Social Security

David Anderson Excerpts

Wednesday 14th September 2016 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

I thank the Minister for bringing this order to the House, but it is a shame that the matter could not have been resolved in Northern Ireland. The order is the result of months of negotiations and an attempt to break budgetary deadlock and avoid the potential collapse of the Stormont institutions. I and many hon. Members were glad to see a deal reached and credit the work of all those involved: the parties in Northern Ireland, the Irish Government and many Members of this House.

I have been involved in Northern Ireland affairs for almost 30 years—within the trade union movement, as a member of the Northern Ireland Affairs Committee, and latterly as a vice-chair of the British-Irish Parliamentary Assembly. In the union work in which I was involved in the 1990s, when we worked hard to deliver the peace process, we coined the phrase, “We are a non-partisan agent for change.” It is that phrase that has guided my work inside and outside this House, and it is with that attitude that I want to address the matter before us today.

The Labour party takes great pride in the role it played in bringing about peace in Northern Ireland, working with good people on the ground and around the world on the Good Friday agreement, the “Fresh Start” agreement and much in between. We have always worked in the best interests of the people of Northern Ireland. What is paramount today is ongoing peace and stability in Northern Ireland, and Labour will work with the Government and all interested parties both in this House and in Northern Ireland on maintaining it. I am sure that that sentiment will be echoed by Members in the House today.

The “Fresh Start” agreement included legislative consent from the Northern Ireland Assembly to allow Parliament to enact legislation on its behalf. I respect the legitimacy of the Assembly to do that, but I am sad that it had to. Today’s order seeks to extend, among other measures, the welfare reform Acts of 2012 and 2016 to Northern Ireland. The Government’s welfare reform programme has devastated the lives of far too many vulnerable people across Great Britain, plunging them into financial distress. In the hour before this debate, we heard about the tax credit fiasco. Real people are suffering as a result of measures brought in by this Government over the past six years. I and many other Members from across the country see the effects of the cuts in our constituency surgeries.

This legislation is in the interests of ongoing stability in Northern Ireland, so we will not stand in its way, but the Labour party will never stop showing its ongoing opposition to the Tory austerity agenda, which we have consistently railed against in this House over recent years. We have opposed cuts to tax credits that hit families in the pocket, changes to ESA that hurt those suffering from disease and injury, a benefits caps that does not rise with inflation, cuts to council tax credits, and cuts to crisis loans. We must also never forget that 42% of those deemed fit for work by Atos were actually declared unfit on appeal—a damning indictment of the Conservative party. I could go on and on.

Welfare reform was intended by this Government to impact hard on the UK’s most vulnerable people and to force them to work when they are not well equipped to do so. The desire to inflict on the people of Northern Ireland the same disastrous policy that has blighted the lives of so many of our constituents right across Great Britain is a desperate tactic from a Government more concerned with ideology than compassion. The use of austerity as a weapon of policy was and still is a crude and blunt instrument. The role of austerity in the now hardly mentioned long-term economic plan will be the epitaph of our dear departed friend from Witney and his sidekick from Tatton. Saying “We will make work pay” rings hollow for those forced to look for work while struggling with long-term illness, injury or disease. The truth is that this Government want to make it impossible for anyone to survive on benefits, which is hugely unfair to those struggling from day to day through no fault of their own.

There may be some who say that the changes should apply to Northern Ireland because they apply across the rest of Great Britain, but, to put it simply, two wrongs do not make a right. The Conservative party clearly believes in the equalisation of misery. Labour believes in the alleviation of misery. When we get back into power, we will not be attacking the sick, the young, the elderly and the disabled or calling them scroungers and skivers. We will not be declaring war on anyone whose curtains are not open by a specific time every day. We will not be making the poor pay for the failings of the rich and those who dabble in money markets. It is interesting that the “Fresh Start” agreement includes measures to mitigate the ongoing austerity regime. While I welcome such measures, does that not show that these changes should not be made in the first place? It is accepted that problems are going to be piled on people who do not deserve them.

We have been advised that the cuts will take £750 million out of the Northern Ireland economy and that the loss per working age adult, at £650 per year, is 38% higher than the UK average. In Northern Ireland, it was recently announced that the Michelin factory in Ballymena will close, resulting in the loss of 860 jobs, that another 250 jobs will be cut in the Caterpillar factory in Newtownabbey and that there will be job losses at Bombardier. Those men and women will find less support than ever and this order will do nothing but compound their difficulties as they try to find their way through the world of unemployment.

As the Minister mentioned, Northern Ireland has some of the highest levels of long-term unemployment in the United Kingdom. Almost one in 10 adults of working age is in receipt of disability living allowance—almost twice the national average—and so will be hit more than those in other parts of the UK. Belfast will be damaged most by the reforms. Poverty is a genuine everyday reality for many in Northern Ireland, and the reforms will serve no purpose other than to compound such difficulties. The cuts will hurt the vulnerable. They hit the disabled, families and children and Labour cannot be complicit in that.

We have to accept that despite the huge opposition to these so called reforms, they have been enforced on the people of Great Britain. But that does not make them any more palatable and it does not give any more reason also to force the changes on the people of Northern Ireland. We have to accept the very real circumstances of its history and of the current difficulties the people of Northern Ireland face. According to figures from the Northern Ireland Statistics and Research Agency, since 1998 more people have taken their own life in Northern Ireland than died throughout the troubles, with research showing that during the recession those figures increased. The suicide rate in Northern Ireland is 70% higher than the UK average. Forcing the vulnerable in society further into despair will do nothing to defeat this problem.

We support any work aimed at maintaining the long-term stability of the institutions in Northern Ireland, as those of us who remember the days of direct rule can attest; we will say how important it is to make sure that these institutions not only carry on, but flourish and improve. On that basis, we will not oppose this order today, but that should in no way be taken as our condoning what is being done by this Government to the people of Northern Ireland.

Disability Employment Gap

David Anderson Excerpts

Wednesday 8th June 2016 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

I speak as someone who worked in the coalmines for 20 years and as a care worker for 16 years. I am also someone whose family has been devastated by muscular dystrophy and who has spent some time being unemployed or off work due to ill health. Throughout my life, I have come into contact with Departments of Health and of Social Security and the Department for Work and Pensions in their various forms. As a trade union representative, I have represented people at tribunals and sat as a wing member of tribunals, so I understand very clearly the history of Government relations with the welfare state.

I am glad to have a consensual debate, as I want to speak mainly about my experience as chairman of the all-party group on muscular dystrophy, but it is right and proper for the shadow Secretary of State to highlight that at last year’s general election the Government went to the people with a pledge to cut £12 billion from welfare budgets and refused to explain from where they were going to take the money. That is a simple fact. It is not rhetoric or scoring party political points; it is absolutely true.

I was glad to hear the Secretary of State say that he wants to work across government and across agencies. He twice mentioned the role that local authorities can play. I would be delighted if Gateshead council could play a role in helping to get disabled people back to work. If, however, 48% of a local authority’s budget is cut over six years, it will be stretched to the limit unless something is done to close the gap and try to provide help.

I want to talk specifically about the information that has been given to the all-party group on muscular dystrophy by the young people who came together under the title of the Trailblazers. I know that the hon. Member for Blackpool North and Cleveleys (Paul Maynard) is a strong supporter of that group and has done tremendous work, so I was pleased to hear him speak today. These young people have clearly said that they have real concerns. They produced a report, “Right to Work”, in which they said clearly that young people should have the right qualifications and skills and exactly the same opportunities to gain paid employment—whether or not they are disabled.

Often these young people with ambitions are restricted by the inbuilt prejudices that they encounter in the workplace. The report shows that fewer than half of the disabled people in the country—48.5%—are actually in employment, in comparison with 78.8% of able-bodied people. They believe that the best way to address that is by giving as much support to individuals looking for work as is given to businesses and organisations already working.

The group also believes that the abolition of the work-related activity component of employment and support allowance has and will continue to put disabled people at a significant disadvantage. Almost half a million people are currently in receipt of the WRAG component, and it helps disabled people to get their interviews and to ensure that they are fit and healthy enough to get to work and stay in work. This abolition means that people with muscle-wasting diseases have had removed from them the support they need for sustainable, long-term and gainful employment, and it is likely significantly to widen the gap at a time when we are all saying that we want to close it.

When members of the Trailblazers went around the country to find out what was the reality, they found some basic things. They found far too many recruitment agencies that people were physically unable to reach because they were inaccessible up a flight of stairs. They were told that all jobs were available online. As Government Members said earlier, what happens if people are trying to go online, but the desk is set at a level from which it is difficult to operate the computer, or if people do not have access to a computer? These are the sort of basic issues that we should be working together to put right.

Some of the people carrying out the work for the report—disabled young people themselves—went for office-based proficiency tests, but instead of being based in the place where they were working, some of the interviews were happening in places such as coffee shops, where many other customers were milling about. How on earth can people show how proficient they are in circumstances like that? Trailblazers said that that while disability employment advisers were a hugely positive resource, it believed that they should all be given an enhanced level of disability awareness, so that they would recognise when disabled people came looking for a job that they might need to look at things in a very different way.

Some disabled young people seeking jobs face a dilemma: they must decide whether or not to disclose that they have a disability; obviously, not all of them will have a visible disability. They worry about the possibility that if they disclose their disability, there will be prejudice against them before they even get through the door. It should be made clear that they should have the right to decide whether or not to disclose their disability, rather than being told that they must state “I am disabled” on the form, and fail as a result. If they do that, they will already be behind the curve. Trailblazers said that when young people went for interviews, they should be given support so that they felt that they had been invited for a genuine interview, and were not just there to make the numbers up so that someone who could tick the boxes.

I ask the Minister to talk to those people, listen to them, learn from them, and apply the lessons.

DWP Data

David Anderson Excerpts

Tuesday 21st July 2015 Commons Chamber

[Priti Patel]

Not only will we publish the data, but we will publish all aspects of the data that we have been asked to publish.

[Mr David Anderson (Blaydon) (Lab)]

Given that autumn lasts from the September equinox until the December solstice, will the Minister spell out exactly what work her civil servants will be doing? She must have some idea of what is needed, because otherwise she would not have specified that timescale. What will those civil servants be doing during the intervening weeks and, possibly, months?

[Priti Patel]

We will be doing all that is relevant. This is complex statistical information, so it is important that we get it right, and that is precisely what my officials are doing.

Welfare Reform (People with Disabilities)

David Anderson Excerpts

Tuesday 30th June 2015 Westminster Hall

[Debbie Abrahams]

My hon. Friend is absolutely right about the punitive sanctions regime. We have called for an independent inquiry into sanctions, following on from the Oakley review. Oakley himself said that his review was “insufficient,” which the Government still refuse to accept. Will the Minister respond to that?

The Government have spread a culture of pejorative language, such as “shirkers” and “scroungers”. They have intentionally attempted to demonise social security recipients, including disabled people. The innuendo that people with a disability or illness might be faking it or are feckless is, quite frankly, grotesque and belies the epidemiological data.

[Mr David Anderson (Blaydon) (Lab)]

The Chancellor of the Exchequer has said, “When you go to work in the morning and see the curtains of your neighbours pulled tight, you know there is somebody lying in there who can’t be bothered to get out of bed and go to work.” Somebody might actually be lying in there because they cannot get of bed owing to an incurable disease. Is it any wonder that some people tar everyone with the same brush? Was that not a deliberate ploy by the Chancellor?

[Debbie Abrahams]

My hon. Friend is absolutely right. I cannot remember whether it was during the Budget or the autumn statement, but it is absolutely shocking that the Chancellor used that language. Incapacity benefit and ESA are recognised as good population health indicators, so what is implied by words such as “shirkers” and “scroungers” is not supported by the evidence.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

It is a pleasure to serve under you, Sir Roger. I have a limited amount of time, but I will do my best to address as many of the points made as I can—I do not have a set speech. If I run out of time, we will send further information.

I congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on calling the debate. She is a long-standing campaigner in this area, and that does shape what we do. She covered many things, but she can always come and see me face to face to run through some of them—my door is open and she has a huge amount of experience. I picked up the point about language. That is not something that I recognise as a Minister, but if there are examples that the hon. Lady wishes to bring to my attention, she should please do so.

[Mr Anderson]

Will the Minister give way?

[Justin Tomlinson]

I have only four minutes in which to respond, so that is what I have to do.

On the disability employment gap, in the past 12 months, an extra 238,000 people got into work, which is 650 a day, an increase of 2.4%, which is the biggest in the past decade. We are committed to halving the disability employment gap—it is about a further 1 million. That is a key priority.

Scope’s Extra Costs Commission report was fantastic. I have already met with Scope’s chief executive to look at different ways to support it—for example, this morning I was at the Inclusive Technology Prize competition. Clever people are coming up with ways to improve access in people’s everyday lives to the sorts of things—

Housing Benefit (Abolition of Social Sector Size Criteria)

David Anderson Excerpts

Wednesday 17th December 2014 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for that intervention.

This afternoon the amendment signed by the Deputy Prime Minister aims to remove our call on the Government to abolish the bedroom tax immediately, and instead merely “notes” that the Liberal Democrats have come up with some “proposals” to change the way the bedroom tax is implemented. We would not be supporting the amendment, because “noting” the latest Liberal Democrat “proposals” is not going to pay anyone’s rent or keep anyone in their home. What matters in this House is how Members vote, how they use the power entrusted to them by their constituents. What we on the Opposition side and people watching the debate will “note” is where Members took their stand when they had an opportunity to make a difference.

[Mr David Anderson (Blaydon) (Lab)]

Will my hon. Friend also note that the reason we are having this debate is exactly the one just given by my hon. Friend the Member for Swansea West (Geraint Davies)? This is about taxing the poor, because the Liberal Democrats supported not only the bedroom tax, but the cut in the rate of tax for millionaires, giving their friends a £100,000 hand-back last year.

[Rachel Reeves]

Yes, and it tells us all we need to know about the priorities of this Government when people earning more than £150,000 got a tax cut while another group of people, two thirds of whom are disabled, got a £14 increase in their rent that they simply cannot afford. What we will note is that there would be no bedroom tax without the Liberal Democrats. They joined the Tories in the Lobby time and again to vote it through, and they combined with the Tories again and again to block Labour’s attempts to repeal it.

In conclusion, the bedroom tax is a cruel and unfair tax that is hitting around half a million low-income households. It has left vulnerable people feeling insecure in their own homes through no fault of their own.

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[Mr David Anderson (Blaydon) (Lab)]

I speak as chair of the all-party group for muscular dystrophy, and as one who knows families who have been devastated by the disease. They have written to me asking me to convey their views, and to describe to the House what they experience every day.

This policy has caused a huge amount of concern to most disabled adults, including those with muscular dystrophy or related neuromuscular diseases. Many disabled people and their families who require adapted housing and special access to accommodate their needs have been hit hardest by the bedroom tax, as it is more widely known. That applies particularly to people who live on their own or with a partner. They may need extra space for vital home adaptations and equipment storage, as well as space that enables carers to stay overnight. If appropriate new housing cannot be found for those people, they face a stark choice. They must force themselves to move to properties that have not been adapted, or remain in their houses and make a number of cutbacks or fall into debt.

Let me give the House some examples that people have asked me to give. Denise is affected by a progressive muscle-wasting condition known as myotonic dystrophy. She lives in a two-bedroom flat with her husband, who acts as her primary carer. Following the Government’s reforms, Denise was told that her housing benefit would be reduced in April. However, the fluctuating nature of her condition makes it necessary for a carer to stay overnight on occasion. The spare room is also used to store ventilation equipment, a shower chair and other equipment, and Denise’s husband uses it occasionally when it is not convenient for him to sleep with her. She must choose whether to stay there or pay the debt.

Kerry has a rare neuromuscular condition. She lives with her husband, who is her full-time carer and who also works part time. Their property contains a spare room, but Kerry is now having to pay £58.16 per month in bedroom tax, although the room is used to store her wheelchair, hoist and shower chair, and is also used by her husband at some points during the week to catch up on sleep outside regular hours. Besides the small wage her husband earns, the couple rely on benefits. That only just covers the bare necessities of life: food, utilities and rent. The cut of nearly £60 has impacted on her independence. She and her husband do not have a car, and because of the new costs, she is now unable to get out of the house. That is the reality of the bedroom tax. This is not about the to and fro of debate; this is what people are living with day in, day out.

My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said that the Conservatives do not get it. They do get it. What they get has been shown by the previous speaker, the hon. Member for South Derbyshire (Heather Wheeler). This is about creating an argument between our side and their side. They want to portray us as being the party of welfare. Well, we are the party of welfare; we are the party of the welfare state. We created the welfare state, and we did that because the Conservatives were perfectly happy to see poor people carrying rich people. That is exactly what we are seeing today, too, with people such as those I have talked about being robbed of £60 while Conservative Members’ friends get a £107,000 payout of taxpayers’ money in the previous Budget and again in this one.

It is clear what this is about. It is not about looking after people. It is about creating a dividing line, so that when the Conservatives go into the next election they can say, “We’re the party who don’t believe in welfare. Labour do.” Well, let us be clear: today we have seen clearly that Labour stands up for the poor of this country, the vulnerable and the sick. It will be interesting to see what the Liberal Democrats do, because if they get it wrong today, it will be yet another nail in their coffin when next May comes around.

Gleision Mine

David Anderson Excerpts

Wednesday 26th November 2014 Westminster Hall

[Mr Hain]

My hon. Friend speaks with great authority as a former leader of the National Union of Mineworkers. The coroner’s inquest was convened and then adjourned, and has never been completed, which has left unanswered questions.

The Gleision tragedy was a chilling reminder of a death-strewn mining era long thought consigned to history, and of the fact that short-cut attitudes to health and safety can be fatal. It also revealed how erosion of the Mines Rescue Service could create greater tragedies in the future if we fail to address the formidable budget challenges that that key agency faces if it is to maintain its long and dedicated record on mining.

The first lesson is that employers must be responsible for their employees in a way that was obviously not the case at Gleision. Throughout its recent life, it seems there was illegal mining at Gleision, certainly in the decade prior to 2011. At the trial, Mr Justice Wyn Williams said that successive managers had read into health and safety regulations what suited their needs, failing to co-operate sufficiently with Her Majesty’s inspectorate of mines. Despite this, the mines inspectors confirmed that the mine plan from which the manager and the four men were working, even as they detonated that fatal blast, was accurate. The inspectors checked during the official investigation after the tragedy and found that, although Gleision had not been inspected in the 16 months prior to the accident—an attempt to do so had been foiled by bad weather—the survey conducted two months before in July 2011 by mines surveyor John Brosnan was up to date and sufficiently accurate.

Of course, the Management and Administration of Safety and Health at Mines Regulations 1993 made it incumbent on the mine manager or owner to inform the mines inspectorate of any major changes in working plans underground. The inspectorate relies on the mutual co-operation of the mine manager and mine owner to alert to changes in the faces that they seam, and it is more than likely that multiple Gleision managers before Malcolm Fyfield had failed to do that adequately and properly.

The entire legal framework of health and safety at work in Britain is sensibly based on a self-policing model, relying on companies and their executives to comply with and guarantee safety standards by keeping risk as low as reasonably practicable. It is clear to me that in the events leading up to the tragedy the regulations were not complied with. However, the most frustrating question, and the one that haunts us all, is: why were the four miners there facing death in the first place?

The day after the tragedy, having been escorted from Rhos community centre up the mountain to stand at the mine entrance amid rescue workers and police, the mines inspector showed me the same mine plan from which Fyfield and the men were working. It showed clearly that they were mining directly towards an area in the old mine workings marked “Old Central Workings and Underground Water”. I have the mine plan here. The mines inspector expressed his surprise at this, and there is still no explanation for why the decision to take that risk was made.

The exact source of the water—whether it was in the area marked on the plan I saw, only a few metres from where the men fatefully detonated their explosion, or somewhere else nearby—was hotly disputed during the trial. The fact remains that the water was indeed there, exactly as marked on the mine plan, and that it killed them. Mines inspectors investigating the accident afterwards confirmed that its presence coincided with markings on the plan I saw. Indeed, they were able to see the high tide mark previously reached by the water that subsequently raged torrentially through the breach.

[Mr David Anderson (Blaydon) (Lab)]

I congratulate my right hon. Friend on bringing this sad debate to the Chamber today. Is it true that this is not a one-off, and that some of the regulations on water ingress into mines were developed because of tragedies such as this? There was one in the 1970s at Houghton Main in Yorkshire, when exactly the same discussions took place. That is one reason why the need to map out where water lay was built into the inspection regimes. That is why it is clear that plans should be checked regularly, and not just cast to one side.

[Mr Hain]

I agree with my hon. Friend. He also speaks with great authority as a former miner.

Mr Fyfield, who was the mines manager, is highly respected and experienced. He told the court that he went into the old workings to check for the presence of water marked on the plan and found none. Somehow, there was a catastrophic misjudgment. The water was indeed there, and it nearly killed him, just as it killed the four miners. Built into the regulations is a statutory procedure that could have prevented all this. A precautions against inrush scheme would surely have given the men an indication of the presence of the water. There can be no question but that it should have been implemented, because the Mines (Precautions Against Inrushes) Regulations 1979 demand that if miners are moving towards a suspected hazard, a PAI scheme be created.

These were all experienced miners, led by an expert and experienced mine manager, yet the Health and Safety Executive has not yet explained—neither has the trial evidence nor the verdict—why those crucial regulations were not followed. Whether motivated by cost-cutting, or simply the result of a cataclysmically mistaken judgment, the decision was taken to blast too close to the water, and four men died as a consequence, the manager only narrowly escaping, emerging so bloodied, severely injured and traumatised that he needed intensive hospital care to get back on his feet.

In 2011, the mines safety expert Dave Feickert claimed that it was possible to have a no-fatality mining industry in the UK, such was the strength of HSE regulations, yet at Gleision, those were ignored. In my view, that is the truth that should have been established by the trial and never was. Although the verdict is the verdict, it delivered neither justice nor accountability to the victims of the tragedy and their families. They have all been failed by the justice system and by the absence of a full coroner’s inquest. It was only through the immense efforts of the fantastic Mines Rescue Service, together with Walter Energy and the Unity mine, close to Gleision in the Neath valley, and which, unlike now, were fully operating at the time, that the bodies were recovered and the accident could be fully investigated.

After the tragedy in 2011, in an open letter to the Secretary of State for Work and Pensions, I warned of three things. The first was that without proper review, the Mines Rescue Service would risk becoming so chronically underfunded that it would be unable to provide the stellar service to Britain’s mines that, following coal privatisation, it was set up to in 1996. Secondly, I warned that were the current funding arrangements to continue, the cost to British mining of the MRS would become prohibitive, unless it was subsidised by Government. Thirdly, I stated that both those factors would combine to reduce and diminish the vital mutually co-operative spirit that is at the heart of the Mines Rescue Service and the coal industry in Britain, irreparably changing them for the worse.

The coal industry has changed a great deal in the three subsequent years. Faced with increasing international competition and dwindling profit margins, more coal mines in the UK have had to shut down. The Mines Rescue Service has been forced to change its funding structure in order to carry on providing a service to British mines while not having its viability impinged on too badly. However, under new regulations, the few remaining mines in Britain will no longer be obliged to pay a levy to the Mines Rescue Service, and instead will have a commercial relationship with a suitable provider should a disaster occur.

The MRS has evolved to become a successfully run enterprise able to diversify and rely on fees from its other work. In 1996, the MRS levy on each mine was able to cover its core costs, but the relentless closure of British mines since means that the coal levy now accounts for only 11% of the Mines Rescue Service budget, and even that is predicted to drop to 7% next year. That clearly impacts on the capability of the MRS to carry out its vital mines emergency service. Indeed, I strongly suspect that the MRS centre at Dinas in the Rhondda valley may have to be closed and its facilities transferred perhaps to Mansfield in England, because there are no longer sufficient south Wales mines to fund it.

Since 1996, the MRS has not received a penny of support from the Government. In the heyday of British Coal, it had the resources to deliver a universal rescue service. Even after privatisation, mines paid the levy because it did not affect their profitability. Instead, a mutually co-operative understanding ensured that aid would come if an accident occurred in a mine. The MRS scheme covered the costs of funding when it was called into action, and additional costs fell to the mine or to nearby mines.

For three weeks after the accident, when the Gleision mine was investigated, the HSE became responsible for keeping the mine open because Gleision’s owners, MNS Mining Ltd, could not afford to do so. Under normal circumstances, the costs of investigation and rescue would be placed on the mining business in question. However, the finances of MNS were so precarious that that was simply not feasible. Such a scenario had never been encountered before by the Health and Safety Executive and the mines inspectorate, and they deserve a great deal of credit for ensuring that a full investigation was carried out despite experiencing budget cuts, yet they should not have been put in that position.

Although the MRS has a team of core rescue specialists, it relies heavily on the mutual co-operation of other British mines, which provide their own men to aid the rescue effort, as well as equipment and resources. In 2011, as I said, those were provided by Walter Energy and Unity, two mining companies nearby in my constituency, and the unsung heroes of the disaster. However, the rescue effort was much more fragile than it appeared. The co-operative ethos, which is the foundation of the MRS, is based on a pooling of fiscal and technical resources in the event of an accident, and was built on the foundations provided by the Coal Board’s central fund, yet Gleision clearly exposed flaws in the mutual co-operation model that were not envisaged when the scheme was set up.

The financial costs of keeping the mine safely open to enable South Wales police and the HSE to investigate fell on the shoulders of the HSE together with Walter Energy and Unity, which were also sacrificing men and equipment to investigators, and this was a heavy burden. By Friday 16 September 2011, the day after the tragedy, Walter Energy alone had covered costs of £77,645 for the recovery and investigation, yet by December had still received no recompense. Last year, it laid off over 100 men, and the Aberpergwm pit has since been on care and maintenance, as has the Unity mine, both victims of the falling price of coal, yet they were both essential to the rescue effort.

As a result of all that, if there were ever to be a future Gleision-type accident, both a rescue and a full investigation might not be feasible. When I was the Secretary of State for Work and Pensions in 2007-08, the HSE’s budget was £215 million. By last year, it had been cut by £50 million, or a quarter, to £165 million. Unless the Government provide more money for mines rescue and the HSE, accidents in mining will be more frequent, as self-policing health and safety and self-funding rescue and investigation services are no longer viable or fit for purpose.

I was one of the many community leaders who, over those long hours, observed the heroic and dedicated efforts of mines rescue workers, supported by highly professional police officers, other emergency workers and mines inspectors. I am full of praise for all of them. None of us knew at the time that there was never a chance of rescuing the men who died, but at least their bodies were recovered, in dark, dangerous and filthy conditions. The families of Philip, David, Garry and Charles have conducted themselves with dignity and deserve enormous praise from all. They do not seek vengeance and scapegoats, and nor do I; all they have asked for is justice, but they have still not received that.

In his letter of January 2012, the Secretary of State assured me that lessons would be learned from the Gleision accident. We await the impending report by the Health and Safety Executive, and I trust it will not be constrained by the trial verdict, because if it is, the inspectors will not be able to reveal their professional conclusions, which I strongly suspect broadly coincide with mine.

The day of 15 September 2011 would have been an unremarkable day in the history of the Swansea valley had proper health and safety practice been followed. We still have no answers as to why Garry, Charles, Philip and David died, why they were heading straight for the water that killed them, and why no precautions against inrush scheme was implemented. The Gleision tragedy should not have happened; that is what makes it not simply a terrible accident, but a shocking, terrible scandal.

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[Mr Harper]

As I said, I have not seen the report and I do not know what it will say. The mines inspectorate will use its professional expertise to set out the evidence from the thorough site investigation that took place, but it cannot rerun the trial. For example, it is not disputed that the water was there at the time of the incident; what was disputed in court was whether the water was there all the time. The right hon. Member for Neath mentioned that there was a debate about the mine manager giving evidence that he had inspected the old workings. The HSE will not be able to settle questions that were dealt with at the trial and on which a conclusion could not be reached. That is all I am saying. It will endeavour, with the best of its professional judgment, to set out the evidence—what was found from the investigation. I have not seen the report and I do not know what it will say. It is in process.

My final point about the report is on timing. The report will be published in the new year—early in the new year, I hope—and, as I said, it will be published for everyone to see. I hope it will set out some lessons that can be learned from this tragedy.

[Mr Anderson]

I thank the Minister for giving way again —he has been very generous. The crux of why we are here today is that, if this was a one-off and had never happened before, we would probably feel a lot more comfortable, but as I said, it was not a one-off and had happened previously. My right hon. Friend the Member for Neath (Mr Hain) mentioned the 1979 regulations that were supposed to address the issue. It is all right saying, “Let’s learn the lessons.” A lesson learned is no use unless it is then applied. Our worry—hopefully this can be tightened up in the report if the HSE decides to do that—is ensuring that things like this, as far as is humanly possible, do not happen again. If, as has been said, the gentleman went in, did the investigation and found that there was no water, that should have raised concerns, because where had the water gone? That should have been followed up. The worry that Opposition Members have is that such an incident could happen again through things just generally not being tight enough.

[Mr Harper]

The hon. Gentleman makes a helpful point, because I was going to move on to the work that has been done to bring forward shortly new mine safety legislation that ensures clear duties on the operators of mines to manage the risks. That work was instigated independently of the Gleision accident, and it arose from the independent review of health and safety legislation by Professor Löfstedt, which reported in November 2011. We have taken into account what happened in the Gleision incident as we have developed the new law.

The current law governing safety in mines comprises more than 40 pieces of legislation, some of which date back as far as 1954. As the right hon. Gentleman has said, the coal industry is vastly different today. In addition to the huge changes in the coal sector, there has been a big shift in the wider health and safety framework, and the old mine safety legislation needs to be reviewed. The Health and Safety Executive has undertaken a review of that legislation over the past two years, and new mines regulations will be introduced in April next year. They will consolidate the key requirements for the control of risks that are, as the right hon. Gentleman has said, inherent in underground mining. That will include managing the risk of water inrushes, which was clearly the major issue at Gleision. Mine operators will remain legally bound to determine whether there is water around workings and to assess the risk of that water causing harm to mine workers.

The new regulations will place duties, for the first time, on the mine operator rather than, as at present, on the mine manager. They will also require the other principal risks in mining to be controlled. They will place clear and simple requirements on operators to ensure that adequate rescue arrangements are made. The current requirement for coal mines to belong to an approved scheme will not be carried forward. The right hon. Gentleman mentioned that scheme, which was designed and introduced when there were 65 coal mines in operation, all of which contributed fees to fund the scheme and resources as part of their commitment to mutual assistance. There are now an insufficient number of mines to fund those arrangements. I looked into the matter in detail, not only now but as a result of experience in my constituency. Mine operators will be under a new duty to ensure that, if the rescue of workers is required in any foreseeable scenario, rescue arrangements will be available and workable. Coal mines will be required to make their own arrangements for rescue provision, tailored to the risks in each particular mine. Mine operators can use whatever third-party services may be appropriate to those risks. The HSE’s mines inspectors have a programme of interventions, between now and the entry into force of the new regulations, to check the arrangements that mines will have in place from April.

The current law is riddled with requirements to notify or otherwise seek the permission of the regulator before undertaking certain activities. It is not the regulator’s role to oversee day-to-day operations in such a way. Regulation of other major hazard industries successfully requires duty holders to demonstrate that their risk assessments and their control systems are in place and, importantly, robust, so that they can adequately manage risk to protect their employees and the wider community. The new regulations will take a similar approach in the mining sector. HSE inspectors are talking to mine operators and trade unions in the period leading up to the introduction of the new regulations to ensure that they are clear about how they will implement and comply with the regulations.

The new regulations will retain all the key controls over the hazards that are, as the Gleision tragedy and the right hon. Gentleman have reminded us, involved in mining, but they will deliver a modern, risk-based regime that will drive mine operators continuously to improve the management of the risks involved in mining. Tragedies such as the one he has powerfully described show us why we should never be complacent. We must try to prevent such incidents from happening again.

The hon. Member for Wansbeck raised the question of the inquests. My understanding is that they have not been restarted following the trial, and no formal notification has been made to the HSE that they have been closed. I will contact colleagues at the Ministry of Justice and make inquiries about the plan for those inquests—I will ask whether they will be restarted or formally concluded. I will write to the right hon. Member for Neath and, with his permission, to the two other hon. Members who are present, to set out the position.

Affordable Homes Bill

David Anderson Excerpts

Friday 5th September 2014 Commons Chamber

[Andrew George]

I am certainly not going to give way to the hon. Lady again.

I can entirely understand the rationale for advancing the regulations: to apply the regulations to the social rented sector that previously applied only to the private rented sector. As a rationale, that is entirely understandable. The Government certainly had an opportunity to see how those regulations would bed in. The purpose of the Bill is to reflect on the results of interim assessments of how the new regulations have fared since their implementation on 1 April last year.

We have now had long enough to be clear about how the regulations have an impact. Therefore, it is clear that if we are to ensure that private and social tenants are treated equally, yet the vulnerable are properly protected, we have as a result of the interim evaluation commissioned by the Government evidence of how the policy has fared. I propose, therefore, that the rules be changed so that existing tenants are not penalised when they cannot move into smaller accommodation because it is not available in their locality, or if they have a serious medical reason for requiring an additional room.

The findings, which have been widely reported, studied and understood, show that, certainly in the first six months of the implementation of the regulations, only 4.5% of affected claimants were reported to have downsized to a smaller social sector property. The researchers found little evidence of claimants finding work, increasing their pay or taking in a lodger, as the Government anticipated when they introduced the regulations. That needs to be taken into account as well. Tenants affected were making cuts and incurring debts, with 57% of them reporting cutting back on what they deemed to be household essentials.

[Mr David Anderson (Blaydon) (Lab)]

Does the hon. Gentleman accept that the interim evaluation proved everybody right in what they said about how exactly the regulations would work out? The only people who were wrong were the Government and the Liberal Democrats who supported them.

[Andrew George]

I urge the hon. Gentleman to study the voting record. The Bill proposes moderate and reasonable measures that should receive the support of all Members from all parties because they are based on the evidence. Perhaps some people had remarkable foresight about how the regulations would fare, as the hon. Gentleman suggests he had, and we can look at Members’ voting record. Labour introduced similar regulations concerning a bedroom tax in the private rented sector. We have to reflect on the evidence and consider the consequences, and the Bill is simply a moderate and reasonable measure introducing new regulations based on that evidence.

--- Later in debate ---

[Mr David Anderson (Blaydon) (Lab)]

We are supposedly here today because of the impact of the interim evaluation reports. As I said in an intervention on the hon. Member for St Ives (Andrew George) who proposed the Bill, there is lots of evidence to suggest that we would end up exactly where we have. Hon. Members need not take it from people like me, who are completely opposed to the proposal on ideological grounds; they can take it from people such as the Chartered Institute of Housing, which said in 2011:

“Tens of thousands of households will be hit hard in the pocket or even be completely priced out of the communities where they are currently living and working. And all this is without consideration of the overall effect these changes will have when combined with significant cuts and changes to funding”.

It went on to say what we could expect: movement of low-income tenants from more expensive rental market areas to cheaper ones; households struggling to access private rented accommodation; increased hardship; a concentration of tenants in receipt of LHA in cheaper, poorer-quality private rented housing; and greater demand on homelessness and housing services.

That was said in April 2011. In February 2012, a study by Cambridge university looked at four specific areas and reached these conclusions a year before the Bill became an Act. The study said that in Sunderland, for example, moving people on the scale suggested by the Government would take eight years—it would take that long to get all the one-bedroom houses re-let. It continued:

“Evidence…from groups of local residents and Housing Officers in these…case studies suggests that many households will be pushed into severe financial difficulties by the cuts.”

I am not sure how many of the colleagues of the hon. Member for St Ives who were listening to that were taken in by it. Perhaps they were taken in by the DWP’s own impact assessment of February 2011. It asked whether there would be an impact on health and well-being—no; will there be an impact on human rights—no. If that is what they believe, this report has clearly proved them wrong.

For months and years we have been lectured by the Deputy Prime Minister—he has stood at the Dispatch Box to defend this policy—who said that there were 1.8 million spare bedrooms in this country. It is as if he was talking like someone looking after racing pigeons. Pigeons are put in what are called “duckets” in my part of the world; that is where the pigeons go. There we have it—1.8 million bedrooms, let’s stick people in there. Is that really happening in this country? If that is not social cleansing, I do not know what is. We are treating as second-class citizens people who have lived a long time in their communities and they might have lived in the same house in the same area for 40 or 50 years. These are people in stable communities who have a sense of place, a sense of belonging, a sense of security.

It was said earlier that the Englishman’s home is his castle. Most of these people will not be living in castles, but the same principle applies to them: they should be allowed to live in security in their own homes where they have lived for years. We all know what this is about: it is not about housing issues; it is about the failure of capitalism and who pays for the failed banking system. We know, too, who is not affected. It is not the fiddlers who fixed the LIBOR rate or the spivs selling mortgages to people who could not afford to pay them. It is the landlords who are the real gainers from housing benefit for decades, under both Governments, as they have been able to put up rents to whatever level they can get away with. When it is suggested that perhaps the one way to deal with this and keep the costs down is to apply rent controls, everyone waves their hands in the air to say, “Oh, no, we cannot interfere with the market.” Why not? It is the market that has got people into this situation in the first place, and the people who pay are the poor, the weak, the vulnerable, the disabled and the dispossessed—the people without a voice. We in the House should obey that voice. We are trying to give them a little voice today, and some people are whispering when they should have been shouting while we Opposition Members have tried to help over the past few years, but the Government have ignored not just the voice of politicians, but the voice of people such as Citizens Advice.

My hon. Friend the Member for Makerfield (Yvonne Fovargue) intervened to try to explain the situation from her personal experience over many years of working in the real world with the people affected, but she was brushed aside. The Government have ignored people such as my hon. Friend, ignored the professionals who work in housing offices, ignored people working at the front line, people in local councils and in the trade unions who represent the workers, the Churches, the chartered institutes and especially the people who are living in and are affected by this situation. Some Members have ignored all those people; we are now trying to redeem the situation.

Is this debate really about putting things right? I would like to think it was, but the cynic inside me says that it is much more about some people trying to survive the next general election, or it might be about some people trying to write the headline for their next newsletter or about trying to rewrite history in the hope that people will forget what has happened here over the last four years. I shall support the Bill and anything we can do to alleviate the suffering that some people are going through, but I will not do that to give any succour to people who should have known better and did know better, but ignored the reality four and five years ago when they pushed these measures through this House.

Mesothelioma Bill [Lords]

David Anderson Excerpts

Tuesday 7th January 2014 Commons Chamber

[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.

[Mr David Anderson (Blaydon) (Lab)]

I congratulate the hon. Lady on what she has done and on what she is saying so far today. I hope that she is right, but does she not understand the track record of these insurance companies? They have challenged mesothelioma victims for decades, and I hope that we can stop them today because people are getting fed up with the way they behave.

[Tracey Crouch]

I am grateful to the hon. Gentleman for his intervention. Decades ago, the insurance industry would have held up its hands and said that, in hindsight, it had treated victims very badly. To be fair to the bigger players in the insurance industry, they have certainly tried, over the past five to 10 years, to improve the system of compensation for victims. They have set up the Employers' Liability Tracing Office and provided funding for research. Some of those bigger insurers have started to play catch-up for the mesothelioma victims. However, I recognise the concerns expressed by the Opposition over pleural plaques. As it happens, I was part of the insurance team that ensured that pleural plaques did not become a legislative issue in this House, and I stand by that decision today. That will remain a difference of opinion that we have on a specific asbestos-related disease. Where we do need consensus is over mesothelioma. It is a fatal condition and one that will kill somebody incredibly quickly and very painfully. I want to make sure that those victims who cannot trace their insurer or employer have access to the scheme and get the highest amount of compensation possible.

--- Later in debate ---

[Ian Lavery (Wansbeck) (Lab)]

It has been a decent debate this afternoon. I am not sure whether we are here to discuss how perfect the Bill could be, or who would be the best recipient of the measures in it, but I think we are here for fairness and justice for individuals who have suffered greatly as a result of mesothelioma. There may be a difference of opinion about who we should be looking after—should we be looking after the insurance companies, or should we look after those who are suffering greatly as a result of mesothelioma?

Right through the Bill, from First Reading until now, the costs of the insurance companies have dominated the debate, yet we rarely discuss the individuals who have suffered and who have died. We rarely discuss the victims or those who are perhaps sitting on the sofa at home watching this debate now. As I am sure everyone is aware, once someone has been diagnosed with mesothelioma, they have a very short time to live. I just want people to be fair; I am not asking for the world, but I think that as politicians we have the right to be fair to ordinary people. Is anything wrong with being fair? Sometime we short-change people, which is not just or fair.

My hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) spoke in a previous debate of someone who went to see him and said, “This is horrendous; it is like a tree growing inside, and it eventually chokes you. It eventually kills you.” That is what we should be thinking about and discussing in lots more detail, not the fact that insurance companies have come forward with a potential 3% levy. What about those who are dying? What about the people who are suffering? Once they have been to the doctor, their life has ended. Let us start discussing those people.

[Mr Anderson]

My hon. Friend is being his normal forthright self. Does he feel—as I do—that he is in the middle of a negotiation, when, like me, he expected to be making the law of the land? We are basically saying that we make the law of the land if the insurance companies will agree to it. It is unbelievable.

[Ian Lavery]

I totally agree with my hon. Friend. I have been through the Bill and I am puzzled by the fact that there is a threat—if we do not agree to something that is a lot less than what people deserve—the insurance companies will walk away. I always thought that if the Government pushed through a Bill that said 100%, it would be 100%. If that is what the Bill says, surely that is what it means and what the insurance companies will have to do. From what has been said throughout the stages of the Bill, it appears that the insurance companies are running this, not Parliament. That concerns me because there have been great discussions and great debates on all sides, but I am yet to hear any persuasive reason why the victims should not receive 100% of their compensation.

--- Later in debate ---

[Ian Lavery]

This issue has been explained. This is not just a shipyard, mining or other heavy industry problem; this disease can be contracted in the classroom. We really need to look at the position with asbestos in schools. I fear that not enough data have been kept on children over the years. People never believe, 30 or 40 years later, that they have mesothelioma. They think back to what type of employment could have caused it, but it could have started in school. I accept my hon. Friend’s point.

Lloyd’s made £2.7 billion between January and June 2012. Royal and Sun Alliance made £233 million last year. Aviva, between January and June 2013, made £605 million. That is just three companies. They are awash with finance. Believe me, Mr Deputy Speaker, they intend to continue to be awash with finance.

The regulatory impact assessment estimated that approximately 6,000 mesothelioma sufferers lost about £800 million in compensation due to untraced insurance. If we add that to the cost to the victims of other asbestos diseases, and the deal cooked up between the Government and their friends in the insurance industry, that represents a saving to insurers of about £1 billion. That is absolutely scandalous.

[Mr Anderson]

Does my hon. Friend agree that in 2007, as a result of the decision on pleural plaques, the insurance companies were handed a windfall of £1.4 billion that they were not expecting?

[Ian Lavery]

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

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

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

--- Later in debate ---

[John Woodcock]

My hon. Friend is right and that does not leave the insurance companies doing sufficient.

Of course time is a factor, and we do not live in an ideal world. Today we will probably not achieve giving these people everything that ought to be given to them, and God knows they have waited far too long already, but we should all thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for her tenacity. She has brought her considerable expertise to bear on this. I am sure her former friends and colleagues in the insurance industry think of her as a poacher turned gamekeeper—[Interruption.] Perhaps it is the other way round in this instance. Her expertise and inside knowledge have enabled the way in which the insurance companies work to be exposed in the House today. Some of us will struggle to see the logic of the 3% cut-off. If we stretch this and have a longer period for making the pay-outs over the next decade, even by the parameters the insurance industry has set itself, the figure will still come in at 3%.

We have shown today that we can go further and I really hope that, even at this late stage, the Minister will listen to the arguments made in this House and improve what is on offer for the victims of this awful, horrible disease.

[Mr Anderson]

I will try to keep my voice going if I can. I appreciate the work the Minister has done but this debate saddens me. We have got a situation where employer liability was paid to these insurance companies. They have had their money and they have run with it. People have died, and that was not a surprise. We have known for a century that asbestos kills people, so the fact that people would need compensation was not a surprise. The whole argument about the cut-off date, and that we cannot just spring this on the insurance companies, is nonsense. Looking back over the last decade, at the Fairchild rules, the Barker rules and the Rothwell rules, we can see that those were all cases in which the industry tried to get out of its responsibilities.

I raised this point with the Prime Minister on 18 December. I asked him to intervene to try to resolve the issue and he said:

“I will obviously look at what he has to say”.—[Official Report, 18 December 2013; Vol. 572, c. 732.]

I understand the time constraints that he has been under since then, but will the Minister tell us whether the Prime Minister has had a chance to look at the Bill? Where has the Prime Minister been to take that look? Has he been to the TUC? The trade unions have supported people through this morass for decades. Has he been to the asbestos victim support groups, including those who have been here today, who have real-life experience of these matters? Has he been to the employment lawyers who have sat with the people while they have died, and with their families?

[Mike Penning]

As a trade unionist myself, I would have expected the TUC to contact me for a discussion, but it has not done so. Other groups, including victim support groups have. This is an interesting situation. I would have been more than happy to speak to the TUC, but it did not knock on my door.

[Mr Anderson]

I thank the Minister for his intervention, but I am talking about what the Prime Minister has done since he made a promise to the House from the Dispatch Box to look into the situation, knowing that the Bill was coming back to the House today.

Perhaps the Prime Minister has looked at what the employment lawyers have been dealing with over the years. Or perhaps he has done the other thing, and spoken to the people who have set the parameters for this debate: the people in the insurance companies. After all, he knows them all. They have bankrolled his party for decades, and they have bankrolled his constituency and those of hundreds of Conservative Members across the country. If a trade union had exerted that much influence, we on this side of the House would have been nailed to the wall. The Prime Minister knows the insurance industry well enough to have appointed the Association of British Insurers to lead the consultation. My hon. Friend the Member for Barrow and Furness (John Woodcock) talked about gamekeepers and poachers a moment ago. If this is not the most glaring example of that, I do not know what is.

At the end of the day, however, the Prime Minister could have gone somewhere much closer to look into this matter. If he had gone to his constituency office, he would have found a document in his in-tray that was sent to every one of us as constituency MPs. It is from the Asbestos Victims Support Groups Forum UK, and it is entitled “The Mesothelioma Bill [HL]—the Victims’ View”. I shall read out a few examples from across the country.

A constituent from Stockton North asks:

“After being robbed of my husband and father of two sons why am I now being robbed of compensation for my children?”

A constituent from Birmingham, Selly Oak states:

“I hope you never have to watch a loved one on oxygen fighting to get his breath, carrying it around to be able to live, or should I say exist. You have no idea what mesothelioma sufferers go through.”

A lady from Halesowen says:

“I watched my husband suffer for 3 years and then his horrific end to this illness. I’m sure that if the Ministers in Parliament witnessed this they would change the Bill without any hesitation”.

A lady from Eltham states:

“My husband was murdered. His name was Alan. My husband died aged 58 because he went to work every day in places riddled with asbestos.”

Mrs Barker from Staffordshire Moorlands says”:

“If you haven’t seen a man die of mesothelioma like I saw my husband in hospital then maybe you ought to go to a hospital. To see him go from a healthy active man to nothing, skin and bone, or anyone diagnosed with mesothelioma fall to pieces…is heart-wrenching.”

Mrs Bell from Telford states:

“My husband died within 2 months of diagnosis of mesothelioma. He was a strong, healthy man brought down to a weak, skeletal figure in that short time. Watching someone you love reduced to such a state is soul destroying.”

Mrs Barclay from Cannock Chase says:

“Come and spend time watching someone you love struggle to walk because of pain and lack of oxygen. My husband was 6 ft 2 in tall and now he is bent double struggling to walk.”

But the Prime Minister need not even have gone there; he could have gone to visit Mr Larrie Lewington, who lives in Witney and who said:

“I’m disgusted because 90% of the work I did was for people like the Ministry of Defence, police and hospitals. I now have this death sentence hanging over me for helping the government and they are trying to reduce the amount of money that I deserve. It’s an absolute insult. I could have had another 20 years left, everything else is perfectly healthy except this horrible disease. No amount of money will ever compensate what this has done to me and my family but it will help, and give me peace of mind that I can live without worry for the rest of my time.”

That is the real story here. It is not about whether the insurance companies can afford this or not; it is about the moral duty of the people in this House to do the right thing and not be told, “We might have to put the insurance bill up and some businesses will be wobbling.” We do things in this House every day of the week that put businesses, people, trade unions and every other organisation in the country under pressure, yet somehow we are saying that because we have this deal we should not put these people under pressure. There is absolutely no excuse for what is going on here today. The least that should be done is that we should start the scheme from 2010, because that is the last point when insurers can say, “We did not realise we were going to have to face up to this.” They should be made to face up to it. They have had their money and they ran with it. They should be caught, brought back to book and made to pay the proper compensation—anything below 100% is a disgrace.

The other clear disgrace—I am glad that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) is in his place—is the concept that somehow the Government can claw back 100% of benefits from people and yet give only 70% compensation. Where on earth has that come from? Where is the morality in that? Has anybody made the case to say that that is fair? It is obviously wrong. Somebody who goes to the courts because the employer is identifiable will get, on average, £154,000, whereas under this scheme the most somebody will get, even though they have to go through all the same hoops, except that they do not have an identified employer or insurance company, is £115,000. So they are already £39,000 worse off. Then 100% of the benefit they had is going to be clawed back because they are lying on their death bed—it stinks! We have to put this right. If it is not put right today, we need to continue on it because this is not the end of the matter. If it is not put right in this Parliament, I hope that when Labour comes to power in the next one we will resolve it.

[Hywel Williams]

It is a pleasure to follow the hon. Member for Blaydon (Mr Anderson) and all the other hon. Members who have spoken most eloquently about this terrible disease in support of the proposal made by the right hon. Member for Newcastle upon Tyne East (Mr Brown), which my party and I support. The hon. Member for High Peak (Andrew Bingham) said that it seemed unlikely that he would be so concerned about mesothelioma, given that he represents a rural area, and the same applies to me; what does mesothelioma mean to us in rural Arfon?

In the early 1960s, a Ferodo factory was established just outside my home town of Caernarfon. The slate industry was dying at the time, and many slate workers were affected with the dust disease that led to the 1979 Act to which I referred earlier in an intervention. At the time, people believed in economic planning and the plan was to establish a large factory in the constituency to mop up the unemployment arising subsequent to the closure of the slate industry. Ironically, the factory was that of the Ferodo firm, which then used asbestos in the production of brake linings, leading to cases of mesothelioma in my constituency.

I will be brief because the arguments have been very well made this afternoon by a variety of hon. Members on both sides of the House, and I pay tribute to the hon. Member for Chatham and Aylesford (Tracey Crouch) for her interesting and well-informed speech. As has been said, the scheme is being set up for individuals who have not only been diagnosed with a terminal illness, but who have been suffering the misfortune of being unable to trace their employer’s insurers. It is plainly unjust that these claimants should automatically lose a significant percentage of the compensation that is rightly theirs through no fault of their own. The industry has argued that mesothelioma claimants should be encouraged to look at all other avenues before making a claim under the scheme. At a meeting I had some months ago with insurers, that point was made most strongly.

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[Mike Penning]

What I have said in Committee and today is that there will be a review after four years. I have committed to the 3% figure beyond the four years, as is absolutely right. I will come back to the £80 million that has been touched on in a second. Actuaries have looked at this very carefully and the Health and Safety Executive, for which I am also responsible, has looked at the costings. We will consider the review at the end of the four years, but there is no way in which the figure will drop below 3%. As far as I am concerned, that will flow through until we get 100% compensation.

It is very important for hon. Members to understand that we are talking about 75% of the average, which means that some people will be worse off—I fully admit that—but that some people will get more than they would have done if they had been able to trace their insurer or employer and go through the scheme. That is an interesting parallel. The percentage is an average, and in working with an average some will be on one side of the line and some will be on the other side of the line. I know that it is really difficult for those on the wrong side of the line in theory, but there will be people on the other side of it.

Where should the arbitrary line be? Of course I could say, as I did in Committee, that the consultation issued by the Government before the last election included a proposal to do nothing. I accept that there is a proposal to do nothing in most consultations, but it was there. I do not, however, think that that is the biggest issue; the biggest issue is how we stay within the 3% over the period and within our financial obligations. That is the position that I am in.

I cannot, obviously, support the 100% figure. I pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for her work on the cross-party group, including before she entered the House, but, sadly, I cannot accept 80%. We have discussed that, and I think that she understands why. I need to make sure that we stay within the realms of what we have agreed and get the Bill through the House and on to the statute book.

[Mr Anderson]

I regret to hear what the Minister is saying. One thing he could do is to change the clawback from 100% to 75%, which would at least give people a little more money.

[Mike Penning]

Some things are out of my hands, and such is the legal situation in relation to clawback. I cannot change that through the Bill. It just happens: if someone gets compensation, there is clawback on it at 100% because taxpayers’ money is used to pay the compensation.

Mesothelioma Bill [Lords]

David Anderson Excerpts

Monday 2nd December 2013 Commons Chamber

[Mike Penning]

If the hon. Gentleman does not mind, I will make some progress.

The date of 25 July 2012 was when the Government announced that we would be setting up the payments scheme and so created a reasonable expectation that eligible people diagnosed with the disease on or after that date would receive a payment. The Bill does not, and cannot, look to respond to all the people who have been affected by asbestos diseases. The issue of individuals who have developed asbestos-related diseases but cannot trace a third party will have to be addressed outside the Bill. The Bill is not an appropriate instrument—I know that some people think that it is—for taking that forward.

Mesothelioma is a distinctive disease, because it is always fatal and always caused by asbestos. That allows for a straightforward scheme to be put in place as soon as possible. A streamlined scheme, such as the one we have brought forward, could not cover all the other diseases. It would otherwise be very complicated and expensive for the taxpayer.

[Mr David Anderson (Blaydon) (Lab)]

Will the Minister give way?

[Mike Penning]

If the hon. Gentleman does not mind, I am not going to give way.

The costs of other schemes would be disproportionate and the agreements we have with the insurance companies —I know that some colleagues do not like them—would make that very difficult. We are 100% committed to delivering on the Bill. This measure represents a huge step forward, and it should be recognised as such. I thank the right hon. Member for Belfast North (Mr Dodds), who is no longer in his place, for doing so.

The scheme will make payments to eligible people according to a fixed tariff and according to the age of the person who has the disease. The payment will be based on roughly 75% of the amount of average civil damages. Those who have followed the Bill’s progress through the other House will realise that it raised the figure from 70% to 75%. The figure of 75% is probably is not as important as the 3% levy, which is very important.

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[Kate Green]

I am happy to answer that question, as I would have done during my speech. The Opposition welcome the progress that has been made, and we will not oppose the Bill this evening, because we share with the Minister and Members from both sides of the House a wish to process payments and get them to victims as quickly as we can. That is not, however, the same as saying that the Bill cannot be improved further. We believe that it can be improved, and I will outline some of our suggestions for how that might be achieved.

As I have said, the Bill has already passed through the House of Lords, and the work done in that place has undoubtedly improved it already. We will support the Bill on Second Reading, but it does not go quite as far as necessary in bringing justice for victims. We will therefore seek further improvements as the Bill continues its parliamentary passage. I want to make it very clear that we are not doing so to score political points or to delay the Bill unnecessarily. Everyone understands the importance of establishing a scheme and getting payments flowing as quickly as possible. However, this House will fail the victims of this terrible disease if we do not do the best we can to recognise their appalling suffering through a fair system of payments.

Victims have been left for years without any compensation, while the insurance industry has continued to benefit from billions of pounds in premiums. It certainly seems to the Opposition that the Government have not yet done everything that could be done and all that needs to be achieved, despite the progress that has been made and the undoubted good intentions of the Minister and his colleague in the House of Lords.

[Mr Anderson]

The Minister spoke about the fact that insurance companies want to keep the 3% levy because they are worried about the ongoing impact on them. Is not the reality that, for 50 years at least, insurance companies got in money that they were not spending? That money has evaporated, but we should now turn to it so that people can get 100% compensation, not the paltry 75% that is on offer.

[Kate Green]

My hon. Friend is right. Over many decades, insurance companies have taken in premiums and in every way resisted paying out to victims. It is good to have reached the point at which the industry is finally facing up to its collective responsibility, but it still has a long way to go.

The Minister rightly described mesothelioma as a cruel and vicious disease that is caused by exposure to asbestos, and as a long-tail disease that is diagnosed years and often decades after it has been contracted. It is invariably fatal and, once a diagnosis is made, cruelly quick: following diagnosis, most victims have only about nine months of life left. The effects of the illness are horrifying for sufferers, and for the loved ones who watch them die. The true disgrace is that the link to asbestos has been known for many decades.

One consequence of the long period for which the disease can lie dormant is that, following a diagnosis, it is of course more difficult to attach liability, given that the circumstances that brought about the condition often took place many years previously. As a result, many sufferers have until now been forced to rely only on statutory payments and welfare benefits. Although I am pleased that the industry will at last take a small step towards meeting the obligations it owes to sufferers, it is only right and proper that it should finally do so.

I understand that, as the Minister said, the scheme will be established as one of last resort, which is to be relied on only if no employer or insurer can be traced. That might be a reasonable position for the industry, but we must ensure that it does not exacerbate the pain and difficulty for claimants.

During the short period from diagnosis to death, sufferers become desperately ill, yet at the same time they are expected to go to often huge lengths to trace a former employer, perhaps from many years back; to identify that employer’s insurer, perhaps via the Employers’ Liability Tracing Office; to obtain the necessary medical records and wait the 40 days that agencies have to respond to such requests; and then, ultimately, to take legal advice and access the scheme. I think we can see how that would eat into the tragically limited time remaining to sufferers following diagnosis, so we must do all we can to speed up and smooth the process.

I recognise the progress made in speeding up the process and helping victims to trace their employers’ insurers. Following its introduction in 1999, many insurers signed up to a voluntary employers’ liability code of practice, but none the less tracing rates remained deeply disappointing, never exceeding 50%. In 2012, the success rate was just over 34%; and even accounting for those cases now proceeding via ELTO, the success rate in 2012 still reached only 61%. Clearly, there is considerable scope for better support for victims to pursue insurers.

It seems, however, that the industry, in its negotiations with Ministers, has sought to do the very minimum it can get away with to make amends to sufferers. As noted, payments will be set at just 75% of average civil damages—admittedly, as the Minister said, an uplift on the 70% initially proposed. It is claimed that the industry cannot afford to pay more without passing on the additional cost to current employers’ liability customers. The notion that this multi-billion-pound industry, which has been collecting premiums for decades while doing all it can to avoid payouts and which is to be gifted £17 million by the Government under this Bill and lent a further £30 million to help with the scheme’s introduction and the smoothing of the first year’s payments, cannot and should not be more generous is simply not credible.

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[Tracey Crouch]

My hon. Friend is right that our constituencies are particularly affected and I am delighted to see him in his place to debate this important issue. He makes an important point. The Government have set a cap of 3% and there is no room for manoeuvre unless they are willing to stand up to the insurance industry and say that there is a firm view on both sides of the House that the 75% they have currently negotiated is not good enough. They need to agree on another figure. I believe that 80% would be appropriate as a good compromise between the 90% being called for by the lawyers—they cite the Financial Services Compensation Scheme as a useful comparator—and the 70% the insurers were originally willing to accept. Furthermore, with the previous assumptions under which their lordships debated the Bill, 80% would have been 2.98% GWP over the first four years and 2.42% over 10 years. Now, with the 3% cap, under the new legal costs associated with the scheme, there is no room for manoeuvre. I find that disappointing, unless the Minister is willing to stand up to the insurance industry and discuss this.

[Mr Anderson]

The hon. Lady is making a compelling case. Does she agree that, as the Minister said, the employers were 100% to blame, that the insurance companies have had 100% contributions for many years, that the Government are asking for 100% clawback on DWP benefits and that, sadly, 100% of the victims are dead? Is there not a clear moral case for this House to accept nothing less than 100% compensation for the people who have died?

[Tracey Crouch]

I am grateful to the hon. Gentleman for his intervention. I was persuaded by the 100% argument, but having read the House of Lords debate, I now think that 100% would not be right. There is room for compromise on the percentage and we need to ensure that we put the victim at the heart of the compensation scheme—not the insurers and lawyers who may ultimately benefit from it.

I am also concerned about the lack of clarity on assumptions relating to the age of people diagnosed with mesothelioma. Some think that those accessing the scheme will be younger than the current age group of claimants going through civil schemes, whereas the Department has assumed that there will be an older age group. I tend to believe that, as employers’ liability insurance has been compulsory since 1972, and given this disease’s latency, those unlikely to be able to trace their insurer, making them eligible for this scheme, would surely be older and the younger workers would be fewer. Again, there is room for negotiation with the insurance industry over the compensation levy.

I understand that the industry is worried about a cohort of younger people who might access the scheme because of exposure in schools and other areas with a less obvious asbestos risk. I am afraid that that is bunkum, because not only would schools have some form of liability insurance, but it would be possible to access compensation via civil procedures. For me, the current 25% running cost of the scheme is far too high, and I genuinely think that this is a poor outcome for the sufferer and a good outcome for the industry, which, as the hon. Member for Blaydon (Mr Anderson) said, has behaved poorly over many decades in this area.

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[Tracey Crouch]

I am grateful for my hon. and learned Friend’s intervention. The irony is that, when the Bill first started in the House of Lords, the figure of £7,000 was debated, but the assumption was subsequently revised down to £2,000 and then back up to £7,000. Under the original £7,000 assumption, however, the DWP calculations were exactly the same as they were when £2,000 was being discussed. Unfortunately, it is completely unclear to anyone who has paid any attention to this Bill precisely who is paying for this, what it includes and how the victim can still be put at the heart of it all.

On one particular point, I pay tribute to the insurance industry. It improved over the years in its financing of research into mesothelioma. This began when I was working at Aviva—I am not talking all the credit for it, but it did—as an attempt to stop the last Government from following the lead of Scotland and legislating too harshly on other asbestos diseases such as pleural plaques. As it happens, I supported the last Government’s resistance to following Scotland and was pleased that the top four insurers contributed to research funding into mesothelioma instead. That said, the funding runs out next year, and there has currently been no voluntary commitment—not just from the top four, but from all EL insurers—to contribute further money into research. I think that is a dreadful shame, which will have a major impact on future treatments to alleviate suffering at a time when we expect meso-diagnosis to spike. I share the views of the British Lung Foundation—supported, I believe, by the Association of British Insurers—about building the continuation of funding directly into the Bill. It is sad that a £4 billion EL industry cannot make a voluntary offering, spread equally across all insurers. If that is so, we parliamentarians now have a statutory opportunity to force them to do so.

[Mr Anderson]

The hon. Lady is generous in giving way. Is she aware that when the pleural plaques legislation went through the other place and the Law Lords decided that it would no longer be compensated, KPMG estimated that the insurance companies had a £1.4 billion windfall, so surely a little bit of that could go into the research that she is talking about?

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[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Falkirk (Eric Joyce), who spoke movingly about his brother and talked with knowledge about his constituency. I rise to speak about my constituency, too. Like hon. Members on both sides of the House who have spoken, I think that the Bill is welcome but does not go far enough to help victims and their families in my constituency.

Far too many of my constituents are severely affected by asbestos-related disease. Thousands of them have died painful deaths as a result of dangers that they were exposed to at work. Families have seen their loved ones die in agony, often while worrying about the financial impact of their death on those whom they left behind, and without seeing proper justice done, or compensation for their illness. Tragically, we know that more deaths as a result of exposure to asbestos in the workplace will come to Hartlepool.

We in Hartlepool suffer more than our fair share of mesothelioma and asbestos-related deaths because of our industrial legacy. My town was a major centre for heavy manufacturing, which was based around the docks, shipyards and steelworks. Firms such as Richardsons, Westgarth and Co.—Richies—and William Gray and Co. are long gone, but are engrained in the social history of my town, having provided employment for many generations of Hartlepudlians. However, asbestos was regularly used in those environments for lagging and other purposes, and employees were far too often not provided with proper protective clothing or equipment.

According to the Health and Safety Executive, in the last 30 years, the number of deaths per million people arising from mesothelioma in England has risen from 26.6 to 67.1. I am pleased to see many hon. Friends from the north-east here; our region is the worst-affected in the country, reflecting the legacy of our heavy manufacturing industry. In the same 30-year period, the figures for the north-east rose from 56.1 to 105. Hartlepool is the 16th worst-affected constituency in the entire country.

However, those are just statistics; we should think about the families, and the tragedy that we have seen. When I do, it brings to mind one of the most tragic cases that I have heard of in my constituency. A woman who was brought up in a community of laggers lost her father, then her husband, then her son, and finally her own life, to mesothelioma—all because of exposure to asbestos in the workplace as a result of negligent employers. Far too many of my constituents are suffering from this disease, and to make matters even worse, they are not seeing justice done or getting compensation for their suffering.

As I say, the Bill is welcome, but it is far from perfect. Amendments were tabled in the other place, but the Government did not listen to the arguments for them. The Minister in charge of the Bill—the Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning)—is on the Treasury Bench; he is a decent, honourable man who cares about working people, so I hope that during the Bill’s passage in the House, he will reconsider many of the amendments that were tabled in the other place. Otherwise, the Bill will not help my constituents. There has been very clear consensus in this debate that we need to make changes to the Bill to ensure that all our constituents are provided with proper compensation.

Clause 2, which sets out the criteria for compensation, is the key part of the Bill. The criteria include the person being first diagnosed with diffuse mesothelioma on or after 25 July 2012, and being employed at the time of exposure. Those criteria are not good enough. As hon. Members have said, the arbitrary cut-off date of 25 July 2012 is grossly unfair, and will mean that many of my constituents who should, if there is any sense of decency, be compensated for diseases caught at work will miss out because they were diagnosed before that date. How can that be fair? There is no possible justification or sensible rationale for that. My constituents will be penalised because their symptoms were diagnosed early. How is that fair? At the very least, as hon. Members have said, the Government should make the cut-off date February 2010, which is when the last Government consulted on introducing a scheme. At that point, the intention and direction of travel were clear. People will be let down if the Government continue to have 25 July 2012 as the cut-off date.

[Mr Anderson]

I thank my hon. Friend for making a valuable contribution, as usual. The Minister said in his opening remarks that the people to blame were the employers, 100%. Regardless of when somebody was diagnosed, if they were in employment, surely there is a moral duty on the employer. The employer is to blame; their insurer should carry the cost. The employee should be awarded compensation, regardless of when they were diagnosed.

[Mr Wright]

My hon. Friend makes an important and eloquent point. He has been a passionate champion on this issue for many years, and I pay tribute to him. I will come to the Bill’s impact on the insurance industry in a moment—

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[Ian Lavery]

I have been involved for many years in trying to claim compensation for people in work, whether from insurance companies or employers, and it has always been a difficult challenge because they try to abrogate their responsibility at every opportunity. They try to run away from it and to put as many obstacles in the way of any form of compensation as they possibly can. Unfortunately, that is how they operate.

Thank goodness we have trade unions that stand up for individuals who are hurt and who suffer from prescribed diseases such as mesothelioma and other asbestos-related diseases, industry-related diseases and injuries at work. Thank goodness that ordinary people have behind them the security of trade unions, which have the finance at least to try to get the compensation that lots of families should have had.

I welcome the scheme as a massive move forward, but I hope that we can come together in Committee and iron out a few major problems. I will mention four items of concern, but that is not to say that there are not others: first, the level of the percentage payment; secondly, the exclusion of other asbestos-related diseases; thirdly, the cut-off date of 25 July 2012; and, lastly, the claw-back of 100% of DWP benefits when the Bill provides for payment at only 75%—a point raised by my hon. Friend the Member for Middlesbrough (Andy McDonald).

On the level of payment, why should anybody who will have two years to live, max, be happy with 75% of any compensation? These people are dying.

[Mr Anderson]

They are being killed.

[Ian Lavery]

Yes, they are being killed.

Why should 75% be acceptable? Someone has said that 80% would be a better figure; of course it would, but it is absolutely vital to have 100% compensation for somebody who has very little lifetime left. Claimants to the scheme have to meet the same standards of evidence and burden of proof that apply in a court action, but those with a successful civil claim will get paid 100%. Why should there be a difference?

Employers’ liability insurance is one of two compulsory insurances in the UK; the other is motor insurance. Insurers collected premiums in full and invested them for decades. The insurance companies used these finances for generations. They put the money in the bank and paid themselves dividends. People made themselves rich while at the same time stashing away the policies—hiding them, burning them, and getting rid of them. The only people who will suffer as a result are those who are set to die 30 or 40 years later due to the latency period and the activities of the insurance companies, which had the money but decided not to keep it for future generations in case something like this occurred. They paid out nothing on the untraced policies that they lost or destroyed. This could have saved the insurance companies billions of pounds, yet we are debating whether to pay these people and their families three quarters of what they are due.

Somebody said that the Minister is an honourable man who looked after honest, hard-working people, and I really do not doubt that. I appeal to him by saying that we cannot give people three quarters of what they are due and think we are being fair—that does not square the circle.

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[Mr David Anderson (Blaydon) (Lab)]

It is not very often that I disagree with my hon. Friend the Member for Wansbeck (Ian Lavery), but I want to start by agreeing with the Minister, who was right to say that we should not have had to be here tonight. This issue should have been resolved no later than when the previous Government were in office and probably much earlier than that. As my hon. Friend the Member for North Durham (Mr Jones) has said, this has been known about since at least 1965. We should have done something about it. Lots of us had meeting after meeting with the previous Prime Minister and others in the previous Government as we tried to find a way forward. I believe that he was genuine in his approach but that he was badly advised by civil servants and special advisers who were frightened that the cost would escalate. As a result, we did not take the action we should have taken.

[Mike Penning]

I did not put the blame on any particular previous Government. I referred to Administrations and I am sure the hon. Gentleman appreciates that.

[Mr Anderson]

I did not say that the Minister said that. The issue should have been resolved, because the facts have not changed between then and now.

My hon. Friend the Member for Wansbeck mentioned the Mick Knighton Mesothelioma Research Fund. I have been a patron of that fund for more than a decade. When I was president of Unison I was approached by a former colleague I used to work with in the mines who asked, “Can you help these people out, Dave?”

It is worth listening to the story of Chris Knighton, whose husband was a classic sufferer of mesothelioma. He would think nothing of getting on a pushbike and riding from Newcastle to Berwick and back again on a Sunday morning before going to the club to see his mates, who had just staggered out of bed. They would be standing at the bar, bleary-eyed, asking, “Where have you been, Mick?” He had done a 100 mile bike ride on a Sunday morning.

On one of those Sunday mornings, the lad fell on the floor. The following day he went to see his doctor, who told him he had mesothelioma. “What’s that, doctor?” asked Mick. He told him it was asbestosis of the lungs. “What can you do?” asked Mick. “Nothing,” said the doctor.

Within a matter of months, the lad was dead. His widow set up the research fund with a good friend, Anne Craig, and they pledged to raise £100,000. Two years ago they raised £1 million, and all that money has been put into research into this disease. It is people like them and the men, women, children, daughters, wives and husbands who have suffered that this debate should really be about.

There is a history of people exploiting asbestos throughout the world. I was proud when a member of my trade union went to South Africa and worked alongside Thompsons Solicitors to litigate against companies there. One of the stories they heard in Namibia was that one of the ways in which companies ensured maximum output was by filling big plastic bags with raw asbestos. How did they make sure they were full? They put young Namibian kids in them to tamp down the asbestos as if they were pressing grapes. Those kids were exposed to raw asbestos at the ages of six, seven, eight and nine. Those are the sorts of people behind the desperate negligence under discussion.

Other diseases have been mentioned. When compensation for plural plaques was challenged in the courts in 2007, the case was won and people stopped getting compensation. As I said in an intervention on the hon. Member for Chatham and Aylesford (Tracey Crouch), KPMG announced a £1.4 billion windfall on that same day. That is what the insurers got as a result of the Law Lords’ ruling. Members on both sides of the House tried to get our Government to change the law so that those people could get compensation again.

Other parts of this nation have managed to change the law. Earlier, the right hon. Member for Belfast North (Mr Dodds) intervened on the Minister in relation to Northern Ireland, and the Scottish Parliament has been able to do it, but we were told that it could not be done in this part of the world. We should have done it.

Equally, people may not have mesothelioma or anything life threatening, but the truth is the same: they were negligently exposed at work to substances that the employer knew would be damaging. Employers have known that since 1892, when asbestos was first recognised as a poisonous substance. As we have heard, they have known since 1965 that it should have been illegal to do so, but they kept on exposing people to the substance for days, weeks, months and years.

We are now told that people can have 75% of their compensation. One thing always sticks in my mind in talking about this. I first had real evidence of mesothelioma when I spoke to a lawyer dealing with it, a guy called Ian McFall, who works in the Thompsons north-east office and is a renowned expert on the issue. He told me that the fibres lie dormant for decades, but all of a sudden they become active, the person suffers horribly and then dies.

I used those words when there was a discussion about this issue some years ago. I was approached via e-mail by a woman who was not one of my constituents, who said that I had really upset her. Her family was sitting there, with their father going through the process, and she had tried to be careful to shield her family from knowing the truth.

I am sorry that I have to repeat those words today, but the people of this country need to understand how serious this disease is. It is to the credit of the Government and others that they have accepted that this is a very special case, because it is a killer. There are no two ways about it: if you get this, you are going to die. That is the main reason why the situation has been challenged to the extent it has over many years.

The insurance companies have put forward the compensation as somehow an act of benevolence: “We are being really nice to you, aren’t we?” No, they are not; they have been caught on the hop and forced into a corner to put right what they should have done. The deal struck between the Government and the insurance companies is just that—a deal. It has not involved the people it should have involved to the extent that they should have been involved, whether they are claimants, their support groups or, crucially, the trade unions.

My hon. Friend the Member for Wansbeck spoke about the work of the trade unions, but that had an impact not only on trade union members but on every member of the public in this country. Many people are not in trade unions or in unionised workplaces, but they have the same rights to compensation and legal redress as those for whom the trade unions work.

[Mr Kevan Jones]

I read Lords Hansard last night. Does my hon. Friend agree that throughout all the negotiations the Government have had on the Bill, those in the driving seat have been the insurance companies? The fact is that we are having to accommodate the situation to suit the insurance companies, rather than the victims.

[Mr Anderson]

That is absolutely right. The Government are saying that they can go only so far, because the companies cannot afford more, but they are forgetting the fact that companies have received millions and millions of pounds, which they could and should have put away since 1965, in the knowledge that this might come along one day. Is not the whole point of insurance that people should save for a rainy day? Well, the umbrellas are up now.

[Andy McDonald]

Does my hon. Friend agree that we are talking about sophisticated people, who have battalions of actuaries to look at the figures, and that they would have taken into consideration the possibility of having the cut-off date as 10 February 2010 rather than later? That would have been in their thinking, so why can they not be encouraged to step up to the mark and live up to their responsibilities?

[Mr Anderson]

Those people must obviously have realised that there was a potential for that. If the consultation had lasted for a short period, it would have been that date, but without a shadow of a doubt, they clearly could have thought that it might be the start date.

My hon. Friend the Member for North Durham spoke about some of the consultations. I went to some of the meetings, which Ministers opened and then virtually handed them over to members of the insurance companies to run and to answer questions. Civil servants and Ministers were not engaged; it was people from the Association of British Insurers who answered all the questions, and it was clearly in their interests to do what they have now got away with. It is clear that the scheme will not provide full protection or full compensation.

I share the concerns of other hon. Members about the level of payment. For the life of me, whatever the cut-off date, I cannot see why the payment should be anything less than 100%. I made the point earlier that there is 100% liability on the employer and the insurer, while 100% of those with this disease have died. If people go through all the hoops they have to go through, which are the same as those in civil litigation, it is not their fault that insurers, employers or both have disappeared; the fault lies with the industry, which collectively should be putting this right. The insurers have had the premiums and have invested them, so they should pay up.

We are talking about at least 6,000 people who, between them, have lost somewhere in the region of £800 million. Compensation of 75% means that people have to absorb 25% of the ongoing costs. My hon. Friend the Member for Wansbeck said that that is at least £43,000. To somebody who is probably on the sick, and whose family is probably not working because they are taking care of them, £43,000 is a life-changing sum of money. It might not be very much to insurance companies or to some of those funded by insurance companies, but it is clearly a lot of money for people at a time of grief.

I want to pick up what has been said about the exclusion of other diseases. If people have been criminally exposed to a poisonous substance, those who did that should be brought to book, and the way to do that is to make them pay compensation. I hope that we would support that and that as the Bill goes forward we can make that case more and more strongly.

Again, why is the cut-off date not February 2010, which is when the consultation was announced? The written ministerial statement came out two and a half years after that consultation was announced. That was two and a half years of what—things gathering dust and people having discussions? What were civil servants doing? All of a sudden, there was a statement two and a half years later, followed by a discussion period to bring us to where we are now. That clearly is not fair. The minimum has to be February 2010, and I agree with my hon. Friend the Member for North Durham that if we really are serious, we should go back to 1965. My guess is that we probably will not, but we must address that issue in Committee as a matter of real urgency.

[Mr Kevan Jones]

Does my hon. Friend agree that there is at least some logic in that? The arbitrary date of 2010 is when the consultation started. The fact is that when that started in 2010, the companies knew about the liability. My hon. Friend has pointed out that they took the premiums and saved money by not paying out.

[Mr Anderson]

Absolutely. The truth is that the companies knew. What was happening was not a secret. It was not the case that all of a sudden the consultation found that mesothelioma was not caused by exposure at work or employers neglecting their duty in not providing proper safety equipment and so putting people at risk. They knew the likely outcome was that there would be implications for the industry. Clearly, they should have said, “Right, we need to start on this at least as a bottom line.”

The insurers have apparently said that they think the legislation will be retrospective and amount to unlawful interference with insurance property rights. What a load of gobbledegook. They mean, “We want to keep more money in our pockets. We want to deny people their rights.” They are denying people, either those seeing out their last few days or their families, the right to have a decent life.

[Mr Jones]

Does my hon. Friend agree that the sums are in stark contrast to some of the eye-watering figures paid out, for example, for the mis-selling of payment protection insurance? These groups of people clearly need the money, and in some cases the victims have suffered a very horrible and painful death.

[Mr Anderson]

There is absolutely no comparison between the two, and seeing what has happened for people abused by being wrongly sold PPI when they did not need it does not make this situation any better. This is about people deliberately being exposed to this substance at work. To reiterate, I see no logic in the state saying, “We want back 100% of DWP benefits.” Reading between the lines, my guess is that there is probably nothing else the state can do, but if so, it has to get its act together and change that part of the Bill.

Some say that we should feel sorry for the insurers and their balance sheets, because if we go beyond the 3% level they will struggle and so put the costs on to people buying insurance today. My hon. Friend the Member for North Durham has already mentioned Lloyd’s making £2.77 billion; it clearly is not suffering too much. I would be much happier if the insurers were so strapped for cash that they were not donating huge sums to the Conservative party. Every Wednesday, our Prime Minister comes here, talks to my leader and accuses us of being in the pay of our paymasters, the trade unions. Let us look at the Tory party’s paymasters in the insurance industry.

It might be coincidental that the Tory party is bankrolled massively by the insurance industry, but it might not. Let us look at some of the figures. [Interruption.] If I can find my glasses, I might be able to tell hon. Members—aged 60 today, I’m not doing bad! Sir John Beckwith and the Beckwith family have donated £524,000 to the Conservative party at central and local level; Caledonia Investments and the Cayzer family have donated £275,300; Centrepoint Insurance has donated £10,000; Dickinson insurance brokers has donated £2,000; General Insurance Brokers has donated £5,000; Hampden insurance has donated £16,800; Michael Spencer and IPGL—this is eye-watering—have donated £3, 929,892.52; the Keswick family in Scotland have donated, between them, somewhere in the region of £523,000; Norwich Union has donated £8,500; R L Davison and Co., from Lloyd’s, donated £5,000; and Theodore Agnew, who founded Town and Country Assistance, has donated £134,000.

If someone today, instead of those names, was saying, “Unison, T&G, Amicus, Unite, the GMB”, we would be being told, “You’re being bought off by the trade unions,” but I could never be that callous towards the Minister or his friends. It does make us think though. This deal has been hatched between the Government and the insurance companies. The restrictions in the Bill are illogical. The clawback from the DWP, the start date for claims—they really say, “There’s something going on here.” Is the Conservative party worried about going too far and upsetting the insurance companies? I hope we can flush this out in Committee and say, “Listen, this has to be paid, because it’s a moral duty.”

We are in a cleft stick tonight. I will probably vote yes tonight, but I feel abused. I feel abused on behalf of the people I work with day in, day out and the families who are helping them to get through this thing. I feel as though I am being blackmailed, because if we do not support the Bill tonight, we will be accused of stopping the Bill and not supporting what we all need to do for these people. I support the Bill with huge reluctance, therefore, and hope that when it returns here, it is in much better shape than it is tonight.

--- Later in debate ---

[Mike Penning]

With the leave of the House, I will respond to the debate, which I opened earlier today.

May I say from the outset that my intention was for as many Members as possible to be able to take part in this important debate? Seventeen colleagues, including those on the two Front Benches, have taken part. I could have taken a few more interventions, but if I had taken too many the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and for West Dunbartonshire (Gemma Doyle) would certainly not have got in. Anyone in the House who knows me will know that that was my intention and that I was not trying to shirk my responsibilities in any way. Perhaps when the hon. Lady has been here a little bit longer, she will know me a bit better.

Interestingly, many Members have said that the Government are in bed with lots of different parties and that perhaps I am anti-trade union. Many Members will know that I am a proud member of the Fire Brigades Union and that I was a member of Unison’s predecessor when I was a lifeguard in Castle Point in Essex after I first left the Army. It is important that we pay tribute to those who have worked so very hard over the years to introduce not just this Bill, but others. I pay tribute to the trade unions for the work they have done over the years and to the victim support groups across the country.

I also want to acknowledge something that my former colleague from the fire service, the hon. Member for Poplar and Limehouse, acknowledged in part, namely that, while this disease has massively affected areas of heavy industry—I understand fully what many Members from the north-east have said—it does not cherry-pick. It is possible for someone to glance past an area with asbestos one day, pick up the disease and not know about it for another 40 years. As has been said, many people who are in work do not know that they have been in contact with asbestos. In some cases, their employers might not even know, especially if they run the emergency services.

I am reminded of my former colleagues in Glasgow and the work they did over the weekend. They would not have thought about whether there was asbestos in there; they would have gone straight in, quite rightly, and dealt with it. What their employers have to do—I completely agree that it is much easier for the public sector to do this than the private sector—is address their own responsibilities. I agree with the hon. Member for North Durham (Mr Jones) that the unions and employees should have a register. Had they had a register, a lot of the issues under discussion would have been addressed a lot earlier.

[Mr Anderson]

I take exception to the Minister’s comments. Why should it be easier for public sector employers to do this than private sector employers? They knew the dangers, they knew the risks and they were insured. Why should the way they manage this be any different?

[Mike Penning]

The hon. Gentleman makes an enormously important point. I can remember being in an asbestos suit not long ago, and the hon. Member for Poplar and Limehouse is a little older than me, and was in the fire service before me. So many lessons can be learned, and they need to be learned, because people have the disease and are suffering.

I think almost 100 different questions—some were very technical and nearly all of them were very important—have been asked during the debate, and it would be impossible for me to answer them all in the time I have been given. I will therefore write to hon. Members who have spoken, and for the benefit of those who have not taken part I will put the answers in the Library of the House so that everyone has an opportunity to read them.

I have listened very carefully to the debate, and I have tried not to be party political or partisan in any way, but nobody watching would think that the previous Administration had been in government for 13 years. The issue has been known about for many years and, as I said in my opening speech, Administrations should have dealt with it.

It is worrying that we have been asked why the Government have taken two years to sort out the problem. The consultation was very wide ranging, and no one would have known from it what the previous Government wanted. I cannot find out exactly what they wanted, because we are not allowed to see their papers. The consultation came out in February 2010, just before the general election, after which we had the purdah period, and then we came into office, and without knowing exactly what was intended, my predecessor and the very dedicated Lord Freud, the Minister in the other House, worked with the Secretary of State to bring forward this Bill.

Nothing is perfect, and I fully understand that hon. Members on both sides of the House want to table amendments in Committee and probably on Report. What is very important, however, is that the Bill is passed and regulations are laid, and that compensation gets out to the victims of this terrible disease and their loved ones. If even some points that have been discussed were put in, the Bill would have to go back to the Lords and that would mean a period of ping-pong. [Interruption.] I said some, not all points.

It is absolutely imperative to get the Bill through, or people who have waited for compensation, in some cases for decades, will not get it. If there is ping-pong on the Bill, we will be into the new year—the Leader of the House is sitting next to me—and although I will be as open minded and pragmatic as I can, the Bill needs to be put on the statute book.

Pensions Bill

David Anderson Excerpts

Tuesday 29th October 2013 Commons Chamber

[Gregg McClymont]

I have listened closely to the Minister. When one listens to him, particularly on pension charges, one has to listen very closely, because—how shall I put this politely?—there is a gap between the rhetoric and the reality. I will analyse the extent to which there remains a gap. In one sense, he has caught up with the questions that need to be asked about pension charges, but from the detail—or lack of detail—in his announcements, it seems we are still a long way from getting answers.

On other matters first, however, the Minister says that auto-enrolment is going “exceptionally well”. I think that that is accurate, but I am sure he would agree that we have to be cautious, given that it is very large employers that have enrolled and that the percentage of savers’ income going into the new pension schemes is very small—in many cases, it is hard to notice. We welcome the developments, however, and pay tribute to him for taking forward the previous Labour Government’s auto-enrolment scheme; there is consensus, I think, on both sides of the House that auto-enrolment has to work effectively. It is crucial that every single one of the 10 million people being auto-enrolled between 2012 and 2017 can be sure of getting value for money from that pension scheme. The necessity of value for money for all auto-enrolment schemes is what drives my amendments.

I wish to say a little about why that matters so much and how the Minister’s wind-up of the state pension interacts crucially with auto-enrolment. Essentially, he has gone for a hard and fast wind-up of the second state pension. No doubt, he will justify that move, and there are reasons to think it is sensible, but if we are to have a quick wind-up of the second state pension and a fast move to a flat-rate state pension, the biggest losers from that switch—this might be defensible, because there are always winners and losers—are likely to be lower-paid workers in the private sector who did well out of the redistribution accrual mechanism in the second state pension. If someone was low paid in the private sector, they accrued in a way that brought them closer to those on higher incomes. In many cases, therefore, the same people now being auto-enrolled will be the same people losing out from the hard and fast wind-up of the second state pension, or losing out in the longer term. That makes getting auto-enrolment right all the more important. The first thing he should have done when he took office—I know he will have an enormous in-tray—was work out how to ensure that every one of the 10 million people enrolled got value for money. That is the context of this debate.

The Minister says that the Bill will further improve the situation, so let me pursue some of his comments and then turn to Labour’s vision for private pensions. Amendments 5 to 10 to clause 32, on short service refunds, are more or less uncontroversial. On clause 34 and exemptions from auto-enrolment, he referred to our amendment 53 and said that I saw this as an “evil Government”.

[Mr David Anderson (Blaydon) (Lab)]

Hear, hear!

[Gregg McClymont]

That is a lesson in not posing a rhetorical question. Whatever my hon. Friend believes, I do not see this as an evil Government—in particular, no one doubts the Minister’s good intentions—but our amendment must be understood in the context of the Beecroft report.

As you will remember, Mr Speaker, Adrian Beecroft is a Tory donor who has produced a report in the last 18 months arguing that red tape and bureaucracy on small businesses are far too heavy and that micro-employers should be removed from auto-enrolment. I know the Minister does not support that and said the Government had no intention of doing it—no one is suggesting he would do such an awful thing—but he will not be there for eternity. Given his recent comments about God being a liberal, perhaps he does intend to be around for eternity, but for those of us of a more sceptical temper, I think we can say he will not be around for ever, so it would be sensible to constrain a future Government, or even this Government—anything could happen—who might be under pressure from the Beecrofts of this world, in a way that is consonant with the best objectives of public policy.

The Minister said that amendment 53 did not even define a small and medium-sized enterprise, but he will know that the Companies Act 2006 clearly defines an SME as an enterprise with 50 or fewer employees. That is a common definition of an SME. The broader point, however, is exactly the one I have already expressed: we are trying to do him a favour by protecting him from those within the coalition Government who take a less enlightened view of the benefits of auto-enrolment. We tabled the amendment in that spirit.

On clause 29 and the debate around schedule 16, the Minister mentioned the Australian example. I was at the National Association of Pension Funds last week, and I have even watched him in the video—I was hoping he would entertain us with the song from “Les Misérables”, but I will come to that when I deal with costs and charges. He said that Australia is doing pot follows member—the inference is that I often point to the benefits of the Australian system—but that is not surprising, because Australia has several hundred schemes, whereas we have 200,000, and that is not including personal private pensions. To compare a system so scaled with our system is to let one’s a priori views of the world get in advance of the evidence, or to put it more simply: he is comparing apples and pears. Australia has several hundred pension schemes; we have 200,000, and that is a fundamental problem with comparing our system. Australia is in a much better place in terms of scale.

The Minister says that pot follows member will be simple and effective and that we will regulate for quality, by which he means there will be minimum standards—or at least he tells us there will be minimum standards, but, guess what, that is also currently part of a consultation. There is a broader theme to which I shall return; when the Minister feels under pressure from the Labour agenda on private pensions, he calls for consultation. He says that this and that will happen but when we study the detail, we see that what he has called for is a consultation. That is not the same as decisive action.

On pot follows member, the problem is that the UK has a fragmented pensions system; we have 200,000 pension schemes. We have—to put it in a simple fashion—great variations in quality. The Minister is being asked repeatedly by the pensions world how pot follows member will work in those circumstances. It is again worth listening closely to what he says, because he has not yet explained how it will work. He has set out his plan and objective to get to pot follows member but not how the mechanism will work. One of the reasons for that is that it is very difficult to do. To go back to the Australian point, pot follows member would be a sensible approach if we started from a very different place, but we do not. We start from a very fragmented private pensions system with a massive variation in quality.

On costs and charges, the Minister does not actually know what is going on in the pensions world. We had a very interesting conversation, or debate on this in Committee. In arguing a point with me, he pointed to DWP evidence. It turned out that the way in which he quoted that evidence was not appropriate, but my point is not to criticise him for making a mistake, which does happen; it is much broader. The DWP is forced to take surveys of employers to try to find out what pension providers are charging them. The Minister talks about evidence. Would not a much more effective way to approach things to have the costs and charges laid out for everyone to see in the first place? Why has he not got on with ensuring that costs and charges are disclosed? Instead, the DWP has to take surveys of employers who, in many cases—as his own survey evidenced—are not aware of what they are buying in terms of a pension scheme.

That brings us to the broader issue of who buys pensions. The Minister wants to move to pot follows member and says that there will be quality criteria; these will be minimum quality criteria. But, as things stand, he could not explain to the House all the costs and charges that exist in a pension scheme. Neither the Government nor the regulator gather that evidence. That is a fundamental point about the pensions market today.

Similarities are often drawn between energy and pensions. One way in which they are similar is that the vertical integration of pension providers—the same as with energy companies—means that it is very hard to crack where the costs and charges lie. I put that point on the table. The Minister wants to move to pot follows member but has not set out in detail the mechanism and the IT by which he would do this. More widely, he is not able to say at this stage what the costs and charges are in pension schemes. So how can he be sure that no one will move from a superior to an inferior scheme? He will say, and has said, that he will ensure that this happens. Again, I do not doubt his good intentions, but he has not so far delivered on costs and charges. More widely, if he does deliver—as I am sure he has every intention of doing—the amount of regulation that it will take to make a pot follows member pension automatic transfer system work is enormous. That is why so many stakeholders in pensions do not think it is a feasible way to proceed. The Minister said that the Association of British Insurers supports it. That is hardly surprising, because this is a system that will have the least detriment to the ABI’s members.

1.45pm

The Minister feels that he is now catching up with the pension charges debate; that is evident from his language and from the extent to which he talks about the Labour agenda, which is quite striking for the Report stage of a Bill. But he is still caught in the mindset of “If only I can get the industry round the table, it will deliver.” There is no evidence of delivery so far and no evidence therefore that that will happen. The reason that there is no evidence relates to a point made by my right hon. Friend the Leader of the Opposition in his powerful 2013 conference speech, which still reverberates around British politics. He asked, rightly, why one would expect an industry to take the decisions necessary to reform a market when it is not in its interests to do so. Why, indeed? I say to the Minister that, on pot follows member, he has to look beyond the ABI’s interests and look to the interests of the wider pensions community and of the most important people, savers.

The Minister mentioned the National Association of Pension Funds conference, where he mentioned pot follows member. I am sure that he got a very warm reception, because the national association is very clear not only that pot follows member is not the best way to proceed, but that there is a serious possibility of significant consumer detriment, which, in everyday language, means rip-offs. The national association, which the Minister so eloquently addressed the other week, is very clear on that. Not only is the association clear that we should have no truck with pot follows member, but it supports—the House will be surprised to learn—aggregators.

The Minister sets out my approach to aggregators as being, “Labour wants several aggregators, but how would they work?” He said that aggregators stop individuals engaging with their pension, or make that engagement impossible. He knows very well that the whole logic of auto-enrolment, which Labour began and which he has followed through, is that we have to use the power of inertia in pensions, because all the evidence is that many people will find it difficult to engage with pensions whatever the circumstances, given their complexity. Also, as he must be all too aware, auto-enrolment involves employers buying pensions, not the saver.

A criticism that I would make more widely of the Minister is that he approaches the pensions market as if it were a functioning market; functioning in the sense that we can and do have a consumer who is engaged, informed and sovereign, and a seller. The Minister knows that that is not the basis on which auto-enrolment proceeds because it is the employer who buys the pension. In other spheres, he has shown that he is fully aware that there is a big problem in the pensions market, which develops from the fact that the saver in many cases cannot be the sovereign—the person who makes the decisions—first, because the employer buys the pension and, secondly, because the pensions are so complex and their annual statements so opaque.

In those circumstances and with the Minister being aware of that, to claim that the aggregators should be excluded and rejected on the basis that they do not allow consumer engagement is a bit of a straw man. Let me say a little about why I think aggregators are so important. This relates to my other new clauses and I should iterate at this stage that these new clauses must, if we are to develop a serious policy to improve auto-enrolment outcomes, go together. For example, the Minister talked about trustees and said that the OFT says that the key is the quality of the trustees. He is of course right. My view, and that of the Labour party, is that trustees, in scaling up the pensions system, and aggregators go together to try to make a significant difference to the 10 million people being automatically enrolled in pensions.