Mesothelioma Bill [Lords]

The Committee consisted of the following Members:

Chairs: Philip Davies  , Mr George Howarth 

Adams, Nigel (Selby and Ainsty) (Con) 

Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab) 

Brine, Steve (Winchester) (Con) 

Brown, Mr Nicholas (Newcastle upon Tyne East) (Lab) 

Bruce, Fiona (Congleton) (Con) 

Bryant, Chris (Rhondda) (Lab) 

de Bois, Nick (Enfield North) (Con) 

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

Green, Kate (Stretford and Urmston) (Lab) 

Heaton-Harris, Chris (Daventry) (Con) 

Kwarteng, Kwasi (Spelthorne) (Con) 

Lavery, Ian (Wansbeck) (Lab) 

Lloyd, Stephen (Eastbourne) (LD) 

McCann, Mr Michael (East Kilbride, Strathaven and Lesmahagow) (Lab) 

Paisley, Ian (North Antrim) (DUP) 

Penning, Mike (Minister of State, Department for Work and Pensions)  

Perry, Claire (Devizes) (Con) 

Phillips, Stephen (Sleaford and North Hykeham) (Con) 

Thornton, Mike (Eastleigh) (LD) 

Fergus Reid, Committee Clerk

† attended the Committee

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Public Bill Committee 

Tuesday 10 December 2013  


[Philip Davies in the Chair] 

Mesothelioma Bill [Lords]

8.55 am 

The Chair:  Before we begin, I have a few preliminary announcements. Members may, if they wish, remove their jackets during Committee sittings. Tea and coffee are not allowed. Please ensure that all electronic devices are switched off or to silent mode. 

As a general rule, my fellow Chair and I do not intend to call starred amendments that have not been tabled with adequate notice. The required notice period in Public Bill Committees is three working days. Therefore, amendments should be tabled by the rise of the House on a Monday for consideration on a Thursday and by the rise of the House on a Thursday for consideration on the following Tuesday. 

Before we begin our line-by-line consideration of the Bill, some brief explanation may be useful to those who are relatively new to Public Bill Committees. The selection list for today’s sitting is available in the room and shows how the amendments selected have been grouped for debate. Amendments grouped together are generally on the same or a similar issue. The Member with their name on the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on any or all amendments in the group. A Member may speak more than once in a single debate. 

At the end of a debate on a group, I will call the Member with the lead amendment again. Before they sit down, they need to indicate whether they wish to withdraw the amendment or press it to a vote. Similarly, if another Member wishes to press a grouped amendment or new clause to a vote, they should let me know. I will assume that the Government wish the Committee to reach a decision on their amendment. 

Decisions on amendments do not take place in the order in which they are debated but in the order in which they appear on the amendment paper. I have discretion to decide on separate stand part debates on clauses and schedules, taking account of the extent of debate on amendments. 

This morning, the Committee will automatically adjourn at 11.25 am. This afternoon, it is in the hands of the Whips, but around 5 pm is conventional. However, there may be a consensus on making brisk progress with the Bill, given the nature of the matter with which it is concerned. 

I hope that this is helpful. Before beginning the line-by-line consideration, we need to dispose of the programme motion and the motion to report written evidence. Ordered,  


(1) the Committee shall (in addition to its first meeting at 8.55 am on Tuesday 10 December) meet— 

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(a) at 2.00 pm on Tuesday 10 December; 

(b) at 11.30 am and 2.00 pm on Thursday 12 December; 

(c) at 8.55 am and 2.00 pm on Tuesday 17 December; 

(2) the proceedings shall be taken in the following order: Clauses 1 to 11; Schedule 1; Clause 12; Schedule 2; Clauses 13 to 21; new Clauses; new Schedules; remaining proceedings on the Bill; and 

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 17 December—(Mike Penning.)  


That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication—(Mike Penning.)  

Clause 1 

Power to establish the scheme 

Stephen Phillips (Sleaford and North Hykeham) (Con):  I beg to move amendment 13, in clause 1, page 1, line 3, leave out ‘may’ and insert ‘must’. 

It is an enormous pleasure, as always, to serve under your chairmanship, Mr Davies, and with the other members of the Committee. I do not intend to press this amendment or the others that I have tabled to a vote, if the Committee is prepared to permit me to withdraw them. They are essentially probing amendments, but they are important ones that I hope the Committee will wish to consider. I hope that the Minister will take them away in due course and come back to the House on Report. 

Clause 1 provides that the Secretary of State “may” make regulations to give effect to the diffuse mesothelioma payment scheme. The amendment proposes that the word “may” be replaced with the word “must”. The Committee will no doubt appreciate that “may” is permissive, whereas “must” is mandatory. No doubt—at least, I hope—the Minister will indicate that the Government intend to introduce regulations to give effect to the scheme as soon as possible. 

9 am 

The amendment’s other purpose is to give the Committee the opportunity to reflect on what this long-desired Bill actually does. Mesothelioma is a terrible disease, as the House heard from many Members on Second Reading. Three things make the Bill welcome; they indicate what an appalling disease it is. First, we sit here today—in my case, only just—because we managed to get to work this morning. Those who suffer from mesothelioma have the disease simply because they went to work. It is a death sentence purely because they sought to put food on the tables of their homes and shoes on the feet of their children and to go on holiday once a year. For those reasons, the House is right to back this scheme for those who cannot achieve compensation by any other means. It is also right that we consider how appalling the disease is and that people have it simply because they did their jobs. 

Secondly, a diagnosis of mesothelioma is about the worst diagnosis someone can have. There is no cure. Once someone has it, that is it. As I have said, it is a death sentence simply because someone went to work and was subjected to the causative factors by virtue of

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doing the job and the negligence of the employers. No one should forget how appalling the diagnosis is when it is given to someone. It is not as though they have only a short time to live. They have months; sometimes a little more than a year, or, very occasionally, more than that. They have to live throughout that period with the knowledge that purely because they went to work, they have this appalling disease and that they will be leaving behind their families and loved ones. 

Thirdly, mesothelioma does not lead to a pleasant death. It gives me no pleasure—I know that many with the disease will read the Hansard report of this Committee—to say that it is not a pleasant death. It is a death that leaves behind many loved ones, because someone did no more than their job. In such circumstances, the Bill—in clause 1, the Secretary of State may make regulations to give effect to a scheme for which we have waited so long—is deficient, unless, as I hope he will, the Minister indicates that he will introduce regulations as soon as he possibly can after the Bill has completed its passage through the House and proceeded to Royal Assent, to ensure that those who have suffered for so long without proper compensation, because their employers or insurers cannot be traced, will receive the compensation to which they are entitled. 

Kate Green (Stretford and Urmston) (Lab):  It is a great pleasure to serve under your chairmanship, Mr Davies, and to follow the opening remarks of the hon. and learned Member for Sleaford and North Hykeham, which I fully endorse. Like him, I believe that it is absolutely imperative that the Bill completes its passage and that the necessary regulations are introduced as quickly as possible, so that we can have payments flowing to the victims of this terrible disease and to their families. I do not doubt the Minister’s intentions to do just that. 

We saw from the way in which the Bill was taken forward by the noble Lord Freud in the House of Lords the degree of commitment that exists throughout Parliament to get the legislation in place and the scheme active as quickly as possible. However, that does not mean we should accept that the Bill in its present form is the very best that we can do for victims. I hope that we will have the opportunity to agree to areas where we can perhaps do a little better in Committee and on Report. 

The scheme has been long awaited, as the hon. and learned Gentleman said, but in the light of the appalling suffering and death that has been described, it is not yet adequately generous. We do not believe that the scheme is unaffordable for the multi-billion-pound insurance industry, which very late in the day is making quite a modest gesture to victims and their families. 

We believe that it is important to take time to look in detail at the Bill’s provisions, and I am pleased that we have this week and next to do that. We would do a great wrong to victims if we did not scrutinise the Bill in detail, to look for where improvements can be made. There is no doubt that victims deserve the best protections that Parliament can offer. That is our role as parliamentarians, not simply to take a done deal as presented by the industry. 

We are to here to legislate for the right and just deal for victims and their families. We will take this opportunity to ensure that we do the best that we can for those

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people. I know that the Minister will also want to ensure that the Bill is as good as it can be, so that the scheme that we all hope to see in a few months can also be as good as it can be for victims. 

The Minister of State, Department for Work and Pensions (Mike Penning):  It is a pleasure to serve under your chairmanship, Mr Davies. I welcome the tone of the Opposition and their support for the Bill. I fully accept and understand that there should be as much scrutiny as possible. I also welcome the opening remarks of my hon. and learned Friend the Member for Sleaford and North Hykeham regarding amendment 13. 

There is no doubt that the sufferers of this horrible disease need help. We would all have hoped that they would have been compensated through their employers’ insurance schemes. The scheme in the Bill is for those let down by the system who have no other recourse. The proposal did not come from the insurers, as was discussed extensively in the other place; it came from hard-fought negotiation. Although I accept that it is not perfect and that there will be understandable requests for an increase in the negotiated compensation, we are where we are. There was extensive discussion in the other place. I will look carefully at how we could improve the Bill without delaying it. That is important because the peak of claims will come in 2015. I will come on to how we can use the regulations to strengthen the Bill as much as possible. 

The Bill provides that the Secretary of State may, by regulation, set up a mesothelioma scheme. The amendment would provide that the Secretary of State must set up a scheme. We believe that the change from “may” to “must” is not needed, as the intention is to lay regulations as soon as possible. There are already draft regulations, and we will ensure that we consult as widely as possible, particularly with the relevant groups, which have understandably been lobbying us so hard. 

My learned and hon. Friend’s amendment may be intended to ensure that we do not repeal the legislation. However, at some stage in future, I hope that the Secretary of State will be able to repeal it because the scheme is not indefinite. We expect and hope that deaths from this terrible disease will reduce and that there will be an improvement in tracing. Therefore, the scheme could be brought to an end and will no longer be needed. Of course, we do not have a definite date for that. However, if we accepted the amendment, we would be put in an indefinite position and would have to introduce legislation for a repeal to take place. I can assure my hon. and learned Friend that we will introduce the regulations, which are currently in draft form, and that we will get them through as soon as possible. 

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab):  I accept what the Minister says about the difference between “may” and “must”. To be honest, it is not the first time that I have heard the matter debated. He mentioned the regulations that he intends to introduce. We all know that the thrust of the measure under consideration today will be contained in the regulations. He mentioned strengthening the regulatory regime. Is he able to tell us now what sort of strengthening of the regulatory regime he envisages? 

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Mike Penning:  The right hon. Gentleman is experienced in the nuances of “must” and “may”, as he has been in government, and I thank him for his comments. This sounds like semantics, but it is actually a serious and important point. The key is that, when I can use the regulations, I will do so to strengthen the Bill. At this moment, as we go through the Bill line by line, I cannot indicate where that will be. My difficulty—I touched on this on Second Reading—is that when I use the regulations that must not cause ping-pong. A situation in which we go back and forth to the House of Lords will delay Royal Assent and so delay the compensation, which we hope to get to victims by July. I will work as closely as I can within the regulations as far as I am allowed. As an experienced former Minister, the right hon. Gentleman will understand exactly where I am coming from. I will use the regulations wherever I can, but at this stage, as we move through the amendments, I will see how I can do that. 

Stephen Phillips:  On the basis of the Minister’s assurances, for which I am most grateful, and notwithstanding the fact that I disagree with both him and the right hon. Member for Newcastle upon Tyne East—the Act can be repealed by a future Parliament, come what may, so it matters not whether it says “must” or “may”—I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Paul Goggins (Wythenshawe and Sale East) (Lab):  I beg to move amendment 55, in clause 1, page 1, line 6, at end insert— 

‘; and for funding research into mesothelioma (through the research supplement under section [Research supplement]).’.

The Chair:  With this it will be convenient to discuss the following: 

Amendment 56, in clause 13, page 7, line 10, at end insert— 

‘( ) The regulations mentioned in subsection (1) must provide for the levy to include a research supplement in accordance with section [Research supplement] (in addition to the amounts set for the purpose specified in subsection (1)).’.

Amendment 57, in clause 13, page 7, line 11, after ‘levy’, insert— 

‘(not including the research supplement)’.

Amendment 58, in clause 13, page 7, line 16, after ‘levy’, insert— 

‘(not including the research supplement)’.

Amendment 59, in clause 13, page 7, line 18, after ‘levy’, insert— 

‘(not including the research supplement)’.

New clause 5—Research supplement—  

‘(1) This section makes provision about the research supplement mentioned in section 13.

(2) The research supplement—

(a) must be expressed by regulations under section 13 as a percentage of the amount set for the purpose specified in section 13(1) in accordance with section 13(2) to (5); and

(b) may not exceed 1 per cent of that amount.

(3) Regulations under section 13 must include provision about the application of the research supplement; in particular, the regulations—

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(a) must include provision for amounts raised by way of the research supplement to be applied by way of grants or other financial assistance for research into mesothelioma;

(b) must require the scheme administrator to make arrangements for the application of the research supplement;

(c) may allow the scheme administrator to arrange for a body which handles applications for research funding to administer the research supplement on the scheme administrator’s behalf;

(d) may allow receipts by way of research supplement in respect of one period to be held for allocation in a later period, and for investment of receipts pending allocation.

(4) Before making regulations in respect of the research supplement the Secretary of State must consult—

(a) insurers;

(b) medical charities and research foundations; and

(c) other persons or bodies who the Secretary of State thinks are likely to be interested.’.

Paul Goggins:  As other Members have already said, it is good to see you in the Chair, Mr Davies. In your introductory remarks, you reminded the Committee of the procedures that you intend to follow and pointed out that that was mainly done for newer Members who are less used to Committee work. I assure you that we all appreciate a reminder about the rules of how the Committee operates. 

I agree with the point made by my hon. Friend the Member for Stretford and Urmston—I am glad the Minister took it in the constructive way that it was intended—that those of us who move amendments in Committee seek not to delay the Bill but to improve it. If we work constructively that can happen. Since Second Reading, I have been trying to think of an amendment that we might agree in Committee to improve the Bill that would cause such great consternation to their lordships that we would be involved in a ping-pong battle, but so far I have not been able to. Perhaps the Minister will point to one during our discussions; but given the debates that have taken place in the other place, if we improve the Bill, I can only see that being greeted warmly by their lordships. Let us work constructively in that way; I am sure that we can make progress. 

I commend the hon. and learned Member for Sleaford and North Hykeham. He and I have worked together previously on legislation, and I know that he will be a great asset to our deliberations in Committee. He was right to take the opportunity, right at the start of our consideration of the Bill, to remind us what mesothelioma means to the people who suffer from it and the people who care for them. The way that he did so was highly commendable. I regret that my amendments might take up a little more time than his comments, but I am sure that the Committee will bear with me. 

The group of amendments, taken together, would impose, in addition to the main levy, a levy not exceeding 1% to fund research into the causes and treatment of mesothelioma. We all feel a sense of duty to those who have to endure such dreadful suffering and a painful death, and we owe it to them and their families to do what we can to improve our understanding of the causes of mesothelioma and to improve treatment for those who suffer from the condition. 

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The amendments are supported by the British Lung Foundation and by a large group of peers, ably led by Lord Alton of Liverpool, who failed by just seven votes to add similar provisions to the Bill. I pay tribute to Lord Alton’s determination in pursuing this issue, not only when the Bill was under consideration in the Lords but in a question to the Minister, Earl Howe, only last Thursday. He took the opportunity to remind their lordships—and all of us—that 2,400 people will die from mesothelioma this year, and over the next 25 years, some 60,000 might die from the disease. He argued effectively and persuasively last Thursday, as he has done before, that it would be shameful if we left unfunded the research that could save lives and ease the pain and dreadful suffering that people with mesothelioma have to endure. 

9.15 am 

To their credit, four of our leading insurance companies decided in 2010 to stump up the cash to fund new research into mesothelioma. Those four companies are Aviva, AXA, RSA, and Zurich. They decided that they would provide a grant of £2.55 million to the British Lung Foundation to invest in research projects, which are already beginning to make a difference. Members of the Committee might have seen some of the detail of the research that the British Lung Foundation has been able to fund as a result of the grant from those four insurance companies. 

The Committee ought to consider five particular research projects. That is important, because the research is making a practical difference right now in our understanding of this dreadful disease. The first project is run from Papworth hospital in Cambridge, where a UK-wide mesothelioma tissue and blood sample bank—the meso-bank—has been established. I draw the Committee’s attention to the remarks of Lord Kakkar: 

“The a very important national initiative that will have global significance”— 

not just for the UK, but globally— 

“because collecting tissue from patients afflicted with mesothelioma provides the opportunity for fundamental and translational research”.—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC245.] 

The bank allows tissues, blood samples and anonymous clinical information to be collected and centrally stored. The technique is used across a range of research fields to provide the raw material for researchers to carry out their work. 

Kate Green:  I congratulate my right hon. Friend on his speech and his amendments. He is right to make the point about the global benefits from the meso-bank and the access that it enables us to have to the research. Does he also acknowledge that in the projections around the incidence of mesothelioma worldwide, particularly in developing economies, the spike might be years if not decades away? 

Paul Goggins:  I am grateful to my hon. Friend for making that point, because that shadow hovers over the whole of the debate. We have the dreadful problem of mesothelioma in this country, and people will die from that dreadful disease, but we know that, because of the export and use of asbestos in the developing world—the

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so-called BRIC countries—the issues that we face now are issues that other countries will face in future. If we can advance the science and understanding of mesothelioma now, that might do great good not only in this country, but throughout the world. My hon. Friend was right to make that point. 

On the tissue and blood bank, researchers can use samples from the bank when they need them, allowing them to do their experiments more quickly and economically. That is an important point. Speed is of the essence. The Minister frequently reminds us that it is important to act quickly. Likewise, it is important that researchers have speedy access to the raw material to help them in their studies. 

The first project is very important. A second project is run by Dr Peter Campbell from the Wellcome Trust Sanger Institute in Cambridge. It is a project about understanding the genetic causes of mesothelioma, and we should not underestimate its importance. The research uses technology to identify exactly which genetic mutations are present in samples of mesothelioma taken from 50 patients. Knowing which genes are important and what they do will help scientists to design more effective ways in which to treat mesothelioma—a new approach to treatment in which choices are made according to the genetic make-up of an individual’s cancer. This is important. As medical science develops, solutions or treatments will be built up and designed with the individual in mind, so that we have specific treatment for particular individuals, according to their genetic make-up. Again, this project advances that cause enormously. 

The third project is run from the London School of Hygiene and Tropical Medicine and focuses on current asbestos exposures and resulting mesothelioma risks in the UK population. This is an important piece of work that looks long term at the mesothelioma risks and exposure among the UK population as a whole. The study will look at large numbers of people and collect information about asbestos exposure in the workplace and the wider environment since the 1980s. The information will be used to estimate future risks of mesothelioma, which will allow the team to make reliable estimates of how the number of UK cases is likely to change after the predicted peak in 2015 and of which occupations represent the highest risk. We know about the 2015 peak, but the important thing is that beyond that, although we make estimates, we need to understand better the basis on which we are making such estimates. This research project will help us to do so. 

Kate Green:  I am sure that my right hon. Friend would also want to acknowledge the particular concern not only for people in the workplace, but for children in schools since the 1970s and 1980s. Many of our colleagues are actively engaged on that subject through the all-party group. 

Paul Goggins:  My hon. Friend makes an important point. We think of those affected by mesothelioma as working in heavy industry—electricians, joiners and so on—but others are exposed as well. The number of teachers who have been exposed to asbestos and have developed mesothelioma is running at a worrying level, and my hon. Friend mentioned children attending schools. Obviously, beyond 2015, we need to understand more

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about the profile of exposure to asbestos and what that is likely to produce in terms of people diagnosed with mesothelioma. 

The fourth and fifth projects look at different developments in the treatment of the disease. The fourth project, which is run from the Queen Alexandra hospital in Portsmouth, looks at regular early specialist palliative treatment for mesothelioma. The project is examining whether specialist palliative care immediately after diagnosis, in addition to normal care, assists in relieving the symptoms from which people suffer. The project is looking to produce an increased quality of life, which is to be commended. The researchers are testing things to see whether they can find a way forward whereby specialist care early on in the treatment of someone diagnosed with mesothelioma can add to quality of life. 

The fifth project, which is run from the university of Sheffield, asks whether it is feasible to use a combined package of different treatments to relieve pain in mesothelioma patients from an early stage of the disease. It will test the feasibility of offering mesothelioma patients a combination package of up to five pain treatments from when they first develop mild to moderate pain. 

All five projects indicate that we are not prepared simply to accept that, when someone is diagnosed with mesothelioma, that is it, there is nothing we can do—all that remains is a painful illness and a dreadful amount of suffering before inevitable death. The projects are stating that there are things that we can do to understand the causes and to improve treatment. Once again, I commend the four insurance companies for taking the initiative to provide the money that means the five projects are now under way. 

The funding for mesothelioma research, however, still lags behind other areas of research—for example, two forms of cancer with similar mortality rates to mesothelioma, myeloma and melanoma. The National Cancer Research Institute reported that in 2011, its partners spent £400,000 on mesothelioma research, but the amount spent on research into myeloma was £5 million and into melanoma, £5.5 million. So, £400,000 for mesothelioma and more than 10 times that amount on these other two cancers, which have a very similar mortality rate, and this in a country with the highest death rate from mesothelioma in the world. 

Lord Freud was absolutely right when he said in Committee in the other place: 

“Something very odd is happening here when so little money has gone into research in this area … There needs to be a kick-start process to get research going here”.—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC250.] 

Lord Freud was absolutely right. My amendments seek to give that kick start a permanent basis on which it can be developed. 

There are at least two problems with the voluntary scheme. I commend the insurance companies for establishing it, but it is a voluntary scheme. The first problem is that it is temporary. Last Thursday in the House of Lords, Earl Howe reassured peers that the British Lung Foundation was in discussion with the industry about extending the arrangement that has run since 2010. It is welcome to learn that discussions are taking

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place, but that is all they are at the moment: discussions. The reality is that if nothing happens, the scheme will come to an end in the next few months and the important pieces of research that I was describing will simply come to an end. They cannot be funded in the longer term. 

In addition to the fact that this is only temporary, the second problem is that currently only four companies make a contribution to the fund. Admittedly, they are four of the largest companies, but there are only four. Something in the region of 150 companies have an interest in the market for employers’ liability insurance, so there should be many more companies involved in this project than just the four. My proposal would mean that all those 150 firms would play a part and make a contribution, helping to fund the research supplement for which new clause 5 sets out the arrangements. The amount shared between 150 companies would be very small and proportionate to their share of that particular part of the insurance market. 

I shall go through the amendments in a little more detail. Amendment 55 makes the funding of research part of the scheme that the Minister seeks to introduce. I applaud and support what he is doing in bringing forward the scheme, but I want to make funding research part of that scheme. Amendment 56 requires that the regulations relating to the levy provide for a separate research supplement. Clearly, this legislation that we are debating provides the mechanism for the levy, and I want to make sure that the research supplement that I propose is provided for as part of that levy. 

Amendments 57, 58 and 59 provide that the calculation of the main levy—the fund from which claimants will receive their payments, as set out in clause 13—is done without reference to the research supplement. In other words, the supplement is in addition to the levy which the Minister seeks to make arrangements for. New clause 5 sets out the detailed arrangements for the research supplement. It must be calculated as a percentage of the main levy and it may not exceed 1% of it. This is a very modest amount. If the levy is based on market share, so too, of course, would be the research supplement, so a company would pay for the level of engagement that it, as an insurance company, has in that particular market. 

Subsection (3)(a) of new clause 5 provides that the research supplement is to pay for research into mesothelioma. Obviously we have to specify in legislation precisely what we want the funding to be for and this is set out in subsection (3)(a). Subsections (3)(b) and (3)(c) require the scheme administrator to arrange the administration of research grants. The administrator could do that themselves, or they could appoint an independent outside body to do it on their behalf. That is an open question for the scheme administrator to decide. 

9.30 am 

Subsection (3)(d) allows the money to be spread and spent over time. The money does not have to be spent in the year in which it is levied; it may be planned and used sensibly in the long term so that we have well-thought-through research projects that can make a real difference. 

Subsection (4) provides for a statutory duty to consult insurers, medical charities and research foundations before making regulations on the research supplement.

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That is obviously sensible to ensure that the regulations are properly drafted and effective in ensuring that we make the best use of money raised by the levy. 

I am aware from other debates, particularly in the House of Lords, that the Government, so far at least, have been reluctant to accept the proposal that I am making now and that Lord Alton and others made in the other place. I find some of the Government’s arguments to be rather weak, and I hope that the Minister will either accept that those arguments are weak or make stronger arguments worthy of further consideration. 

The first argument is that the research supplement would be a hypothecated tax, but that should not necessarily be an obstacle to pursuing research that may save lives and improve the treatment of people who suffer from this dreadful disease. If the research supplement would be a hypothecated tax, is not the main levy also a hypothecated tax? What is the difference? If we are proceeding with the main levy, as we should, there is no argument for not proceeding with the additional levy to fund the research. 

The second argument is that there is no precedent for such a measure, but there are many precedents. I will mention one or two precedents that will be of particular interest to you, Mr Davies. Section 123 of the Gambling Act 2005 allows for a levy on the gambling industry to fund projects related to gambling addiction or other forms of harm associated with gambling. The Gambling Act provides for a levy, and everyone seems to think that that is a good idea, so why not a levy to fund research into an issue that is at least as important? 

Sections 24 and 17 of the Betting, Gaming and Lotteries Act 1963 provide for a levy to be imposed for the benefit of horseracing, including the improvement of breeds of horses. If Parliament was prepared to introduce a levy to pay for the improvement of breeds of horses—again, the Chair would be pleased to see that—surely it should be prepared to fund research into mesothelioma through a levy. 

There are other precedents, such as the fossil fuel levy under section 33 of the Electricity Act 1989. There is a levy on the pig industry under section 1 of the Pig Industry Levy Act 1983. 

Mike Penning:  And the link to the Chairman is? 

Paul Goggins:  The link is not necessarily immediately obvious to the whole Committee, but I am sure the Chairman will already be thinking of a connection that could be made. 

A levy on the British Gas Corporation was imposed by the since repealed Gas Levy Act 1981, and a levy on licensees, similar to that imposed by section 123 of the Gambling Act, was imposed under section 10C of the National Lottery etc. Act 1993 to provide for problems and issues related to addiction and other negative influences. There are many precedents. 

I find the arguments about hypothecated taxes and lack of precedent to be deeply unimpressive and very weak. Perhaps the Minister will come up with a stronger argument this morning, or perhaps he will finally accept that there is merit in my argument and that the Government should accept the proposed modest additional levy to fund such important research. I say that not in the spirit of conflict but in the spirit of consensus. 

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In the House of Lords on 17 July, Earl Howe set out a number of actions that the Government are taking to promote more research into mesothelioma, and I will briefly go through the points that he made in that debate. I hope that the Minister will be able to update us on the promises that Earl Howe made. First, he promised that 

“the National Institute for Health Research will ask the James Lind Alliance to establish one of its priority-setting partnerships. This will bring together patients, carers and clinicians to identify and prioritise unanswered questions about treatment for mesothelioma and related diseases. It will help target future research”. 

That was an attempt to try to target research and to elicit new interest in this area of research. I would be interested if the Minister could give us an update on what has happened since July. Earl Howe continued: 

“Secondly, the National Institute for Health Research will issue what is called a highlight notice to the research community, indicating its interest in encouraging applications for research funding into mesothelioma and related diseases.” 

On that, I ask the Minister to update the Committee, because we need to be persuaded that the Government’s preferred option is producing more effective outcomes than the levy would. Finally, Earl Howe said: 

“Thirdly, the highlight notice would be accompanied by an offer to potential applicants to make use of the NIHR’s research design service, which helps prospective applicants to develop competitive research proposals…Finally, the NIHR is currently in discussion…about convening a meeting to bring together researchers to develop new research proposals in this area. The aim is for the event to act as a catalyst for new ideas that will further boost research into mesothelioma.”—[Official Report, House of Lords, 17 July 2013; Vol. 747, c. 786.] 

With the greatest respect to Earl Howe, that looks a bit like a wish list from a Minister who was trying to defend the indefensible by not accepting the amendments that had been tabled. In a spirit of consensus, however, and in an attempt to be constructive, I believe that the Committee would like to hear what has happened with those proposals. It is several months since they were made and we need to know what has happened to them as we weigh in the balance whether my proposed levy would be a better or worse way to proceed than the Government’s proposals. 

I do not know the real reason why the Government have set their face against the levy. I hope that we will be told of a change to their approach this morning, but that has not happened so far. I wonder whether the Department for Work and Pensions is reluctant to raise funds for research for something that it believes the Department of Health should take care of. I do not think that that is a worthy concern; we should rise above such concerns and cut across boundaries in pursuit of research that will assist sufferers of the dreadful disease of mesothelioma. 

Lord Pannick was clear in his contribution to the debate in the other place: 

“It would be quite fanciful to suggest that there is a legal reason not to support an amendment”—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC247.] 

very similar to that which I have tabled. No less an authority than Lord Pannick has said that there is no legal reason not to do it, there are plenty of precedents and the concern about hypothecated taxes is as true of the main levy as it is of the research levy. I find it difficult, therefore, to understand why the Government will not accept the proposal. 

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Ministers have also argued—this argument is shot through with holes—that there is no lack of funding for research into mesothelioma; instead, there is a lack of high-quality applications. Earl Howe made that point during the brief exchanges last Thursday in the other place, which set off a fierce reaction from members of the medical research community who work on the matter day and night using the modest resources at their disposal. They believe that they have high-quality research, but that there is a lack of money. 

The problem is the lack of certainty about money. The current temporary three-year funding is, as we have heard, producing some good research outcomes. If there is uncertainty, how can high-quality researchers be expected to put at risk their own time and resources to gain an end product that simply is not there? They need certainty. I am clear that, if the funding were there at a reasonable level and were sustainable and accessible, the high-quality bids would come. 

I will quote an important authority, Stephen Holgate, consultant respiratory physician at the Medical Research Council, clinical professor of immunopharmacology in Southampton, and chair of the British Lung Foundation Scientific Committee. If he does not know about this issue, I do not know who does. He says, 

“It is simply not true to state the quality of mesothelioma research applications is not up to standard. Even if it were, the solution would not be to simply withdraw the availability of research funding. In recent years, thanks to contributions from bodies such as the Medical Research Council and charities such as the British Lung Foundation, Mick Knighton Mesothelioma Research Fund and June Hancock Mesothelioma Research Fund, investment in mesothelioma research has increased considerably, albeit from a very meagre starting point. And the quality of research proposal this has attracted has been of an exceptionally high standard.” 

He underlined the word “exceptionally”. 

There is no doubt that the quality of research project is there. If the funding were more certain and plentiful, there would be the high-quality applications that we would all want to see. 

If the Minister were to say today that he was interested in the levy that I am proposing and was prepared to consider it as a reserve power in order to focus the minds of the industry to ensure that it came up with a voluntary scheme that did the business, and that everybody contributed to what would be a permanent scheme—in other words, to hold back the powers that we would pass in the legislation as a reserve—I would consider that. We are trying to work constructively to get something that would work in practice. By and large, all of us would sooner see voluntary schemes that worked well than statutory schemes that were forced on people. 

The problem, as the industry itself says, is not that some companies are not prepared to fund this; it is that not all of them are prepared to do so. In order to make the scheme fair and sustainable we must have a formula and a system that means that everybody contributes according to their market share, and that it becomes a permanent feature. 

If the Minister is prepared to consider using the proposal as a reserve power in the Bill, as something that could be introduced in future if the voluntary scheme does not work, I would be prepared to consider that in a constructive spirit. That is not my starting

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point, or my intention in bringing forward the amendments. I think the time has come to make the research permanent and more effective. 

I conclude that a small additional levy shared proportionately between all insurers involved in the scheme would be viable, legal, fair and effective. It would enable us to understand more fully the causes of mesothelioma. Crucially, it would help to ease the suffering of those with the condition. I urge the Minister to consider the proposals carefully. 

Kate Green:  I will speak briefly to support the amendment and commend my right hon. Friend the Member for Wythenshawe and Sale East. There is universal agreement on the urgent need for greater investment in research into mesothelioma. It is also widely acknowledged that the condition has been the poor relation in terms of cancer research spending. It is right that we should want to invest effectively and adequately to address the terrible experience of people dying of this illness. My right hon. Friend highlighted some of the projects that will look at opportunities for better palliative care and pain relief. We should understand what steps are possible to extend life and quality of life, and that is particularly important when we look at the trajectory of the disease worldwide over the coming decades. 

9.45 am 

It is often thought that mesothelioma is a disease that will die out, because it relates to earlier generations working when the effects of asbestos were not understood. In fact, the effects of asbestos have been well understood for many decades, but, none the less, we have been much more restrictive in this country over the past couple of decades in how we control working with asbestos. There has been a welcome and important focus on the safety of that work. 

Worldwide, we know that many developing economies do not have sophisticated health and safety protections. It is absolutely right that, as a leading economy and as the economy that—my right hon. Friend pointed this out—has the highest incidence of deaths from mesothelioma, we should want to develop learning and knowledge for our community, as well as spreading that knowledge worldwide. That is also important when we think of the global reach of UK industry. It is entirely conceivable that UK industry will continue to have interests in some of these developing economies and the businesses in those economies, where the use and management of asbestos might not reach the standards we expect in the UK. 

With my right hon. Friend, I welcomed the commitment that was given in the House of Lords for a joint strategy with the Department of Health to boost research and encourage more opportunity proposals for high-quality research, but I, too, am sceptical. It is not a lack of quality research that we are struggling with, but a lack of resource for that research to be carried out. I join him in hoping that the Minister will tell us what progress has been made since Earl Howe’s commitments in July to work with the research community and funders. We want to see real progress being made. 

I welcome how my right hon. Friend’s amendments have been constructed to ensure that the levy he proposes is additional to the levy proposed in the Bill, which

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would be for direct payments to sufferers. The amendments would not take funds from the levied fund for payments; it would be a modest extra payment from the insurance industry specifically to further research. 

I would have thought that the industry—leaving aside any moral obligation that it might feel it has to fund such research—has a financial interest in the long run in funding such research. It could be expected that good quality, effective research would mean that the extent of the disease and the damages that people can therefore claim for contracting and living with the disease would reduce over time. The Government would also gain from the proposal, because there could be a reduced requirement for statutory payments as a result of the investment in good quality research. 

With my right hon. Friend, I welcome and commend those insurance companies that offer funding for research. I also welcome the reported willingness of the Association of British Insurers to continue to stand ready to offer support. It is important that we nail down what that support will look like in the Bill, because the industry’s best intentions might be subject to market and financial pressures as we move forward. It is important that we secure a specific commitment from the industry that research will not be the bit of expenditure that falls off the end if insurers feel under financial pressure or find themselves in difficult insurance markets. 

I hope that today’s debate will achieve two things. First, I hope that it will act as a catalyst for the industry and research community to work together to develop and take forward as quickly as possible a comprehensive programme of well-funded research. Secondly, I hope that the Minister will assure us that he is willing to use these proposals, as my right hon. Friend suggested, as a backstop to encourage the industry to do what it can voluntarily. I know that it will pay careful attention to this debate. We have every reason to believe that there will be good support from the industry, but it should know that it is not just a wish, but an absolute requirement of Parliament that the industry provides funding to facilitate good-quality research into this terrible disease. I look forward to the Minister’s response to my right hon. Friend. 

Mr Brown:  I would like to add my voice in support of the proposals made by my right hon. Friend the Member for Wythenshawe and Sale East and endorsed by the hon. Member for Stretford and Urmston on the Labour Front Bench. I have not heard a single voice in this or the other place against the principle of what the Government are trying to do. The Bill is designed to help the victims of the most terrible industrial disease. When discussing what we can best do to help our fellow citizens, the current victims and the victims who we know will come after them, it is right to consider what palliative care and ameliorative measures we can support. 

It is a pleasure, Mr Davies, to serve under your chairmanship when considering such an important issue. I had the honour and privilege to work for the General and Municipal Workers Union before being elected to this place in 1983, and I had some dealings with early mesothelioma cases that various unions were taking forward to try to achieve through the courts what could not be achieved in any other way. I was told by earlier officials that all sorts of suggestions were made. One well-known employer in the industry asked whether,

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given the long lead time between the cause of the disease and its evolution, it would be all right to employ only people aged 55 or over, to which the answer was no. 

Thinking has moved on a bit since then, but it is interesting that my right hon. Friend referred to research showing a genetic propensity to asbestos-induced mesothelioma. That research is important and its implications will be clear to every member of the Committee. It is in its infancy, but it is important to emphasise that there is no immunity, and that no citizen of this or any country is exempt or protected from the effects of asbestos-induced cancer. We know that there is no other way of inducing it. It relates specifically to asbestos, and almost always but not entirely in this country to exposure in an industrial context. 

The phrase, “more research is needed” is often used in this place, and in this case it is true. My right hon. Friend made a powerful and moving case. We must think of the victims and their profile. It is true that contemporary discussion of this condition relates to heavy industry—for example, people who worked in the railway industry and sprayed the asbestos on the inside of the carriages with a minimum of protection, people who worked in shipbuilding, people who worked in heavy engineering, people who worked underneath laggers and as laggers and were sprinkled with the dust. It is not a coincidence that the Labour members of the Committee represent industrial constituencies—constituencies with a heritage of working in heavy industry—and therefore constituencies that have clusters of victims of asbestos-induced disease. 

The potential from the research projects that are under way is substantial. In my own city of Newcastle upon Tyne, we are very proud of the work that Newcastle university and others have done on the development of Alimta. That drug is an expensive intervention, but for some patients it has proved effective, not as a cure but as an alleviation of the deterioration and a slowing down. Admittedly, that is not yet for very long, but the drug does work for some people. In its invention—its discovery—it is surely offering a potential way forward for the future. My hope is that we can provide funds to build on such research and other ideas of the same nature. My right hon. Friend the Member for Wythenshawe and Sale East referred to the work that is being done at Sheffield university, where a combined package of measures is having an ameliorative effect on victims and may offer a different way forward. 

All of this—much of the work is in its infancy—has to be paid for. I want to pay tribute to the funding charity that I know of, based in Wallsend, the Mick Knighton Mesothelioma Research Fund, which has raised more than £1 million. It is named, as I imagine the Committee will realise, after a victim of mesothelioma. To raise that much money, admittedly in a former shipbuilding community, in which these issues are understood and deeply sympathised with, is a substantial achievement. This is not money raised from wealthy people; it is money raised from citizens of ordinary or less than ordinary means, who give willingly because they know that the cause is right and just and they are incredibly sympathetic to the victims, who are their friends and fellow workers—people they will have known all their lives. If a community that cannot possibly be described as a wealthy community can make such generous contributions to a cause of this kind, surely it so much

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more behoves us to think about doing the same, in what my right hon. Friend has described as a relatively modest way. 

My right hon. Friend referred to the temporary nature of the scheme. I would hope that any funding mechanism that we could come up with would not be temporary, but would be industry specific and underpin the research efforts that are being made. My right hon. Friend was absolutely correct to emphasise that this money would be in addition to, rather than taken from, any moneys that are available for identified victims who will benefit under this scheme. I strongly support him in that. In his discussion of hypothecated tax, he went through a long list of levies. Actually, he missed out the meat and livestock industry levy—he did manage to find the pigs, but not the other animals. The levy is there because the industry wanted a levy body and believed that others would not contribute unless the levy was made statutory. 

It is well known in this place that the Treasury is not enthusiastic about hypothecated taxation. It will have made its views very clear to the present Minister as, I can tell him, it has made its views on this topic clear to past Ministers. That does not mean that it is in the right on this matter. Parliament is legislating for a very specific form of cancer, because of very specific issues, not least that the victims are completely innocent and that the condition from which they suffer is entirely preventable. Had they not been exposed to asbestos, they would not have mesothelioma. 

10 am 

I hope that the Minister being asked to resist the amendment is not due to a demarcation dispute between the Department for Work and Pensions and the Department of Health or some other inter-departmental quarrel within Government. These things do happen, but they can be overcome. From listening carefully to the debate on Second Reading and the debate in the other place, I can see that there is cross-party will to overcome such difficulties if that were the obstacle. 

Finally, it has been suggested—recklessly I think—that there is a shortage of high-quality research applications, which I find difficult to believe. The research community would be incensed at the suggestion. The core issue that we are trying to address is the availability of funds for research in this area. My right hon. Friend is absolutely right to have brought forward his proposals, and I hope that the Minister can give us a sympathetic response. If he cannot give a response that is as sympathetic as I know he would personally like, perhaps he will at least commit to take the idea away and to look at the fall-back suggestion of a reserve power to see whether that can progress within Government. It is an idea for which the time has come. The Bill is a real opportunity to do something for our fellow citizens, and I can think of no group more deserving of our sympathy. 

Mike Penning:  I thank the right hon. Member for Wythenshawe and Sale East for his amendments. I will try to address the points made in his speech. I also thank the right hon. Member for Newcastle upon Tyne East for drawing on his experience of hypothecated levies. He is absolutely right that the Treasury is no different now from how it was under his Government. 

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I will touch on the detailed discussions that took place in the other House, in particular the amendment tabled by Lord Walton, which ended in a close Division. One reason why the Government carried the vote in the other place was the fantastic speech by Earl Howe, who is as well-respected there as he is here, during which he committed to increasing capabilities around research. I am not one of those who have been critical of the quality of the research, but there has been some duplication and there is some scepticism about research in this area, which may be based on the financial situation or, as the right hon. Member for Wythenshawe and Sale East mentioned, the high-profile nature of other cancers. 

Since Earl Howe made his comments, a meeting was jointly chaired by Lord Freud and Earl Howe, and the highlighted notice, which needed to go out to researchers, has gone out. Researchers have been invited to a seminar in early 2014, so that bids can be co-ordinated. I do not know whether the right hon. Gentleman has seen the letter that I wrote to him yesterday. It was put on the board rather late last night, and because there were no votes, I was conscious that he might not have received it. I will arrange for it to be passed to him. 

Paul Goggins:  As the Minister is looking at a letter that he wrote to me, but which I have not yet seen, may I have a copy of it? 

Mike Penning:  I will arrange for it to pass through certain channels. The snail post is working rather well. 

I have great respect for the work of the British Lung Foundation, particularly the research around the tissue bank. I understand that funding will continue to into 2015. I also completely agree that we need to share that research around the international community and not hold it ourselves. We particularly need to share that expertise with third-world countries. We sold them asbestos and, perhaps even in our late empire days, put this horrible product into their environments. They have been left to clear up the mess and we need to work very closely with them. 

The issues around research are very important—there is funding from central Government. The Department of Health is very keen to utilise this and bring it together. I believe that we should give it an opportunity to move forward and achieve that. Voluntary funding is an interesting package. It is right that only the four larger companies have been involved in this and I pay tribute to them. While they are the larger companies, they are not the entirety, nor are they the people who are legally responsible. In many cases, we cannot trace the insurers, which is why this fund of last resort has been established. 

I will make a negative and a positive point. To do the 1% will bust the deal, so we will move to 4%. I did not do the deal, but I respect the deal and it is in place with the insurers, so we have the 3% levy. I also want to put on record that, while I will not put a backstop position in the Bill, if the voluntary approach proposed by Lord Howe does not work, we will revisit this and bring legislation forward should we need to do so. I do not want to jeopardise the agreement now—we would have to go into a whole set of new negotiations—but if it does not work, and I accept there is some scepticism across both Houses, we will come back and revisit this.

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But we need to give this an opportunity, which is why I respectfully ask the Committee, if possible, not to accept the amendments from the right hon. Member for Wythenshawe and Sale East, because the biggest issue will be around the agreements we have with the insurance companies and I do not want to jeopardise the agreement that we all want to come through. 

Paul Goggins:  Earl Howe is respected across the House of Lords and I acknowledge that. I also pay tribute to Lord Freud whose negotiations cannot always have been easy. I do not apologise for the fact that we want to press a little further, but I acknowledge the work that Lord Freud has done and the respect with which Earl Howe is regarded in the other place. 

We have a piece of legislation here and decisions to make about whether we can use this opportunity to improve it. I listened very carefully to the Minister’s concluding comments that, if the voluntary approach as outlined by Earl Howe and others does not come to fruition, he is prepared to come back and legislate at some future point. He did not immediately say what vehicles would be there, but the Department for Work and Pensions regularly has legislation, so we all need to think about that. A clear commitment by Ministers to look at this is now on the record, but that is in the future. The point made by my right hon. Friend the Member for Newcastle upon Tyne East and others is that the need is now. 

We have research which, because of the contributions of the four companies, is now in its early stages. That needs to continue and we need new research proposals to come forward. I am pleased that the Minister did not undermine the credibility of the quality of the research proposals. In fact, he seemed to acknowledge that the quality is there and that will be warmly welcomed by the medical research community, and is the basis on which we should work. What is missing is not high-quality bids, but the certainty of the funding. That is what is missing. I hear what the Minister says but £400,000 in 2011 compared with more than £5 million-plus for two other forms of cancer that have similar mortality rates tells its own story. As much as Ministers are trying to accelerate the profile of mesothelioma for research purposes, there is a lot of catching up to do. I have to say, I am not persuaded that the attention that is now being given will get it to the level that it needs to be at in the very short term. I know that those who are engaged in this research and want to bring forward proposals are very perplexed and concerned about that. 

I put forward the proposal for a reserve power, and the Minister has interpreted that in a slightly different way. He does not want to put that on the face of the Bill but he is prepared to see if the voluntary approach works and then maybe come back at some point in the future with legislation. The problem with that is that it is missing the boat; it is missing the opportunity that now presents itself. My right hon. Friend, in a previous role, had important decisions to make about what legislation would be in a particular programme and what would be out—he will remember that with great affection, as will those who were on the receiving end of some of his decisions. These things are not easy. We cannot just rely on a Minister saying, “Maybe sometime in the future legislation will come,” as it is not always that easy. I

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acknowledge that the Minister said that in a constructive way, and I respect him and am grateful to him for doing that. 

I thought long and hard about this issue. I think it would be right to have a levy, using the opportunity of this legislation, of 1% at the most of the value of the general levy that will have to paid by the insurance companies. It is a modest amount. If £3 million is split by 150 it is £20,000 each. One would pay according to the market share, but it will not be a million miles away from that. We are talking very modest amounts of money to gain great good for those who are suffering so much simply because, as the hon. and learned Member for Sleaford and North Hykeham said earlier, they went out to work. That was the only thing that they did wrong. We owe them so much and this is a modest proposal. 

Nevertheless, there is time between now and Report for further thought to be given to this. There is time for the insurance companies to sit down with Ministers and actually say, “Yes, we mean it; we really can make a voluntary approach work. We can structure this, guarantee payments and we can come up with an amount of money.” If the Minister was able to report that back to us on Report, we would be heartened by that. 

Mike Penning:  I can assure the hon. Gentleman that Lord Freud and I will be having meetings with the insurance companies and I will raise this particular issue. If we can come to a consensus that does not break the 3% threshold then I would be more than happy to bring that back on Report. 

Paul Goggins:  That is a very important commitment and I thank the Minister for making that intervention. We now have an approach to this that I think could work. He and his ministerial colleagues will sit down with the insurance companies between now and Report really to thrash out what a properly funded voluntary scheme might look like; one that would deliver the kind of investment in research that experts know is needed, and that we in our hearts know is needed. If the Minister is prepared to do that before Report, and if he is able to give us a positive response on Report, we will all feel that the arguments made in this place and the other place will have been effective. 

Mike Penning:  If we can come to an agreement—that is important. I will have the discussions and I will do my level best, but I cannot make promises that are out of my hands. It will be the insurance companies that will have to decide. 

Paul Goggins:  I acknowledge that. I know the Minister is not giving us a cast-iron guarantee other than that he will meet the insurance companies and have this discussion with them. My own understanding is that many insurance companies are prepared to make a permanent contribution to research. What they are concerned about is that, unless there is a statutory underpinning, some will not want to pay it, and that is the problem. If the Minister can go away, have discussions with the industry and come back with a properly worked-out, albeit voluntary, scheme that we can rely on to produce the money the research community needs to make the advances we all

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want to see, we would all welcome that. He says that if the voluntary approach will not work, he is prepared to come back at some future point with legislation. My preference would have been for him just to stand up and say , “I accept the amendments. They all make sense.” However, he has given us a way forward that holds out some promise, so let me respond in the spirit in which he has engaged in the debate by not pressing my amendment to a Division. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 1 ordered to stand part of the Bill.  

Clause 2 

Eligible people with diffuse mesothelioma 

10.15 am 

Mr Brown:  I beg to move amendment 62, in clause 2, page 1, line 15, leave out ‘25 July 2012’ and insert ‘4 April 1979’. 

The Chair:  With this it will be convenient to discuss the following: 

Amendment 2, in clause 2, page 1, line 15, leave out ‘25 July 2012’ and insert ‘10 February 2010’. 

Amendment 6, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘10 February 2010’. 

Amendment 64, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘4 April 1979’. 

Mr Brown:  I want to speak first to the more modest of the two amendments in my name, but I will speak to the other one too. 

Those who have followed this issue might ask how far back we would want to put the date. After all, the Bill deals with people who are in the direst circumstances, and their life expectancy is short, so the question might be, “Why does this matter?” Of course, the answer would be that it matters not just to the victims themselves, but to their close relatives and other beneficiaries. 

The two dates in my amendments are 10 February 2010 and 4 April 1979. It would have been possible and rational to go back much further. The date when the damage caused by inhaling asbestos dust was first definitively known about can be traced back to before the second world war, and it would have been possible to table an amendment including a date that took us back that far. I suppose it is a sign of my moderation and willingness to find common ground that I have gone back only as far as 4 April 1979. 

There is a widespread feeling that the start date the Government have chosen for the Bill is mean and as narrow as possible. There is at least a case for going back to the start of the consultation. I remind the Committee that the original consultation document was issued under the previous Labour Government, and it is a great credit to the current Government that they carried the consultation through. Somebody in the Government must have championed it. 

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Mike Penning:  The champion is Lord Freud; he is the one who pushed and who had the really difficult negotiations with the insurance companies—they did not just stroll in one afternoon and say, “We would like to do this.” He dragged them in and thrashed a deal out. He then had detailed debates during the Bill’s passage through the other House. He is the champion who took the consultation on from where it was. 

Mr Brown:  I am grateful to the Minister for his intervention. It is right to give credit to the ministerial champion of this proposal. I was not quite certain which group of Ministers was in favour of it and which had reservations, but it is now the policy of the Government, and none of them will be opposed to it. 

A statutory scheme has been under consideration by Governments for some time. I say that with some authority, because when the Department for Work and Pensions was first formed, I was the first Minister with responsibility for work. I had responsibility for these issues and chaired departmental meetings on the possibility of getting such an agreement with the insurance industry. Indeed, for the purposes of transparency, I am quite willing for my papers from that era to be put into the public domain so that people can see what was under discussion and what the difficulties were. There was not unanimity in the Government then. 

Chris Bryant (Rhondda) (Lab):  No, there was not. 

Mr Brown:  My hon. Friend intervenes from a sedentary position to confirm what I said, which is helpful. 

Chris Bryant:  I intervened not because I disagreed with my right hon. Friend, but because we disagreed with some other people, who shall remain nameless. 

Mr Brown:  Exactly so, but I ask myself, with the advantage of hindsight and the distance of time, why should Patricia Hewitt remain nameless? 

Mike Penning:  I am very grateful for the tone and empathy that the right hon. Gentleman uses in his speech. I have been a Minister in three Departments in the last 14 months and I have never understood why certain papers that would really help the public understand what the Government’s thought processes were do not get published. A problem I have had is that all I am allowed to see is the consultation. If he was involved in any of those discussions, it would be really useful if those papers could be released, although I do not know the process for that. I was not involved in any of those understandably difficult discussions with the insurance companies to get us to this position. That is why I am so locked into the 3%, as I am sure the right hon. Gentleman will appreciate. 

Mr Brown:  I am grateful to the Minister for his intervention. We are not quarrelling among ourselves, so I think the Committee will make good progress. The Opposition’s amendments are designed to be constructive. 

It would help wider public understanding if the papers from previous Governments—I am not the only Minister who tried to make progress on this issue—were put into the public domain. If the present Minister requires any

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consent from me to see the ideas that we explored, what I tried to do, where that went right and the reasons why it did not come to fruition as quickly as I wanted, inasmuch as it is for me to say, I am more than happy for the papers to be put into the public domain. It is always difficult to speak for others, but I would not expect any resistance from the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Oxford East (Mr Smith), who had oversight of what happened at that time. Those papers would help inform future debates. 

Like the Minister, I do not understand why the papers on every single issue that previous Governments try to address have to be withheld from the incoming regime. As he will have discovered, 90% of public administration is prosaic and it is hard work. Differences of opinion can be within the governing party as well as between it and the Opposition. Often, there is no specific Conservative or Labour view on a topic, but different judgments and points of view from the individuals who hold ministerial office. Perhaps the best way forward—certainly on this issue—is evidence-based decision making and I think we could all stand up and say that that is what underpins this Bill. 

On both my amendments, my plea is that the start date be pushed back a bit. How far is, of course, a matter of subjective judgment to some extent. One could make a case, as I have said, for going back some way. It is not so much for the victims themselves, although they are at the forefront of our mind, but for their dependants, their relatives and those who may, tragically, be the beneficiary of the award when it is made. I should have thought that a reasonable compromise would be to settle, as the Labour Front Bench has done, on the start date of the consultation. The expectations of those who follow these things would have been, once the consultation had started, that there would be a scheme. 

It is to the credit of the Conservative party that no Conservative Member has suggested that there should not be a scheme. It was readily taken up and found ministerial champions in the new Government. I have tried to follow the debate as closely as anyone can. I am genuinely interested in it. But it has struck me that not a single person has said that there should not be a scheme. There are arguments against statutory arrangements. There are arguments against what could be regarded as an intervention in arrangements that should be left to the civil law and the private sector. But no one has made these arguments. Everybody accepts that there has been a failure, that the victims are left without anywhere to go and, indeed, that some employers who, as the law requires, had paid for their employers’ liability insurance had then been let down by the insurers for a whole range of reasons. 

Historically there is also the case of people who cannot find the insurer or trace their former employers. That is particularly the case with contracting in heavy industry. Therefore, it is the events that gave rise to the legitimate expectations, that is the publication of the consultation document, which will have led people to believe that the Government were consulting on having a scheme and that there would be a scheme. Had there been widespread opposition to it, the argument would be undermined. But there has not been any opposition to it at all, as far as I know. 

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Paul Goggins:  I am looking at the various dates that my right hon. Friend has suggested. There will have been arguments down the years about whether the industry should or should not do something. But what is irrefutable is that in February 2010 a message went to the industry that something would happen and therefore from that point at least the industry should have been making preparations. Does he agree with me? 

Mr Brown:  Of course, I agree with that. It seems a reasonable point. If we were looking for a compromise, my opinion is that that is where the compromise should be, tempting as it is to make the case for the earlier date, or even earlier dates. It is always important in politics to try to find the middle ground. I would submit to the Committee that the middle ground is, as my right hon. Friend said in his intervention, at the start of the consultation rather than at a later date. 

10.30 am 

Stephen Phillips:  I do not want to detain the Committee long. It is a huge pleasure to follow the right hon. Member for Newcastle upon Tyne East, who advanced his amendments with considerable force. The question for the Committee, quite apart from those amendments, is this. The justification for the scheme is that it would give payments to those who cannot trace the employer who negligently exposed them to the fibres that caused the mesothelioma, or that employer’s insurers. In those circumstances there must be a question mark as to why there should be any start date at all. This scheme is being funded by the insurance industry on the basis that it received premiums in the past for risks that it agreed to bear, which have manifested themselves but for which they have not been obliged to pay. 

If that is the justification for this scheme—and as I understand it, it is—there is no justification for any start date at all. Anybody who cannot trace an employer or an insurer should be entitled to compensation. That is consistent with the purpose of the scheme. The difficulty throughout, which the Minister already alluded to in his intervention on the right hon. Member for Wythenshawe and Sale East, is the same difficulty relating to the amendments not moved but spoken to a moment ago by the right hon. Gentleman. That difficulty is the figure of 3%. 

The insurance industry has been clear that the cost of the scheme must be kept within 3% of the gross written premium. That is necessary in order for there to be no rise in the cost of premiums for this type of compulsory insurance, for those whom the legislation obliges to buy it. I understand that, and the Minister alluded to it just a moment ago. I say to the Minister that I can see no justification for any start date at all, other than the 3%, which I understand. I can see no justification, other than the 3%, for not accepting that there should be a research levy, whether hypothecated or not. 

We will come on to this in due course, but I point out to the Minister that a huge pot of money is sitting there, completely untapped by the Bill. That pot of money lies in the hands of the reinsurers, who are not obliged to contribute to this scheme but who none the less received premiums in relation to the risks that have eventuated. The direct insurers have not paid for these risks, but will now be paying. The amendments that I subsequently

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tabled, to which we will come in due course, relate to payments bringing reinsurers within the scope of this scheme and this levy. If the Minister is prepared to look at that, it opens up another pot of money. That would enable the funding of the research levy, on which the right hon. Gentleman spoke during the last group of amendments. Not only that, but it would also enable us either to move back the dates to the date that the right hon. Member for Newcastle upon Tyne East suggests in his amendment or to have no start date at all, as indeed must be the logical and proper conclusion to his argument. 

Kate Green:  I am very much looking forward to the debate on the amendments that the hon. and learned Gentleman tabled in relation to the role of reinsurers. For the moment, if we accept that the figure of 3% is the constraint on amendments such as those in this group and the amendment tabled by my right hon. Friend the Member for Wythenshawe and Sale East in relation to research, perhaps the hon. and learned Gentleman would like to comment on my calculation that backdating the start date to February 2010 would raise the cost over 10 years to £451 million, which is 2.99% of the gross written premium. 

Stephen Phillips:  If the hon. Lady is right, and the Minister is suggesting that the hon. Lady’s amendment cannot be made because of the figure of 3%, then obviously that would be a bad argument. However, if the hon. Lady is asking me to comment on her maths, I am afraid that I have not done the calculation myself. It is always a mistake to ask me to comment on anything mathematical. She may or may not be right; I do not know. If she is right, then she has a good point and no doubt the Minister will have to deal with it, and if he does not accept the amendment then he will have to explain his other reasons for that. If it is not a good point, and in fact her amendment tips us over the 3%, then the Minister will no doubt deploy that argument. I cannot say one way or the other which is right, although I am sure that others in the Committee can. That is really all I wanted to say on this group of amendments. 

Ian Lavery (Wansbeck) (Lab):  It is a pleasure to serve under your chairmanship, Mr Davies. This is an extremely important issue, and I want to come to the point in a slightly different way. I want to focus on the pain and suffering this has caused, not to the insurance companies by the cost it will have for them, but to the people who will miss out—and who have missed out—because of the cut-off date, for which 25 July 2012 has been suggested. The Minister will recall that we discussed it very carefully on Second Reading, and during the course of the debate it went from February 2010 to—I think—1969. Then somebody corrected the guilty date of knowledge of mesothelioma to, I think it was said, 1965. So we had a wide and varied debate on what the date should actually be. 

My hon. Friends on either side of me have suggested that there should be some middle ground here. Perhaps there should be, but between February 2010 and 25 July 2012—is that the middle ground? In reality, we have had people dying from mesothelioma for over half a century, and probably before that as well. We keep talking about

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the 3% levy and the cost to the insurance companies. What about the cost of life for these individuals, who only went to work and suffered as a consequence of negligence, not only by the insurance company but greatly as a result of the employer? It was mentioned that it could be heavy industry. Most of the Labour team have constituencies where that has occurred. 

Mike Penning:  I represent a very working-class area, although there was not the sort of heavy industry that there was in the north-east in particular. Many MPs across the House have cases in their constituency. The key is that, as the right hon. Member for Wythenshawe and Sale East said, it is not just about heavy industry. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) served in the fire service with me—not in the same brigade, but at roughly the same time or perhaps a little earlier. There were issues about the fire service. As I alluded to during the debate following that terrible crash in Glasgow the other day, there will have been no thought processes about what they were rushing into or about the age of the building. So this is not just about heavy industry. As the research goes forward we are starting to realise that, even though I know it is a really difficult situation. My point is that Members across the House are affected. 

Ian Lavery:  I thank the hon. Gentleman. I was coming to that, because again, we have had this discussion at great length. Of course, this does not involve just heavy industry. One could argue that, in the main, the people who suffered from mesothelioma were not in heavy industry. The Minister mentions the fire service. I had a meeting with the fire service only two weeks ago and one of the main items on the agenda was asbestos. It was not just the fact that the fire brigade run into fires when everybody else runs out, which I am sure everybody would agree is unbelievably bad. Funnily enough, they also mentioned the fact that they fit fire alarms in people’s properties and were drilling into asbestos roofs. Mesothelioma just needs one little bit to lodge in the lungs and it could lie latent for 30, 40 or 50 years. If that happens and you are diagnosed as having it, you have a life expectancy of nine months to two years. So I totally accept that it is not just heavy industry; it is across the board. 

Another issue, which is not in the Bill, is asbestos in school properties. That causes me great concern. We often talk about the teachers who have died. Lots of them—up to 10,000 teachers—have died in a very short space of time because of mesothelioma and asbestos-related disease. What concerns me is the kids. There is no record at all of children who are exposed to asbestos in these schools. If teachers are dying with asbestos-related diseases in schools, the children are exposed to the same levels of asbestos. I think it is fair to say that. One could not argue against it, but as far as I am aware, there is no record anywhere of the potential for children in schools to die as a result of asbestos-related diseases, including mesothelioma. 

Let me return to the issue of the cut-off dates. In my previous occupation I was heavily involved with the mineworker schemes for vibration white finger, chronic obstructive pulmonary disease—chest disease—and the pneumoconiosis scheme which, I think, was concluded in 1979. I was still at school then, by the way, but we

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sought to better the situation. In court cases and litigation, the most important point was always the guilty date of knowledge. As far as the Bill is concerned, the guilty date of knowledge is 25 July 2012. That is the date from which people will be paid. I think that that is terribly unfair, and it has been chosen only because that is the date on which Ministers—I am not criticising Ministers from any particular party—got around to doing something about the matter. 

A letter from the Minister to everyone who spoke on Second Reading, which is dated 6 December, states: 

“Several colleagues proposed alternative start dates for the scheme eligibility. The fundamental issues here are around legal expectations and affordability. The expectation for eligibility was deliberately set as early as we could arrange it, once the scheme had been agreed. Whilst I understand the desire to include as many people as possible, February 2010 is not a legitimate date to use as the consultation did not indicate the intention to create a scheme and indeed one of the options proposed was ‘do nothing’. At that point in time, there was no certainty what, if any, scheme would be pursued by government. Only from 25th July 2012, could people have an expectation that they would receive payment.” 

Although I welcome the Bill, just because we as politicians got around to saying on a certain date that there might be a case for it, which gave sufferers an expectation that they would receive compensation—remember, those with mesothelioma suffer only for a short while because they die, which is not the case with diseases such as vibration white finger or pneumoconiosis—that is no justification whatsoever for setting that date as the cut-off point. There is no good reason behind that. We should be looking at the middle ground, somewhere between 1965 and 2013. Doing so may present great difficulties, but we must have some justification for the cut-off date, because it means a great deal to a whole lot of people. 

I will not go into too much detail, but there is a chap in my constituency who was diagnosed before the proposed cut-off date, so he cannot apply. He received some £23,000 in compensation, but if he had been able to apply he might have received as much as £350,000. That is the sort of difference in compensation that many people will suffer because of the cut-off date. 

We are compensating people here. What sort of message does it send out if people cannot apply because they were diagnosed before the cut-off date? How many people are we talking about? These are people who suffer from a disease that was likened on Second Reading to having a tree growing inside them, which spreads its branches until the sufferer simply dies. It is like drowning, because their lungs fill up. It is the most excruciating and horrendous disease. It is unimaginable. Only those who suffer from it, and their families, can truly explain it. I pay tribute to everyone who has insisted on bringing the Bill this far, because it has been needed for many years. For the sake of its being a really good Bill, rather than an okay Bill, we should consider the cut-off date. We should ensure that people who have suffered as a consequence of mesothelioma—only for going to work, as has been said—get rightful compensation. The cut-off date should be as far back as we can possibly make it. The Bill is to compensate people who have suffered, and their families, so we should not preclude hundreds, thousands and possibly tens of thousands from getting rightful compensation. 

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10.45 am 

Kate Green:  I want to speak to amendments 2 and 6, tabled in my name and that of my hon. Friend the Member for Rhondda, and to support the ambition in the amendments tabled by my right hon. Friend the Member for Newcastle upon Tyne East. 

Amendment 2 would set a start date for the scheme of 10 February 2010 and amendment 6 repeats that start date in relation to later references in the Bill. We have already heard compelling arguments for as early a start date as we can possibly manage, recognising that we have not recently come to knowledge of this illness. The knowledge of its existence and effects, and the industry’s role in collecting premiums and therefore, presumably, reserving for possible future risk, has not arisen only since 25 July 2012. 

As my right hon. Friend said, we have selected the date of 10 February 2010 in our amendments, and this is a moderate suggestion to an industry that has been collecting premiums in respect of this industrial illness over many years. That is the date at which, under the noble Lord McKenzie, the then Labour Government launched a consultation, at which point it is arguable that the insurance industry was crystal clear about the intentions of the Government and what would follow. 

It is important that we remember that, in that short period between 10 February 2010 and the proposed start date of the scheme of 25 July 2012, an additional 700 people will have died of this disease without any recourse to compensation. If we were to go back before 25 July, in total more than 6,000 victims have died without any payment recognising their right to justice. 

I recognise that, between the launch of the Labour consultation in February 2010, the change of Government and the response to the consultation, and the legislation being developed in 2012, there was a requirement on current Ministers, particularly the noble Lord Freud, as the Minister mentioned, to engage in complex, detailed discussions with the industry. I do not suggest that nothing was being done between the close of the consultation period and 25 July 2012, and I do not underestimate, either, the scale of the task faced by Lord Freud in negotiating with the industry. The Minister said on Second Reading that the Government had been 

“in deep negotiations—there is no argument about that; it will all come out—but the insurance companies did not just stroll up to Lord Freud’s office and say, ‘By the way, can we do a deal?’ They were dragged there”.—[Official Report, 2 December 2013; Vol. 571, c. 724.] 

The Minister has repeated the words, “dragged there”, today. 

We understand that there has been a protracted period of discussion with the industry, but it is clear that, going right back to February 2010, the industry could be in no doubt at all that some scheme would be put in place because the consultation document issued by the Labour Government made it pretty clear what kind of scheme was likely to evolve. 

The original DWP consultation published in February 2010 stated clearly: 

“We want to see more done to ensure that individuals who are unable to trace insurers are given better support…Arguments have been made suggesting that as drivers are compensated by the Motor Insurance Bureau (MIB) where they are involved in an

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accident with an uninsured driver, so injured workers who had no control over the recording of EL”— 

that is, employer liability— 

“policies should have, at the very least, protection when they are injured or made ill at work. 

Having considered this carefully, the Government are persuaded that an ELIB should form part of the package of measures to improve the lives of those who, for whatever reason and through no fault of their own, have been injured or made ill as a result of their previous employment and who are unable to trace an old employer or their insurer. The ELIB would be the compensator of last resort if all other efforts to trace an employer or insurer have failed. An ELIB could be loosely based on the MIB whose obligations are linked to the compulsory insurance requirement of the Road Traffic Act”. 

That is not the Government saying, “We’re thinking that it might be an idea if…”. It is pretty clear that we intended that from February 2010, that that would be the model established, and the insurance industry was on notice at that time. Although I was obviously not privy to the discussions taken forward then by Lord Freud when the present Government came into office, I have no reason to believe that that was not also the starting point for the discussions with the industry, and that that model is exactly the one that has ended up in the Bill. What is more, the idea that there might have been other possibilities— 

Stephen Phillips:  The hon. Lady is making a powerful case in relation to the consultation, but what is the relevance of the consultation or what it said? The fact is that the industry accepted premiums for risks that have eventuated, presumably reserved for that event and therefore has a pot of money that would have been used if the employer could have been traced, because the employer would then have pursued the insurance. Why have any date at all, whether by reference to the consultation or otherwise? 

Kate Green:  I agree with the intellectual thrust of that intervention, but I also accept the constraint that we discussed earlier during his speech. If Ministers feel that nothing can be done beyond the context of the 3% levy—we will be debating that proposition later—the start date of 10 February 2010, by my calculations, sits within the limit of the 3% levy over a 10-year period. The Minister may question my arithmetic, and I am sure that the whole Committee would benefit from seeing the sums properly worked through, but that is the basis on which I have been prepared to accept that most limited of start dates. 

Arguably, at that point, the precise nature of the scheme began to crystallise, so the industry began to understand exactly what it would have to prepare for. However, the thrust of the remarks of the hon. and learned Member for Sleaford and North Hykeham is absolutely right. The industry has been collecting premiums for decades. It must therefore have anticipated that there was some risk associated with the collection of premiums and the carrying out of that business for decades. Why should that money not now be deployed to the benefit of sufferers? 

It is also worth noting that the Motor Insurers Bureau model was the only model referred to in the consultation. The scheme’s funding is derived from any company

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offering motor insurance in the UK; members contribute to the MIB levy and supply data to the motor insurance database. That is exactly the model being introduced in relation to employer liability insurers. 

Mike Penning:  In a previous incarnation, I was a Transport Minister with responsibility for the insurance industry. The hon. Lady is absolutely right that that is the only other compulsory insurance that we have. The interesting thing, though, is that the insurers pass on that cost directly to the policyholder through the premium. This fund of last resort is not intended to be passed on by the insurers. Specifically, we are not trying to penalise businesses today for mistakes made in the past, whereas the MIB does pass on costs to policyholders. I do not think that the comparison which I saw within the consultation fits perfectly with what we are discussing today. 

Kate Green:  I accept that the costs will be held within the industry in the scheme now before us, but we are talking about a multi-billion pound industry that can easily afford to bear that cost. We are also talking about a rather more constrained and very specific illness in relation to mesothelioma, whereas obviously the ambit of motor insurance is much broader, but I take the Minister’s point. 

However, the industry must have been aware, since 2010, that something new would be happening that would finally begin to crystallise the financial obligation that they have had to victims over many years. We simply cannot accept that an industry whose very raison d’être, whose very lifeblood is the assessment and management of risk would not at least have made some sort of prudent provision from February 2010 to meet the potential new responsibility that would arise if the consultation did indeed move to the kind of scheme that was proposed therein. 

My right hon. Friend the Member for Newcastle upon Tyne East and the hon. and learned Member for Sleaford and North Hykeham have suggested that 2010 would be a very modest start date, particularly when we know that the cause and long-latency characteristics of mesothelioma have been known since early reports in the 1930s. The insurance industry should have therefore been reserving against asbestos claims 50 years or more ago. Certainly—as my right hon. Friend has mentioned—when the Newhouse and Thompson report was published in 1965, the Sunday Times reported on how epidemiological investigation by Newhouse and Thompson for the London School of Hygiene and Tropical Medicine had shed light on the origins and nature of mesothelioma. However, it was the 1930 Merewether and Price report that had warned of a latency of some 25 years in terms of asbestos-related illness. There have been many decades of knowledge in relation to this matter and the industry should have been prepared. 

Paul Goggins:  I am sure that my hon. Friend is aware that the estimated value of the potential claims by people who had mesothelioma and subsequently died is estimated at around £800 million. 

Kate Green:  I am grateful to my right hon. Friend for sharing that figure with the Committee. I think that may be of interest when we discuss amendments in terms of the amount of payments that victims are to

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receive and the extent of generosity which could be expected from an industry that has been doing very well over many decades from the premiums that it has collected. 

My argument is that at the very minimum, a pretty specific model has been on the table since February 2010. Even if the industry believed that it was only a consultation and that it would never come to fruition, given its existence as an industry is about the management of and the preparation for dealing with risk, it would have begun business planning to meet that possibility. It has, after all, been collecting the premiums to support it in meeting that contingency over many more decades and therefore, it is right that it should now be correcting the injustice that many victims have suffered over many years. 

My contention is that a start date of 10 February 2010 is entirely affordable. It is an extremely modest extension of the scheme in comparison to the many years of what my hon. Friend for Wansbeck has called “guilty knowledge” and in relation to the many years over which insurance companies have been collecting premiums. It is certainly an amendment that would be widely welcomed by victims and their families. I hope that the Minister will at least be able to comment on the possibility of other opportunities to make the scheme more generous in other ways, although I know that we will debate that later in our proceedings. 

Mike Penning:  I thank right hon. and hon. Members for their contributions on these amendments. I agree with my hon. and learned Friend the Member for Sleaford and North Hykeham that it is an arbitrary matter. If the insurers are not taking the insurance, how far does it go back? A line has to be drawn in the sand somewhere. In principle and from an intellectual point of view, I completely agree with him. However, we are where we are today, and this is a fund of last resort for those who cannot trace their employer and thus their employer’s liability insurance. We could have decided on myriad different dates, and in our negotiations we decided on 25 July 2012. 

Stephen Phillips:  I know that we will come to my amendments on reinsurers in due course, but does it follow from what the Minister has just said—I am sure it does—that if more could be found, he would agree that there should be no arbitrary cut-off date because we would remain within the 3%? 

11 am 

Mike Penning:  My hon. and learned Friend touched on the 3% a moment ago, and I am afraid that it will come up time and again. Negotiations took place, and it is of course possible theoretically to bring in others, and thus more money, within the 3%. We will debate other insurers later. 

The shadow Minister quoted extensively from the consultation. I tried to be open and honest in the letter I sent to everyone who contributed to the debate, and the one thing that was sitting on the back of that was the set of options, one of which was to do what has been done under previous Administrations of both colours: nothing. I accept that the insurers should have realised in 2010 or earlier that at some time some Government would do

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something about the matter, but they did nothing for years, which was one option. We were not bound by consultation by a previous Administration because of the closeness to the last election, and I am sure that the Opposition would not want to be bound by consultation that we held just before an election, even if they thought it was a good idea to introduce legislation. 

I understand how difficult it will be for anyone who had a loved one who sadly died from this horrible disease on the wrong side of the cut-off date. There will be losers and gainers, but I want the Committee to concentrate on the fact that some people will benefit, and we must ensure that they get that benefit as soon as possible. I want to be open and honest. We estimate that setting the date in 2012 instead of 2010 will affect around 700 people and the cost would have been £80 million, as the shadow Minister said. 

Going back to what the right hon. Member for Wythenshawe and Sale East said, although it is difficult to estimate, the assumption is that around 6,000 extra successful applications would cost in excess of £800 million. I want to be open and honest about the figures, which are out there in the ether. The key is that we have an agreement within the 3%. If I break that agreement, we will have to renegotiate. 

We will discuss at length later the mathematics and the shadow Minister’s qualifications and calculations, but many people are doing the maths for me. We may not agree, but we are trying our best. I hope that the Committee will not accept the amendment and that we stick with the Government’s proposal. 

Paul Goggins:  On more than one occasion this morning, the Minister has reminded the Committee that 3% is the golden rule, but my hon. Friend the Member for Stretford and Urmston made the point that according to her calculations—we look forward to hearing more about this later—it would be possible to go back to February 2010 and remain within the 3% limit, which is the golden rule according to the Minister. If my hon. Friend’s maths are proved to be correct—she is very accurate in mathematical calculations—will the Minister be prepared to look again at the start date in the light of new evidence? 

Mike Penning:  I have to look at the evidence that has been produced for me and is being used extensively. The scheme will run for 10 years and there will be understandable movement in the calculations, so nothing is fixed. I do not think anyone will be absolutely spot-on. The shadow Minister thinks that he is absolutely spot-on. My officials think that they are absolutely spot-on. The estimated cost on top would be £80 million, which would take us over the threshold, so I am not willing to accept that we should do what is proposed. I think that it would break the agreement. 

Kate Green:  Can the Minister confirm whether that £80 million is over the four years or over 10 years? 

Mike Penning:  I believe that it is over the four—no, it is over the 10-year period. That has just been indicated to me in case I made a mistake on that point. 

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Stephen Phillips:  I am a little confused, as I am sure many members of the Committee are, about the numbers. It would be helpful—if not today, then before the Bill is reported back to the House—if the Minister undertook to write to the Committee, setting out why the figures given by the hon. Member for Stretford and Urmston would push the costs over the 3% of gross written premium, so that we can all be satisfied, at least for the purposes of Report, that that is the case. I know the Minister very well and know him to be a deeply honourable and straightforward person. I take the Minister at his word, because I am sure that if it were under 3%, he would be accepting the amendment. 

Mike Penning:  Once we have seen the hon. Lady’s calculations, I will be more than happy to do that, so that the whole House will have an opportunity to look at this when we come to Report. What I am saying is that I am not willing to accept the amendment. I will write to the Committee, but I will also ensure that the document is available to the whole House by placing it in the Library, which I think is what the hon. Member for Rhondda is indicating from a sedentary position that he wants. I will do that. With that in mind, I hope that the Committee will not accept the amendments as tabled. 

Mr Brown:  I have listened carefully to what the Minister has said and I have to say that I do not find it persuasive. My own instinct would be to push my own amendment to a vote, but that is not the united view of the Opposition. Bearing in mind the views of my colleagues rather than my own, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Kate Green:  I beg to move amendment 3, in clause 2, page 2, line 4, leave out 

‘and is not eligible to receive a specified payment’.

The Chair:  With this it will be convenient to discuss the following: 

Amendment 4, in clause 2, page 2, line 4, after subsection (e) insert— 

‘(f) save as provided in (g) below, the application is made within three years of being first diagnosed, and

(g) for those persons first diagnosed on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 2(1)(f) shall commence on the date this Act is brought into force.’.

Amendment 5, in clause 3, page 2, line 35, after subsection (d) insert— 

‘(e) save as provided in (f) below, the application is made within three years of the death of the person with the disease, and

(f) for those persons who died on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 3(1)(e) shall commence on the date this Act is brought into force.’.

Amendment 11, in clause 18, page 10, line 45, leave out subsection (3) and insert— 

‘(3) In specifying circumstances in which a person is, or is not to be treated as, eligible to bring an action for the purposes of section 2(1)(d), or section 3(1)(c), the scheme shall ensure consistency with the definition of eligibility in section 2 and section 3.’.

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Kate Green:  The amendments deal with a number of different issues, so I will speak to each of them in turn. Amendment 3 is intended to remove a loophole that would allow the scheme potentially to direct nearly all prospective claimants to much lower levels of product liability compensation. The amendment has been tabled to deal with the likely exclusion of former workers from the scheme proposed in the Bill, leaving them dependent on other insurance products, which would mean that they were likely to receive less than they would if they were enabled to access this scheme. 

There was discussion in the House of Lords about what the specified payments were to be, and on 7 June, Lord Freud wrote to peers to confirm which payments were to be specified under clause 2. The specified payments that he has listed in that letter are those under the Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 2006, the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005, the UK asbestos trust established on 10 October 2006 for the benefit of certain persons suffering from asbestos-related diseases and the employers’ liability scheme trust established on 23 November 2006 for the benefit of certain persons suffering from asbestos-related diseases, and a payment from any Government Department, authority, body corporate or employer exempted from insurance under section 3 of the Employers’ Liability (Compulsory Insurance) Act 1969. 

There was extensive discussion in the House of Lords about the situation where the Government were the employer and that included the situation in relation to the armed forces. It was recognised that the Government effectively self-insure and that they will not therefore access the employers’ liability market, hence the logic for excluding Government departments and armed services from the ambit of this scheme. 

That is not the case for former employees of Turner and Newall. Lord Freud’s letter is quite clear that the two trusts that I listed are the more commonly known Turner and Newall trusts. Turner and Newall was historically the UK’s largest asbestos company and is currently one of the largest, by volume, asbestos defendants in this country. In October 2001, Turner and Newall entered into administration in the UK in the context of very considerable pressures on the company’s global and, particularly, US business. In the UK, a number of funds were established to pay creditors, but the vast majority had insufficient assets to pay creditors in full and accordingly most are receiving only a partial dividend. 

Our concerns are that the product liability insurance offered by the Turner and Newall trust for compensation at a much lower rate than offered through this scheme will mean that former employees of Turner and Newall will have to be at least eligible to access the product liability cover that would have been on offer and the funds that are available to meet those claims. That would mean that, as currently worded, they would be precluded by this section from applying to the diffuse mesothelioma payment scheme, even if they made no claim and received no payment from any of the Turner and Newall schemes. The purpose of the amendment is to remove what could be a very useful loophole to the insurance industry. 

Amendments 4 and 5, which cover the same issue in clauses 2 and 3, are on a different issue of particular importance. They relate to the date of diagnosis of a mesothelioma sufferer. The current provision is that the

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sufferer will have three years from a diagnosis in which to make a claim to the scheme. As we have heard, the prognosis following diagnosis is well short of three years, so it is obviously envisaged that either the sufferer or his dependants may be the beneficiaries of any payment under the scheme. But it is also important to recognise that that is quite a short timescale in terms of the complexity of assembling the necessary information and evidence to enable a claimant to access the scheme. There is the need to check whether a previous employer or employers can be traced and the need to establish whether those employers’ insurers can be traced or are still in existence. I will speak on subsequent amendments about the need to provide medical evidence and the delays that can arise. 

It would be useful if the Minister could give a specific assurance in relation to a matter that was raised by Lord Browne in the House of Lords. In the course of that debate, on 22 July, he stated that he had received informal assurances from officials: 

“Finally, the most important point that has arisen from my engagement beyond Parliament with the Bill team is that during my conversations and in correspondence with those advising the Minister it was explained to me that it was the Government’s intention that, when a person was diagnosed with diffuse mesothelioma on or after 25 July 2012 but before the Bill comes into force as an Act, application to the scheme would have to be made and received by the scheme administrator not later than three years after the date on which it comes into force, not three years from 25 July 2012. That would be a very welcome relaxation of the limitation rules, given the nature of this dreadful disease and how quickly it can become fatal. 

Unfortunately, the draft rules make no mention of that relaxation and there is no such relaxation anywhere in the Bill. However, there is a very specific relaxation in draft rule 7, where a person has died on or after 25 July 2012 and the claim is made by an eligible dependant. That very significant concession is known to me and is now known to all Members of your Lordships’ House. It requires some parliamentary acknowledgement or commitment, at the very least. More than that, it requires some commitment that the regulations will deal with this in an explicit way”.—[Official Report, House of Lords, 22 July 2013; Vol. 747, c. 1052.] 

The draft rules make no mention of the relaxation and we therefore look to the Minister for that specific commitment today. 

11.15 am 

Finally, amendment 11 is about specifying circumstances in which a person may or may not be eligible to bring a case to the scheme. It would require that those circumstances be consistent with the definition of eligibility in sections 2 and 3. I am not sure what clause 18(3) is intended to achieve and whether it is to limit access to the scheme in some way in relation to what is provided elsewhere in the Bill. This, too, was raised by Lord Browne on Third Reading in the House of Lords. He pointed out that clause 18 introduces circumstances where someone could or could not access the scheme and said that he assumed that the details of that would follow in regulations. Again, I have not yet seen anything to explain in detail what those eligibility criteria will be and, indeed, I have no idea why there might be any additional eligibility criteria that are not already covered by earlier provisions in the Bill. 

My concern is that, if there are to be further eligibility criteria laid down, these should be subject to parliamentary scrutiny. If the Minister can assure me that that will be the case when the regulations come forward, that would

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certainly be welcome. There was no clarity from the Minister in the House of Lords, Lord Freud, about the Government’s intention in relation to this clause and I therefore hope that the Minister will give us some clarity this morning. 

Mike Penning:  I fully understand where the Opposition amendments are coming from and I will try to address each issue as we go through. Let me first address Turner and Newall, as it is commonly known. This is supposed to be a fund of last resort when dependants who have suffered from this disease cannot get the financial help that they deserve from other sources. If they have received money from the Turner and Newall scheme, they would be excluded from this scheme, although, on the face of it, some of them may get less than they would do from this scheme. However, because of exemptions in the legislation that created the Turner and Newall scheme, there will be no clawback of benefits or anything else, which, in most cases, would have taken them over the limit. 

Kate Green:  Will the Minister comment on two points? First, I accept what he said about there being no clawback of benefits, but the level of compensation that people receive under the Turner and Newall scheme is typically substantially less than the amount that they will receive under this scheme. Secondly, people could be prevented from claiming not because they have made a claim or received money from the Turner and Newall scheme, but because they can potentially make a claim, not in relation to employers’ liability, but to product liability. Is it the Government’s intention that people should use the scheme when they have no access to redress under other employers’ liability insurance, or when they have no access under any insurance policy at all? 

Mike Penning:  As I understand it, it is under any insurance policy at all. If I am wrong about that, I will write to the hon. Lady. As I said, the Turner and Newall compensation will allow for benefits and other lump sums to be held; they will not be clawed back. Under the scheme of last resort, the benefits that claimants have received will be clawed back. I will deal with that later in the debate. There are a range of payments, and people should try to receive moneys from whatever sources they can, for the simple reason that this is a fund of last resort. 

On the three-year rule, to which the noble Lord Browne referred in the other place, the compensation will come into force on the day that the regulations come into force, not on the day that the Bill is enacted or from 2012. That is important. I hope that addresses the issues that the hon. Lady raised. 

Amendment 11 seeks consistency when a person 

“is not to be treated as…eligible to bring an action for the purposes of section 2(1)(d), or section 3(1)(c)”. 

It would apply when, for example, a company is in liquidation or administration. It would ensure that the insolvent employer would not be able to pay such damages. It is important that claimants’ civil cases are not affected by the amendment. I am not a lawyer, but I have been told by my officials that this is an important part of the Bill. When a company becomes insolvent, we must ensure that the administrators do not interfere

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with the compensation that should be paid. I hope that I have addressed the issues that the hon. Lady raised, and that she will withdraw the amendments. 

Kate Green:  I am grateful for the Minister’s assurances on amendments 4 and 5, and I will withdraw them both. He gave a more generous response than I asked for, which was very welcome. I am not a lawyer either, so I would like to consider further what he said on amendment 11. It would be helpful if he would write to me—he indicated that he will—so we can return to this matter on Report if necessary. 

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I am disappointed about the Minister’s response on amendment 3. It seems that we are not at one on the spirit of the Bill and on the scheme being a last resort. Victims see it as a scheme of last resort to be used if an employer or insurer cannot be traced, specifically in relation to the employer’s liability insurance. It would be unfortunate if claimants were precluded from accessing the scheme. 

11.25 am 

The Chair adjourned the Committee without Question put (Standing Order No. 88).  

Adjourned till this day at Two o’clock.  

Prepared 11th December 2013