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Delegated Legislation Committee Debates



The Committee consisted of the following Members:

Chair: Mr. Mike Weir
Baron, Mr. John (Billericay) (Con)
Blackman, Liz (Erewash) (Lab)
Blunkett, Mr. David (Sheffield, Brightside) (Lab)
Burden, Richard (Birmingham, Northfield) (Lab)
Challen, Colin (Morley and Rothwell) (Lab)
Clappison, Mr. James (Hertsmere) (Con)
Godsiff, Mr. Roger (Birmingham, Sparkbrook and Small Heath) (Lab)
Goodman, Helen (Parliamentary Under-Secretary of State for Work and Pensions)
Hodgson, Mrs. Sharon (Gateshead, East and Washington, West) (Lab)
Ottaway, Richard (Croydon, South) (Con)
Rowen, Paul (Rochdale) (LD)
Stoate, Dr. Howard (Dartford) (Lab)
Tredinnick, David (Bosworth) (Con)
Webb, Steve (Northavon) (LD)
Whitehead, Dr. Alan (Southampton, Test) (Lab)
Whittingdale, Mr. John (Maldon and East Chelmsford) (Con)
Ben Williams, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 118(2):
Newmark, Mr. Brooks (Braintree) (Con)

Sixth Delegated Legislation Committee

Tuesday 9 March 2010

[Mr. Mike Weir in the Chair]

Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2010
4.30 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Helen Goodman): I beg to move,
That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2010.
The Chair: With this, it will be convenient to consider the draft Mesothelioma Lump Sum Payments (Conditions and Amounts) Regulations 2010.
Helen Goodman: It is a pleasure to serve under your chairmanship, Mr. Weir.
It is a requirement that I confirm to the Committee that the provisions are compatible with the European convention on human rights and I am happy to do so.
I am pleased to introduce the regulations under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the 2008 mesothelioma scheme. These regulations will result in an increase to payments made under the 1979 Act of 1.5 per cent. and an increase in payments to dependants of up to £5,000. Under the 2008 mesothelioma scheme, the regulations will increase all payments to the same level as that under the 1979 Act, including the extra payment of up to £5,000 to dependants.
In previous debates, Ministers have outlined the history and functions of the 1979 Act and the 2008 scheme. I will do so now, but only briefly and for the benefit of Members who may be unfamiliar with those measures.
Someone who suffers from a dust-related industrial disease is entitled to sue their employers if the disease was contracted as a result of working for them. Diseases such as pneumoconiosis can take a long time to develop and to present symptoms, so they might not be diagnosed until 20, 40 or even more years after the exposure to dust. By that time, obviously, the employer responsible may no longer exist, so it is unsurprising that sufferers and their dependants can experience considerable difficulty in obtaining compensation.
The 1979 Act was introduced to help those people. Through the Act, lump sum payments are provided to sufferers. That lump sum is in addition to any award of industrial injuries disablement benefit. The amount paid is based on the age of the sufferer and their level of disability.
Among the five respiratory diseases that the 1979 Act covers, by far the most common among claimants is mesothelioma. Members will know that mesothelioma is a very severe and destructive cancer. Sadly, it is invariably terminal in a very short amount of time.
The 1979 Act originally made provisions for those who had been exposed to asbestos in a work environment. However, some sufferers of mesothelioma contracted the disease through environmental exposure, perhaps through living in proximity to an asbestos-producing factory or through a relative who worked with asbestos. That gap in the legislation was bridged by the 2008 mesothelioma scheme, which provides up front lump sum compensation to mesothelioma sufferers who were previously ineligible for assistance under the 1979 Act.
The 2008 mesothelioma scheme is a self-funding scheme, wherein payments are recouped when civil damages claims are successful. Owing to the nature of that mechanism, awards were originally made at a level consistent with the expected recovery, but that rate was lower than in the 1979 Act.
At the time, the Government made clear their intention to redress the imbalance at the earliest opportunity. It was expected that that would come about during the scheme’s third year of operation. However, with the level of recoveries being higher than expected, we are able to increase all payments under the scheme to the 1979 level from 1 April. As a result, sufferers of mesothelioma receiving lump sum compensation will receive the same amount whether they were exposed to asbestos at work or elsewhere. As I said, the regulations make extra provision for the dependants of sufferers of the diseases covered by the 1979 Act and of mesothelioma.
To put those extra provisions into context warrants some explanation of the situation in which many dependants find themselves. I shall do so briefly. Conditions such as mesothelioma may lie undiagnosed for many years after exposure to asbestos. However, once symptoms present and diagnosis is made, it is often only a short time before the disease proves fatal. The terrible effects of mesothelioma are not limited to sufferers; their families have to cope with the effects of the disease, witnessing their relatives’ pain and suffering and ultimately death.
The Government recognise that the damaging effect of such suffering, when coupled with the potential loss of family income, is pronounced. As a result, payments are made to the families of deceased mesothelioma victims. However, payments are currently paid at a much lower rate than sufferers receive during their lives. For example, awards to dependants of mesothelioma sufferers are on average £11,000, or 60 per cent., less than those paid directly to sufferers.
That differential in payments puts pressure on sufferers at an already extremely difficult time, many feeling that they need to rush through a quick claim to the Department for Work and Pensions in order to maximise compensation for their families. Indeed, some are too sick to make a claim before dying. Thus payment of a lesser amount cannot be paid to the dependant until afterwards. Because mesothelioma is difficult to diagnose and the disease onset is rapid, some sufferers are not diagnosed until after death. The families of those individuals, too, will receive less than if a diagnosis had been made and the claim paid before the individual had died.
We are sympathetic to the long-standing arguments put forward by stakeholders and parliamentarians that the difference in payment is unfair. For that reason we have agreed to reduce the disparity between awards to sufferers and dependants, increasing dependants’ awards by up to £5,000. Although not fully equalising awards, that will go some way to providing a balance. Most dependants will receive the full £5,000 increase, but if a dependant’s rate is already near that of the sufferer in life, they will receive a proportion of the £5,000 to bring them up to the level of compensation due to the sufferer.
It is expected that the incidence of mesothelioma will peak at some time in the next five years. Asbestos is not a problem consigned to the past; its terrible effects are very much a part of our present and will continue to be so. The regulations will help us to provide support to vulnerable people and their families as they face the most difficult of times. I commend the uprating and the increases in payments, and ask the Committee to approve the regulations.
4.38 pm
Mr. James Clappison (Hertsmere) (Con): I join the Minister in saying what a pleasure it is, Mr. Weir, to serve under your chairmanship. My contribution to this debate will be brief.
Having served on the Committee that considered the pneumoconiosis regulations last year, the Minister will know that I do not want to delay the passage of today’s regulations. I have a small number of questions relating to the individuals who suffer from the tragic conditions of pneumoconiosis and mesothelioma. In relation to the pneumoconiosis regulations, how many individuals received a payment under the regulations last year, and how much has been paid in total to individuals who suffer from the condition? How much has been paid to dependants? How does that compare to payments made in previous years?
Since the end of 2008, as the Minister said, compensation has been paid to people suffering from mesothelioma whose exposure did not take place at work. It appears to be good news that the amount recovered on the self-recovery basis of the compensation scheme seems to be higher than originally expected. It has been possible to equalise the amounts received by individuals suffering from non-work-related mesothelioma and their dependants with those paid out under the pneumoconiosis regulations. She said, and it is clear from the regulations, that the amounts received by individuals and their dependants are the same for those who contracted mesothelioma at work and those who did not.
4.41 pm
Steve Webb (Northavon) (LD): I think that this is the first opportunity that I have had to serve under your chairmanship, Mr. Weir, and a very welcome one it is too. Like the hon. Member for Hertsmere, I welcome the regulations and will not detain the Committee unduly. However, I have one or two questions to ask the Minister.
Will the Minister confirm that the 1.5 per cent. uprating in the pneumoconiosis regulations is one of the Government’s slightly phoney 1.5 per cents, in that it will not be consolidated into the base level for future upratings but is a draw-down of next year’s uprating? For example, if the RPI in September 2010 is 1.5 per cent.—to pick a number from the air—is it not the case that in the following year, the rate will be frozen, because the 1.5 per cent. will already have been paid this year as a sort of down payment? Will she confirm that, essentially, people who receive the uprating in the regulations this year will have a real-terms cut next year in the amount that they receive?
On funding and recovery from those who succeed in civil claims, am I to understand that, if I file a civil claim and win, the whole amount that I received under the 1979 Act or the 2008 scheme will be recovered? Do some people therefore lose out if the amount that they win in damages is less than what they got under the scheme? Will the Minister confirm that everything paid out is recovered and that it is up to the court what damages to award? Does she accept that, if true, that might discourage people from taking civil actions, which none of us wants to do? Can she assure me that, leaving costs aside, nobody will be worse off as a result of taking a civil case, and that nobody will find that the amount clawed back makes them wish that they had never done so? That would clearly be an unwelcome side effect of the scheme that we are debating.
On lump sum compensation as against ongoing support, my hon. Friend the Member for Rochdale has taken a close interest in those matters and is concerned. A lump sum is obviously welcome and, if someone has only a short time to live, a capital sum provides reassurance and immediate respite, but they might have dependants with ongoing needs, so it is slightly unclear why the balance has been struck towards a lump sum. I appreciate that we have the ongoing industrial injuries disablement benefit scheme and that people live with the conditions that we are discussing, but the people who qualify for the scheme do not automatically get the benefits. They might get lump sum help but not ongoing help. Will the Minister explain the thinking behind paying a lump sum but not helping with the recurrent costs that a disabled person might well face?
The schedules to the regulations have long, complicated tables detailing the amounts payable to people at different ages. Will the Minister say more about why the payments are so sharply tapered according to the age at which the condition is identified or, in some cases, the age at death? If someone has died or become very ill because of one of those conditions, in one sense it is immaterial how old they are. For example, if someone were ill because of the negligence of an employer who could not be traced, a public sector employer, or whoever it happens to be, there would be an argument for a flat rate. I suppose that, if someone has been deprived of years of working life, the argument would be that younger victims should be compensated more, but the gradient with age is steep. Will the Minister say a little more about whether that is based on evidence, and what principle underlies that gradient?
Discussions of this sort are not complete without mention of pleural plaques, and I am sure that the Minister would expect me to mention that issue. My understanding is that, although people with pleural plaques have been compensated for many years, following the Law Lords’ ruling, and after thinking about it for about 18 months and keeping people in suspense, the Government decided not to compensate people who have a condition closely linked to asbestos. Will the Government look again at that issue, as there is great concern about it?
We welcome the fact that the scale of the scheme has been enhanced earlier than was anticipated. I hope that the Minister will give a specific answer to my particular point, and assure me that someone who takes out a civil case and gets compensation will not be left out of pocket should the compensation that they receive be less than the payments that are clawed back from them. That would be an unwelcome side effect of the scheme and the regulations. Subject to that caveat, we welcome the regulations.
4.46 pm
Helen Goodman: The hon. Member for Hertsmere asked a number of questions about the numbers involved. First, he asked how many people have received pneumoconiosis payments, and what that has cost. Up to January 2010, there were 1,738 sufferers and the cost was £25,213,981. There were 311 dependants, and the total cost was £5.25 million. In previous years, the number of sufferers was higher at about 350.
The hon. Gentleman also asked about numbers and expenditure on the mesothelioma scheme. Between October 2008 when the scheme started, and January 2010, a total of £11.5 million was paid out. In the first year between October 2008 and March 2009, £5.5 million was paid out on awards, of which £5.3 million was paid to sufferers and £154,000 to dependants. The pattern in the second year was similar. Between April 2009 and January this year, £6 million was paid out, of which £5.8 million was paid to sufferers and £150,000 to dependants. He asked whether, under the regulations, the payments for former workers will be the same as the payments for people who contracted the diseases from environmental factors. The answer is yes.
The hon. Member for Northavon also asked a number of important questions. First, he asked whether the increase this year is consolidated, or whether it is being treated like other benefit increases. I confirm that it is being treated like other benefit increases, so we are bringing forward to this year half of the forecast uprating for 2011.
The hon. Gentleman went on to ask whether all amounts get recovered. The situation is complex, because people receive awards under different headings. For some—I do not have the details here, but if he is particularly interested, I will write to him and explain—recovery is one to one. However, for others, because not all payments are taken into account in the state scheme, only a proportion of the compensation achieved through the courts is repaid. I confirm, however, that there are no losers under the scheme, and that everyone receives their money within six weeks.
The hon. Gentleman asked about the relationship to the social security scheme, and whether it is reasonable that people should be paid a lump sum, but no continuing payments if they contracted the disease by an environmental route, rather than as workers. There are, of course, two answers. One is that unfortunately people with mesothelioma have a short life expectancy, so the lump sum is useful for the foreseeable future. The other is that those people are entitled to the full range of social security benefits that we provide.
Steve Webb: Clearly, I accept that people with these terrible conditions have a short life expectancy, but their dependants do not. Will the Minister say something about ongoing support for dependants?
Helen Goodman: That is the group of people who I was trying to say will benefit from the rest of the social security system, but obviously we are increasing significantly the payments that dependants receive by up to £5,000.
Steve Webb: As a lump sum.
Helen Goodman: Albeit as a lump sum. We are making a significant improvement in the relative position of dependants as opposed to sufferers.
The hon. Gentleman asked about the way in which payments are tapered by age. The Government’s view is that it is right that payments are weighted in favour of those who were younger at the time of diagnosis and who will consequently suffer longer from the disease when it is not terminal. Those with terminal illness are paid more to reflect the fact that they have a much shorter life expectancy, die at a much younger age, and the loss to them is far greater.
The hon. Gentleman asked about pleural plaques. The Justice Secretary made a statement about that at the end of February. On the basis of medical evidence, the Government concluded that pleural plaques should not be compensatable under civil law. However, if new medical or other significant evidence emerged, we would obviously reassess the situation. We have taken advice from independent medical authorities, as well as from the chief medical officer, and that is our conclusion, which we believe is reasonable at present.
I hope that I have answered hon. Members’ questions satisfactorily. These diseases are devastating for those who suffer them, and their families. We are making significant increases in the value of payments under the regulations, and I commend them to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2010.

Draft Mesothelioma lump sum payments (conditions and amounts) (amendment) Regulations 2010

Resolved,
That the Committee has considered the draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2010.—(Helen Goodman.)
4.55 pm
Committee rose.
 
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