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Grand Committee

Tuesday, 26 February 2008.

The Committee met at half-past three.

[The Deputy Chairman of Committees (Lord Colwyn) in the Chair.]

The Deputy Chairman of Committees (Lord Colwyn): Before the Minister moves that the first statutory instrument be considered, I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way.

Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2008

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton) rose to move, That the Grand Committee do report to the House that it has considered the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2008.

The noble Lord said: I am happy to confirm to the Committee that these provisions are compatible with the European Convention on Human Rights.

The purpose of the regulations, which are being made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, is to increase by 3.9 per cent the amount of compensation paid under the Act. The increased amount will apply to those who first satisfy the conditions of entitlement on or after 1 April 2008.

Increasing the amounts paid under this scheme fulfils the undertaking given by this Government to increase these payments annually. There is no legislative requirement for the amounts paid under this scheme to be increased annually but we believe that it is right that they are so increased. This was a decision we were pleased to make when responsibility for the scheme was transferred to the Department for Work and Pensions in 2003.

It may be helpful if I briefly set out the purpose of the Act. An employee can sue his employer when he suffers from a disease that he contracted from his work with that employer. However, the diseases covered by this Act are known as long latency diseases, as they take a long time to develop. This can mean that they may not be diagnosed for a very long time after exposure to the dust. In most cases, this is more than 20 years, although it can take much longer. It is not surprising that by the time of diagnosis the employer, or employers, responsible may no longer exist. Sufferers and their dependants can therefore have great difficulty in obtaining compensation.

The Act provides for lump-sum payments to be made to sufferers based on the age of the sufferer and the level of disability. Higher amounts are paid to

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people with higher levels of disability and where the disability arises at an early age. Currently, the average payment to sufferers is around £18,000. A claim can also be made by the sufferer’s dependants after his death, but in this case a lesser amount is paid. The average payment to dependants is currently around £6,000.

Three conditions must be satisfied before any payment can be made. First, the sufferer must be entitled to industrial injuries disablement benefit. Secondly, there must be no relevant employer who can be sued. Finally, no court action can have been brought, nor any compensation received, in respect of any of the diseases for which a person is claiming under the Act.

The Act covers five respiratory diseases, most of which are directly related to asbestos exposure. These are: mesothelioma; pneumoconiosis, which includes asbestosis; diffuse pleural thickening; primary carcinoma of the lung; and byssinosis. It is worth emphasising that these lump-sum payments are in addition to a weekly payment of industrial injuries disablement benefit.

Almost 80 per cent of claims paid under this scheme are to those suffering from mesothelioma. This is an extremely severe form of cancer and is invariably terminal within a short time.

Last year, this Government reaffirmed their commitment to look into all aspects of the current industrial injuries disablement benefit schemes. As a result, a consultation document was published on 29 January 2007 giving people the opportunity to help to shape future provision for those who are injured or made ill by their work. The consultation ended on 22 April 2007 and a report summarising the responses to it was published on the DWP website in June. The consultation process did not commit the DWP to any particular line of action. We are carefully considering several options put to us by officials.

Members will probably also be aware that a separate consultation exercise took place concerning the level of support for people suffering from mesothelioma. Current provision under the 1979 Act is limited to those who were exposed at work. Many people have been exposed to asbestos outside the workplace or through a relative who worked with asbestos. To address that, we are introducing a new lump-sum payment scheme in the Child Maintenance and Other Payments Bill. This removes the condition that a person must be entitled to industrial injuries disablement benefit in order to be entitled to a lump sum.

Lord Jones: I support what my noble friend proposes; surely these are welcome developments. However, is he able to say how many sufferers from asbestosis are drawing moneys? Will he be able to tell me at a later time?

Lord McKenzie of Luton: I thank my noble friend for that question. I shall try to make sure that he gets an answer by the time that we have finished these proceedings.

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I was referring to the Child Maintenance and Other Payments Bill, and explaining that it provides support for the first time to people who have not contracted mesothelioma as a result of their work. I expect that new scheme to be operative later this year. Our intention is that payments under the scheme will be made within six weeks of the date of claim. That ensures, as far as we can, that the sufferers get some payment during their life. Where that is not possible it will at least provide monetary compensation for their dependants.

Finally—I know we all agree here—no amount of money will ever compensate these sufferers or their families. However, these regulations help us to ensure that the compensation provided in the original Act maintains its value. I commend the uprating of the payment scales to Members of the Committee, and will deal with the specific point raised by my noble friend and other comments made when I wind up. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2008. 7th Report from the Joint Committee on Statutory Instruments.—(Lord McKenzie of Luton.)

Lord Lyell: I am very pleased with all the detail that the Minister gave and am grateful to him; he may be able to silence me fairly quickly and write to me. The noble Lord, Lord Jones, mentioned one of the diseases that might be classified under the label here of “etc”—asbestosis. I seem to remember that, 32 years ago, I had occasion to speak on compensation for three associated diseases—pneumoconiosis, asbestosis and another dreadful disease called byssinosis. Did the Minister mention byssinosis? It seemed to be one of the three associated diseases that would be covered by the regulations. Am I right?

Lord McKenzie of Luton: I explained that five diseases were directly covered by the provisions—mesothelioma; pneumoconiosis, which includes asbestosis; diffuse pleural thickening; primary carcinoma of the lung; and byssinosis.

Lord Lyell: The regulations include byssinosis?

Lord McKenzie of Luton: They do.

Lord Lyell: I am much obliged to the noble Lord. As a good accountant, I shall no doubt listen to the details of whether there is the same compensation for all the diseases or whether it is different for some of them; I suspect that the population of unfortunate sufferers from these three or five diseases will have varying numbers according to the severity of the disease. I would be pleased if he let me have that information in a note in due course, and I shall make way for much more important speakers than myself.

Lord Kirkwood of Kirkhope: I shall make a short contribution to this important debate. I welcome these regulations. The Government are to be

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congratulated on what they have done in the recent past. It has taken a long time to get here, and there has been a lot of suffering, but we are beginning to get on top of it now. That is extremely welcome.

I shall make three points. The first is about indexation, which is the most readily available means of making sure that these payments do not fall behind earnings and retail price increases. That is a sensible way of making progress on benefits that are merely about money, but payments of this kind depend so much on the medical conditions, the background and the context in which the awards are given and in which the amounts are paid. I know that under the Social Security Contributions and Benefits Act 1992 there is a duty on the Government to look at indexation in respect of certain benefits. I wonder whether just looking at the numbers is enough. I would like an assurance that there is a medical dimension to the investigation that goes on before a final decision about the level of the annual uprating is made by Ministers. Medical science may make progress, or we may discover more and more that these terrible illnesses are more severe than we originally thought. Can we have an assurance that the uprating calculation is more than merely financial and that thought is given to some of the medical dimensions to the problem?

Secondly, I know the department inherited the scheme in 2003, and I have no evidence to think that it has any problems with it. However, like other Members of the Committee, I am all too well aware that the constraints of the Comprehensive Spending Review on the departmental spending envelope for 2008-11 mean that the administrative pressure under which the department will be administering some of these schemes will increase. Can we have an assurance that there will be no delays in assessments, payments or the processing of the applications? There are Members of the Committee who spent a lot longer than me campaigning honourably and gallantly for this system to be set up. I would not like to think that delays might happen just because we are not watching urgently and clearly enough to see that the falling Civil Service headcount, administrative back-up and resources available to the department mean that there is slippage in the consideration of claims. That would be unfortunate, particularly with regard to the severity of the conditions of some of the claimants and the long road they have had to get to the scheme as it currently is.

Finally, I do not know the answer to this question, so it is a dangerous kind of question to ask. Is there co-ordination with the devolved Administrations in Scotland and Wales? There are some differences in the way that NICE in England and its equivalent north of the border deal with some of the treatments and with the more medical dimensions of the background to this problem. I guess that in Wales and in some of the former shipyard areas of Scotland there is potentially a much higher incidence of some of these diseases, and I would like to think that this scheme is being run in close co-ordination so that best practice and maximum assistance can be given through a co-ordinated drive to try to make this scheme as successful as it should be.

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It is an important scheme. The Government deserve credit for setting it up and for the state it is in. I am sure we are all on the same side in striving to make it even better in future.

Lord Jones: I, too, am grateful for the details given by the Minister, and I am glad to follow the informed remarks of the noble Lord who speaks for the Liberal Democrats. In the south Wales coalfield there is huge interest in these matters even today. The interest is clearly based on the experience of tens of thousands of miners who need these regulations.

I pay tribute to the magnificent work done in another place by many Members of Parliament over many years to obtain the payments that are now coming forward. The noble Lord, Lord Lyell, mentioned asbestosis. It might help your Lordships if I remind the Grand Committee that, in the early 1980s, the late right honourable Lord Harold Walker had charge on the opposition Front Bench of matters relating to asbestosis. I had the privilege of working with him, and we both worked under the leadership of the noble Lord, Lord Varley. I simply make these remarks to help put these excellent regulations into context. Departments, which work for many years and months on the production of regulations such as these, may be able to have a slight historic context to work by in the future.

3.45 pm

Lord Skelmersdale: It is obvious from the remarks that have been made by all noble Lords that the whole Committee is extremely grateful to the Minister for explaining these regulations to us. One of the problems of speaking last, even in a short debate such as this, is that much of one’s thunder has already been stolen. On these occasions I have a regular question for the Minister who is to respond, which I will come to in a minute.

The horrendous diseases to which these regulations refer are all ailments of the lung occasioned either by mining or by the inhalation of asbestos fibres, which may or may not be accompanied in the case of pneumoconiosis by tuberculosis.

I was rapidly looking through last year’s Hansard of this debate when the noble Lord, Lord Kirkwood, was speaking because I seem to remember being told some years ago that the claims were only fractionally greater than the successful payments in these cases of the diseases we are discussing today. Perhaps the Minister could confirm that. I seem to remember that in the year in question there was something in the order of 2 per cent in it.

As we have heard, the regulations uprate the statutory compensation scheme by 3.9 per cent to maintain alignment with other social security benefits, which we will deal with later. Although the Government do not have to increase the rates of payments, they said shortly after coming into office that they would do so. So, here we are again and I and thousands of sufferers appreciate very much their so doing.

However, it occurs to me that with the Child Maintenance and Other Payments Bill currently going through Parliament, with Part 4 covering mesothelioma

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which of course fits into this series of diseases, the department could well have proposed altering the Pneumoconiosis etc. (Workers’ Compensation) Act to add these uprating regulations, which never do anything else, to the Social Security Benefits Up-rating Order, which does exactly the same job for the full range of other social security benefits. It would not be beyond the wit of the draftsman to change both the parent Act of these regulations and the Social Security Administration Act to achieve this objective. I might even be tempted to do it myself, given the unlikely nod and wink from the Minister. Whatever the response to that suggestion, my track record of favourable responses from Ministers in the DWP is far from first class.

Like the noble Lord, Lord Jones, and my noble friend Lord Lyell—although I would not be quite as specific as they were in referring to particular diseases covered by the regulations—I would be grateful to know how many claims there were last year. Although I appreciate that, for many of the diseases we are considering, people may suffer for many years—pneumoconiosis, for example, may last for 40 years—the trouble is that it is identified only at the very last moment; at that point, there can be death within months. I would therefore expect the number of claimants to decrease over time. Has that decrease yet manifested itself?

I note that last year, the noble Baroness, Lady Morgan of Drefelin, who spoke for the DWP on a similar order, referred to the,

There is a latent period, as I have said.

In the debate in another place last week there was a question about why pleural thickening was compensable when pleural plaques were not. Although I am advised that the former can kill whereas the latter are symptomatic, I would be grateful for the Minister’s answer—not least because the subject of pleural plaques exercises the minds of some Members of another place and one or two noble Lords with regard to the Child Maintenance and Other Payments Bill.

Finally, I am pleased to repeat that I support the regulations.

Lord McKenzie of Luton: I thank all noble Lords who have spoken and warmly welcomed the proposals. I shall seek to deal with all the questions that have been raised.

First, on the question asked by the noble Lord, Lord Skelmersdale, on the number of claims, the position is that total claims received up to March 2007 are 27,101, while the total claims paid to that date are 19,214. The issue is that those are lump-sum payments; there is no continuing payment beyond that lump sum.

My noble friend Lord Jones asked about the overall statistics. I do not have the overall data on the number of people claiming industrial injuries disablement benefit, but I shall write to him on that.

On the scale of annual incidence, focusing on claims for mesothelioma, which represents 70 per cent of the total number of claims made under this scheme, in 2005 there were 2,037 deaths. The

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statistical research done by the HSE suggests that the number of mesothelioma deaths is expected to peak, with some 2,450 deaths between 2011 and 2015. That will give the noble Lord some idea of the scale, but I shall write with more specific information.

Lord Jones: I am grateful to my noble friend for handling my query. He may know that the nation first took an interest with urgency in the problem of asbestosis when it became clear in the late 1960s that a workforce in a factory in Hebden Bridge literally played snowballs, as it were, with blue asbestos. It was from thereon that the tragedy that is now unfolding had its origins, in part at least. That is why I wished to pay tribute to the late Lord Harold Walker, because I saw the passion and insight with which he made his case. I also saw Ministers for the Administration of the day responding as well as they could.

Lord McKenzie of Luton: I thank my noble friend for that information. I take this opportunity to acknowledge, and thank him for, the campaigning work that he has done in this area. He talked particularly about the impact of this legislation on miners. Previously, miners have been able to access the 1974 scheme, which is different from the one before us today, but following the dissolution of the British Coal Corporation on 27 March 2004 it became possible for miners to access compensation under the 1979 Act scheme as well, although there are some issues about how that works.

Lord Jones: Again, I am grateful. My noble friend reminds me that when I served under Prime Minister Harold Wilson in his fourth Administration in 1975, I received a deputation from the South Wales Miners led by Emlyn Williams. He made the case for what eventually became these very payments. Again, I use the word “passion”. His delegation knew what the problems were in the valleys of south Wales, from the anthracite fields in the west through to the eastern valleys. Of course, these problems did not simply relate to south Wales; they could also be found in the north in parts, but they largely related to the south Wales valleys.

Lord McKenzie of Luton: Again, I am grateful to my noble friend for those fascinating insights. It is a key bit of Labour history which some of us read about in books in the 1970s, and to hear directly from someone who was engaged in that and worked with a great Prime Minister as well is indeed fascinating.

The noble Lord, Lord Lyell, asked which diseases were covered. I confirm that byssinosis is covered. He asked specifically whether the same rates were applicable to each of the diseases. As I explained, the rate of compensation is determined in part by the age of the sufferer and the degree of disability that the disease demonstrates, although mesothelioma is always compensable at the highest rate of 100 per cent. However, generally the same tables apply to all the five conditions that I listed. I hope that that deals with the noble Lord’s point.

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The noble Lord, Lord Kirkwood, asked about indexation. I reiterate that there is no statutory requirement for this, although there is a government commitment to it. I think that that commitment is clearly on the record and we do not necessarily need to embody it in legislation. The change is driven by the RPI adjustment; there is no reassessment along the way in terms of medical issues and evidence. The noble Lord asked for an assurance that pressures on the department would not impact on the claims process. I reassure him that, whatever pressures the department is under, they will not impact on administrative effectiveness in delivering the benefit.

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