Payment Scheme (Mesothelioma)

Transcription

1 17 Mar 2014 : Column pm Payment Scheme (Mesothelioma) The Minister of State, Department for Work and Pensions (Mike Penning): I beg to move, That the draft Diffuse Mesothelioma Payment Scheme Regulations 2014, which were laid before this House on 3 February, be approved. It is a pleasure to move these regulations on the Floor of the House. We had good debates on the Mesothelioma Act 2014, which allows us to move the regulations we need to ensure that the payments go to those who need them so much. The debates in the House and those with my noble Friend Lord Freud in the other place were incredibly valuable. I should like to place on the record my thanks to the late Paul Goggins. Paul campaigned for many years for the compensation for which these regulations make provision. It is a fitting tribute to him that I listened to him so much that we have moved to the figure of 80%, as I will say later in the debate. We have debated these provisions, but it is good to mention at the start that the Act and the regulations continue to refer to 75% average civil compensation payments. I announced to the House on 6 March that, because the scheme administrator contract was let, and because we will stay within the 3% of the levy to employers, I am able to raise the percentage from 75% to 80%. I will introduce further regulations later, but I did not want to delay in any shape or form the compensation that is so badly needed. Stephen Phillips (Sleaford and North Hykeham) (Con): Will the Minister confirm that, now we are moving to a scheme that will have an 80% compensation rate, 80% will apply to all claimants, including those who make their application under the regulations, on the face of which is the figure of 75%? Mike Penning: My hon. and learned Friend is absolutely right. I was going to say that, even though the regulations are being debated today, all those eligible for the scheme will get 80%. It is important that people do not get one or another of the figures. It will be 80% across the board. Ian Lavery (Wansbeck) (Lab): I am pleased with the increase from 75% to 80%. Will there be an opportunity in the near future to review the legislation to increase it from 80% to 100%? Mike Penning: No, because I have to stay within the agreed 3% of the levy. The important thing, as we said throughout the deliberations on the Mesothelioma Bill, is to ensure that the cost is not passed on to new business. I have come under huge pressure not to raise payments to 80%, because of the risk to the levy. However, because we managed to let the contract to a reputable organisation, we have been able to raise payments to 80% without putting the fund at risk.

2 Although we will review the legislation, we will not raise payments to 100%. If nothing else, the hon. Gentleman has been consistent in pushing for 100%, and I fully understand why. I promised throughout the deliberations on the Bill that I would listen and that nothing was 17 Mar 2014 : Column 598 fixed in stone, but raising the level to 100% would push me, or whoever happened to be Minister at the time of such a review, too far. Mr Gregory Campbell (East Londonderry) (DUP): Everyone will welcome the move to 80%. Can the Minister give an estimate of the cash differential between 75% and 80% for potential beneficiaries? Mike Penning: The move will take the payment up to some 126,000, which represents an extra 13,000. That is in addition to the payment of 7,000 for legal fees, which will be introduced in separate regulations. When Ministers promise the House that they will listen, it is important that they try to do what is requested of them. I stuck rigidly to 75%, because I was not confident that there would be enough money in the fund to increase payments to 80%, let alone 100%. However, I am now confident that there is enough capacity to move to 80%, so when the scheme starts I hope that that will be on 6 April all those affected will receive 80%, even though we have been looking at 75% Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): I am grateful to the Minister for his explanation, and I admire what he has done in getting us to 80%. In truth, compensation ought to be at 100%. Sufferers feel 100% of the injury, and the industry took 100% of the premiums at a time when it believed that it would often have to compensate for pleural plaques as well as for mesothelioma. I hope that the matter is not closed and there will be an opportunity to discuss it again. Mike Penning: I would be amazed if we did not discuss the matter again, as we have done over the years. It would be right and proper for us to do so. If we raise compensation payments to 80%, many people will receive more than they would have done through a civil court. The payment is an average, so some people would have received less in the civil courts. By raising the level from 75% to 80%, we have ensured that more people will receive more than they would have done if they had found their employer or their employer s insurer. Mr Jim Cunningham (Coventry South) (Lab): I apologise for being a little late. It would be interesting to know the difference in costs between payments of 80% and 100%. Mike Penning: I will write to the hon. Gentleman with that information. We debated the matter at length at each stage of the Bill, and I reiterate that the key is to stick within the 3% agreement, which is not being passed on to new business. The House agreed when we debated the subject that to pass on costs to new business would be improper. Kate Green (Stretford and Urmston) (Lab): While we are on the subject, does the Minister accept that, as we discussed in the Mesothelioma Bill Committee, even if we maintained the levy at 3%, the Government s impact assessment makes it clear that after four years it would at least be possible to raise payments to 90%?

3 Mike Penning: We looked at that extensively in Committee, but those figures are all based on assessments. When the four-year review comes up, we will look 17 Mar 2014 : Column 599 carefully to see what is in the pot, but it would be irresponsible of me or any Minister to stand before the House and commit to emptying the pot completely by going even further. By moving to 80% I have moved as far as I can, and a lot further than many wanted me to move. I promised to increase payment levels if I could, and I have done so. Ian Mearns (Gateshead) (Lab): The measure is not perfect, but we are greatly relieved that at last something is happening on behalf of sufferers all over the country. Has the Minister made any special provision for legal costs in the scheme? Mike Penning: The hon. Gentleman must have been reading my notes, because I was just about to come to that. During the passage of the Bill, we made provision for payment of 7,000 for legal costs to all successful claimants, which will be made on top of the 80% payment. I was adamant that that 7,000 would go to the claimant or their families as the fund of last resort, and not directly to any lawyer. It is up to the individual to decide whom they appoint and how much they pay them. We are looking carefully at the operation of the scheme and the website, and we think that many people will be able to make claims without the need for legal advice. If they can do so and they spend none of the 7,000, they will keep the money. If they spend part of it on legal fees, they will keep the remainder. It is important the moneys do not simply go off to lawyers as they have done in other, not dissimilar, schemes. Steve Rotheram (Liverpool, Walton) (Lab): I congratulate the Minister on the progress that has been made. Any progress towards the 100% that the Opposition believe to be justifiable is a step in the right direction. Can he assure the House that the legal payment of 7,000 will not be a pro rata payment, and that claimants will receive the full amount even if they do not use it all on legal advice? Mike Penning: Let me try to be as blunt as I possibly can, which is not unusual for me. The 7,000 is theirs. Even though the money is targeted at legal fees, how claimants spend it is entirely up to them. As I have said, we are trying to make the application as simple as possible. If they spend none of the money remembering that we are talking about a fund of last resort for those who have been unable to find their employer or their employer s insurer, and that, sadly, the money will often go to the dependants and loved ones of sufferers of this terrible disease they will be able to keep all of it. Others, including hon. Members and trade unions, will assist them to ensure that they are not ripped off. The important point is that the 7,000 is an additional sum on top of the 80%. I know that some colleagues are disappointed that we have not moved to 100%. Some colleagues may also be disappointed about the cut-off date, which we discussed extensively during deliberations on the Bill. As I have said the right hon. Member for Newcastle upon Tyne East (Mr Brown) will understand this as a former Minister I did not want to delay compensation by 17 Mar 2014 : Column 600

4 breaking the existing deal. The regulations are in their current format to avoid delay and allow the scheme to start, we hope, in the first week in April. We want to help those who desperately need the funds quickly. Grahame M. Morris (Easington) (Lab): I congratulate the Minister and welcome his announcement that the level of compensation will be increased. We anticipate that there will be a rush of claims. If the fund is in surplus when that initial rush has been addressed and settled, will he give an assurance that the Government will look at using that money for other asbestos-related diseases or research? Mike Penning: We expect there to be a surge, and that is why the scheme has received Government funding, which will be claimed back. It would be improper for me to make a commitment now about how any money that might be left in the fund will be used. However, we are working closely with the Department of Health and specialist research bodies. We are particularly focusing on the tissue bank, which is important in finding out why mesothelioma acts as it does so long after contact with asbestos; a gestation period of 40 or 50 years is not unusual. If there is money in the fund when the review happens, whoever is the Minister at the time I may still be in place; one never knows will look at how best to use it. I am conscious that if I take any more praise from the Opposition, my reputation will be diminished enormously. With that in mind, I commend the regulations to the House pm Kate Green (Stretford and Urmston) (Lab): I am very pleased to see the progress that has been made on the introduction of the scheme and, at risk of doing further damage to the Minister s reputation, I should like to join colleagues from across the House in congratulating him on taking this further step towards ultimately, we hope, securing full justice for mesothelioma victims. I want to take this opportunity to pay tribute again to the many campaigners involved, especially the victim support groups and trade unionists, and to acknowledge that the uplift in the level of payments was pressed for in both Houses of Parliament and across all parties. I am grateful to the Minister for highlighting the contribution of our much-missed colleague and friend, Paul Goggins. We are all pleased that the Minister has been able to bring this increase to the House. I note that he intends to achieve the increase in payments through negative regulations to be tabled immediately after the regulations before us come into force. On that basis, we are entirely happy to accept the motion before us tonight, although it is clear that the amount of scheme payments in schedule 4 do not represent the level of payments that we now expect to be made. The Minister said that he had been able to achieve the increase in payments because of savings made on the administration costs. He will recall that I suggested doing exactly that in Committee on 12 March 2013, so I am pleased that he has been able to take up my suggestion. Will he give us a little more information about exactly where the savings have been found? We have discussed this before in Committee. The Government s impact assessment told us last November that an uplift in 17 Mar 2014 : Column 601

5 payments from 75% to 80% of average civil damages would cost an additional 11 million in the first four years of the scheme, and an additional 22 million over the first 10 years of the scheme. It also stated that, with the payments set at 75%: The costs of the scheme are split between a levy of 371m on the insurance industry and 17m in government funding. This covers scheme payments direct to individuals ( 261.4m), benefit recovery ( 72.2m), applicant legal fees ( 24.6m) and admin of 30.0m (including case legal fees of 24.2m, set up of 1.4m and running costs of 4.4m). The Minister will recall our extensive discussions in Committee about the detail of those admin costs, and about the legal fees within them. As the impact assessment shows, there are two sets of legal fees involved: applicants fees, at 24.6 million, and case legal fees, at 24.2 million. However, despite extensive discussion in Public Bill Committee and despite what he has said tonight, which is reassuring I am still unclear about the respective levels and purpose of the two sets of legal fees. Claimants legal fees were set at 7,000 per case when the legislation was first introduced in the House of Lords, when payment was set at 70% of average civil damages. During the passage of the Bill through the House of Lords, the legal fees were reduced to 2,000 per case and payments increased to 75%. I think we understood that to be a quid pro quo. But later, during the Committee stage in the Commons, legal fees reverted to 7,000. The Minister told us that he had had discussions with the Association of Personal Injury Lawyers and felt 7,000 to be a reasonable figure after all. However, he also said that if cases could be conducted more cheaply, applicants would nonetheless receive the full 7,000. He has confirmed that again this evening, which we welcome. That did not cut much ice with the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) in Committee. As a lawyer himself, he might be assumed to have some insight into lawyers thought processes in these matters. He suggested that if 7,000 was the assumed rate for the job, that would de facto become the tariff, whether it accurately reflected lawyers costs or not. Now the Minister tells us that extra moneys have been squeezed out of the admin costs to fund a further, and very welcome, uplift in payments. Can he tell us exactly where it has come from? He has placed on record that 7,000 per head remains the sum allocated to applicants for their legal fees, and that if their actual fees fall short of that amount, they will receive the difference, in cash, up to 7,000. If there are no changes in the position in relation to applicants legal fees, can he tell us where he has found the additional 11 million, or 22 million, necessary to pay for the uplift in payments to 80%? On the face of it, the extra money must come from a combination of the other admin costs. Will the Minister tell us what he now assesses the running costs and set-up costs of the scheme to be? Have those costs decreased since the impact assessment was conducted? If so, will he tell us by how much, and how that was achieved? Will he tell us how much is now allocated for case legal fees, as opposed to applicant legal fees? I am still struggling to understand what these encompass, but the Minister assured us in Committee that they would be incurred for the benefit of claimants. Will he therefore tell us whether the sum of 24.2 million in the 17 Mar 2014 : Column 602

6 impact assessment has now been reduced, and if so, by how much? What effect will that have on the handling of cases, and what impact will it have on claimants? Will the Minister tell us whether the contract with Gallagher Bassett International, which is to administer the scheme, includes a profit element? I assume that it does. If so, is it included in the running costs? If the additional funds to meet payments at 80% have been found elsewhere, rather than from the costs I have just mentioned, will he tell us exactly where we should look? He has just told us that the levy on the insurance industry would remain at 3%. I had hoped that the Government s commitment to maintain it at 3% would appear in the regulations, but it has not done so. Will he tell us whether payment at 80% remains affordable within a levy of 3%, during and beyond the first four years of the scheme? Mike Penning: We have always tried to have a consensus, and I thought the shadow Minister knew that that was exactly what I had said. That is exactly what is going to happen, and I do not know why she is going over this old ground again. We went through all this in Committee, and she seems to be reiterating the arguments that she made at that time. We are talking about the regulations that are now before us, and we need to get through this tonight so that the compensation can be paid. Kate Green: I am simply trying to understand where the additional 11 million has been found. It would be helpful to the House if we knew that. We are particularly anxious that this should not have a detrimental effect on the way in which the scheme works for claimants. I know that the Minister does not want that to happen, but it would be helpful to understand how he can give us an assurance that it will not. On some of the other aspects of the scheme, regulation 5 sets out the general duties of the scheme administrator, including a duty to take reasonable steps to publicise the scheme. Now that the administrator has been appointed, will the Minister tell us more about how that will be achieved? What discussions have taken place with the administrator to ensure the widest possible dissemination of information about the scheme to those who might have a claim under it, and what discussions are taking place with trade unions, victims groups and others to ensure the widest possible promotion of the scheme? Have health care professionals in the NHS been alerted to it, and will there be clear signposting to the application process? I was pleased to hear the Minister say a moment ago that he expected applications to be accepted with effect from 6 April. However, there is nothing on the Department for Work and Pensions website explaining how people should make an application or at least, there was no such information there two or three hours ago, when I last checked. The Minister will understand the importance of making that information available very quickly, given the poor prognosis of the disease. Will he tell us when he expects the application form to be available, and how claimants will be able to access it? Regulation 5(4) requires the scheme administrator to ensure that there are sufficient numbers of suitably qualified persons to determine applications under the scheme. Will the Minister tell us more about the likely professional background and qualifications of those 17 Mar 2014 : Column 603 persons, and in particular about their independence and how they will be employed? Will they be employees of the scheme administrator, or might they work on a freelance basis? Is it

7 possible that they could have a conflict of interest if they held other appointments or roles within the insurance industry at the same time? How would such conflicts be identified and dealt with, and how will the public and claimants be reassured of the independence of those employed to take decisions in the scheme? I welcome the provisions in regulation 9 on time limits for applications. The Minister has made good on his assurance in Committee that applicants would have three years from the date of diagnosis or three years from when the regulations come into force if diagnosis is after 25 July 2012 but before they come into effect. However, there are concerns about time limits when we look at regulation 18. Generally, if a claimant dies before the case is determined, a payment may be made to his or her personal representative in the event that they leave no dependants. This will, however, still leave a small group of mesothelioma sufferers without dependants who were diagnosed on or after 25 July 2012, but who died before they could make an application, for example because the forms were not available. In those cases, it is my understanding that no payment will be made to the deceased s personal representative. That seems unjust. It has been clear in all our discussions that the Government s firm intention is for claims to be met for anyone with a diagnosis after 25 July 2012, and it cannot be right that a small group, who otherwise would qualify, should be excluded. Will the Minister say what he intends to do to address that situation? I welcome regulation 11, which sets time limits for the provision of additional information. That was a suggestion made by my noble Friend Lord Browne, in discussion with the Minister s officials. I am very pleased that it has been taken on board. I must emphasise my continuing concern, however, that where information is needed from Her Majesty s Revenue and Customs a situation I raised in Committee and on Report the problem of HMRC insisting on a court order to release the employment records of deceased claimants remains totally unresolved. This is a very serious matter, since it risks building in delay and costs for claimants accessing the scheme. On Report, the Minister assured the House that a suitable vehicle for dealing with this problem would be found in good time for the establishment of the scheme, and I recall that he responded positively to the suggestion of the hon. Member for Gainsborough (Sir Edward Leigh) that it could be dealt with in secondary legislation. There is, however, no sign of any such provision in the regulations before us. Indeed, as recently as 25 February, I received a letter from the Exchequer Secretary to the Treasury which suggests that the Government have made absolutely no progress whatever on the matter since we discussed it at the beginning of January. That is really concerning, given the imminent launch of the scheme. I hope the Minister will be able to update us on what urgent action the Government are taking. I welcome the provision in regulation 18, which provides for the applicant to request a review of a determination another of Lord Browne s suggestions. I also welcome regulation 24, which adopts the suggestion of the hon. 17 Mar 2014 : Column 604 and learned Member for Sleaford and North Hykeham that in conducting a review, the administrator must ensure that anyone who had responsibility for the original determination will play no role in the consideration of that review.

8 I am disappointed that schedule 2 continues to include eligibility for payments under the Turner and Newall schemes as grounds for exclusion from access to this scheme. As the Minister knows from our discussion in Committee, this will leave a number of people considerably worse off than if they had been able to access this scheme. I had hoped he would have wanted to be as generous as possible to those sufferers, and I regret that he has not been able to do that. Finally, may I ask the Minister to say a little more on a discussion that took place a few moments ago in relation to the review of the scheme? I welcome the commitment in regulation 27 to annual review of these regulations, but will he be absolutely clear that in addition there will be a full review of the scheme after four years? In Committee, he told us: It is very important that the insurance companies know that the 3% is there. In Committee in the other place, Lord Freud committed to a review at the end of the smoothing period, after four years, to see exactly how things were going I will place that fact in regulations so that the Committee has confidence that a review will take place after the four-year smoothing period. At that point, we will have a much better idea of how much the levy collector is collecting. We may be able to spend that by increasing the percentage, or we may be able to do other things with it. [Official Report, Mesothelioma [Lords] Public Bill Committee, 10 December 2013; c ] That is important, since by my calculation an even more generous level of payment at least 90% of average civil compensation could be affordable within the proposed 3% levy after the first four years of the scheme. I had hoped the regulations would specifically provide for a four-year review to take place, but they do not. Will the Minister say why they do not and what his intentions are in that regard? Let me sum up as follows: we warmly welcome the progress that has been made towards the establishment of the diffuse mesothelioma payments scheme and we certainly have no intention of delaying or opposing the regulations, but there remain a number of outstanding issues. I hope the Minister will be able to respond and offer further reassurance on them pm Tracey Crouch (Chatham and Aylesford) (Con): I do not wish to detain the House long. As the Member who tabled the amendment on Report and put it to a vote, I was disappointed when the Government did not listen to the call to raise compensation to 80%. Members will therefore not be surprised to learn that I am delighted that progress has been made and that the Minister and his officials have managed to find savings, through the tendering process, to ensure that those who contract this dreadful and fatal condition receive the compensation they deserve. It is worth reminding the House that mesothelioma is one of the worst diseases that anyone can contract simply by going to work. There is no reason behind having mesothelioma other than exposure to asbestos. Unfortunately, those who do contract it often die very quickly, leaving their dependants without the financial security that they would have hoped to have provided in any other circumstances. 17 Mar 2014 : Column 605

9 The Mesothelioma Act 2014 provides compensation to those who are unable to get compensation via the civil claims process. Increasing the compensation level to 80% is the right thing to do. I know there is still disagreement across the House on the level of compensation, but there was consensus on an initial minimum compensation level of 80%. Other hon. Members may wish to increase that to 90% or even 100%. The perfect outcome would be 100%, but that is unachievable, and I believe that 80% is the right figure to settle on at this stage. Following Report, many people across the country not just in my constituency contacted me to ask when the scheme would start and how they would be able to access it. Will the Government ensure that a How to guide is published on the website and is readily available for all victims? Mike Penning: It is important that we make the scheme as simple as possible. There will be a direct link on the Department for Work and Pensions website to the administrator s website. We want to make that as simple as possible so that, as I suggested earlier, in some cases the legal profession will not need to be involved. I urge colleagues and representative bodies to get the information out there. The administrators will do that, and we need to do that in constituencies where mesothelioma has blighted the lives of so many. All hon. Members across the House have websites, and they should use them to promote the scheme. Tracey Crouch: I am grateful to the Minister for that response. It is very important that we make it as simple as possible for people to understand exactly how to access the scheme. As long as they are aware that it is a scheme of last resort, and have gone through the appropriate civil process, we can do what is best to ensure that victims and their families receive compensation quickly and fairly. There has been good progress, and that is a fitting tribute to the late Paul Goggins. The issue of mesothelioma is wider than just compensation, although that is very important, and I will do my bit to continue to fight on many of the issues on which he made a start, such as better research funding to ensure that we find a cure; that is beyond the remit of the Minister s Department. I recognise that the Minister has done an incredible job. He has not just listened to Members in all parts of the House, but ensured that the level was increased, and that those in the insurance industry settled for that. I will not say that they have welcomed that, or are happy with it, but they have settled for it, and they have not walked away from the scheme. It will provide valuable financial security for those who contract this dreadful disease pm Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): It is a pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), and to find myself broadly on the same side of the argument as her. I particularly thank her for her kind words about Paul Goggins, who had many friends in all parts of the House, and who made a really significant contribution to our debates on the Bill and on the issue more generally. He is still sadly missed. The Minister has stuck to the departmental briefing that was agreed with the Treasury, and to his original agreement with the insurance industry on the parameters 17 Mar 2014 : Column 606

10 of the scheme, so no one could reasonably criticise him for the way in which he has carried out his responsibilities; I hope that the Government Whips and the Leader of the House, who are listening, will find that satisfactory. Having spelled that out, I must add that the Minister has done everything that he could to help the victims of this terrible condition. I pay tribute to him for that work, and to Lord Freud for his work in the other place. Above all, I pay tribute to the Minister for sticking with this issue, because not every Minister would have done so; it is not a popular issue in Whitehall. It may be appropriate for me to conclude the thanks that are due by thanking the civil servants in the Minister s Department who have helped us to reach this point. Once the administrator of the scheme was established, some issues must have become clearer. It must have been easier to see whether an agreement could be reached on the vexed issue of whether the compensation level should be the 75% at which it stood at the end of the Bill s Committee stage, the 70% at which it stood when it started life, or the 100% that I wanted, which always seemed out of reach in view of the parameters of the scheme. As I have said, the Minister stuck with this, and has brought us to 80%. I must say to him, Well done. The Minister has also preserved the 3% or less parameter on which the industry would no doubt have insisted. That is an industry figure, and there is some scepticism about it on the Opposition Benches. In the letter that he courteously sent to those who were members of the Committee, he said that he felt that it would be possible to keep the cost to less than 3%. I wonder whether he is able to tell us today how much less, and whether this scheme of last resort involves a trade-off between that and a yet higher compensation level for victims. It is early days, and I do not criticise the Minister. I have no reason to doubt his good faith in these matters; indeed, far from it. He has stuck his neck out for our side as far as one would expect any Minister to do. However, having seen the calculations produced by his Department, I should like to hear something about the period over which the costs will be spread. Perhaps he could tell us whether there is any prospect of taking the compensation rate in this scheme of last resort closer to the 100% that many of us think is justified. We have had to sacrifice our wishes for an earlier start date for eligibility. Opposition Members still think that eligibility should start from the date on which the last Labour Government consulted on the introduction of a scheme of this kind. We believe that the consultation exercise, during which the Government made it clear that they were minded to legislate, raised legitimate expectations in the minds of potential applicants. I wonder whether there is room for a little more generosity within the scheme s parameters. The cost of picking up the several hundred cases that I understand to be involved would be a one-off; continuing costs would not be incurred, because eligibility would have to fall between the start date advocated by the Opposition and the date on which the Government settled. The Minister said that he wanted a clear-cut scheme that would be easy to access and would not put undue pressure on applicants. I welcome that, but applicants still have to demonstrate that they are eligible. It is up to them to show that there is not still an employer whom they can sue, or an insurer who has an obligation to pay compensation. That is a big responsibility to put on the 17 Mar 2014 : Column 607

11 shoulders of an applicant. I welcomed what the Minister said about the 7,000 and the legal costs, but someone who puts 7,000 in front of a claims farmer or a lawyer will be presented with a bill of about 7,000. Ian Mearns: I agree with my right hon. Friend that proving that one has been susceptible to exposure to asbestos during a long and sometimes diverse career can be very tough. I know that a number of people who have succumbed to mesothelioma have not worked in heavy industry but have, for instance, taught in schools in which asbestos has been present. It is very difficult to prove exposure, because asbestos fibres often lie dormant in the lungs for decades. Mr Brown: My hon. Friend and constituency neighbour is absolutely right. The effects of this horrible condition can be with a victim for decades, but once full-blown mesothelioma has been diagnosed, life expectancy is extremely short. It is no accident that the north-east of England is disproportionately represented on the Opposition Benches today, because we represent people who are in the older tranche of victims. I know that I do not need to explain this to the Minister. I am talking about people who worked in heavy engineering, shipbuilding and ship repair, people who sprayed carriages with asbestos, and thermal insulation laggers. Members of that generation were the victims of those industries. However, as my hon. Friend the Member for Gateshead (Ian Mearns) pointed out, the new victims will be teachers who have been scraping on asbestos-based boards, school caretakers and janitors who have breathed in asbestos from insulation that is flaking because it has not been properly lagged, and builders who have carried out occasional repairs without being properly protected against the asbestos that they were drilling into, and have generated dust. Mike Penning: The right hon. Gentleman is right to say that there has been a disproportionate effect in the north-east in particular because of the heavy industry there, and to mention many of the organisations involved. However, in such cases it is relatively easy to trace the victims employers, because they are large companies in large industries. This scheme is intended to cover cases in which we cannot find the employers, and hence the insurers, who are legally responsible. That is why it is a scheme of last resort. As for the right hon. Gentleman s other point, I think it is absolutely right for us to help, because the scheme will not work if a large number of people resort to it when they could have claimed elsewhere. We need to help them to obtain compensation from the source from which they deserve it. Mr Brown: I agree with the Minister that in the public sector it should be easier to trace a responsible insurer, and indeed a responsible employer, but there is a rich history of subcontracting, even in the public sector, and not all these people have insurers who maintain liability. It is the missing insurer, as well as the missing contracting or subcontracting company, who generates the cases with which this last-resort scheme is intended to deal. The Minister is right to anticipate more public sector cases in the future. I have asked the Department of Health how many mesothelioma cases were being dealt 17 Mar 2014 : Column 608 with in England by the Department, and that number of cases, as you of all people will well know, Madam Deputy Speaker, is a precursor to the number of compensation claims that there will be if, that is, the injury was inflicted through work. The House will be distressed

12 to learn that the number is still rising. The number identified by the Department is now over 7,000 a year, and that is not a very easy fit with the projection of the number of fatalities coming from the Department via the Health and Safety Executive. Ian Lavery: With regard to public sector workers, 10,000 teachers died because of mesothelioma. Does my right hon. Friend agree that we have to look seriously at the impact on children in schools where asbestos is present? If an adult a teacher or a caretaker can get mesothelioma from being at school, what has happened to the kids? Mr Brown: Like my hon. Friend, I stand up for every single individual who has been exposed to asbestos. This is an entirely preventable condition. Although I understand why in law we draw the distinctions we do, morally this is not right. We should set out to save each and every one of the citizens we represent from being exposed to this awful condition. That applies to young children, too. My hon. Friend will recall me referring to the young children who found a pile of asbestos just lying in a yard in Leeds, and who threw it at each other as if it were snowballs. Of course, the inevitable happened, and 40 years later they are coming down with mesothelioma, but whom do they sue? Mike Penning: As I said on Report, I think, and certainly in the Committee stage of the Mesothelioma Bill, I hope this is the start of a fund of last resort in other areas as well. What the hon. Member for Wansbeck (Ian Lavery) and the right hon. Member for Newcastle upon Tyne East (Mr Brown) are alluding to is a public liability area, not liability for employers. It is absolutely right that we should try to protect everybody, but sadly I think I have gone as far as I can within the scope of the regulations and the scheme before us. Mr Brown: I welcome what the Minister says. If any Minister could take this forward in government, he would be the Minister to do so. I thank him for what he has done, and welcome what is in front of us tonight pm Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): It is a pleasure to follow the right hon. Member for Newcastle upon Tyne East (Mr Brown) who made, as usual, a very thoughtprovoking, good and balanced contribution. I would also like to associate myself sincerely with all the genuine and heartfelt tributes to our late friend and colleague Paul Goggins, who worked tirelessly on this issue as I know he did on many others, but he was particularly involved with this issue for many years. As the hon. Member for Chatham and Aylesford (Tracey Crouch) said, this is a fitting tribute to him as well. The scheme we are debating today is of course a step forward for victims of this disease, many of whom will for the first time be given recourse to compensation if the insurers of their former employers cannot be traced. There are, however, problems with this scheme which 17 Mar 2014 : Column 609 were highlighted in part from the outset, and indeed from the Second Reading of the Mesothelioma Bill onwards, and some of these problems are still with us. The hon. Member for Stretford and Urmston (Kate Green) detailed several of them.

13 First, the scheme, which was established under the Mesothelioma Act 2014, will apply only to the victims suffering from mesothelioma and will do nothing for those with other asbestosrelated conditions, such as asbestosis. That seems fundamentally unfair. I hope that the Government will consider implementing similar schemes for all victims of asbestos-related diseases who are unable to trace the insurers of their former employers. Secondly, it seems to me to be equally unfair that the victims who are eligible for compensation under this scheme will be able to claim not 100% of the average compensation claim but, rather, 80%. The individuals who will find themselves in a position to make a claim for compensation through this scheme will not only have been exposed to asbestos, but will also have had to go through the rigmarole of attempting to trace the employers insurers only to find that it cannot be done, thus they are being penalised for others negligence. I also remind the Government that an individual is not usually alive for very long after being diagnosed with this awful disease. Yet still, dependants will be left with only 80% of the average value of a compensation claim after their loved one has passed away. Of course, until very recently the Government were determined that the victim should be able to gain only 75%. We heard that the Minister recently sent a letter stating that the figure has been raised to 80%, and we are grateful for that. We are grateful that he has moved on the issue, having heard representations, as the right hon. Member for Newcastle upon Tyne East said. I also understand that the letter specifies that applicants can now expect to receive average payments of about 123,000 prior to benefit recovery, as well as 7,000 towards legal fees. We have heard from several Members this evening about the 7,000 for legal fees and the fact that people presume that lawyers will just take the money and do as little as they can. Speaking as a lawyer I have been a solicitor and I am a barrister I remind those who will have to claim that they are entitled to have the lawyer s bill evaluated independently by a professional body and if it is found to be too much, the lawyer will pay it back. It is a straightforward procedure and will cost the applicant nothing. More often than not, these professional bodies are very strict in not allowing huge, unwarranted fees to go unchallenged. I would argue that claimants should be entitled to 100% compensation, but it is easy to say that. I know the Government have worked hard and that the dead hand of the Treasury floats above us all, day in, day out, particularly those on the Treasury Bench. However, the Pneumoconiosis etc. (Workers Compensation) Act 1979 which I am proud to say my party, Plaid Cymru, was instrumental in introducing did introduce 100% compensation. Indeed, Dafydd Wigley, then a Member of Parliament, together with another colleague, drove it through and had an understanding with the Labour Government that it should be introduced. My friend the noble Lord Wigley, as he now is, was instrumental in introducing the legislation before us in the other place, and I am pleased to say that it is coming to fruition. However, at the very least the scheme should follow the 17 Mar 2014 : Column 610 model of the Financial Services Compensation Scheme, which pays out 90% of the value of civil compensation claims to individuals exposed to asbestos before employer s liability insurance was made compulsory in Finally, the fact that claimants will be eligible for compensation under this scheme only if they were diagnosed on or before 25 July 2012 is arbitrary and will be desperately unfair on

14 many. However, as was argued in both Houses in debates on the Mesothelioma Bill, it would surely make far more sense to allow all claimants to claim compensation if they were diagnosed during or before February 2010, when an initial draft of this scheme was first proposed, or when the consultation was proposed, as the right hon. Member for Newcastle upon Tyne East said. Just before the 2010 general election, the then Government began a consultation proposing that an employer s liability insurance bureau should compensate all individuals with industrial diseases who were unable to trace their employer s insurers. I am pleased that, in any event, that is now coming through. However, individuals diagnosed between these two dates are being left out of the scheme through no fault of their own, but simply because the Government did not perhaps expedite the scheme sufficiently. I find it difficult to be hyper-critical, because I know that this measure will make a huge difference to many people, and broadly speaking we all appreciate that. However, the insurance industry could surely afford also to compensate those falling between the two dates, not least since the industry s costs will be lowered, as it will not be entering into negotiations on a case-by-case basis, but awarding average compensation to claimants. I hope we can build on the progress thus far, in order, somehow or other, to compensate these people, who, as I have said, are being dealt with detrimentally for no good reason and through no fault of their own. After that long diatribe, I can say that there is no doubt that this scheme will assist many people, and I am sure we are all very grateful for that. 7 pm Mike Penning: Although some of this evening s discussions were similar to those we have had previously, it was right and proper that many colleagues reiterated some of their concerns about the scheme and how it is going to work, particularly in respect of the regulations. As we discussed at length during the passage of the Mesothelioma Bill, which is now an Act, there are different callings on the money in the pot let us bring it down to basics. There were calls for us to go further back with the scheme, not only to when the previous Administration made the announcement, but even further; to move the compensation percentage from 75 to 80; to include others in the scheme, perhaps the wife, spouse or loved one of someone working in this industry who had contracted mesothelioma as a result of cleaning her husband s overalls I am not being sexist, but that was the environment at the time; and to be generous in other ways. The right hon. Member for Newcastle upon Tyne East (Mr Brown) was kind enough to allude to the fact that I inherited the Bill. Lord Freud had done a fantastic job. When the Bill entered the Lords the compensation figure was 70% and he is the one who got the insurers around the table to come up with any scheme whatsoever herding cats is probably a good way of describing it. 17 Mar 2014 : Column 611 I am sure that the Association of British Insurers will not like me saying that, but it is one of the reasons why, even when previous Administrations tried to do this the right hon. Gentleman tried and so did Paul Goggins it has taken so long. In the end we did a deal let us be honest, we did a deal at 3% which would not be passed on to new business. We then started to frame where the money could go in the scheme of last resort.

15 Assumptions were made and some are still being made today, even though we have appointed a scheme administrator, which has cost us less that was what the shadow Minister was asking about earlier. Assumptions were made about case legal fees I am no lawyer, but my brief says that. Legal fees were highlighted by the shadow Minister and there are case legal fees that we now know we do not need, so we have saved money. I could have gone to 81% today, but that would have stretched the credibility of my honesty to the House and to the sufferers in terms of making sure the scheme is safe. A myriad different questions have been asked during our consideration of the regulations, but the crux of the matter is: how far could we go without putting the scheme at risk. That is why I have resisted some suggestions throughout our consideration, even though my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) rightly pushed me very hard. As the Minister, I had to stand firm until I knew how much money was in the pot how much the scheme was going to cost us. So we are where we are. Ian Lavery: Will the Minister assure the House that he will examine an anomaly outside the 3%: the situation of the people who receive 80% compensation but will have 100% of their benefits taken? Is it not right that anybody who gets 80% of what they should get should have to pay only 80% of the benefits back, too? Mike Penning: I pay tribute to the hon. Gentleman for raising the issue again. I do not think there is an argument with the moral position, but the legal position is something completely different. When someone gets benefits the right hon. Member for Newcastle upon Tyne East is nodding because he was dealing with exactly the same schemes and then gets compensation, those benefits are reclaimed to the taxpayer. That is what happens across the board. I said all along that I would love to have paid 100% my heart tells me that but it has not been possible. I would like to have touched on a lot of the things that the right hon. Member for Newcastle upon Tyne East discussed in his speech such as groups of people outside the scheme. I would like to have dealt with those outside employee liability and with public liability. We talked earlier about young children in schools today who might inhale a tiny fraction of asbestos into their lungs and, 40 or 50 years from today, might get a preventable disease. It would be in their lungs and there is a possibility that they would get mesothelioma, which is terminal, and die within four to nine months. Bob Stewart (Beckenham) (Con): I apologise for my ignorance, but once a person has been diagnosed with this dreadful disease should they not go straight to a civil servant and say, I have been diagnosed with this, 17 Mar 2014 : Column 612 what should I do? Can you please help me? Is that the system that operates at the moment? If it is not, it should be. Ian Lavery: I will second that. Mike Penning: The motion is not carried. I appreciate that my hon. and gallant Friend has not been with us for all the debates on this, but I am afraid that that is not the case. This is a scheme of last resort. In most cases, people who get this abhorrent, horrible and preventable disease will be able to claim from their employer and thus their employer s insurance. Employer s liability insurance is compulsory. The stakeholder groups and the trade unions have been excellent over the years. I pay tribute not only to them but to Members across the

16 House for representing people with mesothelioma, because it is a horrible and terminal disease. The employers who put those people into this position should be liable. This has to be a scheme of last resort. Kate Green: Can the Minister say what progress he and the Government are making in order to obtain employers records from HMRC? He is right that most people will be able to make a claim against an employer, but they will need to be able to obtain those records to do so. Mike Penning: The hon. Lady is absolutely correct, and we are still working with HMRC to ensure that that happens. If necessary, we will introduce legislation. However, at the moment, the Data Protection Act prevents us from doing that. I explained that in Committee. I am sure that that was never the intention, but it is one of the restrictions that the Treasury lawyers have had to look at. I want to deal with a couple of issues quickly because I do not want to delay the House. Should beneficiaries of someone who qualifies under the scheme not dependants or loved ones get a payment? The answer is that they will not, because the scheme is designed specifically for the sufferers of this terrible disease, their loved ones and their dependants to allow them to get on with their lives. On the 7,000 payment, we will look enormously closely with the Association of Personal Injury Lawyers, our own lawyers and the Ministry of Justice to ensure that no rip-offs take place. Ian Lavery rose Mike Penning: Bear with me for a second, because I need to make a tiny bit of progress on this. The scheme is as simple as we can possibly make it. There is a huge amount of skill out there among the stakeholders who know this disease and the compensation scheme back to front. I think that quite a bit of the 7,000, if not most of it, will stay with the people who are claiming. Ian Lavery: Does the right hon. Gentleman share my fears that once the 7,000 becomes common knowledge there will be claims farmers advertising in every paper up and down the country? Can the Minister say whether claims farmers will be able to claim part of that 7,000, or is it strictly for the legal profession? 17 Mar 2014 : Column 613 Mike Penning: It is being paid directly to those who are beneficiaries of the fund, and it is for them to decide who they pay it to. When we introduced these regulations, I was absolutely adamant that the lawyers should not get direct payments from this scheme. I am not a lawyer and I have seen what happened before, but because everybody knows exactly where we are and how simple the scheme is I would tell the stakeholders and everyone else to shop around to make sure that they are not ripped off. There are decent lawyers out there even though there are some scallywags as well.

17 The four-year review, which the shadow Minister specifically asked for, is in place. This is an important set of regulations that will ensure that we get this compensation through as soon as possible. I have not been able to answer all the questions that have been asked this evening, but I will write to hon. Members, including those on the Opposition Front Bench, with the answers. I hope that the House will pass the regulations this evening so that we can get the compensation to those who deserve it so much. Question put and agreed to. Resolved, That the draft Diffuse Mesothelioma Payment Scheme Regulations 2014, which were laid before this House on 3 February, be approved.