Payment Scheme (Mesothelioma)

Debate between Ian Lavery and Mike Penning

Monday 17th March 2014 Commons Chamber

[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.

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 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.

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[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. 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.

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, 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 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.

[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?

Welfare Reform (Sick and Disabled People)

Debate between Ian Lavery and Mike Penning

Thursday 27th February 2014 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mike Penning)]

I apologise as I had to pop out of the Chamber for a second—nature called—but I came straight back and I think I caught most of the speech of the hon. Member for Stretford and Urmston (Kate Green).

[Ian Lavery]

It’s down to age.

[Mike Penning]

Yes, it’s an age thing; the hon. Gentleman is absolutely right—and that is no doubt the voice of experience.

I welcome the debate and congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing it from the Backbench Business Committee. This is the sort of debate that should take place. I also agree that it should be a non-whipped debate; that is right and proper. We may not all agree about what has been discussed, but it is, frankly, in my opinion something the Whips should stay out of, and we should have proper debates. I will probably get shot when I leave the Chamber for saying that.

There are also some parts of this very long motion with which I have a great deal of sympathy, and there are parts of it with which I do not agree, as Members on both sides of the House will realise, but perhaps we can try to work on what I do agree on and what we can do together to make the benefits regime better for the people we are trying to represent and the lobby that is here today.

Some 24 Members including myself have now taken part in the debate and it is a shame that it was time-restricted, but I understand fully why that was the case. We could have spoken for a great deal longer and have had longer contributions, however. Many Members on both sides of the House have raised specific constituency cases and my officials are in the Box and will have taken note of them. I will write to the Members concerned directly after this debate and see how we can progress those matters forward. I will also take a personal interest in certain cases, and in particular the case raised by the hon. Member for Rochdale (Simon Danczuk). On that case, as the Minister responsible, I apologise unreservedly to the family. It falls back on me, and it is about time politicians stood up and apologised when things have gone wrong. In that case, things clearly have gone wrong and the family have every right to be aggrieved, and I hope the hon. Gentleman’s constituent makes a full recovery.

On the call for a cumulative assessment, I am not going to say to the shadow Minister that previous Administrations did not do that—although they did not—but there was a reason why and it is very complex, and the Institute for Fiscal Studies has also said that that could not be done properly and accurately enough. I hope the shadow Minister and others will understand why, although the Treasury carries out independent reviews of different parts of Government policy, it does not do that. I respect the work done in other reports, but they are not cumulative in the way we would like.

Mesothelioma Bill [Lords]

Debate between Ian Lavery and Mike Penning

Tuesday 7th January 2014 Commons Chamber

[Mike Penning]

The hon. Member is making a passionate speech, as he did on Second Reading, and he is rightly standing up for his constituents. I have to tell him that the insurers did not come happily to the table to have this discussion. When the discussions with Lord Freud started, they were told to come, and the negotiations were based on what we could get agreement on without putting a further burden on business—in other words, the 3% levy does not go on to new business. I heard what my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) said, and we will take a close look at that. We have to look at the context. Nothing had been done for so long, but now something is being done and the insurance companies are not happy about it.

[Ian Lavery]

Every hon. Member who has spoken today understands that the insurance companies had to be dragged to the table, because contribution after contribution has cited examples where the first thing an insurance company does after an individual has been diagnosed with mesothelioma is run away and deny it for as long as possible in the hope that the problem goes away. In Committee, I applauded the work done by successive Governments in getting the Bill to this stage. We are just a little too far away from this Bill being absolutely fantastic for mesothelioma sufferers. Three or four points mean that it is nowhere as good as it could be, and some great arguments have been made today on how to bridge the gap.

I return to the point that the insurance companies are not companies that are just surviving. They have made profits over generations—10, 20, 30, 40 and 50 years. They took the premiums and invested the money. Never mind contingency funds, the funds should be there—unless, of course, the money has been paid out in dividends or in other ways. That means that the money that should have been there for mesothelioma sufferers is not there any more because it has been given to shareholders. That is simply a point. The insurers paid out nothing on the untraced policies that they lost or destroyed. Again, that is not the fault of the people who are suffering—it is not their difficulty. Remember, the only thing wrong that they have done is to attend the workplace. For goodness’ sake, we cannot forget that that is the main point.

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[Ian Lavery]

That is absolutely true, and that strengthens the argument put forward with regard to the apparent finances and wealth of the people who are threatening to walk away if they are asked to pay the right amount of compensation, or even more than 75% of it.

There are other examples where compensation has been paid at 100% or at 90%. The pneumoconiosis scheme in the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 pays 100% compensation and the Financial Services Compensation Scheme paid 90% to asbestos sufferers, so there are examples.

On the cut-off date, which my hon. Friend the Member for Southampton, Test (Dr Whitehead) mentioned, why on earth is 25 July 2012 being suggested? Why not February 2010? In other case law, compensation has been paid from the guilty date of knowledge. In this case, that would mean paying compensation right back to the 1960s, but the cut-off date is 25 July 2012, and that causes huge problems. I understand that with a cut-off date there will always be losers—that is a matter of fact—but the 25 July cut-off date was when the written statement was made on the Bill, whereas the consultation started way back in February 2010. That would seem to be the most appropriate cut-off date.

[Mike Penning]

May I politely correct the hon. Gentleman? The date in 2010 was when the previous Administration issued the consultation document, not when the Bill started.

[Ian Lavery]

Yes, the consultation document was issued in 2010, but the cut-off date in the Bill will be 25 July 2012. I cannot see any rationale for that. I cannot understand the reason for it. Eligibility should at least commence with the publication of the consultation document in February 2010, but, as I say, there are strong arguments for going back even further.

It comes down to whose side we are on. As politicians, we face tough choices every day of the week. Are we on the side of the victim who will sadly pass on within months, or are we on the side of the insurance companies, which, as the Minister said, had to be dragged to the table to pay any compensation at all? The insurance companies are getting £17 million from the Government just to start the scheme, and it has been agreed they will get a further £30 million from them through some sort of borrowing arrangement.

In conclusion, when someone with mesothelioma who is soon to pass on comes to one of our surgeries and we explain that the insurance companies have only to pay 75% compensation, I wonder what their reaction will be. It is not fair, it is not just, and it is not acceptable. Wherever there is 100% liability, there should be 100% payment.