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Public Bill Committee Debates

Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) Regulations 2008

The Committee consisted of the following Members:

Chairman: Sir John Butterfill
Barrett, John (Edinburgh, West) (LD)
Battle, John (Leeds, West) (Lab)
Clapham, Mr. Michael (Barnsley, West and Penistone) (Lab)
David, Mr. Wayne (Caerphilly) (Lab)
Duddridge, James (Rochford and Southend, East) (Con)
Harper, Mr. Mark (Forest of Dean) (Con)
Hepburn, Mr. Stephen (Jarrow) (Lab)
Kemp, Mr. Fraser (Houghton and Washington, East) (Lab)
McGuire, Mrs. Anne (Parliamentary Under-Secretary of State for Work and Pensions)
Moss, Mr. Malcolm (North-East Cambridgeshire) (Con)
Pound, Stephen (Ealing, North) (Lab)
Redwood, Mr. John (Wokingham) (Con)
Rifkind, Sir Malcolm (Kensington and Chelsea) (Con)
Ruane, Chris (Vale of Clwyd) (Lab)
Skinner, Mr. Dennis (Bolsover) (Lab)
Willott, Jenny (Cardiff, Central) (LD)
Keith Neary, Committee Clerk
† attended the Committee

Eighth Delegated Legislation Committee

Tuesday 8 July 2008

[Sir John Butterfill in the Chair]

Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) Regulations 2008

4.30 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): I beg to move,
That the Committee has considered the draft Mesothelioma Lump Sum Payments (Conditions and Amounts) Regulations 2008.
I am delighted to be here this afternoon under your chairmanship, Sir John, for what will I hope be a short sitting. I hope that the order will give rise to no issue to divide the Committee. I am required to confirm to the Committee that the provisions are compatible with the European convention on human rights, and I am happy to do so.
The regulations are made under part 4 of the Child Maintenance and Other Payments Act 2008. Their purpose is to provide the amounts payable under the 2008 mesothelioma scheme to those who satisfy all the conditions of entitlement. They also add to the conditions of entitlement, which must apply before a lump sum payment under the scheme can be awarded.
I want briefly to deal with the purpose of the regulations. Mesothelioma, as I am sure we are all aware, is a particularly unpleasant disease, almost exclusively contracted through exposure to asbestos fibres. There is no known cure and a person’s life expectancy from the time the disease is diagnosed can be very short. The annual number of mesothelioma deaths in Great Britain has risen substantially in the past 30 years and continues to rise. In 2005 there were 2,037 deaths compared with only 153 in 1968. The most recent forecast suggests that the number of mesothelioma deaths is rising. It is expected to peak at about 2,100 deaths some time between 2011 and 2015.
The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 provides lump sums to people with certain dust-related diseases, including mesothelioma, where they have contracted the disease as a result of their employment and are unable to pursue a civil action because their former employer has ceased to carry on in business.
Some sufferers of this dreadful disease are not entitled to a lump sum payment under the current provisions of the 1979 Act, because they were not exposed to asbestos in the workplace. For example they may have been exposed environmentally by living close to an asbestos-producing factory or, indeed, from contact with a relative who worked with asbestos. The Government have recognised the shortfall in the current provisions and listened to representations on that point. I am delighted that we are joined today by some of the hon. Members who have been most active in making representations about the matter.
To address the issue that I have outlined we are introducing a new lump sum payment scheme for people with mesothelioma under part 4 of the 2008 Act. The scheme removes the condition that a person must be entitled to industrial injuries disablement benefit to be entitled to a lump sum.
4.33 pm
Sitting suspended for a Division in the House.
4.49 pm
On resuming—
Mrs. McGuire: As I was saying, the scheme under 2008 Act removes the condition that a person must be entitled to industrial injuries disablement benefit to be entitled to a lump sum. It therefore provides financial support for the first time to all sufferers and not only those who contract mesothelioma as a result of their work.
The amounts payable are based on a person’s age at the time that they were first diagnosed with mesothelioma or, in the case of claims from dependants, on the sufferer’s age at the time of death.
Mr. John Redwood (Wokingham) (Con): Does the Minister think, when she looks at the figures, that the sums are very mean, particularly for people beyond 60 years, at which point the amount falls off rapidly? Will she tell us the total cost? My impression is that we are talking about a small sum of money in relation to total public spending, and the figures look low, particularly for the elderly.
Mrs. McGuire: I will come back to the costs of the scheme, but I hope that the right hon. Gentleman accepts that we have introduced the payments and the lump sum to ensure that those who were not covered by any previous legislation, despite a long campaign—there are some veterans of the campaign on the Labour Benches—are compensated as quickly as possible. The lump sum could be the bridge between the compensation that we give through the regulations and any compensation that results from litigation.
I also suggest that the highest amounts will be paid to people who are diagnosed at an early age, as I said. That reflects the poor prognosis associated with mesothelioma for those who are younger at the time of diagnosis, who will, as a consequence, die at a younger age. It is estimated that the average payment to sufferers will be around £10,000.
As the scheme is self-funding in nature, the amounts are based on what can be afforded—I should have thought that the right hon. Gentleman would understand the basis on which the scheme is predicated—through the compensation recovery scheme of the 1979 Act, and new scheme payments, when a claimant has made a successful claim for civil compensation for mesothelioma.
The Government will continue to review the amount of the payments and increase them over time until they equal the amounts paid under the 1979 scheme. We hope to be able to do that within three years of the new scheme coming into force.
Until the amounts paid under the two schemes are equalised, we will ensure that people who claim under the new scheme and subsequently become entitled to a payment under the 1979 Act receive a balancing payment. That will ensure that no one who is entitled to claim under the 1979 Act is worse off by claiming under the new scheme. We intend that payments under the new scheme will be made within six weeks from the date of claim. That time scale ensures that, as far as possible, we can get the compensation to those who are suffering in their lifetime. When that is not possible we will make payments to their dependants, which at least provides the family with some financial compensation.
The regulations make it clear that a condition of entitlement is that the person with mesothelioma was exposed to asbestos in the United Kingdom, and set out certain circumstances in which a person may not claim a lump sum payment because they have already received, or are entitled to claim, a payment for mesothelioma from elsewhere. We believe that it is right that a person is not doubly compensated for the same condition, and the regulations ensure that that will not happen.
The payments fulfil the undertaking previously given by the Government to introduce a scheme, before the end of this year, to compensate all people with mesothelioma, regardless of how they were exposed to asbestos. We agree that no amount of money will ever compensate the sufferers or their families, but the amounts provided by the scheme will help us to ensure that people with this terrible disease may receive some financial assistance from the Government while they are still able to benefit from it.
I commend the regulations to hon. Members and ask that they approve their implementation.
4.54 pm
Mr. Mark Harper (Forest of Dean) (Con): The Minister will not be surprised that Conservative Members support the regulations, as we supported the passage through the House of the 2008 Act. We will not press the matter to a Division, but I should like to press the Minister on one or two points that she could clarify for the Committee’s benefit.
It is worth saying at the outset, as she did, that mesothelioma is a particularly unpleasant form of cancer, and that it is devastating not only for those who are diagnosed with it, but for their families and dependants. It is right that the Government introduce the regulations, which follow what was provided in part 4 of the 2008 Act.
When the Act was being discussed, we asked for draft regulations to be published because we felt that it would be helpful to discuss them as the Act was going through. However, that did not happen, which means that the discussion on them has been left until now. When the regulations were discussed in the other place yesterday, my colleague Lord Skelmersdale asked why the rate of mesothelioma is particularly high in the UK, at around 39 per million, compared with, for example, 16 per million in Germany. Will the Minister throw some light on that? She said that the rate and the number of deaths are expected to grow in the next few years, but has the Department for Work and Pensions done any research on why the impact and prevalence is particularly high in the UK?
Mr. Fraser Kemp (Houghton and Washington, East) (Lab): I would urge an element of caution. The Minister referred specifically to the number of deaths in 1970. I represent an area that had a Turner and Newall factory and many people in my family have contracted the disease. There was a company conspiracy in the 1970s to hide the disease. I suspect that a lot of people died of it, but it was not registered on their death certificate. We should bear that in mind when we look at graphs showing the position of the UK relative to our European neighbours.
Mr. Harper: I am grateful to the hon. Gentleman for that information. I was pressing the Minister for education rather than anything else, and asking her to illustrate why the rate was especially high in the UK. The Minister has already set out for the Committee the expected growth in the number of deaths, which is partly what makes the regulations so valuable.
Will the Minister clarify—she may have done so in her opening remarks—the purpose of regulation 2? Is it to ensure that when someone is eligible under other legislation, they are not compensated twice, which is sensible? We welcome the fact that if someone is eligible for a higher award under the 1979 regulations, they will get that higher amount and there will be a balancing payment.
The main issue on which I wish to probe the Minister—we discussed this at length during the passage of the Act—is the qualification for eligibility under the regulations. It would be helpful if the Minister would explain whether they apply to British citizens only or to citizens of other countries. It seems that a British citizen working overseas for a British company who was exposed to asbestos would not be eligible, but a citizen of another country who was exposed to asbestos in the UK would be. That would be unfair. We debated that during the passage of the Act, and my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) gave some examples of cases in which people working in British Crown dependencies such as Gibraltar for British companies would not qualify. However, he made it clear that we did not want everyone in the world who worked for a British company to qualify—we agreed with the Minister on that.
It is worth being clear on the matter. I counsel clarity because, in a previous role, I debated the commitments that the Government made under the far east prisoners of war scheme. I shall not go into that at length because it is outside the scope of this Committee, but those commitments illustrated that if expectations are set without clarity at the beginning, some people who will not qualify under the regulations could think that they might. To dash their hopes would be cruel, so some clarity on who will qualify would be helpful. I am perfectly happy to accept—the Minister explained this in Committee on the 2008 Act—that the Government cannot afford to pay compensation to people from abroad through the scheme. However, at the moment, as long as someone can show that they were exposed to asbestos in the UK, they qualify: they do not have to be a British citizen, and it is not clear whether they must reside in the UK. It would be worth the Minister’s while to tell us the Government’s current expectations, and whether they are correctly captured in regulation 4.
I return to the payments scale. Having considered some of the details, I would be interested to hear the Minister set out the basis on which the table was calculated. Why, for example, is there no greater payment for those under 37? Why 37? And why is it 77 at the upper end?
I cannot work out the logic of the change in the amounts paid per year as one gets older. The drop between a 43-year-old and a 44-year old is small—a reduction of 1 per cent.—whereas the drop between 61 and 62 is 12 per cent. Will the Minister lay out the method? As she said, it is similar to but not the same as the scale in the pneumoconiosis regulations. I am not entirely sure, but I think that she said that it would take three years to equalise those payments, but I do not see the logic in that—apart from the cost.
I turn to the need to publicise the regulations. Lord Skelmersdale raised the question in yesterday’s debate, as did Baroness Thomas of Winchester. The Minister in the other place made it clear that some information would be communicated to lung cancer nursing specialists, so that they could explain things to those suffering from the condition at the point of diagnosis. The explanatory memorandum says that the Department will issue a press release. The Minister indicated in the other place yesterday that the Department would consider the idea of communicating the regulations more widely, perhaps in GP surgeries or elsewhere. I wonder whether, albeit only 24 hours later, the Minister has had the opportunity to consider the matter.
Finally, the explanatory memorandum says that it will take until 2009 to update the literature that has been distributed. Baroness Thomas asked whether it could be speeded up, and I wonder whether the Minister has had the chance to think about that.
I should be grateful if the Minister would address those issues; otherwise, we are content with the regulations.
5.2 pm
Jenny Willott (Cardiff, Central) (LD): Like the hon. Member for Forest of Dean, I support the regulations. They seem sensible; they are a positive step forward. A number of people have said—I am sure that Labour Members concur—that it is a most unpleasant disease. Those who contract it suffer hideously. I believe that they deserve some compensation.
I should be grateful if the Minister would answer a couple of questions. The first is about the difference resulting from whether the person affected by mesothelioma is dead or alive when the claim is made. If a sufferer receives a payment at the age of 37, he will be entitled to nearly £53,000. However, if his dependants claim after he has passed away, they will be entitled to only £24,000. That is a large drop. Will the Minister clarify the basis for determining such a large difference in the value of compensation? Given that life expectancy after diagnosis is so short, it seems rather unfair that affected families are denied tens of thousands of pounds if they claim after the person’s death.
In the other place, Lord McKenzie said that it was essential that the sufferer should receive some level of compensation before it was too late, which is why more was being paid to sufferers; he was encouraging sufferers to claim for themselves. That leads me to my next question—one that was raised by the hon. Member for Forest of Dean.
The purpose of the new scheme is clearly to encourage people to claim as soon as possible, and for payments to be made as quickly as possible, which is to be welcomed. It is a positive move. However, there is a danger that because the scheme is not sufficiently advertised, people diagnosed with mesothelioma will not be aware that the scheme has been put in place and that they are eligible to benefit from it under the new regulations. Time might pass before they realise that they can apply, and then it might be just their dependants applying, who would receive significantly less money. I would be grateful if the Minister clarified that.
Like the hon. Member for Forest of Dean, I want to ask about a press release from the Department and changing the leaflets. That seems to be a very small way to encourage and inform people. I know that some progress is being made on that, but I would be grateful if the Minister let us know whether the Department could, for example, inform some of the relevant support groups. Perhaps it could make information more broadly available to hon. Members, because I am sure that in some constituencies where mesothelioma is an issue, hon. Members might be well placed to ensure that affected constituents can apply under the new scheme. I again echo the comments of the hon. Member for Forest of Dean in asking whether it is possible to bring forward the date of publication of the altered leaflets, so that rather than coming out in 2009, they could be released at the same time that the scheme is put in place—at the beginning of October. That seems a good way forward.
Finally, I would be grateful if the Minister explained why dependants will receive a lump sum only according to the age of their relative on the date on which they died of mesothelioma, rather than the date on which they were diagnosed. If dependants are claiming after their relative has passed away, they receive a sum based on the relative’s age on the date of death rather than diagnosis. I willingly accept the point that the life expectancy of people diagnosed with this disease is very short, but some people have been known to live for at least a few years afterwards and, particularly for those at the lower end of the age range, as the hon. Gentleman pointed out, there can be quite a significant jump between the amounts that people receive year on year. With only a couple of years’ difference in age, there could be a difference of at least a few thousand pounds for the dependants. Clearly, that could make a difference to people, so I would be grateful if the Minister clarified that. Overall, however, the Liberal Democrats are very supportive of the regulations, and I look forward to seeing them in place as soon as possible.
5.7 pm
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): I will be brief. I want to take this opportunity to thank the Government for moving speedily to ensure that we have a scheme that will pay out to anybody, anywhere in the country, who is diagnosed with mesothelioma cancer. Previously, as you will know, Sir John, these things have been related very much to the payment of industrial disablement benefit, which has meant that, for example, the woman who picks the fibre up from the working clothes of a member of her household has not been able to gain compensation. Under this scheme, she will, so it is groundbreaking.
I also give thanks to my hon. Friend the Minister, because she worked hard in Committee on the Bill that became the 2008 Act. She has put a great deal of energy into ensuring that we have the schedule before us to ensure that by 1 October, when it becomes active, people will be able to see what they are entitled to.
The main point is that compensation will be paid within six weeks to many people who otherwise would not be able to gain compensation. As the Minister rightly points out, the scheme will run parallel to the 1979 Act. That scheme will be continued as a result of the recovery of payments that are made under this scheme from people who successfully pursue a common law damages claim. At some time in the future, the current scheme, the regulated scheme, will equal the 1979 Act, and at that time, as the Minister clarified, it will merge with the 1979 scheme. Again, that is good.
The hon. Member for Cardiff, Central mentioned the publication of information about the scheme. Will it go down the trade union route so that they will be able to disseminate the information to their members, and ensure that victim support groups pick it up? The forum of victim support groups will be important in ensuring the dissemination of the information.
There are 2,000 deaths a year, and the explanatory notes say that 600 cases a year are likely to benefit from the scheme—I understand that those people are unlikely to be able to proceed with common law damages claims. Can the Minister say when the regulated fund is likely to be sufficient to merge with the 1979 scheme? That is important because the sums paid under the 1979 scheme are in excess of the sums that will be paid under the regulated fund. The main point, for which I thank the Government, is that the regulations make compensation available within six weeks to people who otherwise would not be able to receive it.
5.11 pm
John Battle (Leeds, West) (Lab): I welcome the regulations—they are not too late in coming. Many victims have suffered for far too long, and I am grateful to the Government for stepping into the breach to ensure that they get something. I recall that the right hon. Member for Wokingham, who was in the room earlier, was in the Government when I first used the word mesothelioma. If one looks at Hansard, one might find that I was the first person to use the word in this House, in 1988. We were advised by the Conservatives at the time that it was a matter for private industry, and the mantra was that the polluter should pay, so I am pleased that the Government have stepped into the breach.
There was a company called J.W. Roberts’s, which made asbestos blankets, in my neighbourhood. It closed in 1956. When I became a Member of Parliament in 1987, we were discovering that a cluster of people who went to the local school and lived in the neighbourhood had cancer. Why? Because the factory blew the dust out through a vent on to the streets and into homes and the school playground and the whole neighbourhood.
As a result, hundreds of people were polluted, but they could not get any redress, because they were not covered by the Acts that give compensation at work, because they lived in the neighbourhood but did not work in the factory. If a partner, wife or family member was contaminated by someone who came home with dust on their clothes, they could not claim. People who simply lived in the neighbourhood and who were contaminated because the dust was blown around in the street, or because people turned it into snowballs and threw it around, could not claim.
I appealed in this House—I had more Adjournment debates on this topic than were raised on any other issue in the 1980s—and we got as far as a court case in 1996. We took Roberts’s to court, even though it denied that it had any records after moving from the area. It belonged to an umbrella company, as it is known, called Turner and Newall, based in Lancashire, and, as it turned out, it did hold records, in a depository. It was sued by the Prudential insurance company in New York, which managed to glean the records out of the company. We got them back to Britain and a court case proved that it polluted the neighbourhood.
In 1996, a judge ruled in favour of neighbourhood pollution—it was the first case in Britain to say, “If you pollute the neighbourhood, never mind the workers in the factory, you are liable.” Two people were given damages as a result of the case, Mrs. Margereson and June Hancock. However, they were never paid. Why? Because the company, Turner and Newall, was taken over by Federal Mogul in America, which set up a company to put all the British liabilities into one pot, and it liquidated the lot. The next thing we knew, we were spending 10 years arguing with liquidators and lawyers to decide whether they should pay out.
It is good that the Government have stepped into the breach and that they are paying out with taxpayers’ money, but what happened to the notion that the polluter should pay? At the end of the day, the lawyers fought to get compensation out of the pot. I will argue openly—not under privilege—that the companies and the insurance companies have played an atrocious and cynical round of corporate gamesmanship to ensure that people did not get the money. They were waiting for people to die before the payments were made. They avoided making payments.
I am glad that the Government have stepped in, but on behalf of my constituents—they, too, are taxpayers—I am tempted to ask what the Government can do to get back the money from those companies and their insurers. Are the Government making an effort to put pressure on the insurance companies? Are they saying, “It is public money that we are paying out as an interim measure, because you are not honouring your obligations to the people that you polluted, and you are responsible in law as insurers of those companies.”
We should not lose sight of the fact that it is not the Government who have done the polluting. They are stepping into the breach to ensure that sufferers and victims are not left stranded with nothing. We should not let the companies or their insurers off lightly, or we will hear commentary such as, “Are the Government giving us sufficient?” or even a debate on whether it affects people in Europe.
Chris Ruane (Vale of Clwyd) (Lab): Does my right hon. Friend have any view on why previous Governments did not make this compensation offer?
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