Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2013

Lord Avebury Excerpts

Thursday 7th March 2013 Grand Committee

[Lord Avebury]

My Lords, I echo what the noble Lord, Lord Wigley, has said about the commitments that were made two years ago and about the inconsistency of the Government’s response to the demands that were made, I think in both Houses, at that time. When the equivalent to this order was debated two years ago there was criticism by the noble Lord, Lord McKenzie, and my noble friend Lord German of the gap which had developed between payments under the Child Maintenance and Other Payments Act 2008 to living mesothelioma sufferers and to their dependants after they had died. As the noble Lord, Lord Wigley, has said, it may take some time before a claim is submitted. Very ill patients may not be capable of addressing the matter in time. Equally, it is very awkward for relatives of the sufferer or for the local Asbestos Victims Support Group to get a signature from a patient who may be in great pain and on the point of dying, so that a claim can be submitted on his behalf.

The result was that in 2011, there were 2,952 in-life claims and 270 dependency claims. The Minister gave some statistics about the payments made to these individuals but it would be useful if, when he winds up, he could say something about the rates of claims submitted and separate them into in-life and dependency for 2013 and for the years up to the plateau which he says will occur in 2016. I think that that is a year later than we had previously been told.

In 2011, the average in-life payment was £15,204, while the average dependency payment was £9,026, which is trivial enough compensation when you think about someone who has got this frightful disease and even more so for the widow who has gone through the traumatic experience of seeing her husband die in excruciating pain. Of course, these payments are intended to tide the patient or the widow over pending the settlement of a claim which may lie against the former employer in whose service the exposure to asbestos occurred. For some patients, however, as the noble Lord has explained, the discrepancy is actually widening this year. One would have no hint of this from either the order or the Explanatory Memorandum, but the widow of a mesothelioma victim aged 67 at the time of his death will get £7,180 in 2013, compared with the equivalent figure in 2012 of £7,915 and £17,799 for the in-life claimant.

As the noble Lord, Lord Wigley, said, the reason for that discrepancy, the 9% cut, was explained by the DWP by the fact that it had made a mistake in 2010 in calculating the dependency payments for all ages at 50% plus disablement, and that resulted in overpayments to the band of dependency claimants we are concerned with in 2011 and 2012. As a result of that mistake, the dependency rate moved closer to the in-life rate, which, as I said, was clearly the intention of both Houses when we debated the matter in 2011. Nothing in the Explanatory Memorandum gives a hint of that bizarre outcome. I would be grateful if the Minister could explain why it was not drawn to the attention, at least of the Asbestos Victims Support Groups Forum UK, run by Mr Tony Whitston, who discovered it only by accident.

I should also like my noble friend to explain why we have departed from the principle that used to operate. When a mistake of this nature occurred that operated to the benefit of the citizen, we used to say that public faith was thereby pledged and that the Government would stick to the errors made and pay the amounts now to be issued in recognition of the mistake. Since 2008, lump-sum payments have been recovered by the DWP claims recovery unit in cases where civil claims for compensation are successful, and £21.3 million was recovered under the scheme in 2011. The Government expect that a further £49 million will be recovered over a 10-year period through the tariff scheme funded by insurers to pay compensation in cases where it is not possible to trace employers’ liability insurance.

If the Minister could give an estimate—I do not suggest that he should immediately, but when he has had a chance to discuss it with officials—of the net cost of dependency payments over the 10 years, based on the assumption that equalisation would be achieved in a straight line over that period, that would be helpful. The calculation should assume that over the same period, the cut-off age for those payments is raised from 67 and over to 77 and over, the cut-off age for in-life payments over the same 10 years. That would be useful in assessing the likelihood of being able to equalise the payments over that 10-year period.

I recognise that we will not secure any improvement in the lump-sum payment scheme for this year, because the parliamentary process does not allow that to happen. It is a defect in our system that so much is done by secondary legislation, which cannot be amended. In cases like this, where the Government obviously know that what they are proposing is highly controversial, they should offer the stakeholders concerned the chance to put their views forward at a Select Committee-type hearing before coming to a final decision. It is surely wrong that Parliament should be confined to expressing nugatory complaints about decisions such as this which affect people with mortal illnesses.

[Lord McKenzie of Luton]

My Lords, I start by thanking the noble Earl, Lord Howe, for introducing the regulations. I am bound to say that we are used to seeing a DWP Minister deal with them, but we are delighted that it is the noble Earl. I do not know whether that is a passage of a change in policy; we would be interested to hear if it is.

We have made known our general position on uprating by CPI rather than RPI, and that has not changed, but we can support the thrust of the regulations and maintain consensus about these two very important schemes. We are delighted in particular that these payments have not been subjected to the 1% uprating cap.

I note that the alignment of payments between the two schemes both for claimants and dependants has been maintained, and this is obviously something that we support. It is an important matter. But both the noble Lords, Lord Wigley and Lord Avebury, raised the point about the disparity between claimants and their dependants. Certainly, it is my recollection that it was the aspiration that the gap between these amounts be closed, or at least narrowed. Perhaps the Minister can tell us when an assessment was last made of the prospect of achieving this and whether there are any plans to do so.

Both noble Lords who have spoken referred to an error in 2010 and a correction to it which seemed to slip through the Explanatory Notes that we have today. That is quite possible, but an error in 2010 would have been on our watch if it was in the early part of the year. I was trying to recall what that might be. Certainly, if the adjustments that have flowed from it have not been fully explained, that is not good practice, and we would be interested to hear from the Minister on that point.

I am aware from the Cancer Research UK website of several clinical trials being undertaken in respect of mesothelioma and I wonder whether the Minister, wearing his Department of Health hat, has anything that he wishes to impart on the subject. I was going to ask a question about projections of peak numbers, but he dealt with that in his presentation.

The Minister also dealt with the question of pre-1948 schemes saying that people previously under those schemes would be transferred to IIDB. He said that most would receive an increase of up to £5 per week and obviously that is to be welcomed. He also said that no one would lose out, but is that as a result of specific transitional arrangements and protections that are in the scheme?

The Minister pre-empted another question. He has given us an update on the amounts of compensation paid under the two schemes for the previous year and the current year. But perhaps he can also let us have the figures for compensation recovery for these same periods. Compensation recovery was meant to fund certainly the 2008 scheme and contribute to the 1979 scheme.

On the subject of compensation recovery, the tracing and availability of employer liability insurance is clearly relevant. The Minister will be aware of the consultation launched by the previous Government—indeed, he referred to it—on the Employers’ Liability Insurance Bureau as a fund of last resort when employer liability policies could not be traced. The Government's belated response to that consultation—it was slipped out on the last day of the parliamentary Session in July 2012—was a huge disappointment.

Despite what the Minister said in introducing the regulations, could we have an update on progress on this? There are concerns around the scope of the bureau, time limits for making claims and opportunities for dependants to engage. The formulation that we heard a moment ago was that these things would go forward when parliamentary time allowed. We have a week spare as a result of the extra week that we were granted just today, so I am not sure what the pressure on the parliamentary timetable is that precludes this coming forward. It has been a long-term aspiration because we know that there are difficulties in identifying employer liability insurance policies.

The Minister will also be aware of government plans to change the basis on which employees will be able to claim compensation for injury and ill-health caused by work. There is the proposition that claims in the future will have to be based on establishing negligence. What assessment have the Government made of this change, which was rejected by noble Lords in a vote just yesterday? What is the assessment of its impact on compensation recoveries generally and as a source of funding for the 1979 Act and 2008 Act schemes?

Notwithstanding those questions, these are two important schemes that bring some relief to the thousands of people who are afflicted by these terrible diseases, and we will maintain the consensus and support the regulations.