Benefit Claimants (North-east)

Nicholas Brown Excerpts

Wednesday 7th January 2015 Westminster Hall

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. It is also a pleasure to take part in this important debate. I congratulate my neighbour, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), on securing it. It is enormously important to the people we represent that we debate these issues and tease out things that are just not acceptable.

At the heart of the problem is the mismatch between the pressure on DWP staff and what is actually obtainable for the citizens we represent in the circumstances of the north-east of England. The inflexibility of the regime—especially the ESA regime—is at the heart of many of the individual cases that have been raised so far and of the one or two constituency cases I will raise in a minute.

The restricted nature of the jobseekers labour market, as opposed to the broader north-east labour market, is a significant factor in this, as is the Department’s practice of churning people through projects, a further period of JSA and then more projects, and of migrating them from incapacity benefit to the new ESA, when their chances of actually securing sustainable employment are not that strong.

People come to my surgeries, as they do to all Members’ surgeries, but when their opening gambit is, “You are my last hope,” my heart sinks, because I know the system is failing them and that they have been referred to me, as their Member of Parliament, by others who are trying to help them or that they feel they have nowhere else to go.

One chap I met—I will call him Mr A because I do not want to put his name into the public domain—is 62 years old. He has been a labourer all his life. One look at him told me that his days of being a labourer were over. He is on ESA. He is certainly not capable of manual work any more, but he is to be churned through a range of schemes to train him for jobs that I do not think he will ever be able to do. I went to visit Ingeus, and I do not take as harsh a view of the Work programme as my colleagues. I thought that much of what Ingeus was doing, as one of the Government’s contractors, was sensible and well founded; but I was struck by how different the labour market that it was dealing with was from the broader labour market in the north-east of England. The spectrum of all the jobs across the north-east of England is not there for people on ESA. A much narrower range of overwhelmingly service-sector jobs is open to them. I do not think that it will work for the chap who came to see me.

The same will be true for another constituent, who was referred to me by the Newcastle Society for Blind People, which was trying to help her. She is 60 years old and epileptic. Her eyeballs were removed in childhood, so she is absolutely blind. She has a carer; he cares for her, but cannot read or write. She has been transferred from incapacity benefit to ESA; therefore, the system will find her a job. She cannot write or see, but can read Braille. She uses a thumbprint for her signature. I have asked the DWP to write to her in Braille. After a lot of haggling between the Department and me, it has agreed to note my request. Perhaps I may gently put it to the Minister that there are a number of ways for MPs to deal with issues of this kind: the first might be for me to ask her politely to get the Department to do a bit more than just note my request.

Given my constituent’s age and circumstances, and the obvious hardship that she has endured throughout her life, it is not fair to her to kid her on that somehow she will now find a job she can do without overcoming every one of the hardships that confront her. It seems just wrong—almost inhuman—to put her through the sort of exercises that the Department is putting her through. It is harsh and unreasonable. I once did the Minister’s job. I was the first Minister for Work when the Department was created under the previous Labour Government. In my time as a Minister I did not come up against a case of this kind, referred to me by a Member of Parliament from either side of the House. Had I done so, I would have intervened straight away to help the victim of what I would regard as oppressive treatment.

Another constituent of mine, a 62-year-old, was sanctioned for a year for not complying with JSA. As his sanction—it actually went on for a year and a month—came to an end, he was told that he would be sanctioned for another 13 weeks, but not given a reason. He was then told that he had to fill in a JSA10 form at a jobcentre. He went there and was told that the form did not exist any more, and that he had to ring the benefit delivery centre. The centre staff told him that he had to go to Felling to fill in a declaration, and he walked from Newcastle to Felling. Hon. Members might ask why he walked, when we have some very good integrated transport arrangements in Tyne and Wear. The walk is not a direct one, because there is a river in the way, and it means going to the centre of Newcastle—in the constituency of my hon. Friend the Member for Newcastle upon Tyne Central—over the bridge and along the south bank. My constituent walked because he does not have any money to pay for his travel.

When he got to Felling the official gave him a telephone number that he had to ring. It would have been possible either to give him that without requiring him to undertake the journey, or to ensure that he had the money to make the journey on public transport, rather than having to walk. My constituent then got another phone call from the Department—which was being proactive, for once—telling him that he faced further sanctions because he had missed an appointment with his work provider. He had not missed any actual work, the House will understand —just a meeting with the provider. He missed the appointment because, as he had informed the Department, his residency at the Salvation Army on City road was closing down, and his mail was not being satisfactorily redirected. That is an issue that will apply to other people who have lived in that facility, which was quite well known on Tyneside. He spent 45 minutes on the telephone begging for a hardship payment, because he had no money at all to live on. He eventually got an £86-per-fortnight payment—just think of living on £86 a fortnight—and was then told that he stood to be sanctioned again and that his national insurance contributions would be withheld as well.

My office intervened. MPs always get the credit for dealing with these cases and it is actually our staff who do it. This is probably an appropriate time to thank our staff, who work very hard, not least on wading through pretty intransigent responses from the Minister’s Department. It is certainly not how we originally envisaged Jobcentre Plus operating when it was rolled out more than a decade ago. My assistant’s intervention meant that the matter was finally resolved in a satisfactory way; but we should not be putting people through such turmoil. The system should be on their side. It is meant to be run by the state for the citizens of the country—and it just is not. It should not be necessary for us to have to take such matters up with the Minister directly. I hope that she will take from the debate the fact that things are going wrong with case work, and that there is a need to intervene directly to turn around the culture in the Department that allows that to happen.

Oral Answers to Questions

Nicholas Brown Excerpts

Monday 1st September 2014 Commons Chamber

[Mr Harper]

I agree that local authorities have had some funding challenges due to the appalling budget deficit we inherited from the Labour party. Local authorities can set priorities. When my own local authority in Gloucestershire was making its difficult spending decisions, it rightly put adult social care and child protection at the top of that list of priorities and I am very grateful that it did so.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

11. When he expects the business case for universal credit to be fully signed off.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I announced in December that Her Majesty’s Treasury has approved funding for the universal credit programme in 2013-14 and 2014-15. The final stage in Treasury approvals is sign-off of the full business case, which covers the full lifetime of the programme. We expect to agree that very shortly.

[Mr Brown]

The answer to a similar question two months ago was “very shortly”, but it is taking rather longer than the Secretary of State intended. What are the major outstanding issues between his Department and the Treasury, and where does universal credit now stand in the Cabinet Office’s traffic light system?

[Mr Duncan Smith]

Let me explain to the right hon. Gentleman that the reality is that we have agreed—I can run through the list for him—all the spending that is relevant to the plan that we set out at the end of last year. The final point relates to the full lifetime of that programme, which will take it all the way through, probably beyond all the years that anybody present will be in government. [Hon. Members: “Certainly you!”] To be fair, I do not think Labour will be in government given the way its Members behave. That is now being agreed and the reality is that it has to be done very carefully. I genuinely believe, from my discussions, that it will be signed off very shortly. The result will be that the programme will be seen for what it is: a programme that will deliver hugely to those who have the toughest lives and need the most support and help.

Universal Credit

Nicholas Brown Excerpts

Wednesday 9th July 2014 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is absolutely right. The reality is that our welfare reforms are working, and our pensions reforms are working. The truth is that the Opposition have absolutely nothing to say about any of this. Instead, they want to delve and delve into the detail, but that will not tell them anything. Universal credit—started by this Government—will be a great success: it will get more people into work, and it will secure more households with greater earnings.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

The head of the home civil service clearly has reservations about the full business case for the roll- out of universal credit. Which of those reservations has he expressed to the right hon. Gentleman?

[Mr Duncan Smith]

The head of the home civil service has expressed no reservations, and I do not believe that he has any reservations about these plans. As agreed, the plans will be signed off with the Chief Secretary to the Treasury, and when they are signed off, I hope that the hon. Member for Rhondda will write me a letter to say, “Thank you very much, indeed.”

Payment Scheme (Mesothelioma)

Nicholas Brown Excerpts

Monday 17th March 2014 Commons Chamber

[Mike Penning]

The move will take the payment up to some £126,000, which represents an extra £13,000. That is in addition to the payment of £7,000 for legal fees, which will be introduced in separate regulations. When Ministers promise the House that they will listen, it is important that they try to do what is requested of them. I stuck rigidly to 75%, because I was not confident that there would be enough money in the fund to increase payments to 80%, let alone 100%. However, I am now confident that there is enough capacity to move to 80%, so when the scheme starts—I hope that that will be on 6 April—all those affected will receive 80%, even though we have been looking at 75%

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I am grateful to the Minister for his explanation, and I admire what he has done in getting us to 80%. In truth, compensation ought to be at 100%. Sufferers feel 100% of the injury, and the industry took 100% of the premiums at a time when it believed that it would often have to compensate for pleural plaques as well as for mesothelioma. I hope that the matter is not closed and there will be an opportunity to discuss it again.

[Mike Penning]

I would be amazed if we did not discuss the matter again, as we have done over the years. It would be right and proper for us to do so. If we raise compensation payments to 80%, many people will receive more than they would have done through a civil court. The payment is an average, so some people would have received less in the civil courts. By raising the level from 75% to 80%, we have ensured that more people will receive more than they would have done if they had found their employer or their employer’s insurer.

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[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), and to find myself broadly on the same side of the argument as her. I particularly thank her for her kind words about Paul Goggins, who had many friends in all parts of the House, and who made a really significant contribution to our debates on the Bill and on the issue more generally. He is still sadly missed.

The Minister has stuck to the departmental briefing that was agreed with the Treasury, and to his original agreement with the insurance industry on the parameters of the scheme, so no one could reasonably criticise him for the way in which he has carried out his responsibilities; I hope that the Government Whips and the Leader of the House, who are listening, will find that satisfactory. Having spelled that out, I must add that the Minister has done everything that he could to help the victims of this terrible condition. I pay tribute to him for that work, and to Lord Freud for his work in the other place.

Above all, I pay tribute to the Minister for sticking with this issue, because not every Minister would have done so; it is not a popular issue in Whitehall. It may be appropriate for me to conclude the thanks that are due by thanking the civil servants in the Minister’s Department who have helped us to reach this point. Once the administrator of the scheme was established, some issues must have become clearer. It must have been easier to see whether an agreement could be reached on the vexed issue of whether the compensation level should be the 75% at which it stood at the end of the Bill’s Committee stage, the 70% at which it stood when it started life, or the 100% that I wanted, which always seemed out of reach in view of the parameters of the scheme. As I have said, the Minister stuck with this, and has brought us to 80%. I must say to him, “Well done.”

The Minister has also preserved the “3% or less” parameter on which the industry would no doubt have insisted. That is an industry figure, and there is some scepticism about it on the Opposition Benches. In the letter that he courteously sent to those who were members of the Committee, he said that he felt that it would be possible to keep the cost to less than 3%. I wonder whether he is able to tell us today how much less, and whether this scheme of last resort involves a trade-off between that and a yet higher compensation level for victims. It is early days, and I do not criticise the Minister. I have no reason to doubt his good faith in these matters; indeed, far from it. He has stuck his neck out for our side as far as one would expect any Minister to do. However, having seen the calculations produced by his Department, I should like to hear something about the period over which the costs will be spread. Perhaps he could tell us whether there is any prospect of taking the compensation rate in this scheme of last resort closer to the 100% that many of us think is justified.

We have had to sacrifice our wishes for an earlier start date for eligibility. Opposition Members still think that eligibility should start from the date on which the last Labour Government consulted on the introduction of a scheme of this kind. We believe that the consultation exercise, during which the Government made it clear that they were minded to legislate, raised legitimate expectations in the minds of potential applicants. I wonder whether there is room for a little more generosity within the scheme’s parameters. The cost of picking up the several hundred cases that I understand to be involved would be a one-off; continuing costs would not be incurred, because eligibility would have to fall between the start date advocated by the Opposition and the date on which the Government settled.

The Minister said that he wanted a clear-cut scheme that would be easy to access and would not put undue pressure on applicants. I welcome that, but applicants still have to demonstrate that they are eligible. It is up to them to show that there is not still an employer whom they can sue, or an insurer who has an obligation to pay compensation. That is a big responsibility to put on the shoulders of an applicant. I welcomed what the Minister said about the £7,000 and the legal costs, but someone who puts £7,000 in front of a claims farmer or a lawyer will be presented with a bill of about £7,000.

[Ian Mearns]

I agree with my right hon. Friend that proving that one has been susceptible to exposure to asbestos during a long and sometimes diverse career can be very tough. I know that a number of people who have succumbed to mesothelioma have not worked in heavy industry but have, for instance, taught in schools in which asbestos has been present. It is very difficult to prove exposure, because asbestos fibres often lie dormant in the lungs for decades.

[Mr Brown]

My hon. Friend and constituency neighbour is absolutely right. The effects of this horrible condition can be with a victim for decades, but once full-blown mesothelioma has been diagnosed, life expectancy is extremely short. It is no accident that the north-east of England is disproportionately represented on the Opposition Benches today, because we represent people who are in the older tranche of victims. I know that I do not need to explain this to the Minister. I am talking about people who worked in heavy engineering, shipbuilding and ship repair, people who sprayed carriages with asbestos, and thermal insulation laggers. Members of that generation were the victims of those industries. However, as my hon. Friend the Member for Gateshead (Ian Mearns) pointed out, the new victims will be teachers who have been scraping on asbestos-based boards, school caretakers and janitors who have breathed in asbestos from insulation that is flaking because it has not been properly lagged, and builders who have carried out occasional repairs without being properly protected against the asbestos that they were drilling into, and have generated dust.

[Mike Penning]

The right hon. Gentleman is right to say that there has been a disproportionate effect in the north-east in particular because of the heavy industry there, and to mention many of the organisations involved. However, in such cases it is relatively easy to trace the victims’ employers, because they are large companies in large industries. This scheme is intended to cover cases in which we cannot find the employers, and hence the insurers, who are legally responsible. That is why it is a scheme of last resort. As for the right hon. Gentleman’s other point, I think it is absolutely right for us to help, because the scheme will not work if a large number of people resort to it when they could have claimed elsewhere. We need to help them to obtain compensation from the source from which they deserve it.

[Mr Brown]

I agree with the Minister that in the public sector it should be easier to trace a responsible insurer, and indeed a responsible employer, but there is a rich history of subcontracting, even in the public sector, and not all these people have insurers who maintain liability. It is the missing insurer, as well as the missing contracting or subcontracting company, who generates the cases with which this last-resort scheme is intended to deal.

The Minister is right to anticipate more public sector cases in the future. I have asked the Department of Health how many mesothelioma cases were being dealt with in England by the Department, and that number of cases, as you of all people will well know, Madam Deputy Speaker, is a precursor to the number of compensation claims that there will be—if, that is, the injury was inflicted through work. The House will be distressed to learn that the number is still rising. The number identified by the Department is now over 7,000 a year, and that is not a very easy fit with the projection of the number of fatalities coming from the Department via the Health and Safety Executive.

[Ian Lavery]

With regard to public sector workers, 10,000 teachers died because of mesothelioma. Does my right hon. Friend agree that we have to look seriously at the impact on children in schools where asbestos is present? If an adult—a teacher or a caretaker—can get mesothelioma from being at school, what has happened to the kids?

[Mr Brown]

Like my hon. Friend, I stand up for every single individual who has been exposed to asbestos. This is an entirely preventable condition. Although I understand why in law we draw the distinctions we do, morally this is not right. We should set out to save each and every one of the citizens we represent from being exposed to this awful condition. That applies to young children, too. My hon. Friend will recall me referring to the young children who found a pile of asbestos just lying in a yard in Leeds, and who threw it at each other as if it were snowballs. Of course, the inevitable happened, and 40 years later they are coming down with mesothelioma, but whom do they sue?

[Mike Penning]

As I said on Report, I think, and certainly in the Committee stage of the Mesothelioma Bill, I hope this is the start of a fund of last resort in other areas as well. What the hon. Member for Wansbeck (Ian Lavery) and the right hon. Member for Newcastle upon Tyne East (Mr Brown) are alluding to is a public liability area, not liability for employers. It is absolutely right that we should try to protect everybody, but sadly I think I have gone as far as I can within the scope of the regulations and the scheme before us.

[Mr Brown]

I welcome what the Minister says. If any Minister could take this forward in government, he would be the Minister to do so. I thank him for what he has done, and welcome what is in front of us tonight.

Mesothelioma Bill [Lords]

Nicholas Brown Excerpts

Tuesday 7th January 2014 Commons Chamber

Eligible people with diffuse mesothelioma

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I beg to move amendment 5, page 1, line 15, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Amendment 6, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

Amendment 4, in clause 4, page 3, line 4, at end insert

‘but shall not be less than 100 per cent. of the average damages recovered in civil mesothelioma cases.’.

Amendment 1, page 3, line 5, at end insert

‘but shall not be less than 80 per cent of the average civil compensation recovered by mesothelioma claimants.’.

Amendment 9, page 3, line 5, at end insert

‘and shall be met by a levy on insurers of not less than 3 per cent of gross written premium during any given period.’.

[Mr Brown]

Before I explain the purpose of the three amendments that stand in my name, I want to make two more general points.

First, let me identify myself and my constituents with the tributes that have been paid to my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). My right hon. Friend has been a champion of my constituents as well as his own in all his work on issues relating to mesothelioma. Like many other Members whose constituencies are hot spots for the condition, I greatly appreciate the work that he has done over the years in trying to help those who suffer from it, and, indeed, his work more generally as a widely respected parliamentarian. I know that the whole House wishes him a speedy recovery.

Secondly, let me pay tribute to the Minister for managing to take the Bill so far forward—further forward than I managed to take the measure that I attempted to introduce when I was a Minister in the Department, which was slightly more wide ranging and was certainly brought to a halt more effectively. It is with some admiration that I pay my small tribute to the Minister—or, rather, my large tribute, for why should quantum be an issue? Actually, it is the issue in this part of the Bill, but we shall come to that shortly. I know of the pressures that the Minister has faced externally and within the broader Government over this issue, and I think he has done extremely well to get us to where we are now.

Having said that, I should explain why I tabled my three amendments. There is no position that cannot be improved with a little bit of thought, and in any event it is right to test the arguments. The amendments seek to increase the share of the amount that the arbitrator gives the victim that actually reaches the victim, and to give the legislation an earlier start date—2010 rather than 2012.

Let me address the compensation issues first. My amendment says compensation should be 100% of what is due. Nobody in the discussions we had on Second Reading and in Committee has made a moral case against giving somebody 100% of what they are entitled to. In fact, some very powerful speeches were made in this place on Second Reading on precisely this point, and I think it was my hon. Friend the Member for Blaydon (Mr Anderson) who pointed out that within a few months the victims are going to be 100% dead, so 100% compensation does not seem unreasonable. After all, the employers paid 100% of the premiums and they thought they enjoyed 100% of the cover. Had there been recourse in law, they would have got 100% of the damages. In not one of these cases has the defence argued that to some extent the victim contributed to his or her own misfortune, and, when we think about it, what contribution could they have made that led to their own misfortune—breathing? It is a ridiculous contention. The victims are not to blame and therefore they should not have their compensation cut.

[Hywel Williams (Arfon) (PC)]

Does the right hon. Gentleman agree that it is significant that a similar scheme under the 1979 Act provides for 100% compensation for slate workers in my constituency who cannot identify the insurers of their previous employers?

[Mr Brown]

The hon. Gentleman is correct, but the issue before us today is the rules for a very specific scheme that evolved through a voluntary negotiation with the industry. As we know, the Minister will say that there are financial parameters to the scheme that he cannot break.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does my right hon. Friend agree that there have been so many injustices in this area? My brother, Bob, died of this condition. He worked for BP all his life. When it was proven he had this condition, BP worked as hard as it could to give him as little as possible. The company put all that money into addressing the oil spill in America, yet that is how it treats its own employees. I feel very strongly about this, therefore, and support my right hon. Friend’s amendments absolutely, and I do so, too, because many people in the asbestos industry worked in west Yorkshire.

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[Mr Brown]

I care about this issue and I know my hon. Friend cares about it, too, and it is true that many Members of Parliament on both sides of the House, but especially those who represent communities that suffer disproportionately from this, know that their constituents face a desperate injustice. The burden of this condition is not shared evenly across the country. It affects our population by class; working-class constituents are far more likely to suffer from it than middle or upper-class ones. It affects our constituencies by region, too; there are regional hot spots, historically found in areas of heavy industry where people were very likely to be exposed to the dust, whether because they sprayed it on railway carriages or worked with it in the shipyards or as thermal insulation engineers and were not properly protected.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

rose—

[Mr Brown]

I give way to my hon. Friend who represents a similar constituency to mine with a similar history.

[John Woodcock]

My right hon. Friend is absolutely right in what he says. I, too, want briefly to add my tribute to our right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I know many other Members have done so, but this is a fitting time to do so.

Does my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) agree that the people we are discussing served their country for many years? Barrow and Furness has the highest incidence of mesothelioma in this country. They served their country in making what they did and they deserve justice now, and this is our opportunity to give it to them.

[Mr Brown]

I wholly agree with my hon. Friend. We as a House should find a way of doing more. If we cannot do it within the parameters of the scheme, we should find a way of doing more outside the parameters of the scheme.

[Mr Mike Hancock]

If the right hon. Gentleman presses his amendment to a Division he will have my support, but what does he say in response to the argument that if his amendment is carried it will delay the scheme and lead to a legal challenge, which, once again, will mean many people will die before the scheme can be implemented? What is the rebuttal to that, because it is important that we have one?

[Mr Brown]

I hope to make my position clear as I develop my arguments, but I want to do the best I can for the victims of this terrible condition and that will, at the end of the day, involve compromise. We are about to debate among ourselves how far we have to compromise, but I am not going to hold to some theoretically correct position if the arguments march in the opposite direction. We all have a responsibility to do what is right for the victims and if we recognise—I think as the debate progresses the majority of those taking part in it will do so—that there are injustices left unaddressed, then maybe we should return to those issues and find a way of addressing them comparable with agreements that have been made with the industry.

[Sammy Wilson (East Antrim) (DUP)]

Will the right hon. Gentleman accept that of course the insurance industry is going to come in with a heavy hand, arguing that it will take this to court and make legal challenges and that will delay things? We had the same experience with pleural plaques legislation in Northern Ireland. The industry backed down when the legislation went through. Given that the insurance companies have reaped the benefit of these premiums over the years, is it not up to this House to make sure they pay out proper sums to the victims?

[Mr Brown]

The answer to that is that they did take the premiums and prior to 2007 there was an assumption that pleural plaques cases could go against the insurers. It was only the High Court 2007 judgment that put a stop to all that. The premiums did not have to be refunded; they were just kept. The figure I have for that is over £1.4 billion held by the insurers. If companies have taken premiums for something they are never going to have to pay out for, that seems to me to be a pretty good business.

[Toby Perkins (Chesterfield) (Lab)]

I also want to echo the comments of colleagues who have paid tribute to the work of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), and to pay tribute to the work done by Derbyshire asbestos support trust. It has done tremendous work in supporting asbestos victims. It had 14 new victims in the last year and they continue to come forward. I am very pleased with what my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) has said about the moral case being made for these people, and I also entirely agree that we need to work these arguments out, make the moral case for these people and make sure they get justice as quickly as possible.

[Mr Brown]

My hon. Friend will have his share of constituency cases, just as I do, and for the same reason: the industrial heritage of his constituency. We know that the profile of the victims is forecast to be different from the historical legacy, but it depends on the effectiveness of the protection measures we as a House have put in place. That was done with all-party consent—in fact, I think I was the Minister who moved the last set of regulations covering asbestos. We do not yet know how effective they are, however. As has been said from the Opposition Front Bench, we expect the number of cases to peak about now—in a year or so—but we do not know that that will be the case. I hope it will be, but we need to maintain our vigilance. The new cases will come from building contractors, people dismantling, rather than erecting, structures, and people who have come into contact through, perhaps, thinking they were dealing with a solid piece of material and who then hammered a nail into it or scratched it and breathed in the dust.

Exposure once is enough to cause mesothelioma and the consequences are fatal, so it is important that we take this issue seriously. I know the Minister is doing so and that the House is attempting to do so as well, but I think we should have it in the forefront of our minds that we may be returning to this issue in future.

The scheme before us today is targeted on people in a very particular position: they cannot find an insurer or they cannot trace an employer.

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[Mr Brown]

I agree wholeheartedly with the Minister on that point. My thoughts are with the young children in Leeds who found an abandoned pile of what turned out to be asbestos dust that had not yet been mixed with water and used for its purpose. The children, being children, formed it into “snowballs” and threw them at each other and breathed in the dust. Some 40 or 50 years later, their cases are now turning up as mesothelioma cases, but who is the insurer or the employer? It is difficult to say who is the responsible party. No one could possibly argue that those young children contributed to the ill health that they are suffering later in life. The Minister rightly says that we must deal effectively with such public liability cases, and I wholeheartedly support him in trying to find a way of addressing the matter.

There are two arguments against my proposal for 100% compensation. The first—and, incidentally, the weakest—is that it would incentivise the victim to see whether there was an insurer or employer against whom a case could be taken. It is argued that the prospect of getting 100% compensation, compared with 70% under the proposed scheme of last resort, would incentivise someone—whose life expectancy was now a matter of months rather than years—to go out and hunt for the insurer or employer, using whatever resources were available to them.

Let us pause and think about that. How on earth would an ordinary citizen go about tracking down those missing people? A good argument that was made in the other place was that the incentivisation should surely work the other way round. If there is to be incentivisation through paying less compensation, surely we should make the compensation not 100% but 110%, so that the administrators of the scheme, who had access to the former insurance companies’ records, would have to go hunting to determine whether it was possible to launch a case. They should be the ones to be incentivised. I am not arguing for more than 100% compensation, by the way, although I did table a proposal to that effect in Committee.

I believe that any incentivisation should work in that way, rather than suggesting that some poor old victim whose days are numbered should turn themselves into a modern-day Perry Mason and hunt down an employer that probably no longer exists—particularly in the case of a contractor—or an insurance company that has gone into receivership or will not acknowledge its liabilities. I think that the argument about incentivisation is pretty disgusting, and I do not support it.

[Sammy Wilson]

Does the right hon. Gentleman also accept that the very people towards whom the incentive might be directed are least able to track down those organisations? The situation would be doubly unfair, because their health is not great and they do not have the resources to do the tracking.

--- Later in debate ---

[Mr Brown]

I agree 100% with the hon. Gentleman, who represents a community in Northern Ireland with exactly the same history as that of the former Swan Hunter shipyard workers and others whom I represent. We have a common cause in this regard. A lot of help is given by the trade unions in the shipyards—the cases involving Short’s and Harland and Wolff are exactly the same as those involving Swan Hunter—but even with that help, the balance of advantage remains with those who know the insurance industry. Those with links to the relevant trade associations have the resources to find out whether the insurers still exist, and can find that information pretty quickly these days. Some work has been done to try to improve that process, and I am grateful for the efforts made by our Government and the present one to ensure that that continues.

The principal objection to the payment of 100% compensation is that it would break the agreement that the Minister has made with the industry. I know that he does not take offence when people like me say that a lot of premiums have been taken to insure against things that the industry is now not going to have to pay out on. It would pay out if I had my way, but the law established in 2007 says that it need not do so. The pleural plaques judgment has meant that the industry is the beneficiary of the premiums that it has taken in relation to pleural plaques, although not to mesothelioma, because the cause of action has been struck down. I think I am right in saying that that does not apply in Scotland or Northern Ireland, although it certainly does in England.

[Mike Penning]

I apologise for not intervening on the right hon. Gentleman earlier before he moved on to this point. I completely agree that it is spurious to argue that 100% compensation would act as an incentive. That suggestion has come from other parties, but certainly not from the Government. I want to place on record that that is not the Government’s position.

[Mr Brown]

I am grateful to the Minister for that intervention, and for its tone. The incentivisation argument is a distasteful one, and I am glad that the Government are not associating themselves with it. That makes it clear that the argument is about affordability within the parameters of the scheme.

I accept that the case for 100% compensation cannot convincingly be made, even by me, if the test is affordability within the parameters of the scheme. Amendment 1 proposes a figure of 80%, and whether that would be affordable within the parameters of the scheme is a finer point. I am not giving in, however. I believe that the victims deserve 100% compensation, but I understand that, if the Government are saying that the test should be the parameters of the negotiated scheme, we will have to maximise the money available to the victims within those parameters. We have all used the useful chart produced by the Minister’s Department as the factual background to the debate. The outcome will depend on whether we factor the percentages over four years or whether we take a longer, 10-year view. The Minister will not be surprised to hear that I take the longer view because I want the victims to have more money.

In determining whether the proposals are affordable within the parameters of the scheme, the Minister needs to explain two points. First, he must explain why 80% compensation would not be affordable, on his own figures. My submission is that it would be if it were spread over a longer time period and therefore cost less per year. The second point involves the cost of lawyers. This is set out in regulations, and the Minister is right to say that it should not be in the Bill itself, but the legal costs are going to have to be met. The estimate was £2,000 per case, but the figure then rose to £7,000. It is not clear which is the right figure. I do not want to mislead anyone; the cost will not come out of the money awarded to the victim, but it will come out of the overall cost of the scheme. The question of whether the cost is £2,000 or £7,000, or somewhere in between, will therefore make a difference. Will the Minister tell us what the correct figure is?

[Mike Penning]

The figure is £7,000, and the right hon. Gentleman is right to say that the figure comes out of the overall cost of the scheme—out of the 3%. If the claimant pays less than that figure, they keep the difference—thus, it becomes part of their compensation. We discussed the reason why the figure moved in Committee and in the Lords: it was felt that £2,000 was too low and so people would not get the sort of legal advice they needed. We desperately did not want the situation that had happened with other schemes whereby the legal teams got more money out of the compensation than that—that is why the figure is £7,000. In the negotiations I have been having, the feeling has been that the actual amount will be less, so the recipients or their loved ones will get the difference.

[Mr Brown]

I understand what the Minister is saying, and we all travel in hope—I certainly travel with him in hope. I hope this does not sound unduly cynical, but once the legal profession knows that a maximum of £7,000 is available for the cost of administering this, the work done and the effort put in by the individual law firms is likely to rise up towards the £7,000 ceiling. The Minister’s hope that simpler and more straightforward cases will confine themselves to a lower fee is correct, and I am with him on it, but I have the feeling that things will not work out that way. If they do not, there will be a cost on the scheme and so it will become harder to say, “We will put up the money for the victims” because the 3% ceiling will have been approached.

The second issue in this group of amendments is when the scheme should start. The Government’s proposal is to start it in 2012—backdating to the commencement of the Bill’s proceedings. My argument is that it should be backdated to the date of the consultation that led to the Bill. The consultation started under the previous Labour Government and was designed to meet exactly the same problem that the Government have identified. That consultation was on a slightly more generous scheme than this one, but of course the fruits of that consultation have not been heard and the discussions were only in their infancy when the general election interrupted proceedings.

It would be possible to make a case for a much earlier start date for a scheme of this nature. We could go back to the date of guilty knowledge for the industry as a whole, which would take us back before the second world war—if we were being really rigorous. There are certainly milestones in how our thinking has developed on these issues which go back a lot earlier than 2010. However, the Opposition Front-Bench team and I have put forward the most modest proposition that it would be possible to conceive of. We are saying that the start of consultation was the start of legitimate expectations in the minds of the victims who were being consulted and it put the industry on notice that there was to be a statutory scheme or that at least the then Government were contemplating such a scheme. This could not have come as a complete surprise to the industry.

[Alison Seabeck]

I entirely agree with the point my right hon. Friend is making. When the consultation was taking place under the previous Labour Government, my constituents did become enthused. There is not too much to enthuse someone suffering from mesothelioma, but they were enthused because they felt there was some light at the end of the tunnel. It is, therefore, entirely appropriate that we do look back in this regard. I have no doubt that the insurance companies, which understand risk better than anybody, would already have started planning at that stage to deal with a start date going back to 2010.

[Mr Brown]

My hon. Friend, who represents a community that faces exactly the same issues as mine for exactly the same reasons—wrongful exposure to asbestos dust—will have constituents raising exactly the same issues with her. She says that the industry ought to be experts in assessing risk. That is certainly true, but it did not half get it wrong over asbestos. We can all remember the crisis over asbestos liabilities that the industry went through. What relieved the burden more than any other single thing was the 2007 judgment on pleural plaques, which meant that that much larger swathe of cases was taken off the shoulders of the insurers, so the remaining insurers were better able to deal with the mesothelioma cases. We also saw some unhappy episodes relating to the work of Lloyd’s. We will perhaps not go over those again, but they did not reflect well on the industry, which is why we should be a little careful before taking everything it says to us absolutely at face value.

--- Later in debate ---

[Mr Brown]

I take it that when we are talking about “80 million” we are talking about money rather than about people—I know that there is a separate debate about immigration and so on.

[Mike Penning]

I apologise if I have misled anyone; I was talking about the funding parameters I am restricted by. The cost of taking the date back to when the consultation started would be £80 million. One other issue that we discussed in Committee was that although the consultation rightly contained an option that the then Government were looking at taking forward, there was also an option to do nothing. That is obviously an issue, but the big issue is the money.

[Mr Brown]

On that last point, I am more aware than anyone else in this place could be of the forces that would be in favour of the option to do nothing, and I have paid my tribute to the Minister for doing something rather than nothing. He should take pride in the job he has done, and I pay him all credit for it. That £80 million will be the top figure—it will be the highest possible figure that the officials believe they can give the Minister so that he can use it to dissuade the House. I am not entirely convinced by it. He cannot possibly know the real figure, because we will not know that until the cases come forward—it could well be a lot less. I would be willing to take a chance on it and to do justice to the victims. Let us stand the Minister’s argument on its head. He is inviting us to do the victims of this horrible disease—or, more likely, their families and dependants—out of £80 million. I do not want to do that, so I will want to put the proposition to the vote.

[Tracey Crouch]

It is a pleasure to follow the right hon. Member for Newcastle upon Tyne East (Mr Brown), to whose contribution I listened with interest. I rise to speak to amendment 1, which stands in my name and that of other hon. Members from all parts of the House. It is an amendment on a variation of the theme: there is not a consensus, particularly among campaigners for fairer compensation for mesothelioma victims, that the current 75% figure is acceptable. Despite the excellent efforts of Lord Freud and the Minister to bring this Bill before the House, I am afraid that there is still some disappointment that the level of compensation does not go far enough. My amendment seeks to increase the level of compensation from 75% to 80%, and not to the higher percentages proposed by others. Although I recognise that 100% would be the most perfect outcome for victims, the truth is that the Bill would probably not be in front of the House today if that were the case and if that were the only option under consideration.

Although an extra 5% compensation does not sound very much, it is the equivalent of an average extra £6,000 to the victim, which is no small sum to someone trying to finalise their financial arrangements before they pass away. To those of us who seek justice on their behalf, that seems a much fairer figure, not least because they will be asked to give back 100% of the industrial disease and social security benefits that they have received as a consequence of getting mesothelioma, and that is estimated to be around £20,000 on average.

Much has already been said on that issue during previous stages of this Bill in both Houses. I will repeat what I said on Second Reading, which is that Lord Freud deserves praise for negotiating with the insurance industry and for raising the original figure for compensation from 70% to 75%. However, sources in the insurance industry told me that Lord Freud himself wanted 80%, and therefore by moving this amendment today, I am merely reiterating the Minister’s previous desire for a better outcome. Then, with the support from colleagues today, he could have a parliamentary mandate to go back to the industry to start renegotiating compensation levels.

The negotiations and their subsequent outcome were based around another figure—that of the cost of the scheme to the insurance industry being no more than 3% of gross written premium. The argument for introducing the arbitrary figure of 3% was to ensure that the insurance industry would not pass on to its own customers the cost of running the scheme. In its more recent impact assessment, the Government surprisingly stated:

“It is possible that insurers will pass the cost of the scheme onto customers via increased premiums. If it did happen the impact on customers would be relatively low, estimated at 2.46% on average per year on EL insurance premiums.”

Given that inflation is currently running higher than the estimated potential increase in employers’ liability premiums as outlined in the impact assessment, I am pretty certain that the premiums will go up regardless of this scheme. That means that the insurance industry will incur no net loss as a consequence, especially as it will still receive the same Government funding incentive to smooth the first four years of the running of the scheme. The argument being put forward about the EL insurance premium rise is a bit of a red herring. The real debate is around the assumptions of the scheme. Under previous assumptions of legal costs, the scheme could have been extended to provide compensation of 80%. We have had that debate before. We had it on Second Reading and throughout the Committee stage, and the right hon. Member for Newcastle upon Tyne East has mentioned it again. Revised figures of costs—assumptions provided to the Department by insurance and personal injury lawyers—mean that 80% compensation would push the levy over a four-year period above the 3% figure, albeit marginally. However, over a 10-year period—the period I too prefer to look at given the longevity of the mesothelioma disease and when it is likely to occur—80% compensation is well below the threshold at 2.61%. Arguments over the precise nature of legal costs aside, albeit ones that were superbly made in Committee by my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), it seems incredibly unfair that two days before Second Reading in this House, assumptions were changed, and that was wholly for the convenience of the insurance industry. Unfortunately, that means that the victims of the disease will not get the extra compensation they deserve.

I have been warned that if my amendment were to be agreed, the insurance industry would walk away from providing the scheme. I am afraid to say that that is bunkum, and it would be incredibly foolish of the industry to do such a thing. It has highly paid public affairs advisers—I should know as I was one before I entered this House—who will be telling their bosses to read the mood music from the contributions to debates on this Bill in both Houses. There have been calls for the scheme to pay out compensation of 110%, 100% and 90%. There have been calls for the legislation to extend to other asbestos diseases such as pleural plaques and to include those suffering from mesothelioma from secondary sources. There have been references to the profits made by the UK’s £40 billion insurance industry and there have been expressions of disappointment in the long-term failure of the industry to deal with this matter prior to statutory intervention via this Bill.

Do I think the insurance industry will walk away from this Bill leaving tens of thousands of mesothelioma victims without compensation? We are talking about victims who contracted a fatal disease because they did the honourable thing and went to work to provide for their family and who need this scheme because of poor record keeping by the insurance industry and/or their employers. No, I do not think that will happen.

Oral Answers to Questions

Nicholas Brown Excerpts

Monday 20th May 2013 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right. I want a system that gives the right support to the people who need it the most. We should also recognise that because of our reforms and improvements to the process, only 15% of fit-for-work decisions are successfully overturned.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

Will the Minister explain the successful appeals? What factors underlie the success rate?

[Mr Hoban]

The tribunal has published a list setting out the reasons appeals are successful. In most cases, it is a consequence either of oral evidence presented at the tribunal or newer evidence being presented.