts and the legal fraternity that there is a better way
to manage payments so that recipients receive a greater percentage of
the money paid out than they do under the current schemes of instant
gratification, which we see a lot of in the law
courts.
The hon.
Member for Yeovil has put his foot in it. He came here today and,
frankly, made the astonishing statement, which I have never heard
before in a Statutory Instrument CommitteeI have done a few in
my timethat he wants to abolish this Committee. I find it
staggering that he can come along here, when we are debating something
that is very important in terms of money and
representationtaxpayers money is being substituted for
that of past employersand
suggest that we should not deal with the matter separately. He wants to
get rid of statutory instruments and thenthe cheek of
himhe says, Oh, by the way, Ive got a few
questions. If we abolish the Statutory Instrument Committee
that is dealing with this matter, how will we have the opportunity to
ask questions?
I say to
the hon. Gentleman that some MPs, when they have nothing to say, get up
and talk as their belly warms, as my father, rather like the
grandfather of my hon. Friend the Member for Barnsley, East and
Mexborough, used to say. That is what the hon. Gentleman has done
today.
9.26
am
John
Battle (Leeds, West) (Lab): How can I follow that? I do
not represent a mining area, but I welcome these regulations and the
widening of the scheme, which was originally for mineworkers but which
has had to be extended to cover people who suffer from asbestos-related
diseases, in particular
mesothelioma.
I want
to follow what the hon. Member for South-West Bedfordshire has said,
because the scheme is inevitably having to grow like Topsy to cope with
the new situation. My figures from the specialists on asbestos say that
within the next 10 years some 10,000 people will die of mesothelioma.
It is a matter to which I have paid great attention in the House,
because there was an asbestos company in my constituency that closed in
1954. Asbestos dust had blown out on to the streets for 50 years,
polluting more than 450 people in the neighbourhood. I came to the
House in 1987, and there was a massive campaign to hold the company
liable for blowing out dust on to the street knowing that it would kill
people. It took action to protect people inside the factory, but blew
the dust out at tea time, where it fell like snow on door lintels,
window sills and streets outside, and all over a school yard. Years
later, the victims pick up the pieces in a deadly way, when they die of
mesothelioma from one fibre of asbestos stuck in their
lung.
When
I was first elected, there were a few Adjournment debates on the
subject and the Government said, rightly according to the law, that
there was no chance of pursuing the matter because the company had
closed and no longer existed. Some of us campaigned very hard for five
years to prove that it was just a dormant company that had been taken
over by Turner and Newall, and we got the case into the courts on
behalf of two victims. Then Turner and Newall was taken over by
Federal-Mogul, a multinational in America. By that time, the victims,
Mrs. Margereson and June Hancock, had won their case in
court, which found that the company was in existence and that it was
liable.
It is
interesting that the figure that the Minister fixed this morning for
compensation, £67,800, is exactly the amount that the judge in
that case ruled should be the compensation for the two women, who
subsequently died. Did those two women ever get the money? No, because
the company had been sold to Turner and Newall. We then had to prove
that Turner and Newall should go back to court via the Federal-Mogul
company, which decided to roll up its British asbestos liabilities and
dump the company by putting it into liquidation.
Did the families get the £67,000 from the liquidators? No. There
was another long, legal carry-on while we worked out who was liable to
pick up any part of the company that had been dissolved. People did get
a settlement about six months ago in which they received 12p in the
pound. I regret that, because if I had accepted that the company had
closed and we had not fought to prove that it existed, they would now
be getting £67,000 under the regulations. While I appreciate the
fact that the Government have stepped into the breach and picked up the
pieces, which is a good thing to do, half of me thinks that we are
letting those who are really responsible, the companies, off the
hook.
The
Minister might say, The companies are not there. What do we
do?, but not one of the companies could operate without
insurance, and that is where the money should come fromthat is
where it came from in the liquidation case. We should prove that a
company has a pot of insurance that covers such liabilities and try to
drag the compensation back from the insurance. I have two things to ask
the Minister. To follow up the question asked by the hon. Member for
South-West Bedfordshire, will the scheme be extended to cover those who
are not workers but neighbours of an asbestos factory? Neighbourhood
liability has been proved in law. If a company knows that what it does
inside kills workers, then it knows what it is doing when it blows the
same dust outside and kills people in the neighbourhood. Can the scheme
be extended in that way, because such people in my constituency are not
covered? More seriously, I ask the Minister to get the Department of
Trade and Industry and the Treasury to put pressure on the insurance
industry, which is responsible for insuring companies against damages
and liability.
I am
almost tempted to suggestI shall probably never get a decent
insurance policy againa dedicated windfall tax on the profits
of insurance companies to go towards paying compensation to the victims
of diseases and industrial accidents. Those people are not getting
their just rights. I have nearly 20 years experience of long,
tortuous legal cases involving an incredible version of what I would
describe as corporate gamesmanship, in which companies and insurers try
to avoid their liabilities. They do everything that they can to avoid
paying out, and then they have the nerve to say, Mr.
Battle, will you go to the Government and ask them to pay instead and
let us off the
hook?
Mr.
Fraser Kemp (Houghton and Washington, East) (Lab): I thank
my hon. Friend for giving way. In the Turner and Newall case to which
he has referred, the trust was worth in the region of £69
million and people got a percentage back. He will be aware that the
lawyers fee for the administration of Federal-Mogul was
£70 million, which is £1 million more than the trust was
worth. Does he agree that the legal fees in some cases are outrageous?
I speak as one who represents not only a former coal-mining
constituency, but the town of Washington in which the other major
industry was Turner and Newalls chemical plant, which made
asbestos products.
John
Battle:
I agree, and the point about lawyers fees
was raised. Lawyers have to be paid to do a fair jobI accept
that they do not do it for freebut it sticks in
the craw of victims who get hardly anything to see lawyers walking away
and rebuilding their businesses on the basis of their claims. There is
a sense that natural justice is being denied. I shall not go into the
issue of lawyers fees, because I want to emphasise the point
that while companies and their insurance backers played games of
corporate gamesmanship in the courts, many of the people I represented
died waiting for justice. They died before they got anything; they were
not able to get a bit of money to go on holiday or to get a break or a
rest. Everybody in this Room who has met someone suffering from
mesothelioma knows that it is one of the most devastating and deadly
diseases. Any respite that can be given ought to be
given.
It takes some
nerve for companies and insurers to ask us to petition Ministers and
the Department for Work and Pensions to pay out, when they have done
everything to avoid doing so. Perhaps taxpayers should not pick up the
bill and we should insist much more strongly that in law insurance
companies should be forced to pay out. I suggest that the DTI and the
Treasury should take up the matter in conjunction with the DWP, and
that the DWP should look at the implications in the
consultation.
Because of
changes in the law relating to asbestos, there will, of course, be a
peak of claims. If there are to be 10,000 claims between 2017 and 2020,
we can estimate the cost. However, I hope that the Government will get
heavy with the insurance industry when they start the negotiations and
say, We think that you were backing up the companies. You
should be held responsible. If the companies did not have
insurance, then the DTI should have prosecuted them for not operating
in a proper
way.
9.35
am
Mr.
Murphy:
The contributions made by hon. Members on both
sides of the Committee, but especially by my hon. Friends, highlighted
the passion they feel about the issue, the historical sense of
injustice, the continuing demands for greater justice for the victims
of these dreadful illnesses and, on occasion, the inappropriate
handling of their cases by some lawyers and their
firms.
I have seen
much of my right hon. Friend the Member for Leeds, West this week, in
different guises. On behalf of the Committee, I pay tribute to him and
to others who have campaigned on an issue that is crucial but does not
capture the front pages of the newspapers. I also pay tribute again to
Tony Worthington, who is no longer a Member of the House, who
campaigned alongside my right hon. Friend.
In view of
the history of our party and of the trade union movement, I want to
mention Jim Griffiths, who helped to implement much of the post-war
settlement on the welfare state and did so much to bring about the
industrial injuries disablement benefit scheme in the first place. He
was a remarkable man, who became Secretary of State for Wales and
obtained a position to which many others currently seek to elevate
themselvesthe deputy leadership of the Labour party. Well done
to Mr. Griffiths; we will see who follows in his
footsteps.
My right hon. Friend the Member
for Leeds, West raised the matter of Turner and Newall in respect of
compensation and the treatment of his constituents and others. He will
be aware that my right hon. Friends the Secretary of State for Work and
Pensions and the Chief Secretary to the Treasury announced that the
Government would introduce a measure to ensure that at least 800
sufferers from asbestos-related diseases would keep their full
compensation and we would not seek recovery of the benefits
paid.
That decision
means that workers at Turner and Newall and other associated companies
of the American parent company Federal-Mogul will be exempt from a
scheme that ensures that benefit money paid by the state to the victims
of accident or injury is returned once the compensation is paid. The
Department has laid the necessary regulations and greater funds will be
available to compensate that select group of
workers.
Mr.
Kemp:
That is excellent and welcome news to all of us who
represent workers at Turner and Newall. It is brave and courageous and
involves a considerable cost. Will the Minister urge other political
parties to undertake to keep to the Governments commitment and
maintain that money?
Mr.
Murphy:
It is incumbent on the two main Opposition parties
to say so in the Committee. They warmly welcomed the uprating, but I do
not know whether they will honour it and give that commitment. I
suspect that the hon. Member for Yeovil will nod. He honours every
funding commitment because he has an orchard full of money trees in
Yeovil. Opposition Members may wish to intervene to say whether they
will adhere to the important decision on the recovery of compensation
from Turner and Newall.
Andrew
Selous:
As far as I am aware the scheme was introduced in
1979 and was presumably uprated every year under the last Conservative
Government. I am sure my party has no intention of doing anything other
than that in future.
The
Chairman:
Order. The discussion has been drifting further
and further from the proposal. I have let it go thus far, but it would
help the Committee to return to what we are supposed to be
considering.
Mr.
Murphy:
Thank you, Mr. Wilshire. I will be
guided by you, as always.
The scheme was not uprated
annually by the previous Conservative Government and we should reflect
on whether a future Conservative Government would honour the commitment
that has been made today. The hon. Member for South-West Bedfordshire
offered it a warm welcome, and it is important for the Committee to try
to reach consensus on the proposal. It is also important that people
out there, particularly the sufferers of such illnesses, are aware of
an alternative Governments likely position, specifically, as
alluded to by my hon. Friend the Member for Houghton and Washington,
East, the 800 folk from whom the Government will not seek return of
benefit.
That is an important commitment. We do not seek to claw back that money,
but I wonder whether we are alone in that. Will Opposition Members
inform usperhaps not today, if they are not able or willing to,
but later onwhether they would honour the commitments made by
this Government?
My
hon. Friend the Member for Houghton and Washington, East and my right
hon. Friend the Member for Leeds, West raised the issue of legal fees.
It is trite to say that the issue is very important; it is more than
that. It is a matter of whether people have enough money to continue to
provide for themselves and their family at a dreadful time. The
Department for Constitutional Affairs is looking into the detail, so I
do not want to comment further, but my hon. Friends might want to take
the point up with my colleagues in that
Department.
I turn to
the comments of my hon. Friend the Member for Barnsley, East and
Mexborough. We can all reflect on constituency cases, which, for me, is
that of Mr. McGuinness, whom I came to know pretty well
before he developed mesothelioma. There is a human cost, probably in
all our constituencies, but my hon. Friend talked movingly about the
human cost in his own family. He is rightly proud of his grandfather. I
was wondering what the punch line would be when he talked about the
involvement of Arthur Scargill, whose support in the negotiation was
sought after the payment of the £9,000. I thought that the punch
line would be a letter to say that the £9,000 cheque had been
cancelled and not to get in contact again, rather than an additional
£10,000.
My
hon. Friend the Member for Bolsover raised lawyers involvement,
particularly the powerful issue of instant gratification. The
Government are obviously not involved in that; we are involved in
quicker compensation, rather than instant gratification. That is where
we want to be as a Government. My hon. Friend was soft on some lawyers,
albeit a minority, so I think he is mellowing in his middle
agebut that is a wider
debate.
Mr.
Skinner:
I am not mellowing, but since I have been a
Member of the House there have been at least three occasions when I
have had to resort to lawyersto defend myself, to get me out of
a police cell after the TV-am picket line, and during the
miners strike, several times. So, I have a little lista
very small listwith a number of selected names that I need from
time to
time.
Mr.
Murphy:
Will my hon. Friend place that list in the Library
of the House, for ease of reference for colleagues? That is especially
the case for the former Member for Glasgow, Hillhead, now the hon.
Member for Bethnal Green and Bow (Mr.
Galloway)although I am sure he has his own
list.
Turning
to the specific points made by Opposition Members, the hon. Member for
South-West Bedfordshire, while not committing himself to supporting the
funding being put in place today, asked some specific points about
whether there was any limit. The Government will honour their
commitment. We will honour it with
the regulations and by saying we will uprate annually, so there is no
cash limit in that sense. Again, fairly or unfairly, I can but assume
that the hon. Gentleman is of a similar view, or he would not have
asked the
question.
Andrew
Selous:
The Minister asks me to make specific forward
commitments. I have said that we are happy to honour the uprating
today, although I admit that I was not aware that there had not been
uprating in the past. I have every expectation that we would increase
the uprating in future, along with other social security benefits, as
we always
have.
Mr.
Laws:
Will the Minister give
way?
Mr.
Laws:
Notwithstanding the comments made by the hon. Member
for Bolsover, does not that earlier exchange rather make my case? It
would be useful to provide some certainty to people receiving those
funds that future inflation upgrades will not depend on the good will
of the Government of the
day.
Mr.
Murphy:
That will depend on having a Labour Government of
the day rather than on the good will of the Government, because we have
made a commitment to uprate annually.
Two specific provisions in the
Welfare Reform Bill relate to other points that have been raised. The
first is the designation of a relevant employer. We
have been operating parts of the scheme on an extra-statutory basis for
a while, so the Bill enables us to put in statute what has already been
happening for some time. The second provision widens the definition of
dependants to include civil partners and those in same-sex
relationships as part of the extension of civil rights in this country.
I think it is welcomed by most, if not all, in the House.
The hon. Member for South-West
Bedfordshire also asked about the processing of claims. As I have said
before, none of us can or should seek to defend a system whereby the
average processing time for a claim is longer than the life expectancy
post-diagnosis. No one can defend that and we would never try to do so.
The current situation is not acceptable, which is why we are consulting
on how the system can better support the victims of those
diseases.
We would
rather have a voluntary code of conduct that was toughly policed, but
if that did not work, the Government have alternative options. However,
as I said, as part of the process we are consulting about how we can
speed up claims processing to get support to people much more
quickly.
There has
been lively discussion during the review process about the issue of
family members. Hon. Friends have suggestedstronglythat
wives or daughters who wash clothes have been contaminated by a fibre
and then contracted mesothelioma. That is one of the issues covered by
the review. I urge my hon. Friends to become closely involved with and
to try to influence the review.
On the questions about
projections for future cases, the figures may change for all sorts of
reasons, including any changes we make to the scheme itself, and that
may have an impact on the number of claims in future. The latest
statistical modelling on the current structure suggests that the number
of mesothelioma deaths is expected to peak at approximately 1,950 to
2,450 some time between 2011 and
2015.
On the points
raised by the hon. Member for Yeovil, my hon. Friend the Member for
Bolsover clearly said, in his characteristic way, that we have no
intention of cancelling these deliberations for the hon.
Gentlemans convenience.
Andrew
Selous:
I fully accept that the Minister may not have been
able to obtain answers to two of my questions, but as they have not
been answered, will he write to me? First, do the Government view the
money purely as compensation and will any requirement for
rehabilitation be involved with it? Although that is the subject of the
consultation paper the Minister released on 29 January, the point is
not quite clear to me so I would be grateful if he would drop Committee
members a line about
it.
Secondly, the
Minister did not answer the question about what his predecessor meant
last year, as reported in column 10 of the Official Report, when
the right hon. Lady said that a lot of the £800 million was
going on lawyers fees. I do not understand how that can be the
case. His predecessor may have been mistaken, but, for the record, I
would like clarification on that point,
too.
Mr.
Murphy:
On the point about compensation being conditional
on rehabilitation, the hon. Gentleman has quite rightly posed the
question and answered it himself, because that issue is part of the
consultation. Therefore if he, or Members of Opposition parties, have
strongly held views, it is important that they participate in that
consultation to influence its
outcome.
I apologise
to the hon. Gentleman because I thought that I had answered his
questions on legal fees, and my hon. Friend the Member for Bolsover
gave a much better answer than I am about to give. About 2 per cent. of
industrial injuries disablement benefit costs are for administration, a
matter to which my hon. Friend alluded. On the wider point about legal
fees and civil actions, to which my hon. Friend the Member for Houghton
and Washington, East referred, I responded clearly that the DCA is
considering the matter. It is of concern to the Government, and the DCA
is examining the specific details. I hope that I have answered all six
questions asked by the hon. Member for South-West Bedfordshire and that
there will be no need for me to follow them up in
correspondence.
The
hon. Member for Yeovil asked whether there are any circumstances in
which we would not uprate the payments. We are always asked
hypothetical questions about circumstances in which we will do
something but it is much more difficult to answer questions about
circumstances in which we will not do something. Our commitment is to
uprate the payments annually and thus far I have not found any
equivalent commitment from Opposition
parties.
Mr.
Laws:
Given that commitment, why is it not a
statutory
obligation?
Mr.
Murphy:
The support is established under different primary
legislation. The provisions of the 1979 Act are distinct from other
social security benefits and are consequently not part of the main
uprating statement, so a separate debate such as this is needed. The
detailed and important points that have been raised today show that
such a debate still serves a purpose as part of a conversation about a
really important issue. Of course the hon. Gentleman can make
representations that we should cancel this annual debate, but as we
have tragically yet to see the peak of the diseases in question I am
not sure whether it would serve the parliamentary process well for us
to cancel our one guaranteed opportunity to have such a debate in
Committee.
The hon.
Gentleman asked about the number of cases and the amounts paid and said
that I sounded a bit like the Chancellor. Only someone from Yeovil
could confuse a Fife accent and a Glasgow
accent[Interruption.] Perhaps somebody from south-west
Bedfordshire could, too. I will happily provide the hon. Gentleman with
the details, but perhaps a short answer will avoid the need for me to
write to him. In the current financial year to January 2007 we have
made 1,582 payments to individuals, amounting to about
£21 million in compensation under the Act. As he said, 87 per
cent. of claims made under the Act are
successful.
With those
detailed comments, I hope that hon. Members have given the regulations
a fair hearing and that they will meet with the Committees
approval.
Question
put and agreed
to.
Resolved,
That
the Committee has considered the draft Pneumoconiosis etc.
(Workers Compensation) (Payment of Claims) (Amendment)
Regulations
2007.
Committee
rose at six minutes to Ten
oclock.