Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2015

Baroness Donaghy Excerpts

Wednesday 25th February 2015 Grand Committee

[Lord Alton of Liverpool (CB)]

My Lords, I think we are all grateful to the Minister for the way in which he has introduced the regulations today. He has talked about some very significant sums of money to assist some of those who, through either pneumoconiosis or mesothelioma, have had a death sentence merely as a result of their going out to work. I commend the Government for the uprating that they have announced today.

I have some questions for the Minister. He rightly said that Members from all sides of your Lordships’ House have been anxious, first in supporting the Government in the provisions of the Mesothelioma Act last year, but also in pressing for far more resources to be made available, both to those who have been victims of mesothelioma and for the important work involved in research in finding cures and the causes of mesothelioma.

I notice that the Government say in the Explanatory Note:

“An impact assessment has not been prepared for this instrument”.

Although I realise that that is a fairly technical thing and it is not a requirement for the Government to do that in this case, I wonder if that might be reviewed for the future, with regard to such an impact statement and assessment along the lines that the Minister has just referred to. I was not certain what he meant about the year in which he said the number of mesothelioma victims was likely to peak. Perhaps he could repeat it.

[Baroness Donaghy (Lab)]

It was 2018.

[Lord Alton of Liverpool]

The year is 2018. It is very helpful to know that that is the case. That seems to differ from some of the dates that have previously been given by Ministers and in parliamentary replies.

Will the Minister assure me about continuing assessments, so that when these regulations come forward—alas, they will come forward on a regular basis—we can have much more up-to-date information about the total numbers and how the trajectory appears to be working out? I hear very different accounts from people who say that, as a result of diagnosis now being made in a different way from the past, the numbers are being assessed in different ways. Quite alarmingly, we see the incidence of mesothelioma in non-traditional groups. Those of us who have represented sufferers—through the trade union movement, in the case of some noble Lords here, or by representing constituencies, particularly in urban areas—have always been used to meeting people who worked as tunnellers or masons, or in traditional heavy industries. However, there is no doubt that there has been a significant increase in the number of people who present with the disease for no apparent reason—people who are domestic workers, who perhaps have just been at home or who work in schools, and particularly people in the Armed Forces.

I think it was the noble Lord, Lord West of Spithead, who mentioned in the House people he had been at Dartmouth with and literally playing snowballs with asbestos at that time, not realising the dangers. He mentioned the number of significant figures in the Royal Navy who had contracted mesothelioma and subsequently died. One of the things that I would specifically like to see in an impact statement would be categories of workers, such as those in the Armed Forces, for which we monitored the number of deaths from mesothelioma that were recorded so that we had a far better idea of the impact that this was having. I know that there will be particular interest from a number of those from the Armed Forces who have been following our debates. It was wonderful that the noble Lord, Lord West, along with the noble Lord, Lord Hunt of Kings Heath, and others, were able to meet some of those from the Royal Navy who have contracted mesothelioma, here in your Lordships’ House just a couple of weeks ago.

The Explanatory Note also says:

“It is intended that these rates will be reviewed each year”.

Perhaps the Minister could confirm whether that will always be in accordance with the consumer prices index, as it has been on this occasion.

I shall return to a Question that I raised on the Floor of your Lordships’ House on 9 December, which was answered by the noble Lord, Lord Faulks, on behalf of the Government. It touches directly on the allocation of money, and where it comes from, regarding some of the payments that are made to those who have become victims of mesothelioma. During the passage of the 2014 Act, Ministers said that the levy on the insurance industry would be set at 3%; in fact, the quote from the Minister in another place was:

“Three per cent. is 3% and we have no intention of moving away from it”.––[Official Report, Commons, Mesothelioma Public Bill Committee, 12/12/2013; col. 117.]

I asked this on 9 December and I ask it again today: why then has it been set at 2.2% when that original undertaking was given by the Government? That represents a shortfall from the insurance industry of around £11 million, so this is not a small sum of money. Although I welcome the subsequent uprating that the Government have announced in the total amounts of money that victims will be awarded under that legislation, I wonder whether there is a shortfall that still can be reclaimed from the industry and which might therefore be used to assist with the problem of research.

I moved an amendment in your Lordships’ House—I think it was defeated by a majority of about seven—which would have placed a requirement on all insurance companies to contribute to another levy to provide for mesothelioma research. I commend those insurance companies, and there are two big players, which have continued to step up to the plate to provide contributions towards research, voluntarily and without a statute. They put the other companies, of which around 150 are involved, to shame but what they contribute is far from enough. It also raises the question of why more public funding is not provided to tackle the disease.

I would be grateful if the Minister could confirm a figure. The Government have previously said to me that around 50,000 to 60,000 people will die of mesothelioma over the next 20 to 30 years. The Chief Medical Officer, Professor Dame Sally Davies, who is also the Government’s chief scientific adviser for health, has said:

“I hope the research community will now respond by generating new research proposals that will provide robust evidence to help people with mesothelioma”.

What I have quoted was also said by the Minister, the noble Lord, Lord Faulks, in response to a question from the noble Lord, Lord Wigley, who said:

“There needs to be a certainty that the money is there but the top-level researchers also need to be aware of it so that the money and the level of the research capability are brought together”.

The noble Lord, Lord Faulks, also said:

“The funding is very much there”.—[Official Report, 9/12/14; col. 1711.]

However, that seems to contrast with both the Question that I tabled in your Lordships’ House and a letter which I have received from him.

The Question I refer to was answered as recently as 23 February where, in a table, the Government say that there have been four successful applications. One of them is “Subject to contract” and the others have been successful in coming forward to tackle mesothelioma. But then there are several applications which have been turned down, and which were for substantial sums of money. I would be grateful if the Minister could tell us how this therefore accords with the idea that there are plenty of applications and that they have been sufficiently successful, because that does not seem to be the case.

In the letter that the noble Lord, Lord Faulks, wrote to me on 16 December 2014, following the exchanges on the Floor of the House, he said:

“In the last five financial years, the MRC and NICR have received just over twenty applications for grants or fellowships that relate to research on mesothelioma. Of these eight applications were successful resulting in an average success rate of 40%”.

That does not seem to be a very high success rate when we are dealing with the potential loss of life of so many British people, who have contracted this disease simply as a result of going out to work.

During the debate on my Question the noble Lord, Lord Giddens, told your Lordships that his own wife had died of mesothelioma. A few days ago, along with the noble Lords, Lord Giddens and Lord Saatchi, I met the British Lung Foundation. I met a brilliant young woman who is a registrar in London. She told me that she is the only person working anywhere in the world on an innovatory treatment, using adult stem cells which are targeted at mesothelioma cells. She says that that has proved extremely successful in the animal models that have been used. My heart rose when I heard that, and there are other examples that I could cite but I do not want to take up too much of your Lordships’ time today. Surely this is how we must proceed. During that meeting, she told us that it would take £2.5 million to move from the stage that she has reached now on to clinical trials. Again, that does not seem an outrageous sum of money in terms of what we need to do.

As a result of bringing forward these regulations today, I hope that the Minister will give us some assurances that he will return to the House—with a letter that can be sent to Members of the Committee, with further written replies to Parliamentary Questions or in Statements to the House—to tell us what progress is being made to ensure that we tackle this problem at source. Otherwise, I suspect that year after year, for the next 20 or 30 years, we will be gathering in places like the Moses Room and looking at lists of people for whom compensation is being given to deal with the effects of a disease which at the moment has no cure and which wreaks such tragedy in the lives of so many ordinary working people in the United Kingdom.

[Lord Avebury (LD)]

My Lords, I pay tribute to the noble Lord, Lord Alton, for the assiduity with which he pursues the case for the sufferers of mesothelioma, and in particular for the plea that he has just made that those conducting research into a cure for this horrible disease should receive more favourable treatment. Whether that should come out of the 3% levy or from some other source is a matter that we were talking about just before we came into this debate. I know that there are other sources and I hope that the researcher whom he mentioned, who has got as far as she has in using adult stem cells to treat sufferers of mesothelioma, will be able to secure grants from one of them. The noble Lord showed me a list of other applications that have been made but which have not been successful. I very much regret that the sources of funding for research into a cure for mesothelioma have not been more forthcoming in the cases that he mentioned.

I am most grateful to the Minister for his careful explanation of the regulations. I have discussed them with Mr Doug Jewell, the chairman of the Asbestos Victims Support Groups Forum UK, who told me that the forum is pleased that the Government are raising the payments by 1.2%—the same as the increase in social security payments—although they were not obliged to do so by the primary legislation. I thought that it would be even better if the Government undertook to make uprating in line with social security payments obligatory, in primary legislation, when a suitable opportunity arose. It seems that they have every intention of following that path, but it could be an additional safeguard under future Governments if these upratings were in line with those promised for social security payments. Perhaps the Minister could say something about that in the course of his reply.

The forum is also happy with the statement that was made by my noble friend Lord Freud on 10 February, increasing the tariff of payments made under the Diffuse Mesothelioma Payment Scheme—the DMPS—from 80% to 100% of the average payment made on civil claims for those diagnosed from that day onwards. My noble friend said that this was possible because the Employers’ Liability Tracing Office—the ELTO—had been increasingly successful in tracing insurance policies, enabling victims of the disease to pursue a remedy from the companies that issued the policies.

My honourable friend the Member for the Forest of Dean said that that uprating could not be retrospective to the start of the DMPS last July because it was usual for upratings of benefits to be paid from the date of the announcement. In this case, however, the initial decision to pay only 80% of the average civil claims payment was based on a miscalculation of the success rate in tracing insurers. The Government may have needed to be careful not to exceed the 3% gross premiums cap on the contribution to the scheme which had been agreed with the insurance industry, so I assume that they worked on the assumption that the number of successful civil claims would remain constant, and so would the number of claims under the scheme, making no allowance for the work of ELTO. If that is the case, and the decision to pay only 80% was based on a miscalculation, will the Minister please tell your Lordships what the levy is expected to be as a percentage of gross premiums in its first year with the scheme as it is, and what it would have been if the scheme had paid out 100% from the start? I understand that 3% of gross premiums would be £43.6 million, that the cost of the scheme as it is would be £32 million, and that backdating the payment of 100% of civil claims to last July would be £5 million, so that the total would still be well within the 3% gross premiums cap.

These regulations cover the related question of payments under the 2008 lump-sum payments scheme and the workers compensation Act 1979, as my noble friend has explained. These payments are also uprated by 1.2%, so that a person of the Minister’s age—I am talking about my noble friend Lord Freud—and diagnosed in July would receive the princely sum of £23,881. Someone of my age would receive £13,445. Neither of those amounts would provide financial security for the victim’s partner or dependants when the patient died, as they do within an average of 12 months from diagnosis.

But the situation is even worse if the claim is submitted after the victim dies. Patients with mesothelioma realise only too well that their life expectancy is limited, and one of their main concerns is the financial security of their dependants after they die. Most of them manage to submit claims themselves, obviously while they are still living, knowing that the amount paid out in a posthumous claim is greatly reduced. In the case of a patient of my age, a surviving spouse would receive £7,462. Thus, of the 3,770 payments that were made in 2014, only 360 were posthumous. The DWP estimates that it would cost another £2 million to equalise payments between sufferers and their nearest and dearest. Will the Minister please explain on what assumptions that calculation has been based? Does it take into account the substantial incentive that patients have to make a claim so that the number of posthumous claims would decline as time passes?

The forum also suggests that the DWP’s figure does not take into account the sums that are recouped when the applicant is eligible for the DMPS, which they say would amount to £960,000, making the net cost of uprating just over £1 million instead of £2 million. The argument for moving towards equalisation relies not on the relatively small cost in relation to the social security budget as a whole, but on the fact that because of sufferers’ short life expectancy, the beneficiaries of compensation schemes were always going to be mainly their spouses and children, not the applicants themselves, and it was illogical to divide them into two classes according to the date when the claim was made.

The forum also points out the unanimous view of parliamentarians and stakeholders, which was acknowledged by the DWP in the person of the noble Lord, Lord McKenzie, when he was Minister in 2010, that the difference in payments was “unfair and unhelpful”. He added £5,000 to the amount that dependants would otherwise have received under the regulations then under consideration, which he said went some way towards our commitment to bridge the gap.

It is an ancient principle of law that when Governments enter into commitments the public faith is thereby pledged and cannot be lightly abrogated by their successors. I know that neither my noble friend Lord Freud nor his predecessors since the coalition came into office have said that equalisation has been abandoned, but they rely on the argument that in the prevailing economic climate the cost would be too high. I hope my noble friend can say in replying to this debate that the Government are still committed in principle to eliminating the difference and that if the economic conditions continue on their present trajectory, they will do so if they remain in office after the election.

[Baroness Donaghy]

My Lords, as a former president of the TUC, I reiterate the tribute to the trade union movement for its identification and campaigning on this issue. As the noble Lord, Lord Alton, has mentioned, it was a tremendously long time after the start of the trade unions’ campaign before there was any official recognition. I also speak having had a sister-in-law who died of mesothelioma. I am currently the chair of the oversight committee of the mesothelioma fund. The fund was set up after debate by this Parliament and is a matter for congratulation on all sides. I will not say too much about the work of that committee as I am not sure how appropriate that is.

I will say something first about the non-traditional industries that the noble Lord, Lord Alton, mentioned. It would not be appropriate for the oversight committee to take responsibility for this, but the DWP could undertake more publicity about the so-called non-traditional industries. I will mention jewellery repairs as an example that may surprise some. In the old days, particularly in the big centres where there was a jewellery quarter, the glossy shops would take the jewellery that needed repairing off to somewhere else. There would be asbestos benches and the workers would sit with their chin virtually on the bench, scraping grooves into the asbestos to put the mould in so that they could secure the jewellery. Some people worked in these sorts of surroundings for years, but it may not have been an obvious area for others to identify what was wrong with them. They therefore may not know that the disease could have happened as a result of their work in the 1950s and 1960s. In some of the non-traditional industries there was consistent exposure to asbestos but it is not so well known as in some of the traditional industries.

Often when people worked in factories, they were called, for instance, warehousemen. That covered a multitude of sins in the 1950s and 1960s. They were not always warehousemen at all; sometimes they swept up pure asbestos from factory floors. The term “warehouseman” was simply a designation of the grade or the pay rather than an accurate job description. We were all a bit more casual about job descriptions in those days, compared with the rather minute detail that we seem to go into now. Again, it would be useful if some publicity could be given to the fact that job descriptions did not always accurately describe the work that was done. Some publicity by the DWP would be very welcome.

One of the awful things about this dreadful disease is that by the time it is diagnosed people are sometimes so ill, and their families so upset, that the last thing they think of doing is filling in a form. I know that we are supposed to live in a “compensation culture” age, although personally I do not believe that, but some of these families have to be dragged kicking and screaming to fill in a form when all they want to do is think about their loved one. Any publicity or ease of access into the system that the DWP can provide would perform a genuinely good social service.