Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014

Lord Wigley Excerpts

Monday 17th March 2014 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, in moving that the Grand Committee do report to the House that it has considered the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014, I will also speak to the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2014. These two regulations increase the lump sum amounts payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2014.

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 for 2014 by CPI—that is, by 2.7%, which is the same rate as that applied to some social security disability benefits and the industrial injuries disablement benefit under the main social security uprating provisions which were recently debated in the House.

The Government recognise that people suffering from diseases as a result of exposure to asbestos or one of a number of other listed agents may not be able to bring a successful claim for civil damages in relation to these diseases. That is mainly due to the time lag between exposure and onset of the disease, which could be as long as 40 years. Therefore, we fulfil an important role by providing lump sum compensation payments to people suffering from certain asbestos-related diseases through these two schemes. These government schemes also aim to ensure that sufferers receive compensation while they can still benefit from it, without first having to await the outcome of civil litigation. Improved health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling. However, the historic legacy of the common use of asbestos is still with us. That is why we are ensuring that financial compensation from both these schemes is available to those affected.

I will briefly summarise the specific purpose of each scheme. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979—for simplicity I shall refer to it as the 1979 Act—provides a lump sum compensation payment to those who suffer from one of five dust-related respiratory diseases covered by the scheme and who are unable to claim damages from employers because those employers have gone out of business and who have not brought any action against others 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 was introduced to provide compensation to people who contracted mesothelioma but were unable to claim compensation for that disease under the 1979 Act, perhaps because their exposure to asbestos was not due to their work. The 2008 scheme means that payments can be made quickly to mesothelioma sufferers at their time of greatest need. Under both schemes, a claim can be made by a dependant if the sufferer has died before being able to make a claim.

Payment levels under the 1979 Act scheme are based mainly on the level of the disablement assessment and the age of the sufferer at the time that the disease is diagnosed. The highest amounts are to those diagnosed at an early age and with the highest level of disablement. All payments for mesothelioma under the 1979 Act scheme are made at the 100% disablement rate—the highest rate of payment. Similarly, all payments under the 2008 scheme are made at the 100% disablement rate and are based on age, with the highest payments going to the youngest sufferers.

I would like to give some detailed figures on claims and moneys paid out under the two schemes before us today. In the last full year, April 2012 to March 2013, over 3,500 payments were made in respect of both schemes, totalling just over £53 million.

I know that the occurrences of mesothelioma are of particular concern to Members, with the number of deaths from mesothelioma in Great Britain continuing to rise. In 1968, 153 people died from mesothelioma. By contrast, over 2,000 deaths occur each year from that disease now. Mesothelioma is a fatal disease caused almost exclusively by exposure to asbestos. Those diagnosed with mesothelioma usually have a short life expectancy—generally between nine and 12 months—with the sufferer becoming severely disabled soon after diagnosis. This rise in the number of deaths reflects the long latency period of the disease, which can take decades to become apparent. Latest available information suggests that mesothelioma deaths will continue to increase to a peak of around 2,500 in 2018, and then start to fall—thus reflecting a reduction in asbestos exposures following its peak use in the 1960s and 1970s. Just under a half—47%—of payments made under the Government’s 1979 scheme are in respect of mesothelioma.

I remind noble Lords that immediately following this debate we will be debating the Diffuse Mesothelioma Payment Scheme Regulations 2014, and I would ask that any questions about that scheme, and how it interacts with these older schemes, be raised in that debate.

These regulations increase the levels of support through the government compensation schemes. I am sure that we will all agree that, while no amount of money can ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation. The government schemes go some way to ensuring sufferers receive it as soon as possible. It is a requirement that I confirm to the Committee that these provisions are compatible with the European Convention on Human Rights, and I am happy to do so. I commend the increase of the payment scales and ask for approval to implement them. I beg to move.

[Lord Wigley (PC)]

My Lords, I shall certainly follow the Minister’s suggestion that we leave consideration of the new mesothelioma provisions until the next debate, which makes a lot of sense. I shall want to contribute then, if I may. Perhaps I may ask a couple of questions particularly on the regulations made under the 1979 pneumoconiosis Act. In doing so, I welcome, of course, the upratings that are taking place. They should not lose their value as time goes on.

As the Minister and others may know, I have an interest in the 1979 scheme, particularly from the point of view of slate quarrymen. The issue was not, of course, related only to slate quarrymen; it also affected those working in the kiln and cotton industries, and a number of other conditions came under the purview of that Act. Over the period since 1979 there was initially a surge of applications, which reduced in 1986 to just 95. A decade later, in 1995, this had built up to 900, and was running at a level of 1,000 to 2,000 by 2002-03. I believe that some of the cases leading to that surge arose from coal-mining pneumoconiosis, which had not been covered under the coal-mining scheme—there was originally a tripartite scheme between the NUM, the NCB and the Government, in 1975, for that purpose.

I have been trying to ascertain the breakdown of the figures since 2002-03, and would be grateful if the Minister would give some undertaking on this. My colleagues in the House of Commons have been unable to get from the House of Commons Library the breakdown with regard to industry and to the regional spread of those cases. I imagine that the information must be available in the department because it was available 10 years ago. I hope that it might be possible, by letter or some other way, for this to be disclosed. It would be interesting to see how the pattern has changed from the point of view of the sustainability of the scheme itself, which is an important factor.

The second thing I want to ask the Minister is the breakdown of the figure that he has just given us for 2012-13. He mentioned 3,500 payments and £53 million. That figure covered both the 1979 scheme and the 2008 mesothelioma scheme. Presumably there is again some breakdown between those two at the very least, and perhaps the Minister is in a position to give it today, so we can see where this is going. There will be questions about the interplay of the schemes, but I am content to leave those until the subsequent debate.

[Lord Alton of Liverpool (CB)]

My Lords, like my noble friend Lord Wigley, I will reserve my remarks about the current 2014 scheme to the later orders. However, perhaps I can ask about the earlier scheme and take the Grand Committee back to remarks that the noble Lord, Lord McKenzie, made in 2010 when he was Minister. It is good to see him in his place. He said that the,

“differential in payments puts pressure on sufferers during already extremely difficult times. For example, many feel that they need to rush through a quick claim to the department in order to maximise compensation for their families. Some are too sick to make a claim before dying and therefore their families are able to claim only the lesser amount after the claimant's death. In addition, because mesothelioma is difficult to diagnose and the disease onset is rapid, some sufferers are not diagnosed until after death”.—[Official Report, 23/3/10; col. GC 355.].

This therefore raises the question of dependency and lump sum payments which, when the noble Lord, Lord McKenzie, was Minister, he said should be the same. He commenced the process of reducing the differential and both his remarks and the action he took then are to be greatly welcomed.

Each year since 2010, Members of both Houses have asked that the differential should be reduced and each year that has been rejected, due to economic circumstances. My question to the Minister is: as the economic situation continues to improve, at what point in the recovery will there be the trigger that will lead to the Government honouring the commitment to reduce the differential and in-life lump sum payments? Until we do that, it leads to three specific anomalies. First, the dependants are paid significantly less than in-life claimants; secondly, dependants’ age is cut off at 67, compared to 77 for in-life claimants; and thirdly, the 2008 scheme dependants do not receive the 10% enhancement.

Over the next 10 years, the Government are expected to receive some £71 million, less £17 million gifted to insurers, in additional recoveries under the terms of the Mesothelioma Act 2014. Could some of those additional funds be used to reduce the differential? As I will argue later, perhaps some of those funds could also be diverted towards research because once we have established what the causes and cures are, then we will not have a need for schemes like this at all.