Draft Pneumoconiosis Etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 2012
Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2012
The Committee consisted of the following Members:
† Bell, Sir Stuart (Middlesbrough) (Lab)
Binley, Mr Brian (Northampton South) (Con)
† Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab)
† Crabb, Stephen (Preseli Pembrokeshire) (Con)
Gapes, Mike (Ilford South) (Lab/Co-op)
† Grayling, Chris (Minister of State, Department for Work and Pensions)
† Kaufman, Sir Gerald (Manchester, Gorton) (Lab)
† Latham, Pauline (Mid Derbyshire) (Con)
† Leech, Mr John (Manchester, Withington) (LD)
† Lloyd, Stephen (Eastbourne) (LD)
† Lord, Jonathan (Woking) (Con)
† McVey, Esther (Wirral West) (Con)
Mitchell, Austin (Great Grimsby) (Lab)
Moon, Mrs Madeleine (Bridgend) (Lab)
† Morris, David (Morecambe and Lunesdale) (Con)
† Mowat, David (Warrington South) (Con)
† Timms, Stephen (East Ham) (Lab)
Mark Etherton, Committee Clerk
† attended the Committee
First Delegated Legislation Committee
Tuesday 6 March 2012
[Mr Mike Hancock in the Chair]
Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2012
4.30 pm
The Chair: You are just in time, Mr. Timms. It is nice to have you join us.
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 2012.
The Chair: With this it will be convenient to consider the Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2012.
Chris Grayling: It is a great pleasure to serve under your chairmanship, Mr Hancock. It is also good to see my counterpart, the right hon. Member for East Ham.
The two measures, although a small mouthful, are very much part of the parliamentary calendar, and they are so for important reasons. I am required to confirm to the Committee that the measures are compatible with the European convention on human rights, and I do so confirm.
I am pleased to introduce the measures, which increase by 5.2% the amounts paid under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the 2008 mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. The increased payments will be made to those who first satisfy all the conditions of entitlement on or after 1 April 2012.
Before I say anything further on the two schemes, I advise the Committee that the previous drafts of the regulations contained an error in one of the rates in the dependant tables. That error would have meant that, in a small number of cases, a dependant could have received more than an equivalent sufferer. I can confirm that the error was spotted and rectified, and the rate has been corrected.
I will now briefly describe the history and purpose of the two schemes for the benefit of Members who may be unfamiliar with them.
People who suffer from an industrial disease are entitled to sue their employer if the disease was contracted as a result of their work. Certain dust-related diseases such as pneumoconiosis can take a long time to develop and present symptoms, so they might not be diagnosed until decades after the exposure to dust. Of course, by then, the employer responsible may no longer exist. So it is not surprising that sufferers and their dependants can experience great difficulty in obtaining compensation.
The 1979 Act was introduced to help such people and covers five respiratory diseases, most of which are directly related to asbestos exposure. More than half of claims are for mesothelioma, a particularly severe form of cancer. The 1979 Act makes lump sum payments to sufferers, or their dependants, in addition to any award of industrial injuries disablement benefit. The lump sum is based on the age of the sufferer and their level of disability.
Committee members will no doubt be aware of the unfortunate cases of people who contracted mesothelioma through environmental exposure, such as living near an asbestos factory, rather than through work. The mesothelioma scheme was introduced in 2008 for such people. The scheme provides up-front lump sum compensation payments based on the age of the sufferer. As with mesothelioma payments under the 1979 Act, all 2008 scheme payments are made at the 100% disablement rate. The 2008 scheme is self-funding, which means that payments are financed from recoveries of payments made under the 1979 Act and 2008 scheme when subsequent civil damages claims are successful.
Payments under the two schemes are not increased as part of the general increases in benefit rates. The 1979 Act scheme has remained independent of benefits paid under social security Acts since responsibility was transferred to the Department for Work and Pensions in 2002. The 2008 scheme, which complements the 1979 Act, follows the same process for increasing payments.
The measures before the Committee are separate to the routine upgrading of benefits, but they are no less important. I am delighted that we are increasing rates by 5.2%.
In line with the views of Committee members expressed in previous debates that such occasions provide a useful opportunity to discuss issues relating to asbestos exposure, I am happy to continue with such debates, and I can confirm that there are currently no plans for legislation to include these schemes within the general benefit uprating. Indeed, it is a timely opportunity for us to remember that, for all the debates that we may have over the regulation of business, the health consequences of these two challenging, difficult, and—for many people—tragic conditions are such that we should always remember the importance of regulation in this area. I strongly believe that precautions are essential for asbestos, which, as more and more evidence has emerged over the years, has proved to be a very dangerous substance
One other effect of keeping this legislation separate from other social security legislation is that there is no statutory obligation to increase the rates paid under the schemes. However, following the practice of previous years and because of the commitment of the Government and of Members on both sides of the House to those who suffer as a result of asbestos exposure, I am happy that we are increasing the amounts payable for 2012 in line with the rate used to increase social security benefits.
I will provide Committee members with an example of the range of payments that will be made under these regulations. More than half of the payments made under the 1979 Act are as a result of mesothelioma. From April 2012, the maximum payment that can be made to a person suffering from the condition will be £81,536. That amount would be for someone aged 37 or younger at diagnosis. The lowest payment made to a person suffering from mesothelioma will be £12,666 for
a person aged 77 or older. All payments made in respect of mesothelioma are paid at the full 100% rate appropriate to their age at diagnosis. For diseases other than mesothelioma, the amount of payment also depends on the level of disability and varies considerably.Hon. Members may wish to know more about the details of the payments made over the past 12 months, and particularly in the current year. In the year from April 2010 to March 2011, 2,820 payments were made under the 1979 Act and 500 payments were made under the 2008 scheme. The total compensation paid out was £47.5 million. In the current financial year, the total paid out amounts to £35.4 million, with most of the payments made under the 1979 Act. For next year, we estimate that 3,000 claims will be paid under the 1979 Act and some 500 under the 2008 scheme. The estimated total compensation figure is £53.1 million.
We are all aware that the terrible effects of exposure to asbestos will be felt for many years to come. Mesothelioma is a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos, and the life expectancy is usually very short—generally between 12 and 18 months. The annual incidence of the disease continues to increase, and currently there are more than 2,300 mesothelioma deaths each year. The addition of other asbestos-related deaths—mainly lung cancer and asbestosis—brings that figure up to over 4,000 deaths each year. We take such precautions today in the handling, storage and disposal of asbestos, because there is a very real health consequence of getting it wrong. While it is always difficult to forecast exact peaks, the latest available information suggests that mesothelioma deaths in men will continue to increase to a peak in 2016. It is more difficult to predict when deaths in women will peak, but it is likely that that will occur after that for men—albeit at a much lower level.
These regulations will help provide a measure of financial support to these vulnerable people and their families at a time of their greatest need. I hope that these sets of regulations and compensation measures command universal support in the House. They are essential in helping people who face a deeply challenging, traumatic, and tragic development in their lives. I commend the uprating of the payment scales. I hope that everyone will offer their sympathy and support to all those affected by these diseases. Parliament should continue to provide support through the schemes, and I hope that the Committee approves both sets of provisions.
4.39 pm
Stephen Timms (East Ham) (Lab): I, too, am delighted to be serving under your chairmanship, Mr Hancock. Thank you for your lenient response to my delayed arrival, for which I apologise. I am grateful to the Minister for his explanation of the schemes, and the useful information about how many people are benefiting from them and how much money is currently being disbursed. He mentioned that the mesothelioma scheme was introduced in 2008, and I was reminded as he was speaking of the efforts of the former MP for Barnsley, Mike Clapham, who was a tireless advocate for mesothelioma sufferers. It is good to see that support now in place.
This is the second time during this Parliament that the Minister and I have met to debate regulations about payments to sufferers of asbestos-related diseases. The Minister has spelt out that the uprating of the schemes
is not a statutory obligation, so it is considered separately from the uprating of the other benefits that we debated on the Floor of the House a couple of weeks ago. I am not as convinced as the Minister that it is a good thing for these payments to be outside the ordinary uprating arrangements. The last time we debated the matter, I suggested that the uprating of these payments ought to be statutory alongside all the others. The Minister is right to point out that the number of people who will need to claim such payments in the future will unfortunately continue to rise, and I suggested during our previous debate that the then coming Welfare Reform Bill debates provided the opportunity to put the uprating of these payments on a more regular basis. That opportunity, sadly, has not been taken, which is something the Minister might like to comment on.The Minister is right to make the point that the absence of statutory uprating ensures that we have a debate similar to this one every year, and I agree that that is good because it gives us the opportunity to reflect on the scheme and on the great hardship faced by those who receive the payments. The Minister is right to highlight the fact that people suffer enormously as a result of these terrible illnesses, which are generally sustained as a result of asbestos exposure through work. Payments through the schemes should certainly retain their value. Debates such as this one serve as a reminder to Members each year of the weight of the issue. Figures from the Health and Safety Executive suggest that there will be more than 90,000 deaths by 2050, of which two thirds will occur after 2007. As the Minister said, the bulk of the impact of these terrible diseases is ahead of us.
On such an occasion, it is right to pay tribute to those who help sufferers of asbestos-related diseases. In my area, East London Mesothelioma Support does excellent work, and I am sure that other members of the Committee will be familiar with similar groups, particularly in areas such as mine that have an industrial past. Nationally, Macmillan Cancer Support and Mesothelioma UK offer support. The schemes we are considering today are often a last resort for those who suffer from these conditions. They are sometimes a last resort for recently bereaved relatives if they are unable to claim from the deceased person’s previous employer because, as the Minister suggested, the employer no longer exists. The support organisations are particularly important for those who do not have recourse to the Government’s scheme either.
The regulations uprate both benefits by 5.2%, the level of the consumer prices index in September 2011. The wider debate on uprating has been aired elsewhere, and the Government have concluded that the consumer prices index is a more appropriate uprating measure for benefits and pensions than the retail prices index, which was the previous yardstick. Over time, however, the consumer prices index is a less generous measure. The Office for Budget Responsibility expects a long-run average difference of 1.4 percentage points a year, which, compared with the previous arrangements, will hit the incomes of people who are not well off. Over time, the measure will take its toll, if the Government have their way, long after the deficit has been dealt with, although that will take years longer than they thought when they started along this road. If the change to uprating had been introduced as a temporary measure, we would
have seen some merit in it as a device to help deal with the deficit. However, it is wrong to use it as a permanent measure, factored into future Budget calculations long after the deficit has been overcome, in perpetuity.People such as those under discussion are entitled to a reasonable uprating. The RPI is the yardstick that has been used in the past and I have not heard a convincing reason why it should not be used in future. I have explained that we do not object to the impact for the coming year, but we do object to the permanent adoption of CPI uprating. We shall abstain from voting on the regulations today, as we did on the Floor of the House.
Last year, I asked the Minister a question on payment recovery. He said that the Association of British Insurers planned to launch a register of employer liability insurance policies. Such a register would help people such as the many sufferers of mesothelioma, pneumoconiosis and other ailments of that kind, who do not discover their work-related conditions until long after their employer has ceased to operate. Can he tell us more about how the ABI has been getting on with that? Will there be a register before too long to which affected families or individuals can refer?
Many people with mesothelioma and other industrial illnesses receive industrial injuries disablement benefit. Some 2,000 with mesothelioma received that benefit in 2010, when 345 new claims were made from people with pneumoconiosis. I understand that the total household benefit cap that we have debated in recent weeks will not exempt people from receiving industrial injuries disablement benefit, but it will exempt people in receipt of disability living allowance. Many people on IIDB receive DLA, but certainly not all. Even among the support group for employment and support allowance, only some 60% receive DLA. Has the Minister considered whether it is right for people receiving IIDB to be affected by the benefit cap? The Government have emphasised that they want families living with disability to be exempted from the cap’s effects.
The Health and Safety Executive is consulting on regulations on asbestos. We hope that many illnesses relating to coal mining will be ever decreasing in the not-too distant future, but, in terms asbestos, the safety of workers will remain a live issue for many years to come, because, unfortunately, there is still so much asbestos in buildings up and down the country. The regulations that are being consulting on include a requirement for people to receive a medical examination before beginning particular types of work related to asbestos. However, the regulations propose a three-year delay in implementing such a requirement. The Minister has responsibility for health and safety matters, so can he tell us why such a delay is necessary? The issue affects the people about whom we are thinking today, and I should have thought there would be a case for moving as quickly as possible to implement that additional safeguard.
Another issue I raised last year was the period of time between applications for payment and the completion of the claim. Unfortunately, very often the onset of this disease happens unexpectedly and then death comes soon after. As a result, victims often die before their
claims are processed and paid. Will the Minister update us on the Department’s efforts to reduce the time delays that have been experienced?I would prefer statutory uprating; it ought to be a regular part of the system. The Government ought to be required to uprate these benefits, just as they are to uprate others. However, I am glad we have the opportunity to discuss asbestos exposure and other industrial illnesses, and the needs of the people who suffer from them. It is at least a useful quid pro quo for the lack of statutory uprating at the moment. We will not oppose the regulations.
4.51 pm
Chris Grayling: I shall respond briefly to the points raised by the right hon. Gentleman. He asked about the benefit cap. People most severely affected would, I expect, receive ESA and be in the support group for ESA and would therefore not be covered by the benefit cap, under the changes introduced in the Bill. Industrial injuries benefits generally are not designed to cover additional costs incurred in the way that DLA is. They are designed as compensation for something that has gone wrong in the workplace.
The right hon. Gentleman raised the point about RPI and CPI. That is a subject for a longer debate.
Stephen Timms: I take the point the Minister has made. He has rightly explained the purpose of industrial injuries disablement benefit. There must at least be a question mark against whether that should be caught by the cap. As he said, it is effectively a replacement for income that might otherwise have been available. To say that people will lose money if it takes them beyond the cap does not seem right. Will the Minister comment?
Chris Grayling: The right hon. Gentleman is aware that the social security system has, over a long time, taken compensation payments into account when considering people’s levels of savings, or whether they receive a benefit or not. That was the case when he was a Minister and that principle has not changed; certainly not in terms of the industrial injuries disablement benefit. I do not recall that he raised that in the debate on the Welfare Reform Bill, so that was not something he felt strongly about at that time.
With regard to the time taken to process claims, we are always working to improve processes. We believe that around 80% to 90% of claims are paid to the sufferer. We process as quickly as we can, while fulfilling our obligations to ensure that all claims are appropriate and legitimate.
On the question the right hon. Gentleman put about the ABI, the Employers’ Liability Tracing Office has been in operation since last year, helping companies and employees trace policies from organisations that have disappeared. Our response to consultation on accessing compensation and supporting people who need to trace employers’ liability insurance has taken longer to publish than we had hoped. The issues raised are complex and we are in discussion with all stakeholders, including the ABI, to ensure we get it right. We will put forward proposals in due course as quickly as we can.
The regulatory changes arose from a decision taken by the European Commission, that we had not adequately transposed the appropriate EU directive into UK law. Our view is that the measures we had in place in the UK
provided appropriate levels of protection. That set of regulations was, of course, introduced by the right hon. Gentleman’s Government, and I think they got that right. However, the Commission has asked us to modify our regulations to reflect more accurately the exact wording of the directive. That is what we are doing. We seek to minimise the immediate impact on employers, because we do not believe that the current regulations are inadequate.Over the years, we have all agreed that such an area requires proper regulation. I think that the previous Government were right and that the Commission has been over-zealous in seeking to make changes that we think will not add to the existing protections. However, we are legally obliged to introduce those changes, and we will do so in a way that creates as little disruption as possible to employers. The protections put in place by the previous Government were appropriate; we supported them and we continue to do so.
I welcome the supportive comments made by the right hon. Gentleman, and I am sorry that he will not vote for the regulations. I imagine that the CPI-RPI debate is one we will have at length in future years. On his point about the separation of the regulations from broader benefit regulations, that would give any Government, including the current one, the flexibility, if they chose to use it, to increase the benefits in a different way from how they are increased elsewhere in the benefits system.
The opportunity for us to revisit and debate such issues every year and for Parliament to discuss whether we have got everything right for people who face massive health challenges, often in old age and involving lingering and painful terminal illness—including for Members dealing with constituency cases to say that we have missed things that we could or should do—is a useful way for Parliament to refocus on a health care issue that has grown and grown over the years and will continue to grow. We would like the upward trend to start to diminish again, and the sooner that that happens the better.
Stephen Timms: May I take advantage of this opportunity to ask the Minister to drop me a line about the health and safety point? I understand that there is a delay in introducing a regulation that might help to avoid the problem becoming worse.
Chris Grayling: I will certainly do that. The reason why we are not introducing medical checks immediately is that we believe the existing protections are already appropriate. We have to extend the provisions to conform with EU regulations, but the structure that we inherited was right. I am happy to write to the right hon. Gentleman with more details, but the basic issue is that we are adding to what already does the job, which is why we are reluctant to increase the burden on business overnight.
The whole House believes that it is enormously important to support those who suffer from these two dreadful illnesses, so I ask the Committee to send all our good wishes to them and to agree to the uprating for another year.
The Chair: On behalf of the whole Committee, I send our regards to all the people who help those sufferers. Stephen Timms was right to recognise the effort made by so many. I represent the city of Portsmouth, where so many people suffer from asbestos-related illnesses, and I know only too well the efforts that are made to help them. That plug from the Chair is to thank such people.
Draft Mesothelioma Lump Sum Payments (Conditions and amounts) (Amendment) Regulations 2012
That the Committee has considered the Draft Mesothelioma Lump Sum Payments (Conditions and amounts) (Amendment) Regulations 2012.—(Chris Grayling.)