Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2018

Baroness Stedman-Scott Excerpts

Tuesday 27th February 2018 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2018 and the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2018.

[Baroness Stedman-Scott (Con)]

My Lords, I am required to confirm to the Committee that these provisions are compatible with the European Convention on Human Rights and I am happy so to do.

These two statutory 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 set up by the Child Maintenance and Other Payments Actusb 2008. These two schemes stand apart from the main social security benefits uprating procedure and there is no legislative requirement to review the level of payments each year. None the less, I am happy to increase the amounts payable by the consumer prices index of 3%. This is the same rate that is being applied to industrial injuries disablement benefit and certain other disability benefits under the main social security uprating provisions. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2018.

The Government recognise that people who have contracted one of these diseases as a result of exposure to asbestos or one of a number of other listed agents may be unable to bring a successful claim for civil damages. This is mainly due to the long time lag between exposure and onset of the disease, which can make it impossible to trace those responsible or their insurers. Therefore, by providing these lump sum compensation payments through these two schemes, we fulfil an important role to people with these dust-related diseases. As well as compensating people who cannot make civil claims, another aim of the schemes is to ensure that people with these diseases receive compensation in their lifetime, while they themselves can still benefit from it, without first having to await the outcome of civil litigation.

Although improved health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling, the legacy of its common use is still with us. That is why we are ensuring that financial compensation from these schemes is available to those affected. I will briefly summarise the specific purpose of the two compensation schemes.

The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 scheme, which for simplicity I will refer to as the 1979 Act scheme, provides a lump sum compensation payment to those who have one of five dust-related respiratory diseases covered by the scheme, 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. The five diseases covered by the 1979 Act scheme are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis and primary carcinoma of the lung, if accompanied by asbestosis or bilateral diffuse pleural thickening.

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 were unable to claim compensation under the 1979 Act because, for example, 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 died before being able to make a claim.

Payments under the 1979 Act scheme are based on the age of the person with the disease and the level of their disablement at the time they are diagnosed. The highest amounts are paid to those diagnosed at an early age and with the highest level of disablement. All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate—the highest rate of payment—to reflect the seriousness of the disease. Similarly, all payments under the 2008 scheme are made at the 100% disablement rate and based on age, with the highest payments going to the youngest people with the disease. In the last full year, April 2016 to March 2017, 3,620 people received payments under both schemes, totalling just over £50 million.

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[Lord McKenzie of Luton (Lab)]

My Lords, I welcome the first scheduled visit of the noble Baroness, Lady Stedman-Scott, to the Dispatch Box. I think this is the first set of regulations to which she will respond. There is a substantial degree of consensus around the Committee on this very important issue, as we have heard in this brief but inspired debate.

It is always a pleasure to listen to my noble friend Lord Jones speak on these occasions, not only because of the manner of his presentation but because he knows the history of this subject. He gave us a history lesson today, particularly in regard to quarrymen.

The noble Baroness, Lady Finlay, referred to the very important issue of asbestos in schools. The HSE may have proposals and procedures for dealing with that but that does not address the circumstances that she identified. It is good to know that we are on the same page as the noble Lord, Lord Kirkwood, in supporting these changes. However, I have one or two questions. We know that these are appalling diseases, particularly mesothelioma, with its long latency but, once diagnosed, as we have heard, there is a very short life expectancy. Because of that a good deal of work has been done by some noble Lords, including the noble Baroness, and the noble Lords, Lord Alton and Lord Wigley, to make sure that medical research is appropriately focused on this. The hope was that that would be paid for in substantial part by the insurers which escaped liability way back when these diseases were being contracted. So my first question for the Minister is: how is that research project proceeding?

As far as pneumoconiosis is concerned, I think we had some aggregate figures on the contributions that were being made but what is the actual level of payments under that scheme, perhaps for the most recent years? Can it be analysed between the various different diseases? How is that programme funded? I will come on to the 2008 Act scheme in a moment. Is it just direct government funding or is there some other cost recovery arrangement under procedures which operate for the 2008 Act?

Perhaps I might ask also about the tracing office. One of the problems with this is the extent to which insurers of the liability insurance can be identified and contacted. A lot of work was done, particularly by the noble Lord, Lord Freud, when he was Minister, to try to change the arrangements and accelerate circumstances in which the employers’ liability insurance could be identified. Obviously, that is relevant for where there is an employment nexus. It does not work particularly well for the 2008 Act. I think there were various iterations to try to improve the tracing but it recognises that where there is an employment situation, the obligation on employers, going back to the 1970s, was to have employers’ liability insurance. To the extent that there was, and that can be identified, that should bear the costs of this. Perhaps we could have an update on the tracing office.

Similarly, on the 2008 Act diffuse mesothelioma scheme, could I have an update—the noble Baroness may have given it to us—on how many cases were involved and the most recent cost figures for the year that is just about to end? As I understand it, that was being funded, in part if not wholly, from cost recoveries from pursuing those who should be making payments. I think there are two bits to the issue of equalisation: equalisation between sufferers and dependants. I join those who say that there should be an equalisation. But at the start of the 2008 Act scheme there was a fear that there was not going to be enough money in that to pay compensation levels which equated with the 1979 Act scheme. Ultimately, there was enough money so those two are equalised, at least at the sufferer level, but I am interested in whether the recovery has gone beyond that needed just to make the payment and whether there is a surplus which could be deployed in a different way to increase the payments. That is an issue that we need to try to get to the bottom of.

The orders do not touch upon the 2014 mesothelioma payment scheme—the brainchild of the noble Lord, Lord Freud, who did an excellent job in bringing it to fruition. Here we were dealing with circumstances in which there was an employment connection and simply an inability to trace the employer liability policies. The rationale for the scheme was that the insurers should have been bearing the cost of this. They escaped by one means or another. Suggestions that they were then not aware nor back in the 1960s even of the effects of the asbestos are not wholly borne out. The point was to get insurers to cough up and deal with matters for which they were responsible. When that scheme was introduced payment levels were less than 100% of the general tariff of compensation under the 1979 Act scheme. It was subsequently increased and the limit on that was that insurers were not prepared to pay more than 3% of the growth rate in premiums of employer liability insurance. I am interested in an update on that scheme. Are full compensation levels now being met? Are the insurers meeting their full 3% agreement under those arrangements?

I am sorry that those are some detailed points for the Minister, but this is an occasion to focus on this very important matter. I thank the Government for the updating that is before us today, continuing in the spirit of co-operation that there has been on this issue.

[Baroness Stedman-Scott]

I thank all noble Lords who have spoken in the debate for their many helpful contributions—and the generous number of questions. This is designed to keep one on one’s toes. This is my first time doing an SI. I can only plead noble Lords’ indulgence. If I do not answer something properly or I fail to answer it at all, please will noble Lords tell me and I will make sure that they get the answer as quickly possible.

These two schemes play a most important part for these people who have these terrible diseases and it is the very least we can do to get the help that they so rightly deserve. In trying to answer just some of the points—and, again, your Lordships will keep me on my toes to make sure that I do that—I say to the noble Lord, Lord Kirkwood, that I acknowledge that the success of the scheme is in the speed that it is dealt with. That is quite right. Is there a follow-up procedure for the payment of the cheque? I am told that there is not. I do not know if that means that I need to talk to the officials to see if there should be or if it is even possible. I am not promising anything but the point has been made.

On the disparity in equalising the payments, we estimate the cost of equalisation to be around £5 million per year. Following on from the previous debate, there is an affordability issue, although when people are suffering like this it is even more acute. At the moment we are trying to get resources to where they are needed most, to people actually living with the disease. We will keep this under review. I can be clear about that. I hope that that answers the question.

[Lord McKenzie of Luton]

How is the £5 million split between the 1979 and 2008 arrangements, or does it all relate to 1979?

[Baroness Stedman-Scott]

I am advised that I should write to the noble Lord on that. I do not have the information, so I will make sure that he gets an answer to that question.

Is anything more being done to prevent the disease? It is. A grant of £5 million from liable funds was awarded to Imperial College in 2016 to establish a national centre for mesothelioma research. The Government have also committed to a number of other measures to stimulate an increase in the level of mesothelioma research activity. The Department of Health’s National Institute for Health Research undertook a priority-setting exercise to stimulate an increase in mesothelioma research. As a result, five studies are under way following an NIHR themed call, with total funding in the region of £2.6 million. The first two are due for completion this year, although we would not expect results to be published for some time after the completion date. From the fact that noble Lords are nodding, that seems pretty reasonable, which is good.

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[Lord Jones]

The Minister mentioned visiting north Wales. She should note that it rains a lot.

[Baroness Stedman-Scott]

I had heard the rumour, but I did not want it confirmed as being true—but there we are. I shall do my best to do that. The noble Lord mentioned Elwyn Jones, Tom Jones and then a third person. Was it Ted?

[Lord Jones]

Cledwyn.

[Baroness Stedman-Scott]

Cledwyn, okay. I was not quite quick enough to get there. I am glad that the legislation has helped, and I appreciate the noble Lord’s thanks and the comments of other noble Lords that what we are doing is right. As for the debate on the Floor of the House, that is a bit above my pay grade.

[The Earl of Courtown (Con)]

The usual channels.

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[Baroness Stedman-Scott]

The usual channels. I will find out who they are now I am in my new role.

The noble Baroness, Lady Finlay, expressed an ongoing concern about asbestos in schools. I had a good look at this, because I thought it was important, so I can tell noble Lords that the Department for Education and the Health and Safety Executive are proactive in promoting good asbestos management in schools. They run an asbestos in schools steering group made up of experts and campaigners. In 2015, they published a policy review on asbestos management in schools which says what the Government are going to do; developed better and more targeted guidance; published refreshed guidance in 2017; and enhanced the scrutiny on duty holders for managing asbestos in schools by asking all responsible bodies to provide an assurance on schools compliance. An assurance process is now being developed with an aim to publish in early spring 2018—so any minute now. We are looking at ways in which to improve the evidence base and are continuing to fund the removal of asbestos where appropriate, directly and indirectly through our funding programmes for rebuilding and refurbishing schools. The final point on this is about encouraging more academies to join the risk protection arrangement, which is a government-backed alternative to commercial insurance for academy trusts.

[Baroness Finlay of Llandaff]

I take this opportunity to thank the Minister for the way she is handling our questions and to congratulate her on her role. I shall make a small point and ask a question. The scheme she is talking about relates to England. The problem we have is who is responsible for paying for refurbishment in Wales. The Welsh Government believe that it is the Health and Safety Executive, which covers England and Wales, and the Westminster Government have said that this is a devolved issue because it comes under education, which is devolved. There is a problem there and somewhat of a gridlock. I do not expect the Minister to give me an answer today, but I would be most grateful if we could pursue this outside the Committee. Oddly enough, I think it fits completely into the need for there to be national frameworks for issues that are covered between the devolved Governments and the Westminster Government, which we will be dealing with in a much larger context in relation to the European Union (Withdrawal) Bill.

[Baroness Stedman-Scott]

I am very happy to undertake to meet the noble Baroness and others to discuss that and, I hope, to resolve it without it costing lots of money. I am told that the social care disregard is complex, but in broad terms the lump sum is treated as capital, not income, and is disregarded for income-related benefits for a period of 52 weeks. I think I have dealt with asbestos in schools.

I think I have touched on the point made by the noble Lord, Lord McKenzie, about research. I will have to write to the noble Lord on the actual level of payments. I think the answer is in my notes, but I will keep Members of the Committee for ever if I try to find it. The combined cost of the 1979 Act scheme and the 2008 scheme payments outweighs the money received from compensation recovery. There is an overall cost to the Government. In 2016-17, £27 million was recovered and just over £50 million was paid out. Civil damages under the new tariff compensation payments have risen to match 100% of average civil claims, which is up from 80%. I was asked how the 1979 Act scheme and the 2008 scheme are funded. The 2008 scheme was set up on the basis that it would be funded by compensation recoveries from civil claims and the 1979 Act scheme is funded partly by civil compensation recoveries and partly by the department. The net cost to the department of making payments under both schemes in the past financial year was £23 million, which is the difference on that.

If I have missed anything out—I am sure I will find out—I will come back to noble Lords. In the meantime, I commend the uprating of the payment scales for these schemes and ask for approval to implement them.

Motions agreed.