A number of noble Lords spoke about other matters which could be introduced to this Bill. We heard from the noble Baronesses, Lady Howe and Lady Healy, about women offenders not being specifically discussed. We also heard a very interesting idea from my noble friend Lord Beecham about a court for veterans, which I hope he will take forward.

I want to raise a point that was mentioned by a number of Peers. That is the possibility of an increase in the overall custody levels because magistrates or sentencers would be using a custodial sentence for people who breach these sentences. In my experience, magistrates use custodial sentences as an absolute last resort. This is not a new problem. It is a very real dilemma when one has a repeat breacher of a community order, for example, for perhaps a relatively minor matter, but they just do not comply with the provisions of the community order. I believe that magistrates should, as a very last resort, have the possibility of enforcing custody, otherwise there will be even less incentive for certain people to comply with their community order.

Finally, I want to pursue the point raised by the noble Baroness, Lady Linklater, about the transition from youth to adult, and the work from the YOTs to the probation service. This was not addressed by any other Peer. It is a very important and practical point, and as the noble Baroness very rightly said, the YOTs—the ones I have worked with—have a more nurturing role, if you like, in trying to help young people. When they move to the probation service, it is quite often an unpleasant surprise for them. I hope we may explore that more fully.

In conclusion, we have the introduction of a payment system which is untested anywhere in the criminal justice world, the abandonment of the pilot schemes, and the removal of the 35 probation trusts and their replacement with a centralised commissioning service. We will judge this Bill in the wider context of the Government's rehabilitation strategy. We agree with many of the specific provisions of this Bill itself. Reducing reoffending while maintaining public safety must be any Government's objective, but ill-thought-out policies based on an unproven ideologically driven funding policy risks the very services which this Bill seeks to enhance.

5.46 pm

Lord McNally: My Lords, first, I thank the noble Lord, Lord Ponsonby, for that measured response. I thought his peroration wandered into Beecham territory, but for the most part it was moderate and constructive, and for that I am most grateful. I see him as a kind of

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David Beckham figure, coming to dazzle us on the Front Bench and then all too soon going away again. However his participation today and, I hope, in Committee and at other stages of the Bill is now guaranteed.

It is very difficult responding to so comprehensive a debate. It is one where Governments can never win. We pilot, analyse and consult, and then we run out of steam. If we push ahead with radical ideas, we are going too fast and failing to consult. I am not quite sure how to respond to the tour de force of the noble Lord, Lord Ramsbotham. He ended on “The Tempest”, but his message was more from “Life of Brian”. He is quite sure that the Secretary of State is,

“not the Messiah, he’s a very naughty boy”.

One rather more serious point, which I make in all comradeship to both the noble Lord, Lord Ramsbotham, and my noble friend Lady Linklater, is that sometimes if a department makes any move at all, they are so precise about what is wrong that you lose all sense of whether they are supportive of at least the attempt. Of course, there are questions about so radical and innovative a policy. I will try to cover some of them in this reply and I will also look forward to a very thorough examination in Committee.

Since he was one of the last speakers and his name is at the top of my pile of notes, perhaps I may thank my noble friend Lord Bates for his intervention. It gave me a breather and he made a very important point about education. We will be bringing forward thoughts on education and its place in the youth sector, but it also has an important role to play in rehabilitation in the adult sector. It ties in with a point that is often made by the noble Lord, Lord Ramsbotham, about mentoring and the benefit of initiatives such as the Toe by Toe project, whereby literate prisoners help illiterate prisoners to master reading and writing.

I will try to cover the major points in my response and note some of the key ideas. I will follow up the idea from the noble Lord, Lord Beecham, on ex-service personnel because there is growing concern about how many of our ex-servicemen seem to end up in the criminal justice system as offenders. We will look at ideas that have worked and we will certainly follow them up.

A number of noble Lords expressed concern about whether there will be scope for small providers. We intend to put in place market stewardship arrangements so that the smaller voluntary and community sector providers can bid to be a prime provider or to be a partner. We are running a two-part £500,000 grant to support VCS organisations to overcome the barriers to participating in the rehabilitation reforms and, as has been said, this morning my right honourable friend the Deputy Prime Minister announced further funding. I should also like to follow up with my noble friend Lord Marks the idea of a chartered institute of probation officers or some such body. That is something that sits well with the idea of a National Probation Service. I have said many times from this Dispatch Box that I have great admiration for the probation service and at no time have I suggested that it is the fault of the service that we have a 56% rate of reoffending, or indeed any other percentage. The service does an excellent job. What we are doing here is not a

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condemnation of the probation service but an attempt to restructure provision in a way that gets us better value from the money that we are making available for rehabilitation. I take the point made by a number of noble Lords, including the noble Baronesses, Lady Howe and Lady Healy, about women. It is something that we may explore in Committee.

I will deal with some of the broader points made by the right reverend Prelate the Bishop of Newcastle later, but I do not think that ever in my political life have the words, “Public is bad, private is good”, passed my lips. It is an absurd assumption and is certainly not part of the motivation behind this Bill. However, diversity, variety and flexibility are good, and those are what we are trying to promote in what we are doing. I will deal with the matter of breach, raised by my noble friend Lady Berridge, later, but perhaps I may flag up that I have visited one of the Clink restaurants, and very good it was too. They are a real and functioning example of rehabilitation; the hospitality world is one in which the range of skills required matches well with those of prisoners.

I have noted the point made by the noble Baroness, Lady Armstrong, that the previous Government themselves examined payment by results and were none the worse for that. As we have pointed out before, much of this restructuring depends on the 2007 Act. I am not scoring points here; I just want to make the point that it has been a direction of travel for a long time in both prisons and probation because, as has been said a number of times, the private and voluntary sectors have been involved in rehabilitation for a long time. I have seen provision by St Giles Trust, Turning Point and others that demonstrates that. We want to look again at social investment bonds. As the noble Baroness said, they could and should be a major long-term part solution to some of the issues we face. However, I acknowledge her experience and take her advice about the need to find a long-term basis for such investment.

My noble friend Lord Dholakia let it out of the bag that he is my long-term mentor on criminal justice matters, and I hope that I am all the better for that. He made the important point that we should not confuse voluntary with amateur. The voluntary sector has a great deal of professionalism to give us in this area. I hope also that we can press forward on the Rehabilitation of Offenders Act 1974, and we certainly intend to do so as soon as possible.

I take on board the warning from the noble and learned Lord, Lord Woolf, that we should proceed with caution and about the danger that what we are doing will somehow legitimise and justify an inflation in short-term sentencing. I do not think that will happen. As the noble Lord, Lord Ponsonby, recognised, we are talking to magistrates and the Sentencing Council with this very much in mind. The noble and learned Lord also made the point that this kind of attempt has been made before with custody plus, and we will try to learn some of the lessons from that.

As well as raising the issue of women in prison, which I am very willing to explore further in Committee, the noble Baroness, Lady Healy, warned against setting

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people up to fail. I see that as a proper warning and one that we will take to heart when putting these reforms in place. I was glad that my noble friend Lady Linklater welcomed the emphasis on mentoring. She, too, expressed concerns about the probation service and mentioned that it is now 100 years old. I do not believe that we will lose the skills base through these reforms. They will be redeployed across the sector. However, I will say quite frankly that I believe that a National Probation Service along the lines that we are contemplating will have far more status and influence on policy than the service did as, if I may say, the poor relation of NOMS within the Prison Service. Under our new structure, the National Probation Service will have within NOMS direct reporting to the Secretary of State, and I think that that is an advance on what has gone before. My noble friend Lady Hamwee also welcomed mentoring, and I take to heart the importance of getting a complete buy-in to this from prison staff.

I suspect I shall run out of time for all the other issues. We are trying to give discretion to the courts when they are sentencing. Applying the provision to all offenders then setting the appropriate level of supervision is a much more practical approach than deciding at the time of sentencing not to supervise an offender and then realising too late that they actually pose a risk of reoffending and need supervision. A blanket, one-size-fits-all type of supervision will not be applied; there will be proportionality and judgment in taking this forward. The noble Lord, Lord Beecham, gave an example of somebody who has been in prison for an offence that is unlikely to be recommitted and has a minimum requirement for supervision: that is exactly what will happen.

My noble friend Lord Dholakia, the noble Lord, Lord Beecham, the noble and learned Lord, Lord Woolf, and the noble Baroness, Lady Healy, spoke about the danger of raising the threshold for imposing custodial sentences. The Bill is focused on improving rehabilitation for those whom the court decides need to go to prison. We have already made changes to the community order in the LASPO Act and the Crime and Courts Act to ensure that sentencers have tough community sentences at their disposal. The fact remains that, as the noble Lord, Lord Ponsonby, said, some people need to go to prison, even if only for short periods. The current custodial threshold is already high. The court must not pass a custodial sentence unless it is of the opinion that the offence is so serious that a final community sentence cannot be justified. Other matters on the details of application would be better left to be dealt with in Committee.

The noble Baroness, Lady Berridge, asked me specifically whether 14 days committal for breach activates its own 12 months of supervision. It does not: committal is the ultimate sanction for breach but the objective is to get the offender back on to the original rehabilitation programme. That also covers how we intend to extend this to 50,000 offenders and apply it with a sense of proportion in each specific case.

On the question of women, we have, through my honourable friend Helen Grant, taken on a women’s advisory board and will be taking forward proposals on female offenders. I welcome the opportunity to discuss this in Committee.

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A number of noble Lords, including the right reverend Prelate the Bishop of Newcastle, the noble Lord, Lord Beecham, my noble friend Lord Dholakia and the noble Baroness, Lady Berridge, raised concerns about the participation of small charities. Our reforms will open up the probation service to a far wider range of potential providers. We want to encourage partnerships between voluntary or charitable organisations and between VCs and the private sector. In reply to the right reverend Prelate the Bishop of Newcastle about faith group involvement in rehabilitation, I recently went to Liverpool as a guest of the right reverend Prelate the Bishop of Liverpool and saw some of the projects being run there. The noble Baroness, Lady Healy, may be interested to know of Adelaide House, a very interesting project for the resettlement of women offenders. I want to put on record my appreciation of all the faith groups, which already have a network and a committed flock who readily make themselves available for rehabilitation work. That is something we want to work with and build on. In St Albans and Norwich, which I have visited in the past couple of years, the cathedrals are being used as centres for getting the various groups together on projects that work.

Lest I get into trouble for going on too long, I will just deal with the question of payment by results. Our payment mechanisms will ensure that providers have to work successfully with all offenders, including the most prolific and hardest to help, if they are to be paid in full. There will be a fixed fee for service, ensuring that they deliver the sentence requirements, and licence conditions for every offender. The remainder of their payment will be dependent on the reductions they make in reoffending. To be paid in full, providers will need to achieve an agreed reduction in both the number of offenders who go on to reoffend and the total number of offences committed by those in their cohort. So they cannot just focus on the easy wins; they will have to work with the most prolific offenders and keep working with those offenders who have already reoffended. We will be developing the details of our payment mechanism in discussions with providers and practitioners. I am sure that will be developed in Committee.

Lord Beecham: Could the noble Lord clarify whether it is the intention to bring those details back to the House or to Parliament for approval? In what way will there be parliamentary scrutiny of the detail?

Lord McNally: Those are matters of contract with the providers, but the noble Lord can probe me further on that in Committee, when I will try to give more specific answers.

It does not surprise me, given the speakers list today and the range of experience and expertise on view, that a lot of questions have been asked. I hope we can delve deeper into this in Committee. I do not accept that this is not worth pursuing. Most people have welcomed the objectives and, as I have told the House before, we must accept that, in these straitened times, the department cannot call on other resources to fund ambitious programmes. However, we are spending just less than £1 billion on the wide range of rehabilitation services. We have heard about holistic approaches and making sure that we have buy-in from other departments and from local government; these are all important to

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its success and I passionately believe it is worth trying. I understand the dangers but, in the end, you can spot so many dangers that you are paralysed. I do not believe that is the right approach. We should press ahead with this, let this House use its expertise to examine it in detail and see if we can put in place a piece of legislation that will give the framework to bring in ideas, flexibility, innovation and value for money in an area where there is a great deal of common agreement about objectives, as today’s debate has shown. As we take this Bill forward, our job is to see if we can tease out the practicalities so that it is also effective. I beg to move.

Bill read a second time and committed to a Committee of the Whole House.



6.10 pm

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, with the leave of the House, I shall now repeat a Statement made earlier today in another place by my right honourable friend the Foreign Secretary, on Syria. The Statement is as follows.

“Mr Speaker, with permission I will make a Statement on the conflict in Syria, which continues to worsen.

The Syrian regime’s military offensive against opposition-held areas around Damascus, Homs, Idlib, Hama and Aleppo is intensifying, with complete disregard for civilian life. The death toll has doubled in the first five months of this year, and now stands at an estimated 80,000 people. There have been well verified reports of massacres around Damascus by regime security forces, and communities killed in cold blood in villages around Baniyas. Online footage has shown bodies heaped in the streets, and children butchered in their homes. Ten thousand people are believed to have fled the area in panic created by these brutal killings. And last week there were unconfirmed reports of further attacks using chemical weapons.

Over 4 million Syrians are internally displaced and a total of 6.8 million are in desperate need, including 3 million children. It is horrifying to imagine what life must be like for these children, witnessing violence and death on a daily basis, and enduring trauma, malnutrition and disease. This suffering has devastating consequences. It is undoubtedly contributing to radicalisation in Syria. Syrian people are facing a regime that is using warplanes, helicopter gunships, heavy artillery, tanks, cluster munitions and even ballistic missiles against them, often without them having the means to defend themselves and their communities. The conflict is therefore creating opportunities for extremist groups. Syria is now the number one destination for jihadists anywhere in the world today, including approximately 70 to 100 individuals connected with the United Kingdom.

It is also endangering regional peace and security, with over 50 people killed in a bombing in Turkey last week, the kidnapping of UN peacekeepers in the Golan Heights, cross-border shelling and clashes on

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the Lebanese-Syrian border. Half a million Syrians have become refugees in the last 10 weeks alone, bringing the total number of refugees to 1.5 million, 75% of whom are women and children. The UN assesses that, by the end of this year, on these trends, more than 3.5 million, or 15%, of Syria’s total population will have become refugees. And the Foreign Minister of Jordan has warned that Syrian refugees are likely to make up 40% of his country’s population by the middle of next year, with similar numbers predicted for Lebanon.

One of two scenarios lies ahead for Syria: on the one hand, an ever more savage conflict and military stalemate, producing an even bigger humanitarian disaster, greater radicalisation and deeper sectarian divisions, further massacres, and even the collapse of the Syrian state and disintegration of its territory; or, on the other hand, what we must strive for—a negotiated end to the conflict which ends the bloodshed and leads to a new transitional Government, enabling refugees to return to their homes and extremism to be contained.

All our efforts as the United Kingdom are devoted to bringing about such a political settlement, and to saving lives. We have provided over £12 million in non-lethal assistance so far, including to the Syrian National Coalition. This includes vehicles with ballistic protection, body armour, trucks and forklifts, solar power generators, water purification kits, equipment to search for survivors in the aftermath of regime shelling, computers, satellite phones, and office equipment to help people in opposition-held areas.

We have provided human rights training and support to members of Syrian civil society. We have supported human rights investigation teams to collect documentary, photographic and interview evidence of abuses, and trained medical staff to gather forensic evidence of torture and sexual violence. This material is being made available to the UN commission of inquiry and other international investigative bodies so that those involved in human rights violations can be held to account. We therefore welcome the resolution sponsored by Qatar, which was adopted by the UN General Assembly on 15 May by 107 votes to 12, urging accountability for human rights violations and progress on a political transition as well as humanitarian assistance to Syria.

The Prime Minister announced last week that we would double our non-lethal assistance this year to £20 million. This will be used to help provide services to the Syrian people, deliver assistance to them on the ground, forge links between different communities and opposition groups, and support better communications. Our humanitarian funding to date totals £171.1 million, including £30 million announced by the Prime Minister last week in support for people in need in opposition-held and contested areas of Syria. Much of our funding is going to support refugees in Lebanon and Jordan. We have already provided food for over 150,000 people, clean drinking water for over 900,000 people and over 280,000 medical consultations for the sick and injured. The Government have worked hard to urge other countries to meet their commitments to the UN

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humanitarian appeal for $1.5 billion. This is now 71% funded, and we will continue to urge other countries to do more.

We are increasing the support we are providing to Syria’s neighbours, including providing equipment to the Jordanian armed forces to help them deal with the immediate needs of the Syrian refugees at the border and to transport them safely to international humanitarian organisations. We have provided funding to the Lebanese armed forces for four border observation towers, to help reduce cross-border violence in key areas and to protect and reassure local communities. And we are also working with the Syrian National Coalition and key international supporters to develop plans for transition and Syria’s post-conflict needs, building on the conference we held at Wilton Park in January.

The international focus must, above all, be on ending the crisis. To that end, we are stepping up our efforts to support the opposition and increase pressure on the regime, in order to create the conditions for a political transition.

On 20 April I attended the meeting of the core group of the Friends of the Syrian People in Istanbul, where a new ‘compact’ was agreed with the Syrian National Coalition. The coalition issued a declaration committing itself to a political solution and transition, promising to guarantee the rights of all Syria’s communities and rejecting terrorism and extremist ideology. It pledged to preserve the Syrian state, uphold international law, guarantee the safety and security of chemical weapons in Syria and work to keep weapons out of the hands of extremist groups; commitments which I am sure the whole House will welcome. In return, the core group nations agreed to expand support to the coalition and its military council, as the United Kingdom has already done. We are working as I speak to broaden and unify further the Syrian opposition.

On 8 May in Moscow, Secretary Kerry and Foreign Minister Lavrov agreed the basis for a new international conference bringing together representatives of the regime and the opposition. The Prime Minister visited Russia on 10 May for talks with President Putin to cement understanding about the purpose of that conference. He held further talks with President Obama in Washington on 13 May and spoke again to President Putin last Friday. In our view, the conference, which should be held as soon as possible, should be focused on agreeing a transitional governing body, with full executive powers and formed by mutual consent, building on the agreement we reached at Geneva last year.

We are urging the regime and the opposition to attend the conference and to take full advantage of the opportunity to negotiate. In the end, there will have to be a political and diplomatically supported solution, if there is to be any solution at all. There is no purely military victory available to either side without even greater loss of life, the growth of international terrorism and grave threats to neighbouring countries.

The Prime Minister and I have also spoken to UN Secretary-General Ban Ki-Moon about the conference, and we continue to support Special Envoy Lakhdar Brahimi in his role. I am in constant contact with Secretary Kerry about the preparations. Tomorrow I will travel to Jordan to meet him and other Foreign

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Ministers of the core group on Wednesday, and on Monday I will go to Brussels for the EU Foreign Affairs Council. The EU should give strong support to this diplomatic process, including by agreeing further amendments to the arms embargo, without taking any decisions at present to send arms to the Syrian opposition.

The case for further amendments to the arms embargo on Syria is compelling, in order to increase the pressure on the regime and to give us the flexibility to respond to continued radicalisation and conflict. We have to be open to every way of strengthening moderates and saving lives, rather than the current trajectory of extremism and murder. We have not sent arms to any side during the conflicts of the Arab spring. No decision has been made to go down this route and if we were to pursue this, it would be under the following conditions: in co-ordination with other nations, in carefully controlled circumstances, and in accordance with our obligations under national and international law.

The United Kingdom and France are both strongly of the view that changes to the embargo are not separate from the diplomatic track, but essential to it. We must make it clear that if the regime does not negotiate seriously at the Geneva conference, no option is off the table. There remains a serious risk that the Assad regime will not negotiate seriously. This is the lesson of the last two years, in which the regime has shown that it is prepared to countenance any level of loss of life in Syria for as long as it hopes it can win militarily. We also have to persuade the opposition to come to the table; recognising how difficult it is for them to enter into negotiations with a regime engaged in butchering thousands of people.

There is a growing body of limited but persuasive information showing that the regime used—and continues to use—chemical weapons. We have physiological samples from inside Syria which have shown the use of sarin, although it does not indicate the scale of that use. Our assessment is that chemical weapons use in Syria is very likely to have been by the regime. We have no evidence to date of opposition use. We welcome the UN investigation, which in our view must cover all credible allegations and have access to all relevant sites inside Syria. We continue to assist the investigation team and to work with our allies to get more and better information about these allegations.

The UK holds the presidency of the Security Council next month, and we remain in favour of the Security Council putting its full weight behind a transition plan if it can be agreed. All our efforts are directed at ensuring that the coming conference in Geneva has the greatest possible chance of success. We are entering in the coming weeks a period of the most intense diplomacy yet, to bring together permanent members of the United Nations Security Council, to attempt to create real negotiations and to open up the possibility of a political solution. The Prime Minister is fully committed to these efforts and the central role of the Foreign Office over the coming weeks will be to support this process. At the same time our work to save lives, to help to stabilise neighbouring countries and to support the national coalition inside Syria will continue to be stepped up.

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With every week that passes we are coming closer to the collapse of Syria and a regional catastrophe, with the lives of tens of thousands more Syrians at stake. We are determined to make every effort to end the carnage, to minimise the risks to the region and to protect the security of the United Kingdom”.

My Lords, that concludes the Statement.

6.23 pm

Lord Wood of Anfield: My Lords, I thank the Minister for the Statement. We have all watched events unfold in Syria with increasing horror, and we on this side of the House share the determination that Britain plays its part, in partnership with the international community, in helping to bring about a cessation of violence. I shall ask questions about three aspects of the Statement: first, arming the Syrian rebels; secondly, efforts to bring about a long-term settlement in Syria; and thirdly, humanitarian assistance to the victims of this horrific war.

I begin with the issue of arming the rebels. The Prime Minister has suggested in recent months that arming the rebels is key to tipping the balance and creating peace in Syria. The Statement said that:

“The case for further amendments to the EU arms embargo on Syria is compelling, in order to increase the pressure on the regime and to give us the flexibility to respond to continued radicalisation and conflict. We have to be open to every way of strengthening moderates and saving lives”.

This signal should not surprise us. In recent weeks, there have been reports of a confidential document that sets out a range of options that would allow the UK to send lethal support to Syria’s opposition. The Statement had carefully chosen words on this subject. However, I believe that the prospect of what could be a decade-long sectarian civil war in Syria, fuelled in part by weapons supplied by us or others, should give the Minister and her colleagues serious pause for thought before embracing that course of action.

The struggle in Syria today is between forces funded and armed by outside sponsors, notably Saudi Arabia, Qatar and Iran. Also participating are foreign religious groups, not directly controlled by the sponsors, namely the Sunni, Salafist and Iranian-aligned militias, together with anti-western al-Qaeda-aligned fighters. So will the noble Baroness answer these questions? If the Government’s priority is peace, how does contemplating arming the rebels address the central question faced by the international community: how to create a sustainable political settlement in a fractured country? Surely future actions or policies of the UK Government should be adopted only on the basis of their capacity to contribute to that peaceful outcome.

Syria today is awash with weaponry. So what is the Minister’s assessment of how much weaponry would be required to tip the balance against Assad, and how in practical terms will the Government ensure that if they supply weapons they do not fall into the hands of al-Qaeda supporting jihadists? The choice for the international community today is not between sending military support to Syria’s opposition and doing nothing. Assad is sustained by external support from Russia and Iran and the foreign funds that allow him to pay his forces. Will the Minister explain why this Statement

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did not place more emphasis on the practical steps that could be taken to choke off Assad’s finances and the country’s energy supplies through the effective enforcement of sanctions?

Secondly, I turn to questions about international efforts at establishing a settlement in Syria, in particular an international peace conference. I agree with the Minister that we should seize the opportunity afforded by the proposed US-Russia conference to try to end the fighting and prevent the Lebanisation of Syria. We will continue to argue for exactly this type of direct engagement with the Russians, as we have done for some time. As a country which has experienced minority rule for 40 years, a comprehensive peace settlement for Syria must be inclusive. So all parts of the country’s diverse society should be involved in this peace conference—whether Alawite, Sunni, Kurd, Shia, Druze or Christian—because it would be wrong to underestimate the fear, particularly in the Alawite community, but elsewhere as well, that a change from minority rule to democracy provokes.

We have learnt from recent history that when a country with such a range of religious and ethnic identities emerges from a bloody war, communities can be slow to trust each other again. In this regard, will the Minister tell us what lessons she draws from the experience of Syria’s neighbour Iraq, where the disbanding of the Ba’ath Party and its associated structures contributed to the challenges that that country faced in the immediate post-war period? Will the Minister also explain the Government’s assessment of the scale of post-conflict planning by partners in the international community currently under way and what role our Government play in facilitating that? Will the Minister also assure the House that in the Government’s conversations with the Syrian national council and with our allies, they are making the case for the importance of a peace conference which genuinely involves all parts of Syria’s diverse society?

Thirdly, I turn to the issues around humanitarian assistance. We strongly welcome the Government’s humanitarian funding for the Syrian people, but I am sure the Minister accepts that Britain alone cannot take on the burden of upscaling the humanitarian response in Syria in the wake of a peace agreement. It is vital that the Foreign Secretary delivers on the pledge he made at the G8 Foreign Ministers’ meeting he chaired, when he said that his priority was,

“ensuring that donors who generously pledged their support at the Kuwait conference fulfil their commitments”.

What are the Government doing to ensure that all those commitments from different countries are turned into payments to help rebuild Syria? I finish by asking the Minister for a final assurance: that before any decision to loosen the EU arms embargo is taken, she or a colleague will come in advance to this House and make the case for doing so?

6.29 pm

Baroness Warsi: My Lords, first, I thank the noble Lord for being so supportive. The Opposition have been incredibly supportive of the various initiatives that we have brought before this House and the other

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place, and in terms of the many briefings that have been given to individual Ministers. I will try to address some of the specific issues that he raised.

None of the options is without risk. This is an extremely difficult and protracted dispute. The noble Lord referred to the various factions, whether they are theological, within tribes or relate to concerns about minority rule over a long time. We recognise and acknowledge this difficulty. This dispute has gone on for as long as it has precisely because there are no easy answers.

However, I assure the noble Lord that the arming of rebels, which has been discussed here and in the other place, is not something upon which a decision has been made. The Statement made it clear that the Foreign Secretary and I feel that the amendment to the arms embargo, which is what we are seeking at this stage, allows us the flexibility to continue to put pressure on the regime and say that the situation where those who have the weapons are either the Assad regime or the extremists being funded from elsewhere cannot be allowed to continue.

The noble Lord is right: Syria is awash with weapons. I do not think there is an answer as to how much weaponry is required before a political solution can be reached. As an international community, we have two responsibilities: first, to ensure that people are given the opportunity to defend themselves where a political solution is not immediately obvious; and secondly, to allow the pressure to build to say to the regime that this situation cannot continue and that Assad cannot continue to butcher his own people.

We are absolutely of the view that all communities should be included in the international peace conference. In fact, part of the compact that was agreed with the national coalition earlier this year was about it extending its base and outreach to other communities and ensuring that it was as representative as possible of the Syrian people.

Post-conflict planning is already taking place. The Wilton Park conference in January this year was part of that. We have all learnt the lessons of what happened in Iraq, and we are of the view that we must not dismantle everything that is there. Clearly, that did not work in Iraq, and it is important that we keep what is there and what is workable.

With regard to humanitarian funding, it is important for us to step up to the mark and make the pledges, and I am grateful for the positive comments from the noble Lord. It is also important that we continue to lobby the countries that unfortunately have sometimes chosen to fund and support bilaterally when we are making the case that it should be done through the UN system. The good news is that many more pledges have been delivered. We are at more than 70%, but we use whatever opportunity we have to continue to push for these countries to ensure that the pledges that were made are now put on the table.

I assure the noble Lord that I will use whatever opportunity presents itself to keep the House up to date before any decision is made. There is another Question on Syria listed for just after the Recess, and I know that certain questions were raised when foreign affairs were debated in the Queen’s Speech debate last

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week. I also thank noble Lords for being so gracious when I had to step out of that debate at the very last moment.

The noble Lord will be aware that every member state has to vote to renew the arms embargo. If a single member state were to say no, that embargo would fall. At this stage, we are negotiating for an amendment to provide us with some flexibility, and as soon as I have further information I will, of course, come back to the House with an update.

6.34 pm

Lord Wright of Richmond: My Lords, I will address the first of the questions put by the noble Lord, Lord Wood, and I will be as brief as possible.

Has the Minister read a very pertinent article in the latest issue of the Spectator, by my former colleague, Sir Andrew Green? He is probably better known to your Lordships as head of Migration Watch, but in this case he is speaking as a former ambassador to Syria, like me. Will the Minister please draw that article urgently to the attention of her right honourable friends before they take any decision? I note that the Statement says that no decision has yet been taken to supply arms to the rebels. The article’s headline is:

“Arm Syria’s rebels? That would be pouring petrol on a fire”,

and I beg the Government not to do that.

Baroness Warsi: I have not read that article, but I will make sure that I do and that it is brought to the attention of my colleagues. It is important that a wide range of views is fed into the debate when these decisions are made. I absolutely accept the noble Lord’s concerns about pouring petrol on a fire, but I think that he will agree with me that doing nothing is not an option.

Lord Howell of Guildford: My Lords, I am extremely grateful to my noble friend for setting out the position with such acumen and accuracy. There are two points that she did not mention. First, China has growing influence and concern in this region. Indeed, it relies on the area for more and more of its fuel. What discussions, if any, have there been with the Chinese authorities about them playing a more constructive role, in addition to the discussions with Russia?

Secondly, can the Minister clarify the position of Jabhat al-Nusra? As I understand it, Hezbollah is working with Assad and the Iranians and is fighting against Jabhat al-Nusra. Jabhat al-Nusra has declared that it is in alliance with al-Qaeda. Al-Qaeda and Hezbollah are both dedicated to attacking Israel and, indeed, the West. This is an extraordinary melange. Will the Minister describe how we are going to ensure, now that Jabhat al-Nusra dominates areas of Syria and the opposition, that we are not going to find ourselves helping people who are our direct enemies and a direct threat to further peace in the Middle East?

Baroness Warsi: I will have to write to my noble friend in relation to his first question about negotiations and direct discussions with China. I am not familiar with the extent of those conversations, although I know that some have taken place.

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My noble friend raises a really important point about the complications of the country that we are dealing with and the overlaps and different loyalties of groups at any one time. Extremism deeply concerns us in relation to what is happening in the region and its impact upon the United Kingdom. We have credible evidence that up to 100 young British people, or people connected to the United Kingdom, are out there fighting. It is attractive for people around to the world to go there and fight. We are concerned about the implications of that for the region and for when these people start to come home. That is why when we had the discussions with the national coalition one of the first things that we discussed was extremism. We have a commitment from the national coalition that it will do all it can to ensure that terrorism and extremism do not manifest themselves and grow and that weapons or any support given to the national coalition do not get into the hands of extremists.

Lord West of Spithead: My Lords, my question relates to the chemical arsenal held within Syria. As a military man, I find it very strange that the Syrian Government should use chemical weapons in a piecemeal way. Therefore, attribution is crucial in assessing who is using them. As a military man, although I think that the use of them is reprehensible and that it is a pretty odious regime, if you wanted to use them, you would use them on a major scale to try to get a military advantage.

The Minister is absolutely right that no one can win this militarily. That raises the issue of who is actually responsible for the release of a weapon of mass destruction in Syria. I am sure that this is a RFI—request for information—among our security services, but we need to be very clear about that so we can hold whoever it is responsible. If this is being allowed to be done down at very low unit level, that is extremely dangerous. There is quite a lot to be unpicked in this before we move forward.

Baroness Warsi: We have limited but persuasive information that a chemical weapon has been used. The evidence is that it has been used at a low level in a small way. There is credible evidence of sarin being used but the extent of the use is not clear. The noble Lord raises an important point in relation to why the regime would use it in this particular way.

It is important that we act on this matter in conjunction with the international community. We have sent the evidence to the United Nations. It is important that the United Nations takes a view on the evidence that we and other international partners are submitting. The House will agree that if there is anything we have learnt over the past decade and more it is that before we put into the public domain evidence of chemical or biological weapons or weapons of mass destruction, it is crucial we are clear about when they were used, how they were used and by whom they were used.

Lord Anderson of Swansea: My Lords, I congratulate the Minister and the Foreign Office on their sure-footed approach thus far, but they should heed the wise words of the noble Lord, Lord Wright, about putting fuel on the flames. I have three quick questions. What

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is our policy on the 70 or 100 jihadists resident in the UK when they seek to return home? We know there are many laggards in terms of honouring the pledges made at Kuwait; given that, what is the Government’s position? Do we name and shame or is there a way to encourage those laggards to honour their commitments? Given the poor and tardy response so far, what confidence do we have that any commitments made for post conflict reconstruction are met? Finally, on the international conference, President Assad has already said he will attend. Is it assumed that the opposition will also attend? We understand that Iran has largely subcontracted the air operations there to the Revolutionary Guards. Will Iran be invited to the conference? We know the strong opposition of France to that. What does Russia say about the role of President Assad in the interim period before the next presidential election, and how do we, our EU partners and the US respond to the position of Russia in respect of President Assad?

Baroness Warsi: First, in relation to the 70 to 100 jihadis, we have been working, both domestically and through the advice given by the Foreign Office, to discourage people travelling to Syria. Not only are there risks to them as individuals, but there is concern when these people return. It is not entirely clear who these people are fighting for when they are there. There will be interest in those people when they return, and noble Lords can rest assured that if they have intentions against the United Kingdom, they will be dealt with appropriately. We have a number of programmes, as noble Lords are aware, which deal with radicalisation and extremism within communities.

In terms of the international community, those countries that took part in the first Geneva discussions a year ago will be the countries that will take part in the second conference. It is not intended at this stage to invite further countries; Iran was not one of the countries involved last time, and it is not anticipated it will take part in the negotiations this time. We have no indications to suggest otherwise. The noble Lord may be aware of quite positive comments from the Russians; they do not see that Assad remaining in Syria has to be a precondition and do not appear wedded to a leader. We may have different views on how we handle the situation but, like us, the Russians want an end to the conflict. They see Syria fragmenting, and they want that to stop and the people of Syria to determine who governs them. Like us, they are concerned about the growth of extremism. There are lots on which we agree; there may have been differences on how we get there, but the recent negotiations and the Russians’ commitment to these further peace talks is a step in the right direction.

Lord Kilclooney: My Lords, one of the most alarming developments in Syria in recent months has been the ever-increasing influence of radicalised Muslims in the opposition. It is also reported that Qatar and Saudi Arabia are already supplying arms to the opposition. Have Her Majesty’s Government yet made any representations to Qatar and Saudi Arabia to ensure that they do not supply arms to radicalised Islamic groups in Syria?

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6.45 pm

Baroness Warsi: Qatar and Saudi Arabia have both been part of many of the negotiations, including the Friends of Syria discussions which took place earlier this year. Radicalisation, extremism and the commitment of the Syrian national coalition were a big part of those discussions. The countries which form the Friends of Syria stand by those requirements not to support and foster extremism and radicalisation. There is a huge discussion going on at the moment about what inspires radicalisation and extremism. From a domestic perspective, the ideological basis for radicalisation can take two completely different forms. On the one hand, western intervention in Muslim countries can be seen as encouraging extremists to go out and fight, but there is also growing radicalisation and extremism on the back of what is seen as western inaction while many Muslims are being slaughtered in Syria. There is an argument being put which is more akin to Bosnia rather than to Iraq, and it is important that we bear in mind what different drivers of radicalisation and what drives people to extremism.

Lord Brooke of Sutton Mandeville: My Lords, the Statement reports 1.5 million refugees now, with a current response to the UN humanitarian appeal of 71% of the $1.5 billion for which it is appealing. The Statement goes on to report the further UN assessment that on current trends there will be more than 3.5 million refugees by the end of this year. Have we yet begun to calculate what the financial humanitarian need will be next year?

Baroness Warsi: This is the biggest humanitarian appeal ever. Half the country’s population has been displaced, and we are constantly playing catch-up. The UN relief effort is, despite the 71%, still critically underfunded; it is constantly kept at the table, and we continue to assess it. The longer this goes on, the larger the humanitarian need. Without being able to give specifics about what that humanitarian need will be, we should be even more encouraged to bring this matter to a political settlement so that refugees and displaced people can return to their homes.

Lord Soley: Can I take the Minister back to her penultimate answer about the religious aspect? I agree with her about Bosnia; the failure to intervene radicalised and organised people. What I struggle with, and I am certain the Government do too, is the religious divide and how it is moving. The Sunni-Shia divide is getting wider and was never as it is now. Driven, as it must be to some extent, by divisions between Iran and Saudi Arabia, I wonder what thought has been given to the Sunni-Shia divide. If that becomes, as it may well do, a much wider issue playing out on the streets of Baghdad and elsewhere, we have got a much wider and more complex problem. The Minister has painted a picture which is already complex, but underlying it is a religious divide issue which is feeding some of the battles.

Baroness Warsi: This is something with which the Foreign Office is acutely engaged. The concern, not only in relation to Syria but in the wider region, is that intra-community tension is becoming more apparent

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and support for that intra-community tension compounds that problem. It is a phenomenon of more recent years. On a personal level, my background makes me half Sunni and half Shia. As I was growing up, it was never considered to be that unusual as so many families came from that mixed background. Recent political events have brought certain differences into stark light. We see that not just in what happened in Iraq but in the wider region and also now coming to the fore in places like Pakistan. It is something that we are aware of and about which we are doing a huge amount of work, both on the ground and in strategic thinking at the Foreign Office.

Lord Stoddart of Swindon: I shall be brief because I do not want to repeat the questions that have already been asked, particularly by the noble Lord, Lord Wood, who was perhaps moving a little away from the “me too-ism” that we have had from the Opposition in the past. Is there any movement on the part of this Government and the United States Government in relation to the position of Assad? As long as we and the United States say that we will not treat with Assad, the conflict within Syria is likely to continue for a very long time.

Baroness Warsi:It is not for us, the United States or anybody else to decide who should govern Syria; it is for the people of Syria to decide that. The national coalition, which is a broad coalition, is very clear that it does not feel that Assad can be part of the solution. Assad has slaughtered many of his own people and the consequent break-down of trust between those communities does not allow for Assad to play his part. However, if the Syrian people and the national coalition decided that he could play a part, it should be a matter for them, but it is not something that I can envisage in light of what is happening at the moment.

Mesothelioma Bill [HL]

Second Reading

6.51 pm

Moved by Lord Freud

That the Bill be read a second time.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, every Member of this House can recognise that working people should have proper protection from personal injury or disease arising during their work. When this principle is breached through negligence or breach of statutory duty, it is right that a person should be compensated by their employer or employer’s insurer.

We find ourselves presented with a situation that undermines these seemingly simple assumptions. Many sufferers of diffuse mesothelioma, caused by exposure to asbestos, are unable to find an employer or insurer against whom to make a claim. These people were negligently exposed to asbestos and subsequently developed a fatal disease, yet they must go uncompensated for their immeasurable loss because sufficient records do not exist to trace the responsible insurer or employer. The need to address this is apparent and urgent.

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Government, media and public interest in asbestos-related diseases is long-standing. In 1965, the Sunday Times brought this issue to the spotlight and reported on research showing the fatality of exposure to asbestos fibres. Since then, this spotlight has rightly not gone away. Asbestos-related diseases have featured in the press and on television repeatedly, with dedicated programmes produced in 1967, 1971, 1975 and 1982. In 1979, the then Government legislated to make payments to those with certain dust-related diseases who had been exposed to asbestos at work but who could not find an employer or insurer to sue, although lump-sum payments under that were lower than civil damages. In 1999, the insurance industry created a code of practice for better tracing of employers’ liability insurance policies. Although success rates for inquiries on difficult-to-trace policies increased, more needed to be done. In 2008, the previous Government introduced a scheme to make lump-sum payments to all people with diffuse mesothelioma regardless of whether they were exposed to asbestos at work. I pay tribute to the work of the noble Lord, Lord McKenzie of Luton. In 2010, as Parliamentary Under-Secretary for Work and Pensions, the noble Lord issued the consultation that has led us to where we are now. Without his efforts, this matter would not have had the profile that it so rightly deserves, and due credit must be given for his continued efforts to obtain support for sufferers.

The focus of this Bill is diffuse mesothelioma, a fatal disease caused almost exclusively by exposure to asbestos. Diffuse mesothelioma has a long latency period, often of 40 to 50 years. Once diagnosed, the average life expectancy of a sufferer is short: between nine and 13 months. The long delay between exposure and developing the disease, combined with inconsistent record-keeping in the insurance industry, means that individuals often struggle to trace an employer or insurer against whom to make a claim for civil damages. The insurance industry and this Government recognise that this is unjust and that provision must be made for these people.

Despite the recognition of this market failure, the insurance industry alone has not been able to put this right. Disputes between insurers and the different interests of companies that still offer employers’ liability cover, which I shall refer to as “active” insurers, and those that no longer do so—I shall refer to them as “run-off” insurers—have prevented the industry agreeing on a voluntary levy. Industry representatives have therefore asked for legislation to impose a levy to support a payment scheme.

The Mesothelioma Bill will establish a payment scheme to make a lump-sum payment to eligible sufferers of mesothelioma and their eligible dependants. The scheme will be funded through a levy on insurers active in the employers’ liability market, meaning that the active employers’ liability insurance market as a whole will bear the cost. Timing is key; the number of diffuse mesothelioma cases is expected to peak around 2015. My aim is to launch the scheme as soon as possible—ideally in April 2014.

We expect there to be roughly 28,000 deaths from mesothelioma between July 2012 and March 2024. If the Bill is passed during 2013, first payments could be

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made around July 2014 to those diagnosed with mesothelioma on or after 25 July 2012. Around 300 people a year could receive an average payment of approximately £100,000.

The Bill is first and foremost a means to create a scheme to provide for those people who would otherwise be unable to bring a civil claim against their employer. In other words, it is a scheme of last resort. The driving principle is that, where adequate records are not available, those who have developed this disease as a result of their employer’s negligence, or breach of statutory duty, should still be able to access payment for their injury, and the process of applying for this should be as straightforward as possible.

Secondly, the Bill is part of the ongoing commitment of this Government, previous Governments and the insurance industry to correct a market failure. The Bill includes measures which will improve the tracing of employers’ liability insurance policies through the creation of a technical committee that makes binding decisions on insurance cover.

It is at this point worth reflecting on the work that the Ministry of Justice, too, is doing to support sufferers of mesothelioma. In December, a Written Ministerial Statement was issued confirming the Government's intention to consult on a range of measures, including a specific pre-action protocol for mesothelioma cases, a portal and fixed legal costs for such cases. None of these elements is beholden on our Bill and, similarly, our Bill is not beholden on them, but together they demonstrate the desire across government to help people with this terrible illness.

I turn to the question of payments. The scheme will make payments on a tariff basis to eligible people with mesothelioma, or to an eligible dependant if that person has died, where they cannot trace either an employer who exposed them to asbestos or that employer’s insurer and where they have not received civil damages or some other compensation payment in respect of mesothelioma. The scheme is not intended to be an alternative to civil damages, nor is it a compensation scheme. The scheme will be set up by the Secretary of State, who will make arrangements for another body to be the scheme administrator.

The Bill allows for the payment amount to be determined in regulations that will set out a simple tariff, basing payments at roughly 70% of the amount of average civil damages. Payment amounts in the tariff will be linked to an individual’s age. Calculating the amount of civil damages that a person is to receive is complex. However, published research shows that awards in civil cases decrease with the age of the victim. Regarding the amount of the payment, I ask your Lordships’ support in understanding that the scheme strikes a careful balance and does so in a way that is fair and lawful. It ensures a substantial payment to people who have mesothelioma and cannot trace the liable employer or insurer, while ensuring that the contribution made by insurers is fair and not excessive, since not all of them were in business at the relevant time. It will ensure that the scheme can get on with helping sufferers and not get bogged down in legal challenges from insurers.

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There are four main criteria for eligibility. The first is that an individual was diagnosed with diffuse mesothelioma on or after 25 July 2012. The second is that they were employed at the time of exposure to asbestos and that this was due to negligence or breach of statutory duty on the part of an employer. The third is that they have not brought a claim for civil damages against an employer or the employer’s insurer and they are unable to do so. The fourth is that they have not already received damages or other compensation payment in respect of their disease, nor are they eligible to. I should point out that individuals who have received a payment under existing state schemes will be eligible to apply, but any such benefits and lump sum payments will be recovered when a payment is made under the new scheme. Eligible dependants of sufferers of diffuse mesothelioma may apply to the scheme where the sufferer has died before making an application. Calculating awards of compensation for dependants in civil cases can be complex, but under the scheme it will be simple and quick. The scheme will pay eligible dependants exactly the same amount as the sufferer would have received. We will set out details of the application process in the scheme rules. The scheme will give a right to an applicant to request a review of decisions taken and confer a right of appeal to the First-tier Tribunal against a decision taken on a review.

A sufferer must have been diagnosed on or after 25 July 2012 to be eligible under the scheme. A cut-off date will always be unfortunate for those whom it excludes. However, we must be pragmatic. The costs to the active insurers funding the scheme would be prohibitive if we were to make the scheme open-ended. It was on 25 July 2012 that the Government announced that they would set up a payment scheme and so created a reasonable expectation that eligible people diagnosed with mesothelioma on or after that date would receive a payment.

The Bill does not—and cannot—look to respond to all asbestos-related disease. 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. However, this Bill is not the appropriate instrument to do that. Mesothelioma is distinctive, and its link to asbestos exposure is undeniable. This allows for the fast processing of cases because there is no doubt that asbestos exposure caused the disease. The Bill supports the administration of a simple and streamlined scheme. It could not cover other diseases, where there could ever be a question as to the cause, because the lengthy investigations required in order to prove these cases would choke the scheme, preventing the comparatively simpler mesothelioma cases being administered with the necessary speed. Again, I ask noble Lords to look at this emotive issue from a pragmatic perspective and focus not on what is impossible but on what can be achieved. This legislation is a huge step forward and should be recognised as such.

The establishment of a technical committee to handle disputes relating to cover is key. The technical committee will be distinct from the scheme and will deal solely with disputes related to insurance cover. If a question

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arises between an insurer and an individual about whether an employer maintained employers’ liability insurance with the insurer at a particular time, the technical committee will be able to make a binding decision on this issue. In practical terms, this means that if a person with diffuse mesothelioma has some evidence that an insurer was providing cover at the time they were negligently exposed but this evidence is contested by the insurer, they can ask the technical committee to make a decision. This will also benefit other mesothelioma sufferers exposed to asbestos by the same employer at the same time, who may wish to bring a claim against that employer in the future. The technical committee will ensure consistency in decision-making and allow more people to take a case to court, having had the issue of cover already decided. Where the technical committee decides that an insurer is not on cover in a particular case, and no other employer or insurer has been traced, the person with diffuse mesothelioma may then be able to apply for a payment under the scheme.

The Bill envisages a review process for any decision taken by the technical committee. Following a review, a person may refer a decision to arbitration, after which very limited recourse to the courts is possible under the arbitration legislation. Again, timing is key; undue delays in the decision-making process would prevent an eligible applicant taking further action while they are still alive, be it seeking damages in the civil courts or applying for a scheme payment. It is expected that the decisions and reviews will be undertaken by the technical committee with the utmost speed.

I now turn to the levy on insurers. The levy will be imposed on active employers’ liability insurers at large, not on the individual insurers who took the premiums and who were on cover in the cases that will come to the scheme. The levy will be fair and not excessive, and set at a rate that does not require the insurers to pass on increased costs to business. The scheme could be jeopardised if the levy were set disproportionately high, which might invite legal challenges from the insurance industry. This would delay the introduction of the scheme, preventing a payment mechanism being in place at the time of the peak of mesothelioma deaths around 2015. Once more, we must be pragmatic and recognise what can be achieved.

The cost of the scheme in the first year will be considerably higher than in subsequent years because of the number of cases dating back to 25 July 2012. To avoid the first period’s levy being unaffordable and risking costs being passed on to current employers through higher premiums, the costs will be spread over four years.

Existing government provision is available for those who are unable to claim damages or receive payments from elsewhere. Where a person has received government benefits or lump-sum payments for diffuse mesothelioma and subsequently becomes eligible for a payment under the new scheme, the benefits recovery legislation will apply. This is because people should not be compensated twice for the same condition or compensated in excess of their loss. This means that an eligible applicant will receive a scheme payment after the deduction of relevant social security benefits and lump-sum payments, which the scheme administrator will repay to my department

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through its compensation recovery unit. Similarly, the Bill includes amendments to the existing lump-sum payments legislation to prevent an individual receiving such payments after they have received a payment under this new scheme.

I hope that noble Lords can agree today that the principles driving the Bill are right and just; that it is right that we legislate to provide for people with diffuse mesothelioma who are unable to claim civil damages from an employer for negligence or breach of statutory duty; that it is right that the insurance industry bear the cost; and that it is right that we establish the scheme with the greatest possible speed.

The measures contained within this Bill will mean that people with diffuse mesothelioma or their eligible dependants will be supported financially at this most stressful time. Quick access to payments will allow victims to afford care and treatment costs so that they can die at home with dignity.

The Bill marks great progress and strikes a careful balance in a fair and lawful way between the rights of victims and the active insurers funding the scheme. Several active insurers funding the scheme will not have even existed at the time when the exposure to asbestos occurred. Several of these insurers will have also maintained good records for the periods when they were providing insurance services. The Bill demonstrates the commitment of the insurance industry to correcting a terribly damaging market failure, and I thank the Association of British Insurers for this commitment. I am encouraged by the support of the industry, and look to the Financial Conduct Authority to support this work further through vigorously pursuing any insurer that fails to comply with requirements relating to EL record tracing.

The Bill is timely and necessary. It is something that I believe we should all welcome, and I commend the Bill to the House. I beg to move.

7.12 pm

Lord McKenzie of Luton: My Lords, I thank the Minister for his explanation of the Bill, for facilitating a briefing with officials and the follow-up notes, and indeed for his kind words. The core of the Bill, a lump-sum payment scheme funded by insurers for those diagnosed with diffuse mesothelioma who cannot otherwise access redress from their employer or an employer liability insurance policy, is one that we strongly support. The Bill has its shortcomings and we will outline our view on those in a moment, but they will come as no surprise to the Minister. Without this sounding too much like a love-in, we should acknowledge the Minister’s personal commitment to bringing forward this legislation, which I can well understand has involved difficult discussions with the insurance industry, which in times past has resisted such arrangements.

We must also take this opportunity to pay tribute to those who have campaigned tirelessly for those whose lives have been blighted and shortened by exposure to asbestos and other occupational poisoning, not least the trade unions and the Asbestos Victims Support Groups Forum. Doubtless the campaigns will go on, but their efforts have not been in vain.

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Mesothelioma is a particularly pernicious disease of malignant cancerous cells in the mesothelium, creating great suffering. It is caused by exposure to asbestos, as we have heard, and is invariably fatal. Life expectancy post-diagnosis is between nine and 13 months. As we have heard, mesothelioma is a long-latency disease that might not be diagnosed until 30 or 40 years after exposure to asbestos.

As the Minister has explained, the passage of time between exposure and diagnosis might mean that the negligent employer cannot be located or might have gone out of business and, as important, that the employer’s liability insurance policy that should have covered the employee cannot be identified. Such individuals are currently thrown back on statutory schemes and benefits for support.

It is, then, entirely reasonable that the insurance industry, which has had the benefit of the premiums over the years, collectively funds by way of a levy a scheme that supports those who cannot make a civil claim. We have not seen the detail of the scheme and look forward to draft rules being available in Committee, together with some detailed indicative figures of payment values and the construction of the tariff, and indeed details of the technical committee.

However, on the basis of explanations given so far, we have some concerns and disappointment with the Bill. The suggested levels of compensation at around 70% of average damages awarded by the civil courts are too low and unfair; we reject the “careful balance” proposition. Coverage is inadequate; not all asbestos-related or other long-tail diseases are covered. The cut-off date for the scheme at July 2012 is too restrictive. And the prospect of the insurance industry running the scheme gives rise to possible conflicts of interest: on the face of it, insurers have been able to negotiate a proposal that excludes half of asbestos victims, liability for claims before July 2012 and a 30% discount on compensation levels. This must be challenged.

We should also like to see the insurance industry, through the scheme or otherwise, continuing with an earlier commitment to fund ongoing medical research into cancer. The ABI reminds us that in recent years the insurance sector has contributed some £3 million to the British Lung Foundation. Was the prospect of ongoing funding part of the negotiation surrounding the arrangements in the Bill? We make common cause with those who believe that the industry should commit to a further round of funding research.

The Government seek to justify setting payment levels at some 70% of average damage levels awarded by the civil courts. They argue that the level of the award should be below the 100% level as a means of encouraging claimants to seek to trace an employer or employer’s liability policy that could lead to higher compensation. We challenge this analysis, and certainly wish to examine in Committee the effect of using a tariff based on average civil compensation. The process for a claimant to establish exposure to asbestos and a relevant employment nexus and to seek to trace an EL insurance policy would be necessary for entry into the scheme, just as it would be for making a civil claim. Indeed, would not both have to go through the same portal in future?

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That aside, though, it is surely indefensible to pay compensation at 30% less just because someone cannot identify an employer’s liability policy—a policy that existed but now, through no fault of the claimant, is lost or destroyed. As the briefing from the Asbestos Victims Support Groups Forum points out, reduced scheme payments are an invitation to individual insurers to see the scheme as a cheaper option. Why pay full individual compensation when you can pay 70% of average compensation? We will seek to get some improvement to the proposed compensation levels in Committee.

We support the imperative of getting the scheme for those diagnosed with diffuse mesothelioma in place as quickly as possible, and recognise that, in a way, the fact that the awful consequences of a disease that is invariably fatal must have been caused by exposure to asbestos and negligence, when an employment is involved, creates a scenario that makes for some administrative simplicity.

However, there is no moral reason why the scheme should just be limited to mesothelioma. For the future, the tracing office, ELTO, will improve access to compensation, although it is by no means yet perfect, but it will be a long while before it covers long-tail diseases. In Committee we will examine why the scheme cannot be extended to all asbestos-related and long-tail diseases, and at least see why the Bill does not provide for an extension of the scheme in future in a way that does not hold up the current proposals for sufferers of mesothelioma. Can the Minister say—I think he did in his opening remarks—whether the Bill currently precludes such an extension, and if so why, particularly as the technical committee can be expanded to cover diseases over than diffuse mesothelioma?

The Government have set the start date of the scheme as 25 July 2012, for the reasons which the Minister outlined, which is more than two years after the close of the February 2010 consultation. During that period, another 600 people will have died from this awful disease without them or their dependants receiving proper compensation. We will argue for an earlier commencement date but not an open-ended commitment. There are, of course, other things going on in this area. The ABI makes clear that it sees the pre-action protocol, fixed-cost arrangements, the central mesothelioma claims gate or portal, and improvements to ELTO as an intrinsic part of the overall arrangements.

Clearly, only a part of this package is before us when considering the Bill, so it is difficult to evaluate the overall effect. However, concerns have been expressed about whether the pre-action protocol might make matters more difficult for claimants by imposing a more onerous burden in upfront disclosure rather than streamlining the claims process. Can the Minister say how the emerging process will improve on the current civil litigation fast-track process operated by Senior Master Whitaker? Can he also say whether the Government see these other components as an intrinsic part of an overall package and how the terms of the support scheme might have been modified because of them?

Concerns in this area have been heightened generally by the Government’s tightened attitude to compensation for workplace injury, displayed by the denial of future claims of strict liability and breach of statutory duty

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for health and safety failures. The Bill allows for the scheme to be administered by the Secretary of State or for this to be undertaken by another entity. Our briefing sets out that the insurance industry itself is setting up a body to run the scheme, and this might have timing benefits because it can be developed while the legislation is proceeding through Parliament. This might be so, but we need to examine possible conflicts of interest as the scheme administrator is supposed to help claimants or their dependants to bring and conduct proceedings against insurers.

Moreover, the ABI expects the technical committee to be set up by ELTO, which has itself been set up by the industry. The technical committee will consider evidence of whether or not a particular insurer will provide cover. Its decisions in this regard are binding on insurers—active and in run-off—and claimants are subject to review and arbitration. Can the Minister say whether it is agreed that ELTO will set up the technical committee? We will want to test the balance of power in all this where the ABI expects that the insurance industry will administer the support scheme, has developed ELTO and expects to run the technical committee, and is developing and expecting to run the portal.

It is shocking to think that in this rich and sophisticated country of ours more than 2,000 people each year will continue to die from this terrible disease, which is a consequence of past negligent employer health and safety practices. It is also important to recognise that the problem has not gone away. We need to support the HSE and others in current awareness campaigns. Despite some misgivings, this Bill is a welcome step forward. It will get compensation to some 300 sufferers of mesothelioma or their dependants each year who previously could rely only upon support from the state. It will enable benefit recovery for the Government of some £50 million net. We will work with the Minister to seek to improve the scheme where we can but will do nothing to frustrate its speedy passage on to the statute book.

7.24 pm

Lord German: My Lords, first, I congratulate my noble friend the Minister on bringing the Bill forward in this form today. If noble Lords read the response to the consultation from the insurance industry, they will see an almost opposite view to that expressed within the Bill. I congratulate my noble friend on turning the British insurance industry around to support this Bill. It builds on a voluntary code and the consultation. I also echo the tribute to the noble Lord, Lord McKenzie, who has been steadfast in bringing these matters forward. I see this as a continuation of his work.

There are issues where this Bill needs questioning and we need to develop our understanding further. However, the other important factor resulting from this Bill is that the process will be speeded up. Where a civil process now takes perhaps two years, we should see a much more speedy process in place for all claimants of around four to five months when it is put together. That is the ambition of this Bill and the opportunity that arises from the portal.

Unfortunately, we need this Bill for a longer period. It may have a finite lifespan but that may be 30 years or even more. The British Lung Foundation suggests

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30 years but it may well be that this Bill needs to be in place longer. For that reason, it is important that Parliament maintains its connection with the scheme. There will undoubtedly be inevitable changes and tweaks over the coming decades as the scheme beds in and the initial detail on the implementation will require careful scrutiny to minimise the potential for future change and to maximise certainty as far as possible. Therefore, it is a little strange to see that Clause 1 makes no reference to Parliament when we know that there is much detail still to be determined. I hope that my noble friend Lady Thomas’s Delegated Legislation Committee will be able to report on this matter before we reach the later stages of the Bill.

There are some scoping issues which need discussion. First, there is the date of implementation. It is inevitable that some sufferers and their dependants will fall outside the timeframe for involvement in the scheme. We have already heard that from the noble Lord, Lord McKenzie, and my noble friend the Minister. I understand, of course, that the insurance industry had to be brought onboard with these proposals and it was essential to attain its commitment to the funding levy. However, with average claims coming in at £150,000 plus costs, it is a bitter blow to those who may fall just outside the dateline for the new scheme. I would be grateful if my noble friend the Minister could inform your Lordships’ House of the balance of issues which led to the choice of 25 July 2012 as the starting date for this new scheme. It is, of course, the date on which the Government announced their intentions in respect of the scheme but that in turn was more than two years after the department’s consultation had ended.

I listened very carefully to my noble friend’s explanation about other diseases and I very much appreciate that mesothelioma is a unique disease that has a long tail and is virtually always fatal but there are some similarities with other industrial diseases, not least pneumoconiosis. This scheme could therefore act as a model for others. Indeed, the Association of British Insurers said:

“If it proves successful then the Secretary of State can make provisions to extend it to look at other disease types”.

Does my noble friend the Minister support that view, and can he give an indication as to whether a new scheme would require primary legislation?

The second issue referred to is the 70% threshold. We need to understand how this figure has been arrived at. Why is it not 75% or 80%? I understand the need for a tariff-based system, but surely this would keep the incentive to go through the solvent employer/known insurance route even if it was higher. There is a curious statement from the Association of British Insurers on why this level was set:

“As the payments will be made based on a straightforward tariff, some people will receive more compensation under the scheme than they would have received in civil compensation, and the aim is to set the tariff at a level that means this will only happen in a small number of cases”.

This indicates that the overall level of the tariff in the proposed scheme, expressed as a percentage of civil claims, will always be set at a level where very few claimants will get more than a civil claim. Would it not have been better and fairer to raise the percentage value but to put a cap on the amount which would have kept it at or below a civil-system payment? I am told that the current average payment under the existing

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system is in the range of £150,000 plus costs. A 70% tariff will mean that the average payment under the proposed scheme will be £105,000 to £108,000. Surely that is far more of a differential than what is required simply to avoid claimants taking this new scheme course, rather than following the solvent-employer or known-insurer route?

There are some issues relating to legal matters. Although my noble friend the Minister said that they were not interdependent, they are closely related. Two of them involve information that noble Lords might need at this stage. One concerns up-front costs. Legal costs are not a part of the Bill, but the MoJ is about to make an announcement on its proposals. However, the successful outcome of a claim under the current system is virtually certain of having an award of costs with it. Implicit in the new scheme is support from a solicitor. The very helpful diagram from the ABI of how this will all work actually puts the instruction of a solicitor into the structure. Given that there is always a cost to instructing a solicitor, it would appear that this scheme structure is an encouragement to participation by no-win no-fee lawyers.

Secondly, will the level of evidence needed be the same as in civil proceedings? Cases do not always succeed and the Court of Appeal ruled in 2007 that workers making a civil claim for compensation for mesothelioma must first prove employer negligence. I would be grateful if my noble friend the Minister could tell me whether that judgment has been overturned subsequently by the courts. If not—and more generally—proving employer negligence where neither the employing company nor the insurer are traceable will certainly be a more difficult task.

The British Lung Foundation points out the appalling record of investment into research into this terrible disease prior to 2010. Four insurance companies then put money into a three-year scheme investing £3 million in total. Now, with that scheme near its end and the four insurers saying it is unfair that this research funding is spread so thinly across so few insurance companies, surely my noble friend would agree that it is time for a rethink. Naturally, the insurance industry will say that the Government must play a big part but the Bill provides a new impetus for insurers to work collectively in the broader public interest. A small annual contribution from each would secure consistent and long-term research into this dreadful disease and its consequences. Perhaps it is time to add a small top-up levy to secure this fundamentally humane objective.

This is a milestone Bill. It provides the architecture for an end to the current compensation process, which is rather like a lottery. It provides a response which is the sign of a compassionate and caring society. The architecture of the Bill is correct. The direction of travel is absolutely correct. I commend my noble friend the Minister for bringing it before us.

7.33 pm

Baroness Taylor of Bolton: My Lords, I think—I certainly hope—that every speaker in the debate will welcome the introduction of the Bill. I acknowledge and pay tribute to those who have worked so hard to

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get us to this stage, including the Minister and, obviously, my noble friend on the Front Bench, who has campaigned for so long, but also those outside this House, the trade unions and campaign groups, who have been unhappy with compensation arrangements for many years. I regret the fact that industrial diseases and compensation for them are always recognised only slowly, usually very late and often tragically late for many of those who are involved. We should acknowledge that one of the drawbacks in what we are trying to do is the insurance industry being so much stronger than the other interested parties.

I will say a word on the previous Labour Government and what they did. I am proud of many things that the previous Labour Government did, and we should shout about them and apologise less. However, I am sorry that more progress could not be made on this issue. I am pleased that my noble friend Lord McKenzie was able to do so much of the groundwork for the Bill, and glad that the Minister acknowledged that in his opening remarks.

My interest in this subject stems in part from my former constituency of Dewsbury. A number of people worked in Leeds at Turner & Newall. I knew quite a few people with family or friends who had been affected by asbestos-related diseases; they had either suffered themselves or known people who had. I also know what a difference compensation could make to the peace of mind of those who were afflicted in that way.

It was also a coal-mining area. We therefore had quite a lot of contact with the schemes for compensation for pneumoconiosis. Something that strikes me from working with people over those years is how important it is that people who are entitled to compensation not only receive it, but receive it in full. I recall the sterling work that my good friend the late Lord Lofthouse undertook in this House to ensure that he could stop solicitors taking a huge cut out of the compensation claims of miners who were clearly entitled to it, and who still suffer because they lost a chunk of the money. I was interested that the noble Lord, Lord German, made this point: I am still concerned that when you type the words “asbestosis” or “mesothelioma”, or the name of any industrial disease, into a search engine, the first thing that comes up is a list of lawyers wanting to act on your behalf on a no-win no-fee basis. We must be careful that we make sure that people know how to access compensation when they are entitled to it, and do so without having to pay fees in that way. In the debate in the other place the other day, my honourable friend Kevan Jones, who had been a trade union legal officer, talked about how he had to fight for compensation and how that could be done.

Going slightly further back, in the 1970s I was involved with the campaign to try to get compensation for those affected by byssinosis which, as the noble Baroness opposite will know, is the cotton-dust disease. I mention this, although it perhaps seems a slight diversion, because it illustrates how government, industry, society and insurers have never really acted together as they should. Our record as a country on compensating people with industrial diseases is not good. Compensation for byssinosis started in the 1940s—only for men, only for those who had worked for 20 years and only for

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those who had worked in a very specific part of the cotton industry, in carding. Bit by bit, although every bit was a struggle, it was extended first to women, then to a 10-year limit, then to other branches of the cotton industry and eventually to everybody who worked in it. It was piecemeal because of all the barriers that came down from the industry, from insurance, from problems with record-keeping and from legal difficulties. Although Labour Governments made very significant headway in health and safety throughout that time, I do not think that any Government have fully acknowledged the need for a totally comprehensive approach to industrial diseases. There is still a shame—a record that we cannot be proud of because we should have been acting much more quickly on all these issues.

The Minister outlined some of the difficulties that he can see, and some of the difficulties in the piecemeal approach to this particular disease. That could give us a case for a no-fault compensation scheme, but while that could avoid many of the barriers and delays, it is a bit late for that in this context, and now is not the time to argue that.

I welcome the Bill and congratulate the Minister on getting to this stage. However, as my noble friend Lord McKenzie said, there are deficiencies and issues that we will want to address as the Bill progresses. Questions have already been raised as to why this particular date was chosen. I understand where the Minister is coming from but we will have to look at that again, because to have that kind of cut-off and affect so many people’s lives so significantly is a very severe decision.

The 70% compensation figure was also mentioned. I feel some attraction to what the noble Lord, Lord German, said about perhaps having a different approach, and if there is a problem there, having a cap on the figure rather than an automatically lower figure than people might get in civil courts.

On the question of why other similar diseases, such as asbestosis and so on, cannot be included, I understand that the Minister wants a simple and streamlined scheme, as I think he called it. However, having a simple and streamlined scheme and extending the process to other diseases are not mutually exclusive. We could have an incremental approach so that this comes into force as soon as possible but the door is left open for other diseases to join this scheme in the future. Other people will be worried, and I do not see why they should have to wait and suffer the diseases that they have at the moment, and perhaps in the future.

I also hope that the Minister can give some assurances about the other point that my noble friend made about awareness campaigns through health and safety, and an increased emphasis on medical research. The Minister said that a balance had to be struck, and I think we all accept that that is the case. However, in Committee we have to ask ourselves whether this is the best balance possible, or whether we could make some improvements.

As others have said, we are talking about a horrible, debilitating, deadly disease caused by the workplace environment. We are talking about people whom the Government, in their current parlance, would describe

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as strivers. These people worked hard and deserve the best we can give them. While we want the Bill to have a swift passage, I hope through both Houses, we have to try to improve it for their sakes and for all that they have suffered so far.

7.43 pm

Baroness Masham of Ilton: My Lords, I will say just a few words in support of this Bill. Mesothelioma is not an easy disease to diagnose. The earliest signs of the disease are quite vague. The most common symptoms are breathlessness, chest pain, fatigue and weight loss. This occurs as a result of an effusion, when fluid accumulates in the pleural cavity, the space between the two layers of the pleural lining. The patient will often visit their GP at this stage. The cancer can spread to different parts of the body.

Mesothelioma is a cancer caused by exposure to specific types of asbestos, which are present in many homes and workplaces but no longer used for any purpose. On average, people do not develop symptoms for 30 to 40 years after exposure. Few people survive for more than two years after diagnosis. The majority of victims today are former industrial workers who were exposed before 1980. Around 2,400 people a year die from mesothelioma. Around 56,000 people are expected to die in the next 30 years unless a cure is found. No change in lifestyle will help them.

Until recently, very little was spent on research into mesothelioma in the UK. If there is to be progress and hope in treating mesothelioma, there will have to be an increase in research. I am told that the insurance industry leaders would like to see their industry continue to fund research, but it is felt that the long-term funding solution needs to see the burden shared more widely.

I hope that this Bill will pass through Parliament quickly and that the Government will accept my noble friend’s amendment when he moves it. Also, with such a devastating disease, and the rising costs of everything, I sincerely hope that the Government will not reduce compensation by 30%. In these changing circumstances, it should be increased.

7.46 pm

Baroness Donaghy: My Lords, I congratulate the Minister on his commitment to the Bill and thank him for promoting it—I expect against considerable odds.

I understand the reasons for the severe limitations, and I believe it is important that the Bill becomes law as soon as possible. We will have the opportunity in Committee to examine some areas, which have already been raised by noble Lords, to see whether those limitations can be stretched. I am interested in trying to extend the eligibility date and the coverage, and genuinely do not understand why compensation would be less than 100%, rather than the 70% figure.

My reasons for being interested in this Bill are threefold. First, one of my sisters-in-law died of mesothelioma. She was a nurse and would push trolleys through the basement of Scunthorpe Hospital. In the 1950s and 1960s, hospital basements were probably among the most dangerous places to be. The mother

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of a colleague also died of mesothelioma. She did not work in a hospital but washed the overalls of someone who did. So this is about very personal tragedies.

Secondly, I became interested in this disease when I conducted my report into construction fatalities and found out how many construction workers were affected. My third reason is that, as a former trade unionist and president of the TUC, I witnessed the tireless and continuing efforts of the trade union movement over decades to claw, inch by inch, some concessions for affected workers, despite the strongest possible resistance from employers, the insurance industry and some in the legal profession. It was as recently as 1968, only 45 years ago, that the British Medical Journal suggested that mesothelioma was a primary cause of death rather than a secondary cancer. This is not an area, as my noble friend Lady Taylor said, in which we can take pride in the UK, and we know that the worst is yet to come.

I will concentrate on the administration of the proposed scheme and the potential impact of Ministry of Justice streamlining of the overall claims procedure, as it affects mesothelioma suffers. If the administration of the scheme is to be contracted out, I ask the Minister what safeguards will be written into the tender to ensure absolute independence and integrity. This would apply in particular if the insurance industry were to be the scheme administrator. The conflict of interest would be obvious, even if we were looking at an industry with a benign record. However, we are looking at one more commonly characterised by delaying tactics, spurious arguments and obfuscation. The Bill allows for the scheme administrator to,

“help a person to bring relevant proceedings (for example by conducting proceedings or by giving advice or financial help”.

Surely it would be unacceptable to allow this particular fox into the chicken run.

A comment in the departmental briefing indicated that the insurance industry,

“is currently to set up a body, at its own financial risk, that could deliver the functions of the scheme”.

If the industry satisfies the DWP’s requirements,

“we would be able to start making payments more quickly than if DWP work to establish the scheme following Royal Assent”.

That is beginning to sound like a done deal to me. I am very concerned about the implication that any other scheme administrator might be slower at paying out when we know that time is of the essence for these sufferers. Why not put it out to tender without delay? If it is a done deal, what guarantee will there be that awards will not be cash-limited? I appreciate that the department will remain responsible for overall performance, financial accountability and oversight of the scheme, but I wonder what it will mean in practice if the department does not have the resources to carry out that responsibility.

I understand that the scheme will be funded by a levy on remaining insurance companies. We do not know the total sum of money available. How can we be sure that the cost will not be met by the insurance companies making considerable savings elsewhere? I appreciate that this area is not under the direct purview of the Minister, but will he give an assurance that

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nothing in the MoJ’s “streamlined” procedures will be allowed to worsen access to compensation or increase the administrative burden on claimants and their families? Will he ensure that the insurance industry will not receive its payback in this area?

We should remind ourselves that, as the Minister said, it is only 14 years since the retention of information by insurance companies was introduced. Although tracing has improved, it is still unimpressive. Insurance companies should not be allowed to profit from their own incompetence. Neither should they be allowed to slide out from under the extremely efficient and effective procedures in the Royal Courts of Justice, presided over by Senior Master Whitaker, as my noble friend Lord McKenzie mentioned. Insurance companies collected the premiums that were meant to cover,

“all bodily injury and disease”.

Their record in honouring this cover is a disgrace. They consistently resisted efforts to centralise information to improve the success rate for tracing, using business confidentiality as their reason.

As I said, we do not yet know what the total cost of the new scheme will be. The impact assessment indicates the possibility that the industry might pass any extra costs on to customers, and that premiums might increase by 2.24%, although the impact assessment stated that this was unlikely. One way of preventing this would be to cash-limit the awards. I am not in favour of this and I remain concerned about a scheme that is financed and administered by the insurance industry.

On a separate matter, the impact assessment refers to an independent NIESR feasibility study, and the fact that the full report and survey findings will be published in the summer of 2013. Will there be an opportunity to benefit from the report’s findings before the Bill completes its stages in the House? I mentioned the impact assessment on a couple of occasions and make the point that it is a very substantial piece of work. Of course it contains assumptions and uncertainties, but I congratulate the department on its thoroughness.

Finally, despite my concerns and questions, I feel sure that the whole House will agree that this is a very important piece of legislation, and will be a fitting tribute to the Minister when it becomes law, as I sincerely hope it will. I look forward to the rest of the debate and to Committee.

7.54 pm

The Earl of Courtown: My Lords, I admit that this is not the sort of area that I would normally speak about in your Lordships’ House, but there are a number of reasons why I decided to speak tonight. I have had the experience in the construction industry of dealing with demolition work that involved the safe removal and disposal of asbestos insulating board and corrugated sheeting. Another reason that hit me harder was the death of the former MP, John MacDougall, whom I knew well and counted as a friend. Only after he had died did I hear that he was certain that he had contracted cancer in his past career in the shipyards of Rosyth. At this point I pay tribute to his daughter, who after his death set up a charity in support of mesothelioma sufferers.

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The Bill, as ably described by the Minister, is intended to help sufferers who are unable to trace any insurance cover that might exist—or, in certain cases, their past employer—after being exposed to asbestos. As I understand it, the disease may take many years to develop and be diagnosed. As other noble Lords said, diagnosis does not occur until the latter stages of the disease.

In describing the Bill, the Minister outlined the two key measures: first, to establish a payment scheme to make payments to those with mesothelioma; and, secondly, to create a technical committee that will make binding decisions where there is a matter of dispute over whether an insurer was providing employer liability cover at the time of the negligent exposure to asbestos. As I understand the Minister, the technical committee will have the ability to speed up many proceedings that can get bogged down in the courts, such as decisions on an employer’s liability cover and on disputes over the existence of such cover. I was glad to see that the committee’s decision may also be used in future court cases. As such, the existence of the committee will lead to greater parity around standards of proof in relation to employers’ liability. This should result in more people being able to bring cases to court.

Having looked further into past compensation claims concerning mesothelioma, I am informed that case law refers to a considerable number of cases concerning this disease. As I understand it, the main problems associated with this have been the difficulty of proving negligence by the employer, the difficulty of proving that the mesothelioma was contracted as a result of the negligence of the employer, and the length of time it can take such cases to be settled. I was also glad to note that the Bill states that claims will be also considered from eligible dependants. It is so important when people are suffering from this fast-acting disease that their dependants can also claim some form of compensation.

In addition, I have noticed that my noble friend’s department will bring forward draft scheme rules in Committee. Will he tell the House whether these rules will be included in the Bill? I also understand that they will apply to the compensation tariff. Will this be included in the Bill or form part of secondary legislation? Will the Minister also tell the House how any changes to the tariff and the scheme rules will be managed in future?

Many noble Lords have expressed criticisms and concerns about the types of cancer that will not be covered by the scheme. However, due to the unique nature of diffuse mesothelioma and the often short period of life expectancy after diagnosis, it is very important that we have a simple and fast way of helping sufferers and their families.

I have also noted concerns about the insurance companies’ actions in this situation. We would not be where we are unless we were actually able to speak to the insurance companies in the first place. We are also looking at concerns about how the insurance companies will set up the company to administer the scheme themselves. I understand the concerns, but the Government have the final say, should these matters not work out. They can actually reclaim the scheme to work in-house or put it out to other people to run. I

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am looking forward immensely to many other speeches that will be made before the end of this debate and especially to the Minister’s response.

8 pm

Lord Giddens: My Lords, I should like to begin by expressing my heartfelt sympathy to anyone who has, as I have, lost a loved one to this horrendous disease. It is essentially a death sentence for anyone who contracts it. I would like to correct my noble friend Lady Taylor, who is not in her place. It is not always contracted in the workplace. You can contract the disease in other contexts too, and that is true of the person in my family. It is important to say that. It is relevant in this debate not just to concentrate on this country but to look around the world at the eccentric, problematic and tortured history of this disease and the response to it of the legal system and the building and insurance industries. There is a lot to learn here that is relevant to our debate.

Asbestos was originally called a “magic dust” and it was used extensively with that in mind in all sorts of installations around the world, where, of course, it still remains. There is still an enormous amount of asbestos in many buildings in very many countries across the world, especially developing countries, where it is still in a lethal state. There is a very interesting book on this and—my noble friend just referred to this—on the resistance of industry and government to accepting liability. It is by Geoffrey Tweedale and has the appropriate title Magic Mineral to Killer Dust.That is what it is today. As noble Lords have said, it can take 20 to 50 years to appear, and in that sense tracks to some degree the history of tobacco, the diseases from which also take a long time to come out and took a long time to identify. It just makes me wonder what other lethal diseases might be lurking out there in the world, a point I will come back to later on, because we now eat so many foods with additives that no one has ever experienced before and we ingest all sorts of substances from the air that have never existed before because they are new forms of synthetic materials. It just makes me wonder what lies in store elsewhere if diseases like this take such a long time to come out and therefore to identify.

It is difficult to establish the aetiology of diseases that come to light after many years. Tracking the history of mesothelioma is really intriguing in this respect because there was enormous resistance at first to identifying it as a single syndrome or disease, and secondly to identifying its causation. Again, this tracked the tobacco industry. The disease was known in some sense since just after the turn of the century, but it was not until the 1960s that a vital set of researches was published in South Africa that changed the consciousness of the medical profession, and then, quite a long while after that, the other authorities involved.

As often with these sorts of things, publicity was gained for mesothelioma by the fact that the film actor Steve McQueen died of it. He worked with racing cars and he apparently ingested asbestos from their brake linings. That brought it to the public consciousness in America, but it is important to stress that there was very strong resistance from the building industry, from the asbestos industry and particularly from the insurance

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industry in most countries. They just picked apart the research in much the same way in which the tobacco industry tried to pick apart the research on lung cancer. Hence, in all countries, it was a long time before either business or Governments accepted any liability at all. In most countries, there was an endless turmoil of lawsuits, which meant that most people who brought the cases got no benefit from them at all, and neither, often, did their dependants. I am sure noble Lords know that in America there was a complete bottleneck of such cases. That is in nobody’s interest. It is partly for that reason that I join other noble Lords in welcoming this legislation and congratulate the noble Lord on his part in it.

However, I worry a lot about the cut-off date. It is clear that the scheme must have some kind of limitation, but I just worry that it is a recipe for bitterness because it has a wholly arbitrary element to it. I have seen someone at close hand dying of this disease. If you also consider that the cut-off date is 25 July 2012, it is clear that it is purely a date on which the Government responded to their consultation. It is an administrative date; it bears no relation to suffering, and there is terrible suffering from this disease.

I join other noble Lords in suggesting that, at least at some point, a further exploration with the insurance industry is surely warranted. Mesothelioma is not like the whiplash industry: there is no element whatever of moral hazard in it. However, we know that there are large areas like that in the insurance industry with lots of problematic claims. You could argue that mesothelioma sufferers are paying for this grey area of the insurance industry with this arbitrary cut-off. I hope the Minister will give some attention to the impact that that might have on a family before simply going ahead with it in other parts of the discussion of this Bill. If the Minister has not read it, I recommend reading Geoffrey Tweedale’s book. It is a salutary tale of resistance to regulation and the devious practices that can be involved in it.

In conclusion, I have two questions for the Minister. First, will the Government at least give some attention to the moral and psychological impact of a cut-off date of this sort? Could they see whether there is any way in which it could be neutered for the sufferer? As I said, it bears no real relation to the awful depth of suffering, not just for the person but for the dependants of that person. Secondly, will the Minister consider working proactively with the insurance industry to scan similar problems in advance? This is where I come back to the point I made at the beginning: that there might be lots of potentially lethal diseases stored up in our environment, so it would seem sensible to try to develop a kind of proactive response to this. I do not know whether the Minister has any scheme in mind or whether the insurance industry, the Government and medical research could work together. We do not really want this sad and sorry tale repeated elsewhere, because next time it could have even more devastating consequences.

8.09 pm

Lord Howarth of Newport: My Lords, I, too, thank and congratulate the Minister on bringing the Bill to the House. He is a good man who has fallen into bad

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company. He has had to present a number of pretty miserable policies to the House. However, we should recognise that he has worked long and hard to develop this scheme and today he brings us, by his standards, very good news indeed. We should also express measured appreciation of the insurance industry and the ABI. Goodness knows, the industry has been grudging and obstructive in the past, but it has established the Employers’ Liability Tracing Office and is willing to go along with this scheme. It is, however, a scheme that needs improvement.

Credit should certainly be given to the previous Government for the preliminary work that they did. The Minister was rightly generous to my noble friend Lord McKenzie, who published the consultation document in February 2010 on accessing compensation. Credit should also go to this Government for pursuing the process, and I think that means that credit should go to the permanent Civil Service. Credit should, of course, also go to the campaigners. It is right that we should do all we reasonably can to support those who are victims of the horrors of diffuse mesothelioma because of their employers’ negligence. This long-latency illness incubates for perhaps three to four decades but at the end inexorably causes great suffering and death. It is right that we should do what we can to support the dependants of people who contract the disease. It must be grim for all of them in the circumstances that follow diagnosis to struggle to achieve compensation. I am not convinced that that process will be much eased given that the new scheme is a scheme of last resort, but at least it will yield better financial outcomes for more people.

I also ask why the scheme is to be limited to mesothelioma alone. Other asbestos-related diseases of the lung and the pleura caused by the inhalation of asbestos fibres ought surely to receive equal consideration such as asbestosis, diffuse pleural thickening, pleural plaques, pleural effusion, rounded atelectasis and asbestos-related lung cancer. With all these illnesses, employers’ liability is equally disputed and equally hard to trace. Natural justice tells us that people who suffer from this range of asbestos-related illnesses should be treated alike. They all have in common that they suffer from their employers’ negligence in relation to asbestos. The Minister said in his opening speech that these problems also need to be addressed but he thought that if they were addressed straight away too many cases would spoil the scheme.

I echo the question asked by the noble Lord, Lord German, because I am not clear whether the Long Title allows the flexibility to introduce under this legislation further schemes to support people suffering from other asbestos-related diseases. If it does—I understand why the Minister is unable to proceed with introducing schemes in relation to other diseases now—will he indicate when he expects to do so? If the legislation does not permit it, and is not susceptible to amendment to enable it to do so, will he pursue his mission and introduce further legislation? As my noble friend Lady Taylor said, we need a comprehensive approach. In the mean time, we must address the project that the Minister has placed before us.

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The Government have said that their overarching aim is to ensure that employees who are injured or made ill in consequence of their employment should not be denied fair compensation. The scheme, in providing compensation where the employer or the insurer cannot be identified or traced, goes a long way to achieving that objective but does not go far enough.

I would like to probe the Minister on a number of points. I would be grateful if he would clarify the position on legal costs which I do not understand very clearly. The Government’s aim in the Legal Aid, Sentencing and Punishment of Offenders Act 2012—the LASPO Act—was to remove personal injury from the scope of legal aid. On that basis, legal aid would generally not be available to a person diagnosed with mesothelioma who seeks advice from a solicitor, as he or she is bound to do.

Part 2 of the LASPO Act implements the Jackson reforms to no-win no-fee arrangements. However, the Government have deferred implementation of the measure in relation to mesothelioma claims pending the findings of a report which they have commissioned. When will we have the findings of that report? If Sections 44 and 46 of LASPO are applied in mesothelioma cases, as I understand it, lawyers acting under conditional fee agreements will be able to charge a success fee payable from the damages. Does the Minister think it is appropriate that that should be so in mesothelioma cases?

How does the new scheme that this legislation enacts take account of the new position on conditional fee agreements? The 2013 impact assessment assumes that a scheme payment would include an amount to cover legal costs in making an application. The 2012 impact assessment estimated that would be £7,000 for a successful case and £9,000 for an unsuccessful case. The overall legal costs for the scheme are put at £24 million to £27 million. As with civil actions, will they be paid out of the scheme award, which is already reduced to 70% of the level of civil damages, or will they be paid by the scheme over and above that 70% award? Will the payment take account of a personal injury solicitor’s fees incurred for work prior to the application being made to the scheme? Who decides these matters? As far as I can see from Clause 1, the Secretary of State does. There will be no legal aid for appeals to the First-tier Tribunal following the review scheme decision, unless they are exceptionally to secure the claimant’s rights under the ECHR or under European Union law. Are the Government content with that situation? Are the Government going to control the fees that the lawyers charge? The statement by the Minister for Employment, Mr Mark Hoban, on 13 May indicated that the Ministry of Justice is going to consult about a fixed-cost regime for mesothelioma claims. It would be helpful if we could be told what he has in mind. It would also be helpful if the Minister could give us, either today or in Committee, a clear statement in relation to what, if any, legal costs incurred under the new arrangements by claimants, either pursuing their own case against an employer or an insurer or claiming from the scheme, will be met under the arrangements that he has designed.

The interaction of the scheme with the benefits regime will warrant careful consideration. The Bill would permit the Secretary of State to recover benefits

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and other sums from scheme payments. The impact assessment tells us that the Government expect to recoup a net £69 million after the first year. However, in their briefing to us the ABI has stated:

“We have suggested that mesothelioma sufferers should be able to access financial support in addition to the benefits they are entitled to.”

What benefits will continue in payment after an award has been made? If an award under the scheme is to average £87,000, as we are advised it will, what benefits will be left for the claimant? Will income support and housing benefit be swept away? What will happen to industrial injuries disablement benefit, which is a major benefit, and very important in the budgets of such families? Is it correct that the payment of benefits would not be affected during the first year after an award? That is the case, I understand, where civil compensation is concerned. Would it still be the case with this scheme? Is pension credit to be ignored indefinitely? What will be the developing position under universal credit?

It would also be helpful if we could be told whether lump sums, payable for example under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, or the diffuse mesothelioma scheme under the Child Maintenance and Other Payments Act 2008, will be recovered where payments have already been made. Or will it only be the case that someone who receives an award under the scheme will no longer be eligible in the future for such payments?

Schedule 1 contemplates the recovery of benefits on a scale such that the whole award could be negated. However the schedule amends the recovery of payments legislation to permit, but not to require, the Secretary of State to claw back payments. What does the Minister intend? What scope is there for discretion? For example, will the DWP refrain from clawing back any payments that have been made in relation to pain and suffering? Is he able, and will he be prepared, to limit to a certain percentage the amount of benefits to be denied or recovered? Will he take a lenient view of the treatment of carers under the benefits regime in these circumstances? Past practice has been to an extent discretionary and compassionate. I am quite sure that the noble Lord will want to be as compassionate as he can in the appalling circumstances that these families face. I hope he will err on the side of generosity in relation to both benefits and legal aid.

I had hoped to have time—but I have gone on too long on these subjects—to say that I, too, can see no justification for the limit of 70%. I will just briefly say that it cannot be right to discriminate against claimants where employers and insurers have lost or destroyed the documentation. It is no fault of the claimant that the employers and insurers are in that difficulty. If all claimants are to go through a single portal to be followed by a rigorous search to trace the documentation, then surely all claimants ought to be treated equally. There will be a temptation for the industry not to trace the documentation if failure to do so means they will only have to pay 70% rather than the full amount of compensation they anticipate the court will award, so there is a real risk of the industry being conflicted here. Certainly employers’ liability insurers are not in a position to plead poverty. They did very well for

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decades. Up until 2008 they even kept the lump sums that were awarded by the tax payer, aggregating to over £20 million a year to offset the cost to them of compensation. We can be sure, notwithstanding what the Minister has said, as sure as eggs is eggs, just as soon as market conditions permit, the insurance industry will pass on the additional cost to them of this scheme by way of increased employers’ liability premiums.

So, pragmatism and practicality, as he said, are very important, but I am not convinced that the Minister has struck the best bargain that he could in the interests of mesothelioma sufferers and their dependants in agreeing to limit payments under the scheme to 70%.

8.23 pm

Lord Avebury: My Lords, perhaps I may begin by mildly disagreeing with the noble Lord, Lord Howarth. The Minister is in excellent company because he has built on the work done by the noble Lord, Lord McKenzie, and I thank both of them for their excellent work, for the processes which have led up to this Bill and for the actual construction of the Bill by the Minister. We owe them an enormous debt of gratitude for what has been an extremely long and arduous task.

The Bill allows the victims of this horrible disease, contracted as the result of working in environments that contained asbestos many years ago, to recover compensation even if the former employer, through whose negligence the patient was exposed to the asbestos, has gone out of business and the employer’s liability insurance, which would have covered a claim against the employer, cannot be traced. This is partly because the insurers irresponsibly destroyed policies taken out by firms that went bust, even though it was known right from the start of employers’ liability insurance in 1972 that mesothelioma has a very long latency period. A pamphlet entitled Asbestos Kills by Nancy Tait, which I published in 1976, quoted evidence going back to the 1930s to show that asbestos causes a wide range of diseases and that some of them have a latency period of as long as 30 or 40 years after exposure. There is absolutely no excuse whatever for what is now being euphemistically termed “market failure”.

The Minister referred to work being undertaken by the Ministry of Justice on a range of measures, which include a pre-action protocol, and several noble Lords have referred to the work being done by Senior Master Whitaker. Will the Ministry of Justice examine that work carefully because the administration of these mesothelioma cases by Senior Master Whitaker, his practice direction and his use of the “show cause procedure”—whereby once a claimant has established that he was exposed to asbestos in breach of the employer’s duty, the evidential burden shifts to the defendant to produce evidence to demonstrate that it has a real prospect of success in its defence—have been major causes of accelerating the progress of these cases through the courts. Rather than having a pre-action protocol, I wonder whether it might not be best to allocate a special court for the conduct of these cases, where the experience and wisdom of Senior Master Whitaker could be developed and extended to other judges.

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Of course, the scheme does not go as far as the Asbestos Victims Support Groups Forum UK would have liked. I shall refer to two of its main concerns. It was unfortunate that the forum was not invited to any of the consultations held over the two-year period during which the scheme was being negotiated, and I would be grateful if the Minister could explain why the forum was not allowed to have its say. As I am sure he knows, the forum would have preferred a scheme like the one that applies to the motor accident victims of uninsured drivers. Representatives of the forum say, as every noble Lord who has spoken so far has also remarked, that it was wrong to apply the scheme only from 25 July 2012. As has been mentioned, it was a purely arbitrary date, although I imagine that that would have meant squeezing more money out of the insurance industry. The Government have decided to go for the best settlement they could get the industry to agree to voluntarily, and inevitably that was bound to be less than perfect.

The same applies to the 30% reduction, which, again, all noble Lords have condemned, from the average compensation paid to claimants of the same age who can identify the relevant employers’ liability policy. It is not clear how the 30% figure was determined, although I understand that it was intended to be a disincentive to claimants opting for this scheme when they could have identified the insurer and made a claim accordingly. I agree with the noble Lord, Lord McKenzie, who said that this was manifestly absurd—those were not the exact words he used, but that was their meaning—because the claimant who is unable to pinpoint the relevant insurer has no option but to apply to the Employers’ Liability Tracing Office, whose remit is to conduct the search, so the matter is entirely in its hands. A litigant cannot enter the scheme without ELTO being involved, a point to which I shall come back later.

I turn to the Bill itself. I do not believe that the scheme should be left to the unfettered discretion of the Secretary of State, as my noble friend Lord German has already said, but rather that it should be subject to approval by Parliament, as should any amendment, replacement or abolition of it. I have a couple of questions for the Minister. In Clause 2, is the definition of “relevant employer” intended to make a claim possible against any pre-1972 employer on whose premises it can be shown that there was asbestos? Is negligence to be assumed in these cases, irrespective of the circumstances in which the victim now finds himself? How can you establish negligence when the employer has gone out of business and there is no direct evidence of what he was doing in the period before 1972?

In Clause 4(2), is the age referred to the age at the date of diagnosis or the age when the claim was submitted? They may not always be the same. In Clause 4(3)(a) in what circumstances is it envisaged that conditions would be applied to the payment? I was advised that what may be in mind is a situation where the payment falls to be made to the trustees of a dependant who is a child or mentally disabled, but if that is the case, should that not be spelt out in the Bill rather than allowing the Secretary of State to impose any conditions whatever at his absolute discretion?

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It is just a small point, but Clauses 11 and 12 appear to be superfluous because they merely repeat parts of what is already in the schedules. On Clause 13, the Government have found it necessary to defend themselves against the potential criticism of the levy as an infringement of the property rights of the insurers under Article 1 Protocol 1 of the ECHR. One would have thought that securing the agreement of the Association of British Insurers to the scheme would protect it against litigation by an individual insurer. One of the factors which they say is relevant in considering whether transferring to the insurance industry the cost of remedying the market failure to keep adequate records is that the compensation is limited to a percentage of the amount that would have been payable if the records had existed. In order to remedy this market failure comprehensively and restore mesothelioma victims to the position they would have occupied if the insurance records had existed, the figure would, of course, have had to be 100%. Would my noble friend consider aiming for a lower reduction—as all noble Lords who have spoken so far have recommended—than the planned 30%, preferably with the industry agreeing to an increase in the levy to fund the difference? I am advised that the Financial Services Compensation Scheme pays 90% compensation in a situation where the negligent employer is no longer trading and where the insurance company for the defunct company is also no longer trading. The FSCS is authorised by the Financial Conduct Authority and, so far as the asbestos-related disease claims are concerned, FSCS coverage is not limited to mesothelioma. Is this not a model for the scheme that is to be launched under this Bill?

Mesothelioma is an excruciatingly painful disease, and the struggle to get fair compensation for those who are struck down by it has been excruciatingly slow, having taken 40 years so far. As my noble friend Lord German said, the Bill is a milestone, but it is not the end of the road either for the beneficiaries of this scheme or for those who suffer from other asbestos-related diseases.

8.32 pm

Lord Jones: My Lords, I am glad to follow the committed remarks of the noble Lord, Lord Avebury. Nowhere in the Bill, nor in the Explanatory Notes, can the awful consequences of this disease be adequately described. One might read the entire Bill, one might read the helpful, detailed Explanatory Notes, one might have visited a Turner & Newall factory in the north-west, but the sheer human impact of the disease on the sufferer and the sufferer’s family is virtually impossible to place on the public record.

I welcome this measure and wish its speedy enactment as delineated by my noble friend Lord McKenzie. In this instance, we can see a positive trail. The Gordon Brown Government began consultation; the coalition Government carried matters forward to today’s second reading. I thank the Minister for his comprehensive introduction of the long overdue legislation because employers and insurers are not the easiest people to deal with in compensatory matters. The victims of this dreadful disease and their families surely deserve both justice and generosity. In my noble friend Lord McKenzie the victims have had a most reliable champion who

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remains their friend to this day. I acknowledge his detailed, industrious, conscientious and successful ministerial style. He had compassion and capability and got things under way. The noble Lord, Lord Freud—a parliamentary midwife perhaps—has brought matters very patiently to a head. His departmental Bill team must be very pleased with events today.

The Asbestos Victims Support Groups Forum UK—Messrs Whitston and Gordon—supplied a timely and cogent brief to Members of your Lordships’ House. It was helpful. My wish is that, before long, their proposals to embrace those excluded from the Bill might be acknowledged positively by the coalition. There are, for instance, quarrymen in Wales who may still seek claims and may yet get some help. We are not dealing with huge numbers and this dastardly disease is, literally, accompanied by death—there are reasons for moving quickly. In yesteryear, as this disease was stealthily advancing, there were still great British manufacturing industries. In steel, shipbuilding, railways, defence and defence-related industries, the construction industry and many more, asbestos was in use. The power stations and steel works always had their laggers. Asbestos products even entered our schools and hospitals.

In Grand Committee, we have annually debated orders relating to this asbestos-related cancer and similar orders. I recollect in Grand Committee describing the miserable happenings in a Hebden Bridge factory. The workforce had compressed deadly blue asbestos particles and proceeded to play snowballs on the factory floor, innocently and unknowingly. Such was the state of health and safety matters in the then industrialised British state of the late 1960s. This happening was described to me in the Commons by my fellow Front Bench colleague and occasional mentor, the late Harold Walker MP, who became Chairman of Ways and Means and then Lord Walker. He was from the shop floor. He was both a Minister and an opposition spokesperson.

The root of this helpful legislation lies in two Administrations in the 1970s: that of Prime Minister Harold Wilson and the one that followed it, that of Prime Minister James Callaghan. That is something to be proud of. I am glad to have served in their Administrations and to have helped. At that time, the Secretary of State for Employment, the late Michael Foot, successfully presented two Bills, which are the root of our discussions today: the Employment Bill and the Health and Safety at Work etc Bill. Despite much opposition and minuscule government parliamentary majorities, these Bills were, in the end, passed and enacted, with the help of a deeply committed TUC. The two Acts had a considerable impact on the economic, political and social history of Britain. That remains the case today, I am glad to say.

With this Bill, the Minister presents a long-awaited and much needed measure. Health and safety is, today, self-evidently a prime responsibility of every major company in the country. Those companies wish to have good health and safety measures and it is because of those endeavours by those Prime Ministers and Cabinet Ministers in those Administrations that I have talked about. There is no going back. Much has been gained but there is more work to be done. This measure is long overdue. Let us improve it. It might also be described as an historic measure.

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8.39 pm

Lord Monks: My Lords, I am pleased to add my voice to those congratulating the Government on moving forward. Some of us intend to ensure that this movement goes forward a bit more. Correctly, generous tributes have been paid to the Minister and to my noble friend Lord McKenzie. As my noble friend Lord Jones mentioned, others have been involved over many years in the battle to combat the damage that asbestos has done: people from the trade unions, the media, the medical and legal worlds, as referred to by the Minister, and many in this House and the other place.

I would have preferred the Bill to go further than it does and to address more purposefully some of the concerns raised by noble Lords tonight. I live in hope that we can make some improvements in Committee and that perhaps we will get some assurances about action in the future. My concerns are those of others—I will not labour them at this time of night. Limiting the Bill only to mesothelioma excludes 50% of those who suffer from asbestos-related diseases. I understand it would cost about 20% to 25% more if the levy included those and I do not think that this is an impossible ask—if not now then shortly in future.

The more immediate problem is the cut-off date of 25 July 2012. Comparing the treatment of someone who is diagnosed the day before with that of someone diagnosed a day later seems a sheep and goats distinction, which will be hard for some people. If the date is pushed back, then because of the short life expectancy of many sufferers, the problem will be a little easier. I hope that this will be a problem we can discuss.

My third major concern is about this 70% limit. It is unfair discrimination, as my noble friend Lord Howarth so ably put it, against people who cannot find their employer or insurer. Maybe it will be in the interests of some of the less scrupulous insurers to hide a bit and not volunteer all the information that they might. In those circumstances, to discriminate in the compensatory award against the individual concerned is not right. Fourthly, the insurance industry has helped a little in funding research into the treatment of these diseases and I hope that the levy on them will include provision for them to help research even further into the treatments available.

I worked in a brake lining factory more than 40 years ago and was one of the lucky ones. I worked there for six weeks. Many of my contemporaries are not around now. Male life expectancy in the ward where the factory was located was only 59 in 1993. That shows the pernicious effects that this substance has had. Congratulations on continuing the battle against it and let us go a little further than we are at the moment.

8.44 pm

Lord Alton of Liverpool: My Lords, in his opening speech, the Minister benchmarked our knowledge of mesothelioma to 1965. In that year, the Sunday Times reported on how an epidemiological investigation by Newhouse and Thompson for the London School of Hygiene and Tropical Medicine had shed light on the origins and nature of mesothelioma, finally laying to rest the scepticism of some pathologists who had until

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that time disputed its existence or its long period of hibernation, although more than three decades earlier, in 1930, the Merewether report had warned of a latency for asbestosis of some 25 years. Therefore, no one can reasonably claim that the industry, the Government or employers did not understand the risks that workers faced, although, scandalously, insurers routinely destroyed records during that period. That was not market failure—the phrase used by the noble Lord, Lord Avebury.

The 1965 report to which the Minister referred found that the interval between exposure and development of the fatal tumour ranged between 16 and 55 years. One case highlighted the fate of a woman who had died after brushing the white asbestos dust off her husband’s dungarees and work clothes when he returned from work every night. In 1965, it was discovered that even very brief exposure to the dust could prove lethal.

That was 50 years ago and despite assurances that research would be undertaken, there is still no cure. As we have heard in today’s debate, most people die within two years of diagnosis. As the noble Lord, Lord Jones, reminded us, by 1970 Britain led the world in asbestos regulation, yet the British mesothelioma death rate is now the highest in the world and has yet to peak. As we have all said, it is a horrible disease, and all those who have seen it will confirm that it leads to great suffering.

Just over a year ago in March and again in April I divided your Lordships’ House on the Legal Aid, Sentencing and Punishment of Offenders Bill on whether those suffering from mesothelioma should lose up to a quarter of their compensation to pay lawyers’ fees, arguing that victims could not be regarded as part of the compensation culture. Eighteen of your Lordships also joined me in a letter to the Times, in which we insisted that the Government’s claims that the proposed legislation would,

“deter frivolous and fraudulent claims is, frankly, risible as far as dying asbestos victims are concerned”.

We contrasted the Government’s proposals with the failure to deal with increasing road traffic accident claims and alleged whiplash claims, with whiplash alone costing a staggering £2 billion annually.

Your Lordships will recall that the late Lord Newton of Braintree, in his last major contribution in the House, gave his support to my amendment. In response to a Question I put to him at that time, the Minister told the House:

“I am spending considerable time on mesothelioma currently and I hope to sort out the real problem, which is the large number of people suffering from the illness who are getting no compensation at all because they cannot trace who was insuring them”.—[Official Report, 23/4/12; col. 1549.]

This Mesothelioma Bill is a down payment on that promise. Like others, I pay tribute to the Minister, the noble Lord, Lord McKenzie, and the officials who have worked with them, who have invested considerable time and effort in trying to deal with mesothelioma victims who have been unable to trace their insurers. As we have heard, it is a down payment rather than a comprehensive solution; for instance, it does not include the many victims of other asbestos-related diseases.

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At the briefing meeting, the Minister confirmed to me that the title of the Bill prevents any other categories being included at later stages.

Like the noble Lord, Lord McKenzie, my reservations about the Bill are that average compensation payments will be reduced by approximately 30%—a point also made by the noble Lord, Lord Howarth—and that only mesothelioma sufferers diagnosed after 25 July 2012 will be eligible to apply for a payment. The Bill excludes all those diagnosed prior to 25 July 2012. At the very least, the three-year limitation period in law should apply. I hope that we will consider this in Committee.

This Bill addresses the needs of victims who cannot trace their insurers. As we have heard, that is about 300 a year, but what about all the other victims who know who their insurers are? Given that the consultation by the Ministry of Justice, which does not predicate this Bill but is certainly influenced by and connected to it, commences in July, I would be grateful if the Minister can tell us the timescale on which he envisages further changes being made, whether he can assure us that nothing will be done that will place additional burdens on the victims of this fatal disease and whether the Government see this Bill as a template that is likely to be extended.

The Mesothelioma Bill has been inextricably linked to the Ministry of Justice proposals, principally a mesothelioma pre-action protocol, which I understand that the Association of British Insurers wrote for the MoJ and which the ABI says will reduce the time of settling a claim to three months. Considerable scepticism has been expressed about the ABI claims, and I wonder whether the Government have tested those claims.

What really cut through the foot dragging, as the noble Lord, Lord McKenzie, said, was Senior Master Whitaker’s ground-breaking practice direction, and court procedure which gets liability resolved in most cases very quickly. Surely it would have been better to fund those specialist courts and have a more effective approach using those courts than allowing for delays inherent in the proposed protocol.

I was also surprised and disappointed that although the industry has been fully involved at a formal level with the Minister in drawing up these proposals, the victim support groups were not. Many will share their view that 100% compensation—that is the full age-based, average compensation—should be paid, although I know that the Minister will insist that 70%, which it has to be said is worth more than £300 million during the next decade, is better than no payment. I have some sympathy with that, but remember that for decades it was asbestos victims who bore the burden of untraced insurance and insurers have saved hundreds of millions of pounds avoiding liability for insurances that they wrote. For decades, the taxpayer has funded the government lump-sum payments for those who could not trace their insurer, and they have recovered those payments only when an insurer was found since 2008. Prior to that, insurers recovered all government lump-sum payments which offset the compensation they paid, worth hundreds of millions of pounds.

Let me turn to my final point. As well as adequate compensation, should we not be spending more of our time and money, as was alluded to by the noble Lord,

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Lord Monks, in finding a cure to prevent the ravages of this fatal disease? In 2011, the British Lung Foundation invested £1 million in research, the rest of the voluntary sector invested £400,000 and the Government invested nothing at all. These are scandalously small sums to spend on a disease which kills so many people. Let us contrast the £0.4 million from the not-for-profit sector spent on mesothelioma research with the £22 million for bowel cancer, the £41 million for breast cancer, the £11.5 million for lung cancer and the £32 million for leukaemia. Indeed, there are 17 other forms of cancer for which far more research resources are reserved than for mesothelioma. Mesothelioma is literally at the bottom of the list. In 2011, the voluntary sector invested £5 million in myeloma research and £5.6 million on malignant melanoma—the cancers immediately above and below mesothelioma in the table of mortality figures. Yet, even with such limited funds there have been some exciting developments, including the creation of the world’s first mesothelioma tissue bank for researchers, a transatlantic collaborative study of the genetic make-up of mesothelioma and work on overcoming resistance to drugs used to treat the disease. It shows what can be done with the right investment. This Bill offers an opportunity to create a sustainable fund for mesothelioma research to help ensure that future generations do not have to suffer in the same way that so many have in the past.

I have today given the Minister a letter, which will be circulated in your Lordships’ House tomorrow, which has been signed by 20 Members. They include the noble Lords, Lord Avebury, Lord Bach, Lord Crisp, Lord German, Lord Harris of Peckham, Lord Howarth, Lord McColl, Lord Monks, Lord Pannick, Lord Patel, Lord Tugendhat, Lord Turnberg, Lord Walton of Detchant and Lord Wigley, the right reverend Prelate the Bishop of Hereford, the noble and learned Baroness, Lady Butler-Sloss, and the noble Baronesses, Lady Greenfield, Lady Masham, and Lady Thomas of Winchester. Since the letter was written the noble Lord, Lord Kakkar, and the noble Baroness, Lady Morris of Bolton, have also indicated their support. The letter underlines the breadth of support throughout the House for an amendment which will be tabled for Committee stage on 5 June and which enjoys the support of the British Lung Foundation. It involves a small administrative or membership fee for those companies in the scheme and would raise £1.5 million annually. It would have no cost implications for the public purse, although I hope that the Government would consider providing match funding. It is, after all, receiving millions of pounds from the new scheme.

This Bill is a down payment in honouring the Government’s promise to respond to victims of mesothelioma. I welcome that, but I urge the Minister to see what more can be done within the scope of the Bill to bring justice and hope to those who are blighted by a disease that was none of their making. The truth is that we cannot eradicate all asbestos from our homes, schools, hospitals, factories and offices, but we can act justly towards those who have been afflicted by mesothelioma. The one certain way to prevent deaths from mesothelioma is to find a cure.

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8.55 pm

Baroness Whitaker: My Lords, when I worked in the Health and Safety Executive, mesothelioma was recognised as the most dread of all occupational diseases. It is as yet incurable. There is no safe threshold, so that the smallest exposure to crocidolite or blue asbestos could produce it. There are many cases on record of a few weeks’ work or less in which the tiny fibres lodged fatally in the lung cavity, producing a lingering, miserable death in breathlessness and pain. A little girl contracted it simply from being around her grandfather’s work clothes. It was diagnosed when she was in her 40s.

Almost worst of all, although the toxicity of asbestos generally was recognised at the very beginning of the 20th century, effective preventive regulations had to wait until the 1970s. The import and use of blue asbestos was not banned until 1985, after many hard fought legal battles. As it is a disease with a long latency period, those dangerous conditions from before the ban are still now producing cases of mesothelioma.

The disease is now recognised to be so clearly linked to occupational exposure that there have been arrangements for compensation for some time, but there are obvious difficulties when an employer or the employer’s insurer goes out of business. Any improvement on the present system, where invalids not infrequently die before their case is settled, is an important step forward.

The Government’s proposals are therefore welcome. While there are aspects of the Bill that could, and I hope will, be improved in the time-honoured way in which your Lordships’ House deals with legislation, I, too, congratulate the Minister on bringing the Bill before us.

As other noble Lords have said, we shall need to look at the rationale for making the cut-off date for diagnosis as of last year and for setting the compensation cap at 70% of the average. Both will result in arbitrary and inequitable decisions. Some victims of occupational exposure with an equally valid claim will not be covered, as my noble friend Lord Howarth of Newport explained. There is much to tease out in the proposed system itself. I look forward to the Minister’s further answers to these points. I hope that he will offer the possibility of adaptation in the interests of fairness.

8.57 pm

Lord Wigley: My Lords, I welcome this Bill as a major step in the right direction but one that needs some aspects clarified and perhaps strengthened at later stages. I join the number of noble colleagues who have paid tribute to the Minister for his genuine commitment in these matters. I think that is recognised by everyone. I also want to put on record a tribute to the trade unions for the work that they have undertaken in this area. Very often, that is overlooked. The trade unions have played a major role over the years in trying to improve standards and safeguard people from such diseases.

Noble Lords may be aware from the debates last year of my interest in these issues. I had some involvement as an MP for a slate quarrying area in the 1979 Act,

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which is relevant to some mesothelioma sufferers. I represented an area that had a Turner & Newall/Ferodo factory that used asbestos.

As a number of noble Lords have stated, it can take decades for symptoms of this horrendous disease to surface, and it almost always develops as a result of exposure to asbestos. Those who contract mesothelioma are overly represented in construction and certain industrial sectors, although people can contract the disease, as has been stated by a number of noble Lords, by undertaking renovation work on buildings or even washing the clothes of those who work with asbestos. It has been stated that even teachers and pupils may have had an exposure from the decaying fabric of school buildings where asbestos was in the middle of walls and had become exposed.

The disease is notoriously difficult to diagnose, so it is often in its advanced stages by the time a diagnosis can be made. After diagnosis, however, the progress of the disease is usually rapid and the average life expectancy after this point is only two years, as has been said. Since the symptoms can take decades to develop, frequently employers have gone out of business by the time the sufferers are in a position to seek compensation and insurers’ records often have been destroyed, making it difficult to trace which insurer the employer was registered with.

Since the Employers’ Liability (Compulsory Insurance) Act 1969 came into effect, most employers have been required to obtain insurance to cover their liability for any bodily injury or disease acquired by their employees as a result of their employment. However, that did not solve all the problems by any means. The Pearson commission on civil liability and personal injury considered these matters, particularly that of no-fault liability. It is a shame, as the noble Baroness, Lady Taylor, suggested, that greater progress was not made during that time.

Eventually, the 1979 pneumoconiosis Act provided rough justice for a number of industrial lung diseases, including mesothelioma, that were not otherwise covered by the compensation provision. I would be interested to know how the Minister sees the compensation tariff levels provided by this new Bill compared with those provided under the 1979 Act. Can we perhaps have, for Committee, the draft scheme rules and an outline of draft orders indicating the levels of age-related compensation which the Government have in mind?

I am sure noble Lords on all sides of the House will be glad that progress is being made. However, the Mesothelioma Bill is narrower in its scope that some of us would ideally like to see. It offers recourse to those suffering from diffuse mesothelioma only—and eligible dependants, of course—and it is available only to those diagnosed on or after 25 July 2012. The Bill makes provision for a scheme that will make payments to these persons provided that they have brought no action against an employer or that employer’s liability insurer because they were unable to do so. Surely that date, as has already been suggested, should be three years earlier, in line with the three-year limitation period in law. That is an objective basis on which to make a change. I hope that we will have an opportunity to return to that point in Committee.

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I draw to the Minister’s attention the fact that conditions excluded from this Bill’s provisions, presumably because of the difficulty of proving causation, have already been included in an administrative scheme that pays compensation to all asbestos victims at Turner & Newall asbestos factories. If they can do it, why cannot the Government do it?

Alongside this, the Ministry of Justice is, I understand, planning to consult on changes to the legal process for mesothelioma claims, including the introduction of a compulsory online gateway and other somewhat controversial measures. No doubt we will have an opportunity to return to this in Committee, as we shall to the implications of Schedule 2, where I fear the wording may inadvertently exclude persons who should still be included in the purview of the 1979 Act.

The proposed mesothelioma support scheme is the central plank of this new provision. Although it is of course welcome that the Government are making progress for many sufferers of this debilitating disease, a number of concerns have been raised by organisations with expertise in the field. The scheme has been criticised for having been drafted without consulting claimants, support groups and relevant trade unions. The fact that support will be limited to those suffering from diffuse mesothelioma has also been highlighted, in contrast to the Employers’ Liability Insurance Bureau proposal by the previous Labour Government in 2010. Thompsons Solicitors have also pointed out that hundreds of people have unnecessarily lost out on compensation due to the delay of more than two years between the 2010 consultation closing and the present scheme being announced in July 2012.

Most controversially, I think, and as the Association of British Insurers has recognised, the scheme will pay only approximately 70% of the average value of claims.