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 

Thursday 12 December 2013  


[Mr George Howarth in the Chair] 

Mesothelioma Bill [Lords]

2 pm 

Clause 11 ordered to stand part of the Bill. 

Schedule 1 agreed to. 

Clause 12 

Exclusion of payments under other legislation 

Stephen Phillips (Sleaford and North Hykeham) (Con):  I beg to move amendment 33, in clause 12, page 7, line 3, leave out ‘an’ and insert ‘a successful’. 

It is a pleasure to serve under your chairmanship for the first time on this or any other Bill, Mr Howarth. 

The clause deals with schedule 2, which contains amendments to other legislation, to ensure that, where an application is made under the scheme, a person does not receive certain other payments. The amendment, which is in part a probing amendment, would make it clear that a person should not be deprived of payments, whether under schedule 2 or otherwise, unless a successful claim has been made under the scheme. At present, that is not what the clause states. I should be happy if the Minister said that that was the Government’s intention, in case it became an issue either before a court or any other body charged with the administration of the scheme in due course. There should be no loss of payments at all, until such time as a successful claim has been made. I hope that the Minister makes it clear that that is the Government’s intention. 

The Minister of State, Department for Work and Pensions (Mike Penning):  It is a pleasure to serve under your chairmanship, Mr Howarth. 

That is exactly the Government’s intention. I hope that my hon. and learned Friend accepts that in good faith. 

Stephen Phillips:  On the basis of that assurance, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn. 

Clause 12 ordered to stand part of the Bill. 

Schedule 2 agreed to. 

Clause 13 

The levy 

Stephen Phillips:  I beg to move amendment 34, in clause 13, page 7, line 8, after ‘insurers’, insert ‘and reinsurers’. 

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

Amendment 37, in clause 13, page 7, line 23, after ‘insurers’, insert ‘and reinsurers’. 

Amendment 38, in clause 13, page 7, line 28, after ‘insurers’, insert ‘and reinsurers’. 

Amendment 40, in clause 13, page 8, line 5, at end add 

“‘reinsurer” means a person who, at any time during the reference period, was a person offering reinsurance to active insurers or their reinsurers in respect of employers’ liability insurance and includes retrocessionaires.’.

Amendment 41, in clause 14, page 8, line 7, after ‘insurer’, insert ‘or reinsurer’. 

Amendment 42, in clause 14, page 8, line 10, after ‘insurer’, insert ‘or reinsurer’. 

Amendment 43, in clause 14, page 8, line 12, after ‘insurer’, insert ‘or reinsurer’. 

Amendment 44, in clause 14, page 8, line 13, after ‘insurer’, insert ‘or reinsurer’. 

Amendment 45, in clause 14, page 8, line 14, after ‘insurer’, insert ‘or reinsurer’. 

Amendment 46, in clause 14, page 8, line 18, after subsection (4) add— 

‘(5) In this section—

(a) “active insurer” means a person who, at any time during the reference period, was an authorised insurer within the meaning of the compulsory insurance legislation, and

(b) “reinsurer” means a person who, at any time during the reference period, was a person offering reinsurance to active insurers or their reinsurers in respect of employers’ liability insurance and includes retrocessionaires.’.

Stephen Phillips:  During this morning’s sitting, the last amendment, which I moved and in respect of which the will of the Committee was tested, was one that I said mattered. In a sense, these amendments are not probing amendments but are similar to the one this morning, because they would give the Minister a way out of the difficulties that he has faced in Committee and on Second Reading in relation to some points made regarding the deficiencies in the proposed scheme. 

The problem with the proposed scheme, which has been identified by all parties, is that there is no moral case at all, as I think every member of the Committee agrees, for anyone who suffers from mesothelioma to receive anything other than 100% of the compensation that they would receive if they could trace and successfully pursue either an employer or that employer’s compulsory liability insurers. Yet the deal that the Minister has alluded to, which has been done between the Government and their predecessor under whom the negotiations with the insurance industry began, is that to allow the insurance industry to swallow the costs of the scheme, any payments that fall due under the scheme must be accommodated within a cap of 3% of the gross written premium that the industry manages every year. 

Although I may or may not agree with that cap and although I may or may not agree with the ability of the insurance industry to swallow more without passing on the cost to business, I am proceeding on the assumption that that 3% cap is what we have to live with because that is the deal that has been done. Yet if more money were available, we could fund 100% compensation. If

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more money were available, we could ensure that there was a research levy, as the right hon. Member for Wythenshawe and Sale East urged upon the Committee. If more money were available, we could extend the scheme so that, as other Members who spoke on Second Reading suggested, it extended to those who are not at present caught by it. They are the partners or spouses who were exposed to fibrous carcinogens that have caused mesothelioma: people came back to their houses and effectively gave the disease to their spouse or partner. The scheme could then cope with children who were not employed by anybody, but who will sustain a diagnosis of mesothelioma because they were taught in classrooms where carcinogens were present. 

The whole edifice of problems that have been identified with the scheme, welcome as it is, in not going far enough could be cured if there were another pot of money to which the Government could turn to ensure that everyone diagnosed with mesothelioma who has no other recourse could receive full compensation for the injuries that they have sustained and that will ultimately lead to their deaths. On reading the Bill in preparation for the Committee, as no doubt every other member of the Committee did, I not unnaturally wondered whether another such pot of money could be tapped on the basis of the rationale that underlies the Bill. 

Let us be clear what that rationale is. The insurers who will essentially pay for the scheme are—in so far as they are not new entrants, and many are not—insurance companies that received over the years premiums from employers in relation to risks, which have now eventuated, that those employers would negligently have occasioned an exposure to asbestos that has caused mesothelioma in their employees. That is something that those direct insurers received payment for, which, as the hon. Member for Stretford and Urmston indicated, is something that they would have reserved for at the time. They certainly should have done so. That is why they are being asked to contribute to the scheme. 

Behind those insurers—this appears to have eluded both this and the previous Government—sits another group of insurers: insurers of insurers. They have also received significant premiums and are being asked to contribute precisely nothing to this or any other scheme where the person who suffers from mesothelioma has no recourse to anyone else. Those individuals are in the reinsurance market, which operates in this jurisdiction and in every other jurisdiction in the developed world. 

Perhaps, Mr Howarth, I may be permitted a brief excursion by way of education. An insurer does not hold on to all the risks that he collects together. That is not how the market functions. An insurer either parcels out some of those risks by way of quota share reinsurance, which effectively gives the reinsurer part of the original risk, or he might effect some form of stop-loss policy, excess of loss policy or other type of policy that will stop his losses breaching a certain amount. The purpose of the reinsurance industry is to ensure the survival of the insurance industry during various catastrophes and to smooth out results and to create capacity in the direct market. 

Be that as it may, whatever that purpose is, reinsurers operating today have received significant amounts, perhaps as much as 20%—perhaps even more—of the premiums paid to direct insurers by employers to effect compulsory insurance. They are being asked to contribute precisely

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nothing to this or any other scheme of last resort to make whole those who suffer from mesothelioma, who have no other route of recourse. They therefore afford, as the previous Government should have appreciated and as perhaps this Government should also have appreciated, a pocket of money that is not being tapped up, but which could be used to ensure full compensation to those who have to seek recourse from the scheme; that could be used to ensure proper research into treatments and cures for mesothelioma, as urged upon the Committee by the right hon. Member for Wythenshawe and Sale East; that could be used to extend the scope of the scheme, so that it covered those who have no other route of recourse and, for example, did nothing more than wash their husband’s overalls covered with asbestos fibres; and that could be used to ensure that children, who will in middle age and later life sustain diagnoses of mesothelioma, are properly compensated in circumstances in which they have no other recourse because they were not employed by anyone. 

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab):  The hon. and learned Gentleman makes a persuasive case. He is certainly carrying me with his remarks. Why does he think that the negotiators from the Association of British Insurers overlooked the point that he is making? 

Stephen Phillips:  I simply do not know the answer to that. It might be that I am completely wrong and that there is no such pot of money. Many reinsurers are large corporations not necessarily domiciled in this jurisdiction and might therefore not be represented by the ABI. If one thinks of the Swiss Res and the Munich Res of this world, I do not believe they are listed here in the UK. They of course have a significant presence here, but I do not know whether they are represented by the ABI. However, here is a group of companies and markets worldwide, in this jurisdiction and elsewhere, that could have been asked to contribute to the scheme, because they have undoubtedly received premiums in the past that have not been used to pay claims that have eventuated; yet that has not happened. 

The group of amendments, in my name and that of my hon. Friends the Members for Enfield North, for Daventry and for Eastleigh, seeks to ensure that reinsurers are asked to contribute in a way that they have not been by this or the previous Government, so that we can deal with all the problems identified in Committee and on Second Reading, and so that, as the hon. Member for Wansbeck has said a number of times, we do not lose sight of what the scheme is about, which is to ensure that full compensation is given to those who have sustained an appalling diagnosis of mesothelioma, as a result of nothing more than the fact that they went to work, and who will leave behind them relatives who are very often the claimants themselves, who have to deal not only with the death of a loved one, but with having to lose the income that that loved one brought in. 

Mesothelioma is, as we all know, an appalling disease, which the Government are quite properly dealing with in the scheme of last resort; but if we are to deal with these problems, I do not see why we should not ask everybody who made money from the premiums paid by employers who can no longer be traced. 

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Ian Lavery (Wansbeck) (Lab):  The hon. and learned Gentleman is generous in giving way. Like my right hon. Friend the Member for Newcastle upon Tyne East, I am very persuaded by what the hon. and learned Gentleman has said. Many very wealthy organisations are perhaps not represented by the ABI. Does that not give the Government the opportunity to negotiate with them to make up the 75% to 100%? 

Stephen Phillips:  It may well do—the hon. Gentleman is perfectly right about that—but for one fact, which is that we need to get the Bill on the statute book now. We need it as quickly as possible, because there are people out there who have already had a diagnosis of mesothelioma and people whose loved ones have recently died of mesothelioma since the cut-off date. That is another thing that we could deal with if we had more money, but never mind. Those people need recompense as quickly as possible. 

Although I want to hear from the Minister before I indicate whether I want to test the will of the Committee on the amendments, the position that I am urging on him is that, even if at this stage the Government cannot accept the amendments because there has been no write-round or negotiation with the reinsurance industry, this is something that his Department needs to look at. It needs to do some work on it, to work up proposals and approach those who carry this form of reinsurance and who made money out of this market and received reinsurance premiums for which they have not had to pay claims. 

If necessary, the Minister will then need to conduct some other consultation and come back with another Bill, perhaps one that amends this one, to ensure, as every hon. Member wants, that under this scheme of last resort for those who are driven to it proper compensation is afforded for those who receive an appalling diagnosis of mesothelioma. 

2.15 pm 

Kate Green (Stretford and Urmston) (Lab):  Good afternoon, Mr Howarth, it is a great pleasure to serve under your chairmanship. I rise briefly warmly to welcome and endorse the amendments proposed. I hope, like the hon. and learned Gentleman, that the Minister will be able to give a constructive and positive response to the proposal. 

Mike Penning:  I will speak to the amendments in general terms. The principle behind them was put eloquently by my hon. and learned Friend. He rightly expected me to say that I could not accept the proposal now, because the process has not gone through Government structures, as former Ministers will understand, Mr Howarth. 

I will move on to a more positive tone by saying that I would like to look at the proposal in more depth. I come to this with some knowledge, to which I alluded when Mr Davies was in the Chair. He understood where I was coming from in relation to the bookmaking industry. Bookmakers lay off their risk all the time. If I went in and had a £1 million bet with Ladbrokes this afternoon—it might be able to afford it, though other bookmakers might not—it will offload that risk through the system. If that company did not pay out, I could not go to the other bookmakers where that bet had been offloaded. 

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The principle of reinsuring based on moving the risk down the line would need to be debated and looked at more extensively. I am happy to progress discussions with reinsurers. It may perhaps seem sometimes that they are not being represented by the ABI. Many will be the same companies that we are talking about. Because of that and the complexity it would bring, my hon. and learned Friend is right that at this stage of the Bill, being so close to getting the legislation on the statute book— 

Stephen Phillips:  Cannot the Minister just say why nobody in the other place, among officials or those advising the previous Government, thought about that point? If it is a bad point—the Minister does not appear to say it is—I would understand why nobody had thought about it. Why, when we could have given full compensation, are we having to deal with this now? I accept that we are where we are, and that it is too late. There seems to have been a catalogue of poor advice— I choose my words carefully. 

The Chair:  Order. The hon. and learned Gentleman should choose his words carefully and quickly. 

Stephen Phillips:  I am grateful for that. Poor advice has been given to Ministers both in this Government and the previous one. 

Mike Penning:  I have a great deal of sympathy with my hon. and learned Friend’s point. I was, of course, not there in the difficult discussions on who would be party to the levy and who would be a party in the Bill, which the Committee has discussed extensively. Those were difficult discussions about who would be party to the levy and to the legislation before the Committee. I understand that the complexity of tracing reinsure and run off is part of the issue—most hon. Members will realise that it is the biggest issue. I give a commitment that we will continue to pursue the matter and see whether we can bring more organisations to the party, but at the same time, as my hon. and learned Friend touched on his comments, I cannot at this stage of the Bill accept the amendments, simply because they would create a difficult situation. Things are not the right way around—we have not got Treasury approval and we have not even been in discussions with the reinsurers, let alone bringing them in. Given the complexity, sadly—we may disagree on this—I cannot accept the amendment. 

Stephen Phillips:  I am grateful to the Minister for his positive indication that the Government will look at the matter. The lead amendment is in the hands of the Committee rather than in mine. For my part, on the basis of the Minister’s assurances, I will not seek to press the other amendments to a vote, and I will attempt to withdraw this one, but the Committee knows that it is not within my gift that that should necessarily occur. I beg to ask leave to withdraw amendment. 

Amendment, by leave, withdrawn.  

Stephen Phillips:  I beg to move amendment 35, in clause 13, page 7, line 9, leave out 

‘with a view to meeting’

and insert 

‘so as to ensure that’.

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The Chair:  With this it will be convenient to discuss amendment 36, in clause 13, page 7, line 10, after ‘Scheme’, insert ‘are met’. 

Stephen Phillips:  The Bill makes provision for the Secretary of State not only to impose the levy that is dealt with in clause 13, but to impose it with a view to meeting the costs of the scheme. The scheme, in essence, picks up the costs of liabilities for which those who are funding the scheme have already been paid, by way of the premiums that they have received in the past. The amendments in my name and the name of other hon. Friends therefore seek to make it clear that it is the entirety of the costs that should be picked up by the those who have received the premiums—the insurance industry—and that no part of the cost should fall on the taxpayer. I hope the Minister will therefore indicate either that that is the intention, or that he will accept the amendments. 

Mike Penning:  I shall be brief. Yes, that is the intention of the Government and of the Bill. The funds are there explicitly to ensure that there is no way the levy funds can be used for anything else and that they cover the cost of the scheme. Part of the reason why there was Government investment into this and into the smoothing was to ensure that that could take place. That is the position of the Government, so I assure my hon. and learned Friend that the amendments are not required. 

Stephen Phillips:  On that basis, I am content to beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Question proposed, That the clause stand part of the Bill. 

Kate Green:  I will make a short speech on the clause, in particular to ask the Minister to expand on some of the issues discussed on Tuesday. On two separate occasions on that day, he helpfully gave two welcome assurances that the 3% levy on insurers would be protected. First, he told us: 

“that the 3% is not going anywhere. The figure will be 3%, which is important. I hope that hon. Members have listened and understand my position and the Government’s position and will therefore not press their amendments.” 

Later, he repeated the commitment: 

“It is very important that the insurance companies know that the 3% is there. In Committee in the other place, Lord Freud committed to a review at the end of the smoothing period, after four years, to see exactly how things were going. There was certainly not a commitment to interfere. I will place that fact in regulations so that the Committee has confidence that a review will take place after the four-year smoothing period. At that point, we will have a much better idea of how much the levy collector is collecting. We may be able to spend that by increasing the percentage, or we may be able to do other things with it.”––[Official Report, Mesothelioma Public Bill Committee, 10 December 2013; c. 72 to 78.] 

We were grateful for the Minister’s firm endorsement that the 3% levy would not be subject to any reduction, even if surplus funds were available within it. 

Following that debate, I took another look at the impact assessment, particularly the most recent assessment that was published a couple of weeks ago. It states that the costs of the scheme are split between a £371 million

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levy on the insurance industry—the 3% levy—and £17 million of Government funding, which we discussed earlier. In fact, the industry cost of £371 million is mentioned eight times in the document and I cannot trace a different figure being discussed. However, by my calculations, a 3% levy on the gross written premium is approximately £432 million over 10 years, so will the Minister explain the £61 million difference? 

As I said on Tuesday—this was the strong sentiment of all members of the Committee—ensuring that the levy remains at 3% is essential to prevent victims from losing out when insurers can comfortably accommodate that level of payment. I would be particularly concerned if the £371 million represents an under-assessment of what a 3% levy could raise. Will the Minister assure me absolutely that it would not be used as an opportunity for the industry to argue that a smaller total global figure should be protected, and that he will reaffirm that the 3% levy will be consistently applied across all insurers currently active for a minimum of 10 years, if not the 40 years volunteered by the ABI, and that any surplus money will be diverted to a fund for research, to extend the scheme or to enable more generous pay-out levels? 

Mr Brown:  It is a pleasure, Mr Howarth, to serve under your chairmanship and guidance. We go back some 40 years in Labour politics and my only disappointment is that now that I know exactly where you are and the good works you are engaged in, it is far too late by several years for me to make as much use of the information as I might have done a few years ago. 

The Chair:  Order. I am not sure whether the hon. Gentleman was trying to pay me a compliment, or making a veiled threat, but neither will have any impact on the impartiality of the Chair. 

Mr Brown:  The only thing that would serve me now, Mr Howarth, would be the compliment, and of course that is what was intended. I am sure you have taken it in that spirit. 

It would be wrong to leave the matters under discussion in clause 13 without referring back to the point raised by the hon. and learned Member for Sleaford and North Hykeham. I thought his intervention on the Minister about why the reinsurance point was overlooked, if it has been overlooked, was a powerful one. If it has not been overlooked and there is a good reason why those in the reinsurance part of the sector have not been embraced by the Bill, the Committee would like to hear what it is. Will the Minister, either later in our proceedings or on Report or Third Reading, explain what it is? If it is a genuine oversight and there is no policy reason why they should not be embraced by the Bill, will it be possible to put it right? Obviously, some consultation would be needed, but I do not think that, with good will on both sides, that would be impossible and we could return to it on Report. 

Another matter that I found even more perplexing is the industry view. The Minister and his officials will have had discussions with the industry and, as far as we know, they have not raised the point, but one would have thought that it would be to their advantage if they could find another group of people with whom to share

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the costs. There may be some industry reason why they do not want to embrace reinsurance, but I do not know what it is. Can we possibly ask the Minister to ascertain what it is? 

2.30 pm 

Stephen Phillips:  This is a slightly odd intervention, but does the right hon. Gentleman agree that it would be very helpful to the Committee if we received a letter from the Minister, before the Bill is reported to the House, dealing with the points he identifies? 

Mr Brown:  Yes. I am getting myself more into trouble the more I speak on this Committee. First, by paying utterly deserved compliments to the Chair, now by agreeing with— 

Stephen Phillips:  A horrible Tory? 

Mr Brown:  I was going to say “a well-remunerated lawyer,” but perhaps we should just say a Member of the coalition Government. I agree with the hon. and learned Gentleman on that point. It would help if the Minister could satisfy the Committee or at least offer some explanation to us, and if it were possible to get such a thing before the Committee concludes its proceedings. 

Mike Penning:  Yes, of course I will write to members of the Committee, but the information will be available in the Library to all Members who want to take part in the debate on Report and Third Reading. I have no inner knowledge, but I suspect that the reinsurers are going to be almost exactly the same people who were insuring in the first place. There is not an infinite amount of companies out there insuring, but we will write to them. 

There seems to have been an awful lot of oversight, if we want to look at it that way, but I do not think that this was an oversight—it is the deal that was struck. I say to the shadow Minister, the hon. Member for Stretford and Urmston, that I met Lord Freud, my fellow Minister in the Department for Work and Pensions, this morning. Three per cent. is 3% and we have no intention of moving away from it. I will write to her to give her more details, but my note says that the different amount, as she quoted, will add the current assumptions about the rate of volume of payments as estimated. The assumption is of the volume and rate of business, because obviously the businesses that the people were involved in were not passing it on to businesses that are buying the compulsory premium that we will have. I will write to her and explain that in more detail as we progress. 

Question put and agreed to.  

Clause 14 ordered to stand part of the Bill.  

Clause 15 

Technical Committee to decide certain insurance disputes 

Mr Brown:  I beg to move amendment 68, in clause 15, page 8, line 22, after ‘which’, insert 

‘must have a membership including representatives of the insurers, the potential insurance claimants and employers, and’. 

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The Chair:  With this it will be convenient to discuss amendment 69, in clause 15, page 8, line 40, at end insert 

‘which must include at least one representative of each of the parties mentioned in subsection (1).’. 

Mr Brown:  The clause and amendments I have tabled deal with the technical committee that will handle disputes. These are likely to fall into a number of reasonably well understood areas: whether or not a previous employer or their insurers can be found; whether or not the previous employer still exists or the person with responsibility to ensure the employer’s liability still exists; and other reasons, as set out in clauses 2 and 3 of the Bill, which we considered earlier. Very helpfully, the Minister has written to us to set out what the other reasons are. Effectively, the other reasons are circumstances in which either the employer or the insurer is bankrupt, still exists, but could not reasonably be pursued for a payment. 

My question, which I hope the Minister can address when he responds, is this: if the question of whether the employer or the insurer can be found is specifically mentioned in the Bill, and if the question of whether they exist—it would be perfectly reasonable, if they did not, to put that forward as a reason for proceeding under the scheme as a last resort—is also mentioned in the Bill, why is the position in the event of bankruptcy, when the institution still exists but is in receivership and cannot make a payment, not mentioned in the Bill, rather than embraced in the catch-all phrase “other reasons”? 

The obvious answer is that there are some other other reasons, apart from bankruptcy. If that is the answer, will the Minister say what they are? I understand that they will be covered in the regulations, but I have not seen those, so I do not know what they will say. There is a case to be made, if only for consistency, for setting out all the reasons in the Bill. If there is a need for a catch-all provision at the end to cover something that most people would think was reasonable, but that nobody has thought of at the moment, that should be said explicitly. 

Those are the issues the technical committee will have to deal with. It is clear from our discussions on Second Reading and in Committee that there are parties coming to these questions from different points of view. There are those representing the interests of the employers, who thought they were insured; there are those representing the interests of the insurers, who were happy enough to take the premiums, and who had the obligation to provide recompense where there was a case for it; and there are the interests of the victims. The victims will typically be the employees, who are in the direst circumstances, as Members have said—I do not want to go over that again—and for whom time is strictly limited, because life expectancy with this condition is very short. They are looking for some financial compensation, in the hope that it will alleviate their pain and suffering in the months that remain and help to provide for their dependants after they have died. 

Those interests are different, and the purpose of the amendments is to explore whether they should not all be explicitly represented on the technical committee. Even if the Minister does not accept that that should be stated explicitly in the Bill, I hope he will be able to tell

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the Committee how he intends to ensure that there is fairness on the technical committee, that there is somebody on it who will look sympathetically at the arguments that are advanced by different points of view and that it is composed not just of people who, while they should, of course, have technical expertise, earn their living in the same walk of life and, possibly, from people who represent one side of this argument, but not another. 

Mike Penning:  I wanted to intervene to be helpful, but it is just as easy to speak now. 

The role of the technical committee is purely to decide on cover; it is for others to decide on bankruptcy, and I am sure the right hon. Gentleman knows that. However, there is an intention that the technical committee will not go unmonitored and that the Employers’ Liability Tracing Office will have stakeholders on it to give it the oversight the right hon. Gentleman was asking for. I believe that is here within these arrangements. As he mentioned, others will be covered in the draft regulations, and we are working on that as we prepare them. 

Mr Brown:  I am almost allergic to the phrase “stakeholders”, although you might look on it more benignly, Mr Howarth. The Minister’s assurances give me some hope. I assume he means that different points of view will be represented on the committee. If he could just nod, I will cheerfully not press the amendment to a vote. 

Mike Penning  indicated assent.  

Mr Brown:  I thank the Minister. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Stephen Phillips:  I beg to move amendment 47, in clause 15, page 8, line 32, after ‘court’, insert ‘or which is an issue in proceedings which are before a court’. 

The amendment seeks to address a deficiency in subsection (4), which makes it clear that the technical committee 

“does not have jurisdiction to decide a question”— 

a question of cover— 

“that has already been decided by a court.” 

By the same token, if a court is yet to decide a question of which it is already seized, the technical committee should equally be deprived of jurisdiction to decide the question, otherwise one might end up with the position that the clause is plainly designed to avoid whereby the technical committee comes to a different decision from a court of competent jurisdiction. Where a question is in issue in proceedings that are already extant, plainly the technical committee ought not to have jurisdiction. It is for that reason that the amendment is both desirable and, I say respectfully to the Minister, absolutely necessary. 

Mike Penning:  My note indicates that the amendment would provide extra clarity that the technical committee cannot give a decision on a matter that is pending before a court. Our Bill managers indicate that the technical committee cannot do that. 

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Stephen Phillips:  If the Minister is right, it is fine. Why cannot the technical committee decide a question that is already in issue in proceedings that are before a court, even if there has not yet been a trial? Why not? 

Mike Penning:  I may have to write to my hon. and learned Friend. I am not legally trained in any way, but my understanding is that the technical committee cannot pre-empt a court’s decision. The Bill specifically states that the technical committee cannot do so, and I am more than happy to write to him before Report to explain why that is within the Bill. I hope he understands that I do not intend to accept the amendment. 

Stephen Phillips:  If I may, I will make a speech sufficiently long for a note to reach the Minister from those on his left who are scrawling it at the moment. 

The Minister is saying that the amendment is unnecessary because the technical committee does not have jurisdiction to decide, or would not decide, a question on cover that had yet to be decided by a court but that is in issue in court proceedings that have already commenced. If that is right, I would be perfectly prepared to withdraw the amendment. At the moment, I cannot see why that would be the case on the basis of the Bill. I am happy for the Minister either to intervene or to make another speech. 

Mike Penning:  Anyone who serves on a Bill Committee as a Minister will be passed notes. As my hon. and learned Friend predicted, a note has arrived saying that the Bill does not prevent the technical committee from making such a decision, so I apologise if I have misled the Committee. The note goes on to ask why the technical committee would wish to do so. Arrangements are provided in the Bill. 

Stephen Phillips:  I think the Minister has indicated that he will write to me and to the other members of the Committee on that point before Report. No doubt it is my fault for not being clear about my concerns. 

I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 15 ordered to stand part of the Bill.  

Clause 16 

Challenging decisions of the Technical Committee 

2.45 pm 

Stephen Phillips:  I beg to move amendment 48, in clause 16, page 9, line 18, after ‘arbitration’, insert 

‘or to the relevant court’.

The Chair:  With this it will be convenient to discuss amendment 49, in clause 16, page 9, line 30, at end add— 

‘(6) In this section “the relevant court” means—

(a) the High Court in England and Wales or Northern Ireland, or

(b) the Court of Session in Scotland.’.

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Stephen Phillips:  Once the technical committee established by clause 15 has reached a decision, clause 16 tells us that that decision may be challenged by a person who is dissatisfied, but the decision may be challenged under the Bill only by referring the question to arbitration. I think the Bill contemplates that one ends up with a statutory arbitration in accordance with the relevant provisions of, at least in England and Wales, the Arbitration Act 1996. That is desirable in so far as it goes. It enables a route of recourse for someone who is dissatisfied with the decision of the technical committee. But my understanding from my limited knowledge of arbitration is that parties pay their arbitrators. So an applicant who is dissatisfied with a decision of the technical committee, rather than having the right to go to court will have to refer the decision he does not like to arbitration in a private forum, which therefore will not attract publicity. More importantly he will have to pay the arbitrator or arbitrators. If the matter were appealed to court, he would not have to pay the judge because the judge is provided by the state to determine the dispute. 

So it is an added cost to applicants who are dissatisfied with decisions of the technical committee in circumstances where we are trying to give applicants, whether they are those who have been diagnosed with mesothelioma or their dependants, the largest possible chunk of compensation. These amendments suggest that the applicant should have a choice to refer the matter either to arbitration, which is sometimes said to be speedier than court, although it is not always, or to the court. I venture to suggest that this is a desirable group of amendments. I hope that the Minister will feel able to accept them. 

Mike Penning:  The amendments were obviously tabled in good faith. As my hon. and learned Friend the Member for Sleaford and North Hykeham pointed out, there is no requirement to go to arbitration but the technical committee will pay for the applicant’s costs and that will be covered by the arrangements in the Bill. As I understand it—I may need to address this is in regulations—the technical committee has it within its powers and within its funding to pay for such costs. I would agree with my hon. and learned Friend that arbitration can be quicker, and it is often cheaper and it is private. 

Stephen Phillips:  I seek some further clarification from the Minister. My understanding is that under clause 10 the scheme administrator can help a person to bring relevant proceedings. Relevant proceedings, as we have discussed in relation to one of my previous amendments, do not include proceedings before the technical committee or an appeal from the technical committee. The scheme administrator cannot help or pay for proceedings arising from a decision of the technical committee. But what I understood the Minister to say is that the technical committee itself will fund a decision to which it has come with which an applicant is dissatisfied in a statutory arbitration. That seems an odd position because any successful litigant would have to pay for his opponent’s appeal. There we are. I would be grateful for clarification that that is the position and also where I find it in the Bill. 

Mike Penning:  In conclusion, I understand these arrangements are allowed for in clause 15(6). There will be no requirement for me to put it in regulations. 

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Kate Green:  Can the Minister also clarify whether, if the technical committee can indeed pay the arbitration costs of a disgruntled applicant, such costs are encompassed within the total costs of the scheme and therefore within the 3% levy figures that we have been discussing? 

Mike Penning:  They most certainly are within the 3% and within the scheme. 

Stephen Phillips:  Clause 6 or clause 15 deal with the arrangements that are made by the Secretary of State in relation to the technical committee under clause 15(1). There are three things in particular that are dealt with. The composition of the technical committee, the technical committee’s procedure and how that is to be determined and review by the technical committee of its own decisions. There is absolutely nothing about the technical committee paying for the cost of the arbitration. I am prepared to go with the Minister this far. He has now given an indication of what the regulations will contain. The technical committee is going to have to pay for that. Is the technical committee going to pay purely the cost of the arbitrator, or is it also going to pay the cost of the applicant being represented before the arbitrator or arbitrators, so that the applicant is not deprived of further amounts that they are entitled to in compensation? 

Mike Penning:  I will stand and speak slowly for a few seconds while a note appears from behind me. As I understand it, the arrangements may—so it is not exclusive—be paid for by the arbitrators. I will write to the hon. and learned Gentleman. 

I also want to indicate to the hon. Member for Stretford and Urmston that I may have misled her a moment ago when I said it was all within the 3% when it may not be. I will write to her. 

Kate Green:  May I ask the Minister to be clear about my understanding? The applicant will have no choice but to go to arbitration. He may have the cost of going to arbitration funded by the technical committee, and that may or may not fall within the amount of money raised by the 3% levy. 

Mike Penning:  I understand that they do not have to go to arbitration. They can go through the civil process. There is no requirement for them to go through arbitration, as I understand it. 

Stephen Phillips:  I think the sensible thing would be for the Minister to write to the Committee on this point, as he has offered to do, before the Bill is reported to the House. The letter should deal with my points and those raised by the hon. Member for Stretford and Urmston. It is important to get this clear, even if it is not included in the Bill. Nobody wants an applicant to be disadvantaged. It is that with which the amendments seek to grapple. Given that the Minister has offered to write, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 16 ordered to stand part of the Bill.  

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Clause 17 

Regulations under this Act 

Stephen Phillips:  I beg to move amendment 50, in clause 17, page 9, line 35, leave out ‘(the scheme)’. 

The Committee will no doubt have observed in its perusal of the Bill that clause 17(2) refers to 

“A statutory instrument containing— 

(a) the first regulations under section 1 (the scheme)”. 

The Committee will also have observed that the scheme is defined in clause 18 as 

“the Diffuse Mesothelioma Payment Scheme”. 

The amendment seeks to deal with an issue that arises as a result. It might be suggested—based on the drafting of clause 17 with the words the scheme in parentheses after the reference to the first regulations under section 1—that the scheme can only ever be the scheme as enacted by the first set of regulations. If those regulations are subsequently amended they are not the scheme for the purposes of the Act. That is an ambiguity that it would be sensible to clarify in advance of someone seeking to do that before the technical committee, the first tier appeal tribunal, the courts or anyone else. 

Mike Penning:  Although I accept the point my hon. and learned Friend makes, the legal team and the parliamentary draftsmen were happy with the wording. The short title is important. On that basis, it stays in the clause as written. I understand the point he makes but do not think it is an issue, nor do my team or the parliamentary draftsmen. On that basis, I ask him to withdraw his amendment. 

Stephen Phillips:  I am not surprised the Minister and his officials understand the point because I explained it to them yesterday. On the basis that that is plainly the will of the Committee, and if the Bill therefore passes its remaining stages and receives Royal Assent, and that in due course is the interpretation, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 17 ordered to stand part of the Bill.  

Clause 18 

Defined terms used in more than one section of this Act 

Stephen Phillips:  I beg to move amendment 51, in clause 18, page 10, line 5, after ‘scheme’, insert— 

“‘applicant” means a person applying for a payment under the scheme.’.

Amendment 52 follows on from the previous amendment and is therefore not an amendment with which the Committee needs to concern itself. Amendment 51 simply deals with the fact that—perhaps I missed it or I am entirely wrong—there is no definition of “applicant” in the Bill. A definition is not only desirable, but probably necessary. I hope that this is one amendment, at least, that the Minister will, even if not now, be able to accept in due course. 

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Mike Penning:  I also discussed that extensively this morning. I thank my hon. and learned Friend for the conversations and detailed work he has been doing with the Bill Committee team. I will consider the amendment as we go forward, but, at this stage of the Bill, I am content not to progress with it. 

Chris Bryant (Rhondda) (Lab):  But why? 

Mike Penning:  Because I do not feel there is a requirement to do so, and nor does the team or the parliamentary draftsman. Even though my hon. and learned Friend is very knowledgeable in this area, I have to accept the advice that I am given. I have examined it and I feel that it is fine. [ Interruption. ]  

Stephen Phillips:  There is cross-heckling of the heckler going on. I hear what the Minister says, but I do think it would be desirable to have a definition of “applicant” in the Bill. I hope that he will reflect further and no doubt discuss the position with me and with his officials, with whom I can also talk it over, and I hope that he will come back in due course with a Government amendment. On the basis of what he has said, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Question proposed, That the clause stand part of the Bill. 

Paul Goggins (Wythenshawe and Sale East) (Lab):  I was looking in clause 18 for a definition of “specified payment”. Of course, I did not find it, because clause 18 covers the definition of terms used in more than one part of the Bill. If I turn to clause 2, I find that “specified payment” is indeed defined and 

“has the meaning to be given to it by the scheme.” 

The scheme, however, is in clause 18, which is why I now seek to comment. My hon. Friend the Member for Stretford and Urmston made some important points when we met earlier in the week about the T&N Asbestos Trust. Without detaining the Committee on the details, because we did have some discussion about it, I am sure, Mr Howarth, that you and other members of the Committee will know that, because of the company voluntary agreement that was reached in 2006 following that company becoming insolvent, recipients of payments under the T&N scheme receive in the region of £40,000 as compensation. 

Based on what it knows at the moment, T&N Asbestos Trust has estimates for the payments to people who will benefit from the fund, which this legislation is about to establish. At the moment, under the present terms—we hope that those terms will be improved as the Minister reflects on the arguments that have been put—the payments would be about £95,000. 

3 pm 

Because the £40,000 payments are deemed to be specified payments, those who receive them will not be eligible to make a claim to the fund being established by the Bill. On any reading of that, it seems to be a plain injustice that people who have mesothelioma will receive

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inadequate payments for that illness simply because a company insolvency makes them ineligible to claim under the fund being established. 

I make that point because I received specific representations from the T&N Asbestos Trust, which is based in my constituency. As the Minister draws up the regulations on what will be provided for in the scheme, will he think of the plight of those workers who face not just the dreadful prospect of a mesothelioma diagnosis, but being at least £55,000 worse off simply because of the insolvency of the company that they previously worked for? 

Kate Green:  I support my right hon. Friend’s comments. I am aware that the Minister will point out that the people who receive a payment under the Turner and Newall scheme will not suffer a clawback of benefits. None the less, the difference between a typical payment of £40,000 without benefit clawback and a payment of typically £90,000 or £95,000 even with full benefit clawback will mean in most cases that the Turner and Newall scheme beneficiaries will be disadvantaged. 

I will raise another point in relation to the Turner and Newall scheme. I apologise for raising this again, but the letter that the Minister kindly sent us this morning to deal with some issues discussed in Tuesday’s debate raised further questions. I hope that he can clarify these points. In his letter, he said: 

“The provision in clause 18(3) of the Bill for the scheme to specify circumstances in which a person is, or is not, to be treated as able to bring an action, is linked to the eligibility conditions in clauses 2(1)(d) and 3(1)(c). Those eligibility conditions require an applicant to the scheme to show that there is no employer or employers’ liability insurer that they can bring an action for damages against because those parties a.) cannot be found b.) no longer exist or c.) for any other reason.” 

The group I refer to are not Turner and Newall employees, but employees of other businesses who used Turner and Newall products. In fact, almost any worker in the electrician sector, plumbing, shipbuilding, manufacturing and so on will have used Turner and Newall products during some period in our industrial history, because it dominated the asbestos supply market for many years. 

In some cases, those workers will no longer be able to trace their employer or their employer’s liability insurer. Ostensibly, in those cases, they should be able to access the scheme provided for in the Bill. The difficulty as I understand it, however, is that the Turner and Newall schemes, which will be specified payments that preclude people from accessing this scheme, also include the possibility of people raising claims against those trusts on product liability claims, not just employment liability claims. 

I am concerned that a worker who cannot trace his or her own employer but can be shown to have used Turner and Newall products, and therefore could ostensibly access the Turner and Newall product liability scheme, could be precluded from coming to the diffuse mesothelioma payment scheme. I am sure that that is not the legislation’s intention—I would be very surprised if it were—but I would be grateful if the Minister would make that absolutely clear either on Report or in regulations. The real risk is that any worker might be precluded from applying to the scheme, not just those from the manual industries, because, across the decades, so many of us will have come into contact with Turner and Newall products. 

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Mike Penning:  Let me touch on that exact point. That is not the intention. The intention of the Bill is not only financially to assist sufferers of mesothelioma and their dependants to find out about their employer’s insurance if they were employed, but, if there is no scheme for them to go to and they have no recourse, for them to fit in with this fund of last resort. 

I will look carefully at the points made by the hon. Lady, because technical issues such as litigation are involved. I will come back to her between now and Report, or on Report, which I understand will be quite soon—the day after the House returns after Christmas. It has been announced that we will be back on the Tuesday for Report and Third Reading, so I am not pre-empting an announcement by the Leader of the House. We will try to be as expansive as possible about our proposals, as I have been in the letters that I been sending to colleagues during the Committee stage. 

The points made by the right hon. Member for Wythenshawe and Sale East on behalf of his constituents were covered in issues discussed the other day. I know there will be disappointment in what I say, but the principle of the Bill is that the scheme is for those with no other recourse—for people who cannot make a claim elsewhere. Some will feel that that is unfair, and I understand and have sympathy with that view, but we cannot open up the terms of the Bill more than we already have. The fund has to be one of last resort. I know that that is difficult, but that is exactly what it is—that is what it says on the tin, in the Bill. I understand the concerns, but I hope that the clause is accepted. 

Question put and agreed to.  

Clause 18 accordingly ordered to stand part of the Bill. 

Clauses 19 and 20 ordered to stand part of the Bill. 

Clause 21 

Short title 

Stephen Phillips:  I beg to move amendment 53, in clause 21, page 11, line 19, leave out ‘Mesothelioma Act 2013’ and insert 

‘Diffuse Mesothelioma Payment Scheme Act 2013’.

The amendment, as much as anything else, affords an opportunity to end the Committee where we began it. The Bill has been long sought by sufferers of mesothelioma who have no recourse against an employer or insurer of the employer who cannot be found. The diagnosis that sufferers have received is possibly about the most distressing thing that could occur to anyone. To be clear, it is a diagnosis of death, as I said when I moved the first amendment in my name. It is a diagnosis of death in very unpleasant circumstances, as the hon. Member for Wansbeck said in Committee—he is absolutely right. It is also a diagnosis of death as a result of having done nothing more than go to work. 

The Bill, although very welcome, does not cure mesothelioma or do away with what a diagnosis of mesothelioma means for those who are in receipt of it. I therefore venture to suggest to the Committee that it is slightly misleading in due course to describe the Bill—once it has completed its stages, if it does—as the Mesothelioma Act 2014. It will not be the Mesothelioma Act, because it does not deal with mesothelioma—it does not cure it

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or cure the hurt that this most awful of diseases causes. All it will do is to provide a scheme of last resort to enable those who receive a diagnosis of mesothelioma to seek some form of redress for the fact that they were negligently exposed to a carcinogen to which they should not have been exposed and which has led to such serious consequences for them and their families. For that reason, if for no other, I suggest to the Minister that the proposed short title is misleading. It would be much more sensible if, instead of being called the Mesothelioma Act 2014, the Bill in due course became the Diffuse Mesothelioma Payment Scheme Act 2014. 

Mike Penning:  I echo the sentiments expressed by my hon. and learned Friend. He is absolutely right that the Bill, which we hope will become an Act quite soon so that the compensation can paid out of the fund to those who have suffered so much, and to their dependants, has been long awaited. That is not a criticism of any party—the process was started under the previous Administration and we are here today. I understand the sentiment expressed by my hon. and learned Friend, but it is a short title. It does what it says on the tin and that is what the intention was. It was not supposed to be a slight on anyone at all—we just wanted a short title that described the Bill as best we could. 

The short title has come through the House of Lords to us, and I know that it is right and proper for the Committee to examine it, but I think it should stand. I fully understand my hon. and learned Friend’s comments, but I hope he will understand that the Bill was named in good faith and that no slight was intended at all. I hope that the naming of the Bill is exactly what we need. 

Stephen Phillips:  I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Amendment made: 1, in clause 21, page 11, line 20, leave out subsection (2).—(Mike Penning.)  

Clause 21, as amended, ordered to stand part of the Bill.  

New Clause 1 

Establishing additional schemes 

‘The Secretary of State shall within a year of this Act being brought into force, prepare and lay before each House of Parliament a report setting out the Government’s proposals with regard to the establishment of additional schemes for asbestos-related industrial diseases, as prescribed under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, where there are unresolved insurance disputes.’.—(Kate Green.)

Brought up, and read the First time.  

Kate Green:  I beg to move, That the clause be read a Second time. 

The Chair:  With this it will be convenient to discuss new clause 7—Establishing additional schemes: pleural plaques—  

‘(1) The Secretary of State shall, within twelve months of any scheme under this Act being implemented, prepare and lay before each House of Parliament a report assessing the costs and benefits of extending the scheme to—

(a) eligible people with pleural plaques; and

(b) eligible people with other asbestos-related industrial diseases

where there are unresolved insurance disputes.’.

Column number: 128 

Kate Green:  Throughout our deliberations on the Bill, there has been discussion of opportunities that may or may not exist to extend the scheme in a number of ways. New clause 1 simply deals with the possibility of extending it, or additional schemes, to other asbestos-related diseases. New clause 7, which has been tabled by my right hon. Friend the Member for Newcastle upon Tyne East and on which I will speak in a moment, relates specifically to the extension of a scheme to eligible people with pleural plaques. 

New clause 1 asks not that an extension to other asbestos-related diseases be encompassed into the scheme provided for in the Bill, but that the Minister lays a report before Parliament within 12 months, explaining exactly what the Government intend to do and will be able to do about extending a payments scheme to a wider range of asbestos-related diseases. We recognise that the long and short titles of the Bill would exclude the possibility of doing that in this Bill, but we are also aware that there have been encouraging indications from Lord Freud and others that the Government have not ruled out the possibility of extending some other form of payments system to other asbestos-related diseases. 

We do not believe that there would be a moral reason against doing such a thing. We have heard some powerful contributions, for example from my hon. Friend the Member for Wansbeck and from the hon. and learned Member for Sleaford and North Hykeham, about how people have often incurred mesothelioma while going about their daily work. The same is true of other horrible asbestos-related diseases. 

On Second Reading in the House of Lords, Lord Freud said: 

“The Bill does not—and cannot—look to respond to all asbestos-related disease.” 

However, he went on: 

“The issue of individuals who have developed other asbestos-related diseases through negligence or breach of statutory duty and are unable to bring a civil claim for damages of course needs to be addressed.”—[Official Report, House of Lords, 20 May 2013; Vol. 745, c. 690.] 

I hope that the Minister will be able to provide stronger assurances about the Government’s intentions in that regard. The Government’s impact analysis states that 

“extending the scheme to include other asbestos related diseases would result in approximately 4,500 extra successful applicants to the scheme. This would increase the levy by approximately £470m.” 

That would effectively double the levy over 10 years. The Asbestos Victims Support Groups Forum UK strongly believes that the logic and assumptions used to arrive at that calculation are significantly flawed. Its briefing, which I am sure the Minister has seen, suggests that such an extension would add only 20% to the costs of the current scheme. The organisation states: 

“This analysis is ill-researched and wholly misleading. 

The author of the Analysis acknowledges that the assumptions made in the analysis are not appropriate, but because of supposed lack of evidence she relies on the inappropriate assumptions to provide an estimate of the impact of extending the scheme. 

Evidence is available and we have referred to some sources below. There is no excuse for failing to cite evidence which is so easily available. 

We believe her analysis should be withdrawn and a properly researched analysis should replace it.” 

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3.15 pm 

The organisation highlights flaws in a significant number of assumptions: the failure to distinguish the success rate for mesothelioma claims from that of claims for other occupational diseases; the failure to recognise that other asbestos-diseases, on average, attract considerably lower levels of average compensation; the failure to take into account the view that asbestosis and pleural thickening diagnoses may have already reached their peak, unlike mesothelioma, which is predicted to spike in 2015, and therefore the number of claims over the 10-year impact assessment period are likely to diminish; and finally the assumption about the average payment per claim, which the ad hoc analysis concludes will be the same value as mesothelioma payments, at £87,000. In the words of the Asbestos Victims Support Groups Forum UK, “this is preposterous”. Using its own evidenced assumptions, the organisation has conducted an impact assessment. It found the cost during the lifetime of the 10-year impact assessment to be £77 million, some £400 million less than the cost identified in the Government’s impact assessment. That is on the cusp of being affordable within the existing scheme if we accept, as I suggested earlier, that a 3% levy should raise £471 million. 

Even if the administrative costs were doubled to allow for wider-ranging or new schemes—that is not included in the Asbestos Victims Support Groups Forum UK analysis—the costs incurred would be only £131.6 million, which is far below those quoted in the Government’s impact assessment. An additional 2,268 people would benefit, which is almost double the number of beneficiaries of the current scheme. 

The Opposition are surprised that the Government have used such speculative figures when other, more reliable, figures are readily available from the UK asbestos working party, a working group of the Institute and Faculty of Actuaries, which is not famed for its speculative approach to statistics. Given that the criticisms made by the Asbestos Victims Support Groups Forum UK of the Government’s analysis were sent to the Department on 4 December, I am puzzled why they have not been incorporated or at least addressed in the latest ad hoc analysis published on 6 December. 

I invite the Minister to commit to reviewing the figures in the latest impact assessment and providing a detailed response to the concerns and assumptions of the Asbestos Victims Support Groups Forum UK and the figures produced by the UK asbestos working party. I recognise that that, in and of itself, will not bring other asbestos-related diseases within the ambit of the Bill. Given that the Minister has been willing to give a strong assurance of the Government’s intention in relation to other asbestos-related diseases, a proper cost estimate of such an extension would be helpful to all parliamentarians. 

Mr Brown:  I shall speak to new clause 7, tabled in my name. 

I would love to be able to assume that the Minister’s general assurance on looking at other asbestos-related conditions embraced, in its generosity, a commitment to look again at pleural thickening and pleural plaques, but that would be an unwise assumption—unless he wants to intervene and say something now. I see that he does not, although I would happily give way if he did. 

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I identify myself with everything my hon. Friend the Member for Stretford and Urmston said in moving new clause 1. My new clause deals with something different and specific: pleural thickening and pleural plaques. Prior to 2007, it was possible, if the victim could find an employer and an insurer, to sue in common law for pleural plaques. Indeed, people were able to obtain substantial settlements for pleural plaques. 

It might help the Committee if I set out the distinction between pleural thickening and pleural plaques, and mesothelioma. The two things have a common cause: asbestos fibre getting into the lung, with the body’s defence mechanism responding by hardening around the fibre or the fibre’s causing scarring on the lung. That is the pleural thickening or the pleural plaque. It does not, however, of itself—this is a common misconception—go on to develop into full-blown mesothelioma and that form of lung cancer. 

I often find myself explaining that to constituents, because they are not just unsure, but confused and frightened, and worried that because they have been diagnosed with pleural plaque, their life expectancy has been dramatically reduced. Such a diagnosis does not necessarily mean that. It does mean, however, that they have been exposed to asbestos dust, and worry and anxiety that come with that are very real. It also means that they may have developing within them some other condition, because of the exposure to the dust. 

The number of cases is substantially greater than the number identified with mesothelioma. The annual number of cases of pleural thickening, assessed for industrial injury disablement benefit, has more than trebled since 1991, reflecting changes in the criteria for compensation and the number of new cases annually. There were 460 such cases in 2012, compared to 150 in 1991. Between 1998 and 2012, nearly 15,000 cases of pleural disease were confirmed by chest scans, but there is no direct or precise estimate of the current prevalence of pleural plaques in the UK, because people would need a scan to confirm the diagnosis. However, in absolute terms, the condition is likely to be common, with one expert suggesting that as many as 36,000 to 90,000 people a year may be developing plaques. That is one expert’s estimate, and it can only be an estimate. 

The question is: should people with this condition be entitled to any form of remedy at all? No person asked to be given such a thing. People get it by exposure to asbestos. Until 2007, it was possible to take a common-law case to gain compensation. That was fought by the insurers, all the way up to the House of Lords. In the decision of Rothwell v. Chemical and Insulating Co Ltd, which became the definitive case, all future such awards were stopped. 

I am not telling tales out of school, Mr Howarth; you will remember this. There was a huge campaign in the Labour party when we were in government to try to get some compensation for the victims of pleural plaques. The settlement arrived at after strongly argued discussions among colleagues and friends was that those who had made claims prior to the decision would get something—the reasoning was that they had some limited expectation of success, so it would be wrong to have their hopes struck down—but that there could be no future expectation. I disagreed with the settlement then and I disagree with it now. 

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It is unfair that people who did not ask for the condition—the condition having been inflicted upon them without their consent—should be denied any form of redress. Had they been inflicted with an external condition, such as facial scarring rather than scarring on their lungs, they would be entitled to compensation. In any event, it is unreasonable to say that people may be inflicted with something to which they never agreed and that is bound to worry them and be a cause of distress. Moreover, the condition is an indication of exposure to asbestos and therefore results in an enhanced likelihood—we can argue about the degree of enhancement —of developing a much more serious asbestos-related condition that is almost invariably fatal. 

The feeling about that in the north-east of England is very strong. Every single Member of the previous Parliament from the region—I know the region is overwhelmingly Labour—committed themselves to a campaign to secure justice for the victims of pleural plaque. 

The forecasts for sufferers of mesothelioma, which we discussed earlier, are all we have to guide us. I have no quarrel whatever with the public servants and the specialists who put together those forecasts. I am sure they have done their best, but within those figures there are, as we discussed in relation to a previous clause, a substantial number of variants. The figures cannot be absolutely relied upon, and in any event, we know that the profile of victims will be different in the coming decade from the past decade. 

In the past decade communities and regions, such as the one I represent, with a preponderance of heavy engineering, shipbuilding and every single industry from thermal insulation and lagging to railway-related industries, in which asbestos was sprayed as a fire retardant with limited protection for the operatives involved, had the historical cases. My view is that future cases will be more broadly spread. We will find cases among members of the teaching profession who put pins into asbestos-clad boards and people in the construction sector who drilled into asbestos plates. At one stage, asbestos was used as a construction material for outbuildings, which were assembled by drilling into the asbestos. Victims from such industries will be coming through in the future. They will not have shown up yet, and we do not know just how many there are. I hope the predictions are correct and that the public safety measures for which the House voted have effect, but if those measures have been more honoured in the breach, or if the condition is more prevalent than the assessors say, we will have a rising profile, or at least a steady profile, of mesothelioma cases. There is no reason whatever why the profile of pleural plaque and pleural thickening cases will not follow the same broad trend. 

People with such conditions are our fellow citizens. An injury for which they did not ask and that they did not want has been inflicted upon them. There should be a straightforward, simple and proportionate remedy for their condition. My new clause invites the Minister to do no more than think about it. I hope he will think about it. 

3.30 pm 

Mike Penning:  I thank the right hon. Gentleman for a very thoughtful speech on behalf of his constituents and many others, not just in the north-east. As he said,

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there will be sufferers across the country. I had the sad honour the other day of having a discussion on Radio 2 with a relatively young man who had lost his wife when she had done no more than be a teacher who wanted to make the classroom look wonderful for her pupils. She had died of mesothelioma. 

As the shadow Minister said, the long title and short title of the Bill are quite defined. It is important that that is understood. However, Lord Freud made understandable commitments in the other place to work with other Departments, researchers and groups to develop better information and analysis, so that other groups could be as defined as the groups in the Bill, and also get compensation from a fund of last resort if has to happen, although we all hope that would not be the case. I reiterate that here today. 

Lord Freud, Lord Howe, who spoke movingly in Committee in the other place, and I work closely together. Although the right hon. Member for Wythenshawe and Sale East has left for understandable reasons, this is where the research becomes so important. The reason why the Bill has got so close to getting the money to those who desperately need it is that the research and analysis were definitive. 

I pay tribute to the Asbestos and Mesothelioma Support Group. We do not always agree on the figures, but we all agree on one thing. We need to get help in this case. We will work together. That is the commitment that the shadow Minister wanted. We will try to get our figures as close to theirs as possible. I am willing to work with anybody who can come forward and show us a way to get help to people who are not getting it from any other source. 

Kate Green:  I am grateful for much of what the Minister has said about the new clause. Could he share how he intends to keep the House informed of the progress of the work? My new clause proposes a report within one year to Parliament, but I am open to other suggestions from the Minister. 

Mike Penning:  I hope I have already indicated to the Committee and made a commitment that the way the fund is working will be reported to Parliament each year. I do not want it to be complicated or to be full of gobbledegook. It has got to be nice and simple. We will take a similar path with the report. 

Both the hon. Member for Stretford and Urmston and the right hon. Member for Newcastle upon Tyne East made really good points. However, the shadow Minister indicated at the start of her comments that she would withdraw the new clause. 

Kate Green:  I welcome a great deal of what the Minister said. He acknowledged that we already have his commitment to an annual report to Parliament in relation to the diffuse mesothelioma payment scheme. I think I heard him say that there would be a similar commitment to progress on identifying the possibility of extending schemes to other asbestos-related diseases, though I do understand the issues that he raised. 

Mr Brown:  Since I understood the Minister’s remarks to embrace my new clause as well, I will not press it. 

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Kate Green:  I beg to ask leave to withdraw the new clause. 

Clause, by leave, withdrawn.  

New Clause 2 

Medical records 

‘Schedule 3 contains amendments to other legislation to ensure that where medical records are requested in relation to a scheme established under this Act, they are provided quickly.’.—(Kate Green.)

Brought up, and read the First time.  

Kate Green:  I beg to move, That the clause be read a Second time. 

The Chair:  With this it will be convenient to discuss new schedule 1—Supply of medical records 

1 The Data Protection Act 1998 is amended as follows.

2 In section 7, after subsection (11), insert—

“(12) Where the request under this section is, and is stated in the request to be, for the purpose of investigating a claim, or application for payment, arising from the development of diffuse mesothelioma by the data subject, the prescribed period shall be 14 days.’.

Kate Green:  I hope we can dispose of this quickly with what I have to say. However, I cannot anticipate what the Minister will say in response. We are looking for assurances. 

The clause would amend section 7 of the Data Protection Act 1998 so that where a request under that section is for the purpose of investigating a claim arising out of the development by the data subject of acute diffuse mesothelioma, the prescribed period shall be 14 days. Currently to make a claim for compensation a victim will also need to produce medical records. We have already discussed the need for employment records and the need to put pressure on HMRC to obtain those. Under the current data protection legislation, agencies have 40 days in which to respond to such requests. 

Stephen Phillips:  The period of 40 days may be there for reason. These are records that may be ages old, archived who knows where, covered in dust. Does she not think that 14 days is very ambitious and that it would be better for the records to be provided as quickly as possibly but not within a 14-day period as a matter of statute? 

Kate Green:  I would be concerned with “as quickly as possible”, which is a very imprecise and elastic term. I would not be at all surprised to discover that it was considerably longer than 40 days in the minds of those who might hold those records. I would certainly prefer to see a period properly specified. I assume that when the Data Protection Act was passed in Parliament, exactly that sort of concern was raised and 40 days was considered to be perfectly acceptable. 

The issue with mesothelioma claims, as we have said repeatedly, is that the progress of the disease is very fast and invariably fatal. We should seek to do anything we can to minimise the waiting time and the stress that victims and their families will experience in seeking to

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get together the material that they need to see whether they have a valid civil claim or, if not, to access this scheme. I hope that the Minister can give some assurances about speeding up the obtaining of records; 40 days is far too long for such sufferers. I look forward to hearing his comments on that and to his acceptance, if possible, of new clause 2. 

Mike Penning:  I will not be able to accept new clause 2 but I can tell the shadow Minister that progress has already been made without amending the Bill. We are very aware that rapid access to medical records is needed, even though, as my hon. and learned Friend the Member for Sleaford and North Hykeham pointed out, some of them may be quite difficult to get hold of. The Department of Health recently issued guidelines to medical practitioners that medical records for those who are suffering from this terrible disease should be released within 21 days. They have also been advised that sufferers of this disease should be prioritised on the provision of records. 

DWP officials are already exploring with colleagues in the Department of Health, and have meetings planned for very early January, whether we can expand on that. Work is being done as we speak. It will be 21 days at the latest. While we understand that in certain circumstances it might take longer, I do not think there is any excuse for it being delayed by the Data Protection Act. That is why we have made that recommendation. The Department of Health is fully with us on that and is already issuing guidance. 

Kate Green:  I am encouraged by what the Minister says about the progress that has been made with the Department of Health. Perhaps the first annual report that we are looking forward to receiving in Parliament in a year’s time could reassure us about what has been achieved here. The progress that the Minister alludes to is extremely welcome. I beg to ask leave to withdraw the new clause. 

Clause, by leave, withdrawn.  

New Clause 3 

Oversight committee 

‘(1) The Secretary of State must establish, by statutory instrument, an Oversight Committee to monitor, review and report to the Secretary of State on the overall arrangements comprising—

(a) the scheme;

(b) scheme administration;

(c) the Technical Committee;

(d) the Employers’ Liability Tracing Office; and

(e) the Electronic Information Gateway.

(2) The Oversight Committee must include representatives of—

(a) asbestos victims support groups;

(b) trade unions; and

(c) active insurers.

(3) The Oversight Committee must be chaired by an independent person.’.—(Kate Green.)

Brought up, and read the First time.  

Kate Green:  I beg to move, That the clause be read a Second time. 

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There were some good discussions in the House of Lords about the need for some kind of independent oversight of a scheme that in all probability will be run by the insurance industry itself. As I said earlier, the issue is not simply whether that industry-run scheme—if indeed that is what transpires—is run properly and with propriety, but that it is seen to be so. That is where an independent oversight committee could have a considerable effect. 

When the Bill was in the House of Lords, Lord Freud wrote to peers outlining details for an oversight committee in response to a number of debates initiated by my noble friend Lord McKenzie. The new clause I have tabled would put in the Bill a requirement for an independent oversight committee with responsibility for monitoring the activities of the scheme, the tracing database, the technical committee and the portal. The oversight committee proposed by the new clause would monitor and review those elements and report to the Secretary of State on overall arrangements. The committee would include representatives of the asbestos victim support groups, which rightly have seen their work acknowledged very positively in our discussions; trade unions, which have played a significant part over the years in supporting sufferers from this disease in obtaining justice; active insurers, who clearly have a particular interest as they are to a degree bearing the burden of the actions of insurers in the past— 

Stephen Phillips:  Reinsurers. 

Hon. Members:  Lawyers. 

Kate Green:  Regrettably, my new clause does not include lawyers or indeed reinsurers. The new clause would require that the committee include representatives of the groups listed, but that list is not intended to be an exhaustive one, if there is a good case—as I am sure there is—for other groups such as lawyers or reinsurers to be represented on the committee. The new clause would also make provision for the committee to be chaired by an independent person. 

Lord Freud was very positive about the idea of an oversight committee and expressed his agreement with the idea behind the amendments to that effect that were tabled by Lord McKenzie when the Bill was on Report in the House of Lords. He said: 

“The suggestion was made in Committee, and since then we have been exploring available options for some form of oversight. I spent some time looking for an existing mechanism or body already within the auspices of the DWP that I could utilise, but I have not been able to find a suitable vehicle. We are therefore continuing to explore all the options.”—[Official Report, House of Lords, 17 July 2013; Vol. 747, c. 843.] 

Will the Minister tell us what progress has been made since that statement in the House of Lords? Obviously, if an existing body can be utilised that would undoubtedly speed up the matter, which would be very welcome. If not, we would like to hear what progress has been made in establishing a new body. 

I know that the Minister is reluctant to see measures added to the Bill, but it is important that people have an absolute assurance that there will be an independent oversight committee for the scheme. The best possible way to give them that assurance would be to include reference to such a body in the Bill. 

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Mike Penning:  We have gone through nearly two whole sitting days in Committee. Sadly, right at the end of our deliberations, I am going to have to say that I do not see the requirement for new clause 3. The main reason is that we have sought extensive opinions from stakeholders on the proposed oversight body and the representation on that body. We think that representation should be as open and expansive as possible. As a trade unionist, I personally feel that unions should be represented on the body—I am not necessarily saying that all unions should be represented, but some trade union representation is important. 

We have done some work on this matter. The proposed body will monitor the performance of the scheme. It will conduct blind case checks—it is very important that there are checks on how things are being done—and will produce reports for the DWP, either for me as the Minister responsible or for Lord Freud if the responsibility goes back to him. 

The feedback from stakeholders has been enormously positive. We think that we can put details about the body in the contract that the DWP will issue for the scheme administrator, so it could be fitted within that. That is what we are looking at now. It is not definitive yet, but we think that we will be able to do that. I certainly think that the oversight committee is extremely important, and it will happen; Lord Freud gave that commitment in the other place, and I reiterate that commitment today. I hope that the shadow Minister will take that in good faith. We will do everything that we can to make it as open and independent as possible, so that people from the representative bodies and stakeholders have an opportunity to be heard, and so that the body does the job that it should do of holding the scheme to account and reporting back. 

3.45 pm 

Kate Green:  I am rather concerned to hear the Minister say that the letting of a contract for an independent body would be encompassed within the letting process for the contract for the scheme administrator. One of the purposes of an independent oversight body would be to monitor and quality-assure the activity of the scheme administrator. 

Mike Penning:  I apologise; I have misled the hon. Lady. I completely got it wrong, and I put my hands up. It will be written into the contract of the scheme administrator that they will have to supply information to the oversight committee. How wrong could I have got it? 

Kate Green:  I am reassured by that. That is much better news. I hope that this will be supported by an obligation on those who hold such information to provide it to the oversight committee. I am pleased by the strength of the support that both this Minister and the Minister in the House of Lords have given to the notion of an independent oversight body. That will have been noted on the record, and by those who are paying close attention to this debate. I still cannot see any difficulty in including that in the Bill. I know that the Minister is concerned about ping-pong, but I cannot imagine any objections from the other place to such a clause being included in the Bill. However, the assurances are certainly

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very strong, and have been repeated by Ministers in both Houses. On that basis, I beg to ask leave to withdraw the new clause. 

Clause, by leave, withdrawn.  

Mike Penning:  On a point of order, Mr Howarth. Is there a way that I can put on the record my thanks to members of the Committee, who have worked so tirelessly and hard in the past couple of days on a Bill that is very technical? I am sure that colleagues will have found the debates very stimulating and interesting. May I also put on the record that the tone of the debates, and the way that this Committee has dealt with an important and serious Bill, should be commended? Is there any way I could get that on the record? 

The Chair:  That is not a point of order, but it is well made. 

Kate Green:  Further to that point of order, Mr Howarth. I endorse the remarks of the Minister. It has been a pleasure to serve on this Committee; I think that all right hon. and hon. Members who have done so would agree. We found the Minister open and willing to debate all the issues that the Committee put forward. Perhaps we have been disappointed at his lesser willingness to accept some extremely constructive suggestions from across the Committee. However, I endorse the Minister’s comments, and extend our thanks to all who have helped to service and support our deliberations, including, of course, the parliamentary staff; the Minister’s team, who have been helpful to all of us; and you and Mr Davies. 

Mike Penning:  Further to that point of order, Mr Howarth. I forgot the Bill Committee staff and my civil servants, who have done fantastic work in bringing this Bill before the Committee. 

Chris Bryant:  On a real point of order, Mr Howarth. As my hon. Friend the Member for Stretford and Urmston said, we are all enormously grateful for the way in which the Minister has conducted the business, and for regularly saying that he will, on Report, come back to several of the issues raised, not least by some of his hon. and learned Friends. 

The Minister has said countless times that he does not want ping-pong. I think I am right in saying that there has been a Government amendment, but it is only a technical one; the subsection that has been removed

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from the Bill is the one that is always in a Lords Bill that might incur some kind of charge. I suggest to the Minister, through the Chair, that were he to come forward with an amendment on Report—there are many issues on which it would ease the mind of the whole Committee if amendments were brought forward, on a cross-party basis—we Opposition Members would want to make sure that there was no delay in ping-pong of more than 24 hours, to make sure that the Bill was brought to completion. 

The Chair:  The hon. Gentleman knows that that is not strictly speaking a matter for the Chair, and therefore not a point of order. However, he has made his point, and I am sure that the Minister will take due note of it. 

Stephen Phillips:  On a real point of order, Mr Howarth. New clauses 4 to 6 have been debated in accordance with the Chair’s selection list. Under the programme order and the Standing Orders of the House, at this moment, there needs to be a formal opportunity for those clauses to be moved—if they are to be moved. One of them stands in my name, and two of them are in the name of the right hon. Member for Wythenshawe and Sale East. Although those new clauses have been debated, they have not yet been moved. 

The Chair:  It is up to the Members concerned to indicate that that is what they want to do. This is a point of order; the hon. and learned Gentleman can pursue those matters if he wishes to. 

Stephen Phillips:  The right hon. Member for Wythenshawe and Sale East is unfortunately not here, and I indicate, having raised that point of order, that new clause 4 is not moved. 

The Chair:  In the annals of pointlessness—[Interruption.] On behalf of Mr Davies and myself, although I chaired only this afternoon’s proceedings— 

Chris Bryant:  Lightweight. 

The Chair:  Indeed. I understand that proceedings have been held in good humour and expeditiously, so on behalf of both Chairs, I thank members of the Committee for that. 

Bill, as amended, to be reported.  

3.51 pm 

Committee rose.  

Prepared 13th December 2013