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When the issue was first raised, civil servants in the Department for Work and Pensions advised Ministers that the difference in payments had arisen because of the need to keep in step with the common law. That, however, proved not to be the case. In common law the payment made to a dependant is the same as would
have been made to the live claimant. I am told that two other reasons were given. One was that the difference in payments was designed to keep in step with the miners pneumoconiosis scheme of 1974. Again, the miners scheme pays exactly the same to a dependant as to a live claimant. Finally, it was said that under the 1979 Act, dependants get an additional payment of £2,392 where the death is the result of mesothelioma, but that still leaves a wide difference.
I refer the Minister to the example of a person aged 60. Under the 1979 Act the live claimant would receive £31,903, whereas the dependency payment is just £9,295 plus £2,392, making a total of £11,687. That is a wide gap. I am aware that the payments in the first instance will be made from the fund. The fund will gradually increase to payments equal to those made under the 1979 Act.
Amendment No. 15 calls for precisely the same payments to be made, but perhaps the Minister would consider a graduated approach. There will be a graduated approach in any event as the fund grows, so that payments can be made that are equal to those under the 1979 Act. Perhaps we could extend the principle of graduated payments so that over a number of years payments to dependants would achieve equality with payments to live claimants.
On amendment No. 16, it has always been a principle that we protect the general damage element—the element that covers pain and suffering. Payments under the 1979 Act are not specified in terms of their heads of damages. Clause 49(3)(b) allows for the lump sum to be recovered to nil. As I said earlier, recovering that amount rather than leaving it as a windfall to the insurance company is a creative way forward that should be welcomed. I want to see the fund increase gradually so that the level of payment equals that provided by the 1979 scheme, but I also want to protect the general damage element.
Amendment No. 16 provides a way of doing that, which the Minister may be prepared to consider. It allows the lump sum to be referred to in terms of three categories—earnings lost, the cost of care incurred by the claimant, and loss of mobility during the relevant period—and to be reclaimed to nil. It therefore protects the element of general damages.
Let me read out what my right hon. and learned Friend the current Leader of the House said in 1997. At that time, the Conservative Government used the Social Security (Recovery of Benefits) Act 1997 to ring-fence general damages. Politicians of all parties supported that provision. Leading for the Opposition on Second Reading, my right hon. and learned Friend stated:
“any sum awarded in compensation for pain and suffering should rightly belong to the individual who has suffered and should not be clawed back by social security.”—[ Official Report, 25 February 1997; Vol. 291, c. 175.]
The principle was right and just then, and it remains so today. Mesothelioma in particular is an agonising and terminal disease, and if its victims lost out on their rightful amount of compensation for their pain and suffering, that would be a doubly cruel blow.
My right hon. and learned Friend made the point that we need to ring-fence the general damage element, and my amendment No. 16 would allow that to be
done. It would allow the Government to claim back to nil, but as the sum would be referred to under certain heads of damages, the principle of ring-fencing general damages would remain sacrosanct. I hope that the Minister will take that on board. He may not like the drafting of the amendment and may want it to be redrafted. However, given that it maintains the principle of retaining general damages while allowing for the recovery to nil to take place, he might wish to think about taking it on board.
Mr. David Hamilton (Midlothian) (Lab): When we talk about people in such a position, there is a fundamental difference. For example, someone who wins a tribunal award—we have been involved in that—may have to repay the Department a certain amount. However, when a person is at the end of a period and terminally ill, it is surely completely wrong that money should be claimed back for the Department.
Mr. Clapham: My hon. Friend is right in the sense that we would seek to maintain that principle of keeping the general damage element. The Minister may want the amendment to be worded differently, but it retains that principle while allowing the recovery to nil.
Andrew Selous: I am grateful to the hon. Member for Barnsley, West and Penistone (Mr. Clapham) for explaining the purpose of his amendments. He said that he might want to see graduated payments in relation to amendment No. 15, rather than such payments being identical to those paid to people with mesothelioma. Amendment No. 16 relates, certainly in part, to a debate that we had in Committee.
The purpose of amendment No. 15 is to compensate a mesothelioma sufferer’s dependant in the same way as the mesothelioma sufferer himself. I do not believe that the amendment is necessary because it would be highly unusual to compensate a dependant of someone with a disease exactly as if they themselves had the disease.
Mr. Clapham: The hon. Gentleman may be aware that in 1974 the scheme for miners was introduced; it was followed by the 1979 scheme for slate quarrymen. That was modelled on the earlier scheme, which pays precisely the same to a dependant as to a living claimant. As the two schemes have some similarity, I would have thought that there is an argument in favour of the scheme paying dependants the same.
Andrew Selous: I am grateful to the hon. Gentleman for that point of fact about that particular scheme. However, I believe that I am correct about the generality of compensation: it would be unusual to proceed as his amendment suggests. The Bill already provides state benefits to any dependants of workers who worked with asbestos and who develop mesothelioma themselves. Any financial loss suffered by a dependant of someone with mesothelioma is also already covered in common law damages.
The purpose of amendment No. 16 is to limit the part of the compensation from which dependants can offset the amount reimbursed to the Government. Claimant lawyers have raised concerns that if defendants are allowed to offset repayments against any part of the award, some claimants will receive no additional compensation. Again, I believe that the amendment
is not necessary. The average payment under the Pneumoconiosis Act etc. (Workers’ Compensation) Act 1979 is about £12,000. It is not intended to fund anything specific—medical treatment or care, for example—but constitutes compensation for the claimant’s pain and suffering. That is equivalent to general damages in civil compensation and is different from other recoverable benefits, which may be paid by the state for a specific purpose. For that reason, clause 49 allows defendants to offset the amounts that they repay to the Department for Work and Pensions from any part of a lump sum civil compensation award, including general damages.
The amendment seeks to limit the parts of the civil compensation award against which defendants should be able to offset repayments. Although it is right and proper that reimbursements for other recoverable benefits should be limited in that way, that is not appropriate treatment for payments under the 1979 Act for the reason that I have just explained. Indeed, if such restrictions were put in place, they would lead to double compensation for claimants. That would have significant cost implications for defendants, including the state. Indeed, the regulatory impact assessment calculated the cost of the proposal on the basis that defendants would be able to offset the full amount. Furthermore, the restrictions are unnecessary given the size of the average compensation payments for mesothelioma. At £120,000, the average total compensation for mesothelioma is 10 times higher than the average pneumoconiosis payment. As such, it is difficult to envisage a situation in which a claimant would not receive any additional compensation following a claim.
Mr. Plaskitt: Once again, I am grateful to my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) for his contributions. I thank him for the amendments, which would allow for a dependant to be paid the same amount, by way of a lump sum payment, as a sufferer with mesothelioma and which would restrict recoveries of lump sum payments from civil damages to particular heads of damages—namely loss of earnings, the cost of care and loss of mobility.
As my hon. Friend knows, we are funding the scheme from compensation recovery and it will be self-financing. Bearing in mind the limited funds available, we consider that it is much fairer to pay sufferers as quickly as possible in life and pay them as much as can be afforded from compensation recovery. Making payments to dependants at the same rate as payments to sufferers in the new scheme would cost more and we would have to reduce the estimated amount that we are paying sufferers by about £1,000 in the first two years. That would mean that dependants paid under the new mesothelioma scheme would receive more, on average, than dependants paid under the 1979 Act for mesothelioma. That would be unfair, as I think that my hon. Friend will agree. We would have to pay all dependants of those with mesothelioma, including claims made under the 1979 Act, from the new scheme so that they received the higher amount. If we did that, the scheme could not be self-financing, as intended.
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I turn to the amendment about heads of damages. Unlike social security benefits, these lump sum payments are not intended to meet a specific need—rather, they
are a payment made instead of, or in advance of, civil damages. It is therefore right to recover them from any part of a later award of civil damages. The amendment would mean instead that some of the lump sum payments could not be recovered in full. That would have two effects: the person would be over-compensated for their loss; and, unfortunately, the amount available to fund the scheme would consequently be reduced. That would reduce the amounts available to other claimants and erode the long-standing principle that a person should not be compensated twice for the same damage.
I should like to reassure my hon. Friend that the current proposals, which allow for lump sums to be recovered from any element of a compensation award, including awards made for pain and suffering, will not disadvantage the sufferer or their family in any way. They will still receive the full amount of compensation they are entitled to—it is merely that they will not be able to receive it twice. I know that he is concerned about the precedent that that sets, and I can confirm that we have no intention of recovering social security benefits paid for income replacement mobility needs or care needs from general damages.
Given the limited funds available, the Government’s current priority is to pay as much as possible to sufferers in life rather than increase awards to dependants. We also need to maximise the amounts that we receive in compensation recovery. As sufferers or their families will not lose out overall if we recover from all heads of damages, I urge my hon. Friend to withdraw the amendment.
Mr. Clapham: In light of the assurances given by the Minister, I am prepared to do so. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 4, in page 41, line 37, leave out ‘6’ and insert ‘6(1) or (4)’.— [Mr. Plaskitt.]
Amendment made: No. 5, in page 43, line 23 , at end insert—
‘(1A) Section (Registered Maintenance Agreements: Scotland) shall come into force on the day after the day on which this Act is passed.’.— [Mr. Plaskitt.]
Amendments made: No. 6, in page 48, line 28, leave out paragraph (b) and insert—
‘(b) send a copy of each report and certified statement to the Secretary of State.’.
No. 7, in page 48, line 28 [Schedule 1], at end insert—
‘( ) The Secretary of State must lay before Parliament a copy of each report and statement sent under sub-paragraph (4)(b).’.— [Mr. Plaskitt.]
Amendment made: No. 8, in page 64, line 31, after ‘maintenance’, insert ‘or aliment’.— [Mr. Plaskitt.]
Amendments made: No. 9, in page 70, line 21, after ‘Scotland),’ insert—
‘(a) in subsection (1), for “satisfied” substitute “of the opinion”;
No. 10, in page 73, line 6, after ‘Schedule 1)’ insert—
‘(a) after “paragraph” insert “2(2),”;
No. 11, in page 75, line 18, leave out ‘6’ and insert ‘6(5)’.— [Mr. Plaskitt.]
Order for Third Reading read.—[Queen’s Consent, on behalf of the Crown, signified.]
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Mr. Plaskitt: I beg to move, That the Bill be now read the Third time.
Since its inception in 1993, the Child Support Agency has had a troubled history. There was broad consent that it should be established because the previous court-based system was not delivering. However, problems with the design and processes of the agency became increasingly apparent through the early years of its operation. Changes designed to overcome some of the problems were implemented in 2003. They were a step towards simplification of the system, not a fundamental change to the system itself. The problems continued. Some, it must be said, were down to the non-co-operation of some non-resident parents who would go to any lengths to avoid their responsibilities to their children. So while the agency adequately served many of its customers, it was offering an unacceptable level of service to too many. The Government therefore decided that the system had too many basic flaws. Further revision would not be sufficient; a clean break was needed.
The Bill is a result of that decision. It makes far-reaching reforms to the way in which child maintenance is administered. It will lift many more children out of poverty. It will ensure that many more children receive the maintenance due to them. It will ensure that many more parents fulfil their obligations to their children. The Bill also introduces a new scheme to pay a lump sum to sufferers from mesothelioma, providing financial support to anyone diagnosed with this terrible disease. For the first time, people whose exposure to asbestos was not through work will be able to qualify for a payment.
I would like to take the opportunity to thank the many individuals and organisations who have been so important in the development and passage of the Bill. I particularly thank Sir David Henshaw and his team for their initial report. I also thank the members of the Committee and our two Chairs, and all the Members who have taken part in our deliberations today. I have been encouraged throughout by the positive and
constructive atmosphere in which the Bill has been debated throughout our proceedings. Hon. Members on both sides of the House have shown a good-natured determination to ensure that it really does provide the best possible solutions to two hugely important issues.
I thank my right hon. Friend the Secretary of State and the Minister with responsibility for disabled people, my hon. Friend the Member for Stirling (Mrs. McGuire), who led so ably on many of the clauses in Committee. Furthermore, I wish to put on record my appreciation of my honourable Friend from the other place, Lord McKenzie of Luton, who is responsible for child maintenance policy and for mesothelioma policy and has therefore played a key role in the development of the Bill. I thank the Bill team and all those in my Department who have worked so hard on the Bill. On behalf of all the Committee members, I thank the Committee Clerks, who assisted us so ably in our work.
Above all, I should like to mention the staff of the Child Support Agency. Earlier, I briefly outlined the problems which have dogged the CSA since its inception. Those problems have not been, and are not now, the fault of the agency’s staff. Indeed, the staff have made valiant efforts despite working with an imperfect concept and faulty systems. Along with ministerial colleagues, I have met many of our staff in the CSA, and we have all been struck by their dedication and fortitude and by their determination to be part of a successful child maintenance system. They feel strongly that they work on behalf of and in the interests of children, and that has driven them, as it still does, to overcome many difficulties. Throughout, they have remained loyal to their core task.
The agency’s operational improvement plan, launched in 2006 and supported by £120 million of additional investment, is clearly proving effective. Already, at the halfway point, we can see decisive improvements in processing times and diminishing backlogs. We can build on that as we move forward. However, as I said, the overall framework is not working. The agency has multiple objectives that distract its staff from focusing on key outcomes; it has customers who are there through compulsion rather than by choice and do not see what benefits it brings to them; and as a body it has become associated with failure rather than success. The introduction of the Child Maintenance and Enforcement Commission is therefore a fundamental reform. The commission will be a non-departmental public body led by an independent board and operating at arm’s length from Ministers. We believe that that will provide the focus and operational flexibility that is essential if we are to deliver a successful child maintenance system.
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