Mesothelioma Bill [Lords]

Kate Green Excerpts

Monday 2nd December 2013 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

I am very pleased to follow the Minister in opening this debate. As he has said, this Bill marks an important step on the long road to justice for mesothelioma sufferers and their families. I welcome the progress that has been made so far, but the Minister is right to say that we should take this opportunity to see whether we can go a little further before the Bill completes its passage through the House.

I am very pleased to see so many colleagues present, many of whom represent constituencies where the disease is prevalent as a result of their industrial history. I know it will be important for colleagues on both sides of the House to be able to speak about their communities’ experiences, over many decades, of the consequences of this terrible disease. Although I totally share the Minister’s wish for the Bill to make progress through this House so that a scheme can be put in place and payments can flow to victims in the next few months, I do not think we are so pressed for time this evening that we should not give the opportunity to every one of our colleagues to make the case on behalf of their constituents, because this issue is felt very deeply in many of the communities they represent.

I know that many colleagues will want to join me in paying particular tribute to the asbestos victims support groups, which have done so much to campaign for a fairer deal for victims and to keep parliamentarians briefed, not only for this debate, but over many years.

[Mr Kevan Jones]

Will my hon. Friend also add the congratulations of the House to the trade unions, which have not only campaigned on behalf of asbestos victims, but won literally millions of pounds of compensation for people who would not have got it unless they had been members of a trade union?

[Kate Green]

I am very happy to join in that tribute to the work of trade unions, a number of which have worked over many years not only to advocate the cause of individual victims, but to maintain the pressure that has ultimately led to the scheme under discussion.

I also pay tribute to our colleagues in the House of Lords who have already carefully scrutinised and, as the Minister said, improved the Bill. In particular, I acknowledge the work of my noble Friend Lord McKenzie, who, under the previous Labour Government, launched the consultation that has resulted in this Bill. I pay tribute to his assiduousness and his determination to secure justice for the victims of this terrible disease. I also pay tribute to the noble Lord Freud, who has demonstrated his equal determination and commitment to righting a long-standing and terrible wrong by introducing the proposed scheme.

The Bill follows a series of earlier pieces of legislation passed by previous Labour Governments to improve the lot of victims of asbestos-related and industrial diseases. In 1969, Labour introduced the Employers’ Liability (Compulsory Insurance) Act 1969, requiring employers to insure against liability for injury or disease to their employees arising out of their employment. In 1979, Labour introduced and secured the passage of the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, which provides lump sum compensation payments to people suffering from certain dust-related diseases or, if they have died, to their dependants, when a claim for damages is not possible because the employer or employers are no longer in business. In 2008, we introduced the mesothelioma payment scheme, which provides lump sum payments for people suffering from diffuse mesothelioma who are unable to claim compensation from other sources.

[John Woodcock]

I am really glad that my hon. Friend has mentioned the progress made by the previous Labour Government, because so many of us, including those who became Members before me, have wanted to see faster progress and have pushed for it for so long. The Minister was simply not right to say from the Dispatch Box that nothing was done in the period leading up to this Bill.

[Kate Green]

It is right to say that progress could have been faster and that more could have been done, but we should not overlook the fact that, over four decades, it is Labour Governments who have, until now, made the progress that has been made. As I have said, it was my noble Friend Lord McKenzie who began the process of consultation that has brought us to where we are today.

[Lorely Burt (Solihull) (LD)]

I am very supportive of the Bill, as I was of previous ones—my grandfather died of pneumoconiosis—but do the Opposition welcome the Bill and will they support it in the House tonight?

[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.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Lady have a view on what level of compensation could be paid without insurance companies passing on the cost to current policyholders?

[Kate Green]

There are two questions wrapped up in that one question. First, on present figures, what does it appear the industry can afford? I will say something about that in a moment. Secondly, does the industry have to pass on the cost to its customers, or could it choose to absorb it? We are talking about roughly 10% of the total value to the industry of the employers’ liability market. I appreciate that that is not a small sum, but as colleagues have pointed out, the industry has had decades to accumulate profits as a result of the premiums it has collected.

[Mr Kevan Jones]

It is not just about the accumulated profits to which my hon. Friend and my hon. Friend the Member for Blaydon (Mr Anderson) have referred: insurance companies are still making huge profits. Lloyd’s of London made £2.7 billion in 2012, Royal and Sun Alliance made £233 million between January and June 2012, and Aviva made £605 million between January and June 2013. These companies are not unprofitable, so their attitude to a levy costing £350 million is an insult to the victims.

[Kate Green]

I hope we bring the industry to understand that it would be right and proper for it to be more generous to the victims than the current scheme appears.

[Hywel Williams (Arfon) (PC)]

In contrast to the previous speaker, the hon. Lady is being generous in giving way. She will be aware that compensation under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 is 100% of liabilities available before the courts. Should that not be the guide?

--- Later in debate ---

[Kate Green]

I can say that the Opposition will be pushing for payment levels to be increased, and we believe they can be, given that the industry has accepted that a levy of 3% of gross written premiums is affordable and given that the impact assessment has shown that payments set at even 80% or 90% of average civil damages are affordable within a 10-year period. The Minister said that the proportion of GWP that the levy represented was more important than the 75% level derived from that 3% figure. It is our reading of the figures, however, that there is scope for the industry to be more generous, even within its own accepted cap of 3% of GWP. I hope to explore that in more detail with the Minister in Committee. As the hon. Member for Arfon (Hywel Williams) said, there is a strong moral argument, of course, for setting payment at 100%, as is the case, for example, for the Motor Insurers’ Bureau scheme—all the more so because under the Bill recovery of any benefits paid will be set at 100%.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

My hon. Friend is making a powerful speech. Is this not a familiar tune we are hearing from the Government? Whether it is, in this case, the insurance companies, or, in the case of the statement earlier, the energy companies, they do not seem prepared to stand up to powerful vested interests or to stand up for vulnerable people in need of support.

[Kate Green]

I hope that collectively the House can strengthen the Minister’s arm and send a strong message to the industry that we do not consider the scheme to be good enough yet and that we expect and demand improvements.

[Sir Edward Leigh (Gainsborough) (Con)]

Obviously, we want to try to help people who are suffering—everybody has accepted that—but these are complex areas. The hon. Lady has spent much of her speech attacking the insurance industry, which might be fair enough, but it rather raises the question: what was going on during the 13 years Labour was in power?

[Kate Green]

First, the hon. Gentleman might have missed the history I just rehearsed of the legislative process to date, and secondly, he is right that the condition and the legal circumstances surrounding it have been extremely complicated—there has been considerable litigation in this area, not just in the UK but internationally. I share his frustration that it has taken so many years to bring justice to victims, but it is not true that no efforts were being made. In particular, as colleagues have noted, in making what progress has been made, we have been powerfully supported by our colleagues in the trade union movement, so there has certainly not been utter indolence when it comes to securing justice for victims.

[John Healey]

This might help my hon. Friend. I am very impressed by the case she is making about the need for the scheme to be simple, smooth, speedy and more generous. Does she know that, in its briefing, the Association of British Insurers has said today that it would expect the scheme to run for about 40 years and therefore that any calculation of what could be afforded as a level of compensation—and to whom—should be seen in that context and not that of the short four-year term on which the Government have so far based their calculations?

--- Later in debate ---

[Kate Green]

Four years certainly seems a remarkably short period over which to cost the scheme, given the many decades over which the industry expects it to continue. It is a concern—one that we will discuss further in Committee—that the figures seem to have changed since the Bill moved from the Lords to the Commons, and changed back again, in a manner that might be said to favour a particular outcome that suits the industry. We will want to question that in more detail when considering the range of figures being presented.

While the Bill has been proceeding, the Ministry of Justice has been consulting on its proposals to expedite and streamline the process for taking legal action, and to introduce fixed fees for mesothelioma cases, and we have real concerns about the MOJ’s plans for the fate of the scheme before us. Evidence suggests that fixed fees are likely to exert a downward pressure on the level of civil damages, notwithstanding the 10% uplift in damages that has not yet been applied to mesothelioma suffers under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Indeed, our suspicions are borne out by the view of the insurance industry that this Bill and the MOJ process should be seen as part of a single package.

I recognise that the Minister cannot answer for changes that the MOJ will make to court rules, but it is of concern that there will be no parliamentary scrutiny of those changes. I warn him that as the Bill proceeds we will seek assurances that the MOJ’s actions will not adversely affect the scheme in the Bill. Moreover we should remember that these already quite meagre payouts, which are already to be reduced by benefits recovery, will be further depleted by legal fees and fees for medical certificates. We are anxious that the deal looks less and less good for sufferers, and we will return to those points in Committee.

As has been noted, hundreds of sufferers will lose out because the scheme does not take effect until 25 July 2012, which was when the Government published their response to the consultation set up in 2010 under Labour. Although I recognise the time spent by Ministers in detailed negotiations with the industry, we must recognise that between February 2010 when the consultation opened and July 2012, more than 700 people will have died without access to justice. We therefore believe there is a strong argument for the earlier start date of February 2010, and we do not think it credible to suggest that an industry whose very purpose and lifeblood is the anticipation and management of risk has not been preparing for the likely introduction of a scheme such as this since the date of the initial consultation.

As the debate in the House of Lords exposed, this is not a matter of insurers reserving policy—I accept that a more rigorous framework might apply to provision for risk—but a simple matter of business planning. Surely it would have been prudent for insurers to have assumed from 2010 that there would be a payment system with which they would be required to comply, and to have made provision for best and worst-case scenarios. That, too, is a matter we expect to explore further in Committee.

I am sure the Minister will assert that there is a cost to the industry of an earlier start date, and I hope we will have some definitive figures for that. Lord Freud said the costs at 100% of civil damages would be £119 million, and he undertook to calculate figures at the lower percentage—then 70%—introduced by this scheme. It would be helpful to know from the Minister before we go into Committee what progress has been made with those calculations at the level now proposed of 75%.

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

My hon. Friend, quite rightly, points out the faux concerns about cost and affordability. Does she agree that insurers are not doing this out of the goodness of their heart? For many years, they received payments for exactly this eventuality, and they should therefore be made to compensate those who are now sufferers.

[Kate Green]

I can only agree with my hon. Friend, and I hope the industry does not assume that the House will let it get away with the minimum it can propose. I assure the House that the mood of many colleagues from all sides is determinedly that we should do the best we can for victims—we and the industry owe them that.

As I think the Minister has alluded to, there is also a debate to be had about the scope of the Bill. It will exclude the self-employed unless they can determine they were de facto employees, and exclude family members who may have been contaminated—for example because they washed a brother’s or husband’s overalls. It will cover only mesothelioma and exclude all other asbestos-related illnesses. I heard what the Minister said about that, and again, I hope we can explore that issue further in Committee. Lord Freud offered welcome assurance about Ministers’ intentions in relation to other forms of asbestos-related disease when the Bill passed through the House of Lords, and I hope we will be able to secure firm commitments from the Minister on that.

[Mike Penning]

rose—

[Kate Green]

I sense he may be about to give me that assurance.

[Mike Penning]

I can certainly assure the hon. Lady on her second point. On her first point, it is right that the House has those calculations before we go into Committee, and I will ensure those figures are made available to her in the Library.

[Kate Green]

I am grateful to the Minister. Taking advantage of his generosity, he will see the amendments that the Opposition table in the next few hours, so will he bring forward figures for a range of different scenarios, including 75%, 80%, 90% and 100% of average civil compensation?

[Mike Penning]

I ask the hon. Lady please not to push me too far; but I accept those points and my civil servants are listening.

[Kate Green]

I would never push the Minister too far.

We had hoped to have received fuller details of the scheme’s operation by now, but regrettably the regulations have yet to be published. I am sure, however, given the shameful history that precedes this Bill, that Members will agree it is vital that the scheme is seen to be run in a transparent and wholly independent manner. In the House of Lords, Lord McKenzie asked for more information about the oversight committee, and I have seen the letter that Lord Freud wrote to peers on 4 September on that matter. That offers some reassurance, but we would like to see provision for the oversight committee included in the Bill. That is of particular concern because, as I understand, the insurance industry could—and intends to—bid to run the scheme. I confess that I am not entirely comfortable with that notion, but if ultimately the industry is selected to manage the scheme, the role and make-up of the oversight committee becomes all the more important.

[Huw Irranca-Davies (Ogmore) (Lab)]

May I suggest to my hon. Friend and the Minister that a precedent that could be considered is the miners compensation scheme for those with chronic obstructive pulmonary disease? That had clear oversight, including democratic engagement both at UK level and also in the regions, which gave the surety that every last penny piece was paid out to the people who deserved it.

[Kate Green]

I am grateful to my hon. Friend for that advice, and he is right to draw attention to the importance for local communities of a scheme that is transparent, credible, and which they are able to scrutinise and interrogate.

I expect that other issues will arise during our deliberations on the Bill, for example in relation to medical research, where I welcome the commitments made by the Government in the House of Lords, and on the differential between the levels of award made before a sufferer’s death and the level that can be obtained afterwards by his or her dependants. Frankly, that difference has little to commend it for a condition where death is the certain outcome. I recognise that the situation arises not from this Bill but from existing fatal accidents legislation, but I hope there may be scope for a more generous and flexible approach to mesothelioma.

There remain many complex and important issues to explore, and while we share the Government’s ambition to get the scheme in place and payments flowing, it would be a dereliction of our duty as parliamentarians if we did not scrutinise the full detail of the scheme and do all we can to maximise its generosity for sufferers. Victims have waited long for justice in the face of what can only be described as a hitherto intransigent industry. Now it is time to right a long-standing wrong, and give some small peace of mind to victims and their families in the midst of the most terrible suffering.

Let me conclude with the words of my constituent, Mrs Elaine Haskins, who first drew my attention to the terrible injustice and cruelty that victims have long lived with. Her husband died of mesothelioma in 2005—a death she describes as

“very stressful and painful. Two of the insurance companies were not traceable and the others did everything possible to get out of paying a penny. The sad thing was my husband died before he could see justice for his suffering and death.”

For too long we have let down too many victims of this cruel and terrible disease. Let us resolve today that we will right that wrong, and at last give justice to those victims.