Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Bull) (CB)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023
(1 year, 9 months ago)
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Viscount Younger of Leckie
That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I will speak also to the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023. I am pleased to introduce these statutory instruments, which were laid before the House on 12 January 2023. These instruments will increase the value of lump sum awards payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, and the diffuse mesothelioma scheme, which was established by the Child Maintenance and Other Payments Act 2008.
As many noble Lords will be aware, these two schemes are not included in the main social security benefits uprating procedure and their uprating is not a statutory requirement. However, through these statutory instruments, we will increase the amounts payable by the September 2022 consumer prices index of 10.1%. These new amounts will be paid to those who satisfy all the conditions of entitlement for the first time on or after 1 April 2023.
Many noble Lords will be aware of friends and close colleagues from your Lordships’ House who have lost their lives as a result of these dreadful diseases. We must remember the great impact that these diseases have on people and their families. The Government recognise the tremendous suffering that diseases such as mesothelioma and pneumoconiosis cause to those who are diagnosed. The conditions covered by these schemes can be debilitating and life limiting and often involve very long latency periods, with symptoms starting to show many years, often many decades, after exposure. Mesothelioma, for example, is an aggressive type of cancer strongly associated with exposure to asbestos and is usually terminal. Life expectancy from diagnosis is poor.
I will now outline the purpose of the two schemes we are debating. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979, which, for simplicity, I shall refer to as the 1979 scheme, provides a single lump sum compensation payment to individuals who suffer from one of the prescribed diseases covered by the scheme, including mesothelioma, pneumoconiosis and three other dust-related respiratory diseases. This scheme was designed to cover people who are unable to claim damages from employers because they have gone out of business and who have not brought any action against another party for damages. To be eligible, a claimant must be in receipt of industrial injuries disablement benefit for a disease covered by the 1979 scheme.
The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but who are unable to claim compensation under the 1979 Act. This may be because they were self-employed or their exposure to asbestos was not due to their work. The 2008 scheme allows payments to be made quickly to people with diffuse mesothelioma at their time of greatest need. Under both schemes, a claim can be made by a dependant if the person with the disease has sadly died before being able to make a claim. These schemes aim to ensure that, where possible, the people who suffer from the diseases they cover receive compensation within their lifetime.
The rates payable under the 1979 Act scheme are based on the disease sufferer’s assessed level of disablement and their age at the date of entitlement. The highest awards are made to individuals with the highest assessed level of disablement and those who become entitled to a payment at an earlier age.
All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate—the highest rate of payment—reflecting the serious nature of the disease. Similarly, all payments for this condition under the 2008 scheme are made at the 100% disablement rate. The highest payments from both schemes are made to the youngest sufferers of the disease. Between April 2021 and March 2022, the latest financial year for which data is available, 3,080 awards were made across both schemes, totalling £44.7 million. Between 2022-23 and 2027-28, expenditure on these schemes is forecast to fall by 8% in real terms.
I will now touch on the legacy of Covid-19. As the Committee will be aware, the Covid-19 pandemic presented unprecedented challenges. I am mindful of the impact it has had on sufferers of respiratory diseases in particular. As my predecessor set out in last year’s debate, the department made the decision to suspend all face-to-face assessments between March 2020 and April 2021 to protect the health of our claimants, and of course our staff. Some assessments were further suspended beyond April 2021 due to the additional risks of undertaking them face to face. Inevitably, this has led to delays in some customer journeys for claims to industrial injuries disablement benefit and the lump-sum schemes.
In response, the department and its assessment provider, the Centre for Health and Disability Assessments, introduced several innovations to ensure that claims for IIDB, the 1979 scheme and the 2008 scheme continued to be processed as quickly as possible. We increased the use of paper-based assessments and introduced video assessments where appropriate. I am pleased to say that we continue to assess some customers via these routes where possible.
I will now touch on one specific, important and sensitive theme linked to these regulations, which is asbestos removal and schools. Tremendous strides have been made to restrict the use of asbestos and introduce safe environments for its handling in this country. However, the legacy of its widespread use, including in schools, is still with us today.
The Health and Safety Executive has a mature and comprehensive regulatory framework to ensure that the legacy asbestos risks in Great Britain are managed, which aligns with the best evidence currently available. Correct implementation of the Control of Asbestos Regulations 2012 not only ensures management of the risks of exposure but will eventually lead to the elimination of asbestos from the built environment. I understand that some noble Lords have previously raised the issue of asbestos in schools in these debates. I assure them, and this Committee, that the Government take the safety of children and those who work with them incredibly seriously.
The Department for Education is committed to working collaboratively with the regulator, the HSE, to support schools and duty holders. As part of this, the Department for Education published bespoke guidance on asbestos management for schools in 2020 and is working with the HSE and the sector to look at further ways to help them and to build on existing guidance and support. Well-maintained and safe school buildings are a priority for this Government. That is why over £13 billion has been allocated for improving school buildings since 2015, including £1.8 billion committed for the financial year 2022-23.
I will conclude on a positive and—I hope noble Lords will agree—hopeful note. While there is always a degree of uncertainty in predicting future disease incidence, current projections by the Health and Safety Executive suggest that total annual mesothelioma deaths in Great Britain are expected to decline in the coming decades. For males, a decline is projected over the course of this decade, and for females, deaths are projected to start falling shortly after. These figures offer some hope that, one day, no more families shall have to endure the suffering caused by these dreadful diseases.
Medical research into treatment options is ongoing, particularly in the field of immunotherapy. While these treatments are not currently curative, a recent trial has shown clear evidence of benefit to advanced mesothelioma patients, equivalent to an additional three to four months of life.
I am sure that all noble Lords here today will join me in recognising the continued importance of the compensation provided by the 1979 and 2008 schemes and the importance of maintaining the value of these payments at this time. I am pleased to say that these regulations were considered in the other place on 8 February 2023.
Finally, as part of my role today, I am required to confirm—which I am pleased to do—that these provisions are compatible with the European Convention on Human Rights. I commend to the Committee the increase of the payment scales for these schemes and ask approval to implement them. I beg to move.
Lord Alton of Liverpool (CB)
My Lords, I thank the noble Viscount for the way in which he introduced these regulations. Just before we began, a group of us were recalling how we have discussed this year in, year out. We were also recalling some of his illustrious predecessors and others in all parts of the House who contributed to some of the changes that he has referred to.
I am thinking particularly of the late Lord Newton of Braintree, who was a Secretary of State. He was a great supporter when I moved amendments in your Lordships’ House seeking to change the Criminal Justice Bill and to bring about what then became a full-scale Act of Parliament, the Mesothelioma Act. The noble Lord, Lord Freud, was decisive in making that happen. He also once shared in this Committee how his father had died of mesothelioma. On this side of the Committee, I think of Lord McKenzie of Luton, who died at the end of 2021. It will seem a strange debate without his voice. His attention to granular detail was extraordinary and his knowledge of pneumoconiosis and mesothelioma admirable, demonstrating the very best of your Lordships’ House.
The noble Viscount referred to the removal of asbestos from schools, which I was very pleased to hear about. It has been a recurring theme that we have raised in these Committees over the years. On a hopeful note, he said that mesothelioma might be plateauing. I will come back to the data a bit later. He also talked about advances in medical treatments. He will know that the Mesothelioma Act was specifically about providing government funding toward the work of the British Lung Foundation and others on the causes and consequences of mesothelioma and on looking for cures. Can the noble Viscount tell us more about whether that funding is being sustained and what progress is being made in that area?
One of the things that has struck me is the number of noble Lords who have shared personal stories of loved ones, family or friends who have died of this disease, which, over the distance, has claimed more than 30,000 lives. That is the same number of deaths still estimated to be caused globally every year. As I have done on previous occasions, I pay tribute to John Flanagan and the Liverpool-based charity, the Merseyside Asbestos Victims Support Group, for keeping a candle lit for all those afflicted by mesothelioma. In 2020, I noted that people in Liverpool are more than 18% more likely to die of mesothelioma. I know that we will hear from my noble friend Lord Wigley and the noble Lord, Lord Jones, during our proceedings; we have heard from them previously about the situation in Wales. However, this disease is no respecter of geographical boundaries or class. Indeed, the noble Lord, Lord Allan of Hallam, and I were discussing this just before the Committee met. We were talking about some of those who have talked about the loss of loved ones.
My noble friend Lord Freyberg talked in the House about his sister, a journalist, who had died of mesothelioma. The noble Lord, Lord McNally, talked about his sister, who had simply been washing overalls and had died of mesothelioma. The noble Lord, Lord Giddens, told us about his wife, who had died of mesothelioma. We also heard from the noble Lord, Admiral Lord West, the story of how young men training for the Navy played snowballs with asbestos. Indeed, Jeremy Hunt, the Chancellor of the Exchequer, described how his father, Admiral Hunt, had also died of mesothelioma. So this is not something that is remote. It is something we know about, but sometimes it is regarded almost as having Cinderella status.
Lord Wigley (PC)
My Lords, I am delighted to follow the noble Lord, Lord Alton. The figures he just quoted bring home the reality of this to us, and I pay tribute to the work that he has undertaken over so many years in this area. I am delighted to support both the uprating regulations and welcome the 10.1% increase. I am sure the nurses and the teachers would be delighted to have a similar increase if it was in the Government’s ability to do so, but it is good that the value of these payments should be maintained.
Noble Lords will be aware of the provenance of the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. It was driven on to the statute book in the dying days of the Callaghan Labour Government, propelled at that time by the needs of slate quarrymen in north-west Wales. Coal miners suffering from pneumoconiosis had of course been compensated as a result of the tripartite agreement between the NUM, the NCB and the Government in 1975, but no provision was made at that time for workers from other industries suffering similar lung diseases. Slate quarrymen were one such case but there are many other industries where it was relevant.
It was in the few days after losing a vote of confidence by just one vote that Michael Foot, to his eternal credit, ensured that the promise given to Plaid Cymru MPs at that time was delivered in all stages. The legislation went through both Houses in just two days, which was remarkable and very much to his credit. I also pay tribute to the work done by the Transport and General Workers’ Union regional secretary, the late Idwal Edwards, who campaigned vigorously on these matters.
Several thousand ex-quarrymen, who had no remaining employer against whom to take legal action, and their widows have benefited from the legislation and still do. But by now, many more workers in other dust-generating industries are also able to benefit from it, so it would be very helpful if the Minister could indicate how many pneumoconiosis sufferers, by industrial group, receive compensation under the Act over whatever recent period is available. If those figures are not available to him but they are in the department, perhaps he can write as they would, I am sure, be of interest to Members on all sides of the Committee.
By now, the major group of sufferers from lung diseases is that of mesothelioma victims, as outlined by the noble Lord, Lord Alton. Their condition arises from asbestos dust, so it is right that we should debate both these instruments together. Mesothelioma was covered partially in a 1979 order but, rightly, sufferers have demanded specific legislation dealing with the particular nature of that disease. There have been several such steps over the years. It is a vicious condition, as has been described, which can be dormant for many years, without anybody realising it is there, then attack the victim with a ferocity that can kill within months. I have seen that for myself; it happened in the last few months of the life of a very good friend of mine, Peter Wolfe, whom I remember as a teenager playing snowballs with asbestos flakes when our school gym was taken down and rebuilt. That is similar to the story the noble Lord, Lord Alton, recalled being recounted to a previous Committee. Peter died six decades later but only five months after his condition became apparent. That shows the speed with which it can attack.
It is right that asbestos sufferers are covered by legislation specific to their condition, and it is right that it should be uprated and that new ways of helping the victims and families should be developed. Equally important are the steps that the Government are taking to avoid exposure to asbestos dust. The Minister mentioned this; it is so important that publicly owned buildings—schools, colleges and other buildings, even hospitals—are monitored for the dangers in this direction. Perhaps I should mention very gently that there are parts of the Parliamentary Estate where asbestos has been used, and that too should be a matter of some concern to us in all parts of this Committee.
The Minister has told the Committee what is being done to eliminate or at least partly curtail such exposure. Can he give any indication of what the target dates will be for this being finally overcome? That may be too much to hope for, but it should still be the intention, target and aspiration of whoever is in government to take away the cause of the suffering, as well as compensating those who are suffering. Can the Minister give any indication of the anticipated time period until the demand for such compensation, on the present trajectory, would be finally eliminated?
Finally, I return to the slate industry. The demand for slate has increased in the recent past and now the employment profile is on an upward trajectory, interestingly, for the first time in decades. I am glad to say that employment is now being secured for more people, but greater care is being taken to minimise exposure to the dust—and that is to the credit of employers and unions alike. The slate industry landscape of north-west Wales was awarded world heritage designation 18 months ago, which pleased me and other noble Lords, I know, very much. It is worth noting that part of that story was the social dimension, not least the fact that the industrial hospitals provided in three major quarries, starting around 1820, were among the first such hospitals in any industry in the UK.
Today’s uprating regulations should be seen in the context of the social battles to get fair play for those working in particularly dirty and dangerous industries, and the recognition by government that compensation is appropriate. In any way that government can undertake such action, the cause of compensation should be eliminated.
Lord Jones (Lab)
My Lords, I thank the Minister for his thoughtful and succinct introduction. It is always instructive to hear the noble Lords, Lord Alton and Lord Wigley, with their committed and highly informed references to the lump sum payments. On page 4 of the first item on our Order Paper, in lines 4 and 5, I see the magic words that refer to
“increasing the amounts payable under the 2008 Regulations by 10.1 per cent”.
That is really good news. The Minister can be proud of proposing these regulations, which represent a humane approach by a great, undervalued department. Perhaps we can blink at the detail of tables 1 and 2 and contrast those sad figures with the Explanatory Memorandum, which posits words at paragraph 2.1 that must be music to the ear of the recipients or their families. Let us put into Hansard for the record the names of Lewis Dixon of the department and Louise Everett, the deputy director for ESA.
Lord Allan of Hallam (LD)
My Lords, on the substance of the two instruments before us and the uprating of payments by 10.1%, we on these Benches, like the noble Lords, Lord Wigley and Lord Jones, of course welcome that. I have learned a lot from noble Lords in the debate. I know from reading Hansard on their previous appearances on these uprating instruments that they have long and honourable records of advocating for sufferers of these appalling diseases. I thank both noble Lords present and those whom the noble Lord, Lord Alton of Liverpool, reminded us are no longer with us. Their words have helped to inform me and provided me with information that I understand will be useful in future years, as we continue to come back to debate these issues.
Much has been said that I will not repeat, but I will emphasise three areas that I am interested in and where I hope the noble Viscount might be able to expand in his response. The first is the question of the latest trends in the numbers of sufferers. As he pointed out, there is an expectation that they will decline once we reach a point 30 years or so after there was a reduction in the use of asbestos. But it would be interesting to hear from the Minister the extent to which there have been any surprises in the data, to understand more about the distribution of sufferers geographically and in terms of their professions, which has already been raised, their gender and any other factors that have surprised people, given the expected exposure and rate of suffering.
The noble Lord, Lord Wigley, was right to remind us that the exposure is not finished. Indeed, as we stand here, we are standing over huge amounts of asbestos, which is securely contained within the basement but which, at some point, will have to be removed as the works take place on this building. That is true across the country: in the 20th century a huge amount of electrical infrastructure was put in using asbestos as a fire preventer, and that is being replaced; people are now saying, “We need to get rid of it”. Whether that is meters in people’s own domestic premises or something on this scale, asbestos exposure is not finished—it will be an ongoing issue. I know that is broader than the instruments before us today, but I hope the Minister will make sure that his colleagues with relevant responsibilities continue to focus on that.
The predictions of expected sufferers would be helpful—not about individuals but about the population as a whole. Making that information public would help people to understand what is taking place. The Minister raised the effect of Covid on the figures, and I think the noble Lord, Lord Alton, asked whether diagnoses were missed during that period. Again, if there were changes during the Covid period, it is really important that we understand whether they were material changes or changes because of practice—because people were no longer presenting to their doctors and, therefore, in a sense, there is a false lowering of the numbers, rather than a genuine change in what has been occurring.
The second area about which it would be interesting to hear from the Minister is research, particularly the development of international networks. It has been mentioned that this affects people across many different countries. I was interested to see PREDICT-Meso, a network of international researchers run by the University of Glasgow involving countries in the EU but also countries such as India and Brazil, which industrialised very rapidly in the 20th century and which will also, sadly, see significant issues. Given that government support for scientific research is very topical at the moment, I am keen to understand the extent to which the Government are supporting research being carried out in this area. Can the Minister say any more about government support for research networks into respiratory diseases?
My final point, which has been touched on already, is about why the uprating is a manual rather than an automatic process. I can see from Hansard that this has been repeated on many occasions. I am sure that those who support the Minister did not have to do much work to recycle the comments made in previous years, but it would be interesting to hear from him again why the Government believe that this should continue to be a manual rather than an automatic process, whereby the people planning can understand that they will be entitled to the uprating, rather than us having to debate it each year. Perhaps the Minister will surprise us and there will be a change in the Government’s position this year, but I will not hang on for that.
I hope that the Minister can put some flesh on those three points about predicted numbers, government support for research and the manual versus automatic process. I will be interested to hear about them, but, as I said, broadly speaking, we welcome the 10.1% increase.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for introducing these regulations to the Committee, and all noble Lords who have spoken. As we have heard celebrated by my noble friend Lord Jones and others, the sums payable under the 1979 and the 2008 schemes are to be uprated by 10.1%—the rate of inflation as measured by the CPI 12-month rate last September, which is in line with other social security benefits, including the industrial injuries benefit.
First, I join the Minister in remembering all those who have suffered so much from these terrible diseases. Although many of us would like not to have to come back every year, it is at least an opportunity to pay tribute to them and to remember the lives so blighted. These schemes continue to provide crucial compensation to those who suffer from these terrible diseases and their families. Annual deaths from mesothelioma in Britain increased steeply over the last half century, due mainly, as we have heard, to the widespread industrial use of asbestos from about 1950 to 1980, which accounts for the high death rates among males over 70 whose younger working lives coincided with that period of peak asbestos use. It is good to see that death rates from mesothelioma among the under 65s have been falling.
I looked through the latest statistics on mesothelioma deaths published by the Health and Safety Executive last year, which went up to 2020. As the noble Lord, Lord Alton, said, there were 2,544 mesothelioma deaths in Great Britain in 2020, 6% up on 2019 but similar to the average across the previous eight years. But as the Minister pointed out, there are gender differences here. Those deaths comprise 2,085 men and 459 women. The projections are that annual deaths in men will reduce after 2020 but that female deaths will not, likely staying in the range of 400 to 500 throughout the 2020s but hopefully reducing further after that. Does the Minister know why there is this gender difference? I would be interested to know anything he can share on that.
Viscount Younger of Leckie (Con)
I thank the Committee and all noble Lords for participating this afternoon, and for their general support for these regulations. I noticed that the noble Lord, Lord Jones, described our approach as humane; I might think that was a little bit of an understatement, but I appreciate the comments that he made.
I will pick up on some of the comments made by the noble Lord, Lord Alton. He did the Committee a huge service by reminding us about the historical context of this. We should remember, as he rightly said, Lord Newton of Braintree, who I remember—just, as a much younger person—as Tony Newton. I think he was an ex-Health Secretary. It was helpful to hear the noble Lord’s comments there and to remind ourselves, as we do need reminding, of my noble friend Lord Freud, who did so much in this area. We should particularly remember Lord McKenzie of Luton—the noble Baroness, Lady Sherlock, is completely right on that—who was so active in this House and did so much for it.
On a personal note, I also want to mention a very dear friend who died of mesothelioma about 18 months ago. He was a quite remarkable individual who survived for eight years. He told me that he knew the longest surviving period of time was seven years and he managed, through thick and thin, to survive for eight. He was an incredible individual who gained an MBE for the work that he did in prisons, so I always remember that.
A number of questions were asked and I will start by saying that the Government recognise that the two schemes we are debating are a crucial part of the support available to people suffering from these dust-related diseases. It is right that we maintain the value of these payments at this time. In addition to the compensation awarded through these schemes, the department provides specific support for those who have industrial injuries, or diseases caused by occupational exposure, through industrial injuries disablement benefit, a weekly payment based on the assessed level of disablement. Other state benefits may also be available to claimants of the schemes to cover other needs, such as income replacement and caring costs, as well as further costs arising from their disability.
I want to pick up an important point raised by the noble Lord, Lord Alton of Liverpool, which was followed up by the noble Lord, Lord Allan of Hallam, on the question of funding. Research is crucial in the fight against cancer and the Department of Health and Social Care invested £98.3 million in cancer research in 2021-22, through the National Institute for Health and Care Research. For several years, we have been working actively to stimulate an increase in the level of mesothelioma research activity from a pretty low base. This includes a formal research priority setting exercise, a National Cancer Research Institute workshop and a specific call for research proposals through the National Institute for Health and Care Research—so those are important points to be made.
The noble Lord, Lord Alton, asked about schemes comparable with civil damages claims. When the DMPS was introduced in 2014, the payment tariffs were based on 80% of the average damages award in the civil courts. As a result of the Diffuse Mesothelioma Payment Scheme (Amendment) Regulations that were laid on 27 February 2015 and came into effect on 31 March 2015, the tariffs increased from 80% of average civil claims to 100%. Since then, the tariff payments have remained the same. However, in line with commitments made during the passage of the Mesothelioma Bill, working collaboratively with the insurance industry and other key stakeholder groups, the department has now started to progress the tariff review to ensure that the expectations of the stakeholder lobby groups are managed and that, fundamentally, the payments are still commensurate with damages awarded in civil cases for occupational mesothelioma.
The noble Lord also raised equalisation. I hope that I can give him a reasonably comprehensive answer on this, because there is often much interest in the Government’s position on equalisation of payments made to dependents with those made to the sufferers of these diseases. I have listened carefully to the concerns raised today by the noble Lord. The Government remain of the view that available funding should be prioritised for those currently living with the disease to support them in dealing with the challenges that these illnesses bring in life. It is therefore right that available funding should be targeted where it is needed most. Indeed, around 90% of payments made under both schemes are paid to the sufferers of the diseases covered by them. However, it is of course clear that whole families can be devastated by the diseases covered by the lump sum schemes, which is why dependants are still entitled to some compensation under the schemes.
The noble Lords, Lord Jones and Lord Wigley, asked a number of specific questions on the figures involved. I will do my best to answer them, although I fear that there may be a letter arriving after my comments. As a generic response to the noble Lord, Lord Wigley, on the numbers per sector, data on mesothelioma deaths in Great Britain is published on the Health and Safety Executive website, on the health and safety statistics page under the sub-heading “Ill health”. These statistics include analyses of the relative frequency of recording of different occupations on mesothelioma death certificates, which are more useful as an indication of potential past sources of occupational asbestos exposure than absolute numbers recorded for particular occupations.
The noble Lords, Lord Wigley, Lord Jones and Lord Allan, asked about the breakdown of costs by region. The noble Lord, Lord Jones, also asked about quarrymen and those working in the slate industry. I feel that I will need to write to him on that. Volumes of awards through the 1979 and 2008 schemes, broken down by region, are now published. Unfortunately, information on the occupational breakdown of these awards is not published or readily available. This would require analysis of multiple datasets for the 1979 scheme and the industrial injuries disablement benefit scheme to determine industry information. Information on IIDB assessments is published on Stat-Xplore. I will write to see what more I can do to help all noble Lords on this point.
However, I might be able to help in one respect. The noble Lord, Lord Allan, asked, perhaps more as an aside, whether I could give some figures on the sex of those who have suffered. It is fairly simple: in 2017-18, the breakdown was 5% female and 95% male; the overall figures from then until 2021-22 are 7% female and 93% male. I hope that is of some help.
The noble Lord, Lord Allan, and the noble Baroness, Lady Sherlock, asked why statutory uprating should not be done on a regular basis—and this may be asked every year. Perhaps I can make some reassurances to this Committee that, although there is no statutory requirement to review the level of these payments annually, DWP Ministers have agreed to uprate payments under both the 1979 and the 2008 scheme together in line with inflation each year since 2010. A change of this nature is unlikely to make any monetary difference to those who receive awards under these schemes. Making this a statutory requirement would require amendments to primary legislation and, even with amended primary legislation, it is probable that statutory instruments would still be required to uprate the schemes annually. As such, parliamentary debates on this subject would continue. I add that these debates provide a valuable avenue to raise awareness of the lump sum schemes and, more broadly, support for people with respiratory diseases. That point was raised by the noble Baroness, Lady Sherlock, and I very much appreciated that.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023
(1 year, 9 months ago)
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Viscount Younger of Leckie
That the Grand Committee do consider the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023.
National Minimum Wage (Amendment) Regulations 2023
(1 year, 9 months ago)
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Lord Johnson of Lainston
That the Grand Committee do consider the National Minimum Wage (Amendment) Regulations 2023.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
My Lords, the purpose of these regulations, which were laid before the House on 30 January 2023, is to raise the national living wage and the national minimum wage rates on 1 April 2023.
The strength of the UK labour market remains something to be proud of. Unemployment is low, the number of employees on payrolls is 1 million above pre-pandemic levels and demand for workers remains close to record levels. The Government’s overarching priority is to achieve sustained economic growth. Our commitment to a high-skilled, high-productivity, high-wage economy will further address cost of living pressures, as well as levelling up every part of the UK and hastening the transition to net zero.
However, we recognise the impact of inflation for people right across the country, which is why this Government have continued to take robust action. This year sees the largest cash increase in the history of the minimum wage, and, once these measures come into force, the national living wage will have risen more than twice as fast as inflation since its introduction in 2015. Furthermore, benefit payments and the state pension will increase by 10.1% in April, in line with September’s CPI inflation rate. We have also delivered a package of measures, including the energy price guarantee, which has saved a typical UK household around £900 across the winter, and hundreds of pounds-worth of support in the form of cost of living payments targeted towards the vulnerable households that need it most.
I turn to the detail of the national living wage and national minimum wage regulations, which will come into force on 1 April. Following a comprehensive impact assessment prepared and published by the Government, we estimate that 2.9 million workers will receive a pay rise across the United Kingdom. I am pleased to confirm that the Government have accepted all the rate recommendations made by the Low Pay Commission in October 2022. The Low Pay Commission is an independent body which conducts expert research and analysis and brings together input from representatives of business and workers. I thank it for its tireless efforts.
The Government remain committed to their ambitious target for the national living wage to equal two-thirds of median earnings by 2024, provided that economic conditions allow. This will have the effect of ending low pay in the UK in line with the OECD definition, and this year’s increases keep us on course to achieve that target. Under the new regulations, the national living wage, which applies to those aged 23 and over, will increase to £10.42 an hour. This is an increase of 9.7% or 92p. As a result, a full-time worker on the national living wage will see their annual pay before tax rise from £17,300 to over £18,900—an increase in excess of £1,600. This also ensures our national living wage rate remains one of the highest in the world. According to the Low Pay Commission, as of the start of 2022 the UK had the fourth highest minimum wage rate in Europe.
These regulations will also increase the national minimum wage rates for younger workers and apprentices, as well as the accommodation offset. Workers aged 21 and 22 will be entitled to a minimum hourly rate of £10.18, representing an increase of £1 or 10.9%. This narrows the gap with the 23 and over rate and keeps this group on course to receive the full entitlement to the full national living wage by 2024—another ambitious target set by this Government. Those aged between 18 and 20 will be entitled to a minimum rate of £7.49 an hour, an extra 66p, while those aged under 18 will be entitled to a minimum rate of £5.28 an hour, an extra 47p. Both these changes represent an increase of 9.7%. Apprentices under 19 or those in the first year of their apprenticeship will also receive an increase of 9.7%, as their rate rises from £4.81 to £5.28.
Finally, on the detail of the regulations, the accommodation offset will also be increasing. This is the maximum daily amount that an employer can charge a worker for accommodation without it affecting their pay for minimum wage purposes; it will be rising by 4.6% from £8.70 to £9.10. The Low Pay Commission has made recommendations about the future of the accommodation offset in its recent report. The Government are continuing to consider them carefully and will issue a full response in due course.
These regulations aim to reward the lowest paid workers in every sector and in every part of the country for their contribution to our economy. We are aware of cost of living pressures and will continue to closely monitor all the impacts of increases to the national living wage and national minimum wage rates. To that end, the Government will shortly publish this year’s remit to the Low Pay Commission and ask it to provide recommendations for the rates which will apply from April 2024.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for the report on this statutory instrument. I note that, only a few minutes ago in the Chamber, the Minister answered an Oral Question and gave a lot of information related to what we are discussing here. I thank him for that information as well. He said that we do things in bits to get them through. In a sense, it is not very clear when you are doing it “in bits” what the whole picture is.
The increases in minimum wage must be welcomed; of course, we welcome them. But they are not that generous, as £10.42 per hour times, say, 35 hours over a seven-day week is only £364. I wonder if we really consider that anybody can manage on that sort of sum in our large conurbations—£364, if you manage to do 35 hours. It should be more.
The Minister kindly gave us the detail that in October 2022, five months ago, these were considered to be the increases that ought to happen. The question I ask him to consider, because we are doing this five months later, is how up to date those figures are. Should they be more generous? As a start, perhaps we should consider an independent review to consult on how to set a genuine living wage across all sectors. For instance, we could pay the living wage in all central government departments and their agencies and encourage other public sector bodies to do likewise. It is important to set minimum wages at appropriate levels, including setting a 20% higher minimum wage for those on zero-hours contracts at a time of normal demand to compensate for the fluctuations in their hours of work. This statutory instrument takes no account of that.
Lord Lennie (Lab)
My thanks are due to the Minister for setting out the upratings on the national minimum wage, the living wage and associated allowances, and the noble Lord, Lord Palmer, for setting out his views on how things should improve in future. These changes are welcomed by the Opposition. Not surprisingly, it was us who set up the national minimum wage in 1999. We had a minimum wage, below which earnings must not fall, in the teeth of fierce opposition from the then Conservative Opposition Benches. I am glad that that situation has now been ameliorated, and they now support the minimum wage; all converts are welcome.
I think the number of jobs covered in all these figures is 2.9 million. The number affected by the national minimum wage is approximately 1.5 million, which compares with 700,000 at the time of its introduction. Does the Minister have any explanation for this increase in the numbers covered by the national minimum wage? Retail, hospitality and cleaning and maintenance are overrepresented in the minimum wage sector, and women are approximately two-thirds of those currently on the national minimum wage. Some explanation for that would be helpful.
The Labour Party would ensure that the national minimum wage was a real living wage. The noble Lord, Lord Palmer, asked how to do so. We would do it by changing the Low Pay Commission’s remit so that, in addition to other factors, it reflected the need for working people’s pay to at least cover the cost of living. The national living wage would finally live up to its name. We would ensure that the national minimum wage applied to every adult worker and was properly enforced. It is unfair to pay adult workers below the national minimum wage, and by adult worker we mean everyone aged 18—the age at which you are treated as an adult in the UK—or over.
Many employers already pay the national minimum wage, and that is to be commended, but compliance is a big and continuing problem. Can the Minister tell us how many prosecutions or enforcements took place last year for failure to pay the national minimum wage? We welcome these upratings, as I have said, and look forward to having the opportunity to progress this legislation further by extending the protection that the national minimum wage provides for all adult workers sometime in the near future.
Lord Johnson of Lainston (Con)
I thank noble Lords for their valuable contributions in today’s debate. I particularly appreciated the comments of the noble Lord, Lord Palmer, about my responses on the OQ earlier. I like to think that we will have a slightly more mature exchange over this issue than we experienced then—but such is the nature of the important scrutiny of the parliamentary system.
If noble Lords do not mind, I will go through and try to answer some of the points raised by noble Lords. The noble Lord, Lord Palmer, asked about the relationship between the October date and the bringing into practice date of 1 April. In normal periods, that would be a perfectly reasonable time lag; in fact, it is relatively fast for Governments to move with only a six-month or so period. I am very sensitive to the fact that we live in an inflationary environment, and inflation is taken into account by the Low Pay Commission. A number of factors are taken into account, as noble Lords may imagine. It would be difficult to make sudden changes, however, given the fact that we need to make sure that employers have a suitable timeframe to bring into practice the pay increases. Although the public sector is also paying the minimum wage and the national living wage, we must not forget that it is on the whole employers who are paying these additional wages, and we should be thankful to them for the support of this overall concept.
Given that this is appraised every year, I hope we will still be in a position to make sure that these wages reflect our ambition, which is to make them represent two-thirds of median earnings. In preparation for this debate, I did some work with the officials from the department, who can bear witness to this. I wanted to see where we were in relation to other European countries on median earnings and absolute amounts, given the currency fluctuations. It is not my place to celebrate or feel triumphant about minimum wage levels, because we want people on maximum wage levels—but it is important to see where we stand, so at least we can benchmark. We compare very strongly. If you look at where we are on the European averages, you can see that we are one of the highest, out of the whole of Europe, and we compare extremely favourably with countries such as Germany.
The noble Lord, Lord Lennie, made a very good point, and I have thought about the philosophy of minimum wages, which were brought in in 1999 by a Labour Government and not supported by the Conservative Opposition at the time. I personally was unsure of what the effects would be on business; I was concerned that it would drive up costs for business and cause a negative or opposite effect to giving people security—that it would lead to greater insecurity and lower levels of employment. Actually, it has made sure that people are guaranteed a level of income, and it is an extremely powerful way for us to manage our economy. I am very pleased that we have converted—and, like all converts, we have probably ended up being more passionate about the cause than the original proponent. We have introduced the national living wage, which is a very effective way to ensure that the overall pay rates are raised.
On the noble Lord’s comment about the age at which these rates should apply—in other words, that the national minimum wage and the national living wage should be synchronous—I have some sympathy. At the same time, it has been believed, and I think there is evidence, that an element of flexibility for 18 to 22 year-olds, or those in their early 20s, is necessary, particularly as that is where there is greater vulnerability for employment volatility. We have plans for the pay scales of those over the age of 21 to eventually come into line with the national living wage, but we would still be keen to retain some flexibility for employees below that level.
This is all about making sure that the employment market functions properly and that we can employ as many people as possible at the right rates. This is certainly a matter for debate—we are trying to ensure, not that people are paid less, but that there is flexibility in the market so that new workers in the workforce can get the jobs they need.
It is important to cover the noble Lord’s point about there now being 1.5 million, from 700,000 when this came into practice. I am happy to do some more analysis of that, but my surface suspicion is that there are 3.75 million new people in the workforce since 2010. It would be interesting to see an analysis of what those jobs are. I would like to inquire into this, as I appreciate that the noble Lord has raised a very relevant point. In some respects, I would like to think that it is a good thing that we have people coming into the workforce, but clearly we do not want to see a derogation of wages. We want to see people being paid more. I stress that these are minimum-wage levels—they are not the set wage levels—to ensure that no one is paid less than that rate.
The noble Lord, Lord Palmer, mentioned issues around fixed-hours contracts and the flexible economy. We are doing an awful lot in that area to make sure that people have an element of certainty. He was generous enough to remember my response to the Oral Question earlier today. There is quite a long list of different types of specific protections that we are bringing in. I draw his attention to the Employment Relations (Flexible Working) Bill, which effectively allows employees to demand flexible working from day one, rather than week 26, and to the Workers (Predictable Terms and Conditions) Bill, which is probably more relevant to what he was talking about. It gives more strength to employees’ requirements for predictability in terms of numbers of hours if they are on temporary work contracts. Once you have worked for an employer on a part-time basis for a certain length of time, you will be given a greater opportunity to ask for predictability in how you are paid and your hours.
We have to strike a balance—and I think we do—in giving employers flexibility, which is at the core of what has been an incredibly dynamic and successful labour market over the last 20 years or longer, and making sure that workers feel protected. Importantly, flexible working hours are very much appreciated by a number of workers who want flexibility. It would be a mistake to throw the baby out with the bath water and get rid of zero-hours contracts or highly flexible working. People appreciate them, as they give a great deal of flexibility. A lot of students and part-time workers who could not do full-time work and would not want predictable work will use these contracts. They constitute about 3% of the workforce. There are mechanisms and there is analysis of how we can improve the rights of workers, but we do not want to dilute the flexibility that these structures give to our workforce and economy.
The question from the noble Lord, Lord Lennie, about the factors that the Low Pay Commission takes into account is well made. It takes a great number of factors into account when assessing pay. I believe that the Government have accepted all the recommendations of the Low Pay Commission; this is a very important partnership that we have. My assumption is that the factors in decision-making are continually reviewed, which is absolutely right. Ultimately, our ambition is to ensure that the national living wage effectively reaches two-thirds of median earnings by next year. I am very pleased to say that we are on track to achieve that. As a nation and a society—let alone a sense of triumph for the Government; this is about people’s hard work and being rewarded properly—it would be a great thing if the United Kingdom could achieve that, and we are on track and very close to doing so.
I believe I have covered all the issues, except for the question raised by the noble Lord, Lord Palmer, on tips. I am afraid I do not recall seeing the noble Lord in his usual place on Friday for the debate on tips. The legislation is very specific and will be brought to bear specifically so that all tips go to the workforce, with no deductions, not even for credit card charges. I hope that is clear, because that is the whole purpose. They will be paid monthly, so they cannot be accumulated, and, importantly, they cannot be used as so-called “pay bonuses” or “top-ups”.
Lord Lennie (Lab)
Before the noble Lord sits down, could he comment—or write to me if he cannot—on enforcement actions in the past 12 months? What are the numbers and so on?
Lord Johnson of Lainston (Con)
I apologise to the noble Lord, Lord Lennie. I try to answer all the questions, but there is always one that I miss. Enforcement is very important and all businesses are responsible for paying the correct minimum wage to their staff. HMRC follows up on every worker complaint it receives, even those that are anonymous. This includes complaints made to the ACAS helpline. In 2021-22, HMRC identified pay arrears in excess of £16.3 million for more than 120,000 workers. I am very happy to go through this now, but it might be more useful to write to the noble Lord if he is happy with that.
I will address one point that has been raised. To some extent I am embarrassed by it, but not embarrassed to be open and transparent about it. The question was why the listing of companies that have not paid their staff the minimum wage had not happened. The list is supposed to be published every quarter. I am afraid that there has been some turnover of Ministers. I spoke to the Minister responsible today and he is determined to make sure that it happens in the very near future. I cannot give a specific time, but we are very aware of it. We want to make sure these companies are named; it is a powerful incentive for employers to behave properly. We are entirely of one mind here and I will be delighted to put the information in the House of Lords Library relating to enforcement. The good news is that I can reassure the Committee that HMRC in particular has been focusing on tackling wilful non-compliance and that significant progress has been made.
Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023
(1 year, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Vere of Norbiton
That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, these draft regulations were laid before Parliament on 31 January and will be made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, also known as ATMUA. Following the UK’s departure from the European Union, this legislation created a more flexible set of powers for Ministers to implement alleviation measures for airport slots related to the impacts of Covid-19, subject to a vote in both Houses. This allows the UK to adapt its approach to best support the recovery of the aviation sector.
Ordinarily, airlines must operate their slots 80% of the time to retain the right to those same slots the following year. This is known as the 80:20 or “Use it or lose it” rule. This encourages efficient use of scarce airport capacity. We have been amending the airport slots requirements since the summer of 2020; we have seen a promising recovery in passenger demand during 2022 and in the early part of 2023, but there remains some continued uncertainty in the industry and demand remains below the levels seen before the pandemic. The Government have therefore designed a package of measures for the summer 2023 season that sees a return to the normal 80:20 rule on slots usage. This will encourage more efficient use of slots, combined with flexibility to help manage that remaining uncertainty.
When the pandemic originally struck, the 80:20 rule was fully waived. This avoided environmentally damaging and financially costly ghost flights. We then made fairly generous alleviations for the four subsequent seasons, while travel restrictions remained. Last summer, in 2022, we changed the usage ratio to 70:30 because we felt there was a more positive outlook in demand and wanted to ensure that the slots were used as effectively as possible.
However, as noble Lords will recall, there was some disruption during the summer season last year and we made an additional alleviation, a one-off slots amnesty, which helped to calm the disruption and meant that the aviation sector was flying the schedule that it said it would. That very much helped to reduce last-minute cancellations, which ended up being around the 2019 levels.
For summer 2023, the season that starts on 26 March and runs to 28 October, we are planning to return to the pre-pandemic 80:20 allocation—there has been no change in that. We will continue to include the enhanced justified non-use provisions, which we introduced for winter 2022, for those areas where there is still considerably reduced demand. That might be because of pre-departure testing, flight bans, quarantine or self-isolation requirements, all of which put a significant dampener on demand. It is in those circumstances that the justified non-use provisions come into play. Following consultation with the industry—that is, airlines and airports—we have decided to include an alleviation of a 5% slot hand-back, but this must happen before the start of the season so that there is no uncertainty going into it about whether a route will be operated on a day or at any particular time.
It is worth noting that the instrument applies to England, Scotland and Wales. This is because aerodromes are a devolved matter in relation to Northern Ireland. In any event, there are no slot co-ordinated airports in Northern Ireland.
I have had many conversations with the aviation sector and we are very focused on ensuring that summer 2023 is a success. I believe that the provisions within this statutory instrument will contribute greatly to that. However, we also recognise that the sector has nearly recovered and the alleviations we are proposing are therefore limited in nature. I beg to move.
Lord Bassam of Brighton (Lab)
My Lords, I am grateful to the Minister for introducing this. She will be appreciative that I am not my noble friend Lord Tunnicliffe. She looked slightly puzzled earlier that he was not here. I can only say that he is on important duties elsewhere. I have gone through the material and, as my colleagues in the Commons were keen to say, there is not a big policy difference between us; we are quite happy with the measures that the Minister has set out. I will just make a few points.
Obviously, it is vital for our economy that the aviation sector recovers fully to its pre-Covid levels. My understanding is that we are likely to come back to this issue again in the autumn when the summer season will have been reviewed and we will have to decide whether we need to offer some further form of alleviation.
I have looked a little at the data on the strength and pace of the recovery, and my understanding is that aviation in 2022 was at 83% of 2019 levels. It would be good if the Minister could provide us with a bit more of an update on monitoring since those stats were produced and offer us a bit more on how the sector is recovering generally. I live in Brighton, not a great distance from Gatwick, which is a very important part of our economy. I am sure the Minister will be familiar with that from her time spent—usefully or otherwise—knocking on doors in the Brighton Pavilion constituency. I am sure that she will have come across a few people from the aviation sector during that time.
What financial assistance is currently being made available to airlines to support their recovery, and what more can the Government do to underline that? Although I guess the information is less important for Heathrow and Gatwick, is targeted support being offered to regional airports? I note the closure of Doncaster Airport, which is very unfortunate. The strength of our industry is very reliant on its regional recovery as well. With that, I restate my support in general terms for the policy objectives adopted and ask the Minister whether she could cover those points—in particular, whether we are going to be here again in six months’ time.
Baroness Vere of Norbiton (Con)
I am grateful to the noble Lord, Lord Bassam, for standing in for the noble Lord, Lord Tunnicliffe. I bumped into him earlier; all I will say is that he looked very dapper, so I am sure he is going somewhere important.
I am very happy to go through the questions raised by the noble Lord. Will we be back here in autumn? I do not know; quite possibly. You have the summer season and the winter season. The winter season will start towards the end of October, and it will very much depend on the outcome of the consultation. We tend to try to do the consultation with industry as late as possible before the next season starts, but we need certainty, so we need to do it before the season starts. We will consult with industry again. It will depend on how the summer has gone and how things are looking from a Covid perspective for the winter but, as I think I said the last time I was standing here, at the moment, alleviations are moving in one direction, and I do not particularly want to continue them forever. It is right that we get back to the normal slots regime at some stage because it is important for the efficient use of capacity. We will monitor that carefully and speak to the industry in due course.