Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011
Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011

The Committee consisted of the following Members:

Chair: Philip Davies 

† Bottomley, Sir Peter (Worthing West) (Con) 

† Clarke, Mr Tom (Coatbridge, Chryston and Bellshill) (Lab) 

† Collins, Damian (Folkestone and Hythe) (Con) 

† Cox, Mr Geoffrey (Torridge and West Devon) (Con) 

† Freer, Mike (Finchley and Golders Green) (Con) 

† Glindon, Mrs Mary (North Tyneside) (Lab) 

† Goggins, Paul (Wythenshawe and Sale East) (Lab) 

† Grayling, Chris (Minister of State, Department for Work and Pensions)  

† Greenwood, Lilian (Nottingham South) (Lab) 

† Lefroy, Jeremy (Stafford) (Con) 

† McVey, Esther (Wirral West) (Con) 

† Raynsford, Mr Nick (Greenwich and Woolwich) (Lab) 

† Reid, Mr Alan (Argyll and Bute) (LD) 

Robinson, Mr Geoffrey (Coventry North West) (Lab) 

† Smith, Miss Chloe (Norwich North) (Con) 

† Timms, Stephen (East Ham) (Lab) 

† Williams, Hywel (Arfon) (PC) 

† Williams, Roger (Brecon and Radnorshire) (LD) 

Alison Groves, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee 

Wednesday 23 March 2011  

[Philip Davies in the Chair] 

Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011 

2.30 pm 

The Minister of State, Department for Work and Pensions (Chris Grayling):  I beg to move, 

That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011. 

The Chair:  With this it will be convenient to consider the draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011. 

Chris Grayling:  It is a particular pleasure to serve under your chairmanship this afternoon, Mr. Davies. 

It is a requirement that I confirm to the Committee that the provisions are compatible with the European convention on human rights, and I do so confirm. 

I am happy to introduce two sets of regulations that will increase by 3.1% the amounts paid under the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) Regulations 1988 and the mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. The new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2011. 

As a general background, I would like first to set out why the payments under the two schemes are not increased as part of the general increases in benefit rates. The difference arose mainly for historical reasons. Responsibility for the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 was transferred to the Department for Work and Pensions in 2002. Before that, the scope of the scheme had been gradually broadened to cover a wider range of dust-related diseases, but the scheme remained independent from benefits under the various Social Security Acts. The newer provisions of the 2008 scheme follow the same principles, and it remains a stand-alone scheme. To include the schemes in the general uprating order would require primary legislation. In previous debates, Members of both Houses have stressed how useful they have found the debates as a forum for discussing issues related to asbestos exposure. The Government respect that view and can state there are currently no plans for legislation to include the schemes within the general benefit uprating. 

Another effect of keeping the regulations separate from other social security legislation is that there is no statutory obligation to increase the rates paid under the schemes. However, previous Ministers have made a commitment for annual upratings. Last year the commitment was extended to both the pneumoconiosis and mesothelioma schemes, so that both pay the same amount to a person of the same age suffering from mesothelioma. I am pleased to make the same commitment today. 

I should refer back to the increases made to the payments under the two schemes in 2010. In September 2009 the retail prices index was negative for the first time in 50 years. For benefits that had been normally uprated by the RPI, as well as these two schemes, the previous Government increased payments by 1.5% on the understanding that the amount of that increase would be set against the increase in 2011. In other words, the planned increase that we inherited for this year would have been reduced from 3.1% to 1.6%. However, I am pleased to report that that reduction in the increase for this year will not be made. Instead, the rates under the two schemes will be increased by the full 3.1%. I am sure that Committee Members would agree that given the nature of the challenge faced by recipients of the benefits, that is the right decision. 

That gives a couple of detailed points regarding the regulations. It might be helpful if I briefly outlined the nature of the two schemes so that Members understand the context in which we are making the increases. A person who is injured or contracts an industrial disease as a result of their work may sue the employer for damages. However, some diseases, such as those linked to asbestos exposure, may take a long time to develop and may not be diagnosed until many years after the original exposure. The understanding of asbestos-related diseases continues to grow, and it is now recognised that there may be up to 40 years between the original exposure and the start of the linked disease, which is longer than was first thought. Due to that long latency period, the employer responsible at the point of exposure may no longer exist and it may be difficult for a person to obtain compensation through the courts. That is why the two schemes exist and why we are debating the measures before us today. 

The 1979 Act helps people by providing a lump-sum payment of Government-funded compensation to sufferers or their dependents. The Act covers a number of respiratory diseases, many of which are directly related to asbestos exposure. The scheme covers a number of non-asbestos-related diseases, too, such as pneumoconiosis contracted by coal miners, which will be of particular interest to hon. Members who represent former coal mining areas. 

Although people who develop mesothelioma through their employment have been covered by the 1979 Act for some time, there has been no provision for people who have developed the disease outside the workplace. Such exposure commonly arises where someone has contracted the disease as a result of living with someone who works with asbestos, or where people live near, for example, an asbestos factory. That weakness in the provision of compensation was remedied by the introduction of the scheme in 2008, which provided, for the first time, for mesothelioma sufferers who were exposed to asbestos outside their working lives. 

I am sure that we are all aware of the heavy legacy of our industrial past. We need no reminding of the terrible diseases that are covered by the scheme. Mesothelioma is a particularly unpleasant, fatal disease, which is caused almost exclusively by exposure to asbestos. I am saddened to report that the number of deaths from the disease in Great Britain continues to rise. In 1968, 153 people died from it; by contrast, more than 2,000 people a year currently die from the disease. I regret further to state that we expect the number of deaths to rise until they

peak in around 2015. By the latest estimates, between 2006 and 2020, 30,000 people in the UK will die of the disease. Those are truly awful figures. 

In the period from April 2008 to December 2010, payments amounting to just over £95 million were made under the 1979 Act. Since the 2008 scheme was introduced, some 1,200 payments have been made at a cost of just under £20 million. I am sure we all recognise how important it is that such payments maintain their value. That is the purpose of these regulations, which provide an important annual uprating to two schemes that play an important part in the lives of people who have suffered badly as a result of exposure in the workplace. The measures make the burden of their disease a little easier, and are absolutely right because the schemes perform an important role. It is necessary to maintain value of the payments, which is why we are proceeding with the full uplift of 3.1%, rather than the more limited uplift that was predicted. It is right and proper that the Committee endorses the measures and offers that extra support to people, particularly in times of fast-rising prices in some areas. I hope that the Committee will support both provisions this afternoon. 

2.38 pm 

Stephen Timms (East Ham) (Lab):  I am delighted to serve under your chairmanship for the first time, Mr Davies. I thank the Minister for his explanation of the regulations and of how the scheme works. As he has said, the regulations use powers under the Child Maintenance and Other Payments Act 2008, which itself builds on the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. 

I agree with what the Minister has said about the dreadful nature of the diseases under discussion. Mesothelioma is closely associated with asbestos exposure and often afflicts people a long time after they have their first contact with it. Once the disease is diagnosed, however, it typically causes the sufferer to die very quickly indeed. It is devastating for them and their families, who often have to take in the news of the imminent death of their loved one while bearing a heavy caring burden. 

Perhaps we should take the opportunity to pay tribute to the work of the numerous support groups around the country who help those who are suffering from the disease. In particular, I commend the work of the east London mesothelioma support group. It was founded by Eileen Beadle, whose husband, Ray, died in 2006, aged 54, less than a year after his diagnosis. She set that group up entirely off her own back, and it now runs a helpline that operates every evening between 5 pm and 10 pm. I know that there are similar groups around the country, and it is right that we pay tribute to them. 

The statistics are alarming. The Minister has told us that he expects the number of people suffering from such diseases to continue to rise until around the middle of this decade. He is absolutely right that we should ensure that there is adequate financial support and compensation for people who continue to suffer the terrible consequences of past industrial errors. 

The Minister has said that there is no statutory obligation for the amounts paid under such schemes to be uprated, and I was not entirely the convinced by the reason he suggested for that. He said that the fact that we have such meetings as this, where we gather once a year or so to debate, is a benefit of the fact that we do not have

such an obligation. It would be better to have a statutory obligation along with all the other parts of the welfare system. That is perhaps something that we can reflect on in the Welfare Reform Bill Committee, which he and I and others will be attending over the next few weeks. I am glad that Ministers have committed to increasing the rate of this benefit in line with others, and there is support across the House for that. 

The Minister made something of the fact that the uprating has not been reduced by the 1.5% increase that was applied last year. The Government, however, are uprating benefits in line with the consumer prices index, rather than the retail prices index. If the full uprating, as it would have applied previously, had been in place, I think I am right in saying that we would be looking at an increase of 4.6%, which is the rate of RPI that would have applied. We have made it clear that we accept that it is appropriate to uprate social security benefits by CPI, on a temporary basis, as a way of contributing to the reduction of the deficit, so I will not oppose the figure that the Minister is putting before us. As it happens, of course, RPI in September 2010 was 4.6%. If we deduct the 1.5% increase from last year, that just so happens to bring us to 3.1%, which is the same as CPI and which is the figure that is in front of us. However it is worked out, therefore, a figure of 3.1% is reached, so I will not object to that, but I want to take this opportunity to underline again that we do not support a permanent shift to CPI as the basis for benefit uprating. In the long term, that would be unfair, and if we look at those who receive the payments that the Committee is concerned with, it is clear that they ought to be benefiting from the full rate of RPI, rather than CPI. To make it clear, however, we will not oppose the figure that is in front of us. 

May I take this opportunity to ask the Minister a couple of further questions? The previous Government took steps to reduce the gap between the awards payable to sufferers and their dependents. The regulations do not make any further progress in reducing that gap. As I have mentioned, such diseases take a heavy toll on families as well as on victims. Can the Minister the give us any hope that that gap will be reduced further in due course? 

The noble Lord Freud in the debate in the House of Lords made the point that the Department is working to ensure that as many claims as possible are processed before the death of the victim. That is often difficult, because as I have said death can follow diagnosis very quickly. However, to the extent to which that is possible it obviously helps to reduce the impact of the current gap between the value of the payments for the sufferers and their dependents. Can the Minister tell us what proportion of claims are currently settled before the death of the victim, and whether he can hold out the prospect of further progress in reducing that time lag still further? 

I note, again from the discussion in the other place, that there has been further progress in recovering compensation through the insurance arrangements that apply. I would be grateful if the Minister put on the record the progress the Government have made in increasing the amount recovered. Can he tell us anything about further steps the Government are planning to improve recovery further? It would be useful to know how he thinks the record on recovery is likely to develop over the next few years,

and of course that is important given that he has told us that the number of cases of mesothelioma is likely to continue to rise for a number of years. 

I do not wish to detain the Committee further; I have no objection whatsoever to the Government proposals this afternoon, but I would be grateful if the Minister answered those questions. 

2.47 pm 

Hywel Williams (Arfon) (PC):  It is a pleasure to serve under your chairmanship for the first time, Mr Davies. I have a particular interest in the workings of the Act. As I understand it, it was brought in specifically because of the difficulties faced by north Wales slate quarrymen in the ’60s and ’70s, and the long campaign by the TGWU and my predecessor as Member for Arfon, Dafydd Wigley, who is now Lord Wigley of Caernarfon in the other place. At that time a number of former slate quarrying and mining companies had gone out of business, and there was no one to be sued, as it were, whereas coal workers could sue the National Coal Board or some of their previous employers. 

The scheme has benefited a large number of my constituents and those elsewhere in north Wales as well as, I understand, former jute workers in Dundee, so it is a valuable scheme. I share the Minister’s concern about the rate of increase, and I am concerned that the relative value of payments might decline over a long period, given that the RPI is higher. I understand the reasons why the Government have adopted the CPI rather than the RPI—hopefully in the short term—but I am concerned about the value of payments, particularly given that payments are fairly modest, in my area at least. Certainly the people who receive them are in no way wealthy, rich or well-resourced—they are often those who have previously lived on fairly small incomes anyway. 

I apologise to the Minister for missing his remarks at the start—I and another Member were unfortunately held in the lift on the way up. I wondered how the total spending on this scheme is made up? There are payments to various groups, but to what extent are these payments to coal miners, slate workers, or workers in the asbestos industry? I do not know whether those figures are available, but I would be interested in a response, either now or perhaps in a note. 

I think that the most recent case that I have had concerns the slate dust scheme and someone who has problems arising out of their employment many years ago—as I think the right hon. Member for East Ham mentioned, symptoms can become apparent 20 or 30 years after the initial exposure to dust. I have a particularly complex case at the moment where there is also a diagnosis of cancer that is unrelated to the dust this person inhaled. I am not sure if there have been many such problems. I just mention it to the Minister, and I might write to him if I make no further progress. It might be that the case can be solved in the same way as miners’ cases were solved. They were compensated for chronic bronchitis and emphysema, even though they might have been smokers at the same time as they were working in the pits. That is perhaps taking it further than I should on this order but I mention it in passing. 

2.50 pm 

Sir Peter Bottomley (Worthing West) (Con):  It is over 25 years since I as a Minister introduced an order, which was not exactly the same as this—it was on double bisinosis and other things. The Minister has explained why both the Government and the previous Government decided not to roll this compensation scheme in with the others that have automatic uprating. I am not certain that the Government are right but I am not going to object to it because it is important to honour those who suffered in the past and will suffer in the future from work-related lung diseases. There are also 5,000 teenagers a week taking up smoking, and if they do not give it up in time, they are likely to have the same kind of chronic lung diseases that people have picked up in the slate mines, from asbestos and from coal mining. 

One of the reasons I came into public service in the early 1970s was that I knew that deep coal mining was a very dangerous job. We have suffered from the efforts of John L. Lewis, who was the leader of the mine workers of America, who in the 1960s objected to mechanisation in their pits because he thought it was a threat to jobs. I have taken the view that the faster and the sooner you can get people out of dangerous jobs, especially when there is dust around, despite all the precautions you try to bring in, the better. You have an obligation to try to close down those industries or at least adapt the way that they operate. I deeply regret that it took us such a long time to take people out of the deep pits in this country. We were failing them. It was not an argument to save jobs; it was an argument which had as an unintended consequence the growing number of people who suffer. If we had treated the deep mines in the way that we treat asbestos—working with asbestos, whether installing it or processing it or mining it—we would have saved a great deal of distress and handicap and eventual early death. But that is in the past. 

These two statutory instruments are about increasing the levels of compensation payment. The argument about the CPI and RPI is likely to continue. We would say on this side that it was the other side who brought it in. They will say, “So what?” and that will roll on. The key point is that we should welcome the fact that the Government have not imposed the 1.5% increase that they could have done. I conclude by saying that I support these changes. 

2.53 pm 

Roger Williams (Brecon and Radnorshire) (LD):  I, too, support the motions before us today and the increases as set out by the Minister. When I was first elected, I regularly dealt with miners who were suffering from lung damage because of pneumoconiosis and silicosis. I am speaking from ignorance today, however, in the sense that I do not believe that the scheme that was introduced for miners is the one that we are dealing with today. That was the result of a court case that was brought by the NUM and NACODs and was at that time administered by the old Department of Trade and Industry. I wonder whether the Department that is dealing with this now is the Department that the Minister is responsible for or the one that took over from the DTI—the Department for Business, Innovation and Skills. 

The scheme that relates to miners is coming to an end because most of the claimants have settled their cases and the conditions within the mines are such that,

luckily, these conditions have not existed for some time. The scheme was very bureaucratic and cost a lot of money. Hon. Friends who were involved in the legal profession were perhaps involved to a greater extent than they should have been. 

I ask the Minister, are we dealing with the same scheme—the one that I was involved in—or is this a separate scheme for people other than the miners who were settled with the litigation previously? 

2.54 pm 

Chris Grayling:  Let me go through the various comments raised by Members of the Committee. The shadow Minister asked whether we would be able to make improved payments in future. We will always keep these matters under review and seek to do the best we can for those people in difficulties. Inevitably, we are constrained by the financial position of the nation. We have a lot of work to sort that out, but I do not rule out making improvements in future. He made some points about CPI and RPI. As my hon. Friend the Member for Worthing West mentioned, it was the previous Government that said that CPI was the preferred measure of inflation, and we have adopted that advice in our approach to a number of these issues. 

In relation to the amounts of money paid, the shadow Minister asked about the balance between sufferers and dependants. The balance is substantially in the direction of the sufferers. In the last full year, £33.6 million was paid to sufferers, £1.6 million to dependants. It is largely for those who are suffering from the disease. As my noble Friend Lord Freud mentioned in the other place, in some cases the dependant’s rate is the same as the sufferer’s rate. At the moment, we think the decision to raise current levels by the amounts set out this afternoon is the best we can do. We are not looking to make further reductions in that gap at this time because of the financial position that we face. However, I do not rule out changes in future, once matters have been stabilised. 

The right hon. Member for East Ham asked me about recovery of payments. We keep the recovery process under constant review; there is consultation with all interested parties, including the Association of British Insurers about matters related to employer liability insurance. The right hon. Gentleman will be aware that the ABI will shortly launch, on a voluntary basis, a register of employer liability insurance, which has a far broader impact than this. It will provide a vehicle for employees with an issue that emerges years after the event to look back and try to identify where a policy existed, even though the employer might have long since disappeared. 

The hon. Member for Arfon raised a couple of points. Three quarters of the payments made are for mesothelioma. Claims are successfully made by coal miners, with about £2 million paid to them in 2010-11 to date. The 1979 scheme was originally brought in to help slate quarry workers, and does help both kinds of worker. If the hon. Gentleman finds that there is a particular issue with his constituency case, I ask him to write to me and I will look into the situation for him. 

Sir Peter Bottomley:  If anybody thinks they might have an occupational lung disease, it is worth consulting Jobcentre Plus or going to the DWP helpline on 0800 882200. There is a range of different claim forms, which may be relevant. 

Chris Grayling:  I pay tribute to my hon. Friend, who, as the architect of some of these measures, is still closely involved in the impact of what he introduced. I suspect that a Government Minister who started something always retains a close affinity to it. He clearly does that and I congratulate him on the work that he has done. 

Lastly, in response to the comments by the hon. Member for Brecon and Radnorshire, this is a separate scheme from the DTI one. It is focused on the individual condition. The payments to mine workers that he described do flow directly from a court decision. However, this is a specialised separate scheme. 

Stephen Timms:  May I correct a slightly misleading point that the Minister made earlier? He suggested that the previous Government adopted CPI. We did for the inflation target, because for European comparison purposes there are considerable benefits in CPI. It was not adopted for any benefit uprating purposes. It is important to put that point on the record. 

Chris Grayling:  I am happy to accept that point. The right hon. Gentleman will also agree that it was the previous Government who first started to describe CPI as their preferred measure of inflation. Therefore it is logical, as we seek to deal with tough circumstances, to look to their preferred measure as possibly the best way to deal with inflation issues in the times in which we live. 

Stephen Timms:  The Minister is slightly disingenuous. CPI was not used for any benefit uprating purposes. That point needs to be made clear. 

Chris Grayling:  The right hon. Gentleman has made that point clear. I have no doubt that we will be debating the RPI/CPI issue extensively in other Committees in the next few weeks. 

In the meantime, I am grateful to the Committee members who have spoken for their support for these measures. We all want to send good wishes to all of the people who are suffering from these diseases, who receive support under these two schemes. We wish them and their families the best and we are pleased to support them. 

Question put and agreed to.  

Resolved,  

That the Committee has considered the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011. 

DRAFT MESOTHELIOMA LUMP SUM PAYMENTS (CONDITIONS AND AMOUNTS) (AMENDMENT) REGULATIONS 2011 

Resolved,  

That the Committee has considered the draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011.—(Mr Grayling.)  

3.1 pm 

Committee rose.