Diffuse Mesothelioma Payment Scheme

Angus Brendan MacNeil Excerpts

Wednesday 11th February 2015 Westminster Hall

[Steve Rotheram (Liverpool, Walton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen. At the outset, may I welcome yesterday’s written statement from the Minister on behalf of Lord Freud? It goes some way towards addressing one of the central points that I wished to raise, but it also raises a host of points that require clarification. I hope that the Minister will be able to address those. I am certain that my hon. Friend the Member for Stretford and Urmston (Kate Green), who has led the campaign for fair compensation for sufferers, will also have a number of questions for the Minister, as will other Members.

As the honorary president of the Merseyside Asbestos Victim Support Group, I place on the record my thanks to the mesothelioma victim support groups up and down the country for their continued championing of victims and for the dignified and diligent manner in which they fight their cause. I should also make special mention of the late Paul Goggins, who did so much in this place to advance the cause of mesothelioma sufferers and without whom we would not have reached this advanced point.

To give credit where it is due, and so that I cannot be accused of being partisan, let me also say that the work of the hon. Member for Chatham and Aylesford (Tracey Crouch) should also be recognised. The Government’s U-turn should vindicate her steadfast support for victims of this dreadful disease. By the way, I suspect she might still be smarting from the result of last night’s match, when Liverpool secured a deserved victory over her beloved Spurs.

It is now eight months since the Mesothelioma Bill—now the Mesothelioma Act 2014—passed through Parliament. Given that Parliament will dissolve at the end of next month, I thought this would be an appropriate juncture for MPs to convene to discuss the status of the Diffuse Mesothelioma Payment Scheme. That, of course, was before yesterday’s announcement, but the issues before us are no less relevant for that.

Throughout my contribution, I wish to focus on two key points: the 3% levy and research funding. First, however, I would like to highlight the issues that remain outstanding after the Minister’s statement. The 2014 Act delivers the legislative framework for the Diffuse Mesothelioma Payment Scheme, which is a source of compensation for mesothelioma sufferers who could prove they were negligently exposed to asbestos at work, but who could not trace a relevant employer or that employer’s insurer. In addition, the scheme makes payments to eligible dependants of mesothelioma victims who have, sadly, passed away.

Originally, payments of 80% of the level of average civil claims were to be made in respect of people first diagnosed on or after 25 July 2012. The new guidance means that the uprating to 100% will include all those diagnosed from yesterday onwards but exclude those who have already lodged claims.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I congratulate the hon. Gentleman on holding this important debate, which is very much needed. I also welcome the change that the Government announced yesterday. He mentions the 2014 Act and those who were diagnosed on or after 25 July 2012, but some were, of course, diagnosed before then. A constituent’s husband died in November 2012, but she cannot get compensation because they fell outwith the claim period of a year. Does the hon. Gentleman think that that should be remedied, given yesterday’s changes and the Government’s more enlightened understanding of the issue?

[Steve Rotheram]

The case the hon. Gentleman highlights is similar to cases Members raised in Committee and on the Floor of the House when the issue was debated. It is for the Minister to respond to the question of what will happen to those diagnosed before the 2012 threshold.

The arbitrary nature of yesterday’s ruling caused great distress to a small group of about 250 claimants who already receive payments from the scheme. Will the Minister comment on the unjust nature of the anomaly created by Lord Freud? Instead of sticking to yesterday’s written statement, the Minister should stand up today and announce that he will backdate the increase to include victims who have successfully claimed at the lower, 80% rate during the scheme’s first eight months.

It is obvious that Lord Freud has had to take the action he has, because, as the Opposition predicted, the number of claimants has not reached the inflated figure the insurance companies came up with to make the compensatory package look punitive—the number is far smaller. Lord Freud admits:

“The number of claimants has proven to be below the level anticipated.”—[Official Report, 10 February 2015; Vol. 592, c. 42WS.]

Yes—a whopping 70% lower. He might put this down to the fact that insurers are only now tracing an increasing number of policies, but if we start with an overestimate of the number of claimants, we cannot simply put any decrease down to the fact that the industry has only belatedly got its act together and started tracing compensators for remedy.

It should not be forgotten that, over the life of this Parliament, pressure from mesothelioma campaigners has pushed the Government to increase compensation rates from the initial derisory offer of 70%, to 75%, then to 80% and now to 100% of the level of civil claims. I pay tribute to those resolute campaigners. The Labour party consistently called for an increase during the passage of the Bill, so I am delighted to see that increase come to fruition.

The scheme is funded by a levy on insurers that provide employers’ liability insurance. Throughout the passage of the Bill, the Government gave assurances that the levy would be set at a rate equal to 3% of the gross written premiums on employers’ liability insurance policies. Ministers told us that the insurance industry could afford to fund the scheme through a levy of 3% of GWP without having to pass on the costs to its customers through additional premiums. The expectation in the original impact assessment was that the levy on the industry would raise £338.7 million over 10 years.

In a ministerial statement on 28 November 2014, the Government announced that the levy would raise £32 million in the first year. That in fact represents a levy equivalent of just 2.2%, not the 3% originally agreed to and promised. That was due to the fact that the employers’ liability market accounted for GWP of £1,418 million in 2013—an increase of 4.8% on the previous year. From that figure, it is clear that a 3% levy would net £43.6 million, not the £32 million cited in the ministerial statement. The Department for Work and Pensions does not contest those figures, and it verified them at a meeting involving Lord Freud and the hon. Member for Chatham and Aylesford. I guarantee that, if the converse had happened and the take from the insurance pot at 3% had been lower than anticipated, the Government would not have argued to increase that percentage. Why, then, are they letting the insurance industry get away with a lower yield because the market has increased?

The issue is a cause of major concern, because the Government explicitly promised that the 3% target would be met in year 1. The importance of the additional 0.8% differential cannot be understated. If the Government chose to act, the additional £11.6 million difference could enable payments to be made to sufferers of other asbestos-related diseases, who are currently not covered by the scheme, or in respect of those diagnosed before the scheme was in place, such as the constituent of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). The additional £11.6 million could provide much-needed investment in medical research—something I will say more about shortly.

The Minister was not in his current post during the passage of the Bill; his predecessor, the right hon. Member for Hemel Hempstead (Mike Penning), was. The right hon. Gentleman declined, in Committee, to enact Labour’s proposal for the 3% levy to be enshrined in law. Instead, he gave Members a cast iron guarantee:

“I say to the shadow Minister, the hon. Member for Stretford and Urmston, that I met Lord Freud, my fellow Minister in the Department for Work and Pensions, this morning. Three per cent. is 3% and we have no intention of moving away from it.”––[Official Report, Mesothelioma Public Bill Committee, 12 December 2013; c. 117.]

He was unequivocal. What do they say about actions speaking louder than words? If the Government do not commit to ensuring that the insurance industry will meet the 3% levy target, they will leave themselves open to legitimate criticism from mesothelioma campaigners that they are on the side of the insurers, not the victims, and are letting insurers walk away from that cast iron guarantee. That is why we pushed for the 3% to be enshrined in law.

I should be grateful for answers to some questions. Why are the Government set to renege on the promise that they made to mesothelioma victims and Members of this House about the 3% levy? Given the present understandable uncertainty about whether the 3% levy figure will be met, will the Minister confirm whether the Government intend to amend the 2014 Act to enshrine it in law? If applications to the scheme increase steadily, as more people become aware of it, and claims exceed 3% of gross written premiums, will the industry pay out from the windfall that it gets from the underpayment it currently presides over? What work is the Minister doing with hospitals, colleges, surgeries and GPs to make those diagnosed with mesothelioma aware of the scheme, to encourage increased take-up? How much is his Department spending on promoting the scheme to sufferers?

I will remind the House—as if this were needed—of what a terrible disease mesothelioma is. Thankfully, it is not a common cancer, but according to Cancer Research UK it is responsible for 2% of all cancer deaths in the country. The latest statistics showed that there were 2,570 known cases, which was a rise on the previous 12 months, with 2,429 subsequent mesothelioma deaths in the same year. A victim is likely to live less than a year after contracting mesothelioma. The disease is commonly associated with men who have worked in heavy industry, such as the construction industry, which is why I am proud of the lead that my union, the Union of Construction, Allied Trades and Technicians, has taken on the issue.

--- Later in debate ---

[Ian Lavery (Wansbeck) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on once again bringing this really important debate to the fore in Westminster Hall.

Only last year, I had the experience of sitting on the Bill Committee for the Mesothelioma Act 2014. Many problems were brought up about that Bill. Like other Members, I think it really important to remember Paul Goggins’s work, efforts, commitment, passion and dedication on behalf of mesothelioma victims. As a Member of Parliament, he was much treasured in this House, and he did fantastic work right up to the Bill stage. He was sitting with us the weekend before he tragically died from a medical condition. We must always remember people such as Paul Goggins for their efforts.

One big issue with regard to the Mesothelioma Bill was the compensation. That was discussed long and hard, as were the insurance companies. Initially, the maximum was 75%, because the insurance companies could not and would not be able to afford anything more than that. The arguments were long and very bitter at times, because not many compensation schemes agree to pay only 75% of what people should be entitled to.

We should not forget, and we did not forget, that to be entitled to any form of compensation, people have to be diagnosed with the dreaded disease mesothelioma. Once someone is diagnosed with mesothelioma, the prognosis is death. They are lucky if they can last 18 months. The position at this point in time is that once a doctor informs someone that they have this horrendous, horrible disease, they can see the end of their natural life.

We should always recognise and support the victims, and the vast majority of the Bill Committee and Members of this House do, but at that time there was—there still is—too much focus on the power, influence and finances of the insurance companies. The Minister in the Committee said that he was extremely concerned at the Opposition pushing for 80%, 90% and 100% compensation, because the insurance companies had not come to the table willingly. In his words, not mine, the insurance companies had to be dragged to the table. He was concerned that if we pressured the insurance companies—again, these are his words, not mine—they would walk away and there would be nothing for the victims. We agreed eventually, after the Bill was enacted, that the figure for compensation would be set at 80%.

I was delighted that yesterday’s written statement increased the compensation to 100%, but I am not really here to celebrate the fact that the insurance companies have made that decision. The decision should have been made many moons ago. It should have been enacted in the Bill and then we would have seen the correct compensation paid to many of these individuals and their families. It was not, and the Minister might consider—in fact, should consider—whether the people who have been able to claim since July 2012 should be able to claim backdated finance: the difference between 80% and the 100% that was, happily, announced yesterday.

There are a few other things to say about the insurance companies. We should never let these people off the hook, because the insurance companies made millions and millions of pounds on insurance for mesothelioma and other types of disease. They had the finance to pay this money; it is not that they have not had the money. The insurance companies have had the money and have invested the money, or did they give the money out in dividends, meaning that we cannot compensate the people who are suffering greatly as a result of mesothelioma? The insurance companies have had the finance, but it was said that they needed to be dragged to the table. That in itself speaks volumes.

I agree with the hon. Member for High Peak (Andrew Bingham), who is no longer in his place, that mesothelioma does not affect just those who have worked in shipyards, mining and heavy industry; it goes across the board. Teachers are one example. Thousands of teachers have died as a result of mesothelioma. They are dying on an annual basis. Of course, the problem with this dreaded disease, as we all understand, is that its latency period can extend up to 20, 25 or 30 years. People can be fine right up to that time. Then they start to feel unwell, and the prognosis for mesothelioma is, as I said, a death sentence.

Can I mention, Mr Owen, something extremely important? If teachers are getting mesothelioma from working in schools, what is happening to the kids? That is a different issue, but it is cancer and asbestos-related. I fear for the future of many kids who are in schools constructed in the 1950s, ’60s, ’70s—sometimes earlier—in which there is still a large asbestos presence. If teachers are dying, that means that kids are being exposed to the same asbestos dust because of the nature of the school’s construction. We need to look at the issue of asbestos in schools and see whether we can monitor kids who might be exposed. We should in some way be able to measure and control that situation. That is a huge concern of mine.

Let us look at the disease itself. Many people in my constituency have had this dreaded condition. I place on the record my thanks to the Mick Knighton Mesothelioma Research Fund, from the north-east region. It does tremendous work, as my hon. Friends mentioned, across the UK. There are a very large number of people in these support groups. Many of them do not have mesothelioma and will never have it, but feel the need, because of the nature of the condition, to support individuals who do have it. My thanks go to those people.

I mentioned the cut-off date in the legislation. People can claim mesothelioma compensation only if they were diagnosed after 25 July 2012. That is nonsense. There is not a politician in the House of Commons who would not accept that mesothelioma has been present for many years—decades, in fact. Insurance companies were taking premiums for mesothelioma 50 and 60 years ago, so the idea that it is acceptable to have a cut-off date of 25 July 2012 is nonsense. It is an affront to the many hundreds, if not thousands, of victims of mesothelioma who were diagnosed before the cut-off date and can in no way claim compensation. That is just not fair.

[Mr MacNeil]

To back up the hon. Gentleman’s argument, I reiterate that I have a constituent whose husband died after 25 July 2012 but was diagnosed before 25 July 2012.

[Ian Lavery]

Again, there are all these anomalies. If we look at the other types of compensation deal with insurers, trade unions and law firms, we see that the vast majority would pay compensation dating back to what is classified as the date of guilty knowledge, not a date that has just been plucked out of the air. As I said, mesothelioma goes back for generations. We should be looking to compensate people—never mind the cut-off date of July 2012. There was even a document for a consultation that began on, I believe, 25 February 2010. Is that not a date of guilty knowledge in itself? Why can compensation not be paid to victims going back to at least 2010?

Everyone who has spoken has mentioned the real issue at the moment, which is medical research. My hon. Friend the Member for Liverpool, Walton mentioned Dr Moore-Gillon, who has said that mesothelioma is

“not an attractive area for researchers…If you’re a bright person with a PhD making a career in cancer research and you are told you can work on a mesothelioma project for a year, you’re looking for a new job in 12 months. Instead, you can hook into breast cancer research and be employed for 20 years.”

--- Later in debate ---

[Mr Harper]

The commitment that the industry made was not in terms of what it could afford. It was about what the industry was going to absorb and not pass on to employers more generally. It was important that the costs of compensating sufferers of the disease did not fall on employers generally. We wanted the costs to fall on the insurance industry. It is worth reminding people that the insurance companies that pay the levy today are not necessarily the insurance companies that took the premiums for the policies in the first place. That is part of the problem, because of the long latency of the disease.

Governments have created all the schemes—the 1979 scheme, the 2008 scheme and this one—because of the long period between when someone has exposure to asbestos and the diagnosis of the disease. The impact of the disease over a very long period of time led to all the issues with employers not being in business—that generated the 1979 scheme—and the inability to trace either employers or their insurers. All such issues relate to that long period of time, which is why it is important that the costs are borne by the insurance industry, although they are not necessarily the same companies that took the premiums in the first place. That is why it was important for the Government to work on this in an agreed and proportionate way, so that we could get the scheme in place to ensure the benefits go to the victims of the disease. If the matter had got bogged down in a big argument and legal disputes, there would not be a scheme and there would not be any compensation for people. Both Lord Freud and my predecessor as Minister wanted to make sure that the scheme came into force, so that it could start benefiting victims of this disease.

Let me respond to a couple of questions that the hon. Member for Liverpool, Walton specifically put about the written ministerial statement yesterday, which I think was generally welcomed by colleagues, including my hon. Friend the Member for Chatham and Aylesford. Lord Freud made it clear at the beginning of that statement that we are going to monitor the progress of the scheme and the extent to which the assumptions about claim rates are borne out.

During the first months of the scheme, the number of claims is much lower than at other times. However, partly because the Employers’ Liability Tracing Office has been doing an increasingly good job of tracing insurance policies—meaning that sufferers of this disease can more easily, and rightly, pursue compensation from those from whom compensation is due—the costs of the scheme are lower than had been thought. Therefore, we thought it was right to increase the tariff from 80% of average civil claims to 100% from the date of the announcement. The regulations to bring the scheme into effect will become law next month, but as is usual in government the uprating will apply from the date of the announcement, in the same way that the scheme in the first place applies from the date it was announced, which was 25 July 2012.

That is a general rule in government. I know that it is always difficult, because when a scheme is set up there always has to be a starting point and obviously some people will always be on the wrong side of that starting point. However, it is a general rule in government that we have to start things from when we announce them, and not backdate them. [Interruption.] I hear the shadow Minister, sighing, but if she ever has ministerial responsibility—for various reasons, I hope that she will not have such responsibility—I think she will very quickly understand the logic of not backdating things, and if she does not then the conversations she will have with others in her party will soon persuade her of the wisdom of that approach.

I want to be clear, although I think it was made clear in the written ministerial statement yesterday, that the announcement yesterday means that the scheme will start from yesterday for those already diagnosed, even though that is ahead of the legislation coming into force. Again, that is the same argument that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) made—I probably mispronounced the name of his constituency, although I always try to pronounce it correctly—when he referred to the starting point of the scheme. I know that he has tabled a number of written questions about this subject on behalf of his constituents, but I am afraid that that has to remain the position.

Both the hon. Members for Liverpool, Walton and for Stretford and Urmston, as well as my hon. Friend the Member for Chatham and Aylesford, talked about increasing the take-up of the scheme. We have been working with stakeholders, including the Asbestos Victim Support group, Macmillan nurses and other groups, to ensure they have information about the scheme, so that they can notify those victims who have been newly diagnosed. We will continue to consider what more we can do. For example, if someone searches for information about this subject on the internet, as is common now, we have made sure that the scheme will come high up on the search list, so that people can locate it. If anyone has any ideas about how better to communicate that information, I am very happy to listen to them. We think that we are doing a good job, but I guess that one can always do better at communicating.

[Mr MacNeil]

I just wanted to check a point with the Minister. Is it his intention that everybody who suffers from this terrible disease gets the compensation they are due, regardless of dates, timings, or whatever? They have suffered and there is compensation in place, so should they all not get that compensation, regardless of some bureaucracy around the edges?

[Mr Harper]

When one sets up a scheme, it has to have a starting point; we cannot extend it indefinitely. Of course, this scheme is not the first such scheme or the only scheme that is available for those who suffer from mesothelioma. There were two previous schemes—the 1979 scheme and the 2008 scheme—and the reason for developing the latter scheme is that there were obviously groups of people who were not covered by the earlier scheme. I remember that the 2008 scheme was specifically designed to cover, for example, family members of those people who had perhaps come into contact with asbestos fibres but who had not worked in the industry and had not been covered by the 1979 scheme; I think that it was the hon. Member for Wansbeck (Ian Lavery) who mentioned those family members. So, we can widen the scope of schemes, but we still need to have a starting point for a scheme. That always generates some concern, because wherever one starts a scheme there will always be somebody on the other side of the line. I recognise why those people will not be comfortable with that, but I do not think that it is an issue.

I will just be clear about another point. Although people affected will be encompassed by the scheme from yesterday’s date, the actual payment to them from the scheme will obviously have to wait for the regulations to come into force next month. Nevertheless, those people will be eligible for the payment from yesterday.

My hon. Friend the Member for Chatham and Aylesford, and others, referred to the issue of research. I know that she has a long interest in this subject because her constituency is, as she said, a hot spot for this disease, given the industrial history of the local area. So she was interested in this subject even before she was a Member of this House. She referred to some research that is taking place in her local area and welcomed the fact that two insurance companies have put money into research. She made the point very well, that those companies had perhaps demonstrated a certain amount of leadership, and she was keen for others in the industry to follow their lead; I am sure that they will have noted that call.

As I say, my hon. Friend specifically talked about research. The Government agree with her: we also want to see more research in this area. The National Institute for Health Research is calling for mesothelioma research proposals. I listened carefully to the point that was made—I think it was by the shadow Minister—about a written answer that the Minister of State, Department of Health, my right hon. Friend the Member for North Norfolk (Norman Lamb), had given about this issue. I have not seen that written answer, but it sounded like he had talked about some research proposals that were awaiting funding. However, my hon. Friend the Member for Chatham and Aylesford referred to a shortage of research proposals. So I will ask officials to look at this apparent discrepancy. The shadow Minister said there were lots of proposals but no money, whereas my hon. Friend said that there were not really enough proposals.

Another hon. Member also referred to a shortage of research proposals; I forget whether it was the hon. Member for Liverpool, Walton or the hon. Member for Wansbeck. The general sense that I was picking up was that the number of research proposals did not seem to be in line with the tragically large number of people who are dying from this disease—it seemed out of kilter—so the points by my hon. Friend and other hon. Members about research were well made. We set up a partnership, including patients and clinicians, to identify research priorities in this area, and the results were published in December.

[Mr MacNeil]

What then is available to my constituent, who was diagnosed before 25 July 2012, but died in November 2012?

[Albert Owen (in the Chair)]

The Minister has just over two minutes left to speak.