That is surely an injustice. If the suffering justifies the 100% figure, on what possible basis can a lower figure be offered in settlement of the liability? The insurance industry’s rationale for allowing this injustice to occur is apparently that it will maintain an incentive for people to attempt to trace insurers so that claims will be brought to this scheme only once all other avenues have been exhausted. I suggest that paying only 70% shows a flagrant disregard for the highly distressing and incapacitating symptoms that sufferers experience at a time when they are likely to be seeking compensation, as well as the very short life expectancy of these people. Expecting sufferers to exhaust all other avenues before bringing a claim to the scheme makes it quite likely that the person in question will have died before compensation is gained, and will put increased pressure on terminally ill people. I urge the Government and the industry to reconsider this aspect of the proposed scheme.

I would be grateful to hear the Minister’s thoughts, if not now then at a later stage, on comments that have been made by representatives of the insurance industry that the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill currently under consideration in the National Assembly for Wales may undermine the provisions included in the Mesothelioma Bill. The Assembly Member under whose charge the asbestos Bill was presented has written to me stating that his

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Bill would have no adverse relationship with the legislation now under consideration. I would welcome the Minister’s comments on this matter and would like to know whether any discussion has taken place with Welsh government Ministers in Cardiff on the most worrying aspects of the interrelationship of the two Bills. Having said that, I welcome the step being taken.

9.06 pm

Lord Browne of Ladyton: My Lords, it is a pleasure to follow the noble Lord, Lord Wigley. Characteristically, despite how late his contribution has come in the debate, he has identified fresh points that have not been raised by other speakers. That has added significantly to our consideration of the Bill and challenges me to do the same. I shall try to approach the next few minutes in a way that is not repetitive, but I start by joining the Minister in his generous words of praise for my noble friend Lord McKenzie of Luton and his consistent contribution to advancing the cause of mesothelioma and other asbestos sufferers—indeed, to health and safety law in general.

I couple the Minister in that praise, because I know from my own experience what challenges he faced in trying to deal with the insurance industry over this very issue. For a short time in 2003, I was the Minister for Employment and had responsibility for health and safety. I came into the job at the beginning of a summer when there genuinely was a market failure in relation to compulsory employer’s liability insurance, and I know exactly the nature of the challenge that he faced with the insurance industry over this insurance. I pay tribute to him for getting the Bill before us in this fashion.

Having said that, though—taking on board all his entreaties that there are challenges of pragmatism and speed, the fact that we must bear in mind the nature of this filthy disease and its effect on people, the fact that there are people out there who are waiting for justice and have been for some time, and that any delay will mean that people will die before they get it—we still have an obligation to be fair. Fairness and justice are important considerations in what we are doing with this legislation. Having listened to the debate thus far, I think that there is a very strong thread running through it: the judgment as to whether a payment scheme such as this, as opposed to a compensation scheme, serves justice has to be seen in a much broader context than those challenges, with respect to the Minister and the papers that are before us. It has to be seen in the broader context of what can be done to improve the ability of people to get full compensation through our courts.

That leads me to a point that I cannot resist the temptation to make, just because of the Minister’s initial words in introducing the Bill. He said in an early sentence—indeed, it may have been the second sentence that he uttered—that where a person is injured by negligence or a breach of statutory duty, that person should be compensated by their employer. I agree with them. I regret that that statement of principle did not inform the provisions of the Enterprise and Regulatory Reform Act, which we passed this year and which broke the link between breach of statutory

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duty and compensation by an employer. I invite the Minister to reflect on those words in a broader context, rather than just in relation to the matters before your Lordships’ House this evening.

The question of whether we are being just has to be seen in the context of why we need to address this issue in this way, at this stage. I do not intend to repeat the words of other noble Lords, including the noble Lords, Lord Alton of Liverpool and Lord Avebury, and my noble friend Lord Giddens, who pointed out in short that, for decades, employers, and indeed Governments, knew exactly what the risks of using this substance were and did nothing about them but spent a lot of effort resisting justice for those who were being afflicted by the substances they were deploying and using extensively throughout the country.

In relation to the long latency of this and other asbestos-related diseases, I do not think that we can describe what the insurance industry did in recklessly—and I am being kind in using that word—destroying its records as inconsistent record-keeping. These were deliberate acts. I cannot go so far as to say they were designed to have the consequence that they have but they were calculated to do so. If we had not had this combination of deliberate acts over an extensive period, we would not be facing the problems that we face now.

I share the concerns of many noble Lords about the arbitrary nature of the anticipated payment of 70% of average compensation and the cut-off date that will be very brutal to certain people who have suffered greatly. I want to make two points in particular, which I think will be additional arguments at least, if not completely new points in the debate. The first relates to the recovery of benefits. I accept the constraints that have been in place in these negotiations and because of that I am willing to accept that a payment scheme, as opposed to a compensation scheme, is the way forward, at least in the short term. However, that is entirely inconsistent with the approach that the Government plan for the recovery of benefits. My noble friend Lord Howarth of Newport asked a series of very detailed questions about benefits, to which I am sure the Minister will be able to reply. I can tell my noble friend that the answers will be extremely disappointing. It is very clear that the Government intend to recover benefits paid to those who have suffered. That may not affect continuing benefits because of the way the compensation recovery system works, but it will certainly be a significant injustice to people who have received benefits and find them clawed back from their payment.

I draw the attention of noble Lords to the Government’s impact assessment. I accept that this is an excellent document but it is also a quarry of very interesting information, as impact assessments always are. I refer particularly to paragraphs 13 and 14 of the impact assessment signed by the Minister on 2 May 2013. They set out in short how the compensation recovery scheme works. Paragraph 14 states:

“In a civil case, where an individual receives compensation from an employer or insurer, the government … recovers the social security benefits and lump sum payments it has made from the compensation paid”.

That is how it works, I agree with it and there is a justification for it, as the Minister explained: you

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cannot be compensated twice. However, as he is at great pains to explain, those who will get payments out of the scheme are not being compensated. This is a payment scheme, not a compensation scheme. It is not designed to compensate people for their loss and if it were these benefits would be restricted to the part of the loss that relates to income, not the part that relates to pain and suffering, because that is how the compensation scheme works otherwise. Therefore, there is an inherent unfairness in this. With respect to the Minister, the Government cannot have it both ways. This cannot be a compensation scheme for the recovery of benefits paid to those who have been paid out of it, but only a payment scheme for the nature of the compensation. Someone recently said to me in an argument that if you cannot ride two horses you should not be in the circus, but that is not a good enough answer to this issue.

Briefly, I believe that this scheme will end up in the same place as the Motor Insurers’ Bureau scheme, which on its website says that it is,

“a central fund to provide a means of compensating the victims of road accidents by negligent uninsured and untraced drivers”.

It goes on to say:

“The ultimate cost falls to law abiding motorists via their insurance premiums”.

Inevitably, that will happen to this scheme. That is what the impact assessment says. I draw noble Lords’ attention to paragraph 97; effectively, the research shows that that is the industry’s intention, while the impact assessment stands itself on its head and concludes the opposite in the last part of the paragraph. I draw these two issues to the Minister’s attention. I hope that he will either address them now or at some stage in the debate.

Finally, I repeat the words of my noble friend Lord Jones, who said that no words are adequate to describe the nature of the suffering and the anguish that this awful disease has generated. Our obligation is to respond to those pleas of anguish. We have only words to do it, but surely we can translate those words into some form of fair legislation.

9.16 pm

Lord Whitty: My Lords, like other noble Lords who have spoken, I welcome the Bill and will not seek to delay it. Having said that, the Bill is deficient. It needs to be strengthened, either in Committee in this House or through secondary legislation. I hope that that happens.

My basis for speaking is that I have been involved in this field for nearly 40 years. In the early 1970s, when I was a trade union health and safety officer, I sat on the first HSE drafting committee on the asbestos regulations. Of course, as the noble Lord, Lord Alton, has said, by that time the scientific knowledge was clear on blue asbestos and pretty clear on white and brown asbestos as well. However, it took a long time for the government machine to get in place. Of course, employers were still in denial. My union, the GMWU, had significant membership in Turner & Newall itself, and frankly some of them were in denial as much as the management. However, the reality was that they were dying.

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We also had a group of workers who liked to call themselves thermal insulation engineers, or laggers, who stripped off asbestos from machinery in shipyards, steelworks and royal government dockyards. There were some fantastic leading figures among that group of workers, almost all of whom were dead in their 40s from asbestosis. Many of those who survived came to suffer from mesothelioma as well.

As my noble friend Lord Jones and others have said, this is an utterly horrendous disease. I am pleased that, belatedly—50 years on from the scientific knowledge being here—we are finally getting to grips with it. The previous Labour Government did a lot in relation to other asbestos-related diseases, and the noble Lord, Lord McKenzie, started the ball rolling on this one against considerable opposition from the insurance companies and, be it whispered, from the Treasury.

However, we still do not yet have a sufficiently effective Bill. Others have pointed to the deficiencies in relation to those it excludes because of the date. Frankly, many are excluded by that date, given the life-expectancy after diagnosis. Given the exclusion of other long-latency diseases and mesothelioma, which can generally be ascribed to asbestos, although the causal association may be slightly weaker, and to the whole structure of compensation, it is true that those who get through this system, or their dependents, will belatedly get a very significant sum. That is what, rightly, the civil courts have awarded in individual cases which have been through the court system. I find it pretty disgraceful that the average that comes out of that system will now be discounted by a whole 30%.

When one stands back it is not only that there are normally scanty records that employers have disappeared, and that individuals kept changing their employer in many of these sectors, but, as my noble friend Lord Browne of Ladyton just deftly hinted, there was some degree of destruction of records involved here as well. That is the responsibility of the insurance industry, and one they should face up to. His analogy with the motor insurance bureau is also apposite. After all, in the motor industry insurance is compulsory on motorists, as employer’s liability is compulsory on employers. Therefore, despite the greater difficulty of proof, the analogy holds. In that situation, rather than have a sifting body, possibly interpreted by a technical committee, and then the DWP looking at it, or whatever body the DWP eventually devolve this scheme to, effectively the insurance industry faces up to its responsibility and pays effectively the proven 100% of the claim. That is not a complete analogy, but compared with that 100%, a 70% figure seems very difficult to justify. There is a higher risk on the insurers and an increased administration cost on them. I think it was the noble Lord, Lord Avebury, who said that maybe 90% in other analogies is perhaps appropriate, but any person would regard 70% as excessive.

I commend the Minister on getting this Bill to this stage, and no doubt having the equivalent arguments with the Treasury to get it to this stage. However, on the negotiations, I dealt with the insurance industry on flood defence and with some of the Minister’s colleagues in Defra who are in the current Government. The insurance companies are tough negotiators. They

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live for negotiation, even more than trade unionists do, and at times are rather more successful than the trade unionists. We could afford to be a bit tougher in this respect, in particular in relation to the discount. We have a significant exclusion on the basis of the date, another on the basis of the non-mesothelioma diseases, and on top of that the insurance industry has somehow come out with a 30% discount. I suspect that they went home and thought that was a result. The Government could get a better result. I am not sure whether we will manage to get a better result in the course of this Bill. I hope that some of those anomalies can be addressed; for example, the Minister ought to be prepared to accept an amendment that allowed him or a future Secretary of State to add the other diseases to the Bill. I would have thought that that ought not to be a great difficulty for the Government. I hope that when we debate the regulations that might stipulate the 70% or something like it, a little bit of give in an upward direction would be forthcoming from the Government.

Having said all of that, I welcome the Bill. We need to make sure that, for the reasons the Minister spelt out at the beginning, it gets a speedy result within this House and gets on to the statute book. At the end of the day, the people we are helping have gone through horrendous difficulties, and their nearest and dearest have watched them do that. We have a responsibility to ensure that at least the majority of those people get adequate compensation as rapidly as possible.

9.24 pm

Baroness Sherlock: My Lords, this has been a very rich debate, suffused with not only the expertise but the passion and compassion for which the House is widely celebrated. It has been a privilege to hear personal stories about people who have been affected by mesothelioma: to hear of lives cut short and ending avoidably in terrible suffering. I am grateful to all noble Lords who were willing to share those experiences, as well as for the knowledge that they brought.

I acknowledge once again what an extraordinary range of people we have in this House. I pay tribute to all those who in many different ways have been part of bringing the story to this stage of its development: to those who campaigned in Parliament, such as the noble Lord, Lord Alton, who has done so much to raise the issue, and the noble Lord, Lord Avebury; and to those who have been Ministers, such as my noble friend Lord McKenzie in recent times and, in times gone by, my noble friend Lord Jones, whom I thank for such a passionate speech and for bringing us back to the point of remembering what this means for those who are going through such pain and suffering at the moment.

I pay tribute also to my noble friend Lady Donaghy and other trade unionists for reminding us of everything the trade unions have done, and to my noble friends Lord Whitty, Lord Monks and others who have been part of the story of trade unions getting behind efforts to try to change this country’s attitude that nothing could be done and prove that perhaps it could. I pay tribute also to the Minister for his personal commitment and—I suspect that my noble friend Lord Whitty was

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right about this—for conducting some pretty tough negotiations. We hope to give power to his elbow so that he can go back and make them more successful still.

There has been an extraordinary unanimity round the Chamber on almost every Bench on what the top issues will be on which the Minister will have to convince us as the Bill goes through its remaining stages. In true Eurovision style, the top three are already predictable. The first is the scope of the Bill. I understand the pressures that may have led the Government to settle where they have landed. The Minister argued that the Bill’s focus on mesothelioma was based on the fact that it is a terrible disease that is almost always fatal, and that is exclusively caused by exposure to asbestos. That much is uncontested. However, the fact that mesothelioma sufferers will have a case for compensation does not mean that others do not also have such a case, and does not take away from the fact that there are still too many victims of other long-latency asbestos-related conditions who should be entitled to compensation but cannot find either an employer or an insurer to pursue. Of course, their claims would need to be tested, but I see that the Government are not minded to go down that road.

I understand the attractions of clarity and moving forward with the support of stakeholders, but I hope that the Minister has heard the breadth and strength of feeling from all around the House that the Bill needs not only to address this pressing problem but, as my noble friend Lord Browne put it, needs to be fair. It will not be perceived to be fair if it cannot at least set out the way in which the Government will move forward. If the Minister feels that the Bill is not the route forward for that, I hope that he will be able to tell us what the way forward will be, so that by the time we conclude these proceedings we will be able to give some comfort to those who may otherwise feel that they have been unfairly ignored in the process.

I also hope that in Committee we will have a chance to discuss what can be done to try to make the process of moving on in other areas more systematic. I was very struck by the point made by my noble friend Lady Taylor about the piecemeal way in which steps were taken in the past. It would be very helpful if we could set out a way forward that did not involve constantly being dragged step by step into solving problems that will one day have to be solved anyway. Perhaps this time we could be the House that breaks through that way of doing things and tries to find a more systematic way of planning for the future.

The second question on which there is almost total unanimity is why the cut-off point is fixed at 25 July 2012. This point was raised by many noble Lords. Suggestions were made that it could be set at February 2010, when the consultation opened, or May 2010 when it closed. The Asbestos Victims Support Groups Forum suggested that a three-year rule in law should be applied. Whatever the Minister comes forward with, it would be helpful if he would take the House carefully through his reasoning for July 2012, and against having an earlier commencement date. From the reaction of noble Lords around the House, it would seem that simply feeling that one

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could not leave it open-ended was not enough of an answer to the question: why this, why now and why only then?

The third big question is the crucial question of the proposed nature and level of compensation. My noble friend Lord Browne of Ladyton raised some important questions about the way in which damages are constructed. I hope the Minister can set out some more information for us on the record about that, about how he came to this space—in particular, the question of why compensation is likely to end up being set at 70% of the average damages being awarded by the civil courts. I confess I have not yet heard a persuasive argument for that. I understand that the Minister seemed to be saying—and it is certainly what the briefing said—that the rationale is that an incentive of some sort is needed to ensure that this is genuinely a scheme of last resort. However, my noble friend Lord McKenzie raised the telling question: since claimants can by definition access the scheme only if their former employer’s insurers cannot be traced, and since the body will actually have an obligation to help people trace an employer, why is any incentive needed? The door is only open to people who meet this condition, so they surely do not need to be bribed to step through it as well—or in this case, rather than being bribed, they are facing a hefty financial penalty if they are unable to identify a provider of employers’ liability insurance through no fault of their own, a point made very tellingly by many noble Lords.

There is then the question of who runs the scheme. A number of noble Lords have made the point that concerns are being heard abroad that it might be the insurance industry itself that will run the scheme. The Bill, of course, carefully sets out two options: one of having the scheme run in-house, the other run externally by a scheme operator. However, it is clear in the briefing that the plan is that the insurance industry should run it. It is, we are told, already in the process of setting up a scheme in anticipation of the Bill becoming law, which could then be up and running right away on day one, on the assumption that the scheme meets the criteria set out by DWP. However, as my noble friends Lord McKenzie and Lady Donaghy and others have pointed out, there is a potential conflict of interest here if the same industry that has to fund successful claims not merely underwrites but administers the compensation scheme. Aside from the actual conflict, is the Minister not concerned that the perception of a conflict may be a cause of concern to victims and their families? Have the Government done any research to find out how claimants would view such a provision, having the scheme run by the very industry with which they have to join battle?

In particular, could the Minister tell the House whether he considered any alternatives? Would it not have been better, perhaps, to have had an arrangement like that for the FiSMA bodies, such as the Financial Ombudsman Service—and I declare my interest as a non-executive director of that body—or the Financial Services Compensation Scheme, mentioned by the noble Lord, Lord Avebury? Both of those bodies are set up in statute and funded by levies on the financial services industry, but they are administered by independent scheme operators overseen by boards. The job of the

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board is to guarantee the independence of the scheme, both from consumers and from the firms that underwrite the scheme. Therefore, I would be grateful if the Minister could tell me whether he looked at that as an alternative, and, if so, why he rejected it.

Moreover, I would be very interested to hear the Minister’s response to the matters raised by my noble friends Lord Howarth of Newport and Lord Browne about the question of benefits. Why do the Government see this position as analogous to that of a compensation payment, an interesting point made by my noble friend Lord Browne, who did indeed manage to introduce additional material very late in the day? Also, my noble friend Lord Howarth asked whether there would be any caps on the amount that can be clawed back, what particular benefits are in that situation—will it be all benefits, including carers’ benefits?—and what happens to the way in which the money is treated? Finally, there was the very important question of research, raised by the noble Lords, Lord Alton and Lord Monks, the noble Baroness, Lady Masham, my noble friend Lord McKenzie and others. I very much hope that we can return to that in some detail in Committee.

I do not want to detain the House any further at this time. This is a Bill whose purpose we support fully, as one would expect, since the previous Labour Government in the person of my noble friend Lord McKenzie started the consultation process which brought us at last to this point. Action has long been demanded by victims, their families and the organisations that have supported them over many years. We owe it to them to act swiftly, but we also owe it to them to get it right. We owe it to the people who depend upon this fund to scrutinise this legislation as well as we can to ensure that it is robust and that the redress it provides will meet the needs placed upon it. Furthermore, I think we should take a moment to reflect on the terrible consequences of a failure to take seriously the health and safety of workers and, indeed, citizens, a point made by my noble friend Lord Giddens, to whom thanks are due for a very interesting exposition of how we came to this point. I was very taken by his suggestion about the idea of a pro-active scanning forward. I would be interested to hear the Minister’s response to that. How do we learn not just from what has happened but learn lessons for the future?

There is a great temptation in modern life to complain about health and safety as though somehow it is there solely as a means for bureaucrats to stop any of us having any fun. The next time any of us is tempted to complain about there being too much health and safety, we might remember the legacy of the days when there was precious little of either health or safety in too many workplaces.

9.35 pm

Lord Freud: My Lords, I have been in this House long enough to have an expectation that this would be a high-quality debate. I can confirm that my expectations have been exceeded. This was a very good debate which showed that noble Lords have focused on the issues and is the precursor to a valuable process being undertaken as we go through Committee and subsequent stages of the Bill.

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Clearly, the Bill deals with what I called a very damaging historic market failure. Various noble Lords, such as the noble Lords, Lord Avebury, Lord Alton and Lord Browne, implied that it might have been rather more than that. Indeed, it was implied that there might have been reckless behaviour. Observations have also been made about the way in which the paperwork was dealt with. To be blunt, many people in the insurance industry would admit that that was the case.

This is not the Bill I wanted to bring to the House. I will explain why that is the case because it is very important that noble Lords should understand that. I wanted to find a way of allocating responsibility to the companies that had engaged in the relevant business in the year in question so that we could levy a specific charge on those companies for the business for which they were responsible over the relevant period. We would thus have allocated the responsibility where it should lie. I spent a lot of time and, indeed, some of the DWP’s money, researching that proposition. However, I came to the conclusion that such a course of action was legally too risky in a most litigious environment. Therefore, we have moved to a second-best position, the implications of which are driving many of the shortfalls that noble Lords have pointed out vigorously tonight, because it is one thing to say that there is a moral imperative to look after the individuals suffering from this terrible disease and their dependants but it is another to pin the responsibility on companies which, frankly, had nothing to do with it. We are looking to insurers in the employers’ liability market to fund this provision through the levy and we are looking at the appropriate level of levy in that marketplace when direct blame cannot necessarily be attributed. That is why the scheme is designed in the way that it is and why various constraints are in place.

I think that I heard support for the principles of the scheme. We can get money to the sufferers regardless of whether the insurance records have been lost. In general terms it is right that we look to the insurance industry to provide this support, not least because this situation is a horrific blemish on its reputation which it will, and does, want to correct and mitigate.

We need to help the insurance industry to impose this levy. It cannot do it on a voluntary basis, which would have been the ideal position and the one which I would have preferred. It needs the legislative support because it is a disparate industry with very many different players in it.

We are clearly going to spend a lot of time going through the detailed questions raised. As I will be going through them in Committee, I do not intend to spend a lot of time going through everything now, but I will try to pick up the main themes. I need to add something that I omitted to do earlier, my thanks—which several Lords have mentioned—to the victims’ groups and the trade unions for all the work they have done and for which I am personally most grateful.

Before I get into the drier stuff of this, I must add that many noble Lords talked about the human stories. Nearly all of us will know someone who has gone through this, and there is an awareness here that in many ways this is one of the worst diseases to get. I

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acknowledge that. The noble Lords, Lord Giddens and Lord Monks, and many other noble Lords made that point and told us some stories to remind us.

One of the key issues raised by virtually all noble Lords—too many to mention individually—was about setting the figure at 70%. There was a real juggling act about what the right level of levy is, and that is something we can spend more time in Committee debating. If we set the levy too high, in practice what will happen is that it will just raise the amount to be paid and the insurers will pass on virtually all of it to British industry, which is something I was very keen not to see. There is a lot of economics around this, but if you set a small level in a reasonably competitive market, most of it will probably be absorbed by the insurance industry, which should do so, rather than by British industry, which should not be required to absorb it. There is a real balancing act in the amount of money that it is sensible to raise this way to get to the victims, and that is the main driver here. It is not, I want to emphasise, the behavioural incentives that have been floating around. That is not what we are doing here. We are trying to get a balance of funding.

The second issue is, because we went early—theoretically one can start doing a levy like this only at the time at which it becomes law—we have gone from the date of the formal announcement, from which point the insurance industry can start to reserve. However, one of the issues coming from that is that in the first year, we effectively have to make over three years’-worth of payments, and noble Lords will see the problem instantly. There is suddenly a very large levy in one year of the kind that is very difficult to absorb. That is the reason that we have worked to smooth that first year over four years, so that we do not get these sudden large amounts, but it is a constraint. I shall not go into the detail tonight of how difficult all this is to do, although perhaps in Committee I could be persuaded to open my heart a little about particular Treasury rules, levies that are treated like taxes and why the Treasury, which collects taxes, should give the DWP any money to make payments.

Lord Howarth of Newport: Even before the noble Lord opens his heart to us in Committee, will he look again at the question of the start date in the light of the figures we have been given? We have been told that the life expectancy of a mesothelioma sufferer following diagnosis is perhaps two years. We are told that around 2,400 people die each year, and that the insurance history can be traced in more than 50% of cases, which means that more than half are able to pursue their case against the insurer. That leaves around only 1,200 people who would benefit if the noble Lord were simply to remove the start date. I would have thought that that ought to be affordable and that the insurance industry ought to accept that quite limited extension of its responsibility. I hope that the noble Lord will think about that and perhaps even amend Clause 2 himself and not just leave it to us.

Lord Freud: Virtually all noble Lords mentioned the start date. The trouble is that, in principle, this is a sheep and goats situation. Any date, wherever it is set,

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as the noble Lord, Lord Monks, mentioned, is always arbitrary at one level. To pick up on the point made by the noble Lord, Lord Howarth, this concerns dependants as well, so if there was no start date and the date went back indefinitely, we really would be talking about a huge amount of money. We will spend a lot of time talking about this, but let us flesh out the areas of discussion.

I think that we might look in Committee at the point made by my noble friend Lord German and reinforced by the noble Baroness, Lady Taylor, about a cap or a different structure. Noble Lords can see my constraints, but we can look at shaping the structure in different ways. The noble Baroness, Lady Donaghy, asked when we would have the report on payments. It will be ready in the summer. In response to my noble friend Lord Courtown, I will say that we will have the scheme rules ready to be looked at by the time we reach Committee.

Extending this to other asbestos-related diseases was the other big issue of concern to virtually all noble Lords. The point about mesothelioma is that if you have it, you will essentially have contracted it doing a job in which there was negligence, and that it is fatal. You can fix a figure with a tariff level and you can go very fast. The objective is to reach a point within five months as compared with a typical period now of two years. Noble Lords will be conscious of the meaning behind those periods, given the prognosis of survival for up to 15 months. Getting something this quickly is really important. There may be schemes for other types of asbestos-related illness, but they could not be set up within this structure. We would have to look at something else; it could not be a simple extension.

My noble friend Lord Avebury and the noble Lord, Lord Alton, asked how many meetings have been held. Out of amusement, I counted them. There were 15 meetings with representatives of the insurance industry, of which seven were held in quite a tight period. You can imagine that they were being held during a time of heated negotiation. A total of 11 meetings were held with representatives of victims’ groups, lawyers and members of the all-party parliamentary group. It is not a complete balance but I took on board as much as I could as we built this.

I will not spend a lot of time tonight on the MoJ process. We will have time to do a bit more. The fundamental point is that the MoJ will launch a consultation shortly. It will go through all these issues and then come up with a scheme on the balance, taking on board all the responses. This is a major process and we will just wait for it to happen.

The noble Baroness, Lady Donaghy, raised the question of the scheme administrator. We are in control of this scheme and the DWP will drive the scheme rules. The scheme administrator will therefore be answerable to the Secretary of State, who will monitor whether it is doing the job that needs to be done. It is not a done deal with the ABI at this stage, though it is setting up a shadow company. If it does this successfully and if it is the administrator, it means that we can go very fast, but it is open at this stage.

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My noble friend Lord German raised a key point about the assumption of negligence. What distinguishes mesothelioma from some of the other diseases is that there is no reason for it other than being exposed to asbestos in employment. There has been a general acceptance that if you were exposed to asbestos in the workplace it would be through negligence. The decision has typically been made on a balance of probabilities. We will spend more time in Committee on the important legal context of why one can do such a straightforward and rapid scheme.

I have had good warning from the noble Lord, Lord Alton, that I will get an amendment proposing that some of this levy should effectively go into research. I cannot tell the noble Lord how hard I have tried to produce that result for him. I have failed to do it and we will spend time on this in Committee. There are some really complicated technical reasons why that cannot happen, mainly because, formally, a levy is a tax and it cannot go to anyone but the victims. I have tried every single route round this. If noble Lords are cleverer than me and can work their way through it differently, I will be delighted.

Lord Alton of Liverpool: I am grateful to the Minister, who is obviously coming to a conclusion, for giving us a lot of his time in replying. Has he noticed that the British Lung Foundation proposal is not asking for money from the levy? It is suggesting a membership scheme for every insurance company, who would then contribute £10,000 as part of that scheme. This would raise £1.5 million each year. He will also recall that I made a point about the amount of money coming into the Treasury as a consequence of the proposals before your Lordships tonight.

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Lord Freud: My Lords, if it was done on a voluntary basis by the insurance industry itself, that would be one thing. If it is done through legislation that is another thing and that is the problem, but I have not given up on research. There are quite a lot of issues here. The Government do not spend a lot of money in this area and there is a kind of chicken and egg situation because we commission research only if it is of high quality, yet if there is nothing to encourage it you do not get the bids. There is lots more and I am working with my noble friend Lord Howe on trying to get more there. The noble Lord is pushing on an open door, which I am afraid someone else has slammed in all our faces.

I will close by saying that the Bill is a really positive opportunity. It means that we can provide financial support to the sufferers who cannot bring a claim for civil damages. We can do it quickly, with the creation of an industry-supported payment scheme. I am grateful to hear that noble Lords may try to amplify the Bill in different ways but that the determination of the House is to not see a delay. If we achieve that collectively, and pass the Bill in 2013, we can set up the scheme in April next year and get the first payments to people in July, with 300 people receiving, each year, an average of about £100,000. It is an important and essential piece of legislation and I commend the Bill to the House. I again thank everyone who has contributed, in the very high-quality way that noble Lords have, to this debate and ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Grand Committee.

House adjourned at 9.56 pm.