The
Committee consisted of the following
Members:
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.
The
Government are not required to uprate payments under the 1979 Act, but
we have previously made a commitment to increase payments in line with
inflation. That is measured by the retail prices index, which showed a
negative growth of -1.4 per cent. last September.
That meant that those who rely on the uprating of benefits could have
seen their benefits frozen in cash terms. However, because the
Government continue to demonstrate their commitment to helping the
poorest and the most vulnerable in society, they have decided that
those payments should be increased by 1.5 per cent. from April this
year. That is in line with the increase that we are making to those
benefits that are linked to RPI, as announced by the Chancellor in the
last pre-Budget report. Those benefits include industrial injuries
disablement benefit, receipt of which is a criterion for eligibility
for payments under the 1979 Act.
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 schemes 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 dependants 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
todays 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.
How many
claims have been made under the mesothelioma regulations, and how much
has been paid out? Some information about how much compensation
has been recovered to fund the scheme would be helpful, too. As I have
said, we do not want to delay the regulations, and we acknowledge the
plight of those suffering from those terrible conditions and the tragic
losses suffered by their
dependants.
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 Governments 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 years
uprating? For example, if the RPI in September 2010 is 1.5 per
cent.to pick a number from the airis 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 someI do not have the details here, but if he is
particularly interested, I will write to him and
explainrecovery 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 Governments 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.